CLD 2014 Judgments

2014 C L D 948

[High Court (AJ&K)]

Before Munir Ahmed Chaudhary, J

Ch. MUHAMMAD SIDDIQUE and another---Petitioners

Versus

EXECUTIVE ENGINEER ELECTRICITY DEPARTMENT, AJK, BHIMBER and 7 others---Respondents

Writ Petition No.189 of 2006, decided on 29th January, 2014.

Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)---

----S. 44--- Writ petition--- Res judicata, principle of---Applicability---Claim of outstanding electricity bill from subsequent buyer/owner of auctioned property---Scope---Petitioner being a successful bidder purchased a property/Mill auctioned by the orders of Banking Court---Electricity department claimed outstanding bill of property in question from the subsequent buyer/owner and initiated recovery proceedings---Contention of the petitioner was that any liability of outstanding bills of previous owner could not be placed on the shoulders of present petitioner/buyer--- Validity--- Outstanding electricity bill pertained to the period prior to the auction when the Mill in question was functioning under the supervision of its previous owners/directors---Banking Court had dismissed the application for recovery of electricity bills from the bid money and the Electricity Department had not filed any appeal or revision against the said judgment, which had attained finality, therefore the matter was hit by the general principle of res judicata--- Any order made on an application for adjustment of outstanding bills was a judicial order and the affected party was required to challenge the same before the higher forum---Petitioner had purchased the Mill in question as a result of the judgment passed by the Banking Court and auction made later on---Electricity Department could not claim any outstanding bill from the petitioner subsequent buyer/owner of Mill---Impugned recovery proceedings of outstanding electricity bills were set aside---Writ petition was allowed.

Khalid Rasheed Chaudhary for Petitioners.

Raja Niaz Ahmed Khan for Respondents.

2014 C L D 1167

[High Court (AJ&K)]

Before Sardar Abdul Hameed Khan and Azhar Saleem Babar, JJ

Messrs CHINAR POWER (PVT.) LIMITED MUZAFFARABAD through Chief Executive---Petitioner

Versus

AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through Chief Secretary and 6 others---Non-Petitioners

Write Petition No. 2293 of 2012, decided on 1st June, 2014.

Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)---

----S. 44---Writ petition---Advertisement for inviting bids---Post bid conditions, framing of---Scope---Contention of petitioner-company was that post bid conditions were framed and condition of ranking of bank was incorporated secretly---Validity---Advertisement inviting request for proposals was not a final document and further conditions could be attached which had not been mentioned in the same---Information was to be furnished with regard to technical as well as commercial aspects---Bidders were required to provide details with regard to extent of offered financing i.e. whether 100% or part thereof---Finance might be in form of supplier's credit, E.C.A., lease or multilateral/commercial bank finance or mix thereof---Documents with regard to financial standing and credit worthiness of bidders were also to be supplied---Proposal was to be evaluated and ranked keeping in view the bidders standing, technical capability, resourcefulness, condition of finance and award was to be made keeping in view the maximum benefit to the Hydro Electric Board---Petitioner had to comply with any additional requirement within a week---Respondents had every right to ask for additional information and to verify such information through its sources---Initially petitioner was first ranked but later on five items were included in the agenda with regard to approval for issuance of Letter of Interest/Letter of Support and petitioner was directed to provide additional information---Bank reference letters were to be issued by first class Financial/Banking institution with regard to credit rating---Information furnished by the petitioner did not come up to the mark and did not fulfil the required criteria whereas reference letters supporting credentials of respondent were evaluated as reliable---Equal chance to compete for award was provided to the parties but petitioner could not succeed due to its financial deficiency---Project was allotted to the other party in accordance with the prescribed procedure of law---Writ petition was dismissed in circumstances.

2005 SCR 57; 2005 SCR 89 and 1999 PLC (C.S.) 1203 ref.

Sadaqat Hussain Raja for Petitioner.

Huzoor Imam Kazmi for Non-Petitioners Nos.2 to 5.

Kh. Muhammad Naseem for Non-Petitioner No.7.

2014 C L D 83

[Islamabad]

Before Muhammad Anwar Khan Kasi, C.J.

Haji SAIF ULLAH KHAN BANGASH---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman and 2 others---Respondents

Writ Petition No.3076 of 2005, decided on 17th September, 2013.

(a) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Maintainability---Illegality or omission by a public functionary---High Court is competent and can come to aid of "aggrieved person" through the mandate of Art.199 of the Constitution.

(b) Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 17 & 24---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 29 & 38---Brokers and Agents Registration Rules, 2001---Constitution of Pakistan, Art.199---Constitutional petition---Prosecution by Commission---Illegalities committed by broker---Petitioner invested in stock exchange through his broker and suffered huge loss---Grievance of petitioner was that instead of taking penal action against broker, Securities and Exchange Commission of Pakistan, transferred his complaint for arbitration on the claim---Validity---Discretion vested with Securities and Exchange Commission under S.29 of Securities and Exchange Commission of Pakistan Act, 1997, was to be exercised with caution by applying yardstick for examining every case on its own merits---Specific allegation of non-provision of documents and loss of billions of Rupees could not be treated in causal manner and could not be set aside by taking the stance that it would open floodgate of such complaints---Function of the Commission was not of mere post office but of an agency, under duty, to conduct prosecution of offences in fit cases and such fitness could only be determined through investigation/inquiry, conducting a speaking order---Securities and Exchange Commission of Pakistan, on receipt of complaint was duty bound to conduct preliminary inquiry for ascertaining as to whether any offence falling under S.17 of Securities and Exchange Ordinance, 1969, was prima facie made out or not---In case offence was made out, the Commission should have itself proceeded with the same in terms of Ss.29 & 38 of Securities and Exchange Commission of Pakistan Act, 1997---After preliminary probe, if the complaint did not find trace of such violation/offence, it could be referred to alternate dispute resolution by treating same as a dispute complaint---High Court set aside the action of Securities and Exchange Commission of Pakistan sending complaint of petitioner for arbitration, as the same was unjust and improper---High Court directed Securities and Exchange Commission of Pakistan to proceed with complaint of petitioner---Constitutional Petition was allowed in circumstances.

Mian Abdur Rauaf, Advocate Supreme Court for Petitioner.

Azad Nafis, Advocate Supreme Court for Respondent No.1.

Ahmad Bashir for Respondent No.2.

Date of hearing: 19th June, 2013.

2014 C L D 610

[Islamabad]

Before Riaz Ahmad Khan, J

PAKISTAN TELECOMMUNICATIONCOMPANY LIMITED---Appellant

Versus

PAKISTAN TELECOMMUNICATION AUTHORITY---Respondent

F.A.O. No.72 of 2011, heard on 26th February, 2014.

(a) Appeal---

----Appeal against a consenting order was not competent.

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

----S. 28---Pakistan Telecommunication (Re-organization) Act (XVII of 1996), S. 4(m)---Anti-competitive practices in providing broadband services---Concurrent jurisdiction of Pakistan Telecommunication Authority (PTA) and Competition Commission---Complainant-companies filed complaints before PTA alleging that Pakistan Telecommunication Company Limited (PTCL) provided broadband services to them for onward sale to the public, but at the same time provided same services to the general public as well; that PTCL provided broadband services to the public at a much lower rate and put the complainant-companies in a position where they could not provide the same services on the same rate---Maintainability---Concurrent jurisdiction was available to the Competition Commission as well as PTA to adjudicate upon the present complaints---Different companies were involved in the same business, so in order to maintain a healthy competition among companies, the jurisdiction of PTA could not be considered as ousted--- Appeal was disposed of accordingly.

(c) Constitution of Pakistan---

----Art. 18(b)---Freedom of trade, business or profession---Regulation of business in the interest of fair competition---Scope---Under Art. 18 of the Constitution, every citizen had a right to enter into any lawful business, however, the same could be regulated in the interest of fair competition, under Art. 18(b) of the Constitution---Object of free trade and business was also to maintain a healthy competition therein---Object of freedom of business was also to avoid monopoly of any person.

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

----S. 4(m)--- Anti-competitive practices in providing broadband services---Complaint filed before Pakistan Telecommunication Authority (PTA)--- Complainant-companies filed complaints before PTA alleging that Pakistan Telecommunication Company Limited (PTCL) provided broadband services to them for onward sale to the public, but at the same time provided same services to the general public as well; that PTCL provided broadband services to the public at a much lower rate and put the complainant-companies in a position where they could not provide the same services on the same rate---PTCL agreed to provide its accounts to PTA to deduce as to whether it was actually providing broadband services to the public at reduced prices against prices of the complainant-companies--- PTA disposed of the complaints after consent of both parties and directed PTCL to submit its audited accounts---Subsequently PTCL filed present appeal against order of PTA----Competency---Present appeal was filed against a consenting order, thus the same was not competent---Additionally PTA had only called record of PTCL to determine as to whether fair competition existed in the market or not---No final order was passed by PTA, so the present appeal was incompetent on such score as well---Appeal was dismissed accordingly.

Azad Nafees for Appellant.

Babar Sattar for Respondent No.2.

Faraz Khan Jadoon, Law Officer PTA.

Date of hearing: 26th February, 2014.

2014 C L D 848

[Islamabad]

Before Riaz Ahmad Khan, J

SOHAIL NAJEEB---Appellant

Versus

MINISTRY OF FINANCE and others---Respondents

First Appeals from Order Nos.140, 187 of 2010 and 33 of 2013, heard on 23rd January, 2014.

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

----S. 34---Companies Ordinance (XLVII of 1984), S.7---Termination of services of employees of Commission---Appeal to High Court---Maintainability---Jurisdiction conferred by S.7 of the Companies Ordinance, 1984 was confined to the matters which were expressly covered by the Companies Ordinance, 1984 itself, such as winding up proceedings, etc. and not the matters, which were not expressly covered by the Companies Ordinance, 1984---Remedy of appeal before High Court under S.34 of Securities and Exchange Commission of Pakistan Act, 1997 therefore, could be availed only in the cause provided under the Companies Ordinance, 1984 and no other grievance or cause could be agitated before High Court---Employment of the appellants was not covered by the Companies Ordinance, 1984 and therefore, appeal would not lie before High Court in respect of any grievance regarding employment of officers of Securities and Exchange Commission of Pakistan---Appeals were dismissed.

Muhammad Ashraf Tiwana and others v. Pakistan and others 2013 SCMR 1159 ref.

Shazia Baig and others v. Securities and Exchange Commission of Pakistan and others 2011 PLC (C.S.) 900 rel.

Abdur Rehman Siddiqui, Syed Naeem Bukhari, Ch. Asghar, Iftikhar Ahmed Bashir and Ijaz Janjua for Appellant.

Makhdoom Ali Khan, Saad M. Hashmi and Khurram M. Hashmi and Khawaja Azhar Rasheed Advocates, for Securities and Exchange Commission of Pakistan.

Sheikh Muhammad Yaqoob, DAG.

Ibrar Saeed, Law Officer SECP.

Nadeem Arshad, S.O. Finance Division.

Date of hearing: 23rd January, 2014

2014 C L D 924

[Islamabad]

Before Muhammad Anwar Khan Kasi, C.J.

TARIQ MASOOD KHAN---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Water and Power and 3 others---Respondents

Writ Petition No. 4462 of 2013, decided on 18th February, 2014.

(a) Constitution of Pakistan---

----Art. 199(1)(b)(ii)---Quo warranto, writ of---Territorial jurisdiction of High Court to issue such a writ---Test emanating from Art.199(1)(b)(ii) was as to whether the respondent was holding or purporting to hold the office within the jurisdiction of High Court---In the present case, respondent distribution Company performed functions within the territorial jurisdiction of that High Court and appointment was also made by the Authority stationed within the territorial jurisdiction of said High Court---Objection on the territorial jurisdiction was overruled.

(b) Public Sector Companies (Corporate Governance) Rules, 2013---

----R. 2(g)--- Constitution of Pakistan, Art. 199(1)(b)(ii)---Constitutional petition---Maintainability---Public Sector Company---Respondent was holding the office of Director of an Electric Supply Company, which was assailed under constitutional jurisdiction of High Court---Contention was that interference by the High Court under constitutional jurisdiction was not warranted against the Public Sector Company where same was a non-statutory joint stock company incorporated under Companies Ordinance, 1984 and was not funded by the State---Validity---Such averment was devoid of force for the reason that respondent had admitted that Public Sector Companies (Corporate Governance) Rules, 2013 were applicable on the touchstone of definition of "public sector company" as contained in R. 2(g) of said Rules--- Definition of "public sector company" contained in R. 2(g) of the Public Sector Companies (Corporate Governance) Rules, 2013 was sufficient to bring that within the purview of constitutional jurisdiction---Respondent was holding public office because the respondent-Company was providing essential public service by distribution of electricity to the public and as such was performing function in connection with affairs of the State---Appointment of respondent was amenable in constitutional jurisdiction.

(c) Public Sector Companies (Corporate Governance) Rules, 2013---

----R. 2(g)----"Public Sector Company"---Definition---Scope---"Public Sector Company" means a company, whether public or private, which was directly or indirectly controlled, beneficiary owned or not less than fifty per cent of the voting securities or voting power of which were held by the Government or any instrumentality or agency of the Government or a statutory body, or in respect of which the Government or any instrumentality or agency of the Government or statutory body, had otherwise power to elect, nominate or appoint majority of its directors, and includes a public sector association not for profit, licensed under S. 42 of the Companies Ordinance, 1984.

(d) Public Sector Companies (Corporate Governance) Rules, 2013---

----Rr. 2(d) & 3(2)---Qualification and disqualification of independent Director--- Scope--- Contention of the respondent was that R. 2(d) of the Public Sector Companies (Corporate Governance) Rules, 2013 provided only 'qualification' of independent Director and not the 'disqualification'---Validity---Plain reading of R. 2(d) of the Public Sector Companies (Corporate Governance) Rules, 2013 did not support the contention that R.2(d) provided the definition of qualification only and did not operate as disqualification; had it been the intention of law makers, it would not have been set in negative form, in addition to that the word "or" at the end of sub-rule (v) also made it a disqualification, the proviso part of sub-rule (vi) when read in juxtaposition with R.3(2) providing period of two years for enhancement of independent Directors, shall practically have three terms before he became ineligible to be re-elected as independent Director, meaning thereby that after two years' period from the effective date i.e. 6-6-2013, and if appointment of a non-executive Director contravened the ratio of minimum 40% independent Directors and he did not qualify to be an independent Director, he would become ineligible to remain on the Board.

(e) Public Sector Companies (Corporate Governance) Rules, 2013---

----R. 3---Constitution of Pakistan, Art.199---Constitutional petition---"Conflict of interest" of a Member---Scope---Petitioner failed to prove the conflict of interest because the image of diversity in the Board of Directors, contained in R. 3 of the Public Sector Companies (Corporate Governance) Rules, 2013 was of participation from all segments of society and even otherwise, conflict of interest did not attract to mere consumership because if that was admitted true, that would entail the consequence that none of the directors would be able to become consumers of their company---Principle of Conflict of Interest connoted to having rival interest and that situation would have arisen if respondent/(Director) would have been running a business of competition to the company---Constitutional petition was dismissed being devoid of force.

Babar Awan Advocate Supreme Court for Petitioner.

Barrister Jehangir Khan Jadoon Standing Counsel for Respondent No.1.

Khaliq Uz Zaman for Respondents Nos.2 to 4.

Date of hearing: 19th December, 2013.

2014 C L D 975

[Islamabad]

Before Riaz Ahmad Khan, J

Haji ABDUL RAZIQ KHAN---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petition No.3795 of 2013, decided on 7th April, 2014.

(a) Foreign Exchange Manual, 2013---

----Chap. XXIII, Ss. 14, 9, 5 & 16---Import Policy Order, 2013, S. 4---Import Policy Order, 2009, Preamble---Constitution of Pakistan, Art. 199---Constitutional petition---Import of Sprinkler Lorries---Payment for imports---Letters of Credit---Permission of State Bank of Pakistan required for revolving letters of credit---Amendments to letters of credit---Scope---Petitioner under Import Policy Order, 2009 could import sprinkler lorries whereas under the new Import Policy Order, 2013 sprinkler lorries of specification of the petitioner could not be imported---Section 4 of the Import Policy Order, 2013 stated that the amendments made in the letter of credit would not affect imports made on basis of bill of lading or letters of credit established prior to date of new Import Policy Order, 2013---Contention of petitioner was that he had established the letter of credit for import prior date of promulgation of Import Policy Order, 2013 and the period of letter of credit was one year, so within the said year, he could import old lorries through the letter of credit that had been established prior to promulgation of Import Policy Order, 2013---Validity---Section 14 of Chapter XXIII the Foreign Exchange Manual, 2013 provided different types of "letters of credit", and the petitioner had in fact required establishment of a "revolving letter of credit"---Letter of credit, in the present case was one credit but with different drafts as different consignments were imported, but issuance of such letter of credit was not allowed under S.14 of Chapter of XXIII of the Foreign Exchange Manual, 2013 as the requirement for opening such letter of credit was that the petitioner submitted an application to the State Bank of Pakistan, and without permission of the State Bank of Pakistan, the petitioner's Bank could not open such a letter of credit, therefore, issuance of letter of credit to the petitioner was against law---No doubt that letter of credit could be established on providing letter of invoice, but then all consignments mentioned in the invoice were to be imported at one and the same time, which was not done in the present case---Consignments, if imported through different shipments, then either different invoice and different letters of credit were required, or in the alternate, prior approval of the State Bank of Pakistan was required--- Amendment in the letter of credit was also not covered by law as under S. 9 of the Chapter XXIII, Foreign Exchange Manual, 2013 Bank could extend the letter of credit for period of 12 months but a new amount could be provided through an amendment to the letter of credit---Proposed amendment to the letter of credit in fact amounted to opening a fresh letter of credit without fresh invoice, which was tantamount to a fraud upon the law---Arguments of the petitioner, if accepted, would mean that the Import Policy Order, 2013 could never be implemented---Constitutional petition was dismissed, in circumstances.

Black's Law Dictionary, Eighth Edition rel.

(b) Words and Phrases---

----"Revolving Letter of Credit"--- Meaning stated.

Black's Law Dictionary, Eighth Edition rel.

Mian Abdul Ghaffar, Khawaja Azhar Rasheed and Liaqat Ali for Petitioner.

Raja Khalid Mahmood Khan, Standing Counsel for Respondent No.1.

Raja Muhammad Iqbal for Respondent No.2.

Ms. Misbah Gulnar Sharif for Respondents Nos.3 and 4.

Qazi Ghulam Dastgir for Respondent No.5.

Dates of hearing: 26th March and 1st April, 2014.

2014 C L D 1185

[Islamabad]

Before Noor-ul-Haq N. Qureshi, J

AEROTRON (PRIVATE) LIMITED through Managing Director and 2 others---Petitioners

Versus

FEDERATION OF PAKISTAN through Principal Secretary to the Prime Minister (Chief Executive) and 9 others----Respondents

Writ Petitions Nos.2858, 2868 of 2012 and 2927 of 2013, decided on 27th November, 2013.

(a) Purchase Procedure and Instructions (Revised 2002)---

----Chapter III, para. 22---Constitution of Pakistan, Art.199--- Constitutional petition--- Locus standi---Principal and agent relationship---Petitioners were sole representatives for a foreign company dealing in helicopters---Respondents /Authorities wrote letters to foreign company informing that petitioners were security wise not clear for any interaction with Army and defence organizations, therefore, foreign company was asked to change its representatives---Validity---Petitioners though were performing as agents of their foreign principals but had no written or oral contract with respondents/ authorities and could not claim any violation on the part of respondents---Petitioners should have agitated against their principal who on the basis of correspondence of respondents/authorities discontinued agreement executed between them---Principals were not made party to proceedings nor any allegation was levelled against them---Petitioners did not seek relief against principals in accordance with law in view of certain terms and conditions of agreement executed in between them---When petitioners had no direct concern with respondents, they could not agitate their grievance against respondents and entire proceedings initiated were futile---When there was no agreement executed between petitioners and respondents, the provisions of law as envisaged by Purchase Procedure and Instructions or Public Procurement Rules, could not be enforced for agitating their rights as they claimed---Petition was dismissed in circumstances.

New Jubilee Insurance Company Ltd., Karachi v. National Bank of Pakistan, Karachi PLD 1999 SC 1126; Messrs Nizami Construction Company through Sole Proprietor v. Chief Executive Officer, Gujranwala Electricity Company (GEPCO) and 2 others 2005 CLC 366; Messrs United Woollen Mills Ltd. Workers' Union v. Messrs United Woollen Mills Ltd. 2010 SCMR 1475; Ashfaq Hussain v. Government of the Punjab and others 2011 PLC (C.S.) 799; Shahzada Zahir Shah and 6 others v. Muhammad Usman Ghani and 3 others 2005 YLR 1394; Messrs M.A. Aleem Khan through Chairman v. Province of the Punjab PLD 2006 Lah. 84; Atlas Cables (Pvt.) Ltd. v. Quetta Electric Supply Company Ltd. PLD 2011 Quetta 67; Shabbir Ahmed v. Kiran Khursheed and 8 others 2012 CLC 1236; The Federation of Pakistan, through the Secretary Establishment Division, Government of Pakistan v. Saeed Ahmed Khan and others PLD 1974 SC 151; Zaka Ullah Bajwa v. District Coordination Officer, Gujranwala and others 2004 PLC (C.S.) 332; Muhammad Mahmood Bawani v. Deputy Controller, Building Zone-B and others 2007 SCMR 1209; Secretary Revenue Division, CBR/Federal Board of Revenue Islamabad v. Gul Muhammad and others 2011 SCMR 295; Federation of Pakistan and others v. Mian Muhammad Nawaz Sharif and others PLD 2009 SC 644; unreported judgment dated 2-5-2011 passed by this Court in I.C.A No.85 of 2011 titled Mst. Mehboob Mehrbani and others v. Secretary, Ministry of Education Islamabad and others; Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881; Muhammad Abbasi v. S.H.O. Bharakahu and 7 others PLD 2010 SC 969; Lahore Conversation Society through President and 3 others v. Chief Minister of Punjab and another PLD 2011 Lah. 344; Syed Manzoor Hussain v. Tehsil Nazim, Tehsil Municipal Administration, Tehsil Sarai Alamgir, District Gujrat and 3 others PLD 2010 Lah. 101; BP Pakistan Exploration and Production INC, Karachi v. Additional Commissioner, Inland Revenue-B Enforcement and Collection Division-1, Karachi and another 2011 PTD 647; unreported judgment dated 26-9-2012 passed by this Court in Writ Petition No.3022 of 2012 titled Iftikhar Ahmed Abbasi v. Senior Superintendent of Police, Islamabad and others; Nagina Bibi and others v. Federal Directorate of Education and others PLJ 2013 Islamabad 33; Amjad Pervaiz v. Inspector-General Railway. Police, Lahore PLJ 2012 Lahore 259; Abdul Rahim Khan v. Managing Director PEPCO, WAPDA House Lahore and 2 others 2011 PLC (C.S.) 1551; Dr. Molazim Hussain Sumro, Medical Superintendent Tehsil Headquarter Hospital, District Bahawalpur v. Special Secretary Health 2011 PLC (C.S.) 1209; Shagufta Begum v. The Income Tax Officer, Circle XI, Zone B, Lahore PLD 1989 SC 360; Niaz Ali and others v. Federation of Pakistan and others 2004 MLD 460 and Dr. Raja Muhammad Kamran v. Shaheer Constructions through Rao Naveed Aftab (Partner) and 3 others (2013 MLD 118 ref.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Show cause notice---Scope---Issuance of show-cause notice cannot be called in question unless the same yielded some results when a real cause of action accrued to petitioner.

Sikandar Bashir Mohamand, Mustafa Aftab Sherpao and Hamid Ahmad for Petitioners.

Sana Ullah Zahid, D.A.-G.

Tariq Mehmood Jehangiri for Respondents Nos.6, 7, 8 and 9 (in Writ Petition No.2858 of 2013), for Respondents Nos.5, 7 to 9 (in Writ Petition No.2868 of 2012) and for Respondents Nos.6 to 11 (in Writ Petition No.2927 of 2013).

Major M. Sajjad Baig, Assistant Director Legal, Directorate General Procurement (Army).

Dates of hearing: 29th April and 6th November, 2013.

2014 C L D 1

[Sindh]

Before Nadeem Akhtar, J

YAWAR FARUQUI---Plaintiff

Versus

Messrs STANDARD CHARTERED BANK LTD. and another---Defendants

Banking Suit No.B-26 of 2007, decided on 30th September, 2013.

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

----S. 9---BSD Circular No.16 of 2004 dated 6-11-2004 issued by State Bank pertaining to "Reporting To Credit Bureaus"---Duty of State Bank and financial institution---Scope---Financial institution would be bound to ensure meticulous compliance of directions contained in such Circular as directions (ii) & (iii) thereof were mandatory in nature on account of use of word "shall" therein---­Duty of State Bank would be to ensure and verify as to whether advice/information given by financial institution was correct or not, and whether financial institution had made meticulous compliance of such Circular or not.

(b) Banker and customer---

----Credit Card and cheque---Duties and liabilities of financial institution and merchant stated.

All credit cards bear a specimen signature of the card holder. This is because of security reasons to enable the merchant to compare and verify the card holder's signature when the credit is presented to the merchant for swiping the same for clearance of payment of the transaction at the time of the transaction.

By issuing credit card, the financial institution allows the customer to enjoy/use the facility through merchants all over the world upto the limit sanctioned to him. Under the banking practice, there is an agreement between the financial institution and the merchant, whereby the merchant agrees to honour payments on behalf of the financial institution, and in consideration of such services, the financial institution agrees to pay a fixed commission to the merchant on every transaction. The interest of both the parties and the risk of fraudulent transactions are duly secured through insurance. The merchant acts on behalf of the financial institution as he accepts and honours the payments of transactions carried out through him. Thus, it is the duty of the merchant to compare and verify the card holder's signature when the credit card is presented to him for swiping and clearance at the time of the transaction. If the merchant fails or neglects in discharging his said duty, the liability of the transaction would fall on the financial institution. The principle is the same as that of a cheque, this is, when a cheque is presented to a banker, it is the primary and foremost duty of the banker to compare and verify the signature appearing on the cheque with that in his record. If the cheque is honoured by the banker, despite discrepancy in the signature, the banker shall be solely responsible for the consequences, and not only the account holder/customer shall not be held liable, but the banker shall also be liable to reimburse the amount debited from his account through such cheque.

The Official Assignee of the High Court of West Pakistan and others v. The Lloyds Bank Ltd., Karachi and others PLD 1969 SC 301 rel.

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

----Art. 133---Fact deposed by witness in examination-in-chief not questioned in cross-examination by his opponent party--- Effect--- Such fact would be presumed/deemed to have been admitted by opponent party.

(d) Tort---

----Defamation suit--- Damages, quantum of---Determination---Factors requiring consideration stated.

While determining quantum of damages, the background, social status, position, life expectancy and the nature of the damage caused to plaintiff must be kept in mind.

The loss arising out of injury to reputation of a person cannot be compensated in terms of money.

Islamic Republic of Pakistan through Secretary, Ministry of Railways and others v. Abdul Wahid and others 2011 SCMR 1836; Municipal Corporation of Delhi v. Association of Victims of Uphaar Tragedy and others 2012 SCMR 1549; Muhammad Malik v. Fazal Karim and another 1999 MLD 935; Muhammad Ibrahim and others v. Sui Northern Gas Corporation and others PLD 2012 Pesh. 132; Nasreen Firdous v. Tanweer Kishwar Siddiqui and 5 others 1991 CLC 907; Messrs Habib Bank Ltd. v. Messrs Publix Industries Ltd. 1991 CLC 1907; Chief Administrator Auqaf, Hyderabad v. Ghulam Shabbir Shah alias Dini Ali Shah 1992 CLC 1263 and Messrs Pak Suzuki Motor Co. Ltd. v. Muhammad Jumshad Saeed 2009 CLD 503 ref.

Abdul Majeed Khan v. Tawseen Abdul Haleem and others 2012 CLD 6 rel.

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

----O. VII, R.1(g)---Relief against one of defendants not claimed in plaint---Effect---Court declined to pass decree against such defendant.

Plaintiff in person.

Neel Keshav for Defendant No.1.

Defendant No.2 called absent.

Dates of hearing: 7th December, 2012, 20th May and 5th August, 2013.

2014 C L D 52

[Sindh]

Before Nazar Akbar, J

SULEMAN LALANI---Plaintiff

Versus

AL-ABBASS SUGAR MILLS LTD. through Chief Executive and 9 others---Defendants

Suit No. 281 of 2013, decided on 24th September, 2013.

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

----Ss. 3 & 29---Companies Ordinance (XLVII of 1984), S.263---Powers of court and Security Exchange Commission to interfere in internal management of a corporate entity---Scope---Court would not interfere in internal management of companies, if they were working within parameters of law--- Commission could conduct investigation of affairs of company in exercise of its suo motu powers under S. 29 of Securities and Exchange Commission of Pakistan Act, 1997 or on application by members of company under S. 263 of Companies Ordinance, 1984---Failure of Commission to exercise its powers by invoking relevant enabling provisions to protect interest of minority shareholders in a company would frustrate very basis of its establishment.

Farid Sons Ltd. v. The Karachi Cotton Association Ltd. PLD 1956 Kar. 315; Parvez Aslam Mian Muhammad Aslam v. Synthetic Chemical Co. Ltd. Karachi and another PLD 1980 Kar. 401 and Messrs Port Services (Private) Limited v. Pakistan through Secretary, Ministry of Communications, Government of Pakistan, Islamabad and others PLD 1995 Kar. 374 rel.

Ziaul Haq Makhdoom and Muhammad Ahmer for Plaintiff.

Sajid Zahid and Safdar Mehmood for Defendant No.1.

Munawar Hussain holding brief for Dr. Muhammad Farogh Naseem for Defendants Nos.2 to 5.

Nemo for Defendants Nos.6 to 10.

2014 C L D 132

[Sindh]

Before Nadeem Akhtar, J

ENGRO FERTILIZERS LIMITED---Plaintiff

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Industries, Government of Pakistan, Islamabad---Respondent

Suit No.684 of 2003, decided on 21st October, 2013.

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

----Ss. 17 & 30---Award challenged partially---Effect---Undisputed portion of award would be liable to be made rule of court straightaway, while objections regarding its disputed portion could be heard and decided according to law.

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

----S. 30---Application for setting aside of award---Duty of applicant stated.

The applicant is required to first point out/show the efforts from the award itself, as the court cannot first look into the material used by the Arbitrator and then compare it with the reasoning given in the award in order to discover the error in the award. If applicant succeeds in pointing out/showing such an error from the award itself, the burden will have still be on the applicant to show that the findings of Arbitrator are contrary to the evidence produced before him. The applicant is also required to show that the error of law or fact in relation to the proceedings or the award is floating on the surface, which cannot be ignored, and if it is left outstanding, it shall cause grave injustice or it shall violate any express provision of law or the law laid down by the Superior Courts.

President of Islamic Republic of Pakistan v. Syed Tasneem Hussain Naqvi and others 2004 SCMR 590; Muhammad Ramzan v. Additional District Judge, Multan and others 2005 SCMR 1542; Federation of Pakistan through Secretary, Ministry of Food, Islamabad and others v. Messrs Joint Venture Kocks K.G./RIST, PLD 2011 SC 506; Mian Corporation through Managing Partner v. Messrs Lever Brothers of Pakistan Ltd. through General States Manager, Karachi PLD 2006 SC 169; Ashfaq Ali Qureshi v. Municipal Corporation, Multan and another 1984 SCMR 597; S. G. Rayon Mills (Pvt.) Limited v. Fida Hussain and Associates 2002 CLC 353; Al-Abdullah Constructors (Pvt.) Ltd. v. Pakistan Water and Power Development Authority through Chief Engineer 2008 CLC 798; Friends Corporation v. Airport Development Agency and another 1997 CLC 626; Messrs Abdullah Traders through Partner Mukhtar Ahmed v. Trading Corporation of Pakistan Ltd. through Chairman, Attorney, Principal Officer and 2 ohers 1999 CLC 2047; Messrs Joint Venture KG/RIST through D. P. Giesler G.M., Bongard Strasse 3,4000, Dusseldorf-30, Federal Republic of Germany, C/o 15 Shah Charagh Chambers, Lahore and 2 others PLD 1996 SC 108; Trustees of the Port of Karachi v. Messrs Iftikhar Brothers 1993 CLC 1491; Messrs Gandhara Consultants (Pvt.) Ltd. v. Pakistan Defence Officer's Housing Authority, Karachi 2010 CLC 506; Razo (Pvt.) Ltd. v. Pakistan Steeel Mills Corporation (Pvt.) Ltd. 2009 MLD 1399; Ghee Corporation of Pakistan Ltd. and others v. Multan Chemicals Ltd. and others 2000 YLR 253; Messrs Waseem Construction Co. v. Government of Sindh and others PLD 1987 Kar. 575; Messrs Ibad and Co. v. Province of Sindh through Secretary to the Government Communication and Works Department and 2 others PLD 1980 Kar. 207; Haji Abdul Hameed and Co. v. Insurance Company of North America and others 1999 YLR 1213; Rais Chiragh-ud-Din v. Muhammad Aslam 2001 YLR 2162; Saifullah Khan and others v. Karachi Customs Agents Association and others 2011 YLR 202; Civil Aviation Authority, Quaid-e-Azam International Airport, Karachi v. AER Rainta International Pakistan (Pvt.) Ltd., Karachi 2003 YLR 1523; Chairman, WAPDA and another v. Messrs Syed Bhais (Pvt.) Ltd. and another 2011 CLC 841 and The Federation of Pakistan, Chamber of Commerce and Industry, Karachi v. Messrs Al-Farooq Builders 2001 MLD 99 ref.

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

----S. 30--- Award, setting aside of--- Scope--- Findings given by Arbitrator on merits could not be challenged by applicant or interfered with by court---Well reasoned findings of Arbitrator would not call for interference by Court---Court while deciding objections could neither act as a court of appeal nor reappraise evidence.

Rashid Anwar for Plaintiff.

Mrs. Tabassum Ghazanfar, Standing Counsel.

Dates of hearing: 20th December, 2012 and 14th October, 2013.

2014 C L D 160

[Sindh]

Before Aqeel Ahmad Abbasi and Muhammad Junaid Ghaffar, JJ

Messrs BANK ALFALAH LIMITED---Petitioner

Versus

The PRESIDING OFFICER and another---Respondents

Constitutional Petition No.D-3171 of 2012, decided on 18th September, 2013.

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

----Ss. 9 & 10--- Constitution of Pakistan, Art. 199---Constitutional petition---Suit for recovery of outstanding finance---Application for grant of leave to defend suit---Order of Banking Court granting unconditional leave to defendant---Validity---Various entries in statement of accounts reflected charging of mark-up over mark-up and other alleged unauthorized charges, which required to be explained---Statement of accounts and plaint did not corroborate each other---Validity of documents filed along with replication could not be determined without evidence as defendant had no opportunity to rebut the same---Statement of accounts and plaint signed by Recovery Officer were yet to be verified---Break-up given in the plaint and statement of accounts contained illegal charging from defendant a fine imposed by State Bank on plaintiff-Bank---Banking Court had granted unconditional leave after considering all such grounds raised in leave application and contents of plaint and documents annexed thereto---Defendant had raised substantial questions of law and facts requiring determination on basis of evidence to be led by parties---Banking Court had exercised its discretion for valid reasons---Plaintiff had not alleged any mala fide---Impugned order did not suffer from any jurisdictional error or illegality---Defendant in order to secure interest of plaintiff-Bank had furnished sufficient security towards financial liability--- No prejudice had been caused to plaintiff by impugned order---High Court dismissed constitutional petition in circumstances.

Messrs Baghpotee Services Pvt. Ltd. v. Allied Bank of Pakistan Ltd. 2001 CLC 1363 ref.

(b) Constitution of Pakistan---

----Art. 199---Discretionary order passed by Court/ Tribunal/Authority--- Interference in such order by High Court in exercise of constitutional jurisdiction---Scope stated.

The discretion vested in the Court, Tribunal or Authority, if exercised in accordance with law and not tainted with malice or based on misreading or non-reading of evidence and material available on record, cannot be interfered by High Court in its constitutional jurisdiction under Article 199 of the Constitution.

Abdul Shakoor for Petitioner.

Hamid Idrees for Respondents.

Date of hearing: 18th September, 2013.

2014 C L D 222

[Sindh]

Before Sajjad Ali Shah and Aqeel Ahmed Abbasi, JJ

SALIM GODIL and others---Petitioners

Versus

PROVINCE OF SINDH through Secretary and others---Respondents

Constitutional Petitions Nos.D-1272, D-1970 and D-3410 of 2010, decided on 24th October, 2013.

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

----Ss. 2(xxxv), 12 & 33, Schedules I & II---Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Regln. 5---Constitution of Pakistan, Art.199--- Constitutional petition--- Environmental assessment--- Commercialization---Withdrawal of permission---Security risk---Proof---Petitioners intended to raise commercial cum residential building on a commercial plot but District authorities withdrew the status of plot as commercial on the plea that it was security risk as a Jamat Khana (religious building) was in its vicinity---Validity---Withdrawal of commercialization status of plot on the ground that construction which would be raised on such plot would be a "security risk" did not fall within the domain of District authorities---Building approval was an act subsequent to and independent of the status of the plot---Declaration of District authorities to such effect could not sustain unless it had statutory backing such as in the cases of key point installations all those structures, installations, factories or other establishments which were of vital importance to country in its readiness and ability to fight a war and the event of whose destruction or severe damage, the loss would impair vital national war effort---Provincial Government or Central Government had the prerogative to prohibit construction within a specified parameters for the safety of such construction/installation---Environmental Impact Studies presupposed planning and zoning---Once planning and zoning had taken place or changed then such entry could not be applied against the proponent of a project which had undertaken construction or installation in consonance to such change---Pakistan Environmental Protection Agency could require such proponent to file Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA) by invoking any specific entry in either of the Schedules---Order passed by District Authorities to the extent of withdrawing commercial status of plot in question on the ground of being "security risk" to Jamat Khana (religious building) was mala fide and without jurisdiction and was set aside---Petition was allowed accordingly.

Nighat Jamal v. CDGK 2010 YLR 2624; Ardeshir Cowasjee and others v. Karachi Building Control Authority and others PLD 2006 Kar. 63; Mrs. Farida and others v. New Allied Electronics Industries (Pvt.) Ltd. 2009 YLR 1896; Shehri C.B.E. v. Government of Pakistan PLD 2007 Kar. 293; Amin v. Navaid Hussain 2008 SCMR 133; Zaheer Ahmed Chaudhry v. City District Government Karachi 2006 YLR 2537; Shamsul Arfin v. Karachi Building Control Authority PLD 2007 Kar. 498; Ummatullah v. Province of Sindh PLD 2010 Kar. 236; Irfan v. Karachi Building Control Authority 2005 CLC 694; Muhammad Azhar Khan v. Assistant Commissioner/Collector Toba Tek Singh 2006 SCMR 778; The Murree Brewery Co. Ltd. v. Pakistan through the Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279 and Jawad Mir Mohammadi v. Haroon Mirza PLD 2007 SC 472 ref.

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

----Ss. 2(xxxv), 12 & 33, Schedules I & II---Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Regln. 5---Environmental Protection Agency---Powers---Environmental Impact Assessment---Scope---Power under Regulation 5(2) of Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, or Entry J to Schedule-II to Pakistan Environmental Protection Act, 1997, can only be exercised by the Agency when it comes to the conclusion that a particular project though has not been categorized in any of the Schedules annexed to Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, but still is likely to cause an adverse environmental impact and a recommendation to that effect has been made in writing by Environmental Assessment Advisory Committee, then the proponent of a project upon detailing the reasons can be directed to file Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA).

Abid S. Zuberi for Petitioner (in Constitutional Petition No.D-1272 of 2010).

Sher Muhammad K. Sheikh, Additional AG for Respondents Nos. 1, 6 and 7 (in Constitutional Petition No.D-1272 of 2010).

Manzoor Ahmed and Mrs. Azra Moqueem for Respondents Nos. 2 and 3 (in Constitutional Petition No.D-1272 of 2010).

M. Naim-ur-Rahman and Abdur Rahman for Respondents Nos. 8 to 25 (in Constitutional Petition No.D-1272 of 2010).

Nemo for Respondents (in Constitutional Petition No.D-1272 of 2010).

Khalid Jawed Khan for Petitioners (in Constitutional Petition No.D-1970 of 2010).

Shafi Muhammad Memon, Additional AG for Respondent No.1 (in Constitutional Petition No.D-1970 of 2010).

Obaid-ur-Rehman Khan for Respondent No.2 (in Constitutional Petition No.D-1970 of 2010).

Manzoor Ahmed and Mrs. Azra Moqueem for Respondents Nos. 3 and 4 (in Constitutional Petition No.D-1970 of 2010).

Habib-ur-Rehman Solangi for Respondent No.6. (in Constitutional Petition No.D-1970 of 2010).

Nemo for Respondent No.5 (in Constitutional Petition No.D-1970 of 2010).

Khawaja Shams-ul-Islam for Petitioner (in Constitutional Petition No.D-3410 of 2010).

Sher Muhammad K. Sheikh, Additional AG for Respondent No.1 (in Constitutional Petition No.D-3410 of 2010).

Habib-ur-Rehman Solangi for Respondents Nos.2 and 3 (in Constitutional

Petition No.D-3410 of 2010).

M. Naim-ur-Rahman and Abdur Rahman for Respondents Nos.4 to 8 (in Constitutional Petition No.D-3410 of 2010).

Dates of hearing: 13th, 23rd February, 1st March, 30th July, of 2012, 25th, 26th, 27 and 28th February, 2013.

2014 C L D 292

[Sindh]

Before Aqeel Ahmed Abbasi and Farooq Ali Channa, JJ

FIRST DAWOOD INVESTMENT BANK LIMITED---Appellant

Versus

HOUSE BUILDING FINANCE CORPORATION LIMITED---Respondent

Spl. H.C.A. No. 79 of 2011, decided on 21st August, 2013.

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

----Ss. 2(a), 2(c), 7 & 10---Suit for recovery---"Financial Institution"--- Definition--- "Customer", definition of---Scope----"Finance" and "investment", distinction---Jurisdiction of Banking Court---Application for leave to defend was dismissed and suit was decreed ---- Contention of the defendant was that the amount disbursed by the plaintiff House Building Finance Corporation in its favour was not a "finance facility" as the plaintiff House Building Finance Corporation was not competent to lend money according to its mandate and said disbursement was in fact an investment made by the plaintiff in the business of the defendant and therefore no relationship of "customer" and "financial institution" existed between the parties, hence the suit was not maintainable---Held, that issuance of letter by the defendant to the plaintiff accepting terms of borrowing and disbursement, amounted to sanction of a finance facility covered under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Burden of proof as to whether disbursement was merely an investment and not a finance facility, rested upon the defendant, who could not discharge the same---Defendant in its documents had itself shown the amount as borrowing from a financial institution, and therefore, transaction in the present case was between a "customer" and a "financial institution"---Word "investment" in common parlance meant an expenditure to acquire property or assets to produce revenue or to contribute capital in the business carried by someone on profit or loss; whereas in the present case no such expenditure had been made by the plaintiff to acquire any asset/property; therefore such disbursement could not be termed as an "investment"---Impugned order of Banking Court could not be interfered with---Appeal was dismissed, in circumstances.

Karachi Electric Provident Fund v. National Investment (UNIT) Trust and others 2003 CLD 1026; National Bank of Pakistan v. S.G. Fibre Limited and others 2004 CLD 689; Messrs Speedway Fondmetall Pakistan Ltd. v. NIB Bank Ltd. (Formerly PICIC) 2010 CLD 896 and Messrs Fancy Manufactures Limited and another v. Equity Participation Fund 2004 CLD 444 ref.

Advanced Law Lexicon, 3rd Edition (Extensively Revised and Enlarged) Volume 3, J-P 2005 and Black's Law Dictionary (8th Edition) rel.

(b) Words and Phrases---

----"Loan"---Meaning.

Advanced Law Lexicon, 3rd Edition (Extensively Revised and Enlarged) Volume 3, J-P 2005 rel.

(c) Words and Phrases---

----"Finance", meaning of---Finance is defined as aspect of business concerned with the management of money, credit, banking and investments---Word "investment" in common parlance meant an expenditure to acquire property or assets to produce revenue or to contribute capital in the business carried by someone on profit or loss.

Black's Law Dictionary (8th Edition) rel.

Muhammad Ali Lashari for Appellant.

Ijaz Ahmed for Respondent.

Date of hearing: 21st August, 2013.

2014 C L D 304

[Sindh]

Before Sajjad Ali Shah and Aziz-ur-Rahman, JJ

KAMRAN and another---Appellants

Versus

ZONAL MANAGER and another---Respondents

Ist Appeal No.25 of 2011, decided on 12th September, 2013.

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

----S. 15---Civil Procedure Code (V of 1908), O.XXI, R.66---Sale by auction---Scope---Appellants claimed to be owners in possession of suit property having purchased on 24-9-1997---Appellants assailed auction proceedings on the plea that no notice under S.15(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was given to them and it was in violation of mandatory provision of law---Validity---Auction proceedings were not conducted transparently and it was conducted in a fraudulent and in collusive manner 'ex-facie' to extend favour to auction purchaser---No auction was conducted on site and neither names nor number of participants in auction proceedings had been disclosed---Non-mentioning of 'reserve price' and auction of suit property at throw-away price much below the 'Forced Sale Value' and non-deposit of bid amount strictly in accordance with law and or terms and conditions of public auction, rendered sale of suit property in favour of auction purchaser, as fake and nullity in law---Violations of Ss.15(3) & (10) of Financial Institutions (Recovery of Finances) Ordinance, 2001, so also non-compliance/violation of mandatory terms and conditions of public auction made the auction proceedings violative of law and terms and conditions of public auction and sale of suit property at a price much below the Forced Sale Value were not sustainable in law---High Court declared the auction proceedings as null and void and set aside the same---Appeal was allowed in circumstances.

Nizamuddin and Company v. The Bank of Khyber 2003 CLD 914; Noor Badshah v. House Building Finance Corporation PLD 2006 Lah. 771 and Mst. Nadia Malik v. Messrs Makki Chemical Industries Pvt. Ltd. through Chief Executive 2011 SCMR 1675 ref.

Muhammad Ishtiaque Khan for Appellants.

Abdul Rasheed Shaikh for Respondent No.1.

Riazuddin Qureshi for Respondent No.2.

Date of hearing: 21st August, 2013.

2014 C L D 337

[Sindh]

Before Munib Akhtar, J

LAKHRA POWER GENERATION COMPANY LIMITED (LPGCL)---Plaintiff

Versus

KARADENIZ POWERSHIP KAYA BEY through Master of the Vessel and 4 others---Defendants

Admiralty Suit No.7 of 2013, decided on 23rd December, 2013.

(a) Words and Phrases---

----"Powership", meaning of.

A powership (or power ship) is a special purpose marine vessel, on which a power plant is installed to serve as a power generation resource. It is an existing ship that has been modified for power generation, a marine vessel, on which a power plant is installed to serve as a power generation resource. Converted from existing ships, powerships are self-propelled, ready to go infrastructure for developing countries that plug into national grids where required. Unmotorised powerships, known as power barges, are simply conventional power plants installed on a deck barge. These are sometimes called "floating power plants" or "barge mounted power plants".

Wikipedia rel.

(b) Bilateral Investment Treaty ("BIT")---

----Nature and scope stated.

Almost all States have entered into bilateral investment treaties (known as "BITs"). As its name implies, a BIT is a bilateral treaty concerned with investments made in each State by nationals of the other. It is estimated that there are several thousand BITs in force all over the world. Pakistan is also a party to several BITs and has had long familiarity with this type of international agreement. Indeed, it appears that the very first BIT ever signed was that between Pakistan and Germany in 1959. Although each BIT is, in the end, a treaty between two States and must be interpreted and applied as such, BITs tend to follow a certain common format and share many features. For present purposes, two may be noted. Firstly, a BIT invariably contains a definition of "investment", and this tends to be stated quite broadly. Secondly, a BIT provides for a mechanism for resolving disputes between an investor from one State and the other State, in which the investment has been made. Although the dispute resolution clauses vary greatly, they do tend to provide (usually as part of a menu of options) for arbitration under the ICSID (International Centre for Settlement of Investment Disputes) Convention.

(c) International Arbitration---

----Convention On The Settlement Of Investment Disputes Between States and Nationals of other States ("ICSID Convention"), Arts. 25, 26, 27 & 36---International Centre For Settlement of Investment Disputes ("ICSID")---Bilateral Investment Treaties ("BITs")--- Investor-State disputes---Standard Practice for dispute resolution, stated.

Settled international practice appears to be that if a State is a member of the ICSID Convention and is party to a BIT that provides for arbitration in terms thereof, that constitutes an open or standing "offer" by the State, and consent to ICSID arbitration. In such circumstances, an investor from the other State (which State must also, of course, be party to the Convention) can "accept" such "offer" and take any dispute relating to investment under the BIT to arbitration under the ICSID Convention by making an appropriate request in terms of Article 36. This fulfills the requirement of "consent in writing" by the investor in terms of Article 25, and sets the ICSID arbitration in motion. The question whether the dispute relates to "investment" is to be determined by considering the ICSID Convention along with the definition contained in the BIT. It is to be emphasized that the foregoing is only a general description and much depends on a number of factors, including (but certainly not limited to) the exact terms of the BIT as well as any objections by way of maintainability or jurisdiction as may be available to the respondent State. Such international practice has been reiterated by tribunals in ICSID arbitration proceedings.

El Paso v. Argentina rel.

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

----S. 3(2)(h)---Senior Courts Act, 1981 (United Kingdom), S.20(2)(h)---Scope of exercise of admiralty jurisdiction of High Court---Interpretation of S.3(2)(h) of the Admiralty Jurisdiction of High Courts Ordinance, 1980---Claims arising out of "any agreement relating to the carriage of goods in a ship or to the user or hire of a ship"---Scope---Section 3(2)(h) of the Admiralty Jurisdiction of High Courts Ordinance, 1980 was to be applied broadly---Admiralty Jurisdiction of High Courts Ordinance, 1980 was based on an equivalent English legislation, the Senior Courts Act, 1981 which was similarly worded and was also to be broadly construed---Words "agreement relating to use or hire of a ship" were not to be given a restricted meaning and said clause was also broad enough to include a claim in tort in appropriate circumstances.

Halsbury's Laws of England, 4th Ed. (Reissue), 2001, Vol 1(1), para 321; The Antonis P Lemos [1985] 1 All ER 695; Compagnie Continentale (France) SA v. Pakistan National Shipping Corporation and others 1994 MLD 2178 and Metal Construction of Greece SA v. Owners of the vessel mv Lady Rea 2013 CLD 1829 rel.

(e) Contract---

----Interpretation of contract---Business sense/context of the contract as an aid to interpretation of the contract---Business sense of the contract was a permissible aid to the interpretation of contracts---In addition to the words of the instrument, and the particular facts proved by evidence admitted in aid of interpretation, the court may also be assisted by a consideration of the commercial purpose of the contract, and in considering such purpose, it may rely upon its own experience of contracts of a similar character to that under examination, however a court must be cautious before concluding that a particular interpretation does not accord with commercial common sense.

The Interpretation of Contracts by Kim Lewison, 5th ed., 2011, pg. 42 rel.

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

----S. 3(2)(h)---Contract Act (IX of 1872) S. 65---Obligation of person who has received advantage under void agreement or contract that becomes void---Contract for use or hire of powerships was declared as void ab initio by the Supreme Court---Effect---Exercise of admiralty jurisdiction of High Court to a suit relating to such a contract---Scope---Section 65 of the Contract Act, 1872 applied to a situation where the agreement was void at inception--- Declaration that the contract was void ab initio and in consequence was to be rescinded was tantamount to it being "discovered to be void" within the meaning of S.65 of the Contract Act, 1872---Plaintiff's claim must therefore be regarded as being in terms of S.65 of the Contract Act, 1872 and such claim would be for restoration by the defendant of the advantage received by it "under such agreement", that was, an agreement discovered to be void, or to make compensation for having received such advantage---Section 3(2)(h) of the Admiralty Jurisdiction of High Courts Ordinance, 1980 was broad enough to support a claim arising in circumstances to which S.65 of the Contract Act, 1872 was applicable---An "agreement" to which S.3(2)(h) of the Ordinance could apply was not limited to one enforceable by law; as used therein, and this term referred to both "agreements" and "contracts" and term could therefore also mean an agreement discovered to be void---Claim in terms of S.3(2)(h) of the Ordinance could thus be in relation to an agreement which was void ab initio---Plaintiff's claim in the present case, under S.65 of the Contract Act, 1872, for restoration by defendant of the advantage it obtained under the contract, which was void ab initio or to make compensation for having received such advantage, would be a claim within the scope of S.3(2)(h) of the Admiralty Jurisdiction of High Courts Ordinance, 1980---Notwithstanding that the contract was void ab initio, the matter would nonetheless fall within the admiralty jurisdiction of the High Court.

The Antonis P Lemos [1985] 1 All ER 695; Thakurain Harnath Kuar v. Thakur Indar Bahadur Singh AIR 1922 PC 403; Khan Muhammad v. Abdul Wakeel Khan and others 2012 CLC 324; Muhammad Sabir v. Muhammad Khalid Naeem Cheema and others 2010 CLC 1879; Hyderabad Municipal Committee v. Jaweed Murtaza Khan 1986 MLD 1410 and Ali Murtaza v. Karachi Metropolitan Corporation 1985 CLC 1730 rel.

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

----S. 3(2)(h)---Contract Act (IX of 1872) S. 65---Contracts which were void ab initio---Exercise of Admiralty Jurisdiction of High Court over such contracts---Section 3(2)(h) of the Admiralty Jurisdiction of High Courts Ordinance, 1980 was broad enough to support a claim arising in circumstances to which S.65 of the Contract Act, 1872 was applicable.

(h) Words and Phrases---

----Phrase, "subject to all just expressions", meaning and connotation---Meaning of the phrase "subject to all just exceptions" was that the order which contains said expression, would be effective unless and until the other party who would be effected by such an order took exception to it and raised objections which were ultimately upheld to be just and valid.

Ghulam Muhammad v. Irshad Ahmad PLD 1982 SC 282 rel.

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

----S. 65--- Obligation of person who has received advantage under void agreement or contract that becomes void---Object and scope of S.65---Object of S.65 of the Contract Act, 1872 was to restore the advantages obtained by both parties to each other---Section 65 of the Contract Act, 1872 did not work in one direction only and if one party to the contract was asked to disgorge the advantage received by him under a void contract so too the other party to the void contract may ask him to restore the advantage received by him---Restoration of such advantage and the payment of compensation had necessarily to be mutual.

State of Rajasthan v. Associated Stone Industries (Kotah) Ltd. AIR 1985 SC 466 and Govindram Seksaria v. Edward Radbone AIR 1948 PC 56 rel.

(j) Arbitration---

----Doctrine of seperatability of arbitration clause from the main agreement/contract---Autonomy of arbitration clause in an agreement/contract---Scope---Survival of arbitration agreement/clause if main contract is declared invalid or void ab initio---Principles---Investor-State dispute---Main contract for rental power was declared void ab initio by the Supreme Court---Effect---Question before the High Court was whether the arbitration clause of said contract, which had been declared void ab initio, was distinct and separate from the main contract---Held, principle that an arbitration agreement was distinct and separable from the main contract was "part of the very alphabet of arbitration law"---Said doctrine of separability could apply to save the arbitration agreement even where the main contract was void ab initio and not merely voidable---Supreme Court, in the present case, was concerned with the main contracts and not with any arbitration clause embedded therein as part of the dispute resolution mechanism; and thus, what was declared void ab initio by it and ordered to be rescinded, was the main contract and not any arbitration agreements therein--- Additional directions were given by the Supreme Court for the relevant amounts to be recovered through "civil action" and not only by recourse to criminal law---Arbitration proceedings were of course in the nature of "civil action"---Arbitration agreement between the plaintiff and defendant, in the present case, was therefore, distinct and separable from the main contract, and survived the latter being declared void ab initio by the Supreme Court.

Lesotho Highlands Development Authority (Respondents) v. Impregilo SpA and others [2005] 3 All ER 789 and Harbour Assurance Co (UK) Ltd v. Kansa General International Insurance Co Ltd [1993] 3 All ER 897 rel.

(k) Arbitration---

----Arbitration agreement "incapable of being performed"---Meaning and scope---Expression 'incapable of being performed' referred to practical aspects of the prospective arbitration proceedings.

New York Convention: Commentary by Dr. Reinmar Wolff (ed.), 2012 rel.

(l) Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011)---

----S. 4---Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 ("New York Convention")---Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965---International Centre for Settlement of Investment Disputes (ICSID)---Admiralty suit--- International Arbitration--- Enforcement of arbitration agreement--- Investor-state dispute---Arbitration agreement incapable of being performed---Stay of arbitration proceedings in presence of an arbitration agreement--- Application for stay of proceedings in an admiralty suit was filed by the defendant under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Contention of the defendant was that in the light of arbitration agreement between the parties, the proceedings of the suit could be stayed in terms of S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Held, that arbitration agreement, in the present case, was incapable of being performed for the reason that the defendant had already initiated proceedings at the ICSID and it had therefore, itself created a situation where recourse to the arbitration clause between the parties would not be possible or feasible and therefore, the arbitration agreement was incapable of being performed---Present suit, therefore could not and ought not to be stayed under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011; however, there appeared to be nothing in the New York Convention to suggest that the reason why the arbitration agreement was incapable of being performed must be of a permanent or irremediable nature and may well be temporary or remediable---High Court observed that if the reason or situation rendering the arbitration agreement incapable of being performed existed when the application for stay of proceedings under S.4 came up for hearing before the court, then such application was to be dismissed, but if subsequently the situation changed and the reason ceases to exist (e.g., the impediment was removed), no reason existed why the defendant could not renew the application if the proceedings were still pending---In the present case, if the ICSID proceedings failed or were abandoned, then defendant would be able to renew its application under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---High Court further observed, however, that any such application, if filed, would be dealt with on its own merits and subject to the rights of the plaintiff and in the light of the circumstances then prevailing---Application for stay of proceedings of the Admiralty Suit, was dismissed, accordingly.

New York Convention: Commentary by Dr. Reinmar Wolff (ed.), 2012; SGS v. Pakistan ICSID Case No.ARB/01/13; SGS Societe Generale v. Pakistan 2002 CLD 790 and Societe Generale De Surveillance S.A. v. Pakistan 2002 SCMR 1694 (reproduced at 8 ICSID Reports 356) rel.

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

----Ss. 4 & 5---Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, S.4---Exercise of Admiralty jurisdiction of High Court---Arrest of vessels---Arbitration agreement between the parties---Stay of proceedings in light of arbitration agreement---Question before the High Court was as to whether in presence of an arbitration agreement between the plaintiff and the person liable in personam (whether or not a defendant), could in rem jurisdiction be exercised to arrest a ship in respect of which an action would otherwise lie in admiralty jurisdiction---Held, that even if a defendant's application for stay of proceedings of the admiralty suit was allowed, High Court still would have the discretionary jurisdiction to order the arrest of a vessel or the providing of security for their conditional release---Principles stated.

J.S. Ocean Liner LLC v. mv Golden Progress (decided on 25-1-2007 and noted at AIR 2007 NOC 1376 (Bom.) rel.

(n) Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011)---

----Ss. 4 & 3---Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965 ("ICSID Convention"), Arts. 47, 53 & 54---International Centre for Settlement of Investment Disputes (ICSID)---Nature of provisional measures under Art.47 of the ICSID Convention---Extent to which provisional measures recommended by the ICSID Tribunals could affect judicial proceedings in the domestic courts of a host State---Nature of legal obligation imposed when provisional measures were recommended by ICSID Tribunals---State responsibility---Giving effect to provisional measures in domestic courts---Scope and nature elaborated.

Tokio Tokeles v. Ukraine; ETI Euro Telecom International NV v. Republic of Bolivia and another [2008] EWCA Civ 880, [2008] 2 Lloyd's Rep 421 and Christoph H. Schreuer, et. al., The ICSID Convention: A Commentary, 2nd ed., 2009, pp. 212-3 rel.

(o) Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011)---

----Ss. 4 & 3---Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965 ("ICSID Convention"), Art. 47---International Centre for Settlement of Investment Disputes (ICSID)---Investor-state disputes---Nature of provisional measures made under Art.47 of the ICSID Convention---Provisional measures recommended by an ICSID tribunal, though undeniably a "legal obligation" of the State are not, and ought not to be regarded as, an "international obligation".

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

----S. 4--- Order for arrest of a ship/vessel---Arrest of a ship/vessel in the exercise of admiralty jurisdiction of the High Court was at the discretion of the Court and if such an order had been made, it was not for the plaintiff to claim, as of right, for its modification by way of temporary suspension or otherwise--- Plaintiff, may of course, at any time withdraw its application altogether--- High Court observed that it would be contrary to settled principles for party to apply for and be granted discretionary relief, and for that party to then come forward and seek "suspension" and "restoration" of such relief at its own will or to serve some collateral purpose, howsoever, pressing.

(q) Administration of justice---

----Discretionary relief---Contrary to settled principles for a party to apply for and be granted discretionary relief, and for that party to then come forward and seek "suspension" and "restoration" of such relief at its own will or to serve some collateral purpose, howsoever, pressing.

A.H. Mirza for the Plaintiff.

Anwar Mansoor Khan along with Syed Ahmad Hassan Shah and Ms. Umaimah Anwar Khan for Defendants Nos.1, 2, 3 and 5.

Amjad Ali Shah, DPG NAB along with Zamin Hussain Mirza, Senior Prosecutor NAB.

Dates of hearing: 26th and 28th November, 2013.

2014 C L D 417

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

Messrs AGILITY LOGISTICS (PVT.) LIMITED through Executive Director---Appellant

Versus

Messrs B.K. SHIPPING CO. LTD. through Authorized Representative and 2 others---Respondents

Admiralty Appeal No.2 of 2013, decided on 23rd December, 2013.

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

----Ss. 3 & 7---Sindh Chief Court Rules (O.S.), Rr. 731 & 759---Admiralty jurisdiction--- Appeal--- Mate's receipt---Purpose---Bill of lading, non-production of---Effect---Shipping company filed suit for recovery of amount in lieu of freight, demurrage and other charges against defendant consignee---Application under Ss.731 & 759 of Sindh Chief Court Rules (O.S.) was allowed by High Court and cargo was directed to be auctioned---Plaintiff company refused to release goods to defendant consignee as it only had mate's receipt and did not produce bill of lading---Validity---Mate's receipt was prima facie an evidence of quantity and condition of goods as it was a receipt of goods by carrier or ship owner and while taking goods alongside the ship, the ship-owner acknowledged receipt of the same through mate's receipt---Recipient or possessor of mate's receipt was entitled to have bill of lading issued to him---Shipper or anybody else did not lodge any claim with ship-owner and there was no issue of payment to be made to shipper, either on surrender of mate's receipt or of bill of lading---Plaintiff company did not deny that mate's receipt was not issued by them or the shipper or anybody else had lodged any claim in respect of goods in question---Name of defendant consignee mentioned in mate's receipt was not disputed and it was the notified party---No intimation or notice was served by shipper upon plaintiff company to withhold delivery of goods and being a donor of the goods had not undertaken to pay the freight, which had been received by plaintiff company---No ground existed to withhold delivery of subject goods, on the pretext that no bill of lading had been produced, as the same was admittedly withheld by plaintiff company---Division Bench of High Court set aside the order passed by Single Judge of High Court and directed plaintiff company to immediately hand over the goods loaded on vessel to defendant consignee---Division Bench of High Court further directed plaintiff company to issue necessary delivery order or release instruction for compliance and defendant consignee was directed to execute a personal bond for the total invoice value of goods---Appeal was allowed accordingly.

Kum and another v. Wah Tat Bank Limited and another [1971] 1 Lloyd's Report [PC] 439 rel.

Khawaja Shamsul Islam for Appellant.

Syed Ali Haider for Respondent No.1.

Capt. Irfan Hassan Farooqi, Managing Director of Messrs Ship Shape (Private) Limited for Respondent No.1.

Date of hearing: 23rd October, 2013.

2014 C L D 435

[Sindh]

Before Nazar Akbar, J

NATIONAL BANK OF PAKISTAN ("NBP") and another---Plaintiffs

Versus

NORTHERN POLYETHYLENE LIMITED ("NPL") and 15 others---Defendants

Suit No.B-1222 of 1999, decided on 5th December, 2013.

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

----Ss. 10, 14 & 19---Civil Procedure Code (V of 1908), S.151 & O.XXIII, Rr. 1 & 2--- Suit for recovery---Withdrawal and adjustment of suits---Enforcement of Memorandum of Understanding (MOU) between plaintiff and defendant; signed after the dismissal of defendant's application for leave to defend---Effect---Suit for recovery was decreed after dismissal of defendant's application for leave to defend on 25-8-2004---Defendant through present application under S.151, C.P.C. read with O.XXIII, Rr.1 & 2; and S.14 of the Financial Institutions (Recovery of Finances) Ordinance 2001 sought enforcement/settlement of the suit through MOU dated 13-8-2007 between the plaintiff and the defendant---Validity---Defendant had no right of audience in the suit with effect from 25-8-2004 when leave to defend application was dismissed---Legal position was that the proceedings had been finally concluded in terms of S.10(11) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit would now proceed in terms S.19 of the Ordinance and the Court would treat proceedings as execution proceedings in accordance with S.19 of the Ordinance---Defendant could file whatever objections it wished once said proceedings for execution were started---Application was dismissed, in circumstances.

Safdar Mehmood for Plaintiff No.1.

Nabeel Kolachi for Plaintiff No.2.

Muhammad Riaz for Muhammad Anwar Tariq for Defendants Nos.1 to 3.

Nemo for Defendants Nos.4 to 16.

Date of hearing: 24th October, 2013.

2014 C L D 454

[Sindh]

Before Sadiq Hussain Bhatti, J

Messrs AL-RAUF BUILDERS through Sole Proprietor and another---Appellants

Versus

Pir MUHAMMAD ISHAQUE SARHANDI---Respondent

2nd Appeal No.12 of 2012, decided on 6th September, 2013.

Specific Relief Act (I of 1877)---

----S. 42---Suit for declaration---Cancellation of allotment of flat---Plaintiff got a flat booked with defendant company and according to terms of agreement certain amount was to be paid in cash by plaintiff while remaining amount was the loan obtained by defendant company and to be paid by plaintiff in installments---Defendant company cancelled the allotment of flat on the plea that plaintiff failed to pay installments in time---Contention of plaintiff was that loan was to be arranged by defendant company, which it failed to arrange---Both the Courts below concurrently decreed suit in favour of plaintiff---Validity---Loan of Rs.300,000 was to be obtained by defendant company and the same was to be paid by plaintiff in 30 installments---If defendant company failed to arrange such loan, it was not the fault of plaintiff and defendant company could not demand the same from plaintiff within three months---Defendant company was not able to arrange for loan and could not derive benefit from its own fault/failure---No clause existed in agreement between parties catering for penalty in case of late payment and there was no late payment on the part of plaintiff, as he had paid agreed amounts on time---Concurrent findings of courts below could be reversed in case non-reading or misreading of evidence was shown---Defendant company failed to show that judgments of two courts below were a result of non-reading or misreading of evidence---No error in procedure was adopted by courts below nor any question of law had arisen for determination by High Court---Second appeal was dismissed in circumstances.

Muhammad Zubair v. Mansoor Ali and others 2008 CLC 921 ref.

Zafar Iqbal Dutt for Appellants.

Abdul Rehman for Respondent.

Date of hearing: 21st August, 2013.

2014 C L D 491

[Sindh]

Before Munib Akhtar, J

HABIB BANK LIMITED---Plaintiff

Versus

HIGHWAY GENERAL TRADING CO. and others---Defendants

Suit No. B-58 of 2002 decided on 7th February, 2012.

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

----Ss. 2(a)(i), 9 & Preamble--- Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) S. 2(a)(i)---Interpretation of S.2(a)(i) of the Financial Institutions (Recovery of Finances) Ordinance, 2001--- "Financial Institution", meaning of--- Finance facilities provided and availed outside Pakistan---Banking business not transacted in Pakistan---Jurisdiction of Banking Court in Pakistan---Scope---Suit for recovery---Plaintiff Bank sought recovery of amount disbursed to defendants under finance facility availed by defendants from branch of Bank located outside Pakistan---Contention of defendants was that since facility was availed outside Pakistan, Banking Court had no jurisdiction in the matter---Validity---Question to determine was whether the plaintiff Bank in the present case, fell within the purview of the definition "Financial institution" as used in the Financial Institutions (Recovery of Finances) Ordinance, 2001---Expression "means and includes" was used in the definition of "Financial Institution" under Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) rather than merely "means" which was used in the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, which had clearly broadened the scope of the definition of "Financial Institution"---Definition of a "Financial Institution" in the Ordinance was identical with the definition of "Banking Company" as used in Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997; except certain words---Specific limiting words "in Pakistan" had not been omitted, and new words "through its branches within and outside Pakistan" had simply been added at the end---Said words were clarificatory in nature; as they gave recognition to the fact that the bank concerned may be transacting banking business in Pakistan not merely through branches located herein but also abroad---While cause of action sued upon must relate to arise out of banking business transacted in Pakistan, it was immaterial whether such business originated from within or outside Pakistan and suit under Financial Institutions (Recovery of Finances) Ordinance, 2001 would be maintainable in either case---Under the Financial Institutions (Recovery of Finances) Ordinance, 2001, banking business may originate any where, that was, either from a branch inside Pakistan or abroad, and all that was essential was that the business be transacted in Pakistan---In order to determine whether banking business was transacted in Pakistan what had to be considered was the effect of the banking business that had been transacted, that was, the purpose or object sought to be achieved by it, and if such purpose or object was in Pakistan, then the suit would be maintainable under the Financial Institutions (Recovery of Finances) Ordinance, 2001---However if Pakistani bank provided the financing for a project situated outside the country, but the documentation in respect of the loan was executed in Pakistan, and the drawdowns also took in Pakistan, then such a suit would also be maintainable under the Financial Institutions (Recovery of Finances) Ordinance, 2001---In the present case, the finance and facilities were provided outside Pakistan and banking business was not transacted in Pakistan, therefore, the plaintiff bank was not a Financial Institution under the Ordinance and the suit was not maintainable under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Suit was dismissed, and ordered to be numbered and registered as an ordinary suit, in circumstances.

Nadeem Ghani v. United Bank Ltd. and others 2001 CLC 1904 rel.

Value Gold Ltd. and others v. United Bank Ltd. PLD 1999 Kar. 1; Hi Lite Industries and others v. Muslim Commercial Bank Ltd. 2004 CLD 1266; Agha Samiullah Khan v. Regional Development Finance Corporation and another 2004 CLD 1465; T. Zubair Ltd. v. Judge Banking Court III, Lahore 2000 CLC 1405 and International Finance Corporation v. Sarah Textiles Ltd. and others 2009 CLD 761 distinguished.

Habib Bank Ltd. v. Ali Muhammad 2005 CLC 409 dissented from.

Naveed-ul-Haq for Plaintiff.

Abdul Qayyum Abbasi for Defendants.

Dates of hearing: 17th October and 7th December, 2011.

2014 C L D 519

[Sindh]

Before Aziz-ur-Rehman, J

PAK PETROCHEMICAL INDUSTRIES PVT. LTD. through Chief Executive----Plaintiff

Versus

Syed HAMID ALI----Defendant

Civil Suit No.1764 of 2010, decided on 29th May, 2013.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3---Suit for recovery of money on basis of dishonoured cheque---Proof---Presumption attached to cheque for being a negotiable instrument was not only statutory, but also mandatory---Special rules of evidence in terms of S.118 of Negotiable Instruments Act, 1881 would apply to such instrument, thus, party wishing to dispel such presumption would have to produce cogent evidence/proof in its rebuttal.

Muhammad Sabir v. Khalil-ur-Rehman 2002 CLD 1543 and EFU General Insurance Ltd v. Messrs Security and Management Services (Pvt.) Ltd. 2002 CLD 107 rel.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, R.2---Recovery of money on basis of dishonoured cheque---Remedies available to plaintiff---Scope---Discretion vested in plaintiff to institute on basis of such cheque either suit under O.XXXVII, C.P.C. or ordinary/regular civil suit---Filing of such ordinary/regular civil suit would not deprive plaintiff of benefit of presumption attached to negotiable instrument under S.118 of Negotiable Instruments Act, 1881.

Syed Kausar Abbas Shah v. Sardar Khan 2005 YLR 3321 rel.

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

----S. 73---Suit for damages for breach of contract---Absence of defence and evidence in rebuttal, of plaintiff's claim---Details of damages missing in plaint, affidavit-in-ex parte-proof and documentary evidence---Validity---Damages could not be granted merely on basis of routine assertions---Fixed amount of damages could not be granted without proving quantum of actual losses through cogent evidence---Party claiming damages was legally obliged firstly to plead and then lead sufficient, truthful and positive evidence in proof thereof---Heavy burden was on plaintiff to prove damages despite absence of defence/evidence---Plaintiff had failed to discharge such burden--- Suit was dismissed in circumstances.

Muhammad Amin Muhammad Bashir Ltd. v. Muhammad Amin Brothers Ltd. PLD 1969 Kar. 233 and Daoud Shami v. Messrs Emirates Airlines and another PLD 2011 SC 282 rel.

Junaid M. Siddiqui for Plaintiff.

Nemo for Defendant.

Date of hearing: 15th May, 2013.

2014 C L D 561

[Sindh]

Before Faisal Arab and Aqeel Ahmed Abbasi, JJ

Messrs UNITED BANK LIMITED---Appellant

Versus

Messrs RAZO (PRIVATE) LIMITED and another---Respondents

Ist Appeal No.59 of 2008, decided on 18th January, 2012.

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

----S. 9---Pleadings---Adjudication of Banking disputes---Settlement of accounts---Calculation of mark-up---Suit for settlement of accounts and redemption of mortgaged property and damages was decreed, and it was found that the defendant Bank had claimed excess amount from the plaintiff, and the same was liable to be refunded---Contention of the bank was that after availing the first facility, the plaintiffs had also availed subsequent finance facilities and on such basis the suit was rightly decreed---Contention of the plaintiff was that such plea of renewal of facilities was not taken in the written statement filed by the bank and therefore, it could not be taken into consideration in spite of the fact that evidence in such regard had been recorded---Validity---No doubt it was a principle of law that no evidence was to be looked into if it was not based on the pleadings of the parties, however, present proceedings arose from a suit for settlement of accounts between two parties and while settling the accounts, whatever amount that was due and payable by a party to the other was to be calculated on the basis of the evidence that was brought on record and not objected to by the contesting party when such evidence was being recorded---When taking accounts, if a document had not been denied or disputed, when it was produced in evidence, which related to the accounts between the parties, then the Banking Court while determining the amount due to a party, shall take into consideration all such admissions and documents, if any, even though it may not be part of the pleadings---In the present case, there were three other agreements executed after the first facility agreement, and on such basis High Court held that the decretal amount be partly reduced after taking into account subsequent finance facilities--- Appeal was partly allowed, accordingly.

PLD 2010 SC 965; PLD 1993 SC 88; 1968 SCMR 804; 1996 SCMR 336; 1992 MLD 2000; 1984 CLC 1853; 2004 CLD 162; 2009 CLD 419; PLD 2011 SC 151; AIR 1942 P.C. 64; 2005 CLC 444; 2005 SCMR 152; 2007 CLD 1384 and 2000 CLC 847 ref.

Sadruddin Hudda for Appellant.

K. A. Wahab for Respondent No.1.

Mushtaq A. Memon and Ishtiaq A. Memon for Respondent No.2.

Salahuddin Ahmed, Amicus Curiae.

Dates of hearing: 7th, 13th and 14th December, 2012.

2014 C L D 606

[Sindh]

Before Syed Muhammad Farooq Shah, J

ARAB KHAN----Appellant

Versus

Lt. Commdr. (Rtd.) MUHAMMAD AKHTAR JAVED----Respondent

First Appeal No.35 of 2010, decided on 29th November, 2013.

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

----S. 4---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 2 & 3---Institution of summary suit on negotiable instrument---Contention of defendant was that alleged document did not fulfil the ingredients of "promissory note"---Suit was decreed by the Trial Court---Validity---Loan amount had not been denied by the defendant---Conditions for "promissory note" had been fulfilled---Genuineness or execution of promissory note had not been challenged by the defendant---Evidence had been thoroughly discussed by the Trial Court---No misappreciation, non-reading or misreading of evidence had been pointed out by the defendant---Trial Court had passed judgment on cogent reasons---Appeal was dismissed in circumstances.

Nadeem Kamran and another v. Waseem Akhtar Tareen 2011 CLC 837 and Muhammad Rafique v. Muhammad Nawaz 2001 CLC 318 rel.

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

----S. 4---"Promissory note"---Meaning.

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

----S. 4---"Promissory note"---Conditions---Conditions for promissory note were: An unconditional undertaking to pay; sum of money should be certain; the payment should be to the order of, or to a certain person or to the bearer of the instrument and the maker should sign the document.

Amir Pervez for Appellant.

Ms. Mehreen Ibrahim for Respondent.

2014 C L D 658

[Sindh]

Before Nadeem Akhtar, J

IGI INVESTMENT BANK LIMITED through Attorney---Plaintiff

Versus

Messrs ADMORE GAS (PVT.) LTD.and another---Defendants

Suit No.B-117 of 2011 in C.M.As. Nos. 2517, 2518 and 2519 of 2013, decided on 30th October, 2013.

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

----S. 10(4)---Limitation Act (IX of 1908), S. 5---Suit for recovery---Application for leave to defend---Condonation of delay---Requirements---Defendant sought condonation of delay in filing of application for leave to defend inter alia on the ground that there was a change of management in the defendant company and that the counsel engaged by the defendant had failed to discharge his duties in filing of the application---Validity---Name of counsel purportedly engaged by the defendant company had not been disclosed in the application and date on which said counsel was engaged was also not mentioned---While seeking condonation of delay, the applicant had to submit explanation for each and every day which had not been done in the present case---Parties were bound by the acts and omissions of their counsel and in case of any negligence on part of the counsel, the parties could not claim that they were not to be held responsible---Application for condonation of delay was dismissed, in circumstances.

Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171; Yasir Chaudhry v. Zarai Taraqiati Bank Limited (ADBP) through Branch Manager 2005 CLD 1701; Messrs Simnwa Polypropylene (Pvt.) Ltd. and others v. Messrs National Bank of Pakistan 2002 CLD 1510; Messrs Waqas Enterprises and others v. Allied Bank of Pakistan and others 1999 SCMR 85 and Abdur Rehman v. Farooq 1989 MLD 951 ref.

Muhammad Sharif Khan and 4 others v. Board of Revenue, West Pakistan, Lahore 1970 SCMR 76; Zulfiqar Ali v. Lal Din and another 1974 SCMR 162 and Zahid Ahmed v. Deputy Director Adjudication and 2 others PLD 2006 Kar. 252 rel.

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

----S.10(4)---Civil Procedure Code (V of 1908), O. VII, R.11---Suit for recovery---Application for leave to defend---Rejection of plaint---Unless the defendant was granted leave to defend the suit, he could not seek rejection of plaint or file an interlocutory application.

Manzoor Ahmed v. Agricultural Development Bank of Pakistan 2005 CLD 653; Sh. Nazir Ahmed v. House Building Finance Corporation 2002 CLD 1634; Waheed Corporation v. Allied Bank Limited 2003 CLD 245; Sheikh Muhammad Kashif v. Askari Leasing Ltd. 2004 CLD 1645; Habib Bank Limited v. The English Engineering Co. and others 2005 CLD 292; Muhammad Husain v. SME Bank Ltd. 2005 CLD 323 and Falcon Ventures (Pvt.) Ltd. v. Punjab Banking Court-II 2004 CLD 726 rel.

Manzoor-ul-Haq for Plaintiff.

Jaffer Raza for Defendants.

2014 C L D 729

[Sindh]

Before Nadeem Akhtar, J

HABIB METROPOLITAN BANK LIMITED through Attorney---Plaintiff

Versus

CENTURY 21 TEXTILE AND SPORTSWEAR (PVT.) LIMITED and 3 others---Defendants

Suit No.B-125 of 2011, decided on 15th January, 2014.

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

----Ss 10, 9, 4, 7 & Preamble---Object and scope of Financial Institutions (Recovery of Finances) Ordinance, 2001---Adjudication of Banking disputes---Procedure of Banking Court---Application for leave to defend, concept of---Mandatory requirements for filing of a plaint---Interpretation of Ss. 9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Mandatory nature of provisions of Ss.9 & 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, non-compliance with---Effect---Concept of obtaining leave to defend the suit by a defendant was not new or unusual---For the first time in the history of Banking Legislation of Pakistan, S. 9(3) of the Ordinance had put the plaintiff/financial institution and under S. 10(4) the defendant/customer, under identical statutory responsibilities to clearly and particularly plead and state the finances availed by a defendant, and repayments made by him with the dates thereof, as well as amounts of finance repayable by such a defendant and a defendant was also burdened with an additional responsibility to also specify the amounts disputed by him---No such provision existed in any previous law and such was a new and distinctive addition in the Financial Institutions (Recovery of Finances) Ordinance 2001 wherein proceedings were of a summary nature---Such provisions were introduced especially and clearly with the view that the dispute of accounts should come before the Banking Court straightway through pleadings of the parties, so that the dispute could be resolved in a summary manner, without going through the lengthy procedure of evidence---Plaintiff/financial institution was obligated under S.9(2) of the Ordinance to file relevant documents and statement of accounts along with the plaint in support of its claim and the defendant/customer was obliged under S.10(5) of the Ordinance to file all such documents along with its application for leave to defend, which in the defendant's opinion supported the substantial questions of law or fact raised by the defendant---After examination of such contents of plaint, and the application of leave to defend, discretion vested with the Banking Court to either allow the defendant to defend the suit or reject the application for leave to defend---Defendant, in order to succeed shall have to show that the application for leave to defend was compliant with all mandatory requirements of S.10 of the Ordinance, and likewise the plaintiff/financial institution shall have to show, even if leave to defend was refused to the defendant, that the plaint was compliant with all mandatory requirements of S. 9 of the Ordinance, and that the suit was not barred by any law---Requirements of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, whatever they may be, and in whatever form, manner or context, were required to be fulfilled, as they were mandatory in nature and must be strictly construed and complied with, whether they suited the defendant or not---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law, and by virtue of S.4 thereof, its provisions overrode all other laws---Sections 9 & 10 of the Ordinance required strict compliance, and non-compliance therewith attracted consequences of rejection of application for leave to defend, along with decree.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337 rel.

Shahid Farooq Sheikh v. Allied Bank of Pakistan Ltd. through Manager 2005 CLC 1489; United Bank Ltd. v. Progas Pakistan Ltd. 2010 CLD 828; Bank of Punjab through EVP/General Manager v. Genertech Pakistan Ltd. through Chief Executive and 2 others 2008 CLD 765 and MCB Bank Ltd. v. Eastern Capital Ltd. and 7 others 2011 CLD 84 ref.

Messrs Taxila Cotton Mills Ltd. and 10 others v. Allied Bank of Pakistan Ltd. and 4 others 2005 CLD 244 and Messrs Soneri Bank Ltd. v. Messrs Compass Trading Corporation (Pvt.) Ltd. through Director/Chief Executive and 3 others 2012 CLD 1302 distinguished.

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

----Ss. 10 & 9---Counter suits filed by customer and financial institutions under Financial Institutions (Recovery of Finances) Ordinance, 2001---Applications for leave to defend---Where counter-suits had been filed against each other by a financial institution and a customer, applications for leave to defend in both suits were to be decided independently, and on their own merits and in case leave to defend was granted in one suit, even then the defendant in the other suit did not become entitled to grant of leave to defend in the other suit as a matter of right.

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

----Ss. 2(e) & 7---"Obligations"---Jurisdiction of Banking Court---Scope---Arrears of rent in respect of property sold by customer to Financial Institution---Amount claimed in respect of arrears of rent of property did not fall within the definition of "obligation" as defined in the Financial Institutions (Recovery of Finances) Ordinance, 2001, and thus could not be granted by the Banking Court.

Khalid Anwer, Rashid Anwar and Anas Makhdoom for Plaintiff.

Arshad Mohsin Tayebaly and Muhammad Shahid for Defendants.

Dates of hearing: 7th, 19th November, 4th and 16th December, 2013.

2014 C L D 773

[Sindh]

Before Nazar Akbar, J

PAKISTAN INTERNATIONAL BULK TERMINAL LTD. through Chief Finance Officer and others---Plaintiffs

Versus

MAQBOOL ASSOCIATES (PVT.) LTD. through Managing Director and others---Defendants

Suit Nos.568, 670, 708 and 1260 of 2013, decided on 17th January, 2014.

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

----O. XXIII, R. 3---Contract---Compromise between parties---Scope---Lawfully entered contracts by and between parties are binding upon them irrespective of placing such contracts before court of law by means of joint applications under O. XXIII, R. 3, C.P.C.

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

----S. 20---Civil Procedure Code (V of 1908), O. XXIII, R.3---Arbitration--- Dispute resolution--- Role of court---Compromise between parties---During pendency of proceedings under S.20 of Arbitration Act, 1940, parties entered in compromise and sought disposal of suit under O. XXIII, R. 3, C.P.C.---Validity---Court was only gateway to adjudication of dispute between parties and not adjudicator in its own right---Present was not a regular suit under common law and dispute resolution was not possible by court of law under S.20 of Arbitration Act, 1940---Court was not empowered to examine and even comment on "dispute/issues" between parties, lest it could prejudice case of either party---Provisions of O.XXII, R. 3, C.P.C. were not applicable to arbitration suit under S.20 of Arbitration Act, 1940---Court appointed sole arbitrator for resolution of dispute between parties in terms of arbitration agreement---Suit was disposed of accordingly.

Mohamed Abdul Latif Faruqi v. Nisar Ahmed and another PLD 1959 (W.P.) Kar. 465; Jamia Industries Limited v. Pakistan Refinery Ltd. PLD 1976 Kar. 644; China Harbour Engineering Co. v. Water and Power Development Authority and others 2001 YLR 1781; Manzoor Construction Co. Ltd. v. University of Engineering and Technology, Taxila 1984 CLC 3347 and Messrs Time N. Vision International (Pvt.) Ltd. v. Dubai Islamic Bank PLD 2007 Kar. 278 rel.

Khalid Anwar for Plaintiff (in Suit No.568 of 2013).

Khalid Anwar for Defendant No.1 (in Suit No. 670 of 2013).

Abdul Hafeez Pirzada for Plaintiff (in Suit Nos.670 and 708 of 2013).

Abdul Hafeez Pirzada for Defendant No.1 (in Suit No.568 of 2013 and sole defendant in Suit No.1260 of 2013).

Makhdoom Ali Khan for Plaintiff (in Suit No.1260 of 2013).

Makhdoom Ali Khan for Defendant No.2 (in Suit Nos.568 and 670 of 2013 and sole defendant in Suit No.708 of 2013).

Date of hearing: 12th December, 2013.

2014 C L D 809

[Sindh]

Before Hassan Azhar Rizvi and Muhammad Junaid Ghaffar, JJ

A & A SERVICES through Proprietor---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Finance and others---Respondents

C.P. No.3990 of 2011, decided on 3rd March, 2014.

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

----S. 25-A---Credit information Bureau List---Words "in such manner as the State Bank may specify"---Scope---Words so used in S. 25-A(1) of Banking Companies Ordinance, 1962, do not mean either, nor authorize State Bank to collect information from Banking Companies regarding "credit information" beyond the meaning assigned in Explanation (b) in S. 25-A, of Banking Companies Ordinance, 1962.

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

----S. 25-A---Constitution of Pakistan, Art. 199---Constitutional petition---Credit Information Bureau---Defaulter list, placing name in---During pendency of recovery suit filed by bank against petitioner, Credit Information Bureau placed name of petitioner in defaulters list---Validity---Bank had no authority in law to put name of petitioner in Credit Information Bureau list or to recommend it to be put on such list---State Bank of Pakistan was obliged under law to monitor Credit Information Bureau list, especially in cases where case against petitioner was pending before Banking Court of competent jurisdiction and alleged defaulter had been granted leave to defend unconditionally---High Court directed State Bank of Pakistan to delete name of the petitioner from Credit Information Bureau list and thereafter intimate the same to all Banking Companies so that petitioner could avail loan or finance facility in accordance with law and procedure in vogue---Petition was allowed in circumstances.

Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191; Abdul Karim v. Additional Commissioner â Multan 1986 CLC 2403; Aslam Textile Mills Limited through General Manager v. State Bank of Pakistan 2006 CLD 73; Messrs Abdul Aziz Nawab Khan and Company v. Federation of Pakistan, Ministry of Finance 2006 CLD 55; New Jubliee Insurance Company Ltd., Karachi v. National Bank of Pakistan Karachi PLD 1999 SC 1126; Agricultural Development Bank of Pakistan and another v. Abid Akhtar and others 2003 SCMR 1547 and National Bank of Pakistan v. SAF Textile Mills Limited Civil Appeal No.146 of 2009 ref.

Haider Waheed for Petitioner.

Mohsin Imam, D.A.-G. for Respondent No.1.

Hassan Akbar for Respondent No.2.

Naveedul Haq for Respondent No.3.

Date of hearing: 23rd December, 2013.

2014 C L D 853

[Sindh]

Before Nazar Akbar, J

NASIM BEG----Plaintiff

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman and 2 others----Defendants

Suit No.139 of 2010, decided on 28th April, 2014.

Companies Ordinance (XLVII of 1984)---

----S. 224(2)---Specific Relief Act (I of 1877), Ss. 42 & 54---Discretion of court as to declaration of status or right---Bar to such declaration---Trading by director, officers and principal shareholders of a company---Show-cause notice under S.224(2) of the Companies Ordinance, 1984---Suit for declaration and permanent injunction challenging issuance of show-cause notice to plaintiff by the Securities and Exchange Commission of Pakistan (SECP), under S.224(2) of the Companies Ordinance, 1984---Maintainability of such suit---Contention of the plaintiff was inter alia that he had not realized any tenderable and/or other gain and was not therefore liable to tender any amount under S.224 of the Companies Ordinance, 1984---Held, that declaration sought by plaintiff was not in respect of any legal character of the plaintiff---Very fact that plaintiff had submitted a detailed reply to the show-cause noticed issued by the SECP, was contrary to his claim in the plaint and in the said reply plaintiff had not claimed that the defendants had acted illegally, in a mala fide way or that they were not competent to issue impugned notice under S.224 of the Companies Ordnance, 1984---Fact that plaintiff had submitted to the jurisdiction of the SECP unconditionally amounted to accepting jurisdiction of SECP to issue notice under the Companies Ordinance, 1984---Plaintiff should have appeared before the competent authority for personal hearing, which he had avoided--- Plaintiff had not sought declaration as to his own rights and status; and declaratory relief could only be granted in respect of legal character which was not under threat in the present case---Plaintiff was therefore neither entitled to declaration or permanent injunction--- Suit being incompetent and not maintainable, was dismissed in circumstances.

Karsaz Construction Company v. Pakistan 1999 CLC 1719 and Alvi Sons Ltd. v. Government of East Pakistan PLD 1968 Kar. 222 rel.

Emad-ul-Hassan for Plaintiff.

Naveed-ul-Haq for Defendants Nos.1 and 2.

Date of hearing: 10th December, 2013.

2014 C L D 897

[Sindh]

Before Hasan Feroz, J

EARTHFACTOR (PRIVATE) LIMITED through Director---Appellant

Versus

PATENT OFFICE, IPO-PAKISTAN through Controller and 2 others---Respondents

Miscellaneous Appeal No.74 of 2012, decided on 13th March, 2014.

(a) Patents Ordinance (LXI of 2000)---

----Ss.7(4)(d), 2(s), 2(t), 8, 21 & 23---Patentable inventions---"Double-number SIM"--- "Novelty" and "invention"---Scope---Subsequent use of a known product or process---Appellant impugned order of Patent Office, Intellectual Property Organization ("IPO"), Pakistan whereby patent application of respondent, for a "double-number SIM" was allowed and patent was granted for the same---Contention of appellant was inter alia that patent application of the respondent neither qualified as an "invention" nor did it qualify as a "process" and/or "produced" within the meanings and scope given in the Patents Ordinance, 2000---Held, that acceptance of patent application of respondent seemed to be a violation of rules, procedure and law applicable thereto---Any invention was patentable if it was new, involved an inventive step, and was capable of industrial application and under S.7(4)(d), for a new or subsequent use of a known product and process, a patent was not to be granted---"Dual" or "Double-number" SIM card was not new to the world and would not fall within the legal as well as the literary definition of the words "invention" and "novelty" and its acceptance as patent would not be in consonance with the principles of law under the Patents Ordinance, 2000---Such technology was already in use in many countries around the world including Pakistan and therefore adhering to the essence of S.7(4)(d) of the Patents Ordinance, 2000, no patent could be granted---If the process of manufacture was already known, such manufacturing could not be called an "invention" and nor any patent could be granted for it and if such patent was already granted, the same could not be allowed to continue---Impugned order whereby patent was granted to the respondent, was set aside---Appeal was allowed, accordingly.

Black's Law Dictionary and 1980 CLC 396 rel.

AIR 1936 Bombay 99 distinguished.

(b) Patents Ordinance, (LXI of 2000)---

----S. 2(i)---"Invention"---Meaning of---"Invention" was the act of or operation of finding out something new, the process of contriving and producing something not previously known or existing, by the exercise of independent investigation and experiment and also the article or contrivance or composition so invented.

Black's Law Dictionary rel.

(c) Patents Ordinance (LXI of 2000)---

----S. 8---"Novelty"---In order that there may be novelty, to sustain a patent, the thing must not have been known to any one before, and mere novelty of form was insufficient.

Black's Law Dictionary rel.

Altaf Ahmed Butt for Appellants.

Muhammad Shoaib Razzak for Respondent.

Examiner of Patents present in person.

Date of hearing: 27th January, 2014.

2014 C L D 941

[Sindh]

Before Syed Hasan Azhar Rizvi and Muhammad Junaid Ghaffar, JJ

PERVEZ HUSSAIN---Petitioner

Versus

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

C.P. No.D-3378 of 2012, decided on 17th February, 2014.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 40A, 40, 35 & 34--- Constitution of Pakistan, Art.199--- Constitutional petition--- Complaint against conduct of Banking Company made to the State Bank of Pakistan---State Bank of Pakistan, duties of---Petitioner made a complaint regarding commission of an alleged fraud against a Bank to the State Bank of Pakistan, with the request to initiate and conduct inquiry with regard to alleged fraud---Contention of the State Bank of Pakistan was that since the matter of the alleged fraud was pending in two separate civil suits, it would not be proper for the State Bank of Pakistan to take any action in a matter which was sub judice---Held, that reason assigned by State Bank for not proceeding any further on the complaint of the petitioner was not tenable---Mere pendency of any civil suits was not an impediment for the State Bank to conduct any inquiry or investigation in terms of Banking Companies Ordinance, 1962, as State Bank was not party to the dispute, and even otherwise there was no restraining order operating in the said cases---State Bank of Pakistan was a regulator of the affairs of Banking companies operating in the country, as it was its primary duty and responsibility to attend to any complaint of an account-holder or depositor---State Bank of Pakistan was vested with a controlling and regulating authority under the Banking Companies Ordinance, 1962 and had the statutory duty to give necessary directions to a Banking Company to prevent affairs of a Banking Company from being conducted in a manner which was prejudicial or detrimental to the interest of Banking Company as well as the general depositors---As a regulator the State Bank was bound to see whether the actions of Banking Companies were within the framework of law and specially the Banking Companies Ordinance, 1962 as well as the relevant circulars and instructions issued by it---Provisions of Ss. 34, 35,40 & 40A of the Banking Companies Ordinance, 1962 empowered the State Bank to oversee the operations of the Banking Companies---State Bank of Pakistan was duty bound to act as an independent and non-partisan regulator and could not absolve itself from proceeding on any complaint merely due to the fact that the dispute was pending before a court of law---Upon receipt of a complaint regarding affairs and conduct of a Banking Company, it was incumbent upon the State Bank to see whether or not there was any default in the statutory performance of duty, patently on record, by the Banking Company so as to take corrective and necessary measures in accordance with the Banking Companies Ordinance, 1962---High Court directed the State Bank of Pakistan to attend to the complaint of the petitioner and conduct an independent investigation and thereafter proceed and take action in accordance with law---Constitutional petition was allowed, accordingly.

Muhammad Ashraf v. United Bank Limited through President and 3 others 2009 CLD 1250 ref.

Abdul Hafeez Pirzada and Abdul Sattar Pirzada for Petitioner.

Yousuf A. Saeed for Respondent No.1.

Jam Asif Ali for Respondent No.2.

Saeed A. Memon, Standing Counsel for Respondent No.3.

Date of hearing: 6th February, 2014.

2014 C L D 961

[Sindh]

Before Nadeem Akhtar, J

KING'S FOOD (PRIVATE) LIMITED AND HILAL CONFECTIONERY (PRIVATE) LIMITED: In the matter of

J. Miscellaneous No.21 of 2012, decided on 7th March, 2014.

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

----Ss. 92, 94, 284 & 287---Amalgamation of companies---Authorized share capital, increase in---Principle---Petitioner companies sought approval of scheme of amalgamation---Plea raised by Security and Exchange Commission of Pakistan was that authorized share capital of surviving company could not increase without compliance of provisions of S.92 or 94 of Companies Ordinance, 1984---Validity---As a result of grant of scheme of amalgamation of petitioner companies by High Court, their authorized share capitals stood automatically merged resulting into automatic increase in authorized share capital of surviving company without recourse to S.92 or 94 of Companies Ordinance, 1984---Surviving company was not obliged to take any step for enhancement of its authorized capital or to do any further act or deed---Provisions of S.92 or 94 of Companies Ordinance, 1984, were inapplicable to cases of merger or amalgamation of companies and or their authorized paid-up share capital in such cases would be governed on under Part IX "Arbitration , Arrangements and Reconstruction" of Companies Ordinance, 1984---Respective authorized share capitals of both the companies were subjected to payment of fee at the time of registration and were covered by definition of property of every description under S.287(4) of Companies Ordinance, 1984---Company could not again subjected to pay fee on same authorized share capital on which it had already paid requisite fee---Amalgamation of petitioner companies was allowed as per terms prayed by them---Petition was allowed in circumstances.

J. Miscellaneous No.48 of 2011 in the matter of Messrs Feroze 1888 Mills Limited, Feroze Textile Industries (Pvt.) Ltd., UTI Industries (Pvt.) Ltd., and Friendship (Pvt.) Ltd.; Amalgamation of Shaily v. Unknown 2003 (2) Bom Cr 514 and 2003 (2) MhLj 22 distinguished.

Messrs Omer Iqbal Solvent (Pvt.) Ltd. and another 2010 CLD 1802; Mahmood Power Generation Limited and Mahmood Textile Mills Limited v. Joint Registrar of Companies and others 2006 CLD 1364; OBS Pakistan (Private) Limited and Merck Sharp and Dohme of Pakistan Limited in J. Miscellaneous No.19 of 2008; PMP Auto Industries Ltd.'s case [1994] 80 Comp Cas 289 Bom.; Areva T and D India Ltd.'s case [2007] 138 Camp Cas 834; Saboo Leasing P. Ltd.'s case [2003] 117 Camp Cas 728; Hotline HI Celdings P. Ltd.'s case [2005] 127 Camp Cas 165; Jaypee Cement Ltd. [2004] 122 Camp Cas 854 and [2004] 62 CLA 329 ref.

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

----Ss. 92 & 94---Authorized share capital---Connotation---Every company limited by shares or limited by guarantee and having a share capital is required to have an authorized capital with which it is registered---Such is one of the essential features of company's constitution and it must be specifically stated in memorandum of association---Authorized capital may be increased above or reduced below the figure stated in memorandum; it is equal to nominal value of shares which directors of company are authorized to issue, hence is termed as "authorized capital"---In its original or altered form, the authorized capital sets limit of capital available for issue and accordingly issued capital of a company can never exceed its authorized capital---Authority by shareholders of company to its directors create new capital by issue of shares---While increase or decrease in authorized capital cannot be affected without a resolution of company in its general meeting where issue of shares may be decided by Board of Directors of the company without recourse to a general meeting, provided that articles of association of company do not provide otherwise.

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

----S. 287(4)---Words "rights and powers of every description"---Enforcement---Right of a company and power of its shareholders/Board of Directors, to increase or decrease authorized share capital, if denied, can be enforced through a court of law---Such valuable right of company and special and exclusive power of its shareholders/Board of Directors is not intangible, imaginary or incapable of being transferred.

A.H. Mirza and S. Nauman Zahid Ali for Petitioners.

Waqas Asad Sheikh for Securities and Exchange Commission of Pakistan.

Date of hearing: 2nd September, 2013.

2014 C L D 985

[Sindh]

Before Aqeel Ahmed Abbasi and Zafar Ahmed Rajput, JJ

ELBOW ROOM and another---Appellants

Versus

MCB BANK LIMITED---Respondent

Ist Appeal No.49 of 2013, decided on 27th March, 2014.

(a) Words and phrases---

----"Statement of Account"---Definition stated.

"Encyclopedia of Banking of Finance" by Glemn G. Maunn, F.L. Garcia and Chalres J rel.

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

----S. 9---Interpretation of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Statement of Account, essentials of---Word "supported" used by the Legislature in S. 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 meant that if the suit was not supported by the Statement of Account, same would not be competent and the word "support" read in the mandatory perspective of the word "shall"; made a plaint filed by a Financial Institution totally dependent upon a duly certified statement of account on the "support" of which a plaint may stand and sustain per Ss. 9(1) & 9(2) of the Ordinance.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 rel.

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

----S. 9---Bankers' Books Evidence Act (XVIII of 1891) Ss.2(8) & 4---Suit for recovery---Statement of Account---Certification of Statement of Accounts---Application of defendants for leave to defend suit was dismissed---Contention of the defendants was that plaintiff Bank had not filed a proper Statement of Account in terms of the Bankers' Books Evidence Act, 1891 and the Financial Institutions (Recovery of Finances) Ordinance, 2001---Held, that Statement of Account in the present case appeared in a typed form on a white paper, being incomplete, sketchy and unsubscribed by the principal accountant or manager and did not fulfil the mandatory requirements of S.9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and Ss.2(8) & 4 of the Bankers' Books Evidence Act, 1981---Statement of Account filed by the plaintiff Bank therefore did not qualify as a "Statement of Account" duly certified under the Bankers' Books Evidence Act, 1891 and did not contain the details of the entire transactions between the plaintiff Bank and the defendants during the period of finance---Statement of Account did not bear any date and particulars with regard to sanction and disbursement of the finance facility, payment of liabilities and date and period of charging of markup---Statement of Account in the present case was also undated and had been subscribed by the Attorney of plaintiff Bank instead of principal accountant or manager of the Bank as required under S.2(8) of the Bankers' Books Evidence Act, 1891---High Court set aside order and decree of Banking Court, and remanded the matter to Banking Court to decide the application of defendants for leave to defend and the suit afresh in accordance with law and observed that the plaintiff Bank would be at liberty to file proper statement of account and the defendants may raise such objections thereon as they may deem fit---Appeal was allowed, accordingly.

United Bank Limited v. Messrs Ilyas Enterprises through Proprietor Mr. Ilyas Malik and 2 others 2004 CLD 1338 and Messrs C.M. Textile Mills (Pvt.) Limited through Chairman v. Investment Corporation of Pakistan 2004 CLD 587 rel.

S. Muhammad Kazim for Appellants.

Khalid Mehmood Siddiqui for Respondent.

Date of hearing: 27th March, 2014.

2014 C L D 998

[Sindh]

Before Abdul Rasool Memon and Riazat Ali Sahar, JJ

MAZHARUDDIN SIDDIQUI and another---Appellants

Versus

Messrs INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Respondent

Ist Civil Appeal No.D-18 of 2012, decided on 17th April, 2014.

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

----Ss. 22(6) & 19---Execution of decree---Application of judgment debtor before Executing Court contending that Executing Court needed to initiate an investigation as to whether the decree was correctly passed or not---Said application was dismissed---Contention of judgment debtor was that the Executing Court had power to vary alter and amend decree, therefore the said dismissal of application could be impugned by filing appeal under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and there was no need to file appeal against the judgment and decree---Held, that Executing Court for the purpose of execution of decree could assume all powers of a decretal court but that did not mean that the said court could add, alter or nullify the very decree---Question as to whether a decree had been obtained by fraud was not a question arising out of execution, or discharge of satisfaction of a decree, as it affected the very validity of the decree and the Executing Court could not go beyond the decree---Executing Court could not go behind the decree however it could determine an objection with regard to the executability of the decree and it has to take as granted that a valid decree existed---Judgment debtor could only assail the decree before the appropriate Appellate Court---Appeal, being not maintainable, was dismissed in circumstances.

PLD 1987 Lah. 537; 1986 MLD 735; PLD 1975 Quetta 29 and 1994 CLC 1112 ref.

Muhammad Shamim Khan for Appellants.

2014 C L D 1010

[Sindh]

Before Hasan Feroz, J

MUHAMMAD SHAHID SIDDIQUI---Appellant

Versus

MUHAMMAD MANZAR ALAM QADRI and another---Respondents

First Appeal No.17 of 2011, decided on 28th January, 2014.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3---Institution of summary suit on negotiable instruments---Contention of defendant was that he had paid the whole amount to the plaintiff---Suit was decreed by the Trial Court---Validity---Certified copies of dishonoured cheques as well as endorsement of bank and statement of account had not been denied by the defendant---Issuance of cheques had been admitted by the defendant---No proof was available on record to establish that defendant had paid amount to the plaintiff---Presumption of correctness was attached in favour of documents which would fall within the ambit of Negotiable Instruments Act, 1881---Defendant was bound to discharge the initial presumption, he had not proceeded with the matter diligently and ex parte decree was passed against him---Ample opportunity had been granted to the defendant but he showed his negligent conduct in pursuing the suit---Appeal was dismissed in circumstances.

1980 CLC 110; PLD 1962 Pesh. 28; PLD 2001 Lah. 9 and PLD 2004 SC 10 rel.

Muhammad Iqbal Khan for Appellant.

Nemo for Respondents.

Date of hearing: 10th December, 2013.

2014 C L D 1039

[Sindh]

Before Muhammad Shafi Siddiqui, J

ZAFAR IQBAL and 3 others---Plaintiffs

Versus

NASREEN AHMED and 8 others---Defendants

Suit No.1580 of 2013, decided on 29th January, 2014.

Companies Ordinance (XLVII of 1984)---

----S. 7---Civil Procedure Code (V of 1908), O. VII, R. 10 & S. 20(c)---Specific Relief Act (I of 1877), S. 42---Suit for declaration---Return of plaint---Winding up of company---Relief claimed in the civil suit covered by provisions of Companies Ordinance, 1984---Registered office of company---Jurisdiction of court---Scope---High Court where the registered office of the company was situated would have the jurisdiction in the matter---Registered office of the company for the purpose of winding up of the same was one which had longest been the registered office of said company during last six months immediately preceding the presentation of the petition for winding up---Cause of action in the present case had accrued within the jurisdiction of High Court whose jurisdiction registered office of the company was situated---Court under S. 20(c), C.P.C. would only have the jurisdiction over the matters if the cause of action had arisen within the local limits of its jurisdiction---"Cause of action" as used in S. 20(c), C.P.C. with regard to jurisdiction of court would with regard to the facts or allegations giving rise to a claim leading to infringement of some right of a party and not to a notional or imaginary assertion in such context---Landing of machinery at the Port of Karachi would not infringe any right of the plaintiffs within the jurisdiction of the Court---If rights were infringed in entering into contract for the purchase of the machinery then such rights would be infringed at the place where the contract was entered i.e. within the jurisdiction of High Court where right was infringed---Plaintiffs could not create a cause of action by their own effort but same must be created by some act of the defendants---Company had entered into an agreement for purchase of machinery in Punjab where registered office of the same was situated and machinery was being imported which would arrive there via Port of Karachi--- Machinery was to be installed and used at Multan (Punjab) within the jurisdiction of Lahore High Court---Defendants had not done anything that had breached or infringed rights of plaintiffs within the jurisdiction of Lahore High Court---Landing of consignment at Karachi Port and that too for its onward journey was not breach of any right---Plaintiffs had to make out a case that certain rights which were being enjoyed by them were declined and the alleged landing of consignment at Karachi for its onward destination would not constitute infringement of rights which they were enjoying--- Plaint was returned in circumstances to the plaintiffs.

D. Munirangappa v. Amidyala Venkatappa and another AIR 1965 Mysore 316; Dessee Veerabhadrayya Venkata Subbayya Firm v. Biswanath Jagadish Parsad AIR 1962 Andhra Pradesh 338; Messrs Brady and Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. 1981 SCMR 494; Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and others PLD 1996 SC 543; Muzaffar Ali Awan v. Messrs Pioneer Alliance (Pvt.) Ltd. and others PLD 1989 Lah. 106; Siddique Muhammad Malik and others v. Immad Iftikhar Malik and others 2000 CLC 477 and Iftikhar Hussain and others v. Dadex Eternit and others 2002 CLD 575 ref.

National Investment Trust Ltd. v. Lawerencepur Woollen and Textile Mills Ltd. 2002 CLD 527 and Haji Riaz Ahmed Mir v. Brig. (Retd.) Ch. Muhammad Sharif PLD 2003 Kar. 45 distinguished.

Chalna Fibre Company Ltd. v. Abdul Jabbar and 9 others PLD 1968 SC 381 rel.

Taimor Mirza for Plaintiffs.

Rashid Anwar for Defendants.

Date of hearing: 17th January, 2014.

2014 C L D 1097

[Sindh]

Before Munib Akhtar, J

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LIMITED---Petitioner

Versus

Messrs AJMA CORPORATION LIMITED---Respondent

J. M. 56 of 2000 in Civil Original No.3 of 1994 and C.M.A. 176 of 2005, decided on 11th June, 2014.

Companies Ordinance (XLVII of 1984)---

----Ss. 404 & 405---Provincial Insolvency Act (V of 1920), S.47---Winding up of company---Distribution of auction proceeds---Claim, partially disallowed---Entitlement of Revenue authorities---Petitioner bank was a secured creditor and a part of its claim was disallowed by official liquidator but petitioner (bank) did not raise any objection at relevant time---Plea raised by petitioner (bank) was that its claim took precedence over that of all persons including the Revenue, claiming under S.405 of Companies Ordinance, 1984---Validity---Secured creditor, under the provisions of S.404 of Companies Ordinance, 1984 read with S.47 of Provincial Insolvency Act, 1920 was free to relinquish his security and such creditor could choose not to do so but once secured creditor did, then his position altered---Option that was earlier available to secured creditor (i.e. to realize his security by standing outside winding up), was no longer at hand---Position of secured creditor was relegated to that of any other creditor who had proved his debt before official liquidator, in accordance with relevant provisions---As security was relinquished, claim of Revenue must be accorded preference under S.405 of Companies Ordinance, 1984---High Court directed official liquidator to pay the amounts to Revenue out of withheld amount and if there was a balance remaining (whether on account of any accrued profit/mark up or otherwise) that was to be distributed amongst the company's creditors on the same terms as before--- Application was disposed of accordingly.

Re David Lloyd & Co. (1877) 6 Ch D 339; Moor v. Anglo-Italian Bank (1879) 10 Ch D 681; National Development Finance Corporation v. Rawal Papers (Pvt.) Ltd. 1993 MLD 1562; United Bank Ltd. v. PICIC and others 1992 SCMR 1731; Mst. Shanti v. Karachi Transport Corporation and others 2000 CLC 595; PICIC v. Allied Textile Mills Ltd. 1991 MLD 2301; Malik Muhammad Saeed Muhammad Azam and others v. Sargodha Central Co-operative Bank Ltd. PLD 1973 Lah. 682; Kanaiyalal Kripa Sankar Bijoy Sankar Gobinda Sarkar Dikshit Firm v. Shah Mahmud Palwan and others PLD 1959 Dacca 939; Federation of Pakistan v. Pioneer Bank Ltd. PLD 1958 Dacca 535; Pakistan Industrial Credit and Investment Corporation Ltd. v. Ali Gul Khan Packages Ltd. 1989 CLC 1774 and Orix Leasing Pakistan Ltd. v. Sunshine Cloth Ltd. 2001 PTD 3146 ref.

M.A. Khan for Petitioner.

Luqman ul Haq, Official Liquidator.

M. Khalil Dogar for Claimant.

Dates of hearing: 14th February, 3rd, 25th March and 17th April, 2014.

2014 C L D 1125

[Sindh]

Before Aamir Raza Naqvi, J

SANOFI-SYNTHELABO through Authorized Signatory---Plaintiff

Versus

ZAFA PHARMACEUTICAL LABORATORIES (PRIVATE) LIMITED through Chief Executive/ Director/Secretary/Principal Officer---Defendant

Suit No.367 of 2003, decided on 16th June, 2014.

Patents and Designs Act (II of 1911)---

----S. 11---Patents Ordinance (LXI of 2000), S.29---Infringement of patent---Suit for perpetual injunction to restrain such infringement---Term of patent expired---Original jurisdiction of High Court---Abatement, concept of---Effect on pending proceedings---Plaintiff had sought relief to the effect that defendant, be prohibited to sell "Clopidogrel" in addition to any other pharmaceutical ingredients/element or compound---Contention of the defendant was that the plaintiff had no cause of action, as the term of patent of the plaintiff had already expired and allegation of infringement of the patent levelled against the defendant was prima facie without any evidence---Validity---Suit became infructuous in the month of May, 2014---On the instruction of the plaintiff, counsel for the plaintiff stated that instructions had been taken from the plaintiff and since the term of the patent shall, in any case, expire by the end of May, 2014, therefore, suit itself shall be withdrawn---Suit had become infructuous and no purpose could be achieved by any of the parties by keeping this matter pending in court without any reason, therefore, the suit could not be kept pending and was required to be disposed of in pursuance of the 'concept of abatement'---Suit of the plaintiff was disposed of as having become infructuous along with applications.

Mubashir Muhammad Khan v. Government of Pakistan and others 1992 SCMR 866 rel.

Nemo for Plaintiff.

Javed Musrat for Defendant.

2014 C L D 1151

[Sindh]

Before Sadiq Hussain Bhatti, J

EMIRATES BANK INTERNATIONAL PJSC---Plaintiff

Versus

DIAMOND'S WORLD, L.L.C. and another---Defendants

Suit No.650 of 2005, decided on 25th October, 2013.

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

----S. 9---Recovery of bank loan---Written statement, non-filing of---Effect---Plaintiff bank filed suit against defendant for recovery of amount and relied upon different documents including statement of accounts and other documents---Defendants did not file any written statement to rebut the documents relied upon by plaintiff---Effect---Plaintiff succeeded in proving assertions made in plaint by filing affidavit in ex parte proof---Both the plaint in suit as well as affidavit in ex parte proof were on oath and there was nothing in rebuttal---Suit was decreed in circumstances.

S. Noman Zahid Ali for Plaintiff.

Nemo for Defendants.

Date of hearing: 10th October, 2013.

2014 C L D 1244

[Sindh]

Before Nadeem Akhtar and Shahnawaz Tariq, JJ

AIJAZ MAHMOOD---Appellant

Versus

Messrs HONGKONG AND SHANGHAI BANKING CORPORATION---Respondent

First Appeal No.D-14 of 2010, decided on 10th April, 2014.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)---

----S. 7---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 22---Suit filed by plaintiff/customer seeking recovery of damages from Financial Institution/Bank---Plaintiff had contended that he had availed letter of credit facility from defendant bank and negotiated credit facilities on agreed rates and terms of conditions and subsequently delivery of his goods was delayed due to actions of the defendant bank which were, inter alia, escalation of prices, high interest and non-commercial and foul practices, which caused immense loss to the plaintiff---Held, that onus to establish veracity of allegations regarding alleged damages absolutely and unquestionably lay on the plaintiff and he had to establish that the losses and damages were caused by an act, omission or unnecessary negligence of the defendant bank or that the defendant bank had deliberately failed to comply with its responsibilities---Plaintiff had failed to establish his claims and evidence led by the plaintiff was miserably lacking in proving that he sustained damages because of any fault of defendant bank---Plaintiff had also admitted that no notice was issued to the defendant for alleged damages prior to institution of the suit---Plaintiff had therefore failed in discharging his burden to prove that he suffered alleged losses because of defendants and due to said reason, the burden never shifted to the defendant bank---Appeal was dismissed, in circumstances.

Masood Awan Ausaf for Appellant.

Imtiaz Agha for Respondent.

Date of hearing: 23rd October, 2013.

2014 C L D 1255

[Sindh]

Before Aziz-ur-Rehman, J

HABIB METROPOLITAN BANK LTD. through Attorneys---Plaintiff

Versus

Messrs HAY'S (PVT.) LTD. and 8 others---Defendants

Suit No.B-79 of 2012, decided on 8th April, 2014.

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

----Ss.3 (2), 9 & 10---State Bank of Pakistan BCD Circular No. 32 dated 26-11-1984---Suit for recovery of finance---Statement of accounts---Cost of funds---Miscellaneous charges---Despite service of process through all mode prescribed under law, defendants remained unrepresented and nobody filed application to seek leave to defend the suit---Plea raised by bank was that suit be decreed in terms of amount reflected in statement of accounts along with cost of funds, miscellaneous and EDS charges---Validity---Presumption of correctness was attached to entries made in certified statement of accounts but such presumption attached to statement of accounts was only to the extent that entries/figures made in statement of accounts were true per books of accounts---Merely on the basis of such presumption, bank's suit could not be straight away decreed as prayed---Bank, per break-up of liabilities given in certified statement of accounts also claimed/debited other charges and EDS charges but the same were declined for want of requisite documents and proof, as in absence of materials, vouchers etc. the same could not be granted---Payment of 'penalty' in the event of delay in payment of agreed purchase price was prohibited in Islamic System of Finance read with in juxtaposition of State Bank of Pakistan BCD Circular No.32, dated 26-11-1984---High Court declined markup beyond the date of expiry of finance agreements, as it could not be allowed---Even in absence of leave to defend application in terms of S.10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, courts were supposed to do justice and not perpetuate injustice---Jurisdiction vested in courts was to advance cause of justice instead of causing miscarriage of justice---High Court decreed the suit in favour of plaintiff bank and against defendants including cost of funds in terms of S.3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Suit was decreed accordingly.

Messrs Union Bank of Middle East Limited v. Messrs Zubna Limited and 3 others PLD 1987 Kar. 206; Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497; PLD 1987 Kar. 207; Muhammad Arshad and another v. Citibank N.A., Lahore 2006 SCMR 1347; United Bank Ltd. v. Messrs Sartaj Industries through Qaiser Iqbal, Managing Partner and 6 others PLD 1990 Lah. 99 and Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419 ref.

Rabel Zeeshan Akhund along with Afzal Ahmed, VP and Ansar Memon, AVP for Plaintiff.

Nemo for Defendants.

Date of hearing: 26th March, 2014.

2014 C L D 1279

[Sindh]

Before Munib Akhtar, J

PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY---Plaintiff

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Environmental Protection and 6 others---Defendants

Suit No.538 of 2014, decided on 29th April, 2014.

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

----S.12(2)---"Initial Environmental Examination (IEE)" and "Environmental Impact Assessment (EIA)"---Distinction---Two separate streams have been envisaged under S.12(2) of Pakistan Environmental Protection Act, 1997, one relating to projects requiring an IEE and the other to those in relation to which an EIA must be submitted.

(b) Constitution of Pakistan---

----Art. 201--- Judgment of High Court---Scope---Subject only to a different view being expressed by Supreme Court, interpretation of statutory provisions by a High Court is of binding effect in the Province concerned.

(c) Interpretation of statutes---

----Purpose of rules of interpretation is, in the end, to discover and apply legislative intent.

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

----S. 12(2), Scheds. I & II---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA)---Object, scope and purpose---Pakistan Environmental Protection Act, 1997, is beneficial legislation enacted for welfare of public at large---If in ensuring that its objectives are achieved, a particular person (i.e. proponent of a given project) is put to greater inconvenience or a more onerous burden is cast on him, then so be it---If a project can be regarded as falling within two different entries, one set out in Sched-I and the other in Sched-II, then it must be regarded as falling within the latter hence requiring an EIA.

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

----S. 42--- "Declaratory suit" and "seeking of declaration"--- Distinction--- Every suit in which a declaration is sought is not and does not have to be a declaratory suit under S.42 of Specific Relief Act, 1877.

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

----O. XXXIX, R.2---Term 'injury'---Connotation---Term 'injury' as used in O. XXXIX, R. 2, C.P.C. has always been broadly construed and applied---All manner of acts contrary to law, including breach of statutory duty, fall within the scope of an 'injury' to which O. XXXIX, R. 2, C.P.C. can apply.

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

----S. 12---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss.42 & 54---Suit for declaration and permanent injunction---Interim injunction, grant of---Environmental Impact Assessment (EIA)---Defence Housing Authority filed suit against defendant company seeking stay of construction of an underpass on the plea that no EIA had been sought for the construction---Validity---Defence Housing Authority had established a prima facie case as there was a serious breach of applicable statutory provisions---Project in question required EIA but Environment Agency had purported to accord approval of IEE---Mandatory requirements relating to public participation and hearing and solicitation of comments from concerned government agencies were not complied with---Project had a direct and close connection with Defence Housing Authority administered areas and the same would be affected by the Project---High Court restrained and stopped all construction in relation to or touching upon the Project---Karachi Metropolitan Corporation as proponent was not prevented from submitting an EIA for consideration by the Agency and if the same would be submitted it must be accorded on top priority---Application was allowed accordingly.

Salma Iqbal Chundrigar and others v. Federation of Pakistan and others 2009 CLD 682; Salim Godil and others v. Province of Sindh and others 2014 CLD 222; Standard Chartered Bank v. KMC and others C.P. No.D-3851 of 2012; 2011 SCMR 1743; Matloob Ali Khan v. Additional District Judge East, Karachi and another 1988 SCMR 747; Defence Flyover case, Shehri CBE v. Government of Pakistan and others PLD 2007 Kar. 293; Sultan v. Province of Sindh 2004 CLC 392; Muhammad Umer Baig v. Sultan Mehmood Khan and another PLD 1970 SC 139; Ilyas Ahmed v. Muhammad Munir and others PLD 2012 Sindh 92 and Nestle Milkpak Ltd. v. Sindh Institute of Urology and others PLD 2007 Kar. 11 ref.

Malik Naeem Iqbal, Malik Altaf Jawed and Ijaz Khattak for the Plaintiff.

Qazi Majid Ali, AAG, Farooq H. Naek, Murtaza Wahab, Jaffer Raza and S. Iftikhar ul Hassan for the Defendant No.5.

Akhtar Hussain, Advocate for the Defendant No. 7.

Ashiq Ali Langa, Director Technical.

Habib ur Rehman Solangi Assistant Director and Imran Sabir, EIA, for EPA Sindh.

Dates of hearing 17th and 21st April, 2014.

2014 C L D 1313

[Sindh]

Before Nadeem Akhtar and Shahnawaz Tariq, JJ

AIJAZ MAHMOOD---Appellant

Versus

Messrs HONGKONG AND SHANGHAI BANKING CORPORATION---Respondent

First Appeal No.13 of 2010, decided on 10th April, 2014.

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

----Ss. 9 & 22---Suit for recovery of finance---Non-decision of miscellaneous applications by Banking Court before passing judgment and decree---Effect---Defendant assailed judgment and decree passed by Banking Court on the ground that such applications pending before the court remained undecided before passing of decree---Validity---Decision of pending applications in either way would not affect, alter and change merits and final findings of judgment passed by Banking Court---Defendant could not take any benefit in such context by mere agitating technicalities, while he had failed to establish his case on merits---High Court declined to set aside judgment and decree passed by Banking Court mere in the score of pendency of miscellaneous applications---Banking Court took into consideration all material facts relating to controversy and documentary evidence placed on record was fully discussed and perused--- Defendant failed to point out any illegality and infirmity in judgment passed by Banking Court, which did not call for any interference and the same was maintained--- Appeal was dismissed in circumstances.

2006 CLD 132 and 1993 CLC 334 distinguished.

Cotton Export Corporation of Pakistan (Pvt.) Limited v. Messrs Rupali Cotton Industries and 4 others 2002 CLD 1430 and Muhammad Arshad and others v. City Bank N.A., Lahore 2006 SCMR 1347 ref.

Masood Anwar Ausaf for Appellant.

M. Imtiaz Agha for Respondent.

Date of hearing: 22nd October, 2013.

2014 C L D 1327

[Sindh]

Before Munib Akhtar, J

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

Versus

M.V. "AVIONA" and 2 others---Defendants

Adm. Suit No.1 of 2008, decided on 22nd November, 2013.

(a) Precedent---

----Legal principles must in the end be applied to facts before Court in each case and such application may sometimes lead to divergent results.

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

----Ss. 3(2)(h) & 4(4)---Suit for recovery of claim arising out of carriage of goods agreement---Action in rem---Plaintiff alleged that on arrival of vessel, consignment was short delivered, landing of which resulted into loss in a sum of Rs.18,672,038.60---In compliance of ad interim order, defendant vessel initially filed letter of undertaking and subsequently it was replaced with bank guarantee equivalent to suit amount---Validity---Plaintiff claimed that landed quantity was less than that consigned---Prima facie question existed with regard to quantity that was delivered to plaintiff---Such question could not be answered with reference to draught survey reports---Inherent vice or method of delivery that could have resulted in loss or spillage and others were either questions of fact or at the most mixed questions of law and fact---Such questions could not be addressed at initial stage and determination was also deferred to as it was dependant on the outcome of trial---Plaintiff was able to make out a prima facie case with regard to its claim of short delivery/landing of the consignment---Plaintiff had made out a case in terms of S.3(2)(h) read with S.4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980, for action in rem against the vessel---Balance of convenience was in favour of plaintiff who might suffer irreparable loss and injury, especially if surety provided was discharged---High Court directed that surety furnished pursuant to ad interim order was to remain in place for duration of the suit---Application was allowed in circumstances.

I Congreso del Partido [1981] 1 All ER 1092, 1099; Metal Construction of Greece SA v. Owners of the vessel m.v. Lady Rea 2013 CLD 1829; Sunrise Maritime Inc. v. Uvisco Ltd. ("The Hector") [1998] 2 Lloyd's Rep 287 and Homburg Houtimport BV v. Agrosin Private Ltd. and others "(The Starsin") [2003] 2 All ER 785 ref.

V.N. Lakhani & Co. v. m.v. Lakatoi Express and others PLD 1994 SC 894; 1994 CLC 1498; Sun Line Agencies Ltd. v. Psiloritis and others 1984 CLC 1553; Atlantic Steamer's Supply Company v. m.v. Titisee and others PLD 1993 SC 88; Khadija Edible Oil Refinery (Pvt.) Ltd. v. m.t. Galaxy and others 2011 CLD 1329; 2011 CLD 709; The Evpo Agnic [1988] 2 Lloyd's Rep 411 and 2011 CLD 1343 distinguished.

Muhammad Safdar for Plaintiff.

Adeel Abid for Defendant No.1.

A.H. Mirza for Defendant No.2.

Date of hearing: 7th November, 2013.

2014 C L D 1343

[Sindh]

Before Faisal Arab and Muhammad Shafi Siddiqui, JJ

Messrs THARPARKAR SUGAR MILLS LIMITED through Authorized Representative and 7 others---Appellants

Versus

BANKERS EQUITY LIMITED through Official Liquidator---Respondent

High Court Appeal No.7 of 2013, decided on 4th January, 2014.

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

----Ss. 27 & 22---Interpretation of S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit for recovery was decreed in terms of compromise between the parties, and subsequently, the defendant filed another suit seeking to take advantage of a State Bank Circular---Contention of the defendant was inter alia, that till such time the proceedings of the second suit culminate, status quo with regard to mortgaged property had to be maintained---Held, defendant had sought indirect relief for setting aside or modification of the judgment and decree passed in the first suit, against which defendant had not filed appeal and decree had obtained finality---Under S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 no court or authority was prohibited to revise, recall, call or permit or call into question the judgment and decree of Banking Court or the legality or propriety of anything done by the Banking Court, subject to provisions of S.22 of the Ordinance---Legislature in its anxiety to protect orders of the Banking Court had gone to the extent of ordaining that no authority other than the appellate forum shall even allow to throw a challenge to the validity of orders of the Banking Court and the same could not be assailed before any forum except by the way of appeal---Only possibility in which an injunction or restraining orders against execution of decree and sale of mortgaged property could be granted, would be on the presumption that decree in the first suit might be modified, altered and or set aside, which could not be presumed under provisions of S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001--- Appeal was dismissed, in circumstances.

Marhaba Textile Ltd. v. Industrial Development Bank of Pakistan 2003 CLD 1822 rel.

Abid S. Zuberi along with Umer Lakhani for Appellants.

Ijaz Ahmed for Respondent.

Qadir Buksh Umrani, Official Assignee.

Date of hearing: 15th May, 2013.

2014 C L D 1354

[Sindh]

Before Nadeem Akhtar, J

IGI INVESTMENT BANK LIMITED through Attorney---Plaintiff

Versus

Messrs ADMORE GAS (PVT.) LTD. and another---Defendants

Suit No.B-117 of 2011, decided on 6th February, 2014.

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

----Ss. 9(2) & 10(4)---Banker's Books Evidence Act (XVIII of 1891) Ss.2(8) & 4---Suit for recovery---Certification of statement of account by "Principal Accountant" or Manager"---Requirements--- Application for leave to defend was dismissed--- Defendant raised objection regarding authenticity of statement of account filed by plaintiff/Bank---Contention of defendant was that statement of account had not been certified by the "Principal Accountant" or "Manager" of the Bank in terms of Bankers' Books Evidence Act, 1891, and had instead been certified by a "Senior Officer", therefore, the same was defective---Validity---Defendant at this stage, after the leave to defend application had been dismissed, could not raise such an objection, and even otherwise in the defendant's application for leave to defend, no single entry or illustration in the statement of account was shown to be incorrect nor any discrepancy was shown therein---Statement of account carried presumption of truth by virtue of S.4 of the Banker's Books Evidence Act, 1891 when entries therein were not rebutted with cogent reasons---Every Financial Institution had a "principal accountant" and "manager", but it was not necessary that the said titles of designations were allocated to such officers or were mentioned with their names---No legal bar existed for a Senior Officer, who in the opinion of the Financial Institution was qualified and capable of handling and supervising accounts, to be assigned the task, charge and responsibility of a "principal accountant" or "manager"---Defendants had not made the case that the officer who certified the statement of account was not a senior officer or that the statement of account did not bear any certification---Officer, in the present case, was admittedly a senior officer and attorney of the plaintiff Financial Institution, and power of attorney had been executed in his favour by the plaintiff Bank, which was on record---In any such organization, a senior officer was certainly deemed to be senior or at least equivalent to a manager---Statement of account filed by the plaintiff Bank could not be discarded and the plaintiff could not be non-suited only for the reason that instead of the titles of "Principal Accountant" or "Manager", the title "Senior Officer" had been mentioned with the name of the plaintiff's officer who had certified the statement of account---Statement of account filed by the plaintiff Bank therefore fulfilled the requirements of S.2(8) of the Bankers' Books Evidence Act, 1891 and S.9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was decreed, in circumstances.

Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Messrs Liaquat Flour and General Mills through Partners and 3 others v. Messrs Muslim Commercial Bank Ltd. 2007 CLD 188; National Bank of Pakistan through Manager v. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others 2007 CLD 678; Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Pvt.) Limited through Director/Chief Executive and 3 others 2012 CLD 1302 and Pakistan Kuwait Investment Company (Pvt.) Limited through Authorized Representative v. Messrs Active Apparels International and 6 others 2012 CLD 1036 distinguished.

Equity Participation Fund v. Messrs Abbrasive Products C. Limited and 4 others 2012 CLD 971; Habib Metropolitan Bank Ltd. v. Mian Abdul Jabbar and another 2013 CLD 88; National Bank of Pakistan v. Messrs Apollo Textile Mills Limited and 4 others 2012 CLD 189; Silk Bank Limited v. Messrs Dewan Sugar Mills Limited 2011 CLC 436; Habib Bank Limited through Authorized Attorney v. Haidri Homes through Partners and 3 others 2012 CLD 2016; Mrs. Jawahar Afzal v. Messrs United Bank Limited 2003 CLD 119; Sh. Abdul Sattar Lasi v. Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and 6 others 2006 CLD 18; Messrs International Traders and others v. Union Bank Limited 2003 CLD 1464; Messrs United Steel Corporation, Moman Pura, Darughawala, G.T. Road, Lahore and 4 others v. Muslim Commercial Bank Limited 1999 YLR 2071; Grindlays Bank Limited v. Messrs Cheap John 1992 CLC 1108 and United Bank Ltd. v. Messrs Sartaj Industries through Qaisar Iqbal, Managing Partner and 6 others PLD 1990 Lah. 99 rel.

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

----S. 9---Procedure of Banking Court---Passing of decree---Admission by defendant---Non-disputing of liability---Effect---Non-disputing of liability by the defendant would be sufficient to draw conclusion that decree had been passed on admissible documents.

Smooth Pharmaceuticals (Pvt.) and others v. Bank of Khyber 2005 CLD 120 rel.

Mrs. Samia Faiz Durrani for Plaintiff.

Jaffar Raza for Defendants.

Date of hearing: 12th November, 2013.

2014 C L D 1367

[Sindh]

Before Muhammad Shafi Siddiqui, J

HABIB METROPOLITAN BANK LIMITED---Plaintiff

Versus

ABID NISAR---Defendant

Suit No.B-89 of 2012, decided on 5th March, 2014.

(a) Interpretation of statutes---

----Mandatory provision---Effect---Mandatory provisions of a statute are required to be complied strictly and no deviation of whatsoever nature is acceptable unless otherwise required by law---Compliance of mandatory provision of law is more important than wisdom of individual which negates such compliance.

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

----O.VII, R.11---Rejection of plaint---Principle---Still born or incompetent suit should be burried at its inception so that no time is consumed on a fruitless litigation and that in the same breath it may give chance to parties to retrace their steps at the earliest possible moment so that if permissible may find a properly instituted case.

Messrs Standard Hotels (Private) Limited v. Messrs Rio Centre and others 1994 CLC 2413 and Muhammad Akhtar and others v. Abdul Hadi and others 1981 SCMR 878 rel.

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

----Ss. 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), S.4---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for recovery of bank loan---Rejection of plaint---Statement of accounts, not certified---Plaintiff, financial institution, did not append certified statement of accounts with the plaint---Defendant besides challenging entire claim and refuting recovery amount raised point of competence---Validity---Claim under Financial Institutions (Recovery of Finances) Ordinance, 2001, was based on accounts and once such accounts did not qualify test, it could not be a basis of passing decree in favour of plaintiff and on such score claim must fail---Claim of plaintiff financial institution could neither be established nor did it lie as the claim lacked necessary compliance of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaint was rejected in circumstances.

Bankers Equity Limited v. Messrs Bentonite Pakistan Limited and others 2003 CLD 931; 2010 CLD 651 and Soneri Bank Limited v. Compass Trading Limited 2012 CLD 1302 ref.

National Bank of Pakistan v. Mujahid Nawaz Cotton Ginners 2007 CLD 788; Apollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337; Messrs Standard Hotels (Private) Limited v. Messrs Rio Centre and others 1994 CLC 2413 and Muhammad Akhtar and others v. Abdul Hadi and others 1981 SCMR 878 rel.

Khalid Mehmood Siddiqui for Plaintiff.

Taimor Mirza for Defendant No.1.

Date of hearing: 21st February, 2014.

2014 C L D 1398

[Sindh]

Before Syed Saeed-ud-Din Nasir, J

Mrs. HUSNA RIZVI---Plaintiff

Versus

Mrs. KIRAN ASIF ALI CHUDHARY and 3 others---Defendants

Suit No.960 of 2010, decided on 11th July, 2014.

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

----S. 19---Civil Procedure Code (V of 1908), O. I., R.10, O.XXI, Rr. 84, 85 & 86---Execution of decree---Auction bidder---Impleading of necessary party---Entitlement---During pendency of suit, intervener sought himself to be impleaded as necessary party, on the plea that he was auction bidder of suit property during execution proceedings of decree passed by Banking Court---Validity---Proposed intervener failed to deposit 25% bid money with Banking Court concerned and could not assume status of auction purchaser---Against proposed intervener no relief was claimed in the suit---It was not necessary to join intervener as necessary party---Writ of attachment was issued in respect of property in question by Banking Court in execution proceedings, therefore, High Court declined to restrain Banking Court from executing decree--- Application was dismissed in circumstances.

Salim Salam Ansari for Plaintiff.

Wasi Hyder Jafferi for Defendants.

Imran Ameer for applicant/intervener.

Date of hearing: 7th July, 2014.

2014 C L D 1424

[Sindh]

Before Syed Hasan Azhar Rizvi and Junaid Ghaffar, JJ

Mst. MEHWISH KASHIF through Attorney/Husband---Appellant

Versus

Messrs SUMMIT BANK LTD. and 4 others---Respondents

First Appeal No.59 of 2013, decided on 27th January, 2014.

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

----Ss. 19, 15 & 22---Civil Procedure Court (V of 1908), S.151---Execution of decree of Banking Court---Auction of mortgaged property---Higher bid made by person after conclusion of auction proceedings and confirmation of sale to the auction-purchaser--- Effect--- Mortgaged property was auctioned with the intervention of the court and after following of the procedure, sale was confirmed in favour of auction-purchaser---One month after conclusion of auction proceedings, appellant filed application under S. 151, C.P.C., offering a higher amount for the said property and prayed that appellant's higher bid should be accepted---Validity---Appellant failed to participate in auction and application under S. 151, C.P.C. was filed after one month and eight days from the conclusion of the auction proceedings---Nothing had been stated by the appellant to point out commission of any fraud, irregularity, inadvertence, error or mistake on part of Banking Court or the procedure adopted for the auction---Appellant was neither party to the suit or execution nor participated in the auction proceedings and after a delay of one month and eight days, appellant filed an application under S.151, C.P.C. for acceptance of an offer that the appellant had never made at the time of auction---Banking Court had confirmed the bid in favour of the auction-purchaser and had adopted the procedure and mechanism under the law for the same, therefore, appellant had no locus standi to raise any objection to the auction proceedings---Nothing should be left to the sweet will of any individual to bypass such legal procedure on the pretext that he/she was ready to offer to pay more money than the highest bid made during the auction, which was concluded after following the legal procedure and timeframe by the law and was proclaimed by the Banking Court---Mere increase of offer made by a stranger after more than a month from the conclusion of the auction proceedings could not be accepted as a valid ground for setting aside a valid sale through open auction with intervention of Banking Court unless proceedings of auction were shown to be collusive, fraudulent or lacking transparency---Even mutual understanding, consent or compromise between the decree-holder and the judgment-debtor or any third party would not affect the right of the auction-purchaser, which the Banking Court was bound to honour and protect in order to maintain the sanctity of the transaction--- Appeal was dismissed, in circumstances.

Investment Corporation Limited v. Shahdin Limited 2001 CLC 1267; Muhammad Ikhlaq Memon v. Zakria Ghani PLD 2005 SC 819 and Hudaybia Textile Mills Ltd. v. A.B.P.L. PLD 1987 SC 512 rel.

PLD 2005 SC 470; 2007 CLC 1409; Barkat Ali v. Muhammad Nawaz PLD 2004 SC 489; Messrs Irisma International v. United Bank Limited, Karachi 2006 CLD 832; Askari Commercial Bank Limited v. Zafar Ahmed 2008 CLD 800; Messrs Unicom Enterprises v. Banking Court No.5 and others 2004 CLD 1452; Mst. Noor Khatoon v. Messrs Habib Bank Ltd. 2013 CLC 702; S. Soundararajan and others v. Khaka Mahomed Ismail Saheb of Messrs Roshan and Co. AIR 1940 Madras 42 and Muhammad Nawaz v. Barkat Ali PLD 2004 Lah. 21 ref.

Ms. Syeda Sara Kanwal for Appellant.

Sultan A. Alana for Respondent No.1.

S.M. Kazim for Respondent No.5.

Date of hearing: 16th January, 2014.

2014 C L D 1439

[Sindh]

Before Faisal Arab and Salahuddin Panhwar, JJ

Messrs GLOBAL ENERGY AND COMMODITY EXCHANGE GROUP ITALY SPA (GECX GROUP) and another---Appellants

Versus

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

High Court Appeal No.13 of 2013, decided on 17th September, 2013.

Arbitration Act (X of 1940)---

----S. 20---Dispute pertaining to performance of contract---Arbitration proceedings--- Application to restrain encashment of bank guarantee executed by appellant in favour of the respondent--- Scope---Contention of the appellant was that respondent should be restrained from encashing the bank guarantee till conclusion of arbitration proceedings between the parties---Held, that encashment of bank guarantee was to be restrained only if a prima facie case was made when there was material available on record to show that the person in whose favour the performance bond was executed, had also committed default in performance of the contract---When such a prima facie case was made out then the court could restrain the encashment of a bank guarantee---In the present case, however, time for performance of the contract by the appellant was extended many times, but the appellant failed to discharge its contractual commitment, and only after getting extension of contract, when the contract was still not performed by the appellant, the bank guarantee was sought to be encashed---No justification therefore, existed to restrain the respondent from encashing the bank guarantee---Appeal was dismissed.

PLD 1996 Kar. 183 and 2011 CLD 1625 rel.

PLD 1997 Kar. 636; PLD 1976 Kar. 644 and 1989 SCMR 379 ref.

Omair Nisar for Appellants.

Sarfaraz Ali Metlo for Respondents.

2014 C L D 1458

[Sindh]

Before Nadeem Akhtar and Syed Muhammad Farooq Shah, JJ

Messrs SADIA INDUSTRIES and 3 others---Appellants

Versus

Messrs SONERI BANK LIMITED---Respondent

Ist Appeal No.48 of 2011, decided on 5th April, 2014.

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

----Ss. 10(4), 10(5) & 9---Non-compliance of mandatory requirements of S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Allegation of obtaining of signatures from customer on blank paper by Financial Institution--- Scope--- Suit for recovery---Application for leave to defend was dismissed and suit was decreed in favour of the plaintiff Bank---Contention of the appellants (defendants) inter alia was that the plaintiff Bank had obtained their signatures on blank pieces of paper and that statement of account filed by the plaintiff Bank was incomplete and contained serious irregularities---Held, that contention of defendants with regard to signatures on blank paper could not be accepted as where one person signs and delivers to another paper stamped in accordance with law, either wholly blank or having written thereon an incomplete negotiable instrument, in order that the same may be made, or completed into a negotiable instrument, he thereby give prima facie authority to person who receives that paper to make and complete it as case may be into a negotiable instrument for any amount---Defendants, in their applications for leave to defend did not file documents which in their opinion supported the substantial questions of law and fact as required under S.10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendants, therefore, did not comply with mandatory requirements of Ss.10(4) & 10(5) of the Ordinance, and were bound to face consequences for such non-compliance--- Appeal was dismissed, in circumstances.

Mushtaq Ahmed Vohra v. Cresent Investment Bank Limited 2005 CLD 444; Messrs Shaz Packages and 3 others v. Messrs Bank Alfalah Limited 2011 CLD 790; Messrs Agha Fabrics (Pvt.) Limited and 3 others v. Union Bank Limited and another 2004 CLD 915 and Messrs New Qureshi Agro Traders through Managing Partner and 2 others v. Muslim Commercial Bank Ltd. 2005 CLC 904 ref.

Muhammad Arshad and another v. Citi Bank N.A. Lahore 2006 SCMR 1347 and Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337 rel.

Khaleeq Ahmed for Appellants.

Azizuddin Khan for Respondent.

Date of hearing: 8th October, 2013.

2014 C L D 1482

[Sindh]

Before Nadeem Akhtar, J

UNITED BANK LIMITED---Petitioner

Versus

GULISTAN TEXTILE MILLS LIMITED---Respondents

J. Miscellaneous No.1 of 2013, decided on 20th December, 2013.

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

----S. 306---Statutory notice of demand---Failure to pay debt---Commercial insolvency---Presumption---In the event of failure to pay debt in accordance with statutory notice of demand under S.306 of Companies Ordinance, 1984, insolvency was to be presumed through it could also be proved in other ways.

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

----Ss. 305, 306 & 309---Winding up of company---Failure to pay debt---Commercial insolvency---Company ceased to be a going concern and it was cripplingly indebted to a number of creditors including petitioners---Company had become "commercially insolvent" and was unable to pay its debts and its paid up capital had been completely wiped out---Even the remotest possibility of revival of the company did not exist and its further existence or continuance would only multiply its liabilities to detriment of its creditors and shareholders---Effect---Winding-up of the company had become inevitable and no objection was received from any quarter and statutory presumption as to commercial insolvency of the company was created---High Court appointed official assignee as Official Liquidator, who would take over complete charge and control of the affairs and assets of the company---High Court directed that official liquidator would perform all such duties and functions and exercise all such powers as were required under the law---Mills of the company were located in different districts in other province, therefore, official liquidator was authorized to seek assistance of such persons at those places as he might deem fit and proper in the best interest of creditors and shareholders and for expeditious winding-up of the company---Petition was allowed in circumstances.

Hala Spinning Mills Ltd. v. International Finance Corporation and another 2002 SCMR 450 and Messrs Ali Woolen Mills v. Industrial Development Bank of Pakistan and 3 others PLD 1990 SC 762 ref.

Kazim Hassan for Petitioner.

Mrs. Sofia Saeed Shah for Applicant/Intervener.

Adnan Iqbal Chaudhry for Respondent.

2014 C L D 1499

[Sindh]

Before Nadeem Akhtar, J

Messrs HABIB BANK LTD.---Plaintiff

Versus

MAHMOOD ALAM SHERANI and another---Defendants

Suit No.B-97 of 2009, decided on 10th April, 2014.

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

----S. 10---Limitation Act (IX of 1908), S. 5--- Suit for recovery of finances---Condonation of delay---Principle---Application for leave to defend the suit was barred by two days---Application was filed on 26-8-2009 and was not accompanied by any application for condonation of delay, whereas application for condonation of delay was filed by defendant on 23-11-2010---Instead of giving plausible explanation or justification for delay, defendant insisted in his application for condonation of delay that his application for leave to defend the suit was not barred by time---Defendant sought condonation of 'alleged one day delay in filing of leave to defend application' by assuming that there was no delay of two days and by claiming that even delay of one day was an alleged delay---Validity---While seeking condonation of delay, defendant had to submit explanation for delay of each and every day---If each and every day's delay was not explained or justified in satisfactory and convincing manner, delay could not be condoned---For invoking discretionary power of High Court in order to condone delay, defendant had to show strong and solid grounds and also to explain delay of each and every day---Defendant did not attempt to explain or justify delay of two days---High Court declined to condone the delay---Allegations of fact in plaint disclosed subsisting cause of action against defendant and suit was maintained by all standards---Plaintiff was able to show that he was entitled to relief against defendant---If anyone of such conditions precedent for competent suit was lacking, plaintiff was not entitled to decree either under S. 10(1) and (11) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was decreed in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497; Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353; Mst. Hajra Bibi v. Zarai Taraqiati Bank Limited (ADBP) through Manager 2006 CLD 261; My Bank Limited v. Messrs Muslim Cotton Mills (Pvt.) Ltd. through Chief Executive and 3 others 2011 CLD 1721; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd PLD 2012 SC 268 = 2012 CLD 337; Khawaja Muhammad Bilal v. Union Bank Limited through Branch Manager 2004 CLD 1555; Masood Alam v. Muslim Commercial Bank 2004 CLD 1227; Akhtar Kaleem v. Citibank N.A. 2004 CLD 1361; Rajana Cotton Factory (Pvt.) Ltd. v. Bank of Punjab 2004 CLD 1569; Imtiaz Ali v. Atta Muhammad and another PLD 2008 SC 462 and Pakistan Handicrafts, Sindh Small Industries Corporation, Government of Sindh v. Pakistan Industrial Development Corporation (Pvt.) Ltd. and 2 others 2010 CLC 323 ref.

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

----Ss. 9 & 10-- -Interlocutory application--- Principle---Defendant cannot file interlocutory/ancillary application and has no right to defend the suit unless allowed by court to defend the suit.

Waheed Corporation v. Allied Bank Limited 2003 CLD 245 rel.

Nabeel Kolachi for Plaintiff.

Siddiq Mirza called absent for Defendants.

Date of hearing: 12th December, 2013.

2014 C L D 1518

[Sindh]

Before Nadeem Akhtar, J

KASB BANK LIMITED---Plaintiff

Versus

MUHAMMAD AHMED ANSARI---Defendant

Suit No.B-59 of 2013, decided on 8th May, 2014.

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

----S. 10--- Cross cases---Leave to defend the suit---Principle---Where separate suits are filed against each other by financial institution and customer, applications for leave to defend filed in both suits are to be heard and decided independently on their own merits---Order passed on one application for leave to defend in one suit does not affect or prejudice merits or demerits of application for leave to defend in other suit---In case leave to defend is granted in one suit, even then defendant in other suit does not become entitled for leave to defend the suit as a matter of right.

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

----Ss. 9 & 10---Suit for recovery of finance---Vague defence---Substantial question of law and fact, non-raising of---Defendant in his application for leave to defend the suit vaguely stated 'amount deposited', 'amount withdrawn', 'amount payable/excess paid' and 'amount disputed: nil'---Defendant did not comply with mandatory requirements of S.10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant was obliged to file under S.10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, all documents along with his application, which in his opinion could support purported substantial questions of law and fact raised by him---High Court declined to grant leave to defend as it did not comply with mandatory requirements of S.10(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and also as he was not able to raise any substantial question of law or fact that could require evidence in the matter---Entries appearing in statement of account and claim made in suit fully corroborated each other---Suit was decreed in circumstances.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337 rel.

Muhammad Ishaq Ali for Plaintiff.

Khaleeq Ahmed for Defendant.

Date of hearing: 15th April, 2014.

2014 C L D 1526

[Sindh]

Before Nadeem Akhtar, J

SILKBANK LIMITED through Authorized Persons---Plaintiff

Versus

Messrs AZM CHEMICAL COMPANY through Proprietor and 5 others---Defendants

Suit No. B-101 of 2013, decided on 2nd May, 2014.

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

----Ss. 10, 9 & 4--- Procedure of Banking Courts---Adjudication of banking disputes---Duties of customer and financial institutions---Non-compliance with mandatory provisions of Ss. 10 & 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Plaintiff institution and defending customer had identical statutory responsibilities respectively under Ss. 9(3) & 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to plead and state clearly and particularly the finances availed by the defendant, repayments made by the defendant, and the dates thereof, and the amounts of finance repayable by the defendant, who is saddled with the additional responsibility to specify amounts disputed by him---Defending customer was further obliged to put in a definite response to bank's accounting and had under Ss.10(3) & 10(4) of the Ordinance, to compulsorily plead and answer in the application for leave to defend, his accounts as well as the facts and amounts disputed by the defendant, repayable to the plaintiff---Banking suit was normally a suit on accounts which were duly ledgered and maintained compulsorily in the books of accounts under prescribed principles/standards of accounting in terms of laws, rules, and banking practices---Instead of leaving it to the options of parties to make general assertions on accounts, the Financial Institutions (Recovery of Finances) Ordinance, 2001 bound both sides to be absolutely specific on accounts and the parties were obligated equally to plead and to specifically state their respective accounts---Provisions contained in Ss.10 & 9 of the Ordinance required strict compliance and non-compliance therewith attracted consequences of rejection of application of leave to defend along with decree.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337 rel.

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

----Ss. 10, 9 & 4--- Procedure of Banking Court---Application for leave to defend suit---Adjudication---Non-compliance with mandatory provisions of Ss.9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001--- Effect--- Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law, and by virtue of S.4 thereof, its provisions overrode all other laws, and the provisions contained in Ss.9 & 10 of the Ordinance required strict compliance---Non-compliance with said sections attracted consequences of rejection of application of leave to defend, along with a decree.

Syed Muhammad Kazim for Plaintiff.

Sami Ahsan for Defendants called absent.

Date of hearing: 15th April, 2014.

2014 C L D 1548

[Sindh]

Before Nadeem Akhtar and Aftab Ahmed Gorar, JJ

ASIF KUDIA---Appellant

Versus

Messrs KASB BANK LIMITED and others---Respondents

Ist Appeal No.121 of 2010 and Ist Appeal No.3 of 2011, decided on 10th June, 2014.

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

----Ss.9, 10 & 22---Constitution of Pakistan, Art.199---Constitutional petition---Recovery of bank loan---Service of process---Proof---Ex parte order, setting aside of---Converting of proceedings---Suit filed by bank against defendant was decreed ex parte on the ground that process was issued according to all prescribed modes and he failed to appear before Banking Court---Validity---Summons sent to defendant through courier service was returned with the remarks that defendant had shifted from address at which summons was sent---Summons to defendant was sent through ordinary registered post instead of sending the same through registered post acknowledgement due, due to which there was nothing on record to show that summons was duly served upon him or he had refused to receive the same---Bailiff did not submit his report nor was there any report by him available on record to show that summons had received by defendant or he refused to receive the same---No evidence was available on record to show refusal on the part of defendant, or non-service or proper service of summons upon him---By not sending summons through registered post acknowledgement due as specifically provided in S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, mandatory compliance was not made---By passing ex parte order against defendant, despite such non-compliance, Banking Court committed a grave illegality---Summons was not issued in accordance with S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, defendant was not served and service upon him was never held good---Without first holding service good upon defendant, no further proceedings could be taken in suit nor any adverse order could be passed against him---Ex parte order passed against defendant was not sustainable and was liable to be struck down/set aside and application for leave to defend was within time---High Court converted appeals into Constitutional petitions, ex parte order passed by Banking Court against defendant was declared illegal and without jurisdiction and was set aside---High Court directed the Banking Court to decide application for leave to defend in accordance with law---Petition was allowed accordingly.

Civil Petition Nos.139-K of 2006 and 273-K of 2006 Mubarak Ali v. First Prudential Modaraba and Civil Petition No.19-K of 2009 Messrs Axleproducts Limited v. Messrs Allied Bank of Pakistan Ltd. rel.

Farzand Raza Naqvi and 5 others's case 2004 SCMR 400; Messrs Naeem Associates through Proprietor and 6 others v. Allied Bank of Pakistan Limited through Branch Manager 2004 CLD 1672; Haji Muhammad Yaqoob Akhtar v. Habib Bank Ltd. and others 2009 CLD 1699; Monazam Bibi and 2 others v. Zarai Taraqiati Bank Ltd. through Branch Manager 2006 CLD 836; United Bank Limited v. Messrs Exim International and 7 others 2012 CLD 471; Fazal-e-Rabbi v. Judge Banking Court and 4 others 2010 CLD 972; Saleem Ahmed v. Zarai Taraqiati Bank Limited through Manager 2007 CLD 872; Messrs Liaqat Flour and General Mills through partners and 3 others v. Messrs Muslim Commercial Bank Ltd. 2007 CLD 188; Messrs Huffaz Seamless Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419; Javaid Tanveer Mughal v. Agricultural Development Bank of Pakistan through Branch Manager and 3 others 2004 CLD 748; Karamat Hussain and others v. Muhammad Zaman and others PLD 1987 SC 139; Muhammad Yusuf v. Mst. Kharian Bibi 1995 SCMR 784; Capital Development Authority, Islamabad through its Chairman, 1994 SCMR 771; Muhammad Aslam (through his L.R.) v. Wazir Muhammad PLD 1985 SC 46; Mst. Amina Begum and others v. Mehar Ghulam Dastgir PLD 1978 SC 220; Messrs United Bank Limited through authorized attorneys v. Banking Court No.II and 2 others 2012 CLD 1556; Messrs Mumtaz Traders and 3 others v. Messrs Habib Bank Limited and another 2009 CLD 169; Ms. Rahima Iqbal v. Banking Court No.II and 2 others 2008 CLD 338; Investment Corporation of Pakistan and 5 others v. Judge, Banking Court No.1, Multan and 9 others 2006 CLD 1161 and Khadim Hussain and 12 others v. Gul Hassan Tiwano and 3 others 2013 CLD 981 ref.

Messrs Simnwa Polypropylene (Pvt.) Ltd. v. Messrs National Bank of Pakistan 2002 SCMR 476 and National Bank of Pakistan v. Messrs West Pakistan Tanks Terminal (Pvt.) Ltd. 2000 CLC 896 distinguished.

(b) Administration of justice---

----Wrong provision of law---Effect---If a wrong provision of law is mentioned in title of an application, the same can be ignored and application can be treated to have been filed under the relevant provision.

(c) Administration of justice---

----Moulding of relief---Correction of wrongs---Superior Courts have inherent and constitutional powers to remedy and correct wrongs committed by subordinate courts---High Court has vast powers in its inherent jurisdiction not only to mould relief but also to 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 and Mst. Mubarak Salman and others v. The State PLD 2006 Kar. 678 rel.

(d) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Interlocutory orders---Principle---Constitutional jurisdiction of High Court cannot be invoked against every interlocutory order passed by a court, nor can every appeal against such order be converted into Constitutional petition---Such discretion and inherent powers are to be exercised by High Court keeping in view the facts and circumstances of each case and particularly in cases where gross and blatant violation of any of the provisions of law is apparent in the order assailed, for which no remedy is available to aggrieved party or where order assailed has been passed by court by exercising such jurisdiction which was not vested in it by law or where the court fails to exercise of jurisdiction which was vested in it by law.

Messrs United Bank Limited through authorized attorneys v. Banking Court No.II and 2 others 2012 CLD 1556; Messrs Habib Bank Limited through authorized officers/attorneys v. Messrs Victor Electronic Appliances Industries (Pvt.) Ltd. and another 2011 CLD 1571 and Bank of Punjab v. International Ceramics Ltd. and 4 others PLD 2013 Lah. 487 rel.

Abbadul Hussnain for Appellant.

Muhammad Zubair Quraishy for Respondent No.1.

Respondents Nos.2 to 7 called absent.

Dates of hearing: 24th September, 3rd December of 2013 and 29th May, 2014.

2014 C L D 1567

[Sindh]

Before Munib Akhtar, J

SOUTH ASIA GEOPHYSICAL SERVICES (SAGeo) through General Manager---Petitioner

Versus

NEW HORIZON EXPLORATION AND PRODUCTION LIMITED (NHEPL)---Respondent

J.M. No.9 of 2013, decided on 11th April, 2014.

Companies Ordinance (XLVII of 1984)---

----S. 306---Limitation Act (IX of 1908) S. 19---Company when deemed unable to pay its debts---Petition for winding up of such company---Time-barred debts---Scope---Notice under S.306 of the Companies Ordinance, 1984 could not be validly issued on a time-barred debt, therefore a company could not, on such debt, be deemed unable to pay its debt---Debt must be within the period of limitation in accordance with provisions of the Limitation Act, 1908 when the petition for winding up of a company was presented, and if not, then such a company could not be wound up on such a debt---Debt, if was not time barred when notice under S.306 of the Companies Ordinance, 1984 was issued, thereby triggering the deeming provision of said section, but the debt was so barred by time the petition was presented, the company still could not be wound up on the ground that it was unable to pay its debt.

Interactive Media and Communication Solution Private Limited v. GO Airlines Limited (2013) 199 DLT 267; Mosenthals Wool and Mohair S.A. Pty. Ltd. v. C.L. Jain Woolens Mills P. Ltd. (2013) 179 Comp. Cas. 174 (P&H); Gurdino Jiwatram Kukreja v. Eastern Mining and Allied Industries Ltd. (2004) 121 Comp. Cas. 762 (Gau); Mazboot Packers and Engineers Co. v. Himachal Pradesh Horticulture Produce Marketing and Processing Corporation Ltd. (1999) 95 Comp. Cas. 579 (HP); Vijayalakshmi Art Productions v. Vijaya Productions P. Ltd. (1997) 88 Comp. Cas. 353 (Mad); Niyogi Offset Printing Press Limited v. Doctor Morepen Limited (2009) 149 Comp. Cas. 467, 476 and Ridgeway Motors (Isleworth) Ltd. v. Alts Ltd. [2005] EWCA Civ 92, [2005] 2 All ER 304 rel.

M.G. Kadir & Co. v. Abdul Latif PLD 1970 Kar. 708 and Province of West Pakistan v. Makhdoom Mohamed PLD 1961 Kar. 722 distinguished.

Amjed Sarfraz for Petitioner.

Umair A. Qazi for Respondent.

Dates of hearing: 3rd and 24th December, 2013.

2014 C L D 1583

[Sindh]

Before Syed Hasan Azhar Rizvi, J

Mian KAMRAN ILAHI and another---Plaintiffs

Versus

DIGRI SUGAR MILLS LIMITED and 2 others---Defendants

Suit No. 1177 of 2013, decided on 21st March, 2014.

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

----O. XXXIX, Rr. 1 & 2---Grant of interim injunction---Essential ingredients---Party seeking interim injunction must show that a prima facie case existed in his favour, the court be satisfied that if injunction is not issued, irreparable damage or injury would be caused to such party and the balance of convenience has to be in favour of the grant of injunction.

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

----O. XXXIX, Rr. 1 & 2, O. II, R. 2 & S. 114---Specific Relief Act (I of 1877) S. 12---Suit for specific performance of contract and damages---Contract for sale of sugar---Interim injunction, grant of---Plaintiff had claimed that sugar was not delivered by the defendants as per delivery order and agreements and sought specific performance of agreements and additionally claimed damages---Application for temporary injunction, to restrain defendants from creating third party interests or from selling sugar to the extent of the plaintiff's claim was allowed, however was later modified so as to not include sugar produced in subsequent seasons---Contention of defendants was inter alia, that there was no remaining obligation for supply of sugar to plaintiff and that since plaintiff had calculated and claimed damages in the suit, therefore no interim injunction or specific performance could be granted---Held, that reports of the court appointed Nazir inspections, confirmed that the defendants were creating third party interests in the sugar by selling it to various buyers---Under Rule 2 of Order XXXIX, C.P.C., plaintiff could apply for temporary injunction to restrain defendants from committing breach of contract whether compensation was claimed in the suit or not---Damages claimed by the plaintiff were in addition to the relief of specific performance was not claimed as an alternative relief---Loss or injury which the plaintiff would suffer in case defendants commit breach of agreement, could not be calculated and proper course would be to restrain the defendants from committing breach of contract pending decision of the suit---Balance of convenience lay therefore in favor of the plaintiff---Under Order II, R. 2, C.P.C. a plaintiff should ask for all possible remedies within one civil suit, as the plaintiff was barred from filing an independent case for seeking a different remedy for the same cause of action; and as such seeking damages as an alternative prayer could not bar the plaintiffs from seeking specific performance of contract or interim injunction---High Court recalled earlier order and directed defendants not to dispose of/sell sugar to the extent of plaintiff's claim and/or to create third party interests therein, till disposal of suit---Application for review was allowed, accordingly.

Land Acquisition Officer and Assistant Commissioner, Hyderabad PLD 2005 SC 311; Molasses Export Co. Ltd. v. Consolidated Sugar Mills Ltd. 1990 CLC 609; Amar Lal v. Principal Nishtar Medical College Multan and 6 others 2005 CLC 884; All Pakistan Textile Mills Association v. Federation of Pakistan and 2 others PLD 2009 Lah. 494; Messrs Petrocommodities (Pvt.) Ltd. v. Rice Export Corporation of Pakistan PLD 1998 Kar. 1; Bolan Beverages (Pvt.) Limited v. PEPSICO Inc. and 4 others 2004 CLC 1530; Tahir Zaman v. Jin Wei (M) SDN BHD and others 2004 CLD 603; Zawar Patroleum v. O.G.D.C. and others 2003 YLR 1450; Coca Cola Beverages Pakistan Limited v. Abdul Hameed Chaudhry 2001 YLR 568; Messrs Gulf Pacific Fertilizer v. Messrs Ali Akbar Enterprises and 2 others 2000 MLD 1537; Government of Pakistan and 3 others v. Kamruddin Valika 1996 CLC 1086; Dada Steel Mills v. Metalexport and 5 others 1985 CLC 1814; Muhammad Azam Muhammad Fazil and Co. v. Messrs N.A. Industries, Karachi PLD 1977 Kar. 21; Pakistan State Oil Company Limited v. Federation of Pakistan and 4 others 2010 CLC 1843; Syed Waqar Hussain and another v. Messrs National Refinery Ltd. 1993 CLC 2497; Agha Saifuddin Khan v. Pak Suzuki Motors Company Limited and another 1997 CLC 302 and Raees Ghulam Sarwar v. Manzoor Sadiq Zaidi and 4 others PLD 2008 Kar. 458 ref.

Haider Waheed for Plaintiffs.

Ijaz Ahmed for Defendant No.1.

Zeeshan Abdullah for Defendants Nos.2 and 3.

Date of hearing: 24th February, 2014.

2014 C L D 1601

[Sindh]

Before Munib Akhtar, J

RUPALI POLYESTER LIMITED through Attorney Authorized Person---Plaintiff

Versus

BABA CHINA BUILDERS AND DEVELOPERS and 6 others---Defendants

Suit No. 712 of 2009, decided on 15th May, 2014.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 14, 17 & 80---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Infringement of trade mark---Interim injunction, grant of---Plaintiff company alleged that defendant construction company was using its name---Validity---Possible grounds for invalidity fell into two distinct parts, one in relation to S. 14 of Trade Marks Ordinance, 2001 and the other in relation to S. 17 of Trade Marks Ordinance, 2001, which provisions of law were found in chapter II of the statute---Provisions of S.14 of Trade Marks Ordinance, 2001, listed the ground which must result in an application for registration being refused---Such were absolute grounds which apply regardless of whether there was any other trade mark in the field---On the other hand S.17 of Trade Marks Ordinance, 2001, listed relative grounds, which applied in the main if there was another, earlier registered trade mark although S.17(4) of Trade Marks Ordinance, 2001, related to an unregistered mark/right as well in the circumstances therein stated--- Application of defendants could not relate to anything contained in S.80(3) of Trade Marks Ordinance, 2001---None of the provisions of S.17 of Trade Marks Ordinance, 2001, applied in relation to defendants' unregistered mark/right on the one hand and to the plaintiff's registered trade mark---Insofar as S.80(1) of Trade Marks Ordinance, 2001, was concerned, that could apply, if at all, in relation to only one provision of S.14(4) of Trade Marks Ordinance, 2001---Trade marks should not be registered if or to the extent that application was made in bad faith---Plaintiff was not entitled to interim injunctive relief--- Application was dismissed in circumstances.

Venkateswaran on Trade Marks and Passing-off, 5th edition, 2010; Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1985] 3 All ER 52; Harrison v. Teton Valley Trading Co. Ltd. [2004] EWCA Civ 1028, [2005] FSR 10; Kerly's Law of Trade Marks and Trade Names, 14th Ed., 2005; Fry Consulting Pty Ltd. v. Sports Warehouse Inc. (No.2) [2012] FCA 81; Valentino Globe BV v. Pacific Rim Industries Inc. [2010] SGCA 14; Royal Enfield Trade Marks [2002] RPC 24 and Soneri Travel and Tours Ltd. v. Soneri Bank Ltd. 2011 CLD 193 ref.

Khurram Gul Ghory for Plaintiff.

Taha Kamal for Defendants Nos.1 to 4 and 7.

2014 C L D 1646

[Sindh]

Before Aziz-ur-Rehman, J

MUHAMMAD JUNAID PASHA---Plaintiff

Versus

FAISAL SALEEM and 2 others---Defendants

Suit No. 57 of 2011, decided on 28th May, 2014.

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

----S. 118---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Negotiable instrument--- Presumptions--- Filing of ordinary recovery suit---Effect---Plaintiff filed ordinary suit for recovery of amount on the basis of bank cheques issued by defendants in his favour---Validity---Filing of ordinary suit based on negotiable instrument in no manner deprived plaintiff of the benefits of statutory presumptions attached to negotiable instrument under S. 118 of Negotiable Instruments Act, 1881---All cheques and pay orders i.e. loan amount, were debited/shown in statements of accounts---Loan amount was not only acknowledged by issuing five cheques but also acknowledged the same in writing on stamp papers, which were not only signed and executed by defendants but also attested by Notary Public and Justice of Peace---Averments made in plaint, affidavit-in-ex parte proof and documents produced by plaintiff in his deposition had gone un-rebutted/un-challenged and plaintiff had fully succeeded to establish his claim against defendants---Suit was decreed in circumstances.

Muhammad Sabir v. Khalil-ur-Rehman 2002 CLD 1545; Muhammad Yasin v. Shabbir Ahmed 1985 CLC 2111; Muhammad Nazir Khan v. Muhammad Ameer 2012 CLC 644 and Malik Umar Aslam v. Sumaira Malik and another PLD 2007 SC 362 ref.

Syed Kausar Abbas Shah v. Sardar Khan 2005 YLR 3321 rel.

(b) Administration of justice---

----Civil and criminal proceedings---Stopping of civil proceedings---Principle---Civil case cannot be halted to proceed on its merits merely because some criminal proceedings relating to same transaction are pending---Such pendency of cases is not a bar to maintainability of civil proceedings---Both the cases can proceed concurrently because conviction for criminal offence is different matter as far as civil liability is concerned---Spirit and purpose of criminal proceedings is to punish offender for commission of crime, while the purpose behind civil proceedings is to enforce civil rights---Both proceedings in law can co-exist and proceed simultaneously.

Seema Fareed and others v. The State and another 2008 SCMR 839 and Muhammad Saleem and 2 others v. Khuda Bux and 4 others 2013 MLD 266 rel.

(c) West Pakistan Money Lenders Ordinance (XXIV of 1960)---

----S. 3--- Money lending business--- Determination---Investments of savings, do not necessarily, amount to money lending business, if such investments are few and often made to relatives or friends---If such investments by way of advancing loan are frequently made in the shape of regular money lending business coupled with gain also then, such advancing of loan constitutes engagement in money lending business and consequently prohibited.

Muhammad Asim Tiwana v. Syed Shaukat Hussain Rizvi and 6 others 1999 CLC 1177 rel.

Muhammad Saleem Ibrahim for Plaintiff.

Nemo for Defendants.

Date of hearing: 16th May, 2014.

2014 C L D 1672

[Sindh]

Before Syed Saeed-ud-Din Nasir, J

UMER FAROOQ---Plaintiff

Versus

ATTOCK PETROLEUM LIMITED through Chief Executive Officer

and 3 others---Defendants

Suit No.1459 of 2013, decided on 16th July, 2014.

Contract Act (IX of 1872)---

----S. 202---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Termination of agency---Grant of temporary injunction---Plaintiff had successfully participated in submitting tender for lease of land for petrol and CNG Station and in anticipation of getting dealership for grant of lease he had paid earnest money---Lease Deed was executed for construction of Petrol Pump-cum-CNG station and dealership was promised to the plaintiff for the same---Plaintiff had acquired interest in the subject matter of suit which was the said land in terms of S.202 of Contract Act, 1872---Plaintiff must have put financial and other resources in order to obtain requisite "NOC" for different Government departments---Dealership was offered to the plaintiff subject to successful bidding of land in question---Plaintiff had succeeded in getting the bid approved of the land on which proposed filling station was to be constructed and he had paid heavy amount to procure the said lease---Proposed dealership had been withdrawn with immediate effect and without affording any opportunity to the plaintiff of being heard when he was in the process of obtaining requisite "NOC" for establishment and operation of a Petrol Pump-cum-CNG station---Defendants were restrained by High Court from issuing dealership, explosive certificate as well as approval for construction of building plan in favour of any third party and from creating third party interest with regard to dealership to plaintiff for establishment of Petrol Pump-cum-CNG station at the land which had already been leased out---Application for grant of temporary injunction was allowed in circumstances.

Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588; PLD 1979 Kar. 112; Karachi Catholic Coop. Housing Society Ltd. v. Jawad Baig PLD 1994 Kar. 194; 2003 SCMR 50; PLD 2004 SC 860 and PLD 1958 Lah. 63 ref.

2003 SCMR 50; PLD 2004 SC 860 and PLD 1958 Lah. 63 distinguished.

Mushtaq Ahmed Memon and Irfan Aziz for Plaintiff.

Muhammad Umer Lakhani and Ayyan Mustafa Memon for Defendants Nos.1 and 2.

2014 C L D 1696

[Sindh]

Before Munib Akhtar, J

MUHAMMAD KASHAN---Plaintiff

Versus

COCA COLA CORPORATION PAKISTAN LIMITED through Chief Executive Officer and 3 others---Defendants

Suit No. 1303 of 2013, decided on 13th May, 2014.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 2(c-a) & 10(1)---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Infringement of copyright---Interim injunction, grant of---Art work---Plaintiff was in production of original audio-visual content and had assailed program 'Coke Studio Season 6' aired by defendant company---Plea raised by plaintiff was that by airing 'Coke Studio Season 6', defendant infringed copyrights of his art work---Validity---Video of defendant could not be regarded as infringing plaintiff's video---Plaintiff sought to place reliance on certain specific instances of similarity or commonality but such instances lost any relevance that might appear to have, if considered in isolation---Two videos were distinct and each proceeded on its own basis and ideas described in both the works and the same were also distinct---High Court did not find any infringement of plaintiff's work even in any sense---Plaintiff failed to make out any case for interim injunctive relief on the ground of infringement of work under Copyright Ordinance, 1962---Application was dismissed in circumstances.

Donoghue v. Allied Newspapers Ltd. [1937] 3 Ch D 503; R.G. Anand v. Delux Films and others AIR 1978 SC 1613; Computer Associates International Inc. v. Altai Iac. (1992) 982 F.2d 693; Independent Media v. Ali Saleem and another 2006 CLD 97; Copinger & Skone James on Copyright 16th ed., 2010; IPC Media Ltd. v. Highbury-Leisure Publishing Ltd. [2004] EWHC 2985 (Ch), [2005] FSR 20 and Dymow v. Bolton (1926) 11 F.2d 690 ref.

Nichols v. Universal Pictures Co. (1930) 45 F.2d 119 rel.

Faraz Faheem Siddiqui and Muhammad Wasiq Mirza for Plaintiff.

Khawaja Shoaib for Defendants Nos.1 and 2.

Rauf Ahmed for Defendant No.3.

Omer Soomro for Defendant No.4.

Dates of hearing: 11th, 18th November 2011, 9th December, 2013 and 9th May, 2014.

2014 C L D 26

[Lahore]

Before Syed Mansoor Ali Shah, J

FATIMA SUGAR MILLS LTD. and others: In the matter of

C.O. No.10 of 2012, heard on 23rd October, 2013.

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

----Ss. 284, 285, 286 & 287---Compromises, arrangements and reconstruction of companies---Power of court to enforce compromises and scheme of arrangements between companies under the Companies Ordinance, 1984---Provisions for facilitating reconstruction and amalgamation of companies---Sanction of the court for such schemes of arrangements ---Jurisdiction of the court under Ss.284, 285, 286 & 287 Companies Ordinance, 1984---Nature scope and limits, explained.

Under sections 284 and 287 of the Companies Ordinance, 1984 the Court has to only ensure that the Scheme is made in good faith, is fair and reasonable, has commercial viability and is not adverse to the interest of the creditors or members or in any manner against the public interest. The Court is not to substitute its judgment over the collective commercial wisdom of the members or the creditors but is to actually supervise the Scheme in general so that it doesn't offend the parameters prescribed. It is the commercial wisdom of the parties to the Scheme who have taken an informed decision about the usefulness and propriety of the Scheme by supporting it by the requisite majority vote that has to be kept in view by the Court. The Court certainly would not act as a Court of Appeal and sit in judgment over the informed view of the concerned parties to the compromise, as the same would be in the realm of corporate and commercial wisdom of the concerned parties. The Court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the Scheme by the requisite majority. Consequently the Company Court's jurisdiction to that extent is peripheral and supervisory and not appellate. The Court acts like an umpire in a game of cricket who has to see that both the teams play their game according to the rules and do not overstep the limits; and subject to that how best the game is to be played is left to the players and not to the umpire. If the Scheme as a whole is fair and reasonable, it is the duty of the Court not to launch an investigation upon the commercial merits or demerits of the case, which is function of those who are interested in the arrangement/Scheme.

It is, however, emphasized that the supervising power of the Court is not cosmetic or mechanical and the Court is not bound to accept the Scheme as a fait accompli. In exercising its powers under sections 284 and 287 of the Ordinance, the Court does not function as a mere rubber stamp or post office and it is incumbent upon the Court to be satisfied prima facie that the scheme is genuine, bona fide and in the interests of the creditors and the company. Its function is to see that a Scheme as a whole is a reasonable one and if the Court so finds, it is not for the Court to interfere with the collective wisdom of the shareholders of the Company. It is only when the Court on its own motion or on the application moved by an objector is of the view that Scheme is against any law or unfair or fraudulent or disadvantageous to the minority shareholders or to the other key stakeholders falling outside the Scheme e.g., the Government or any other public authority e.g., Tax Department or the Utility Authorities that the Court refuses sanction or directs amendments before the sanction of the Scheme.

Under its supervising eye, if the Court is satisfied that the Scheme is fair, viable and is not adverse to the interest of the key stakeholders, the Court need not scrutinize the Scheme "in the way a carping critic, a hair-splitting expert, a meticulous accountant or a fastidious counsel would do but, it must be tested from the point of view of an ordinary reasonable shareholder, acting in a businessman-like manner, taking within his comprehension and bearing in mind all the circumstances prevailing at the time when the meeting was called upon to consider the scheme in question. It is also pointed out that, before the scheme is sanctioned, it would be the duty of the Court to see that the proposed scheme is a fair and reasonable one, but the initial burden in this respect would be on the petitioner to show that, prima facie, the scheme is fair and reasonable one, such as a prudent and reasonable shareholder would approve of and not object to. The Court is really not concerned with the finer details of the architecture of the Scheme as long as the Scheme passes the broad test of fairness under the law and has received the assent of the majority shareholders. A Scheme may be open to criticism, but unless it is affirmatively shown to be unfair, the Court will not interfere. The Court cannot, therefore, undertake the exercise of scrutinizing the Scheme placed for its sanction with a view to finding out whether a better Scheme in the realm of commercial democracy permeating the activities of the concerned creditors and members of the company who in their best commercial and economic interest by majority agree to give green signal to a compromise or arrangement.

The jurisdiction of the Company Court while considering the Scheme does not extend to, ascertaining with mathematical accuracy if the determination of valuation of shares of the transferor and transferee companies by the valuer satisfies the arithmetical test. When the statutory formalities have been complied with and the scheme is fair and reasonable and there is no fraud involved, the Court must proceed to give effect to the business of the shareholders of the company.

A Ramaiya, Company Law Digest, Fifth Edition 1995, page 1493; Gujrat Ambuja Exports Ltd. Re, (2004) 118 Com Cases 265; A Ramaiya, Guide to the Companies Act, 17th Edition, 2010" pages 4070-4071; X Alabama, New Orleans, Texas and Pacific Junction Railway Co., (1891) I Ch. 213; Gaya Sugar Mills Ltd. v. Nand Kishore Bajoria AIR 1955 SC 441; Sidhpur Mills Co. Ltd., In Re, AIR 1962 Guj 305; Navjivan Mills Ltd., Re, (1972) 42 Com Cases 256; Hoare and Co. Ltd. (1933) 150 LT 374; Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506 and (1994) 4 Comp. L.J. 267 rel.

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

----Ss. 284, 285, 286 & 287---Power of company court to enforce/sanction compromises and scheme of arrangements between companies under the Companies Ordinance, 1984---Valuation of assets---Jurisdiction of the court under Ss.284, 285, 286 & 287 Companies Ordinance, 1984---Scope---Petition under Ss.284 to 287 of the Companies Ordinance, 1984 seeking sanction for a scheme of arrangement which envisaged the transfer of the "sugar undertaking" of one company to the transferee company against issuance of shares by the transferee company in favour of the transferor company---Said scheme of arrangement had been unanimously approved by the members of both petitioner companies in extraordinary general meetings---Objection of the Securities and Exchange Commission of Pakistan ("SECP") to said scheme of arrangement was inter alia that valuation assets for the same was done on 26-4-2010 and while the effective date was 1-10-2011, hence, assets of the companies had to be revalued and that stocks had not been revalued, therefore the scheme of arrangement did not reflect the correct position of assets---Validity---Parallel had to be drawn between scheme of arrangement or compromise and an ordinary compromise entered between the parties to a suit---Contents of such compromise were not to be minutely examined by the court as they reflected consent and mutual understanding of the parties and which ordinarily did not concern the court---Court was to simply ensure that such compromise should not be against public interest or against law or against any third party and it was not the function of the court "to dot the i's and cross the t's" of the compromise and same was the case with the scheme of arrangement in the present case---Technical details regarding quantification of valuation of assets should best be left to the discretion of the parties---Case, of course, would have been different had the minority shareholders raised an objection regarding valuation of assets, which did not exist in the present case---Even otherwise, at best, fresh valuation could only affect the amount of stamp duty (if any) to be paid on the transfer of assets and such financial liability, if any, had been secured by the undertaking given by the petitioner companies in the present case---Objection raised by SECP vis-a-vis valuation of assets, therefore, did not fall within the broad ambit of supervisory jurisdiction of the court exercised while sanctioning a scheme of arrangement and such matter of details should best be left to the commercial wisdom of the companies unless they adversely impinged on the interest of parties---Objection raised by the SECP was overruled, in circumstances.

(c) Stamp Act (II of 1899)---

----S. 3, Sched. 1---Companies Ordinance (XLVII of 1984), Ss. 284, 285, 286 & 287---Compromises, arrangements and reconstruction of companies---Petition under Ss. 284 to 287 of the Companies Ordinance, 1984 seeking sanction for a scheme of arrangement which envisaged the transfer of the "sugar undertaking" of one company to the transferee company against issuance of shares by the transferee company in favour of the transferor company---Objection was raised that such transfer would attract liability of stamp duty under the Stamp Act, 1899---Held, that prima facie, there appeared to be merit in the argument regarding imposition of stamp duty, however, said matter required further deliberation and should be taken up separately---Petitioner companies, however, undertook that in case the issue of stamp duty was decided against the petitioner companies, they would unconditionally pay stamp duty as assessed on the effective date of the transfer subject to the petitioners first exhausting their lawful remedies before higher forum against any such order passed by High Court---High Court, fixed the date for arguments on the issue of stamp duty.

Imtiaz Rashid Siddiqui, Ali Asim Sayed and Shehryar Kasuri, Advocates along with Asim Zulfiqar Ali, Chartered Accountant, A.F. Ferguson and Co., Lahore for Petitioner.

Umair Mansoor, Advocate/Assistant Director Law for SECP Anwaar Hussain, Advocate for Soneri Bank Ltd. and Muhammad Naveed, Executive (Legal) SECP, Lahore for Respondents.

Date of hearing: 23rd October, 2013.

2014 C L D 45

[Lahore]

Before Muhammad Qasim Khan, J

MUHAMMAD ASIF NAWAZ---Petitioner

Versus

ADDITIONAL SESSIONS JUDGE/JUSTICE OF PEACE MULTAN and 2 others---Respondents

Writ Petition No.10707 of 2012, decided on 16th May, 2013.

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

----S. 20(4)---Criminal Procedure Code (V of 1898), S.22-A---Penal Code (XLV of 1860), S. 489-F---Constitution of Pakistan, Art.199---Constitutional petition---Re-payment of finance---Dishonoring of cheques---Petitioner obtained loan from bank and for its return issued cheque which was dishonored on presentation---Ex-Officio Justice of Peace, on application filed by complainant bank, directed police to record statement of complainant and proceed in accordance with law---Grievance of petitioner was that no criminal case could be registered against him---Validity---Jurisdiction was only with Banking Court established under Financial Institutions (Recovery of Finances) Ordinance, 2001, and not before any other court until and unless the same was provided by law, by which financial institution was established---If Legislature had any intention, it could have, at the very beginning formulate or afterwards could amend Financial Institutions (Recovery of Finances) Ordinance, 2001, in such a manner so as to bring the offence within definition of "cognizable" offence---When amendment was not made in Financial Institutions (Recovery of Finances) Ordinance, 2001, Legislators explicitly made their intention clear that with regard to matters between financial institutions and their customers, therefore, such enactment would hold the field and S.489-F, P.P.C. would be applicable to all other persons in general except those covered by Financial Institutions (Recovery of Finances) Ordinance, 2001---Purpose by not amending Financial Institutions (Recovery of Finances) Ordinance, 2001, was that normally in any case of loan from financial institution, loans were protected by mortgage, warranties and covenants with regard to ownership, mortgage, pledge, hypothecation or assignment of or other charges on assets or properties and financial institution could recover the amount by adopting appropriate process under any of such modes---High Court set aside order passed by Ex-Officio Justice of Peace---Petition was allowed accordingly.

Abid Mahmood Malik v. Station House Officer, Police Station Margalla and others 2013 CLD 508 and Muhammad Iqbal v. Station House Officer, Police Station Hajipura, Sialkot and 2 others PLD 2009 Lah. 541 rel.

Abdul Rauf Chaudhry and 2 others v. The State and 2 others 2013 CLD 738 distinguished.

(b) Interpretation of statutes---

----Special and general law---Applicability---Where there are two Acts, one of which is special and particular and the other general, which if standing alone, would include the same matter---Conflict with special Act, the special law must prevail since it evinces legislative intent more clearly than that of a general statute.

(c) Words and phrases---

----"General" and "special laws"---Distinction---General law as a universal rule affecting entire community and special law is one relating to particular persons or things of a class.

Javed Iqbal Bhatti for Petitioner.

Mubashir Latif Gill, Assistant Advocate-General with Muhammad Arif, ASI.

Syed Wasim Haider for Respondent No.3.

2014 C L D 63

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

MUHAMMAD BOOTA---Appellant

Versus

BASHARAT ALI---Respondent

Regular First Appeal No.505 of 2013, heard on 7th October, 2013.

(a) High Court (Lahore) Rules and Orders---

-----Vol. V, Part-A, Chap I, Rr.9 & 9-A---Constitution of Pakistan, Art. 202--- Appeal--- Rules of procedure---Objections by High Court office, non-removal of within specified time---Consequences---Procedure to be followed by Deputy Registrar (Judicial) of High Court in such cases---Preliminary objection as to the expiry of limitation period for filing appeal---Failure of the appellant to remove the office objections within specified time---Respondent raised a preliminary objection that where the appeal was returned by the office of High Court for removing the objections within the specified time and meanwhile prescribed period for filing appeal lapsed, then such delay would render the appeal time-barred unless delay was explained through an application for condonation of delay under S.5 of the Limitation Act, 1908 and the delay was condoned by the court---Contention of the appellant that the appeal was not barred by time as the same was originally filed within time and the date relevant for determining whether the appeal was within time or not would be the date when the appeal was originally filed and mere delay in removing the office objections would not render the appeal time-barred---Validity---Office report showed that although the appeal was originally filed within time, however, the office objections were not removed despite repeating objections by the office and re-filings by the appellant, and when finally the objections were removed the time prescribed for filing the appeal had elapsed---Legal question for the High Court was as to which of the two dates would be treated as date of filing of the appeal for the purposes of limitation, the date on which the appeal was originally filed or the date when the office objections were finally removed---Held, that once appeal was originally filed within the prescribed limitation period but was returned within given time and when the office objections were finally removed the prescribed period of limitation for filing appeal elapsed, would not render the appeal barred by time---Present appeal being within the prescribed period of limitation and only because the office objection was removed subsequent to that period, will not make the appeal barred by time.

Naheed Ahmad v. Asif Riaz and 3 others PLD 1996 Lah. 702 ref.

Farqan Ali v. Muhammad Ishaq and others PLD 2013 SC 392 and Mst. Sabiran Bibi v. Ahmad Khan and another 2000 SCMR 847 rel.

(b) High Court (Lahore) Rules and Orders---

-----Vol. V, Part-A, Chap. I, Rr.9 & 9-A---Constitution of Pakistan, Art.202---Appeal---Deputy Registrar (Judicial) of High Court---Powers, duties and functions of---Interpretation of Rr. 9 & 9-A of Vol. V, Part A, Chap.I of High Court (Lahore) Rules and Orders---Deputy Registrar (Judicial) under R.9 can raise objections against any suit, appeal, petition or application, etc., and once the objections are raised, the appeals, etc., are returned for making up the deficiency with the time so specified---Deputy Registrar (Judicial) under R.9 is only authorized to return the appeal for making up any deficiency or filing requisite document within the time to be specified in the objection memorandum, however, this Rule does not empower the Deputy Registrar (Judicial) to entertain the petition or to dismiss the petition having not been validly instituted---In case, the deficiency is not corrected by the appellant within the time given by the Deputy Registrar (Judicial), the situation is fully covered under R.9-A which provides that if within time provided such petition is not refiled or returned a notice shall be affixed upon the notice Board meant for the purpose specified and if within 7 days the deficiency is still not made good, the matter shall be placed before a Judge of the High Court for an order on a date to be notified by fixing such a petition in motion cause list---Under the Rules, it is thus for the court to decide as so what should be done in the matter---High Court, in circumstances, held that once appeal was originally filed within the prescribed limitation period but was returned within given time and when the office objections were finally removed the prescribed period of limitation for filing appeal elapsed would not render the appeal barred by time.

Naheed Ahmad v. Asif Riaz and 3 others PLD 1996 Lah. 702 ref.

Farqan Ali v. Muhammad Ishaq and others PLD 2013 SC 392 and Mst. Sabiran Bibi v. Ahmad Khan and another 2000 SCMR 847 rel.

(c) Constitution of Pakistan---

----Art. 202---High Court (Lahore) Rules and Orders, Vol. V, Part-A, Chap.I, Rr.9 & 9-A---Rules of Procedure---Rules relating to office objections and refiling and filing of appeals in High Court.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3---Qanun-e-Shahadat (10 of 1984), Arts.78, 79 & 84---Suit for recovery of money on the basis of promissory note---Leave to appear and defend---Comparison of signatures and thumb impressions, powers of court---Presumptions as to negotiable instruments---New plea in appeal---Execution of promissory note and its Receipt, proof of---Trial Court allowed the application of the appellant to appear and defend however, decreed the suit of the respondent after framing of issues and recording of evidence---Appellant assailed the judgment and decree of the Trial Court in appeal---Contentions of the appellant that the entire case hinged upon the Promissory Note and the Receipt that were produced by the respondent in evidence---Appellant contended that he had denied his signatures on the Promissory Note and its Receipt, therefore, these documents, could not be treated as negotiable instruments, that the stamps on Promissory Note were not cancelled, and the thumb impressions were on the Receipt and not the Promissory Note, therefore, it could not be tendered in evidence; that once the signatures and thumb-impressions on documents were denied, the Trial Court was bound to refer the matter to the Handwriting Expert under Art.78 of the Qanun-e-Shahadat, 1984 and could not have compared the signatures and thumb-impressions by itself and that once signatures of execution of the said documents were denied, no presumption was available to these documents under S.118 of the Negotiable Instruments Act, 1881 and the respondent was bound to prove the execution---Respondent on the other hand submitted that the Promissory Note and the Receipt were duly proved through oral as well as documentary evidence produced before the Trial Court; that the appellant had not raised any objection before the Trial Court regarding the non-cancellation of stamps, as well as the thumb impressions being not on the Promissory Note, therefore, new pleas could not be raised in appeal, which was not raised before the Trial Court and that under Art.84 of the Qanun-e-Shahadat, 1984 the Trial Court had ample power to compare the thumb-impressions and signatures of the appellant with the signatures and thumb-impressions on the admitted documents, which exercise was lawfully done by the Trial Court---Validity---Perusal of the oral and documentary evidence showed that the respondent while appearing as witness reiterated his stance raised in the plaint and also produced original Promissory Note and Receipt as exhibits in evidence---Marginal witnesses of these exhibits also appeared as witnesses and supported the stance of the respondent to the effect that the appellant in their presence had borrowed a sum of money from the respondent and had executed the Promissory Note and the Receipt and also had put his thumb impressions along with signatures on the said documents---Appellant though had denied the signatures on these documents but surprisingly no application was moved by the appellant before the Trial Court for referring the matter to the Handwriting Expert---Trial Court while exercising powers under Art.84 of the Qanun-e-Shahadat, 1984 itself compared the thumb-impressions of the appellant with the thumb-impressions on admitted documents in the shapes of grooves and arches, which were very much the same as on the admitted documents---Signatures of the appellant were also compared with the signatures on the admitted documents by the Trial Court and found to be the same that of the appellant---Under the provisions of Art.84 of the Qanun-e-Shahadat, 1984 in certain eventualities, the court enjoyed preliminary powers to compare the signatures itself along with the other relevant material to resolve the controversy---High Court noted that the Trial Court had carefully gone through the process and compared the exhibited documents to the documents admittedly executed by the appellant and found them to be in complete similarity and tallied with each other---Fact that the matter was not referred to the Handwriting Expert did not render the impugned judgment legally infirm as to warrant interference by the High Court, especially where the appellant had not moved any application for referring the matter to the Handwriting Expert---No objection was taken by the appellant at the time when the Promissory Note was being tendered in evidence before the Trial Court on the ground that the stamps on the Promissory note were not duly cancelled and it was not admissible in evidence, therefore, this plea could not be raised in appeal---Objection of the appellant that thumb-impressions and signatures were on the Receipt and not on the Promissory Note was contrary to the record, as there were two signatures and two thumb-impressions, available on the document and the perusal of it showed that one was regarding the Promissory Note and the other was on the Receipt, moreover, even the said objection was not raised in the Trial Court---If a plea was not raised at the trial stage, same could not be raised for the first time in appeal---Findings of the Trial Court were based on correct appreciation of evidence on record, therefore, the same did not call for any interference---Impugned judgment and decree of the Trial Court were upheld and the appeal was dismissed by the High Court, in the circumstances.

Mst. Shahida Adeeb and another v. Nauman Ejaz and another 2007 CLC 1160; Mst. Riffat Jehan and another v. Habib Bank Limited and 10 others 2005 CLD 941; Ch. Munir Hussain v. Mst. Wazeeran Mai alias Mst. Wazir Mai PLD 2005 SC 658 and Malik Muhammad Akram v. Khuda Bakhsh 2000 CLC 759 ref.

Messrs Waqas Enterprises and others v. Allied Bank of Pakistan and 2 others 1999 SCMR 85; Ghulam Rasool and others v. Sardar ul Hassan and another 1997 SCMR 976; Abdul Abbas 2007 MLD 1 and Hyder Ali Bhimji v. VIth Additional District Judge Karachi (South) and another 2012 SCMR 254 rel.

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

----Arts. 61, 78 & 84---Handwriting Expert, opinion of---Signature and Handwriting of a person, proof of---Comparison of signatures and thumb-impressions, powers of court---Plea of the appellant that once the signatures and thumb-impression on Promissory Note and its Receipt were denied, the Trial Court was bound to refer the matter to the Handwriting Expert under Art.78 of the Qanun-e-Shahadt, 1984 and could not have compared the signatures and thumb-impressions by itself---Validity---Trial Court while exercising powers under Art.84 of the Qanun-e-Shahadat, 1984 itself compared the thumb-impressions of the appellant with the thumb-impressions on admitted documents in the shapes of grooves and arches, which were very much the same as on the admitted documents---Signatures of the appellant were also compared with the signatures on the admitted documents by the Trial Court and found to be the same of the appellant---Under the provisions of Art.84 of the Qanun-e-Shahadat, 1984 in certain eventualities, the court enjoys preliminary powers to compare the signatures itself along with the other relevant material to resolve the controversy.

Messrs Waqas Enterprises and others v. Allied Bank of Pakistan and 2 others 1999 SCMR 85 and Ghulam Rasool and others v. Sardar ul Hassan and another 1997 SCMR 976 rel.

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

----O. XXXVII, Rr. 2 & 3---Suit for recovery on the basis of Promissory Note---Suit was decreed by Trial Court---Objection about non-cancellation of stamps on the Promissory Note having not been tendered in evidence, such plea could not be raised in appeal.

Abid Hussain v. Abdul Abbas 2007 MLD 1 rel.

(g) Administration of justice---

----New plea/ground---Scope---Plea not raised before the Trial Court cannot be agitated in appeal.

Hyder Ali Bhimiji v. VIth Additional District Judge Karachi (South) and another 2012 SCMR 254 rel.

Hamid Iftikhar Pannu for Appellant (in C.Ms. Nos. 1 and 2 of 2013).

Majid Ali Wajid for Respondent.

Date of hearing: 7th October, 2013.

2014 C L D 92

[Lahore]

Before Rauf Ahmad Sheikh, J

KHUSHI MUHAMMAD---Petitioner

Versus

MUZAMMAL KHATOON and 10 others---Respondents

Civil Revision No.884 of 2012, decided on 18th March, 2013.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 2, 3 & Appendix B, Form No. 4---Limitation Act (IX of 1908), Art. 159--- Penal Code (XLV of 1860), S. 489-F---Institution of summary suit on negotiable instrument---Dishonouring of cheque issued as guarantee---Suit for recovery of money---Application for leave to appear and defend the suit---Limitation---Plaintiffs-respondents filed suit for recovery of money wherein application for permission to appear and defend the suit was moved by the defendant-petitioner which was dismissed by the Trial Court---Contention of defendant-petitioner was that he was not served in accordance with law---Validity---Report of the Process Server did not show that he delivered the copy of the plaint and other documents appended therewith---In a suit under O. XXXVII, R. 2, C.P.C., the summons was to be issued on Form IV of Appendix-B and it was imperative that the copy of the plaint with annexures should be sent under O.XXXVII, R.2(1), C.P.C. along with the summons and without fulfilment of that legal requirement, the service was not complete and the period of limitation did not start---Copy of the plaint did not appear to have been sent along with the summons, the period of ten days prescribed for submission of the application for leave to appear and defend the suit under Art.159 of the Limitation Act, 1908 did not start---Defendant-petitioner did not owe any amount directly and he had issued the cheque as surety for his son, who was involved in a case under S.489-F, P.P.C. and according to the agreement deed executed between the parties, the cheque was issued as guarantee and the predecessor of the plaintiffs-respondents also reserved the right to move an application for cancellation of the bail granted to son of the defendant-petitioner---Whether the suit under O.XXXVII, R. 2, C.P.C. was maintainable and the defendant-petitioner was in fact liable to make the payment required adjudication and verdict of the Trial Court and such aspect of the matter alone was sufficient to allow the application submitted by the defendant-petitioner---When important questions of fact and law emerged, then the court must exercise its jurisdiction under O.XXXVII, R.3, C.P.C. and should not hesitate in granting the leave to appear and defend the suit---Trial Court erred in dismissing the application by ignoring the important legal aspects of the matter and committed material irregularity causing gross miscarriage of justice---Impugned order was not sustainable under the law---Revision petition was accepted and impugned order was set aside and leave to appear and defend the suit was granted accordingly.

Asad Mahmood Abbasi for Petitioner.

Raja Tahir Masood for Respondents.

2014 C L D 107

[Lahore]

Before Mehmood Maqbool Bajwa and Amin-ud-Din Khan, JJ

Messrs AIMS CORPORATION (PVT.) Ltd. and others---Appellants

Versus

HABIB BANK LIMITED---Respondent

R.F.A. No.55 of 2008, heard on 13th September, 2013.

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

----S. 22---Civil Procedure Code (V of 1908), O.I, R.10 & O.XLI, R. 20--- Appeal--- Non-impleading of necessary parties---Oversight, plea of---Suit was decreed in favour of bank and appellants while assailing appeal before High Court failed to implead all defendants in appeal---Plea raised by appellants was that failure to implead necessary party in appeal was due to oversight---Validity---Appellants failed to give any plausible explanation for non-impleading necessary parties and application for the purpose was filed after a delay of about five years without application for condonation of delay---Decree was not divisible and was passed jointly and severally against all defendants---Appeal was filed against decree, by some of the defendants, not impleading other defendants as party as appellants/respondents in appeal---High Court declined to allow appellants to implead remaining defendants as party---Application was dismissed in circumstances.

Chan Zeb and 9 others v. Gul Zaman and 5 others 1998 CLC 1857; Shoaib Ahmed Faridi v. United Bank Limited 2007 CLD 835 and Said Muhammad and others v. M. Sardar and others PLD 1989 SC 532 distinguished.

Murad Begum (Mst.) and others v. Muhammad Rafiq and others PLD 1974 SC 322; Mst. Maqoob Begum and others v. Gullan and others PLD 1982 SC 46; Ghulam Muhammad and others v. Mehtab Beg and others 1983 SCMR 849 and Shoaib Ahmed Faridi v. United Bank Limited 2007 CLD 835 rel.

Muhammad Manzoor ul Haq for Appellants.

Muhammad Nazim Khan and Sardar Riaz Kareem for Respondent.

Date of hearing: 13th September, 2013.

2014 C L D 119

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

AHMAD DEEN---Appellant

Versus

ZARAI TARAQIATI BANK LTD. through Branch Manager---Respondent

R.F.A. No.34 of 2009, heard on 26th September, 2013.

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

----Ss. 3, 9 & 22---Suit for recovery of bank loan---Cost of funds, imposition of--- Scope--- Suit was decreed in favour of plaintiff bank and defendant was aggrieved of cost of funds imposed by Banking Court---Validity---Expiry date of finance facility was 7-1-1999, whereas outstanding finance liability was finally paid in Court on 11-1-2008---Banking Court rightly rejected claim of bank regarding excess markup charged after expiry date of finance and allowed cost of funds for such period in terms of S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declined to interfere in judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

Habib Bank AG Zurich through Manager v. Mustafa Shams-ud-Din Ghatilla and 2 others 2003 CLD 658 ref.

Haji Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162; Habib Bank Ltd. v. Karachi Pipe Mills Ltd. 2006 CLD 842; Prime Commercial Bank Limited v. Agricide (Private) Limited and others 2006 CLD 940 and Trycot Synthetic Fibre Company through Proprietor and another v. Habib Bank Limited 2012 CLD 1670 rel.

Muhammad Aslam Siddiqui for Appellant.

Sardar Riaz Karim for Respondent.

Date of hearing: 26th September, 2013.

2014 C L D 126

[Lahore]

Before Amin-ud-Din Khan, J

MUHAMMAD ASHRAF QADRI---Petitioner

Versus

BANK OF PUNJAB through Chairman and another---Respondents

Writ Petition No.5977 of 2012, heard on 6th May, 2013.

Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope--- Alternate remedy--- Contractual matters---Petitioner was declared a successful bidder for properties auctioned by respondent Bank, however, subsequent to his offer being accepted by the Bank, the auction process was cancelled and the property was re-auctioned at a much lower price than what had been offered by the petitioner---Petitioner contended that the cancellation of his offer and subsequent re-auction be declared illegal---Held, High Court was bound to see that the person who came to the High Court for discretionary relief, whether such relief was equitable or not---Where any violation of contractual obligation was made, the petitioner certainly had alternate remedies available to him---High Court observed that keeping in view the principles of equity and interest of the public exchequer, extraordinary constitutional jurisdiction should not be exercised in favour of the petitioner.

Messrs Ittehad Cargo Service and 2 others v. Messrs Syed Tasneem Hussain Naqvi and others PLD 2001 SC 116; Faisal Razzaq v. Tehsil Municipal Administration, Khairpur Tamewali and 5 others 2007 YLR 2887; Messrs Hotel Summer Retreat, Nathiagali through Managing Partner v. Government of N.-W.F.P. through Secretary, C&W Department Peshawar and 5 others 1999 MLD 2418; Messrs M.A. Khan and Co. through Sole Proprietor Muhammad Ali Khan v. Messrs Pakistan Railway Employees Cooperative Housing Society Ltd. through Principal Officer/Secretary, Karachi 2006 SCMR 721; Fateh Muhammad Agha and another v. City District Government, Karachi through District Coordination Officer and 5 others 2009 CLD 1336; The Muree Brevery Co. Ltd. v. Pakistan through the Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279; Messrs Pacific Multinational Pvt. Ltd. v. Inspector-General of Police, Sindh Police Headquarters and 2 others PLD 1992 Kar. 283; Islamia University, Bahawalpur through Vice-Chancellor v. Dr. Muhammad Khan Malik PLD 1993 Lah. 141; Salahuddin and 2 others v. Frontier Sugar Mills and Distillery Ltd. Tokht Bhai and 10 others PLD 1975 SC 244; Muhammad Zubair Akram v. Aitchison College, Lahore PLD 2000 Lah. 489; Town Committee, Gakhar Mandi v. Authority Under the Payment of Wages Act, Gujranwala and 57 others PLD 2002 SC 452; Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268; Messrs Wak Orient Power and Light Limited Gulberg III, Lahore v. Govt. of Pakistan, Ministry of Water and Power through its Secretary, Islamabad and 2 others 1998 CLC 1178; Umar alias Umar Hayat and another v. The State PLD 1975 Lah. 575; Muhammad Sufdar Gogar v. Province of Punjab through Secretary and 4 others 2003 YLR 1597; Babu Javed Ahmad, Tehsil Nazim and 2 others v. Abdul Hafeez 2005 YLR 1443 and Mehmood Medical Store through Proprietors v. Services Hospital, Lahore through Medical Superintendent and 3 others 2012 YLR 174 ref.

Province of Punjab and 3 others v. Dr. Muhammad Daud Khan Tariq 1993 SCMR 508; Javed Iqbal Abbasi and Co. v. Province of Punjab 1996 SCMR 1433 and Federation of Pakistan and others v. Haji Saifullah Khan and others PLD 1989 SC 166 rel.

Malik Waqar Haider Awan for Petitioner.

Muhammad Saleem Iqbal for Respondents.

Date of hearing: 6th May, 2013.

2014 C L D 153

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

Messrs DHRALA OIL MILLS through Partners/ Guarantors and 4 others---Appellants

Versus

The BANK OF PUNJAB through Branch Manager---Respondent

R.F.A. No.79 of 2007, heard on 25th September, 2013.

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

----Ss. 10(4) & 22---Suit for recovery---Leave to defend, application for---Application for leave to defend was dismissed, and suit was decreed in favour of the plaintiff Bank---Contention of the defendants was that in their application for leave to defend, they had specifically challenged various entries in the statement of accounts and that markup had been charged illegally beyond the expiry period of the facility; and therefore, leave to defend should have been granted to them---Validity---Bank could not charge markup beyond the expiry date of the facility; where the documents and rate of markup were disputed, the same was a ground for leave to defend the suit---Perusal of statement of accounts revealed that in most of entries, particulars of transactions were not given, and therefore, no presumption of truth could be attached to such incomplete statement of accounts and it was not sufficient to decree the suit on basis of the incomplete statement of accounts unless supported by corroborative documents--- Defendants had raised substantial questions of law and facts in the application for leave to defend which could not be decided without the framing of issues and recording of evidence---Impugned order was set aside and defendant's application for leave to defend was granted and matter was remitted to the Banking Court to decide the matter after framing of issues and recording of evidence---Appeal was allowed accordingly.

Haji Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162; Allied Bank of Pakistan Limited v. Mrs. Fahmida and 2 others 2004 CLD 110; Muhammad Ayub Khan v. Husssain Khan and others NLR 1981 SCJ 281; Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931 and Apollo Textile Mills Limited and others v. Soneri Bank Limited 2012 CLD 337 rel.

Apollo Textile Mills Limited and others v. Soneri Bank Limited 2012 CLD 337; National Bank of Pakistan v. Messrs Latif Shakir Textile Mills Limited and another 2007 CLD 1655; MCB Bank Limited, Peshawar v. Messrs Tila Frontier Fruit Company and others 2011 CLD 938; Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; Messrs Multimed Marketers through Managing Partner and 7 others v. United Bank Limited through Manager 2007 CLD 344; Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Limited PLD 1966 SC 684; Habib Bank Limited (Successor to Standard Bank of Pakistan Limited) v. Nazir Ali Awan NLR 1981 SCJ 281; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Private) Limited through Director/Chief Executive and 3 others 2012 CLD 1302; Habib Bank Limited v. Taj Textile Mills Limited through Chief Executive and 5 others 2009 CLD 1143 and Haji Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162 ref.

Muhammad Suleman Bhatti for Appellants.

Sohail Ahmad Janjoa for Respondent.

Date of hearing: 25th September, 2013.

2014 C L D 176

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

Mst. AASIYA BIBI and 5 others---Appellants

Versus

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

R.F.A. No.50 of 2008, heard on 23rd September, 2013.

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

----S. 9---Transfer of Property Act (IV of 1882), S. 58(f)---Suit for recovery of bank loan---Mortgage of property---Appellants were guarantors and assailed judgment and decree passed by Banking Court on the plea that no guarantees were executed by them, as the same were not available on Court record--- Validity--- Contention of appellants was contrary to record, where personal guarantees were available---Once given the guarantees, it was not open for appellants to wriggle out of it on a bald assertion that there was no guarantee available on record---Appellants failed to point out any illegality in judgment passed by Banking Court---Appeal was dismissed in circumstances.

Industrial Development Bank of Pakistan through Chief Manager v. Shaf Industries (Pvt.) Ltd. and another 2006 CLD 743; Habib ur Rehman and another v. Judge Banking Court No.4, Lahore and another 2006 CLD 217 and Messrs Taxila Cotton Mills Ltd. and 10 others v. Allied Bank of Pakistan Ltd. and 4 others 2005 CLD 244 ref.

Ghazala Arif v. Union Bank Ltd. (now Emirates Bank International), Lahore 2000 CLC 1201 rel.

Mian Babar Saleem for Appellants.

Sardar Riaz Karim for Respondent No.1.

Muhammad Nazim Khan for Respondents Nos.2 and 4.

Date of hearing: 23rd September, 2013.

2014 C L D 180

[Lahore]

Before Syed Iftikhar Hussain Shah and Shoaib Saeed, JJ

Messrs MUNAWAR ABBAS COTTON GINNER TAUNSA DARRI PEER ADIL through Partner and 3 others---Appellants

Versus

UNITED BANK LTD. through Attorney---Respondent

R.F.A. No. 14 of 2007, heard on 21st May, 2013.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Leave to defend the suit--- Blank documents--- Banking Court dismissed application for leave to defend the suit and resultantly suit was decreed in favour of plaintiff bank---Defendants contended that blank documents were not signed by them---Validity---Documents were duly signed by defendants and no illegality was pointed out in credit and debit entries as reflected in statement of accounts---By giving blank documents by defendants, an opportunity was provided to fill the same according to bank's choice--- Trial Court rightly concluded that defendants failed to make out it case for grant of leave to defend---Defendants failed to point out any misreading or non-reading of evidence in judgment and decree passed by Banking Court---High Court declined to interfere in judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

Sardar Riaz Karim for Appellants.

Syed Abdul Jalil Shah for Respondent.

Date of hearing: 21st May, 2013.

2014 C L D 191

[Lahore]

Before Syed Iftikhar Hussain Shah and Shoaib Saeed, JJ

STANDARD CHARTERED BANK (PAKISTAN) LIMITED through Regional Litigation Manager---Appellant

Versus

ARSHAD ALI and another---Respondents

F.A.O. No.31 of 2011, decided on 18th June, 2013.

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

----Ss. 9 & 22--- Suit for recovery of bank loan---Restoration of suit dismissed for non-prosecution---Wrong date, noting of---Suit filed by plaintiff bank was dismissed for non-prosecution and bank sought its restoration on the plea that wrong date had been noted by clerk of its counsel---Validity---At the time of dismissal of suit at 3-30 p.m. only clerk of counsel for defendants was marked present---Pages of diary of counsel of plaintiff bank revealed that case was wrongly noted in counsel's diary---No rebuttal to affidavits brought on record along with application for restoration of suit---High Court set aside order passed by Banking Court and remanded the case to Banking Court for decision on merits---Appeal was allowed in circumstances.

Muslim Commercial Bank Limited v. Tariq Saeed and another 2004 CLD 902 and United Bank Limited v. Messrs Khawaja Radio House through Proprietor and 2 others 2004 CLD 1609 rel.

Imran Yousaf for Appellant.

Sardar Riaz Karim for Respondents.

2014 C L D 193

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

Sardar ALI MUHAMMAD KHAN---Appellant

Versus

MUHAMMAD AYYUB---Respondent

R.F.A. No.9 of 2010, heard on 1st October, 2013.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.1 & 2---Presumption as to negotiable instrument of consideration---Suit for recovery of money on basis of promissory note, was dismissed inter alia on the ground that plaint was silent about mode and place of payment etc.---Validity---Since the defendant had not filed any leave to defend, therefore the Trial Court was required to decree the suit in terms of O.XXXVII, R.2(2), C.P.C. and it was not even necessary for the plaintiff to give ex parte evidence---Trial Court need not have gone into issues of place of payment, and mode of payment etc, as under S.118 of the Negotiable Instruments Act, 1881 consideration in respect of negotiable instrument was to be presumed under the law unless such presumption had been rebutted by the defendant, and in the present case, the defendant had not rebutted the same---Findings of the Trial Court were therefore, erroneous; and impugned order was set aside and the suit was decreed---Appeal was allowed, in circumstances.

Haji Ali Khan v. A.B.L. PLD 1995 SC 362; Ahmad Autos v. A.B.L. PLD 1990 SC 497; Naeem Iqbal v. Mst. Zarina 1996 SCMR 1530; Ashfaq Ahmad v. Muhammad Waseem 1999 SCMR 2832; Muhammad Haneef Sheikhani v. Muhammad Khalid Shafi 2009 CLD 1129; Malik Liaqat Ali v. Muhammad Sharif 2009 CLD 1313; Muhammad Ishaque v. Rana Dilbar Hussain 2010 CLC 1059 and Muhammad Aziz ur Rahman v. Liaqat Ali 2007 SCMR 1820 rel.

Syed Muhammad Ali Gillani for Appellant.

Ex parte for Respondent.

Date of hearing: 1st October, 2013.

2014 C L D 198

[Lahore]

Before Ijaz ul Ahsan and Mrs. Ayesha A. Malik, JJ

The BANK OF PUNJAB through General Attorney---Appellant

Versus

Malik UMER FAROOQ---Respondent

F.A.O. No.402 of 2012, heard on 5th November, 2013.

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

----Ss. 9 & 10---Procedure of Banking Courts---On filing of suit under S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, notices were to be issued on the presentation of the plaint to the Banking Court under S.9(5) of the Ordinance---Such notices were to be issued in Form No.4 in the Appendix 'B' to the Code of Civil Procedure, 1908 or any other Form as may be prescribed in the Rules---Four modes had been prescribed and all such modes had to be used by the Banking Court to effectuate service on the defendants---Banking Court was also required to ensure that summonses were published in one English and one Urdu newspaper with wide circulation within its territorial limits---Notices must be issued in terms of S.9(5) of the Ordinance on the presentation of plaint---No provision in the Financial Institutions (Recovery of Finances) Ordinance, 2001 existed to issue simple notices to defendants---When summons had been served on the defendant, the defendant was entitled to defend the suit under S.10(1) of the Ordinance---Such was a right given to the defendant under the Ordinance wherein the defendant shall file an application for leave to defend within thirty days from the date of first service by any one of the modes laid down in S.9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----Ss. 9 & 10--- Leasing of vehicle---Re-possession of vehicle by Bank--- Procedure of Banking Court---Plaintiff/customer filed suit for declaration and permanent injunction assailing re-possession of leased vehicle by the bank and sought return of said vehicle---Suit was disposed of on basis of statement of plaintiff that he was willing to pay the instalments and subject to said payment of instalments and re-possession fee, the defendant bank was directed to return the vehicle---Validity---Banking Court had erred in law by neglecting to follow prescribed procedure under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court, in the present case, failed to give defendant an opportunity to defend their case under S.10 in the form of a preliminary leave to defend application---Suit was filed by the plaintiff/customer seeking a declaration that the acts of the defendant bank in re-possessing the vehicle were illegal and unlawful; for directing the Bank to render true and faithful statement of accounts; a permanent injunction not to auction the re-possessed vehicle and to hand over the possession of the re-possessed vehicle to the plaintiff---By virtue of the impugned order the Banking Court had accepted the statement of the plaintiff that he was a defaulter of some instalments, and had granted him an opportunity to pay defaulted instalments along with repossession charges---Banking Court, therefore, granted the plaintiff final relief without giving the defendant bank an opportunity to file its leave to defend application under S.10 of the Ordinance---Banking Court had to determine in the first instance whether or not the defendant should be granted leave to defend in the case as some substantial questions of law and fact had been raised for which evidence needed to be recorded---Once leave to defend had been granted and issues had been framed as to the substantial questions of law and fact, then evidence had to be recorded and only thereupon disposal of the suit under S.10 could be done---Banking Court therefore could not have disposed of the suit vide impugned order as it had to exercise jurisdiction strictly according to Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside impugned order and remanded the case to the Banking Court to decide the same afresh---Appeal was allowed, accordingly.

Nadeem Saeed for Appellant.

Jalal Tariq Joyia for Respondent.

Date of hearing: 5th November, 2013.

2014 C L D 257

[Lahore]

Before Ibad-ur-Rehman Lodhi, J

MUHAMMAD ASLAM----Appellant

Versus

GENERAL MANAGER PIONEER PAKISTAN SEED LIMITED, LAHORE and 4 others----Respondents

First Appeals from Order Nos.89 and 69 of 2009, decided on 5th August, 2013.

(a) Punjab Consumer Protection Act (II of 2005)---

----S. 33---Limitation Act (IX of 1908), S.5---Appeal---Condonation of delay---Deceiving by respondent--- Effect--- Consumer filed appeal against decision of Trial Court beyond period of limitation---Consumer sought condonation of delay on the ground that after decision of Trial Court, respondent-company approached him and promised that he would be compensated by providing 250 bags of seed of maize and thus they deceived consumer and let the limitation period expire---Validity---Explanation extended by consumer in order to seek condonation of delay caused in filing of appeal did not appeal to sense and such plea had never been recognized as justification for condonation of delay in filing of some legal proceedings---High Court declined to condone delay, as consumer failed to justify delayed filing of appeal--- Appeal was dismissed in circumstances.

(b) Punjab Consumer Protection Act (II of 2005)---

----Ss.25, 28 (3) (4) & 30---Consumer protection---Claim---Limitation--- Consumer purchased seed of maize on 11-12-2007 and used the same in the month of June, 2008, but claim was instituted before Consumer Court on 7-10-2008 and notice was issued on 21-9-2008---Consumer Court partly allowed claim filed by consumer and directed company to provide him 250 bags of maize seed---Validity---Starting point of period of limitation provided for filing of claim before Consumer Court was accrual of cause of action and if in particular background of the matter, cause of action was accrued to consumer in the month of June, 2008, when crop was harvested, institution of claim before Consumer Court was beyond limitation---Consumer purchased 250 bags of maize and out of the same 248 bags were consumed and used by consumer and subsequently challenged quality of whole purchased lot only by producing two bags and that too without any proper seal over the same---Not certain that either the bags contained seed, were in fact originally filled by the company or after de-sealing the same by consumer, those were refilled by some substandard seeds by consumer to create a circumstance to justify the claim---Consumer failed to bring any convincing evidence on record to show that seeds in sealed bags of company were in fact substandard one---Merely by saying of consumer, it could not be presumed that quality of seed was not up to the mark for the reason that consumer was not an expert in the relevant field---Claim placed by consumer before Consumer Court was beyond limitation as provided in S.28 of Punjab Consumer Protection Act, 2005, and also was not maintainable in absence of mandatory notice, delivery of which was to be proved beyond any shadow of doubt and also on merits---High Court directed Punjab Government to initiate appropriate administrative/legislative measure to make necessary amendments in S.30 of Punjab Consumer Protection Act, 2005, in order to provide power to Consumer Court to frame issues from divergent pleadings of parties and also to record evidence of parties on such issues and then to give issue-wise findings on such material available before it--- High Court set aside the order passed by Consumer Court---Appeal was allowed in circumstances.

Al-Jehad Trust through Habibul Wahab Al-Khairi Advocate and 9 others v. Federation of Pakistan through Secretary, Ministry of Kashmir Affairs, Islamabad and 3 others 1999 SCMR 1379 rel.

Mian Ahmad Mahmood for Appellant.

Barrister Rafey Altaf for Respondents.

Date of hearing: 24th June, 2013.

2014 C L D 272

[Lahore]

Before Syed Mansoor Ali Shah and Mamoon Rashid Sheikh, JJ

COMMISSIONER INLAND REVENUE ZONE-II, REGIONAL TAX OFFICE, MULTAN---Appellant

Versus

Mrs. AMBREEN FAWAD C/O PAK ARAB FERTILIZERS LIMITED, MULTAN---Respondent

T.R. No.51 of 2011, heard on 4th November, 2013.

(a) Interpretation of statutes---

----"Beneficial legislation"---Meaning and scope of---Principles of interpretation, explained.

N.S. Bindra, Interpretation of Statutes, Tenth Edition, pp.341-342 & 348 rel.

(b) Interpretation of statutes---

----"Remedial or curative statutes"--- Meaning and scope of--- Principles of interpretation, explained.

N. S. Bindra, Interpretation of Statutes, Tenth Edition, pp.341-342 & 348 and Antonin Scalia & Bryan A. Garner, Reading Law, The Interpretation of Legal Texts, 2012, p.365 rel.

(c) Interpretation of statutes---

----Retroative legislation---Retrospective effect of legislation--- Principles of interpretation--- Scope---Retroactive legislation was looked upon with disfavour, as a general rule, and properly so because of its tendency to be unjust and oppressive---In the absence of any indication in the statute that the Legislature intended for it to operate retroactively, it must not be given retrospective effect---Where a statute however, was procedural, declaratory or explanatory or where a statute was passed for the purpose of supplying an obvious omission in a former statute, it was to operate retrospectively obviously because it did not affect vested rights.

Earl T. Crawford, The Construction of Statutes, 1940 pp.562, 563 and Taxmann Interpretation of Taxing Statutes, p.475 and 1993 SCMR 73 at 78 rel.

(d) Interpretation of statutes---

----Retrospective effect of beneficial, remedial or curative legislation---Meaning, object, scope and principles of interpretation for such statutes explained.

N. S. Bindra, Interpretation of Statutes, Tenth Edition, pp.341-342 & 348; Antonin Scalia and Bryan A. Garner, Reading Law, The Interpretation of Legal Texts, 2012, p.365; Earl T. Crawford, The Construction of Statutes, 1940 pp.562, 563; Taxmann Interpretation of Taxing Statutes, p.475; Commissioner of Income Tax v. Shahnawaz Ltd. and others 1993 SCMR 73 and State Bank of Pakistan v. Messrs Faisal Spinning Mills Limited 1997 SCMR 1244 rel.

(e) Interpretation of statutes---

----Beneficial legislation--- Retrospective effect of beneficial legislation---Liberal interpretation---Scope---Beneficial legislation, generally, was to be given a liberal interpretation, however for the said legislation to have a retrospective effect, beneficial legislation must carry curative or remedial content---Such legislation must, therefore, either clarify an ambiguity or an omission in the existing law and must be explanatory or clarificatory in nature---While beneficial legislation was to be liberally interpreted, in order to advance the beneficent object of the statute, it in no manner meant that "beneficial legislation" or "liberal interpretation" necessarily included or interchangeably meant retrospective application of the statute---Unless the legislation was remedial, curative, explanatory or clarificatory, it could not be interpreted retrospectively merely on the ground that the legislation is generically beneficial in nature.

Commissioner of Income Tax v. Shahnawaz Ltd. and others 1993 SCMR 73 and State Bank of Pakistan v Messrs Faisal Spinning Mills Limited 1997 SCMR 1244 rel.

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

----Second Sched. Part I, Cl.(130B) & S.150---Deduction of tax at source--- Dividends--- Dividends in specie---Conditional exemption on payment of tax on dividends in specie by virtue of Cl.(103B) of the Second Schedule to the Income Tax Ordinance, 2001---Retrospective application of such exemption---Scope---Contention of the taxpayer was that Cl.(103B) of Part I of the Second Schedule to the Income Tax Ordinance, which was introduced in the year 2010, applied retrospectively to the tax year 2008; therefore, the taxpayer was not liable to tax on payments of dividends in specie, for the tax year, 2008---Validity---Section 5 of the Income Tax Ordinance, 2001 was the charging section for the imposition of tax on dividends, and Cl.(103B) of Part I of the Second Schedule to the Ordinance simply introduced a conditional exemption in the year, 2010 which did not remedy or cure any ambiguity or omission in the law, and on the contrary, provided an exemption from tax for the first time which was not in existence in the year 2008---Labelling said Cl. (103B) Part I of the Second Schedule to the Income Tax Ordinance, 2001 as remedial or curative legislation, was therefore, misconceived and it did not have a retrospective effect and therefore, had no application to the tax year 2008---Reference was answered, accordingly.

Commissioner of Income Tax v. Shahnawaz Ltd. and others 1993 SCMR 73 and Dawood Cotton Mills v. Commissioner of Income Tax 2000 PTD 285 distinguished.

(g) Words and phrases---

----"Deduct", meaning of---Word "deduct" meant to take away money, points, etc. from a total amount; or to take away, separate, or remove, in numbering or estimating, to subtract often with from or out of, and to take away an amount from a total or take away or subtract from a sum.

Oxford Advanced Learner's Dictionary, 8th Edition, p.395; Webster's New International Dictionary, Second Edition, p.684; Merriam-Webster's Collegiate Dictionary, Eleventh Edition, p.324 and The Major Law Lexicon, 4th Edition 2010, p.1841 rel.

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

----Ss. 150, 156(2) & 233(2)---Deduction of tax at source---Dividends---Dividends in specie---Deduction of tax in terms of S.150, Income Tax Ordinance, 2001 on payment of dividend in specie---Question before the High Court was whether a company paying dividend in specie to its directors was entitled to deduct tax in terms of S.150 of the Income Tax Ordinance, 2001---Held, that S.150 of the Income Tax Ordinance, 2001 implied that dividend should in such a form that deduction of tax therefrom was possible from the person paying the dividend---In case of dividend in specie, such deduction was not practically possible---Reference was to be made to S.156(2) of the Ordinance which stated that in case prize was not in cash, the person while giving the prize shall collect tax on the fair market value of the prize; which was similar to the case of Brokerage and Commission under S.233(2) of the income Tax Ordinance, 2001---Therefore, unless S.150 of the Income Tax Ordinance, 2001 separately provided for collection to tax from assessee at the time of deduction of tax, the same section could not be applied to "dividend in specie"---Reference was answered, accordingly.

Agha Muhammad Akmal Khan and Tariq Manzoor Sial, along with Asif Rasool, Addl. Commissioner, Inland Revenue, Multan for Petitioner.

Rana Muhammad Afzal for Respondent-Assessee.

Date of hearing; 4th November, 2013.

2014 C L D 322

[Lahore]

Before Ijaz Ahmad, J

ATHAR MEHMOOD KHAN---Petitioner

Versus

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

Writ Petition No.3090 of 2011, decided on 27th May, 2013.

(a) Foreign Exchange (Temporary Restrictions) Act (IV of 1998)---

----S. 2---Constitution of Pakistan, Art.199---Constitutional petition---State Bank of Pakistan, F. E. Circular No.16, dated 24-6-1999---Seizing of foreign currency accounts during economic emergency of 1998---Petitioner was a foreign national who had held deposits of foreign currency in various banks at fixed interest rates during the economic emergency of 1998 and during the promulgation of the Foreign Exchange (Temporary Restrictions) Act, 1998---Contention of the petitioner was that he remained abroad and no notice was served upon him by the banks and when he approached the banks for return of his principal amount along with the interest agreed upon at the time of opening of accounts, the same was refused---Contention of the respondent banks on the other hand was, inter alia, that the petitioner was aware of the developments and never approached the banks, that petitioner had failed to approach the respondent banks in accordance with State Bank F.E. Circular No.16 dated 24-6-1999 for receipt or withdrawal of money and that the petitioner had given no specific instructions as to the future use of the money lying with the banks, however the banks were ready to pay the principal amount back with the usual nominal rate of 0.05 per cent. per annum---Validity---Contention that the petitioner failed to make a prompt demand and failed to renew the original agreement in relation to fixed deposits, thereby leaving the banks ignorant as to whether the petitioner intended to continue or discontinue the arrangement, was not an acceptable contention since the petitioner could not be attributed the delay in the making of the demand---Respondent Banks who were custodians of the petitioner's money and aware of the change in legislation, were duty bound to intimate the same to the petitioner and seek his option---High Court directed the respondent banks to return to the petitioner his money in Pakistani Rupees on the existing inter bank exchange rate along with the interest form the date of their initial deposit at the rate agreed with the petitioner in each case---High Court further directed that the return be made in an honourable way and within a certain period of time---Constitutional petition was allowed, in circumstances.

Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026; PAKCOM Limited and others v. Federation of Pakistan and others PLD 2011 SC 44; Zonal Manager, UBL and another v. Mst. Perveen Akhtar, PLD 2007 SC 298; S.M. Ismail v. Capital Development Authority, Islamabad through Chairman and 5 others 2006 CLC 131; Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268 and State Bank of Pakistan through Governor and another v. Imtiaz Ali Kihan and others 2012 SCMR 280 ref.

(b) Laches---

----Laches are not determined with the length of a specific period of time only and were to be ascertained by a combination of time and behaviour of both parties; and varied from case to case---Laches may occur within a couple of days or the mischief may not come into play even by the passage of decades.

Zafar Mahmood Mughal for Petitioner.

Habib Ahmad Bhatti for Respondents Nos. 1 and 2.

Masood Raza for Respondents Nos. 3 and 4.

2014 C L D 335

[Lahore]

Before Abdul Waheed Khan, J

Syed KHADIM HUSSAIN---Petitioner

Versus

JUDGE BANKING COURT NO.III, LAHORE and another---Respondents

Writ Petition No.8206 of 2011, decided on 14th December, 2011.

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

----S. 19(3)--- Constitution of Pakistan, Art. 199---Constitutional petition---Execution of decree passed by Banking Court---Sale of mortgaged property by way of public auction--- Reserve price--- Scope and nature---Grievance of judgment-debtor/petitioner was that reserve price of property intended to be auctioned was too low and had been wrongly fixed by the Executing Court by relying on a valuation report and that reserve price of property should have been fixed at the market rate---Validity---Reserve price was always tentative in nature and was the minimum price from where the bid started---Low reserve price attracted more bidders to participate for a fair competition---No prejudice was likely to be caused to the judgment-debtor because his interest would be in the final bid, i.e. offer by a bidder, which would be the price at which the property would be sold---Constitutional petition was dismissed accordingly.

Messrs Tri-Star Polyester Limited and another v. Citi Bank 2001 SCMR 410 ref.

Ghulam Hussain Chaudhry for Petitioner.

Usman Sahi for Respondent No.2.

2014 C L D 390

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shujaat Ali Khan, JJ

NISAR AHMED AFZAL---Appellant

Versus

MUSLIM COMMERCIAL BANK through Assistant Vice-President/Chief Manager and 14 others---Respondents

F.A.Os. Nos.140 of 2007, 114 of 2008 and C.R. No.156 of 2008, heard on 6th February, 2013.

(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 bank loan---Application for setting aside ex parte decree--- Maintainability--- Auction of suit property by the Banking Court---Contention of applicants was that they were bona fide purchasers of the property in question---Banking Court dismissed application filed under S.12(2), C.P.C. summarily---Validity---Provisions of S.12(2) were made part of Civil Procedure Code, 1908 by withdrawing the right of a suit of aggrieved party challenging the decree on the ground of fraud---Section 12(2), C.P.C. was applicable to the proceedings arising under Financial Institutions (Recovery of Finances) Ordinance, 2001---Application under S.12(2), C.P.C. was maintainable in appropriate cases---Possession of suit property was with the applicants---Applicants purchased the suit property through registered sale deed against consideration---Mortgagor or his tenant or representative of mortgagor was not in possession of the mortgaged property---Trial Court could only transfer the symbolic possession under O.XXI, R.96, C.P.C. to the auction purchaser---Warrant of possession against the mortgagor was issued by the Trial Court but applicants were dispossessed from the suit property---Applicants filed application under S.12(2), C.P.C. on coming to know about the sale of suit land---Applicants had the right to challenge the decree and to get the property redeemed---Banking Court was bound to hold inquiry whether the decree was rightly passed or not and the applicants were bona fide purchasers for value without notice or not---Applicants had given the particulars of fraud in their application which required the detailed inquiry---Impugned orders were set aside in circumstances---Application under S.12(2), C.P.C. would be deemed to be pending before the Banking Court which should be decided after framing of issues and recording of evidence.

Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation Karachi PLD 2002 SC 500 rel.

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

----S. 7(a)--- Power of Banking Court--- Scope--- Banking Court had all the powers vested in civil court under Civil Procedure Code, 1908 in exercise of civil jurisdiction.

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

----S. 7(2) & Preamble---Procedure to be followed by the Banking Court---Scope---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law enacted for the resolution of disputes between the customer and Financial Institution--- Courts established under the Ordinance were having the jurisdiction of civil and criminal courts---Banking Court would follow the procedure as laid down in the Civil Procedure Code, 1908 where same had not been provided in the Financial Institutions (Recovery of Finances) Ordinance, 2001---Provisions of Criminal Procedure Code, 1898 would be applicable in criminal jurisdiction if special procedure was not available under the Ordinance.

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

----Ss. 27 & 22---Civil Procedure Code (V of 1908), Ss. 10 & 12(2)---Order of Banking Court---Scope---No court or any other authority subject to S.22 of the Ordinance, had jurisdiction to revise, review, or call in question any proceedings, judgment, decree or order of Banking Court---No appeal, review or revision would lie against an order accepting or rejecting an application for leave to defend or any interlocutory order of Banking Court which did not dispose of the entire case other than order passed under subsection (11) of S.15 or subsection (7) of S. 19 of the Ordinance---Section 10, C.P.C. would not apply on the suit filed under the Ordinance, however the applicability of S.12(2), C.P.C. had not been debarred under the said Ordinance.

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

----S. 12(2)---Bar to further suit---Scope---Provision of S.12(2) was made the part of Civil Procedure Code, 1908 by withdrawing the right of a suit of the aggrieved party challenging the decree on the ground of fraud.

Syed Najmal Hassan Kazmi, Imran Muhammad Sarwar and Shahid Ikram Siddiqui for Appellant.

Imran Aziz Khan and Khurram Raza for Respondents.

Date of hearing: 6th February, 2013.

2014 C L D 403

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

HABIB METROPOLITAN BANK LTD.---Petitioner

Versus

ZAB RICE (PVT.) LTD. and others---Respondents

C.O.S. No.36 of 2010, decided on 14th September, 2012.

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

----Ss. 9 & 19(3)---Recovery suit---Ex parte decree passed by Banking Court, setting aside of--- Scope---Contumacious default by defendant---Lack of bona fides--- Effect--- Recovery suit was decreed ex parte against defendants---Defendants filed application before High Court to set aside ex parte decree---High Court allowed said application and directed defendants to deposit Rs. 400,000 with decree-holder/Bank for setting aside ex parte decree---Defendants deposited a cheque of Rs.400,000 with the Bank, however the same was dishonoured due to lack of funds---Plea of defendants that on the day of presentment of cheque by the Bank, one of defendants' customers withdrew Rs. 30,000 from the account, and as such the cheque was dishonoured; that cheque had been issued to the bank bona fidely, therefore more time might be allowed to the defendants to deposit Rs. 400,000---Validity---Defendants were given concession by the High Court directing them to deposit Rs.400,000, being the expenses of auction as the plaintiff/decree-holder Bank had incurred the said expenses towards payment of court auctioneer fee and other charges etc.---Suit filed by Bank was for recovery of Rs. 58,482,336.57 and if defendants were unable to deposit Rs.400,000, how would they pay the decretal amount--- Intention of defendants was not bona fide and they were trying to linger on disposal of recovery suit--- Defendants on the present date of hearing were again not in a position to deposit amount of Rs. 400,000, and as such default on their part was contumacious--- High Court set aside the order whereby ex parte decree was set aside subject to depositing of Rs. 400,000 with the Bank, and resultantly ex parte decree against defendants was revived---High Court appointed Court Auctioneers for conducting auction of property--- Application was dismissed accordingly.

Zahoor Ali Nasir Tagha for Petitioner.

M. Usman Sahi for Respondents.

2014 C L D 411

[Lahore]

Before Amin-ud-Din Khan, J

COCA COLA BEVERAGES PAKISTAN LIMITED through Director Supply---Appellant

Versus

VITA PAKISTAN LIMITED through Chief Executive and another---Respondents

F.A.O. No. 491 of 2010, decided on 12th November, 2012.

Arbitration Act (X of 1940)---

----S. 34---Arbitration agreement---Stay of proceedings---Pre-conditions---Suit for recovery of damages and compensation was pending before Trial Court and application filed by defendant for stay of proceedings was dismissed---Validity---Parties had not agreed to make Arbitration Act, 1940, applicable to them, therefore, S.34 of Arbitration Act, 1940, could not be pressed into service--- Another condition for pressing S.34 of Arbitration Act, 1940, was that proceedings of arbitration had been commenced but in the present case no such proceedings commenced---No steps having been taken before filing application under S.34 of Arbitration Act, 1940, therefore, Trial Court did not commit any illegality while rejecting application under S.34 of Arbitration Act, 1940--- Appeal was dismissed in circumstances.

Kh. Muhammad Aslam v. Ch. Aftab Ahmad and 4 others 1992 MLD 60; Muhammad Idris and others v. Tobarak Hossain PLD 1965 Dacca 260; The Province of the Punjab v. Messrs Irfan and Co. PLD 1956 (W.P.) Lah. 442; Rachappa Gurduadappa Bijapur v. Gurusiddappa Nuraniappa and others 1990 MLD 1383; Messrs Cosmopolitan Development Company v. Messrs So DI ME S.P.A and another 1987 MLD 2832 and Uzin Export Import Foreign Trade Co. v. Macdonald Layton and Co. Ltd. Karachi and another 1996 SCMR 690 ref.

Usman Akram Sahi for Appellant.

Syed Ijaz Ali Sabzwari for Respondents.

2014 C L D 440

[Lahore]

Before Shezada Mazhar, J

The ARMY WELFARE TRUST TRADING AS NIZAMPUR CEMENT PLANT through Director of AWT and Acting Managing Director ---Plaintiff

Versus

SONERI BANK LIMITED and 2 others---Defendants

Civil Original Suit No.3 of 2005, decided on 23rd October, 2013.

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

----S. 9--- Banking Court---Jurisdiction---Multiple claims---Scope---Plaintiff company filed suit against bank which included different claims depending upon contractual liabilities and tortuous acts---Validity---Only those issues could be solved under Financial Institutions (Recovery of Finances) Ordinance, 2001, which were between customers and financial institutions in respect of finance and that too on the ground that any obligation had not been fulfilled---Only two claims could be tried under Financial Institutions (Recovery of Finances) Ordinance, 2001, whereas rest of the claims could not be entertained before Banking Court---High Court deleted the claims from plaint which were not maintainable under Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit filed by plaintiff was maintainable accordingly.

2003 CLD 1026; 2001 CLC 1904; 1998 CLC 1718; 2009 CLD 49; 2008 CLD 1326; PLD 2003 Lah. 358; 2006 CLC 167; 2002 CLD 1170; 2006 CLD 1147; 2003 CLD 931; 2003 CLD 1165; 2004 CLD 1232; 2004 CLD 587; 2008 CLD 765 and Tri Star Industries (Pvt.) Ltd. v. State Bank of Pakistan and another 2004 CLD 257 ref.

2009 CLD 432 rel.

(b) State Bank of Pakistan Circulars---

----Applicability--- Scope--- Circulars of State Bank of Pakistan have to apply as a law and have binding effect like other provisions of law---Such circulars have been issued under the authority and same must be treated as having the force of law.

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

----S. 9(1)--- Banking Court--- Jurisdiction--- Breach of contract and tortuous act---Scope---If claim is based on breach of contract for finance, the same is dealt with under S.9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, however, if claim is based on tortuous act then Banking Court has no jurisdiction.

2003 CLD 1843 rel.

Khaliq uz Zaman Khan for Plantiff.

Syed Ali Zafar for Defendant No.1.

M. Faisal Butt for Defendant No.3.

Date of hearing: 2nd October, 2013.

2014 C L D 462

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

MUHAMMAD AZAM KHAN---Appellant

Versus

ASKARI LEASING LIMITED through Branch Manager---Respondent

Regular First Appeal No.171 of 2010, heard on 30th September, 2013.

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

----S. 7--- Suit for rendition of accounts--- Scope--- Car finance--- Maintainability of suit for rendition of accounts--- Essentials--- Contention of the plaintiff/ customer was that he had availed car finance and had been regularly paying instalments to the defendant Bank, however, the defendant Bank was illegally charging markup and penalties; hence the suit for rendition of accounts was filed---Suit was dismissed on the ground that the same was not maintainable---Validity---Perusal of the lease agreement between the parties showed that there existed no clause which required the defendant Bank to render any account to the plaintiff, and it had been specifically mentioned in the said lease agreement that the bank shall not be accountable for any liability---Suit for rendition of accounts was an equitable remedy which was available to the plaintiff only if he was entitled to the accounts and had not been given such accounts---Such relief would not arise out of mere contractual relationship or because accounts may have to be examined in the course of a suit but in order to bring a suit for rendition of accounts, one had to see that there had been an open current and mutual account---In order to determine whether a suit for rendition of accounts was maintainable, one had to see if it was really a case of debtor and creditor or only a case of mutual obligation which in the ordinary way resulted in enforceable liabilities on each site---Case of accounts where one party never had any demand against the other, did not fall within such purview and for rendition of accounts there ought to be debit and credit on both sides---For the purpose of maintainability of a suit for rendition of accounts, liability of the other party to render accounts was a basic foundation and such liability did not exist when the relationship was contractual between the parties, however, it existed when there was a fiduciary relationship between the parties as in the case of a partners of a firm, guardian and ward, principle and agent, trustee and beneficiary of the trust---Relationship of the parties, in the present case, was contractual in nature and not fiduciary, therefore the suit for rendition of accounts filed by customer was not maintainable--- Appeal was dismissed, in circumstances.

Messrs Friend Engineering Corporation, the Mall, Lahore v. Government of Punjab and 4 others 1991 SCMR 2324 and Pakistan International Airlines Corporation v. Karachi Municipal Corporation through Chairman/Administrator, Karachi and another PLD 1994 Kar. 343 rel.

Muhammad Shehzad Aslam for Appellant.

Respondent proceeded ex parte.

Date of hearing: 30th September, 2013.

2014 C L D 504

[Lahore]

Before Umar Ata Bandial, C.J.

Messrs ARQAM EDUCATIONAL SOCIETY---Appellant

Versus

DAR-E-ARQAM SCHOOL and others---Respondents

F.A.O. No.383 of 2010, heard on 20th February, 2013.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 17, 14 & 114--- "Dar-e-Arqam" School was established in the year 1992, whereafter appellant set up a school with the same name in 1993---Appellant's application for registration of Trade Mark was allowed, and upon rectification applications filed by respondent, appellant's opposition applications to the same were dismissed by Registrar Trade Marks---Contention of the appellant was that the Registrar Trade Marks had passed the impugned order without recording of evidence---Held, that there was no disagreement with regard to inventor/adopter of the name "Dar-e-Arqam", and the fact that the respondent school was registered in the year 1992 prior to the establishment of the school of the same name by the appellant---Dispute, in the present case, was as to whether there was acquiescence on part of each party in dispute to the use of the common name by the other party and if so, the consequence thereof; and secondly, there was dispute as to which party had a larger footprint in the public domain in order to claim benefit of such standing, repute and business profile for claiming exclusive use, if at all, of the name in question---High Court observed that finding on the said points of fact should provide an answer to the rival claims of the parties, and Registrar Trade Marks was directed to record evidence on the said points of facts and give his findings on the claims of the parties for exclusive use and trade mark registration for the name "Dar-e-Arqam" within a period of three months---Appeal was disposed of, accordingly.

Syed Faiz-ul-Hassan for Appellant.

Muhammad Asad Manzoor Butt for Respondents.

Date of hearing: 20th February, 2013.

2014 C L D 567

[Lahore]

Before Amin-ud-Din Khan and Shahid Waheed, JJ

Messrs ATTIQUE ENTERPRISES and 2 others----Appellants

Versus

BANK OF OMAN LTD. through Managers----Respondent

C.Ms. Nos.1-C and 2-C of 2012 in E.F.A. No.514 of 2006, decided on 11th June, 2013.

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

----S. 22---Civil Procedure Code (V of 1908), O.XLIII, R.3---Limitation Act (IX of 1908), S. 5 & Art. 168---Maxim: nullus commodum capere potest de injuria sua propria: No one can take advantage of his own wrong---Appeal under S.22 of the Financial Institutions (Recovery of Finances) Ordinance 2001---Limitation---Condonation of delay---Appeal of applicant was dismissed for non-prosecution---Contention of the applicant was that his non-appearance before the court on the date of hearing was due to non-receiving of cause-list and that the applicant was a heart-patient undergoing treatment and was therefore not aware of the date of hearing---Validity---As per Art.168 of the Limitation Act, 1908 time began to run from the date of dismissal and not from date of knowledge of dismissal of appeal and the period of thirty days had been provided for filing of application for readmission of appeal dismissed for want of prosecution whereas applicant filed application after a lapse of six months ---Ground of non-receiving of cause-list from the Bar hardly constituted a sufficient cause for the reason that cause list was not only provided to the Bar but was also displayed on the website of the High Court---High Court also communicated the cause list to counsel through email and SMS and the negligence of counsel to get cause-list from Bar or to check the website email or SMS was not excusable on basis of the maxim nullus commodum capere potest de injuria sua propria (no man can take advantage of his own wrong)--- Application was dismissed, in circumstances.

Mian Javed Jalal for Applicants.

Muhammad Asif Ismail for Respondent.

2014 C L D 582

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

SAEED ULLAH PARACHA---Appellant

Versus

HABIB BANK LIMITED and others---Respondents

F.A.O. No.18 of 2010, heard on 2nd October, 2013.

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

----Ss. 19 & 7---Limitation Act (IX of 1908) Art. 181---Civil Procedure Code (V of 1908) S. 48---Execution of decree of Banking Court---Limitation---Automatic conversion of decree into execution petition---Scope---Suit for recovery was decreed whereafter plaintiff bank filed petition for execution of the decree---Defendant/judgment-debtor's application for setting aside execution proceedings, on the ground that the same were time-barred, was dismissed--- Contention of the defendants/judgment debtors was that decree was dated 10-10-2001, and decretal amount was payable by 10-2-20012; therefore under Art.181 of the Limitation Act, 1908 and S.48 of the C.P.C.; first execution petition could only be filed within a period of three years and the second within a period of six years, and in the present case, application for execution was dated 16-10-2008; which was barred by time---Validity---Under S.7 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; provisions of Civil Procedure Code and Limitation Act, 1908 would apply only in matters where procedure and provision was not provided in the Ordinance itself---Financial Institutions (Recovery of Finances) Ordinance, 2001 provided special procedure for execution of decrees and under S.19 of the Ordinance, upon pronouncement of judgment and decree, the suit shall automatically stand converted into an execution petition without filing of separate execution petition/ application---Such special procedure provided in the said S.19(1) of the Ordinance, would exclude general provisions of Art.181 of the Limitation Act, 1908 and S.48 of the C.P.C.---Application filed by plaintiff bank for conversion of a decree into execution proceedings was merely an application to trigger the machinery of the Banking Court into motion for implementation of the mandatory provisions of S.19(1) of the Ordinance which Banking Court was otherwise required to follow and such application could not be treated as an execution petition, therefore the same was not barred by time---No illegality existed in the impugned order---Appeal was dismissed.

Nazir Ali M.H. Gangji v. Commissioner of Income Tax, Companies-1, Karachi 1994 PTD 958; Messrs N.A. Industries Karachi v. Commissioner of Income Tax, Central Zone "A" Karachi 1993 PTD 45; Collector of Sales Tax (East) Karachi v. Customs, Excise, Sales Tax Appellate Tribunal, Karachi and another 2003 PTD 1477; National Bank of Pakistan and 7 others v. Emirates Bank International Limited and another 1993 CLC 2009 and Habib Bank Limited v. Messrs Ajma Corporation and others 2000 CLC 1425 rel.

(b) Interpretation of Statutes---

----Special law shall exclude provisions of the general law.

Nazir Ali M.H. Gangji v. Commissioner of Income Tax, Companies-1, Karachi 1994 PTD 958; Messrs N.A. Industries Karachi v. Commissioner of Income Tax, Central Zone "A" Karachi 1993 PTD 45; Collector of Sales Tax (East) Karachi v. Customs, Excise, Sales Tax Appellate Tribunal, Karachi and another 2003 PTD 1477; National Bank of Pakistan and 7 others v. Emirates Bank International Limited and another 1993 CLC 2009 and Habib Bank Limited v. Messrs Ajma Corporation and others 2000 CLC 1425 rel.

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

----Preamble & S. 7---Objects and scope of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Interpretation of the Ordinance---Objects and reasons for enacting the law of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to provide a single forum to the financial institutions as well as to the customers against a default in fulfillment of their obligation towards each other with regard to any finance---Financial Institutions (Recovery of Finances) Ordinance, 2001 being a special law took care of various situations itself and application of general laws would not only amount to circumventing the provisions of said special law, but would also erode its very object and purpose---Under the Ordinance, there was no requirement for decree holder bank to file separate execution petition and it was the duty of the Banking Court itself to convert the decree into execution without waiting for separate application for execution from the decree holder.

Malik Muhammad Riaz for Appellant.

Muhammad Masood Sabir for Respondent No.1.

Date of hearing: 2nd October, 2013.

2014 C L D 648

[Lahore]

Before Atir Mahmood, J

GENERAL MANAGER, NHA, MULTAN and 2 others---Appellants

versus

MUHAMMAD AQEEL AHMEDANI and another---Respondents

F.A.O. No.50 of 2010, heard on 20th November, 2013.

Punjab Consumers Protection Act (II of 2005)---

----Ss. 27, 2(c) & 33---National Highways Authority Act (XI of 1991), S.10(2)---Jurisdiction of Consumer Court---"Consumer" definition and scope of---Toll plaza---Toll tax, collection of---Complainant had sought direction from Consumer Court that Toll Plaza established by the National Highways Authority ("NHA") be shifted to its original place and until such time, no toll be collected from the complainant---Complaint was partially decreed to the effect that Highway Authority would not collect toll plaza till providing him such facility at a new designated place---Contention of the Highway Authority was that Consumer Court had no jurisdiction in the matter--- Validity--- Under S.10(2) of the National Highways Authority Act, 1991, Authority may levy or collect or cause to be collected toll tax on national highways by establishing toll plazas, which was the prerogative and function of the Authority wherein the court should not have interfered in ordinary circumstances---Consumer Court had been established for protection of consumers of products and services and it had no jurisdiction to pass orders for shifting of toll plazas established in accordance with law or stopping the Authority from collection of toll tax on toll plazas constructed on highways---Consumer Court in the present case had therefore, travelled beyond its jurisdiction and the impugned order could not thus be sustained in the eye of the law and the complainant did not fall within the ambit of a "consumer" as the establishment of a toll plaza was for the purpose of collecting toll tax and no service of any kind was being provided to the complainant---Impugned order of Consumer Court was set aside, and complaint filed by the complainant was dismissed---Appeal was allowed in circumstances.

Malik Muhammad Tariq Rajwana for Appellants.

Respondent: Ex parte.

Date of hearing: 20th November, 2013.

2014 C L D 664

[Lahore]

Before Umar Ata Bandial, C.J.

Engineer GHAZANFAR ALI KHAN and others---Petitioners

Versus

F.O.P. and others---Respondents

Writ Petition No.1627 of 2012, heard on 26th September, 2013.

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

----S. 183--- Public Sector Companies (Corporate Governance) Rules, 2013, Rr. 1, 3, 2(d), 2(g) & Annexure---Constitution of Pakistan, Arts. 199 & 189---Constitutional petition----Public Sector Company---Appointment of Chief Executive Officers (CEOs) of Power Distribution and Supply Companies (DISCOs)----Authority of Federal Government to make such appointments---Independence of Board of Directors of such companies---Criteria for determining a 'Fit And Proper Person"----Scope---Petitioners impugned advertisement issued by Federal Government for recruitment of CEOs for LESCO and FESCO---Question raised by the petitioners was, inter alia, whether the Federal Government had any authority to initiate and finalize appointment process for said posts---Validity---Under the Companies Ordinance, 1984, the Federal Government, could as the principal shareholder of public sector companies, exert influence on their management, through its appointed Directors---Rather than acting through Boards, the Federal Government had exaggerated its role in the affairs of DISCOs and adverse consequences thereof had followed with the Federal Government's direct interference in the management of power sector companies through ad hoc measures---Compliance with duties imposed by the Companies Ordinance, 1984 would foster management independence and accountability and therefore bring efficiency and transparency in affairs of DISCOs and the Public Sector Companies (Corporate Governance) Rules, 2013 were tailored for regulating governance of such companies, and, DISCOs fell squarely within the ambit of said Rules---In the context of appointments to senior posts in public sector entities, the law had moved ahead by requiring a transparent, meritorious and competitive process of selection for senior management posts of, inter alia, public sector companies----Impugned advertisement assuming exclusive power of appointment by the Federal Government, was issued in excess of lawful authority and under Public Sector Companies (Corporate Governance) Rules, 2013, successful candidate for CEO must fulfil the standards of "fit and proper person" given in the Annexure of the said Rules; and it was equally important that members of the Board of Directors also meet the said standards and only then the selection process may achieve the fairness and transparency mandated by the Supreme Court in Khawaja Muhammad Asif v. Federation of Pakistan and others [2013 SCMR 1205]---Desired autonomy of LESCO and FESCO (the DISCOs) could not be achieved unless their Board of Directors and CEOs were appointed by the Federal Government under the recognized criteria laid down in the Public Sector Companies (Corporate Governance) Rules, 2013, which would bring merit and dynamism to senior management positions in such companies----Impugned process of selection of CEO of DISCOs by Federal Government directly without recommendation by their Boards was improper and said selection process was unlawful---High Court directed that selection process be restarted in accordance with parameters laid down in Public Sector Companies (Corporate Governance) Rules, 2013 as interpreted herein for purposes and Board of Directors of the companies be reconstituted according to law---Guidelines and directions for reconstitution of Board of Directors and appointment of CEOs were provided by the High Court.

Muhammad Ilyas Sheikh v. PEPCO and others (Writ Petition No.12272 of 2011); Muhammad Yasin v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and others PLD 2012 SC 132; Corruption in Hajj Arrangement's case PLD 2011 SC 963 and Khawaja Muhammad Asif v. Federation of Pakistan and others 2013 SCMR 1205 ref.

(b) Public Sector Companies (Corporate Governance) Rules, 2013---

----R. 3 & Annex.---Public Sector Power Companies (DISCOs)---Management---Efficiency of management of a service industry was directly linked with competence and independence of management---Power utility company was not merely an ordinary business for profit but was provider of an essential service to different strata of society in accordance with governmental policy objectives----As a company incorporated under law, a DISCO must be organized and run in accordance with the provisions of the Companies Ordinance, 1984 and subordinate legislation framed thereunder.

(c) Public Sector Companies (Corporate Governance) Rules, 2013---

----Appointments on senior posts in public sector enterprise---Law had moved ahead by requiring a transparent, meritorious and competitive process of selection for senior management posts of, inter alia, public sector companies.

Muhammad Yasin v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and others PLD 2012 SC 132 and Corruption in Hajj Arrangement's case PLD 2011 SC 963 rel.

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

----S. 183---Certain provisions not to apply to directors representing special interests---Interpretation of S.183, Companies Ordinance, 1984---"At pleasure" discretion of the Government---Scope---"At pleasure" discretion of the government conferred by S.183 of the Companies Ordinance, 1984 was merely regulated under the principles established by the Supreme Court in Muhammad Yasin v. Federation of Pakistan through Secretary Establishment Division, Islamabad and others [PLD 2012 SC 132]----Doctrine of pleasure could not now be interpreted to confer a power of appointment that was exercisable by government arbitrarily or whimsically.

Muhammad Yasin v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and others PLD 2012 SC 132 and Corruption in Hajj Arrangement's case PLD 2011 SC 963 rel.

(e) Public Sector Companies (Corporate Governance) Rules, 2013---

----Appointment of persons to senior management of public sector enterprises---Responsibility for evaluating and recommending candidates for appointment to senior public posts, inter alia, in government control corporations must vest in an independent authority constituted by the Federal Government, that is, a Commission---Relevant appointments ought to be made by the Federal Government from amongst the recommendees of the Commission.

Khawaja Muhammad Asif v. Federation of Pakistan and others 2013 SCMR 1205 ref..

(f) Public Sector Companies (Corporate Governance) Rules 2013---

----Rr. 3, 5 & Annex.---Appointment of Directors and CEOs of Public Sector Companies---Conformity of Public Sector Companies (Corporate Governance) Rules 2013 with principles laid down by the Supreme Court in Khawaja Muhammad Asif v. Federation of Pakistan and others [2013 SCMR 1205]; examined.

Khawaja Muhammad Asif v. Federation of Pakistan and others 2013 SCMR 1205 ref.

(g) Public Sector Companies (Corporate Governance) Rules, 2013---

----Appointment of independent persons to manage public sector enterprises---Universality of principles embedding transparency and merit in the appointment of top management of public utilities---Examination of comparative legislation from foreign jurisdictions.

(h) Public Sector Companies (Corporate Governance) Rules, 2013---

----Management of public sector enterprises---Autonomy---Public Sector enterprises must be managed and run by professional, competent and meritorious chief executives who were guided by and accountable to an independent Board of Directors, whose members possess similar or better credentials--- Autonomy in managing the operations of public sector power companies was safeguarded by the law and such independence was also necessary for productivity and profitability of operations.

Kh. Haris Ahmad assisted by Syeda Maqsooma Zahra Bukhari and Ghulam Subhani, along with Iftikhar Ahmad Mian for Petitioners.

Syed Naeem Bukhari, assisted by Afzal Bhatti and M. Yousaf Anjum for Respondents Nos. 1 and 2.

Shaukat Umar Pirzada, assisted by Muhammad Imran Nasir for Respondent No.4/PEPCO.

Munawar-us-Salam, assisted by Usman Sahi for LESCO/Respondent No.5.

Waqar A. Sheikh, assisted by Ahmad Ali Ranjha for PESCO/Respondent No.6.

Muhammad Yasin Badar, Legal Consultant, LESCO.

Umair Mansoor, Assistant Director (Legal) SECP.

Date of hearing: 26th September, 2013.

2014 C L D 726

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman

and another---Appellants

Versus

Haji BASHARAT ULLAH---Respondent

R.F.A. No.166 of 2009, heard on 24th October, 2013.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Suit for recovery of insurance proceeds and liquidated damages---Refusal of Insurance Company to accept such claim of husband of deceased lady (her nominee) on ground that she was suffering from lungs disease, which fact was concealed---Proof---Insurance Company has not denied that before entering into insurance contract, deceased was thoroughly medically examined by its Medical Officer---Deceased had died during subsistence of insurance policy---Insurance Company had neither produced Proposal Form containing information provided by deceased nor produced the Medical Officer as witness---Insurance Company had not produced in evidence record of medical treatment of deceased---Suit was decreed in circumstances.

Ali Akbar Qureshi for Appellants.

Liaqat Ali Butt for Respondent.

Date of hearing: 24th October, 2013.

2014 C L D 763

[Lahore]

Before Mrs. Ayesha A. Malik, J

NIB BANK LTD.---Plaintiff

Versus

HIGHNOON TEXTILE LTD.and 3 others---Defendants

Civil Original Suit No.22 of 2006, decided on 16th December, 2013.

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

----Ss. 9(2) & 10(4)---Bankers' Books Evidence Act (XVIII of 1891) Ss.2(8) & 4---Suit for recovery---Application for leave to defend---Certification of the statement of accounts---Mode of proof of entries in bankers' book---Persons authorized to certify statement of accounts---Scope---Interpretation of S. 2(8) of the Bankers' Books Evidence Act, 1891---Contention of the defendants/ applicants was inter alia that statement of accounts had not been certified by the competent authority in terms of S. 2(8) of the Banker's Books Evidence Act, 1891 which was a requirement under S.9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Statement of accounts filed with the plaint had been certified by the Senior Vice-President, Accounts Department as well as the Senior Vice-President and the Assistant Vice-President of the plaintiff Bank---Section 2(8) of the Banker's Books Evidence Act, 1891 required that certification be made by the principal accountant or the manager of the bank with his name and official title and said definition did not provide for the designation or title of the principal accountant or manager of the bank but required that a responsible officer of the bank certify the statement of accounts---Such an officer would provide his official title in the certification, meaning thereby, that the official title did not have to be a principal accountant or manager of the bank---Title of the persons maintaining the books of accounts may vary from bank to bank and may also change over time and the intent was to ensure that a responsible officer whose work related to accounts or management sign the certificate---In the present case, the certification had been issued by the Senior Vice-President, Accounts Department which was a certification by the principal accountant and the signature of the Senior Vice-President and Assistant Vice-President of the bank was a certification by the manager of the bank---Certification through the responsible officer meant the bank owned the statement of accounts and certified that the same represented the true and correct statement, as maintained in its books of accounts---Such certification enabled the court to consider the copies of the statement of accounts as admissible evidence in the suit---Requirements of S. 2(8) of the Act of 1891 was not mandatory but directory and that sufficient compliance would depend upon the facts and circumstances of each case---Where the accounts were duly signed by the agent of the bank, it implied that it was a true copy maintained by the bank in its ordinary course of business and that such book was in the custody of the bank---Contention that leave to defend had to be granted to ascertain that the signatures were that of the principal accountant and the manager of the bank was related to the authority of the persons signing the statement of accounts and no such objection had been made with regard to said authority in the present case---High Court held that the statement of accounts was compliant with S. 2(8) of the Banker's Books Evidence Act of 1891.

Mian Muhammad Shahbaz Sharif through Attorney v. Election Commission of Pakistan, Islamabad and 15 others PLD 2003 Lah. 646; Pakistan Kuwait Investment Company (Pvt.) Limited through Authorized Representative v. Messrs Active Apparels International and 6 others 2012 CLD 1036; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Pvt.) Limited through Director/Chief Executive and 3 others 2012 CLD 1302; Fine Textile Mills Ltd. v. Haji Umar PLD 1963 SC 163; Ali Khan & Co. v. Allied Bank of Pakistan PLD 1995 SC 362; Ravi Associate (Pvt.) Ltd. v. Industrial Development Bank of Pakistan 2005 CLD 393; Bankers Equity Ltd. v. Betnonite Pakistan Ltd. 2010 CLD 651; Suo Motu Case No.18 of 2010 dated 8-8-2011 2012 PLC (C.S.) 394 and Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684 ref.

Barthels and Luders GmbH v. M.V. Dominique AIR 1988 Bombay 380 and Barker v. Wilson (1980) 2 All ER 81 rel.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend---Counter-claim made by the defendant---Effect---Res judicata in relation to counter claim of the defendant--- Procedure of Banking Court--- Scope---Contention of the defendant was that leave to defend be allowed on the ground that defendant had raised counter-claim against the plaintiff bank---Validity---Counter-claim of the defendant was based on the failure of the plaintiff Bank to disburse the total facility amount in terms of a commitment made by it, whereas the plaintiff Bank had filed a suit for the recovery of amounts disbursed to and due from, the defendant---Such were two separate and distinct issues where the suit of the plaintiff Bank would not operate as res judicata against the claim of the defendant---Section 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 clearly provided that the suit should specifically provide as to what finance had been availed, what amounts had been paid and what amounts were due from the defendants and under S.10 of the Ordinance, the defendant in their leave to defend application had to show the finance availed and the finance due from them---Recovery suit was with respect to finance availed and due to the plaintiff where the issues were not directly and substantially the same as in a counter claim for damages being claimed on account of the conduct of the plaintiff bank---Held, that any grievance that the defendant had with respect to amounts not disbursed would not operate as res judicata against the defendants and such a counter claim could not be included in the leave to defend application as the leave to defend under S. 10 of the Ordinance was merely an application stating the grounds on the basis of which the defendant sought leave from the court with respect to the questions of law and fact for which evidence needed to be recorded specifically with respect to finance availed and finance due---Claim for damages could not be included in the leave to defend application as it did not give rise to the same questions of law or fact on the basis of which the court would adjudicate to decide on the claim of the plaintiff---Question of sustaining losses by the borrowers on account of conduct of the bank could be sorted out in some other forum instead of claiming relief from the Banking Court---Counter-claim related to damages was not germane to the issues raised for the purposes of grant of leave---Application for leave to defend was dismissed, in circumstances.

Siddique Woollen Mills and others v. Allied Bank of Pakistan and others 2003 CLD 1033 and Messrs Razzaq and Company v. Messrs Riazeda (Pvt.) Ltd. 1990 CLC 1243 rel.

(c) Bankers' Books Evidence Act (XVIII of 1891)---

----S. 2(8)---Interpretation of S.2(8), Bankers' Books Evidence Act, 1891.

Syed Ali Zafar for Plaintiff.

Salman Aslam Butt for Defendants Nos.1 to 3.

Shams Mehmood Mirza for Defendant No.4.

Date of hearing: 4th November, 2013.

2014 C L D 803

[Lahore]

Before Mrs. Ayesha A. Malik, J.

TANVEER SHAKOOR---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Interior Division and another---Respondents

Writ Petitions Nos.22349 and 22356 of 2013, heard on 6th March, 2014.

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

----Ss. 2 & 3(2)---Exit From Pakistan (Control) Rules, 2010---Constitution of Pakistan, Arts 10A & 199--- Constitutional petition---Placement of name on Exit Control List on request by Financial Institution---"Default"---Scope---Petitioners impugned placement of their names on Exit Control List on account of outstanding liability to pay amounts to a Financial Institution (Bank)---Contention of the petitioners was that placement of their names on the Exit Control List on request of the Financial Institution and the State Bank of Pakistan was illegal---Held, that where a Financial Institution was seeking to recover amounts due from a customer, the Banking Court, after due process of law, adjudicates upon the matter and decides the question of default and without clear determination from a court of competent jurisdiction on the question of default, the State Bank could not use State machinery for recovery purposes---Key word used in R.2(e) of the Exit From Pakistan (Control) Rules, 2010 was "default" of loans or liabilities, and admittedly, there was no decree against the petitioners with respect to amounts stated to be due to the Financial Institution---State machinery could not be used for purposes of exerting pressure or in a private dispute unless government interest was at stake, and the same was clearly provided in R.2(2)(a) of the Exit from Pakistan (Control) Rules, 2010---Petitioners' names therefore had been placed on ECL without application of mind, in a mechanical manner and without considering the element of public interest by the respondents; and they had been denied their fundamental rights without due process of law--- High Court directed that the names of the petitioners be removed from ECL---Constitutional petition was allowed, accordingly.

Mian Ayaz Anwar v. Federation of Pakistan through Secretary Interior and 3 others PLD 2010 Lah. 230 and Dossani Travels Pvt. Ltd. and 4 others v. Messrs Travels Shop (Pvt) Ltd. and others 2013 SCMR 1749 ref.

Miss Naheed Khan v. Government of Pakistan and others PLD 1997 Kar. 513 and Munir Ahmad Bhatti v. Government of Pakistan Ministry of Interior through Secretary and others PLD 2010 Lah. 697 rel.

Muhammad Shoaib Rashid for Petitioners.

Muhammad Zikria Sheikh, D.A.G. along with Mubashir Ahmad Tirmazi, AD/FIA for Respondents.

Date of hearing: 6th March, 2014.

2014 C L D 858

[Lahore]

Before Shoaib Saeed, J

MUHAMMAD MASOOD KHAN---Petitioner

Versus

JUSTICE OF PEACE/ADDITIONAL SESSIONS JUDGE and 2 others---Respondents

Writ Petition No.10394 of 2013, decided on 1st October, 2013.

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

----Ss. 7, 9 & 20---Penal Code (XLV of 1860), S. 489-F---Constitution of Pakistan, Art. 199--- Constitutional petition---Dishonestly issuing a cheque, and default in fulfilment of obligation---Jurisdiction of Banking Court---Scope---Petitioner instituted a suit for declaration and rendition of accounts along with permanent injunction against the respondent/bank in Banking Court---Court passed injunctive order in favour of petitioner, wherein respondent/bank was restrained to adopt any illegal coercive measures for recovery of loan against the petitioner---Bank which did not put in appearance, moved an application before Justice of Peace for registration of criminal case against the petitioner---Cheque in question issued by the petitioner in favour of the bank, was dishonoured on presentation due to insufficient amount---Justice of Peace vide impugned order, ordered registration of criminal case against the petitioner---Contention of the petitioner was that he being a "customer" and bank being 'Financial Institution', bank could adopt recourse to the procedure under Financial Institutions (Recovery of Finances) Ordinance, 2001 for recovery of its defaulted loans by filing proceedings against the delinquent defaulters with the Banking Court having exclusive jurisdiction to adjudicate and decide such matter---Validity---By obtaining impugned order from Justice of Peace, ultimate object of bank was for initiation of proceedings under S.489-F, P.P.C. as cheque issued by the petitioner in favour of the bank was dishonoured---Object of the Financial Institution (Recovery of Finances) Ordinance, 2001, and to initiate proceedings under P.P.C., were entirely different, as both the enactments, could not be amalgamated or confused with each other---Civil liability existed between the parties and diverting the same into criminal offence where a complete recourse for recovery of such liability was provided under Financial Institutions (Recovery of Finances) Ordinance, 2001, seemed to be with mala fide intention and ulterior motive---Section 20(4) of said Ordinance, provided the remedy wherein cheque dishonestly issued and dishonoured because of insufficient funds, would be governed by said section of law, bank could file a direct complaint in the Banking Court---Bank could avail remedies available under said Ordinance for recovery of its debt, as well as for dishonoured cheque---Proceeding further on the basis of impugned order would be abuse of process of the court and without lawful authority---Order accordingly.

Gul Muhammad and others v. The State 1999 SCMR 2765; MADAWA through President v. Inspector-General of Police, Punjab and 15 others PLD 2013 Lah. 442; Sabir Ahmad v. Nazeer Ahmed and another 2010 PCr.LJ 412; Mian Farid and another v. Industrial Development Bank of Pakistan and 4 others 2005 PCr.LJ 766; Sheikh Mureed Hussain v. S.H.O. Police Station Kohsar, Islamabad and 2 others 2005 PCr.LJ 144 and Muhammad Mazhar Iqbal v. The State and another 2011 CLD 704 ref.

Ghulam Murtaza Malik for Petitioner.

Ch. Muhammad Siddique Dewal for Respondents.

Mubashar Latif Gill, A.A.-G. with Anwar, A.S.-I.

2014 C L D 893

[Lahore]

Before Ijaz ul Ahsan and Mrs. Ayesha A. Malik, JJ

PROJECT DIRECTOR, PUNJAB RURAL SUPPORT PROGRAM (PRSP) and 2 others---Appellants

Versus

REHMAT ALI and another---Respondents

Intra-Court Appeal No.839 of 2012 in Writ Petition No.21154 of 2011, decided on 27th June, 2013.

Insurance---

----Group Insurance Policy, 2008---Group Life insurance for employees---Accidental death benefit for legal heirs of employees---Respondents were legal heirs of employee who died when he met with an accident, and were duly paid amount under group life insurance---Respondents had contended that they were also entitled to accidental death benefit; and their constitutional petition in such regard was allowed---Contention of the appellants was inter alia, that at the time of death, the Life Insurance Policy did not cover accidental death benefit---Validity---Accidental death benefit was only available under the group life insurance policy issued by State Life Insurance Corporation of Pakistan, for the year 2008-09; which expired on 31-5-2009 and when the said group insurance policy was renewed, it only provided for one benefit, namely insurance claim, which was duly paid to the deceased---Group life insurance policy covering the period during which the deceased died, did not provide for accidental death benefit---Impugned order was, therefore, not sustainable in the eye of the law and was set aside.

Umer Sharif for Appellants.

Hafiz Khalil Ahmad for Respondents.

Date of hearing: 19th June, 2013.

2014 C L D 920

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

MUHAMMAD ABDULLAH----Appellant

Versus

MUHAMMAD ASLAM----Respondent

Regular First Appeal No.145 of 2010, heard on 27th September, 2013.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3---Qanun-e-Shahadat (10 of 1984), Art.84---Stamp Act (II of 1899), Art. 5, Sched. I & S.35---Institution of summary suit on negotiable instrument---Contention of defendant was that blank cheques were handed over to the plaintiff for payment of price and agreement was written that no amount was due against him---Suit was decreed by the Trial Court---Validity---Agreement was mentioned in the written statement but plaintiff had denied the same---Said document was in the custody of defendant and was not confronted to the plaintiff, such document could not be used against plaintiff---Agreement was on the plane paper and no stamp duty had been paid on the same in accordance with law---Stamp duty was required to be paid on the instrument---Non-judicial paper of Rs.100 was required for writing of agreement---Trial Court was bound to impound said document and ask the defendant to deposit original duty along with fine---Instrument which was not duly stamped was inadmissible in evidence---Neither Trial Court had adopted the procedure nor defendant was offered to discharge his duty in accordance with law---Presumption of correctness was attached to negotiable instrument and defendant was bound to rebut the same---Defendant had failed to discharge his duty---Issuance of cheques and signatures thereupon were admitted---Trial Court exercised powers properly for comparison of signatures and handwriting of defendant on the cheques---Findings with regard to filling up the cheques were in accordance with law---Defendant had failed to point out any illegality or infirmity in the findings recorded by the Trial Court---No case for interference by the High Court had been made out---Appeal was dismissed in circumstances.

Malik Muhammad Latif Khokhar for Appellant.

Muhammad Tariq Rajwana for Respondent.

Date of hearing: 27th September, 2013.

2014 C L D 937

[Lahore]

Before Shujaat Ali Khan and Mahmood Ahmed Bhatti, JJ

AL-GHAZI TRACTOR LIMITED through Chief Executive and another---Appellants

Versus

MUHAMMAD HANIF IQBAL and 2 others---Respondents

I.C.A. No.129 of 2011 in W.P. No.984 of 2008, decided on 1st April, 2014.

(a) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction of the High Court---Scope---Constitutional jurisdiction of the High Court was confined to persons who were performing functions in connection with the affairs of the Federation or a Province.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction of the High Court---Scope---Constitutional petition against a private limited company---Maintainability---Jurisdiction of the High Court would not be attracted against a private limited company, thus a constitutional petition filed against such company would not be maintainable.

Salah ud Din and 2 others v. Frontier Sugar Mills and Distillery Ltd. Tokht Bhai and 10 others PLD 1975 SC 244; Syed Khalid Ali Bukhari and another v. Government of Pakistan and others 2012 PLC (C.S.) 818; Muhammad Masood Butt and 3 others v. S.M. Corporation (Pvt.) Ltd. and 6 others 2011 CLD 496 and Muhammad Saleem v. Chief Controller of Boiling KESC Karachi and others 2010 YLR 2946 rel.

(c) Constitution of Pakistan---

----Art. 199---Constitutional petition against a private limited company---Maintainability---Respondent booked five tractors from the appellant-company (a private limited company) and deposited the requisite amount---Respondent filed a constitutional petition against the appellant-company alleging that it did not hand over the tractors within due date and instead claimed price of the tractors according to revised rates---Single Judge of High Court disposed of the constitutional petition with a direction to appellant-company to handover the tractors to the respondent---Legality---Constitutional jurisdiction of the High Court was confined to persons who were performing functions in connection with the affairs of the Federation or a Province---Appellant-company was a private limited company, thus jurisdiction of the High Court was not attracted---After depositing the price of the tractors, respondent might have been entitled to their delivery but the issue still remained that the High Court in its constitutional jurisdiction could not direct the appellant-company to handover the tractors to the respondent---Constitutional petition filed by respondent was not maintainable, and consequently order of Single Judge of High Court was set aside---Intra-Court appeal was allowed accordingly.

Salah ud Din and 2 others v. Frontier Sugar Mills and Distillery Ltd. Tokht Bhai and 10 others PLD 1975 SC 244; Syed Khalid Ali Bukhari and another v. Government of Pakistan and others 2012 PLC (C.S.) 818; Muhammad Masood Butt and 3 others v. S.M. Corporation (Pvt.) Ltd. and 6 others 2011 CLD 496 and Muhammad Saleem v. Chief Controller of Boiling KESC Karachi and others 2010 YLR 2946 rel.

(d) Jurisdiction---

----Question of jurisdiction determined before taking cognizance---Scope---Prior to taking cognizance of a matter, it was of paramount importance that a court determined the question of its jurisdiction---Any order passed without jurisdiction could not be allowed to hold the field for a moment.

Malik Muhammad Tariq Rajwana for Appellant.

Mirza Aziz Akbar Baig for Respondent No.1.

2014 C L D 954

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

MUHAMMAD BAKHSH KHAN alias MUHAMMAD KHAN---Appellant

Versus

AKHTAR HUSSAIN and others---Respondents

F.A.O. No.165 of 2007, herd on 24th September, 2013.

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

----S. 15---Civil Procedure Code (V of 1908), O.XXI, R.89---Auction proceedings---Sale, setting aside of---Property in question was owned by different persons and was mortgaged at more than one places---Bank, after giving notice to borrower, directly auctioned property in question under S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Earlier, co-owners had filed objection against auction of property, which objection was dismissed by Banking Court and had attained finality---Subsequently, respondent filed objection petition under O. XXI, R. 89, C.P.C., on the ground of being one of the co-owners---Banking Court allowed objection petition and set aside auction of whole property---Validity---Property which was auctioned by bank, was mortgaged by various individuals including co-owners--- Objection petition against auction proceedings in favour of appellant was earlier challenged by co-owners and the same was dismissed by Banking Court and appeal was withdrawn, therefore, auction to the extent of co-owners had already attained finality---Such aspect of the matter was not taken into account by Banking Court while deciding objection petition of respondent and auction proceedings in respect of entire property were set aside---Banking Court was bound to decide fate of auction proceedings only to the extent of objection petitioner---High Court set aside the order passed by Banking Court and remanded the matter to Banking Court for decision afresh to the extent of share of appellant in suit property---Appeal was allowed accordingly.

Muhammad Umer Rathore v. Federation of Pakistan 2009 CLC 257; Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500; Izhar Alam Farooqi Advocate v. Sheikh Abdul Sattar Lasi and others 2008 SCMR 240 and Tehsil Nazim TMA, Okara v. Abbas Ali and 2 others 2010 SCMR 1437 ref.

Mughees Aslam Malik for Appellant.

Sardar Riaz Karim for Respondent No.1.

Suleman Bhatti for Respondents Nos.4 to 6.

Muhammad Waseem Shahab for Respondent No.7.

Date of hearing: 24th September, 2013.

2014 C L D 995

[Lahore]

Before Amin-ud-Din Khan, J

KHALIFA AZHAR MUMTAZ---Appellant

Versus

GHULAM AKBAR---Respondent

R.F.A. No. 39 of 2002, heard on 16th August, 2013.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 72, 84 & 6---Civil Procedure Code (V of 1908), O.XXXVII Rr.1 & 2---Suit for recovery of money---Non-presentation of cheque, effect---Dishonourment---Cause of action---Scope---Plaintiff sought recovery of money on basis of a cheque given to the plaintiff by the defendant---Suit was dismissed on the ground that the said cheque was never presented to the bank for payment, therefore no cause of action had arisen---Validity----When the cheque was never presented for payment, then in light of S.72 read with S.84 of the Negotiable Instruments Act, 1881, there was no refusal by the drawer or the bank for payment of the cheque, therefore, no cause of action accrued to the plaintiff for filing a suit under provisions of O.XXXVII, C.P.C.--- Cheque was only payable on demand and cause of action arose only when such demand was not honoured--- Suit of the plaintiff was therefore, not maintainable--- Appeal was dismissed.

Sardar Tariq Sher Khan for Appellant.

Nemo for Respondent.

Date of hearing: 16th August, 2013.

2014 C L D 1005

[Lahore]

Before Syed Iftikhar Hussain Shah and Shoaib Saeed, JJ

Messrs AMBROSIA CHEMICALS through Managing Partner and 3 others---Appellants

Versus

BANK OF PUNJAB through Manager and 2 others---Respondents

R.F.A. No.83 of 2013, heard on 9th September, 2013.

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

----S. 18---Contract Act (IX of 1872), S. 126---Bank guarantee---Execution of counter guarantee in favour of bank to secure Bank guarantee issued in shape of limit---Scope---Agreement for finance would not be required in cases of bank guarantees---Individual counter guarantee could be obtained in single transaction in bank guarantee cases---Counter guarantee would not be required in respect of every issue of bank guarantee---Signatures of guarantors of borrower would not be required on counter guarantees.

Muzammil Brothers and another v. Saudi Pak Commercial Bank Ltd. through Manager 2006 CLD 1546; United Dairies Farms Pvt. Ltd. and 4 others v. United Bank Ltd. 2005 CLD 569; Habib Credit and Exchange Bank Ltd. v. Emirates Bank International Ltd. 2002 CLD 524 and Soneri Bank Ltd. v. Classic Demin Mills Pvt. Ltd. and 3 others 2011 CLD 408 ref.

Muhammad Manzoor-ul-Haq for Appellants.

Muhammad Saleem Iqbal for Respondent No.1.

Date of hearing: 9th September, 2013.

2014 C L D 1020

[Lahore]

Before Mamoon Rashid Sheikh and Ch. Muhammad Younis, JJ

GHULAM DASTGIR ASIF and another---Appellants

Versus

UNITED BANK LTD. through Manager and 7 others---Respondents

R.F.A. No. 75 of 2006, decided on 9th September, 2013.

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

----S. 22--- Limitation Act (IX of 1908), Ss. 5 & 12---Appeal---Condonation of delay---Provisions of Limitation Act, 1908---Applicability---Though provisions of S.5 of Limitation Act, 1908, have not been made applicable to proceedings under Financial Institutions (Recovery of Finances) Ordinance, 2001, however, the same has not excluded applicability of S. 12 of Limitation Act, 1908---In absence of such exclusion, provisions of S.12 of Limitation Act, 1908, are applicable to proceedings under Financial Institutions (Recovery of Finances) Ordinance, 2001.

Chairman District Evacuee Trust Committee, Rawalpindi v. Sharif Ahmad and others PLD 1991 SC 246 rel.

(b) Administration of justice---

----Proceedings, conversion of---Principle---Courts have always liberally allowed conversion of proceedings of one kind into the other---Mis-description in title of proceedings and/or mentioning of a wrong provision of law is not considered fatal to grant of relief if it is otherwise available under the law to an aggrieved party.

Margrete Williams v. Abdul Hamid Mian 1994 SCMR 1555 and Muhammad Sarwar v. The State PLD 1969 SC 278 rel.

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

----S. 22---Limitation Act (IX of 1908), Ss.5 & 12---Appeal---Limitation---Time for certified copy, exclusion of---Condonation of delay---Banking Court passed judgment on 21-12-2005 against defendants who applied for certified copies on 22-12-2005, copies were prepared on 1-2-2006 and obtained on 27-4-2006, while appeal was filed on 16-5-2006---Defendants sought condonation of delay on the plea that no date was given by Copying Agency for delivery of copy, therefore, time spent in obtaining copies was to be excluded while calculating period of limitation---Contention of plaintiff bank was that provisions of Limitation Act, 1908, were not applicable to proceedings under Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Time requisite for obtaining certified copies of judgment and decree to be appealed against was to be excluded for the purposes of computing period of limitation---Time requisite was deemed to be the time intervening between the day on which application for copy was made and the day actually intimated to defendants for delivery of copy---Copying Agency was to intimate date on which copy would be ready for delivery---Ambiguity existed as to whether any date for delivery of copies was communicated to defendants or not---Stamp of Copying Agency did not reveal as to when application for obtaining certified copies was made or when were the certified copies prepared or what was date of delivery intimated to defendants---Only date which appeared with stamp was 1-2-2006, i.e. purported date of preparation of certified copies---In absence of requisite dates plea raised by defendants was relied upon by High Court---Period spent in obtaining certified copies of judgment was excluded from computing period of limitation in filing of appeal---Application was allowed in circumstances.

Akhtar Kaleem v. Citibank N.A. through Branch Manager 2004 CLD 1361; Mian Muhammad Sabir v. Malik Muhammad Sadiq through Legal Heirs and others PLD 2008 SC 577; M. Asif Ali Khan v. Ghulam Shabbir 2010 YLR 507; Noor Jahan alias Bhoori through L.Rs. v. Mst. Anjum Mughees and 3 others 2009 MLD 645; Messrs Pak Suzuki Motor Col. Ltd. v. Haji Ahmed Shaikh and another 2005 CLC 680 and Haji Umer and 2 others v. Province of Sindh through Secretary, Revenue Department, Karachi and 5 others PLD 2009 Kar. 247 ref.

Islamic Republic of Pakistan through the Secretary Ministry of Defence, Government of Pakistan, Rawalpindi and another v. Amjad Ali Mirza PLD 1977 SC 182 rel.

Sardar Riaz Karim for Appellants.

Muhammad Ishaq Rana for Respondents.

Date of hearing: 24th November, 2011.

2014 C L D 1034

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shujaat Ali Khan, JJ

SHAMIM AKHTAR---Appellant

Versus

Messrs STANDARD CHARTERED BANK PAKISTAN LIMITED through Manager Legal and Recovery and 3 others---Respondents

R.F.A. No. 682 of 2011, heard on 25th June, 2013.

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

----Ss. 10 & 9---Suit for recovery---Co-borrowers---Joint and several liability of borrowers, determination of---Application for leave to defend by the defendant was dismissed, and suit was decreed---Contention of the defendant was that she was a co-borrower and had mortgaged her property only to the extent of the finance that had been returned to the plaintiff Bank and that she was not the beneficiary of the enhanced amount sought to be recovered from her---Held, that under agreement of personal guarantee the liabilities of the guarantor were joint and several---Banking Court, if it was of the view that the other borrowers had adjusted the liability and were only responsible for the reduced amount which had been paid, then it was bound to grant leave to defend the suit to the defendants as separate liability could only be ascertained after recording of evidence---Banking Court had relied on a document which was undated and only showed the appellant as a co-borrower and no cheque or statement of account in the name of the appellant was produced---Impugned order of Banking Court was set aside and applications for leave to defend were allowed---Appeal was allowed, accordingly.

Saba Saeed Sheikh for Appellant.

Abid Nazeer Sayal and Muhammad Nadeem for Respondents.

Date of hearing: 25th June, 2013.

2014 C L D 1049

[Lahore]

Before Mrs. Ayesha A. Malik, J

BANK AL-HABIB LTD.---Plaintiff

Versus

ANGORA TEXTILE LTD. and others---Defendants

C.O.S. No.38 of 2006, decided on 2nd September, 2013.

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

----S. 10(2)---Civil Procedure Code (V of 1908), O. VII, R.11---Suit for recovery---Application for rejection of plaint filed after leave to defend application---Defendants could not raise a new ground challenging the claim of the plaintiff in an application under O.VII, R.11, C.P.C. when such ground was not raised in the leave to defend application (PLA) as doing so would defeat the purpose of S.10(2) of the Financial Institutions (Recovery of Finances) Ordinance 2001; since the defendant could then at any stage raise a new ground through an application, hence rendering the 30 days requirement under S.10(2) of the Ordinance meaningless.

Abdul Basit v. Bank of Punjab 2003 CLD 751; Cantor Index Ltd. v. Thomson 2008 All ER (D 271); Muhammd Shahnawaz v. KESC 2011 PLC (C.S.) 1579; Rauf B. Kadri v. SBP PLD 2002 SC 1111; HRCP v. GOP PLD 2009 SC 507; Muzaffar Abbas v. Pak PVC Ltd. PLD 1998 Kar. 71; Sandoz Limited v. Federation 1995 SCMR 1431; Green Fuels v. Shell Pakistan Ltd. 2005 CLC 1602; PICIC v. Frontier Ceramics Ltd. 2000 CLC 287; Ali Shan v. Essen Hotel Ltd. 2007 SCMR 741; Mrs. Musarrat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189; Messrs Al-Kashmir Traders and 6 others v. United Bank Limited through Muhammad Jarar 2005 CLD 1116; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Habib Metropolitan Bank Ltd. v. Mian Abdul Jabbar Gihllin and another 2013 CLD 88; Bolan Bank Limited through Attorneys v. Baig Textile Mills (Pvt.) Limited through Chief Executive and 6 others 2002 CLD 557; Messrs Al-Madan Coal Company (Pvt.) Limited and others v. Regional Development Finance Corporation 2009 CLD 645 and Messrs Mohib Exports Ltd. and 4 others v. Trust Leasing Corporation Ltd. through Chief Executive 2005 CLD 581 rel.

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

----Ss. 9 & 2(a)---Civil Procedure Code (V of 1908), O. III, R.1---Persons authorized to institute suits---Power of attorney---Power of attorney, appended with the plaint established sufficient authority on the persons instituting the suit.

Muhammad Arshad Javed and Asim Nazir for Plaintiff.

Muhammad Iftikhar ud Din Riaz for Defendants.

Date of hearing: 26th June, 2013.

2014 C L D 1068

[Lahore]

Before Umar Ata Bandial, C.J.

NATIONAL BANK OF PAKISTAN---Petitioner

Versus

ITTEFAQ FOUNDRIES (PVT.) LTD.---Respondent

C.O. No.63 of 1998, decided on 27th May, 2014.

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

----S. 284---Agreement between financial institutions (secured creditors) and management of a company---Discharge of outstanding liability---Sale of charged assets---Financial institutions in the present case were lenders and secured creditors of certain group companies---Financial institutions entered into an agreement with the management of the group companies in terms of S. 284 of Companies Ordinance, 1984 to settle outstanding dues--- Validity--- All members/ shareholders of company secured creditors consenting to the agreement under S.284 of Companies Ordinance, 1984---Effect---All living shareholders and the heirs of some deceased members of the group companies constituting 89% of the total equity and voting power in such companies had filed their letters of consent in favour of the arrangement under S. 284 of the Companies Ordinance, 1984 proposed by the secured creditors, including settlement of their outstanding dues from the sale of the offered assets on "as is where is basis" at a price of Rs.6.0 billion---No shareholder opposed the said arrangement or sale of the offered assets at the said price---Purpose of the arrangement was the bona fide settlement of outstanding dues owed by the group companies to the secured creditors that had been waiting for decision of present petition for the last sixteen years---Object of the arrangement was to be achieved by the sale of properties charged to the financial institutions, as such the said agreement neither infringed the rights of nor was disputed by (any) other claimant, creditor or right holder of the group companies---Financial institutions i.e. secured creditors of the group companies unanimously support the proposed arrangement under S.284 of the Companies Ordinance, 1984 and the sale of the offered assets at Rs.6.0 billion---In terms of S.284(2) of the Companies Ordinance, 1984 a creditors' arrangement, bearing support of 75% or more of the class of such creditors for discharge of outstanding liabilities qualified for approval and sanction by the Court---In the present case, with 100% endorsement of all secured creditors of the group companies, the creditors arrangement proposed under S. 284 of the Companies Ordinance, 1984 was eminently eligible for approval by the Court---Features of proposed arrangement/agreement showed that it promoted public policy of discharging debt to banks holding public money; that it was prudent and reasonable because it was un-objected from any quarter, and that the scheme was not discriminatory in its effect or coercive in its terms---On the tests of validity laid down for sanctioning of creditors' arrangement, there were no grounds whatsoever to decline approval---Bona fides and fairness of the present creditors' arrangement under S. 284 of the Companies Ordinance, 1984 were unexceptionable in the eyes of law---Present agreement/ arrangement was approved by the High Court but subject to the condition that it shall be implemented in stages: initially, by payment to the secured creditors of the principal amounts claimed, followed by payment of accrued markup and cost of funds after adjustment of the reconciled, adjudicated or determined claims of preferential creditors of the group companies---High Court directed that smaller claimants against the group companies like government institutions and electricity authorities must also be entertained for their statutory claims to be adjusted or settled; that such exercise could be done after verification of their claims to consider whether there were sufficient funds or other tangible security available for discharging the said claims; that at the time of confirmation of sale, remuneration for the two members of the Sale Committee must also be fixed; that the creditors arrangement approved by court would become redundant if the sale of the offered assets pursuant thereto was delayed or avoided, accordingly, the matters that needed to be dealt with and determined prior to approving the sale of assets ought to be resolved at the earliest---Petition was allowed accordingly.

Messrs Pakland Cement Limited through Director Shamim Musheq Siddiqui 2002 CLD 1392 and Caravan East Fabrics Limited v. Askari Commercial Bank Limited 2006 CLD 895 ref.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between secured creditors and management of a company---Discharge of outstanding liability---Charged properties, sale of---Charged properties including private properties of members of company---Legality---If charged properties forming subject matter of sale under an arrangement under S.284 of the Companies Ordinance, 1984 included private properties of certain members, it did not vitiate the arrangement/agreement proposed by secured creditors---No requirement of law existed to the effect that only properties belonging to a debtor/customer company could constitute charged securities for its secured creditors---When the private members and sponsors of a company charged, mortgaged and encumbered their private assets for obtaining finance for the company, then such mortgaged, charged or encumbered assets could be sold validly to discharge the liabilities owed to the secured creditors.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between secured creditors and management of a company---Discharge of outstanding liability---Realization of assets---Secured creditors---Priority in payment---Arrangement under S. 284 Companies Ordinance, 1984 proposing to sell charged assets that were either pledged, hypothecated or mortgaged to the secured creditors to cover finance availed by the company--- In relation to the said charged assets, the secured creditors would be exclusive holders of security entitled to priority for payment and discharge through the realization of such assets.

Orix Leasing Pakistan Ltd. v. Sunshine Cloth Ltd. 2001 PTD 3146 rel.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between creditors and management of a company---Discharge of outstanding liability---Company's management and members, role of---In a case of creditors' arrangement, S. 284 of the Companies Ordinance, 1984 did not mandate that such an arrangement must enjoy the support of the management of the debtor company or any specific proportion of its membership--- Role of members in a creditors' arrangement was to bring objections that disproved the bona fides or fairness of the scheme of the arrangement.

Messrs Pakland Cement Limited through Director Shamim Musheq Siddiqui 2002 CLD 1392 and Caravan East Fabrics Limited v. Askari Commercial Bank Limited 2006 CLD 895 ref.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between creditors and management of a company---Fairness of such agreement---Duty of court---Claims made by preferential creditors---Court was under a duty to examine the over-all fairness of the creditors' arrangement---In such respect the Court ought to consider the fate of claims, if any, filed by preferential creditors recognized by law---Such consideration would entertain the claims raised or lodged by statutorily specified creditors, in particular, tax authorities, statutory funds and institutions and utility companies---Effort should be made by the Court that claims asserted by such preferential creditors under public law should not be ignored.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between secured creditors and management of a company---Discharge of outstanding liability---Realization of assets---Secured creditors and preferential creditors---Priority in payment---Preferential creditors could not override the interests and rights of the secured creditors.

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

----S. 284---Agreement under S. 284 of the Companies Ordinance, 1984 between creditors and management of an infrastructural industry---Infrastructural industry/Industrial units---Discharge of outstanding liability towards creditors---Sale of assets to a consenting buyer---Credentials of buyer---Scope---When offered assets under sale valued billions of rupees and they pertained to an essential infrastructural industry, then law, public interest and policy required that such industry was entrusted to bona fide hands---Notwithstanding its financial strength the consented buyer of a huge industrial unit must possess other credentials that satisfied the criteria of domicile, credit worthiness, bona fide business operations and profile, tax probity and compliance by both the buyer and its sponsors.

Salman Akram Raja assisted by Tariq Bashir for Petitioner.

Ashtar Ausaf Ali, Ms. Nida Aftab, Muhammad Azam Chughtai, Shehriyar Riaz, Sardar Muhammad Omer Khan Khosa, Waqas Farooq assisted by Asad Rahim Khan for Family Nos.1 and 4.

Abid Khan Minhas for Family No.2.

Syed Moazzam Ali Shah for Family No.3.

Asim Hafeez for Family No.5.

Ch. Amir Nasser for Family No.6.

Muhammad Iqbal Akhtar on behalf of Hamid Khan for Family No.7.

Kaleem Ilyas for Mst. Shehnaz Latif D/O Mian Abdul Aziz.

Shazib Masood for HBL.

Waheed Khalid for Bank of Punjab.

Munawar-us-Salam assisted by Shoaib Rashid for Applicant (in C.M. 337 of 2014 (Al-Rehmat Group)).

Dur-e-Shahwar for Applicant (in C.M. No. 60 of 2011).

Khalid Zafar for Applicant (in C.M. No.718 of 2013 (AKD Capital Limited and Faysal Bank Ltd.)).

Irfan Hayat Bajwa for Applicant (in C.M. No.488 of 2014 (Premium Property)).

Muhammad Hammad Khan for PESSI (Social Security).

Sh. Izhar-ul-Haq assisted by Sultan Mehmood for Inland Revenue (FBR).

M. Naeem Sehgal for NIT.

Malik Muhammad Pervez Akhtar and Saleem Ansar, Members Sale Committee.

Liaqat Ali Dola, Additional Registrar Companies, SECP.

Ch. Muhammad Asghar, Head SAM and Legal, First Punjab Modaraba.

2014 C L D 1122

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

JUBILEE LIFE INSURANCE COMPANY through Manager---Appellant

Versus

ADDITIONAL DISTRICT AND SESSION JUDGE and another---Respondents

Insurance Appeal No.278 of 2013, heard on 12th November, 2013.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Suit for recovery of insurance proceeds with accrued bonus under insurance policy and liquidated damages---Refusal of Insurance Company to accept such claim on ground that insured being a serving Police Inspector, who died due to heart attack just after payment of two premiums, had not provided correct information about his health---Proof---Insurance Company had not proved giving of wrong information by insured about his health in Proposal Form---Doctor examined by Insurance Company had denied validity of medical certificate issued by him regarding health of insured---Insurance Company at its option had not got medically examined insured before entering into contract of life insurance policy---Insurance Company had not examined person having conducted inquiry after submission of claim by plaintiff---Insurance Company would have to suffer, if having foregone any formality regarding medical examination of insured person before entering into life insurance policy---Suit was decreed in circumstances.

Malik Muhammad Faisal and another v. State Life Insurance Corporation through Chairman and 2 others 2008 SCMR 456 ref.

Qaim Ali Memon and Ch. Javed Iqbal for Appellant.

Liaqat Ali Butt for Respondent No.2.

Date of hearing: 12th November, 2013.

2014 C L D 1133

[Lahore]

Before Abdus Sattar Asghar, J

YOUNG DOCTORS ASSOCIATION and others---Petitioners

Versus

GOVERNMENT OF PAKISTAN and others---Respondents

Writ Petitions Nos.2521, 2154 and 3731 of 2014, decided on 7th April, 2014.

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

----S. 2(xlii)--- Term 'sustainable development'---Connotation---Term 'sustainable development' for the first time was recognized in Stockholm Declaration of 1972, and it was defined in Brundtland Report "as development that meets the needs of the present without compromising the ability of the future generations to meet their own need"---In Pakistan the term has been defined in S. 2(xlii) of Pakistan Environmental Protection Act, 1997---In meeting for URBAN 21 Conference (Berlin, July 2000) a more comprehensive definition of the term 'sustainable development' was adopted.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Public Trust, doctrine of--- Petitioners assailed project namely 'Construction of Signal Free Junction at Azadi Chowk Lahore', on the plea that the project was to affect a portion of Lady Willingdon Hospital Lahore---Validity---When any action of a public authority was questioned before court of law arising an important issue of public interest, the court ordinarily had to examine as to whether the authority while taking such action was conscious of imperative considerations with appropriate deliberations thereupon after having expert opinion before taking decision in accordance with law---Project in question was launched by competent authority after having consultations with all concerned departments and agencies and after having obtained necessary expert opinion to study its feasibility carried out by a renowned and well reputed firm like NESPAK---Authorities proposed and had undertaken rehabilitation and substitution of existing facilities of the hospital likely to be affected to the satisfaction of Medical Superintendent of the hospital with a clear undertaking to complete reconstruction of substitute facilities within a period of 45 days---Public trust was properly safeguarded and it did not call for issuance of any writ against authorities---Material apprehensions, objections and prayers of petitioners had been duly taken care of and fructified by authorities---Petition was dismissed accordingly.

Suo Motu Case No.25 of 2009 (2011 SCMR 1743) and Muhammad Bashir v. Abdul Karim PLD 2004 SC 271 rel.

Azhar Siddique for Petitioner (in W.P. No.2521 of 2014).

Shahid Siddiqui for Petitioner (in W.P. No.2154 of 2014).

Ahmed Awais for Petitioner (in W.P. No.3731 of 2014).

Syed Nayyar Abbas Rizvi, Additional Advocate-General and Ms. Samia Khalid Assistant Advocate-General for Respondents.

Waqar A. Sheikh for Respondent No.6/LDA.

Dr. Zafar Yousaf, Medical Superintendent, Lady Wallingdon Hospital Lahore for Respondent No.9.

Israr Saeed Project Director in person.

Date of hearing: 20th March, 2014.

2014 C L D 1155

[Lahore]

Before Shezada Mazhar, J

UBL INSURERS LIMITED---Petitioner

Versus

ASHIQ HUSSAIN and another---Respondents

Writ Petition No.4475 of 2013, decided on 10th December, 2013.

Insurance Ordinance (XXXIX of 2000)---

----S. 124---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court---Scope---Interim order---Insurance Ordinance, 2000 excluding a right of appeal from the interim order, could not be bypassed by impugning such interim order in constitutional jurisdiction of High Court---Party affected had to wait till such interim order matured into a final order, and could then attack it, in the proper exclusive forum created for the purpose of examining such orders.

Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165 rel.

State Life Insurance Corporation of Pakistan through Chairman and another v. Additional District Judge-I and another 2010 CLD 845 distinguished.

Arshad Nazir Mirza for Petitioner.

Liaqat Ali Butt for Respondent No.1.

2014 C L D 1177

[Lahore]

Before Amin-ud-Din Khan and Mehmood Maqbool Bajwa, JJ

Messrs PARAS OIL INDUSTRIES and others---Appellants

Versus

MUSLIM COMMERCIAL BANK LIMITED---Respondent

R.F.A. No.23 of 2008, heard on 10th September, 2013.

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

----Ss. 9(5) & 12---Suit for recovery---Ex parte decree setting aside of---Procedure of Banking Court---Service/summons---Scope---Suit for recovery was decreed ex parte against the defendants---Contention of the defendants was that service was not duly effected upon them in terms of S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Perusal of order of Banking Court and reports on registered envelope and summons revealed that the defendants were not residing at the given address, therefore, such process through summons could not be served upon the defendants---Report of the representative of the courier service clearly suggested that defendants were not residing at the said address---Proclamation in the newspapers also disclosed the address where the defendants were not residing---Specific plea had been taken by the defendants to the effect that they were not resident at the address, and such plea, prima facie found support from said reports---Application for setting aside ex parte decree could not therefore, be decided summarily by the Banking Court and should have been disposed of by casting issues and providing an opportunity to the defendants to substantiate their contention which involved a factual controversy---Impugned order was set aside, matter was remanded and Banking Court was directed to decide the application for setting aside ex parte decree in accordance with law---Appeal was allowed, accordingly.

Shuja Haider Sayyed for Appellants.

Muhammad Saleem Iqbal for Respondent.

Date of hearing: 10th September, 2013.

2014 C L D 1216

[Lahore]

Before Ijaz Ahmad and Shezada Mazhar, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Appellants

Versus

Mst. Begum RASHEEDA JAMIL---Respondent

R.F.A. No.1024 of 2012, decided on 10th December, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122 & 124---Group insurance---Denial of insurance benefits to deceased's widow on ground that deceased had violated his employment contract during service---Applicant, whose husband had died in service of the appellant, had made application for recovery of insurance benefits---Claim of applicant was turned down by appellant on the ground that the applicant's husband, at the time of being in service of the appellant, was also on payroll of the Education Department, which was contrary to the terms and conditions of his contract of service---Contention of the appellant was that said concealment meant that the applicant was not entitled to receive benefits as on such concealment, his contract stood cancelled---Validity---Deceased had joined the appellant in the year 1997---During time of the deceased's service, appellant squashed the energies and capabilities of the employee till the date of his death, and deceased had netted clientage and financial benefits for the appellant, and during such time, the alleged violation of contract by the deceased, never pinched the appellant, and only at the time of making the claim in the year 2007, the appellant found the declaration made by the deceased to be false---Alleged false declaration of the deceased was tolerated during his lifetime, and no cancellation of contract or demotion was ordered---Even otherwise restraint on second employment in the contract was cast on direct or indirect employment under any other insurer transacting life insurance business, and the words "any other employer" meant to include any other employer transacting same business, and expression "any other employer" was therefore ejusdem generis in nature---Claim of applicant/widow was valid---Appeal was dismissed.

Rana Waqas Lateef Khan for Appellants.

Liaqat Ali Butt for Respondent.

2014 C L D 1228

[Lahore]

Before Umar Ata Bandial, C.J.

Messrs AL-BARKA ISLAMIC BANK LTD.---Plaintiff

Versus

Messrs JAVED NAZIR BROTHERS---Defendant

P.L.A. No.18-B and C.O.S. No.6 of 2005, decided on 30th May, 2014.

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

----S. 9(1)---Filing of suit by authorized person of the bank---Registered power of attorney in favour of officer of the bank---Scope---Court was excluded from going behind a registered power of attorney---Regional General Manager of the bank in the present case was authorized by its Board of Directors empowering him to confer authority on officers of the bank---Regional General Manager executed powers of attorney in favour of the officers signing the plaint---Such plaint filed by officers of the bank was competently filed.

Haji Saghir Ahmed v. United Bank Ltd. 2004 CLD 1334 rel.

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

----S. 9(1)---Limitation Act (IX of 1908), Ss. 19 & First Sched., Art.85---Suit for recovery of finance facility---Filing of---Limitation---Acknowledgment of liability in writing by the defendant---Starts fresh period of limitation---Where defendant made an acknowledgement in writing within the limitation period from the date of finance agreement, then under S. 19 of Limitation Act, 1908 a fresh limitation period of three years was given to the plaintiff-bank for filing its claim.

Harchandrai v. The Popular Metal Works, Gujranwala and 2 others PLD 1971 Kar. 925 and Allied Bank of Pakistan v. Safdar Ali Khan PLD 1988 SC(AJ&K) 199 rel.

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

----S. 9(1)---Limitation Act (IX of 1908), Ss. 20 & First Sched., Art.85---Suit for recovery of finance facility---Filing of---Limitation---Defendant authorizing bank to sell mortgaged property--- Effect---Acknowledgment of liability---Starts fresh period of limitation---Letter from defendant giving authorization to the plaintiff-bank to sell mortgaged properties---Sale proceeds of the said properties deposited in the account of the defendant---Such deposits were acknowledgement of liability by the defendant in terms of S. 20 of Limitation Act, 1908 and started a fresh period of limitation of three years for the plaintiff/bank to file its claim.

Harchandrai v. The Popular Metal Works, Gujranwala and 2 others PLD 1971 Kar. 925 and Allied Bank of Pakistan v. Safdar Ali Khan PLD 1988 SC(AJ&K) 199 rel.

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

----Ss. 3(1) & (2)---Liability of defendant---Additional mark-up imposed by the bank---Validity---Additional mark-up outside the validity of the finance agreement could not be incorporated to impose liability on the defendant.

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

----S. 9(1)---Suit for recovery of finance facility---Murabaha agreements, existence of---Evident from the General Finance Agreement---Photocopies of some of the Murabaha agreements placed on record---Remaining Murabaha agreements evident from the General Finance Agreement---Plea of defendants that photocopies of only eight out of thirteen Murabaha agreements were available on record, accordingly, Murabaha finance under the five absent agreements could not be included for the purpose of liability---Validity---Such plea of defendants admitting presence of some of the Murabaha agreements was inconsistent with an earlier objection taken by them that no financing had been availed by them from the bank---Moreover the petition for leave to appear and defend the suit ("PLA") did not contain any such plea---Each of the Murabaha agreements pertained to a portion of sanctioned Murabaha finance under the General Finance Agreement---Murabaha agreements were made on the defendants'' request for disbursement of the sanctioned finance---Copies of eight Murabaha agreements on record was indicative of an arrangement between the parties, and in view of the bald and clearly false denial of all sanctioned finances generally, there was no need for the remaining five agreements to be placed on record---Existence of remaining five Murabaha agreements was evident from the General Finance Agreement.

Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741 rel.

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

----Ss. 18(2) & (4)---Qanun-e-Shahadat (10 of 1984), Art.17---Finance agreement---Not attested by witnesses in terms of Art. 17 of Qanun-e-Shahadat, 1984---Admissibility in evidence before the Banking Court---Scope---According to S. 18(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 a document that failed to comply with requirements of Art. 17 of Qanun-e-Shahadat, 1984 or any other law, may, nevertheless be received in evidence by a Banking Court---Provisions of S.18(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 diluted the effect of S. 18(2) of the said Act by excluding consequences of inadmissibility in evidence in a case where Art. 17 of Qanun-e-Shahadat, 1984, was not satisfied---Notwithstanding non-attestation of a document, it shall nevertheless be admissible in evidence before the Banking Court.

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

----Ss. 18(2) & (4)---Qanun-e-Shahadat (10 of 1984), Art.17---Finance agreement---Not attested by witnesses in terms of Art. 17 of Qanun-e-Shahadat, 1984 but corroborated by supplementary documentations---Admissibility in evidence before the Banking Court---Scope---Finance agreement that failed to comply with requirements of Art. 17 of Qanun-e-Shahadat, 1984 or any other law, may, nevertheless be received in evidence by Banking Court---Additionally finance agreement in the present case was corroborated by supplementary documentation executed by the defendants--- Supplementary documentation included promissory notes, letters of guarantee executed by defendants, mortgage deeds and general power of attorney for sale of property--- Finance agreement in question was thus admissible in evidence before the Banking Court.

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

----Ss. 3(2), 9(2) & (3)--- Murabaha agreement---Profit/ mark-up charged by bank---Beyond contractual period of finance--- Legality--- Profit/mark-up could not be charged by the bank beyond the life of the Murabaha agreement---Mark-up was not an interest that could be charged by a bank solely with the passage of time.

Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162; Messrs United Bank Ltd. through Authorized Attorneys v. M. Mubeen Khan 2012 CLD 1995 and Bank of Punjab through Authorized Officer v. Messrs KNK Infrastructure (Pvt.) Ltd. through Chief Executive Officer and 2 others 2012 CLD 961 rel.

Muhammad Ahmad Qayyum for Plaintiff.

Abdul Hameed for Defendant.

Date of hearing: 18th June, 2013.

2014 C L D 1253

[Lahore]

Before Abid Aziz Sheikh, J

Messrs NIAGARA MILLS (PVT.) LTD. through Chief Executive---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary (Revenue Division), Federation Board of Revenue, and others---Respondents

Writ Petition 4005 of 2014, decided on 17th February, 2014.

Sales Tax Act (VII of 1990)---

----S. 46--- Constitution of Pakistan, Art. 199---Constitutional petition---Recovery of Sales Tax---Appeal to the Appellate Tribunal---Petitioner/taxpayer contended that his appeal with regard to disputed amount of sales tax was pending before Appellate Tribunal, Inland Revenue; and during the pendency of said appeal he was issued notice for recovery of amount---Contention of petitioner/taxpayer was that unless appeal was decided by at least one independent forum outside the departmental hierarchy, recovery should not be made by Department---High Court directed Appellate Tribunal Inland Revenue, to decide the appeal or stay application of the petitioner/taxpayer within a period of thirty days, till decision of appeal or stay application, whichever was earlier and no coercive measures should be adopted against the petitioner/taxpayer for the disputed amount---Constitutional petition was disposed of, accordingly.

Messrs Pak Saudi Fertilizers Limited v. Federation of Pakistan and others 2002 PTD 679; Messrs. Z.N. Exports (Private) Limited v. Collector of Sales Tax 2003 PTD 1746 and Additional Collector-II Sales Tax, Lahore v. Messrs Abdullah Sugar Mills Limited and others 2003 PTD 1664 ref.

Khubaib Ahmad for Petitioner.

Safdar Mehmood for Respondents.

2014 C L D 1275

[Lahore]

Before Mrs. Ayesha A. Malik, J

ACRO DEVELOPERS (PVT.) LTD. through Chief Executive---Plaintiff

Versus

BANK OF PUNJAB through Branch Manager and another---Defendants

C.O.S. No.76 of 2013, decided on 9th October, 2013.

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

----Ss. 15 & 19---Civil Procedure Code (V of 1908) O.XXXIX, Rr. 1 & 2---Auction of mortgaged property---Plaintiff sought to restrain auction of mortgaged property by the Bank on the ground that plaintiff being the owner of the property Bank could not auction the property---Held, that there was nothing on record to show that the plaintiff was the owner of the plots in question---Plaintiff placed on record allotment letters wherein the plaintiff was not shown as a owner of the said plots---Plaintiff had filed a summary of an arbitration award which confirmed that the plaintiff did not own any plot but claimed an interest in the allotment of plots on account of losses it had suffered due to failure of a housing project---Plaintiff had filed a suit for damages and rendition of accounts against the Housing Society, and even if its prayers in the said suit were allowed, it would not be entitled to the plots sought to be auctioned--- Application to restrain the respondents from auctioning the plots was dismissed, in circumstances.

M. Imran Malik for Plaintiff.

Amir Wakeel Butt for Defendant No.1.

Syed Muhammad Shah (in C.M. No.486-B of 2013).

2014 C L D 1310

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

Malik SAFDAR HUSSAIN---Appellant

Versus

IRFAN AHMAD AYYUB and another---Respondents

F.A.O. No.23 of 2014, decided on 20th January, 2014.

Trade Marks Act (XIX of 2001)---

----S. 5(2)---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Infringement of trade mark---Grant of temporary injunction restraining defendant from using the registered trade mark---Validity---Plaintiffs being proprietors of registered trade mark had entered into licence agreement whereby defendants were permitted to manufacture and sell fans under registered trade mark for a period of three years---Licence agreement had expired---Parties had referred the matter to arbitrator---Award of arbitrator could not be considered as a further permission or authority to use the trade mark by defendants which would tarnish the reputation and good-will of trade mark and result in irreparable loss to plaintiffs---Appeal was dismissed.

Mahmood Tahir Chaudhary for Appellant.

2014 C L D 1323

[Lahore]

Before Ali Baqar Najafi and Atir Mahmood, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Attorney---Appellant

Versus

Mst. KANEEZ BIBI---Respondent

R.F.A. No.786 of 2012, heard on 13th March, 2014.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 115, 118 & 121---Claim arising out of insurance policy issued before commencement of Insurance Ordinance, 2000---Forum---Recovery of liquidated damages on late settlement of claim---Commencement date of Insurance Ordinance, 2000 was 19-8-2000---Insurance policy in question was issued on 1-7-2000, prior to commencement of said Ordinance---Claimant sought recovery of liquidated damages on late settlement of claim, which claim was allowed by the Insurance Tribunal---Legality---Section 118 of Insurance Ordinance, 2000 regarding payment of liquidated damages on late settlement of claim would not extend to policies issued before the commencement of the Insurance Ordinance, 2000, therefore, Insurance Tribunal set up under the said Ordinance would not have jurisdiction to adjudicate upon the matter---Claimant was permitted to go to the civil court for his claim--- Appeal was allowed accordingly.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477; Civil Appeals Nos.449-L of 2009, 284 to 286, 283-L, 586-L to 591-L, 609-L to 613-L, 637-L to 640-L and 767-L of 2013, 817, 818 of 2010, 56-L, 63-L of 2011, 623-L to 628-L, 723-L, 726-L to 731-L of 2013 and Civil Petitions Nos.1253-L of 2011 and 1516-L to 1521-L of 2013 rel.

Ibrar Ahmad for Appellant.

Liaqat Ali Butt for Respondent.

Date of hearing: 13th March, 2014.

2014 C L D 1341

[Lahore]

Before Ayesha A. Malik, J

BANK OF PUNJAB through SVP---Plaintiff

Versus

T&N PAKISTAN PVT. LTD. through Chief Executive and 7 others---Defendants

C.O.S. No.71 of 2011, decided on 17th February, 2014.

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

----Ss. 11, 10 & 7---Civil Procedure Code (V of 1908) O. XII, R. 6---Suit for recovery---Admission in pleadings---Interim decree to the extent of the admitted amount---Plaintiff Bank sought interim decree for the amount admitted by the defendants in their application for leave to defend---Validity---Amount was admitted by the defendants as the net amount due and payable to the plaintiff Bank, whereas the suit was filed by the plaintiff was for a greater amount---Section 11 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with O.XII, R.6, C.P.C., empowered the court to pass an interim decree on basis of admitted amount---High Court passed a preliminary interim decree for the admitted amount and directed that arguments for leave to defend for the balance amount shall be heard on a later date---Application was allowed, accordingly.

A. W. Butt for Plaintiff.

Haqnawaz Chatha for Defendants Nos. 1 to 6.

Shamas Mahmood Mirza for Defendants.

2014 C L D 1351

[Lahore]

Before Ali Baqar Najafi and Miss Aalia Neelum, JJ

STATE LIFE INSURACNE CORPORATION OF PAKISTAN through Chairman and another---Appellants

Versus

MUHAMMAD ASHRAF---Respondent

Insurance Appeal No.5 of 2013, heard on 12th February, 2014.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122 & 124---Group Insurance---Appellant Insurance Company impugned the order of Insurance Tribunal, whereby it was ordered to pay life insurance claim to the father of deceased employee of Insurance Company---Contention of the appellant Insurance Company was that the deceased was only appointed as a Sales Officer and was not holding a valid license to work at the time of his death---Held, that deceased was a bona fide worker and it was noticeable in the vouchers that he held a licence---Appellant Insurance Company, it appeared, squashed the energies and capabilities of their employee till the date of his death, who netted financial benefits and clientage for the company, and only at the time of making the claim, it was found that he had no valid license---No illegality in the impugned order was found---Appeal was dismissed.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477 ref.

Rana Waqas Latif for Appellants.

Liaqat Ali Butt for Respondent.

Date of hearing: 12th February, 2014.

2014 C L D 1364

[Lahore]

Before Amin-ud-Din Khan and Ijaz Ahmad, 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. 23 & 19---Transfer of Property Act (IV of 1882), S.52---Lis pendens, principle of---Applicability---Sale of mortgaged property---Bona fide purchaser---Scope---Suit for recovery was decreed, and mortgaged property was ordered to be auctioned by the plaintiff Bank---Contention of the appellants was that they were bona fide purchasers of the suit property which could not be sold as satisfaction for the decree---Validity---Appellants purchased the property three months after the passing of the decree and under S.23 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; a suit was converted into an execution application after passing of decree and no formal application was required to be made in this regard---Appellants purchased the property at less price therefore, the purchase of the appellants did not seem to be bona fide--- Principle of lis pendens defeated rights of the appellants--- Appeal was dismissed, in circumstances.

Khalid Adeeb Khanam v. Messrs Prudential Investment Bank Ltd. and others 2002 CLD 451 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.

2014 C L D 1384

[Lahore]

Before Ijaz ul Ahsan, J

JAHANGIR MEHMOOD CHEEMA and another---Petitioners

Versus

GOVERNMENT OF PAKISTAN, MINISTRY OF INTERIOR, ISLAMABAD through Secretary and 2 others---Respondents

Writ Petition No.4594 of 2013, decided on 20th March, 2014.

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

----S. 9---Exit from Pakistan (Control) Ordinance (XLVI of 1981), S. 2---Exit from Pakistan (Control) Rules, 2010, R.2(1)(d)---Constitution of Pakistan, Art. 199---Constitutional petition---Chairman and directors of a company ("petitioners")---Alleged default in repayment of loan---Pending recovery suit---Placing name of alleged defaulter on Exit Control List (ECL) during pendency of recovery suit---Legality---Right to travel abroad---Scope---Mere fact that there was a claim against a person by a commercial bank, which was yet to be adjudicated upon, was no ground for placing name of such person on the Exit Control List or to deprive him of his fundamental right to travel abroad or restrict his right of free movement---No one could be termed a "defaulter" unless so declared by a court of competent jurisdiction---Courts established under the Banking laws were the sole authority to adjudicate upon the default in cases involving commercial loans---Recovery suit filed by the bank was pending, and no determination had been made by the Banking Court relating to status of petitioners as defaulters---No power vested with the commercial bank, the State Bank of Pakistan or for that matter the Federal Government to declare a person to be in default---Such power solely vested with the courts of competent jurisdiction---Any action on part of either the commercial bank or the State Bank of Pakistan, to determine that a customer was in default of an amount calculated by the bank and thereafter recommending placement of his name on the Exit Control List, was notonly violative of settled principles of law but amounted to making the entire system of banking law and banking courts redundant---Petitioners were not given an opportunity of being heard by giving them a notice---Besides petitioners had furnished adequate and sufficient securities to the lending bank to cover the entire alleged claim of the bank, if and when decreed---As such the lending bank was adequately covered in terms of its financial risk---Act of placing name of petitioners on the Exit Control List was without lawful authority and of no legal effect---High Court directed that the name of petitioners should immediately be removed from the Exit Control List---Constitutional petition was allowed accordingly.

Munir Ahmad Bhatti v. Government of Pakistan, Ministry of Interior PLD 2010 SC 697; Higher Education Commission through Project Manager v. Sajid Anwar and others 2012 SCMR 186; Hassan Raz through Lawfully Constituted Attorney v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad and 2 others 2012 CLD 92; Messrs Zurash Industries (Pvt.) Ltd. through Director and 4 others v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad and 3 others 2011 CLD 511; Writ Petition No.20730 of 2010 and Writ Petition No.7713 of 2010 ref.

(b) Constitution of Pakistan---

----Arts. 2A, 4, 9, 15 & 25---Right to travel abroad---Scope---Right of a citizen to travel was a Fundamental Right guaranteed by Arts. 2A, 4, 9, 15 & 25 of the Constitution.

(c) Constitution of Pakistan---

----Part II, Chapter 1 [Arts. 8 to 28] & Art. 199---Fundamental rights, abridgment of--- Scope---Fundamental rights were sacred and could not be lightly allowed to be taken away or abridged on the whims of private parties or even the State except in accordance with the law.

Shahid Ikram Siddiqui for Petitioner.

Muhammad Akram Pasha for Respondent No.3.

Miss Shaishta Qaisar, Deputy Attorney-General for Government of Pakistan.

2014 C L D 1410

[Lahore]

Before Abid Aziz Sheikh, J

Messrs KHALID AND BROTHER through Proprietor and 5 others---Petitioners

Versus

PUNJAB PROVINCE through Secretary Housing Urban Development and Public Health Engineering Department, Punjab, Lahore and 2 others---Respondents

Writ Petition No.4872 of 2014, heard on 6th March, 2014.

(a) Punjab Procurement Rules, 2014---

----Rr. 17 & 16---Constitution of Pakistan, Art. 199---Constitutional petition--- Public procurement--- Pre-qualification and pre-qualification process---Petitioner in pursuance of a notice of pre-qualification, submitted its applications for pre-qualification, and subsequently petitioner's name was not mentioned in the list of firms which were pre-qualified for the bidding process---Grievance of the petitioner was that respondent authorities had, with mala fide, not pre-qualified the petitioner and had not given any reasons for its non-pre-qualification---Held, that under R. 17(3) of the Punjab Procurement Rules, 2014 the procuring agency shall promptly inform the contractor who had applied for pre-qualification, whether or not he had pre-qualified, and under R.17(4), shall on request from the contractor, communicate to him the reasons for not pre-qualifying the contractor---Petitioner in the present case, had been intimated promptly regarding its non-pre-qualification and it was not the case of the petitioner that it had applied for reasons for the same and no application or request was made by the petitioner to the procuring agency for supply of reasons---Question as to whether a particular contractor was pre-qualified or not was either a policy issue or commercial transaction requiring specialized fields and courts lacked expertise to express any opinion as to technical expertise or managerial capabilities of the contractor--- Courts ordinarily refrain from entering into the policy making domain of executive authority unless the same smacked of arbitrariness, favoritism and a total disregard for mandate of law---Question as to whether petitioners were qualified or not being a factual controversy, could not be resolved by the High Court in its constitutional jurisdiction---Constitutional petition was dismissed, in circumstances.

Writ Petition No.25522 of 2011 distinguished.

Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455; Afzal Motors Company (Pvt.) Limited v. Province of Sindh and others 2009 SCMR 659 and Public Health Contractors Welfare Association v. Province of Punjab and others 2004 MLD 21 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Judicial review of executive actions---Policy making domain of the executive---Courts ordinarily refrain from entering into the policy making domain of executive authority unless the same smacked of arbitrariness, favoritism and a total disregard for mandate of law.

Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455 rel.

Riaz Karim Qureshi for Petitioners.

Khawar Ikram Bhatti, Additional A.-G. for Respondents.

Date of hearing: 6th March, 2014.

2014 C L D 1420

[Lahore]

Before Ibad-ur-Rehman Lodhi, J

GHULAM SAMDANI---Appellant

Versus

MUHAMMAD ARSHAD MALIK---Respondent

Regular First Appeal No.1169 of 2013, heard on 21st January, 2014.

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

----Ss. 79 & 80---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 2 & 3 & O. VII, R. 10---Institution of summary suit on the basis of affidavit---Negotiable instrument---Scope---Contention of defendant was that suit was not based on any negotiable instrument---Trial Court decreed the suit on account of failure of defendant to pray for leave to appear and defend the suit---Validity---Trial Court had not considered as to whether the plaint presented before it was filed on the basis of any "negotiable instrument"---Suit was decreed on account of failure on the part of defendant to file an application for leave of the court to appear and defend the same---Plaintiff had not produced even copy of any cheques and Trial Court did not require him to produce any evidence in support of plaint and to produce any documentary evidence in order to bring his suit within the ambit of summary suit---Trial Court was not competent to entertain and decide suit in absence of any evidence on record to show that suit was filed upon any negotiable instrument---District Judge was bound to direct his office to examine the suits filed under O.XXXVII, C.P.C. at the time of their filing as to whether same were filed upon any negotiable instrument and a separate report must be available on the file of every suit and only then further proceedings were to be taken in such suits---Impugned judgment and decree passed by the Trial Court were not sustainable in the eye of law and same were set aside---Suit was filed before the wrong forum and plaint was directed to be returned to the plaintiff for presentation of the same before court of competent jurisdiction---Appeal was accepted in circumstances.

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

----O. XXXVII, R. 2---Institution of summary suit on basis of negotiable instrument---Scope---Suits upon bills of exchange, hundies and promissory notes might be instituted by presenting a plaint before the competent court---Such suit could be decreed if defendant did not appear or fail to defend the suit by taking leave of the court.

Azhar Iqbal for Appellant.

Tariq Mehmood Mughal for Respondent.

Date of hearing: 21st January, 2014.

2014 C L D 1436

[Lahore]

Before Amin-ud-Din Khan and Abid Aziz Sheikh, JJ

Messrs PACE PESTICIDES (PVT.) LIMITED through Chief Executive and 3 others---Appellants

Versus

SAUDI PAK COMMERCIAL BANK LIMITED through Branch Manager and another---Respondents

R.F.A. No.200 of 2009, heard on 25 September, 2013.

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

----Ss. 9, 10 & 11---Charging of markup by Financial Institution beyond date of expiry of finance facility---Suit for recovery---Applications for leave to defend were dismissed and suit was decreed---Contention of the defendants was that plaintiff bank had charged mark-up beyond date of expiry of finance facility---Held, that plaintiff bank could not charge mark up beyond expiry date of finance facility---High Court modified the decree amount by disallowing mark-up charged beyond date of expiry of finance facility---Appeal was allowed, accordingly.

Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162 rel.

Sardar Riaz Karim for Appellants.

Mughees Aslam Malik and Muhammad Suleman Bhatti for Respondents.

Date of hearing: 25th September, 2013.

2014 C L D 1452

[Lahore]

Before M. Sohail Iqbal Bhatti, J

Messrs UMAR AUTO STORE and others---Petitioners

Versus

The JUDGE BANKING COURT and others---Respondents

Writ Petition No.3108 of 2012, decided on 11th April, 2014.

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

----Preamble---Nature of Financial Institutions (Recovery of Finances) Ordinance, 2001---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a "remedial statute" and remedial acts/statutes were those which were enacted in order to improve and to facilitate remedies already existing for redress of wrong or injury as well as to correct defects, mistakes and omissions---"Remedial statues" were ones which were made to supply such defects and bridge such difficulties which arose either from general imperfection of all human laws from change of time and circumstances.

Crawford in Statutory Constructions rel.

(b) Interpretation of statutes---

----Remedial statutes/acts, nature of--- Remedial acts/statutes were those which were enacted in order to improve and to facilitate remedies already existing for redress of wrong or injury as well as to correct defects, mistakes and omissions---Remedial statues were ones which were made to supply such defects and bridge such difficulties which arose either from general imperfection of all human laws from change of time and circumstances.

Crawford in Statutory Constructions rel.

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

----Ss. 22 & 27---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court--- Scope---Interlocutory order---Maintainability of constitutional petition against interlocutory order passed by Banking Court---Perusal of S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 revealed that where legislature did not provide appeal against interlocutory order, the same could not be challenged by way of constitutional petition as allowing the same would amount to negating provisions of the Ordinance, which did not provide for appeal against an interlocutory order---Section 27 Financial Institutions (Recovery of Finances) Ordinance, 2001 explicated the intention of the legislature that interlocutory orders passed by the Banking Courts should not be called into question in any proceedings---Constitutional petition against interlocutory order of Banking Court, was therefore, not maintainable.

Al-Shamas Apparel (Pvt.) Ltd. through Chief Executive and 3 others v. Muslim Commercial Bank Ltd. through Chief Manager/Manager Shadman Colony Branch, Lahore and another 2002 CLD 1407; Crawford in Statutory Constructions; Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165; Sheikh Gulzar Ali and Co., Ltd. and others v. Special Judge, Special Court of Banking and another 1991 SCMR 590; Crescent Factories Vegetable Ghee Mills and 5 others v. National Bank of Pakistan, District Courts Branch, Sahiwal and another PLD 1985 Lah. 150; Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1989 SC 26 and Muslim Commercial Bank Ltd. through Chief Manager and Principal Officer v. Judge Banking Court No.II Faisalabad and 8 others 2002 CLD 991 rel.

(d) Constitution of Pakistan---

----Art. 199---Bar to constitutional jurisdiction of High Court---Scope---Language used in a statute, if was such that it led to no room for doubt as to the intention of the legislature to oust jurisdiction of the High Court in all circumstances, then such intention would have to be given effect and even acts performed without jurisdiction or with mala fide, would not be open to judicial scrutiny under Art.199 of the Constitution.

Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1989 SC 26 rel.

Nadeem Iqbal Chaudhary for Petitioners.

Muhammad Farhan Masud for Respondent No.2.

Date of hearing: 2nd April, 2014.

2014 C L D 1473

[Lahore]

Before Ijaz ul Ahsan, J

BANK OF PUNJAB through Branch/Chief Manager---Plaintiff

Versus

Messrs KHAN UNIQUE BUILDERS PVT. LTD. through Chief Executive Officer and 3 others---Defendants

Civil Original Suit No. 6 of 2010, decided on 8th April, 2014.

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

----Ss. 10, 9 & 3---Suit for recovery---Interim decree---Contention of plaintiff bank was that defendants had admitted to their liability towards the bank---Held, that record indicated that the disbursement of sum by the plaintiff bank was not denied by the defendants and the defendant company had acknowledged its liability in terms of a letter issued by it, which letter's issuance or signatures of the Chief Executive thereon, had not been denied by the defendants---Dispute between the parties was limited to the differential between the amount disbursed, and the amount claimed by the plaintiff bank---Defendants' attempts to deny the disbursement amount were at best evasive, and an evasive denial, under law, was no denial at all---High Court issued an interim decree for the disbursed amount against the defendants jointly and severally, with cost of funds, in terms of S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and granted the defendants unconditional leave to defend the suit to the extent of the differential amount.

2005 CLD 1546; 2004 CLD 1356; 2009 CLD 931; 2005 CLD 1421; 2003 CLD 606; 2006 CLD 1213 and 2011 CLD 458 ref.

(b) Administration of justice---

----Evasive denial was no denial at all.

Hafeez Saeed Akhtar for Plaintiff.

Shahid Ikram Siddiqui and Rao Athar Akhlaq for Defendants.

2014 C L D 1493

[Lahore]

Before Syed Iftikhar Hussain Shah and Miss Aalia Neelum, JJ

HAMAD RAZA through Special Attorney---Petitioner

Versus

The STATE and 2 others---Respondents

Criminal Revision No.791 of 2004, heard on 12th March, 2014.

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

----Ss. 4, 2(d) & Sched.---Special Court, jurisdiction of---Embezzlement and misappropriation by a Bank employee--- Scope of scheduled offences--- Petitioner, an employee/officer with the complainant bank, was accused of misappropriation, embezzlement of various amounts in respect of different bank accounts---Contention of the petitioner was that the Special Court established under the Offences in Respect of Banks (Special Courts) Ordinance, 1984 did not have the jurisdiction to take cognizance of the matter---Held, that petitioner was an officer of complainant bank and was along with co-accused, charged with misappropriation, embezzlement and other irregularities and after an inquiry conducted by the Bank, petitioner returned a sum of amount and as such admitted his guilt---Petitioner and co-accused, therefore, committed "scheduled offences" as provided under the Offences in Respect of Banks (Special Courts) Ordinance, 1984 which provided that such offences committed in respect of or in connection with the business of the bank would be triable by the Special Court established under the Ordinance---Three pre-requisites were required to invoke the jurisdiction of the Special Court, which were; that the offence should be a scheduled offence; that the offence should be in respect of a scheduled bank; and that the offence should relate to the business of the bank---Present case fulfilled such criteria and conditions existed which specified that the Special Court possessed the necessary jurisdiction to try an accused person of such offences; and the offences committed by the petitioner clearly brought him within the ambit of "scheduled offences"---Revision was dismissed, in circumstances.

M.D. Tahir, Advocate v. Director, State Bank of Pakistan, Lahore and 3 others 2004 CLD 1680 and Ghulam Mustafa v. Presiding Officer, Special Court (Offences against Banks), Rawalpindi 2003 MLD 841 rel.

Suqrat Basit for Petitioner.

Zahid Nawaz Cheema for Respondent No.3.

Gulzar Ahmad Sabir, Additional Prosecutor-General for the State.

Date of hearing: 12th March, 2014.

2014 C L D 1516

[Lahore]

Before Mrs. Ayesha A. Malik, J

FIVE STAR INTERNATIONAL (PVT.) LTD.---Petitioner

Versus

REGISTRAR OF COMPANIES---Respondent

C.O. No.6 of 2014, heard on 30th April, 2014.

Companies Ordinance (XLVII of 1984)---

----Ss. 96, 97, 98 & 101---Reduction in share capital of Company---Power of the court to dispense with addition to name of company of "and reduced"---Petitioner Company sought reduction of its share capital as decided by special resolution passed by its Directors---Contention of the petitioner Company was that said reduction in share capital would not affect ownership or voting rights of shareholders, and would not be detrimental to any Director or shareholder of the Company; and further that nothing was due to any creditor---Held, that special resolution was duly registered with Securities and Exchange Commission of Pakistan under Form 26 and there were presently no creditors and no prejudice would be caused by reduction in share capital to any share holders---High Court allowed petition for reduction in share capital and directed that the petitioner Company was exempted from writing the words "and reduced" as part of the name of the company upon reduction of its capital.

Ms. Saadia Malik for Petitioner.

Umair Mansoor and Aftab Ahmad, Manager Credit, Soneri Bank, Main Branch, Faisalabad for Respondent.

Date of hearing: 30th April, 2014.

2014 C L D 1543

[Lahore]

Before Shujaat Ali Khan, J

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Attorney and 3 others---Applicants

Versus

Mst. KAUSAR HUSSAIN---Respondent

Review Application No. 37 of 2013 in Writ Petition No.6506 of 2013, decided on 30th May, 2013.

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

----S. 114--- Review--- Insurance dispute--- Applicant Insurance Corporation sought review of order passed in the constitutional petition filed by the respondent, whereby direction was given to the applicant Insurance Corporation to look into the grievance/insurance claim of the respondent---Contention of the applicant was inter alias, that no claim had been lodged by the respondent, therefore, the applicant was not in a position to adjudge the status of the insurance policies in question---Validity---Perusal of record revealed that respondent had approached the Insurance Tribunal for redressal of her grievance, but her petition was returned and she was directed to present it before the appropriate forum---Respondent instead of approaching concerned court, filed constitutional petition instead, wherein she changed her address, which fact alone was sufficient to establish that the constitutional petition was filed by the respondent by concealing facts---Respondent, it seemed by way of obtaining a decision on her insurance claim wanted to create a new cause of action, just to frustrate the applicant Insurance Corporation---Order sought to be reviewed was passed without hearing the applicant, and the same deserved to be recalled---High Court recalled impugned order and allowed review application, in circumstances.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477 ref.

(b) Administration of justice---

----Right of hearing was a universally acknowledged principle and nobody could be deprived of it at any cost.

Ibrar Ahmad for Applicant.

Mian Muhammad Sharif for Respondent.

2014 C L D 1596

[Lahore]

Before Shujaat Ali Khan and Mahmood Ahmed Bhatti, JJ

MUHAMMAD KHAN---Appellant

Versus

ZARAI TARAKIATI BANK LIMITED through President---Respondent

F.A.O. No. 46 of 2014, decided on 17th March, 2014.

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

----Ss. 22(6) & 22(1)---Interpretation of S.22(6) & 22(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal against interlocutory order---Maintainability---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---Held, that while S.22(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 conferred an absolute right upon an aggrieved person to assail validity of a judgment/decree/sentence or final order, S.22(6) on the other hand, circumscribes it and hedges it in respect of interlocutory orders---While S. 22(1) of the Ordinance used the word "may" implying the permission to file an appeal; S.22(6) of the Ordinance in contradistinction opened with the imperative language employing the words "no appeal review or revision shall lie against... any interlocutory order of the Banking Court"---Said choice of phraseology was used by the Legislature to emphasize two facets of the same coin and left no room for doubt that the same were intended to stonewall a challenge to an interim, intermediate or interlocutory order, with the underlying object to let the suits tried by the Banking Court to conclude within the shortest period of time---Law on the subject was designed to allow the banking matters to proceed apace without any hiccup--- Appeal was dismissed.

Black's Law Dictionary (sixth Edition) and 10 Rang. 335 rel.

(b) Words and Phrases---

----"Final Order"---Meaning and scope.

Black's Law Dictionary (Sixth Edition) and 10 Rang. 335 rel.

Muhammad Suleman Bhatti for Appellant.

2014 C L D 1617

[Lahore]

Before Amin-ud-Din Khan, J

MUHAMMAD SHABBIR through Legal Representatives and 3 others---Petitioners

Versus

MUHAMMAD ZAFEER---Respondent

Civil Revision No. 3769 of 1994, heard on 24th April, 2014.

Malicious prosecution---

----Suit for damages--- Death of parties--- Maxim "actio personalis moriture cum persona"--- Applicability---Scope---Suit for damages filed by the plaintiff was never decreed and he passed away during pendency of revisions---Cause of action would disappear and extinguish with the death of wrong doer or to the party wronged on the basis of maxim "actio personalis moriture cum persona"---Proceedings had been abated in the present case---Revisions were not proceedable and same were dismissed in circumstances.

Mst. Nasri Begum v. Virgil L. Moor, Consular for Administration, Embassy of the United States of America and 6 others 1989 CLC 511 and Mir Shakeel ur Rehman and others v. Yahya Bakhtiar and others PLD 2010 SC 612 rel.

Naveed Shehryar Sheikh and Miss Humera Bashir Chaudhry for Petitioners.

Ch. Muhammad Yousaf and Imtiaz Hussain Khan Baloch for Respondent.

Date of hearing: 24th April, 2014.

2014 C L D 1636

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Sh. ALTAN AZMAT---Appellant

Versus

HABIB BANK LIMITED through Chief Manager and another---Respondents

R.F.A. No. 251 of 2010, heard on 29th September, 2014.

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

----Ss. 2(c), 2(d), 2(f), 5, 7, 9 & 22---Specific Relief Act (I of 1877), Ss. 42 & 55---Suit for declaration, along with mandatory injunction as a consequential relief, was filed by the appellant before the Banking Court claiming to be a benami owner of Deposit Growth Certificates purchased by him in the name of his mother and grandfather---Appellant sought a decree that he was the actual owner and holder of the Deposit Growth Certificates and was entitled to receive the entire amount of the certificates along with the mark-up/interest, and a direction against the Bank to make the said payment---Banking Court disposed of the suit observing that as the Certificates were being claimed by the appellant to be in the names of his deceased relatives, therefore, the appellant should either obtain a succession certificate in respect of Deposit Growth Certificates or he may seek a decree for declaration from the court of competent jurisdiction on the ground that the appellant is a benami owner of these certificates---Aggrieved of the order of the Banking Court, the appellant filed an appeal before the High Court---Contention of the appellant was that he was within the jurisdiction of the Banking Court in terms of S. 7 of the Ordinance, therefore, the impugn order was against the law---Appellant further argued that initially he had filed a suit for declaration with consequential relief before the Civil Court but the plaint was returned and upon the return of the plaint the appellant filed the suit before the Banking Court---Bank argued that no such fact as to the return of the plaint from civil court or an appeal filed against the order of the civil court was mentioned in the plaint before the Banking Court, however, such plea was being taken by the appellant for the first time in appeal---Bank contended that the suit filed by the appellant was not maintainable before the Banking Court---Validity---Accumulative effect of Ss.2(c), 2(d), 2(f) & 9 of the Ordinance was that where a customer or a financial institution committed a default in fulfilment of any obligation with regard to any finance, the financial institution or such as the case may be, the customer, may institute a suit in the Banking Court---Even if the argument of the appellant is accepted that Deposit Growth Certificates fall within the definition of finance as given in S. 2(d) of the Ordinance, it remained an undeniable fact that Deposit Growth Certificates were in the name of other individuals and not the appellant---Any Court or Tribunal, established under a special law, was a court of limited jurisdiction and all the jurisdictional facts must exist before invoking the jurisdiction of a special Court or a Tribunal---If any of the jurisdictional fact is missing, the assumption of jurisdiction by special Court would amount to defective or excessive exercise of jurisdiction---Appellant had failed to establish that he was a "customer" as defined in S.2(c) of the Ordinance---Suit under S. 9(1) of the Ordinance was only maintainable by a customer if a financial institution committed a default in fulfillment of any obligation with regard to any finance---To attract jurisdiction of the Banking Court under S. 9 of the Ordinance, the Appellant had to establish that he was a customer but in the present case the Deposit Growth Certificates were in the names of other persons and it was rightly observed by the Banking Court that the appellant should either obtain succession certificate from the competent court of law or he may seek a decree for declaration to the effect that the appellant was a benami owner of the said certificates from the Court of plenary jurisdiction---Decree for declaration to the effect that the appellant be declared a benami owner of the Deposit Growth Certificates cannot be passed by the Banking Court established under S. 5 of the Ordinance---Section 7(1)(a) of the Ordinance though provides that in exercise of its civil jurisdiction the Banking Court shall have all the powers vested in a Civil Court under the Code of Civil Procedure, 1908, but subsection (1) of S. 7 of the Ordinance also provides that the Banking Court shall have these powers subject to the provisions of said Ordinance, meaning thereby, that at the first instance the appellant was to establish that all other jurisdictional facts exist to invoke the jurisdiction of the Banking Court, and where the Banking Court has jurisdiction to adjudicate upon the matter, it shall, in that case, have all the powers vested in a Civil Court---Order of the Banking Court, thus, required no interference and was upheld---Appeal was dismissed by the High Court, in the circumstances.

Haji Muhammad Nawaz Khokhar v. United Bank Ltd. 2012 CLD 1709; Brig. (Retd.) Hamid-ud-Din v. Askari Leasing Ltd. 2012 CLD 898 and Abdul Majeed v. Amir Muhammad and others 2005 SCMR 577 ref.

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

----Ss. 2(c), 2(d), 2(f) & 9---Accumulative effect of Ss. 2(c), 2(d), 2(f) & 9 of the Ordinance, would be that where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or such as the case may be the customer may institute a suit in the Banking Court.

(c) Administration of justice---

----Principle of law--- Jurisdiction--- Court or Tribunal, established under a special law, was a court of limited jurisdiction and all the jurisdictional facts must exist before invoking the jurisdiction of a special Court or a Tribunal---If any of the jurisdictional fact is missing, the assumption of jurisdiction by special Court would amount to defective or excessive exercise of jurisdiction.

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

----S. 2(d)---"Finance", definition of---Term "finance" has wide connotation which includes the bills of exchange, promissory notes or other instruments with or without buy-back arrangement by a seller, participation term certificate, musharika, morabaha, musawama, istisnah or modaraba certificate and term finance certificate.

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

----Ss. 5 & 7---Benami owner, declaration of---Jurisdiction of Banking Court---Scope---Decree for declaration to the effect that a person be declared a benami owner of the Deposit Growth Certificates cannot be passed by the Banking Court established under S. 5 of the Ordinance---Although S. 7(1)(a) of the Ordinance provides that in exercise of its civil jurisdiction the Banking Court shall have all the powers vested in a Civil Court under the Code of Civil Procedure, 1908, but subsection (1) also provides that the Banking Court shall have these powers subject to the provisions of said Ordinance, meaning thereby, that at the first instance the person was to establish that all other jurisdictional facts exist to invoke the jurisdiction of the Banking Court, and where the Banking Court has jurisdiction to adjudicate upon the matter, it shall, in that case, have all the powers vested in a Civil Court.

Iftikhar Ullah Malik for Appellant.

Majid Ali Wajid for Respondents.

Date of hearing: 29th September, 2014.

2014 C L D 1683

[Lahore]

Before Mrs. Ayesha A. Malik, J

MUHAMMAD IJAZ TAHIR---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

C.O. No. 17 of 2013, decided on 25th June, 2014.

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

----Ss. 290 & 291---Company's affairs---Prevention of oppression and mismanagement---Application to court under S. 290 of Companies Ordinance, 1984---Purpose and scope---Section 290 of Companies Ordinance, 1984 was invoked for prevention of oppression or mismanagement---Application under the said section was made where the members of the company were of the opinion that the affairs of the company were being conducted, or were likely to be conducted, in an unlawful or fraudulent manner, or in a manner, which was contrary to its Memorandum and Articles of Association, or in a manner oppressive to the members or any of the members or the creditors, or in a manner prejudicial to the public interest---Court may with a view to brining an end to matters complained of, make such orders which it deemed fit for regulating the conduct of the company's affairs---However a court under Ss. 290 & 291 of the Companies Ordinance, 1984 could not look into a dispute inter se the parties (i.e., shareholders).

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

----Ss. 290 & 291---Petition to court under S. 290 of Companies Ordinance, 1984--- Maintainability---Oppression and mismanagement in a company---Scope---Inter se dispute between shareholders of a company---Such dispute was not adjudicable under S. 290 of Companies Ordinance, 1984---Petitioner and respondent were the only two shareholders in a private company which provided Hajj and Umra services---Petitioner alleged that respondent, without his consent added another shareholder in the company; that respondent and new shareholder forged certain documents and also forged his signatures on company documents and bank accounts and that respondent and new shareholder also did not follow the guidelines with respect to providing Hajj services and illegally used the Hajj quota---Such allegations of petitioner could not be adjudicated under S.290 of Companies Ordinance, 1984, as they did not relate to matters of the company, which ought to be regulated by the Court---Present dispute was in fact a dispute inter se the petitioner, respondent and the new shareholder---Court under Ss. 290 & 291 of the Companies Ordinance, 1984 could not look into a dispute inter se the parties---Allegations made by petitioner did not amount to oppression and mismanagement under S.290 of Companies Ordinance, 1984---Petition under S. 290 of Companies Ordinance, 1984 was held to be not maintainable in such circumstances and was consequently dismissed.

Farooq Ali Bajwa for Petitioner.

Syed Shahab Qutab for Respondents Nos.6 and 7.

2014 C L D 1710

[Lahore]

Before Mahmood Ahmed Bhatti, J

SHAKEEL AHMAD---Petitioner

Versus

ZARI TARAQIATI BANK LIMITED through Branch Manager---Respondent

T.A. No. 108-C of 2013, decided on 2nd April, 2014.

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

----S. 5(3)---Power of High Court to transfer a case from one Banking Court to another---Scope---Discretionary power---Considerations that should weigh with the High Court before deciding to transfer a case---Discretion conferred upon the High Court to transfer a case was not be exercised whimsically or in routine---No party to a lis could demand the transfer of a case as a matter of right, and it was for the Judge of the High Court to take all the ambient circumstances into consideration before allowing any application for transfer of a case from one Banking Court to another---Before invoking its power to transfer a case, the High Court should see as to whether in the background of the peculiar facts of a case, it would be appropriate, expedient and conducive to the interests of justice to pass a transfer order; whether the transfer order would relieve the parties of their hardships in pursuing the case or it would compound the miseries and whether it would make things easier for witnesses to be produced by the parties to the lis.

(b) Administration of justice---

----Members of the Bar---Duty of---Maintaining discipline and decorum during proceedings---As officers of the Court, it was expected of Members of the Bar, that they would help maintain discipline and decorum, letting the proceedings to be carried out in a manner conducive to the administration of justice---In no case should Members of the Bar play up small matter, which tended to foul up things or undermine the authority of the court or descend the administration of justice into chaos.

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

----S. 5(3)---Transfer of case from one Banking Court to another---Grounds not warranting transfer of case---Scope---Ego of applicant---Judge not yielding to desires of counsel for applicant---No reason was found in the present case to believe that Judge before whom suit was being heard, would not do justice to the applicant---No ground existed within the parameters of S. 5(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 to transfer suit of applicant to another court of competent jurisdiction---Seemingly in the present case ego of the applicant had been hurt during proceedings and the matter was made worse and exacerbated when counsel for applicant took it to heart that the Judge did not oblige him and did not yield to his desires when the bank brought some disputed documents on record---Application for transfer of case was disposed of accordingly.

Shahid Mahmood for Petitioner.

Mian Muhammad Akram for Respondent.

2014 C L D 284

[Peshawar]

Before Mazhar Alam Khan Miankhel, J

SAID RASOOL---Appellant

Versus

Dr. HAMAYUN KHAN and 4 others---Respondents

F.A.O. No.47 of 2011, decided on 4th November, 2013.

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

----Ss. 4, 8 & 15---Suit for recovery of damages---Publication of defamatory material in three leading newspapers of wide circulation causing mental torture to plaintiff and loss to his business and reputation---Filing of suit after giving notice thereof to defendant---Decree for Rs. 10,00,000 passed by Trial Court as against Rs.50,00,000 claimed in suit---Defendant's plea was that plaintiff had failed to comply with mandatory provision of S. 8 of Defamation Ordinance, 2002 for not having proved service of legal notice by examining official from Postal Department or producing postal receipt/A.D., or receipt of courier service---Validity---Defendant in written statement and during trial had not denied factum of convening press conference and levelling of allegations against plaintiff---­Press clippings containing defamatory statements, when tendered in evidence by plaintiff, had not been objected to by defendant---­Defendant had produced in evidence copy of such like material without proving its genuineness---Such notice despite being mandatory could be given by any means i.e. through a messenger, ordinary post or any other possible mode---Such prior notice of action given to defendant had not been specifically denied by him nor had he objected to its tendering in evidence by plaintiff---Plaintiff's statement regarding giving prior notice of action to defendant had not been rebutted---Such notice of action would be presumed under law to have been given to defendant prior to filing of present suit--- Defendant's such act was an actionable wrong, which had been proved, thus, no further and formal proof thereof would be required---­Quantum of damages awarded by Trial Court was a bit harsh in absence of proof of special damages---General damages could be awarded keeping in view gravity of allegations and effect/size/influence of publication---High Court partially accepted appeal by awarding damages of Rs. 50,000 in given circumstances.

Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore and 2 others PLD 1971 SC 61; Badar Zaman v. Sultan 1996 CLC 202; Raja Hamayun Sarfaraz Khan and others v. Noor Muhammad 2007 SCMR 307 and Tehsil Nazim TMA, Okara v. Abbas Ali and 2 others 2010 SCMR 1437 ref.

Tehsil Nazim TMA, Okara v. abbas Ali and 2 others 2010 SCMR 1437; Raja Hamayun Sarfaraz Khan and others v. Noor Muhammad 2007 SCMR 307 and Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore and 2 others PLD 1971 SC 61 rel.

Siemens Pakistan Engineering Co. Ltd. v. Pakistan and others 1999 PTD 1358 and Mudasser Iqbal Butt v. Shaukat Wahab and others PLD 2006 Lah. 557 distinguished.

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

----S. 8---Notice of action to defendant prior to filing of suit for damages by plaintiff---Proof---Such notice, though being mandatory, could be given by any means i.e. through a messenger, ordinary post or any other possible mode and was not statutorily required to be sent through registered post with Acknowledgment Due Card for proof of its delivery---Principles.

The intention of the legislature is quite visible from the plain reading of section 8 of the Defamation Ordinance, 2002. The perusal of this provision of law would make it clear that notice of action prior to filing of any claim/suit for damages is must, but the mode of communication of the same is not the concern of the legislature as nothing special in this regard has been given in the Statute. Had there been any such intention, then the same would have been expressly provided in the Statute like notice of "Talb-i-Ishhad" in pre-emption matters. It can be by any means whether it is through a messenger or through an ordinary post or any other possible mode, and purpose of the same is only to communicate one's intention to file a suit for damages in case the wrongdoer does not respond to the notice. It is not necessary that this notice must be sent through registered post with its acknowledgment for proof of its delivery.

Shah Faisal Utmankhel for Appellant.

Shakeel Ahmad for Respondents.

Date of hearing: 4th November, 2013.

2014 C L D 400

[Peshawar]

Before Qaiser Rashid Khan and Lal Jan Khattak, JJ

Messrs GANDAPUR CONSTRUCTION COMPANY---Petitioner

Versus

GOVERNMENT OF KHYBER PAKHTUNKHWA through Secretary and 3 others---Respondents

Writ Petition No.423 of 2012, decided on 7th May, 2013.

Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Maintainability---Alternate remedy--- Contractual obligation--- Petitioner-company obtained contract through tender---Prayer of petitioner was for payment of escalation amount as per clause of agreement which he suffered due to price-hike in the construction material and increase in carriage charges---Validity---Arbitration clause existed in the agreement with regard to referring matters to the Superintending Engineer in case of any disagreement arising out of the contract and Superintending Engineer was to give his decision in writing not later than three months after reference was made to him---Said clause of agreement had provided forum to the parties to settle their disputes out of court through process of arbitration---Such was a forum where all the disputed matters would be discussed by recording pro and contra evidence by the experts---When agreement itself had provided forum for resolving a dispute, without availing such forum disputed questions of fact could not be placed before the High Court under its constitutional jurisdiction---High Court might issue writ only when facts were admitted and there was no alternate remedy to the aggrieved person---Neither facts of present case were admitted nor petitioner was divested of alternate forum for resolution of his grievance---Constitutional petition was not maintainable in circumstances---Petitioner might approach the department for arbitration as per clause of the agreement and if he opted for the same then Authorities were directed to proceed as per arbitration clause in accordance with law and merit---Constitutional petition was dismissed in circumstances.

Haji Salim Jan for Petitioner.

Khan Wali Khan Mehsud, A.A.-G. for Respondents.

Date of hearing: 7th May, 2013.

2014 C L D 579

[Peshawar]

Before Abdul Latif Khan, J

SULTAN alias KALOO---Petitioner

Versus

Haji MUHAMMAD KHAN and another---Respondents

Civil Revision Petition No.88 of 2011, decided on 27th September, 2013.

(a) Malicious prosecution---

----Suit for damages---Plaintiffs filed suit for damages on the ground that defendant lodged criminal complaint which was dismissed---Suit was dismissed by the Trial Court but same was decreed by the Appellate Court---Validity---No receipt with regard to payment of fee to the counsel or expenses incurred upon the litigation in complaint case had been annexed with the plaint---No evidence to such effect had been produced---Name of counsel was not mentioned nor he was produced as witness in support of claim by the plaintiffs---Plaintiffs had failed to prove the damages with regard to defamation and mental torture---Plaintiffs were not arrested and case was not tried but same was dismissed in limine and accused were discharged---Plaintiffs failed to prove as to how they suffered damages and mental torture---No evidence was produced that defendant acted without reasonable and probable cause or they were actuated by malice---Ingredients of malicious prosecution were lacking in the present case---Complaint was dismissed on account of pendency of civil cases rather than on merits---Appellate Court was swayed by the consideration other than judicial---Extraneous material had been based upon for awarding decree instead of scanning evidence available on file---No reason had been assigned by the Appellate Court for grant of decree in favour of plaintiffs---Impugned judgment was not sustainable in the eye of law---Revision was accepted and judgment of Appellate Court was set aside and that of Trial Court was restored.

(b) Malicious prosecution---

----Ingredients--- Ingredients to establish malicious prosecution were; that plaintiff was prosecuted by the defendant; that prosecution ended in favour of plaintiff; that defendant acted without reasonable and probable cause; that defendant was actuated by malice; that the proceedings had interfered with plaintiff's liberty and had also affected his reputation and plaintiff had suffered damages.

Muhammad Khurshid Qureshi for Petitioner.

Bahadar Khan and Noor Gul Khan for Respondents.

Date of hearing: 27th September, 2013.

2014 C L D 934

[Peshawar]

Before Mian Fasih-ul-Mulk and Musarrat Hilali, JJ

STATE LIFE INSURANCE CORPORATION---Appellant

Versus

SUMERA IQBAL---Respondent

F.A.O. 9-P with C.M. No.206-P of 2012, decided on 26th September, 2013.

Insurance Ordinance (XXXI of 2000) ---

----S. 2(xxvii)---Application for recovery of accidental death benefits---Contention of insurance company was that the death of deceased was due to murder and assault and such risk was excluded from "accidental death benefits"---Insurance Tribunal accepted deceased's widow's claim---Validity---Assault/murder was done with malice or due to some personal enmity whereas accidental death was caused spontaneously and through unexpected external force---Death had been caused by the events which were unusual to the deceased---Incident took place unexpectedly and without any apparent cause or fault on the part of the deceased---Deceased had embraced 'Shahadat' in line of duty when he was injured in a suicidal bomb blast--- Death of deceased was not assault or murder to be treated as excluded risk--- Respondent's case was covered by the 'risk clause'--- Refusal on the part of Insurance Company to the extent of accidental death benefits was unjustified---Respondent was entitled for the recovery of said claim---Appeal was dismissed in circumstances.

Khalilullah Khan for Appellant.

Raza Muhammad Iyaz for Respondent.

Date of hearing: 26th September, 2013.

2014 C L D 992

[Peshawar]

Before Abdul Latif Khan and Lal Jan Khattak, JJ

Messrs KHURASAN CONSTRUCTION COMPANY, DERA ISMAIL KHAN---Petitioner

Versus

DIRECTOR-GENERAL (FDRD), C&W DEPARTMENT, GOVERNMENT OF KPK and 3 others---Respondents

Writ Petition No.55-D of 2012, decided on 26th September, 2013.

Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope--- Alternate remedy--- Contractual obligation---Factual controversy---Issue related to resolution of facts which required recording of evidence in order to ascertain whether the petitioner was entitled to any transportation charges etc. or not and if so then to what extent and under what circumstances---When the facts were alleged then the same must be proved through evidence and not through a constitutional petition---Issue raised by the petitioner-company having stemmed from contractual obligation and in the contract proper forum had been provided for the redress of the grievance of the petitioner, the controversy raised by the petitioner in that petition could not be resolved by the High Court under its constitutional jurisdiction---Constitutional petition was dismissed with the observation that the petitioner-company could avail his remedy before the proper forum.

Khalid Hussain for Petitioner.

Nemo for Respondents.

Date of hearing: 26th September, 2013.

2014 C L D 1001

[Peshawar]

Before Abdul Latif Khan, J

ABDUL KARIM---Appellant

Versus

MUHAMMAD IDREES---Respondent

R.F.A. No.12 of 2011, decided on 25th October, 2013.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, R.2---Suit for recovery on the basis of pro note---Proof of execution---Presumption as to negotiable instrument of consideration (etc.)---Plaintiff proved execution of pro note by producing scribe and marginal witnesses---Under S.118 of the Negotiable Instruments Act, 1881 presumption (of due execution) was attached to negotiable instrument---Minor discrepancies could not be made basis for non-suiting the plaintiff---Witnesses had admitted their signatures with slight variations which were not material---Defendant having admitted pro note, variations in deposition of marginal witnesses regarding venue and signatures and non-payment of consideration in their presence were not fatal---Trial Court did not appreciate evidence properly---Appeal was accepted.

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

----S. 118---Presumption as to negotiable instruments of consideration (etc.)---Under S.118 of the Negotiable Instruments Act, 1881 presumption (of due execution) was attached to negotiable instruments.

Muhammad Abdullah Baloch for Appellant.

Muhammad Imran Khan Gandapur for Respondent.

Date of hearing: 25th October, 2013.

2014 C L D 1015

[Peshawar]

Before Malik Manzoor Hussain, J

Messrs HABIB BANK LIMITED through Senior Manager---Plaintiff

Versus

Messrs R.G. MATCH INDUSTRIES (PVT.) LTD. through Chief Executive and 3 others---Defendants

B.O.S. No.2-P of 2013, decided on 3rd February, 2014.

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

----Ss. 10(4), 10(6) & 9---Suit for recovery---Application for leave to defend---Procedure of Banking Court---Reading of plaint---Scope---Contention of the customers/defendants was, inter alia, that statement of accounts did not depict a true picture of transactions and that markup applied was not according to the finance agreement---Validity---Execution of finance agreement had not been specifically denied by the defendants---Defendants seeking to appear and defend the suit must disclose a plausible defence or show that there were substantial questions of facts and law which needed to be tried, otherwise, leave to defend had to be refused and suit was to be decreed---Only on an evasive denial or as a routine matter, leave to defend could not be granted---All documents annexed with a plaint were to be read as part and parcel of the plaint and contents whereof could not be read in isolation--- All terms and conditions of the finance agreement between the parties, and the sanction letter should be read in conjunction with the paragraphs of the plaint and it could not be argued that the Financial Institution had not disclosed cause of action and had provided wrong entries in the statement of accounts---Under S.10(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 non-compliance of provisions of S.10(4) of the Ordinance, would result in rejection of application for leave to defend---Defendants in the present case, had failed to specify amount payable to the Bank and had failed to disclose the disputed amount in their application for leave to defend---Application for leave to defend, was dismissed, in circumstances.

Omer Farooq Adam for Plaintiff.

Issac Ali Qazi and Ashfaq Ahmad for Defendants.

Date of hearing: 27th January, 2014.

2014 C L D 1157

[Peshawar]

Before Malik Manzoor Hussain, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

Messrs KHYBER TEXTILE MILLS LTD. and others---Defendants

B.O.S. No.14 of 1998, decided on 17th March, 2014.

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

----S. 9---Banking Companies (Recovery of Loans, Advances, Credits and Advances) Act (XV of 1997) S. 9---State Bank of Pakistan Circular No.19, dated 5-6-1997---Incentive Scheme---Binding nature of State Bank of Pakistan Circulars---Scope---Recovery of bank loan---Contention of defendant was that suit for recovery was not maintainable since the defendants had availed and complied with Incentive Scheme issued by the State Bank of Pakistan via Circular No.19 dated 5-7-1997---Held, that a Banking Company could not deviate from Circulars issued by the State Bank of Pakistan due to their binding nature---Directions issued in the shape of Circulars were as consequence of promulgation of a statute or an Act of Parliament and banks were obliged to follow the same---In the present case, since Invective Scheme was duly complied with by the defendants, therefore suit for recovery of plaintiff Bank was not maintainable--- Suit was dismissed, in circumstances.

Alamzeb Khan for Plaintiff.

Zahid Idrees Mufti for Defendants.

Date of hearing: 10th March, 2014.

2014 C L D 1181

[Peshawar]

Before Abdul Latif Khan and Lal Jan Khattak, JJ

AMANULLAH KHAN---Appellant

Versus

HABIB BANK LIMITED---Respondent

F.A.B. No.11 of 2010, decided on 11th September, 2013.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, Rr. 11 & 10---Suit for recovery of damages---Rejection of plaint---Scope---Banking Court rejected the plaint on the ground of lack of jurisdiction---Validity---Plaintiff filed suit against bank and insurance company before civil court which was returned and then he filed the same before Insurance Tribunal which was dismissed as withdrawn on the ground that remedy was to be sought from Banking Court---Customer or financial institution could file a suit in Banking Court in case of default in fulfilment of any obligation with regard to any finance which had been made---Section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 empowered the Banking Court to adjudicate the matter brought by the customer---Banking Court had to follow the provision of statute in accordance with law instead of by-passing the procedure provided under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court had passed the impugned order in slipshod manner and beyond the jurisdiction vested in the same---Impugned order had been passed on the application moved under O.VII, R.11, C.P.c. in a casual manner which was not warranted by law instead of deciding the application for leave to defend---Banking Court was bound to decide the application for leave to defend first in order to determine the locus standi of defendant and in case he failed to establish the same to defend the suit then he had no right to file any other application including the one under O.VII, R.11, C.P.C.---Rejection of plaint prior to the grant of leave to defend would amount to deviation from the provision of Financial Institutions (Recovery of Finances) Ordinance, 2001---Rejection or dismissal of plaint could be considered by the Banking Court after the grant of leave to defend if said court had come to the conclusion that substantial question of facts and law had been raised by him but prior to such stage the exercise of jurisdiction would amount to departure from procedure and law---Plaint had been rejcted on the ground of lack of jurisdiction which was incorrect application of law---Order VII, R. 10, C.P.C. was applicable in such like cases and grounds for the same were different as to the grounds enumerated in O.VII, R.11, C.P.C.---Plaints/suits were returned and dismissed from two different forums but same had been ignored by the Banking Court and impugned order had been passed in haste and harsh manner---Impugned order was set aside and case was remanded to the Banking Court for decision in accordance with law---Appeal was accepted in circumstances.

Muhammad Iqbal Khan Kundi for Appellant.

Khuda Bakhsh Khan Baloch for Respondent.

Date of hearing: 11th September, 2013.

2014 C L D 1220

[Peshawar]

Before Malik Manzoor Hussain, J

Messrs UNITED RUBBER (PVT.) LIMITED and 4 others---Plaintiffs

Versus

BANK OF KHYBER, (BOK)---Defendant

B.O.S. No. 2-P of 2012, decided on 3rd February, 2014.

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

----S. 5(8)---Specific Relief Act (I of 1877) Ss. 42 & 54---Consolidated suit for recovery of finances filed by Financial Institution and suit for declaration, permanent injunction and rendition of accounts filed by customer/borrower---Appointment of amicus curiae for assistance on technical aspects of banking transactions---High Court observed that the moot issue between parties was with regard to availed financial facilities and disbursement of the same; which could be adjudged by invoking provisions of S. 5(8) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Borrower had already applied for appointment of a commissioner and had offered payment of fee(s) for said commissioner therefore it would be in the interest of both parties that a well reputed and experienced commissioner be appointed to properly audit the accounts submitted by the parties---High Court appointed a commissioner to audit the accounts maintained by the bank with that of the borrower for the purpose of finding out the liabilities of the parties and directed that the fee for said audit be settled by the borrower and further directed the parties to associate themselves with the commissioner and make available to him, the concerned record as and when required.

Saalim Salam Ansari for Plaintiffs.

Nazirullah Qazi for Defendant.

Date of hearing: 3rd February, 2014.

2014 C L D 1632

[Peshawar]

Before Waqar Ahmad Seth, J

ANWARZEB---Appellant

Versus

MUSHTAQ AHMED---Respondent

R.F.A. No. 50-A of 2008, decided on 23rd June, 2014.

(a) Malicious prosecution---

----Damages---Assessment---Principles---Plaintiff filed suit for damages on the ground that defendant lodged an application to District Police Officer by leveling frivolous and baseless allegations---Trial Court dismissed the suit due to non-mentioning and proving the quantum of damages--- Validity--- Plaintiff had 28 years of unblemished uniformed service and carried good reputation in the village---Defendant had locked plaintiff in civil litigation due to his property in the village and he was disgraced/insulted due to allegations and raid of police---Trial Court had decided each and every issue and circumstances in favour of plaintiff besides holding that element of malice had been proved---Plaintiff was non-suited due to non-mentioning and proving the quantum of damages which was not requirement of law and due to the same suit could not be dismissed---Essentials of malicious prosecution were proved beyond shadow of doubts as defendant levelled criminal charges but nothing was proved after police raid---Malice was previous civil litigation which was without reasonable and probable cause and raid by police had affected the reputation of plaintiff---Every person in the society had a right to set in motion Government and Judicial machinery for protection of his rights but said person should not infringe the corresponding rights of others by instituting improper legal proceedings in order to harass by unjustifiable litigation---Plaintiff had not specified the damages and general damages were to be assessed---Loss arising out of injury to reputation of a person could not be compensated in terms of money but for said reason alone courts should not decline to grant compensation---Just, fair and reasonable compensation was to be assessed in such cases and same was to be granted to the victim(s)---No yardstick or definite principle for assessing damages existed in such cases and assessment of fair compensation was difficult---Court had discretion in such cases which would depend on facts of each case and how far society would deem a fair sum determining the amount to be awarded to a person who had suffered such damages---General damages would not be needed to be proved by strict evidence as same would arise by inference of law even though no actual pecuniary loss had been or could be shown---Impugned judgment was not based on correct appreciation of evidence and same could not be maintained---Damages/compensation of Rs.3,00,000 was fixed by the High Court keeping in view the narrated principles and nature of allegation with reference to society plus status of plaintiff---Impugned judgment and decree passed by the Trial Court were set aside and suit was decreed to the extent of Rs.3,00,000---Appeal was allowed accordingly.

Muhammad Akram v. Farman Bibi PLD 1990 SC 28 rel.

(b) Words and phrases---

----"General damages"---Meaning---"General damages" were those which law would imply in every violation of a legal right.

T.H. Lughmani for Appellant.

Shah Nawaz Asim for Respondent.

Date of hearing: 23rd June, 2014.

2014 C L D 111

[Balochistan]

Before Muhammad Noor Meskanzai and Muhammad Hashim Khan Kakar, JJ

MUHAMMAD RASOOL---Appellant

Versus

ABDUL GHAFOOR---Respondent

Regular First Appeal No.138 of 2010, decided on 25th July, 2013.

(a) Malicious prosecution---

----Suit for damages---Plaintiff filed suit for damages on the ground that he was acquitted of the charge in F.I.R. lodged by the defendant in relation to snatching of a sale agreement---Suit was partially decreed by the Trial Court---Validity---Trial Court had based its findings on certain documents but said documents were neither tendered in evidence nor exhibited---Documents neither tendered in evidence nor produced and exhibited could not be relied---Such documents could not be made basis for decision of a lis rather were treated as non-existent---Defendant was not afforded opportunity of cross-examination on said documents---Trial Court could neither consider such documents as a valid piece of evidence nor same could be used against the defendant---Documents were illegally taken into consideration and were believed though were not referable---Plaintiff had failed to prove the case by producing cogent and confidence inspiring evidence and also failed to justify the compensation demanded on various counts---Defendant was right to lodge the report as there was a probable cause for lodging the same---Prima facie, there was no malice on the part of defendant---Trial Court did not take into consideration the basic elements on the basis of which suit for malicious prosecution could be accepted or rejected---No doubt plaintiff had proved that there was a case against him and he was arrested but rest of elements could not be proved by him---Plaintiff was required to prove want of reasonable and probable cause for prosecution and defendant acted maliciously---Plaintiff had failed to prove elements entailing him for the decree prayed for---Defendant had succeeded to prove that he acted with reasonable and probable cause---Trial Court mis-appreciated the facts, mis-applied the law and mis-read the evidence---Findings drawn by the Trial Court being perverse and un-sustainable could not be maintained---Appeal was accepted and judgment and decree passed by the Trial Court were set aside and suit was dismissed.

(b) Malicious prosecution---

----Elements to be taken into consideration---Elements on the basis of which suit for malicious prosecution could be accepted or rejected were; the prosecution of the plaintiff by the defendant; there must be a want of reasonable and probable cause for that prosecution; the defendant must have acted maliciously i.e. with a improbable motive and not to further the ends of justice; the prosecution must have ended in favour of the person proceeded against; it must have caused damage to the party proceeded against and proceedings had interfered with plaintiff's liberty and had also effected his/her reputation.

Muhammad Ilyas Mughal for Appellant.

Ajmal Khan Kakar for Respondent.

Date of hearing: 30th April, 2013.

2014 C L D 40

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

PEARL SECURITIES LIMITED, TREC HOLDER/ BROKER OF KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.1 (03)/Wash/KSE/MSW/SMD/ 2009/97 dated 2-11-2012, decided on 19th February, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, R.12 & Code of Conduct---Unfair trade practice like 'wash trades'---Client of company bought and sold shares through brokerage company, 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 transaction fell within the meaning and ambit of the term 'Wash Trades' as it had created false and misleading impression in the market and was a violation of the regulatory framework---Such "Wash Trades" were harmful for the development of the market; and damaged the market integrity---Execution of said trades had shown that the company had failed to maintain high standards 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 Code of Conduct---Violations of the Rules and Regulations, was a serious matter, which could even lead to suspension or cancellation of the registration of the company by the Commission---Taking lenient view in the matter, penalty of Rs.100,000 (Rupees one Hundred Thousand only) was imposed with strong advice to the company to take immediate measures, and put in place proper checks in its Management System to restrict such orders, which could result in "Wash Trades".

Sajid Anwar, Chief Executive Officer, Pearl Securities Limited representing the Pearl Securities Limited.

Kapeel Dev, Assistant Director, SECP assisting the Director/HOD (MSCID).

Date of hearing: 1st February, 2013.

2014 C L D 78

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

HIGHLINK CAPITAL (PVT.) LIMITED, BROKER LAHORE STOCK EXCHANGE: In the matter of

Show Cause Notice No.1 (03)/Wash/KSE/MSW/ SMD/2009/96 dated 24-10-2012, decided on 7th December, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.--- Wash trades--- After examination of the trading data, it was noted that brokerage 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 transaction fell within the meaning of the term 'wash trades', which was harmful for the development of the market and damaged market's integrity---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 thus contravened the provisions of the Code of Conduct---Violation of the rules and regulations was a serious matter which could even lead to suspension of the registration of the company as a broker by the Commission---Commission taking lenient view in the matter imposed on the company a penalty of Rs.100,000 with advice to the company to take immediate measures and put in place proper check to eliminate the occurrence of such instances in future; and to ensure that full compliance be made of all rules, regulations and directives of the Commission, in future.

Khuram Shahzad, Company Secretary representing the Highlink Capital (Pvt.) Limited.

Osman Syed, Deputy Director, SECP assisting the Director/HOD (MSCID).

Date of hearing: 8th November, 2012.

2014 C L D 96

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

TAKAFUL PAKISTAN LIMITED: In the matter of

Show Cause Notice dated 13th February, 2013, decided on 28th June, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 2(lxiv) & 156---Takaful Rules, 2012, R.26---Takaful scheme---Failure of company to comply with the principles of Islamic Shariah, and violation of Shariah Guidelines---Takaful was a scheme of mutual assistance to the participants in case of occurrence of certain contingencies, and the participants mutually agreed to contribute to the common fund for that purpose in compliance of principles of Shariah---Rule 26 of Takaful Rules, 2012, required that each operator would appoint a Shariah Advisor who would ensure adherence of condition specified by the Commission upon advice of the Shariah Advisory Board on all matters---Company's Shariah Board had also prescribed the Shariah Guidelines regarding Co-Takaful arrangement with the conventional insurers---Company had violated the Shariah Guidelines relating to Co-Takaful arrangement with the conventional insurers---Default of the company of the Shariah Guidelines issued by Shariah Supervisory Board of the general takaful operators was established---Company should at all times comply with the principles of Shariah, which was the most integral part of the Takaful business, but company failed to do that---Penalty as provided under S.156 of the Insurance Ordinance, 2000, could be imposed onto the company and/or its Director---Commission, instead of imposing the penalty, took a lenient view and condoned the company due to the fact: (a) that, the company's management had adopted the required procedure as laid down in Shariah Guidelines issued by the Shariah Supervisory Board of the general takaful operators; and (b) that prior to December, 2011 there were no guidelines for the company to follow in respect of co-insurance/facultative inward arrangements with the conventional insurers.

Taimur Mirza, Advocate/Legal Counsel (Messrs Mohsin Tayebaly and Co.) attended.

Date of hearing: 4th April, 2013.

2014 C L D 122

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

DEWAN FAROOQUE MOTORS LIMITED: In the matter of

Show Cause Notice No.SMD/BO/9(215)2005 dated 30th July, 2012, decided on 15th February, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224(4)---Late filing of Return of beneficial ownership---Public Listed Company being a beneficial owner of more than ten per cent of its ordinary shares, was required to file Return of beneficial ownership on Form 32 within period of fifteen days as stipulated under S.222 of Companies Ordinance, 1984, but in the present case, company filed said Return with delay of 72 days---Company had admitted the default of late filing of the Return, with the contention that said default was not committed wilfully and knowingly---Company had assured for timely filing of the return in future; and requested to condone the default in question---Record had revealed that company had filed Form-32, by its own motion; it was therefore, considered that late filing of the return, could not be wilful---Commission taking lenient view of the matter, strictly warned the company to ensure timely compliance of S.222 of the Companies Ordinance, 1984 in future.

2014 C L D 166

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

AXIS GLOBAL LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.Misc./MSW/SMD/1 (5) 2004/1630 dated 25th October, 2012, decided on 7th December, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Schedule---Trading by the client of the company with its other client in violation of Code of Conduct---Client of the company bought shares from company's another client---Said client earned quick profit by exercising said transactions---Representative of the company had contended that said transaction was result of private deal between the clients and that the company had nothing to do with that---Evidence was available to the effect that it was a co-ordinated scheme on the part of the company wherein the transactions were executed by the company through its clients---Company was responsible to exercise the transaction at best available rate in a transparent and faithful manner, but it had failed to safeguard the interest of its client---Each and every market participant was responsible to play its due role to ensure that market was fair, efficient and transparent for the protection of investors---If any market participant would not act accordingly, then it should be held accountable for that---Practice adopted by the company, had brought disrepute into the profession and detrimental for the interest of market participants and small investors---Company had failed to maintain high standards of integrity as it had indulged in improper, dishonourable and undesirable conduct; to act with due skill, care and diligence in the conduct of its business; to abide by the provisions of the Rules and Regulations by the Commission and had violated the clauses A(1), A(2), A(5) and B(6) of the Code of Conduct set forth under the Third Schedule of the Brokers and Agents Registration Rules, 2001---Violation of said Rules and Regulations was a serious matter which entitled the Commission to even suspend the registration of the company, but Commission had elected not to exercise said power---Commission in exercise of powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.1000,000 with direction to the company to ensure that full compliance be made of all rules, regulations and directives of the Commission in future for avoiding any punitive action under the law.

Hamad Kehar, Managing Director and Naveed Alam, Partner, Junaidy Shoaib Asad, Chartered Accountants representing Axis Global Limited.

Muhammad Ali, Deputy Director assisting the Director/HOD (MSCID).

Date of hearing: 12th November, 2012.

2014 C L D 183

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

DJM SECURITIES (PVT.) LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.Misc/MSW/SMD/1 (5) 2004/1607 dated 24th September, 2012, decided on 5th December, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Schedule---Conducting business in violation of Code of Conduct---Evidence on record had established that Brokerage company had created false market and failed to maintain fairness in the conduct of its business---Company was responsible to monitor all trading activities being carried out through its trading terminals in order to track and prevent any transaction being made in violation of any applicable rules and regulations---Company had indulged in improper and undesirable conduct on the stock-exchange---Execution of said trades had shown that the company had failed to maintain high standards of integrity, promptitude and fairness in conduct of its business---Company had failed to exercise due care, skill and diligence in conduct of its business and had failed to abide by the provisions of the rules and regulations issued by the Commission---Company, in circumstances, had violated clauses A(2), A(4) & A(5) of the Code of Conduct set forth under Third Schedule of Brokers and Agents Registration Rules, 2001, which in turn was in violation of R.12 of said Rules---Unfair trade practices, were detrimental to the growth and development of the market and undermine market integrity---Such trading activities of the company had interfered with the fair and smooth functioning of the market and also damaged the interest of other investors who were trading in the scrip---Violation of Rules and Regulations, was a serious matter, which entitled the Commission to even suspend the registration of the company, but the Commission had elected not to exercise that power---In exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969 Commission had imposed a penalty of Rs. 200,000 on the company with a direction to the company to take immediate measures; and put in place proper system and check to eliminate the occurrence of such type of violations in future; and to ensure that full compliance be made of all rules, regulations and the directives of the Commission in the future for avoiding any action under the law.

Yaqoob Jan Muhammad, Director representing DJM Securities (Pvt.) Limited.

Muhammad Ali, Deputy Director assisting the Director/HOD (MSCID).

Date of hearing: 12th November, 2012.

2014 C L D 203

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

Messrs DAWOOD CAPITAL MANAGEMENT LIMITED: In the matter of

Show Cause Notice No. SCD SD (Enf)/DCML/2012/398, dated 8th November, 2012, decided on 22nd March, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 282-D, 282-J(1)(2) & 282-M---Non-Banking Finance Companies and Notified Entities Regulations, 2008, Regln.38(a)(n)---Wilfully authorizing and permitting the use of privileged information, and providing forged documents by the Management of the company; and making unauthorized changes in the documents of the company---Record had established that the Management of the company, wilfully authorized and permitted the use of privileged information; provided forged documents; and made unauthorized changes to itself; its related parties, including connected persons, its Chief Executive Officer, and her close relatives for avoiding imminent loss---Same was subsequently passed on to the remaining unit holders of other companies; which could have been equally shared otherwise---Said act of the company, was directly detrimental to the interest of the remaining unit holders; and was against the fiduciary responsibilities stipulated in the constructive documents of the Collective Investment Schemes (CIS)---Company, in circumstances, had failed to manage the assets of the company in the interest of the unit holders---Default under Regln.38(a)(n) of Non-Banking Finance Companies and Notified Entities Regulations, 2008, had been established, which was punishable under Ss.282-J(1)(2), 282-M and 282-D of the Companies Ordinance, 1984---Licences of the company, were cancelled to undertake the business of asset management services and Investment advisory services; and a penalty amounting to Rs.20,000,000 (Twenty Million Rupees) on the Chief Executive Officer of the company was imposed and her close relatives had avoided imminent loss of Rs.18.224 million---Penalty of Rs.1,000,000 (one million) was also imposed on the Chief Financial Officer and company's Secretary, for the wilful contraventions of Regln.38(a)(n) of Non-Banking Finance Companies and Notified Entities Regulations, 2008.

Ms. Tara Uzra Dawood, Chief Executive Officer-CEO, Gul Nawaz, Director and Chairman, Audit Committee-AC, Masood Wahedna, Director and Member AC, S. Shabahat Hussain, Director and Member AC, S. Kabiruddin, Chief Financial Officer-CFO and Company Secretary, Nazimuddin Feroz, Director and Ashfaq Tola, FCA, Authorized representative of the Company in attendance at Ist Hearing on 10th January, 2013 and 11th January, 2013.

Ms. Tara Uzra Dawood, (CEO) (in personal capacity and on behalf of the Company), Ms. Shafqat Sultana, Chairperson of the Board and S. Kabiruddin, CFO and Company Secretary in attendance at 2nd Hearing on 20th February, 2013 and 21st February, 2013.

Ms. Tara Uzra Dawood, (in personal capacity and on behalf of the Company), Ms. Shafqat Sultana, Chairperson of the Board and S. Kabiruddin, CFO and Company Secretary in attendance at 3rd Hearing on 12th March, 2013.

Ms. Tara Uzra Dawood, CEO (in personal capacity and on behalf of the Company) and Ms. Shafqat Sultana, Chairperson of the Board in attendance at 4th Hearing on 15th March, 2013.

Dates of hearing: 10th, 11th January, 20th, 21st February, 12th and 15th March, 2013.

2014 C L D 263

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Imtiaz Haider, Commissioner (SCD)

Messrs MUBARAK TEXTILE MILLS LIMITED---Appellant

Versus

DIRECTOR (ENFORCEMENT)---Respondent

Appeal No.2 of 2012, decided on 11th September, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 231 & 232---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Adverse opinion of the auditors regarding financial statements of the company and its financial position---Appeal against administrative order---Maintainability---Examination of the annual accounts of the company for the relevant period had revealed that Auditors in their reports on the respective accounts, had given adverse opinion and that the financial statements did not give a true and fair view of the financial position of the company, of its financial performance of the loss/profit its cash flows and statement of charges in equity, together with notes forming part thereof for the respective financial years---Directors of the company in their report to members on the respective annual accounts, failed to give satisfactory and complete information and explanation in regard to the reservations, observations, qualifications or adverse remarks contained in the respective Auditors' reports---Details of assets disposed of had shown that the company had disposed of the entire plant and machinery which was beyond the authorization obtained from the shareholders in the Annual General Meeting---Director (Enforcement) of the Commission, in exercise of the power conferred under S.231(1) of the Companies Ordinance, 1984, was authorized to inspect the books of accounts and books and papers of the company, and the company had filed appeal against said order---Validity---Section 33(1)(a) of Securities and Exchange Commission of Pakistan Act, 1997, provided that no appeal would lie against an administrative direction given by a Commission or an officer of the Commission---Exercise of powers under S.231 of Companies Ordinance, 1984 was administrative in nature and limited to conducting of inspection; and preliminary inquiries into the affairs and books of accounts and papers of the company---No appeal, in circumstances, would be maintainable against administrative order---Appeal was dismissed, in circumstances.

Ofspace (Private) Limited v. Federation of the Islamic Republic of Pakistan and 3 others 2012 CLD 923 rel.

Faisal Latif, FCA and Imran Shafiq, Advocate for Appellant.

Aqeel Zeeshan, Joint Director (Enforcement) and Zulfiqar Ali, Assistant Director (Enforcement) departments representatives.

Date of hearing: 22nd July, 2013.

2014 C L D 299

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

ARIF HUSSAIN, CHIEF EXECUTIVE, ALI RAZA TEXTILE MILLS LTD. and 4 others---Appellants

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.35 of 2013, decided on 3rd October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 244, 473 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure of company to annex the notes to the accounts and Director's report along with the accounts filed with the Commission--- Enforcement department of the Commission while examining the annual audited accounts for the relevant year, observed that the company had failed to annex the notes to the accounts and Director's report along with the accounts filed with the Commission, without any reasonable explanation for the same---Director (Enforcement), dissatisfied with the response to show-cause notice issued to the company, imposed a penalty of Rs.3,000 on the Chief Executive and each Director with the total penalty aggregating to Rs.15,000---Chief Executive was directed under the provisions of S.473 of the Companies Ordinance, 1984 to submit the fresh copy of accounts along with notes to the accounts and Director's report within 30 days of the order---Commission did not agree with the counsel for the company that mens rea had to be established in proceedings under S.244 read with S.476 of the Companies Ordinance, 1984---Default, in the present case, having been committed under S.244 of the Companies Ordinance, 1984, which was civil and not a criminal offence, mens rea need not be established---Contention of the appellants that the default was not wilful, would have no merits---Directors of the company, having not exercised due skill and care as required of them at the time of submission of the accounts, default, would be considered as wilful---Directors having failed to comply with the statutory requirement of S.244 of the Companies Ordinance, 1984, they were rightly proceeded against by the respondents.

Principle of Statutory Interpretation by Justice G.P. Singh (7th Edition, Chapter 11, pages 653 and 659 published by Wadhwa and Company Nagpur ref.

(b) Words and phrases---

----'Mens Rea'---Definition.

Black Laws Dictionary rel.

(c) Words and phrases---

----'Wilful default'---Definition.

Oxford Dictionary of Law, Fifth Edition rel.

Rana Munir Hussain, Advocate Supreme Court for Appellants.

Malik Asim Pervez, Deputy Director (Enforcement), Shahid Javed, Deputy Director (Enforcement) and Haroon Abdullah, Deputy Director (Enforcement) for Respondent through Video Link.

Date of hearing: 5th September, 2013.

2014 C L D 330

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

ASRAL-UL-MAJEED KHAN---Appellant

Versus

HEAD OF DEPARTMENT (ENFORCEMENT)---Respondent

Appeal No.61 of 2012, decided on 1st October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 255 & 260---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Irregularities in the accounts of the company---Powers and duties of Auditors---Non-compliance of relevant legal provisions by auditor---Auditors, audited the accounts of the company for relevant year and issued an unqualified report---Enforcement department, examined the accounts of the company to determine, whether the report of the auditors pertaining to relevant year had been made in conformity with the requirements of S.255 of the Companies Ordinance, 1984---Detailed scrutiny of the accounts had revealed certain irregularities---Company had conceded the failure to observe the non-disclosure of relevant information, basis and specific accounting policies; and requested for taking a lenient view---Commission, after carefully considering the submission and all facts and circumstances of the case, found that provisions of S.255 of the Companies Ordinance, 1984 had been violated, and in exercise of powers under S.260(1) of the Companies Ordinance, 1984, imposed a fine of Rs.10,000 on the appellant, who had filed present appeal---Auditors had conceded the default of failure to file the cash flow statement; and statement of charges in equity with the accounts, and had pleaded that the act was unintentional---Role of Auditors was critical in order to ensure that the financial accounts presented were true and fair---Auditors had to act in a professional manner, and their duty towards the shareholder and stakeholders should be that of a skilled professional---Failure to submit the revised report to the Commission had shown that the act of the company was wilful---Commission had already taken a lenient view in the matter by imposing a penalty of Rs.10,000---No reason being available to interfere with the impugned order, appeal was dismissed in circumstances.

Jalaluddin F.C.A. v. Commissioner SEC 2005 CLD 333 distinguished.

City Equitable Fire Insurance Co. Ltd. Re, 1925 Ch. 407 2005 CLD 333 rel.

Asrarul Majeed Khan, FCA for Appellant (in person).

Shahid Javed, Deputy Director (Enforcement) and Haroon Abdullah, Deputy Director (Enforcement) for Respondent through Video Link.

Date of hearing: 5th September, 2013.

2014 C L D 406

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

SAQIB BASHIR & CO. CHARTERED ACCOUNTS---Appellant

Versus

HEAD OF DEPARTMENT (ENFORCEMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.45 of 2013, decided on 3rd October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 255, 260 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Issuing an un-modified report by the Auditor---Enforcement Department of the Commission while examining the annual audited accounts of the company for relevant year and audit report, had observed that the company was incorporated in the year 2009, but it was not operational during the year under revision and in the preceding year---Despite all the given facts, the Auditor issued an un-modified report without highlighting the fact that the company could not carry out any operations; and was dormant for the last two years---Enforcement department, dissatisfied with the response of the Auditor, imposed a penalty of Rs.10,000 on the Auditor---Validity---Annual accounts of the company for two years had shown that the company was not in operation---Director's reports had stated that the Management of the company had decided to keep the company dormant---Both facts which were material, were sufficient for the Auditor to express its opinion in the report; that the financial condition of the company casted significant doubt on the company's ability to continue as a going concern---Auditor's failure to modify the report, was violation of the mandatory provisions of S.255 of the Companies Ordinance, 1984, which required the Auditor to provide true and fair view of the affairs of the company---In absence of any reason to interfere with the impugned order, appeal was dismissed.

Saqib Bashir, FCA for Appellant.

Ms. Maheen Fatima, Director (Enforcement) and Amjad Iqbal Rao, Assistant Director (Enforcement) for Respondent through Video Link.

Date of hearing: 5th September, 2013.

2014 C L D 430

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Imtiaz Haider, Commissioner (SCD)

MD SADEQUL ISLAM, EX-CEO and 4 others---Appellants

Versus

DIRECTOR (ENFORCEMENT)/ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.45 of 2012, decided on 11th September, 2013.

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

----Ss. 226, 229 & 473--- Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Utilizing money received as security and deposit---Imposition of penalty--- Appeal--- Commission, while examining the annual audited accounts of the appellant company for relevant financial year, observed that an amount was shown against micro credit receivables on account of security deposits---Securities and Exchange Commission, vide letter advised the company to furnish evidence of compliance with the provisions of S.226 of the Companies Ordinance, 1984, whereby the company could not utilize any money received as security or deposit--- Commission after hearing authorised representative of the company and reviewing the written submission of the company, found that company had failed to provide any information/document evidencing compliance with provisions of S.226 of the Companies Ordinance, 1984 and imposed penalty on the company---Appeal had been filed by the company against impugned order---Record had shown that company did not receive any money as security and deposit from the borrowers as envisaged in S.226 of the Companies Ordinance, 1984---In fact 10% of the microcredit loan disbursed to each borrower was withheld and used for settlements against last installment---No obligation was or pledge given by the borrower "by furnishing the creditor (lender) with a resource to be used in case of failure in the principal obligation", which at the best could be treated as a 'margin' and in no way could be deemed to be a security or deposit---Title of account as security deposit used in the company's account had created the misimpression that it was a security deposit in terms of S.226 of Companies Ordinance, 1984 and was to be placed in a separate account---Company had removed the ambiguity in the annual accounts and corrected the head of account of "Amount withheld for settlement against last installments"---Impugned order was set aside, in circumstances.

(b) Words and phrases---

----'Security'---Defined and explained.

Black Law Dictionary rel.

Javed Panni, Chief Executive, M J Panni Associates for Appellants.

Ms. Bilal Rasul, Director (Enforcement) and Moeed Hassan, Assistant Director (Enforcement) for Respondent.

Date of hearing: 22nd July, 2013.

2014 C L D 449

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Zafar Abdullah, Commissioner (OED and TMF&CD)

KHALID MUMTAZ MALIK and 2 others---Appellants

Versus

DIRECTOR (ENFORCEMENT)---Respondent

Appeal No.36 of 2011, decided on 22nd May, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 208 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33--- Investments in associated companies and undertakings unauthorizedly---Appellant company passed special resolution for making investment up to Rs.120 million in associated undertaking---Record of the company showed that company had been making payment as advance to the associated undertaking, and that on the date limit of Rs.120 million was approved same had been exhausted as till that date the company had made a total advance of Rs.130 million to associated company; thus it had exceeded the approved limit of Rs.120 million---Show-cause notice was issued to the company for making additional investment in excess of approved limit of Rs.120 million---Authority being dissatisfied with response of the appellant company, imposed penalty of Rs.100,000 on each Director of the company---Validity---Special Resolution had clearly stated that the appellant company was authorized to invest an amount upto Rs.120 million; and the wordings of the Resolution had not restricted it to be a one-off investment or investment made within a time frame---In accordance with Special Resolution, the amount of 120 million could be given as advance to associated undertaking on a recurring basis as long as the total amount advanced did not exceed that limit upto Rs.120 million---In the present case, there were periodical repayments and the outstanding amounts had been brought down considerably---Net outstanding advance at close of the accounting period stood at Rs.59 million only; and at no point exceeded the approved limit of Rs.120 million---Authority, in circumstances, had wrongly assumed the recurring nature of the investment that the amount had exceeded by Rs.110 million to Rs.230 million---Threshold of Rs.120 million set out in the Special Resolution was never breached---No violation of S.208 of the Companies Ordinance, 1984, had been committed as alleged---Impugned order of the Authority was set aside in appeal, in circumstances.

M. Javed Panni, Corporate Consultant for Appellants.

Bilal Rasul, Director (Enforcement) and Alshah Ali Raza, Deputy Director (Enforcement), Departmental representatives.

Date of hearing: 9th April, 2013.

2014 C L D 467

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SCD) and Mohammad Asif Arif, Commissioner (Insurance)

Col. (R) MUHAMMAD ISHTIAQ KHAN, CEO/DIRECTOR ELIXIR LABORATORIES (PVT.) LTD.---Appellant

Versus

COMMISSIONER, COMPANY LAW DIVISION (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.14 of 2013, decided on 1st October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 263, 269 & 484---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.10, 17 & 33---Securities and Exchange Commission of Pakistan (Conduct of Business) Regulations, 2000, Regln.7---Investigation into the affairs of the company---Delegation of powers of functions of Registrar of Companies to Director (Enforcement) of the Commission---Securities and Exchange Commission ordered for investigation into the affairs of the appellant/company in the light of the complaint from one of the company's Directors---Commission delegated its powers and the powers of functions of Registrar of Companies to Director (Enforcement) of the Commission for the specific purpose of looking into the affairs pertaining to the company vide notification---Company filed a review appeal before the Commission alleging that said Director (Enforcement) was a close friend of one of the relatives of complainant--- Commissioner of the Commission had returned the review by the Company---Validity---Delegation by the Commission, could not be challenged before the Appellate Bench, as it was an administrative decision by the Commission---Appellate Bench under S.33(1) of Securities and Exchange Commission of Pakistan Act, 1997, could only hear appeal against the orders passed by a Commissioner, or an authorized officer of the Commission, and not against the orders of the Commission---Accusation of acquaintance of the Director of Commission with the relative of the complainant, without even naming the relative was far-fetched---Appellant's counsel was asked repeatedly about providing proof of the alleged acquaintance, but neither the name, nor the relationship was stated by him---Allegations on Director (Enforcement), were an attempt to abuse the process of adjudication under the garb of provision of law---Delegatee/Director (Enforcement) did not have a interest, as he neither himself was a party, or had direct connection with the litigation; he had no pecuniary interest in the case---Accusation of acquaintance with the relative of the complainant, without even naming the relative by appellant, had shown that delegatee/Director did not have a personal bias towards a party owing to relationship and there was no likelihood of prejudice by delegatee/Director---Ability of said Director to complete the assignment impartially and without any bias was beyond doubt---Appeal was dismissed.

All Pakistan Newspaper Society and others v. Federation of Pakistan and others PLD 2012 SC 1 distinguished.

Muhammad Saad Khan for Appellant.

Bilal Rasul, Director (Enforcement) and Hammad Javed, Deputy Director (Enforcement) for Respondent through Video Link.

Date of hearing: 4th September, 2013.

2014 C L D 510

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

UNIVERSAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 2nd August, 2013, decided on 26th December, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(c), 36, 63(1) & 156---Securities and Exchange Commission (Insurance) Rules, 2002, R.13(1)(b)---Admissible assets in excess of liabilities to meet the minimum solvency requirements---Company, in the present case, was not having admissible assets in excess of liabilities to meet the minimum solvency requirements, as prescribed through R.13(1)(b) of Securities and Exchange Commission (Insurance) Rules, 2002 and contravened the provision of S.36 of Insurance Ordinance, 2000---Company appeared to be insolvent as on December 31-2012, which was non-compliance of S.11 of the Ordinance---Default of S.36, read with S.11(1)(c) of Insurance Ordinance, 2000 having been established, penalty as provided under S.63(1) and S.156 of Insurance Ordinance, 2000 could be imposed on the company---Securities and Exchange Commission, instead of imposing the penalty, took a lenient view, condoned the penalty, due to the facts; (a) that company was solvent by the end of year 2011, and adherence of minimum solvency requirement at all times before notice; (b) that the Management of the company had adopted and undertook that the minimum solvency requirement as laid down by the laws should be fulfilled; and should take care to adherence of the applicable laws, rules in that regard in future; (c) that the company also took remedial measurement to come up to meet the shortfall by injecting new-equity; and disposing of its properties and investments in associated (companies) to bring the company's solvency position as required by law.

Amir Raza, Principal Officer of the Company.

Date of hearing: 28th October, 2013.

2014 C L D 549

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

SAUDI PAK INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 13th April, 2013, decided on 31st October, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11, 32, 36, 63(1) & 156---Securities and Exchange Commission (Insurance) Rules, 2002, Rr. 10 & 13---Failure to fulfil minimum insolvency requirement---Company under provisions of Ss.32 & 36 of Insurance Ordinance, 2000 and Securities and Exchange Commission (Insurance) Rules, 2002 should have assets in excess of minimum solvency requirement---Record showed that statement of assets of company for solvency as on December 31, 2011, total admissible assets of the company were Rs.309,163,682; and as per the statement of assets and liabilities as on December 31, 2011, the total liabilities were Rs.246,328,850---Net admissible assets, in circumstances, would be Rs.62,834,832---Minimum solvency requirement as prescribed under Rules (as on December 31, 2011) was Rs,50,000,000---Company, in circumstances, stood out to be solvent by an amount of Rs.12,834,832, which was less than Rs.50,000,000 and a violation of provisions of Insurance Ordinance and Rules---Default of the company having been established, penalty as provided under Ss.63(1) & 156 of the Insurance Ordinance, 2000 could be imposed upon the company; Commission, however, taking lenient view, condoned the penalty, observed that company's management should adopt and undertake that the minimum solvency requirement, as laid down under the law, would be fulfilled by December 31, 2013; and assure adherence of the applicable laws in that regard at all times in future; that the company to assure that it would follow the requirements of laws in letter and spirit; that company had already taken remedial measures to meet the shortfall by purchasing the 'PIBs' and 'T-Bills' carrying an aggregate amount of Rs.31.1 million.

Abdul Majeed, Director and Zeeshan Abdullah, Legal Counsel-Advocate High Court for Saudi Pak Insurance Company Ltd.

Dates of hearing: 7th May and 19th September, 2013.

2014 C L D 570

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

ASIAN STOCK FUND LIMITED: In the matter of

Show Cause Notice No.SCD-SD(Enf)/SFL/2013/59 dated 22nd March, 2013, decided on 31st May, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 282-D, 282-M(1) & 282-J(1)---Non-Banking Finance Companies and Notified Entities Regulations, 2008, Regln.55(5)---Excess exposures of Collective Investment Scheme in violation of Regulations---Company was managing two closed-end funds i.e. "Asian Stock Fund Limited (ASFL)"; and "Safeway Mutual Fund Limited (SMFL)"---Shareholders of the company, approved conversion of 'ASFL', from a closed end Fund (Investment Company) to an open end scheme---Regulation 55(5) of Non-Banking Finance Companies and Notified Entities Regulations, 2008, had provided that exposure of a Collective Investment Scheme to any single entity, would not exceed an amount equal to ten per cent of total net assets of the Collective Investment Scheme---ASFL's exposures in the shares of Bank, were in excess of the per party exposure limit of ten per cent as prescribed by Regln.55(5) of Non-Banking Finance Corporations and Notified Entities Regulations, 2008---Company was advised time and again by the Commission to regularize ASFL's excess exposures in line with the applicable regulatory framework, but the Management of the company remained adament, and ignored the Commission's advices in the matter---Such an act of the company tantamount to sheer disrespect of Non-Banking Finance Companies and Notified Entities Regulations, 2008, which had encouraged lawlessness in the Industry, which could not be allowed---Default committed by the company, was punishable under S.282-J(1) of the Companies Ordinance, 1984---Continuation of such default was known and wilful on part of the company---Law permitted to impose penalty up to Rupees fifty million, on such wilful contravention of Regulations, but the Commission taking lenient view of the matter, imposed penalty of rupees five hundred thousand only on the company---Members of the Investment Committee, were strictly warned to be careful in future, and abide by the prevailing regulatory framework in letter and spirit.

Nihal Cassim, Chief Executive Officer of Messrs Safeway Fund Limited (the AMC) and Asian Stock Fund Limited (also representing Messrs Safeway Fund Limited and Muhammad Turab Hasny, Financial Accountant) in attendance.

Ms. Tehmeena Khan, Chief Financial Officer of Messrs Safeway Fund Limited in attendance.

Date of hearing: 2nd May, 2013.

2014 C L D 588

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

PAKISTAN REINSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 5th July, 2012, decided on 12th June, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 234, 472 & 495--- Non-verification/non-reconciliation of the balances, and accounts of the company---Failure of the company to remove the external auditors' qualified opinion on the financial statements of the company---Section 234 of the Companies Ordinance, 1984, required that every balance sheet and profit and loss account of a company would give a true and fair view of the state of its affairs; and that all listed companies would follow such International Accounting Standards; and other standards in regard to the accounts, and preparation of the balance sheet and profit and loss accounts; as were notified for the purpose in the official Gazette by the Securities and Exchange Commission---Company, acted contrary to the requirements of S.234 of the Companies Ordinance, 1984, as due to non-verification/non-reconciliation of the balances, the accounts of the company did not give a true picture of the state of its affairs---After reviewing the Auditor's Report for relevant year, it appeared that company had committed default of the direction of the Commission issued under S.472 of the Companies Ordinance, 1984, for which the Commission could have initiated proceedings under S.495 of the Companies Ordinance, 1984---Default of the directions under S.472 of the Companies Ordinance, 1984, having been established, penalty as provided under S.495 of the Ordinance, could be imposed on the company and its Directors--- Commission taking lenient view, condoned the company due to the facts; that the company and its Directors had finally been successful in removing the external auditors' qualified opinion relating to un-re-conciliated balances from the accounts for relevant period; external auditors of the company had given a clean report on those financial statements; that company and its Directors had devised a strategy for avoiding any such qualification to appear in the auditors' reports, in future, by inclusion of the relevant clauses for early recovery of outstanding balances---Company was issued a stern warning that in case of similar non-compliance in future, a stronger action against the company, would be taken.

Mrs. Farzana Munaf, Chief Financial Officer, Shahzad Lodhi, Company Secretary and Ayaz Hussain M. Gad, Executive Director attended.

Dates of hearing: 14th September, 2012 and 7th May, 2013.

2014 C L D 615

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

TAKAFUL PAKISTAN LIMITED: In the matter of

Show Cause Notice issued dated 13th February, 2013, decided on 8th May, 2013.

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

----Ss. 34, 46(1)(b), 51 & 156---Securities and Exchange Commission (Insurance) Rules, 2002, Part B of Annexure II---Accounting Regulations, Reglns. Nos.3(1) & 16(1)(a)--- Failure to prepare and deliver to the Commission annual statutory account---Insurance company was required to state its available for sale investment at lower of cost or market value in terms of the provisions of Regln.16(1)(a) of Accounting Regulations and S.34 of Insurance Ordinance, 2000 which had been violated as the company had stated; its available for sale investments at the prevailing market value, on the date to which the statement of assets for solvency was made up---Default of S.34 of Insurance Ordinance, 2000, read with Regln.16(1)(a) of the Accounting Regulations, having been established penalty as provided under S.156 of Insurance Ordinance, 2000 could be imposed on the company or its Directors---Commissioner, instead of imposing penalty, taking lenient view condoned the company due to the fact that the effect of each contravention had not grossly plunged the company into insolvency---Company was issued a stern warning that in case of similar non-compliance in future, a stronger action would be taken against the company.

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

----S. 34--- Securities and Exchange Commission (Insurance) Rules, 2002, Part B of Annexure II---Accounting Regulations, Regln. No.16(1)(a)---Duties of the Directors---Directors, in addition to the day-to-day running of the company and the management of its business, also had some 'fiduciary' duties, which were 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 require them to be vigilant; and perform their duties with due care and prudence--- Directors were supposed to be well aware of their legal obligation in connection with the statutory requirements of S.34 of Insurance Ordinance, 2000 read with Regln.16(1)(a) of the Accounting Regulations.

Taimur Mirza for Takaful Pakistan Limited.

Date of hearing: 4th April, 2013.

2014 C L D 651

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

TAKAFUL PAKISTAN LIMITED: In the matter of

Show Cause Notice dated 13th February, 2013, decided on 15th May, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 2(vi), (xiv), 54 & 156---Failure of Company to furnish certified copy of minutes of the proceedings of general meeting---Duties of Directors of the company---Scope---Company under provisions of S.54 of Insurance Ordinance, 2000, was to furnish to the Commission a certified copy of the proceedings of every general meeting as entered in the Minutes Book of the insurer within thirty days from the holding of the meeting---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 of the Company were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care---In the present case, the Directors had failed to perform their duties with due care and prudence---Directors were supposed to be well aware of their legal obligations in connection with the statutory requirements of S.54 of Insurance Ordinance, 2000, it could be legitimately inferred, in circumstances, that default had been committed, and penalty as provided under S. 156 of the Insurance Ordinance, 2000 could be imposed onto the company and/or its Directors---Commission, taking lenient view, condoned the company due to the fact that the company had inadvertently filed the minutes of the Annual General Meeting for relevant period later on.

Taimur Mirza for Takaful Pakistan Limited.

Date of hearing: 15th May, 2013.

2014 C L D 686

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

CONTINENTAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 14th February, 2013, decided on 27th June, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11, 28, 39, 63, 156 & 158---Raising of paid-up share capital through fictitious transactions---Ministry of Commerce vide notification, prescribed the minimum amount of paid-up capital required for the insurers registered under Insurance Ordinance, 2000---Paid-up share-capital was raised by the company through fictitious transactions---Company, in circumstances, had essentially contravened the provisions of Ss.11(1), 28, 39 of Insurance Ordinance, 2000---Company had also grossly misstated that amount of the paid-up share-capital as on 13-12-2011 for which action under Ss.63(1), 156 & 158 of Insurance Ordinance, 2000 could be taken against the company and/or its Directors and Chief Executive---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 required to be well aware of their legal obligations, and the company's legal obligation in the matter along with the consequences of the said default---Company's counsel had also admitted the default---Commission, in exercise of the powers under Ss.156 & 158 of the Insurance Ordinance, 2000, instead of imposing penalty on to the company and/or its Directors, took a lenient view, condoned the company due to the fact that, the company had completed necessary requirements; and the property against the shares of company had been transferred into the name of the company; and the title of property also transferred into the company's name---Company was issued a stern warning that in case of similar non-compliance in future, a strong action would be taken against the company.

S.M. Suhail, Company's Representative.

Date of hearing: 29th April, 2013.

2014 C L D 708

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

Messrs ERNST AND YOUNG FORD RHODES SIDAT HYDER, CHARTERED

ACCOUNTANTS: In the matter of

Show Cause Notice No.SCD-SD(Enf)/DCML/2013, dated 29th April, 2013, decided on 26th July, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 282-B, 282-J(1) & 282-M---Non-Banking Finance Companies and Notified Entities Regulations, 2008, Sched.V, clause 7---Failure of 'External Auditors' to report to unit holders any material fact/event which was detrimental to the interest of unit holders---"External Auditors", who were responsible to the unit holders, and their fees were charged to the funds, were expected to perform their duties in the interest of unit holders of the funds; and to report to them any material fact/even which was detrimental to their interest---External Auditors, failed to highlight the risk of related party's transactions which were indicative of possible fraud on the part of Management---External Auditors, had failed to account for the impact of; non-disclosure of related party/connected person's transactions in the financial statements for the relevant year; non-disclosure of necessary information of related parties/connected persons transactions for user to understand the potential effect of those transactions in the financial statements for the relevant year---External Auditors, were well aware of the requirements of prevailing regulatory framework and International Accounting and Auditing Standards; which required Auditors to recognize fraud risk factors arising out of related party's relationship and transactions; and report to the user of the report---Securities and Exchange Commission, taking lenient view did not impose penalty on External Auditors and instead strictly warned to be cautious in future; and to ensure that all the related parties/connected persons; and their transactions were disclosed appropriately in the financial statements stringently in line with the requirements of prevailing regulatory; and to perform their duties in the interest of unit holders; and report to them any material fact/event which could be detrimental to the interest of the unit holders; or having impact on the decision making of users of financial statements, to avoid any expropriation of the assets by the related parties/ connected persons.

Omer Chugtai, Engagement Partner Messrs Ernst and Young Ford Rhodes Sidat Hyder attended at Ist hearing.

Arslan Khalid, Partner Messrs Ernst and Young Ford Rhodes Sidat Hyder attended at Ist hearing.

Salman Talibuddin, Advocate (Kabraji and Talibuddin) attended at Ist hearing.

Omer Chugtai, Engagement Partner Messrs Ernst and Young Ford Rhodes Sidat Hyder attended at 2nd hearing.

Arslan Khalid, Partner Messrs Ernst and Young Ford Rhodes Sidat Hyder attended at 2nd hearing.

Aftab Salahuddin, Executive Director Messrs Ernst and Young Ford Rhodes Sidat Hyder attended at 2nd hearing.

Salman Talibuddin, Advocate (Kabraji and Talibuddin) attended at 2nd hearing.

Dates of hearing: 13th and 18th June, 2013.

2014 C L D 755

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

CONTINENTAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 14th February, 2013, decided on 27th June, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 76 & 156---Engaging of insurer in misleading or deceptive conduct---Website of the Insurance Company, gave an impression to the general public that the company was allowed to underwrite products related to property insurance, motor insurance, health insurance by displaying certain deceptive and misleading content regarding those products into the said website of the company, whereas the company was only allowed to underwrite/transact credit and suretyship class of business vide certificate of Registration dated May 28, 2010---Said website of the company stated "future products subject to approval of competent authority", and the company had not approached the Commission to allow other classes of insurance business as was specified in Insurance Ordinance, 2000---Said disclosure regarding the "future product" on the website of the company could have been misleading for the public at large, and chances were that the company could have underwritten policies which could fall under other classes of business for which company was not permitted to underwrite---Company, in circumstances, had contravened the provisions of S.76(1) of the Insurance Ordinance, 2000, which attracted the provisions under S.76(5) or S.156 of the Ordinance---Established default of S.76 of Insurance Ordinance, 2000 had taken place as the company and its Directors were required to ensure presence of non-deceptive information on the company's website---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 of the company 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, 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 S.76 of Insurance Ordinance, 2000, it could be legitimately inferred that the default was committed---Penalty as provided under S.156 of the Insurance Ordinance, 2000, could be imposed on the company and/or its Directors for such default---Commission, taking lenient view, instead of imposing penalty on the company and/or its Directors condoned the company due to the fact that the company had made necessary corrections in the information available on its website; and that the company had not underwritten any policies other than those which fell under the definition of "credit and suretyship class" of business---Company, was issued a stern warning that in case of similar non-compliance in future, a strong action against it would be taken.

S.M. Suhail, Company's Representative.

Date of hearing: 29th April, 2013.

2014 C L D 791

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

ASIAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED: In the matter of

Show Cause Notice dated 22nd March, 2013, decided on 21st June, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 46 & 156---Securities and Exchange Commission (Insurance) Rules, 2002, R.16, Annexure-II, Regln.16(1)(b)---Contravention of requirements of the Regulations relating to the recording and reporting of investment properties---Company had failed to ensure compliance with the provisions of Regln.16(1)(b) by not stating their Investment properties and cost thereby not following the Cost Model under IAS 40, as required under said Regulations---Company had taken the Commission's earlier reservation on the same issue casually and unconcernedly, which were communicated to the company vide the Commission's letter---Impact of the company's treatment regarding its investment properties had resulted in the overstatement of the company's balance sheet footings by amount of Rs.8,395,000 which was an established default of Regln.16(1)(b) of the Regulations---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 said 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---In the present case, the Directors of the company 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 the Regln.16(1)(b) of the Regulations, therefore it could be legitimately inferred that the default was committed knowingly and wilfully---Commission in exercise of the powers under S.156 of the Insurance Ordinance, 2000, imposed a fine of Rs. one Hundred Thousands (Rs.100,000) on the company for the default---Company was directed to reverse the treatment and book their investment properties using Cost Model under 1AS 40, in order to ensure compliance of Regln.16(1)(b), failing which a strong action against the company and its Directors and Chief Executive Officer, would be taken.

Irfan Ilyas, FCA and Tahir Mahmood, Manager, the Asian Mutual Insurance Co. (Gte) Limited.

Date of hearing: 25th April, 2013.

2014 C L D 862

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

ASKARI GENERAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 12th April, 2013, decided on 17th July, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 227 & 229---Failure to comply with the provisions of S.227 of Companies Ordinance, 1984---Company, under provisions of S.227 of the Companies Ordinance, 1984 was required to transfer all money or securities, deposited by its employees in pursuance of their contracts of service with that company, within fifteen days from the date of such deposit in a special account to be opened in a Scheduled Bank and no portion of such amount, could be utilized by that company, except in the case of breach of employment contract on the part of employees as provided in that contract, after notice to the employees concerned---Company had kept separate bank account for Provident Fund, but the payments were made through company's Bank account which was used for normal operation---Company, in circumstances, had mixed its normal operations with the Provident Fund Account--- Spirit and purpose of the Companies Ordinance, 1984, in respect of keeping a separate Bank Account of the Provident Fund, was to safeguard the money deposited by the employees in that respect and to foster the transparency and traceability of the payments/deposits so made in the Provident Fund account---Company by depositing cash in the Provident Fund, had violated the essence of the provisions of S.227 of the Companies Ordinance, 1984 and the purpose of maintaining separate Bank Account of the Provident Fund, had failed---Bank Statement of the Provident Fund for relevant period showed that there had been certain withdrawals of huge amounts, which did not appear to be withdrawals as a result of termination of the employment contracts---Company had contravened the provisions of S.227 of the Companies Ordinance, 1984 by using/withdrawing amount from the Provident Fund account in the normal course of operations, for which penal action provided under S.229 of Companies Ordinance, 1984 could be taken---Company and its Directors had failed to perform their duties with due care and prudence---Securities and Exchange Commission, under S.229 of the Companies Ordinance, 1984, taking lenient view, condoned the company, as the act of transfer of the adjusted contribution amount in the Provident Fund, had not harmed the interests of employees of the company and company did not appear to have any malicious intent---Company was advised to ensure that no portion of the balance payable to the Provident Fund be utilized, adjusted or deducted at any cost, and at any point of time and all such balance be transferred and/or paid to the Provident Fund account in strict pursuance of S.227 of Companies Ordinance, 1984.

Suleman Khalid, Company Secretary Askari General Insurance Company Limited.

Date of hearing: 10th June, 2013.

2014 C L D 913

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

Messrs PAKISTAN PACKAGES (PVT.) LTD.---Appellant

Versus

Messrs ADAMJEE INSURANCE COMPANY LIMITED---Respondent

Appeal No.10 of 2012, decided on 7th June, 2013.

Insurance Ordinance (XXXIX of 2000)---

----S. 130(2)---Damage to stock of insured due to monsoon rains---Dispute regarding determination of loss---After seven months of having insurance policy by the insured, monsoon rains lashed the city, resultantly, damages were caused to factory stock of insured who lodged claim with the insurance company, which appointed surveyor to survey the loss caused to the insured---Insurance company firstly offered only 10% of the claim amount to the insured, which was not acceptable to him---Insured, claimed that 70% of the assessed loss should be paid to him---Subsequently insurance company enhanced its offer to the 20% of the assessed amount, but same was not accepted by the insured---Said situation led the Appellate Authority to nowhere, nor in determining the magnitude of loss falling under the insurance policy, nor in effecting on amicable settlement; as both parties lacked the substance to establish their respective assertions---Having no other way, but to act in accordance with the conclusion reached by the Ombudsman, insured/appellant party was at liberty to look for redressal at some other judicial forum under the law.

Zafar Khokhar, Nadeem Haider (A.-G.) and Zaheer-ul-Haq for Appellant.

Jameel Khan, General Manager and Yahya Ajmal, Manager for Respondent.

Date of hearing: 22nd November, 2012.

2014 C L D 1026

[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) 2004/1636, dated 6th November, 2012, decided on 19th April, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Selling shares of other company---Ready Market trading data of Stock Exchange for relevant period had revealed that company had sold shares of other corporation---Chief Operating Officer of the company, had accepted that it was a mistake on the part of the company and he prayed that Securities and Exchange Commission should take a lenient view of the matter---Company was one of the well-reputed companies of Pakistan, and belonged to a very well known financial and industrial group---Company was expected to be conversant and to fully comply with the regulatory requirements---Company was established to have sold shares of other corporation in the closed period violating clause 35(xxii) of Listing Regulation of (Karachi) Stock Exchange---Violation of the Rules and Regulations was a serious matter, which would entitle the Commission to impose penalty on the company---Commission taking a lenient view, instead of imposing penalty, strictly warned the company to abstain from trading in such manner in future, failing which appropriate action would be taken---Company was further directed to ensure that full compliance be made of all rules, regulations and directives of the Commission, in future for avoiding any punitive action under the law.

Sulaiman S. Mehdi, Chief Operating Officer and Faisal Nadeem, Chief Financial Officer representing CYAN Limited.

Muhammad Ali, Deputy Director assisting the Director/HOD (SMD).

Date of hearing: 19th November, 2012.

2014 C L D 1057

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

SUI NORTHERN GAS PIPELINES LIMITED: In the matter of

Show Cause Notice No.1(3) SNGP/MSW/SMD/2013 - 002 dated 26th March, 2013, decided on 10th May, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Failure to disclose relevant price sensitive material information---Meeting of the Board of Directors of the company was held to consider the financial results for the relevant period---Company conveyed the financial results to the Stock Exchange---Same was not considered satisfactory as it contained no cogent reason, explanation, evidence or justification for not disclosing the relevant price sensitive material information---For efficient, fair and transparent market, two principles must apply; companies need to release relevant information as soon as it was available; and all the investors who want to deal in shares, should have access to the same information at the same time---For the protection of the investor's interest, a listed company must communicate information to shareholders and potential shareholders in such a way as to avoid the creation or continuation of a false market---Company had failed to inform the investors in time about impact on financial health of the company, if the financial statement had been prepared in accordance with the decision of Oil and Gas Regulatory Authority (OGRA)---Company had also failed to disseminate the factual position i.e. financial statements were prepared, presented and approved by the Board of Directors of the company on the basis of a stay granted by High Court---Company had failed to conform to the provisions of Securities and Exchange Ordinance, 1969 by failing to comply with the provisions of Listing Regulations made thereunder--- Company was liable for the penalty as defined in S. 22 of the Securities and Exchange Ordinance, 1969---Commission taking lenient view imposed a penalty of Rs.1000,000 (one million) on the company and directed the company that full compliance be made of all orders, Regulations and directives of the Commission in the future for avoiding any serious punitive action under the law.

Amer Tufail, Deputy Managing Director (Services), SNGPL and Wajiha Anwar, Company Secretary, SNGPL representing the Sui Norther Gas Pipelines Limited (SNGPL).

Muhammad Ghufran, Deputy General Manager, KSE representing Karachi Stock Exchange Limited (KSE).

Osman Syed, Deputy Director, SECP assisting the Director/HOD (MSRD).

Date of hearing: 11th April, 2013.

2014 C L D 1113

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

NATIONAL REFINERY LIMITED (NRL) AND OTHERS: In the matter of

Show Cause Notice No.1(15) NRL/MSW/SMD/2013 - 001, dated April 23, 2013, decided on 30th May, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Listing Regulations of Karachi Stock Exchange, Regln.16(1), Clause 35(xx)---Failure to disclose material information---Company vide its letter conveyed its financial results to the Karachi Stock Exchange for relevant period---Major difference in the earning and profitability was observed in the said announcements of the company---Company had failed to disclose the requisite price-sensitive material information as envisaged in clause 35(xx) of the Listing Regulations thus did not comply with the provisions of Regulation 16(1) of the Listing Regulations of Karachi Stock Exchange---Effect---For efficient, fair and transparent market, two principles must apply; companies need to release relevant information as soon as it was available; and all the investors who wanted to deal in shares, should have access to the same information at the same time---For the protection of the investor's interest a listed company must communicate information to shareholders; and potential shareholders in such a way as to avoid the creation of false market---When an announcement was to be made a company must take all reasonable care to ensure that any information it disseminates to the market was not misleading, false or deceptive; and that it does not omit anything that was likely to affect the price of the scrip---Company had failed to disclose the requisite price-sensitive material information as envisaged in the Listing Regulation---Management of the company was expected to be conversent in and fully comply with regulatory requirements---Company was established to have failed to conform to the provisions of Securities and Exchange Ordinance, 1969 by failing to comply with the provision of Listing Regulations made thereunder---Taking a lenient view, Commission had imposed a penalty of Rs.500,000 on the company, with direction to ensure that full compliance be made of all rules, regulations and Directives of the Commission in future for avoiding any serious punitive action under the law.

Muhammad Irfan Amanullah, Chief Executive of NRL representing the National Refinery Limited.

Nouman Ahmed Usmani, Company Secretary, NRL.

Muhammad Ghufran, Deputy General Manager, Karachi Stock Exchange Limited (KSE).

Osman Syed, Deputy Director, SECP assisting the Director/HOD (MSRD).

Date of hearing: 7th May, 2013.

2014 C L D 1127

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

ACE SECURITIES (PRIVATE) LIMITED, BROKER/TREC HOLDER OF KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.SMD-MSRD-C&IW/10-1(62)/2013, dated March 27, 2013, decided on 4th June, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6 & 22---Brokers and Agents Registration Rules, 2001, R.8---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, R.4---Inspection of Books of accounts and other documents of the company---Failure of the company to provide essential information---Effect---Securities and Exchange Commission, in exercise of powers under subsection (1) of S.6 of Securities and Exchange Ordinance, 1969, and R.4 of Stock Exchange Members (Inspection of Books and Record) Rules, 2001 appointed Inspectors to conduct inspection of Books of accounts and other documents required to be maintained by the company---Company failed to provide essential information/documents/details as required by Inspection team---Non-provision of required information/ documents was the violation of Rules and Regulations; and was serious matter as provided in S.6(3) of Securities Exchange Ordinance, 1969 and R.8 of Brokers and Agents Registration Rules, 2001---Company had failed to comply with the requirements of the Code of Conduct laid down in Third Schedule of Brokers and Agents Registration Rules, 2001---Violation of the Rules and Regulations by the company was a serious matter which would entitle the Commission to even suspend the Registration of the company---Commission elected not to exercise said power, and taking a lenient view in the matter, in exercise of the power under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.100,000---Commission advised the company to take immediate measures to provide the required information and documents---Company was also strongly directed to fully cooperate and comply with the directions of the Commission in letter and spirit.

Muhammad Asif Alam, Manager Settlement, Jabran A. Sattar, Assistant, Gul Khan Assistant representing ACE Securities (Private) Limited.

Muhammad Tanveer Alam, Joint Director, Muhammad Tanveer, Deputy Director and Kapeel Dev, Assistant Director assisting the Director/HOD (MSRD).

Date of hearing: 16th May, 2013.

2014 C L D 1210

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

AAMIR: In the matter of

Show-Cause Notice No.1(14)ISMAILIQBAL/MSW/SMD/ 2013/01, dated 23rd April, 2013, decided on 17th June, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15E--- Insider Trading--- Respondent, traded extensively in shares of a number of companies, and his trading was conducted through a brokerage company, which was holding Broker/Trading Right Entitlement Certificate of Stock Exchange---Trading of the respondent was also carried out significantly in co-relation with the trading of the Foreign clients of another broker---Information obtained from said other brokerage company, had revealed that another person, the operator in said other brokerage company was responsible for execution of the orders placed by Foreign clients---Said person being an insider had passed on/disclosed the inside information relating to trading orders received from foreign clients to the respondent---Based on said inside information, respondent indulged in insider trading---Said other person was an insider by virtue of his position and employment at the other brokerage company, whereas he gave material non-public information relating to trading orders of foreign clients to the respondent---Respondent, indulged in 'insider trading' in his account on the basis of the inside information, and earned significant amount of profit---In view of the apologetic submission of his offence, the extent of remorse experienced by him, personal circumstances of the respondent; and the hardships bore by his family, due consideration to the prayer of the respondent had been made; and a lenient view in the matter had been taken---Commission, in exercise of powers under S.15 E(1) of Securities and Exchange Ordinance, 1965, imposed on respondent a fine of Rs.1,100,000 (Eleven Lakh only) for contravention of subsection (1) of S.15-A of Securities and Exchange Ordinance, 1969---Commission had also taken enforcement action against said informer and imposed fine on him for passing on/disclosing inside information pertaining to trading orders of foreign clients to the respondent under S.15-E of Securities Exchange Ordinance, 1969.

Aamir Respondent in person.

Ms. Tayyaba Nisar, Assistant Director assisting the Director (MSRD).

Date of hearing: 8th May, 2013.

2014 C L D 1223

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

ECOPACK LIMITED: In the matter of

Show-Cause Notice No.1(4) ECO/MSW/SMD/2013 dated 26th March, 2013, decided on 6th May, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Listing Regulations of Karachi Stock Exchange, Regln.17---Delay in communicating financial results of the company---Meeting of the Board of Directors of the company was held to consider the financial results of the company for the half year ended on December 31, 2012, but the company communicated its financial results to the Karachi Stock Exchange, a day after the meeting of the Board---Karachi Stock Exchange vide its letter, communicated to the company that its letter intimating closed period was not received timely---Company was required to communicate the reasons for delay in communicating the financial results, but no response to that was received from the company---Company was established to have contravened the provisions of the Listing Regulations of the Karachi Stock Exchange and requirement stated in the Correspondence Manual of Karachi Stock Exchange---Company was expected to be conversant and fully complied with the regulatory requirement---Security Exchange Commission in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, and taking lenient view imposed penalty of Rupees Twenty Five Thousands, with direction to the company to ensure that care and caution be exercised while announcing any price sensitive information; and to ensure that full compliance be made of all rules, regulations and directives of the Commission in future for avoiding any punitive action under the law.

M. Javed Panni, CEO, MJ Panni and Associates representing Ecopak Limited.

Ms. Najia Ubaid, Deputy Director (MSRD) assisting the Director/HOD (MSRD).

Date of hearing: 25th April, 2013.

2014 C L D 1273

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

FAIRTRADE CAPITAL SECURITIES (PVT.) LIMITED THROUGH CHIEF EXECUTIVE OFFICER: In the matter of

Show-Cause Notice No.MISC/MSW/SMD/1(5)/2004/1738, dated 7th June, 2013, decided on 28th June, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Brokers and Agents Registration Rules, 2001, Third Sched., Code of Conduct clause D(2)---Failure to deposit amount of penalty---Securities and Exchange Commission, vide its order imposed a penalty of Rs.50,000 on the company, with direction to deposit said amount of penalty in the account of the Commission, not later than 30 days from the date of order; and furnish copy of the deposit challan to the Commission---Company, instead of complying with the order of the Commission, filed appeal before the Appellate Bench in terms of S.33 of the Securities and Exchange Commission of Pakistan Act, 1997---Said appeal was dismissed and order of the Commission was upheld---Company had failed to provide the desired information after repeated reminders---Company, in circumstances, had contravened clause D(2) of Code of Conduct set forth under the Third Schedule of Brokers and Agents Registration Rules, 2001---Conduct of the company of flagrant contravention of the direction of the Commission, was appalling and concerning---Broker holding a certificate of registration, had to all times abide by the Code of Conduct, specified in the Brokers Rules---Each and every market participant was bound to comply with the general and specific directions issued by the Commission---Violation of the Rules and Regulations, was serious matter---Commission taking a lenient view, strictly warned the company to comply with its direction, in future, failing which appropriate action would be taken---Company was further directed to ensure that full compliance be made of all rules, regulations and directors of the Commission in future for avoiding any punitive action under the law.

Kamran Shehzad, Head of Compliance representing Fairtrade Capital Securities (Pvt.) Limited.

Muhammad Ali, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 20th June, 2013.

2014 C L D 1402

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

MESSRS PEOPLES FINANCIAL SERVICES (PVT.) LTD.: In the matter of

Show Cause Notice No.4/BRC-246/PMEX/SMD/2012 dated 19th June, 2013, decided on 17th July, 2013.

Commodity Exchange and Futures Contract Rules, 2005---

----Rr. 11 & 12(4)---Application for grant of certificate of registration as a Broker---Submission of false experience certificate--- Applicant submitted application to the Securities and Exchange Commission and it was observed that applicant had submitted experience certificate, provided by a company stating therein that applicant had more than five years of experience in the relevant field---Further probe, revealed that said certificate was fake/false---Applicant had nothing to present in its defence, and was watchful of the fact that the certificate provided by him was false---Applicant lacked the required experience in the business of buying, selling and dealing in commodities, commodity futures contract or other securities as required under R.11(1) of Commodity Exchange and Futures Contract Rules, 2005--- Application of the applicant was refused in terms of R.12(4) of Commodity Exchange and Futures Contract Rules, 2005---Applicant was strictly prohibited to undertake any regulated financial activity, unless registered with the relevant authority.

No one appeared on behalf of the Respondent on the scheduled dates and time.

Dates of hearing: 1st and 15th July, 2013.

2014 C L D 1431

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

INTERMARKET SECURITIES LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.4(BRK-170)SE/SMD/03, dated 14th May, 2013, decided on 31st May, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 18 & 22---Brokers and Agents Registration Rules, 2001, R. 8--- Registration as Broker--- Filing false experience certificate--- Applicant, applied for registration as broker and provided an experience certificate issued by a company---Prima facie, certificate provided by the company to the applicant was false---Securities and Exchange Commission, examined the facts, evidence and documents on record, in written and verbal submissions made on behalf of the company---Certificate provided by the company was established to be false and misleading---Violation of S.18 of Securities and Exchange Ordinance, 1969, was a serious matter, which invoked penalty under S.22 of the Ordinance---Wrong submission of documents, also attracted the provisions of Brokers Rules relating to suspension---Considering that the violation was committed for the first time, and apparently not wilful, Commission opted to take a lenient view on the subject matter, and decided not to impose penalty as provided---Company was strictly warned to abstain from giving any false/ misleading information/statement and/or certificate, in future.

Azneem Bilwani, Chairman present at hearing.

Date of hearing: 22nd May, 2013.

2014 C L D 1441

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

FIRST NATIONAL EQUITIES LIMITED (FNEL): In the matter of

Show Cause Notice No.4/BRK-176/SE/SMD/2004, dated 19th April, 2013, decided on 6th June, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 18 & 22---Brokers and Agents Registration Rules, 2001, Rr.5(4), 7(2) & 8---Securities and Exchange Rules, 1971, R.3(b) & Sched.--- Renewal of certificate of registration as broker, application for---Overstating Net Capital Balance (N.C.B.)--- Company submitted application for renewal of certificate of registration as broker---Calculation of Net Capital Balance (NCB) as on 31-12-2012, submitted by the company had major irregularities, as same was not calculated in accordance with Third Sched. of the Securities and Exchange Rules, 1971, and prima facie, was overstated---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 particular in violation of S.18 of Securities and Exchange Ordinance, 1969, and violation of R.8 of Brokers and Agents Registration Rules, 2001---Company was also penalized previously for the same violation---Violation of the Rules and Regulations, was a serious matter, which entitled the Commission to even suspend company's registration---Commission elected not to exercise said power, considering that decision of suspension might increase the systemic risk in the market---Suspension of the company would also have serious adverse impact on other two brokerage houses of the company's group and actual impact would be much greater---Commission taking lenient view, decided to give another opportunity to the company in the matter and renewed the certificate of Registration of the company, with the condition that company would be required to submit a revised Net Capital Balance (NCB) certificate within three months in strict compliance with the Third Schedule of Securities and Exchange Rules, 1971---In view of Regulatory violation, Commission in exercise of the powers under S. 22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.500,000 with direction to the company to ensure that full compliance be made of all Rules, Regulations and directives of the Commission in future for avoiding any punitive action under the law.

Ali Aslam Malik, Chief Executive Officer, FNEL and Syed Shahab Qutub, Advocate representing FNEL.

Shafqat Ali, GM/Acting Chief Regulatory Officer, KSE representing KSE.

Hasnat Ahmad, Director MSRD and Ms. Saima Shafi Rana, Deputy Director assisting the Director/HOD (MSRD).

Dates of hearing: 6th May and 15th May, 2013.

2014 C L D 1468

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRC)

MUHAMMAD HASHIM, MEMBER OF PAKISTAN MERCANTILE EXCHANGE LIMITED: In the matter of

Show Cause Notice No.4/BRC-252/PMEX/SMD/2013 dated 26th April, 2013, decided on 22nd May, 2013.

Commodity Exchange and Futures Contracts Rules, 2005---

----R. 12(4)---Application for grant of certificate of registration as "broker"--- Securities and Exchange Commission issued show cause notice to the applicant on the ground that applicant had mis-stated with regard to his experience and advised him to provide a valid experience certificate---Experience certificate submitted by the applicant had provided enough evidence of his experience of dealing in securities and the business activities which also had supported experience of applicant in commodities trading---In view of the submissions and documents on record, applicant had provided sufficient evidence to the Commission against show-cause notice issued to him--- Show-cause notice, stood disposed of, in circumstances.

Muhammad Hashim present at hearing.

Murtaza Abbas (Deputy Director - MSRD) representing MSRD.

Date of hearing: 15th May, 2013.

2014 C L D 1489

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

ACE SECURITIES (PVT.) LIMITED THROUGH CHIEF EXECUTIVE OFFICER: In the matter of

Show Cause Notice No.1(2) SMD/MSRD/C&IW/2103 dated 22nd August, 2013, decided on 12th September, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Failure to deposit amount of penalty as per direction without any justification---Securities and Exchange Commission had imposed a penalty of Rs.100,000 on the company with direction to deposit said amount in the account of the Commission not later than 30 days from the date of order---Company failed to comply with order of the Commission and vide letter informed the Commission that company would like to file an appeal in the Appellate Bench of the Commission against said order---Company which had failed to comply with the direction of the Commission, had contravened clause D-1(2) of the Code of Conduct, setforth under the Third Schedule and R.12 of Brokers and Agents Registration Rules, 2001---Conduct of the company contravening the direction of the Commission was unacceptable and concerning---Broker holding a certificate of registration had to all times abide by the Code of Conduct specified in the Brokers Rules, 2001---Each and every market participant was bound to comply with the general and specific directions issued by the Commission---Contravention of the direction of the Commission and failure to comply with the Rules and Regulations by the company was not proper---Violation of the Rules and Regulations was serious matter---Taking a lenient view, company was strictly warned to comply with the direction of the Commission in future, failing which appropriate action would be taken against it.

Muhammad Asif Alam, Manager Settlement and Jabran A. Sattar, Assistant representing ACE Securities (Pvt.) Limited.

Muhammad Tanveer Alam, Joint Director assisting the Director/HOD (MSRD).

Date of hearing: 6th September, 2013.

2014 C L D 1509

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Zafar Abdullah, Commissioner (SSD, OED, SED & LLGCD)

Messrs CLIMAX ENGINEERING COMPANY LIMITED---Appellant

Versus

HEAD OF DEPARTMENT (ENFORCEMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.13 of 2013, decided on 18th June, 2013.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss. 231 & 263---Appeal against interim order, competency of---Inspection of the books of account and papers of the company, was conducted under the order of Securities and Exchange Commission, under provisions of S.231 of the Companies Ordinance, 1984, to verify the sale transaction of land of the company; and to verify the loan from Directors and sponsors---Transaction with respect to sale of land, prima facie, cast serious doubts on the legitimacy of transactions/activities, and had necessitated further investigation into the affairs of the company--- Authorities, in exercise of powers conferred under the provisions of S.263 of the Companies Ordinance, 1984, appointed Inspectors to conduct investigation on all aspects of the company; and to furnish report along with supporting documents to the Commission within 30 days from the date of the order--- Validity--- Impugned order was an interim order to investigate the affairs of the company, with no penal repercussions for the company---Section 33(1)(d) of Securities and Exchange Commission of Pakistan Act, 1997, had provided that no appeal would lie against an interim order, which did not dispose of the entire matter---Appeal against order of investigation, being an interim order, was not maintainable, which was dismissed, in circumstances.

Attock Refinery Ltd. v. Executive Director (Enforcement) and Monitoring Division, SECP and another PLD 2010 SC 946 rel.

Hammad Raza Zaidi and Nasir Altaf for Appellant.

Ms. Amina Aziz, Director (Enforcement) and Rohail Ahmed Abbasi, Assistant Director (Enforcement) Departmental representative.

Date of hearing: 17th May, 2013.

2014 C L D 1533

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS AVAIS HYDER LIAQUAT NAUMAN, CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No. 4(BRK-148)SE/SMD/02 dated 23rd January, 2013, decided on 6th May, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 1971, R.2(d) & Third Sched.---Irregularities in calculation of "Net Capital Balance (NCB)"---Inspection report submitted by the Inspection Team, had highlighted major irregularities in calculation of 'Net Capital Balance (NCB)'---"Net Capital Balance" appeared to be not in accordance with Third Schedule of Securities and Exchange Rules, 1971---After examining the written and verbal submissions made on behalf of the company, it was observed that company had failed to perform its professional duty with due care, and, had shown negligence in verifying the calculation and certifying the Net Capital Balance---Amount of securities purchased for clients appearing in NCB, was required to be verified with sufficient appropriate evidence---Company had failed to obtain sufficient evidence and did not apply the necessary prudence in certifying the NCB, and it was not aware about the significance of NCB, the relevant Rules, Regulations, methods of certification and the systemic risk involved as a result of overstatement---On account of professional misconduct and negligence in performing duty by the company with due care, competence and diligence, Commission in exercise of the powers under S.22 of Securities and Exchange Ordinance, 1969 imposed a penalty of Rupees Twenty Thousand on the company, with direction to the company to ensure full compliance with Securities and Exchange Ordinance, 1969, Rules, Regulations and directives of the Commission in future.

Syed Naveed Abbas, Partner and M. Jamil Akhtar, Director present at the hearing.

Ms. Saima Shafi Rana, Deputy Director-MSRD representing MSRD.

Date of hearing: 4th April, 2013.

2014 C L D 1562

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

METROPOLITAN STEEL CORPORATION LIMITED: In the matter of

Show Cause Notice No.1(12)METRO/MSW/SMD/2013, dated 13th June, 2013, decided on 24th July, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Listing Regulations of Karachi Stock Exchange, Regln.17---Failure of company to send its financial results to Exchange---Meeting of the Board of Directors of the company, was held to consider the financial statements of the company for relevant period, but the results of the company were not communicated to the Karachi Stock Exchange as required under Listing Regulations of Karachi Stock Exchange---Company neither did communicate its results in the manner specified in the Correspondence Manual, nor did it communicate any status of the Board Meeting---Representative of the company, admitted the mistake, and had asserted that the violation of the provisions of the Listing Regulations of Karachi Stock Exchange, occurred because of non-availability of Chief Financial Officer of the company---Representative of the company further assured that in future, the company would strive its best to comply with all the regulatory requirements---Failure of the company to announce its financial results as per regulations having been established, Commission in exercise of powers under S.22 of the Securities and Exchange Ordinance, 1969 imposed on the company a penalty of Rs.50,000 (Fifty thousands only) with direction to the company to ensure that care and caution be exercised to ensure full compliance with Rules, Regulations and Directives of the Commission in the future for avoiding any punitive action under the law.

Syed Asghar Jamil Rizvi, Chief Executive Officer representing Metropolitan Steel Corporation Ltd.

Ms. Najia Ubaid, Deputy Director (MSRD) assisting Director/HOD (MSRD).

Date of hearing: 9th July, 2013.

2014 C L D 1576

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS ASLAM MALIK AND COMPANY, CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No. 4/BRK-62/SE/SMD/01, dated 24th April, 2013, decided on 19th July, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6, 18 & 22---Securities and Exchange Rules, 1971, R.2(d), Third Sched.---Stock Exchange Member (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Overstating 'Net Capital Balance', in violation of Rules---On review of the inspection report submitted by Inspection Team, duly constituted; it had come to the notice of the Securities and Exchange Commission that 'Net Capital Balance' of the company, was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971, and had been overstated---Prima facie, it appeared that the certificate of 'Net Capital Balance' of the company as on December 31, 2011, certified by 'Auditor', was not in accordance with the Third Schedule of the Rules, 1971; and that Auditor had prima facie certified a statement and given information which Auditor had reasonable cause to believe to be false, or incorrect in material particulars, in violation of S.18 of Securities and Exchange Ordinance, 1969---Respondent/Auditor had failed to perform its duties as Auditor for 'Net Capital Balance Certificate'---Auditor had not applied necessary prudence while certifying the 'Net Capital Balance Certificate', which resulted in misrepresentation and overstatement---Since such violation had been noted for the first time, Commission, while taking lenient view, imposed a penalty of Rupees ten thousand only on the Auditor, with direction to the Auditor, to ensure full compliance with Ordinance, regulations and directives of the Commission, in future.

Muhammad Shoaib, Authorized Representative of Messrs Aslam Malik and Company, Chartered Accountants present at hearing.

Murtaza Abbas, Deputy Director (MSRD) representing (BR&ICW).

Date of hearing: 20th May, 2013.

2014 C L D 1621

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS ZAFAR MOTI CAPITAL SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No.4/BRK-14/SE/SMD/01 dated 24th April, 2013, decided on 26th June, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6 & 22---Securities and Exchange Rules, 1971, Third Schedule---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Violation regarding calculation of "Net Capital Balance ('NCB')" etc.---Securities and Exchange Commission ordered an inspection of the books and records required to be maintained by the company---On review of the inspection report, various prima facie violations regarding calculation of "Net Capital Balance", recovery of late payment charges and segregation of client's account were observed---Company's justification regarding 'Net Capital Balance' was not tenable---Company had accepted the violation of charging late payment charges; and non-maintenance of separate bank accounts for the clients---Company which had failed to provide any documentary evidence in support of pledging of client's securities, was found guilty of the non-compliance---Commission in exercise of powers under S.22 of Securities and Exchange Ordinance, 1969, imposed a penalty of Rs.500,000 (Rupees Five hundred thousand only) on the company---Company was further directed to; (i) discontinue the practice of keeping client's securities in its House Account, and transfer such securities to respective sub-accounts; (ii) discontinue the practice of transferring/pledging client's securities; (iii) properly maintain separate bank accounts for the clients and deposit the proceeds of client's trading in the same; (iv) regularize its "Net Capital Balance", in line with the requirements of Third Schedule of the Securities and Exchange Rules, 1971 and (v) discontinue the practice of charging the late payment charges to the clients.

Muhammad Javed Muhammad Ibrahim and Naveed Yaqoob, Authorized Representatives of Messrs Zafar Moti Capital Securities (Pvt.) Limited present at hearing.

Murtaza Abbas, Deputy Director - (MSRD) representing (MSRD).

Date of hearing: 15th May, 2013.

2014 C L D 1664

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

FIRST EQUITY MODARABA, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No. 4(BRK-148)SE/SMD/02 dated 23rd January, 2013, decided on 26th April, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr. 3 & 4---Irregularities in calculation of "Net Capital Balance (NCB)"---Inspection team, after inspecting the books and record maintained by the company, had highlighted major irregularities in calculation of "Net Capital Balance (NCB)" of the company for relevant period and was not in accordance with the Third Schedule of the Securities and Exchange Rules, 1971---Evidence on record had shown that company had calculated Trade Receivable and Trade Payable on the basis of overall position, rather than individual transaction basis---Violation of Ordinance, Rules and Regulations was a serious matter, but alleged violation was not wilful, as same was because of the interpretation issues and peculiar issues regarding Modaraba business and its regulatory structure---Commission took lenient view and no penalty was imposed on the company---Since the company, apart from being a 'Modaraba', was also holding the certificate of registration as a broker, company was strictly advised to adhere to securities laws and rules pertaining to calculation of 'NCB'---Company was also warned to be vigilant in future, and was directed to ensure full compliance with Securities and Exchange Ordinance, Rules, Regulations and directives of the Commission in future.

Adil A. Ghaffar, CEO and Qazi Obaid Ullah, CFO present at hearing.

Ms. Saima Shafi Rana, Deputy Director (MSRD) representing SECP (SMD).

Date of hearing: 14th March, 2013.

2014 C L D 1688

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

FAIRTRADE CAPITAL SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No.1(27) SMD/MSRD/C&IW/2014 dated 29th April, 2014, decided on 18th June, 2014.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss.6 & 22---Brokers and Agents Registration Rules, 2001, R.8---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Irregularities in calculation of "Net Capital Balance (NCB)"---Inspection team, duly constituted, in its report had pointed out irregularities in calculation of 'Net Capital Balance (NCB)' by the broker company---"Net Capital Certificate" was not in accordance with the Third Schedule of the Securities and Exchange Rules, 1971---Company had failed to properly maintain segregation of its client's assets and to prepare KYC and CDD Policy in a timely manner---Company, therefore, was involved in the imposition of late payment charges---Segregation of clients' assets was of paramount importance for the protection of investors' interest---Company being the custodian of clients' assets was expected to comply with the applicable regulatory framework in letter and spirit---Penalty of Rs.25,000 was imposed on the company with further directions; that the company would comply with Rules and guidelines issued in letter and spirit; to ensure segregation of clients' assets, maintain separate bank account for the clients' funds and use that one account solely for the purpose of client's funds.

Kamran Shahzad, Director and Muhammad Faisal, Manager Operations representing Fairtrade Capital Securities (Pvt.) Limited.

Muhammad Tanveer Alam, Joint Director and Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 22nd May, 2014.

2014 C L D 1715

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

ATLAS INSURANCE LIMITED: In the matter of

Show Cause Notice issuing date 28th March, 2014, decided on 10th July, 2014.

(a) Securities and Exchange Commission (Insurance) Rules, 2002---

----Regln. 16(1)(a)---Insurance Ordinance (XXXIX of 2000), Ss.46 & 156---Recording and reporting the Available for sale investments, without complying requirements of Regulations---Company had made an investment in the shares of another company---Company had not recorded the impairment, loss on said investment in its financial statement which constituted non-compliance of Regln.16(1)(a) of the Securities and Exchange Commission (Insurance) Rules, 2002 and S.46(1)(b) of Insurance Ordinance, 2000---Company was required to state their Available for sales investments at lower of cost or market value in terms of Provisions of Regln.16(1)(a) of Securities and Exchange Commission (Insurance) Rules, 2002, which had been violated as the company had stated its Available for sale investment in the shares of other company at cost, and had not booked impairment in the book value of those investments; as the market price of those shares had fallen well below the cost or book value, which persisted for a considerably longer period of time---Directors of the company had failed to perform their duties with due care and prudence---As the Directors were supposed to be well aware of their legal obligations in connection with statutory requirement of Regln.16(1)(a) of the Regulations, it could be legitimately inferred that the default was committed---Default, having been established, penalty as provided under S.156 of the Insurance Ordinance, 2000 could be imposed on the company and/or its Directors---Commission, taking lenient view condoned the company, issuing a stern warning that in case of similar non-compliance in future a stronger action would be taken against the company.

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

----S. 196---Duties of the Directors---Directors, in addition to the day-to-day running of the company and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust, and some 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.

Muhammad Afzal Company Secretary Messrs Atlas Insurance Limited attended.

Date of hearing: 5th May, 2014.

2014 C L D 415

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar and Amir Hani Muslim, JJ

TELECARD LIMITED through Authorized representative---Appellant

Versus

PAKISTAN TELECOMMUNICATION AUTHORITY through Chairman---Respondent

Civil Appeal No.1612 of 2013, decided on 13th February, 2014.

(On appeal from the judgment dated 5-7-2013 of the Islamabad High Court, Islamabad passed in F.A.O. No.114 of 2008.)

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

----S. 7--- Constitution of Pakistan, Art. 185(2)--- Appeal filed by Telecommunication Company---Appellant was a limited company, and appeal on its behalf under S.7 of the Pakistan Telecommunication (Re-organization), 1996, had been filed by a person not having authority under Articles of Association or a Board Resolution of the company---Held, that a lis could not be initiated on behalf of a company, which was a juristic person, without having due authority either in terms of its Articles of Association, or the Board Resolution; which were conspicuously missing in the present case---Appellant had not even appended any document to establish that the Chief Executive Officer (CEO) of the Company, who had allegedly signed the memo of the appeal, had authority to do so---Appeal was dismissed, in circumstances.

Arshad M. Tayebaly, Advocate Supreme Court for Appellant.

Nemo for Respondent.

Date of hearing: 13th February, 2014.

2014 C L D 506

[Supreme Court of Pakistan]

Present: Jawwad S. Khawaja, Iqbal Hameedur Rahman and Mushir Alam, JJ

Mst. NASEEM BEGUM and others---Appellants

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN and others---Respondents

Civil Appeals Nos.449-L of 2009, 284 to 286, 283-L, 586-L to 591-L, 609-L to 613-L, 637-L to 640-L, 767-L of 2013, 817, 818 of 2010, 56-L, 63-L of 2011, 623-L to 628-L, 723-L, 726-L to 731-L of 2013, Civil Petitions Nos. 1253-L of 2011 and 1516-L to 1521-L of 2013, decided on 4th February, 2014.

(Against judgments of Lahore High Court, Lahore, passed in R.F.As. and I.As. Nos.435 of 2007, 183 of 2008, 190 of 2008, 911 of 2011, 443 of 2007, 440 of 2007, 434 of 2008, 16 of 2008, 1024 of 2011, 100 of 2012, 98 of 2008, 183 of 2008, 97 of 2012, 99 of 2012, 827 of 2012, 424 of 2013, 183 of 2008, 724 of 2010, 725 of 2010, 726 of 2010, 727 of 2010, 728 of 2010, 724 of 2010, 423 of 2013, 183 of 2008, 359 of 2013, dated 16-3-2009, 12-10-2012, 7-7-2010, 5-5-2009, 13-5-2010, 12-10-2012, 26-3-2013, 12-10-2012, 26-3-2013, 11-4-2013, 12-10-2012, 14-10-2010, 11-4-2013, 12-10-2013, 2-6-2010, 12-10-2012, 31-7-2013 etc.)

Insurance Ordinance (XXXIX of 2000)---

----Ss. 115 & 121--- Constitution of Pakistan Art. 185(2)---Interpretation of S.115 of the Insurance Ordinance, 2000---Application of law to insurance policies issued in Pakistan---Right of insurance policy holder to sue in respect of insurance policy before Insurance Tribunal---Insurance policies issued before the date of commencement of Insurance Ordinance, 2000---Jurisdiction of Insurance Tribunal---Contention was that S.115 of the Insurance Ordinance, 2000 despite its clear wording to the contrary, would also extend to insurance policies issued before the date of the commencement of the Insurance Ordinance, 2000, and consequently, Insurance Tribunal set up under the Insurance Ordinance, 2000 would have jurisdiction to adjudicate upon such matters---Held, that the contention was not only misconceived but was also frivolous as it flew in the face of express wording of the provisions of S.115 of the Insurance Ordinance, 2000.

State Life Insurance Corporation v. Mst. Sadaqat Bano 2008 CLD 1069; State Life Insurance Corporation of Pakistan v. Sadaqat Bano PLD 2008 Lah. 461; State Life Insurance Corporation of Pakistan v. Naseem Begum 2009 CLD 1413; Azhar Iqbal v. State Life Insurance Corporation of Pakistan 2009 CLD 910; Ijaz Begum v. State Life Insurance Corporation of Pakistan 2009 CLD 1317; Nasreen Begum v. State Life Insurance Corporation 2009 CLD 1480; Rukia Bivi v. State Life Insurance Corporation of Pakistan 2009 CLD 1213; Ghulam Raza Sajid v. State Life Insurance Corporation of Pakistan 2010 CLD 792; Riffat Asghar v. State Life Insurance Corporation of Pakistan 2010 CLD 1123 and Fatima Begum v. State Life Insurance Corporation of Pakistan 2010 CLD 1171 ref.

Liaquat Ali Butt, Advocate Supreme Court for Insurance Claimants/Appellants (in all cases).

Ibrar Ahmed, Advocate Supreme Court for SLIC (in C.As. Nos.449-L and 767-L of 2013).

Raja M. Ibrahim Satti, Senior Advocate Supreme Court for SLIC (in C.As. Nos. 284 to 286 of 2013).

Ali Akbar Qureshi, Advocate Supreme Court for SLIC (in C.As. Nos.609-L to 613-L, 726-L to 731-L and C.Ps. Nos.1516-L to 1521-L of 2013).

Jehanzaib Bharwana, Advocate Supreme Court along with Safdar Ali Qureshi, Law Officer for SLIC (in C.As. Nos.56-L, 63-L, 283-L, 586-L to 591-L, 623-L to 628-L, 631-L to 640-L and 723-L of 2013 and C.P. No.1253-L of 2011).

Date of hearing: 4th February, 2014.

2014 C L D 544

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, Ijaz Ahmed Chaudhry and Muhammad Ather Saeed, JJ

Messrs UNITED BANK LTD.---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Civil Petition No.1010 of 2010, decided on 24th April, 2013.

(On appeal from the judgment dated 22-3-2010 of the Lahore High Court, Lahore passed in W.P. No.21020 of 2009)

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

----S. 2---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9(1)---General Clauses Act (X of 1897), S. 24A---Constitution of Pakistan, Art.185(3)---Placing name of Director of a company on Exit Control List during pendency of recovery suit against company before the Banking Court---Scope---Respondent was Director of a private company against which an alleged default in repayment of loan had been claimed by the Bank by filing a recovery suit---Recovery suit was pending adjudication, when Bank in question requested State Bank of Pakistan for placing name of Director on the Exit Control List---State Bank of Pakistan forwarded the matter to the Ministry of Interior, which vide a memorandum placed name of Director on the Exit Control List---Director filed constitutional petition before the High Court which was allowed and it was held that placing name of Director on Exit Control List was without lawful authority---Validity---No appropriate order had been passed by the Banking Court regarding liability of Director and the matter was still pending so much so that leave to defend application filed by Director had not been disposed of---Bank, at the time of loan agreement in question, had safeguarded the loan by acquiring necessary securities and by mortgaging property of private company and its Directors---No explanation was given by the bank as to how its position would be compromised by absence of Director if he escaped away---Ministry of Interior placed name of Director on Exit Control List in a mechanical manner without applying its mind and without giving any reason for such decision---Order passed by Ministry of Interior was a bald order hit by S. 24A of General Clauses Act, 1897 and could not be sustained---High Court had rightly held that if Bank wanted an interim order, it should have approached the Banking Court, where the recovery suit was pending as said court could pass any appropriate order---Order passed by High Court was unexceptionable and did not warrant any interference---Petition for leave to appeal was dismissed in circumstances and leave was refused.

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

----S. 2---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9(1)---Constitution of Pakistan, Art. 15---Placing name of Director of a company on Exit Control List during pendency of recovery suit against company before the Banking Court---Validity---When claim by a commercial Bank against Director of a company was yet to be adjudicated, such claim could not be a ground to place the name of Director on the Exit Control List to deprive him from his fundamental right of travel abroad or restrict his right of free movement---Illustration.

Asim Mansoor Khan, Advocate Supreme Court for Petitioner.

M. Aleem Abbasi, D.A.-G. for Respondent No.1.

Raja Abdul Ghafoor, Advocate-on-Record for Respondent No.2.

Shahid Ikram Siddiqui, Advocate Supreme Court for Respondent No.3.

Date of hearing: 24th April, 2013.

2014 C L D 625

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, Gulzar Ahmed and Iqbal Hameedur Rahman, JJ

Messrs ESSA ENGINEERING COMPANY PVT. LTD.and another---Appellants

Versus

PAKISTAN TELECOMMUNICATION COMPANYLIMITED and another---Respondents

Civil Appeals Nos.371 and 717 of 2005, decided on 22nd January, 2014.

(On appeal against the Judgment dated 16-3-2005 passed by the Lahore High Court, Lahore, in R.F.A. No.335 of 2000)

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

----S. 59--- Remedy for breach of warranty--- Scope---Section 59 of Sale of Goods Act, 1930 provided for a situation where in a contract of warranty between seller and the buyer, the seller made a breach of such warranty, then the buyer was not only entitled to reject the goods but was also entitled to set up against the seller the breach of warranty in diminution or extinction of the price or sue the seller for damages for breach of warranty---Situation of setting up against the seller the breach of warranty in diminution or extinction of price, arose where the seller brought a suit against the buyer either for damages or for price of the goods---Buyer at such stage was entitled to set up a claim against the seller i.e. breach of warranty and as a consequence ask for diminution or extinction of price.

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

----S. 59---Remedy for breach of warranty---Contract for supply of items---Items found to be substandard---Buyer refusing to take delivery and invoking warranty clause---Supplier agreeing to replace items---Applicability of S.59 of Sale of Goods Act, 1930---Buyer setting up against the supplier the breach of warranty in diminution or extinction of the price---Scope---As per contract plaintiff-supplier supplied 3100 tubes to the defendant-company (buyer)---Initially 106 tubes were found to be defective and plaintiff did not raise any dispute regarding it---Further defendant-company rejected another lot of 1359 tubes as substandard upon which a warranty clause of the contract was invoked by the defendant-company---Plaintiff did not contest or object to the invoking of warranty clause by the defendant-company but agreed to replace 1359 substandard tubes and in doing so went on to prepare 1400 tubes as a replacement and informed the defendant-company to inspect the 1400 tubes---Such facts were admitted and also pleaded by the plaintiff in its plaint, therefore apparently there did not arise an occasion for the defendant-company to set up against the supplier for breach of warranty either a claim of diminution or extinction of price---By making 1400 tubes as replacement on account of invocation of warranty clause by the defendant-company, the plaintiff accepted the fact that it was not entitled to the price of 1359 tubes which stood rejected by the defendant-company as substandard---Plaintiff itself gave in to the breach of warranty and agreed to replace 1359 tubes and in doing so admitted that it was not entitled to claim the price of 1359 tubes and thus, there was hardly any reason or justification with the defendant-company to set up claim against the plaintiff in the plaintiff's suit as provided in S. 59 of Sale of Goods Act, 1930---Facts of present case were quite different from the remedy postulated in S. 59 of the said Act---Illustration.

Commissioner of Sales Tax v. Prem Nath Motors (P) Ltd. ILR 1978 Delhi 273; G. N. Behera v. Messrs Nanagran Bhikamchand Rice Mills Firm and another AIR 1966 Assam and Nagaland 95; Syed Niamat Ali and another v. Dewan Jairam Dass and another PLD 1983 SC 5 and Maple Flock Company Limited v. Universal Furniture Products (Wembley) Limited The Law Times Volume 150, p.69 distinguished.

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

----S. 44---Civil Procedure Code (V of 1908), O. VI, Rr. 2 & 4 & O. VII, R. 1---Pleadings--- Scope--- Claim to be contained in the plaint---Scope---Contract between plaintiff-supplier and defendant-company for supply of tubes---Plaintiff initially supplied 3100 tubes to the defendant and on inspection some of the tubes were found to be defective and substandard---Defendant invoked the warranty clause in the conditions of contract for replacement of the substandard tubes---Plaintiff agreed for the replacement and in that connection prepared 1400 and 1260 replacement tubes respectively and requested defendant to inspect them---Defendant refused to take delivery of replacement tubes and did not make payment for them---Plaintiff filed a suit against defendant which was decreed by Trial Court for the amount of 1400 and 1260 replacement tubes prepared by the plaintiff---High Court found that there was no claim in the plaint in respect of 1260 replacement tubes, therefore decree of Trial Court in respect of said 1260 tubes was not sustainable---Plea of plaintiff that the claim of 1260 tubes was very much contained in the plaint---Validity---Plaintiff in a paragraph of its plaint had specifically claimed that it had prepared 1260 tubes for supplying them to the defendant and in such regard it also referred to the inspection call made by it to the defendant---Defendant in its reply to said paragraph of the plaint had made a general denial without specifically denying the plaintiff's letter in which details in respect of inspection calls were very much mentioned which included the inspection call of 1260 tubes---Letter from a director of defendant-company addressed to one of its engineers was also available on record, wherein it was specifically mentioned that the plaintiff had offered a quantity of 1400 and 1260 replacement tubes respectively for inspection/testing, but the testing had not so far been conducted and a request was made that the testing be conducted---On the basis of pleadings and the documentary evidence available on record, it was abundantly clear that the plaintiff did in fact prepare 1260 replacement tubes for supplying to the defendant and had also requested them to be inspected by a representative of the defendant---Defendant did not inspect them nor took delivery of the 1260 tubes---High Court had discarded claim of the plaintiff in respect of 1260 tubes on mere, assertion that such claim of the plaintiff was not contained in the plaint---No justification or basis existed to deny claim of the plaintiff with respect to the 1260 tubes---Supreme Court decreed claim of plaintiff for the additional price of 1260 tubes with interest @ 16% per annum---Appeal was disposed of accordingly.

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

----S. 44---Civil Procedure Code (V of 1908), O. VI, Rr. 2 & 4, O. VII, R. 1 & O. XIV, R. 1---Claim/relief sought not specifically contained in the plaint---Claim/relief based on a plea on which no issue framed---Effect---Contract for supply of items--- Items found to be substandard---Defendant-buyer refusing to take delivery---Plaintiff-supplier agreeing to replace items and incurring costs in the process---Defendant-buyer refusing to take delivery of replacement items and not paying for them---Plaintiff instituted suit against defendant, which was decreed and plaintiff was also awarded costs of acquiring machinery and raw material for making replacement items despite not mentioning such claim in the plaint---Validity---Plaint of plaintiff did not mention the facts that it had acquired machinery or raw material and as to what treatment the plaintiff had given to such two items after the contract was revoked---Perusal of claims made in the plaint and the issues framed on the pleadings of parties clearly demonstrated that the plaintiff did not at all make any claim in the suit with regard to the raw material and machinery nor any issue on such plea was struck in the suit---Subject matter of machinery and raw material was never an issue nor it could be said that it was the ground which both parties understood to be in issue in the case---Claim of plaintiff towards raw material and machinery was wrongly allowed and was set aside accordingly--- Appeal was disposed of accordingly.

Bhagwati Prasad v. Chandramaul AIR 1966 SC 735 distinguished.

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

----O. VI, R. 2 & O. XIV, R. 1---Pleadings, significance of---Framing of issues---Scope---Pleadings of the parties were the benchmark of their respective claims on which issues were drawn and evidence was led---Evidence was restricted to the issues struck between the parties alone and not beyond them---When any evidence beyond the purview of issues did come on record, no party could on basis of such evidence set up altogether a new case and press the same for getting relief merely on basis of an out of context evidence.

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

----S. 55---Suit for price---Contract for supply of items---Items found to be substandard---Plaintiff-supplier agreeing to replace items and preparing replacement items---Defendant-buyer refusing to take delivery of replacement items and not paying for them---Replacement items having no market except for defendant---Remedy---Scope---Items/tubes prepared by the plaintiff had no other market except that of the defendant and the plaintiff was in no position to sell said tubes as it has no buyer in the market---Plaintiff could not make any salvage out of the tubes, more so for the reason that the tubes had been affixed with the monogram of the defendant-company---Plaintiff could not fetch any other market for the tubes as they could only be used by the defendant thus their resale value could not be ascertained---In such a situation, where the tubes were lying with the plaintiff and their price as per the contract had not been paid, the provision of S. 55 of the Sale of Goods Act, 1930 would be applicable---Plaintiff had given notice to the defendant to inspect the replacement tubes but neither such tubes were inspected nor their delivery was taken by the defendant and such act of the defendant was a unilateral one without finding any fault in the said replacement tubes---Plaintiff was required to make supplies of tubes within a specified period and after it had supplied the tubes to the satisfaction of the defendant, the payment was to be made---Burden was on the defendant to satisfy as to why the tubes were not inspected by it and their delivery not taken---No explanation was provided by the defendant for non-inspection and non-taking of delivery of the replacement tubes except that there was an enquiry pending in the matter---Supreme Court ordered that plaintiff was entitled to the price of all the replacement tubes with interest that defendant had the option to take delivery from the plaintiff of the replacement tubes in whatever shape they were in now, and that the plaintiff was also free to lift from the store of the defendant the rejected tubes---Appeal was disposed of accordingly.

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

----S. 55---Suit for price---Scope---Under the provision of S.55 of the Sale of Goods Act, 1930, where the property in goods had passed to the buyer or where the property in goods had not passed to the buyer but the price was payable on a day certain irrespective of delivery, the seller would be entitled to sue for the price of the goods.

Salman Aslam Butt, Advocate Supreme Court for Appellant (in C.A. 371 of 2005).

Hafiz S.A. Rehman, Senior Advocate Supreme Court for Appellant (in C.A. 717 of 2005).

Hafiz S.A. Rehman, Senior Advocate Supreme Court for Respondent (in C.A. 371 of 2005).

Salman Aslam Butt, Advocate Supreme Court for Respondent (in C.A. 717 of 2005).

Date of hearing: 20th November, 2013.

2014 C L D 696

[Supreme Court of Pakistan]

Present: Jawwad S. Khawaja, Iqbal Hameedur Rahman and Mushir Alam, JJ

ZEESHAN ENERGY LTD. and others---Appellants

Versus

FAYSAL BANK LTD.---Respondent

Civil Appeal No.2059 of 2004 and C.M.A. No.2172 of 2013, decided on 12th February, 2014.

(On appeal from the judgment dated 6-9-2004 passed by the Lahore High Court, Lahore in R.F.A. No.281 of 2003)

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

----S. 10(8)--- Recovery suit filed by Bank against borrower---Leave to defend suit, grant of---Grounds---Substantial questions of law and fact involved---Opportunity to borrower/defendant to prove documents for establishing the nature of its relationship with the Bank---Simultaneous suits filed by Bank and borrower against each other---Effect---Both suits to be heard and decided together---Defendant-company started a power generation project---Bank had granted a letter of credit facility to the defendant-company---Defendant-company claimed that the power generation project was agreed to be 100% equity based "without any banking finance"---Bank claimed amount from defendant-company on the basis of certain guarantees which were issued by it to secure the lease finance---Single Bench of High Court dismissed application of defendant-company for leave to defend and decreed the suit filed by the Bank---On appeal Division Bench of High Court only reduced the decretal amount---Validity---Documents available on record showed that project in question had been conceived as based entirely in equity---Bank could not explain the circumstances in which its involvement in the project was altered from 100% equity to that of banking finance---Record showed that arrangements between defendant-company and the Bank were prima facie, based on reciprocal promises other than routine/conventional finance---Significant aspects of the dealings between defendant-company and the Bank needed determination on the basis of evidence at regular trial---If defendant-company was given an opportunity to prove the documents on record and the nature of its relationship with the Bank, it would be in accordance with the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to grant leave to defend to the defendant-company as substantial questions of law and fact required adjudication---Bank did not bring on record certain documents which were crucial for adjudicating the dispute relating to the date of payment under Letter-of-Credit and for determining as to whether the project was conceived as equity based--- Dates of payment under the Letter-of-Credit given by the Bank were prima facie, inconsistent with its plea that it was through lease finance that payments under the Letter-of-Credit were made---Sufficient documentary and circumstantial evidence existed on record to prima facie show that allegations made by the defendant-company against the Bank were neither frivolous nor un-substantiated---Defendant-company had also filed a suit against the Bank prior to the present recovery suit, wherein Bank had filed an application for rejection of defendant-company's plaint---Suit filed by defendant-company and present recovery suit should have been conducted and proceeded simultaneously and decided together in order to avoid any conflicting judgment---Denial of leave to defend to the defendant-company would in the facts and circumstances of the case, amount to denial of legal right available to defendant-company under S. 10(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Impugned judgments and decrees of Single Bench and Division Bench of High Court were set-aside and leave to defend was granted to defendant-company---Supreme Court directed that suit filed by defendant-company against the Bank and present recovery suit filed by the Bank against defendant-company should be heard together as the bank had already been granted unconditional leave to defend in the suit filed by defendant-company--- Appeal was disposed of accordingly.

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

----S. 10---Recovery suit filed by Bank against borrower/defendant---Leave to defend suit, grant of---Scope---Defendant/borrower had also filed a suit against the Bank prior to the recovery suit---Effect---Mere filing of a suit by the borrower (against the Bank or financial institution) would not be sufficient, as a general rule, for granting leave to defend to the borrower in the recovery suit filed by the Bank or financial institution---Illustration.

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

----S. 10---Recovery suit filed by Bank against borrower/defendant---Leave to defend suit, grant of---Scope and purpose---Grant of leave to defend merely ensured that a right which was ordinarily available to all defendants as of right in all civil suits was not denied to borrowers/defendants in Banking suits under the Financial Institutions (Recovery of Finances) Ordinance, 2001, if there were substantial questions of law and fact which had been raised by a borrower-defendant.

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

----S. 10---Recovery suit filed by Bank against borrower/ defendant---Leave to defend suit, grant of---Scope--- Principle of consistency and comity---Defendant/borrower had also filed a suit against the Bank prior to the recovery suit---Plea that when Bank was granted leave to defend in the suit filed by the borrower, then on the principle of consistency and comity and for the administration of justice, borrower was also entitled to leave to defend in the recovery suit filed by the Bank---Validity---Such rule was not an absolute rule to be followed in all cases regardless of the specific facts of the case.

Muhammad Khalid Butt v. United Bank Ltd. 2003 CLD 911 ref.

Khalid Anwar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Appellants.

Syed Ali Zafar, Advocate Supreme Court and Arshad Ali Chaudhry, Advocate-on-Record for Respondent.

Date of hearing: 12th February, 2014.

2014 C L D 824

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani, C.J., Khilji Arif Hussain and Sh. Azmat Saeed, JJ

A. QUTUBUDDIN KHAN---Appellant

Versus

CHEC MILLWALA DREDGING CO. (PVT.) LIMITED---Respondent

Civil Appeal No.319 of 2004, decided on 3rd April, 2014.

(On appeal from the judgment dated 19-3-2003, passed by the High Court of Sindh, Karachi, in H.C.A. No.311 of 2000)

Per Sh. Azmat Saeed, J.; Tassaduq Hussain Jillani, C.J., agreeing; Khilji Arif Hussain, J., disagreeing [Majority view]

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

----Ss.17, 30 & 33---Limitation Act (IX of 1908), Art. 158---Arbitration award presented in court---Objections against arbitration award either not filed or not filed within the time prescribed by law---Effect---Power of court to decide whether to make such an award Rule of the Court---Scope---Powers vested in the court to make an award, the Rule of the court were judicial in nature and not ministerial---Absence of objections to such an award did not absolve the court of its responsibility to examine the same---Even in the absence of objections to the arbitration award, the award may be set aside by the court and not made Rule of the Court if it was a nullity; or was prima facie illegal; or for any other reason it was not fit to be maintained; or suffered from an invalidity which was self-evident or apparent on the face of the record---Single Judge of High Court, in the present case, after concluding that objections filed by respondent-company were time barred, without conducting a judicial exercise of examining the award qua its validity, made the same Rule of the Court---Such an order was not sustainable in law---Supreme Court upheld judgment of Division Bench of High Court whereby case was remanded to Single Judge of High Court and directed that Single Judge in post-remand proceedings should decide whether to make the award Rule of the Court after examining as to whether the said award was a nullity or prima facie illegal or was not fit to be maintained or suffered from any other invalidity which was self - evident or apparent on the face of the record---Appeal was disposed of accordingly.

Muhammad Tayab v. Akbar Hussain 1995 SCMR 73 and Messrs Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division 1992 SCMR 65 ref.

Per Khilji Arif Hussain, J.; disagreeing with Sh. Azmat Saeed, J.

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

---Ss. 15, 16, 30 & 33---Arbitration award presented in court---Objections filed against award---Power of court to examine such an award and set it aside---Scope---While hearing objections and examining the award, the court could not sit as a court of appeal on the award rendered by the Arbitrator and substitute its own view for the one taken by the Arbitrator---Award of the Arbitrator who was chosen as judge of facts and of the law, between the parties, could not be set aside unless the error was apparent on the face of the award or from the award it could be inferred that Arbitrator had misconducted himself.

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

----Ss. 17, 30 & 33---Arbitration award presented in court---Objections against arbitration award not filed---Effect---Power of Court to decide whether to make such an award Rule of the Court---Scope---Even if no objection under Ss. 30 & 33 of the Arbitration Act, 1940 had been filed, the court at the time of making award Rule of Court could see whether award suffered from any patent illegality---In exercise of power under S. 17 of the Arbitration Act, 1940, even if no application under Ss.30 & 33 of the said Act was filed by a party, the same did not absolve the court of its responsibility to see that the award did not suffer from any patent illegality necessitating either the setting aside of the award or its remission to the Arbitrator---While making an award rule of the court, in case parties had not filed objections, the court was not supposed to act in a mechanical manner, like post office and put its seal on it but had to look to the award and if patent illegality was found on face of it, court could remit the award or any matter referred to Arbitrator for reconsideration or set-aside the same---However, while doing so, the court would not try to find out patent irregularity, and only if any patent irregularities could be seen on the face of award arbitration proceedings like the award was beyond the scope of reference or the agreement of arbitration was void agreement, or Arbitrator awarded damages on black marketing price, or award was given after superseding of the arbitration, etc., court could set aside the same.

Province of Punjab v. Shafique Ahmad PLD 1989 Lah. 26 ref.

(d) Interpretation of statutes---

----'General provision' and 'special provision' in a statute---Scope---General provision in a statute could not operate to control a specific (special) provision in the same statute.

Sher Ali Baz v. Secretary, Establishment Division PLD 1991 SC 143 and Muhammad Nawaz Sharif v. President of Pakistan PLD 1993 SC 473 ref.

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

----Ss. 17, 30 & 33---Award, setting aside of---Grounds---While exercising jurisdiction under S. 17 of the Arbitration Act, 1940, award could not be set aside on the grounds which fell under Ss. 30 & 33 of the same Act---Section 17 of the Arbitration Act, 1940 could neither be used as substitute of Ss. 30 & 33 of the Act nor given overriding effect, making Ss. 30 & 33 of the Act redundant meaningless.

Madan Lal v. Sunder Lal AIR 1967 SC 1233 and Devendra Singh v. Kalyan Singh AIR 1978 Rajasthan 134 ref.

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

----Ss.17, 30 & 33---Limitation Act (IX of 1908), Art. 158---Arbitration award presented in court---Objections against arbitration award not filed within the time prescribed by law---Effect---Remanding matter of award to forum below 13 years after pronouncement of such award---Propriety---Denial of justice---Scope---Dispute between parties was referred to an Arbitrator who gave an award on 6-12-1997---Said award was set aside by consent of the parties on 13-8-1998---As per consent order, both the parties agreed to nominate their Arbitrators within 15 days from the date of the order---Admittedly, the respondent-company did not nominate his Arbitrator, and the Arbitrator nominated by the appellant, after giving notice to the parties, gave ex parte award on 11-11-1998---Evidence on record showed that findings of fact recorded by sole Arbitrator (appointed by appellant) could not be termed as patently illegal to set aside the award under S. 17 of Arbitration Act, 1940---Despite service of notice to respondent-company during different stages of the arbitration proceedings, it failed to appear before the sole Arbitrator---After sole Arbitrator filed its award in court, notice was issued to the respondent-company to file objections and admittedly despite service of notice, the respondent-company failed to file objections within 30 days from the date of service, as required under Art.158 of the Limitation Act, 1908 and ultimately objections were filed with a delay of 74 days---Presently, after 13 years of the arbitration award having been made, asking the parties again to go before the forum below (Single Judge of the High Court) would be tantamount to denial of justice---Appeal was allowed accordingly and judgment of Single Judge of High Court whereby award of sole Arbitrator was made Rule of the Court was upheld. [Minority view]

Ashiq Ali v. Mst. Zamir Fatima PLD 2004 SC 10 and Anwar Ahmad v. Mst. Nafis Bano 2005 SCMR 152 ref.

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

----Ss. 13 & 29---Civil Procedure Code (V of 1908), S. 34---Interest Act (XXXII of 1839), S. 1---Arbitrator, powers of---Scope---Awarding interest prior to date of decree---Legality---Arbitrator could not award interest prior to date of decree, in the absence of any express or implied agreement between the parties, or on basis of mercantile usage and statutory provisions or on equitable grounds in a proper case---Section 34, C.P.C., which gave discretion to court to award interest from the date of suit or period prior to it, did not apply to arbitration proceedings---Likewise, the Interest Act, 1839 also did not confer power on the Arbitrator to award interest---Grant of interest from the date prior to award or from the date of award until payment of the amount due and payable, the Arbitrator could under no circumstances award interest for the period beyond the passing of the decree by the court in terms of award---Under S. 29 of the Arbitration Act, 1940, only the court and not the Arbitrator had discretion to order interest, from the date of the decree at such a rate as the court deemed reasonable---Grant of interest prior to date of award, in absence of an express or implied statutory provisions, or agreement between the parties, would be an error of law apparent on the face of award.

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

----S. 13---Arbitrator, powers of---Scope---Arbitrator was not clothed with any power, which neither any law conferred upon him nor there was any such usage of trade having the force of law, nor any agreement between the parties conferring such power.

Nadeem Qutab, son of Appellant in person.

Bilal A. Kh. Advocate Supreme Court for Respondent.

Date of hearing: 22nd January, 2014.

2014 C L D 873

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Sarmad Jalal Osmany and Ijaz Ahmed Chaudhry, JJ

MUHAMMAD NADEEM ANWAR---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Director NBFCs Deptt., Islamabad---Respondent

Civil Petition No.304 of 2012, decided on 11th February, 2014.

(On appeal from the judgment dated 30-11-2011 in Intra Court Appeal No.1 of 2010 passed by the Peshawar High Court, Peshawar)

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

----S.403---Constitution of Pakistan, Arts. 13(a) & 185(3)---General Clauses Act (X of 1897), S. 26---Companies Ordinance (XLVII of 1984), Ss. 230(7), 234(6) & 282-K---National Accountability Ordinance (XVIII of 1999), Ss. 9, 10 & 11---Penal Code (XLV of 1860), Ss. 409 & 109---Double jeopardy, principle of--- Scope--- Offences committed in one go but punishable under two separate and distinct enactments---Chief Executive Officer of bank (i.e. accused) allegedly obtained loan facilities fraudulently, falsified bank records, misappropriated funds of bank and his company and also committed corrupt practices---Criminal complaint was filed against accused by Securities and Exchange Commission of Pakistan (SECP) before the High Court---Reference was also filed against accused before National Accountability Bureau (NAB)---Criminal complaint and NAB reference were based on the same acts/omissions by accused---Accused was convicted under the NAB reference for corruption and corrupt practices---Plea of accused that elements of the criminal complaint filed by SECP and NAB reference were identical; that when he was convicted in the NAB reference, he could not be convicted twice for the same acts and omissions in the criminal complaint before the High Court---Validity---Provisions of Ss. 230(7), 234(6) & 282-K of Companies Ordinance, 1984 and Ss. 9, 10 & 11 of National Accountability Ordinance, 1999 were different enactments of law having different procedure and forum for initiating proceedings thereunder---Although both sets of offences had been committed by the accused in one go, however accused acted in such a manner which constituted offences punishable under two separate and distinct laws, i.e. one under the National Accountability Ordinance, 1999 and the other under the Companies Ordinance, 1984--- Despite the fact that the two separate prosecutions of accused arose out of the same incident or that some of the facts in the two prosecutions were common, the offences committed by accused under the Companies Ordinance, 1984 were quite different from the offences committed by him under the National Accountability Ordinance, 1999---Both were different and distinct pieces of legislation, therefore, acts and omissions committed by accused could not be said to be the same offences---Since the acts committed by accused did not fall within the definition of same offences, therefore, principle of double jeopardy would not come into force---Petition for leave to appeal was dismissed accordingly and leave was refused.

PLD 2002 SC 273 distinguished.

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

----S. 403---Constitution of Pakistan, Art. 13(a)---General Clauses Act (X of 1897), S. 26---Double jeopardy, principle of---Scope---No person could be vexed twice and prosecuted or punished for the same offence, but if he was guilty of offence under another enactment, though by the same chain of facts, he could be tried, convicted and punished under that very offence committed by him.

Adam v. Collector of Customs, Karachi PLD 1969 SC 446; Behari and others v. The State AIR 1953 All 510; Monica Bedi v. State of Andhra Pradesh (2011) 1 Supreme Court Cases 284; Manipur Administration, Manipur v. Thokchom Birasingh AIR 1965 SC 87; Sangeetabar Mahendrabhai Patel v. State of Gujarat and another (2012) 7 Supreme Court Cases 621; Muhammad Ashraf and others v. The State 1995 SCMR 626; Brothers Steel Mills Limited and others v. Mian Ilayas Mairaj and 14 others PLD 1996 SC 543 and Sher Muhammad Unar and others v. The State PLD 2012 SC 179 ref.

Syed Hasnain Ibrahim Kazmi, Advocate Supreme Court for Petitioner.

Iftikharuddin Riaz, Advocate Supreme Court, M.S. Khattak, Advocate-on-Record, Muzaffar A. Mirza, Director Law SECP and Ibrar Saeed, Law Officer, SECP for Respondent.

Date of hearing: 11th February, 2014.

2014 C L D 1378

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, Amir Hani Muslim and Ijaz Ahmed Chaudhry, JJ

Sheikh MUHAMMAD SHAKEEL---Appellant

Versus

Sheikh Hafiz MUHAMMAD ASLAM---Respondent

Civil Appeal No.1428 of 2007, decided on 14th May, 2014.

(Appeal against the order dated 18-6-2007 passed by the High Court of Sindh, Karachi, in Ist Appeal No.32 of 2004)

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

----S. 4---Qanun-e-Shahadat (10 of 1984), Art. 17(2)(a)---"Promissory note"--- Attestation of--- Not a legal requirement---Instrument which fulfilled all the conditions mentioned in S. 4 of the Negotiable Instruments Act, 1881 would be termed as a "promissory note"---Such an instrument was not required to be attested in terms of Art. 17(2)(a) of Qanun-e-Shahadat, 1984.

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

----S. 4---Stamp Act (II of 1899), Ss. 35 & 36---Promissory note---Insufficiently stamped---Neither invalid nor void---Admissibility in evidence of an insufficiently stamped promissory note--- Scope--- Insufficiently stamped Promissory Note was neither invalid nor a void instrument, but it was only subject to disabilities mentioned in S. 35 of the Stamp Act, 1881---Deficiently stamped pro note was not admissible in evidence nor it could be acted upon unless duly stamped---However in terms of S. 36 of Stamp Act, 1881 if a deficiently stamped instrument was once admitted in evidence and marked as an exhibit, it was not permissible for the Court of first instance, or in appeal or in revision to exclude such instrument from its consideration---Provisions of S. 36 of Stamp Act, 1881 were mandatory in nature and had overriding effect on S. 35 of the said Act imposing a complete bar to question the admissibility of a Promissory Note once it had been admitted and exhibited in evidence without any objection from the other side and included all such instruments which fell under proviso (a) to S.35 of the Stamp Act, 1881.

Ch. Khalid Mehmood v. Ch. Said Muhammad PLD 2005 Lah. 732 ref.

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

----S. 4---Stamp Act (II of 1899), Ss. 35 & 36---Civil Procedure Code (V of 1908), O.VIII, R.1 & O. XIV, R. 1(5)---Promissory Note insufficiently stamped---Admissibility in evidence--- Scope--- Irrespective of the fact that the Promissory note produced by the plaintiff in evidence was insufficiently stamped, it was neither challenged by the defendant in his written statement nor an issue was framed in regard to it--- Insufficiently stamped promissory note was admitted in evidence and marked as an exhibit without objection, thus it could not be discarded on the ground that it was insufficiently stamped---Section 36 of the Stamp Act, 1881 debarred the defendant from calling in question the admissibility of such a Promissory Note on the ground that it was insufficiently stamped---Appeal was allowed accordingly.

Ch. Khalid Mehmood v. Ch. Said Muhammad PLD 2005 Lah. 732 ref.

Arshad Ali Ch., Advocate-on-Record/Advocate Supreme Court for Appellant.

Muhammad Ilyas Sheikh, Advocate Supreme Court for Respondent.

Date of hearing: 14th May, 2014.

2014 C L D 1404

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, Amir Hani Muslim and Ijaz Ahmed Chaudhry, JJ

Messrs NICE 'N' EASY FASHION (PVT.) LTD. and others---Appellants

Versus

ALLIED BANK OF PAKISTAN and another---Respondents

Civil Appeal No.189 of 2006, decided on 3rd June, 2014.

(On review against the order dated 5-4-2005 passed by the Lahore High Court, Lahore in E.F.A. No.469 of 2004)

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

----S. 19(7)---Civil Procedure Code (V of 1908). O. XXI, Rr.89 & 90---Recovery suit--- Auction of judgment-debtor's property---Legality---Objection petition filed by judgment-debtor contending that auction process was irregular and illegal---Validity---Bid sheet was prepared by the auctioneer appointed by the Banking Court, who conducted the auction proceedings and submitted his detailed report---Said report reflected that proper steps were taken for conducting the auction proceedings and the highest bid was accepted, which was more than the value of the property shown by the judgment-debtor---Judgment-debtor contended that auction proceedings were irregular and illegal but filed an application before the Banking Court under S. 19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001, instead of making an application under O. XXI, Rr. 89 & 90, C.P.C.---Even if objection petition of judgment-debtor was treated as an application under O.XXI, Rr.89 & 90, C.P.C., judgment-debtor had failed to deposit the amounts as mandated in the said Rules, without which the objections could not be entertained---Banking Court had issued notices in terms of S. 19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001 in the execution proceedings and thereafter it followed the inbuilt mechanism provided therein, which was summary in nature, thus the Banking Court was not bound to follow the procedure provided under O.XXI, C.P.C.---Highest bidder had deposited the auction amount within the stipulated time, and possession of property in dispute had already been delivered to the highest bidder---No inherent defect was found in the procedure adopted by the Banking Court in terms of S.19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was dismissed accordingly.

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

----O. XXI, Rr. 89 & 90---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 19---Recovery suit---Sale of judgment debtor's property by auction---Objection application against such sale---Pre-requisites---Deposit of amount---Order XXI, Rr. 89 & 90, C.P.C. mandated that the objector should deposit the amounts mentioned in the said Rules along with the objection application---In the absence of the deposit, the application and or objection could not be entertained by a Banking Court.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI---Recovery suit---Sale of judgment-debtor's property by auction--- Summary procedure--- Once the Banking Court adopted the summary procedure provided under S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was not bound to follow the procedure provided under O.XXI, C.P.C. in execution proceedings.

Mahmood A. Sheikh, Advocate Supreme Court for Appellants.

Ashar Elahi, Advocate Supreme Court for Respondent No.1.

Khalid Jamil, Advocate Supreme Court for Respondent No.2.

Date of hearing: 3rd June, 2014.

2014 C L D 473

[Supreme Court of UK]\

Present: Lord Neuberger, President, Lord Clarke, Lord Sumption, Lord Reed and Lord Carnwath

VESTERGAARD FRANDSEN A/S (now called MVF 3 ApS) and others---Appellants

Versus

BESTNET EUROPE LIMITED and others---Respondents

Decided on 22nd May, 2013.

(On appeal from [2011] EWCA Civ 424.)

Per Lord Neuberger, PSC; Lord Clarke, Lord Sumption, Lord Reed, Lord Carnwath, JJSC agreeing.

(a) Intellectual property---

----Trade secrets--- Confidential information---Breach of confidence by employee---Scope and defence---Common design in relation to misuse of trade secrets---Scope---Trade secrets/confidential information acquired by employee during employment, misuse of---Former employee developing a new product using trade secrets/ confidential information of his former employer---Claimant-companies ("Claimants") were involved in developing and manufacturing specialized insecticidal nets with the assistance of a consultant biologist ("consultant") "S", who was employed by the claimants as a sales manager, left her employment and set up a competing business, which also produced the same specialized insecticidal nets---"S" employed the consultant, who previously worked for claimants, to develop the competing product---Consultant developed competing product by using the claimants' trade secrets and was found to be in breach of his duty of confidence to the claimants---Claimants sought damages and relief for misuse of confidential information from "S"---Question as to whether "S" was liable for breach of confidence on basis of, inter alia, her contract of employment or being party to common design---Any former employee was not liable for breach of confidence for starting a business which developed a product using his/her former employers' trade secrets, in circumstances where he/she neither knew the identity of such secrets nor that they were being used to develop the new product---Former employee "S" was employed by the claimants in their sales department---"S" was not liable for breach of confidence relating to misuse of confidential information as she did not have actual or objective knowledge of the confidential information in question either during her employment or afterwards---"S" did not know the trade secrets and was not aware that they were being misused by the consultant---Unless S's employment contract with claimants expressly/ impliedly imposed such a liability, she could not be primarily liable for misuse of confidential information because she had received no confidential information---"S" could also not be secondarily liable for such misuse as she had not known that the consultant was using, or had used, claimants' confidential information to develop the product, and it was not contended that she could be vicariously liable for any misuse of claimants' confidential information by the consultant---S's employment contract with claimants contained a clause which stated that she agreed to "keep absolutely confidential all information relating to the employment and any knowledge gained in the course of the employment and which inherently should not be disclosed to any third party"---Confidential information used by the consultant was neither information relating to S's employment nor knowledge gained by her in the course of her employment, in fact it was knowledge gained by the consultant in the course of his consultancy work for claimants---To imply a term into S's employment contract to the effect that she would not assist another person to abuse trade secrets owned by the claimants, in circumstances where she did not know the trade secrets and was unaware that they were being misused, would be wrong in principle---To impose such a strict liability on "S" was inconsistent with the express terms of S's employment contract; was unnecessary in order to give the employment contract commercial effect, and was almost penal in nature, thus incapable of satisfying tests of obviousness and reasonableness--- With respect to liability of "S" on basis of being party to a common design, it had to be proved that she shared with other defendants each of the features of the design which made it wrongful--- "S" could not be made liable on the basis of common design involving misuse of trade secrets given her state of mind, or knowledge, as she had no knowledge of the trade secrets and also did not know that they were being misused by the consultant---Argument that "S" had blind-eye knowledge" of the fact that the consultant was using claimants' trade secret could not succeed in the absence of any finding of relevant dishonesty on S's part---Contention that "S" had taken a risk in starting a new business and employing the consultant was on its own not enough to render her secondarily liable for the misuse of trade secrets---Law had to maintain a realistic and fair balance between effectively protecting intellectual property rights and not unreasonably inhibiting competition in the market place---Importance of research and development in the commercial world to the economic prosperity of a country was self-evident, and the protection of intellectual property was one of the vital contributions of the law to that end---On the other hand, the law should not discourage former employees from benefitting society and advancing themselves by imposing unfair potential difficulties on their honest attempts to compete with their former employers---Given the circumstances of the present case, it would be oppressive to hold "S" liable to claimants for breach of confidential information, notwithstanding whether she had previously worked for claimants pursuant to a contract containing a standard provision aimed at protecting claimants' trade secrets---Appeal was dismissed accordingly.

Royal Brunei Airlines SdnBhd v Tan [1995] 2 AC 378, PC ref.

Seager v Copydex Ltd [1967] 1 WLR 923, CA; Unilever plc v Gillette (UK) Ltd [1989] RPC 583, CA and Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629, CA distinguished.

(b) Intellectual property---

----Confidential information acquired by employee during employment, misuse of---Breach of confidence---Scope---Defendant-employee who learnt of a trade secret in circumstances where he/she reasonably did not appreciate that it was confidential, might nonetheless be liable to respect its confidentiality from the moment he/she was told, or otherwise appreciated, that it was in fact confidential---From such moment on, it could be said that his/her conscience was affected in a way which should be recognised by equity.

(c) Intellectual property---

----Confidential information, misuse of--- Breach of confidence---Primary and secondary offenders---Scope---Recipient of confidential information might be said to be primarily liable in a case of its misuse, but a person who assisted him in the misuse could be liable, in a secondary sense---Such person/secondary offender would normally have to know that the recipient was abusing confidential information--- Knowledge of such person/secondary offender would not be limited to his actual knowledge, and it would include "blind-eye knowledge".

Royal Brunei Airlines SdnBhd v Tan [1995] 2 AC 378, PC ref.

(d) Intellectual property---

----Confidential information, misuse of--- Breach of confidence--- Vicarious liability--- Scope--- Confidential information acquired by employee during employment, misuse of---Where a person directly misused a claimant's trade secret and did so in the course of his employment by a third party, then the third party could (at least arguably) be liable to the claimant for the breach of confidence, on the basis of vicarious liability.

(e) Intellectual property---

----Confidential information/trade secrets, misuse of---Common design---Joint liability---Scope---Common design could, in principle, be invoked against a defendant in a claim based on misuse of confidential information, however, in order to be party to a common design, a defendant had to share with the other party each of the features of the design which made it wrongful---If, and only if, all such features were shared, the fact that some parties to the common design did only some of the relevant acts, while others did only some other relevant acts, would not stop them all from being jointly liable.

(f) Patent---

----Patent, infringement of---Strict liability---Knowledge and intention of alleged infringer--- Primary and secondary infringer---Scope---Patent infringement was a wrong of strict liability: it required no knowledge or intention on the part of the alleged infringer, whose state of mind was wholly irrelevant to the issue of whether he infringed the patent---Fact that the alleged infringer did not know of the existence, contents or effect of the patent was completely irrelevant to the question of infringement, even if he had thought the invention up for himself---Logically a person who, while wholly innocent of the existence, contents or effect of the patent, could nonetheless be secondarily liable if he assisted the primary infringer in his patent-infringing acts.

(g) Intellectual property---

----Intellectual property rights and trade secrets, protection of---Scope---Law had to maintain a realistic and fair balance between effectively protecting trade secrets (and other intellectual property rights), and not unreasonably inhibiting competition in the market place.

Mark Platts-Mills QC and Thomas Moody-Stuart (Instructed by Field Fisher Waterhouse LLP) for Appellants.

Alastair Wilson QC and George Hamer (Instructed by McGuire Woods London LLP) for Respondents.

Date of hearing: 24th April, 2013.