CLD 2015 Judgments

2015 C L D 1638

[Competition Commission of Pakistan]

Before Mueen Batlay, Dr. Shahzad Ansar and Ikram Ul Haque Qureshi, Members

JOTUN PAKISTAN (PVT.) LIMITED FOR DECEPTIVE MARKETING PRACTICES: In the matter of

Show Cause Notice No.2/2014, decided on 17th March, 2015.

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

---S. 10---Deceptive marketing practices---Effective system of checks against deception in marketing---Significance---Deceptive marketing practices by shaping the standards and values that determined acceptable business conduct, could have a negative influence on business and the society as a whole---Deceptive marketing practices gave rise to growing concerns within the field of marketing among the general public, consumer welfare bodies and competition agencies.

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

----S. 10---Deceptive marketing practices---Claims made by a company while advertising/marketing its product---Recognizable substantiation for such claims---Where a company made a certain claim about its product in an advertisement, it was imperative to see whether the company/advertiser had some recognizable substantiation for the claim made.

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

----S. 10(2)(a)---Deceptive marketing practices capable of harming business interests of competitors---Proof---To prove such deceptive practices/conduct, it was not necessary to show actual harm to competitors; it was sufficient to show the existence of a deceptive marketing practice that had the potential to harm the business interests of the competitors---Among such deceptive marketing practices was the distribution of claims lacking reasonable basis that were essentially designed and used to gain an unfair advantage over competitors.

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

----Ss. 10(1) & 10(2)(a), (b)---Deceptive marketing practices---Deceptive claim made by a company while advertising/marketing its product---Distribution of false or misleading information to the consumers which was capable of harming business interests of competitors---Defendant ­company marketed its paint products through print media advertisements and bill boards claiming to be 'No. 1 in Paints' in Pakistan--Complainant-company alleged that by making such claim defendant-company was disseminating misleading and false information to the consumers that lacked a reasonable basis, related to character, properties or quality of its product and was capable of harming the business interest of complainant-company--Validity--Defendant­ company had not provided any recognizable substantiation, survey results or other data to support its claim of being the 'No.1 Paints' in Pakistan---Enquiry report found that such claim of defendant-company was prima facie deceptive in nature--Defendant-company's claim of being the 'No. 1 Paints' lacked a reasonable basis and was, hence, false and misleading information distributed in violation of Ss. 10(1) & 10(2)(b) of the Competition Act, 2010---Further, the unsubstantiated claim of being the 'No. 1 Paints' in Pakistan was capable of creating, unfairly, a positive consumer perception in favour of the defendant-company which, in turn, was capable of harming the image, goodwill, sales, and other business interests of competitors in the market--­Defendant-company's claim was capable of harming the business interest of its competitors, thus it was distributed in violation of Ss.10(1) & 10(2)(a) of the of the Competition Act, 2010--Commission ordered the defendant-company to refrain from indulging in deceptive marketing practices in the future, and continue to abstain from making the claim of 'No. 1 Paints' in all its marketing campaigns---Commission in view of the undertaking and commitment shown by the defendant-company in not indulging in deceptive marketing campaigns in the future imposed a token penalty of Rs. 10,00,000 (one million) on the defendant-company, with the warning that future violations may attract stricter penal consequences.

Per Arne Langnes, Chief Executive Officer, Adeel Paracha, Arsalan Khan, Sales Manager and Salman Dar, Area Sales Manager for Messrs Jotun Pakistan (Pvt.) Limited.

Tariq Munir, Advocate, Sajjad Ahmed, Dr. Asghar Ali and Farooq Ahmed for Messrs Diamond Industries (Pvt.) Limited.

Ms. Saira Soofi, Company Secretary and Imran Qureshi, Business Manager for Messrs Akzo Nobel Pakistan Limited.

Dates of hearing: 22nd May, 2014 and 26th February, 2015.

2015 C L D 1737

[Competition Commission of Pakistan]

Before Mueen Batlay, Dr. Shehzad Ansar and Ikram Ul Hague Qureshi, Members

MESSRS NATIONAL FOODS LIMITED AGAINST MESSRS SHANGRILA (PRIVATE) LIMITED: In the matter of

Show Cause Notice No.20 of 2013 dated 1st November, 2013, decided on 26th February, 2015.

Competition Act (XIX of 2010)---

----Ss. 10(1) & 10(2)(a), (b)---Deceptive marketing practices---Claim made by a company in an advertisement/marketing campaign without any reasonable basis-7-Distribution of false or misleading information to the consumers which was capable of harming business interests of competitors---Defendant-company marketed its "tomato ketchup" through various marketing campaigns claiming that it was the 'No. 1 in Pakistan'---Complainant-company alleged that such claim of defendant-company lacked a reasonable basis relating to character, suitability for use or quality of goods, in violation of S. 10 of the Competition Act, 2010 and that the marketing campaign was capable of harming the business interest of the complainant-company---Validity--­Enquiry report concluded that the overall net impression of the marketing campaign/advertisement of defendant-company was that its "tomato ketchup" was `Pakistan's No. 1 Tomato Ketchup', whereas the actual market share of the complainant-company was higher than that of the defendant-company---Findings of said enquiry report were well reasoned as no reasonable basis for making the claim in question had been placed before the Commission, therefore, the claim lacked reasonable basis and was misleading and false, and in violation of S.10(2)(b) of the Competition Act, 2010---Further the complainant-company had also submitted information which showed a certain dip in their market share subsequent to the launch of the marketing campaign by the defendant-company---Defendant-company only denied such information but did not submit anything to the contrary---Reduction in market share of the complainant-company and increase in market share of the defendant-company, though minimal, was sufficient to establish a violation of S. 10(2)(a) of the Competition Act, 2010---Defendant­ company tendered its commitment that it would not use marketing campaign with the claim that its "tomato ketchup" was 'Pakistan's No. 1 Tomato Ketchup', and that all future marketing campaigns would be in compliance with the competition law---Commission, in view of the commitment made by the defendant-company reprimanded the company not to indulge in deceptive marketing practices in future as it shall entail penal consequences, and ordered the same to continue refraining from making the claim about its tomato ketchup in their advertisements or marketing campaigns---Commission directed defendant-company to file an undertaking with the Registrar of the Commission, stating that it had stopped its (deceptive) marketing campaign and had also withdrawn all the materials regarding such marketing campaign from the public domain, and in future the company would ensure compliance with the provisions of the Competition Act, 2010.

Adnan Malik, GM (Marketing) on behalf of Messrs National Foods Limited.

Hasan Madviwalla and Miss Sidra Jameel Advocates of Mandviwalla and Zafar for Messrs Shangrila (Private) Limited.

Dates of hearing: 29th November, 2013 and 24th February, 2015.

2015 C L D 1864

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Mueen Batlay, Dr. Shahzad Ansar and

Ikram Ul Haque Qureshi, Members

MESSRS RECKITT BENCKISER PAKISTAN LIMITED FOR DECEPTIVE MARKETING PRACTICES: In the matter of

Show Cause Notice No. 21/2013 dated 11th November, 2013, decided on 11th August, 2015.

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

----Ss. 10(1) & 10(2)(a)----Deceptive marketing practices---Distribution of false and misleading information capable of harming business interests of other undertakings---Respondent-company was engaged in manufacturing and marketing of consumer household, antiseptic and pharmaceutical products--- Enquiry report prima facie found respondent-company having been engaged in deceptive marketing practices in violation of S. 10(1) read with S. 10(2)(a), (b) & (c) of Competition Act, 2010---Show cause notice was issued to respondent-company to justify its claims made in its advertisement campaign---Respondent-company pleaded that its disputed claims had reasonable basis, same were substantiated with comparative efficacy report and tests and were also accompanied by disclaimer---Validity---Claim that 'Phenyl is highly ineffective against Germs' was alleged to have been supported by results of Disinfectant Efficacy Study, which compared efficacy of product with that of ordinary unbranded phenyl---Said study did not in any way substantiate said claim---Respondent-company had not relied upon competent and reliable evidence to make said claim, which might be understood to be disseminating misleading information---Use of word 'Phenyl' in said claim had potential to harm business interests of all producers of phenyl, whether branded or unbranded--­-Such claim was, therefore, in violation of S. 10(1) read with S. 10(2)(a) of Competition Act, 2010---Respondent-company undertook to reformulate disputed claims to bring them in conformity with provision of S. 10 of Competition Act, 2010---Commission imposed a fine of rupees two hundred and fifty thousand on respondent-company for each violation.

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

----Ss. 10(1) & 10(2)(b)----Deceptive marketing practices---Distribution of false or misleading information lacking reasonable basis---Claim of respondent-company with respect to its product was that 'Only Dettol Surface Cleaner can kill more germs than Phenyl' and 'Dettol Surface Cleaner can kill germs 10 times more than Phenyl'---Respondent-company took the plea that said claim was accompanied with disclaimer stating that said claims were being made only against 'ordinary unbranded phenyl'---Validity---Concept of having reasonable basis provided that advertiser must have had some recognizable substantiation for its claims made prior to making it in advertisements---No studies testing efficacy of surface cleaners other than product in question had been provided or relied upon by respondent-company---In absence of comparison of phenyl with other surface cleaners available in market, it was not appropriate to say that only 'Dettol Surface Cleaner' could kill germs more than phenyl--- Disclaimer was not included in advertisements at time of issuance of show cause notice--- Said claims were found to be in violation of S. 10(1) read with S.10(2)(b) of Competition Act, 2010.

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

----Ss. 10(1) & 10(2)(b)---Deceptive marketing practices---Distribution of false or misleading information lacking reasonable basis---Respondent-company claimed that its product 'Dettol Surface Cleaner can kill 99.9% of Germs'---Plea of respondent-company that said claim had been tested and accepted by various global regulatory bodied worldwide, and in particular, its product had undergone to two such tests---Validity---Term 'germs' under common definition included bacteria, viruses and fungi---According to SABS report, relied upon by respondent-company, product in question had been tested against four species of bacteria, and there was no evidence that product had been tested against viruses and fungi---Use of term 'Germ' in said claim was, therefore, blatantly misleading---Other more stringent standard test used was specifically for bactericidal activity and as such was not all encompassing standard against which surface cleaner might be measured--- Laboratory conditions were appreciably different from those found in common households, and special steps were required to achieve 99.9% efficacy against bacteria in normal everyday settings where cleaning took place---Achieving 99.9 % efficacy against selected bacteria was not possible---Consumer was (misleadingly) lead to reasonably believe that any sort of cleaning with product would achieve same result---Said claim, therefore, also constituted violation of S. 10(1) read with S. 10(2)(b) of Competition Act, 2010---Commission directed respondent-company to either state clearly conditions required for its product to achieve 99.9 % efficacy against bacteria on product packaging and all it marketing materials, or to change said claim to include word 'upto' between words 'kills' and '99.9%'.

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

----Ss. 10 & 10(2)(c)---Deceptive marketing practices---False and misleading comparison in advertising--- Comparison was made whenever qualities of two or more products or services were judged against each other---Comparison of goods made without reasonable basis would be considered to be false and misleading---Term 'Phenyl' used in three of the disputed claims, was false and misleading as respondent-company alleged to have used said term only for 'ordinary unbranded phenyl' for comparative testing purposes---Respondent-company had not relied upon any substantiable evidence to make its claims, which rendered it in violation of S. 10 read with S. 10(2)(c) of Competition Act, 2010.

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

----S. 10--- Deceptive marketing practices, prohibition against---Purpose---Section 10 of Competition Act, 2010 delineates prohibition against deceptive marketing practices, and as such encompasses protection of both consumer and competition interests.

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

----S. 10(2)(b)---Distribution of false or misleading information lacking reasonable basis--- Reasonable basis--- Scope--- Concept of having reasonable basis provides that advertiser must have some recognizable substantiation for its claims made prior to making it in advertisements.

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

----S. 10(2)(c)---Deceptive marketing practices---False and misleading comparison in process of advertising---Comparison is said to have been made whenever qualities of two or more products or services are judged against each other---Comparison of goods made without reasonable basis will be considered as false and misleading.

Mehmood Mandiviwalla, Hassan Manviwalla and Ms. Wajiha Zahid Khawaja on behalf of Messrs Reckitt Benckiser Pakistan Limited.

Muna Farid, Regional Legal Director.

Burhan Khan, Director Marketing.

M. Zaki Khan, Manager R&D.

Dates of hearing: 20th December, 2013, 26th March and 9th June, 2015.

2015 C L D 1908

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Joseph Wilson, Dr. Shahzad Ansar

and Ikram Ul Haque Qureshi, Members

AL-HAJ MIAN LIAQUAT ALI AND DR. SHAZIA LIAQUAT OF LIAQUAT HOSPITAL LAHORE: In the matter of

Show Cause Notices Nos.13 and 14 of 2014, decided on 11th February, 2015.

Competition Act (XIX of 2010)---

----Ss. 10(2)(a) & 10(2)(b)--- Deceptive marketing practices by healthcare service provider--- Distribution of false and misleading information capable of harming business interests of other undertakings---Distribution of false or misleading information lacking reasonable basis---Reasonable basis---Determination---Enquiry report found respondent-hospital prima facie engaged in deceptive marketing practices by running its advertisements on television channels claiming to absolutely cure various types of diseases, which was not actually possible---Commission, on basis of said report, issued show cause notice to respondent-hospital to justify disputed claims---Validity---Concept of having reasonable basis provided that advertiser must have had some recognizable substantiation for its claims made prior to making them in advertisement---Respondent-hospital failed to substantiate disputed claims regarding healthcare services made in its advertisement and provided no reasonable basis for the same---Various claims made by respondents were in violation of S. 10 of Competition Act, 2010--- Deceptive advertisements as to healthcare services posed significant risks to public---Fraudulent claims might entice consumers to undergo costly, ineffective and dangerous medical procedures---Successful healthcare provider and patient relationship was based on trust---For such a relationship, it was essential that patients had confidence that healthcare provider was honest and was not manipulating information for any purpose---Patients, being relatively in uninformed position, usually assumed that provider was telling them all they needed to know and information provided to them was accurate---Patient also trusted that healthcare provider had appropriate training and skills, and that he would listen to him, diagnose his disease and advise him accurately and objectively about the available course of treatment---Misrepresentation might harm patients by making them less likely to seek out treatments they needed or make them vulnerable to accept treatments that were not useful or necessary---Commission reprimanded the respondent-hospital and directed the same not to indulge in deceptive marketing practices in future by making disputed claims in its advertisement or marketing campaigns.

In re: Procter and Gamble 2010 CLD 1695 rel.

Syed Mansoor Ali Bukhari, Advocate Supreme Court on behalf of Dr. Al-Haj Mian Liaquat Ali.

Fayyaz Sindhu and Ashfaq Ali for Dr. Shazia Liaquat.

Dates of hearing: 23rd October, 11th November, 2014 and 15th January, 2015.

2015 C L D 1079

[Punjab Environmental Tribunal]

Before Justice (R) Ch. Muhammad Younis, Chairperson, Prof. Dr. A.R. Saleemi, Member Technical and Ubaid Rubbani, Member General

Messrs UNITED ETHANOL LIMITED and 6 others---Appellants

versus

ENVIRONMENTAL PROTECTION AGENCY, PUNJAB---Respondent

Appeals Nos.5, 8, 11, 17, 19, 21 and 24 of 2014, decided on 4th February, 2015.

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

----Ss. 12, 17, 22, 31 & 33---Application for environmental approval---Dismissal---Establishment/appellants installed tyre pyrolysis plants, which was latest technology, and widely accepted throughout the modern world---Increasing industrialization and motorization, had led to a significant rise in demand of petroleum products---Pyrolysis of scrap tyres could be used effectively to produce oil, thereby solving the problem of waste tyre disposal---Pyrolysis was a thermochemical decomposition of organic material at elevated temperature in the absence of oxygen---Environmental Protection Agency (EPA), did not communicate its approval or otherwise within the stipulated period, and under S.12(4) of Pakistan Environmental Protection Act, 1997, the reports were deemed to be approved, after lapse of statutory period---Environmental Protection Agency, after keeping the matter pending for a considerable period, communicated the impugned orders, whereby applications of the appellants for Environmental Approval was declined---Pakistan being a party to the 'Basel Convention', had adopted Revised Technical Guidelines for the environmentally sound management of used and waste pneumatic tyres---Pyrolysis, was internationally recognized as environmentally sound process of recycling waste tyres; and Guidelines had been adopted by Basel Convention---Pakistan had adopted the policy of sustainable development, use of natural resources scarcely and to use indigenous coal, biomass in power plants to reduce reliance upon imported oil---Environmental Protection Agency failed to adopt the legal procedure contained in S.12 of Pakistan Environmental Protection Act, 1997---Environmental Protection Agency was not empowered to decline demand of the appellants---Agency, either had to approve or could require submission of EIA by the proponent, if permissible by law; and for the reasons to be recorded, only in case the project was likely to have any adverse environmental effect---In the present case, Agency, travelled beyond its jurisdiction and declined environmental approval without requiring appellants to submit EIA---No adverse environmental effect had been discussed---Agency did not find that the project of the appellant, was contrary to environmental objectives---Grounds for declining the approval were extraneous---Approval could not be declined on the basis of any recommendation or direction of the Federal Government, as it was a Provincial subject---Impugned order passed by Agency, was not sustainable in the eyes of law and had not been passed by application of independent mind---Impugned orders were set aside by the Tribunal, and matter was remanded to the agency to review each and every Unit, in view of the specific facts and circumstances of the project, and decide the matter afresh after hearing the parties.

2014 CLD 222; 2006 SCMR 129; 1970 SCMR 323; PLD 1970 SC 173; 2013 CLC 141; 2012 SCMR 186; PLD 1994 SC 693; 2007 CLD 783; PLD 2010 Kar. 236; 2013 SCMR 642; 2013 CLC 325; 1992 SCMR 1152; PLD 2013 Lah. 343; 2011 SCMR 1621; 2012 SCMR 1034; 2000 SCMR 907; 1971 SCMR 681 and PLD 1993 SC 473 ref.

Yasin Hatif for Appellants.

Nawaz Manik, Director Legal assisted by Ijaz Majeed, Deputy Director Legal and Abdul Hafeez, AD Legal on behalf of the Respondent/EPA.

2015 C L D 1705

[High Court (AJ&K)]

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

Syed GHULAM HASSAN SHAH---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED through Chief Manager---Respondent

Civil Appeal No.126 of 2012, decided on 14th April, 2015.

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

----S. 22(2)---Civil Procedure Code (V of 1908), O. XLIII, R. 3---Suit for recovery of loan amount---Appeal---Procedure---Notice under O.XLIII, R. 3, C.P.C. was mandatory and condition precedent to exercise appellate jurisdiction before filing appeal---Failure to serve notice would render the appeal incompetent and liable to be dismissed---No reason had been advanced by the appellant for non-serving of notice---Appeal being against the basic provisions of statutory law, was not maintainable---Appeal was dismissed in circumstances.

Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad PLD 1993 Lah. 706; Nazir Ahmed Jagirani Balouch v. Province of Sindh and another 1987 CLC 1750; Attaullah Khan and others v. Samiullah Khan and others 1991 MLD 941 and Sindh Industrial Trading Estate Ltd. and 3 others v. Noorani Enterprises 1996 CLC 570 ref.

Syed Shahid Bahar for Appellant.

Shahzad Shafi Awan for Respondent.

2015 C L D 8

[Islamabad]

Before Athar Minallah, J

MONTAGE DESIGN BUILD through Partner---Appellant

Versus

The REPUBLIC OF TAJIKISTAN through the Embassy of Tajikistan and 2 others---Respondents

F.A.O. No. 77 of 2014, decided on 10th December, 2014.

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

----Ss. 126 & 128--- Contract of guarantee--- Bank/insurance/ performance guarantee---Encashment of such guarantee---Distinction between "conditional" and "unconditional" guarantees---Independence and autonomy of contracts of guarantee---Nature and scope---In cases of construction or service contracts, advance paid to the contractor was known as the "mobilization advance"; and normally as a pre-condition for release of the advance to the contractor, the latter was required to furnish a guarantee, either from a bank or an insurance company---Two separate and distinct agreements/contracts existed in such cases, which were firstly, the underlying agreement and secondly, the bank or insurance guarantee---On completion of the agreed work, the guarantee was to be released, or it may be enforced/encashed if a default was committed---Depending upon the intention of the parties, a bank or insurance guarantee may be either conditional or unconditional---Conditional guarantee could only be invoked on fulfilment of the condition(s) stipulated therein; for example proof of breach or default---In case of unconditional guarantee, the guarantor, that was either the bank or an insurance company, was under an obligation to honour its commitment by making payment on demand; regardless of any dispute between the parties arising out of or connected with underlying agreement/contract---"Mobilization guarantee" was an independent contact, and terms and conditions stipulated therein determined its nature and consequent effect---Like any other contract, a guarantee came into existence as a legally binding agreement between two or more willing parties, and therefore, the same had to be read and interpreted independent of any other agreement or the underlying agreement pursuant to which it had been furnished.

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

----Ss. 126 & 128---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2--- Contract of performance guarantee, in the form of a bank or insurance company issued guarantee---Grant of injunction/ restraining order under O. XXXIX, Rr. 1 & 2, C.P.C. against encashment of an unconditional bank guarantee/insurance guarantee in suit filed by contractor who furnished such guarantee--- Independence and autonomy of the contract of guarantee---Non-interference by courts in relation to the contracts of unconditional guarantee except in rare and exceptional circumstances---Concept of "fraud" and "irretrievable harm and injustice"---Comparative and illustrative jurisprudence and case-law, examined.

Standard Construction Company (Pvt.) Limited v. Pakistan through Secretary M/o Communication and others 2010 SCMR 524; Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191; Pak Consulting and Engineering (Pvt.) Ltd. v. Pakistan Steel Mills and another 2002 SCMR 1781; U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. (JT 1987 (4) SC 406); U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. (1988) 1 Supreme Court Cases 174; U.P. State Sugar Corporation v. Sumac International Ltd. (1997) 1 SCC 568; Itek Corporation v. First National Bank of Boston 566 Fed Supp 1210 (1983); Svenska Handelsbanken v. Messrs Indian Charge Chrome and others AIR 1994 SC 626; Messrs Tarapore and Co., Madras, v. Messrs V/o Tractoroexport Moscow and another AIR 1970 SC 891; United Commercial Bank v. Bank of India and others AIR 1981 SC 1426; Messrs BSES Ltd. (now Reliance Energy Ltd.) v. Messrs Fenner India Ltd. and another AIR 2006 SC 1148; Messrs Alcove Industries Ltd. v. Messrs Oriental Structural Engineers Limited AIR 2005 Delhi 173; Hindustan Construction Co. Ltd. v. State of Bihar and others (1999) 8 SCC 436; Vinitec Electronics Private Ltd. v. HCL Infosystems Ltd. (2008) 1 SCC 544; Hindustan Steel Works Construction Ltd. v. Tarapore and Co. and another (1996) 5 SCC 34 and Bolivinter Oil SA v. Chase Manhattan Bank and anothers (1984) 1 All ER 351 rel.

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

----Ss. 126 & 128---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Contract of performance guarantee, in the form of a guarantee issued by bank or insurance company---Grant of injunction/restraining order under O. XXXIX, Rr. 1 & 2, C.P.C. against encashment of an unconditional bank guarantee/insurance guarantee in suit filed by contractor who furnished such guarantee---Independence and autonomy of the contract of guarantee---Non-interference by courts in relation to the contracts of unconditional guarantee except in rare and exceptional circumstances---Grant of injunction against encashment of unconditional guarantee in cases of "fraud" and "irretrievable injustice and injury"---Scope---Bank or insurance guarantee was an independent contract, and its autonomy was to be protected; and the courts, as a rule, did not interfere with the autonomy of an unconditional and irrevocable guarantee except in certain exceptional circumstances, which were fraud and/or irretrievable injustice or injury; and it was not sufficient to raise or allege the plea of fraud, rather a prima facie case had to be made out to demonstrate an established fraud, both to the fact of fraud and the knowledge of the bank or the insurance company---Scope of irretrievable injury or injustice" was narrow and limited and the basic test was that the court had to be satisfied that plaintiff would have no adequate remedy if injunction was refused---In money matters there would be no "irreparable loss or injury", because a decree was executable and in order to satisfy the test for granting an injunction which restrained the encashment of an irrevocable and unconditional guarantee, the question ought to be whether a money decree passed by a competent court would be executable, and if the answer was in the affirmative, a case for granting an injunction would not be made out as it would not amount to an irretrievable injury or injustice---Plea of irretrievable injury or injustice therefore must be genuine and immediate and not speculative and a mere apprehension that the other party would not be able to pay, was not enough---Certainty and the impossibility to recover must be "decisively established"---Relying on the principle that a guarantee was independent and its autonomy was to be protected, a court should not be influenced by either the dispute arising out of the primary or underlying agreement, or whether or not in a suit, a prima facie case was made out---Said rule had been laid down to ensure certainty of binding contractual commitments, keeping the sanctity and autonomy of a guarantee a paramount consideration so as to ensure confidence in commercial and mercantile spheres; therefore the courts were slow and showed restraint in interfering in encashment of an unconditional guarantee, except in very exceptional cases.

Anwarul Haq v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and 13 others 1995 SCMR 1505; Messrs Continental Cable (Pvt.) Ltd. v. Messrs China Harbor Engineering Co. Ltd. and another 2011 CLD 1625; Sandoz Limited and another v. Federation of Pakistan and others 1995 SCMR 1431; Province of West Pakistan v. Messrs Mistri Patel and Co. and another PLD 1969 SC 80; Messrs Jamia Industries Ltd. v. Messrs Pakistan Refinery Ltd. PLD 1976 Kar. 644; Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd. Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596; Messrs Strong Built Enterprises (Pvt.) Ltd., Lahore v. Fauji Fertilizer Company Ltd. through Resident Manager, Sadiqabad 1998 MLD 1628; Hyundai-Hidco-Hakas Joint Venture v. Water and Power Development Authority PLD 2003 Lah. 714 and Messrs Syed Bhais (Pvt.) Ltd. through Director v. Government of Punjab through Secretary Local Government and 3 others 2012 CLD 298 ref.

Kirloskar Pneumatice Company Ltd. v. National Thermal Power Corporation Ltd. and another AIR 1987 Bombay 308 rel.

(d) Interpretation of Documents---

----Contents of a document had to be read as a whole.

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

----Ss. 126 & 128---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Contract of guarantee, nature of---Unconditional guarantees issued by banks and insurance companies---Obligation of banks and insurance companies to encash unconditional guarantees immediately---Non-interference by courts in such unconditional and irrevocable guarantees---Irrevocable and unconditional guarantee like any other contract stood on the foundation of entering into binding contractual obligations voluntarily and the principle of freedom to contract---Once parties had executed binding commitments, they were expected to observe certain standards of behaviour---Insurance Companies and Banks promptly issued unconditional guarantees and when demand for encashment of the same was made, many avoided fulfilling such commitments and undertakings---Delay in payment of guaranteed amount is usually made for allowing parties an opportunity to seek intervention of the courts in the hope that an injunction may be obtained---Similarly, contractors in their exuberance for release of advance payments under a contract, cause unconditional guarantees to be furnished as security, but when a demand on the same was raised for encashment, they expected that the courts would come to their rescue despite unambiguous language of the guarantee---Courts had no powers to interfere with, alter, vary, or in any other manner change the intention of the parties who voluntarily entered into binding contractual commitments; nor could the courts rewrite or defeat terms agreed and explicitly stipulated in a contract---Granting an injunction and restraining encashment of an irrevocable and unconditional guarantee would amount to changing nature of the agreed terms and conditions of the contract, and frustrating intention of the parties---High Court observed that the parties, particularly the banks and insurance companies, should exercise care and caution while issuing unconditional and irrevocable guarantees and it was expected of them to take sufficient care instead of avoiding their absolute obligations by delaying payments.

Barrister Suleman Khan for Appellant.

Barrister Afzal Hussain for Respondent No.1.

Altaf Ellahi Sheikh for Respondent No.2.

Muhammad Anwar Darr for Respondent No.3.

Date of hearing: 12th November, 2014.

2015 C L D 764

[Islamabad]

Before Shaukat Aziz Siddiqui, J

Messrs POLYFINE CHEMPHARMA (PVT.) LIMITED through Chief Executive---Appellant

versus

MONOPOLY CONTROL AUTHORITY, GOVERNMENT OF PAKISTAN through Registrar---Respondent

F.A.O. No. 71 of 2007, heard on 12th November, 2014.

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

----Ss. 21, 2(m), 19 & 20---Power of Monopoly Control Authority to call for information relating to undertakings---Scope---Appellant undertaking had impugned the order of the Monopoly Control Authority ("Authority") whereby the appellant was fined with a direction to provide information regarding its business---Contention of appellant inter alia was that it had provided the required information and that the provisions of the Monopolies and Restrictive Trade Practices (Control and Protection) Ordinance, 1970 were not applicable to the appellant---Held, that the Authority per S. 21 of the Ordinance was empowered to requisition certain information as asked from the appellant undertaking and said provision was applicable to the appellant, as admittedly the appellant was an undertaking however, instead of providing the requisite information, the appellant kept pressing a rigid and unlawful stance that the provisions of Monopolies and Restrictive Trade Practices (Control and Protection) Ordinance, 1970 were not applicable to the appellant---Reasonable opportunity was provided to the appellant for complying with directions of the Authority and the legal position was also clarified by the Authority to the appellant---No illegality existed in impugned order and Authority had acted in accordance with law---Appeal was dismissed, in circumstances.

Kohat Cement Company Ltd. v. Monopoly Control Authority, Islamabad and others 2004 CLD 868 ref.

Muhammad Haroon for Appellant.

M. Bilal, Advocate Supreme Court and Babar Bilal for Respondent.

Date of hearing: 12th November, 2014.

2015 C L D 899

[Islamabad]

Before Athar Minallah and Aamer Farooq, JJ

EHSAN ULLAH QURESHI---Appellant

versus

UNITED BANK LIMITED---Respondent

I.C.A. No.16 of 2015, decided on 31st March, 2015.

(a) Words and phrases---

----"Mutatis mutandis"---Meaning---All necessary changes, or all necessary changes having been made.

Black's Law Dictionary 19th Edition rel.

(b) Interpretation of statutes---

----Legislation by reference--- Meaning, object and scope---Independence of provisions--- Interpretation of Legislation by reference---Any Legislation whereby certain provisions of a section in a statute were incorporated into another; was generally known as Legislation by reference---Effect of such incorporation by reference to a provision of a statute was as if a new statute/provision(s) had come into force containing those provisions subject to such modification and alteration, if any, as made by or indicated in adopting statute---Where Legislation was by reference, and specific provisions from an Act or section(s) were incorporated into another provision , such provisions would operate as if they had been specifically been penned in the referring section or provision, meaning thereby that they operated independently from the Act or section from which they had been taken---Where there was specific legislation by reference; any amendment or repeal of the borrowed statute/provision did not affect the provisions/statute in which the same were incorporated.

1985 SCMR 70; AIR 2002 SC 3499; Aamir Raza Ashfaq v. Minhaj Ahmed Khan 2012 SCMR 6 and ZTBL v. Said Rehman 2013 SCMR 642 rel.

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

----Ss. 19(5) & 15---Execution of decree of Banking Court---Sale of mortgaged property---Interpretation of S. 19(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Striking down of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect on S. 19(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Question before the High Court was whether S.19(5) was fully applicable even after S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 had been struck down by the Supreme Court and declared ultra vires of the Constitution in the case titled National Bank of Pakistan v. Saif Textile Mills [PLD 2014 SC 283]---Held, that the Supreme Court had struck down entire S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, however it made no reference to S.19(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court observed that subsections of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 mentioned in S.19(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 operated independently and were to be considered a part of S.19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; as if they had been incorporated in S.19 notwithstanding S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Where there was specific legislation by reference; any amendment or repeal of the borrowed statute/provisions, did not affect the provisions/statute in which the same were incorporated---Since provisions of S.19 Financial Institutions (Recovery of Finances) Ordinance, 2001 were attracted only where decree had been passed in favour of the Financial Institution against the customer and in execution proceedings, the pledged hypothecated or mortgaged property was being auctioned/sold, therefore the reference to S.15 as provided in S. 19(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be made with necessary changes as the Legislature had provided that the same applied mutatis mutandis.

National Bank of Pakistan v. Saif Textile Mills Ltd. PLD 2014 SC 283; 1985 SCMR 70; AIR 2002 SC 3499; Aamir Raza Ashfaq v. Minhaj Ahmed Khan 2012 SCMR 6 and ZTBL v. Said Rehman 2013 SCMR 642 rel.

UBL v. Defence Housing Authority 2004 CLC 215 ref.

Ahmed Awais for Appellant.

Habib Ahmed Bhatti for Respondent.

2015 C L D 938

[Islamabad]

Before Athar Minallah and Aamer Farooq, JJ

EHSAN ULLAH QURESHI---Appellant

versus

UNITED BANK LIMITED through Manager---Respondent

I.C.A. No. 16 of 2015, decided on 29th January, 2015.

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

----Ss. 15(6) & 19---Civil Procedure Code (V of 1908) O. XXI, R. 66---Execution of decree of Banking Court---Sale of mortgaged property---Application of decree holder bank for possession of mortgaged property was allowed by Banking Court---Contention of judgment debtor was that he had been condemned unheard as he was under the impression that the cause list on date of hearing of said application had been cancelled---Held, that examination of order sheet in execution proceedings indicated that judgment debtor was delaying the adjudication on one pretext or the other---Main contention of the judgment debtor that he did not appear as the cause list was cancelled was not tenable as the cause list for the said date indicated that the hearing was not cancelled and even otherwise, judgment debtor had not challenged the decision on objection petition filed vide impugned order---Terms of sale were still to be settled by the Executing Court and judgment debtor could appear in execution proceedings and could have the same settled in his presence as provided under O.XXI, R. 66, C.P.C. and raise objections thereto---Appeal was dismissed.

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

----Ss. 15, 19 & 7---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree and sale with or without intervention of Banking Court---Sale of mortgaged property---Transfer of possession of mortgaged property to decree-holder bank prior to its auction/sale---Interpretation and scope of Ss. 15 & 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Application of provisions of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 apply to cases where mortgaged property was sold by the Financial Institution without intervention of the court inasmuch as the said section empowered the Financial Institution to seek possession of mortgaged property and to transfer the same by Financial Institution without intervention of the Banking Court---Section 15(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 could be regarded as an exception and could be held to be applicable in case of sale of mortgaged property with the intervention of the Banking Court---Section 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 allowed the Financial Institution to sell mortgaged property with or without intervention of the court and S. 19(5) of the Ordinance made S.15(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001 applicable to sale of mortgaged property by the Financial Institutions under S. 19(3) of the Ordinance---Section 15(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was therefore applicable even in case where sale of mortgaged property was sold with the intervention of the Banking Court---In execution proceedings before the Banking Court, if one procedure was adopted by the Financial Institution, then same was to be followed and could not be deviated from---By putting decree holder in possession of the mortgaged property under S.15(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 prior to its auction by the Banking Court in accordance with procedure laid down in the C.P.C.; the same did not tantamount to following two different procedures---Section 7(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that the Banking Court shall follow procedure laid down in the C.P.C. in respect of matters for which procedure was not provided in Financial Institutions (Recovery of Finances) Ordinance, 2001 and S. 19(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 provided for sale whether without the intervention of the court and if it was with the intervention of the court, the mortgaged property could be sold in accordance with procedure provided in the C.P.C. and the decree holder could be put in possession of the same even prior to such sale/auction.

Muhammad Hussain v. IDBP 2014 MLD 192 rel.

Muhammad Safeer Mughal for Appellant.

Muhammad Habib Ahmed Bhatti for Respondent.

2015 C L D 1149

[Islamabad]

Before Athar Minallah and Aamer Farooq, JJ

Messrs CAPITAL POULTRY FEED AND DAAL MILLS through Managing Partner and 5 others---Appellants

versus

ATLAS BANK LIMITED through Branch Manager and 3 others---Respondents

E.F.A. No. 2 of 2014, decided on 23rd April, 2015.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66 & 90---Execution of decree of Banking Court---Sale of mortgaged property---Auction proceedings---Notice of proclamation under O. XXI, R. 66, C.P.C.---Objection petition under O. XXI, R. 90, C.P.C. filed by the judgment debtors was dismissed by Banking Court---Contentions of judgment-debtor were, inter alia, that no notice under O. XXI, R. 66, C.P.C. was served to the judgment debtors; that the property was wrongly described in the proclamation and that the auction proceedings were conducted fraudulently---Held, that contention of judgment-debtors that no notice under O. XXI, R. 66, C.P.C. were issued to them was not tenable inasmuch that the property was admitted to be auctioned in the past but the same could not materialized and the fact that it was ordered again to be auctioned did not require fresh issuance of notice under O. XXI, R. 66, C.P.C.---Where judgment-debtors were aware of auction proceedings, they could not challenge the auction on grounds that notice was sent to them on incorrect address, as notice, in the present case, was also published in the newspaper---Contention that the property was wrongly described was also not tenable as the bidders made their bids at the site of the property which was to be auctioned, therefore, they knew that the said property was a building with fixtures and the bids were made accordingly therefore no prejudice had been caused to the judgment-debtors---Said property had been auctioned at more than the reserved price and the auction report indicated that bidders actively participated in the process---High Court observed that it was the prerogative of the decree-holder to have any or all of the mortgaged properties sold in the execution of the decree---No illegality existed in the impugned order---Appeal was dismissed, in circumstances.

Messrs Nowshera Bricks and Tiles (Pvt.) Limited and others v. Regional Development Finance Corporation 2002 CLC 904 and Nadeem Akhtar Tabasum v. MCB Ltd. and others 2014 SCMR 1371 ref.

Ghulam Abbas v. Zohara Bibi and another PLD 1972 SC 337 and Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. and others v. Allied Bank of Pakistan and another 2014 CLD 1404 rel.

Tariq Saleem Sheikh for Appellants.

Raja Muqsit Nawaz Khan for Respondent No.1.

Irsalan Rasheed Qureshi for Respondents Nos.3 and 4.

Date of hearing: 5th March, 2015.

2015 C L D 1721

[Islamabad]

Before Athar Minallah, J

GREAT BEAR INTERNATIONAL SERVICES (PVT.) LTD.---Petitioner

Versus

PAKISTAN TELECOMMUNICATION AUTHORITY---Respondent

F.A.O. No. 33 of 2012, decided on 29th May, 2015.

Pakistan Telecommunication (Re-organization) Act (IV of 1996)---

----Ss. 23 & 43---Civil Procedure Code (V of 1908), O.XXIX, R.1---Spectrum fee, non-payment of---Use of spectrum---No resolution by Directors of the Company---Effect---Appellant company was holding licence for rendering services to its customers and was to pay various fees and charges---Authority, after issuing show-case notice to appellant, issued enforcement order---Plea raised by appellant company was that it did not use the spectrum, therefore, was not liable to pay spectrum fee---Contention of authorities was that proceedings were not validly filed as there was no resolution of Board of Directors of the Company in such regard---Validity---Allocation and assignment of spectrum, as a scarce resource, was to be undertaken through a transparent process and by means of auction---Spectrum being a scarce resource, therefore, regardless of its use, its allocation or assignment attracted levy and surcharge of spectrum fee---Licensee to whom such a scarce resource was allocated, was liable to pay the fee regardless of its use---Law suit or legal proceedings invalidly or incompetently instituted in the name of incorporated company (a juridical person) could not be treated as legal proceedings by that company---Proceedings being not valid/legal proceedings, instituted by appellant company, therefore, even a subsequent ratification could not cure the defect by making proceedings valid and competent---High Court declined to interfere in enforcement order passed by authorities against appellant---Appeal was dismissed in circumstances.

Mian Ejaz Shafi and others v. Federation of Pakistan and others PLD 1997 Kar. 604; Rahimullah Khan and 65 others v. Government of N.-W.F.P through Secretary Agricultural Forest and Cooperation Department Peshawar and 5 others 1990 CLC 550; Telecard Limited through authorized representative v. Pakistan Telecommunication Authority through Chairman 2014 CLD 415; 'Messrs Razo (Pvt.) Limited v. Director, Karachi City Region Employees Old Age Benefit Institution 2005 CLD 1208; American Life Insurance Company (Pakistan) Ltd. v. Commissioner, Sindh Employees Social Security Institution and others 2009 CLD 1329; WAPDA and another v. Messrs Ghulam Rasool & Co. (Pvt.) Ltd. 2005 MLD 1165; Sirajuddin Paracha and 12 others v. Mehboob Ellahi and 3 others PLD 1997 SC 276; Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Pakcom Limited and others v. Federation of Pakistan and others PLD 2011 SC 44; Pak Telecom Limited v. Pakistan Telecommunication Authority, Islamabad PLD 2014 SC 478; H.M. Ebrahim Sait v. South India Industries Ltd. AIR 1938 Mad. 962; Government of Pakistan v. Premier Sugar Mills and others PLD 1991 Lah. 381; Dr. S.M. Rab v. National Refinery Ltd. PLD 2005 Kar. 478; Abdul Rahim v. United Bank Ltd. of Pakistan PLD 1997 Kar. 62 and Qamar Construction (Pvt.) Ltd. v. Saleemullah and others 2008 CLD 239 rel.

Ali Raza, Advocate Supreme Court and Ajmal Khattak for Petitioner.

Barrister Munawar Iqbal Duggal for Respondent.

Date of hearing: 6th February, 2015.

2015 C L D 1787

[Islamabad]

Before Aamer Farooq, J

NASIR ALI SHAH BUKHARI and 2 others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Finance and 7 others---Respondents

Writ Petition No.1274 of 2015, decided on 5th May, 2015.

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

----S. 47---Civil Procedure Code (V of 1908), O. XXIII, R. 1--- Constitution of Pakistan, Art. 199---Constitutional petition---Withdrawal of petition--- Suspension of business of Banking Company-Petitioners were running a Banking Company and State Bank of Pakistan had suspended its business---Earlier petition filed by petitioners was withdrawn unconditionally---Plea raised by petitioners was that they had arranged a foreign investor to invest in the company-Validity-Same issues having been raised, present petition was barred under O. XXIII, C.P.C., as Civil Procedure Code, 1908, was applicable to Constitutional petition---Nature of powers exercised by State Bank of Pakistan under S. 47 of Banking Companies Ordinance 1962, was not determination of any dispute or rights and liabilities as result of dispute happening in past---Power under S. 47 of Banking Companies Ordinance, 1962, was executive and was exercised in the capacity as a regulator of Banking Company-Where executive was empowered under law to prepare a scheme in respect of any Banking Company, in its capacity as supervisory/regulatory it could not exercise judicial function in any way---High Court declined to interfere in order passed by State Bank of Pakistan---Petition was dismissed in circumstances.

Sheikh Riaz ul Haq and another v. Federation of Pakistan through Ministry of Law and others PLD 2013 SC 501; In the matter of Reference No.2 of 2005 by the President of Pakistan PLD 2005 SC 873; Jibendra Kishore Achharyya Chowdhury and 58 others v. The Province of East Pakistan and Secretary, Finance and Revenue (Revenue) Department, Government of East Pakistan PLD 1957 SC 9; Director Food N-.W.F.P and another v. Messrs Madina Flour and General Mills (Pvt.) Limited and 18 others PLD 2001 SC 1; Brig. (Retd.) F.B. Ali and another v. The State PLD 1975 SC 506; Vasanthial v. State of Bombay AIR 1961 SC 4; East and West Steamship v. Pakistan PLD 1958 SC 41; Province of West Pakistan v. Siraj ul Haq PLD 1966 SC 854; Benazir Bhutto v. FOB PLD 1988 SC 416; OMV (Pakistan) Exploration GMBH, Islamabad v. Federation of Pakistan through Secretary, Revenue Division Islamabad and 2 others 2012 PTD 396; 2010 PLC (C.S.) 478; 2000 SCMR 1017; 2002 SCMR 970; 2006 MLD 978; (1981 PLC 286; PLD 1983 SC 358; Dr. Akhtar Hussain v. Federation of Pakistan and others 2012 SCMR 455; Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026 and Hussain Bakhsh v. Settlement Commissioner, Rawalpindi and others PLD 1970 SC 1 ref.

Pakistan Tobacco Company Limited and others v. Government of N.-W.F.P. through Secretary of Law and others PLD 2002 SC 460; Tariq Transport Company Lahore v. The Sargodha-Bhera Bus Service Sargodha and 2 others PLD 1958 SC 437; Elahi Cotton v. Commissioner of Income Tax PLD 1997 SC 582; Arif Hussain Shah v. Operative Director, Administration, Electric Equipment Manufacturing Co., Ltd. and others PLD 1979 Lah. 603 and Muhammad Mohsin Ghummon and others v. Government of Punjab and others 2013 SCMR 85 rel.

(b) Discretion---

----Discretion has to be exercised in a fair and reasonable manner.

Amjad Hussain Bokhari, Hasham Hayat Wathra and Barrister Hamza Randhawa for Petitioners.

Salman Akram Raja, Malik Ghulam Sabir for Respondents.

2015 C L D 1902

[Islamabad]

Before Athar Minallah and Aamer Farooq, JJ

S.M. BAQIR BUKHARY and another---Appellants

Versus

STANDARD CHARTERED BANK through Manager and another---Respondents

F.A.O. No. 208 of 2010, decided on 31st March, 2015.

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

----Ss. 22 & 19(7)---Suit for recovery of loan---Consent order---Appeal--- Maintainability---Impugned order was passed with the consent of the parties---No appeal would lie against a consent order---Appellant had not raised any cogent ground on the basis of which impugned order could be set aside---Appeal was dismissed in circumstances.

Syed Zulfiqar Abbas Naqvi for Appellants.

Messrs Raja Muqsit Nawaz Khan and Syed Kazim Raza Naqvi for Respondents.

2015 C L D 33

[Sindh]

Before Nadeem Akhtar, J

TRANSMISSION ENGINEERING INDUSTRIES LIMITED through Duly Authorised Director---Plaintiff

Versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through Managing Director---Defendant

Suit Nos. B-06 of 2008 and 80 of 2002, decided on 9th August, 2014.

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

----Ss.9 & 22---Civil Procedure Code (V of 1908), O.IX, R.9 & O.XVII, R.3---Suit for rendition of account, recovery of money and damages--- Dismissal for non-prosecution--- Failure to produce evidence---Plaintiff sought restoration of his suit which was dismissed for non-prosecution---Validity---Time was granted to plaintiff at least on two occasions at his request to produce evidence but plaintiff failed to produce evidence and comply with orders passed in such behalf by Court---Consequences for failure on part of plaintiff in producing its evidence, causing attendance of its witnesses, performing any other act necessary to further progress of suit, for which time was allowed by court, as specifically enumerated in O. XVII, R. 3, C.P.C. were fully attracted at the time when his suit was dismissed for non-prosecution---Such order of dismissal of suit was under O. XVII, R. 3, C.P.C., which was to be deemed to be judgment on merits and adjudication in which rights of parties with regard to controversy in suit were conclusively determined by court---Order of dismissal of suit was a judgment on merits and only remedy for plaintiff was to file appeal against that judgment under S.22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which specifically provided that any person aggrieved by any judgment, decree, sentence or final order passed by Banking Court might prefer appeal to High Court---Application filed by plaintiff for restoration of suit was barred under S.22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, and not maintainable---High Court declined to restore suit of plaintiff which was dismissed for non-prosecution---Application was dismissed in circumstances.

Messrs Makran Fisheries (Pvt.) Limited v. Platinum Co. 2006 CLD 52; Shaikh Kamran Maqbool v. Bolan Bank Limited through Manager and another 2006 CLD 163 and Shahid Hussain v. Lahore Municipal Corporation PLD 1981 SC 474 rel.

Zulfiqar Ali v. Lal Din and another 1974 SCMR 162; Muhammad Yousuf v. Shamsuddin 1980 SCMR 519; Kh. Ghulam Qadir and another v. Muhammad Sharif and 11 others 2000 MLD 2047; Haji Ahmad Hassan v. Dr. Mian Aziz Ahmad and 5 others 1979 CLC 629; Muhammad Farid v. Mst. Shahnaz Begum and 5 others PLD 1987 AJ&K 44; Sufi Ghulam Mohyuddin v. Khushi Muhammad and 2 others 1997 SCMR 924 and Munawar Hussain v. Additional District Judge, Jhelum and 3 others 1998 SCMR 1067 ref.

M. Siddique Shahzad for Plaintiff.

Nabeel Kolachi for Defendant.

Date of hearing: 3rd December, 2013.

2015 C L D 52

[Sindh]

Before Aqeel Ahmed Abbassi and Muhammad Junaid Ghaffar, JJ

BALOCHISTAN GLASS LIMITED through Authorized Representative and 2 others---Petitioners

Versus

BANK ALFALAH LIMITED and 2 others---Respondents

Constitutional Petition No.172 of 2012, decided on 10th October, 2014.

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

----Ss. 10 & 9---Constitution of Pakistan, Art. 199---Constitutional petition---Application for leave to defend---Procedure of Banking Court---Petitioner/defendant impugned order of Banking Court whereby application for leave to defend of petitioner/defendant was dismissed---Contention of petitioner/defendant was that such dismissal was done summarily through a stereotypical order; which was identical to orders passed by the same Banking Court while dismissing other applications for leave to defend---Held, that perusal of various orders in juxtaposition with the impugned order; revealed that stereotype identical orders had been passed by the same Banking Court whereby leave to defend applications filed by various parties had been dismissed in a mechanical manner, without proper application of mind to the facts of each case---High Court set aside impugned order and remanded matter to Banking Court for decision afresh with the direction to pass a well reasoned speaking order after providing of opportunity of hearing to both parties---Constitutional petition was allowed, accordingly.

Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165; Bolan Bank Ltd. v. Capricorn Enterprise (Pvt.) Ltd. 1998 SCMR 1961; Doha Bank Limited through Duly Authorized Attorneys v. Javaid Carpets (Pvt.) Ltd. through Managing Director and 6 others 2001 MLD 1532 and Ms. Afshan Ahmed v. Messrs Habib Bank Limited and another 2002 CLD 137 ref.

(b) Administration of justice---

----Natural Justice, principles of---All courts, including courts subordinate to the High Court, and special courts such as the Banking Courts, Labour Courts, Customs Courts, Anti-Corruption Courts and Special Tribunals; were required to pass well-reasoned and speaking orders after providing of an opportunity of hearing to litigant parties, strictly in accordance with law---Such was not only the mandate of the Constitution, and law but was also a requirement for the smooth administration of justice, equity and fair play and compliance to such principles substantially reduced unnecessary litigation which may ensue pursuant to sketchy and bald judicial orders---High Court observed that all subordinate courts and tribunals functioning within the territorial jurisdiction of the Province should ensure that principles of natural justice and legal mandate provided under a statute was not to be violated and cases should be decided through speaking and well reasoned orders after providing an opportunity of being heard to the parties, strictly in accordance with law.

Salahuddin Ahmed for Petitioners.

Jam Asif Mehmood for Respondents.

2015 C L D 64

[Sindh]

Before Amer Raza Naqvi, J

ASIF MANNAN and 9 others---Plaintiffs

Versus

SULEMAN LALLANI and 9 others---Defendants

Suit No.579 of 2014, decided on 17th October, 2014.

Companies (Issue of Capital) Rules, 1996---

----Rr. 5 & 10---Companies' Share Capital (Variation in Rights and Privileges) Rules, 2000, Rr. 3 & 5---Civil Procedure Code (V of 1908), O. XXXIX Rr. 1 & 2---Issue of right shares by a listed company---Application for grant of injunction---Mandatory nature of requirements of R. 5 of Companies (Issue of Capital) Rules, 1996---Relaxation of the Companies (Issue of Capital) Rules, 1996---Scope---Phrase "not practicable"; connotation---Plaintiffs sought to restrain the Securities and Exchange Commission of Pakistan from giving approval to issuance of right shares in the Extraordinary General Meeting of the defendant Company---Contention of the plaintiff was inter alia that as per R.5 of the Companies (Issue of Capital) Rules, 1996, financial projections had to be signed by all directors who were present in the meeting in which issuance of right shares were approved; however in the present case one of the directors present in the meeting did not sign the financial projection---Contention of plaintiff Company, on the other hand, was that under R.10 of the Companies (Issue of Capital) Rules, 1996; the Authority/Commission could relax any of the Companies (Issue of Capital) Rules, 1996; subject to conditions it may deem fit---Held, that per R.10 of the Companies (Issue of Capital) Rules, 1996; relaxing of any of the Companies (Issue of Capital) Rules, 1996 could only be done in a situation which could be termed as "not practicable" and said phrase could only be relevant where it was beyond the control of the Company or it would be a circumstance in which in any given situation it was not possible for the Company to comply with any of the Companies (Issue of Capital) Rules, 1996---Non-signing of a document by a director, therefore, did not fall into such category and thus such issuance of rights shares could not be approved legally by the extraordinary general meeting of the defendant Company---High Court observed that said reason was sufficient to declare approval of issuance of right shares as void and High Court restrained the Securities and Exchange Commission of Pakistan from giving approval to the decision of the extraordinary general meeting of defendant Company---Application for temporary injunction, was allowed accordingly.

1998 CLC 237; PLD 1969 Lah. 615; 1999 CLC 1938; 2000 CLD 1314; 2010 CLD 963; 2009 CLD 1687; 2007 CLD 1047; 2002 CLD 1747; 2002 CLD 1314; 2006 CLD 1478; 2009 CLD 541; PLD 2013 SC 829; PLD 1997 Kar. 432; 2005 CLD 747; 2006 CLD 635; 2006 CLD 1470 and 2010 CLD 1110 ref.

Murtaza Wahab for Plaintiffs.

Khalid Javed Khan for Defendants Nos.1 and 9.

Dates of hearing: 26th, 29th and 30th September, 2014.

2015 C L D 89

[Sindh]

Before Munib Akhtar, J

Messrs U.K. INTERNATIONAL, through Sole Proprietor---Plaintiff

Versus

TRADING CORPORATION OF PAKISTAN---Defendant

Civil Suit No.2 of 2006, decided on 17th April, 2014.

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

----S. 230---Civil Procedure Code (V of 1908) O. VII, R. 11---Agent cannot personally enforce, nor be bound by, contracts on behalf of the principal---Presumption of contract to the contrary---Sale and purchase of goods for a merchant abroad---Suit for declaration and specific performance of the contract filed by agent of foreign principal---Application for rejection of plaint ---- Contention of defendants was that the plaintiff was merely an agent of the principal, and under S.230 of the Contract Act, 1872 such an agent could neither liable for nor could sue on any contract unless there was a contract to the contrary---Held, that original offer was made by the principal, but it never materialized in a contract, and a revised offer was verbally made by the agent/plaintiff (who had full authority to negotiate the contract), which offer was accepted by the defendants in writing---Revised offer, upon acceptance, materialized into a contract between the parties, therefore the contract was entered into by the parties by the agent acting on behalf of the foreign principal and not directly by the principal itself---Section 230 of the Contract Act, 1872, with the first exception stated therein, was therefore applicable to the case and the plaint could not therefore be rejected---Application was dismissed.

Angbats Aktiebolaget Bohuslanska Kusten and another v. Central Hardware Stores, Chittagong PLD 1969 SC 463; Pakistan Insurance Corporation v. Pakistan National Shipping Corporation and others 1994 MLD 667; Bombay Co. Ltd. v. Haji Adam Haji Peer Muhammad Issak PLD 1959 W.P. (Kar.) 411; Pakistan Insurance Corporation v. Pan Islamic Steamship Co. Ltd. 1988 CLC 1373; Capt. Dr. Abdul Wahab and others v. Province of Punjab and others 1986 MLD 2049 and Raj Bahadur Lal v. Silta Prasad and others AIR 1951 All 596 distinguished.

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

----O. XXX, R.10 , O.VII, R.11 & S.153---Suit by or against sole proprietorship---Plaint filed in the name of the sole proprietorship and not in the personal name of the proprietor---Rejection of such plaint---Scope---Suit for declaration, and specific performance of contract---Application for rejection of plaint on ground that the plaintiff, being a sole proprietorship, ought to have instituted proceedings in his personal name and not in the trading name of the proprietorship---Held, that description of a plaintiff given in the title of the plaint must be carefully examined, and if such examination revealed, or could reasonably be regarded as revealing the true identity of the party (that is the proprietor); then the suit must be held to have been brought in the name of the latter---However, if despite such examination, the true identity of plaintiff could not be determined, then it could be said that the suit had been brought by an entity that had no existence in the eye of the law (that is the proprietary concern) and it may be that such suit was to be dismissed or the plaint rejected---In the present case, it was evident from the title of the plaint that the person filing the suit was the sole proprietor whose identity was substantially disclosed and no vested right could be said to have been accrued to the defendant therefore the present case was one of bona fide mis-description to which no limitation could apply and the error could be corrected under S.153, C.P.C.---Plaint therefore, could not be rejected---Application was dismissed, in circumstances.

Trading Corporation of Pakistan (Pvt.) Ltd. v. Messrs Syed Corporation PLD 2006 Kar. 258; Messrs M.A. Majeed Khan v. Karachi Water and Severage Board and others PLD 2002 Kar. 315 and Habib Bank Ltd. v. Iqbal I. Chundrigar and another 1983 CLC 1464 distinguished.

Angbats Aktiebolaget Bohuslanska Kusten and another v. Central Hardware Stores, Chittagong PLD 1969 SC 463; Bombay Co. Ltd. v. Haji Adam Haji Peer Muhammad Issak PLD 1959 WP (Kar.) 411; Capt. Dr. Abdul Wahab and others v. Province of Punjab and others 1986 MLD 2049 and Ismail Haji Sulaiman v. Hansa Line and another PLD 1961 Dacca 693 ref

Collector of Customs v. Imran Enterprises 2001 CLC 419 and Aran Saz Contracts v. Pak Chromical Ltd. 1999 MLD 1781 dissented from.

Farhan Zia and Muhammad Rehan Quraishy for Plaintiff.

S. Mamnoon Hasan for Defendant.

Date of hearing: 31st March, 2014.

2015 C L D 107

[Sindh]

Before Muhammad Ali Mazhar, J

SHAFIQUE AHMED QURESHI and others---Plaintiffs

Versus

HYDERABAD CHAMBERS OF COMMERCE AND INDUSTRY through President and others---Defendants

Suit Nos. 1408 and 1409 of 2012, decided on 5th August, 2013.

(a) Trade Organizations Ordinance (XLIX of 2009)---

----Ss. 35, 1(3) & 14---Trade Organizations Ordinance (XLV of 1961), S. 35---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 20, 21 & 22---Specific Relief Act (I of 1877), S. 42---Trade Organizations, regulation of---Repeal of Trade Organizations Ordinance, 2009 and Trade Organizations Ordinance, 1961---Effect---Securities and Exchange Commission of Pakistan (SECP) and regulation of Trade Organizations---Suit for declaration to the effect that elections held by defendant Chamber of Commence were held illegally and without jurisdiction and further that associate members were inducted illegally---Maintainability of such suit---Contention of the plaintiffs/members of the Chamber of Commerce was that many of the associate members of the defendant Chamber of Commence were inducted despite allegedly not being qualified to become members; and the plaintiffs filed complaints before the Securities and Exchange Commission of Pakistan; which did not take any action on the ground that it was not the regulatory authority in such matters and the same was the Director General Trade Organization appointed by the Federal Government under the Trade Organization Ordinance, 2009---Plaintiffs inter alia contended that such suit was maintainable as the Trade Organizations Ordinance, 2009 had been repealed and the Securities and Exchange Commission of Pakistan was to regulate the Chamber of Commerce---Contention of some of the defendants/members was however that after repeal of Trade Organizations Ordinance, 2009; the Trade Organizations Ordinance, 1961 stood revived; hence the suit was not maintainable---Held, that examination of articles of the memorandum of association of the defendant Chamber of Commerce revealed that the object and business of the Chamber of Commerce was not confined to the Province; and High Court held that the Trade Organizations Ordinance, 1961, so far as its application to the defendant Chamber of Commerce was concerned, stood repealed---High Court observed that after such repeal, the authority under the Trade Organizations Ordinance, 2009 had passed some orders which were impugned in various constitutional petitions and such orders were suspended by Superior Courts---Under such circumstances, High Court observed, that the plaintiffs on the premise that the Trade Organizations Ordinance, 1961 was no more in field, invoked jurisdiction of the Securities and Exchange Commission of Pakistan to assail the issuance of membership to associate members; however the SECP, on such complaint did not take any action---High Court further observed that the argument that the Trade Organizations Ordinance, 1961 was revived after expiry of the Trade Organizations Ordinance, 2009; was incorrect---High Court held that the present suit was, therefore, maintainable and the court had jurisdiction to try the suit.

Abu Dhabi Medical Devices Co. L.L.C. v. Federation of Pakistan 2010 CLC 1253 and 2012 CLD 1339 rel.

Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879; PLD 2010 Kar. 261; Lahore Race Club v. Raja Khusbakht-ur-Rehman PLD 2008 SC 707; Rimpa Sunbeam's case PLD 2006 Kar. 444; Muhammad Saeed v. Federation of Pakistan PLD 1954 Sindh 117; Pakistan v. Waliullah Sufyani PLD 1965 SC 310; Mushtaq Ali Tahirkheli's case PLD 2003 SC 930; Chalna Fibre v. Abdul Jabbar PLD 1968 SC 381; 2010 CLD 760; PLD 2011 Kar. 416; 1998 SCMR 1618 and PLD 1993 SC 395 ref.

Naveed Aslam's case PLD 2010 Kar. 261; 2011 CLC 1176; Lahore Race Club v. Raja Khusbakht-ur-Rehman PLD 2008 SC 707; Rimpa Sunbeam Cooperative Housing Society's case PLD 2006 Kar. 444; Muhammad Saeed's case PLD 1954 Sindh 117; Pakistan v. Waliullah Sufyani's case PLD 1965 SC 310; Mushtaq Ali Tahirkheli's case PLD 2003 SC 930; Chaina Fibre's case PLD 1968 SC 381; Pakistan Kuwait Investment Company Ltd.'s case 2010 CLD 760; Normeen Shafi's case PLD 2011 Kar. 416; Hitachi Ltd.'s case 1998 SCMR 1618 and Muhammad Yasin's case PLD 1993 SC 395 distinguished.

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

----S. 42---Companies Ordinance (XLVII of 1984) Ss. 159 & 177---Election of Trade Organization--- Chamber of Commerce---Interpretation of Articles of Association of said Chamber of Commerce---Suit for declaration to the effect that elections held by defendant Chamber of Commence were held illegally and without jurisdiction and further that associate members were inducted illegally---Grievance of plaintiff was that the associate members were inducted illegally and in violation of the Articles of Association which classified associate members as those persons "which are not a body corporate, or a multinational or sales tax registered manufacturer and business concern having annual turnover of Rs.50 million or above"---Associate members were inducted on the interpretation that said Article started with a negative covenant by use of the word "not", therefore having a turnover of 50 million rupees was not mandatory to become associate member of the Chamber of Commerce---Held, that if such interpretation was accepted, it would create absurdity and complications and any person would become an associate member without any threshold, which was against the true intention and scope of classification of an associate member under the Articles of Association of the Chamber of Commerce---Basic intention of the author was that such Article of Association should show the differentiation of two classes of members, corporate and associate, however the basic criteria and the threshold was having an annual turnover of fifty million rupees or above---Body corporate, multinational corporation or sales tax registered manufacturer having turnover of fifty million rupees or above and business concern having annual turnover of fifty million or above could become a corporate member---For becoming an associate member, person may not be body corporate, and/or multinational or a sales tax registered manufacturer but according to the intention of the author manifesting from Articles of Association; such member must have annual turnover of fifty million rupees or above---Word "and" used was qualifying that associate member may not fulfil the above pre-requisite but he should be a business concern having a turnover of fifty million rupees or above---Such threshold of fifty million rupees turnover, if read in negative, would mean that there would be no control and any person could apply for associate membership no matter what business such person may be doing---Associate member therefore could only be allowed with some restrictions in the class itself and the requirement of having a minimum turnover was the true spirit and interpretation of said Article of Association---High Court observed that the entire controversy could be resolved between both types of members if an extraordinary general meeting (EGM) of the Chamber of Commerce was convened under S.159 of the Companies Ordinance, 1984---High Court directed that the present executive committee should continue till next election, and that the EGM should decide the fate of Articles of Association concerning associate members; and at the EGM, the date of next elections should be announced; which shall be conducted under the supervision of Nazir of the Court---High Court enumerated further directions for the fair conduct of the elections in accordance with law and Articles of Association---Suits were decreed, accordingly.

Dr. Muhammad Farogh Naseem for Plaintiffs (in both cases).

Sardar M. Aijaz Khan for Defendant No.1 (in both cases).

Ravi Pinjani for Defendants Nos.3 to 8 (in Suit No. 1408 of 2012).

Jhamat Jethanand for Defendants Nos. 11 to 18 (in Suit No.1408 of 2012).

Jhamat Jethanand for Defendants Nos. 6 to 13 (in Suit No. 1409 of 2012).

Haq Nawaz Talpur for Defendants Nos. 9 and 10 (in Suit No.1408 of 2012).

Haq Nawaz Talpur for Defendant No.8 (in Suit No. 1409 of 2012).

Dates of hearing: 27th March, 10th, 24th April and 29th May, 2013.

2015 C L D 147

[Sindh]

Before Amer Raza Naqvi, J

MUHAMMAD ASIF KHAN----Applicant

Versus

Mst. ZUBAIDA KHANUM and 4 others----Respondents

Civil Miscellaneous Applications Nos.4800 and 243 of 2014 in Civil Suit No.309 of 2006, decided on 11th September, 2014.

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

----Ss. 19 & 15---Civil Procedure Code (V of 1908), O.I, R.10 & O.XXXIX Rr.1, 2---Specific Relief Act (I of 1877), Ss. 12, 9 & 54---Suit for specific performance of contract to sell immovable property; for possession and mandatory and permanent injunction---Impleading of decree-holder bank (in a separate banking suit) pertaining to the same property, as necessary party---Plaintiff inter alia sought direction to restrain proceedings for execution of decree pending before Banking Court in a separate suit but pertaining to the same property which was mortgaged in favour of the bank---Contention of plaintiff was that he had purchased the property in question from the defendants and was partially in possession of the same; and in case proceedings for execution of decree before Banking Court were not stayed and mortgaged property was sold; he would suffer irreparable loss---Held, that plaintiff did not implead the decree-holder bank as defendant in the suit when the suit was filed and there was no grievance mentioned against the now-proposed defendant (the bank) by the plaintiff---Admittedly, the property stood mortgaged in favour of the bank prior to execution of alleged agreement to sell the property---Record revealed that said agreement was executed during pendency of the banking suit filed by the bank---High Court observed that in such circumstances, applications to restrain execution proceedings before the Banking Court or to implead the decree-holder bank as defendant, could not be accepted, and were dismissed, accordingly.

S. Amjad Hussain for Applicant.

S. Danish Ghazi for Intervener.

2015 C L D 170

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

ALLIED BANK LIMITED---Appellant

Versus

ZAARK MARINE AND TRADING and 4 others---Respondents

First Appeal No.9 of 2011, decided on 28th August, 2014.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), Ss. 151, 152 & 153---Suit for recovery of finance---Clerical mistake---Correction of decree--- Scope--- Property mortgaged by borrower measured 1072 square yards but inadvertently 730 square yards were mentioned in plaint---Grievance of decree holder bank was that Banking Court mentioned 730 square yards in its decree and declined to correct the measurement---Validity---Banking Court was not required to decree suit merely on the basis of averments in plaint, rather had to examine material and documents placed before it which included lease deed as well as mortgage deed---Mortgage deed signed by borrower clearly stated that total area of property was 1072 square yards which had been acquired on the basis of lease deed and allotment letter issued by authorities---Any mistake of declaring area of property in plaint due to inadvertence was liable to be corrected and such correction did not amount to re-appraisal of judgment and decree passed by Banking Court---High Court in exercise of appellate jurisdiction allowed application filed by decree holder and corrected judgment and decree passed by Banking Court to the extent of measurement of suit property---Appeal was allowed accordingly.

Abdul Majeed for Appellant.

Mrs. Seema Waseem for Respondents.

2015 C L D 179

[Sindh]

Before Nadeem Akhtar, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

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

Suit No.B-52 of 2006, decided on 15th January, 2014.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for recovery of finance---Rejection of plaint---Absence of cause of action---Non-filing of application to defend the suit---Defendants sought rejection of plaint on the plea that bank did not have any cause of action against them---Plea raised by bank was that without seeking leave to defend the suit, application under O. VII, R. 11, C.P.C. could not be decided---Validity---Words appearing in S.10(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were of great importance as they indicated that if defendant failed in obtaining leave to defend the suit, his admission would be deemed only to the extent of allegations of fact in plaint and decree in favour of plaintiff might be passed only because of such admission of allegations of fact in plaint or such other material as Banking Court required in the interest of justice---Before passing decree in favour of plaintiff in a blindfolded fashion because of defendant's failure in obtaining leave to defend the suit, allegations of fact in plaint must be examined critically and minutely by Banking Court so as to corroborate as to whether or not the same constituted a cause of action in favour of plaintiff---Cause of action would arise out of the fats pleaded/alleged in plaint---Provisions of S.10(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were directory and not mandatory in nature because of the use of word "may" therein---From the averments made in plaint and in view of relevant admitted material on record, the facts averred and allegations made in plaint did not disclose any cause of action and also the plaintiff had no cause of action when the suit was instituted--- Plaint was rejected in circumstances.

Banque Indosuez v. Banking Tribunal for Sindh and Balochistan and others 1994 CLC 2272; UBL v. Messrs Aziz Tanneries (Pvt.) Ltd. 2004 CLD 1715; Imran Ali Soomro v. Saudi Pak Leasing Company Limited 2011 CLD 269; H.B.L. v. Crescent Softwear Products (Pvt.) Ltd. 2009 CLD 412; Bank of Khyber v. Messrs Spencer Distribution Ltd. and 14 others 2003 CLD 1406; Habib Bank Limited v. Messrs Sabcos (Pvt.) Ltd. 2006 CLD 244; Faysal Bank Limited v. Genertech Pakistan Ltd. 2009 CLD 856; Habib Bank Ltd. v. Paragon Industries (Pvt.) Ltd. 2009 CLD 1346; NIB Bank Limited v. Taha Spinning Mills Limited 2010 CLD 635; United Bank Limited v. Progas Pakistan Limited 2010 CLD 828 Allied Bank Limited v. Muslim Cotton Mills Private Limited and 3 others 2011 CLD 393; Silkbank Limited v. Messrs Dewan Sugar Mills Limited 2011 CLD 436; KASB Bank Limited v. Mirza Ghulam Mujtaba and 2 others 2011 CLD 461; Abdul Rehman v. Sher Zaman and another 2004 CLC 1340; Abdul Rehman v. Wahid Bakhsh and 9 others PLD 1977 Lah. 1243; Pakistan Agricultural Storage and Services Corporation Ltd. v. Mian Abdul Latif and others PLD 2008 SC 371; Gulistan Textile Mills Ltd. v. Askari Bank Ltd. and others 2013 CLD 2005; Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362; Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353; Abdul Nasir and another v. Haji Saeed Akbar 2010 SCMR 1770; Diamond Rubber Mills v. Pakistan Television Corporation Ltd. and 2 others 1989 CLC 1989; Hyderabad Electronic Industries Ltd. v. Messrs Sony Corporation through Messrs Sony Gulf Company 1999 MLD 850; Raja Ali Shan v. Messrs Essem Hotel Limited and others 2007 SCMR 741; Jewan and 7 others v. Federation of Pakistan 1994 SCMR 826; S.M. Shafi Ahmed Zaidi through Legal Heirs v. Malik Hassan Ali Khan (Moin) through Legal Heirs 2002 SCMR 338 and Muhammad Saleem Ullah and others v. Additional District Judge, Gujranwala and others PLD 2005 SC 511 ref.

Muhammad Zubair Quraishy for Plaintiff.

Mirza Sarfraz Ahmed for Defendants.

Date of hearing: 26th November, 2013.

2015 C L D 203

[Sindh]

Before Munib Akhtar, J

NAZEER AHMED KHAN---Petitioner

Versus

ADMORE GAS (PVT.) LIMITED, KARACHI and another---Respondents

J. M. No. 37 of 2012, decided on 26th June, 2014.

(a) Discretion---

----Exercise of---Principle---Discretionary power is not exercised in arbitrary, perverse or capricious manner but is guided by sound judicial principles---Equity jurisdiction is flexibility inherent in discretionary nature---Flexibility and discretion to decide case after taking into consideration all relevant matters that tend towards justice or injustice of granting remedy that is sought such as hardship, laches, unfairness, lack of clean hands, and so on and by weighing them against each other in order to decide whether particular relief that is in question should be granted in absolute, partial or conditional form or else refused.

Equitable Remedies by Dr. I.C.F. Spry, 9th ed. (2014), Pg.4 rel.

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

----S. 305---Winding up of company---Civil suit, pendency of---Effect---Petitioner earlier filed suit for recovery of money and then sought winding up of company---Validity---Options before court in a situation where civil suit was pending, were not limited to either disregarding earlier filed suit altogether (and ordering the company to be wound up even if by a conditional order) or to regard subsequent petition as abuse of process and dismissed it as filed only to put undue pressure on the company to pay or settle claim---Power conferred on court was discretionary and that discretion was to be exercised on the basis and in the light of equitable principles---Such required that all relevant factors be taken into consideration, given due weight and only then should the court decide on justice or injustice of granting remedy of winding up either absolutely or conditionally or refusing it altogether---Winding up petition was filed after such a prolonged period of institution of suit that a substantial portion of relevant debts would have become barred by limitation---In respect of such debts there had therefore, been such unreasonable delay as would amount to laches---No material change took place in intervening period, especially insofar as petitioner and company were concerned---Matters were same on the date when the petition was filed as they were on the date on which suit was instituted---Discretionary power of court ought therefore, to be exercised accordingly---High Court ordered to wind up respondent company subject to certain conditions---Petition was allowed accordingly.

Equitable Remedies by Dr. I.C.F. Spry, 9th ed. (2014), Pg. 4; Platinum Insurance Co. Ltd. v. Daewoo Corporation PLD 1999 SC 1; Muzaffar Abbas Malik and others v. Pakistan PVC Ltd. PLD 1998 Kar. 71; Sindh Glass Industries Ltd. v. National Development Finance Corporation and others PLD 1996 SC 601; South Asia Geophysical Services v. New Horizon Exploration and Production Ltd. J.M. No.9 of 2013; Industrial Development Bank of Pakistan v. Modern Poultry Farm Ltd. 1990 CLC 1030; Industrial Development Bank of Pakistan v. Sheikh Impex 1994 CLC 2334; United Bank Ltd. v. Pak Wheat Products Ltd. PLD 1970 Lah. 235; 21st Century Management Services Ltd. v. Gujarat Industrial Investment Corporation Ltd. [2011] 162 Comp Cas 206; Guangdong Fuwa Engineering Manufacturing Co. Ltd. v. Ang Auto Ltd. [2011] 162 Comp Cas 65; Amupama Wine Distributors v. Tilaknagar Industries Ltd. [2009] 151 Comp Cas 395; Humera Abdul Aziz Essa v. Al-Abbas Cement Industries Ltd. 2008 CLD 214; Agricultural Development Bank of Pakistan v. Abid Akhtar and others 2003 SCMR 1547; Creek Marina (Pvt.) Ltd. v. Pakistan Defence Officers' Housing Authority 2012 CLD 1525; Syma Mahnaz Vayani v. Molasses Export Co. (Pvt.) Ltd. 2013 CLD 1229; Pakistan Industrial and Credit Investment Corporation Ltd. v. Bawany Industries Ltd. PLD 1998 Kar. 45 and United Bank Ltd. v. Pak Leather Crafts Ltd. J.M. No.18 of 2011 ref.

Rustam Feroz Virjee for Petitioner.

Murtaza Wahab for Respondent No.1.

Dates of hearing: 3rd February, 19th March and 29th May, 2014.

2015 C L D 227

[Sindh]

Before Nadeem Akhtar and Sadiq Hussain Bhatti, JJ

MUHAMMAD AKHTAR HOOKMANI and another---Appellants

Versus

FAYSAL BANK LIMITED---Respondent

First Appeal No.15 of 2011, decided on 18th August, 2014.

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

----Ss. 10(4) & 9---Procedure of Banking Court---Application for leave to defend---Scope and object---Object of S.10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to give an opportunity to the defendant customer to make out a case for grant of leave to defend by disclosing amounts paid by the defendant to the financial institution and dates of such payments---Defendant would not be absolved from its obligation under S.10(4) of the Ordinance by simply disputing or denying amount claimed in the suit or by stating an amount towards repayments in general or vague terms without filing documents in support thereof.

Messrs International Trade through Proprietorship and others v. Union Bank Ltd. 2003 CLD 1464 rel.

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

----Ss. 18, 10(4) & 9---Procedure of Banking Court---Obtaining of signatures on blank paper by Financial Institution---Leave to defend, grant of---Scope---Suit for recovery was decreed after application of defendant for leave to defend was rejected---Contention of the defendant was, inter alia, that statement of accounts filed by the plaintiff Bank was defective, and that documents relied upon by plaintiff Bank were unreliable as signatures of the defendant were obtained on blank paper by the plaintiff Bank---Held, that signing a blank document would amount to creating or impliedly authorizing the bank to fill in any amount at a later point in time---Defendant in the present case had also conceded that defendant never made any protest nor did it send any letter or notice to plaintiff Bank or initiated any legal proceeding to challenge the said documents or for cancellation of such documents---Contention of defendant vis-a-vis obtaining of signatures, therefore, had no force and furthermore no specific entry in statement of account was pointed out by defendant in application for leave to defend which would make the plaintiff's claim doubtful---Defendant, if he/she admits availing of facility, and if execution of documents and liability to pay was not disputed by defendant; then such defendant would be deemed to have failed to make a case for grant of leave to defend---No substantial question of law or fact therefore existed in the present case and thus there was no occasion for grant of leave to defendant---Appeal was dismissed, in circumstances.

Messrs Kinza Fashion (Pvt.) Ltd. and others v. Messrs Habib Bank Ltd. and another 2009 CLD 1440 and Messrs Shaz Packages and 3 others v. Messrs Bank Alfalah Limited 2011 CLD 790 distinguished.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337; Siddique Woolen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033; Messrs Aima Industries (Pvt.) Ltd. and others v. Allied Bank of Pakistan Ltd. 2003 CLD 1770; Travel Kings (Pvt.) Limited through Chief Executive and 4 others v. Union Bank Limited and 2 others 2004 CLD 460; Tariq Javed and another v. National Bank of Pakistan 2004 CLD 838 and National Bank of Pakistan through Zonal Chief and others v. Messrs Power Textile Industries Ltd. through Chief Executive and others 2004 CLD 1239 rel.

Khaleeq Ahmed for Appellants.

Khalid Mahmood Siddiqui for Respondent.

Date of hearing: 13th August, 2014.

2014 C L D 243

[Sindh]

Before Nazar Akbar, J

Messrs PEARL FABRICS CORPORATION and 3 others---Applicants

Versus

Messrs KASB BANK LIMITED and another---Respondents

J. M. No. 48 of 2013 in Suit No. B-169 of 2010, decided on 22nd October, 2014.

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

----S. 19(1), 19(2), 4 & 9---Civil Procedure Code (V of 1908), S. 12(2) & O.XXIII, Order XXI---Interpretation of S. 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Execution of decree---Power of Banking Court---Applicability of provisions of C.P.C. to execution of decrees under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Execution of decree and sale of mortgaged property---Judgment-debtor sought setting aside of order of Banking Court whereby application for execution of decree was allowed to be withdrawn and permission for filing a fresh application was given to the decree holder bank---Contention of judgment-debtor was inter alia that impugned order violated O.XXIII, Rule 4, C.P.C.---Held, that the Banking Court derived its power for execution of its decree from S. 19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and not from S. 19(2) of the Ordinance---Reference to provisions of the C.P.C. in said S. 19(2) of the Ordinance was for the purpose of adopting a "procedure" for execution of the Banking Court's decree---Procedure to be followed by a court and exercise of its authority were two different things---Powers conferred on an ordinary court under the C.P.C. were alien to the powers conferred on the Banking Court---Authority/power of Banking Court was not subservient to powers conferred on a Civil Court under provisions of the C.P.C.---Banking Courts, as a practice, allowed the plaintiff Financial Institution to file a formal execution application in terms of O.XXI, Rule 11 of the C.P.C. for sake convenience for satisfaction of decree passed by the Banking Court and merely accepting such an application under any provision of the C.P.C. did not mean that such proceedings were converted into execution of a decree in an ordinary suit and did not therefore entail that power conferred on Banking court under the Financial Institutions (Recovery of Finances) Ordinance, 2001 stood compromised or nullified---Subsections (1) and (2) of S. 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were to be read together---Any embargo in terms of O.XXIII, Rule 4, C.P.C. regarding applicability of provisions of O. XXIII, C.P.C. in the execution proceedings had no bearing on power of Banking Court in execution of a decree---Irrespective of fact that certain provisions of C.P.C. were mentioned in execution application of decree-holder Bank, Banking Court under S.19(1) of the Ordinance had power to allow decree-holder to withdraw earlier application and file a fresh one---Power of Banking Court in terms of S.19(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was protected by section 4 of the Ordinance whereby provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 had an overriding effect on provisions of C.P.C.---Application under S.12(2), C.P.C. was dismissed, in circumstances.

(b) Interpretation of Statutes---

----All provisions of a statute were to be read together and any particular provision of a statute was not to be considered in isolation unless and until there was a clear-cut conflict, which was irreconcilable.

Sohail Hameed for Applicants.

Ravi R. Pinjani for for Respondent No.1.

Nemo for Respondent No.2.

Date of hearing: 1st October, 2014.

2014 C L D 253

[Sindh]

Before Ahmed Ali M. Shaikh and Syed Muhammad Farooq Shah, JJ

Messrs INDUSTRIAL DEVELOPMENT SUPPLIES CORPORATION through Director---Petitioner

Versus

FEDERATION OF PAKISTAN through Chief Controller Purchase and another---Respondents

C.P. No. 347 of 2013, decided on 23rdMay, 2014.

Constitution of Pakistan---

----Art. 199---Constitutional petition---Factual controversy---Bank guarantee, encashment of---Petitioner who was contractor of respondent authorities had furnished unconditional irrevocable bank guarantee in favour of authorities---Plea raised by petitioner was that authorities could not ask bank to encash bank guarantee in question without first referring it to petitioner---Validity---Bank guarantee in question was unconditional and irrevocable and bank had undertaken to pay immediately on demand upon advising them the reason for demand, without objection and without reference to petitioner, any amount up to the extent mentioned in the guarantee---Decision of authorities was final and binding---Unconditional and irrevocable bank guarantee could not be interfered with except in case of fraud and or in case of question of apprehension of irrevocable injustice had been made out---Liability of a person pursuant to a document / contract and factual controversies requiring evidence could not be determined in exercise of extra ordinary Constitutional jurisdiction of High Court---In order to justify granting of extraordinary relief, absence of adequate alternate remedy in law should have clearly appeared---Petition was dismissed in circumstances.

Naeem Shahid for Petitioner.

Ainuddin Khan, D.A.-G.

Altaf Hussain Khoso for Chief Controller of Purchase, Pakistan Railways, Headquarters Office, Lahore.

Khalid Mahmood Siddiqui for Respondent No.2 (Bank).

2015 C L D 269

[Sindh]

Before Aziz-ur-Rehman, J

UNION BANK LIMITED---plaintiff

Versus

REFRIGERATORS MANUFACTURING COMPANY PAKISTAN LIMITED and another---Defendants

Suit NO. B-31 of 2001, decided on 21st July, 2014.

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

----Ss. 2(d) & 9---Suit for recovery of bank loan---Contract of guarantee---Relationship of customer and banker---Proof---defendant company claimed that it had no relationship of any sort with plaintiff bank---Plea raised by plaintiff bank was that defendant company had executed 'contract of guarantee' and 'letter of comfort', therefore, was a real beneficiary of the finance---Validity---In view of definitions of 'contract of guarantee' and 'letter of comfort', in juxtaposition of he contents thereof, defendant company was not liable to make any payment to plaintiff bank---defendant company was not beneficiary of financial facilities granted to and availed by borrower company, therefore, it could not be held liable for outstanding dues of plaintiff bank---plaintiff bank did not obtain any guarantees from Directors of borrower company which omission nonetheless called for wisdom of plaintiff bank---Figures of amount claimed by plaintiff bank was subsequently substituted with other figures on the basis of application filed by plaintiff bank, therefore, such substituted figures were liability of borrower company---defendant company was not liable to pay any amount to plaintiff bank---Suit was decreed accordingly.

Lalchand and 2 others v. Officer on Special Duty, Federal Land Commission and 3 others 1984 CLC 2396; Sardar Abdul Ghafoor Khan and 3 others v. The Federal Land Commission, Islamabad PLD 1979 Lah. 375; Banque Brussels Lambert SA v. Australian National Industries Ltd. 1989 21 NSWLR 502; Pak American Fertilizers Ltd. Mianwali v. Amir Abdullah Khan and another 1984 CLC 2170; Merican Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880; National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689; Procter and Gamble Pakistan (Pvt.) Ltd., Karachi v. Bank Al-Falah Limited, Karachi and 2 others 2007 CLD 1532 and Law of Guarantees by Geraldine Andrews, (Longman Publication) ref.

M. Umer Soomor along with Ms. Humayon Paracha for plaintiff.

Khawaja Mansoor along with Ms. Nida Raees for defendant No.2.

Date of hearing: 22nd May, 2014.

2014 C L D 303

[Sindh]

Before Aqeel Ahmed Abbasi and Abdul Maalik Gaddi, JJ

S.S. EAGLE CAPE and another---Appellants

Versus

HUSSAIN CAN COMPANY (PVT.) LTD.---Respondent

Admiralty Appeal No. 2 of 2012, decided on 15th July, 2014.

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

----S. 7---Appeal---Execution of decree---Disbursement of amount---Execution of decree was allowed by High Court directing Court official to disburse amount lying with him to decree holder---Plea raised by appellants was that order was passed in execution without hearing them---Validity---High Court committed no error or illegality while allowing execution application and had rightly ordered disbursement of amount to decree-holder, keeping in view bank rate and such order did not call for any interference by High Court---Appeal was dismissed in circumstances.

Amber Ahmed Khan v. Pakistan International Airlines Corporation, Karachi PLD 2003 Kar. 405; Jewan Lal Daga and another v. Nilmani Chaudhuri AIR 1928 (Privy Council) 80; (Gudimalla) Narasinham and another v. (Paidimarri) Venkata Subbayya and another AIR 1933 (Madras) 171 and Soneri Bank Limited v. Idrees Ahmed Siddiqui and another 2005 CLD 1003 ref.

Adeel Abid and Khalid Rehman for Appellants.

Muhammad Haseeb Jamali and Sanaullah Gondal, Law Officer, State Bank of Pakistan for Respondent.

Date of hearing: 20th May, 2014.

2015 C L D 310

[Sindh]

Before Syed Hassan Azhar Rizvi and Muhammad Junaid Ghaffar, JJ

AAMIR MALIK---Petitioner

Versus

BANKING COURT-II AT KARACHI through Nazir and 2 others---Respondents

Constitutional Petition No. D-377 of 2014, decided on 10th June, 2014.

(a) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction---Scope---High Court under constitutional jurisdiction cannot look into disputed facts of case and is neither in a position to alter any such factual position.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 64 & 66---Constitution of Pakistan, Art. 199---Constitutional petition---Execution of decree---Recover of possession---Petitioner was one of legal heirs of deceased-borrower and he assailed execution of decree passed in favour of Bank on the grounds that reserved price of property was not properly settled and no notice of execution proceedings was issued to him---Validity---Terms of sale were properly settled by Banking Court in terms of O.XXI, Rr. 64 & 66, C.P.C., wherein amount of decree, market price and Forced Sale Value were mentioned hence substantial compliance of law was done---Neither any enhanced offer was ever received nor petitioner had given any offer nor had brought any other buyer or bidder for purchase of property in question---High Court declined to interfere in order passed by Banking Court in seeking possession of property in question during execution of decree---Petition was dismissed in circumstances.

Khursheed Begum and others v. Inam-ur-Rehman Khan and others PLD 2009 SC 552; Brig. (Retd.) Mazhar ul Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; Mst. Zainab Bibi v. Allied Bank of Pakistan Limited and others 2003 YLR 3274; Mirza Munawar Baig and 5 others v. Bank Al-Falah Limited and 2 others 2007 YLR 126; Messrs Ripple Jewelers (Pvt.) Limited v. First Women Bank Limited 2003 CLD 1318; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; Mrs. Shahida Saleem and another v. Habib Credit and Exchange Bank Limited and 4 others 2001 CLC 126; Messrs Lanvin Traders, Karachi v. Presiding Officer, Banking Court No.II, Karachi and others 2013 CLD 1581; Syed Ghazanfar Hussain through Legal heirs and others v. Nooruddin and others 2011 CLC 1303; Muhammad Hashim v. Presiding Officer, Special Banking Court, Karachi (Offences in Banks) and 7 others 2007 YLR 2651; Ms. Rahim Iqbal v. Banking Court No.II and others 2008 CLD 338; Mst. Ghulam Sakeena v. Bashir Ahmed and others 2000 CLC 334; Azam Wazir Khan v. Messrs Industrial Development Bank of Pakistan and others 2013 CLC 974; Nazir Cotton Mills v. State Bank of Pakistan and others 2007 CLD 1642; Mumtaz ud Din Feroze v. Shaikh Iftikhar Adil and others 2009 CLD 594; Messrs Chawla International v. Habib Bank Ltd. and others 2003 CLD 956; Mst. Noor Khatoon and others v. Habib Bank Ltd. and another 2013 CLC 702; Messrs Irisma International and 3 others v. United Bank Limited and another 2006 CLD 832; Mukhtar Ahmed v. Messrs United Bank Limited and another 2013 CLD 841; Messrs Ashraf Agro and others v. Habib Bank Limited 2008 CLD 449; Messrs United Bank Ltd. v. Mst. Asma Zafarul Hassan 1980 CLC 565; Messrs Kayjay Industries Ltd. v. Messrs Asnew Drums (Pvt.) Ltd, and others AIR 1974 SC 1331 Bombay; Muhammad Ikhlaq Memon v. Zakaria Ghani and others PLD 2005 SC 819; Pakistan Industrial Credit and Investment Corporation Ltd. v. Shahdin Limited 2001 CLC 1267; Mst. Asma Zafarul Hassan v. United Bank Ltd and another 1981 SCMR 108; Lilaram v. Ghulam Ali @ Essa through legal heirs and others 1991 SCMR 932; Bandu Hari v. Bhagya Laxman and others AIR 1954 Bombay 114; Narayan Purushottan Bansod v. Ramchandra Mudgaliji Choudharkar and other AIR (35) 1948 Nagpur 177; P. Q. Chemicals v. A. W. Brothers and others 2005 CLD 169; Habib Bank Ltd. v. Messrs Ajma Corporation and others 2000 CLC 1425; Muhammad Moin v. State Bank of Pakistan and others 2009 CLD 899; Messrs Unicom Enterprises v. Banking Court No.5 and 2 others 2004 CLD 1452; Muhammad Rafiq v. Federation of Pakistan and 2 others 2013 CLC 1679; Ghulam Mustafa Bughio and another v. Judge Banking Court No.IV, Karachi 2006 CLD 528; Ghulam Rasool Bhatti v. Judge Banking Court No.IV, Karachi 2007 CLD 1578; Messrs UBL v. Banking Court No.IV, Lahore and others 2004 CLD 1114; Muhammad Rafi and another v. Muhammad Ashfaq, Civil Judge, Hasilpur and others 1994 SCMR 2301 and Muhammad Abbasi v. SHO Bhara Kahu and 7 others PLD 2010 SC 969 ref.

Zeeshan Abdullah and Saalim Salam Ansari for Petitioner.

Ijaz Ahmed Zahid, Waqar Ahmed and Aijaz Ahmed Shirazi for Respondent No.2.

S.M. Kazim for Auction Purchaser.

Date of hearing: 20th March, 2014.

2015 C L D 323

[Sindh]

Before Munib Akhtar, J

JAHANGIR SIDDIQUI & CO. LTD. through Chief Executive Officer---Plaintiff

Versus

HUM NETWORK LTD. through Chief Executive and another---Defendants

Suit No. 298 of 2014, decided on 8th July, 2014.

Companies Ordinance (XLVII of 1984)---

----Ss. 20, 21(d) & 160-A---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Interim injunction, grant of---Memorandum of Association of company---Alterations---Plaintiff was a shareholder of company and was aggrieved of certain alterations in Memorandum of Association of company as approved in Extra Ordinary General Meeting---Validity---When existing circumstances had to be kept in mind, the manner in which existing and proposed business could be 'combined' was different from situation prevailing then, where any such consideration was irrelevant---In S. 21(d) of Companies Ordinance, 1984, the word 'combined' was to be construed and applied in a much looser sense than before, which had sense of old and proposed business being carried on together by the company---To what extent old business continued had become irrelevant---New or proposed business was not to be immediately wholly destructive of old or existing business and that was all---Anything else fell within the domain of shareholders and provided that a special resolution was passed, it was for them to make necessary decision---Barring exceptional circumstances, which must be clearly spelt out, there ought not to be any interference with decision of members---Provision of S.21(d) of Companies Ordinance, 1984, had taken an entirely new shape on account of omitted words and change in law was to be given due effect---While Security and Exchange Commission of Pakistan, when considering a petition under S.21(2) of Companies Ordinance, 1984, would be bound to act in accordance with principles of law---High Court directed Security and Exchange Commission of Pakistan to decide any petition before it on its own merits and petition presented in respect of special resolution passed at Extraordinary General Meeting of the Company must be dealt with accordingly---Application was dismissed in circumstances.

Lahore Race Club and others v. Raja Khusbakht-ur-Rehman PLD 2008 SC 707; In re: Parent Tyre Co. Ltd. [1923] 2 Ch 222; In re: Standard General Assurance Co. Ltd. AIR 1965 Cal. 16; In re: Bhutoria Brothers (Pvt.) Ltd. AIR 1957 Cal. 593; Riaz & Co.: In the matter of PLD 1967 Kar. 695; In re: National Underwriters Association Ltd. PLD 1969 Kar. 71 and In re: Cyclists's Touring Club [1907] 1 Ch 269 ref.

Khalid Jawed Khan along with Muhammad Ahmer for Plaintiff.

Ijaz Ahmed for Defendant No.1.

Dates of hearing: 1st, 23rd April and 21st May, 2014.

2015 C L D 390

[Sindh]

Before Nadeem Akhtar, J

MUHAMMAD YOUNUS and another---Applicants

Versus

VENUE GURDAS ADVANI and others---Respondents

Judicial Miscellaneous No. 50 of 2005 in Suit No.1124 of 1997 and Judicial Miscellaneous No.47 of 2012 in Suit No.1348 of 2005 and C.M.As. Nos.4350 of 2005 and 2217 of 2013, decided on 16th September, 2014.

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

----S. 68---Civil Procedure Code (V of 1908), S. 12(2)---Specific Relief Act (I of 1877), S. 42---Suit for declaration---Partnership---Application under S.12(2), C.P.C. alleging fraud and misrepresentation---Requirements--- Limitation--- Condonation of delay---Aggrieved person--- Scope--- Word "validity"--- Significance--- Contention of respondents was that applicants had ceased to be the partners of firm, that they had no locus standi to file the present application and application under S.12(2), C.P.C. could be filed only against the final judgment, decree or order and not against an order passed on an interlocutory application---Validity---One could seek his remedy under S. 12(2), C.P.C. by making an application to the court which had passed the final judgment, decree or order if the validity of the same was challenged by him on the plea of misrepresentation, fraud or want of jurisdiction---Word "validity" would relate to the legality, legitimacy and propriety of the judgment, decree or order challenged under S.12(2), C.P.C.---Judgment, decree or order challenged under S.12(2), C.P.C. was to be based on formal determination or adjudication in the proceedings in absence of which its "validity" could neither be challenged nor same could be decided---Judgment, decree or order which did not fall within such category could not be challenged under S.12(2), C.P.C.---Court was bound to determine the nature and effect of impugned judgment, decree or order while deciding an application under S. 12(2), C.P.C. and then to see whether the requirements of said Section had been fulfilled by the applicant or not---No judgment or decree had been challenged in the present application and an order passed with regard to withdrawal of suit had been impugned---Element of conclusive determination of the rights of parties with regard to all or any of the matters in controversy in the suit was applicable to orders challenged under S.12(2), C.P.C.---No determination or adjudication had taken place nor any judgment, decree or order was passed in the suit on merits but suit was simply dismissed as not pressed without opposition of contesting defendants---Impugned orders which were passed without any conclusive determination or adjudication could not be challenged under S.12(2), C.P.C.---Applicants, in the present case, were not partners of the firm when impugned orders were passed---Applicants thus were not "aggrieved" by the impugned orders and they could not file the present application---Presumption would be that a party had admitted the contents of document (certificate issued by Registrar of Firms), in absence of any denial or dispute with regard to such contents of the document---Document had presumption of truth unless same was disproved by cogent and admissible evidence---Burden of proof that the entries in the record were wrong would be on the party who had alleged the same---Documentary evidence could be rebutted only by documents---Certificate issued by the Registrar of Firms with regard to retirement of applicants and induction of other partners was conclusive proof against them as same had not been suspended or cancelled---Statement, intimation or notice which had been entered in the register of firms would constitute conclusive proof against the person by or on whose behalf same was filed---Estoppel would apply against a person who had notified the Registrar of Firms that he/she had become a partner of the firm and he/she could not be permitted to resile from the same---Events of retirement of applicants and induction of other partners of firms took place prior to the passing of impugned orders---Such events were not done by the parties in connection with the proceedings before the court nor same were recorded by the court at the time of passing the impugned orders---Alleged fraud or misrepresentation, in circumstances, took place either outside the court or subsequent to the passing of impugned orders---Section 12(2), C.P.C. had limited scope and same could not be invoked on the plea of mala fide or abuse of process of the court---Fraud or misrepresentation should be specifically alleged with all relevant and material particulars in order to invoke the provisions of S. 12(2), C.P.C. and same should be in connection with the proceedings of the court and not prior to its initiation or after decision of the court---In the present case, no fraud was committed on the dates when impugned orders were passed, provisions of S.12(2), C.P.C., therefore, could not be invoked by the applicants---No allegation of fraud had been alleged against the contesting defendants of the suit---Limitation for filing an application under S.12(2), C.P.C. was three years and present application was time-barred---No application for condonation of delay had been filed to justify the delay of each and every day--- Application under S. 12(2), C.P.C. was dismissed in circumstances.

Mrs. Afroz Shah and others v. Sabir Qureshi and others PLD 2010 SC 913; Abdul Razzaq v. Muhammad Islam and 3 others 1999 SCMR 1714; Moulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others PLD 2008 SC 663; Agha Ghazanfar Ali v. Shaukat Ali and others 1997 SCMR 1006; Haji Muhammad Boota and others v. Member (Revenue), Board of Revenue, Punjab and others PLD 2003 SC 979; Abdur Rehman Khan v. Muhammad Altaf and 3 others 1997 CLC 1260; Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166; Mumtaz Bibi and others v. Ghulam Akbar PLD 1995 Pesh. 81; Abdul Ghani and others v. Mst. Yasmeen Khan and others 2011 SCMR 837; Jehan Khan v. Province of Sindh and others PLD 2003 Kar. 691; Mazloom Hussain v. Abid Hussain and 4 others PLD 2008 SC 571; Messrs Safa Textile Ltd. v. Messrs Habib Bank Ltd. and others 2004 CLD 279; Shakil Ahmed v. SSP and others 2007 CLC 975; Arshadullah and another v. Muslim Commercial Bank and others 2008 SCMR 640; Lal Khan v. Additional District Judge, Jhelum and others 1993 CLC 731; Hassamuddin v. Al-Zamin Leasing Modaraba and 5 others 2007 CLD 1600; Muhammad Ramzan and 3 others v. The State and another 2010 YLR 1227; Muhammad Iqbal Siddiqui v. Bashir Ruiwala, 1989 CLC 1091; Pio Khan v. Sar Anjam Khan and another PLD 2004 SC 351; Mst. Hafeezen v. Rana Zaheer-ud-Din and another 1999 YLR 2214; Izzat Khan and others v. Province of Sindh and others 1999 YLR 1180; Nathu Khan v. Muhammad Rafiq and another 1987 CLC 1501; Hyesons Sugar Mills (Pvt.) Ltd. v. Consolidated Sugar Mills Limited and others 2003 CLD 996; Mst. Hamida Begum v. Muhammad Saleem, 1988 CLC 2456; Syed Ameer Hussain Shah v. Syed Dilbar Hussain Shah and 3 others 2011 MLD 1986; Miss Shazia Ashraf v. Municipal Committee, Sahiwal, through Administrator and another 2006 CLC 1018; Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation 2006 CLD 687; Shaikh Ahmad and 2 others v. Muhammad Sadiq and another 2003 YLR 1689; M. Yousuf Adil Saleem and Co. and 7 others v. Hamid Masood 2007 CLC 994; Faizum alias Toor v. Nader Khan and others 2006 SCMR 1931; Messrs Dadabhoy Cement Industries Limited and 6 others v. Messrs National Development Finance Corporation, Karachi PLD 2002 SC 500; Muhammad Iqbal Kamdar v. Muhammad Tahir Ahmadani and 12 others 2011 MLD 835 and Mst. Shabana Irfan v. Muhammad Shafi Khan and others 2009 SCMR 40 ref.

Mrs. Afroz Shah and others v. Sabir Qureshi and others, PLD 2010 SC 913; Abdul Razzaq v. Muhammad Islam and 3 others 1999 SCMR 1714; Moulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others PLD 2008 SC 663; Agha Ghazanfar Ali v. Shaukat Ali and others 1997 SCMR 1006; Haji Muhammad Boota and others v. Member (Revenue), Board of Revenue, Punjab and others PLD 2003 SC 979; Abdur Rehman Khan v. Muhammad Altaf and 3 others 1997 CLC 1260; Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166 and Mumtaz Bibi and others v. Ghulam Akbar PLD 1995 Pesh. 81 distinguished.

Abdul Ghani and others v. Mst. Yasmeen Khan and others 2011 SCMR 837; Jehan Khan v. Province of Sindh and others PLD 2003 Kar. 691; Mazloom Hussain v. Abid Hussain and 4 others PLD 2008 SC 571; Nathu Khan v. Muhammad Rafiq and another 1987 CLC 1501; Hyesons Sugar Mills (Pvt.) Ltd. v. Consolidated Sugar Mills Limited and others 2003 CLD 996; Mst. Hamida Begum v. Muhammad Saleem, 1988 CLC 2456; Syed Ameer Hussain Shah v. Syed Dilbar Hussain Shah and 3 others 2011 MLD 1986; Miss Shazia Ashraf v. Municipal Committee, Sahiwal, through Administrator and another 2006 CLC 1018; M. Yousuf Adil Saleem and Co. and 7 others v. Hamid Masood 2007 CLC 994; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. Messrs National Development Finance Corporation, Karachi PLD 2002 SC 500; Mst. Shabana Irfan v. Muhammad Shafi Khan and others 2009 SCMR 40 and Ghulam Hussain Shah v. Ghulam Muhammad PLD 1974 SC 344 rel.

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

----S. 2(2)---"Decree"---Meaning---"Decree" was formal expression of an adjudication which would conclusively determine the rights of parties with regard to all or any of the matters in controversy in the suit which might be either preliminary or final.

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

----S. 2(9) & (2)---"Judgment"---Meaning---"Judgment" was the statement given by the Judge of the grounds of a decree or order.

Akhtar Hussain and Masaud Ghani for Applicants (in Judicial Miscellaneous No. 50 of 2005).

H.A. Rahmani for Plaintiff (in Judicial Miscellaneous No. 50 of 2005).

Mirza Sarfaraz Ahmed for Defendants Nos.1 and 2 (in Judicial Miscellaneous No. 50 of 2005).

Faisal Siddiqui for Defendant No.3 (in Judicial Miscellaneous No. 50 of 2005).

Ijaz Khattak for Defendant No.4 (in Judicial Miscellaneous No.50 of 2005).

Abdul Qadir Leghari for Defendant No.5 (in Judicial Miscellaneous No. 50 of 2005).

Abid S. Zuberi for Defendants Nos. 6 to 9 (in Judicial Miscellaneous No. 50 of 2005).

Akhtar Hussain and Masaud Ghani for Applicants (in Judicial Miscellaneous No. 47 of 2012).

Mirza Sarfaraz Ahmed for Plaintiff (in Judicial Miscellaneous No. 47 of 2012).

Ziauddin Ahmed Junejo, A.A.-G. for Defendant No.1 (in Judicial Miscellaneous No. 47 of 2012).

Muhammad Idrees Alvi for Defendant No.2 (in Judicial Miscellaneous No. 47 of 2012).

Ijaz Khattak for Defendant No.3 (in Judicial Miscellaneous No.47 of 2012).

H.A. Rahmani for Intervener (in Judicial Miscellaneous No. 47 of 2012).

Abid S. Zuberi for Interveners (in Judicial Miscellaneous No. 47 of 2012).

Faisal Siddiqui for Intervener (in Judicial Miscellaneous No. 47 of 2012).

Dates of hearing: 5th, 21st, 26th, 27th, 29th November, 4th December, 2013 and 29th May, 2014.

2015 C L D 437

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

SADIQ AHMED---Appellant

Versus

Messrs SILK BANK LIMITED and others---Respondents

Ist Appeal No. 2 of 2014, heard on 17th September, 2014.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), S. 47---Execution of decree---Sale, setting aside of---Auction of land---Resumption of said land by Government---Effect---Banking Court acquired knowledge about resumption of land in question by Government and status quo granted by Supreme Court---Banking Court was required to cancel entire auction proceedings in respect of land in question which was not even available for auction in view of resumption of the same by Government, as well as in view of pendency of proceedings before Supreme Court, wherein status quo order was operative---Amount deposited by auction purchaser was required to be returned which had not been done, on the contrary, request of appellant was declined---High Court set aside the order passed by Banking Court and directed the office to return entire bid amount deposited by appellant in respect of subject land to appellant---Appeal was allowed accordingly.

Abdul Shakoor for Appellant.

Suleman Huda for Respondent No.1.

Date of hearing: 17th September, 2014.

2015 C L D 452

[Sindh]

Before Syed Hassan Azhar Rizvi and Muhammad Junaid Ghaffar, JJ

Messrs U.I.G. (PVT.) LTD. through Director and 6 others---Appellants

Versus

BANK AL-FALAH LTD.---Respondent

First Appeal No. 12 of 2011, decided on 23rd July, 2014.

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

----Ss. 2(e)(ii), 9 & 10---Suit for recovery of finance---Running Finance Facility---"Obligation" of customer---Scope---Plea raised by borrowers was that after dismissal of leave to defend the suit, Banking Court could not ask plaintiff bank to file break up of accounts and furthermore no mark up could be charged after expiry of finance agreement as they did not execute any fresh agreement---Validity---Running Finance Facility had its own peculiar mechanism unlike any other Finance Facility---In such type of facility, borrowers were allotted a cash limit, as agreed upon between parties, whereafter borrowers were at liberty to withdraw amount from account as required by them and mark up was charged when amount was withdrawn from limit on utilized amount---Amount of markup was then calculated on daily basis, allowing borrowers to make payments towards utilized principal as well, thereby reducing markup burden---Borrowers could withdraw amount at their own sweat will from time to time and were liable to pay agreed mark up on the amount which they had withdrawn from amount disbursed or credited by bank---Borrowers also could make deposits in the same account and such deposits were credited in that account and accordingly amount of markup was charged on outstanding amount---Running Finance Facility was in fact a revolving credit, having a debit and credit entry in statement of account as and when the same was operated, either by withdrawal or deposit---Despite of the fact that no formal agreement was signed by borrowers for continuing previous agreement, therefore, intention was to continue with arrangement of Running Finance Facility on the same terms and conditions---Conduct of borrowers, in the present case, was implied renewal of agreement of Finance Facility, as they continued to avail Finance Facility without raising any objection with regard to non-signing of any agreement to such effect---Finance Facility was also utilized by borrowers, which showed their intention to continue with such renewal of Finance Facility which had been extended by bank at their request---Such renewal request fell in the category of 'obligation' of customer as defined in S. 2(e)(ii) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declined to interfere in the judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

United Bank Limited Karachi v. Messrs Gravure Packing Pvt. Limited and 4 others 2001 YLR 1549; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation Pvt. Limited through Director/Chief Executive and 3 others 2012 CLD 1302; Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477; Soneri Bank Limited v. Classic Demin Mills Pvt. Limited and 3 others 2011 CLD 408; Messrs Shaz Packages and 3 others v. Messrs Bank Al-Falah Limited 2011 CLD 790 and Habib Bank Limited v. Messrs Doaba Corporation through Proprietor and another 2009 CLD 845 distinguished.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Messrs International Traders through Proprietorship and 3 others v. Union Bank Limited 2003 CLD 1464; Amir Javed and another v. Al-Baraka Islamic Investment Bank and others 2006 CLD 178; Ch. Muhammad Ashraf and another v. Muslim Commercial Bank Limited through Manager 2005 CLD 1685 and Imam Din v. Bank of Khyber, D.I. Khan through Manager 2012 CLD 447 ref.

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

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

----S. 22---Appeal---New plea---Principle---Appellants are precluded from raising any such objection/plea at appeal stage, which they failed to raise specifically before Banking Court at the time of filing of leave to defend application.

Khawaja Shamsul Islam for Appellants.

Abdul Sattar Lakhani for Respondent.

Date of hearing: 12th March, 2014.

2015 C L D 477

[Sindh]

Before Irfan Saadat Khan and Shahab Sarki, JJ

Messrs AL-FATAH COTTON GINNERS AND OIL MILLS and another---Appellants

Versus

Messrs ALLIED BANK OF PAKISTAN LIMITED and 7 others---Respondents

First Civil Appeal No.D-01 of 2010, decided on 16th October, 2014.

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

----Ss. 10(2), proviso & 9---Limitation Act (IX of 1908), S. 5---Suit for recovery---Application for leave to defend---Delay in service upon the defendant--- Limitation--- Expression "Service validly effected"; interpretation---Procedure of Banking Court---Application for leave to defend was rejected by Banking Court, on ground that same was barred by time---Contention of defendant was that service was not validly effected upon the defendant; and therefore, delay should be condoned---Held, wisdom behind proviso to S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was that there would be occasions where, in certain remote areas, newspapers did not have wide circulation therefore there could be possibility that the person upon whom the service was to be effected may not be able to get the information which had been published in a particular newspaper and had service been duly effected through other modes, then proviso to S.10(2) would not have any application---Banking Court, in the present case, did not consider whether defendants were duly served through other modes, therefore a miscarriage of justice took place---Banking Court, in dismissing application for leave to defend, ought to have considered matter in its entirety in juxtaposition with the claim of the plaintiff bank and thereafter should have passed a judicial order---Application for leave to defend, even it was not filed, or had been filed but rejected, in either case, Banking Court had to pass a well reasoned and speaking order; and had to examine the plaint on touchstone of S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside impugned order of Banking Court and remanded matter to Banking Court to decide defendants' application for leave to defend after affording an opportunity of hearing to all parties---Appeal was allowed, accordingly.

Mubarak Ali v. First Prudential Modaraba 2009 CLD 849; Messrs Aamer Enterprises (Pvt.) Ltd. and 3 others v. Messrs United Bank Limited and another 2009 CLD 342; Faysal Bank Limited v. Badin Road Mills and 6 others 2010 CLD 442 and Malik Muhammad Ayaz v. Messrs United Bank Limited and others 2002 CLD 423 ref.

Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651 and Appolo Textile Mills Ltd. and others v. Soneri Bank Limited 2012 CLD 337 rel.

Manoj Kumar Tejwani for Appellants.

Rasool Bux I. Siyal and Imtiaz Ali Soomro, Assistant A.-G. for Respondents.

Date of hearing: 23rd September, 2014.

2015 C L D 498

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

AHMED ALI---Appellant

Versus

FAYSAL BANK LIMITED and 3 others---Respondents

Ist Appeal No.60 of 2013, decided on 24th September, 2014.

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

----S. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, Rr. 89, 90, 91, 92 & 100---Execution of decree---Confirmation of sale---Offer of amount higher than bid amount---After confirmation of sale of immovable property in question appellant filed application before Banking Court offering more than bid amount confirmed in auction---Application filed by appellant was dismissed by Banking Court---Validity---No objection was raised by any party from any quarter with regard to transparency of auction proceedings or bid amount which was offered by auction purchaser, which bid was higher than forced sale value determined in respect of mortgaged property and highest amongst other participants in auction proceedings---Appellant was stranger to entire proceedings who was neither a party in suit nor participated in open auction, came to know about such auction and highest bid offered by auction purchaser for purchase of mortgaged property and had found it convenient to file application before Executing Court by enhancing bid amount, which was offered by auction purchaser in open auction---High Court declined to allow such practice as it would render court proceedings and transactions executed between parties pursuant to court's order as redundant and might destroy public confidence in judicial proceedings---Order passed by Executing Court did not suffer from any illegality or error---Appeal was dismissed in circumstances.

Messrs Bela Lubricant Ltd. through Chief Executive and others v. National Bank of Pakistan and others 2009 CLD 1056 and Captain PQ Chemical Industries (Pvt.) Ltd. v. Messrs A.W. Brothers an others 2004 SCMR 1950 ref.

Abdul Shakoor for Appellant.

Suleman Hudda for Respondent No.1.

Muhammad Azhar Faridi for Respondent No.4.

Date of hearing: 24th September, 2014.

2015 C L D 512

[Sindh]

Before Salahuddin Panhwar, J

HAMDARD LABORATORIES (WAQF) PAKISTAN---Plaintiff

Versus

MUHAMMAD FAHIM---Defendant

Suit No. 1268 of 2014, decided on 25th September, 2014.

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

----Ss. 21, 43 & 74---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1 & 2---Infringement and passing off of registered trade mark---Application for permanent injunction---Contention of plaintiff was that he was marketing under the Trade Mark of ROOH AFZA label but defendant had started manufacturing, packing and marketing a syrup under the Trade Mark ROOH-E-SAMAR label and both the marks were identical, confusing and deceptively similar with each other visually as well as phonetically---Interim injunction, application for---Validity---Injunction was a form of equitable relief and was to be issued in aid of equity and justice but only where a person had established all the three ingredients in his/her favour---Both 'Sharbat Rooh Afza' and 'Rooh-e-Samar' had no phonetic similarities---Registration of 'mark' would give to its proprietor an exclusive right to use the trade mark and registration was a prima facie evidence of its validity---Infringement of such right could not be allowed to hold the field but before restraining one from continuing with lawful trade or business it must be established prima facie that his right being hit by exception could not be allowed to continue---Similarity between two products/brands these should so resemble that an ordinary consumer might not differ between what he intended to purchase or what was presented to him---Bare look of both the products did not result into any confusion because not only the colour scheme but also the calligraphy and its manner were quite different from each other---Mere having photo-graph/picture of different fruits was not sufficient to believe the plea of plaintiff that label of defendant's product 'Rooh-e-Samar' would cause 'confusion' or 'deception' to its customers of 'Sharbat Rooh Afza'---Colour scheme, calligraphy and picture of fruits of products was entirely different with considerable distinction to an ordinary eye---Label of product of defendant would not result in causing a 'deception' or 'confusion' to the customer of plaintiff---No case of 'confusion' or 'deception' having been made out, plaintiff had no prima facie case in his favour to deprive the defendant from doing/continuing lawful business or trade---Application for temporary injunction was dismissed in circumstances.

Wellcome Foundation Limited v. Karachi Chemical Industries (Private) Ltd. 2000 YLR 1376; J&P Coats Limited v. Golden Thread Industries through Proprietor 2011 CLD 811; Messrs Dewan Sugar Mills (Pvt.) Ltd. v. M.B. Abbasi and others 2007 CLD 1610; M. Sikandar Sultan v. Masih Ahmed Shaikh 2003 CLD 26; Mehran Ghee Mills (Pvt.) Ltd. v. Chiltan Ghee Mills (Pvt.) Ltd. 2001 SCMR 967; The State v. Abdul Qayum PLD 2001 SC 14; 1990 CLC 497; PLD 1973 SC 104; 1988 CLC 489; NLR 1981 UC 362; 1987 CLC 1539; 1980 CLC 1272; PLD 1971 Kar. 189; 1984 CLC 2478; PLD 1964 SC 536; 1972 SCMR 100; 2005 YLR 1895; 2006 YLR 1895 and 2006 YLR 856 ref.

Wellcome Foundation Limited v. Karachi Chemical Industries (Private) Ltd. 2000 YLR 1376; J&P Coats Limited v. Golden Thread Industries through Proprietor 2011 CLD 811; M. Sikandar Sultan v. Masih Ahmed Shaikh 2003 CLD 26; Mehran Ghee Mills (Pvt.) Ltd. v. Chiltan Ghee Mills (Pvt.) Ltd. 2001 SCMR 967; Puri Terminal Ltd. v. Government of Pakistan 2004 SCMR 1092 and J.N. Nichols (VIMTO) PLC A Company Incorporated in the United Kingdom v. Mehran Bottlers (Private) Limited, Karachi PLD 2000 Kar. 192 rel.

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

----Preamble---Constitution of Pakistan, Art. 18--- Object of the Ordinance---Object of Trade Marks Ordinance, 2001 was to ensure a protection to the goodwill, name and reputation of a "trade mark" to avoid any mala fide move of other competitor to come and take the benefit of such name and reputation of the 'mark'---Trade Marks Ordinance, 2001 would fall within the exception of Art. 18 of the Constitution which had ensured and protected the right of every citizen to enter upon any lawful profession or occupation and to conduct any lawful trade or business---Trade Mark did not restrict any one to enter upon a lawful business or to do a lawful trade but same would demand that such trade or business should not be at the cost of the goodwill or reputation of other registered 'mark'---'Trade mark' once registered would become the property of the person in whose favour same was registered---No new mark should be registered which might result into a 'deception' or 'confusion' while purchasing a product/brand---Any ordinary man while purchasing a product/brand was not supposed to minutely examine the same to find out the difference into a product in his hand or the one which he intended to purchase---Name of product/brand alone or its phonetic would not matter but scheme, colour, calligraphy and manner of presentation of such product would matter while deciding a question of 'deception' or 'confusion'---Question of 'deception' and 'confusion' could be determined on the principles that the purchaser/customer was not intelligent to stick with name of product/brand one; that phonetic should not be such to let seller/shop keeper to present other product than demanded with an excuse of similarity between two; overall similarity consisting upon theme, manner and colour scheme which was of more importance as difference in theme might not open the eye of an ordinary man but the colour scheme would do the same.

Salman Ahmed Shaikh for Plaintiff.

Shamshad Ali Qureshi for Defendant.

Date of hearing: 10th September, 2014.

2015 C L D 528

[Sindh]

Before Syed Saeeduddin Nasir, J

Messrs SHIELD CORPORATION LTD.---Plaintiff

Versus

DALDA FOODS (PVT.) LTD.---Defendant

Suit No. 752 of 2014, decided on 16th September, 2014.

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

----Ss. 39 & 40---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration, injunction and infringement of registered trade mark---Interim injunction, grant of---Registration of trade mark---Goods falling in another category---Grievance of plaintiff company was that trade mark in question was registered in its name and defendant company was infringing its trade mark by using it on its products, though in other category/class---Validity---Legislature had inserted S.40(4)(b) in Trade Marks Ordinance, 2001, whereby protection was extended to proprietor of registered trade mark in all fields of business activities in respect of goods which fall in another category/classification of goods services and were dissimilar to those for which trade mark or service mark was registered---Such provision of law was inserted in Trade Marks Ordinance, 2001, in order to provide protection to proprietor of registered trade mark against infringement by dilution of mark and dishonest adoption of the same by a person who was doing business in totally different field of activities---Plaintiff's trade mark was well known trade mark and had repute to house-hold trade in Pakistan since 1974---Use of plaintiff's trade mark by defendant on his product, though the field of business activity was different, was without due cause and was being used in order to take unfair advantage of distinctive character and reputation of plaintiff's trade which was detrimental to distinctive character of plaintiff's trade mark---Defendant was guilty of committing act of infringement as well as passing of and infringement by dilution of trade mark of plaintiff, which was registered by plaintiff in different classes of goods, including by not limited to class 29 of the classification of goods and services---Plaintiff made prima facie case for grant of temporary injunction and balance of convenience was also in favour of grant of injunction in favour of trade mark of plaintiff registered under several registration numbers and renewed up to date---Plaintiff was likely to suffer irreparable loss if defendants were allowed to continue to infringe trade mark of plaintiff---High Court restrained defendant by way of temporary injunction from selling, manufacturing, importing, exporting and offering for sale, advertisement or distributing directly or indirectly trade mark of plaintiff or any other mark which was identical with or deceptively similar to plaintiff's registered trademarks in different classes---High Court further restrained defendant from using any trade mark colourable imitation of which closely and deceptively similar with the plaintiff's trade mark---Application was allowed accordingly.

Messrs Dewan Sugar Mills (Pvt.) Ltd. v. M.B. Abbasi and others 2007 YLR 2672; J. No. Nichols (Vimto) PLCA A Company Incorporated in the United Kingdom v. Mehran Bottlers (Private) Limited Karachi PLD 2000 Kar. 192; Muhammad Saeed Mughal and 3 others v. Messrs National Aviation Services (Pvt.) Limited through Malik Talat Mehmood 2001 YLR 2004; Muhammad Fazil v. Messrs Ashfaq Brothers, Karachi 1981 CLC 1519; Messrs Chas A. Mendoza v. Syed Tausif Ahmed Zaidi and 2 others PLD 1993 Kar. 790; Kaiser Jeep Corporation v. Saber Saleem Textile Mills Ltd. PLD 1969 Kar. 376; Formica Corporation v. Pakistan Formica Ltd. 1989 SCMR 361; Messrs Hero Motors Ltd. through Authorized Signatory v. Babar Auto Trading and Manufacturing Company through Proprietor 2010 CLD 22; Trebor Bassett Limited v. The Football Association, Fleet Street Reports (1997); Soneri Travel and Tours Ltd. through Chief Executive/Director Secretary v. Soneri Bank Limited 2011 CLD 193; Reckitt & Colman Products Ltd. v. Borden Inc. and others 1990 (i) All ER 873; Perry v. Truefitt (1842) 6 Beav. 66, 73; Ruston & Hornsby Ltd. v. The Zamindara Engineering Co. 1969 (2) SCC 727; Laxmikant V. Patel v. Chetanbhai Shah and another 2002 (3) SCC 65; Satyam Inforway Ltd. v. Sifynet Solutions (P) Limited 2004 (6) SCC 145; Ramdev Food Products (P) Limited v. Arvindbhi Rambhai Patel and others 2006 (8) SCC 726; Harrods Limited v. R. Harrod Limited (1924) RPC 74; Harrods Limited v. Harrodian School Limited (1996) RPC 697; Midas Hygiene Industries (P) Ltd. and another v. Sudhir Bhatia and others (2004) 3 SCC 90; Madhubhan Holiday Inn v. 47 Holiday Inn Inc. 100 (2002) DLT 306 (DB); Mahendra & Mahendrab Paper Mills Limited v. Mahindra & Mahindra Limited (2002) 2 SCC 147; Bata India Limited v. Pyare Lal & Company, Meerut City and others AIR 1985 All 242; Godfrey Philips India Limited v. Girnar Food & Beverages (P) Limited (2004) 5 SCC 257; Edge (India) Private Limited and another v. Shailesh Gupta 55 and another 98 (2002) DLT 499; Office Cleaning Services Limited v. Westminister Office Cleaning Association 1944; Halsbury's Laws of England, Volume 48 Fourth Edition; McCarthy on "Trademarks and Unfair Competition Vol.2, 3rd Edition in Para 12.5(a); Kamal Trading Co., Bombay and others v. Gillette U.K. Limited [1988] IPLR 135; Honda Motors Company Ltd. v. Charanjit Singh and others (1015 2002) DLT 358; Messrs Bengal Waterproof Limited v. Messrs Bombay Waterproof Manufacturing Company and another (1997) 1 SCC 99 and Prakash Roadline Limited v. Prakash Parcel Service (P) Ltd. 48 (1992) Delhi Law Times 390 ref.

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

----S. 39---Registration of trade mark---Effect---Proprietor of registered trade mark has exclusive right to use the same in relation to goods specified therein and has got the right to restrain every and all persons from using the registered trade mark.

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

----Ss. 43 & 44--- Registration certificate--- Scope--- Registration certificate of mark is prima facie an evidence that registration is valid and after expiration of period for which the registration was valid, its subsequent renewal, registration is taken to be valid and conclusive in all respects.

Shahid Qadeer along with Choudhry Saleem-uz-Zaman for Plaintiff.

Khawaja Shoib Mansoor for Defendant.

Date of hearing: 25th June, 2014.

2015 C L D 600

[Sindh]

Before Nadeem Akhtar and Muhammad Iqbal Kalhoro, JJ

PAKISTAN GENERAL INSURANCE COMPANY LIMITED through Executive Vice-President---Appellant

Versus

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

First Appeals Nos. 102 to 123 of 2004, decided on 24th December, 2014.

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

----Ss. 2(a)(b)(d)(e) & 9--- Banking Court--- Procedure--- Only a 'financial institution' or a 'customer' as defined in S. 2(a) & (b) of Financial Institutions (Recovery of Finances) Ordinance, 2001, can invoke jurisdiction of Banking Court by instituting suit against one another---Cause of action for filing suit must arise out of a breach either by financial institution or customer in fulfilment of an 'obligation' as defined in S. 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Such breach must be a breach with regard to any 'finance' as defined in S. 2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Relationship between parties to suit must be that of a financial institution and customer---Such relationship must emanate from any 'finance' as defined in S.2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

(b) Jurisdiction---

----Objection---Stage---Courts are duty bound to decide fundamental questions that may affect legality of proceedings before them, such as jurisdiction and limitation at the earliest possible stage, even if objection to such effect has not been raised---Question of jurisdiction, being a legal one, can be raised even at appellate stage.

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

----Ss. 2(a)(b)(c)(d), 9 & 22---Suit for recovery of finance facility---Relationship of 'financial institution' and 'customer'---Proof---Insurance company was impleaded as defendant along with borrowers by financial institution in suit for recovery of finance facility---Banking Court decreed the suit against all defendants including insurance company---Validity---Insurance company was not a customer of "financial institution" within the meaning of S. 2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in relation to any finance as defined in S. 2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001---No relationship of 'financial institution' and 'customer' existed between financial institution and insurance company, therefore, Banking Court had no jurisdiction to entertain or adjudicate upon suit against insurance company---Judgment and decree passed by Banking Court against insurance company was coram non judice, and the same was set aside---Appeal allowed in circumstances.

Messrs United Bank Limited v. Messrs Adamjee Insurance Company Ltd. and 2 others 1988 CLC 1660; EFU General Insurance Ltd. through Executive Vice-President v. Chairman, Banking Tribunal No.1, Lahore and 3 others PLD 2001 Lah. 313; Messrs Evergreen Press and 3 others v. Bank of Punjab 2004 CLD 239; Messrs Grace Textile Mills (Pvt.) Ltd. and another v. Habib Bank Limited and 5 others 2003 CLD 1685; National Bank of Pakistan (N.B.P.) and 5 others v. Punjab Road Transport Board through Managing Director and 3 others 2003 CLD 653 and Messrs Moghul and Sons through Partner v. NIB Bank Ltd. and another 2012 CLC 1915 rel.

Salah-ud-Din and another v. The State and another 2005 MLD 371; Ghulam Yasin alias Bhaidoo v. The State 2006 YLR 1775; Mst. Dur Naz and another v. Yousuf and another 2005 SCMR 1906 and Shakeel Abbas v. The State PLD 2004 Pesh. 84 distinguished.

Mrs. Seema Waseem for Appellant (in all appeals).

Syed Danish Qazi for Respondent No.1 (in all appeals).

Respondent No.2 called absent (in I.As. Nos.102 and 103 of 2004).

Respondent No.2 called absent (in I.As. Nos.104 and 110 of 2004).

Respondent No.2 called absent (in I.As. Nos.105 and 111 of 2004).

Respondent No.2 called absent (in I.As. Nos.106, 107, 108 and 109 of 2004).

Respondent No.2 called absent (in I.As. Nos. 112 to 123 of 2004).

Ms. Asmara Parveen holding brief for Shaiq Usmani for Respondents Nos.3 and 4 (in all appeals).

Respondent No.5 called absent (in all appeals).

Date of hearing: 21st October, 2014.

2015 C L D 626

[Sindh]

Before Nadeem Akhtar and Sadiq Hussain Bhatti, JJ

PAK LIBYA HOLDING COMPANY (PRIVATE) LIMITED---Appellant

versus

KOHANOOR EDIBLE OILS LIMITED and 3 others---Respondents

First Appeal No.46 of 2000, decided on 18th October, 2014.

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

----S. 5---Condonation of delay---Public functionaries---Principle---Public functionaries cannot seek any preferential treatment in the matter of condonation of delay.

Muhammad Bashir and another v. Province of Punjab 2003 SCMR 83 rel.

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

----S. 22---Limitation Act (IX of 1908), S. 5---Appeal---Condonation of delay---Public functionaries---Financial institution filed appeal with a delay of seven days and sought condonation of delay on the plea that its staff, under directions of Federal Government, was busy in preparing list of defaulters for submission to State Bank of Pakistan---Validity---Such plea could not be made a ground for condonation of delay---Financial institution failed to show "sufficient cause" for not making appeal within prescribed time period of limitation---High Court declined to condone the delay caused in filing of appeal---Appeal was dismissed in circumstances.

Muhammad Bashir and another v. Province of Punjab 2003 SCMR 83; Imtiaz Ali v. Atta Muhammad and another PLD 2008 SC 462; Lahore Development Authority v. Messrs Sea Hawk International (Pvt.) Ltd. Lahore 2003 CLC 269 and Pakistan Handicrafts, Sindh Small Industries Corporation, Government of Sindh v. Pakistan Industrial Development Corporation 2010 CLC 323 rel.

Abdul Sattar Lakhani for Appellant.

2015 C L D 637

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs PANGRIO SUGAR MILLS LTD.---Appellant

versus

BANKERS EQUITY LTD. and 5 others---Respondents

H.C.A. No.10 of 2012, decided on 4th September, 2014.

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

----Ss. 9 & 22---Limitation Act (IX of 1908), S. 5---Suit for recovery of loan amount---Appeal---Limitation---Delay, condonation of---Sufficient cause---Scope---Limitation period would start from the date of announcement of order and not from the knowledge of the same whether copy of such order was ready or not---Limitation would not depend on the fate of order whether same was in favour of appellant or not---Period consumed in preparation of certified copy could only be condoned in favour of a party provided application for issuance of such copy was made in time---Limitation for filing appeal under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was thirty days from the date of order---Present appeal was barred by time---Powers vested in the court to condone period of limitation in terms of S.5 of Limitation Act, 1908 were discretionary in nature---Court must be satisfied that delay in filing of appeal was beyond the control of a party for exercise of such discretion and was not contumacious---Defendant had not made out a prima facie case to exercise such discretion in its favour to condone the delay in filing of present appeal---Once time had begun to run it did not stop, and delay of each and every day had to be explained---Defendant had failed to explain the delay of each and every day---Defendant was required to show sufficient cause but no such cause had been shown to condone delay in filing of appeal---Appeal was dismissed as barred by time.

Sheikh Atiq-ur-Rehman Sarwar v. Sajjad Hussain 2009 SCMR 684; Tauqeer Ahmad Qureshi v. Additional District Judge, Lahore and others PLD 2009 SC 760?????????????????????; Muhammad Tariq Khan v. Kh. Muhammad Jawad Asami and others 2007 SCMR 818; Mst. Naseem Akktar and others v. Shalimar General Insurance Co. Ltd. and others 1994 SCMR 22; MCB Ltd. v. Messrs Hirra Farooq Ltd. and others 2009 CLD 922; HBL v. Karachi Pipe Mills Ltd. 2006 CLD 842; Zarai Taraqiati Bank Ltd. v. S. Nusrat Ali Shah and others 2005 CLD 1539; Zarai Taraqiati Bank Ltd. v. Hassan Aftab Fatiana 2009 CLD 36; HBL v. Tauqeer Ahmed Siddiqui and others 2009 CLD 312 ; Messrs Green Oil Mills and others v. NBP and another 2005 CLD 1676; NBP v. Messrs Overseas Trading Services (Pvt.) Ltd. and others 2006 CLD 393 and HBL v. National Engineering Co. (Pvt.) Ltd. and others 2006 CLD 804 ref.

Asim Manzoor Khan for Appellant.

Muhammad Ali Hakre for Respondent No.1.

Hamid Idrees for Respondent No.2.

Khalid Mahmood Siddiqui for Respondent No.4.

Dates of hearing: 10th, 28th February and 18th March, 2014.

2015 C L D 655

[Sindh]

Before Syed Saeed-ud-Din Nasir, J

MUHAMMAD SALEEM WARIND---Plaintiff

versus

MAZHAR and 2 others---Defendants

Suit No. 85 of 2014, decided on 21st July, 2014.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 40, 43 & 44---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Suit for infringement of trade mark and passing off---Interim injunction, grant of---Plaintiff claimed that trade mark in question was registered in his name and defendant was infringing the same---Validity---In all legal proceedings relating to registered trade mark, Registration Certificate of the mark was a prima facie evidence that registration was valid and after expiration of period for which registration was valid and subsequent renewal would be taken to be valid and conclusive in all respects---On registration and subsequent to that on renewal for a further period of 15 years of mark in question, plaintiff had acquired exclusive right to use the same in concerned class in respect of specified goods---Plaintiff by virtue of registration had right to restrain all persons from using any mark similar to or identical with or resembling the trade mark in question which was likely to deceive or cause confusion of the trade that goods of defendants were produced by plaintiff---Plaintiff had a right to obtain injunction against the person who infringed registered mark of plaintiff on production of Registration Certificate---Plaintiff had made out a good prima facie case for grant of temporary injunction and balance of convenience was also in his favour for grant of injunction---Plaintiff admittedly was likely to suffer an irreparable loss if defendants were allowed to continue to infringe the trade mark of plaintiff---High Court granted interim injunction in favour of plaintiff---Application was allowed in circumstances.

Naseem Ahmed v. Messrs Samuddin Remzan Khan and 2 others 2004 CLD 315 rel.

Ghulam Muhammad Dossal & co. v. Vulcan Company Ltd. and another 1986 MLD 886; M. Sikandar Sultan v. Masih Ahmed Shaikh 2003 CLD 26; The Wellcome Foundation Limited v. Messrs Karachi Chemical Industries (Private) Limited 2000 YLR 1376; Messrs Exide Pakistan Limited v. Pakistan Accumulators (Pvt.) Limited and 2 others 2010 CLD 890; Rio Chemical Company and another v. Pakistan Drug House (Pvt.) Ltd. 2004 CLD 1210; J. N. Nichols (Vimto) PLC a company incorporated in the United Kingdom v. Mehran Bottlers (Pvt.) Limited, Karachi PLD 2000 Kar. 192; Messrs Dewan Sugar Mills (Pvt.) Ltd. v. M.B. Abbasi and others 2007 CLC 1610; Societe Des Products Nestle S.A. v. Food International (Pvt.) Ltd. 2004 CLD 1383; Dabur India Ltd. v. Hilal Confectionery (Pvt.) Ltd. PLD 2000 Kar. 139; Ghulam Mujtaba Pracha v. Muhammad Saleem 2010 CLD 311; 1992 MLD 2357; PLD 1991 SC 27; Messrs Trista Industries v. Messrs Trisa Bursten Tabrik A.G. 1999 YLR 638; Messrs Durafoam (Pvt.) Ltd. v. Messrs Vohra Enterprises (Pvt.) Ltd. 2002 CLD 1639; Telephone Soap v. Messrs Lever Brothers 1994 CLC 2135 and 1986 MLD 886 ref.

Munawar Ali for Plaintiff.

Sultan Ahmed Shaikh for Defendants.

Date of hearing: 23rd June, 2014.

2015 C L D 691

[Sindh]

Before Syed Saeed-ud-Din Nasir, J

BANK ALFALAH LIMITED---Plaintiff

versus

Messrs CALLMATE TELIPS TELECOM LTD. and 5 others---Defendants

Suit No. 1 of 2008, decided on 22nd December, 2014.

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

----Ss. 9, 10 & 11---Suit for recovery of Bank loan---Interim decree---Leave to defend the suit---Defendant partially admitted liability and for remaining liability filed suit against Bank---Validity---If court was of the opinion, on consideration of contents of plaint, application of leave to defend of defendant and reply thereto that dispute between parties did not extend to whole claim or that part of the claim was either undisputed or was clearly due, then under S. 11(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, Banking Court while grating leave with respect to disputed amounts could pass an interim decree in respect to the amount appeared to be payable by defendant---Amount of Rs. 18.2 million was an admitted loan by defendant for which interim decree under S. 11(1) Financial Institutions (Recovery of Finances) Ordinance, 2001, was passed in favour of bank and unconditional leave to defend the suit was granted to defendant to the extent of disputed amount---Application was allowed accordingly.

2006 CLD 1506; Wajid Ali v. Rent Registrar/Special Judge Rent PLD 2010 Lah. 463; Zeeshan Energy Ltd. v. Faisal Bank Ltd. 2014 CLD 696; Apollo Textile Mills Ltd. v. Soneri Bank Ltd. 2012 CLD 337; Elbow Room v. MCB Bank Limited 2014 CLD 985; Bankers Equity Ltd. v. Bentonite Pakistan Ltd. 2010 CLD 651; United Bank Ltd. v. Messrs Ilyas Enterprises 2004 CLD 1338; Habib Metropolitan Bank Ltd. v. Abid Nisar 2014 CLC 1367; Munawar Abbas Cotton Ginner Tauns Darri Peer Adil v. United Bank Ltd. 2014 CLD 180; Warrior Chemical (Pvt.) Ltd. v. National Bank of Pakistan 2012 CLD 1222; National Bank of Pakistan v. SAF Textile Mills Ltd. PLD 2014 SC 283; Suo Motu Case No.4 of 2010 PLD 2012 SC 553; Huffaz Seamless Pipe Industries Ltd. v. Security Leasing Corporation Ltd. 2002 CLD 550; Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation 2006 SCMR 619; Amir Javed v. Al-Baraka Islamic Investment Bank 2006 CLD 178; Dr. Ghulam Hussain v. Orix Leasing 2009 CLD 614; Habib Metropolitan Bank Ltd. v. Abdul Jabbar Gihllin 2013 CLD 88; Atif Manzoor v. Faysal Bank Ltd. 2013 CLD 1165; Habib Metropolitan Bank Limited v. Century Textile and Sportswear (Pvt.) 2014 CLD 729; Khawaja Muhammad Daud Sulaimani v. Election Tribunal PLD 2003 Lah. 106; United Bank Limited v. Presiding Officer, Banking Court 2011 CLD 1931; Bank of Khyber v. Spencer Distribution Ltd. 2012 CLD 1336 and KASB Bank Limited v. Dewan Salman Fibre Ltd. 2011 CLD 267 ref.

Abdul Sattar Lakhani for Plaintiff.

Salim Salam Ansari for Defendants.

Ravi Pinjani for Intervener.

Dates of hearing: 6th and 7th November, 2014.

2015 C L D 745

[Sindh]

Before Munib Akhtar, J

CRESCENT STEEL AND ALLIED PRODUCT LIMITED---Applicant

versus

SUI SOUTHERN GAS CO. LIMITED---Respondent

C.M.A. No.7151 of 2013 in Suit No.754 of 2013, decided on 10th April, 2014.

Public Procurement Rules, 2004---

----R. 26---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss.42 & 54---Suit for declaration and injunction--- Interim injunction, grant of--- Plaintiff-company, manufacturer of pipes was the lowest bidder in tender invited by defendant, a gas company---Grievance of plaintiff-Company was that defendant-company could not revoke its bid and relied upon R.26 of Public Procurement Rules, 2004---Validity---Private entity calling for bids under a tender for its own purposes had a right to cancel the tender without assigning any reason or even without having one---Such option was not open to public sector entity which was a procuring agency within the meaning of Public Procurement Regulatory Authority Ordinance, 2002---All public sector actions must be taken for a valid legally defensible reason---Concerned entity or authority must have a lawful reason for action that it had taken (or refused to take, as the case might be) even if it might be able to assert a right not to make that reason public (i.e. to 'assign' it), the fundamental obligation of having lawful reason was not thereby annulled---Court, in appropriate circumstances, could insist that reason be given, i.e. disclosed, so that it could satisfy itself as to the lawfulness of the same---Pipes were lying with plaintiff and it was best placed being the lowest bidder in terms of the tender to coat the pipes---Plaintiff had to bear substantial inconvenience, both physical arid financial of keeping pipes at its factory for a long period entirely as a result of defendant's inaction and it had significantly interfered with plaintiff's other business operations---Balance of convenience was in favour of plaintiff and against defendant company---Plaintiff would suffer irreparable loss and injury if the contract for coating pipes was awarded to some other party---High Court granted interim injunction as all ingredients for interim relief were in place---Application was allowed in circumstances.

Ch. Atif Rafiq for Applicant.

Asim Iqbal for Respondent.

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

2015 C L D 759

[Sindh]

Before Nadeem Akhtar and Muhammad Iqbal Kalhoro, JJ

ALLIED BANK OF PAKISTAN LIMITED through Manager/Assistant Vice-President---Appellant

versus

SULTAN ALI J. LILANI---Respondent

Ist Appeal No. 62 of 2001, decided on 18th December, 2014.

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

----Ss. 9, 10 & 12---Leave to defend suit---Time barred application---Suit filed by respondent was decreed against appellant Bank as it did not file application for leave to defend the suit within statutory period---Validity---Appellant Bank despite service through publication did not approach Trial Court to obtain copy of plaint enabling same to file application for leave to defend the suit within stipulated period---Failure of appellant Bank to obtain leave to defend the suit as required under law left no option with Trial Court but to decree the suit based on averments made in plaint, in terms of S. 9(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---No illegality was committed by Banking Court, which could be taken care of---Appeal was dismissed in circumstances.

Messrs Ahmed Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 and Messrs Simnwa Polypropylene (Pvt.) Ltd. and others v. Messrs National Bank of Pakistan 2002 SCMR 476 rel.

Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353 ref.

Ms. Fauzia Rasheed for Appellant.

Naveed Ahmed for Respondent.

Date of hearing: 18th December, 2014.

2015 C L D 772

[Sindh]

Before Sajjad Ali Shah and Shaukat Ali Memon, JJ

PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY through Secretary---Petitioner

versus

SINDH ENVIRONMENTAL PROTECTION AGENCY through Director General and 2 others---Respondents

Constitutional Petition No. D-4192 of 2014, decided on 17th October, 2014.

Sindh Environmental Protection Act (VIII of 2014)---

----Ss. 17 & 31---Pakistan Environmental Protection Agency (Review of IEE and IEA) Regulations, 2000, Regln. 10---Constitution of Pakistan, Arts. 199 & 270-AA(6)---Constitutional petition---Environment Impact Assessment---Laws applicable---Concurrent List of the Constitution, omission of---Petitioner was a Housing Authority and assailed Environment Impact Assessment issued by authorities regarding projects of respondent company---Validity---Even after omission of concurrent legislative list all Ordinances, orders, rules, bye-laws, regulations and notifications and other legal instruments having force of law made in respect of any matter enumerated in that list continued to remain in force until altered, repealed or amended by competent authority---Provisions of Pakistan Environmental Protection Agency (Review of IEE and IEA) Regulations, 2000, were neither altered nor repealed or amended, therefore, the same continued to remain in force until and unless regulations and rules framed under Sindh Environmental Protection Act, 2014---Law applicable was Sindh Environmental Protection Act, 2014 and Pakistan Environmental Protection Agency (Review of IEE and IEA) Regulations, 2000---Law did not impose responsibility of adjudication of grievances of stakeholder while approving Environment Impact Assessment, however provided for reasoning only when the Agency after examining Environment Impact Assessment rejected project being contrary to environmental objectives---In case Environment Impact Assessment was granted law had provided that approval would specify conditions subject to which it was accorded---Approval in favour of respondent company specified conditions on the basis whereof approval was accorded---Requirement of submitting Strategy Environmental Assessment (SEA) was to be undertaken by government agencies, departments, authorities, local councils before formulating prescribed categories of policies, plans and programs for areas which could cause environmental impact in the Province of Sindh and not in respect of project, which was being constructed in an area in respect whereof government had already made a policy by declaring it a "High Density Zone"---High Court declined to interfere in approval granted by authorities in favour of respondent---Petition was dismissed in circumstances.

Abid S. Zuberi and Muhammad Haseeb Jamali for Petitioner.

Muhammad Imran Sabir for Respondent No.1.

Farooq H. Naek for Respondent No.2.

Khalid Jawed Khan for Respondent No.3.

Dates of hearing: 12th, 29th, 30th September, 1st and 2nd October, 2014.

2015 C L D 848

[Sindh]

Before Aziz-ur-Rehman, J

Dr. SHAKEEL AHMED SIDDIQUI and another---Plaintiffs

versus

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

Suit No. B-55 of 2008, decided on 4th August, 2014.

(a) Words and phrases---

----Obligation---Defined.

Black's Law Dictionary 6th Edition rel.

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

----S. 9---Suit for declaration, injunction, rendition of accounts, cancellation of cheques/instruments---Phrase "any obligation with regard to finance"---Scope---Plaintiffs were borrowers who filed suit for declaration, injunction, rendition of accounts, cancellation of cheques/instruments against defendant Bank---Plea raised by plaintiffs was that they had paid excess amount which was not adjusted by defendant Bank towards their outstanding liability---Validity---Phrase "any obligation with regard to finance" enlarged scope of S. 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Said Phrase was wide enough to include in its ambit: (i) legal obligations (ii) contractual obligations and (iii) absolute obligations---If a 'customer' or 'financial institution' committed default in fulfilment of any obligation (i.e. by not following or violating laws, rules, regulations and/or State Bank of Pakistan's instructions/circulars etc.) with regard to finance (i.e. legal obligation and contractual obligations) then in such eventuality any of the aggrieved parties could competently institute a suit inter alia for declaration, injunction, damages and specific performance of contract under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant Bank was not entitled to increase amounts of monthly instalments or any of them in respect of subject finance facility granted to and availed by plaintiffs---Defendant Bank was only entitled to receive instalment amounts in accordance with re-payment schedule---High Court directed that excess amount already paid to and received by defendant Bank was refundable to plaintiffs which could be adjustable to future instalments---High Court restrained defendant Bank from encashing cheques lying with it to the extent of excess amount deposited by plaintiffs and restrained the Bank permanently from charging any increase amount over and above monthly instalment as given/detailed in initially prepared repayment schedule---Defendant Bank was also directed to take necessary and appropriate steps for removal of names of plaintiffs from the list of defaulters of State Bank of Pakistan (CIB) promptly---Suit was decreed accordingly.

Soneri Travel and Tours Ltd. through Chief Executive/Director/Secretary v. Soneri Bank Limited 2011 CLD 193; Mayzone Pak International v. Additional Secretary, Government of Pakistan 2002 CLC 388; Tri-Star Industries (Pvt.) Ltd. v. State Bank of Pakistan and another 2004 CLD 257; Mst. Jan Ara and others v. Muhammad Zubair and others 2012 CLC 1630; U Arzeina v. M a Kijni Shave and another 1987 AIR 1940 Rangoon 298; Dr. Mohomed Aqeel Khan and others v. Mst. Dr. Shaharyar and 2 others 1987 MLD 2809; Investment Corporation of Pakistan v. S. Ahmed Sarwana, Advocate 1987 MLD 2442; PLD 1968 Kar. 222; PLD 1982 Kar. 313; 1999 CLC 1719; PLD 1997 Kar. 88; Lalchand and 2 others v. Officer on Special Duty, Federal Land Commission and 3 others 1984 CLC 2396; Sardar Abdul Ghafoor Khan and 3 others v. The Federal Land Commission, Islamabad PLD 1979 Lah. 375 and Ahmed Nadeem Kirmani v. Messrs Muslim Commercial Bank Ltd., Islamabad 1993 SCMR 441 ref.

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

----S. 9--- State Bank of Pakistan BPD Circular No. 1, dated 21-1-2004---Consumer financing--- Karachi Interbank Offered Rates (KIBOR)--- Applicability--- Consumer financing remains exempted/ excluded from applicability of KIBOR.

Federation of Pakistan and others v. Shoukat Ali Mian and others PLD 1999 SC 1026; United Bank Ltd. v. Kashmir Textile Mills Ltd. 2013 CLD 1325 and United Bank Ltd. v. Messrs Gravure Packging (Pvt.) Ltd. and 4 others 2001 YLR 1549 rel.

Zeeshan Abdullah and Saalim Salam Ansari for Plaintiffs.

Abdul Sattar Lakhani for Defendant.

Date of hearing: 30th May, 2014.

2015 C L D 918

[Sindh]

Before Ahmed Ali M. Sheikh and Syed Muhammad Farooq Shah, JJ

Mrs. SEEMA SHEERAZI---Petitioner

versus

NATIONAL ACCOUNTABILITY BUREAU through Director General Sindh---Respondent

Constitutional Petition No. 133 of 2015, decided on 17th February, 2015.

(a) National Accountability Ordinance (XVIII of 1999)---

----Ss. 5(r) & 9(a)(viii)--- Constitution of Pakistan, Art. 199---Constitutional petition---Wilful default---Determined liability---Quashing of reference---Petitioner was one of the directors of the company which borrowed finance facility of Rs.125.665 million and wilfully defaulted in payment of the same---Suit filed by financial institution was decreed in its favour and against petitioner as well as other directors---Petitioner sought quashing of reference filed by National Accountability Bureau on the plea that she was not liable to repay the facility---Validity---Joint and several liabilities of petitioner being a borrower were determined through judicial disposition as compromise decree was drawn by High Court in banking suit against petitioner and three other judgment debtors, which had attained finality---Petitioner and others were jointly and severally held liable to pay decretal amount along with cost of funds from the date of default till realization and mechanism provided under National Accountability Ordinance, 1999, could be invoked---Loan amount released by financial institution was not repaid by petitioner and others and the same constituted act of 'wilful default'---High Court declined to quash proceedings, as the matter was sub judice before Trial Court---Petition was dismissed, in circumstances.

Asim Textile Mills Limited v. National Accountability Bureau PLD 2004 Kar. 638 fol.

(b) National Accountability Ordinance (XVIII of 1999)---

----Ss. 5(r) & 9(a)(viii)--- Constitution of Pakistan, Art. 199---Constitutional petition---Bail, refusal of---Wilful default---Petitioner was one of the directors of the company which borrowed finance facility of Rs.125.665 million and wilfully defaulted in payment of the same---Validity---Allegations levelled against petitioner in her capacity being director of the company to repay outstanding dues advanced as a loan facility admitted in compromise application in suit for recovery of money---Huge decretal amount of financial institution was outstanding against petitioner and others, who were fully aware about such decretal amount and defaulted wilfully, intentionally and deliberately to repay the same---High Court declined bail to the petitioner---Petition was dismissed in circumstances.

Khan Asfand Yar Wali v. Federation of Pakistan PLD 2001 SC 607 and Muhammad Nadeem Anwar v. Security Exchange Commission of Pakistan 2014 SCMR 1376 = 2014 CLD 873 rel.

Dr. Farogh Naseem for Petitioner.

Muhammad Altaf, ADPG NAB for Respondent.

Date of hearing: 28th January, 2015.

2015 C L D 942

[Sindh]

Before Salahuddin Panhwar, J

Messrs COUNTRYMEN through Partners---Plaintiff

versus

PROVINCE OF SINDH through Secretary and 11 others---Defendants

Suit Nos. 1308 of 2005 and 1379 of 2010, decided on 29th October, 2014.

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

----S. 69---Civil Procedure Code (V of 1908), O. VII, R. 11---Specific Relief Act (I of 1877), S. 42---Suit for declaration---Plaint, rejection of---Scope---Contention of defendant was that unregistered firm (partnership) could not file suit and plaint was liable to be rejected---Validity---Plaintiff had not claimed to have entered into a contract with defendant under a status of firm---Present suit had not been filed for enforcement of a right with regard to any contract but the relief sought was governed by the Specific Relief Act, 1877---Suit of plaintiff was not in contravention of embargo provided under S. 69(2) of Partnership Act, 1932---Plaintiff should not be knocked out from the court only for the reason that suit was filed under the status of 'firm' which was not registered one---Penal provisions should be read strictly and same should not be given any other meaning except what was intended thereby---Application for rejection of plaint was dismissed in circumstances.

Australasia Bank Ltd. v. A. Ismailji and Son PLD 1952 Lah. 314; United Cotton Factory v. Ahmed Khan PLD 1960 Kar. 774; Province of West Pakistan v. Ashar Ali, Muhammad Ali Co. PLD 1968 Kar. 196; Muhammad Hasan Khan v. Province of N.-W.F.P. 1990 MLD 1039; Province of Sindh v. Royal Contractors 1996 CLC 1205; CHEF v. Union Cooperative Club Limited 1997 CLC 187; Messrs Marvi International through Partners v. Muhammad Aslam PLD 2007 Kar. 78; Najma Sugar Mills Ltd. through Company Secretary v. Mega Trading Company through Chief Executive 2009 CLC 209; Ali Muhammad v. Chief Settlement and Rehabilitation Commissioner 1984 SCMR 94; Messrs M. A. Majeed Khan v. Karachi Water and Sewerage Board PLD 2002 Kar. 315; Collector of Customs (Appraisement) Collectroate of Customs, Government of Pakistan v. Imran Enterprises 2001 CLC 419; Habib Bank Ltd. v. Iqbal I. Chundrigar 1983 CLC 1464; Lakhani Textile International v. Southern Agencies (Pvt.) Ltd. 2008 CLC 444; Messrs Muhammad Junaid v. Karachi Electricity Supply Corporation Ltd. 2010 YLR 952 and Ardeshir Cowasjee v. K.B.C.A. PLD 2003 Kar. 314 ref.

Australasia Bank Ltd. v. A. Ismailji and Son PLD 1952 Lah. 314; United Cotton Factory v. Ahmed Khan PLD 1960 Kar. 774; Usman v. Haji Omer and Haji Razzak PLD 1966 SC 328 and Atta Muhammad v. Settlement Commissioner PLD 1971 SC 61 rel.

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

----S. 69---Unregistered firm---Bar to file suit---Scope---Provisions of S.69 of Partnership Act, 1932 would only bar a suit for enforcing a right arising out of a contract against either the firm or any past or present member of it or against any third party.

Abid S. Zuberi for Plaintiffs (in Suit No. 1308 of 2005).

Muhammad Haroon for BOR, Ms. Saima Imdad, State Counsel, Kamal Azfar and Zaid Khan Abbasi for Defendant No.12 (in Suit No.1308 of 2005).

Asim Iqbal Intervener (in Suit No.1308 of 2005).

Muhammad Haseeb Jamali for Plaintiff (in Suit No. 1379 of 2010).

Ms. Saima Imdad, State Counsel, Muhammad Haroon for BOR and Muhammad Anwar Tariq for Defendants Nos.10 and 11 (in Suit No.1379 of 2010).

Date of hearing: 23rd September, 2014.

2015 C L D 963

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

AZHAR RASHID KHAN and another---Appellants

versus

MUJEEB SALMAN KHAN and 10 others---Respondents

H.C.A. No. 233 of 2014, heard on 9th September, 2014.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66 & 89---Law Reforms Ordinance (XII of 1972), S. 3---Intra Court Appeal---Auction sale---Publication in one newspaper only---Execution of decree---Auction proceedings, setting aside of---Appellants as legal heirs of deceased borrower filed objections to sale through auction of suit properties---Plea raised by appellants was that matter was not put to open auction---Validity---Though publication was made in one newspaper instead of two but such non-publication of advertisement in two newspapers had no material bearing on auction proceedings, as one auction purchaser had appeared before the court and offered bid which was accepted, whereas contesting parties including appellants had option to match the bid or offers, which they failed to do so, despite having sufficient time---Objection in such regard was correctly overruled by Single Judge of High Court---Plea raised by appellants was not tenable and was misconceived as the matter was put to open bid amongst the parties and in fact the same had been recorded in the order of court, whereby respondent was offered to buy the property for which sufficient time was also given, however, subsequently, he failed to do the needful and did not deposit 25% of bid amount, whereafter offer of auction purchaser was accepted by High Court---Objection regarding open auction was correctly disregarded by Single Judge of High Court---Appellants failed to point out any error or omission in order passed by Single Judge whereas no substantial ground was raised through appeal which required any interference by Division Bench of High Court---Intra Court Appeal was dismissed in circumstances.

Islamuddin Ayubi for Appellants.

Muhammad Khushhal Khan for Respondent No.11.

Date of hearing: 9th September, 2014.

2015 C L D 1095

[Sindh]

Before Sajjad Ali Shah and Shaukat Ali Memon, JJ

Mst. NAJUM-UN-NISA ZAHRA through Attorney---Appellant

versus

Syed IJAZ HUSSAIN SHAH---Respondent

High Court Appeal No.76 of 2013, decided on 7th November, 2014.

Defamation Ordinance (LVI of 2002)---

----S. 8---Civil Procedure Code (V of 1908), S. 11 & O. VII, R. 11---Law Reforms Ordinance (XII of 1972), S. 3---High Court appeal---Suit for defamation---Rejection of suit---New plea before Appellate Court---Res judicata, principle of---Applicability---Defendant filed application under O. VII, R.11, C.P.C. for rejection of plaint but Single Judge of High Court dismissed the application---Appellant raised fresh plea before Division Bench of High Court (in High Court appeal) to support application under O. VII, R. 11, C.P.C.---Validity---Application of defendant under O. VII, R. 11, C.P.C. was rejected on his failure to demonstrate that plaintiff had failed to disclose any cause of action and the law did not bar repeating of fresh application on different ground---Plea that suit was barred by law was not agitated before the Trial Court, such plea could not be examined by the Appellate Court, which would not only amount to usurpation of power of Trial Court but would also deprive plaintiff of an appellate forum---No fresh plea could be raised before Appellate Court which was not taken before Trial Court in case of rejection of application under O. VII, R. 11, C.P.C.---Division Bench of High Court declined to interfere in order passed by Single Judge---High Court appeal was dismissed in circumstances.

Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore, Division, Lahore and others PLD 1971 SC 61; Messrs Overseas Pakistanis Foundation v. Income Tax Appellate Tribunal AJ&K PLD 2001 SC(AJ&K) 37; Messrs Shoaib Bilal Corporation v. The Commissioner of Income Tax, Faisalabad and another 1993 PTD 332 and Raees Ghulam Sarwar v. Mansoor Sadiq Zaidi and others PLD 2008 Kar. 458 ref.

Abu Bakar Khalil for Appellant.

Zaheer-ul-Hassan Minhas for Respondent.

Dates of hearing: 11th August and 29th October, 2014.

2015 C L D 1108

[Sindh]

Before Amer Raza Naqvi, J

EMAMI LIMITED through Authorized Signatory---Appellant

versus

The DEPUTY REGISTRAR OF TRADE MARKS---Respondent

Misc. Appeal No.26 of 2011, decided on 15th December, 2014.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 27(2), 85, 86 & 114---Paris Convention for the Protection of Industrial Property [20th March, 1883]---Application for registration of trade mark---Examination of application---Protection of a well known trade mark---Trade mark registered in other countries---Examination of application in view of Ss. 85 & 86 of the Trade Marks Ordinance, 2001---Appellant applied for a trade mark, and said application was summarily dismissed and registration was refused---Contention of appellant was that Registrar of Trade Marks was required to allow publication of notices and thereafter should have heard the matter in case of any opposition; and that the appellant's trade mark was a well known trade mark registered in seventeen countries, however the Registrar did not carry out search under S. 27(2) of the Trade Mark Ordinance 2001 in other jurisdictions, which he was required to do in view of Ss. 85 & 86 of the Trade Marks Ordinance, 2001---Held, that appellant had stated in its reply to the Registrar that such trade mark had been registered in favour of the appellants in seventeen countries---Registrar, in such a situation, did not carry out the proper exercise under S.27(2) of the Trade Marks Ordinance, 2001 and there was nothing on record to show that any investigation was carried out in respect of contention of appellant that its trade mark stood registered in seventeen countries----Registrar had therefore ignored Ss. 85 & 86 of the Trade Marks Ordinance, 2001 while passing impugned order---High Court observed that the world was a global village and the Legislature had recognized such fact by providing Ss. 85 & 86 of the Trade Marks Ordinance, 2001; and it was compulsory for the Registrar that while exercising powers under S. 27 of the Ordinance, Ss. 85 & 86 of the Trade Marks Ordinance, 2001 should be kept in mind---Appellant had in its reply to the show-cause notice specially mentioned and raised plea regarding the appellant's registration in other countries, therefore search beyond the jurisdiction of Pakistan was necessary---Impugned order was set aside and matter was remanded to the Registrar to exercise its powers under S. 27(2) of the Trade Marks Ordinance, 2001 in accordance with law while keeping in view Ss. 85 & 86 of the Trade Marks Ordinance, 2001---Appeal was allowed, accordingly.

1986 MLD 1666; 1992 SCMR 2323; PLD 1967 Kar. 492; 1987 MLD 91; 1980 SCMR 625 and PLD 1990 SC 313 ref.

Tasawar Ali Hashmi for Appellant.

Salim Ghulam Hussain for Respondent.

Date of hearing: 15th December, 2014.

2015 C L D 1159

[Sindh]

Before Shahab Sarki, J

AMEER ALI---Appellant

versus

KHUDA BUX---Respondent

1st Civil Appeal No. S-03 of 2014 decided on 28th November 2014.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 2 & 3---Suit on the basis of negotiable instrument---Application for leave to defend---Limitation---Trial Court dismissed application for leave to defendant being barred by time and decreed the suit---Validity---Defendant appeared before the Trial Court and moved an application that he needed copies of plaint as same had not been supplied---Defendant also sought copies of the pleadings when Vakalatnama was filed by his counsel---Nothing was on record that copies of plaint and annexures were provided to the defendant---Application for leave to defend was filed within 10 days of the time when defendant was provided the copies---Application for leave to defend could not be filed prior to having copies of the plaint---Impugned judgment and decree were set aside and matter was remanded to the Trial Court for decision afresh from the stage of hearing of application for leave to defend within a specified period---Appeal was disposed of accordingly.

Ali Akber v. Gulzar Ali Shah PLD 1984 Kar. 252; Cotton Export Corporation of Pakistan (Pvt.) Limited v. Messrs Nagina Cotton Industries Ginning, Pressing and Oil Mills and 6 others 1993 CLC 2217 and Mst. Khursheed Begum v. Ahmed Bakhsh and another PLD 1985 SC 405 ref.

Ali Akber v. Gulzar Ali Shah PLD 1984 Kar. 252 rel.

Tariq G. Hanif Mangi for Appellant.

Lubna Jaffery for Respondent.

Date of hearing: 24th November 2014.

2015 C L D 1162

[Sindh]

Before Muhammad Shafi Siddiqui, J

NOVARTIS AG through Authorized Signatory and another---Plaintiffs

versus

NABIQASIM INDUSTRIES (PRIVATE) LIMITED through Chief Executive/Director/Company Secretary---Defendant

Suit No. 1203 of 2007, decided on 3rd April, 2015.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 8(1) & 40---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), S. 54---Infringement of trade mark---Permanent Injunction---Application for grant of interim injunction under O. XXXIX, Rr. 1 & 2, C.P.C.---Similarity and deceptivity in trade marks, determination as to--- Plaintiffs, pharmaceutical company owned trade mark "LESCOL" and got the same registered in year 1991---Trade mark "DESCOL" belonged to defendant, also a pharmaceutical company, which was registered in 2003---Plaintiff sought permanent injunction against use of defendant's trade mark and running of business thereunder contending that defendant's trade mark was phonetically, visually and structurally deceptive and confusingly similar and/or resembled plaintiff's trade mark and defendant's product was likely to pass off as that of plaintiff's product---Both trade marks involved sale of almost same medicinal product---Validity---Prescription of doctor and his expert opinion would be important factor in recommending medicine---Persons prescribing, dealing and offering medicines were specialist meant to protect passing of such medicine available at shop and sale of such medicine were carried out by authorized or licensed persons---Partially phonetically both trade marks were similar, but, for pharmaceutical products, the assigned names were given on basis of generics---No one could claim any proprietary right regarding such generic words as to its exclusive use---Trade mark was to be seen with complete getup, colour scheme, design and printing---Plaintiff's claim related to phonetic similarity between the two trade marks and not to the whole word or design or getup---No deceptive similarity existed between the two trade marks when seen as a whole---Pharmaceutical products were not ordinary goods which a person could point out at shop and buy at his choice---No case was made out for injunction---Application was dismissed, in circumstances.

Jamia Industries Ltd. v. Caltex Oil (Pak.) Ltd. PLD 1984 SC 8; Societe Des Products Nestle S.A. v. Food International (Pvt.) Ltd. 2004 CLD 1383; Platinum Pharmaceuticals Company (Private) Limited v. Stand Pharm Pakistan (Private) Limited 2006 CLD 1109; National Detergents Ltd. v. Mod International (Pvt.) Ltd. 1993 MLD 590; Lipha Lyonnaise Industrielle Pharmaceutique v. Registrar of Trademarks 2009 CLD 1289; Bayer A.G. v. Macter International (Pvt.) Ltd. 2003 CLD 794; English Laboratories (Pvt.) Ltd. v. Chas Mendoza Pharmaceutical Laboratories 1998 MLD 1234 and Johann A. Wulfing v. Chemical Industrial and Pharmaceutical Laboratories AIR 1984 Bombay 281 rel.

Ms. Amna Salman for Plaintiffs.

Muhammad Akram Swaleh for Defendants.

Date of hearing: 12th March, 2015.

2015 C L D 1188

[Sindh]

Before Aqeel Ahmed Abbasi and Syed Saeed-ud-Din Nasir, JJ

COMBINE PRODUCTS and 3 others---Appellants

versus

Messrs SME LEASING LIMITED---Respondent

First Appeal No. 19 of 2012, decided on 31st March, 2015.

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

----Ss. 10(2) & 9(5)---Limitation Act (IX of 1908) S. 5---Procedure of Banking Court---Service of notices on the defendants---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Filing of application for leave to defend suit---Limitation---Interpretation, object and scope of S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit for recovery was decreed ex parte against defendant---Application of defendant for leave to defend along with application for condonation of delay in filing said application for leave to defend, was dismissed on ground that service upon the defendant was held good through publication in newspaper---Contention of defendant was that admittedly summonses were not served upon defendant through any other mode therefore, the Banking Court ought to have exercised discretion vested upon it vide proviso to S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to extend time in filing application for leave to defend---Held, where service had been affected only through publication in newspaper; then the Banking Court was authorized in terms of proviso to S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to extend time for filing an application for leave to defend; upon being satisfied that defendant requesting condonation of delay in filing leave to defend application did not have any knowledge about pendency of proceedings against him in the Banking Court---Banking Court in the present case, while dismissing application of defendant for condonation of delay treated the same as an application under S. 5 of the Limitation Act, 1908 whereas said application was also to be read with S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and the possibility of concession contained therein was ignored by the Banking Court--- Object and intention of Legislature behind proviso to S. 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was that a concession with respect to limitation be provided inasmuch as there was a possibility that an aggrieved party might not have read such publication in the newspaper and would have genuinely acquired knowledge through some other source after publication, when period of limitation for filing application for leave to defend had expired---Provisions of Ss. 9(5) & 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 with regard to service on the defendant were not to be read as disjunctively from the rule of the natural justice "audi alterm partem"; which was to be read into every statute regardless of whether or not the same was contemplated in the statute---Article 10-A of the Constitution provided that every individual was entitled to a fair trial and due process and under Art. 4 of the Constitution, every individual of the State was entitled to be dealt in accordance with law---Impugned order was set aside and case was remanded to the Banking Court with the direction to decide the same on merits after providing opportunity of hearing to the defendant---Appeal was allowed, accordingly.

Simnwa Polypropylene (Pvt.) Ltd. v. National Bank of Pakistan 2002 SCMR 476 ref.

Khuda Bux v. Banking Court No.2, Multan 2000 CLC 1013 rel.

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

----Ss. 9(5) & 10(2)---Constitution of Pakistan, Art. 10-A---Service of notice on the defendant in a suit---Procedure of Banking Court---Substitute service---Obligations of Banking Court---Fair Trial and due process---Natural justice--- Scope--- Banking Court must always endeavor to exhaust all possibilities of service on the defendant through first three modes of service while resorting to substitute mode of service through publication so that service through other modes should not totally become redundant and it shall as a last resort, publish the citation in the newspaper, if service could not be effected on the defendant by the first three modes; and such procedure would not only reduce the multiplicity of litigation and delay in disposal of cases but also meet the requirements of natural justice and rights of fair trial under the Constitution.

(c) Natural justice, principle of---

----Scope---Principle of "audi alterm partem"---Principle of "audi alterm partem" was to be read into every statute regardless of whether the same was contemplated in the statute.

(d) Interpretation of statutes---

----Courts were required to interpret every provision in a statute in such a manner that it should suppress mischief and advance remedy; and not the other way around.

Khuda Bux v. Banking Court No.2, Multan 2000 CLC 1013 rel.

Muhammad Idrees Sukhera for Appellants.

Abdul Shakoor for Respondent.

Date of hearing: 4th March, 2015.

2015 C L D 1257

[Sindh]

Before Nadeem Akhtar and Muhammad Iqbal Kalhoro, JJ

ABID ALI----Petitioner

versus

Messrs BAZAR-E-FAISAL BUILDERS AND DEVELOPERS through Azam Hussain and 2 others----Respondents

Constitutional Petition No.D-1198 of 2010, decided on 23rd January, 2015.

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

----S. 69---Specific Relief Act (I of 1877), S. 9---Constitution of Pakistan, Art. 199---Constitutional petition---Suit for restoration of possession---Fundamentals to be proved---When a person was dispossessed of immovable property without his consent and otherwise than due course of law, suit under S.9 of Specific Relief Act, 1877 could be filed---Controversy, in the present case, was not with regard to the right arising from a contract to be enforced by the plaintiff through the suit against the defendant---Plaintiff had come to the court against wrong defendant who had allegedly dispossessed him from the suit property---Court under S.9 of Specific Relief Act, 1877 could decide only the claim of possession and was not required to decide title, right or legal character of claimant of the property---Fundamentals to be proved by the plaintiff in order to succeed in such suit would be his possession on immovable property and he was dispossessed from the property without his consent and such dispossession was otherwise than due course of law---Question of title was ancillary to the proceedings under S.9 of Specific Relief Act, 1877 which could not be looked into for restoring the possession---Version of defendant was not supported by any evidence---Defendant had failed to justify his possession on the suit property---Findings of both the courts below were in accordance with the evidence on record---No prejudice had been caused to the defendant---No illegality or irregularity had been pointed out in the impugned judgments and decrees passed by the courts below---No gross violation of law or misreading or non-reading of evidence was on record---Constitutional petition was dismissed, in circumstances.

PLD 1968 Kar. 196; 1986 CLC 242; 1994 MLD 274 and PLD 1987 Kar. 180 ref.

Abdul Rehman v. Parvez Ahmed Butt and 2 others 1983 CLC 1740 rel.

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

----S. 9---Suit for restoration of possession---Object---Object of provision of S.9 of Specific Relief Act, 1877 was to accord a right to the person to promptly have his possession of immovable property taken back in the face of his dispossession without his consent and otherwise than due course of law---Object of S.9 of Specific Relief Act, 1877 was to discourage people from forcibly occupying the immovable property by taking law in their hands and further to safeguard the possession of a person to the immovable property irrespective of his title---Said provision of law would provide for undoing the wrong with simple, effective and effectual remedy available to the party wronged without a lengthy hassle.

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

----S. 9--- Suit for restoration of possession--- Requirements---Fundamentals to be proved by the plaintiff in order to succeed in a suit for restoration of possession would be his possession on immovable property and that he was dispossessed from the property without his consent and such dispossession was otherwise than due course of law.

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

----S. 9---Suit for restoration of possession---Limitation---Limitation for a suit for restoration of possession was six months from the day when dispossession took place.

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

----S. 69---Non-registration of firm---Effect---Impediment envisaged under S.69 of Partnership Act, 1932 would be attracted only when a right arising out of a contract was to be enforced against either the firm or any past or present member of the same or against any third party.

Abdul Rehman v. Parvez Ahmed Butt and 2 others 1983 CLC 1740 rel.

(f) Estoppel---

----Person was estopped to say a thing at a particular point of time which had been acted upon and then deny it subsequently.

(g) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope---High Court has limited jurisdiction to examine the factual controversy between the parties.

Muhammad Sadiq Hidayatullah for Petitioner.

Mahmood Ahmed Khan for Respondent No.1.

Nemo for Respondents Nos.2 and 3.

Date of hearing: 25th November, 2014.

2015 C L D 1309

[Sindh]

Before Syed Saeeduddin Nasir, J

FAWWAD BUTT---Applicant

versus

Messrs MARY (PVT.) LIMITED and 5 others---Respondents

C.M.A. No. 350 of 2015 in Suit No.1667 of 2014, decided on 24th March, 2015.

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

----O. XXIII, R. 3---Specific Relief Act (I of 1877), S. 42---Suit for declaration---Compromise of suit---Scope---Compromise between the plaintiff and one or more defendants would be valid to the extent of parties who had compromised---When no reply to civil miscellaneous application had been given, the contents of the application had to be admitted as correct---Court could only record a compromise by way of any lawful agreement---Present application for compromise of suit having been filed contrary to O.XXIII, R. 3, C.P.C., was not by way of any lawful agreement or compromise which was dismissed in circumstances.

2003 CLD 183; M.s. Madhusoodhanan and another v. Kerala Kaumudi (Pvt.) Ltd. and others (2004) 9 SCC 204; Hillcrest Realty Sdn. Bhd v. Hotel Queen Road (Pvt.) Ltd. and others [2006] 71 SCL 41 (CLB); Ganesh Flour Mills Ltd. v. T.P. Khaitan (1986) 60 Com. Cas. 28 (Delhi); Babul M. Varrna v. New Standard Coal Co. (Pvt.) Ltd. (1967) 1 Camp U 161 (Cal.); Tett v. Phoenix Property and Investment Co. Ltd. (1986) BCLC 149; Cruickshank Co. Ltd. v. Stridewell Leather (Pvt.) Ltd. [1996] 86 Comp Cas 439 (CLB); John Tinson & Co. (Pvt.) Ltd. v. Mrs. Surjeet Malhan AIR 1997 SCW 1537; V.B. Rangaraj v. Gopalakrishnan AIR 1992 SC 453; United Liner Agencies of Pakistan (Pvt.) Ltd. v. Mahenu Aga 2003 SCMR 132; Umar Baksh v. Azim Khan 1993 SCMR 374; Pakistan Industrial Credit and Investment Corporation Ltd. v. Messrs Khairpur Sugar Mills Limited and another 2012 CLD 1136; Humayun Akhtar Jalil v. Capital One Equipment Ltd. 2012 CLC 1674 and Jehan Khan v. Province of Sindh PLD 2003 Kar. 691 rel.

Tele Card Limited v. Pakistan Telecommunication Authority 2014 CLD 415; National Bank of Pakistan v. Karachi Development Authority PLD 1990 Kar. 260; Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Messrs Muhammad Siddiq Muhammad Umar and others v. The Australasia Bank Ltd. PLD 1966 SC 684; Jehan Khan v. Province of Sindh PLD 2003 Kar. 691; Abdul Rauf v. Government of Sindh 2003 CLC 1602; Sarfaraz v. Sultan Ahmed 2002 MLD 886; Muhammad Ramzan v. Muhammad Akbar Bhatti 2013 CLC 1561; Abdur Razzaq v. Abdul Aziz 1991 MLD 889; Sourendra Nath Mitra v. Tarubala Dasi AIR 1930 Privy Council 158; Noor Muhammad v. Muhammad Siddique 1994 SCMR 1248 and Fozia Hussain Abbasi v. The Nomination Board through Chairman 1995 CLC 1761 ref.

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

----Ss. 2(28) & 89---Transfer of shares of private limited company---Scope---Shares of private limited company could not be transferred without concurrence of other share holders of the company where Memorandum and Articles of Association had placed such embargo---Shares of private limited company could be transferred only to the members of the company---Existing members of company has a pre-emptive right to claim the shares of the outgoing member of the company---Shares of private limited company could not be transferred to an outsider.

(c) Words and phrases---

----"Pre-emptive right"---Meaning---Pre-emptive right was a contractual right to acquire certain movable property newly coming into existence before it could be offered to any other person or entity.

Muhammad Rahman Ghous for Applicant.

Khawaja Shamsul Islam for Respondent No.1.

Muhammad Saleem Ibrahim for Respondents Nos.2 and 3.

Date of hearing: 2nd February, 2015.

2015 C L D 1351

[Sindh]

Before Munib Akhtar, J

Messrs HABIB BANK LIMITED---Decree Holder

versus

Messrs NATIONAL FIBERS LIMITED---Judgment Debtors

Execution No. 36 of 2001, decided on 17th March, 2015.

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

----Ss. 290 & 410---Winding up proceedings and investigation of affairs of company---Applicability of S.410, Companies Ordinance, 1984---Scope---Provision of S. 410 of Companies Ordinance, 1984, applies in respect of proceeding order S. 290 of Companies Ordinance, 1984, only as a power, i.e. only if court, while making an order also directs that the section is to apply to company in question---Provision of S. 410 of Companies Ordinance, 1984, does not apply automatically in the manner as it does in winding up proceedings.

Nazeer Ahmed Khan v. Admore Gas (Pvt.) Ltd. and another 2015 CLD 203 rel.

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

----S. 144---Restitution of pre-decree position---Principle---Compromise between parties---Applicants sought restitution of suit property which had been sold in execution of decree and possession was also transferred to auction purchaser---Plea raised by applicants was that compromise had been effected between parties, therefore, pre-decree position be restored---Validity---Provisions of S. 144, C.P.C. had no application as it could not apply to a decree being "varied" or "reversed" by a compromise arrived at, even if it was before and was recorded by an appellate Court---Decree being "varied" or "reversed" was an act of court, while compromise was an act of parties---Though there was decree in the latter case but that was only "the compromise agreement to which Judge's order had been superadded"---Applicants did not seek restitution but enforcement of compromise decree, which was different thing altogether---Application was couched in terms that appeared to suggest that what applicants were seeking was to have company's property returned to it, it was clear from actual manner in which they had conducted themselves and sought to make out their case that they sought enforcement of compromise decree---Decree had made it clear that property was to be handed over to applicants---Principle of restitution was not applicable to compromise decree and restitution actually sought was not a reversion to or restoration of status quo ante but creation of new situation---Provision of S. 144, C.P.C. was not applicable---Application was dismissed in circumstances.

Registrar of Companies v. Taj Company Ltd. 1993 CLC 1413; Taj Company (Muhammad Yousaf applicant): In the mater of 1994 CLC 403; In re: Taj Company Ltd. 1994 CLC 2197; National Bank of Pakistan v. Banking Tribunal No.1 and others PLD 1994 Kar. 358; Shaheen Foundation v. Capital F.M. (Pvt.) Ltd. 2002 CLD 188; Abdul Bari v. Muhammad Rasheed Khan 1995 SCMR 851; Zubaida Bai v. IInd Rent Controller Karachi and another PLD 1981 Kar. 82; Meraj Din v. Ghulam Muhammad PLD 1965 Lah. 374; Lakhsmi Narayan and others v. Surath Lal Chakraborti and others PLD 1964 Dacca 177; Badaruddin v. Maniruddin PLD 1961 Dacca 686; Rodger v. Comptoir D'Escompte de Paris (1871) L.R. 3 P.C. 465; Sevatha Goundan v. Pappammal and others AIR 1935 Mad. 476; Kandula Sudarsana Rao v. Uppulury Gopala Rao (1933) MWN 641 and Anjum Rasheed and others v. Shehzad and others 2007 CLD 1210 ref.

Pakistan Industrial Credit and Investment Corporation Ltd. v. Khairpur Sugar Mills Ltd. and another 2012 CLD 1192 rel.

Mushtaq A. Memon, Ishtiaq A. Memon and Qazi Shuneel Ahmad for Applicants.

Muhammad Abu Bakar Khalil and Ms. Nancy Dean for Employees of JD.

A. I. Chundrigar and Nabeel Kolachi for Allied Bank.

Behzad Haider and Abid Naseem for NBP.

Ms. Afshan Jamal for Faysal Bank.

Faisal Siddiqui for Auction Purchaser.

Dates of hearing: 8th April, 6th, 13th, 22nd, 29th May and 9th December, 2014.

2015 C L D 1384

[Sindh]

Before Munib Akhtar, J

PFIZER PRODUCTS INC. through Authorized Signatory and 2 others---Plaintiffs

versus

HILTON PHARMA (PRIVATE) LIMITED through Chief Executive/Director/Secretary/Principal Officer---Defendant

Suit No.647 of 2008, decided on 27th January, 2015.

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

----Ss. 22, proviso, 21 & 67(4)---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), S. 54---Object, purpose, scope and interpretation of S. 22 and proviso thereto, of the Patents Ordinance, 2000---Acceptance of complete specification---Effect---Bar to institution of proceedings for infringement until patent was sealed---Applicant, after acceptance of its complete specification for patent, sought interim injunctive relief to restrain defendant from acting in any manner that would infringe the patents yet to be granted---Contention of the defendant was that proviso to S. 22 of the Patents Ordinance, 2000 barred institution of such proceedings---Held, that S. 22 of the Patents Ordinance, 2000 sought to place the applicant in the same position as a patentee which was clear from the words "like privileges and rights" used in the said section; however, an applicant was not the patentee as the application could be defeated and patent, either in part or wholly, could be refused---Section 22 of the Patents Ordinance, 2000, therefore, had a proviso; the purpose of which was clear, which was to highlight that notwithstanding the applicant was being granted "like privileges and rights"; however, he was yet not the "patentee"---Law contained in S. 22 of the Patents Ordinance, 2000 contemplated that some legal recognition ought to be given to the applicant for the patent once application had reached the stage of S. 21 of the Patents Ordinance, 2000 (i.e. acceptance of complete specification); but such recognition must be tampered by keeping in mind the stage yet to come---Such balance was struck by S. 22 of the Patents Ordinance, 2000; which first put the applicant in the same position as the patentee; a position towards which he had by then made substantial progress however, the same was modulated by the proviso; which regulated what the applicant could actually do while he remains in the such position---Right was undoubtedly created by S. 22 of the Patents Ordinance, 2000 but the remedy to which the right-holder would be entitled to, was to be regulated and controlled---Once the applicant becomes the patentee, he was immediately entitled to remedy in respect of grievance which may arise but for the period covered by S. 22 of the Patents Ordinance, 2000, such remedy was not available for reason of the proviso to the S.22 of the Patents Ordinance, 2000---Applicant however, would be entitled to sue for damages, (howsoever described or computed) and remedy once available would be applicable even for the period covered by S. 22 of the Patents Ordinance, 2000 and the proviso did not therefore render applicant remediless and did not take away what was granted by the main part of the S. 22; and it simply deferred the remedies---Once an applicant became the patentee; he was entitled to the remedies as were then available in respect of any grievance that arose during the earlier period---Proviso to S. 22 of the Patents Ordinance, 2000 therefore carved out an exception from the main provision, and nature of such exception was that it affected the remedies but not the rights and a distinction existed between a right and a remedy---Proviso to S. 22 of the Patents Ordinance, 2000 did not nullify the main provision and only limited the main provision in the sense that remedies were deferred---From the perspective of an applicant, hoping to become (and eventually becoming) the patentee, there was a severe limitation inasmuch that injunctive relief was not available for the period to which S. 22 of the Patents Ordinance, 2000 applied, and such limitation was severe but did not nullify the main provision---High Court observed that S. 67(4) of the Patents Ordinance, 2000 after insertion of amendment to S. 22 of the Patents Ordinance, 2000 was now anomaly and was effectively redundant and could not be used to give proviso to S. 22 of the Patents Ordinance, 2000 a different meaning to what it clearly and naturally had---Plaintiff/applicant was therefore not entitled to any interim relief due to clear bar of proviso to S. 22 of the Patents Ordinance, 2000---Application for grant of interim injunction was dismissed, in circumstances.

Ibrar Hussain and others v. Government of N.-W.F.P. and others 2001 PLC (C.S.) 856; Enmey Zed Publications (Pvt.) Ltd. v. Sindh Labour Appellate Tribunal and others 2001 PLC (C.S.) 368; Dyal Singh v. Kenyan Insurance Ltd. PLD 1955 PC 4; Sevcon Ltd. v. Lucas CAV Ltd. [1986] 2 All ER 104 and Pacific Coilcoaters Ltd. v. Interpress Associates Ltd. [1998] 2 NZLR 19 rel.

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

----Ss. 22 & 21---Specific Relief Act (I of 1877) S. 54---Civil Procedure Code (V of 1908), O.VII, R. 11--- Acceptance of complete specification---Effect of acceptance of complete specification---Bar to institution of proceedings for infringement until patent was sealed---Suit for perpetual injunction---Plaintiff, after acceptance of its complete specification for patent, sought perpetual injunctive relief to restrain defendant from acting in any manner that would infringe the patents which were not yet sealed---Held, that such a suit could be dismissed as it was an abuse of process and was also barred by reason of the proviso to the S. 22 of the Patents Ordinance, 2000---Real relief being sought by plaintiff was the injunction and in particular the interim relief, and no such relief was possible at present stage---Injunction (which was the whole purpose of the suit) could not be granted for or on during the pre-sealing period of the patent and such would be even so if the patent was sealed---Plaint could be rejected even if the case did not formally come within the grounds specified in O. VII, R. 11 of the C.P.C.---Suit, being not maintainable, was rejected in circumstances.

Sevcon Ltd. v. Lucas CAV Ltd. [1986] 2 All ER 104 and Pacific Coilcoaters Ltd. v. Interpress Associates Ltd. [1998] 2 NZLR 19 rel.

(c) Interpretation of statutes---

----Construction of a proviso to the main provision of statute---Scope---Proviso or an exception to the main provision was to be construed strictly and any repugnancy between the two ought to be avoided, the proviso governed ordinarily by the operative portion of the section.

Ibrar Hussain and others v. Government of N.-W.F.P. and others 2001 PLC (C.S.) 856 and Enmey Zed Publications (Pvt.) Ltd. v. Sindh Labour Appellate Tribunal and others 2001 PLC (C.S.) 368 rel.

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

----O. VII, R. 11---Rejection of plaint---Scope---Plaint could be rejected even if the case did not formally come within the grounds specified in O. VII, R. 11 of the C.P.C.

Moin Qamar for Plaintiffs.

Muhammad Akram Swaleh for Defendant.

Dates of hearing: 30th October and 12th November, 2014.

2015 C L D 1404

[Sindh]

Before Zafar Ahmed Rajput, J

MANSOOR AHMED MUGHAL---Decree Holder

versus

NOOR QADIR TAWAQAL and 3 others---Judgment Debtors

Execution No. 44 of 2013, decided on 4th February, 2015.

Stock Exchanges (Corporatisation, Demutualization and Integration) Act (XV of 2012)---

----Ss. 16(1) & 16(11)---Civil Procedure Code (V of 1908) O.XXI, R. 64---Execution of decree---Auction of Trading Rights Entitlement Certificates to satisfy decree---Decree-holder sought satisfaction of the decretal amount against the judgment-debtor stock broker by auctioning of TRE (Trading Right Entitlement) Certificates of the judgment debtor---Contention of judgment debtor was that it was not yet registered with the SECP in accordance with S. 16 of the Stock Exchanges (Corporatisation, Demutualization and Integration) Act, 2012; since it was under suspension, therefore no compliance of the Stock Exchanges (Corporatisation, Demutualization and Integration) Act, 2012 had been made; which would result in lapse of the TRE Certificates---Held, that since TRE Certificates of the defendant had already been suspended/attached by the order of the Court, there should be no undesirable effect on Ss. 16(1) & 16(11) of the Stock Exchanges (Corporatisation, Demutualization and Integration) Act, 2012; if the said Certificates were still unregistered---High Court directed that defendant/judgment-debtor to satisfy the decree within a period of thirty days from the date of the order and in case of failure to do so, directed the Nazir of the court to auction the said TRE Certificates/shares as per provisions of the Stock Exchanges (Corporatisation, Demutualization and Integration) Act, 2012; and that the transfer of said TRE Certificates on the name of the auction-purchaser would be subject to the confirmation of auction by the Court---High Court further directed that the decree-holder shall initially bear the costs of the auction proceedings, however the same would be finally paid by the judgment debtor and adjusted from the sale proceeds---Application under O. XXI, R. 64 of C.P.C. was allowed, accordingly.

M. R. Sethi for Decree Holder.

Tariq Qureshi for Judgment Debtor No.4.

Muhammad Zia Qureshi for K.A.S.B. Bank Limited.

Date of hearing: 20th August, 2014.

2015 C L D 1416

[Sindh]

Before Shahab Sarki and Irfan Saadat Khan, JJ

GHULAM JAFFAR PHULPOTO---Appellant

versus

Messrs ALLIED BANK LIMITED and another---Respondents

Ist Civil Appeal No. D-22 of 2012, decided on 27th January, 2015.

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

----Ss. 9, 3(2) & 3(3)--- Suit for recovery--- Procedure of Banking Court---Calculation of cost of funds---Application for leave to defend was dismissed and suit was decreed in favour of plaintiff bank---Contention of defendant was inter alia that the statement of accounts of the plaintiff bank was not in accordance with the Bankers' Books Evidence Act, 1891 as per the mandatory provisions of Ss. 9(2) & 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Held, that requirements of Ss. 9(2) & 9(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 required that a Financial Institution should append a statement of account duly certified under the Bankers' Books Evidence Act, 1891 and should also state the amount of finance availed and repaid---No repayment having been made in the present case, therefore no such entry had been shown in the statement of account and the mark-up had only been calculated up till the period of expiry of the facility and not thereafter---Banking Court had rightly ordered that the cost of funds be granted from date of default till realization in accordance with Ss. 3(2) & 3(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Cost of funds was to be calculated only on the defaulted amount at the rates applicable from time to time specified by the State Bank of Pakistan, from the date of commission of default till realization---No illegality therefore existed in impugned order---Appeal was dismissed, in circumstances.

IDBP v. Pakistan Belting (Pvt.) Ltd. 2006 CLD 808 and Muhammad Yousif v. ADBP and others 2002 CLD 1270 ref.

Trycot Synthetic Fibre Company through Proprietor and another v. Habib Bank Limited 2012 CLD 1670 rel.

Ashok Kumar K. Jamba for Appellant.

Rasool Bux I. Siyal for Respondent-Bank.

Zahid Mehmood Mughal, Standing Counsel.

Date of hearing: 21st January, 2015.

2015 C L D 1419

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

Messrs INDEPENDENT MEDIA CORPORATION (PVT.) LTD. through Senior Executive---Appellant

versus

SHOAIB AHMED SHEIKH and 9 others---Respondents

H.C.A. No.34 of 2015, decided on 19th March, 2015.

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

----Ss. 11, 33 & 43---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Law Reforms Ordinance (XII of 1972), S. 3---High Court appeal---Suit for declaration and injunction---Infringement of trade mark---Interim injunction, grant of---Principles---Plaintiff claimed that trade mark "BOL" was its property as in year 2007 it was registered as "Pakistani Idol Bol"---Single Judge of High Court declined to grant interim injunction in favour of plaintiff---Validity---Plaintiff, in a suit for trade mark infringement, must make out a prima facie case of being registered proprietor or assignee etc. thereof---Plaintiff did not produce any certificate of registration duly signed by Registrar of Trade Marks in terms of S. 33 of Trade Marks Ordinance, 2001, and had merely placed reliance on purported certified copy of extract of Registration Certificate which was issued by some unauthorized officer and such fact was verified from comments filed by the Registrar, Trade Marks---Single Judge of High Court rightly held that plaintiff failed to establish a prima facie case in its favour---Plaintiff was not able to demonstrate that other two factors i.e. balance of inconvenience and irreparable loss and injury were in favour of grant of injunction, whereas more emphasis was given to make an effort to establish a prima facie case---Plaintiff failed to demonstrate that it had either adopted or using trade mark "BOL" prior to the claim of defendant in such regard, or it had proved to make huge investment in respect of trade mark "BOL" or started any business in the name of trade mark "BOL"---Single Judge of High Court rightly declined injunctive relief sought by plaintiff as it could not make out a prima facie case for seeking discretionary relief in its favour---None of the factors which were required to be taken into consideration for grant of injunction application were in favour of plaintiff---Division Bench of High Court declined to interfere in order passed by Single Judge of High Court---High Court appeal was dismissed in circumstances.

Pioneer Cement Limited v. Fecto Cement Limited PLD 2013 Lah. 110; Messrs Dewan Sugar Mills (Pvt.) Ltd. v. M.B. Abbasi and others 2007 YLR 2672; Dollar Industries (Pvt.) Ltd. and another v. Nisar Traders and 7 others 2011 CLD 847; Messrs Team Nayyer (Pvt.) Ltd. v. Tariq Ahmed Sultani 2008 CLD 94; Messrs Alpha Sewing Machine Company v. Registrar of Trade Marks and another PLD 1990 SC 1074; Shan Food Industries v. Eastern Products (Pvt.) Ltd and others 2012 SCMR 1504; Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090 and Bayer AG. through Authorized Signatory and another v. Bayhealth Care (Private) Limited 2013 CLD 2087 distinguished.

Messrs Tri-Star Industries (Pvt.) Ltd. v. Messrs Trisa Bursten Tabrik A.G. and others 1999 YLR 638; Pioneer Cement Limited v. Fecto Cement Limited 2013 CLD 201; National Detergents Ltd. v. Nirma Chemicals Works 1992 MLD 2357; Qadeer Ahmed v. Assistant Registrar of Trademarks 1999 YLR 96; Consolidated Foods Corporation v. Brandon & Co. AIR 1965 Bombay 35; Azra Jawed v. Jamshed Aslam Khan 1996 MLD 1203; Puri Terminal Ltd. v. Government of Pakistan 2004 SCMR 1092; Muhammad Abid v. Nisar Ahmed 2000 SCMR 780; Abdul Wasim v. Messrs Haico 2002 CLD 1623; General Biscuit v. English Biscuit Manufacturers (Pvt.) Ltd. 2004 CLD 680; Messrs Akhter Muhammad and Brothers v. Muhammad Nabi and Brothers 2011 CLD 1730; Naseem Ahmed v. Messrs Samiuddin Ramzan Khan 2004 CLD 315; Messrs Macter International (Pvt.) Ltd. v. Messrs Sante (Pvt.) Limited 2007 CLD 978 and Soneri Travel and Tours Ltd. v. Soneri Bank Limited 2011 CLD 193 ref.

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

----O. XXXIX, Rr. 1 & 2---Interim injunction, grant of---Principles---While seeking favourable injunctive relief, applicant is to prove prima facie existence of right claimed in suit and also its infringement---Mere fact that a prima facie case is established does not entitle applicant to injunction unless other two factors i.e. balance of convenience and irreparable damage or injury are fulfilled---Court is required to balance inconvenience and to see as to whether applicant suffers more inconvenience by withholding of injunction than that which defendant would suffer by granting of injunction---Court is further required to weigh mischief of either party in case of grant or refusal of injunction---Normally balance lies in favour of continuation of a state of things, such as to protect possession of a party or to allow continuance of a contract---While granting injunction or otherwise, it has to be ensured that grant of injunction to one party may not cause irreparable damage or injury to other party whose loss cannot be compensated in terms of money.

Muhammad Saad and another v. Amna and 27 others 2015 YLR 1; Shahzada Muhammad Umar Beg v. Sultan Mahmood Khan and another PLD 1970 SC 139; Abdul Ghafoor Memon v. Muhammad and another PLD 1975 Kar. 464; Marghub Siddiqi v. Hamid Ahmad Khan and 2 others 1974 SCMR 519 and Pervaiz Hussain and another v. Arabian Sea Enterprises Limited SBLR 2006 SC 3 rel.

Abdul Hafeez Pirzada along with Abdul Sattar Pirzada, Moin Jamal Abbasi, S. Ghulam Shabbir Shah, Umair Ali Kazi and Sameer Ghazanfar for Appellant.

Anwar Mansoor Khan, Imdad Ali, Salman Ahmed Sheikh and Muhammad Zaheer for Respondents Nos.1 to 8.

Munawar Ghani, Advocate for Registrar, Trade Marks.

Date of hearing: 18th February, 2015.

2015 C L D 1448

[Sindh]

Before Munib Akhtar, J

INDEPENDENT MEDIA CORPORATION (PRIVATE) LIMITED through Authorized Signatory---Plaintiff

versus

SHOAIB AHMED SHEIKH and 9 others---Defendants

Suit Nos.1461 and 1584 of 2013, decided on 19th January, 2015.

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

----Ss. 11, 33, 43 & 7(2)---Civil Procedure Code (V of 1908), O. XXXIX Rr. 1 & 2---Evidence of entries in Register and things done by Registrar of Trademarks---Registration to be prima facie evidence of validity of ownership of trade mark---Application for interim injunction---Scope---Plaintiff claimed to be registered proprietor of a trademark, and sought to restrain defendant from infringing its registered trade mark---Contention of plaintiff was, inter alia, that application of plaintiff for registration of said trademark was accepted by the Registrar and said trademark was then entered into the Register of Trademarks and a certificate of registration was also issued to the plaintiff in the prescribed manner---Contention of the defendant, on the other hand, was that the said certificate of registration was a fabricated and manipulated document and the same position was reflected in the written statements of the official defendants from the office of the Registrar---Held, that said certificate was not issued by the Registrar himself and therefore, the position adopted by the official defendants in their written statements must be given primacy, whose position was that no certificate duly signed and stamped by the competent authority had been issued to plaintiff and they also deliberately avoided stating in their written statements that the trademark was owned by the plaintiff, which they could have easily done---Said omission on part of the official defendants seemed to be deliberate, which conclusion was strengthened by the fact that it appeared from the said written statements that some sort of internal inquiry was ongoing with regard to the plaintiff's application and files in respect thereof---Stance of the official defendants, therefore, cast serious doubts on the veracity and integrity of the certificate relied upon the plaintiff---Certificate in question must have been issued by the Registrar or an officer duly authorized in terms of S. 7(2) of the Trade Marks Ordinance, 2001, which was not done in the present case---Certificate of registration, under normal circumstances, was the only evidence that was on record regarding registration of trademark and S.11(1) of the Trade Marks Ordinance, 2001 suggested that such evidence was all that was required and therefore if the certificate presented by the plaintiff was categorically denied by the Registrar, then effect of such denial was that there was no prima facie basis on which it could be concluded that the plaintiff was the registered proprietor of the trademark in question---Such a situation had a serious consequence for an application for interim injunctive relief and the plaintiff must be treated as having failed to make out a prima facie case---In a suit for trademark infringement; the plaintiff must make out a prima facie case of being the registered proprietor (or assignee etc.) thereof and for that the certificate that was issued, and to which the plaintiff would be entitled to as a right, was a crucial document---Such certificate, if as produced, was repudiated by the authority empowered by law to issue the same, then clearly it would be unsafe for the court to conclude that a prima facie case had been made out---Plaintiff therefore, had failed to establish the first of the three ingredients required for interim injunctive relief---Application for interim relief was rejected, in circumstances.

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

----Ss. 27 & 28---Trade Marks Act (V of 1940), S. 15(1)---Trade Marks Rules, 2004, R. 29---Registration of trade mark---Examination of application---Publication, opposition proceedings and observations---Advertisement of an application for registration in the Journal before its acceptance---Comparison of Trade Marks Ordinance, 2001 with the Trade Marks Act, 1940---Statutory duties of the Registrar of Trade-marks in respect of examination of application for registration---Advertisement before acceptance in exceptional circumstances only---Procedure to be adopted by the Registrar for advertisement of application before its acceptance while applying Ss. 27 & 28 of the Trade Marks Ordinance, 2001; outlined.

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

----Ss. 28(1) & provisos---Trade Marks Rules, 2004, R. 29---Trade Marks Act (V of 1940), S. 15(1)---Advertisement in Journal before acceptance of application---"Exceptional circumstances", meaning and scope in terms of S. 28 of the Trade Marks Ordinance, 2001---Mandatory procedure to be adopted by Registrar in deciding whether an application was to be advertised before its acceptance---Interpretation of S. 28(1) of the Trade Marks Ordinance, 2001---Scope---First proviso to S. 28(1) of the Trade Marks Ordinance, 2001 could apply only if exceptional circumstances were shown to exist and not otherwise---Such requirement applied to all cases and there was no separate category as was to be found in S. 15(1) of the Trade Marks Act, 1940---Exceptional circumstances were circumstances of such a rare or unusual nature as would warrant departure from the main rule, namely that an application was only to be advertised if accepted (whether absolutely or conditionally) and therefore such a provision could only be applied in exceptional circumstances and could not become a matter of routine---Second proviso to S. 28(1) of the Trade Marks Ordinance, 2001 was mandatory and the manner in which the Registrar was to simultaneously notify the "exceptional circumstances" which led him to allow advertisement of application before its acceptance could only be for such circumstances as stated in the advertisement itself---By routinely invoking first proviso to S. 28(1) of the Trade Marks Ordinance, 2001 the Registrar had abdicated due and proper discharge and performance of one of his most important statutory duties---High Court directed that in any case where an applicant wished to invoke the first proviso to S. 28(1) of the Trade Marks Ordinance, 2001; he must first make an appropriate application setting out therein the "exceptional circumstances" which existed in his case as would warrant advertisement of application before acceptance---Registrar then must apply his mind to such an application and make proper order identifying each circumstance(s) that in his view were exceptional within the meaning of S. 28(1) of the Trade Marks Ordinance ,2001 and only then permission could be granted for advertisement before acceptance---Such permission if granted, then the circumstance(s) on basis of which the applicant had successfully invoked the first proviso to S. 28(1) of the Trade Marks Ordinance, 2001 must be set out in the advertisement as required by the second proviso to S. 28(1) of the Trade Marks Ordinance, 2001---Any person opposing the application would be entitled to take objection also to the special circumstances disclosed in the advertised application---In considering such opposition, Registrar must apply his mind to such objection, and if he was of the view that grounds for opposition were without merit, but objection to the advertisement before acceptance nonetheless had merit; he must further apply his mind and make a specific order as to whether the application was to be re-advertised or not---High Court further directed the Registrar of Trade marks that in every issue of the Journal of Trade Marks, that was now to be published, no application was to be advertised before acceptance in respect of which the above procedure was not followed.

(d) Words and phrases---

----"Exceptional circumstances"---Meaning---Circumstances of such a rare or unusual nature as would warrant departure from the main rule.

(e) Interpretation of statutes---

----Provision for exceptional circumstances--- "Exceptional circumstances" were circumstances of such a rare or unusual nature as would warrant departure from the main rule and a provision that could only be applied in exceptional circumstances could not become a matter of routine and a power so granted could not be exercised more or less automatically.

Khurram Gul Ghory and Mirza Mehmood Baig for Plaintiff (in Suit No.1461 of 2013).

Khurram Gul Ghory and Mirza Mehmood Baig for Defendant No.3 (in Suit No.1584 of 2013).

Asim Mansoor Khan, Anwar Mansoor Khan, Salman Shaikh and Imdad Ali for Plaintiff (in Suit No.1584 of 2013).

Asim Mansoor Khan, Anwar Mansoor Khan, Salman Shaikh and Imdad Ali for Defendant No.8 (in Suit No.1461 of 2013).

Monawwer Ghani for Defendants Nos.1 and 2 (in Suit No.1584 of 2013).

Dates of hearing: 28th January, 26th March, 12th July and 5th December, 2014.

2015 C L D 1475

[Sindh]

Before Hasan Feroz, J

Messrs EFU GENERAL INSURANCE LTD.---Appellant

versus

Messrs PAKISTAN NATIONAL TILES AND CERAMICS (PVT.) LTD.---Respondent

IInd Appeal No.82 of 2010, decided on 15th December, 2014.

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

----Ss. 14, 5 & 12---Limitation---Exclusion of time---Scope---Benefit of exclusion of time spent in proceedings before court without jurisdiction could not be claimed when such proceedings prosecuted were not maintainable being devoid of faith---Such matter, if decided by appellate court, in no way could be treated within the period of limitation.

NLR 1998 Civil (Lahore) 65; PLD 2000 SC 63; PLD 1980 SC 198 and 1982 SCMR 995 rel.

Bashir Ahmed and 2 others v. Hussain PLD 2004 Quetta 62 distinguished.

1995 SCMR 584; PLD 2002 SC 630; 2012 SCMR 377; PLD 1962 (W.P.) Kar. 510; 1985 MLD 1475; 1989 CLC 1949; PLD 2004 Quetta 62; 2007 CLC 490; 2009 CLC 960; 2011 CLC 1303; 2013 CLC 1313 and 2013 CLC 477 ref.

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

----S. 122---Civil Procedure Code (V of 1908), S. 9---Insurance Tribunal---Jurisdiction---Scope---Jurisdiction of Insurance Tribunal was restricted and it could only be invoked by policy-holder---Civil court would be the court of competent jurisdiction to entertain suit of non-payment of premium amount against policy-holder.

Messrs EFU General Insurance Limited v. Messrs Duty Free Shops Limited 2013 CLD 1313 rel.

Tanveer Ashraf for Appellant.

Muhammad Ameen for Respondent.

Date of hearing: 30th October, 2014.

2015 C L D 1513

[Sindh]

Before Faisal Arab, C.J. and Zafar Ahmed Rajput, J

MUHAMMAD KASHAN---Appellant

versus

COCA COLA EXPORT CORPORATION through Chief Executive Officer and 3 others---Respondents

High Court Appeal No.297 of 2014, decided on 27th February, 2015.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 2(ca), (p) & (zf)---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Law Reforms Ordinance (XII of 1972), S. 3---Suit for declaration, injunction and damages---Intra-court appeal---Interim injunction, grant of---Scope---Copyright--- Terms 'work', 'idea' 'booklet' and 'video presentation'---Seeking of damages---Effect---Plaintiff alleged infringement of his copyright in music work protected under Copyright Ordinance, 1962, and had sought recovery of damages also---Single Judge of High Court declined to grant interim injunction in favour of plaintiff---Validity---Interim injunction, by its nature, was a preventive remedy for the purpose of preserving status quo of the matter of suit, pending determination---Such was a discretionary relief and Court while considering question of grant of such relief, had to see co-existence of prima facie case, balance of convenience and irreparable loss and injury in favour of a party seeking the relief---Existence of a right and its infringement were the first conditions for grant of interim injunction, therefore, when action was brought before Court by plaintiff to prevent infringement of copyright, the Court would grant interim injunction only when the right claimed by plaintiff was clear---Interim injunction could not be granted as a matter of course in those cases where even to establish prima facie case evidence had to be produced---Plaintiff failed to make out a prima facie case on the ground of infringement of a 'work' under Copyright Ordinance, 1962, and for such reason no discretion could be exercised in favour of plaintiff for grant of interim injunctive relief---Loss allegedly suffered by plaintiff was not irreparable and could be assessed in terms of money---When plaintiff himself quantified damages, plea of irreparable loss was not available to him---Division Bench of High Court did not find any irregularity or illegality in the order, requiring interference in appellate jurisdiction---Intra-court appeal was dismissed in circumstances.

Computer Association International Inc. v. Altai Inc. (1992) 982 F.2d 693 ref.

Zeeshan Adhi and Faraz Faheem for Appellant.

Omar Soomro for Respondent No.4.

Date of hearing: 27th February, 2015.

2015 C L D 1524

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs UNION NATIONAL BANK LIMITED through Attorney---Decree Holder

versus

IQBAL AHMED MALIK---Judgment Debtor

Execution No.20 of 2004, decided on 20th April, 2015.

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

----S. 19---Civil Procedure Code (V of 1908), S. 51---Execution of decree of Banking Court---Procedure in execution---Attachment of property---Exercise of powers under S. 51, C.P.C.---Arrest/detention of judgment-debtor---Suit for recovery was decreed---Contention of decree-holder Bank was that the property sought to be attached by Bank had been gifted/transferred by the judgment-debtor to his wife in order to defraud the decree-holder; therefore, he was liable to be arrested/detained per provisions of S.51, C.P.C.---Held, that property in question, at present, was not in the name of the judgment-debtor but the same was gifted/transferred by the judgment-debtor to his wife prior to the filing of the suit for recovery by the decree-holder Bank---Executing Court could not exercise powers under S.51, C.P.C. as the decree-holder had not been able to show any material whereby it could be said that the property in question was dishonestly transferred, gifted, and/or alienated by the judgment-debtor---Gift deed and the lease documents or the veracity of the same had not been challenged or dislodged independently nor the credibility and the authority of such documents had been disputed, which were legally executed---No case had been made out by the decree-holder whereby an order could be passed for the detention of the judgment-debtor, neither could the property in question be attached---Application under S.19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was dismissed, in circumstances.

Abdul Basit Zahid v. Modaraba Al-Tijarah and 2 others PLD 2000 Kar. 322; Precision Engineering Ltd. and others v. The Grays Leasing Limited PLD 2000 Lah. 290 and Mir Haji Ahmed Ali Khan Talpur and 9 others v. Government of Sindh and 2 others PLD 1976 Kar. 316 ref.

Sohail Farooq Shaikh v. The State 2009 MLD 375 rel.

Habibur Rehman and Ghulam Mujtaba for Decree Holder.

Salim Salam Ansari for Judgment Debtor.

Rana Azeem for Objector.

Date of hearing: 1st April, 2015.

2015 C L D 1535

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

MANSOOR KHALIL---Appellant

versus

MUHAMMAD MOIZUDDIN and another---Respondents

Ist Appeal No.29 of 2010, decided on 29th May, 2015.

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

----S. 15---Execution of decree of Banking Court---Sale of mortgaged property under S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Striking down of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 by the Supreme Court in National Bank of Pakistan v. Saif Textile Mills [PLD 2014 SC 283]---Effect in cases where auction proceedings were initiated before striking down of said provision, but not finalized---Past and closed transactions---Scope---Appellant impugned the order of Banking Court whereby application of auction purchaser of mortgaged property for issuance of writ of possession under S. 15(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was allowed---Contention of appellant, inter alia, was that since S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was held to be ultra vires of the Constitution and struck down by the Supreme Court, the entire auction process carried out by the Financial Institution was a nullity in the eye of the law, as possession of the property was not handed over to the auction purchaser, therefore, the matter was not a "past and closed transaction"---Held, that in order to be determined as a "past and closed transaction", the three parameters laid down in Muhammad Umar Rathore v. Federation of Pakistan [2009 CLD 257] must have been completed, including delivery of possession of property auctioned by a Financial Institution in terms of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; otherwise said sale/auction was not complete and the same was liable to be declared a nullity in the eye of the law as the said S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was no more a "law"---Since auction proceedings had not been finalized, in the present case, including handing over possession of the mortgaged property, auctioned privately by the plaintiff Bank, in terms of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which no more existed in the statute book, the impugned order could not be sustained and was liable to be set aside---Auction proceedings in respect of mortgaged property undertaken by the Bank were set aside by High Court and sale deed was held to be cancelled, with the observation that the Bank may proceed for recovery of any due amount against mortgagor/borrower in accordance with law---Appeal was allowed, accordingly.

National Bank of Pakistan and 117 others v. Saif Textile Mills Ltd. and another PLD 2014 SC 283; Muhammad Ismail v. Dubai Islamic Bank Limited Ist Appeal No.114 of 2011 and Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 fol.

Mirza Sarfaraz Ahmed for Appellant.

Ilyas Khan Tanoli for Respondent No.1.

Khalil Ahmed Siddiqui for Respondent No.2.

Date of hearing: 17th February, 2015.

2015 C L D 1547

[Sindh]

Before Aziz-ur-Rehman, J

NIB BANK LIMITED---Plaintiff

versus

Mirza GHULAM MUJTABA and others---Defendants

Suit No.B-9 of 2012, decided on 23rd April, 2015.

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

----Ss. 2(c), 2(d) & 7---Contract Act (IX of 1872) Ss. 126, 127 & 128---Contract of guarantee---Surety, principal debtor and creditor---Consideration for guarantee---Surety's liability---Scope of terms "customer" and "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit for recovery of finance---Liability of guarantors---Held, that defendants to the suit, who were guarantors, were also jointly and severally liable and the liability of guarantors was co-extensive with that of the principal debtor, unless it was otherwise provided by the contract of guarantee itself---Anything done or promise made for the benefit of the principal debtor was sufficient consideration as far as the surety was concerned---Manifestly the contract of guarantee was a contract to perform the promise or discharge the liability of a third person in case of default---Under S. 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, guarantors fell within the meaning of "customers"; as such they were also liable to pay the dues of the principal debtor on whose behalf they stood as guarantors---Among other things, performance of an undertaking or fulfilment of a promise relating to repayment of finance or payment of any other amounts regarding finance was also an "obligation" within meaning of S. 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was decreed.

Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419 and Bela Automotives Ltd. v. Habib Bank Ltd. 2008 CLD 778 rel.

Jam Asif Mahmood and Abid Naseem for Plaintiff.

Barrister Habib-ur-Rahman for Defendants.

2015 C L D 1572

[Sindh]

Before Syed Saeed-ud-Din Nasir, J

Y.G. INVESTMENT AND DEVELOPERS through Authorized Attorney---Plaintiff

versus

CLIFTON ESTATES COOPERATIVE HOUSING SOCIETY through President and 43 others---Defendants

Suit No.1486 of 2008, decided on 27th April, 2015.

Partnership Act (IX of 1932)---

----S. 69(1) & (2)---Civil Procedure Code (V of 1908), O. VI, R.14 & O.XXX, Rr.1, 2---Suit by partner on behalf of firm---Pleading to be signed---Scope---Partner of a firm could file a suit on behalf of the firm through an authorized attorney---Neither S.69(2) of Partnership Act, 1932 nor O.VI, R. 14, C.P.C. created any bar on institution of a suit by a partner on behalf of a partnership firm through a duly authorized attorney---Order XXX, C.P.C. did not create a bar on the partner of a firm from authorizing an attorney to institute/defend a suit on behalf of such partner---One of the partners of firm had conferred authority upon attorney to sign the pleadings or to sue or defend on her behalf everything with regard to her share in the firm---Suit filed by such a person had been filed by an authorized person.

PLD 1975 Kar. 428; 1997 CLC 187 and 2014 CLC 71 ref.

Messrs Muhammad Siddiq Muhammad Umar v. The Australasia Bank Ltd. PLD 1966 SC 684; Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. PLD 1971 SC 550; Dumez Borie v. International Forwarders Ltd. NLR 1983 UC 184; Abubakar Saley Mayet v. Abbot Laboratories and others 1987 CLC 367; Messrs Standard Hotels (Private) Ltd. v. Messrs Rio Centre and others 1994 CLC 2413; Abdul Rahim and 2 others v. United Bank Ltd. PLD 1997 Kar. 62; Raja Ali Shah v. Messrs Essen Hotel Limited and others 2007 SCMR 741; Sirajuddin Paracha and 12 others v. Mehboob Elahi and 3 others PLD 1997 Kar. 276; Board of Control for Cricket in Pakistan v. Karachi Development Authority 1997 CLC 795; Bashir Dawood v. Haji Suleman Goawala and Sons 2010 CLC 191 and Dr. S.M. Rab v. National Refinery Ltd. PLD 2005 Kar. 478 distinguished.

Khawaja Shamsul Islam for Plaintiff.

Mushtaq A. Memon for Defendant No.1.

Sajjad E. Halai and Ghulam Abbas Pishori for Defendants Nos.2 to 5 and 7 to 42.

Date of hearing: 17th February, 2015.

2015 C L D 1598

[Sindh]

Before Aziz-ur-Rehman, J

NATIONAL BANK OF PAKISTAN---Plaintiff

versus

CAST-N-LINKS PRODUCTS LTD. and 9 others---Defendants

Suit No. B-11 of 2001, decided on 27th May, 2015.

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

----S. 9---Contract Act (IX of 1872), S. 73---Suit for recovery of loan by Bank---Penal/additional interest, charge of---Scope---No 'interest' or 'penal interest' could be charged on the amount of 'commitment charges' which would amount to compounding the interest---Penal interest in the loan agreement could be referred as 'additional interest'---'Penal'/'additional interest' could not be recovered as it would amount to "penalty"---Interest in the case of loan on the 'judgment debtor' was to be granted from the institution of suit till payment.

N.D.F.C. v. Anwar Zaib White Cement Ltd. and others 1999 MLD 1888; Pakistan Industrial Credit and Investment v. Messrs Bawany Industries Limited PLD 1998 Kar. 400; Federation of Pakistan through Secretary Ministry of Finance and others v. Haji Muhammad Sadiq and others PLD 2007 SC 133 and Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596 rel.

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

----S. 9---Contract Act (IX of 1872), Ss. 126, 127 & 128---Suit for recovery of loan by Bank---Surety, liability of---Scope---Liability of guarantors was co-extensive with that of the principal debtor unless in the letter of guarantee it had been provided otherwise---Anything done or promise made for the benefit of principal debtor was sufficient as far as the surety was concerned---Contract of guarantee was a contract to perform the promise or discharge the liability of third person in case of his default.

Bank of Baroda's case AIR 1992 Karnataka 108 rel.

Adnan I. Chaudhry for Plaintiff.

Nemo for Defendants Nos.1 to 9.

Date of hearing: 30th April, 2015.

2015 C L D 1655

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

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

Versus

CUMMINS MIDDLE EAST FZE through Chief Executive and 4 others---Respondent.

High Court Appeal No.138 of 2012, decided on 29th May, 2015.

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

----Ss. 3 & 4---Specific Relief Act (I of 1877), S. 54---Suit for permanent injunction---Arbitration agreement-Stay of proceedings ­Scope-Application for stay of proceedings on the ground that parties had agreed to refer their disputes either for mediation or for arbitration was accepted and proceedings were stayed in the suit--- Validity---Once a party had come before a court and had sought relief with regard to an agreement by making a specific prayer and if such agreement contained an arbitration clause, it was not required by the court to see and distinguish whether the dispute being raised or agitated was specifically covered by the agreement itself or not---Such objection, if any, could be validly raised before the arbitrators who were competent to adjudicate and see as a preliminary objection---Filing of application for modification of status quo order could not be termed as participation in the suit proceedings on merits of the case---Such was only to the extent of seeking modification of ex parte interim order and the same did not debar the defendants from seeking further remedy---Party to an arbitration agreement against whom legal proceedings had been brought with regard to a matter which was covered by the arbitration agreement might upon notice to the other parties apply to the court to stay proceedings---Court should refer the parties on filing such application to arbitration unless it was found that arbitration agreement was null and void, inoperative or incapble of being enforced---Mere change in the nomenclature of Ordinance/Act would not ipso facto mean that the application was liable to be dismissed---Impugned judgment did not suffer from any error or illegality, which was a reasoned order---Suit had been stayed by the exercising discretionary powers in accordance with law---Appeal was dismissed, in circumstances.

Messrs Tanscomerz AG v. Messrs Kohinoor Trading (Pvt.) Ltd. and 2 others 1988 CLC 1652; Muhammad Aril and another v. The State and another 1993 SCMR 1589; Messrs Travel Automation (Pvt.) Ltd. v. Abacus International (Pvt.) Ltd. 2006 CLD 497; Province of Punjab through Secretary Health Department v. Dr. S. Muhammad Zafar Bukhari PLD 1997 SC 351; Messrs Pakistan Insurance Corporation, Karachi v. P. T Indones Oriental Lines and 4 others PLD 1977 Kar. 562; an unreported judgment of this Court in H.C.A. No. 237 of 2008; Lahore Stock Exchange Limited v. Fredrick J. Whyte Group (Pakistan) Ltd. and others PLD 1990 SC 48; Renusagar Power Co. Ltd. v. General Electric Company and another AIR 1985 SC 1156; Port Qasim Authority, Karachi v. A1-Ghurair Group of Companies and 3 others PLD 1997 Kar. 636; Dar Okaz Printing and Publishing Ltd. Liability Company v. Printing Corporation of Pakistan Pvt. Ltd. PLD 2003 SC 808; Messrs Royal Group v. Messrs Semos Pharmaceuticals (Pvt.) Ltd. 2011 CLC 235; Mst. Surriya Rehman v. Siemens Pakistan Engineering Company Ltd. PLD 2011 Kar. 571; Farm and Foods International v. Hamid Mahmood 2006 CLC 492; Muhammad Ilyas v. Managing Director, Sui Northern Gas Pipelines 1998 CLC 600; Akbar Cotton Mills Ltd. v. Messrs Ves/Ojuanojo Objedinenije Tech/Amesh Export and another 1984 CLC 1605; Messrs Manzoor Textile Mills Ltd. v. Nichimen Corporation and 2 others 2000 MLD 641; Hitachi Limited v. Rupali Polyester and others 1998 SCMR 1618; Metropolitan Steel Corporation Ltd. v. Macsteel International U.K. Ltd. PLD 2006 Kar. 664; Far Eastern Impex (Pvt.) Ltd. v. Quest International Nederland BV and 6 others 2009 CLD 153; Gas Authority of India Ltd. v. SPIE CAPAG, S.A. and others AIR 1994 Delhi 75; General Electric Company v. Renusagar Power Company 1987 Indlaw SC 28792 and Banque Indosuez Belgium and others v. Haral Textile Ltd. 1998 CLC 583 ref.

Messrs Transcomerz AG v. Messrs Kohinoor Trading (Pvt.) Ltd. and 2 others 1988 CLC 1652 distinguished.

Novelty Enterprises Ltd, Tariqabad, Mirpur through General Manager v. Deputy Collector Excise and Taxation/Sales Tax Officer and 5 others 1993 CLC 1165 rel.

Moin Qamar and Mrs. Amna Salman for Appellant.

Sajid Zahid, Mansoor Sheikh and Safdar Mahmood for Respondents Nos.1, 2 and 4.

Dates of hearing: 17th September, 2013, 10th, 24th February, 18th, 26th August, 11th September, 2014 and 20th May, 2015.

2015 C L D 1756

[Sindh]

Before Aziz-ur-Rehman, J

The BANK OF PUNJAB---Plaintiff

Versus

DEWAN FAROOQUE MOTORS LIMITED---Defendant

Suit No. B-164 of 2010, decided on 14th May, 2015.

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

----S. 118--- Negotiable instrument-- Presumption--- Negotiable instrument under S. 118 of Negotiable Instruments Act, 1881,,attaches itself statutory presumption that is to say, as to consideration, date, time of acceptance, time of transfer, order of endorsement, stamping and also as to holder of a negotiable instrument in due course---Presumption attached to negotiable instrument besides statutory in nature is also mandatory---No person can dispel such presumption without furnishing solid proofs and evidence.

Muhammad Sabir v. Khalil-ur-Rehman 2002 CLD 1545 rel.

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

----Ss. 9 & 10---Recovery of finance of Bank---Promissory estoppel--­Applicability---Rescheduling/renewal of finance---Suit filed by Bank was resisted by defendant on various pleas including factor of roll-over of mark-up over mark-up at the time of rescheduling of finance-- Validity---On account of defendant's default, renewal/rescheduling was not only requested by defendant but also accepted by plaintiff Bank--- Defendant under the doctrine of promissory estoppel could not be permitted to allege that documents duly signed and executed were void and/or otherwise not enforceable under the law---Bank could recover Purchase Price' [mark-up price] as mark-up was charged onoutstanding due amount' which included mark-up as such the 'sale price' and 'purchase price', both were polluted one---Defendant was fully aware of charging mark-up' on renewed/rescheduled amounts, and despite such knowledge and awareness, defendant not only executed finance agreements but also got itself benefited therefrom---Defendant could not be permitted to allege thatmark-up' in terms of finance agreements were `Haram' or otherwise were prohibited---Defendant if really did not want to pay mark-up on renewed/ rescheduled amounts then it should have not requested for renewal/ rescheduling of the subject facilities---High Court declined the leave to appear and defend the suit as it failed to raise any substantial questions of facts and law which needed recording of evidence---Suit was decreed in circumstances.

Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408; Pakistan Kuwait Investment Company (Pvt.) Limited through Authorized Representative v. Messrs Active Apparels International and 6 others 2012 CLD 1036; United Bank Limited v. Mehmood Ilyas Khan and another 2012 CLC 1372; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Habib Bank Ltd. v. Karachi Pipe Mills Ltd. 2006 CLC 842; Messrs Saudi Pak Commercial Bank v. Messrs Lucky Textile (Pvt.) Ltd. and others 2007 CLD 1005; HBL v. Al-Jalal Textile Mills Ltd. 2003 CLD 1007; Mushtaq Ahmed Vohra v. Crescent Investment Bank Limited 2005 CLC 444; Habib Bank Limited v. Messrs Qayyum Spinning Limited and others 2001 MLD 1351 and United Bank Ltd., Karachi v. Messrs Gravure Packaging (Pvt.) Ltd. and 4 others 2001 YLR 1549 distinguished.

Muhammad Arshad and another v. Citibank N.A., Lahore 2006 SCMR 1347; Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143; Citibank N.A. through Branch Manager v. Ameer Alam 2015 CLD 429; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation Karachi PLD 2002 SC 500; United Bank Ltd. v. Golden Textile Mills Ltd. and 7 others 2000 CLC 819 and Dr. M. Aslam Khaki v. Syed Muhammad Hashmi PLD 2000 SC 225 rel.

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

---S. 9---Liquidated damages, recovery of---Principle---Such damages cannot be allowed in absence of any evidence.

Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596 rel.

(d) Contract---

----Varying of--- Principle--- Nothing prohibits the parties from varying or altering terms and conditions of original contract mutually.

Arfan Hameed, S.D.O. Mirpur and 42 others v. Secretary, Education, AJ&K Government Civil Secretariat, Muzaffarabad and 3 others 2005 CLC 564 rel.

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

----S. 9(2)---Statements of account---Scope---Statutory presumption of truth in attached with certified statement of accounts.

Muhammad Ramzan v. Citibank N.A. 2001 CLC 158 rel. K.K. Agha for Plaintiff.

Adnan Iqbal Chaudhry for Defendant.

Date of hearing: 13th April, 2015.

2015 C L D 1806

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

Messrs MEEZAN BANK LIMITED---Appellant

Versus

Mrs. PARVEEN SABIR and another---Respondents

I.A. No. 53 of 2013, decided on 13th January, 2015.

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

----S. 27---Civil Procedure Code (V of 1908), Ss. 151 & 152---Decree, correction of---Clerical or arithmetical mistake---Scope---Suit for recovery of Rs. 33,165,599 was filed by plaintiff Bank and a decree in its favour was passed by Banking Court for an amount of Rs.14,534,274---Plaintiff Bank sought correction of decretal amount, which application was dismissed by Banking Court---Plea raised by plaintiff Bank was that Banking Court committed a mistake with regard to decretal amount and the same could be corrected under S.152, C.P.C. read with S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001-Validity-Correction/rectification sought by plaintiff Bank did not fall within the purview of a clerical or an arithmetical mistake, either in terms of S.152, C.P.C. or for that matter, under S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Banking Court passed a well-reasoned judgment and decree on merits of the case, whereby, claim of plaintiff bank in respect of charity and termination charges was declined and such refusal by Banking Court did not fall within the purview of a "clerical or arithmetical mistake"- Appeal was dismissed in circumstances.

Nabeel Kolachi for Appellant.

Date of hearing: 13th January, 2015.

2015 C L D 1813

[Sindh]

Before Aqeel Ahmed Abbasi and Syed Saeeduddin Nasir, JJ

ASIF ALI KHAN and another---Appellants

Versus

STANDARD CHARTERED BANK LIMITED and another---Respondents

Ist Appeal No.27 of 2014, decided on 29th May, 2015.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), O. XXI, Rs. 66 & 67---Suit for recovery of loan amount---Execution of decrees---Modeof execution---Notice to judgment debtor before issuance of proclamation of sale---Requirement---Plaintiff, on defendant's failure to fully satisfy decretal amount as settled under compromise, filed second execution application-Defendant filed application seeking suspension of auction proceedings on ground that notice as required under O. XXI, R. 66, C.P.C. had not been served upon him---Executing court, dismissed application filed under O. XXI, Rr. 66 & 67, C.P.C., and confirmed auction sale of mortgaged suit property---Validity---Executing court had ordered proclamation of sale without issuance of notice under O. XXI, R. 66, C.P.C., and, admittedly, no such notice had been served upon defendants by court for settling terms of auction sale--Provisions of O.XXI, R. 66, C.P.C. were mandatory in nature, and non-compliance thereof in letter and spirit were fatal to sale proclamation-Non-issuance of notice under O. XXI, R. 66, C.P.C. was material irregularity, which had vitiated whole auction proceedings---High Court, allowing present appeal, set aside impugned order of Banking Court and auction sale, directed Executing court to put up suit property on re-auction after service of due notice upon defendant under O. XXI, R. 66, C.P.C.--- Appeal was allowed in circumstances.

Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Muhammad Ikhlaq Memon v. Zakaria Ghani and others PLD 2005 SC 819; United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Limited and 8 others 2000 CLC 1438; Yasmin Yaqoob v. Messrs Allied Bank of Pakistan Ltd. and 3 others 2007 CLD 1511; Mukhtar Ahmed v. Messrs United Bank Limited 2013 CLD 841; Zulqarnain and 2 others v. Surbuland Khan and another 2004 SCMR 1084; Messrs Jugotekstile Impex, 61001, Lubijana Yugosalavia v. Messrs Shams Textile Mills Ltd. 1990 MLD 857 and Balagamwalla Cotton Ginners and Pressing Factory v. Messrs Akber Oil Mills PLD 1965 (W.P.) Kar. 460 ref.

Abdul Qayyum Abbasi for Appellants.

Ghulam Rasool Korai along with Azmat Zuberi, Regional Manager (Litigation) for Respondent No.l.

Abid Hussain for Respondent No.2.

Date of hearing: 8th April, 2015.

2015 C L D 1828

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

INVEST CAPITAL INVESTMENT BANK LIMITED and another---Appellants

Versus

Messrs HOUSE BUILDING FINANCE CORPORATION---Respondent

First Appeal No. 11 of 2010, decided on 29th May, 2015.

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

----Ss. 9, 7 & 2(a), (c), (d), (e)---Suit for recovery of loan amount---Breach of obligation---Defendant had obtained/borrowed money from the plaintiff/Bank and had promised to pay mark-up at a certain rate---Defendant had acknowledged its liability with regard to payment of mark-up/profit to the Bank---Defendant had defaulted in payment of mark-up/profit---No exception could be taken with regard to grant of mark-up/profit---No infirmity or illegality had been pointed out in the impugned judgment---Finance facility must have been availed by the customer and the dispute must have arisen between the customer and Financial Institution with regard to violation or breach of any obligation required to be performed or honoured by any of them---Relationship of customer and Financial Institution between the parties must be in existence for maintainability of suit before the Winking Court and there must have been a finance facility availed by the customer---Defendant had not led any evidence with regard to sustaining of losses---No error or illegality had been pointed out in the impugned judgment---Appeal was dismissed in circumstances.

Muhammad Ashraf v. United Bank Limited through President and others 2009 CLD 1250; Sh. Anayat Ali v. National Bank of Pakistan 2006 CLD 679; Pakistan through Ministry of Finance Economic Affairs and another v. Fecto Belarus Tractors Limited PLD 2002 SC 208; Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546; Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1991 SCMR 1652; Al Samrez Enterprise v. The Federation of Pakistan 1986 SCMR 1917; Brig (Reid.) Hamiduddin v. Askari Leasing Limited and others 2005 CLD 898; Karachi Catholic Cooperative Housing Society Ltd. v. Mirza Jawad Baig PLD 1994 Kar. 194; Muhammad Hanif v. Hyderabad Municipality and others PLD 1966 (W.P) Kar. 219; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi PLD 2002 SC 500; Khiali Khan v. Haji Nazir and 4 others PLD 1997 SC 304; Satyanarayana v. Koganti Ramaiah and others AIR 1983 SC 452; International Industries Ltd. v. Collector of Customs (Appraisement) Customs House, Karachi 1991 MLD 1447; Habib Bank Ltd. v. Taj Textile Mills Ltd through Chief Executive and 5 others 2009 CLD 1143; Messrs Sartaj Industries through Qaisar Iqbal Managing Partner and 6 others PLD 1990 Lah. 99; Haji Ali Khan and Company, Abbottabad through Managing Director and 8 others v. Messrs Allied Bank of Pakistan Limited 1992 CLC 1906; Mirza Munawar Ahmed and another v. Official Liquidator and 3 others PLD 1980 Lah. 86; Raja Nasir Khan v. Abdul Sattar A. Khan and another PLD 1998 Lah. 20 and Muhammad Ashraf v. United Bank Limited through President and 3 others 2009 CLD 1250 ref.

First Dawood Investment Bank Limited v. House Building Finance Corporation Limited 2014 CLD 292 rel.

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

----S. 2(c)---"Customer"---Meaning and scope.

Procter and Gamble Pakistan (Pvt.) Limited, Karachi v. Bank Al-Falah Limited, Karachi and 2 others 2007 CLD 1532 rel.

(c) Interpretation of statutes---

----Word "include" in a definition clause of a statute was generally

used in order to enlarge the meaning of the words and phrases according to the body of the statute.

Don Basco High School v. The Assistant Director E.O.B.I. and others PLD 1989 SC 128 and Messrs Usmania Glass Sheet Factory Limited, Chittagong v. Sales Tax Officer, Chittagong PLD 1971 SC 205 rel.

Asim Mansoor Khan and Zeeshan Rashid for Appellants.

Ms. Rukhsana Ahmad along with Amjad Masood, representative of Respondent/HBFC.

2015 C L D 1849

[Sindh]

Before Muhammad Shafi Siddiqui, J

THARPARKAR SUGAR MILLS LTD. through Chief Executive---Plaintiff

Versus

NATIONAL DEVELOPMENT FINANCE CORPORATION through Manager and 10 others---Defendants

Suit No.B-29 of 2005, heard on 18th November, 2014.

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

----Ss. 9, 19, 22 & 27---State Bank of Pakistan, BPD Circular No.29 dated 15-10-2002---Suit for declaration and injunction---Auction of property---Plaintiff company filed application for restraining defendant Bank from auctioning its property to recover outstanding amount in pursuance of decree passed in an earlier suit---Plea raised by plaintiff company was with regard to applicability of State Bank of Pakistan, BPD Circular No.29 dated 15-10-2002---Validity---Enforcement of BPD Circular No.29 by individual Banks to their respective customers was in fact the prerogative of Banks and it was for them to decide whether such debt outstanding against customer was a lost debt or recoverable in terms of assets mortgaged with them---State Bank of Pakistan, BPD Circular No.29 was binding once the Bank reached to a decision that such debt was not recoverable or a lost category and then procedure and perameters as laid down therein were to be adopted as a binding parameter but prima facie not in terms of its mandatory application---Judgment. and decree passed in earlier suit could not be made subservient to the outcome of present suit in terms of Ss. 22 & 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Any mode whereby consent decree passed in earlier suit was sought to be deferred, modified, altered and reviewed was violative of law--­Application was dismissed in circumstances.

Dr. Muhammad Farogh Naseem for Plaintiff. Adnan Iqbal Chaudhry for Defendant No.7. Khalid Anwar for NIB Bank.

2015 C L D 1852

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs PREMIER FINANCIAL SERVICES (PVT.) LTD. and another---Plaintiffs

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Defendant

Suit No. 669 of 2009, decided on 8th July, 2015.

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

----S. 21---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Inquiry to affairs of company---Interim injunction, grant of---Plaintiffs were aggrieved of initiation of inquiry into the affairs of company, under S. 21 of Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980---Plaintiffs sought restraining of Securities and Exchange Commission/defendant from inspecting and investigating affairs of the company---Validity---After issuance of show-cause notice, no final order was passed against the company and therefore, continuation of inquiry in question did not in any manner gave rise to any cause to plaintiff to initiate proceedings---Courts should not interfere in proceedings at the stage of inquiry, as the same amounted to pre-empting the conduct and action of the authorities concerned---Plaintiffs failed to make out any case for grant of injunction, as no prima facie case was made out by them, whereas no irreparable loss was caused to them, if injunction was refused and so also the balance of convenience did not lie in their favour as mere inquiry notice/order was assailed in the suit, whereas no further proceedings had taken place then---High Court declined to grant interim relief to plaintiffs--- Application was dismissed in circumstances.

Chief Commissioner, Karachi v. Mrs. Dina Sohrab Katrak PLD 1959 SC 45; The University of Dacca and another v. Zakir Ahmed PLD 1965 SC 90; Rohtas Industries Ltd. v. D. Agawal and another AIR 1969 SC 707; Service Industries Textiles Ltd. Lahore v. SECP 2000 MLD 1880; Delhi Mercantile Cooperative Society Ltd. v. Registrar Cooperative Societies, Sindh Hyderabad and another 2011 YLR 2121; Mansab Ali v. Amir and 3 others PLD 1971 SC 124; Moulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others PLD 2008 SC 663; Muhammad Haleem and another v. General Manager (Operation) Pakistan Railways Headquarter, Lahore and others 2009 SCMR 339; Sheikh Abdul Wahid and 7 others v. Securities and Exchange Commission of Pakistan and 2 others 2008 CLD 57; Royal Management Services (Pvt.) Ltd. and another v. The Chairman SECP, Islamabad and others 2015 CLD 150; Rehmatullah Khan and others v. Government of Pakistan through Secretary, Petroleum and Natural Resources Division, Islamabad and others 2003 SCMR 50; Burmah Eastern Ltd. v. Burmah Eastern Employees' Union and others PLD 1967 Dacca 190; Nasim Beg v. Securities and Exchange Commission of Pakistan through its Chairman and 2 others 2014 CLD 853; Messrs Karsaz Construction Company v. Pakistan through Secretary, Ministry of Defence Islamabad and another 1999 CLC 1719; Alavi Sons Ltd. v. Government of East Pakistan and others PLD 1968 Kar. 222; Mecmar Management (Pvt.) Ltd. and another v. Karachi Port Trust and another 2002 YLR 1473; Abdul Rehman Mobashir and 3 others v. Syed Amir Ali Shah Bokhari and 4 others PLD 1978 Lah. 113; Mrs. Shazadi Baber v. Hina Housing Project (Pvt.) Ltd. and others 1994 CLC 1601; S. M. Shaft Ahmed Zaidi through legal heirs v. Malik Hassan Ali Khan (Moin) through legal heirs 2002 SCMR 338; Muhammad Rasab and another v. Muhammad Siddiquie Chaudhry 1998 MLD 2045; Mian Nur Husain and others v. Khalifa Muhammad Sultan and others PLD 1956 (WP) Lah. 893; M. A. Naser v. Chairman, Pakistan Eastern Railways and others PLD 1965 SC 83; Ilyas Ahmed v. Muhammad Munir and 10 others PLD 2012 Sindh 92; Muhammad Hamdan Shaikh v. The Chairman, Board of Secondary Education, Nazimabad, Karachi and 2 others PLD 1998 Kar. 59; Government of East Pakistan v. Federation of Pakistan and another PLD 1962 (W.P.) Kar. 353; Akmid Units, Muzafarabad and others v. Moinuddin and others 1987 MLD 1055; Managing Committee, Revenue Employees Cooperative Housing Society, Rawalpindi v. Secretary, Cooperative Societies Government of Punjab, Lahore and 3 others 2001 CLC 838; Negotiating Committee for Disinvestment of Akmid Units, Muzaffarabad and 3 others v. Moinuddin and 6 others 1987 CLC 1322; Sayyid Yousaf Husain Shirazi v. Pakistan Defence Officers Housing Authority and 2 others 2010 MLD 1267; Assistant Collector of Customs AFU Airport, Lahore v. Messrs Tripple-M (Private) Limited through Managing Director and 4 others PLD 2006 SC 209; Muhammad Ashraf Tiwana and others v. Pakistan and others 2013 SCMR 1159; Royal Management Services (Pvt.) Ltd. and another v. The Chairman SECP, Islamabad and others 2015 SCMR 101 and Arif Majeed Malik and others v. Board of Governors Karachi, Grammer School 2004 CLC 1029 ref.

Owais Ali Shah for Plaintiffs.

Naveedul Haq for Defendant.

2015 C L D 1889

[Sindh]

Before Sadiq Hussain Bhatti, J

Messrs SHAHID HANIF POULTRY through Proprietor----Appellant

Versus

Messrs K&N's POULTRY FARMS through Managing Partner----Respondent

IInd Appeal No.59 of 2012, decided on 28th April, 2015.

Partnership Act (IX of 1932)---

----S. 19---Civil Procedure Code (V of 1908), O. VII, R.2---Suit for recovery of money--- Limitation--- Authorization to file suit by partnership firm---Filing of documents after expiry of time granted by court---Effect---Second appeal---Scope---Suit for recovery of money was filed by plaintiff that was decreed by Trial Court and appeal against was dismissed--- Second appeal was filed against decisions of courts below on grounds that suit was time barred, there was no resolution of Board of plaintiff firm to file suit and that documents filed after expiry of time set for filing of documents could not be taken into consideration by Trial Court---Plaintiff contested second appeal on ground that suit was filed within time and no Board resolution was required under law by a partnership firm to file suit---Plaintiff contended that documents were filed within seven days of framing of issues---Validity---Defendant had admitted that last cheque was issued by him as part payment in respect of outstanding amount against him and such document in existence extended period of limitation before its expiry---Defendant had failed to support his claims with confidence inspiring evidence and show that courts below had not properly appreciated evidence, or not made substantial error and or decisions of courts were contrary to law---Second appeal was dismissed in circumstances.

Muhammad Manzoor v. National Bank of Pakistan 1986 SCMR 1366; Muhammad Yasin v. Muhammad Abdul Aziz PLD 1993 SC 395; Iftikhar Ahmed v. Shahzada Kabir Aftab 2004 CLC 46 and Rafiul Qadre Naqvi v. Safia Sultana 2009 SCMR 254 rel.

Abid Akram for Appellant.

Bashir Ahmed for Respondent.

Date of hearing: 27th March, 2015.

2015 C L D 1897

[Sindh]

Before Sajjad Ali Shah and Syed Saeeduddin Nasir, JJ

Syed WAJAHAT HUSSAIN ZAIDI---Petitioner

Versus

STATE BANK OF PAKISTAN through Governor and 14 others---Respondents

Constitutional Petitions Nos. D-1625, D-1638 of 2014, D-2113 of 2012 and D-3217 of 2013 heard on 5th May, 2015.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 25-A & 93(C)---State Bank of Pakistan Act (XXXIII of 1956), S. 9-A---BCD Circulars No. 6 of 1990---BCD Circular No. 4 of 2003---BCD Circular No. 8 of 2013---Constitution of Pakistan, Art. 199---Constitutional petition---Credit Information Bureau (CIB) List---Removal of name---Petitioner sought direction to State Bank of Pakistan to remove his name from CIB list---Validity---Sole purpose of BCD Circular No. 4 of 2003 and BCD Circular No. 8 of 2013 was to create one common source of information for all financial institutions from which they could collect information about financial status and conduct of transacting business of a particular customer/their customers with other banks, in order to enable all financial institutions/Banks/NBFIs to adopt their future course of business transaction with regard to advancing finance facilities to such customers whose names appeared on the CIB---Only requirement of BCD Circular No. 6 of 1990, was to intimate authorities about default and liabilities of borrowers and that in no way could encroach upon any one of the Fundamental Rights of petitioner envisaged by the Constitution---Bank while informing State Bank of Pakistan about financial status of petitioner in compliance of Clause 5 of BCD Circular No. 6 of 1990, which was issued by State Bank of Pakistan in exercise of its powers under S. 25-A read with 93(C) of Banking Companies Ordinance, 1962, which Circular was followed by Circular No. 4 of 2003 and Circular No. 8 of 2013, upon which State Bank of Pakistan placed the name of petitioner on CIB---High Court declined to interfere in the matter as the State Bank of Pakistan did not violate any constitutional provisions---Petition was dismissed in circumstances.

Messrs Yousuf Sugar Mills v. Trust Leasing Corporation 2006 CLD 1191; Messrs Abdul Aziz Nawab Khan and Co. v. Federation of Pakistan 2006 CLD 55; Messrs Abdul Aziz Nawab Khan and Co. v. Federation of Pakistan 2006 CLD 1080 and Azam Wazir Khan v. IDBP 2013 SCMR 678 ref.

Sami Ahsan for Petitioner.

Muhammad Kazim, Sami Ahsan and Ejaz Ahmed for Respondents.

Shaikh Liaquat, Standing Council for Respondents.

Date of hearing: 5th May, 2015.

2015 C L D 1964

[Sindh]

Before Sajjad Ali Shah and Shahnawaz Tariq, JJ

Messrs PACIFIC PLASTIC COTTAGE INDUSTRY through Proprietor and 2 others---Appellants

Versus

ASKARI BANK LTD. and another---Respondents

Ist Civil Appeal No. 54 of 2014, decided on 15th April, 2015.

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

----Ss. 9 & 10---Suit for recovery of finance---Application for leave to defend the suit, non-filing of---Effect---Defendants assailed judgment and decree passed by Banking Court in favour of plaintiff Bank but did not file application for leave to defend, resultantly suit was decreed in favour of Bank---Validity---Concept of leave to defend required that defendants should come up with positive defence of a particular fact which had to be supported by documentary evidence to convince Court that there were sufficient grounds for granting leave to defend application to adjudicate substantial question of law or fact in respect of which evidence needed to be recorded---Mere denial of defendants without any plausible explanation could not be considered---Defendants failed to show any sufficient cause for their inability to comply with mandatory requirement as envisaged under S. 10(3)(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and also failed to make out any substantial question of law as well as fact in respect of which any evidence was required to be led by parties---Banking Court did not commit any illegality in passing judgment and decree in favour of Bank and the same did not call for interference---Appeal was dismissed in circumstances.

Fazal-e-Rabi's case 2010 CLD 972; Messrs Aamer Enterprises Ltd. and others v. United Bank Ltd. and another 2009 CLD 342 and Waqar Jalal Ansari v. National Bank of Pakistan 2008 SCMR 1611 ref.

Bank of Punjab v. Genertch Pakistan Limited 2008 CLD 765 and United Bank Limited v. Progas Pakistan Limited 2010 CLD 828 rel.

Ameen ud Din Ansari for Appellants.

Date of hearing: 2nd April, 2015.

2015 C L D 1990

[Sindh]

Before Aziz-ur-Rehman, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

NAJMA SUGAR MILLS LIMITED and 3 others---Defendants

Suit No.B-161 of 2010, decided on 23rd April, 2015.

(a) Banker and Customer---

----"Hypothecation"---Meaning/definition of---Constructive delivery of goods without involvement of actual possession of goods given as security for advance; charge on goods without its ownership or possession by the Bank and flexible security in which possession remained with the borrower, lender however could check stocks at intervals to verify payments of installments.

Hand Book of Banking Terms by Fazul Suleiman Kazi rel.

(b) Banker and Customer---

----"Pledge"---Meaning/definition of---To provide commodities as security for credit facility involving physical delivery of goods to be taken out only with permission of Bank on cash payment, whenever so needed; bailment of goods as security for payment or a debt or performance of a promise; a delivery of goods or documents of title by debtor to creditor as security to be returned on discharge of debt; holding goods, its possession and title, till debt was discharged; Banks could release part of pledged goods on payment for it and commitment taken from the applicant on obtaining a credit that covered the issuing bank for satisfaction of the claim without appointment of liquidators to distribute the proceeds of the goods sold under credit to creditors.

Hand Book of Banking Terms by Fazul Suleiman Kazi rel.

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

----Ss. 2(e)(iii) & 23---Binding representations, warranties and covenants regarding pledge, hypothecation etc. under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Restriction on transfer of assets and properties---Scope---Section 2(e)(iii) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 inter alia spoke about binding representations, warranties and covenants regarding pledge and hypothecation etc., and under the Financial Institutions (Recovery of Finances) Ordinance, 2001, it was the obligation and duty of customers to perform their undertakings and promises made by them at any stage with a Financial Institution without fail, otherwise they had to face consequences and under S. 23 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 any sale in contravention of S. 23 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was void and of no legal effect.

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

----Ss. 2(c), 2(d) & 7---Contract Act (IX of 1872) Ss. 126, 127 & 128---Contract of guarantee---Surety, principal debtor and creditor---Consideration for guarantee---Surety's liability---Scope of terms "customer" and "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001---Guarantors having signed and executed letters of guarantees in their personal capacity for duly discharging obligations of the debtor company were "customers" in terms of S. 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and were liable to pay outstanding amounts of finance facility and per S.126 of the Contract Act, 1872, contract of guarantee was a contract to perform the promise or discharge the liability of a third person in case of his default and the person who gave such guarantee was the "surety", the person in respect of whose default the guarantee was given was the "principal debtor" and the person to whom the guarantee was given was called the "creditor"---Guarantee may be oral or written and anything done or any promise made by the guarantors by giving the guarantee for the benefit of the principal debtor was sufficient consideration for the surety under S. 127 of the Contract Act, 1872---In terms of S. 128 of the Contract Act, 1872 the liability of the guarantor was co-extensive with that of the principal debtor unless it was otherwise provided by the letter of guarantee itself.

Jam Asif Mahmood and Behzad Haider for Plaintiff.

Chaudhry Abdul Rasheed for Defendants Nos.1 and 2.

2015 C L D 2010

[Sindh]

Before Muhammad Shafi Siddiqui, J

GADOON TEXTILE MILLS LIMITED and 2 others: In the matter of

J. Misc. Petition No. 41 of 2014, decided on 4th June, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287 & 288---Demerger of companies---Collective business decision---Scope---Determination of consideration including the commercial aspect of the merger along with manner of the swap ratio was primarily and substantially the prerogative of the members of the respective companies---Businessmen had to take decision considering all the pros and cons of demerger and merger of companies---While taking such decision there would be chances of success and failure but while questioning such decision the bona fides was the real test---Businessmen could take decision foreseeing the future aspect---Court could only see that all the legal formalities had been fulfilled and scheme was neither unjust nor unfair or against the national interest but could not challenge the wisdom of a decision of businessmen---While demerging shares of Real Estate and Textile the representatives or shareholders might decide to keep them separately which could not be challenged before the court---Company was conducting two business which were being separated---Advantages and disadvantages of keeping them together would remain there by disassociating the two businesses and their shareholding---Both would separately yield profit and loss hence the cumulative effect of the net result would not matter---Proposed scheme was based on the principle that each shareholder would get its respective share in terms of percentage that he was in collective business---Petition for demerger of companies was granted.

Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230; Brooke Bond (Pakistan) Limited v. Aslam Bin Ibrahim 1997 CLC 1873; Lipton Pakistan Limited's case 1989 CLC 818 and Aslam Bin Ibrahim v. Monopoly Control Authority PLD 1998 Kar. 295 rel.

Arshad Tayebaly for Petitioners.

Munawwar Awan along with Muhammad Nasir, Deputy Registrar, SECP for Securities and Exchange Commission of Pakistan.

Date of hearing: 6th May, 2015.

2015 C L D 1

[Lahore]

Before Shujaat Ali Khan and Muhammad Khalid Mehmood Khan, JJ

Messrs ALI TRADERS RICE DEALER GUJRANWALA through Sole Proprietor and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

R.F.A. No. 302 of 2007, decided on 24th July, 2014.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), Ss. 173 & 176---Suit for recovery of finance---Pawnee, duty of---Borrowers admitted availing of finance facility but asserted that liability was adjusted as pledged goods were with the bank but bank claimed that borrowers had taken delivery of pledged goods against trust receipt---Application to defend the suit was dismissed by Banking Court and suit was decreed in favour of plaintiff bank---Validity---Bank being the Pawnee was bound to return pawned goods to pawner on payment of debt---High Court in exercise of appellate jurisdiction declined to give definite findings about genuineness of delivery order as well as trust receipt and stock report issued by Muqaddam---No evidence being available on record and Trial Court had dismissed application for leave to defend the suit on technical ground, therefore, High Court refrained to further comment on merits of the case as it might cause prejudice to either party---High Court accepted application for leave to defend filed by borrowers, set aside judgment and decree and remanded the matter to Banking Court to decide the same after framing of issues and recording of evidence---Appeal was allowed in circumstances.

Askari Bank Limited v. Waleed Junaid Industries and 2 others 2012 CLD 1681 and Messrs Polymer International through Proprietor and another v. Messrs Bolan Bank Ltd. 2005 CLD 1129 ref.

A. M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 (W.P.) Lah. 1 and Lallan Prasad v. Rehmat Ali and another AIR 1967 SC 1322 rel.

Zubair Afzal Rana for Appellants.

Farrukh Mehmood Solehria for Respondent.

Date of hearing: 26th June, 2014.

2015 C L D 25

[Lahore]

Before Ayesha A. Malik, J

COLONY SUGAR MILLS---Petitioner

Versus

PROVINCE OF PUNJAB and others---Respondents

Writ Petition No. 10702 of 2013, heard on 10th June, 2014.

(a) Import Policy Order, 2013---

----Ss. 5(B)(iii) & 20 & Appendixes G & G-I---Constitution of Pakistan, Art. 199---Constitutional petition---Import of Carbon Dioxide (CO2) gas from India through Wahga Border---Policy decision of Government---Non-interference by court---Petitioner alleged that import of Carbon Dioxide (CO2) from India through Wahga Border was not allowed under S. 5(B)(iii) of Import Policy Order, 2013; that Provincial Government was repeatedly granting one time permissions to respondents for importing CO2 from India, which was contrary to S.20 of Import Policy Order, 2013; that imported CO2 gas was unfit for human consumption, and that there were no testing, storage or transportation facilities available at Wagha Border, which could prove to be hazardous---Validity---As per Import Policy Order, 2013, CO2 gas was not an item which was absolutely restricted for import from India---CO2 gas was neither a banned item nor a prohibited item nor was it included in the list of restricted items mentioned in the Import Policy Order, 2013---When an item was not banned or prohibited under the Import Policy Order, 2013, then the Provincial Government could consider and give permission to import such item as per its requirement and policy---In the present case, the respondents had been taking permission from the Provincial Government to import CO2 gas into Pakistan from India through Wagha Border---Provincial Government being the relevant authority could give such permission in order to meet the local demand for CO2 gas---Local supply of CO2 gas could not meet the increasing demand, hence the Provincial Government had deemed it appropriate to allow the respondents to import CO2 gas from India through Wagha Border from time to time---Such decision was a policy decision exercised by the Provincial Government which did not call for interference by the court---Petitioner did not bring anything on record to show as to how imported CO2 gas was unfit for human consumption---Respondents purchased CO2 gas in India from their approved vendors to ensure that it complied with the requisite quality standards---CO2 gas did not require any special handling---Constitutional petition was dismissed in circumstances.

(b) Import Policy Order, 2013---

----S. 20---Relaxation of prohibitions and restrictions on imports---Scope---Section 20 of the Import Policy Order, 2013 provided that the Federal Government may for reasons to be recorded allow or permit import (of an item) in relaxation of any prohibition or restriction under the said order---Nothing in the said section provided that such permission could only be given one time.

Shahid Ikram Siddiqui for Petitioner.

Muhammad Javed Kasuri and Muhammad Zikria Sheikh, DAGs along with Muhammad Yasin Akhtar, Director for Respondents.

Ch. Muhammad Zafar Iqbal along with Rahat Pirzada, Superintendent, Custom for Respondent No.2.

Muhammad Raheel Kamran Sheikh for Respondent No.6.

Munawar us Salam and Usman Akram Sahi for Respondent No.7.

Moazzam Ali for Respondent No.9.

Sameer Khosa and Bilal Bashir for Respondents Nos.10 and 11.

Ayesha Hamid for Respondent No.12.

Date of hearing: 10th June, 2014.

2015 C L D 40

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Haji ZAHID SAEED---Appellants

Versus

Messrs ASIF BROTHERS and others---Respondents

F.A.O. No. 47 of 2010, heard on 23rd October, 2014.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66, 90,67, 68 & 89---Execution of decree---Sale/auction of property---Non-mentioning of "reserve price"---Issuing of proclamation---Setting aside of auction/sale on ground of material irregularity and fraud---Non-compliance of provisions of mandatory O. XXI, Rr. 66, 67 & 68 of C.P.C.---Effect---Scrutiny of process of auction by the Executing Court; inherent jurisdiction of---Process of sale of properties in execution proceedings was assailed by judgment-debtor on grounds of collusion between auction purchaser and court auctioneers as well as material and procedural irregularities---Held, that properties were situated at place "J" whereas publication of public notice under O. XXI, C.P.C. was made in newspapers at place "F"; and there was no mention of reserve price in pro forma allegedly submitted for schedule of auction---Order sheet did not show that the said schedule of auction had been incorporated in the order of the Executing Court---Although reserve price was mentioned in the publication, the same was done so without any authority and without fixation of the same by the Executing Court and mentioning of reserve price in the publication had no value as the same had not been mentioned in pro forma (schedule of auction)---High Court observed that even where the sale was conducted by the Court; a reserve price was essential and absence thereof may be fatal and it stood established that no reserve price was fixed by the Executing Court in the present case and proclamation issued under O.XXI, R. 66, C.P.C. did not comply with the requirement of the law---Executing Court, in the present case was not only having jurisdiction under O.XXI, R. 89, C.P.C.; but also under S.19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as well as an inherent jurisdiction to scrutinize the process of sale of properties through auction and to unearth fraud and save any party against whom fraud had been committed---No place of auction had been mentioned and proceedings were conducted by the Executing Court and the court auctioneers in a manner that necessitated the consideration of the element of fraud in said proceedings---High Court further observed that when any fraud was visible in auction proceedings, the Executing Court had suo motu powers in relation to the same---Auction proceedings, in circumstances, were not transparent from the first day, and illegalities were committed by the Executing Court as well as court auctioneers---Sale confirmed in favour of the auction-purchaser, was set aside--- Appeal was allowed, in circumstances.

Messrs Asif Brothers, Jhang Saddar through Sole Proprietor and another v. Muslim Commercial Bank Limited through Manager and 3 others 2005 CLD 236; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; National Bank of Pakistan and 117 others v. SAF Textile Mills Limited and others PLD 2014 SC 283; Rana Muhammad Naseeb Khan v. Zarai Tarakiyati Bank of Pakistan and 2 others 2007 CLD 466; Messrs National Electric Company of Pakistan v. Allied Bank of Pakistan Limited and 2 others 1996 CLC 192 and Messrs Lanvin Traders, Karachi v. Presiding Officer, Banking Court No. 2, Karachi and others 2013 SCMR 1419 rel.

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

----S. 19(4)---Civil Procedure Code (V of 1908) O. XXI, Rr. 90 & 66,6, 68---Limitation Act (IX of 1908), Arts. 181 & 166---Execution of decree---Auction/sale of property---Fraud---Application to set aside auction on ground of fraud and irregularity---Limitation---When sale/auction appeared to be outcome of collusion between court auctioneers, and auction-purchaser and mandatory provisions of O.XXI, Rr. 66, 67 & 68, C.P.C. and S.19(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were not complied with; in such circumstances Art.181 of the schedule to the Limitation Act, 1908 was attracted instead of Art.166 of the same---When sale in execution was inoperative and void; an application by the judgment-debtor to have such sale declared void and for appropriate relief, was governed by Art.181 and not Art. 161 of the Schedule to the Limitation Act, 1908.

National Bank of Pakistan and 117 others v. SAF Textile Mills Limited and others PLD 2014 SC 283; Mst. Manzoor Jahan Begum and others v. Haji Hussain Bakhsh PLD 1966 SC 375; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; Messrs National Electric Company of Pakistan v. Allied Bank of Pakistan Limited and 2 others 1996 CLC 192; Mst. Zainab Bibi v. Allied Bank of Pakistan Limited and others 2003 YLR 3274 and Rana Muhammad Naseeb Khan v. Zarai Tarakiyati Bank of Pakistan and 2 others 2007 CLD 466 rel.

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

----O. XXI, Rr. 90 & 89---Application of judgment-debtor under O.XXI, R. 90, C.P.C. in relation to objections on auction of property, was withdrawn---Contention of the auction-purchasers was that since said application was withdrawn, the judgment-debtor on appeal had no right to challenge the auction on grounds of defects in procedure adopted by Executing Court---Held, that when the High Court was of the view that auction proceedings conducted by an Executing Court as well as the court auctioneers were not in accordance with the provisions of the law; and could be said to be fraudulent; the court could not shut its eyes on basis of technicalities and could look into to the matter and the same powers were also available to the Executing Court.

Naveed Shahryar Sheikh, Miss Fatima Malik, Miss Humaira Bashir Chaudhary and Bashir Ahmad Mirza for Appellant.

Tahir Mehmood Khokhar for Respondents Nos.1 and 2.

Ch. Mushtaq Ahmad Khan for Respondent Bank.

Date of hearing: 23rd October, 2014.

2015 C L D 72

[Lahore]

Before Abid Aziz Sheikh, J

Messrs HABIB RAFIQ PVT. LTD. through Authorized Representative---Petitioner

Versus

GOVERNMENT OF PUNJAB through Chief Secretary and another---Respondents

Writ Petition No.9910 of 2014, heard on 5th May, 2014.

(a) Punjab Procurement Rules, 2009---

----S. 19--- Words "mechanism and manner"---Connotation---Blacklisting of contractor---Method---Procuring agency is required to prescribe method and system for dealing with complaints against contractors and suppliers for their temporary and permanent blacklisting.

Oxford Dictionary New 8th Edn. rel.

(b) Interpretation of statutes---

----Redundancy, principle of--- Scope--- Redundancy cannot be attributed to legislature and every word used in statute and rules must have meaning.

Messrs V.N. Lakhani and Co. v. M.V. Lakhotoi Express and others PLD 1994 SC 894 and Muhammad Aslam v. Land Acquisition Collector 1994 MLD 1340 rel.

(c) Punjab Public Procurement Rules, 2009---

----R. 19---Constitution of Pakistan, Arts. 4, 10-A, 13 & 199---Constitutional petition---Blacklisting of contractor---Right to fair trial and due process of law---Double jeopardy, principle of---Petitioner company was aggrieved of decision made by authorities blacklisting it for a period of three years---Validity---Blacklisting of a contractor or supplier under R.19 of Punjab Procurement Rules, 2009, entailed serious consequences of forbidding contractor/supplier from participating in future tenders, which would not only result in deprivation from its business activities but amounted to commercial killing of the company---Blacklisting also tarnished its reputation, credibility and honour in business community, therefore, such disaster step of blacklisting of contractor/supplier could not be resorted to without observing fair trial and due process of law as envisaged in Arts.4 & 10-A of the Constitution---Words 'mechanism' and 'manner' used in R.19 of Punjab Procurement Rules, 2009, were not meaningless rather it denoted due process and fair procedure which included adjudication by impartial and independent authority, prescribing fair criteria, proportionate duration of punishment and structuring of discretion of authorities exercising power of blacklisting---Word 'shall' used in R.19 of Punjab Procurement Rules, 2009, also made it mandatory and obligatory for procuring agency to provide such fair and transparent mechanism and manner of blacklisting---Petitioner was initially blacklisted for a period of three years on 31-10-2012 and remained blacklisted for almost 16 months till date when the case was remanded with consent of parties on 11-2-2014---On remand while passing order dated 4-4-2014, the period during which petitioner already remained blacklisted was not excluded and petitioner was again blacklisted for another period of three years, which amounted to double jeopardy in clear violation of Art.13 of the Constitution---Contractor could be blacklisted who had consistently failed to provide satisfactory performance---Prior to contract in question, petitioner had not defaulted in any other previous contract relating to authorities---In absence of failure to provide satisfactory performance in any other contract, it could not be said that petitioner had consistently failed to provide satisfactory performance---Order of blacklisting was not within the parameters of R. 19 of Punjab Procurement Rules, 2009---High Court in exercise of constitutional jurisdiction set aside the order passed by authorities blacklisting the petitioner---Petition was allowed accordingly.

Atlas Cables Pvt. Ltd. v. Quetta Electric Supply Company Ltd. PLD 2011 Quetta 67; Canara Bank v. Messrs Studywell and others AIR 1994 Delhi 308; Bhim Sain v. Union of India and another AIR 1981 Delhi 260 and Tristar Shipping Lines Limited v. Government of Pakistan and others 1997 CLC 1475 ref.

Hafiz Ikram Saeed v. State 2013 SCMR 1045; Government of Blochistan, CWPP&H Department and others v. Nawabzada Mir Tariq Hussain Khan Magsi and others 2009 SCMR 115; Haji Abdul Aziz v. Government of Balochistan through Deputy Commissioner, Khuzdar 1999 SCMR 16; Province of the Punjab through Member Board of Revenue Lahore and others v. Muhammad Hussain through Legal Heirs and others PLD 1993 SC 147 and Deputy Commissioner/Registrar, Sialkot and 2 others v. Hamid Khalidi and 4 others 1987 CLC 2360 distinguished.

Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191; New Jubilee Insurance Corporation v. NBP Karachi PLD 1999 SC 1126; Messrs M.A. Aleem Khan through Chairman v. Province of the Punjab PLD 2006 Lah 84; Messrs Nizami Construction Company v. Chief Executive Officer, Gujranwala 2005 CLC 366; Messrs Al-Noor Construction Co. v. Cantonment Board Peshawar 2004 CLC 1647; The Crescent Star Insurance Co. Limited v. National Bank of Pakistan 2002 CLD 433; Tristar Shipping Lines Limited v. Government of Pakistan 1997 CLC 1475; Messrs Rajput Builders and others v. National Security Insurance Co. 1992 CLC 818; Atlas Cables (Pvt.) Ltd. v. Quetta Electric Supply Company Ltd., PLD 2011 Quetta 67; Arian Equipment and Chemicals Ltd. v. State of West Bengal and others AIR 1975 SC 266; Messrs V.K Dewan and Co. v. Municipal Corporation of Dehli and others AIR 1994 Delhi 304; Pretam Pipes Syndicate v. Tamal Nado AIR 1986 Mad. 310; Messrs Tank Steel and Re-Rolling Mills Pvt. Ltd. Dera Ismail Khan and others v. F.O.P and others PLD 1996 SC 77; Muhammad Yousaf Ali Shah v. Federal Land Commissioner Govt. of Pakistan Rawalpindi and 2 others 1995 CLC 369; Mst. Ayesha Bibi v. Nazir Ahmed and 10 others 1994 SCMR 1935; Salah ud Din and 2 others v. Frontier Sugar Mills and Distilliary Ltd. and 10 others PLD 1975 SC 244 and Muhammad Younas Sheikh v. Correx Enterprises and others 2007 MLD 508 rel.

(d) Administration of justice---

----Act should be done according to relevant rules or not at all.

Syed Abdul Aziz Nasir Haqani v. R.O. for Presidential Election (Chief Election Commissioner) Islamabad 1994 CLC 648; Muhammad Siddique Farooqi v. Azad Jammu Kashmir Government through its Chief Secretary Muzaffarabad and others PLD 1994 AJK 13 and Salahuddin and 7 others v. Bibi Zubaida and others 1994 MLD 2464 rel.

(e) Punjab Procurement Rules, 2009---

----R. 19---Blacklisting of contractor---Discretion---Human subjectivity, removal of---Scope---Administrative compulsion and wisdom to structure discretion as in R.19 of Punjab Procurement Rules, 2009, is to remove human subjectivity from exercise of discretion---Constitutional and jurisprudential importance of structured discretion is that it nursed requirement of due process, fairness and fair trial and safeguards unbridled discretion against voice of discrimination and arbitrariness.

Muhammad Ashraf Tiwana and others v. Pakistan and others 2013 SCMR 1159; Tanveer Ahmad Khan v. Registrar Lahore High Court Lahore and 3 others PLD 2013 Lah 386; Chairman, Regional Transport Authority, Rawalpindi v. Pakistan Mutual Insurance Company Limited Rawalpindi PLD 1991 SC 14; Director Food, N-W.F.P. and another v. Messrs Madina Flour and General Mills (Pvt.) Ltd., and 18 others PLD 2001 SC 1; Chief Secretary Punjab and others v. Abdul Raoof Dasti 2006 SCMR 1876; Abdul Wahab and another v. Secretary, Government of Balochistan and another 2009 SCMR 1354 and Delhi Transport Corporation v. D.T.C. Mazdoor Congress and others AIR 1991 SC 101 rel.

(f) Interpretation of statutes---

----Amendment in law---Scope---Where law is amended during pendency of an action, case is required to be decided under old law unless specifically provided in the amended law.

Khudadai Dad alias Mama and others v. State and others PLD 1997 Quetta 69 and Muhammad Sarwar Khan v. Muhammad Azam Khan and others 1997 CLC 500 rel.

(g) Constitution of Pakistan---

----Arts.4, 9, 10-A, 18 & 199---Constitutional petition---Alternate remedy, availability of---Principle---If order passed by authority is without jurisdiction and question involved requires interpretation of rules and enforcement of provisions of Arts.4, 9, 10-A & 18 of the Constitution, despite departmental remedy, Constitutional petition is maintainable.

Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty (2) Pakistan, through Secretary Ministry of Finance and others PLD 1961 SC 119; The Burmah Oil Company (Pakistan Trading) Ltd. Chittagong v. The Trustees of the Port of Chittagong PLD 1962 SC 113; Nagina Silk Mill, Lyallpur v. The I.T.O. A-Ward Lyallpur and the I.T.A. Tribunal Pakistan PLD 1963 SC 322; Messrs Usmania Glass Sheet Factory Ltd, Chittagong v. Sales Tax Officer, Chittagong PLD 1971 SC 205; Muhammad Hussain Munir and others v. Sikandar and others PLD 1974 SC 139; Sindh Employees Social Security Institution v. Dr. Mumtaz Ali Taj PLD 1975 SC 450; Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer, Circle XVII South Zone, Karachi and others 1992 SCMR 250; Parvez Iqbal and 2 others v. Provincial Transport Authority, Sindh and another 1996 CLC 182; Republic Motors Ltd. v. Income Tax Officer and others 1990 PTD 889; Pakistan Industries v. Assistant Collector Central Excise and Land Customs Karachi and another 1990 CLC 1002; The Fecto Cement Limited v. The Collector of Customs Appraisement and another 1994 MLD 1136; Messrs Kamran Industries v The Collector of Customs (Export) Fifth Floor Customs House, Karachi and 4 others PLD 1996 Kar. 68; Hudaybia Textile Mills Limited and 3 others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 219; Adil Polypropylene Products Ltd. v. The Federation of Pakistan and others 1997 MLD 2189; Muhammad Khan and 2 others v. Karim Bakhsh and 2 others PLD 1996 Kar. 451; Tawakal General Export Corporation and another v. The Collector of Customs (Export) Karachi and 2 others PLD 1992 Kar. 199; Messrs Haroon Brothers v. Drugs Registration Board and another 1992 CLC 1017 and Messrs Chenab Cement Product (Pvt.) Ltd., v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672 rel.

Shahzad Rabbani for Petitioner.

Syed Nayyer Abbas Rizvi, Addl. A.-G., Shan Gull, Addl. A.-G. and Miss Hina Hafeez Ullah Ishaq, Assistant Advocate-General for Respondents.

Date of hearing: 5th May, 2014.

2015 C L D 130

[Lahore]

Before Shezada Mazhar, J

A.M. CONSTRUCTION COMPANY (PVT.) LIMITED through Chief Executive Officer and another---Petitioners

Versus

The NATIONAL HIGHWAY AUTHORITY through Chairman and 2 others---Respondents

Writ Petition No. 33295 of 2013, decided on 24th January, 2014.

(a) Constitution of Pakistan---

----Art. 199---Territorial jurisdiction of (Lahore) High Court---Scope---Constitutional petition filed against the National Highway Authority ("NHA") before the Lahore High Court---Plea that all acts and documents in relation to contract between NHA and contractor were signed at Islamabad, therefore Lahore High Court did not have jurisdiction in the matter---Validity---National Highway Authority was a statutory authority performing functions in whole of Pakistan, therefore, any action or inaction on part of the statutory body could be challenged in any High Court of any Province---Lahore High Court did have territorial jurisdiction to adjudicate upon the present matter.

LPG Association of Pakistan v. Federation of Pakistan and others 2009 CLD 1498 and Messrs Sethi and Sethi Sons through Humayun Khan v. Federation of Pakistan through Secretary, Ministry of Finance, Islamabad and others 2012 PTD 1869 rel.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Maintainability--- Factual controversy---Scope---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Controversy revolved around the interpretation of certain clauses of tender documents for periodic maintenance contract and application of some provisions of certain Public Procurements Rules, in such circumstances it could not be said that present case involved factual controversies---Constitutional petition was held to be maintainable accordingly.

(c) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of the High Court---Scope---Constitutional petition highlighting loss to the public exchequer/loss of public money---Maintainability---High Court would have jurisdiction to consider the merits of such a constitutional petition.

Arshad Waheed v. Province of Punjab and others PLD 2010 Lah. 510 rel.

(d) Pakistan Public Procurement Rules, 2004---

----Rr. 4, 23 & 38---Constitution of Pakistan, Art. 199---Constitutional petition---National Highway Authority ("NHA") projects---Tender floated by NHA---Tender documents, interpretation of---Bid security, ambiguity in---"Non-responsive"/"not acceptable" bid---Scope---Substantial but not complete compliance with bidding documents---Scope---NHA floated tenders for certain projects--- Company/petitioner submitted bid security for said projects at 2% of the "Estimated Cost" of the projects mentioned in the tender notice---NHA contended that according to instructions provided in tender documents bid security had to be 2% of the "Bid value" and not 2% of the "Estimated cost" of the project, thus bid security submitted by company was deficient and could not be accepted---Contention of company was that no guidance was available in the tender documents as to whether bid security was to be 2% of the "Estimated Cost" or 2% of the "Bid value" submitted by the bidder---Validity---Tender documents showed that bidders were required to submit bid security at 2% of either "Bid Price" or "Bid value"---Neither words, i.e. "Bid Price" or "Bid value" were defined in the bidding documents, therefore there was an ambiguity in the bidding documents---Act of NHA of not clearly drafting the tender documents should not prejudice the company---Difference between bid security deposited by company at 2% of "Estimated cost" and bid security of 2% of "Bid value" which should have been allegedly deposited according to NHA was (only) Rs. 1,876,081---On the other hand company was the lowest bidder and difference between its bid and the next lowest bid was of about Rs. 35 million---NHA in such circumstances would suffer a minimum loss of over Rs. 35 million in case bid of company was not considered by it---Submission of bid security by company at 2% of "Estimated cost" although a bit less than the amount allegedly required under the tender documents as per contention of NHA, it should still be considered as substantial compliance of the bidding documents--- Shortfall in bid security was caused due to bona fide confusion/ambiguity in the tender documents, therefore rule of substantial compliance would apply and bid security submitted by company should not be considered as non-responsive---Constitutional petition was allowed and NHA was directed to consider bid of company for evaluation purposes along with other bidders.

Muhammad Ayub and Brothers v. Capital Development Authority, Islamabad and 5 others PLD 2011 Lah. 16 distinguished.

(e) National Highway Authority (XI of 1991)---

----Preamble--- National Highway Authority ("NHA")--- Public organization---Custodian of public money/property---NHA being a public organization was the custodian of public money/property, and was required to protect and safeguard the same---NHA was required to obtain services at the best possible price.

(f) Public functionary---

----Acts---Nobody should be penalized for the acts of public functionaries.

Province of the Punjab through Collector District Khushab, Jauharabad and others v. Haji Yaqoob Khan and others 2007 SCMR 554 and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another 2007 SCMR 569 rel.

(g) Interpretation of documents---

----Tender document, interpretation of---Purposive and commercial interpretation---Scope---One should give purposive and commercial interpretation to tender documents and not restrictive or literal construction.

Data Steel Pipe Industries (Pvt.) Ltd. v. Sui Southern Gas Co. Ltd. 2012 CLD 832 rel.

(h) Public Procurement Rules, 2004---

----R. 4---Procurement by public authority---Terms of tender---Non-compliance with---Technical irregularity, waiving of---Scope---Public authority should not be bound to give effect to every term mentioned in the tender document, as it had the power to waive technical irregularity of little or no significance---Public functionaries had the power/ authority to deviate from and not insist upon strict compliance of a condition (in the tender).

Dr. Akhtar Hasan Khan and others v. Federation of Pakistan and others 2012 SCMR 455 and Messrs Nishat Mills Limited v. Superintendent of Central Excise Circle II and 3 others PLD 1989 SC 222 rel.

Uzair Karamat Bhandari and Mian Muhammad Kashif for Petitioners.

Muhammad Shabbir Ahmad for Respondents.

Muhammad Shahid Paracha for Applicant.

2015 C L D 160

[Lahore]

Before Shezada Mazhar and Shah Khawar, JJ

Messrs MULTAN TEXTILE ALLIED INDUSTRIES (PVT.) LIMITED through Managing Director and 5 others---Appellants

Versus

HABIB BANK LIMITED through Branch Manager and another---Respondents

F.A.O. No. 110 of 2013, decided on 19th June, 2014.

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

----Ss. 19 & 22---Execution of decree---Objection---Fresh cause of action---Warrant of possession of mortgaged property issued by Banking Court was resisted by judgment debtors on the plea that liability was adjusted and any finance agreement created for the purpose of adjustment was to be adjudicated in fresh suit---Validity---Decree holder bank was responsible to prove their claim that vouchers in question were internal vouchers and adjustments were made from fresh finance facility created in view of compromises---Decree holder bank failed in discharging its duty to prove internal transfer/adjustment by placing on record cogent and reliable evidence---Any statement made by judgment debtors which was contrary to facts of case was of no consequence and could not be relied upon for creating liability of judgment debtors, especially when bank had failed to establish on record the creation as well as disbursement of fresh finance facility---In absence of any internal vouchers for creation of fresh finance facility, adjustment of different facilities from such facility and absence of any entry in fresh finance facility statement of account, the creation as well as disbursement of fresh finance facility was not proved---High Court allowed objection petition and set aside the order passed by Banking Court---Appeal was allowed in circumstances.

National Bank of Pakistan v. Messrs Trend Hosiery (Pvt.) Ltd. and others 2012 CLD 1078; Ghulam Nazak v. Zarai Taraqiati Bank of Pakistan through Manager and another 2007 CLD 667; National Bank of Pakistan through Manager v. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others 2007 CLD 678 and MCB Bank Limited v. Eastern Capital Ltd. and 7 others 2011 CLD 938 rel.

Muhammad Irfan Wyne for Appellants.

Muhammad Suleman Bhatti for Respondent No.2.

Muhammad Nazim Khan and Sohail Ahmad Janjua for Respondent No.1.

Date of hearing: 29th May, 2014.

2015 C L D 173

[Lahore]

Before Ibad-ur-Rehman Lodhi, J

Messrs J.S. DEVELOPERS through Chief Executive and another---Petitioners

Versus

STATE BANK OF PAKISTAN through Governor SBP and another---Respondents

Writ Petition No.1353 of 2014, decided on 25th April, 2014.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 25-A, 41(2) & (3)---State Bank of Pakistan Act (XXXII of 1956), S.3---Constitution of Pakistan, Art. 199---Constitutional petition---Alternate remedy---Written off loans---Credit Information Bureau (CIB) list---Petitioners availed financial facilities from bank and during litigation the same were settled between the parties without payment of markup---Petitioners were aggrieved of inclusion of their names in CIB list maintained by State Bank of Pakistan---Validity---Petitioners on one hand were not going to make payment of markup, which had been written off by the bank, at the same time they wanted that their names should not be included in list indicating such defaulters to be maintained by CIB in State Bank of Pakistan---Petitioners had no right to ask for such illegal withholding of information from financial institutions just in order to put at guard the banks/financial institutions for any future transaction to be carried out with them---High Court noted it with serious concern that bona fide account holders were not being extended any due benefit of such banking system, rather privileged classes were being extended undue benefits resultantly economy had become termitarium and main causes for such disaster were those undue benefits which were being extended to so called aristocracy, which class was behind our economy---High Court observed that it was high time to eradicate such menace---State Bank of Pakistan must deal with such elements and also banks/financial institutions, who were proved to be hands in gloves with such defaulters, with strong hands to put all such stakeholders in a discipline---Remedy of representation provided under S.41(3) of Banking Companies Ordinance, 1962, whereunder, State Bank could, on representation make to it or on its own motion, modify or cancel any direction issued under S.41(1) of Banking Companies Ordinance, 1962---Petitioners had alternate remedy to represent against inclusion of their names in list maintained by CIB and without availing such remedy constitutional jurisdiction of High Court was not competent---Petition was dismissed in circumstances.

Messrs Abdul Aziz Nawab Khan and Company v. Federation of Pakistan, Ministry of Finance and others 2006 CLD 55 and Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191 ref.

Muhammad Umer Riaz for Petitioners.

Rehan Nawaz for Respondent No.1.

Amir Waheed Butt for Respondent No.2.

2015 C L D 196

[Lahore]

Before Ijaz ul Ahsan, J

Messrs ASKARI LEASING LTD. Through Chief Manager---Petitioner

Versus

PRESIDING OFFICER and another---Respondents

Writ Petition No.20346 of 2009, decided on 20th October, 2014.

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

----Ss. 9 & 7(4)---Punjab Consumer Protection Act (II of 2005), Ss.2(j)(k), 4 & 26---Civil Procedure Code (V of 1908), O.VII, R.10---Constitution of Pakistan, Art.199---Constitutional petition---Consumer Court, jurisdiction of--- Lease finance facility--- Defective service/product---Return of plaint---Petitioner was a leasing company and respondent availed finance facility for purchase of a vehicle---Due to default in payment of instalments, petitioner repossessed the vehicle and during that period many parts of the vehicle were replaced---Respondent filed a suit before Consumer Court alleging that petitioner had provided defective product and defective service to him---Petitioner bank assailed jurisdiction of Consumer Court on the matter which application was dismissed---Validity---No claim for defective services could be raised by respondent for the reason that petitioner had not undertaken any obligation to provide services having direct nexus or connection with leased vehicle---Claim of respondent was that petitioner failed to fulfil its obligation towards him as a customer, when it failed to take proper care of the vehicle, which petitioner had lawfully repossessed insofar as certain parts were allegedly replaced or stolen---Claim of respondent was based on lease agreement between parties and his cause of action had arisen out of failure on the part of petitioner bank to fulfil an obligation towards him to keep vehicle safe after it was repossessed---Case of respondent was covered by S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, on the basis of which he could file a claim against petitioner bank---Such claim in terms of S.7(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, could be filed only in Banking Court, for which said court had exclusive jurisdiction---Relationship between petitioner bank and respondent was that of financial institution and customer---Alleged replacement/theft of certain parts of vehicle while in custody of petitioner bank, if proved could constitute default in fulfilment of obligation on the part of petitioner bank for determination of which dispute exclusive jurisdiction was with Banking Court established under the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside the order passed by Consumer Court and returned the plaint to respondent for filing the same in competent court---Petition was allowed accordingly.

(b) Interpretation of statutes--

----Special and general law---Scope---Where a specific remedy is available under a special law, general law cannot be resorted to.

Sardar Mashkoor Ahmad for Petitioner.

Muhammad Baleegh uz Zaman Ch. for Respondents.

2015 C L D 219

[Lahore]

Before Amin-ud-Din Khan and Shams Mehmood Mirza, JJ

Messrs ZAMINDAR RICE MILLS through Partners and others---Appellants

Versus

FAYSAL BANK LIMITED through Attorneys and others---Respondents

R.F.A. No. 293 of 2009, heard on 11th September, 2014.

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

----Ss. 9, 10(9), 11 & 17---Suit for recovery of loan amount---Leave to defend, application for---Condition, imposition of---Scope---Interim decree and final decree were passed which were distinct and independent---Merger of decrees, principle of---Scope---Banking Court passed an interim decree while deciding the application for leave to defend and granted conditional leave subject to furnishing bank guarantee---Defendants failed to submit bank guarantee and suit was finally decreed---Validity---Banking Court had power to pass an interim decree for an amount which was not disputed after consideration of pleadings and documents appended therewith---Banking Court had passed an interim decree for Rs. 12,398,584 and final decree was passed in the sum of Rs. 38,075,958---Both the said decrees were distinct and independent and were passed with regard to two separate amounts constituting the entire claim of plaintiff-bank in the suit---Final decree was not an adjudication on merits but same was passed due to default in submitting the bank guarantee---"Interim decree" had not merged into the "final decree" entitling the defendants to challenge the same---Principle of merger of decrees was limited to the situation where decree of lower court was modified or altered by the Appellate Court which would result in merger of decrees of lower court with that of the higher court---Matters dealt with by the interim decree were conclusive and final and were unalterable through any proceedings which were taken subsequently in the suit---Interim decree did not merge in the final decree and both the decrees retained their independent legal status in terms of filing of execution and appeals---Defendants had not challenged the interim decree in the present case---Basis for challenging the final decree was no longer available to the defendants---Final decree was passed merely for non-fulfilment of condition attached with to the grant of leave to defend the suit---High Court could not go behind the final decree and pass judgment on merits on interim decree which had not merged with the final decree and was not challenged in appeal---Banking Court had discretion to impose condition while adjudicating upon application for leave to defend---Banking Court had exercised such discretion by ordering for furnishing of bank guarantee as defence set up by the defendants in their application for leave to defend the suit was illusory and not bona fide---Defence of defendants was not with regard to the finance facilities or the amounts due thereunder, rather same was to set off the liability owned by them towards the plaintiff-bank with the pledged goods under the possession of the Bank--- Defendants had not denied the liability and Banking Court imposed the condition of furnishing bank guarantee for grant of leave to defend the suit---Discretion for imposing condition on defendants was rightly exercised by the Banking Court---Banking Court had rightly passed final decree as defendants had failed to fulfil the condition attached to the grant of leave to defend the suit---Appeal was dismissed in circumstances.

Haji Ali Khan and Company and others v. Messrs Allied Bank of Pakistan Limited PLD 1995 SC 362; Messrs S.M. Ayub and Co. and others v. National Bank of Pakistan and others 1983 CLC 2828; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Limited and another PLD 1996 SC 749 and Messrs Shaheen Pumps (Pvt.) Limited v. Messrs Beacon Engineering Industry and another 2006 MLD 1709 ref.

Haji Ali Khan and Company and others v. Messrs Allied Bank of Pakistan Limited PLD 1995 SC 362 and Messrs S.M. Ayub and Co. and others v. National Bank of Pakistan and others 1983 CLC 2828 distinguished.

Gul Muhammad and others v. Habib Muhammad Khan and another PLD 1960 (W.P.) Pesh. 37; Sultan Ali v. Khushi Muhammad PLD 1983 SC 243; Venkata Reddy and others v. Pethi Reddy AIR 1963 SC 992; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Limited and another PLD 1996 SC 749 and Messrs Shaheen Pumps (Pvt.) Limited v. Messrs Beacon Engineering Industry and another 2006 MLD 1709 rel.

Saeed-uz-Zafar Khawaja for Appellants.

Khawaja Aamir Farooq for Respondents.

Faisal Naseem Chaudhary, Advocate/Court Auctioneer.

Mian Abdul Sattar, Advocate/Legal Advisor for NBP.

Date of hearing: 11th September, 2014.

2015 C L D 236

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs LASANI BUILDERS and others---Appellants

Versus

BOLAN BANK LIMITED---Respondent

R.F.A. No. 9 of 2009, decided on 16th September, 2014.

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

----S. 2(d)(iv)---Term "finance"---Scope---Term "finance" is an exhaustive term and includes every conceivable transaction between borrower and financial institution---Even a financing agreement which obliges a banking company and a customer to do certain acts constitutes relationship of customer and banker / financial institution between parties.

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

----Ss. 9 & 22---Suit for recovery of finance---Approval letter, non-issuance of---Defendant assailed judgment and decree passed by Banking Court on the plea that there was no approval letter of finance agreement and it did not accept sanction letter as it had applied for facility of Rs.20 million but bank provided only Rs.8.5 million---Validity---Issuance of approval letter was an internal arrangement of financial institution and at the time when amount was withdrawn by defendant through three different cheques, there was no formal approval, as the same was done through sanction letter dated 23-7-2001, which had given effect from 23-2-2001---Defendant did not deny three cheques and amount was withdrawn, therefore, defendant could not wriggle out of its liability/obligation to repay the amount which had been withdrawn through three cheques---Grant of finance facility was prerogative of financial institution and finance facilities were not allowed at the whims of customer as financial institution had to take into consideration different financial aspects of the case---Letter issued by defendant regarding non-acceptance of finance facility had no bearing upon recovery suit filed by bank as at that time defendant had already availed an amount of Rs.8.5 million---Appeal was dismissed in circumstances.

Sheikh Jamil Ahmed for Appellants.

Ch. Abdul Rauf for Respondent.

Date of hearing: 16th September, 2014.

2015 C L D 249

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

INAM ULLAH ZAFAR---Appellant

Versus

ORIX LEASING PAKISTAN LIMITED and another---Respondents

F.A.O. No. 281 of 2009, decided on 22nd September, 2014.

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

----Ss. 12 & 9---Civil Procedure Code (V of 1908), S. 12(2)---Suit for recovery of lease finance---Ex parte decree, setting aside of---Maintainability---Appellant had no privy to lease agreement as no guarantee had been executed by him in consideration of said lease agreement---Judgment and decree passed by Banking Court was result of want to jurisdiction---Banking Court though could pass a decree if application for leave to defend was not filed within time or same was rejected but said court was bound to determine the actual liability of the defendants while passing the decree---Application under S.12(2), C.P.C. was maintainable under the proceedings arising under Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court was bound to determine the liability of appellant while passing the decree---Miscarriage of justice would occur to the appellant if ex parte judgment and decree were allowed to remain in field---Application filed under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001 read with S.12(2), C.P.C. was accepted and impugned judgment and decree were set aside subject to payment to 50% of the decretal amount within a specified period---Appeal was accepted in circumstances.

Nisar Ahmad Afzal v. Muslim Commercial Bank through Assistant Vice-President/Chief Manager and 14 others 2014 CLD 390 rel.

(b) Jurisdiction---

----Scope---"Jurisdiction" would include "assumption and exercise of the jurisdiction" as no court could be said to have exercised its jurisdiction if the court was prevented from knowing the true facts; if the court took for a material fact as to what was not in law that fact; if court proceeded to act in grave and obvious disregard of law or if court had violated the principles of natural justice when law had not permitted the court to do so and if court had given reasons for its conclusions which could not in such circumstances lead to them.

Abdul Waheed Chaddah for Appellant.

Ms. Raisa Sarwat for Respondents.

Date of hearing: 22nd September, 2014.

2015 C L D 257

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Sheikh MUHAMMAD USMAN---Petitioner

Versus

Learned JUDGE BANKING COURT NO.1 and another---Respondents

Writ Petition No. 24341 of 2014, decided on 15th September, 2014.

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

----Ss. 7, 9 & 10---Procedure of Banking Court---Power of the Banking Court---Scope---Moving of an application by the defendant relating to his rights of defence before grant of leave to defend---Maintainability of such application---Before grant of leave to defend the suit, a defendant could not move the court to adjudicate upon any of his rights of defence and the law specifically prohibited taking into consideration the defence of the defendant before leave to defend was granted and a specific procedure had been provided under the law that the defence of any nature involving legal and factual controversy could only be considered after leave to defend the suit had been granted, and an ancillary application would not be maintainable---Defendant could not file any ancillary or interlocutory application unless such defendant was allowed by the court to defend the suit---Defendant could not even file any interlocutory application in order to raise any point relating to jurisdiction of Banking Court till leave to defend had been granted.

Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245 and Falcon Ventures Pvt. Ltd. through Chief Executive, Iftikhar Ahmad v. Punjab Banking Court No.II, Lahore and another 2004 CLC 726 rel.

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

----S. 22(6) & Preamble---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court---Object of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant sought to impugn an order of Banking Court passed whereby an interlocutory application filed by defendant in a suit for recovery, was dismissed---Held, that object behind Financial Institutions (Recovery of Finances) Ordinance, 2001 was to provide speedy measures for recovery of outstanding loans and finances of Financial Institutions---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a remedial statute and remedial statutes were enacted in order to improve and facilitate remedies already existing for redress of wrong or injury as well as to correct defects, mistakes and omissions---Per S. 22(6) of the Ordinance, where the statute had not provided appeal against an order, then the same could not be challenged by way of a Constitutional petition as any such allowance would amount to negating provisions of the statute---Where a statute excluded right of appeal, the same could not be bypassed by bringing it under attack in the Constitutional jurisdiction of High Court---Language used in a statute if was such that it left no room for doubt as to the intention of the Legislature, then intent of the Legislature was to be given effect and even acts performed without jurisdiction or with mala fide would not be open to judicial scrutiny by the High Court in its Constitutional jurisdiction---Constitutional petition, being not maintainable, was dismissed.

Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165 and Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1989 SC 26 rel.

(c) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Nature of writ of mandamus and writ of certiorari---Exercise of discretion by High Court---Scope---Order in nature of a writ of certiorari or mandamus was a discretionary order and its object was to foster justice and right a wrong---Before any person could be permitted to invoke such discretionary power of the Court, it must be shown that an order sought to be set aside had occasioned some injustice and if such an order did not work any injustice to the party, in such a case the extraordinary jurisdiction of High Court ought to be allowed to be invoked.

M. Salman Masood for Petitioner-Defendant.

2014 C L D 263

[Lahore]

Before Umar Ata Bandial, C.J. and Muhammad Farrukh Irfan Khan, J

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN (IDBP)---Appellant

Versus

CRYSTAL CHEMICALS LTD. and 4 others---Respondents

E.F.A. No. 81 of 2009, decided on 9th June, 2014.

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

----Ss. 19 & 22---Transfer of Property Act (IV of 1882), S.58---State Bank of Pakistan, BPD Circular No.29, dated, 15-10-2002---Execution of decree---Compromise decree---Mortgaged property---Change in shares---Suit for recovery of bank loan was decreed on the basis of compromise between the parties deciding shares to be received by two financial institutions out of the assets of defendants/customers---During execution of decree, plaintiff/bank intended to change share ratio in its favour by decreasing that of other financial institution---Single Judge of High Court dismissed the application filed by plaintiff bank---Validity---Plaintiff bank could not enlarge its share in the security having recourse to S. 58 of Transfer of Property Act, 1882, or for that matter contents of BPD Circular No.29 issued by State Bank of Pakistan, on 15-10-2002---Legal rights for settlement of over-dues was over-ridden by the conduct of parties inter se following the compromise, which had taken into account provisions of law and contents of the Circular---Compromise created a mechanism for modifying rights of parties which were to be decided to be modified on basis of certain existing contents---Modified rights were enumerated in settlement application sanctioned by Banking Court with the consent of parties---Recourse of the provisions of law and BPD Circular No.29 was superseded by arrangement made between the parties---Payment of amount by defendants / customers to plaintiff/bank in pursuance of settlement application and order passed by Banking Court had created rights in parties including defendants / customers and other financial institution in relation to sharing ratio in security---Any modification of such sharing ratio was to have occurred by consent of parties and not unilaterally---Enhancing share of plaintiff/bank of sharing ratio of other financial institution was illegal and against defendants/customers---Division Bench of High Court declined to interfere in order passed by Single Judge of High Court---Appeal was dismissed in circumstances.

Tariq Kamal Qazi for Appellant.

Mahmood A. Sheikh and Miss Sidra Sheikh for Respondents.

Date of hearing: 9th June, 2014.

2014 C L D 297

[Lahore]

Before Ijaz ul Ahsan and FAisal Zaman Khan, JJ

Messrs MILLAT TRACTORS LTD. through Deputy General Manager Administration and Purchases---Appellant

Versus

MUHAMMAD MUNIR AHMAD and 3 others---Respondents

I.C.A. No. 918 of 2010 in W.P. No. 8786 of 2006, decided on 1st October, 2014.

Constitution of Pakistan---

----Art. 199---Law Reforms Ordinance (XII of 1972), S. 3---Intra-Court appeal---Constitutional petition---Maintainability---Private company---Appellant was a private company and aggrieved of order passed by Single Judge of High Court whereby demand made by the company to respondent was declared illegal---Validity---Appellant was a private company and could not be regarded as a person performing functions in connection with affairs of Federation or Province---No writ in exercise of powers of Art. 199 of the Constitution could be issued against the company---Division Bench of High Court set aside judgment passed by Single Judge---Intra-Court appeal was allowed in circumstances.

Salahuddin and 2 others v. Frontier Sugar Mills and Distillery Ltd. Tokht Bhai and 10 others PLD 1975 SC 1974 and Abdul Wahab and others v. Habib Bank Ltd. and others 2014 PLC (C.S.) 393 ref.

Hasham Ahmad Khan for Appellant.

Ch. Muhammad Khalid Dogar and Waqas Qadeer Dar, Deputy Attorney-General for Respondents.

Date of hearing: 1st October, 2014.

2015 C L D 307

[Lahore]

Before Shams Mehmood Mirza, J

MUHAMMAD ABAID ULLAH---Petitioner

Versus

ATEEQ-UR-REHMAN and 8 others---Respondents

Civil Revision No. 288 of 2010, decided on 5th June, 2014.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 29 & 29-A---Civil Procedure Code (V of 1908), O. VII, R. 10 & O. XXXVII, Rr. 2 & 3---Summary suit against the legal heir of executant of negotiable instrument---Maintainability---Plaintiff filed suit for recovery of money on the basis of cheque whose maker died before encashment of the same---Suit was dismissed by the Trial Court---Validity---Maker of cheque had died before the same could be presented for encashment---Said cheque had ceased to have any effect as a "bill of exchange" on the death of its maker---Summary suit could only be filed against the executants of bill of exchange, hundies or promissory notes and not otherwise---Party who was not a drawer or maker of a cheque/bill of exchange was not liable thereon and he could not be sued under O. XXXVII, Rr. 2 & 3, C.P.C.---Legal representatives of deceased must sign the instruments in order to make them liable thereunder---Defendants had not signed the disputed cheque, they were not liable to the plaintiff against the cheque issued by their predecessor---Present suit was not maintainable---Trial Court was directed to return the plaint---Revision was dismissed in circumstances.

Muhammad Ashraf and another v. Nadeem Shahid and another 1998 SCMR 804 and Tanveer Mehboob and another v. Haroon and others 2003 SCMR 480 ref.

Ch. Shakeel Ahmad Sindhu for Petitioner.

2015 C L D 320

[Lahore]

Before Shezada Mazhar and Shah Khawar, JJ

GHULAM YASEEN---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager and 4 others---Respondent

E.F.A. No. 16 of 2013, heard on 2nd June, 2014.

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

----Ss. 19(1)(7) & 27---Civil Procedure Code (V of 1908), O.XXI, R.66---Suit for recovery---Auction of property---Reduction of reserve price by banking court---Suit was decreed and decree was converted into execution---Banking Court, on the application of court auctioneer reduced the reserve price---Objection petition was dismissed---Defendant contended that Banking Court had no power to review its judgment---Validity---Defendant did not appear before Banking Court despite issuance of notice--- Defendant having admitted the appearance of lawyer on his behalf could not claim that proceedings were ex parte---Neither fixation nor reduction in reserve price of property for auction was challenged by defendant---Reduction of reserve price did not fall within the scope of "reviewing" or "recalling the order"---Impugned order did not affect right of any party---Appeal was dismissed.

Mst. Shakila Riaz v. Judge Banking Court 2007 CLD 349 rel.

Malik Muhammad Riaz for Appellant.

Malik Muhammad Husnain Rajwana for Respondents.

Date of hearing: 2nd June, 2014.

2015 C L D 342

[Lahore]

Before Ali Baqar Najafi and Atir Mahmood, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Attorney---Appellant

Versus

Mst. BASHIRAN BIBI---Respondent

R.F.A. No. 1015 of 2012, heard on 13th March, 2014.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 115, 118 (2) & 124---Insurance claim---Application of Pakistan law to insurance polices issued in Pakistan---Insurance Tribunal accepted insurance claim of respondent along with liquidated damages---Plea raised by appellant/insurance company was that Insurance Tribunal could only entertain insurance policy issued after commencement of Insurance Ordinance, 2000---Validity---Provisions of S.118 of Insurance Ordinance, 2000, could not be extended to policies issued before commencement of Insurance Ordinance, 2000, therefore, Insurance Tribunal set up under Insurance Ordinance, 2000, had no jurisdiction to adjudicate upon the matter---Insurance claim of such policies could only be filed before civil Court---Appeal was allowed in circumstances.

Mst. Ribina Bibi v. State Life Insurance and others 2013 CLD 477 and 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 Petition No.1253-L of 2011 and 1516-L to 1521-L of 2013 reported as 2014 SCMR 655 = 2014 CLD 506 rel.

Ibrar Ahmad for Appellant.

Liaqat Ali Butt for Respondent.

Date of hearing: 13th March, 2014.

2015 C L D 429

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

CITIBANK N.A. through Branch Manager---Appellant

Versus

AMEER ALAM---Respondent

Regular First Appeal No. 211 of 2004, heard on 25th September, 2014.

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

----Ss. 2(e) & 9---Suit for recovery of finance facility---Rescheduled facility---Scope---Banking Court dismissed the suit filed by bank on the ground that it was based upon rescheduled facility which was like charging markup on markup---Validity---Effect of rescheduling or restructuring of finance facility was mutually agreed by parties to be absorbed by future interest or markup till agreed date of liquidation of liability---Rescheduling, restructuring and renewal was also a facility or accommodation granted by bank to customer and the same had been recognized as 'obligation' as defined in S. 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside the judgment and decree passed by Banking Court and decreed the suit in favour of bank---Appeal was allowed in circumstances.

Habib Bank Limited v. Service Fabrics Ltd. and others 2004 CLD 1117 and Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143 ref.

Mian Muhammad Azhar Saleem for Appellant.

Nemo for Respondent.

Date of hearing: 25th September, 2014.

2015 C L D 439

[Lahore]

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

MUHAMMAD AFZAL DEURA---Appellant

Versus

ORIX LEASING PAKISTAN and others---Respondents

F.A.O. No.561 of 2014, decided on 14th October, 2014.

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

----Ss. 12 & 22---Ex parte decree, setting aside of---Summons, non-service of---Onus to prove---Banking Court passed ex parte decree against defendant and refused to set aside the decree as defendant failed to prove non-service to him---Validity---Burden to prove that summonses were not duly served by any of the modes was on defendant---If the Court was satisfied, it was bound to set aside the decree---Defendant neither changed address nor was residing in the area where newspapers in question were not circulated---Defendant failed to satisfy through sufficient cause that he was prevented from making application under S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, and that summons were not served, rather delay was caused deliberately---Appeal was dismissed in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 ref.

Mubarak Ali v. First Prudential Modarba 2011 SCMR 1496 distinguished.

Barrister Ch. Muhammad Umar for Appellant.

2015 C L D 464

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

MUHAMMAD AFZAL KHAN and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager and another---Respondents

E.F.A. No. 450 of 2010, heard on 22nd October, 2014.

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

----O. XXI, R. 66---Sale by auction---Reserve price, fixation of---Object and purpose---Duty of Executing Court---Wisdom behind enacting O.XXI, R.66, C.P.C. is that parties in execution proceedings should be treated alike and rights of decree-holder should not be preferred over the interest of judgment-debtor---Function of Executing Court is to execute decree but at the same time it is also duty of Executing Court to protect rights of judgment-debtor, which should not be jeopardized and scarified at the altar of execution of decree---Duty is caste upon Executing Court to determine reserve sale price of property as Executing Court is to safeguard interests and rights of judgment-debtor and ensure that properties are not sold at throw-away prices---"Reserve sale price" means market price of property.

Muhammad Amin alias Jaloo v. Judge Banking Court and others 2011 CLD 280 rel.

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

----Ss. 7(i)(a) & 19---Execution of decree---Civil Procedure Code, 1908, applicability of---Banking Court has been empowered to decide objections etc. on the basis of material before it without going in regular trial but relevant substantive law as contained in Civil Procedure Code, 1908, for sale of immovable property continues to be attracted---Under the provisions of S. 7(i)(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001, provisions of Civil Procedure Code, 1908, have been made applicable to proceedings before Banking Court and decree has to be executed in accordance with the provisions of C.P.C.---Any sale conducted and made absolute in violation of Rules provided in C.P.C. can be validly challenged under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, R. 84---Execution of decree---Deposit by purchaser and re-sale on default---Principles---Judgment-debtor filed objection against auction proceedings but Executing Court dismissed the objection and confirmed the auction---Validity---Provision of O. XXI, R. 84, C.P.C. was mandatory as consequence of its non-compliance had itself been provided under the said provision of law which stated that if a purchaser had committed fraud in immediate payment of 25% of sale price, the property would forthwith be resold---Principles which should govern confirmation of sale were well established and condition of confirmation by court operated as safeguard against property being sold at inadequate price, whether or not it was a consequence of any irregularity or fraud in conduct of sale---In every case it was duty of court to satisfy itself that no irregularity was committed in conduct of sale---Executing Court being custodian of interest of parties i.e. decree-holder and judgment-debtor, it was incumbent upon Executing Court to satisfy itself that no material irregularity had been committed even when there was no suggestion of irregularity or fraud---Contravention of material provisions of law having been committed High Court set aside the sale and all consequential order in favour of auction purchaser who was entitled to withdraw purchase money deposited with Executing Court---Appeal was allowed accordingly.

Messrs Chawla International v. Habib Bank Ltd. and others 2003 CLD 956; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; Messrs Makki Chemicals Industries (Pvt.) Limited through Chief Executive and 3 others v. Habib Bank Ltd. through Manager and 2 others 2003 CLD 571 and Mst. Nadia Malik v. Messrs MAQI Chemical Industries Pvt. Ltd., through Chief Executive and others 2011 CLD 1517 ref.

Muhammad Ali Asghar Sabir Raja v. Mst. Sajida Bashir and others 2006 SCMR 801; Afzal Maqsood Butt v. Banking Court No.2, Lahore and 8 others PLD 2005 SC 470; Arshad Chaudhry v. Judge Banking Court No. 1, Lahore and 5 others 2006 CLD 1467; Messrs S.P.R.L. Remand Brothers and another v. Judge Banking Court No. II, Lahore and another 2000 MLD 1957; Messrs Dawood Flour Mills and others v. National Bank of Pakistan 1999 MLD 3205; Messrs National Electric Company of Pakistan v. Allied Bank of Pakistan Ltd. and 2 others 1996 CLC 192 and Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 rel.

Muhammad Imran Malik for Appellants.

Muhammad Younis for Respondent No.1.

Khalid Masood Sindhu for Respondent No.2.

Date of hearing: 22nd October, 2014.

2015 C L D 482

[Lahore]

Before Shams Mehmood Mirza, J

FIRST WOMAN BANK LTD. through Branch Manager---Plaintiff

Versus

GULISTAN TEXTILE MILLS through Chief Executive---Defendant

C.O.S. No. 116 of 2012, decided on 23rd May, 2014.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), S. 47---Contract Act (IX of 1872), S. 151---Suit for recovery of finance facility---Leave to defend the suit---Pledged goods---Care to be taken by bailee---Executing Court, powers of---Plea raised by defendant company was that finance facility was secured against facility of hypothecation of stocks and not against pledge and if pledgor could not account for goods, it could not ask for return of money---Validity---Executing Court under S. 47, C.P.C. was fully empowered and competent to decide all questions regarding execution, discharge or satisfaction of decree---All objections by defendant regarding security of pledge could be adjudged at the time of execution of decree by Executing Court---Questions of accounting for and tracing of security of pledged stocks could also take place before Executing Court---Defendant company in its petition for leave to appear and defend the suit had nowhere specifically asserted that plaintiff bank mis-appropriated pledged stocks or that it failed to take care of pledged stocks as were required by it in terms of S. 151 of Contract Act, 1872---Petition for leave to appear and defend the suit was dismissed---Suit was decreed in circumstances.

Askari Bank Limited v. Waleed Junaid Industries and others 2012 CLD 1681 distinguished.

Messrs Crystal Enterprises and others v. Platinum Commercial Bank Limited and others 2002 CLD 868; Habib Bank Limited v. Orient Rice Mills Limited and others 2004 CLD 1289; Messrs Muhammad Siddique Muhammad Umar v. The Australiasia Bank Limited PLD 1966 SC 684; Apollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033 ref.

Abdul Hameed Chohan for Plaintiff.

Munawar-us-Salam and Muhammad Shoib Rashad for Defendant.

Date of hearing: 30th April, 2014.

2015 C L D 569

[Lahore]

Before Shams Mehmood Mirza, J

FIRST IBL MODARABA through Duly Authorized Officer---Petitioner

Versus

Mrs. RANA AZHAR SAYED and others---Respondents

C. O. No.42 of 2012, heard on 12th January, 2015.

(a) Prudential Regulations for Modarabas, 2004---

----Regln. 7(7), proviso--- Companies Ordinance (XLVII of 1984), Ss.86, 503 & 152---Modaraba Companies and Modaraba Rules, 1981, R. 3(2)(e)---Modaraba Companies and Modaraba (Floatation and Control) Ordinance (XXXI of 1980), Ss. 41, 11, 19 & 20---Companies governed by special enactments---Investment by a modaraba in an unlisted company---Restriction on investments by a modaraba in an unlisted company exceeding five per cent of modaraba's equity---Petition under S. 152 of the Companies Ordinance, 1984 seeking rectification of Register of Companies---Issue before the High Court was whether the petitioner, which was a modaraba company, was prohibited under Prudential Regulations for Modarabas, 2004 from investing further in the shares of the company, since as per the said Regulations, an investment made by a modaraba in an unlisted Company could not exceed five per cent of the modaraba's equity---Contention of the petitioner was that the said restriction was not absolute and could be waived in terms of proviso to Regln. 7(7) of the Prudential Regulations for Modarabas, 2004 and that the Prudential Regulations for Modarabas, 2004 was a sub-delegated legislation which could not override the provisions of S.86 of the Companies Ordinance, 1984 regarding further issuance of capital---Held, that contention of the petitioner was misplaced as by virtue of the clear language of Regln. 7(7) of the Prudential Regulations for Modarabas, 2004 the petitioner had to first move an application before the Registrar (Modaraba) seeking waiver of the restriction placed on it and only when such permission was granted, could the petitioner become entitled to issuance of further shares in the Company---Contention that the Prudential Regulations for Modarabas, 2004 was a sub-delegated legislation, and could not override provisions of the Companies Ordinance, 1984 had no substance as the petitioner being a modaraba was regulated and bound by the Prudential Regulations for Modarabas, 2004 and could not take refuge behind S. 86 of the Companies Ordinance, 1984---Petitioner, in the present case, was under a legal disability by virtue of the Prudential Regulations for Modarabas, 2004 from exercising its right of first refusal with respect to further issuance of shares in the Company and such disentitlement would continue till such time it obtained the necessary permission from the Registrar (Modaraba) in terms of the proviso to Regln. 7(7) of Prudential Regulations for Modarabas, 2004---Section 86 of the Companies Ordinance, 1984 shall be subject to the provisions of the Modaraba Companies and Modaraba Rules, 1981 and the prudential regulations framed thereunder and in case of conflict between the provisions of the Companies Ordinance, 1984 and Prudential Regulations for Modarabas, 2004, the latter had to prevail by force of S. 503 of the Companies Ordinance, 1984 and the court could not pass any order in favour of the petitioner which would result in violation of Prudential Regulations for Modarabas, 2004---Section 86 of the Companies Ordinance, 1984 by force of S. 503 of the Companies Ordinance, 1984 had to yield to the restriction placed on the petitioner under Prudential Regulations for Modarabas, 2004---Petition under S.152 of the Companies Ordinance, 1984 was dismissed, in circumstances.

(b) Prudential Regulations for Modarabas, 2004---

----Regln. 7(7)--- Companies Ordinance (XLVII of 1984), Ss. 503 & 86---Modaraba Companies and Modaraba Rules, 1981, R. 3(2)(e)---Modaraba Companies and Modaraba (Floatation and Control) Ordinance (XXXI of 1980), S. 41---Companies governed by special enactments---Modaraba---Investment of a modaraba in an unlisted company---Restriction on investment in excess of five per cent of the modaraba's equity---Issuance of further capital---Statutory construction of the Prudential Regulations for Modarabas, 2004 in relation to the provisions of the Companies Ordinance, 1984---Scope---Prudential Regulations for Modarabas, 2004 had the force of law having been framed in pursuance of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and the Modaraba Companies and Modaraba Rules, 1981---In terms of S. 503 of the Companies Ordinance, 1984 the provisions of the Companies Ordinance, 1984 had to yield to the provisions of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 to the extent of inconsistency---A fortiori, S.86 of the Companies Ordinance, 1984 shall be subject to the provisions of the Modaraba Companies and Modaraba Rules, 1981 and the prudential regulations framed thereunder and in case of conflict between the provisions of the Companies Ordinance, 1984 and Prudential Regulations for Modarabas, 2004, the latter had to prevail by force of S. 503 of the Companies Ordinance, 1984 and the court could not pass any order which would result in violation of Prudential Regulations for Modarabas, 2004.

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

----Ss. 152 & 9---Power of Court to rectify Register---Scope of powers of court under S. 152 of the Companies Ordinance, 1984---Disputed questions of fact---Disputed questions of fact required recording of evidence and could not be decided in summary proceedings before the High Court under S. 152 of the Companies Ordinance, 1984 which jurisdiction was liable to be exercised where the legal title of the applicant was clear---Principles and case-law examined.

Khurshid Ahmad Khan and another v. Pak Cycle Manufacturing Company Limited, Shahdara and others PLD 1987 Lah. 1; Inayatullah Khan Niazi v. Additional Registrar of Companies and others 2007 CLD 334 and Lahore Race Club through Secretary and others v. Raja Khushbakht-ur-Rehman PLD 2008 SC 707 rel.

Miss Ruqiya Ismail for Petitioner.

Manzoor Usman Awan for Respondents.

Date of hearing: 12th January, 2015.

2015 C L D 595

[Lahore]

Before Muhammad Khalid Mehmood Khan and Ibad-ur-Rehman Lodhi, JJ

Mst. INAYAT BEGUM---Appellant

Versus

STATE LIFE INSURANCE CORPORATION through Chairman and another---Respondents

Regular First Appeal No.187 of 2008, decided on 17th December, 2014.

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

----Ss. 118, 121 & 124---Limitation Act (IX of 1908), Art. 86(2)---Life insurance claim---Computation of period of limitation for filing of claim/application before the Insurance Tribunal under S.118 of the Insurance Ordinance, 2000---Scope---Deceased died on 9-7-2003 and claimant filed application under S. 118 of the Insurance Ordinance, 2000 on 31-7-2006; and such claim was held to be barred by time in view of Art. 86(2) of the Limitation Act, 1908---Validity---Period of three years notwithstanding the entries made in column No. 3 of Art.86(a) of the Limitation Act, 1908 would start from the point of time, when the proof of death of the insured had been given to or received by the insurer; and when merits of the case were adjudged on such provision of law---When on 17-6-2004, fact of death of insured was placed before the Insurance Corporation; it was the point of time from where period of limitation was to be started for filing of an application under S.118 of the Insurance Ordinance, 2000 before the Insurance Tribunal---Application of claimant was therefore within time and claimant was wrongly made victim of limitation---High Court set aside impugned order of Insurance Tribunal and allowed application of the claimant---Appeal was allowed, accordingly.

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

----Preamble & S. 118--- Insurance laws--- Deficiencies--- No period of time prescribed in which a claim had to be decided by the Insurance Corporation or an Insurance Company---Unbridled power available with Insurance Corporations to keep claims pending for an indefinite period of time--- High Court observed that there was need for necessary legislation and amendment in the Insurance Ordinance, 2000---Comparative legislation and principles examined---Recommendations and proposals for legislative reforms outlined.

Liaqat Ali Butt for Appellant.

Ali Akbar Qureshi and Ibrar Ahmad with Safdar Ali Qureshi, Law Officer for Respondents.

Date of hearing: 11th September, 2014.

2015 C L D 618

[Lahore]

Before Muhammad Khalid Mehmood Khan and Ibad-ur-Rehman Lodhi, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Attorney and another---Appellants

versus

Mst. MANZOOR BIBI---Respondent

Regular First Appeal No.934 of 2011, decided on 17th December, 2014.

Insurance Ordinance (XXXIX of 2000)---

---Ss. 118 & 124---Payment of liquidated damages on late settlement of claims---Appellant Insurance Corporation impugned order of Insurance Tribunal whereby application of claimant under S. 118 of the Insurance Ordinance, 2000 was allowed and she was held entitled to receive insurance claim along with liquidated damages---Contentions of appellant Insurance Corporation were that the deceased had died due to an accident while handling of inflammable materials, of which the insured did business and that such business was not disclosed to the Insurance Corporation at time of purchasing of policy, therefore no claim could be paid out---Held, that at the time of issuance of insurance policy; the appellant Insurance Corporation itself undertook investigation through its own medical expert and other sources, but nothing was brought on record which prohibited the Insurance Corporation from issuing the insurance policy---When the appellant Insurance Corporation issued repudiation of the insurance policy, the said letter did not contain any sound reasoning for refusal of claim, except that the insured did not disclose certain material facts at time of purchase of policy---In view of S. 118 of the Insurance Ordinance, 2000; neither the scrutiny of the claimant's case was finalized during the ninety days period, nor any payment was made and the policy was repudiated by the appellant Insurance Corporation after expiry of such period; therefore the claimant was rightly held to receive liquidated damages as well---Appellant Insurance Corporation had failed to prove its case by non-production of any witness; and its plea was therefore found not to be correct---No illegality existed in the impugned order---Appeal was dismissed, in circumstances.

Ali Akbar Qureshi and Ibrar Ahmad with Safdar Ali Qureshi, Law Officer for Appellants.

Liaqat Ali Butt for Respondent.

Date of hearing: 11th September, 2014.

2015 C L D 629

[Lahore]

Before Shams Mehmood Mirza, J

HABIB BANK LIMITED---Plaintiff

versus

Messrs TOWELINE (PVT.) LIMITED and others---Defendants

C.O.s. No. 174 of 1998, decided on 7th November, 2014.

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

----S. 9---Contract Act (IX of 1872), Ss. 130 & 133---Suit for recovery of finance---Discharge of guarantee---Change of management of borrowing company---Plea raised by guarantors was that by change of new management in defendant company, their guarantees were discharged by virtue of S. of 133 of Contract Act, 1872---Validity---Guarantees in question were continuing guarantees and under S.130 of Contract Act, 1872, such guarantees for future transaction could only be revoked if notice in writing for their revocation was given by guarantors---Evidence of plaintiff bank was consistent that approval of release of one guarantee did not contemplate substitution of remaining guarantees with those of incoming management---Guarantees in question were executed in lieu of finance facility granted to defendant company and that liability of guarantors was co-extensive with that of defendant company---Guarantees in question expressly stated that the liability of guarantors would be that of principal debtor---High Court decreed the suit against defendant company and its guarantors jointly and severally---Suit was decreed accordingly.

2000 CLC 819; 200 MLD 100 and PLD 1986 Kar. 107 distinguished.

S. A. Hameed and another v. Allied Bank of Pakistan Limited 2004 CLD 1620 and Malik Iftikhar Ahmad v. RDFC 2003 CLD 1050 rel.

Khalid Ishaque for Plaintiff.

Muhammad Umar Riaz for Defendants Nos.3 and 4.

Date of hearing: 16th October, 2014.

2015 C L D 645

[Lahore]

Before Muhammad Ameer Bhatti and Ibad-ur-Rehman Lodhi, JJ

HAROON TRADERS, BHAUN CHOWK CHAKWAL through Proprietor and 2 others---Appellants

versus

K.A.S.B. BANK LIMITED through Manager---Respondent

R.F.A. No. 77 of 2014, decided on 13th October, 2014.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Remand of proceedings---Non-compliance of direction---Judgment and decree passed by Banking Court was set aside by High Court and matter was remanded with direction to plaintiff bank to file complete statement of accounts---Bank, in post remand proceedings failed to file complete statement of accounts as directed by High Court---Effect---Directions contained in order of High Court were not complied with in letter and spirit and plaintiff bank failed to produce any evidence in a legally permissible manner, therefore, it was a case of no evidence---Plaintiff bank was provided ample opportunity to substantiate its claim by production of its evidence but failed to avail such opportunity, therefore, plaintiff bank was not entitled to any leniency---Plaintiff bank failed to establish its claim with the help of any evidence, therefore, judgment and decree passed by Banking Court, in favour of the bank was not sustainable and was set aside---Appeal was allowed in circumstances.

Sardar Muhammad Ashfaq Abbasi for Appellants.

Mushtaq Ahmed Mohmand for Respondent.

Date of hearing: 13th October, 2014.

2015 C L D 679

[Lahore]

Before Ch. Muhammad Masood Jahangir and Ch. Muhammad Iqbal, JJ

Mst. SAFIA AKHTAR---Appellant

versus

LIFE INSURANCE CORPORATION and 2 others---Respondents

Insurance Appeal No.1092 of 2013, decided on 22nd January, 2015.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 122---Limitation Act (IX of 1908), Ss. 19, 149 & Art. 86(a)---Civil Procedure Code (V of 1908), O. VII, R. 11---Life insurance claim---computation of period of limitation---Effect of acknowledgment in writing in relation to life insurance claim---Application of claimant for insurance claim along with liquidated damages was rejected by Insurance Tribunal on the ground that the same was barred by time---Contention of claimant was, inter alia, that fresh period of limitation would be computed from the time acknowledgment in writing of liability was given by the Insurance Corporation before Federal Ombudsman---Held, the insured deceased died on 23-8-2007 and claim of claimant was repudiated on 13-8-2009 by the Insurance Corporation after which claimant filed complaint before Federal Ombudsman before whom vide letter dated 28-6-2012; an acknowledgement in writing of liability of right of claimant was issued by the Insurance Corporation; therefore fresh period of limitation was to be computed from 28-6-2012 when the said acknowledgement of liability was signed and S. 19 of the Limitation Act, 1908 was therefore applicable to the present case---Question of limitation was a mixed question of law and facts and same could not be adjudged without recording of evidence and the Insurance Tribunal failed to consider applicability of S. 19 of the Limitation Act, 1908 and application of the claimant could not be summarily rejected while applying Art. 86(a) of the Limitation Act, 1908---Article 86(a) of the Limitation Act, 1908 would be applicable if the claim of the claimant was payable, whereas in the present case claim of the claimant was reputiated, and such aspect of the case was ignored by the Insurance Tribunal while passing impugned order---High Court aside impugned order and remanded the case to the Insurance Tribunal for decision afresh---Appeal was allowed, accordingly.

Mst. Robina Bibi v. State Life Insurance Corporation of Pakistan 2013 CLD 477 rel.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

Date of hearing: 22nd January, 2015.

2015 C L D 708

[Lahore]

Before Muhammad Farrukh Irfan Khan and Shahid Karim, JJ

INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF PAKISTAN through President and 2 others---Appellants

versus

GHULAM ABBAS and others---Respondents

I.C.As. Nos. 66, 78, 83 and 84 of 2015, heard on 15th January, 2015.

Cost and Management Accountants Regulation, 1990---

----Reglns. 11(3) & 25 [as amended by notification S.R.O. No.1020(I)/2014, dated 12-11-2014]---Law Reforms Ordinance (XII of 1972), S. 3---Intra court appeal---Election dispute---Electoral lists, change into---Amendment in Regln. 25 of Cost and Management Accountants Regulation, 1990, made after issuance of election schedule, was declared ultra vires by Single Judge of High Court, in exercise of constitutional jurisdiction---Validity---Election was highly skilled enterprise in which prospective candidates were expected to market and put across to voters their unique ability to be elected to the position on offer---Such was essential and of fundamental importance that candidates had a right to sufficient time to canvass their candidature and to be able to approach members of electoral college in order to solicit their vote---Issuance of election schedule which was announced by Election Committee had a purpose in law---Such purpose was clearly delineate steps in election so that prospective candidates could manage and regulate their election campaigns---No scope existed for candidates to be caught unaware or to be confronted with procedure which was not there previously---Amendment in Regln. 25 of Cost and Management Accountants Regulation, 1990, was aimed at facilitating overseas voters yet the rights of candidates were to be kept in view and they could not be prejudiced to their detriment by insertion of an amendment which had unholy effect of recasting candidates' election campaigns---Electoral laws of Pakistan did not permit electoral lists to be amended once the schedule for elections had been announced and proposed amendment was tantamount to amending lists for election of National Council---Division Bench of High Court declined to interfere in judgment passed by the Single Judge of High Court---Intra court appeal was dismissed in circumstances.

Haji Kadir Bux v. Province of Sindh and another 1982 SCMR 582; Richard A. Posner in his book 'How Judges Think'; Gohar Hayat Nasir v. A.C. Samundri/Registration Officer, Sumundri and 2 others 1992 CLC 1005; Muhammad Asmail v. Punjab Local Council Election Authority, Lahore and others 1999 MLD 2841 and Ch. Muhammad Yusuf and others v. Azad Government through Chief Secretary, Muzaffarabad and others PLD 2001 AJ&K 60 ref.

Sameer Khosa for Appellants (in I.C.A. No. 66 of 2015).

Wasif Majeed for Appellants (in I.C.A. No. 84 of 2015).

Syed Shahab Qutub for Appellants (in I.C.A. No. 83 of 2015).

Asad Abbas Butt for Appellants (in I.C.A. No.78 of 2015).

Waqar A. Sheikh for Respondent No.1.

Bilal Bashir for Respondent No.3.

Date of hearing: 15th January, 2015.

2015 C L D 786

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs CRESCENT STAR INSURANCE through Assistant General Manager---Appellant

versus

AL-REHMAN TRADERS through Proprietor and another---Respondents

Insurance Appeal No. 962 of 2014, heard on 30th October, 2014.

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

----Ss. 2(lxv) & 121---Insurance Tribunal---Scope---Insurance Tribunal is an adjudicatory forum within the framework of Insurance Ordinance, 2000.

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

----S. 122(1)(a)(d)---Insurance Tribunal--- Powers vested with Civil Court under Civil Procedure Code, 1908---Applicability---Scope---Intention of Legislature is not that the Tribunal which is a 'persona designata' has become a "Civil Court"---Provisions of S. 122(1)(a)(d) of Insurance Ordinance, 2000, are meant to facilitate Insurance Tribunal to get its decision/mandate implemented by adopting coercive mechanism provided in Civil Procedure Code, 1908.

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

----Ss. 121, 122, 123 & 124---Insurance Tribunal---Execution of order---Non-drawing of decree sheet---Claim against insurance company was accepted by Insurance Tribunal and the decision was not challenged in appeal---Tribunal, on the application of respondent, initiated proceedings to execute its decision---Plea raised by insurance company was that without drawing a formal decree sheet, Insurance Tribunal could not execute its decision---Validity---Insurance Tribunal was vested with powers of "Civil Court" under S. 122 of Insurance Ordinance, 2000 but the decision made by the Tribunal was capable of being executed without there being formal decree drawn by Insurance Tribunal---Original decision dated 21-3-2013 passed by Insurance Tribunal was not challenged in appeal under S. 122(2) of Insurance Ordinance, 2000, and the same had attained finality---Objection petition filed by insurance company to the effect that no execution proceedings could be carried out without there being a formal decree had also been dismissed on 19-3-2014, and the same had also not been challenged--- After order dated 19-3-2014, insurance company had been appearing before Insurance Tribunal and seeking time to adjust the claim but no positive step was taken to satisfy claim of respondent---Insurance Tribunal was left with no other option but to resort to coercive mechanism provided in Civil Procedure Code, 1908, in exercise of powers conferred upon it under S. 122(1)(a) and (d) of Insurance Ordinance, 2000---Filing of appeal by Insurance company was again an attempt to wriggle out of its liability in pursuance to decision made by Insurance Tribunal on 21-3-2013, which had attained finality as the same was not challenged in terms of S. 124(2) of Insurance Ordinance, 2000---Appeal was dismissed in circumstances.

Zahur Din v. Anjuman Himayat-i-Islam 1989 MLD 480 and Muhammad Muzaffar v. Maqsood-ul-Hassan 2006 SCMR 1157 distinguished.

State Life Insurance Corporation of Pakistan and another v. Javaid Iqbal 2011 SCMR 1013; Ranjit Singh Hazari and others v. Juman Meah and another PLD 1961 Dacca 842 and Khavir Saeed Raza v. Wajahat Iqbal 2003 CLC 1306 rel.

Arslan Akhtar for Appellant.

Muhammad Saleem Chaudhry-I for Respondents.

Date of hearing: 30th October, 2014.

2015 C L D 802

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs IBRAHIM OIL MILLS through Proprietor and 2 others---Appellants

versus

MCB BANK LIMITED---Respondent

Regular First Appeal No. 274 of 2010, heard on 27th November, 2014.

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

----Ss. 10 & 9---Contract Act (IX of 1872), Ss. 148, 172 & 176---Civil Procedure Code (V of 1908), S. 47---Procedure of Banking Court---Application for leave to defend---Dispute with regard to pledged stock---Adjudication of such dispute in execution proceedings---Suit for recovery--- Application of defendants for leave to defend was dismissed---Contention of the defendants was inter alia that said applications could not be dismissed when the defendants had raised dispute with regard to pledged stock; and that the pledged stock, while in possession of the plaintiff Bank, had been stolen therefore; no decree could have been passed against the defendants---Held, that under Ss. 148 & 172 of the Contract Act, 1872; bailment was the delivery of goods by one person to another for some purpose as per the contract and when the purpose of the same was accomplished, the said goods shall be returned or otherwise disposed of, according to the direction of the person delivering them---Pawnee was bound to return the pledged goods to the pawnor but where the pawnor failed to repay the debt; the pawnee was within his rights to sell the pledged goods after notice to the pawnor or retain the goods and file suit for recovery of debt---Only when the bailer had been granted a decree and he was enforcing the same in execution proceedings, the question could be asked as to whether the bailer was in a position to return the security of pledged goods to the bailee or not; and therefore where the Financial Institution was treating the pledge of goods as collateral security; leave to defend the suit could not be granted to the defendant/customer; on the basis of the status, condition and availability or otherwise, of the pledged goods---High Court observed that per provisions of S. 47 of the C.P.C.; the Executing Court was fully empowered to decide all questions regarding execution, discharge or satisfaction of the decree and therefore; all questions regarding security of pledge could be adjudicated at the time of execution of decree by the Executing Court---Impugned order of Banking Court could not be interfered with---Appeal was dismissed, in circumstances.

A.M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 Lah. 1 ref.

Habib Bank Limited v. Orient Rice Mills Ltd. and others 2004 CLD 1289; Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033 rel.

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

----S. 9(1)---Presentation of plaint by the Financial Institution---Persons authorized to file plaint on behalf of the Financial Institution---Scope---Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; a plaint could only be presented by a Financial Institution before the Banking Court which was duly signed and verified on oath either by the Branch Manager or such other officer of the Bank who was holding power of attorney or was authorized otherwise.

Muhammad Nawaz Chaudhry and another v. Citibank N.A. 2002 CLD 334; Haji Saghir Ahmed v. United Bank Limited 2004 CLD 1334 and Allied Bank Limited v. Muslim Cotton Mills Private Limited and 3 others 2011 CLD 393 rel.

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

----Ss. 2(e) & 9---Jurisdiction of Banking Court---Obligations of customer---Adjudication of a suit for recovery---Renewal/restructuring/ rescheduling of finance facilities---Physical disbursement of funds---Where the case related to renewal of finance facilities; no physical disbursement was required---Concept of renewal, rescheduling/ restructuring of financial facilities in light of case-law; examined.

Habib Bank Limited v. Service Fabrics Ltd. and others 2004 CLD 1117 and Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143 rel.

Nadeem Ahmad Sheikh for Appellants.

Ahmad Parvez for Respondent.

Date of hearing: 27th November, 2014.

2015 C L D 818

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs WARIS STEEL MILLS through Proprietor and another---Appellants

versus

SILK BANK LIMITED through Branch Manager---Respondent

E.F.A. No. 417 of 2012, heard on 19th December, 2014.

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

----Ss. 9(5) & 12---General Clauses Act (X of 1897) S. 27---Civil Procedure Code (V of 1908) O. XXI, R. 21 & O. IX, R. 13---Procedure of Banking Court---Service of notices on the defendants---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Object and scope---Suit for recovery was decreed after the defendants failed to appear and file application for leave to defend before the Banking Court---Contention of defendants was that notices were not served upon the defendants in any of the modes provided under the law---Held, that under S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001; Banking Court was to issue notices to the defendants in all the modes provided in said S. 9(5) of the Ordinance; and service effected in any one of the modes therein, would be deemed sufficient service---Service, in the present case, had been effected upon the appellants through publication in two newspapers and service effected through publication of notice in newspaper was a valid service---Legislature while promulgating the Financial Institutions (Recovery of Finances) Ordinance, 2001 went a step further while framing S.9(5) of the Ordinance to ensure that service was effected upon defaulting borrowers at the earliest so that the disposal of suits was not delayed---Defendants, in the present case, also tried to play hide and seek with the bailiff of the court and the notices had been sent to the defendants through registered post, which was also effective in terms of S. 27 of the General Clauses Act, 1897---Impugned order could not be interfered with---Appeal was dismissed, in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 and Khawaja Muhammad Bilal v. Union Bank Limited through Branch Manager 2004 CLD 1555 rel.

Muhammad Iqbal Malik for Appellants.

Ch. Mushtaq Ahmed for Respondent.

Date of hearing: 19th December, 2014.

2015 C L D 829

[Lahore]

Before Muhammad Khalid Mehmood Khan and Abdus Sattar Asghar, JJ

HABIB BANK LIMITED---Appellant

versus

Messrs MEDINA RICE AND ICE MILLS, SARGODHA through Proprietor and another---Respondents

Regular First Appeal No. 108 of 2009, decided on 12th November, 2014.

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

----Ss. 148 & 172---Bailment and pledge---Connotation---Pledge is bailment and purpose of creation of pledge is security for payment of debt as is defined in S. 172 of Contract Act, 1872.

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

----S. 9---Contract Act (IX of 1872), Ss. 148, 151, 152 & 172---Suit for recovery of finance facility---Bailment and pledge---Loss caused by bailee---Suit was resisted by borrowers on the plea that bank had misappropriated pledge stock and claimed adjustment of misappropriated pledge goods---Banking Court decreed the suit in favour of bank with direction to return excess stock to borrowers---Plea raised by bank was that borrowers committed fraud with bank at the time of creation of pledge in its favour and borrowers had misappropriated pledged stocks---Validity---Where pawnee sued for recovery of debt allowed against security of pawned goods, the creditor was required to keep goods intact for returning the same to the pawner subject to natural wear and tear, who retained the right to redeem pledged goods unless sold after reasonable notice---Creditor could maintain its suit subject to adjustment of sale proceeds of the goods---Knowingly the Bank did not claim any shortage or replacement of pledged stock by borrowers---Bank filed plaint and did not mention facts alleging replacement or loss of pledged goods, when in reply to application for permission to defend the suit, Bank claimed that borrowers had replaced and removed pledged stock---Bank was duty bound to prove that they were the borrowers who misappropriated and replaced pledged goods of inferior quality which bank failed to prove---High Court declined to interfere in judgment and decree passed by Banking Court as the said court had thoroughly discussed evidence produced by parties---Appeal was dismissed in circumstances.

Mst. Talat Nasreen v. United Bank Limited 2003 CLD 94; Prudential Commercial Bank Ltd. v. Hydari Ghee Industries Ltd. and 9 others 1999 MLD 1694; Messrs United Bank Ltd. v. Messrs Amin Corporation Ltd. and others 1983 CLC 1559; Habib Bank Ltd. v. Kashif Steel Industry and others PLD 2001 Lah. 224; Messrs Crystal Enterprises and 6 others v. Platinum Commercial Bank Ltd. and 2 others 2002 CLD 868; Mst. Talat Nasreen v. United Bank Ltd. and others 2003 CLD 94; Mian Aftab A. Sheikh and 2 others v. Messrs Trust Leasing Corporation Ltd. and another 2003 CLD 702; Bashir Ahmed Mughal v. S.M.E. Bank Ltd. through General Manager and 2 others 2005 CLD 1689; Messrs Fybron Pvt. Ltd. through Managing Director and others v. National Bank of Pakistan through Zonal Chief 2006 CLD 127; A.M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 Lah. 1; Messrs Muhammad Siddique Muhammad Umar and another v. The Australasia Bank Ltd. and others PLD 1966 SC 684; Central Bank of India v. Syed Muhammad Abdul Jalil Shah and others 1999 CLC 671; Ellis E and Company's Trustees v. Dixon Johnson (1925) AC 489 P.493; Lallan Prasad v. Rahmat Ali and others AIR 1967 SC 1322; Khusiram v. Swaroop Naraya 1989 WLN UC 332; Coldman v. Hill [1919] 1 KB 443 and Mendelssohn v. Normand Ltd. [1969] 2 All ER 1215 ref.

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

----S. 152---Bailee when not liable to loss---Principle---Where pawnee claims loss or damage to pawned goods, it is the duty of pawnee to establish that he has fulfilled his obligation both statutory and contractual otherwise, he is not entitled to get benefit of S. 152 of Contract Act, 1872---Bailee is not an insurer of goods and is not responsible for loss caused by accident but he has to show when goods bailed are lost and there was no negligence or default on his part---Bailee is bound to take step to recover goods and if he can inform owner, in time he must do so and if he has failed to inform owner, he must act as an agent of necessity and takes steps which a reasonable owner would take in defence of property of value in question---Bailee is bound to take reasonable means to protect bailor's property and in case of loss, onus is on the bailee to prove that it occurred due to his negligence or want of ordinary care.

Ahmad Pervaiz and Suleman Aslam for Appellant.

Ms. Sarwat Nawaz for Respondents.

Date of hearing: 18th March, 2014.

2015 C L D 893

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

SHAMIL BANK OF BAHRAIN E.C.---Appellant

versus

Mian AYAZ ANWAR and 6 others---Respondents

F.A.O. No. 370 of 2010, decided on 19th December, 2014.

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

----Ss. 2(a)(i), 9, 3 & 22---Banking Companies Ordinance (LVII of 1962), Ss. 5(b), 5(c), 5(ff) & 7---Civil Procedure Code (V of 1908), O.VII, R. 10---Banking Company---"Financial Institution", definition of---Scope---Suit for recovery filed by foreign banking company not licensed by State Bank of Pakistan---Suit filed in respect of transaction carried outside Pakistan---Maintainability---Suit for recovery of plaintiff-bank was rejected under O. VII, R. 10, C.P.C. on the ground that the plaintiff-bank did not fall within the definition of "Financial Institution" under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 since inter alia, plaintiff was a banking company incorporated outside Pakistan---Held, that a foreign banking company which was not registered with the State Bank of Pakistan, could not do banking business in Pakistan and therefore could not file a suit for recovery under S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and was not a "Financial Institution" under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S. 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, State Bank of Pakistan certified the "cost of funds" of banking companies which were to be awarded in a decree passed by the Banking Court, and the word "shall" used in the said section indicated that without awarding of "cost of funds", no decree could be passed---Definition of "Financial Institution" given in S. 2(a)(i) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, made it clear that transaction in respect of which a "banking company" can file a suit for; must be in Pakistan in light of the words "any associated or ancillary business in Pakistan through its branches within or outside Pakistan"---High Court observed that it was necessary that for filing of suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001; the transaction must take place in Pakistan, however, the branch of the Financial Institution may be outside Pakistan---In the present case, plaintiff company was incorporated in a foreign country and the transaction in respect of which suit was filed, was claimed by the plaintiff company directly there and not through its branches in Pakistan---Suit was therefore, rightly rejected---Appeal was dismissed, in circumstances.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for recovery filed on basis of foreign arbitral award---Maintainability---Plaintiff-bank was incorporated in a foreign country and filed suit for recovery on basis of arbitration award in there which arbitration was done in accordance with the arbitration clause of the finance agreement between the parties---Plaintiff, on basis of such foreign arbitral award, filed suit for recovery of amount awarded to it by the Arbitration Tribunal---Held, that for implementation or adjudication on basis of foreign arbitral award, no provision was available in the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, suit of the plaintiff was not maintainable.

Mansoor Hassan Khan and Saqib Majeed for Appellant.

Asim Hafeez for Respondents Nos.1 - 6.

Dates of hearing: 16th, 29th October, 19th and 25th November, 2014.

2015 C L D 913

[Lahore]

Before Shezada Mazhar, J

GHULAM ABBAS---Petitioner

versus

FEDERATION OF PAKISTAN through Secretary Finance and 3 others---Respondents

W.P. No. 31586 of 2014, heard on 22nd December, 2014.

Cost and Management Accountants Act (XIV of 1966)---

----Ss. 9 & 34(4)---Cost and Management Accountants Regulations, 1990, Regln. 49--- Notification No. S.R.O. 1020(I)/2014, dated 11-11-2014---Constitution of Pakistan, Art. 199---Constitutional petition---Election---Amendment in Cost and Management Accountants Regulations, 1990, retrospective effect of---Petitioner asserted that amendment made in Cost and Management Accountants Regulations, 1990, vide Notification No. S.R.O. 1020(I)/2014, dated 11-11-2014, for conducting election could not have retrospective effect---Validity---Held, as per provisions of Regulations earlier there was no online procedure available, therefore, it was possible that a candidate could not approach overseas members for canvassing---Overseas members, with amendment in question, had also become important for any candidate---Amendments had also affected rights of all contesting candidates, therefore, the same could not be allowed to operate retrospectively---New procedure was introduced for balloting of overseas members which in fact affected rights of contesting candidates as well, therefore, it could not be allowed to apply retrospectively---High Court directed the authorities to hold elections on the basis of Cost and Management Accountants Regulations, 1990, without taking into account amendments made by Notification No.S.R.O. 1020(I)/2014 dated 11-11-2014---Petition was allowed in circumstances.

Muhammad Asif Khan and 173 others v. Azad Government of the State of Jammu and Kashmir through Chief Secretary and 14 others 2014 PLC (C.S.) 534; Water and Power Development Authority, Lahore through Chairman and others v. Haji Abdul Aziz and others 2012 SCMR 965; Federation of Pakistan and others v. Ammar Textile Mills (Pvt.) Limited and others 2002 SCMR 510; K. Kapen Chako v. The Provident Investment Company (P) Ltd. (1977) 1 Supreme Court Cases 593 and Ch. Muhammad Yusuf and others v. Azad Government through Chief Secretary, Muzaffarabad and others PLD 2001 Azad J&K 60 ref.

Waqar A. Sheikh for Petitioner.

Sameer Khosa for Respondents.

Date of hearing: 22nd December, 2014.

2015 C L D 933

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

MUHAMMAD ASLAM and 2 others---Appellants

versus

NATIONAL BANK OF PAKISTAN through General Attorney and 4 others---Respondents

F.A.O. No. 610 of 2013, heard on 10th December, 2014.

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

----Ss. 15, 16 & 9---Suit for recovery---Delivery of possession of mortgaged property to Financial Institution---Appellants had purchased mortgaged property after which suit for recovery against sellers of the said property was filed by the mortgage-holder bank---Application of the plaintiff-Bank under S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 seeking possession of the mortgaged property was allowed, and order of Banking Court was impugned by the appellants---Held, that S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was declared ultra vires the Constitution in Muhammad Umer Rathore v. Federation of Pakistan (2009 CLD 257), and therefore no order could be made under the provisions of said section, regarding delivery of mortgaged property to the plaintiff-Bank---After filing of suit for recovery by the plaintiff Bank, the mortgagor/customer/defendant, after publication of summons under S.5 of the Ordinance, could not transfer, alienate, encumber, remove or part with possession of any of its assets or property furnished to the Financial Institution as security by way of mortgage, hypothecation, charge, lien or otherwise; pending final decision of the suit---Filing of suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001; however, would not vest with the plaintiff Bank with rights to obtain possession of mortgaged property as had been done in the present case, especially when it was admitted by the plaintiff Bank that the mortgage was not with possession---No order, therefore, could have been passed for delivery of possession of mortgaged property---High Court observed that the Banking Court, at most, could have exercised powers under S.16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; however the same could only be done with a view to prevent mortgaged property from being transferred, alienated, encumbered, wasted or otherwise dealt with in a manner which was likely to impair or prejudice the security in favour of the bank---Plaintiff bank, in the present case, in its application before the Banking Court, had not referred to any pre-requisites mentioned in S.16(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Impugned order was set aside---Appeal was allowed, accordingly.

Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 fol.

Iftikhar Ullah Malik for Appellants.

Noor Muhammad Khan Chandia for Respondent No.1.

Shahid Ikram Siddiqui for Respondents Nos.2 to 5.

Date of hearing: 10th December, 2014.

2015 C L D 959

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

TARIQ MEHMOOD---Appellant

versus

ATLAS BANK LTD. through Authorised Agent---Respondent

R.F.A. No. 1602 of 2014, decided on 10th November, 2014.

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

----Ss. 12, 22 & 27---Power of Banking Court to set aside decree under S.12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Finality of order of Banking Court---Scope---Application of defendant to set aside judgment and decree passed against it by the Banking Court, was rejected---Held, that in the present case, the defendant had appeared before the Banking Court and filed an application for leave to defend---Application under S.12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was therefore not maintainable, in the present case, as it had not been the case of the defendant that summons was not duly served upon him and on account of such fact the defendant could not appear and file an application for leave to defend under S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---After passing of order and decree by the Banking Court; the only remedy available to the defendant was to file an appeal under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant had therefore misdirected himself by filing an application under S. 12 of the Ordinance to set aside the decree which also otherwise not maintainable in view of S. 27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was dismissed, in circumstances.

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

----S. 22---Limitation Act (IX of 1908) Ss. 29(2) & 5---Time-barred appeal under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Condonation of delay---Bar to the applicability of S.5 of the Limitation Act, 1908 upon Financial Institutions (Recovery of Finances) Ordinance, 2001 in view of S. 29(2) of the Limitation Act, 1908---Scope---Section 29(2) of the Limitation Act, 1908 provided that when for a special law or local law, a different period of limitation had been prescribed, the provisions of S. 5 of the Limitation Act 1908 would not be applicable---Under ordinary law, the period of filing a regular first appeal was ninety days, but in cases covered by provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, which was a special law, the prescribed period was thirty days for filing of an appeal against judgment and decree of the Banking Court---Application under S. 5 of the Limitation Act, 1908 for condonation of delay in filing of appeal under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance 2001, was therefore, not maintainable.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Bashir Ahmad and others v. Messrs Habib Bank Ltd. 1990 CLC 1105; Akhtar Kaleem v. Citibank N.A. through Branch Manager 2004 CLD 1361 and Citi Bank N.A. A Banking Company through Attorney v. Riaz Ahmed 2000 CLC 847 rel.

Ms. Tabinda Islam for Appellant.

2015 C L D 972

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs PERVAIZ & CO. through Proprietor and others---Appellants

versus

NATIONAL BANK OF PAKISTAN through Attorney---Respondent

R.F.A. No. 841 of 2011, heard on 2nd December, 2014.

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

----S. 22--- High Court (Lahore) Rules and Orders Volume V; Chapter I, Part A, Rr. 9 & 9A---Appeal, filing of---Removal of objections---Duty of appellant---Appeal under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was filed within time, however, when the same was returned by the Deputy Registrar (Judicial) of the High Court with objections, the appellant took three years to finally refile the appeal after removal of all objections---Contention of the appellant was that the said objections were frivolous and therefore the appeal should now be heard---Held, that even though the appeal was filed within time; it was also duty of the appellant, when the office raised objections, to receive back the appeal and refile the same within reasonable time which was ordinarily seven days after removing of all objections---When an appeal was filed within the prescribed period of limitation under the law; then in case of subsequent delay to comply with instructions or the objections raised by the office of the court; there were two options available to the litigant party; one was to comply with the objection(s) raised and the second was to request the office of the court to place matter before the court for determination with regard to the validity of the office objections---In the present case, when the office raised objection, and appellant received back the appeal and filed the same again without removing some of the objections and then received the appeal back and finally removed all the objections and in such process appellant consumed more than three years and no explanation for period of three years had been given by the appellant---Such contumacious act of the appellant did not entitle the appellant to any leniency---Appeal was dismissed.

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

----S. 22---Limitation Act (IX of 1908) Ss. 29(2) & 5---Time-barred appeal under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Condonation of delay---Bar to the applicability of S. 5 of the Limitation Act, 1908 upon Financial Institutions (Recovery of Finances) Ordinance, 2001 in view of S. 29(2) of the Limitation Act, 1908---Scope---Section 5 of the Limitation Act, 1908 was not applicable for condonation of delay, if any, as the Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law.

Protein and Fats International (Pvt.) Limited through Chief Executive and 2 others v. Capital Assets Leasing Corporation Limited through Manager 2005 CLD 857; Manzoor Hussain and others v. Sajawal and others 1983 SCMR 465 and Ali Muhammad and others v. Fazal Hussain and others 1983 SCMR 1239 rel.

Syed Salman Haider Jafri for Appellants.

Muhammad Younis for Respondent.

Date of hearing: 2nd December, 2014.

2015 C L D 983

[Lahore]

Before Syed Mansoor Ali Shah, Mrs. Ayesha A. Malik and Muhammad Yawar Ali, JJ

Ms. IMRANA TIWANA and others---Petitioners

versus

PROVINCE OF PUNJAB and others---Respondents

Writ Petition No.7955 of 2015, decided on 17th April, 2015.

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

----Ss. 5 & 12---Constitution of Pakistan. Arts.140A & 199---Public interest litigation---Maintainability---Policy matter---Signal Free Corridor Project ("Project") proposed and initiated by Lahore Development Authority ("LDA")---Environmental Impact Assessment---Objection of Provincial Government that the project in question was a policy matter, which should be left to the Executive, and the High Court should not interfere in such matters---Validity---High Court, in the present case, was not examining the merits or demerits of the project in question or questioning the justification and rationality for having such a project---Instead, High Court was simply concerned with the constitutionality and legality of the environmental process adopted to review the Environmental Impact Assessment filed by Lahore Development Authority ("LDA")---High Court was also concerned with the legal character of the regulator (Provincial Environmental Protection Agency) and the constitutional role of LDA, the proponent of the project, in the light of Art. 140A of the Constitution---High Court was not examining the policy dimension of the project or its technical viability, therefore, the court was neither assuming the role of the Provincial Environmental Protection Agency or stepping into the shoes of the consultant who had prepared the Environmental Impact Assessment or the concerned members of the civil society who, inter alia, opposed the project on the ground of misplaced, inappropriate and irrational allocation of public funds---Objection of Provincial Government was rejected accordingly and present public interest litigation under Art. 199 of the Constitution was held to be maintainable.

(b) Constitution of Pakistan---

----Art. 199--- Public interest litigation--- Scope--- Nature of proceedings---Proceedings of public interest were inquisitorial, rather than adversarial---Public interest litigation, therefore, was not about personal interests and benefits but about public interest and welfare.

(c) Constitution of Pakistan---

----Arts. 9 & 14---Punjab Environmental Protection Act (XXXIV of 1997), S.5---Protection of environment, right of---Scope---Right of protection of environment emerged from the right to life, liberty and dignity under Arts. 9 & 14 of the Constitution---Environment (natural and built) was the overarching habitat and was intrinsic to survival and integral to quality of life---Protection of the environment was, therefore, an inalienable right and perhaps more fundamental than the other rights.

Principles of the Stockholm Declaration, 1972, (Principles 1, 2 and 8) ref.

(d) Constitution of Pakistan---

----Arts. 2A, 9 & 14---Punjab Environmental Protection Act (XXXIV of 1997), Ss.5 & 12---Environmental justice---Scope---Environment and its protection---Integral to the right to life and dignity---Environmental justice rested on right to life (Art. 9 of the Constitution), meaning a right to a healthier and cleaner environment---Environmental justice was an amalgam of the constitutional principles of democracy, equality, social, economic and political justice guaranteed under the Objectives Resolution, the fundamental right to life, liberty and human dignity (Art.14 of the Constitution) which included the international environmental principles of sustainable development, precautionary principle, environmental impact assessment, inter and intra-generational equity and public trust doctrine---Environment and its protection were central in the scheme of constitutional rights---Right to environment that was not harmful to the health or well-being of the people and an environment that protected the present and future generations was an essential part of political and social justice and even more integral to the right to life and dignity under the Constitution.

Ms. Shehla Zia and others v. WAPDA PLD 1994 SC 693 ref.

(e) Punjab Environmental Protection Act (XXXIV of 1997)---

----Ss. 5 & 8 & Preamble---Constitution of Pakistan, Arts. 9 & 14---Provincial Environmental Protection Agency ("EPA")---Functions and autonomy---Environmental Protection Agency (EPA) was a body corporate and architecturally an independent provincial environmental regulator---Environmental Protection Agency (EPA) under the law acted as a trustee and a watchdog with the responsibility of protection, conservation, rehabilitation and improvement of the environment, for the prevention and control of pollution, and promotion of sustainable development on behalf of the people---Environmental Protection Agency (EPA) acted as a guardian of the people and the nature, in protecting the environment of the community---Environmental Protection Agency (EPA) had the onerous responsibility to safeguard the constitutional value of social justice which included environmental principles of sustainable development, precautionary principle, inter and intra-generational equity and public trust doctrine and the fundamental rights to life and dignity---To achieve such objective EPA needed to be fiercely independent and autonomous in reality---Environmental Protection Agency as an environmental regulator had to regulate public, as well as, the private sector---Neutrality, autonomy and independence were foundational to the existence of any robust, dynamic and proactive EPA and were mandatory to actualize its avowed objectives under the law.

(f) Civil service---

----Public post, appointment to---Public advertisement---Necessity---Transparency and merit---Mode of appointment or qualification for appointment to a pubic post not provided under any Act or Regulations---Any such public post had to be filled through public advertisement to ensure transparency and merit.

Ghulam Rasool v. Government of Pakistan through Secretary, Establishment Division Islamabad and others PLD 2015 SC 6; Asaf Fasihuddin Khan Vardag v. Government of Pakistan and others 2014 SCMR 676; Khawaja Muhammad Asif v. Federation of Pakistan and others 2013 SCMR 1205; Muhammad Yasin v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and others PLD 2012 SC 132 and Dr. Naveeda Tufail and 72 others v. Government of Punjab and others 2003 SCMR 291 rel.

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

----S. 5 (2)---Constitution of Pakistan, Art. 199---Public interest litigation---Director General of Provincial Environmental Protection Agency ("EPA"), post of---Mode of appointment and qualification---Mode of appointment or the qualifications of the Director General, EPA were not provided under the Punjab Environmental Protection Act, 1997, or the Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000---Post of the Director General had to be filled through initial recruitment as it was not a cadre post---Director General actually embodied EPA, hence, professional qualifications, relevant experience, open and transparent recruitment process, was necessary, in selecting and appointing the Director General---Facts of the present case showed that the current Director General was a serving civil servant appointed through promotion as a Director General, who had an LL.B degree to his credit besides some unrelated experience in various departments of the Provincial Government---High Court declared that current Director General, EPA, did not have technical/professional environmental qualifications or requisite experience, and he had not been appointed through an open and transparent advertisement process---Constitutional petition was allowed accordingly.

(h) Theory---

----"Regulatory capture", theory of---Definition and meaning---Regulatory capture was defined as the capture of 'regulators' by the regulated---Regulatory capture was the process by which regulatory agencies eventually came to be dominated by the very industries they were charged with regulating---Term regulatory capture referred to the subversion of regulatory agencies by the firms they regulated---Regulatory capture happened when a regulatory agency, formed to act in the public's interest, eventually acted in ways that benefitted the industry it was supposed to be regulating, rather than the public---Public interest agencies that came to be controlled by the industry they were charged with regulating were known as captured agencies---Regulatory capture was an example of gamekeeper turned poacher; in other words, the interests the agency set out to protect were ignored in favour of the regulated industry's interests.

Richard Posner Preventing Regulatory Capture by Daniel Carpenter; http://www.investopedia.com/terms/r/regulatory-capture. asp#ixzz3ZzUspoha and Regulatory Capture:Causes and Effects", by G.MacMahon at www.iipe.org/conference 2002/papers / MeMahon.pdf http://www.iipe.org/conference 2002/papers/ MeMahon.pdf ref.

(i) Punjab Environmental Protection Act (XXXIV of 1997)---

----Ss. 5, 8, 12 & Preamble---Constitution of Pakistan. Arts.9, 14 & 199---Public interest litigation---Environmental justice---Regulatory capture, theory of applicability---Signal Free Corridor Project ("Project") proposed and initiated by Lahore Development Authority ("LDA")---Constitutionality and legality---Environmental Impact Assessment---Provincial Environmental Protection Agency ("EPA") and its Director General working as delegates of the Provincial Government---Effect---Mockery of environmental justice and fraud on the rights of the people---Contention of petitioners that Provincial Environmental Protection Agency ("EPA"), in its current form was not operating as an autonomous agency but as an attached department of the Provincial Government; that Director General of "EPA" hurriedly granted the Environmental Impact Assessment ("EIA") approval for the project in question, where after the Lahore Development Authority ("LDA") mobilized the works and illegally commenced the construction of the project---Validity---Provincial Environmental Protection Agency ("EPA"), in its current form, was operating as a delegate of the Provincial Government, and functioning as a government agency rather than an independent environmental regulator---Any regulator, which was controlled and dictated by the parties it regulated (in the present case the Provincial Government), was in fact under regulatory capture and its decisions and approvals had no credence, legal value or moral authority and amounted to fraud on the rights of the people and a mockery of environmental justice---Section 5 of Punjab Environmental Protection Act, 1997, stated that EPA shall be headed by the Director General, implying that there were other members that constituted the said Agency, but in fact, presently EPA was one person i.e., the Director General (DG)---Current Director General, EPA, was a serving civil servant appointed through promotion to the post of Director General---Post of Director General, EPA, was not a cadre post and could not be filled through promotion, besides a person who was already an employee of the Provincial Government could not be appointed to head a statutory regulator, which under the law was to grant approval of projects proposed by the Provincial Government---Environmental Impact Assessment ("EIA") approval for the project in question proposed by LDA, an Authority headed by the Provincial Chief Minister and controlled by other members of the Provincial Government could not possibly be refused by the Director General, EPA, who was himself a grade 20 employee of the same government, which also controlled his appointment and transfer---Provincial Environmental Protection Agency ("EPA"), in such circumstances could not perform its assigned role under Punjab Environmental Protection Act, 1997, hence, the entire exercise of EIA approval was a sham unless and until, the post of Director General, EPA, was filled through an open and transparent recruitment process keeping in view the required qualifications for the post---Impugned approval of Director General, EPA for the project in question was a result of dictation and non-application of mind and hence bad in law---High Court set aside the Environmental Impact Assessment (EIA) approval for the project in question and struck down the initiation of the said project by LDA as being unconstitutional---Constitutional petition was allowed accordingly.

(j) Punjab Environmental Protection Act (XXXIV of 1997)---

----Ss. 5, 8, 12 & Preamble --- Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Reglns. 10(5), 11---Constitution of Pakistan, Arts.9, 14 & 199---Public interest litigation---Environmental justice---Signal Free Corridor Project ("Project") proposed and initiated by Lahore Development Authority ("LDA")---Constitutionality and legality---Environmental Impact Assessment (EIA)---Even though the Lahore Development Authority ("LDA") had submitted an Environmental Impact Assessment (EIA) for approval with the Provincial Environmental Protection Agency (EPA), it did not think it important to wait for the approval before commencing the project in question---Environmental Impact Assessment (EIA) was prepared and submitted in the present case as a routine requirement and not for any meaningful feedback---Provincial Environmental Protection Agency (EPA) was under an obligation to either confirm that the EIA was complete for purposes of initiation of the review process, or require the proponent to submit additional information or return the EIA to the proponent for revision clearly listing the points requiring further study and discussion---Provincial Environmental Protection Agency (EPA) had to pass a speaking order explaining the option exercised by it---No such order has been passed in the present case---Environmental Impact Assessment (EIA) approval passed by the Provincial Environmental Protection Agency (EPA) in the present case did not refer to or address a single objection raised by the public during public participation---Cosmetic public participation exercise conducted by the EPA amounted to playing a fraud on the people---Under the Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, the exercise of public participation required EPA to solicit the views of other concerned government agencies which included departments, attached departments, development authorities, local authority, company or a body corporate established or controlled by the Government---No such exercise was undertaken in the present case---Section 5(6) of the Punjab Environmental Protection Act, 1997, provided that for the assistance of the EPA in the discharge of its functions, the Government shall establish Advisory Committees for various sectors and appoint as members, eminent representatives of the relevant sector, educational institutions, research institutes and non-governmental organizations---No such Advisory Committee had so far been established by the Government with regard to the project in question---Regulation 11(2) of Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, mandated that the EPA was to consult a Committee of Experts constituted for the purpose and may also solicit the views of the sectoral Advisory Committees constituted by the Government---However in the present case no such Committee of Experts was constituted---Approval for the project in question was granted by the DG, EPA, in contravention of Regln.11(4) of the Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, as he did not consider the comments of the public and the government agencies received during the public hearing, the report of the committee of experts, and the report of the sectoral advisory committee---High Court struck down the initiation of the Signal Free Corridor Project by LDA as being unconstitutional and set-aside the Environmental Impact Assessment (EIA) approval for the project by declaring that the same was granted by DG, EPA, in violation of the right to life, dignity of the citizenry besides being offensive to environmental justice and due process protected under Arts.4 & 10A of the Constitution---High Court directed the National Accountability Bureau (NAB) to initiate an inquiry against the Director General, Provincial Environmental Protection Agency (EPA) for failing to comply with the law and to account for the loss of public money---Constitutional petition was allowed accordingly.

(k) Punjab Environmental Protection Act (XXXIV of 1997)---

----S. 2(xi)--- Environmental Impact Assessment---Scope and significance ---Environmental Impact Assessment was as essential a tool as the feasibility report at the planning stage; it was an information-gathering exercise carried out by the developer and other bodies, which enabled a local planning authority to understand the environmental effects of a development before deciding whether or not to grant planning permission for that proposal---Innovation behind the formal Environmental Impact Assessment process was the systematic use of the best objective sources of information and the emphasis on the use of the best techniques to gather such information---Ideal Environmental Impact Assessment would involve a totally bias free collection of information produced in a form, which would be coherent, sound and complete; it should then allow the local planning authority and members of the public to scrutinize the proposal, assess the weight of predicted effects and suggest modifications or mitigation (or refusal) where appropriate---With time Environmental Impact Assessment has emerged as an important international and domestic legal technique for integrating environmental considerations into socio-economic development and decision-making processes---Environmental Impact Assessment described a process, which produced a statement to be used in guiding decision-making, with several related functions; first, it should provide decision-makers with information on the environmental consequences of proposed activities and, in some cases, programmes and policies, and their alternatives; second, it required decisions to be influenced by such information, and third, it provided a mechanism for ensuring the participation of potentially affected persons in the decision-making process.

Environmental Law-Stuart Beel & McGillivary. 5th edition. p.347 and Principles of International "Environmental Law. Philippe Sands. Vol. 1, p.579 ref.

(l) Punjab Environmental Protection Act (XXXIV of 1997)---

----S. 2(xi)---Constitution of Pakistan, Arts. 9 & 14---Environmental Impact Assessment---Purpose---Purpose of Environmental Impact Assessment was to ensure that decisions were taken following timely and sound advice; to encourage and provide opportunities for public consultation in environmental aspects of proposals before decisions were made; to ensure that proponents of proposals took primary responsibility for protection of the environment relating to their proposals, and carried the costs necessary for environmental protection; to facilitate environmentally sound proposals by minimizing adverse impacts and maximizing benefits to the community, and to provide a basis for ongoing environmental management, including through the results of monitoring---Through the tool of an Environmental Impact Assessment, the Environmental Protection Agency regulated and protected the environment and as a result the life, health, dignity and well-being of the people who inhabited the environment---Environmental Assessment was, therefore, a substantive exercise as every step in such process cautiously guarded the fundamental rights of the people.

(m) Punjab Environmental Protection Act (XXXIV of 1997)---

----S. 2(xi)---Environmental Impact Assessment---Essential constituents to be present in an Environmental Impact Assessment listed.

Environmental Impact Assessment was not complete and could not be accepted for review by the Environmental Protection Agency unless it clearly provided for the following essential constituents:

(i) collection of data, (ii) prediction of qualitative and quantitative impacts.

(iii) comparison of alternatives.

(iv) evaluation of preventive, mitigatory and compensatory measures.

(v) formulation of environmental management and training plans and monitoring arrangements.

(n) Punjab Environmental Protection Act (XXXIV of 1997)---

----S. 2 (xi) --- Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Regln. 10(5)---Environmental Impact Assessment---Public consultation and participation---Objectives and significance of public consultation and participation at the time of Environmental Impact Assessment listed.

Objectives of public consultation and participation at the time of Environmental Impact Assessment included:

(i) informing the stakeholders about what was proposed;

(ii) providing an opportunity for those otherwise unrepresented to present their views and values, therefore allowing more sensitive consideration of mitigation measures and trade- offs;

(iii) providing those involved with planning the proposal with an opportunity to ensure that the benefits of the proposal were maximised and that no major impacts had been overlooked;

(iv) providing an opportunity for the public to influence project design in a positive manner;

(v) obtaining local and traditional knowledge (corrective and creative), before decision making;

(vi) increasing public confidence in the proponent, reviewers and decision-makers;

(vii) providing better transparency and accountability in decision making;

(viii) reducing conflict through the early identification of contentious issues, and working through them to find acceptable solutions;

(ix) creating a sense of ownership of the proposal in the minds of the stakeholders; and

(x) developing proposals which were truly sustainable.

More intangible benefits flowed from public involvement as participants saw that their ideas could help to improve projects. People gained confidence and self-esteem through taking part in the process, and perceptions were expanded by meeting and exchanging views with people who had different values and ideas.

Review of Environmental Impact Assessment was not inter parties or an adversarial exercise but were inquisitorial proceeding carried out under the public gaze and open to public scrutiny---Such review process was incomplete without effective public participation and technical advice of the experts.

Public participation also included solicitation of comments from concerned government agencies. Public participation, which was akin to environmental democracy, and was an integral part of Environmental Impact Assessment and affirmed that public was the direct beneficiary of the environment and must be heard. Objections to a project raised during the public hearing had to be addressed by the Environmental Protection Agency through a speaking order.

(o) Constitution of Pakistan---

----Art. 140A---Local Government system---Meaning, significance and autonomy---Term "Local Government" literally meant management of the local affairs by the people of the locality---System of local government was based on the principle that the local problems and needs could best be addressed by the people of the locality rather than by central or State governments---Local government was a prime element of democracy and demonstrated the intrinsic values of democracy, irrespective of the services it provided---Government was truly representative when all types of people could take part---Local government level offered the closest thing to widespread consultation and participation---On a political dimension, the operational freedom to fulfil local needs and aspirations with necessary popular mandate was the hallmark of local government, it was thus a variant of democracy---Creation of the third tier of government (i.e. Local Government) based on constitutional directive to devolve political, administrative and financial responsibility and authority to the elected representatives of the local government promoted Pakistan's constitutional vision of a federalist State---Political significance of a local government was further underlined when under Art.140A(2) of the Constitution, which commanded that the elections to the local government, like the national and provincial assemblies, shall be held by the Election Commission of Pakistan---Electoral recognition added constitutional weightage to the political importance of the local government and firmly established local government as a third tier of government in Pakistan's political landscape---Without a clear vesting of certain core functions with the local government it would be unable to play its role, for democracy to deepen, for diverse opinions and legitimate interests to be taken into account, for service delivery to be closer to and held accountable by the people, for institutions to build capacity and expertise etc.---Local government institutions had to be empowered and given definite functions; they were not envisioned by Art. 140A of the Constitution to be an agent or an underling of provincial governments but a distinct and empowered third tier of elected governance.

(p) Constitution of Pakistan---

----Art. 140A---History of Local Governments in Pakistan traced.

Cheema, A., A. Q. Khan and R. Myerson (2015, forthcoming). "Breaking the Countercyclical Pattern of Local Democracy in Pakistan¨ in J. P. Faguet (eds) Is Decentralization Good for Development: Perspective from Academics and Policymakers, Oxford University Press; Cheema, A., A. I. Khwaja, and A. Qadir (2006) "Local Government Reform in Pakistan: Context, Content, and Causes," in Bardhan, P. and D. Mookherjee (eds.) Decentralization and Local Governance in Developing Countries: A Comparative Perspective, MIT Press; Cheema, A. (2012) "Devolution of Power Plan 2000¨ in A. Jalal (eds.) The Oxford Companion to Pakistani History, OUP; Pash, H. and A. G. Pasha (1990) Local Government Administration in Pakistan, AERC, Karachi; Manning, N., D. Porter, J. Charlton, M. Cyan and Z. Hasnain (2003) Devolution in Pakistan: Preparing for Service Delivery Improvements, World Bank, Pakistan; Rizvi, S. A. (1976) Changing Patterns of Local Government in Pakistan, Pakistan Historical Society, Karachi; Aziz, D. (2011) "Bureaucracy v. the People," The News December 13, 2011: Acemoglu, D. and J. A. Robinson (2012). Why Nations Fail: The Origins of Power, Prosperity and Poverty, Profile Books, Tocqueville, A. (1835) Democracy in America, 2003 edition, Penguin and Heller, P. (2001). "Moving the State: The Politics of Democratic Decentralization in Kerala, South Africa, and Porto Alegre,¨ Politics and Society, 29(1); Ghatak, M. and M. Ghatak (2002). "Recent Reforms in the Panchayat System in West Bengal: Toward Greater Participatory Governance?¨ Economic and Political Weekly, January, 5; Sambur, B (2009). "The Great Transformation of Political Islam in Turkey: The Case of Justice and Development Party and Erdogan,¨ European Journal of Economics and Political Studies, 2(2) ref.

(q) Constitution of Pakistan---

----Art. 140A---Local Government system---History and features of Local Government systems in foreign jurisdictions (India and South Africa) traced.

Durga Das Basu, Commentary on the Constitution of India, Vol-8, p.8591. 8th Edn. (reprint 2012); De Visser, Jaap (2002) "Powers of Local Government" 17 SA Public Law 223 and De Visser, Jaap (2005) Developmental Local Government (Antwerpen, Oxford: Intersentia) 125ff. as quoted in, "DEFINING PROVINCIAL AND LOCAL GOVERNMENT POWERS AND FUNCTIONS: THE MANAGEMENT OF CONCURRENCY by Professor Nico Steytler Mr Yonatan Fessha available at http://p09.opennetworks. co.za/ldphs. org.za/publications/ publications-by-theme/local-government-in-south-africa/powers-of-local-government/ Defining%20 Provincial%20and %20Local%20 Govern-ment% 20Powers %20and%20Functions% 20The %20Management %20of%20Concurrency%20-2005.pdf ref.

(r) Words and phrases---

----"Federalism"---Meaning.

The Free Dictionary by Farlex and Making Our Democracy Work-Stephen Breyer, pp.122-123 ref.

(s) Constitution of Pakistan---

----Art.140A---Local Government system---Decentralization of powers---Administrative, fiscal and political decentralization---Meaning---Local Government system was established and empowered through the process of decentralization---Logic behind decentralization was not just about weakening the central authority, nor was it about preferring local elites to central authority, but it was fundamentally about making governance at the local level more responsive to the felt needs of the large majority of the population---Different dimensions of decentralization were; administrative decentralization - how responsibilities and authorities for policies and decisions were shared between levels of government and how these were tuned into allocative outcomes; fiscal decentralization - the assignment of expenditures, revenues and borrowing amongst different levels of governments; political decentralization - how the voice of citizens was integrated into policy decisions and how civil society could hold authorities and officials accountable at different levels of government.

Pranab Bardhan. Decentralization of Governance and Development. Journal of Economic Perspectives. Vol.16., Number 4, Fall 2002. pp.185-205 ref.

(t) Constitution of Pakistan---

----Art.140A---Local Government system---Decentralization of powers---Modes of decentralization---Deconcentration, Delegation and Devolution---Meaning and distinction---Deconcentration was the shallowest form of decentralization and the least ambitious level of decentralization, where responsibilities were transferred to an administrative unit of the central government that was spatially closer to the population where service was to be provided, usually a field or regional office---Delegation was an intermediate level of decentralization, where some authority and responsibilities were transferred to a lower level of government, but there was a principal-agent relationship between the central and sub-national government in question, with the agent remaining accountable to the principal---Devolution was the deepest form and most ambitious form of decentralization, where the central government devolved responsibility, authority, and accountability to sub-national governments with some degree of political autonomy.

(u) Words and phrases---

----"Devolve"---Meaning.

Corpus Juris Secondum Volume 26A and Blacks Law Dictionary 9th Edn. ref.

(v) Constitution of Pakistan---

----Arts. 140A, 2A, 9, 14 & 17(2)---Local Government system---Devolution of powers from Provincial to Local Government---Autonomy of Local Government---Scope---Dilution/restriction of powers of Local Government---Effect---Devolution signified transfer of power from the provincial government to the local government---Scope and nature of power, the "core functions," to be transferred could be by the Constitution itself or left to the discretion of the provincial legislature---Complying with the constitutional mandate under Art.140A of the Constitution, once the trinitarian devolution i.e., political, administrative and financial, took place, the elected local government enjoyed the autonomy and independence to exercise such powers to the exclusion of other executive functionaries---Any interference or dilution of such power by the provincial government or any other authority, without there being any change in the legislative design, which drew its power under Art.140A, would render a democratically elected local government totally otiose---Any interference in the political, administrative and financial space of the Local Government system, would be undemocratic and not in step with the constitutional vision---Any provincial law that thwarted or restricted the elected local government from performing its functions under the law offended Art.17(2) of the Constitution---When clearly delineated devolved powers of the local government were in any manner abridged, diluted or impeded by the provincial government or through its instrumentalities, it offended the fundamental rights to life, dignity and political participation besides offending constitutional principles of political, economic and social justice guaranteed to the citizens under the Objectives Resolution---Article 140A of the Constitution suggested that the assignment of functions to the local tier remained the prerogative of the provincial legislature subject to the limitation that local tier could not be stripped off a core bundle of functions over which it was empowered to exercise self-government---Diluting the core bundle beyond a minimum threshold through centralization was tantamount to stripping local governments of their basic functionality as a tier of government---While local government legislation came under the purview of the provincial legislature, but it did not make provincial governments the "controlling authority" of local governments---Although local governments would have to function within the substantive framework established by the provincial legislature, but any such framework established by the provincial legislature had to conform to Art. 140A of the Constitution, and, hence, devolve a meaningful set of core local functions to comply with Art. 140A of the Constitution---Provincial legislatures had to ensure that local governments had been provided a meaningful core bundle of functions on which provincial departments did not have overlapping jurisdictions---Failure to do so would limit the local governments' ability to act as institutions of self-government, which was not consistent with Art. 140A of the Constitution.

(w) Principles---

----Subsidiarity", principle of---Meaning, significance and scope.

Chantal Millon-Delsol, L'etat subsidiaire 13 (1992); The Free Dictionary by farlex; Mark Friesen. Subsidiarity and Federalism: Anold concept with contemporary relevance for political society. Federal Governance: A Graduate Journal of Theory and Politics (2003); Let Them Eat Beans, Austin AM-Stateman, 2002 at A15 and Subsidiarty as a principle of governance-beyond Devolution. Robert K. Vischer. INDIANA Law Review Vol.35:103 ref.

(x) Lahore Development Authority Act (XXX of 1975)---

----Ss.6, 13, 13A, 14, 15, 16, 18, 20, 23, 24, 28, 34A, 34B, 35, 38 & 46---Punjab Local Government Act (XVIII of 2013), S. 87---Constitution of Pakistan. Arts.9, 14, 17, 25, 32, 37(i), 140A & 199---Public interest litigation---Signal Free Corridor Project ("Project") proposed and initiated by Lahore Development Authority ("LDA")---Constitutionality and legality---Lahore Development Authority ("LDA") usurping and encroaching upon the powers and authority devolved on to the elected representatives of the Local Government---Section 13(5) of Lahore Development Authority Act, 1975, specifically provided that a "Government Agency" (which includes a local government) shall not prepare a planning or development scheme within the Area except with the concurrence of LDA---Similarly, LDA had the power to prepare housing, building infrastructure services, commercial and semi-commercial projects (section 13A) or do land use classification (section 14), make master plan (section 14A ), or give direction to the local government to execute a scheme in consultation with LDA, or take over and maintain any of the works and services in that area, to provide amenity in relation to the land which in the opinion of the LDA ought to be provided and to enforce regulations on behalf of LDA (section 15)---Lahore Development Authority (LDA) also had the powers to execute schemes (section 16); to declare any locality within an area to be controlled area and issue such directions for the prevention of haphazard growth or encroachments and unauthorized construction in such area (section 18); to remove sources of pollution (section 20); to impose betterment fee (sections 23 & 24); to impose rates, fees, surcharges or other charges and fines (section 28); to extension time and cancel approved schemes (sections 34A and 34B); to punish offenders (section 35); to convert property for different use (section 38)---Lahore Development Authority Act, 1975, was to override other laws (section 46)---All such powers provided to LDA under the Lahore Development Authority Act, 1975, usurped the responsibilities and authorities devolved to the local government under Punjab Local Government Act , 2013, and offended the constitutional mandate of Art.140A of the Constitution---Lahore Development Authority (LDA) could not assume jurisdiction or interfere in the political, administrative and financial powers devolved on to the local government through Punjab Local Government Act, 2013, under Article 140A of the Constitution---High Court declared that the powers and functions of LDA under Ss.6, 13, 13A, 14, 15, 16, 18, 20, 23, 24, 28, 34A, 34B, 35, 38 & 46 of Lahore Development Authority Act, 1975, to the extent that they usurped, trumped, encroached, diluted and abridged the powers, responsibility and authority devolved on to the elected representatives of the Local Government System under Art.140A of the Constitution through Punjab Local Government Act, 2013, were ultra vires Arts.9, 14, 17 & 25 of the Constitution and offensive to Arts.32, 37(i) & 140A of the Constitution; that proceedings with the Signal Free Corridor Project by LDA would be in violation of Art. 140A of the Constitution, therefore, initiation of the said Project by LDA was struck down as being unconstitutional---High Court directed that till such time the local government system was functionalized by its elected representatives, LDA may continue with its day-to-day repair and maintenance work within its area of jurisdiction and complete all the pending projects; that LDA may propose the establishment of the project in question to the elected local government system and it was up to the elected Local Government to approve the same in accordance with law; that LDA proceeded with the project in question at the cost of causing loss to the public exchequer and inconvenience to the residents of Lahore, thus, National Accountability Bureau (NAB) should initiate an inquiry against the DG, LDA for failing to comply with the law and to account for the loss of public money---Constitutional petition was allowed accordingly.

(y) Constitution of Pakistan---

----Art. 140A---Local Government, powers of---Political, administrative and financial powers of Local Government, withdrawal of---Permissibility---Provincial Legislature had the power to alter or withdraw the devolved powers subject to the principles of subsidiarity and federalism but till then the said powers were protected under the vertical separation of powers introduced by Art. 140A of the Constitution and no provincial or federal legislation could impair or impede the political, administrative and financial responsibility and authority of the elected representatives of the Local Government.

(z) Constitution of Pakistan---

----Arts. 140A & 199---Punjab Local Government Act (XVIII of 2013), Preamble---Public interest litigation---Local Government elections---Provincial Government delaying holding of elections for Local Government---Effect---Such delay in holding elections was purely political and in violation of the law---Delay in holding the elections did not in any manner undo devolution or by any mechanism revert power from the local governments into the hands of the Provincial Government or its statutory authorities---Elections were a consequence and not the source of devolution---Article 140A of the Constitution was the source and design of devolution and the provincial legislation actualized such constitutional mandate---Delay in elections simply delayed the exercise of such devolved power but could not permit it to be exercised by another authority in the meanwhile---Failure to hold local government elections and the absence of municipal services for the benefit of the public was the sole responsibility of the executive---Constitutional petition was allowed accordingly.

Petitioners by:

Salman Akram Raja assisted by Ms. Aneesa Agha, Ali Javaid, Hamaad Mustafa, Tariq Bashir and Ms. Atira Ikram, along with Ms. Imrana Tiwana, petitioner.

Saad Rasool, Saad Amir, Fahad Malik (petitioner in person) and Angbeen Atif Mirza in connected writ petitions.

Respondents by:

Naseer Ahmad Bhutta, Additional Attorney General for Pakistan.

Mian Irfan Akram and Nasar Ahmad, Deputy Attorneys General for Pakistan.

Syed Akmal Hussain Shah, Standing Counsel for Pakistan.

Ms. Hina Hafeezullah Ishaq, Standing Counsel for Pakistan.

Naveed Rasool Mirza, Advocate General, Punjab.

Shan Gul, Additional Advocate General, Punjab.

Anwaar Hussain and Ahmad Hasan Khan, Assistant Advocates General, Punjab.

Shahid Hamid and Ayesha Hamid for respondent No.9 (in W.P. No.5323/2015).

Khawaja Haris Ahmad, Mustafa Ramday, Waqar A. Sheikh, Salman Mansoor and Jahanzaib Inam for respondent LDA.

Barrister Muhammad Umar Riaz, Asjad Saeed and Parvez I. Mir and Muhammad Azhar Siddique for respondents.

Farooq Ahmed Sheikh, DG, EPA, Naseem ur Rehman, Director (EIA), Muhammad Rashid, Director (Law), Muhammad Nawaz Manik, Deputy Director (Legal), EPA, Punjab.

Ashfaq Ahmed Rana, Litigation Officer, TEPA.

Sharjeel Haider, Assistant Director (Legal), EPA, Punjab.

Asrar Saeed, Chief Engineer, LDA.

Khalid Mahmood Alvi, Project Director, LDA.

Amici Curiae:

Professor Roger Myerson, Glen A. Lloyd Distinguished Service Professor of Economics at the University of Chicago and the Recipient of the 2007 Nobel Memorial Prize in Economics Sciences, Dr. Ali Cheema, Associate Professor of Economics Lahore University of Management Sciences (LUMS) and Senior Research Fellow in Political Economy Institute of Development and Economic Alternatives (IDEAS), Professor Osama Siddique, an international legal scholar and public policy expert. He is an Associate Fellow at the public policy research institute IDEAS and also on the senior faculty of the Harvard based research center IGLP.

Waqqas Ahmad Mir.

Assisted by:

Qaisar Abbas and Mohsin Mumtaz, Civil Judges/Research Officers, Lahore High Court Research Centre (LHCRC).

Dates of hearing: 6th, 7th, 8th, 9th, 10th, 13th, 14th, 15th, 16th and 17th April, 2015.

"You can cut all the flowers but you cannot keep spring from coming."

Pablo Neruda

2015 C L D 1089

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN (IDBP) through Authorized Officer---Appellant

versus

The LEARNED JUDGE, BANKING COURT NO.III, LAHORE and others---Respondents

E.F.A. No. 443 of 2012, heard on 11th December, 2014.

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

----Ss. 22, 7 & 2(a)---Industrial Development Bank of Pakistan Ordinance (XXXI of 1961), Ss. 42, 3(2) & 13---Suit for recovery by Financial Institution, a statutory body---Persons authorized to file suit and appeal under Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Appeal of appellant (Bank) under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was filed through an officer who had been delegated powers by the Board of Directors of the Bank---Contention of the respondent was that the said person was not authorized to file present appeal, and therefore, the same was not maintainable---Held, that the present appeal had been commenced by an officer to whom powers had been delegated under a statute by the Board of Directors of the appellant Bank---When a suit was filed by a limited company, the lis could not be initiated on behalf of a company without having due authority either in terms of Articles of Association or the Board of Directors; but in the present case, the appellant Bank was a statutory body and in terms of S.42 of the Industrial Development Bank of Pakistan Ordinance, 1961; powers had been delegated by the Board of Directors upon the official who had initiated the present appeal; and therefore the present appeal was maintainable.

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

----Ss. 3, 17 & 9---Decree of suit---Award of "cost of funds"---Determination of "cost of funds"---Mandatory nature of S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Suit for recovery was decreed and a certain amount was determined by the Banking Court as being payable by the customer/defendant to appellant Bank as the "cost of funds"---Contention of the appellant Bank was that the impugned order of Banking Court had been passed in violation of S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as the cost of funds determined by the Banking Court were in contravention to the said S.3 of the Ordinance---Held, that S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that the customer, in case of default in discharging his obligation, shall be liable to pay from the date of such default till realization of the outstanding liability, the "cost of funds" of the Financial Institution at the rate as certified by the State Bank of Pakistan, from time to time---In the present case, the Banking Court while passing impugned order had not taken into account the rate of cost of funds as determined by the State Bank of Pakistan and parameters had not been followed by the Banking Court and nothing was specified as to at what rate the cost of funds had been applied upon the outstanding liability of the customer, while determining the amount payable by the customer/defendant---Impugned order, therefore, had been passed in contravention to the mandatory provisions of S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside impugned order and remanded matter to the Banking Court with the direction to determine the cost of funds strictly in accordance was S.3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed, accordingly.

Muhammad Younus Ch. for Appellant.

Waqar Mushtaq for Respondents Nos.5 to 7.

Nemo for Respondents Nos.2 to 4.

Date of hearing: 11th December, 2014.

2015 C L D 1104

[Lahore]

Before Muhammad Qasim Khan, J

BILAL AHMAD---Petitioner

versus

JUSTICE OF PEACE/A.S.J. and 2 others---Respondents

W.P. No. 658 of 2012, decided on 3rd June, 2013.

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

----Ss. 20 & 7---Penal Code (XLV of 1860), S. 489-F---Criminal Procedure Code (V of 1898) S. 154---Constitution of Pakistan, Art. 199---Constitutional petition---Jurisdiction of Banking Court---Cheque issued to Financial Institution by customer as guarantee for return of loan facility---Dishonouring of cheque---Order for registration of FIR under S. 489-F, P.P.C.---Petitioner impugned order of Justice of Peace whereby FIR under S. 489-F, P.P.C. was ordered to be registered against him for dishonouring of cheque issued by him as guarantee to the Financial Institution---Held, that per S. 7 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; no court other than the Banking Court shall have or exercise jurisdiction with respect to any matter to which jurisdiction of the Banking Court was extended to under the said Ordinance---Section 20(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 dealt with the dishonest issuance of cheque and punishment of said offence had been provided in this section and therefore it was obvious that in said matter jurisdiction only lay with the Banking Court and not before any other court---Under S. 20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, offences under the Ordinance shall be bailable, non-cognizable and compoundable and S. 154, Cr.P.C. came in field where the commission of a cognizable offence was disclosed---When the statute itself made it clear that the offence was not cognizable, then registration for a criminal case/FIR by local police could not be permitted---High Court observed that even though S. 489-F was inserted after promulgation of the Financial Institutions (Recovery of Finances) Ordinance, 2001; but same would not give it an overriding effect over the Financial Institutions (Recovery of Finances) Ordinance, 2001, which was a special law---Impugned order was set aside--- Constitutional petition was allowed, in circumstances.

Muhammad Asif Nawaz v. The ASJ and others W.P. No. 10707 of 2012 rel.

(b) Interpretation of statutes---

----Conflict of laws---Interpretation of a general law in juxtaposition with a special law---Principles---General law and a special law on the same subject were statutes in pari materia and should accordingly be read together and harmonized, if possible, with a view to giving effect to both---Whenever there were two laws; one which was a special and particular law, and the other a general law, which if standing alone, would include the same matter and thus conflict with the special law; the special law must prevail since it evinced the legislative intent more clearly than the general statute---If a special law was passed before or after the general law; the same would be regarded as an exception to; or a qualification of, the prior general law; and where the general law was passed later than the special law; the special law would be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication.

Muhammad Asif Nawaz v. The ASJ and others W.P. No. 10707 of 2012 rel.

Makhdoom Mashooq Hussain for Petitioner.

Mubashir Latif Gill, Assistant Advocate General.

Muhammad Salim Iqbal for Respondent No. 3.

2015 C L D 1119

[Lahore]

Before Shams Mehmood Mirza, J

FATIMA SUGAR MILLS LIMITED AND OTHERS: In the matter of

C.O. No.10 of 2012, decided on 16th March, 2015.

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

----S. 284---Amalgamation scheme of companies---Consent of shareholders---Principle---There need not be 100% consent of shareholders or the creditors as what is required is super majority of three fourth in order to constitute consent for the purposes of sanctioning a scheme of arrangement/amalgamation---Scheme when approved by prescribed majority of members and creditors, also binds minority dissidents, if any.

J.K. (Bombay) Private Limited v. Messrs New Kaiser-I-Hind Spinning and Weaving Company Limited and others AIR 1970 SC 1041 and In re: Telesound India Limited (1983) 53 Company Cases 926 (Delhi) rel.

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

----Ss. 284 & 287---Stamp Act (II of 1899), Ss. 2(14), 3 & First Sched., Art.27-A [as amended by Punjab Finance Act (I of 2008)]---Amalgamation of companies--- Transfer of property---Stamp duty, levy of---Words 'instrument' and 'document'---Scope---At the time of approval of scheme of amalgamation of petitioner companies, authorities raised an objection with regard to payment of stamp duty on the properties which were to be transferred as a result of such amalgamation---Validity---Decree of Court which resulted in transfer of property or had created or transferred a right in property should be included in the definition of 'document'---In consequence of an order sanctioning scheme of arrangement/amalgamation, transfer of assets had taken place from transferor company to transferee company in terms of S. 287 of Companies Ordinance, 1984---Such order was an instrument as it conveyed and had the effect of conveying title in property from transferor company to transferee company---Incident of transfer of assets from transferor company to transferee company in the order sanctioning scheme of arrangement/amalgamation made it liable to stamp duty in terms of Art. 27-A of First Schedule to Stamp Act, 1899---Such order was, without any question, an 'instrument' as defined in S. 2(14) of Stamp Act, 1899---High Court directed parties to petition to supply to office of High Court, requisite stamp paper, before the order sanctioning a scheme under S. 284 of Companies Ordinance, 1984, was passed, whereafter the order would be placed for final signatures---High Court restrained Registrar of Companies from receiving and taking on its record an order sanctioning a scheme of arrangement/amalgamation until the same was duly stamped in terms of applicable provisions of Stamp Act, 1899---Petition was allowed accordingly.

Hindustan Lever and another v. State of Maharashtra and another (2004) 9 Supreme Court 483; J.K. (Bombay) Private Limited v. Messrs New Kaiser-I-Hind Spinning and Weaving Company Limited and others AIR 1970 SC 1041; In re; Telesound India limited (1983) 53 Company Cases 926 (Delhi); Sun Alliance Ltd. v. Inland Revenue Commissioners [1971] 1 All ER 135; Pakistan National Shipping Corporation v Adamjee Insurance Company Limited 1987 CLC 1376; Delhi Towers 1 Limited v. G.N.C.T. of Delhi C.A. No.466/2008 in Company Petition No.50 of 2003 and State of Maharashtra and others v. M.S. Builders Pvt. Ltd. and another 1992 (1) Bom. Cr. 568 ref.

Ruby Sales and Services 9P) Ltd. and another v. State of Maharashtra and others (1994) 1 SCC 531; Bayer Pakistan (Pvt.) Limited and others v. Board of Revenue and others 2002 CLD 823 and Re Harrison's Share under a settlement, Harrison v. Harrison [1995] 1 All ER 285 rel.

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

----S. 2(10)--- Word 'includes'---Effect---Word 'includes' as used in S. 2(10) in Stamp Act, 1899, implies an extended meaning by including to generic meaning of 'conveyance'.

Dilworth v. Commissioner of Stamps 1899 AC 99 and Emperor v. Jianand AIR 1928 Sindh 149 rel.

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

----Ss. 2(4), 2(7), 2(13) & 2(21)---Company, status of---Organs of company---Scope---Company thinks, forms intentions, makes decisions and acts through more than one means---Members (voting in general meeting) and directors (taking decisions in Board meetings) constitute two organs of the company---Such terms signify their constitutional authority to act as company rather than merely to represent as its agent---Each organ has specific and general powers to make decisions---Organ constituted by members is called "the general meeting" and by directors "the board of directors"---Board of directors, as a decision making organ of the company, has broad powers to manage business of company.

Meridian Global Funds Management Asia Limited v. Securities Commission [1995] 3 ALL ER 918 ref.

Imtiaz Rasheed Siddiqui, Barrister Shehryar Kasuri for Petitioners (in C.O.No.10 of 2012 and C.O No. 25 of 2013).

Barrister Ahmad Pervez for the Petitioner Companies (in C.O No.18 of 2012).

Ms. Samia Khalid, Assistant Advocate General.

Umair Mansoor Advocate for SECP.

Date of hearing: 22nd December, 2014.

2015 C L D 1155

[Lahore]

Before Muhammad Khalid Mehmood Khan and Ibad ur Rehman Lodhi, JJ

Mst. NASEEM BIBI---Appellant

versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Respondents

Regular First Appeal No. 186 of 2008 decided on 17th December, 2014.

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

----Ss. 118 & 124---Appellant/claimant impugned order of Insurance Tribunal whereby claim of additional liquidated damages of appellant was rejected and she was only held entitled to receive the amount of liquidated damages already paid to appellant by the Insurance Corporation---Held, that an additional amount as liquidated damages was received by the appellant from the Insurance Corporation but there was dissatisfaction on part of the appellant as to the quantum of such amount of liquidated damages, but neither any period as to the entitlement of the appellant to receive such liquidated damages nor any amount, except one which was calculated by the Insurance Corporation and paid to the appellant, were provided by the appellant---In absence of any exact calculation to the contrary, the Insurance Tribunal was right in depending upon calculation made by the Insurance Corporation towards the entitlement of the appellant in respect of the amount of the liquidated damages---Appeal was dismissed, in circumstances.

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

----S. 118---Limitation Act (IX of 1908), Art. 86(a)---Computation of period of limitation for filing of claim/application before the Insurance Tribunal under S. 118 of the Insurance Ordinance, 2000---Claims arising before the constitution of the Insurance Tribunal under S. 118 of the Insurance Ordinance, 2000---Insured died on 12-10-2001 and application of claimant under S. 118 of the Insurance Ordinance, 2000; before Insurance Tribunal was rejected on the ground that the same was barred by time---Held, that period of limitation of three years provided in Art. 86(a) of the Schedule to the Limitation Act, 1908 was to run from date when the sum insured was payable after proof of death had been given or received by the insurer---Insurance Tribunal came into existence with effect from 20-6-2006 and before said date; the claimant had been approaching different forums like the Ombudsman, the President, the High Court and immediately after the constitution of the Insurance Tribunal, under the Insurance Ordinance, 2000; the claimant within three months approached the Insurance Tribunal therefore claimant could not be held guilty of any delay in lodging of application under S. 118 of the Insurance Ordinance, 2000 despite the fact that the insured had passed away on 12-10-2001---High Court observed that in the present case, limitation could not be treated to commence from date of death of the insured; rather the same would start from 20-6-2006 when the forum for lodging of such application under S. 118 of the Insurance Ordinance, 2000 was established; and therefore application of appellant under S. 118 of the Insurance Ordinance, 2000 was not barred by time.

Liaqat Ali Butt for Appellant.

Ali Akbar Qureshi and Ibrar Ahmad with Safdar Ali Qureshi, Law Officer, State Life Insurance Corporation for Respondents.

Date of hearing: 11th September, 2014.

2015 C L D 1167

[Lahore]

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

The BANK OF PUNJAB---Appellant

versus

SIKANDAR HAYAT KHAN and 4 others---Respondents

R.F.A. No. 62 of 2013 heard on 3rd October, 2013.

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

----Ss. 9, 17 & 22---Civil Procedure Code (V of 1908), O. XX, R. 11---Suit for recovery---Decree passed by consent of parties---Payment of decretal amount by instalments---Mandatory for Banking Court to give sufficient reasons for order of payment of decretal amount in installments---Banking Court passed decree in favour of plaintiff bank by consent of both parties---Subsequently application of judgment-debtors to pay decretal amount by instalments was allowed by Banking Court---Contention of the decree-holder bank was that while giving consent to the decree, the decree-holder bank never agreed to receiving payments on instalments---Held, that Banking Court had the option to either refuse passing of the consent decree or in absence of an agreement between the parties on the mode of payment, the Banking Court could itself, after giving hearing to the parties and by giving sufficient reasons, make order for payment of decretal amount in instalments---Perusal of impugned order revealed that said order was made in a mechanical manner without giving sufficient reasons for passing order for payment of decretal amount in instalments---Under O. XX, R. 11, C.P.C., the court had to give sufficient reasons, which was not done in the present case---No facts or circumstances of the case were discussed and there was force in the contention of the decree-holder bank that once sufficient mortgaged property was available with the bank to recover the decretal amount in lump sum, and given that the defendants were resourceful persons; no justification was available to pass order for payment for decretal amount in instalments---High Court observed that the Banking Court could not pass order for payment of decretal amount in instalments without giving sufficient reasons, especially where decree was a consent decree and amount was already reduced by the bank itself---High Court modified decree and order of Banking Court to the extent that the defendants were to pay the decretal amount in lump sum---Appeal was allowed, accordingly.

Wilayat Hussain v. Zeb-un-Nisa PLD 1979 Note 10 (Lahore) ref.

Mst. Shaheda and 2 others v. Imam ud Din PLD 1978 Kar. 472; Syed Ghulam Abbas and others v. Mst. Khurshid Begum 1980 CLC 1636; Messrs Muslim Commercial Bank Limited v. Messrs Perwani Export and Import Trading Co. and others 1999 YLR 975 and Mrs. Farida Hanif Motiwala v. Qais Mansoor Sheikh 2000 CLC 1328 rel.

Muhammad Saleem Iqbal for Appellant.

Abdul Majeed Malik for Respondents Nos. 1 to 3.

Date of hearing: 3rd October, 2013.

2015 C L D 1184

[Lahore]

Before Ch. Muhammad Masood Jahangir and Ch. Muhammad Iqbal, JJ

Mst. SHAFIA BIBI---Appellant

versus

STATE LIFE INSURANCE CORPORATION and others---Respondents

Insurance Appeal No. 413 of 2014 heard on 22nd January, 2015.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 122---Limitation Act (IX of 1908) Ss. 19, 149 & Art. 86(a)---Civil Procedure Code (V of 1908), O. VII, R. 11---Life insurance claim---Computation of period of limitation---Effect of acknowledgement in writing in relation to life insurance claim---Application of claimant for liquidated damages was rejected by Insurance Tribunal on the ground that the same was barred by time---Contention of claimant was, inter alia, that fresh period of limitation would be computed from the time the main life insurance claim was paid in compliance of the direction of the Federal Ombudsman, therefore application of claimant for liquidated damages was filed within time---Held, that the insurance policy commenced on 31-8-2007 whereas the insured died on 27-12-2007 and claim of claimant was repudiated on 25-11-2008 by the Insurance Corporation after which claimant filed complaint before Federal Ombudsman which was concluded on 6-2-2010 and in compliance thereof, the main life insurance claim amount was paid to the claimant on 25-5-2012 and therefore fresh period of limitation was to be computed from 25-5-2012 when claim was paid without liquidated damages; as the same amounted to acknowledgement of liability and S. 19 of the Limitation Act, 1908 was therefore applicable to the present case---Even otherwise question of limitation was a mixed question of law and facts and same could not be adjudged without recording of evidence and the Insurance Tribunal failed to consider applicability of Ss. 14 & 19 of the Limitation Act, 1908 and application of the claimant could not be summarily rejected while applying Art. 86(a) of the Limitation Act, 1908---Article 86(a) of the Limitation Act, 1908 would be applicable if the claim of the claimant was payable, whereas, in the present case claim of the claimant was repudiated, and such aspect of the case was ignored by the Insurance Tribunal while passing impugned order---High Court set aside impugned order and remanded the case to the Insurance Tribunal for decision afresh---Appeal was allowed, accordingly.

Mst. Robina Bibi v. State Life Insurance Corporation of Pakistan 2013 CLD 477 rel.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

Date of hearing: 22nd January, 2015.

2015 C L D 1197

[Lahore]

Before Muhammad Farrukh Irfan Khan and Ali Akbar Qureshi, JJ

MUHAMMAD AJMAL KHAN---Appellant

versus

ZARAI TARAQIATI BANK LIMITED through Branch Manager---Respondent

R.F.A. No. 365 of 2010 decided on 8th December, 2014.

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

----Ss. 10, 9 & 22---Civil Procedure Code (V of 1908), O. XI, Rr. 12 & 14---Procedure of Banking Court---Suit for recovery---Application for leave to defend was dismissed and suit was decreed in favour of plaintiff Bank----Contention of defendant was, inter alia, that the plaintiff Bank had charged excessive mark-up and had tampered with the record and documents---Held, that contention of defendant had no force in presence of its admission that loan facility was availed by the defendant after executing necessary documents and a presumption of correctness was attached to the same---Defendant could not point out any forgery or tampering as alleged by it therefore mere allegation of fraud or tampering was not sufficient as the defendant was bound to state the details and ingredients of the alleged fraud---Contention that application under O. XI, Rr. 12 & 14 of the C.P.C. should have been allowed by the Banking Court for summoning of documents; had no force as without granting the petition/application for leave to defend, no such application could be entertained or decided by the Banking Court---No reason therefore, existed to interfere with impugned order of Banking Court---Appeal was dismissed, in circumstances.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 and Muhammad Azwar Siddiqui v. Chief Executive Union Leasing Ltd. and 21 others 2006 CLD 946 rel.

Abdul Majeed Malik for Appellant.

Sardar Riaz Karim for Respondent.

2015 C L D 1202

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

ALLIED BANK LTD.---Appellant

versus

Messrs CHIC TEXTILES (PVT.) LTD. and others---Respondents

Case No. E.F.A. 387 of 2007 heard on 11th November, 2014.

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

----Ss. 19(7)(a), 19 & 27---Civil Procedure Code (V of 1908), O. XXI, Rr. 23-A, 29 & S. 47---Specific Relief Act (I of 1877), S. 42---Execution of decree passed by Banking Court---Stay of execution proceedings in view of pending suit, under O. XXI, R. 29, C.P.C.---Mandatory provision of O. XXI, R. 23-A, C.P.C.---Scope---Decree-holder/Financial Institution impugned order of Banking Court whereby execution proceedings were stayed until disposal of a suit for declaration filed by judgment-debtor---Contention of decree-holder/Financial Institution was that the impugned order was passed in disregard to provisions of O. XXI, R. 23-A, C.P.C.---Held, that judgment and decree passed in favour of the Financial Institution had attained finality, which then stood converted into execution proceedings, and if some verbal objections had been raised by judgment-debtor, neither such objections could be considered nor the execution could have been stayed in view of the bar contained in O.XXI, R. 23-A of the C.P.C.---Decree passed in favour of the Financial Institution was a money decree and in terms of O. XXI, R.23-A, C.P.C., even an objection to a money decree could not be considered unless judgment-debtor deposited decretal amount in court or furnished security---Contention that proceedings had been stayed in view of O. XXI, R. 29, C.P.C. was misconceived as in the suit for declaration the judgment-debtor had claimed ownership of the mortgaged machinery imported by it and was now contending that said machinery had already been auctioned of and decretal amount had been satisfied; and such stance was contradictory---Operative part of the impugned order of Banking Court explained that the execution proceedings were to be kept pending until disposal of suit for declaration filed by judgment-debtor; however said suit for declaration had apparently become infructuous as judgment-debtor contended that the machinery had been auctioned off; meaning thereby that no decree could be passed in favour of the judgment-debtor in the suit for declaration, on basis of which impugned order to stay execution proceedings was made---Even otherwise question with regard to satisfaction of decree could have been decided under S. 47 of the C.P.C. as all questions relating to discharge or satisfaction of a decree were to be determined by the Executing Court; and no such exercise was made in the present case---Objection as to non-executability of decree related to execution of decree and Executing Court was barred from considering the same under provisions of R. 23-A of O. XXI, C.P.C. unless the judgment-debtor furnished security for its payment---Provisions of O. XXI, C.P.C. were to be read in conjunction with provisions of S. 47, C.P.C., which laid down the scope of the objection that could be raised in execution and S. 47 of the C.P.C. empowered the Executing Court to determine the questions relating to execution, discharge and satisfaction of decree and it barred a separate suit and the court was also barred from considering such objections unless the judgment debtor made compliance of O. XXI, R. 23-A of the C.P.C.---Impugned order therefore could not hold field and was set aside---Appeal was allowed, accordingly.

Happy Family Associate through Chief Executive v. Messrs Pakistan International Trading Company PLD 2006 SC 226 and Allied Bank of Pakistan Ltd. v. Fath Textile Mills Limited and 7 others PLD 2007 Kar. 397 rel.

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

----Ss. 19(7)(a), 19 & Preamble---Civil Procedure Code (V of 1908), O. XXI & S. 47---Object and purpose of Financial Institutions (Recovery of Finances) Ordinance, 2001---Execution of decree---Interpretation of S. 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Procedure for execution of decree, nature of---Financial Institutions (Recovery of Finances) Ordinance, 2001 was enacted to provide speedy measures for recovery of outstanding loans and finances of the Financial Institutions/banking companies, and for such reason; it had been specifically provided in S. 19(7)(a) of the Ordinance, that notwithstanding anything contained in the Civil Procedure Code, 1908; or any other law for the time being in force, the Banking Court shall conclude the claims and objections filed in execution proceedings within a period of thirty days and in doing so shall follow a summary procedure---Legislature through a special law had excluded the applicability of the Civil Procedure Code, 1908 on execution proceedings pending before the Banking Court---Use of the term "notwithstanding anything contained in the Civil Procedure Code, 1908 or any other law for the time being in force" in S. 19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001 made it clear that through the said non obstante clause, the Legislature in its wisdom had excluded the application of provisions of C.P.C. in execution of decree passed in favour of the Financial Institution.

Ms. Ayesha Hamid for Appellant.

Muhammad Shahnawaz Khan for Respondents.

Date of hearing: 11th November, 2014.

2015 C L D 1208

[Lahore]

Before Ch. Muhammad Masood Jahangir and Ch. Muhammad Iqbal, JJ

Mst. ABIDA ALTAF---Appellant

versus

STATE LIFE INSURANCE CORPORATION and others---Respondents

Insurance Appeal No. 198 of 2014 heard on 22nd January, 2015.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122 & 118---Limitation Act (IX of 1908) Ss. 14 & 19 & Art. 86(a)---Civil Procedure Code (V of 1908), O.VII R. 11---Life insurance claim---Computation of limitation---Adjudication of question of limitation---Scope---Application of claimant for recovery of life insurance claim along with liquidated damages was rejected by Insurance Tribunal on the ground that the same was barred by time---Contention of claimant was that question of limitation was a mixed question of law and fact and could not be summarily rejected---Held, that the insured deceased died on 18-3-2010 and insurance claim was repudiated by the Insurance Corporation on 7-5-2012 thereafter application of claimant was filed before Insurance Tribunal on 12-1-2013---Question of limitation was a mixed question of law and facts and same could not be adjudged without recording of evidence and the Insurance Tribunal failed to consider applicability of Ss. 14 & 19 of the Limitation Act, 1908 and application of the claimant could not be summarily rejected while applying Art. 86(a) of the Limitation Act, 1908---Article 86(a) of the Limitation Act, 1908 would be applicable if the claim of the claimant was payable, whereas, in the present case, claim of the claimant was repudiated, and such aspect of the case was ignored by the Insurance Tribunal while passing impugned order--- High Court set aside impugned order and remanded the case to the Insurance Tribunal for decision afresh.

Mst. Robina Bibi v. State Life Insurance Corporation of Pakistan 2013 CLD 477 rel.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

Date of hearing: 22nd January, 2015.

2015 C L D 1211

[Lahore]

Before Shezada Mazhar, J

Messrs SHAFIQ SUPREME RICE INDUSTRIES (PVT.) LIMITED through Chief Executive---Plaintiff

versus

BANK AL-FALAH LIMITED through Branch Manager---Defendant

C.O.S. No.82 of 2012, heard on 10th December, 2014.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O. VII, Rr. 10 & 11---Suit for declaration, injunction, recovery of damages and cancellation of documents---Rejection of plaint---Customer filed suit against Bank for declaration, injunction, recovery of damages and cancellation of documents---Defendant sought rejection of plaint under O.VII, R. 11, C.P.C.---Plea raised by customer was that after grant of leave to defend the suit, Banking Court was bound to record evidence and the matter could not be decided on the issue of maintainability of suit---Validity---Banking Court had power to apply O. VII, Rr. 10 & 11, C.P.C. at any stage of proceedings and therefore, claim of defendants that after grant of leave order it was necessary to record evidence was of no consideration---Claims as raised in the plaint were on account of damages suffered by customer due to non-disbursal of sanctioned finance but nowhere in plaint any reference had been given with regard to sanctioned letter whose violation was committed by defendant Bank---Plaint specifically mentioned that finance facility was sanctioned in year, 2008 and thereafter no finance was granted and there was nothing in plaint as to under which agreement or law it was necessary upon defendant Bank to grant further finance to plaintiff---In absence of such requirements in plaint, the same was liable to be rejected---Plaint was rejected in circumstances.

Owais Ahmed Idris v. Syed Muhammad Waqar ud Din PLD 2014 Sindh 465; Muhammad Nawaz v. Zarai Taraqiati Bank Limited through Manager and 2 others 2013 CLD 1390; Media Max Pvt. Ltd. through Chief Executive v. ARY Communication Pvt. Ltd. through Chief Executive and another PLD 2013 Sindh 555; Mst. Bano alias Gul Bano and others v. Begum Dilshad Alam and 4 others 2011 CLC 88; Muhammad Altaf and others v. Abdur Rehman Khan and others 2001 SCMR 953; Haji Allah Bakhsh v. Abdul Rehman and others 1995 SCMR 459; The Bank of Punjab through General Attorney v. Malik Umer Farooq 2014 CLD 198; Rustam Khan v. Zarai Tariqiati Bank Limited through Manager 2008 CLD 427; Zarai Taraqiati Bank Limited through Branch Manager v. Messrs A-One Chicks and Feeds Pvt. Limited through Chief Executive and 6 others 2006 CLD 950; Zarai Taraqiati Bank Limited through Manager v. Syed Furrakh Hussain Shah 2006 CLD 171; Shabbir Ahmed Malik v. Small Busiess Finance Corporation, Okara, through Manager 2005 CLD 1471; Lt. Col. (Retd.) Mahmood Akhtar v. Bank of Punjab through Manager 2004 CLD 821; National Bank of Pakistan through Senior Vice-President v. Messrs Yaqoob Rice Mills through Partners 2 to 5 others 2002 CLD 1306; Farrukh Abbas v. Agricultural Development Bank of Pakistan, Mandi Bahauddin Branch 2006 CLD 970; Ghulam Rasool Bhatti v. Judge Banking Court-II, Lahore and 4 others 2007 CLD 1578; The State v. Mst. Fazeelat Bibi PLD 2010 Lah. 498; Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Zeeshan Energy Ltd and others v. Faysal Bank Ltd. 2014 SCMR 1048; Shahbaz A. Khokhar v. Habib Bank Limited 2013 CLD 1802; Saleem Malik v. Pakistan Cricket Board (PCB) and 2 others PLD 2008 SC 650; Mst. Nishat Ishaq v. Amjad Khan and 2 others 2014 CLC 71; Mian Mehmood Ahmad v. Hong Kong and Shanghai Banking Corporation Ltd. through Manager and 6 others 2010 CLC 293; Abdul Sattar Rana v. Manager, National Bank of Pakistan and 3 others 2005 CLC 1481; Ahmed Nawaz and 4 others v. Abdul Khalique and 13 others 2002 MLD 1783; S.M. Shafi Ahmad Zaidi through Legal Heirs v. Malik Hassan Ali Khan Moin through Legal Heirs 2002 SCMR 338; Messrs Al-Riaz Agencies v. Chambers of Commerce and Industries, Karachi and others 2001 CLC 1955; Messrs Asmar Textile Mills (Pvt.) Ld. through Chief Executive v. Askari Commercial Bank Ltd. through Manager and another 2007 CLC 457; Muhammad Yousaf v. A.D.B.P. 2002 CLC 1270; Messrs KLB-e-Hyder and Company (Pvt.) Ltd. through Chief Executive v. National Bank of Pakistan through President and 3 others 2008 CLD 576; Gulistan Textile Mills Ltd. v. Askari Bank Ltd. and other 2013 CLD 2005; Haji Abdul Karim and others v. Messrs Florida Builders (Pvt.) Limited PLD 2012 SC 247; Jewan and 7 others v. Federation of Pakistan through Secretary, Revenue, Islamabad and 2 others 1994 SCMR 826; Bank Al-falah Limited v. Iftikhar A. Malik 2003 CLD 363; Asghar Ali v. P. K. Shahani and 2 others 1992 CLC 2282; Messrs United Bank Ltd., Karachi v. Messrs Mohibali Tanvery Ltd., Karachi and 8 others PLD 1994 Kar. 275; Muhammad Arshad and another v. Citibank N.A., Al-Falah Building, Lahore 2006 CLD 1011; Smooth Pharmaceuticals Pvt. and others v. Bank of Khyber 2008 SCMR 385; Smooth Pharmaceuticals Pvt. and others v. Bank of Khyber 2005 CLD 120; Chiragh Bibi and another v. Mst. Rashida Begum and others PLD 1958 SC 209; Messrs United Bank Limited v. Messrs Sindh Tech Industries Ltd. and others 2003 CLD 1331; Kaloo and 3 others v. Hassan Bakhsh and 3 others 2000 YLR 2473; Tayabali v. Abdul Hai PLD 1959 Kar. 79; Azizullah Sheikh and another v. Standard Chartered Bank Ltd. 2009 SCMR 276; Citi Bank N.A. v. Syed Shahnasha Hussain 2009 CLC 1564; Bela Automotive Limited v. Habib Bank Limited 2005 CLC 893; Messrs Shazim International (Pvt.) Ltd. and 6 others v. Messrs First Women Bank Ltd. 2009 CLC 432 and Army Welfare Trust Trading as Nizampur Cement Plant through acting Management Director v. Soneri Bank Limited and 2 others 2014 CLD 440 ref.

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

----S. 9---Suit for declaration, cancellation of document and recovery of damages---Scope---Customer can file such suit under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---For a plaint to fulfil conditions of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it must clearly state obligation of financial institution along with reference to law or agreement of finance which have been violated by financial institution.

(c) Pleadings---

----Parties to set out their case in pleadings.

Muhammad Tariq and others v. Mst. Shamsa Tanveer and others PLD 2011 SC 151 rel.

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

----S. 9---Suit by customer---Statement of accounts---Scope---Statement of accounts is necessary to support claim of customer, either it is attached with plaint or embodied in body of plaint for a suit by a customer to be maintainable before Banking Court.

Bakers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLC 931; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; and Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587 rel.

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

----S. 9---Suit for recovery of damages---Maintainability---Only those claims of damages can be filed which arise from breach of obligation with regard to finance facility---Any negligence or carelessness on the part of financial institution does not entitle a customer to file a suit before Banking Court for damages.

Nasimuddin Siddiqui and others v. United Bank Limited and others 1998 CLC 1718 and "The Law of Torts" by Ratanlal and Dhiraj edited by Justice (R) G.P. Singh, 23rd Edition rel.

Shahid Ikram Siddiqui, M. Imran Malik and Rao Athar Akhlaq for Plaintiff.

Ashar Elahi assisted by Shamraiz Nasir for Defendant/Bank.

Date of hearing: 10th December, 2014.

2015 C L D 1243

[Lahore]

Before Muhammad Farrukh Irfan Khan and Ali Akbar Qureshi, JJ

MUHAMMAD YOUSUF CHISHTI---Appellant

versus

HABIB BANK LIMITED through Manager---Respondent

R.F.A. No. 180 of 2010 decided on 3rd December, 2014.

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

----Ss. 9 & 22---Car (vehicle) finance---Suit for recovery was decreed in favour of plaintiff Bank---Contention of defendant was, inter alia, that the plaintiff Bank had already recovered amount of mark-up in monthly installments and that the defendant was also entitled to recovery of security deposit paid to the plaintiff Bank---Held, that the Banking Court had rightly decreed the suit, and the plaintiff Bank, at stage of appeal, conceded to the claim of the defendant regarding amount of mark-up which had been recovered in monthly installments---Defendant was not entitled to the security deposit as per terms of the lease agreement---Decree of the Banking Court was modified by excluding amount of mark-up already recovered by the plaintiff bank in monthly installments---Appeal was disposed of, accordingly.

Muhammad Suleman Bhatti for Appellant.

Muhammad Nazim Khan and Sardar Riaz Kareem for Respondent.

2015 C L D 1254

[Lahore]

Before Shams Mehmood Mirza, J

POSTAL LIFE INSURANCE through General Manager---Petitioner

versus

MUHAMMAD ISHAQ BUTT and another---Respondents

W.P. No. 11248 of 2014, heard on 9th December, 2014.

Insurance Ordinance (XXXIX of 2000)--

----Ss. 171(1), 171(2), 2(xxxi), & 118---Pakistan Postal Services Management Board Ordinance (CXXVI of 2002) Ss. 3 & 11---Civil Procedure Code (V of 1908), O. VII, R. 11---Constitution of Pakistan, Art. 199---Constitutional petition---Jurisdiction of the Insurance Tribunal---"Insurer", meaning of---Exemptions under S. 171 of the Insurance Ordinance, 2000---Scope---Question before the High Court was whether the petitioner Postal Life Insurance, was amenable to the jurisdiction of the Insurance Tribunal under the Insurance Ordinance, 2000---Contention of the petitioner Postal Life Insurance was, inter alia, that since it was run by the Federal Government, it fell under the exemption created by S. 171 of the Insurance Ordinance, 2000---Held, that under S. 2(xxxi) of the Insurance Ordinance, 2000 any company incorporated under the Companies Ordinance, 1984 or a body corporate incorporated under any law carrying on the business of insurance came within the purview and jurisdiction of the Insurance Tribunal---Although S. 171(1) of the Insurance Ordinance, 2000 made it clear that provisions of the Insurance Ordinance, 2000 were not to apply to any insurance business carried on by the Federal Government or Provincial Government, however, S. 171(2) of the Insurance Ordinance, 2000 created an exception to the effect that insurance business carried out by a body corporate, even if controlled by the Federal Government; shall not be deemed to be insurance business carried out by the Federal Government---Per Ss. 3 & 11 of the Pakistan Postal Services Management Board Ordinance, 2002; the Board of the Postal Life Insurance was a body corporate and squarely fell within the exception created by S. 171(2) of the Insurance Ordinance, 2000---Fact that petitioner was not registered with the Securities and Exchange Commission of Pakistan did not in any manner effect or had a bearing on jurisdiction of the Insurance Tribunal---High Court observed that a combined reading of Ss. 2(xxxi) & 171 of the Insurance Ordinance, 2000 together with Ss. 3 & 11 of the Pakistan Postal Services Management Board Ordinance, 2002; made it clear that the petitioner was amenable to jurisdiction of the Insurance Tribunal---Impugned order was therefore, rightly passed--- Constitutional petition was dismissed, in circumstances.

Muhammad Amir Sohail for Petitioner.

Liaqat Ali Butt for Respondents.

Date of hearing: 9th December, 2014.

2015 C L D 1274

[Lahore]

Before Sardar Muhammad Shamim Khan, J

Messrs ITTEFAQ FOUNDRIES (PVT.) LTD. and 4 others---Petitioners

versus

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

Writ Petition No. 2618 of 2011, decided on 6th February, 2015.

(a) National Accountability Ordinance (XVIII of 1999)---

----S. 18(g)--- Investigation--- Non-association of accused---Responsibility of investigating officer---Scope---Prime responsibility of Investigating Officer is to collect incriminating evidence against accused so that court of law should arrive at a just and fair conclusion pertaining to guilt or innocence of accused---Associating accused in every investigation is a sine qua non.

Nadeem Sarwar v. Station House Officer Saddar Hafizabad and others 2000 YLR 756 and Bank of Punjab and another v. Haris Steel Industries (Pvt.) Ltd. and others PLD 2010 SC 1109 rel.

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

----S. 284(2)---Contract Act (IX of 1872), S. 62---National Accountability Ordinance (XVIII of 1999), Ss. 5(r) & 18---Constitution of Pakistan, Art. 199--- Constitutional petition--- Quashing of reference---Wilful default---Novation of contract---Petitioners availed finance facility from financial institutions and reference was filed by National Accountability Bureau on the allegation of wilful default---Plea raised by petitioners was that there was a novation of contract between parties and no amount was outstanding against them---Validity---Subsequent contract based on mutual agreement of parties was novation of original contract between petitioners and creditor banks and other institutions---Once original contract had been novated, right and obligations thereunder stood extinguished and were replaced by rights and obligations under the novated contract---Novation of contract in fact had created a new contractual obligation and variation in terms of original contract, therefore, if there was any default simpliciter or wilful, stood extinguished by virtue of subsequent agreement between the parties which came under judicial consideration of High Court in civil suit---As the arrangement between the parties was already pending between the parties before competent Court of law, therefore, there was no occasion or cause of action available with financial institution to file a complaint with National Accountability Bureau or National Accountability Bureau authorities to proceed against petitioners under National Accountability Ordinance, 1999---Petitioners had paid all outstanding amount to creditor banks along with mark-up and authorities had no objection to quashing of reference---Petition was allowed in circumstances.

National Bank of Pakistan v. Ittefaq Foundries and others 2014 CLD 1068; The State v. Salehoon PLD 1971 Lah. 292; Muhammad Sharif v. The State PLD 1971 Lah. 708; State v. Salehoon PLD 1971 Lah. 292 and The State of Orissa v. Minaketan Patnaik AIR 1953 Orissa 160 rel.

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

----Vol.V, Chap. 4, Part H, R. 5---Referee Judge, opinion of---Scope---Due to difference of opinion between two Judges of Division Bench of High Court, matter was refereed to Referee Judge---Effect---Petition was not to be referred again to same Division Bench of High Court which originally heard the same as the decision would not be that of majority, rather it would be the opinion of Referee Judge which had decisive effect and was of binding nature---Judgment had to follow the opinion of Referee Judge.

Ashtar Ausaf Ali assisted by Faisal Nawaz for Petitioners.

Waqas Qadeer Dar, Prosecutor General for NAB, Naseer Ahmed Bhutta, Additional Attorney General and Qamar ul Haq Bhatti, Standing Counsel for Federation of Pakistan.

Date of hearing: 6th February, 2015.

2015 C L D 1297

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

Messrs UNIQUE SCHOOL---Appellant

versus

Messrs UNIQUE GROUP OF INSTITUTIONS---Respondent

F.A.O. No. 76 of 2009, heard on 18th November, 2014.

(a) Administration of justice---

----Court, responsibility of--- For proper administration of justice, it is duty and responsibility of court confronted with such a situation to make efforts to prima facie systematically unwind complexities by carefully looking at facts presented by parties, claims and defences raised by each side and documents available on record and after looking at what law provides, arrive at a tentative assessment and decide matter in accordance with law and judicial precedents.

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

----Ss. 39, 40 & 42(3)---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1 & 2---Infringement of trade mark---Suit for injunction and infringement of trade mark---Disclaimer, effect of---Prior use and goodwill---Proof---Plaintiff was aggrieved of use of word "Unique" by defendant on the plea that it was its registered trade mark---Trial Court granted interim injunction and restrained defendant from using trade mark "Unique"---Validity---On the basis of trade mark registration, plaintiff could not allege that defendant had infringed its trade mark UNIQUE by using trade mark UNIQUE as such feature was disclaimed by plaintiff itself while obtaining trade mark registration---Prior user and goodwill and reputation acquired through use could be shown at prima facie stage by submitting sales figures, copies of invoices and sale documents, advertisements in newspapers, magazines, documents showing promotion through electronic media etc.---Defendant claimed to be using trade mark UNIQUE for about ten years and, therefore, at such stage when plaintiff has no statutory rights, nor had filed any document to prima facie show prior use, it was inappropriate to injunct defendant---Plaintiff was not entitled to injunction as it failed to make out a prima facie case nor showed that balance of convenience or likelihood of irreparable loss were in its favour---High Court set aside interim injunction passed by Trial Court in favour of plaintiff---Appeal was allowed in circumstances.

Tabaq v. Tabaq 1987 SCMR 1090; National Disinfectant Company v. National Detergents Ltd. PLD 1983 Kar. 402 and Riaz Ahmed Mansuri v. Abid Ali Qazi and 2 others 1990 MLD 1786 ref.

B.K. Engineering Co. v. U.B.H.I. Enterprises AIR 1985 Delhi 210; Mehtab Rehman v. Saeed Ahmed 1986 CLC 348 and Syed Muhammad Maqsood v. Naeem Ali Muhammad 1985 CLC 3015 rel.

Syed Tahir Abbas Rizvi for Appellant.

Farooq Amjad Mir for Respondent.

Date of hearing: 18th November, 2014.

2015 C L D 1324

[Lahore]

Before Shezada Mazhar, J

Messrs ANGORA TEXTILES LIMITED through Chief Executive---Plaintiff

versus

UNITED BANK LIMITED through Branch Manager---Defendant

C.O.S. No. 72 of 2008, heard on 17th February, 2015.

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

----S. 9---Specific Relief Act (I of 1877), Ss.42, 54 & 39---Suit for declaration, injunction, cancellation of documents and recovery of damages---Non-filing of statement of accounts---Borrower company, filed suit against Bank alleging that at the time of execution of finance agreement, Bank received blank documents which had been misused---Validity---Plaintiff in order to avoid repayment of finance facilities availed, filed suit as a counter blast---To establish series of allegations levelled by plaintiff regarding causing of alleged damages as agitated in the suit, was absolutely and unquestionably lay on the part of plaintiff that alleged losses and damages were caused by an act, omission or unnecessary negligence committed by defendant (financial institution) or defendant had deliberately failed to comply with its responsibility for which defendant was bound under correspondence and documents duly executed between the parties---Plaintiff failed to establish its claim of damages against defendant through persuasive evidence supported by relevant documents---Defendant Bank, in circumstances, did not commit any breach of contractual obligations---Statement of accounts was a necessary document for a suit to be maintainable before Banking Court, which was lacking---Plaintiff in order to establish its claim did not attach statement of accounts---Suit was dismissed in circumstances.

Messrs C.M. Textile Mills Pvt. Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587 ref.

Muhammad Imran Malik for Plaintiff.

Ms. Ayesha Hamid for Defendant.

Date of hearing: 17th February, 2015.

2015 C L D 1338

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

ABDUL SATTAR---Appellant

versus

ZARAI TARAQIATI BANK LTD. and 4 others---Respondents

F.A.O. No. 165 of 2003, heard on 9th February, 2015.

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

----O.XVII, R. 5---Adjournment---Word "proceedings"---Connotation---In the context of proceedings in civil suit, word "proceed" means taking of steps for further progress of suit---In view of word "proceed" with suit on such date or fixed some other date thereafter means the conduct of same proceedings by court on the date fixed by its ministerial officer which was scheduled to be conducted by the court on the date when Presiding Officer was absent, was on leave or otherwise, which means that the date to which case is adjourned under O.XVII, R. 5, C.P.C. is for the same purpose for which the case was fixed by Presiding Officer for the date on which he did not hold the court.

Nowsheri Khan v. Said Ahmad Shah 1983 SCMR 1092 rel.

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

----O. VIII, R. 13---List of legal heirs, non-filing of---Effect---Non-compliance of O. VIII, R. 13, C.P.C. authorizes court to proceed with suit notwithstanding death of defendant---Even if legal representatives of dead party are not impleaded, the same is not fatal to proceedings.

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

----O. XI, Rr. 89 & 90---Sale through auction, setting aside of---Fetching of more price---Scope---Properties sold through court do not fetch market price for a number of reasons the foremost amongst them is the reluctance on the part of purchasers to involve themselves in transactions which entail proceedings before court.

Messrs Ashraf Agro and others v. H.B.L. 2008 CLD 449 and Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 rel.

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

----Ss. 12 & 19---Civil Procedure Code (V of 1908), Ss. 12 (2), 47, 151 & O. XXI, R.90---Recovery of finance facility---Sale in execution of decree---Judgment and decree setting aside of---Mother of deceased borrower acquired knowledge of sale conduced on 29-9-2001, from second borrower, who had filed application for setting aside judgment and decree dated 26-7-1999---Objection was filed by mother of deceased borrower after the second borrower exhausted all his remedies i.e. filing of application under S. 12(2), C.P.C., constitutional petition before High Court and application under O. XXI, R. 90, read with Ss.47 & 151, C.P.C. and lastly made an offer on 4-3-2002--- Banking Court dismissed applications filed under S. 12(2), C.P.C. and Ss.12 & 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity--- When application of second borrower was dismissed on 1-4-2003, the appellant and mother of deceased borrower came on the scene which fact had established connivance and collusion amongst appellant and second borrower and mother of deceased borrower---Objection petition and application under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001, filed by mother of deceased borrower were barred by time and appeal against order passed upon application under S. 12(2), C.P.C., fled by appellant was also barred---High Court declined to interfere in order passed by Banking Court, dismissing the applications---Appeal was dismissed in circumstances.

Imtiaz v. Mst. Shagufta 2002 CLC 1272; Habib Bank Limited v. Muhammad Abbas and 2 others PLD 2001 SC 489; N.D.F.C. v. Anwar Zaib White Cement Ltd. and others 1999 MLD 1888; Khalid Qureshi and 5 others v. United Bank Limited I.I. Chundrigar Road, Karachi 2001 SCMR 103; Mst. Lalan Bibi and others v. Muhammad Khan and others 2007 SCMR 1193 and Mst. Afzal Begum and others v. Y.M.C.A. through its General Secretary PLD 1979 SC 18 ref.

Javaid Tanveer Mughal v. Agricultural Development Bank of Pakistan through Branch Manager and 3 others 2004 CLD 748 fol.

Tahir Mehmud Khokhar for Appellant.

Agha Syed Najam-ul-Hassan Zaidi for Respondent No.1.

Uzair Karamat Bhandari for Respondent No.2.

Date of hearing: 9th February, 2015.

2015 C L D 1400

[Lahore]

Before Atir Mahmood, J

CEPHALON FRANCE---Appellant

versus

HIMONT PHARMACEUTICALS---Respondent

F.A.O. No. 116 of 2008, decided on 24th March, 2015.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 17(6), 28 27, 33 & 7---Registration of trade mark---Opposition proceedings---Procedure before the Registrar---Exercise of jurisdiction by Registrar Trade Marks--- Determination of ownership of trade mark---Jurisdiction of Registrar to stay opposition proceedings and give direction to parties to approach Civil Court for determination of ownership of trade mark---Scope---Appellant had filed opposition to application for registration of trade mark filed by respondent, on the ground that the said trade mark was owned by the appellant---Registrar vide impugned order stayed opposition proceedings and directed parties to get the question of ownership of trade mark determined by a civil court---Contention of appellant inter alia was that in the impugned order, the Registrar failed to exercise jurisdiction vested in him and that the question of ownership of trade mark was within the domain of the jurisdiction of the Registrar---Held, that the Trade Marks Ordinance, 2001 provided a comprehensive procedure and remedies regarding grant or refusal of a trade mark to a party applying for it and such powers were vested with the Registrar of Trade Marks---Respondent, in the present case, had applied for grant of the trade mark to which the appellant objected by filing an opposition claiming that the said trade mark was already owned by it---Both the parties submitted their affidavits and evidence available with them before the Registrar however, the Registrar did not decide the matter himself and sent the parties to the civil court for determination of their ownership---Power to grant or refuse the trade mark applied for by the respondent and controverted by the appellant was vested with the Registrar, therefore, the same should have been exercised rather than directing the parties to approach the civil court for determination of the ownership of the trade mark---Registrar could advise the parties to approach the civil court only if substantial rights of any or both the parties were involved which could not be determined by preponderance of evidence produced by the parties within the scope of jurisdiction conferred on the Registrar---In the present case, no such substantial right appeared to be involved and only question of grant or refusal of trade mark was before the Registrar, which he could decide himself in accordance with law---High Court observed that Registrar failed to exercise the jurisdiction vested in him in law and had unlawfully sent the parties to the civil court for determination of their ownership---Impugned order was set aside and Registrar was directed to decide the question of ownership of trade mark on its own---Appeal was allowed, accordingly.

Sanjeda Bano v. Muhammad Saeed Jehangir PLD 1987 Kar. 53 rel.

Jawad Sarwana for Appellant.

Ex parte for Respondent.

Date of hearing: 24th March, 2015.

2015 C L D 1409

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Syed ABBAS ALI---Appellant

versus

BANK OF PUNJAB through Manager and others---Respondents

R.F.A. No. 848 of 2011, heard on 27th November, 2014.

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

----Ss. 2(e), 9 & 10---Suit for recovery---"Obligation", meaning of and scope---Application of defendant/customer for leave to defend suit was dismissed---Contention of customer/defendant was that the case was one of restructuring and no actual disbursement of funds had been made therefore all documents annexed by the plaintiff bank were without consideration and decree was liable to be set aside---Held, that renewal, rescheduling, restructuring of a finance facility only ensued upon default, non-payment, delayed payment or inability in payment of outstanding liability by a customer who normally sought such concession upon admission of his liability---Through rescheduling/ restructuring, customer requested postponement of repayment of finance on renewed terms as agreed between the parties and by approving such restructuring/rescheduling/renewal of finance facility, the bank forgoes its immediate right of recovery and enforcement of securities against the customer, which was absorbed through mutual agreed interest, or markup charges till agreed date of liquidation---High Court observed that restructuring or renewal was also a facility or accommodation granted by the bank to a customer and was therefore to be recognized as an "obligation" within the meaning of S. 2(e) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Financial institutions in case of restructuring or rescheduling of previous finance, were not obliged to bring on record statements of accounts prior to the agreement through which restructuring had been made; as such was an admitted amount duly acknowledged by the customer and no disbursement of amount was involved in the matter as the case being that of restructuring and not that of fresh finance---Appeal was dismissed, in circumstances.

Habib Bank Limited v. Service Fabrics Ltd. and others 2004 CLD 1117 and Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143 rel.

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

----Ss. 2(d), 2(c), & 9---Contract Act (IX of 1872) Ss. 133 & 135---Contracts of guarantee---Discharge of surety by variance in terms of contract---Rights available to surety under the Contract Act, 1872 could be waived by the surety---Scope---Question before the High Court was at to "whether, in a suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001, surety/guarantor would be bound by the terms of the guarantee in case of variation/composition of the loan or the terms of repayment"---Held, that if variation or composition of a loan or time as to its repayment was allowed by the creditor to the borrower and consent/assent in advance to the same were given by the guarantor in the letter of guarantee, subsequent to the date of the guarantee, such variation composition, extension or change or indulgence being within the contemplation of the parties at time of execution of guarantee did not effect discharge of surety guarantor from obligation under the guarantee---Such surety continued to be bound by terms of the guarantee despite enlargement of time, composition and variations between the creditor and the principal borrower---Rights available to the surety under the Contract Act, 1872 could be waived by the surety---In consideration of the renewal/restructuring of the facility, the guarantor may execute a new guarantee; however without prejudice to such effect, if it is assumed that no guarantee was executed, even then the surety remained bound for repayment of finance facility along with the principal debtor.

Mian Aftab A. Sheikh and 2 others v. Messrs Trust Leasing Corporation Limited and another 2003 CLD 702 and H.B.L. v. Crescent Software Products (Pvt.) Ltd. 2009 CLD 412 rel.

Zahoor Ali Nasir Tagga for Appellant.

Salman Aslam for Respondent No.1.

Miss Saba Saeed for Respondent No.2.

Date of hearing: 27th November, 2014.

2015 C L D 1439

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

MUHAMMAD FAROOQ AZAM---Appellant

versus

BANK AL-FALAH LIMITED and others---Respondents

R.F.A. No.212 of 2010, heard on 4th December, 2014.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), Ss. 73 & 74---Banking Companies Ordinance (LVII of 1962), Ss. 3A, 25 & 41---State Bank of Pakistan BCD Circular No.13 of 1984 dated June 20, 1984---State Bank of Pakistan BCD Circular No.32 of 1984 dated November 26, 1984--- Mark-up beyond original contractual period/additional sum/penalty for delay in payment by customer--- Principles---Car/automobile finance facility--- Plaintiff filed suit seeking redemption/clearance of vehicle from defendant Bank, on the ground that finance facility availed by plaintiff for the said vehicle was re-paid completely but defendant Bank refused to issue the NOC---Suit was dismissed by Banking Court on the ground that plaintiff was under contractual obligation to pay late payment charges---Held, that with introduction of State Bank of Pakistan BCD Circular Nos.13 of 1984 dated June 20, 1984 and BCD Circular No.32 of 1984 dated November 26, 1984, all Financial Institutions in Pakistan had been prohibited from charging any additional sum on account of delay caused by the customer in re-payment of its obligation created under an agreement based on mark-up and such obligation under a mark-up based agreement, once fixed could not be enhanced, so as to entitle a Financial Institutions charge any sum over and above original contractual amount---Mark-up beyond the original contractual period or any late payment charged, claimed by the Financial Institution was in violation of the restrictions contained in the said State Bank of Pakistan Circulars and any clause incorporated in a finance agreement for charging any additional mark-up or penalty would violate the said Circulars and was therefore, void ab initio---Penalty or damages at fixed rate was opposed to the provisions contained in Ss.73 & 74 of the Contract Act, 1872 and general principles for granting compensation when beneficiary alleged breach of contract were regulated by Ss.73 & 74 of the Contract Act, 1872 and without proving the actual loan, even a fixed amount, if stipulated for liquidated damages, did not become automatically payable---If a clause existed in the agreement for finance regarding late payment charges and penalties, the same could be disregarded by the courts being against the Islamic system of finance, and for being unconscionable and against the law---Order and decree of Banking Court was set aside and suit of plaintiff was decreed and defendant Bank was directed not to withhold issuance of clearance certificate in favour of plaintiff---Appeal was allowed, accordingly.

Zarai Tarqiati Bank Limited through Branch Manager v. Muhammad Mehmoodul Hassan Khan and another 2007 CLD 488 and Askari Commercial Bank Limited and others v. Pakland Cement and others PLD 2000 Kar. 246 ref.

Messrs Hitoc Metai Plast (Pvt.) Ltd. and others v. Habib Bank Limited PLD 1997 Quetta 87; Habib Bank Ltd. v. Messrs Farooq Compost Fertilizer Corporation Ltd. and 4 others 1993 MLD 1571; Zarai Tarqiati Bank Limited through Branch Manager v. Muhammad Mehmoodul Hassan Khan and another 2007 CLD 488. Messrs Nigah-e-Karimee Enterprises through Proprietor and another v. Trust Investment Bank Limited 2005 CLC 912; Messrs Bukhari Agritek (Pvt.) Limited through Director and 3 others v. Agricultural Bank of Pakistan 2005 CLD 619 and Abdul Rahim and 2 others v. Messrs United Bank Ltd. of Pakistan PLD 1997 Kar. 62 rel.

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

----Ss. 3-A, 25 & 41---State Bank of Pakistan Circulars---Nature and scope---Obligations of Financial Institutions/Banking Companies---Circulars, issued by the State Bank of Pakistan, were in the nature of instructions/directions to the Financial Institutions---Commercial Banks, whether private or government owned, were bound by such instructions and all banking companies were under obligation to follow the instructions given by the State Bank of Pakistan in contemplation of Ss.3-A, 25 & 41 of the Banking Companies Ordinance, 1962.

(c) Contract---

----Fairness---Court had the power to look into the question as to whether outcome of a contract was fair.

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

----Ss. 73 & 74---Breach of contract---Compensation---Scope---General principles for granting compensation when beneficiary alleged breach of contract were regulated by Ss. 73 & 74 of the Contract Act, 1872 and without proving the actual loan even a fixed amount, stipulated as for liquidated damages, did not become automatically payable.

Messrs Hitoc Metai Plast (Pvt.) Ltd. and others v. Habib Bank Limited PLD 1997 Quetta 87 rel.

Muhammad Yousuf Chaudhry for Appellant.

Tariq Mehmood for Respondent No.1.

Date of hearing: 4th December, 2014.

2015 C L D 1468

[Lahore]

Before Shams Mehmood Mirza, J

UNITED BANK LIMITED through Duly Authorized Attorneys---Plaintiff

versus

Messrs ANGORA TEXTILES LIMITED through Chief Executive and 11 others---Defendants

C.O.S. No. 37 of 2007, heard on 27th August, 2014.

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

----Ss. 9 & 10---Suit for recovery of finance facility---Leave to appear and defend the suit---Authority to file suit---Resolution of Board of Directors of the Bank, non-filing of---Effect---Plea raised by borrowers was that suit was not competently filed by plaintiff Bank, as there was no resolution of Board of Directors to file the suit---Validity---Any officer on behalf of financial institution who held a power-of-attorney could file a suit on its behalf, provided the power to file a suit was contained in the power-of-attorney---Borrowers failed to raise any factual dispute qua their liability requiring recording of evidence, therefore, High Court declined to grant leave to appear and defend the suit---Claim of plaintiff was fully established from documents and statements of account available on record---Suit was decreed in circumstances.

Mashreq Bank PSC v. Farooq Habib Textile Mills Limited 2007 CLD 320; National Bank of Pakistan v. Mujahid Nawaz Cotton Ginners 2007 CLD 678; Pakistan Kuwait Investment Co. (Pvt.) Limited v. Active Apparels International 2012 CLD 1036; Soneri Bank Limited v. Compass Trading Corporation (Pvt.) Limited 2012 CLD 1302; Nusrat Textile Mills Limited v. United Bank Limited 2005 CLD 1421; Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408; Zeeshan Energy Limited and others v. Faysal Bank Limited 2014 CLD 696 and Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 ref.

Ms. Ayesha Hamid for Plaintiff.

Shahid Ikram Siddiqui for Defendants Nos.1 to 7.

Aamir Quddos for Defendant No.8.

Muhammad Akram Pasha for Defendant No.9.

Date of hearing: 27th August, 2014.

2015 C L D 1508

[Lahore]

Before Erum Sajad Gull, J

HABIB BANK LTD.---Petitioner

versus

CAPITAL CITY POLICE OFFICER and others---Respondents

Writ Petition No.28918 of 2012, decided on 7th July, 2015.

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

----S. 7--- Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), S. 5--- Criminal Procedure Code (V of 1898), Ss. 22-A & 22-B---Police Order (22 of 2002) Art. 155-C---Constitution of Pakistan, Art.199---Constitutional petition--- Registration of FIR--- Offences involving banking matter---Jurisdiction of ex officio Justice of Peace---Powers of Banking Court---Scope---Ex officio Justice of Peace issued direction under Ss.22-A & 22-B, Cr.P.C. to respondent for registration of criminal case against accused who were alleged to have stolen hypothecated stock of petitioner-Bank, but respondent failed to comply with said direction---Validity---Special Banking laws had been enforced to deal with all matters pertaining to Banks---Special law would override general law---Section 5(8) of Offences in Respect of Banks (Special Courts) Ordinance, 1984 provided that in case procedure was not prescribed under special law, general law would be followed, and Bank had no choice to first avail remedy under general law or special law---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a complete code, which did not provide that in banking matters, Bank had choice to avail general or special remedy---Financial Institutions (Recovery of Finances) Ordinance, 2001 was provided for Banking Court and for dealing with any offence---Remedy available to petitioner-Bank was through Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001---Petitioner-Bank had only availed one remedy before Banking Court that was filing of suit for damages---Matters relating to Bank had to be dealt with only by Banking Court---Petitioner-Bank had no authority or justification to file application under Ss.22-A & 22-B, Cr.P.C. before ex officio Justice of Peace, nor did ex officio Justice of Peace had authority to entertain any such application---Orders of ex officio Justice of Peace were set aside---Constitutional petition was dismissed in circumstances.

Industrial Development Bank of Pakistan and others v. Mian Asim Fareed and others 2006 SCMR 483 and Shaukat Ali and others v. The State and others 2012 CLD 1 distinguished.

Tariq Hameed and 2 others v. Additional Sessions Judge and 5 others 2015 MLD 1188 and Muhammad Asif Nawaz v. Additional Sessions Judge/Justice of Peace Multan and 2 others 2014 PCr.LJ 1 rel.

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

----S. 7--- Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), S.5---Scope---Financial Institutions (Recovery of Finances) Ordinance, 2001 is a complete code, which does not provide that in banking matters, Banks have choice to avail general or special remedy---Financial Institutions (Recovery of Finances) Ordinance, 2001 is provided for Banking Court and deals with any offence.

Hassan Iqbal Warraich for Petitioner.

Malik Waseem Mumtaz, Addl. A.-G. for Respondents.

2015 C L D 1518

[Lahore]

Before Shams Mehmood Mirza, J

Ms. IJAZ DYEING AND FINISHING MILLS LTD.---Plaintiff

versus

UNITED BANK LIMITED---Defendant

C.O.S. No. 47 of 2012, decided on 6th July, 2015.

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

----S. 9---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Suit for declaration, damages and loss---Onus to prove---Plaintiff/borrower filed suit against defendant/Bank alleging that he suffered loss due to acts of defendant Bank---Validity---Witness of plaintiff failed to discharge onus of proof and did not substantiate allegations of plaintiff in regard to failure of defendant bank to comply with terms and conditions of finance facilities---Plaintiff neither brought relevant documents on record nor put any questions to witnesses of plaintiff in such regard---In examination-in-chief of two witnesses of plaintiff, nothing much had been stated or revealed with regard to terms and conditions of finance facilities that were not complied with by defendant Bank---High Court declined to refer to evidence of defendant Bank as plaintiff's witnesses abjectly failed to discharge burden of proof that was cast upon them---Plaintiff's case had to stand on its own legs and plaintiff could not take benefit of deficiencies in evidence of defendant---Plaintiff failed to prove issues regarding sustaining of loss and breach of terms and conditions of finance facilities by defendant Bank---Plaintiff was not entitled to any relief---Suit was dismissed, in circumstances.

Muhammad Imran Malik and Aakif Majeed for Plaintiff.

Mrs. Ayesha Hamid for Defendant.

Date of hearing: 6th March, 2015.

2015 C L D 1532

[Lahore]

Before Mrs. Ayesha A. Malik and Faisal Zaman Khan, JJ

ALLIANCE TEXTILE MILLS LIMITED and 8 others---Appellants

versus

Mrs. NAHEED KAYANI and 9 others---Respondents

I.C.A. No. 9/L of 2006, decided on 18th May, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 76 & 152---Law Reforms Ordinance (XII of 1972), S. 3---Intra-court appeal---Rectification of register of members of company---Transfer of shares and debentures---Pre-requisites---Power of court to rectify register of members---Transfer of shares on basis of disputed agreement---Principles---Petitioner filed petition under S.152 of Companies Ordinance, 1984 seeking rectification of register of members claiming that register of members in question had been tampered with and his name had been fraudulently omitted from the same, as he had not transferred any shares in favour of respondents---Court below, accepting said petition, declared that petitioner had never transferred any shares in favour of respondents, and rectification in register of members was fraudulently made to reflect such transfer---Respondents took plea that shares had been transferred in their names by petitioner on basis of valid contract for valuable consideration, and that said agreement had been entered into with prior written permission of Bank in whose custody the instruments of shares were lying---Validity---Alleged transfer of shares in favour of respondents did not meet mandatory requirements of S.76 of Companies Ordinance, 1984---Section 76 of Companies Ordinance, 1984 provided that company should not have registered transfer of shares or debentures unless proper instrument of transfer, duly stamped and executed by transferor and transferee, had been delivered to company along with script---Original instrument of transfer was admittedly in custody of Bank by way of pledge during alleged transfer---Rectification in register of members to show transfer in favour of respondents was not in accordance with law---Court below had rightly concluded that register of members could not have been changed on basis of disputed agreement---Respondents would have to prove their claim before appropriate forum before they could seek rectification in register of members---Appeal was dismissed in circumstance.

Ms. Raeesa Sarwat for Appellants.

Abrar Ahmed for Respondents.

2015 C L D 1543

[Lahore]

Before Arshad Mahmood Tabassum, J

STATE LIFE INSURANCE CORPORATION and others---Petitioners

versus

Mst. SHEHNAZ AKHTAR and others---Respondents

Civil Revision No.2172 of 2007, heard on 24th June, 2015.

Civil Procedure Code (V of 1908)---

----O. VII, R. 2---Suit for recovery of money---Insurance claim---Accidental death claim---Date of death---Proof---Plaintiff filed suit for recovery of money as nominee of her husband who was insured claiming that she had submitted premium for revival of insurance policy on day that her husband had died due to accident, so she was entitled to recovery of accidental death claim---Trial Court dismissed the suit on ground that plaintiff had fraudulently got revived policy after one day of her husband's death---Appellate court set aside judgment and decree of Trial Court and decreed the same after recording of additional evidence holding that deceased had died on same day on which policy had been revived---Validity---Defendant Corporation had revived insurance policy on submission of premium without any objection---Plaintiff had categorically stated that her husband had died on the same day on which policy had been got revived---Plaintiff's testimony remained consistent and could not be shaken throughout---Imam Masjid had also corroborated statement of plaintiff as to death of her husband describing date announced by him from mosque loud-speakers, cause of death and leading funeral prayer of deceased---Plaintiff witnesses, officials of defendant Corporation, had also acknowledged entitlement of plaintiff as to accidental death claim preferred by her---Plaintiff witnesses also remained consistent as to date of death of deceased---Claim of defendant Corporation that deceased had died a day before revival of policy was based on its own inquiry, and witnesses, who had recorded their statements in the inquiry, had not been produced before Trial Court---Defendant witnesses did not support claim of petitioner/defendants, and the same were got declared hostile during examination---Policy was alive on the day the deceased had died---Deceased having died before reaching the hospital, his post-mortem was not required nor any death certificate could be issued---Policy having been alive and deceased having died during subsistence of his insurance policy period, his legal heirs were entitled to accidental death claim---No illegality or irregularity had been detected in impugned judgment calling for any interference in revisional jurisdiction---Judgment and decree of appellate court was upheld---Revision petition was dismissed in circumstance.

Ibrar Ahmed for Petitioners.

Imtiaz Hussain Khan Baloch for Respondent No.1.

Date of hearing: 24th June, 2015.

2015 C L D 1555

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Mian MUHAMMAD AMJAD and others---Appellants

versus

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

R.F.A. No.683 of 2002, heard on 25th February, 2015.

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

----Ss. 9 & 10---Contract Act (IX of 1872), Ss. 51, 52, 53 & 54---Suit for recovery of finance---Leave to appear, grant of---Reciprocal promise---Scope---Banking Court declined to grant leave to appear to defendants and suit was decreed in favour of plaintiff Bank---Validity---Where order in which reciprocal promises were to be performed was fixed, said promises were to be performed in that order but where the order was not expressly fixed; said promises were to be performed in that order which the nature of transaction required---Nature of transaction for providing fresh finance facility was that defendants were to provide additional securities for availing fresh finance facilities and since defendants failed to provide additional collateral securities, no default could have attributed to plaintiff bank as agreement in question did not fix order of performance of reciprocal promises---Order of performance had to be in accordance with the nature of transaction---Defendants failed to raise a substantial question of law and fact which could have entitled them right to grant leave to appear and defend the suit---High Court declined to interfere in judgment and decree passed by Banking Court in favour of bank---Appeal was dismissed in circumstances.

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

----S. 10(8)---'Substantial'---Connotation---Term 'substantial' means, of real worth and importance as opposed to imaginary and illusory---For grant of leave by Banking Court, defendant has to raise a serious question which needs to be important, grave and entails consequences giving cause of concern and must be worth consideration.

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

----Ss. 9 & 10---Contract Act (IX of 1872), Ss. 51, 52, 53 & 54---Suit for recovery of finance---Leave to appear, grant of---Reciprocal promise---Scope---Previous management of defendants, liability of---Banking Court declined to grant leave to appear to defendants and suit was decreed in favour of plaintiff Bank---Validity---Bank never required previous management of defendants to execute any guarantee to secure liability of defendant company---Previous management could not be held liable for liabilities which had been undertaken by new management with the approval of plaintiff Bank---Passing of decree by Banking Court against previous management was incomprehensible---High Court set aside judgment and decree passed by Banking Court against previous management and dismissed the suit to their extent---Appeal was allowed in circumstances.

(d) Contract---

----Classical theory---Scope---In law of contract, classical theory is only aimed as procedural fairness--- Such theory propagates the idea of freedom of bargaining power while only lying down rules of procedure but the theory is not concerned with substantive fairness or justice in the outcome of contract.

Muhammad Imran Malik for Appellants.

Hassan Iqbal Warraich for Respondent No.1.

Munawar-ul-Islam and Shoaib Rashid for Respondents Nos.2 to 6.

Date of hearing: 25th February, 2015.

2015 C L D 1567

[Lahore]

Before Shams Mehmood Mirza, J

The BANK OF PUNJAB through Executive Vice-President---Plaintiff

versus

FLYING CEMENT COMPANY LIMITED through CEO/Director and 14 others---Defendants

C.O.S. No.148 of 2011, heard on 26th January, 2015.

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

----Ss. 2(e), 9 & 10--- "Obligation"--- Meaning and scope---Restructuring/rescheduling of finance facilities---Suit for recovery---Contention of defendant, inter alia, was that the plaintiff bank had charged mark-up on restructured finance facilities and no disbursement was made in the Demand Finance Facility, therefore no mark-up on such amount could be charged----Held, that contention that plaintiff Bank could not have charged mark-up on restructuring of amount under letter of credit had no basis in law---Not only had the defendants made requests for restructuring of its overdue amounts but also accepted offer letters in which rate of mark-up on restructured facilities was clearly mentioned---Defendants had also executed finance agreements in respect of restructured finance facilities, undertaking therein to repay the mark-up---Section 2(e) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 recognized restructuring/ rescheduling/renewal of the finance facilities and said section clearly showed that fresh disbursement was not necessary---Party to an agreement, after its execution, could not turn around to contend that mark-up was fraudulently charged---Suit was decreed, in circumstances.

Habib Bank Limited v. Service Fabrics Limited and others 2004 CLD 1117 and Messrs Dadabhoy Cement Industries Limited and others v. National Development Finance Corporation PLD 2002 SC 500 rel.

Amir Wakeel Butt for Plaintiff.

M. Jahanzaib and M. Afzal for Defendants Nos.1, 2 to 4, 7, 8, 11 to 15.

Date of hearing: 26th January, 2015.

2015 C L D 1590

[Lahore]

Before Abid Aziz Sheikh and Ch. Muhammad Iqbal, JJ

Messrs MONTGOMERY FLOUR AND GENERAL MILLS, SAHIWAL through Chief Executive---Appellant

versus

MCB BANK LIMITED (Formerly MUSLIM COMMERCIAL BANK LIMITED), SAHIWAL through Branch Manager/Attorney and 7 others---Respondents

E.F.A. No. 4 of 2015, heard on 4th May, 2015.

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

----Ss. 19 & 9---Civil Procedure Code (V of 1908), S. 47 & O. XXXIX, Rr. 1, 2---Contract Act (IX of 1872) S. 62---Novation, rescission and alteration of contract---Execution of decree by Banking Court---Consent/compromise decree---Failure of defendant/judgment debtor to adhere to terms of compromise/consent decree---Suit for recovery was decreed by consent of the parties whereby defendant undertook to pay reduced settlement amount in twelve equal instalments and in case of failure to do so, defendant would be liable for the full amount claimed by Bank---Defendant failed to make said payments and plaintiff thereafter initiated execution proceedings for the full amount---Defendant's applications under S. 47 & O. XXXIX, Rr. 1 & 2, C.P.C. against the execution petition of the plaintiff Bank and for redemption of mortgaged property were dismissed by Executing Court---Contention of defendant was inter alia, that the plaintiff Bank had voluntarily extended time after failure of defendant to pay the instalments, therefore, the same amounted to novation of contract and the plaintiff Bank could only file a separate suit---Held, that from facts of the case, it was evident that defendant had failed to pay the decretal amount in twelve equal instalments and therefore the plaintiff Bank was legally justified to recover the full amount through execution in terms of the settlement agreement between the parties, on basis of which the consent decree was passed by Banking Court---Contention that time had been extended by the plaintiff Bank therefore consent decree had been novated and only a separate suit could be filed by the plaintiff Bank was not tenable, as the plaintiff Bank had allowed one last opportunity to the defendant to pay balance amount however it was made clear that in case of default, the amount claimed in the recovery suit would be payable---In absence of any material change in the compromise decree through subsequent compromise, Executing Court would be in a position to execute the consent decree under S. 47 of C.P.C. and no separate suit was required to be filed---Change in schedule of payment of decretal amount which was also defaulted by the defendant was not a new contract nor did it rescind or alter the original contract and therefore, by no means novated the compromise decree when looked at in light of S. 62 of the Contract Act, 1872---Contention that Executing Court should have framed issues and recorded evidence was not tenable as the consent decree, outstanding amounts, dates of payment, defaults and subsequent correspondence between the parties were admitted, hence there were no disputed facts for which issues were required to be framed---High Court observed that date of default for the purpose of cost of funds had not been determined in the consent decree and directed that Executing Court would be empowered to determine the said date under S. 47 of the C.P.C. to calculate costs of funds payable by defendant--- No illegality existed in impugned order---Appeal was dismissed, in circumstances.

Barkat Ullah v. Wali Muhammad 1994 SCMR 1737; Musarrat Shaukat v. Sufia Khatoon 1994 SCMR 2189; SAMBA Bank Ltd. v. Syed Bhais 2013 CLD 2080; Messrs M. Amin M. Bashir Limited Karachi v. Messrs Star Oil and Ice Mills PLD 1973 Kar. 409 and Habib Bank Ltd. v. Pak Poly Products Pvt. Ltd. 2013 CLD 1661 rel.

Peer Dil and others v. Dad Muhammad 2009 SCMR 1268; Fakir Abdullah and others v. Government of Sindh through Secretary to Government of Sindh Revenue Department, Sindh Secretariat, Karachi and others PLD 2001 SC 131; Asghar Ali v. Additional Sessions Judge, Kasur and others 2015 MLD 353; Industrial Development Bank of Pakistan through Vice-President I.D.B.P. v. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. and 9 others PLD 2009 Lah. 176 and Water and Power Development Authority through Chairman, WAPDA, Lahore v. Mian Abdul Rauf PLD 2002 Lah. 268 distinguished.

Asim Hafeez for Appellant.

Sardar Riaz Karim for Respondent No.1.

Date of hearing: 4th May, 2015.

2015 C L D 1644

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

HABIB BANK LIMITED, DEIRA BRANCH, DEIRA DUBAI UAE---Appellant

Versus

W.R.S.M. TRADING COMPANY, L.L.C. and 4 others---Respondents

R.F.A. No.395 of 2005, decided on 10th March, 2015.

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

---S. 5---Contract Act (IX of 1872), S. 23---Banking Companies Ordinance (LVII of 1962), Ss. 3-A, 25 & 41---BCD Circulars by State Bank of Pakistan---Jurisdiction of Banking Court---Scope---BCD Circulars are issued by State Bank of Pakistan in exercise of powers under Ss. 3-A, 25 & 41 of Banking Companies Ordinance, 1962, and have force of law---Any contract or agreement executed in violation to BCD circular comes within the mischief of S. 23 of Contract Act, 1872, being contrary to law and therefore, is not enforceable by Banking Court established under section 5 of Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----S. 9(1)---Suit before Banking Court---Locus standi---Under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, before Banking Court, financial institution or a customer can file a suit and none else.

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

----S. 2(a)(i)---"Financial institution"---Scope---For falling within the definition of term financial institution' the transaction must be within Pakistan.

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

----Ss. 2(a) & 9---Civil Procedure Code (V of 1908), O. VII, R.10---Suit for recovery of finance---Return of plaint---Loan advanced by Foreign Branch of Bank (plaintiff)---Filing of suit in Pakistan--­Scope---Branch of plaintiff bank -in foreign country advanced finance facility to defendant company registered in that foreign country but Directors of the company were Pakistanis---Plaintiff Bank filed suit in Pakistan against defendant company and its Directors---Validity--­Transaction in question or for filing of suit in Pakistan under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, Bank was not a "financial institution" under S. 2(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court returned plaint to plaintiff Bank and set aside judgment and decree passed by Banking Court---Appeal was allowed accordingly.

Ms. Ayesha Hamid for Appellant (in R.F.A. No. 395 of 2005). Bashir Ahmad Shaheen for Appellant (in R.F.A. No. 395 of 2004).

Mrs. Raeesa Sarwat for Appellant (in F.A.O. No.254 of 2008). Muhammad Shahzad Shaukat for Respondent No.2.

Muhammad Shuja Baba for Respondents Nos. 4 and 5 (in R.F.A. No. 362 of 2003).

Muhammad Akram Pasha for Respondent (in R.F.A. No.362 of 2003).

Abdul Rauf Saleem on behalf of Hashim Sabir Raja for Respondent No.2 (in F.A.O. No. 254 of 2008).

Date of hearing: 28th January, 2015.

2015 C L D 1682

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

The BANK OF PUNJAB through Mehboob ul Hassan, EVP Head SAM---Petitioner

Versus

AMTEX LIMITED through Director and 9 others---Respondents

Writ Petition No.8315 of 2015, decided on 25th March, 2015.

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

----Ss. 9 & 22--- Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Interlocutory order---Petitioner Bank issued bank guarantee and Banking court directed the petitioner to deposit amount of bank guarantee in Court--- Validity---Order for depositing amount of bank guarantee in court was interlocutory in nature against which no appeal had been provided by the Ordinance therefore, the same could not be challenged by filing constitutional petition--- Order passed by Banking Court directing petitioner to deposit amount of bank guarantee with court did not occasion any injustice to petitioner---High Court declined to interfere with order passed by Banking Court---Constitutional petition was dismissed in circumstances.

Bank of Punjab v. International Ceramics Ltd. and others 2013 CLD 1472; Messrs National Security Insurance Co. Ltd. v. Messrs Hoechst Pakistan Ltd. and others PLD 1990 SC 709; Sheikh Gulzar Ali and Co. Ltd. and others v. Special Judge, Special Court of Banking and anomer 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; Muslim Commercial Bank Ltd. through Chief Manager and Principal Officer v. Judge Banking Court No.II Faisalabad and 8 others 2002 CLD 991; Pakistan through Secretary Ministry of Food and Agriculture v. Special Court (Banking) Sindh and others 1991 SCMR 2355; Pak Consulting and Engineering (Pvt.) Ltd. v. Pakistan Steel Mills and another 2002 SCMR 1781; United Bank Limited v. Pakistan Industrial Credit and Investment corporation Ltd. and another PLD 2002 SC 1100 and Prudential Commercial Bank Limited v. Hydari Ghee Industries Limited and others 1999 MLD 1694 ref.

(b) Constitution of Pakistan--

----Art. 199--- Constitutional jurisdiction of High Court--- Scope--- Discretion vested in court, tribunal or authority, if not tainted with malice cannot be interfered with by High Court in its extraordinary constitutional jurisdiction.

Zahid Nawaz Cheema and Talib Hussain for Petitioner.

2015 C L D 1699

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs FAZAL SONS through Sole Proprietor and 3 others--Appellants

Versus

MUSLIM COMMERCIAL BANK LIMITED through Manager---Respondent

E.F.A. No.592 of 2012, decided on 4th February, 2015.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), Ss. 47 & 152-- Execution of decree--- Executing Court, powers of--- Appellate jurisdiction of High Court---Scope---Execution petition filed by decree holder Bank included mark-up beyond the period of agreement-- Executing Court declined to interfere in decree passed in favour of Bank--- Validity---Executing Court could touch question of executability of decree and further if the decree was nullity in the eye of law or had been passed without jurisdiction, the Executing Court could adjudige the same while exercising jurisdiction under S.47, C.P.C.---Executing Court was competent to look into the matter agitated before it under S. 47, C.P.C. read with S.152, C.P.C. and High Court in appellate jurisdiction had ample power to correct the mistake or illegality committed by Trial Court/Executing Court---High Court set aside the order passed by Executing Court---Appeal was allowed in circumstances.

Habib Bank Limited v. Mst. Parveen Qasim Jan and others 2014 SCMR 322; Fakir Abdullah and others v. Government of Sindh through Secretary to Government of Sindh, Revenue Department, Sindh Secretariat, Karachi and others PLD 2001 SC 131; Messrs A.Z. Company v. Messrs S. Maula Bukhsh Muhammad Bashir TED 1965 SC 505; Islamic Republic of Pakistan v. Muhammad Saeed PLD 1961 SC 192; Muhammad Sharif v. Jalaluddin 1971 SCMR 594; Raheel Ikhlas v. Messrs Citibank N.A. 2003 CLD 1599; National Bank of Pakistan v. Punjab Buildings Products Ltd. PLD 1998 Kar. 302; Zarai Tariqiati Bank Limited through Branch Manager v. Hassan Aftab Fatiana 2009 CLD 36; Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162 and Mst. Shahista Bibi and another v. Superintendent, Central Jail, Mach and 2 others PLD 2015 SC 15 rel.

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

----S. 9--- Mark-up beyond expiry of contract--- Scope--- Banking Court is not competent to grant mark-up beyond expiry of period.

Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162 rel.

Mian Sohail Ahmad for Appellants.

Bilal Kashmiri for Respondent.

Date of hearing: 26th January, 2015.

2015 C L D 1710

[Lahore]

Before Amin-ud-Din Khan and M. Sohail lqbal Bhatti, JJ

Dr. FAIZ RASOOL and others---Appellants

Versus

The ASKARI BANK LIMITED through Branch Manager/Authorised Attorney--Respondent

R.F.A. No. 1207 of 2013, heard on 5th March, 2015.

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

----S. 2(d)--- Term 'Diminishing Musharika'--- Connotation-- "Diminishing Musharika" is a concept where a financer and his client participate either in joint ownership of a property or an equipment or in a joint commercial enterprise---Share of financer is further divided into a number of units and it is understood that client has to purchase units of the share of financier one by one periodically, thus increasing his own share until all units of the financer are purchased by him so as to make him the sole owner of the property.

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

----Ss. 2(d) & 9--- Suit for recovery of finance--- "Diminishing Musharika"---Charity or gift---Denial of agreement---New plea, raising of---Parties entered into 'Diminishing Musharika' agreement and on default made by defendant, Bank filed suit before Banking Court---Defendant denied having entered into any agreement with Bank, therefore, Banking Court declined to grant leave to defend to the suit and suit was decreed in favour of Bank---Banking Court included amount claimed by bank in shape of charity imposed on defendant as penalty for delays caused in payment-Validity---Diminishing Musharika could not be taken out of the pale of term `Musharika' which was specifically termed as "finance" in S. 2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001---In case of default by client to fulfil terms and conditions of finance, the financial institution could institute a suit in Banking Court---Charity or gift was something a donor gave/granted with his free will, at his own discretion - and according to his own choice and not under compulsion or under dictates of others---Plaintiff Bank in any eventuality was not entitled to claim any amount on account of charity---Such clause in Musharika relating to charity was void and was in conflict with Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendants in their application for grant of leave to appear and defend the suit completely and outrightly denied availing of finance facility---Defendants could not raise a plea not mentioned in application for grant of leave to appear and defend the suit---Requirement of fair and reasonable hearing stood negated if new and additional pleas were allowed to be raised during arguments-Requirement of reasonable hearing meant a fair opportunity to meet the case set up by other side and desire to administer justice and equity could not be enforced in a manner to ignore technicalities altogether---Even evidence which had come on record and was found contrary to or beyond pleadings was required to be discarded out of consideration---Appeal was dismissed accordingly.

Apollo Textile Mills Ltd. v. Soneri Bank Limited 2012 CLD 337 ref.

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

----S. 9---Suit for recovery of finance---Penalty or penal charges ­Scope-Penalty or penal charges in any form cannot be claimed by financial institution.

Muhammad Umar Riaz for Appellants.

Barrister Kashif Rajwana and Saeed Nasir for Respondent.

Date of hearing: 5th March, 2015.

2015 C L D 1729

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

Messrs WAZIR KHAN STORE and others---Appellants

Versus

UNITED BANK LIMITED through Authorized Attorney---Respondent

R.F.A. No. 632 of 2013, decided on 19th March, 2015.

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

----Ss. 9 & 10---Suit for recovery of finances---Statement of account, non-rebuttal of---Banking Court did not grant to defendants leave to defend the suit, resultantly the suit was decreed in favour of Bank-- Validity---In application for leave to defend filed by defendants there was no rebuttal of statement of accounts and suit was maintainable-- Certified statement of accounts was available on record and no entry of the same was challenged---Such statement of accounts appended with plaint was presumed to be correct---High Court declined to interfere in judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

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; 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; Messrs Muzamil Brothers and another v. Saudi-Pak Commercial Bank Limited through Manager 2006 CLD 1546; Elbow Room and another v. MCB Bank Limited 2014 CLD 985; Habib Metropolitan Bank Ltd. v. Abid Nisar 2014 CLD 1367; NIB Bank Ltd. v. Highnoon Textile Ltd. and 3 others 2014 CLD 763; Equity Participation Fund v. Messrs Abbrasive Products Co. Limited and 4 others 2012 CLD 971; Habib Bank Limited through authorized Attorney v. Haidri Homes through Partners and 3 others 2012 CLD 2016; The Bank of Punjab v. Messrs Khan Unique C.O.S. No.41 of 2010 and Appollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 ref.

Habib Metropolitan Bank Limited v. Mian Abdul Jabbar Gihllin and another 2013 CLD 88 and IGI Investment Bank Limited through Attorney v. Messrs Admore Gas (Pvt.) Ltd. and another 2014 CLD 1354 rel.

(b) Interpretation of statutes---

----"Directory" or "mandatory" provision---Determination---One of the essential features of mandatory provisions is not merely use of word `shall' which may be used merely to stress importance of compliance of 17 particular requirement---Ordinarily, where consequences of failure to comply with direction or requirement of statute are not stated, the direction is treated as directory and not mandatory.

Citibank N.A. v. Judge, Banking Court-IV and 2 others 2001 CLC 171 rel.

Syed Waqar Hussain Naqvi for Appellants.

Amir Iqbal Basharat for Respondent.

Date of hearing: 5th March, 2015.

2015 C L D 1749

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

ALLIED BANK LIMITED through Manager---Appellant

Versus

SAMAR ABID and 8 others---Respondents

E.F.A. No.394 of 2010, heard on 24th March, 2015.

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

----Ss. 19 & 22---Specific Relief Act (I of 1877), Ss. 42 & 43-- Execution of decree---Suit for declaration of title---Scope---Appellant was decree holder and during execution proceedings property in question was attached by Banking Court---Objector claimed her owner of ,the property on the basis of compromise decree passed in her favour---Banking Court allowed objection and property in question was deleted from Fard-Taleeqa---Plea raised by decree holder was that decree in favour of objector was not binding as decree holder was not party to proceedings before Civil Court--- Validity---Declaratory decree passed under S.42 of Specific Relief Act, 1877, could declare a pre­existing right and did not create or confer a new right, when creation of rights of decree holder in suit property was never denied---Procuring a decree without impleading decree holder as defendant in suit and without proving a right against decree holder for which declaration was sought, such decree was not binding upon decree holder---Decree in question could not injure rights of decree holder in property in question, -as claim of objector was wholly based upon ex parte declaratory decree---High Court set aside objection petition filed by objector---Appeal was allowed in circumstances.

Moiz Tariq for Appellant.

Syed Muhammad Kaleem Ahmad Khurshid for Respondent No.l.

Syed Shahab Qutab for Respondents Nos.4 to 6.

Rana Abdul Ghaffar Khan for Respondent No.9.

Date of hearing: 24th March, 2015.

2015 C L D 1811

[Lahore]

Before Shahid Jamil Khan, J

The BANK OF PUNJAB-Petitioner

Versus

JUDGE BANKING COURT and others---Respondents

Writ Petition No.10712 of 2013, decided on 10th February, 2015.

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

----S. 27, proviso---Constitution of Pakistan, Art. 199---Constitutional petition---Arithmetical mistake---Decretal amount, enhancement of-- Plea raised by plaintiff Bank was that order, which enhanced decretal amount was not an arithmetical mistake--- Validity---Mistake alleged by plaintiff Bank was not dilated upon and Banking Court was bound to find out the nature of mistake first before giving its finding on law--­Non-exercise of jurisdiction was a material irregularity which could be corrected in exercise of constitutional jurisdiction---High Court set aside the order in question and remanded the matter to Banking Court for deciding the application afresh---Petition was allowed accordingly.

Askari Commercial Bank Limited through Authorized Signatory v. Messrs Bake Line Products through Partners and 5 others 2013 CLD 836 ref.

Muhammad Saleem Iqbal for Petitioner.

Muhammad Masood Sabir for Respondents.

2015 C L D 1820

[Lahore]

Before Shams Mehmood Mirza and Shahid Karim, JJ

MUHAMMAD ALI---Appellant

Versus

WALI MUHAMMAD---Respondent

R.F.A. No. 119 of 2010, heard on 29th April, 2015.

Negotiable Instruments Act (XXVI of 1881)--

---S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2--- Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Suit for recovery of money--- Negotiable instrument--- Presumption--- Onus to rebut-- Plaintiff filed suit for recovery of money on the basis of cheque issued by defendant which was dishonored on presentation due to insufficient balance-Trial Court decreed the suit in favour of plaintiff-Validity­ Held, there was an initial presumption under S. 118 of Negotiable Instruments Act, 1881, that a negotiable instrument was made, drawn, accepted or endorsed for consideration---Although the presumption was rebuttable yet the onus was on the person denying consideration to allege and prove the same---Where execution of negotiable instrument was admitted, the burden of proof of non-payment of consideration was on the executant---Trial Court by analyzing entire evidence adduced pro and contra by the parties, rightly came to the conclusion that the plaintiff had brought his whole claim owing to the fact that execution of cheque was admitted and thus a presumption was attached---Presumption was not patently rebutted by the appellant and the findings of Trial court were valid and were affirmed---Appeal was dismissed in circumstances.

Muhammad Aziz-ur-Rehman v. Liaqat Ali 2007 SCMR 1820; Muhammad Arshad and another v. Citibank N.A. Lahore 2006 SCMR 1347; 2009 CLC 584 and 2004 MLD 951 ref.

Abdul Qayyum v. Haji Badri Zaman and others 2008 MLD 152; Raja Zubair v. Chaudhry Mohabit 2007 MLD 1215; Nasir Ahmad v. Pakland Cement Limited 2001 CLC 1156; National Bank of Pakistan v. Messrs M. Ismail Thakur and Sons Ltd. 1988 CLC 700; Syed Ali Hussain Naqvi v. Ali Sher Naqvi 2005 CLC 1751 and Jam Abdul Hameed Shahid v. Liaqat Ali 2004 CLC 219 distinguished.

Muhammad Rafiq Goreja for Appellant.

M. Masood Bilal for Respondent.

Date of hearing: 29th April, 2015.

2015 C L D 1843

[Lahore]

Before Shams Mehmood Mirza and Shahid Karim, JJ

Messrs S.M. NISAR AND COMPANY through Partner and 4 others---Appellants

Versus

BANKING COURT-III, MULTAN CAMP AT SAHIWAL and 5 others---Respondents

E.F.A. No. 44 of 2014, heard on 3rd June, 2015.

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

----Ss. 19, 22 & 12---Civil Procedure Code (V of 1908), O. XXI, Rs. 66 & 90---Suit for recovery of loan amount---Auction of mortgaged properties without intervention of court---Procedure---Objections to auction proceedings---Notice to judgment debtor before auction proceedings, absence of---Effect---Knowledge of execution proceedings, presumption as to---Objection as to quantum of sale price---Banking Court, after dismissing application for leave to defend, decreed the suit---Plaintiff-Bank during execution proceedings filed application under S.19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 seeking permission to auction mortgage properties without intervention of court, which was allowed---Defendant filed objection application under 0. XXI, R. 90, C.P.C. read with provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 raising objections as to conduct of said auction proceedings, which was dismissed by Banking Court---Contentions raised by defendant was that grave procedural irregularities had been committed during entire process of said auction and that no notice had been served upon him before auction proceedings---Plaintiff-Bank took plea that defendant, knowing about auction proceedings, had deliberately avoided the same--- Validity---Section 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001 granted options to decree holder that were either to choose for public auction or to invite sealed tenders for sale of mortgaged properties---In case decree holder opted for sale of mortgaged properties by inviting sealed tenders, notices thereof were required to be published in one English daily newspaper and one Urdu daily newspaper and thirty days time was to be given to prospective bidders for submitting offers---Section 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 conferred right upon decree holder Bank to proceed to auction mortgaged properties without intervention of Banking Court---Primary requirement for decree holder Bank was to seek permission from Banking Court which had been duly granted---Plaintiff-Bank, having obtained permission from Banking Court, proceeded for auction of properties properly by duly complying with provision of S. 19(3) & (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Auctioneer was appointed by plaintiff-Bank who took steps to issue proclamation in widely circulated newspapers and also affixed posters at prominent places in order to give wide publicity to sale---Process prescribed under S. 19 of Financial Institutions (Recovery.. of Finances) Ordinance, 2001 was fully met with by plaintiff-Bank---Defendant in his objection petition had raised objections regarding non-observance of requirements of O. XXI, R. 66, C.P.C. which more properly pertained to auction of mortgaged properties by way of public auction---Objection raised by defendant, therefore, did not apply to auction through sealed tenders---Objection of defendant as to non-issuance of notice before auction proceedings was not sustainable for reasons that judgment and decree had specifically stated that suit was being converted into execution petition and date was fixed for filing Fard Taaliqa; that defendant had already filed appeal against judgment and decree, so he could not deny knowledge of pendency of execution proceedings; that report of auctioneer stated to have posted proclamation and posters to defendant but same were not received by him; postal receipts and notices received back were annexed with said report---Defendant had been appearing before Banking Court in execution proceedings, and it could be inferred that defendant had knowledge regarding permission granted to plaintiff-Bank for auction of mortgaged properties without intervention of court---Defendant had never objected to sale of mortgaged properties without intervention of court---Objection of defendant regarding inadequate 'gale price, being post-sale objection, had no merit---Sale price of mortgaged properties was more than their forced sale value--- Plaintiff-Bank had fulfilled all procedural requirements for putting mortgaged properties to sale---Sale was well advertised, fair and transparent and competing bidders had participated therein---Objections of defendant were perfunctory and tentative in nature and same had no nexus with sale of mortgaged properties by way of invitation through sealed tenders---Banking Court had rightly rejected objection application filed by defendant---Appeal was dismissed in circumstances.

Ch. Saghir Ahmad for Appellants.

Barrister Malik Kashif Rafique Rajwana, Malik Muhammad Tariq Rajwana and Abdul Rauf Sindhu for Respondents.

2015 C L D 1875

[Lahore]

Before Ijaz ul Ahsan and Faisal Zaman Khan, JJ

HABIB BANK LIMITED---Appellant

Versus

JUDGE BANKING COURT and others---Respondents

I.C.A. No. 912 of 2013, decided on 24th March, 2015.

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

----S. 10---Law Reforms Ordinance (XII of 1972), S. 3---Intra-court appeal---Leave to defend the suit, grant of---Principle---Effect of Rollover---Markup on markup---Suit for recovery of finance was filed by Bank and Banking Court granted leave to defend the suit to the defendant---Single Judge of High Court, in exercise of constitutional powers maintained the leave granted by Banking Court---Validity---Lack of clarity was noticed in the documents to establish calculation of markup, finalization of amounts repaid and modus operandi adopted by Bank for alleged renewal/restructuring the facility---Accounts statement did not clearly depict a fresh transaction and allegation of rollover could not be ruled out---Banking Court rightly granted opportunity to parties to adduce evidence to prove their respective claims---Bank had to establish that there was no rollover and markup on markup was not charged while the defendants could prove otherwise---Such fact alone furnished justification for the order of Banking Court---Division Bench of High Court declined to interfere in the judgment passed by Single Judge of High Court--- Intra-court appeal was dismissed in circumstances.

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

----S. 9---Suit for recovery of finance---Rollover of finance---Scope---Renewal of finance in shape of rollover is illegal and does not confer any power on the Bank to charge markup.

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

----S. 22(6)---Interlocutory order---Right of appeal, bar on---Object, purpose and scope---Matters before Banking Court involve substantial sums of money, which constitute life blood of economy---Such matters cannot be allowed to be delayed indefinitely by allowing numerous and multiple appeals against every interim or interlocutory order that may be passed by Court at various stages of the suit---In the interest of expeditious decision of banking suit, legislature has in its wisdom curtailed the right to file appeals against interim/interlocutory orders---In order to safeguard interests of aggrieved party and to fulfil salutary principle of due process and natural justice an appeal against final judgment or final decree has been provided, in which all interim orders merge and can be challenged before Appellate forum at the appropriate stage when a final order, judgment/decree is passed---Language of S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001 clearly and unambiguously points towards such directions.

(d) Constitution of Pakistan---

----Art. 199---Constitutional petition---Interim/interlocutory orders---Scope---Where right of appeal has intentionally not been provided against interim orders, the trend to challenge such orders in constitutional jurisdiction leads to defeating the purpose of law in exercise of extraordinary jurisdiction of High Court, which is discretionary in nature.

Messrs Sajid Brothers and Co. through Proprietor and 2 others v. Manager, Allied Bank Limited and 8 others 2012 CLD 1858; Mohtarma Benazir Bhutto, M.N.A. and Leader of the Opposition, Bilawal House, Karachi v. The State 1999 SCMR 1447; Syed Saghir Ahmed Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165; Muhammad Siddiq Awan v. Mst. Shahjehan Begum and another 1997 CLC 436; Bank of Punjab through Authorized Attorney v. Messrs AMZ Ventures Limited and another 2013 CLD 2033; Dadex Eternit Limited v. Syed Haroon Ahmed and others PLD 2011 Kar. 435 and Muhammad Raza Hayat Hiraj and others v. The Election Commission of Pakistan and others 2015 SCMR 233 rel.

Hassan Iqbal Waraich for Appellant.

Rizwan Ahmad Batth for Respondents.

2015 C L D 1894

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

JAMSHED HASSAN BUTT---Appellant

Versus

MCB BANK LIMITED---Respondent

R.F.A. No. 482 of 2011, decided on 24th November, 2014.

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

----Ss. 9, 7 & 22(7)---Suit for recovery of loan amount---Decree, execution of---Injunctive order, grant of---Scope---Any order of stay of execution of a decree should automatically lapse on the expiry of six months from the date of the order---Amount deposited in the court should be paid to the decree-holder after lapse of six months---Injunctive order passed on 10-4-2012 had lapsed by operation of law---Word 'shall' used in S. 22(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was mandatory in nature---Grant of injunctive relief would amount to circumvent the provisions of S. 22(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Application for grant of interim relief was dismissed in circumstances.

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

----Preamble---Object---Purpose of enacting Financial Institutions (Recovery of Finances) Ordinance, 2001 was to provide speedy measures for recovery of outstanding loans and finances---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a remedial statute.

(c) Interpretation of statutes---

----Word 'shall' and 'may' were interchangeable when used in a provision of law---Word 'shall' when used in a statute was not mandatory as a rule of thumb but no universal rule could be laid down to determine as to whether a provision was directory or mandatory in nature---Even enactment had to be construed on its own merit in the light of general object intended to be secured by the legislation.

Ms. Tasneem Akhtar Awan for Appellant.

2015 C L D 1904

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

MUHAMMAD MOBEEN---Appellant

Versus

A.B.N. AMRO BANK LIMITED through Manager---Respondent

E.F.A. No. 1035 of 2011, heard on 28th November, 2014.

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

----S. 19---Civil Procedure Code (V of 1908), S. 51 & O.XXI, R. 37---Execution of decree---Arrest of judgment debtor--- Pre-conditions---Executing Court just on the statement of judgment debtor that he suffered loss in business and was unable to repay decretal amount passed order for his detention in civil prison---Validity---Unless pre-requisites of S. 51, C.P.C. were proved to exist, detention in prison could not be ordered---Pre-conditions were that judgment debtor should be proved to have made attempt to leave limits of the Court; that he/she obstructed the decree or execution thereof; that he/she dishonestly transferred property after institution of suit to avoid decree; or that he had means to pay decree but neglected to do the same---Without satisfaction of such pre-conditions, no mechanical order for detention in prison could be passed---Executing Court, without making inquiry, could not straightaway order detention in civil prison---Order passed by Executing Court lacking all such ingredients which were sine qua non for committing judgment debtor to civil prison---High Court set aside the order and directed Executing Court to pass fresh order after complying with mandatory provisions of law---Appeal was allowed in circumstances.

Iftikhar Ullah Malik for Appellant.

Zahid Mughal for Respondent.

Date of hearing: 28th November, 2014.

2015 C L D 1917

[Lahore]

Before Shahid Karim, J

NATIONAL BANK OF PAKISTAN through President---Petitioner

Versus

EXECUTIVE DISTRICT OFFICER (REVENUE) MULTAN and another---Respondents

W.P. No. 6976 of 2005, decided on 31st March, 2015.

(a) West Pakistan Urban Immovable Property Tax Act (V of 1958)---

----S. 4(a)---Constitution of Pakistan, Arts. 165 & 199---Constitutional petition---Property tax, exemption from---Plea raised by National Bank of Pakistan was that Bank was an instrumentality of Federal Government and by virtue of Art. 165 of the Constitution it was exempted from payment of property tax---Validity---National Bank of Pakistan was merely another Bank operating in the vast landscape of banking business which was involved in trading, business and commerce and could not be considered as a government department performing sovereign functions having a dominant monopoly or carrying on welfare related functions of the State/Federal Government---To extend the benefit of Art. 165 of the Constitution to National Bank of Pakistan and thus exempt it from payment of property tax, would work discriminately against similarly placed Banking Companies operating in the field---Petition was dismissed in circumstances.

Chairman, District Council, Rahim Yar Khan and another v. United Bank Limited, Rahim Yar Khan 1989 CLC 1397; Association Cement (State Cement Corporation of Pakistan (Pvt.) Limited) v. Government of Sindh, through the Secretary, Local Government and 2 others 1992 MLD 1730; Sindh Industrial Trading Estate Ltd. Karachi v. Central Board of Revenue and 3 others PLD 1975 Kar. 128; Messrs Rice Export Corporation of Pakistan Ltd. v. Karachi Metropolitan Corporation through Director Octroi and another PLD 1990 Kar. 186; Central Board of Revenue and another v. S.I.T.E. PLD 1985 SC 97; Water and Power Development Authority through General Manager and Project Director and another v. Administrator District Council Swabi and 5 others 2005 SCMR 487; Collector of Sales Tax and Central Excise, Lahore v. Water and Power Development Authority and others 2007 SCMR 1736 and Central Board of Revenue, Islamabad and another v. WAPDA and another PLD 2014 SC 766 ref.

Union Council Ali Wahan, Sukkur v. Associated Cement (Pvt.) Limited 1993 SCMR 468 and Province of N.-W.F.P. through Secretary Local Government and Rural Development, Peshawar and others v. Pakistan Telecommunication Corporation through its Chairman and others PLD 2005 SC 670 rel.

(b) Interpretation of statutes---

----Fiscal matter---Exemption from tax---Principle---Any claim for exemption from payment of tax, it presupposes levy of duty and in such case, the burden of proof squarely falls on the person claiming exemption---While interpreting provisions granting exemption, courts have to lean towards revenue rather than the assessee.

Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652 rel.

Ch. Altaf Hussain for Petitioner.

Rana Muhammad Hussain, A.A.-G. along with Muhammad Yousaf Virk, Excise and Taxation Officer, Multan for Respondents.

Date of hearing: 19th March, 2015.

2015 C L D 1957

[Lahore]

Before Amin-ud-Din Khan and M. Sohail Iqbal Bhatti, JJ

TANVEER IQBAL---Appellant

Versus

MCB BANK LIMITED through Manager---Respondent

Regular First Appeal No.538 of 2012, heard on 15th January, 2015.

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

----Ss. 9 & 10---Suit for recovery of finances---Leave to defend the suit---Defendant was aggrieved of order passed by Banking Court whereby leave was declined to defend the suit---Defendant in his application to defend the suit, admitted that he made payment of 21 instalments and thereafter when Bank enhanced the rate of markup he stopped making payment to the Bank--- Defendant made payment of his monthly instalments in pursuance to the schedule of repayment and thereafter committed default resultantly Bank filed a suit for recovery---Banking Court rightly declined leave to defend the suit and rightly disallowed amount of markup charged after the date of default---High Court declined to interfere in the order and decree passed by Banking Court---Appeal was dismissed in circumstances.

KLCT Chidambran Chettyar v. Aziz Mian and others AIR 1938 Rangoon 149 and State Life Insurance Corporation of Pakistan v. S.U. Durrani and another PLD 1987 Kar. 588 ref.

Zahoor Ali Nasir Tagga for Appellant.

Rana Zain Tahir for Respondent.

Date of hearing: 15th January, 2015.

2015 C L D 1969

[Lahore]

Before Amin-ud-Din Khan and Muhammad Sajid Mehmood Sethi, JJ

Mian NADEEM AKHTAR---Appellant

Versus

JUDGE BANKING COURT NO.III, MULTAN and 3 others---Respondents

E.F.A. No. 7 of 2015, decided on 16th June, 2015.

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

----Ss. 12 & 22---Civil Procedure Code (V of 1908), S. 12(2)---Suit for recovery of loan amount---Ex parte judgment and decree---Power to set aside ex parte decree---Fraud, collusion, misrepresentation, proof of---Service of summons and notices---Principles---Power of attorney---Validity---Ex parte decree by Banking Court---Defendant challenged judgment and decree by filing application under S. 12(2), C.P.C. read with S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which was dismissed by Banking Court---Contention raised by defendant was that impugned judgment and decree was based on fraud, misrepresentation and concealment of fact as he was out of country while the same had been passed and that proceedings conducted on his behalf were without lawful authority---Validity---Defendant had earlier filed application for setting aside ex parte decree, which was dismissed by Banking Court---Neither any appeal against dismissal of said application was filed nor validity of such application was challenged before any forum, nor authority of counsel who had been appearing in said application had been questioned or any complaint filed against him---Defendant was real brother of attorney holder, who had executed all documents to mortgage suit property in favour of plaintiff-Bank, but no allegation of fraud, forgery and misrepresentation had been made against said attorney in application under S. 12(2), C.P.C.---Power of attorney was duly executed before Sub-Registrar in presence of witnesses---Defendant had neither made said attorney party to application under S. 12(2), C.P.C. nor instituted any complaint against him---Banking Court, before passing ex parte decree, had fulfilled all legal formalities for summoning defendant---Summons and notices were sent on address which defendant had provided to plaintiff-Bank at time of availing loan facility---Defendant could not raise objection that summons and notices were not sent on address where he was residing at that time, as he had not produced any proof regarding his intimation to plaintiff-Bank regarding change of his address---Defendant was bound to inform plaintiff-Bank about change of his address---Application filed under S. 12(2), C.P.C. was silent about source of knowledge through which appellant had come to know about pendency of execution petition---Application was rightly dismissed by Banking Court being not bona fide---Appeal was dismissed in circumstances.

Raja Karim Elahi v. Muhammad Arif and others 2010 MLD 58 and Raja Muhammad Arshad v. Raja Rabnawaz 2015 SCMR 615 rel.

Ch. Asif Ali Sanghera for Appellant.

2015 C L D 1978

[Lahore]

Before Shams Mehmood Mirza, J

Mian WAHEED-UD-DIN and others---Petitioners

Versus

Messrs ROYAL RICE MILLERS (PVT.) LTD. through Authorized Representative and others---Respondents

C.O. No. 21 of 2012, decided on 16th January, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 86, 152 & 494---Inquiry by High Court---Plea of fraud---Petitioners challenged issuance of shares by company to respondents on the plea that same were unlawful and illegal and sought rectification of Register of members of the company---Plea raised by respondents was that as fraud was alleged, the proper forum was Civil Court---Validity---Where complicated questions of fact were involved, summary procedure should not be invoked, however, whether a petition for rectification of Register raised complicated questions of fact or not, depended on the facts of each case---Petitioners had clearly alleged that company did not send notice to petitioners in violation of the provisions of S. 86 of Companies Ordinance, 1984---Although company alleged that proper notices were issued, yet they failed to append notice or any other document evidencing dispatch of the same with their reply---Company was under a duty to have appended necessary documents in support of their allegation that proper notices were issued to rebut allegation of petitioners---In absence of necessary material, showing dispatch of notices, it could safely be inferred that notices under S. 86 of Companies Ordinance, 1984, were not issued to petitioners by company, therefore, provision of S. 86 of Companies Ordinance, 1984, were on purpose violated to dilute shareholding of petitioners---Petitioners had demonstrated that shares in question of the company were fraudulently issued to respondents without complying with mandatory requirements of S. 86 of Companies Ordinance, 1984---High Court directed the company to rectify Register of its members---Petition was allowed accordingly.

Mrs. Saeeda Mahmood and another v. Anas Munir (Pvt.) Limited and 6 others 2007 CLD 637; Syed Akbar Ali v. Mamun Ali Bumasuk (Pvt.) Limited and others 2006 CLD 960; Brother Steel Mills Limited and others v. Mian Ilyas Miraj and others PLD 1996 SC 543 and Lahore Race Club through Secretary and others v. Raja Khushbakht-ur-Rehman PLD 2008 SC 707 ref.

Haqnawaz Chattha for Petitioners.

Barrister Muhammad Umer Riaz and Saqib Haroon Chishti for Respondents Nos.1 to 6.

Umair Mansoor for SECP.

Date of hearing: 1st December, 2014.

2015 C L D 2000

[Lahore]

Before Muhammad Farrukh Irfan Khan, Ali Akbar Qureshi and Shahid Waheed, JJ

MUHAMMAD BARAN KHAN---Petitioner

Versus

JUDGE BANKING COURT NO.3, MULTAN and another---Respondents

W.P. No. 2444 of 2015, decided on 1st July, 2015.

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

----S. 19(2)---West Pakistan Land Revenue Act (XVII of 1967), Ss. 80 & 81---Execution of decree---Procedure---Banking Court under S. 19(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, is fully authorized to adopt any of the three modes mentioned therein for recovery of decretal amount---Banking Court is fully empowered to assess decretal amount recoverable as arrears of land revenue and direct the same to be recovered under S. 80 (onwards) of West Pakistan Land Revenue Act, 1967, by itself or may forward the warrants to Collector for recovery of the same as arrears of land revenue---If Court initiates proceedings under any one of the modes so provided by law, it continues to follow the same and cannot deviate to skip to another mode of execution.

Mian Aftab Ahmad Sheikh and 2 others v. Messrs Trust Modaraba through Trust Management Services Ltd. and another 2012 CLD 1663; Muhammad Fayyaz Hussain v. Judge Banking Court and 3 others F.A.O. No.10 of 2011; Muhammad Attique v. Jami Limited and others 2015 SCMR 148; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; Messrs Lanvin Traders, Karachi v. Presiding Officer, Banking Court No.2, Karachi and others 2013 SCMR 1419; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. through Branch Manager and 3 others 2003 CLD 1693; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993 and Mst. Nadia Malik v. Messrs Makki Chemical Industries (Pvt.) Ltd. through Chief Executive and others 2011 SCMR 1675 ref.

Muhammad Suleman Bhatti, Malik M. Riaz Khokhar, Sarwar Khalil Samdani and Javaid Ahmad Khan for Petitioner.

Sardar Riaz Karim, Mansoor Alam, Saleem Iqbal, Muhammad Ashraf, Shakeel Akhtar Hashmi, Muhammad Nazim Khan and Aamer Riaz for Respondents-Bank.

Sh. Muhammad Naeem Goreja, Deputy Attorney-General for Pakistan.

Dates of hearing: 18th, 19th, 23rd, 24th and 25th February, 2015.

2015 C L D 2015

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

KAMRAN TAJ---Appellant

Versus

MUHAMMAD SHAHZAD JAMIL and 2 others---Respondents

F.A.O. No. 641 of 2014, decided on 21st November, 2014.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 14(3)(a), 17(2)(b) & 73---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Infringement of trade mark---Interim injunction, grant of---Trade mark application under process---Effect---Trial Court issued interim injunction in favour of plaintiff against defendant restraining him to use trade mark in question---Validity---At the stage of hearing application under O. XXXIX, Rr. 1 & 2, C.P.C., Trial Court, prima facie, considered evidence and material which was placed before it---Any findings recorded for grant or refusal of injunctive order were only of a tentative nature and had no effect on final outcome of a main suit---Merely filing an application for registration of trade mark could not be treated as a defence to claim for infringement, and the same had to be decided on its own merits---Appeal was dismissed in circumstances.

Messrs Burney's Industrial and Commercial Co. Ltd. v. Messrs Rehman Match Works PLD 1983 Kar. 357 rel.

Fawad Malik for Appellant.

2015 C L D 155

[Peshawar]

Before Rooh-ul-Amin Khan and Muhammad Daud Khan, JJ

SULTAN ROOM KHAN---Applicant

Versus

UNITED BANK LIMITED through Major and 2 others---Respondents

Civil Miscellaneous Application No.26-B of 2012 in F.A.B. No.1-B of 2006, decided on 21st October, 2014.

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

----Ss. 9 & 7---Civil Procedure Code (V of 1908), O. XLI, R. 19---Suit for recovery of loan amount---Dismissal of appeal for non-prosecution, restoration of---Limitation---Condonation of delay---Sufficient cause---Vested right---Scope---Appeal was dismissed for non-prosecution on 30-3-2012 whereas application for re-admission of appeal has been filed on 19-5-2012---Limitation for re-admission of appeal was thirty days from the date of knowledge where notice was not duly served on the applicant---Applicant was duly served but neither he nor his counsel appeared before the court on the date fixed---Time-barred application for restoration of appeal was filed without any application for condonation of delay but subsequently prayer for condonation of delay in appeal was made through an application on the ground that applicant came to know about the dismissal of appeal on 24-4-2012---No evidence was produced with the application for condonation of delay that applicant came to know about the dismissal of appeal on the given date---Applicant was well aware of the date fixed but had deliberately avoided his appearance before the court---No sufficient case existed for condonation of delay---Indolent and non-cooperative attitude of the applicant towards the court had created a vested right in favour of respondent-bank which should not be dislocated---Limitation provided by the statute should be construed strictly in compliance with the maxim that "delay would defeat equity"---Each day's delay had to be explained by the party and in case of failure applicant should face the consequences---Court could not use its discretion in arbitrary way by abridging the provisions of limitation even if valuable rights of a person were involved in a case---Applicant had either gone into deep slumber or was deliberately avoiding his appearance before the court to delay the disposal of appeal---Application for restoration of appeal was dismissed in circumstances.

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

----O. XLI, R. 19---Appeal, restoration of---Limitation---Limitation for re-admission of appeal was thirty days from the date of knowledge where notice was not duly served on the appellant.

Muhammad Shah Nawaz Sikandari for Applicant.

Najeebullah Khan for Respondents.

Date of hearing: 21st October, 2014.

2015 C L D 719

[Peshawar]

Before Yahya Afridi, J

ABDUL KAREEM KHAN---Petitioner

versus

Messrs HAROON-UR-RASHEED TEXTILE MILLS (PVT.) LTD. through Chief Executive and 13 others---Respondents

Company Case No. 1-P of 2014, decided on 31st October, 2014.

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

----Ss. 9, 152 & 290---Limitation Act (IX of 1908), Art. 120---High Court, jurisdiction of--- Limitation--- Petitioner assailed fraudulent transfer of his shares in the names of other persons---Objection raised by respondents was that petition was barred by limitation---Validity---Petitioner first approached Civil Court on 2-5-2012 and High Court on 20-3-2014 which would bring the petition within six years, the time prescribed under Art. 120 of Limitation Act, 1908---Petitioner was also claiming legacy of his late father, which could be claimed by him even beyond six years period prescribed under Art. 120 of Limitation Act, 1908---Petition was within limitation---Objection was overruled in circumstances.

Mrs. Saeeda Mehmood's case 2007 CLD 637 rel.

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

----S. 290---Affairs of company---Complaint---Maintainability---Official record did not depict petitioner as member of company---Claim of petitioner for seeking directions of High Court under S.290 of Companies Ordinance, 1984, was not maintainable as he lacked locus standi to seek the same.

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

----S. 152---Rectification of Members' Register---Locus standi---No condition precedent has been provided in S. 152 of Companies Ordinance, 1984, of having requisite share capital to invoke jurisdiction of High Court for seeking correction of Members' Register of company---Single shareholder seeking correction of a single share in company can seek his remedy under S. 152 of Companies Ordinance, 1984, even if his name was not recorded in Members' Register of company.

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

----Ss. 9 & 265---Affairs of company---Fraudulent transfer of shares---Conversion of proceedings---Petitioner assailed transfer of his shares in the names of other persons alleging commission of fraud---Validity---Claim of petitioner was based on serious allegations of fraud against respondent and his denial thereof warranted deeper probe---Essential documents to support respective claims of parties were not available on record---Regulator, the custodian of record, in its counter affidavit was silent about affairs of company between relevant period of time---Such was crucial period when petitioner's shares were stated to have been transferred in favour of predecessor-in-interest of parties---High Court treated petition under S. 9 of Companies Ordinance, 1984, as petition under S. 265 of Companies Ordinance, 1984, seeking investigation of the company---Mention of wrong provisions of law in a petition could not deter court from exercising its proper authority and appropriate jurisdiction vested under law---High Court directed Security and Exchange Commission of Pakistan to appoint an Inspector to investigate affairs of company in question and also to investigate validity of transfer of shares---Petition was disposed of accordingly.

Lahore Race Club v. Raja Khushbakht-ur-Rehman 2008 CLD 1117; Mst. Saifa Bibi's case 1982 SCMR 494; Multan Electric Power Company Ltd's case PLD 2006 SC 382; Brothers Steel Limited's case PLD 1995 SC 320 and Messrs Light Metal and Rubber Industries's case 2011 CLD 1485 rel.

Muhammad Tariq Khan Hoti for Petitioner.

Shumail Ahmad Bhutt for Respondents.

Date of hearing: 31st October, 2014.

2015 C L D 951

[Peshawar]

Before Syed Afsar Shah, J

MEHRBAN---Petitioner

versus

GHULAM HASSAN---Respondent

C.R. No. 427-D of 2011, decided on 18th August, 2014.

(a) Malicious prosecution---

----Damages---Prosecution of a criminal offence---Probable and reasonable cause---Scope---Plaintiff filed suit for damages on the ground that he was acquitted of the charge in FIR lodged by the defendant---Suit was dismissed concurrently---Validity---Prosecution of a criminal offence would only provide a cause for damages for malicious prosecution to the acquitted accused if same was based on malice of the complainant and that too when same was without any reasonable and probable cause---Son of defendant, in the present case, was murdered for which he charged the plaintiff along with others---Investigation was conducted by the police and on completion of the same complete challan was submitted---One of the accused during investigation had even made confession---No personal enmity existed between the parties prior to the occurrence---Prosecution on the part of defendant was more than reasonable---Mere acquittal from the charge would not confer any right on the plaintiff to sue the defendant for damages on the basis of malicious prosecution---Element of malice on the part of defendant was missing in toto in the present case---Malice did not appear to be without any reasonable and probable cause---Both the courts below had rightly appreciated the case concurrently---Revision was dismissed in circumstances.

Hussain Gul v. Soorat Shah and others 2014 MLD 1008 rel.

(b) Malicious prosecution---

----Elements to be taken into consideration, enlisted.

Balbhaddar Singh and another v. Badri Sah and another AIR 1926 Privy Council 46; Naber Shaha v. Shamsuddin and others PLD 1964 Dacca 111; Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28; Subedar (Retd.) Fazale Rahim v. Rab Nawaz 1999 SCMR 700; UBL and 5 others v. Raja Ghulam Hussain and 4 others 1999 SCMR 734 and Rafique Ahmad Khan v. Province of Punjab through Secretary, Education and others 2004 SCMR 1065 rel.

(c) Malicious prosecution---

----Meaning.

Lectric Law Library Lexicon; Dustin Mark Ammons Attorney at Law; Legal glossary; Law dictionary and Halsbury's Laws of England (Fourth Edition) Volume 45, Page 612 Para 1342 rel.

(d) Malicious prosecution---

----"Probable and reasonable cause"--- Meaning.

Province of East Bangal and others v. S.M. Faruque and others PLD 1959 Dacca 268 rel.

Ghulam Hur Khan Baloch for Petitioner.

Allah Nawaz Khan for Respondent.

Date of hearing: 18th August, 2014.

2015 C L D 1691

[Peshawar]

Before Yahya Afridi, J

FRONTIER STEEL (PVT.) LTD and others---Appellants

Versus

JAVED JADOON---Respondent

Company Case No. 1 of 2009, decided on 31st October, 2014.

(a) Administration of justice---

----Wrong provision of law, mentioning of---Effect---Mentioning a wrong provision of law in a petition does not deter a court from exercising its proper authority and appropriate jurisdiction vested under the law, keeping in view the circumstances of the case.

Mst. Saifa Bibi's case 1982 SCMR 494 and Multan Electric Power Company Ltd's case PLD 2006 SC 382 rel.

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

----Ss. 265 & 493---Investigation of company's affairs---Petitioner company and its Chief Executive Officer sought restoration of possession in exercise of powers under S. 493 of Companies Ordinance, 1984 of the industrial unit to them--- Validity---Petition under S. 493 of Companies Ordinance, 1984 in the form, as presented, was not maintainable---High Court treated the petition as petition under S. 265 of Companies Ordinance, 1984 as prima facie, a case for investigation was made out and directed the Securities and Exchange Commission of Pakistan to appoint an Inspector to investigate in general the affairs of the petitioner company and in particular to render its finding as to whether respondent had any authority to takeover possession of petitioner company and if not, the gains or benefits he had derived from illegal withholding of the petitioner company---Petition was disposed of accordingly.

Brothers Steel Limited's case PLD 1995 SC 320 and Messrs Light Metal and Rubber Industries's case 2011 CLD 1485 rel.

Isaac Ali Qazi for Appellants.

Muzammil Khan for Respondent.

Date of hearing: 31st October, 2014.

2015 C L D 1754

[Peshawar]

Before Waqar Ahmad Seth and Musarrat Hilali, JJ

Messrs ONE 2 ONE SOLUTIONZ (PVT.) LTD.---Petitioner

Versus

The POSTMASTER GENERAL KHYBER PAKHTUNKHWA and 2 others---Respondents

Writ Petition No. 2185 of 2014, decided on 20th May, 2015.

(a) Company--

--Constitutional petition by company lacked requisite resolution of Board of Directors which was mandatory for any company to initiate proceedings---In absence of resolution, which was a legal requirement; such constitutional petition could not be termed as competent---Constitutional petition was dismissed.

Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 and Abubakar Salim Mayet v. Abbott Laborities 1987 CLC 367 rel.

(b) Company---

----Appeal by or against company---Appeal filed by company without legal sanction of a valid resolution of Board of Directors was incompetent.

Hibro Instruments (Pvt.) Ltd. v. Mst. Sikandar Begurn 2007 MLD 1270 rel.

Nemo for Petitioner.

Date of hearing: 20th May, 2015.

2015 C L D 1951

[Peshawar]

Before Qalandar Ali Khan, J

MUHAMMAD AKHAN---Appellant

Versus

MUHAMMAD SULTAN KHAN---Respondent

R.F.A. No. 62-A of 2014, decided on 29th June, 2015.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII---Qanun-e-Shahadat (10 of 1984), Arts. 74, 76 & 77---Suit for recovery of money on basis of pronote---Summary Procedure on negotiable instrument---Presumption as to negotiable instruments---Burden of proof---Time as to payment of consideration for pronote---Principles---Plea of duress and coercion regarding execution of pronote---Secondary evidence, production of---Procedure---Pronote admitted in evidence without objection as to insufficiency of stamp and non-cancellation of adhesive stamps---Effect---Sale transaction, proof of---Plaintiff filed present suit claiming that he had purchased plot from defendant on payment of sale consideration, but upon verification of titled documents, said plot was turned out not to be in ownership of defendant, and transaction of sale was, therefore, cancelled and defendant, for repayment of sale consideration, executed pronote along with affidavit as undertaking, which defendant failed to honour---Trial court dismissed the suit---Defendant took plea that pronote in question was result of duress and coercion, and that he, in fact, had sold out said plot to some other person with whom plaintiff had entered into sale transaction---Validity---Execution of pronote was not denied by defendant---Pronote was not the only document which had been executed, as affidavit had also been executed on same date, which had also been signed and thumb impressed by defendant in presence of marginal witnesses---Marginal witnesses had fully supported execution of pronote and affidavit---Deed writer, stamp vendor and Notary Public, who belonged to place where defendant belonged, had also appeared as plaintiff witnesses to substantiate execution of both said documents---All said witnesses were subjected to thorough cross-examination, but nothing could be brought on record to show that pronote and affidavit had been executed at place as alleged by defendant or that signatures and thumb impression of defendant on the same had been obtained through duress and coercion---Defendant had failed to prove his application filed to DCO, as photocopy of same had not been exhibited and same had only been marked---Nothing was brought on record to show dispatch of said application by defendant and its receipt in office of DCO--- Defendant had not moved application for production of secondary evidence to prove application filed to DCO---Nothing was on record to show that defendant had ever pursued his application against DDOR for using of pressure tactics to obtain his signatures and thumb impression on pronote and affidavit---­Defendant, therefore, had failed to prove allegations of duress and coercion---Under S. 118 of Negotiable Instruments, 1881, until contrary was proved, there would be presumption that negotiable instrument was made for consideration---Contrary had to be proved by party alleging non-genuineness of promissory note, who was under obligation to prove the same, and his failure would lead to presumption attached to pronote---Payment of consideration for pronote on same date on which pronote had been executed was also not essential requirement of law, and even consideration paid earlier in time was good consideration---As pronote had been admitted in evidence without any objection with regard to insufficiency and non-cancellation of adhesive stamps, same, therefore, could not be challenged at any subsequent stage of suit on ground of said objection---Adhesive stamps on pronote, at different places, bearing signatures and thumb impression of defendant, had indicated their cancellation---After proof of execution of pronote, there was no need to prove sale transaction with respect to property between plaintiff and defendant or between defendant and third person introduced by him in his written statement---Defendant, before present case, had been accused of more than once for entering into transactions and executing pronotes and then backing out from same---High Court, setting aside impugned judgment and decree of trial court, decreed the suit as prayed for---Appeal was accepted in circumstance.

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

----S. 118--- Presumption as to negotiable instrument---Burden of proof---Time as to payment of consideration for pronote---Principles---Objection as to insufficiency and non-cancellation of adhesive stamps not raised during trial---Effect---Under S. 118 of Negotiable Instruments, 1881, until contrary was proved, there would be presumption that negotiable instrument had been made for consideration---Payment of consideration for pronote on same date on which pronote was executed was not essential requirement of law, and even consideration paid earlier was good consideration---Contrary had to be proved by party alleging non-genuineness of promissory note, who was under obligation to prove the same, and his failure would lead to presumptions attached to instrument---Pronote, admitted in evidence without any objection with regard to insufficiency and non-cancellation of adhesive stamps, could not be challenged at any subsequent stage of suit on ground of said objection---Adhesive stamps on pronote bearing signatures and thumb impressions of defendant at different places indicated their cancellation.

1992 MLD 1007; 1993 CLC 2015; 1991 CLC 42; 1990 CLC 1018; PLD 1993 Lah. 244 and 2001 CLC 318 rel.

Syed Altaf Hussain Shah for Appellant.

Qazi Muhammad Azhar for Respondent.

Date of hearing: 29th June, 2015.

2015 C L D 1973

[Peshawar]

Before Rooh-ul-Amin Khan, J

Messrs PHARMATEC PAKISTAN through Managing Director and 3 others---Appellants

Versus

AMJID ALI SHAH---Respondent

Regular First Appeal No.174 of 2010, decided on 8th June, 2015.

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

----O. XXIX, R. 1---Proceeding by company or corporation---Resolution of Board of Directors of company---Scope---Proceedings on behalf of corporation or company could not be filed by a person unless duly authorized by Board of Directors of the company through a proper drafted resolution passed in meeting of Board of Directors duly convened for the said purpose---Signatory of vakalatnama, in the present case, was not competent to file appeal on behalf of company---Appeal had been filed by the company through its Managing Director but same had not been signed by any of the appellants---Present appeal had been signed by the counsel of the appellant---Appellants were not authorized by resolution of Board of Directors of the company to file present appeal---Memorandum of appeal was not signed and verified by the Chief Executive or legally authorized person---Any pleading might be signed and verified on behalf of corporation in a suit by or against the same by Secretary or Director or other principal officer of the said corporation who was able to depose the facts of the case---Alleged resolution drafted at the letter pad of the company might not be termed as valid resolution of Board of Directors of the company and at the most could be treated as an authority letter---Alleged resolution was also silent about referral to any meeting of the Board---Appellant had failed to produce an extract from the Minutes Book of the company which was of great importance---Indecipherable, un-cleared and scanty letter without referring to a particular meeting being not supported by minutes of meeting of Board of Directors might not be given any sanctity and could not be treated as substitute of resolution of the Board---Proceedings on behalf of company by a person not authorized by Board of Directors in a duly convened meeting would be nullity in the eye of law---When law required the doing of anything in a particular manner, same must be done in that manner only and all other manners of doing such an act could not be resorted---Present appeal having been filed by an incompetent person, was not maintainable---Appeal was dismissed in circumstances.

Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. Lahore PLD 1971 SC 550; Messrs Razo Pvt. Ltd. v. Director Karachi City Region Employees Old Age Benefit Institution and others 2005 CLD 1208; Hasnain Cotex Ltd. and 2 others v. Jasim Khan 2012 YLR 2743 and Hakim Ali v. Muhammad Saleem and others 1992 SCMR 46 rel.

(b) Administration of justice---

----When law required the doing of anything in a particular manner, same must be done in that manner only and all other manners of doing such an act could not be resorted.

Farid Ullah Kundi for Appellants.

Muhammad Ali and Attiq-ur-Rehman for Respondent.

Date of hearing: 8th June, 2015.

2015 C L D 57

[Punjab Environmental Tribunal, Lahore]

Before Ch. Shabbir Hussain, Chairperson, Prof. Dr. A.A. Saleemi, Member Technical and Ubaid Rubbani, Member General

AFZAAL AHMED KHAN---Complainant

Versus

DIRECTOR-GENERAL ENVIRONMENTAL PROTECTION AGENCY, LAHORE and others---Respondents/Accused

Private Complaint No.19 of 2012, decided on 29th April, 2014.

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

----S. 21(3)(b)---Pakistan Environmental Protection Act (XXXIV of 1997), Ss. 17 & 19--- Criminal Procedure Code (V of 1898), Ss.265-C(2)(a)(i) & 265-K---Environment protection and hazardous waste---Private complaint---Statutory notice by complainant, non-issuance of---List of witnesses and gist of evidence, non-providing of---No notice was issued by complainant, rather a notice was issued by an advocate and complainant also did not file list of witnesses and gist of evidence---Validity---Mandatory provision of filing complaint after issuance of notice and waiting for thirty days was not complied with---Notice of contravention and intention to make complaint to Environmental Tribunal was to be issued by complainant and not by advocate who was not so authorized---Complaint was moved without issuance of notice as required under S.21(3)(b) of Punjab Environmental Protection Act, 1997, therefore, complainant was not competent to proceed for trial of accused as mandatory requirement was missing---Complainant, in a criminal complaint, was under legal obligation to tender list of witnesses along with gist of evidence to be made by each witness independently before tribunal/Court---Witnesses were to be summoned and examined by complainant from the list provided to all accused and delivered to accused before commencement of trial---Controversies culminating into charges could only be resolved by adopting procedure provided in Criminal Procedure Code, 1898---Such was not a mere technicality to put up list of witnesses along with gist of evidence to be produced by prosecution against accused---Accused, in case of default, was not only to be taken by surprise but also he would not have a chance to prepare his defence---Environmental Tribunal in exercise of powers under S.265-K, Cr.P.C., acquitted the accused as charge could not be established due to lack of evidence and trial would be futility in the eyes of law---Application was allowed in circumstances.

2007 PCr.LJ 233 and 2011 YLR 2169 ref.

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

----S. 540--- Summoning of material witness--- Powers--- Court on coming to know that there is a witness or witnesses whose statements are necessary to lead towards truth and to promote cause of justice in a particular case can directly summon such witnesses and record their statements---In such eventuality court is not obliged to ask law officer (district attorney) or investigating officer to bring names of such witnesses on schedule of witnesses.

(c) Administration of justice---

----"Technicalities"---Scope---Where law requires an act to be done in a particular manner, it had to be done in that manner alone---Such dictate of law cannot be termed as a technicality.

Abdul Khaliq Safrani on behalf of the Complainant.

Irfan Zia, Law Officer on behalf of the Respondents Nos. 1 and 2.

Messrs Haji Protein Farm on behalf of the Respondent No.3.

Yasin Hatif on behalf of the Respondents Nos.4 and 5.

2015 C L D 1935

[Punjab Environmental Tribunal]

Before Justice (R) Ch. Muhammad Younis, Chairperson, Prof. Dr. A.R. Saleemi, Member Technical and Muzaffar Mahmood, Member General

Messrs HUSSAIN INDUSTRIES CORPORATION PYROLYSIS UNIT, LAHORE---Appellant

Versus

ENVIRONMENTAL PROTECTION AGENCY, PUNJAB---Respondent

Appeal No.22 of 2015, decided on 4th September, 2015.

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

----Ss. 11, 12, 16, 17, 22 & 33----Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations 2000, Reglns. 5, 23 & Sch.II---Basel Convention, 2011---Environmental Protection Order (EPO)--- Scope--- Initial environmental examination (IEE) and environmental impact assessment (EIA)---Principles as to their submission, determination and limitation---Service of EPO upon applicant, requirement as to---Duty of Director General---Prohibition of certain discharges or emissions---Power to make regulations---Environmental protection order in name of establishment other than that of applicant---Effect---Projects not requiring IEE and EIA---Appeal to Environmental Tribunal---Limitation--- Penalties---Applicant for installation of pyrolysis oil plant, submitted IEE report to Environmental Protection Agency for obtaining environmental approval---Applicant, before determination of said IEE report and issuance of environmental approval, installed and began operating proposed unit of pyrolysis plant---Environmental Protection Agency, passing Environmental Protection Order, sealed said unit of applicant on basis of negative report submitted by District Officer (Environment)---Applicant contended that delay in issuance of environmental approval to installation of pyrolysis plant was violation of Basel Convention, 2011, and that Environmental Protection Agency could not require him to file EIA---Validity---Environmental Protection Agency was required, within ten days from submission of said IEE report, either to confirm that IEE was complete for purpose of initiating review process or to require applicant to submit such additional information as might be specified or to return IEE clearly listing points requiring further study and discussion---District Officer (Environment), submitting its inspection report, had first recommended that proposed site for installation of plant was suitable---Contrary report later on submitted by same District Officer (Environment) was not understandable as to its basis---Environmental Protection Agency, having received first favourable report of District Officer (Environment), had delayed issuance of environmental approval, which was result of mala fide on its part---Environmental Protection Agency had ignored all facts and guidelines which had determined waste rubber pyrolysis as one of three environmentally suitable processes---Environmental Protection Agency, before passing impugned order, had not obtained any expert or analysis report---Environmental Protection Agency could not direct submission of EIA, unless project of applicant had fallen within ambit of Sched. II or same had adverse environmental effect, there was recommendation of Environmental Assessment Advisory Committee as required under Regln.23; no such recommendations had been made by such Environmental Assessment Advisory Committee---Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000 related to Federal Agency, which had to be adopted after necessary modifications so as to apply same to Provincial Agency---Provincial Agency, therefore, had to frame its own Regulations under Punjab Environmental Protection Act, 1997 (as amended in 2012)---Section 12(6) of Punjab Environmental Protection Act, 1997 provided that provisions of subsections (1), (2), (3), (4) & (5) of S.12 were to apply to such category of projects, and in such manner, as prescribed by Regulations---Unless Rules and Regulations were framed, Environmental Protection Agency had no unfettered powers under S.12 of the Punjab Environmental Protection Act, 1997 to direct applicant to file EIA---Neither requisite Regulations had been framed nor Environmental Assessment Advisory Committee had been constituted and notified under new Regulations---Environmental Protection Agency, while directing applicant to file EIA, had not even followed Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000---Environmental Protection Agency had passed impugned order without deciding IEE filed by applicant, discarding defence plea and without giving any sound and plausible reasons---Impugned order was not speaking order---Environmental Protection Agency was bound to consider and discuss each and every point raised by applicant and to decide matter within thirty days after hearing applicant or within reasonable time; whereas, Agency had decided matter after nine months---Present appeal was well within time as there was no proof of service of impugned order upon applicant---Impugned order was passed against "M" whereas name of applicant was "H"---Impugned order was not sustainable as IEE had been submitted by "H" and entire litigation was also in same name---Before sealing unit, no show-cause notice had been given to applicant---Director General of Environmental Protection Agency was under duty to ensure that impugned order was served on applicant---In absence of service of impugned order on applicant, his unit could not be sealed---Applicant, before passing of impugned order, had been directed to adopt remedial measures to minimize environmental pollution; but no such direction was mentioned in impugned Environmental Protection Order---Applicant was directed to stop operation of his plant only once---Direction issued to applicant to adopt remedial measures to control emissions, etc, could, therefore, not be issued, as same was last resort in any case---Applicant had fulfilled all legal and technical requirements given under Punjab Environmental Protection Act, 1997, and there was no adverse environmental impact due to operation of proposed plant---Even if there was any violation of S.11 or S.12, applicant could be prosecuted under S.17(i) of Punjab Environmental Protection Act, 1997---Order in question was arbitrary and whimsical and result of malice, abuse of powers and discriminatory treatment as several other plants of similar nature were in operation and had never been sealed by Environmental Protection Agency---Matter of issuance of environmental approval being still pending before Environmental Protection Agency, it could not be said that applicant had established his unit illegally---Appellate Tribunal, setting aside all impugned orders, directed Agency to de-seal unit of applicant and to decide his IEE report, not requiring him to file any EIA without first obtaining recommendations from Environmental Assessment Advisory Committee---Appeal was allowed accordingly.

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

----Ss. 17 (i), 11 & 12----Penalties, imposition of---Procedure---Initial environmental examination and environmental impact assessment---Prohibition of certain discharges or emissions---Prosecution for violation of Ss. 11 & 12 Punjab Environmental Protection Act, 1997---Procedure---Any violation of S.11 or S.12 is punishable under S.17(i) of Punjab Environment Protection Act, 1997 [as amended in 2012]---Complaint, if any, can be filed under Punjab Environmental Protection Act, 1997.

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

----Ss. 33 & 12 [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)]---Power to make regulations---Initial environmental examination and environmental impact assessment---Framing of rules and regulations---Requirement and competent authority---Under S.33 of Punjab Environmental Protection Act, 1997, words 'this Act' refer to Amendment Act, 2012 and word 'Government' means Provincial Government and not Federal Government---Regulations have to be made under S.33 (as amended)---Section 33(f) clarifies that regulations have to be made by Provincial Agency for providing category of projects to which, and manner in which, S.12 applies.

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

----S. 16---Environmental Protection Order (EPO)---Direction to adopt remedial measures--- Validity--- Applicant, before passing of Environmental Protection Order, had been directed to adopt remedial measures to minimize environmental pollution; but no such direction was given in the impugned Environmental Protection Order---Applicant was directed to stop operation of his plant only once---Direction issued to applicant to adopt remedial measures to control emissions, etc., could not, therefore, be issued, as same was the last resort.

(e) Punjab Environmental Protection Act (XXXIV of 1997)---

----S. 16----Environmental Protection Order (EPO)---Service of Environmental Protection Order---Duty of Director General---Sealing of plant without service of EPO---Validity---Director General of Environmental Protection Agency was bound to ensure that EPO was served on the applicant---In absence of service of the order on applicant, his unit could not be sealed.

(f) Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000----

----Reglns. 5, 23 & Sched. II----Projects not requiring IEE and EIA---Determination--- Environmental Assessment Advisory Committee--- Requirement as to constitution---Environmental Protection Agency cannot direct submission of EIA, unless project of applicant falls within ambit of Sched.II or same has adverse environmental effect.

Miss Kausar Perveen for Appellant.

Nawaz Manik, Director Legal for Respondent/EPA.

2015 C L D 1743

[Baluchistan]

Before Muhammad Ejaz Swati and Jamal Khan Mandokhail, JJ

GOVERNMENT OF BALOCHISTAN through Additional Chief Secretary, Planning and Development Department---Appellant/Petitioner

Versus

Messrs ENTERPRISE AND DEVELOPMENT CONSULTING (PVT.) LTD.---Respondent

Civil Miscellaneous Appeal No.7 and Civil Revision No.219 of 2006, decided on 26th May, 2015.

Arbitration Act (X of 1940)---

----S. 20---Agreement between department of Provincial Government and Private Limited Company---Appointment of arbitrator---Arbitration clause in the agreement---Scope---Trial Court appointed arbitrator who filed award which was made rule of court---Trial Court was bound to consider whether arbitration agreement should be filed in the court or not---Arbitrator could be appointed by the court if parties were agreed for the same---Mode, manner and mechanism for selection of arbitrator had to be adhered from the agreement if arbitration clause did not name an arbitrator---Trial Court, in the present case, without considering the dispute between the parties, and arbitration clause of the agreement, had unilaterally appointed arbitrator thus had conducted the proceedings without adhering to the clause of contract/agreement---Trial Court was required to have first determined its competency/jurisdiction over the dispute prior to appointment of arbitrator which had not been done---Award given by the such arbitrator was void ab initio---Parties must stick to the agreement/contract entered into between them in case of arbitration with intervention of court---If arbitration clause had named an arbitrator and had provided for the manner in which the arbitrator was to be chosen and appointed, parties were bound to act accordingly---Primary duty of arbitrator under the deed of reference was to determine whether he had jurisdiction with regard to dispute arising out of an agreement---Trial Court was bound to consider whether arbitrator had exceeded his jurisdiction or he had jurisdiction to adjudicate upon the matter--- Trial Court had decided the question of competency of reference as well as appointment of arbitrator without reference to the agreement---Impugned order passed by the Trial Court was set aside and award was rejected---Case was remanded to the Trial Court with the direction to first decide as to whether under the clause of agreement it had jurisdiction to appoint an arbitrator other than provided in the clause of said agreement and then decide the matter within a specific period---Appeal was accepted accordingly.

Farooq Sarwar, Assistant Advocate-General for Applicant.

H. Shakil Ahmed for Respondent.

Date of hearing: 26th February, 2015.

2015 C L D 345

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

PAK KUWAIT TAKAFUL COMPANY LIMITED: In the matter of

Show Cause Notice dated 8th February, 2013, decided on 8th April, 2013.

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

----Ss. 174, 186, 187(h), 188, 189 & 209(2)---Appointment of Directors of the company---Eligibility---Every private company would have not less than two Directors, and every public company not less than seven Directors, under provisions of S.174 of the Companies Ordinance, 1984---Under provisions of S.209(2) of the Companies Ordinance, 1984, each Director was required to hold the shares of an amount not exceeding the nominal value of the qualification shares i.e. Rs.5000 each, but no Director of the company was holding such shares---Directors of the company, in circumstances, would ipso facto cease to hold office of Directors, being not members of the company---Company having failed to comply with provisions of Ss.174, 187(h), 188 and 209(2) of the Companies Ordinance, 1984, was liable to be imposed penalty under Ss.186, 189, 209(2) of the Ordinance---Commission, instead of imposing the penalties, took a lenient view, and condoned the company due to reasons that company and its management had no intention to violate said provisions of law and that the effect of each contravention had not grossly harmed the interest of the company's shareholders.

(b) Interpretation of statutes---

----When two or more words, which were susceptible of analogous meaning, were coupled together 'noscitur ex sociis', they were understood to be used in cognate sense---Said words take as it were the colour from each other, the meaning of more general being restricted to a sense analogous to that of less general---In order to ascertain the meaning of any word or phrase that was ambiguous or susceptible to more than one meanings, resort had to be taken to the other words with which the ambiguous word was associated in the statute---If several words were connected by the copulative conjunction, a presumption would arise that they were of the same class, unless a contrary intention was indicated.

Maxwell on Interpretation of Statutes - 12th Edition, Page 289; PLD 1984 SC 385 and Crawford on Statutory Construction, Page 325 rel.

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

----Ss. 185 & 196---Duties of the Directors of company---Directors of the company, in addition to the day-to-day running of the company, and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute---Breach of those statutory duties would be a criminal offence, punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care.

Syed Wajahatullah Quadri, Chief Financial Officer of Messrs Pak Kuwait Takaful Company Limited.

Abdul Razzak Adam, Legal Counsel of Messrs Sattar and Sattar.

Date of hearing: 12th March, 2013.

2015 C L D 385

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Imtiaz Haider, Commissioner (SCD)

Col. (R) ASGHAR ALI MALIK, CHIEF EXECUTIVE OFFICER and 3 others---Appellants

Versus

HEAD OF DEPARTMENT (ENFORCEMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 59 of 2012, decided on 22nd October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 231, 476 & 492---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Giving false statement, effect---Annual audited accounts of the company for the relevant financial year had revealed that the company had re-classified comparative figures of 'Trade debtors' of Rs.74 million and disclosed the same as Rs.3,626,885 and Rs.71,131,623 against 'Trade debtors'---Disclosure of figures reported in Note on 'transactions with related parties', did not reconcile with the balance appearing in the accounts with respect to the associated undertakings---Company had been incorrectly classifying the transaction with associated companies as 'Trade debtors' in the accounts---Company had incorrectly included day to day transactions which were not in the nature of normal trade credit; and transfer of funds under the head of 'Trade debtors'---Inspection team reported that the company did not have a clear distinction of balance pertaining to 'transactions with associated companies' and the 'Trade debtors', due to which the company had intermingled balances at the time of presenting figures in the accounts---No evidence had been produced to substantiate the argument of the company's counsel that complete reconciliation statements of all transactions with associated companies were submitted at the time of inspection---Such practice had affected the true and fair reporting of figures in the accounts---Company was unable to provide proper justification with regard to reclassification/regrouping of the transaction with the associated undertaking---Act of the company was wilful and failure of company to comply with the requirements of S. 492 of the Companies Ordinance, 1984 was a mala fide and it was sufficient to show that the act of the company was done stubbornly, and in an unseemliness manner, despite the express provision of law---Penalty was rightly imposed on the company, in circumstances, there being no reason to interfere with the impugned order, appeal was dismissed.

Jalaluddin F.C.A. v. Commissioner SEC 2005 CLD 333 rel.

Tariq Mahmood for Appellants.

Bilal Rasul, Director (Enforcement), departmental representative.

Date of hearing: 22nd July, 2013.

2015 C L D 433

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

D.J.M. SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No. 1(1) SMD/MSRD/C&IW dated 3rd September, 2013, decided on 20th November, 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, Rr.3 & 4---Failure to provide requisite information, documents to Inspection Team---Interim inspection report submitted by Inspection Team duly constituted by the Commission had revealed that respondent/broker company had not co-operated with the inspectors in providing requisite information, documents and clarification as required under the law---Broker company despite numerous opportunities, had failed to provide the information/documents/details required by the Inspection Team in a timely manner, which had placed restrictions on the ability of the Inspection Team to perform the inspection initiated by the Commission---Non-provision of required information/documents, was violation of Rules and Regulations, which was serious matter as provided in subsection (3) of S.6 of Securities and Exchange Ordinance, 1969 and R.8 of Brokers and Agents Registration Rules, 2001---Violation of the Rules and Regulations, was a serious matter which entitled the Commission to even suspend the registration of the broker company---Commission, taking a lenient view in the matter, in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.100,000.

Dawood Jan Muhammad, Chief Executive Officer and Ghani, Head of Operations representing D.J.M. Securities (Private) Limited.

Muhammad Tanveer Alam, Joint Director, Kashif Ali, Deputy Director and Adnan Ahmed, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 24th September, 2013.

2015 C L D 447

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

RAHMAN SARFRAZ RAHIM IQBAL RAFIQ, CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No.1(1) SMD/MSRD/C&IW dated 27th August, 2013, decided on 4th November, 2013.

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

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 1971, Third Schedule---Irregularities in calculation of 'Net Capital Balance' (N.C.B.)---Inspection report, submitted by Inspection team had highlighted major irregularities in calculation of Net Capital Balance (N.C.B.), which calculation was duly verified and certified by the Charted Accountant company from the evaluation of the Inspection report---'NCB' appeared to have not been calculated in accordance with Third Schedule of Securities and Exchange Rules, 1971---Company did not apply the necessary prudence in certifying the 'NCB'---Company was responsible to ensure that the amounts/numbers used to arrive at the NCB value, were duly audited, and was also expected to give a statement to the same effect in the 'NCB' certificate---Auditor should be perceived as professional that was beyond reproach, and it should perform its functions in a fair, proficient and impartial manner---Company being a Chartered Accountant firm certifying the 'NCB' statement, should be well versed with the applicable rules and regulations, its significance for the securities business, and adhered to professional conduct---Violation of the Rules and Regulations, was a serious matter---Taking lenient view, company was strictly warned to comply with the directions of the Commission in future failing which appropriate action would be taken against it---Said order was issued without prejudice to any other action that the Commission could initiate against the company in accordance with law on matters subsequently investigated or otherwise brought to the knowledge of the Commission.

Muhammad Rafiq Dosani, Partner and Muhammad Waseem, Partner representing Rahman Sarfraz Rahim Iqbal Rafiq, Chartered Accountants.

Muhammad Tanveer Alam, Joint Director and Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 25th September, 2013.

2015 C L D 472

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

INTERMARKET SECURITIES LIMITED: In the matter of

Show Cause Notice No.1(1) SMD/MSRD/C&IW dated 22nd August, 2013, decided on 7th November, 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, Rr.3, 4 & 7---Securities and Exchange Rules, 1971, Third Sched.---Involvement of the broker company in imposing late payment charges to the clients and irregularities in calculation of Net Capital Balance (NCB) and it appeared that 'NCB' was not in accordance with the Third Schedule of the Securities and Exchange Rules, 1971---Company had failed to perform its responsibilities as specified in the applicable Rules and Regulations---In order to maintain the confidence of investors in the securities market, a number of Rules, Regulations and Procedures had been formulated by the Commission, which prescribed the minimum set of standards that a Company/Broker had to follow---Broker company should be perceived as professional that was beyond reproach; and it should perform its functions in a fair, proficient and impartial manner---Violation of the Rules and Regulations, was a serious matter, which could lead to suspension of Broker's registration and/or imposition of fine, but Commission had elected not to exercise that power---Commission taking lenient view, reprimanded the company and was directed to ensure full compliance with the Ordinance, Rules, Regulations and directives of the Commission in future.

Muhammad Yasin Chaudhary, Chief Financial Officer and Company Secretary and Muhammad Hassan Amin, Finance Executive representing Intermarket Securities Limited.

Muhammad Tanveer Alam, Joint Director and Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 24th September, 2013.

2015 C L D 491

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

MUSSAID HANIF, CHIEF EXECUTIVE and 6 others---Appellants

Versus

HEAD OF DEPARTMENT (ENFORCEMENT), SECP---Respondent

Appeal No. 8 of 2012, decided on 31st October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 492 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Payment of dividend to shareholders, restriction on---Issue of mens rea---Imposition of penalty for false statement---Board of Directors of the company in their board meeting proposed cash dividend for relevant year---Said proposed dividend payment was presented for approval of shareholders in the Annual General Meeting---Bank which was one of the creditors of the company, vide letter communicated to the Commission its reservations regarding said decision of the Board, informing, that the company had duly signed a rescheduling/restricting letter, and entered into rescheduling/restricting agreement; that both said letter and agreement had expressly barred the company from payment of dividend without prior permission of the Bank---Bank informed the Commission that it had obtained a stay order from High Court against the payment of dividend by the company---Directors of the company claimed that Board had declared dividend for the minority shareholders only, while the directors holding substantial shares had waived their right to receive said dividend; that dividend was in the interest of the shareholders; and declared strictly in accordance with the provisions of the Companies Ordinance, 1984---Material fact relating to the restriction on declaration/payment of dividend, was not disclosed by the company in the respective notes to the account---Show-cause notice under Ss.492 & 476 of the Companies Ordinance 1984 was issued to the directors of the company---Commission dissatisfied with the response of the directors to said show-cause notice, vide impugned order, imposed penalty of Rs.400,000 on each appellant/director---Appellants/directors of the company had claimed that; mens rea was an ingredient of S.492 of the Companies Ordinance, 1984, which needed to be established before imposition of penalty; that in the present case, there was neither any mala fide on the part of the directors, nor was their any intention to mislead or defraud the public or any of the investor; that impugned order failed to take the same into account, and was liable to be set aside on that ground---Validity---Default having been committed under S.492 of the Companies Ordinance, 1984, which was a civil, and not a criminal offence, mens rea need not be established---Appellants had not been charged with mala fide or intention to defraud, but from the facts of the case, it was established that the appellants knowingly had committed default---Impugned order, could not be interfered with---Appeal was dismissed, in circumstances.

Principle of Statutory Interpretation, by Justice G.P. Singh (7th edition, Chapter 11, pages 653 and 659, published by Wadhwa and Company Nagpur rel.

Usman Akram Sahi and Furqan Naveed Ch. for Appellants.

Ms. Amina Aziz, Director (Enforcement) and Tariq Ahmad, Joint Director (Enforcement) for Respondent.

Date of hearing: 5th September, 2013.

2015 C L D 503

[Securities and Exchange Commission of Pakistan]

Before Mohammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

ASIM IFTIKHAR (PARTNER, ANJUM ASIM SHAHID REHMAN, CHARTERED ACCOUNTANTS)---Appellant

Versus

ALI AZEEM IKRAM, HOD, SECP---Respondent

Appeal No. 25 of 2013, decided on 31st October, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 255 & 260---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure of Auditor to bring out material facts about the affairs of the company---Chartered Accountants (Firm), conducted the statutory audit of the book of accounts of the company, and made audit reports on the financial statement of the company for the relevant period---Said audit reports were signed by the Auditor, who was partner of the Chartered Accountant's firm---Board of Directors of the company proposed a cash dividend, and said proposed dividend payment was presented for approval of the shareholders in Annual General Meeting---Company was restricted from declaration/payment of dividend to shareholders by virtue of clauses of rescheduling/restricting letter, and rescheduling/restricting agreement, entered by the company with the Bank---Said agreement, had expressly barred the company from payment and declaration of dividend, without permission of the bank---Annual accounts of the company filed with the Commission, had transpired that the material fact regarding restriction on declaration/payment of dividend was not disclosed by the company in the respective notes to the accounts---Auditor failed to give opinion on the non-disclosure of restriction to declare/pay out dividend in the annual accounts---Restriction on company to declare dividend despite being material information affecting the rights of the shareholders was not reported by the Auditor, despite the fact that he issued an unqualified audit report regarding the affairs of the company---Commission dissatisfied with the response of the Auditor to show-cause notice held that he had failed in its responsibility as an Auditor to bring out material facts about the affairs of the company and imposed penalty of Rs.50,000---Auditor under S.255(3) of Companies Ordinance, 1984, was required to express an opinion to the best of his information according to the explanation which gave a true and fair view relating to the affairs of the company---Auditor could not assume that the majority shareholders were aware of restriction on dividend---Auditor by failing to give opinion on the company's non-disclosure on restriction to declare dividend, did not perform his duties with due diligence in terms of S.255 of the Companies Ordinance, 1984---Penalty, in circumstances, was rightly imposed on the Auditor---In absence of any reason to interfere with the impugned order, appeal, was dismissed, in circumstances.

Mansoor Usman Awan for Appellant.

Ms. Amina Aziz, Director (Enforcement) and Tariq Ahmad, Joint Director (Enforcement) for Respondent.

Date of hearing: 5th September, 2013.

2015 C L D 521

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Zafar Abdullah, Commissioner (SMD)

WASI SECURITIES (SMC-PRIVATE) LTD. and another---Appellants

Versus

CHAIRMAN, SECP and 5 others---Respondents

Appeal No. 10 of 2012, decided on 29th November, 2013.

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

----S. 33--- Securities and Exchange Ordinance (XVII of 1969), Ss.21 & 22---General Regulations, Reglns.2(A)(1)(d), 2(A)(1)(i) & 36(c)---Unlawful withdrawal of shares by the appellant company from the sub-accounts of its clients, and depositing of such shares without permission of the account holders---Failure of appellants to fully co-operate with Enquiry Officers--- Commission received numerous complaints against the company regarding unlawful withdrawal of shares from the sub-accounts of its clients and disposing of the same without permission of account holders---Company also failed to honour the award of the panel of arbitrators of Stock Exchange---Company instead of payment of award money to the complainant, filed winding up petition---Stock Exchange switched off terminals of the company on account of violation of Regulations---Commission appointed Enquiry Commission to enquire into the matter relating to outstanding investor's claims against the company---Company was directed to fully co-operate and assist the Enquiry Officers in conducting and completing the enquiry---Company was also directed to provide any information and documents as required by the Enquiry Officers, but the company which ought to have fully co-operated with the Enquiry Officer failed to provide relevant record as directed by the Enquiry Officers, despite repeated direction---Enquiry Officers vide notice directed the Company to ensure presence of an authorized representative of the company at the company's office at the Stock Exchange building to inspect the record of the company, but no one appeared on behalf of the company as directed---Company, ought to have settled the claims of the investors before initiation of winding up, and should have fully co-operated with Stock Exchange being the front line regulator and the Securities and Exchange Commission of Pakistan being its apex regulator---Investors had suffered an inordinate delay for settlement of their claims due to the actions of the company---Commission, in circumstances, had rightly imposed a penalty of Rs.3 million on each Director of the company and Rs.2 million on Chief Executive Officer---In absence of any reason to take lenient view, appeal against impugned order was dismissed, in circumstances.

Wasi Ullah for Appellants.

Hasnat Ahmad, Director (ICW) and Tahir Mehmood Kayani, Deputy Director (ICW) for Respondents.

Date of hearing: 6th November, 2013.

2015 C L D 562

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Zafar Abdullah, Commissioner (SMD)

KHALID JAVED SECURITIES PRIVATE LIMITED and 3 others---Appellants

Versus

AKIF SAEED and 8 others---Respondents

Appeal No. 17 of 2012, decided on 29th November, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 305 & 309---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Securities and Exchange Ordinance (XVII of 1969), Ss.18, 21 & 22---Winding up of company and closing its offices without prior permission---Failure of company and its Directors to co-operate and assist the Enquiry Officers in conducting and completing the enquiry---Stock Exchange, informed the Commission that company, which had filed a winding up petition before High Court, had closed its offices registered with Stock Exchange without any prior intimation, in violation of Regln.10 of Regulation Governing Lahore Stock Exchange Members/Branch Offices for conducting the business; and trading of shares and securities within/outside the Exchange---Stock Exchange switched off all trading terminals of the company---Company vide letter was advised to settle all outstanding complaints before winding up of the company; and was further advised to attend a meeting through video conferencing, but company failed to provide any concrete arrangement for settlement of claims/complaints---Stock Exchange informed that the company had been expelled from the membership of the Exchange---Subsequently Central Depository Company also suspended admission of the company to the Central Depository System---Initial scrutiny of documents, record and contents of the winding up petition, had revealed several discrepancies, violations, non-compliances and pending investors' claims against the company---Commission appointed Enquiry Commission to enquire into the matter to outstanding investors claims against the company---Company and Directors were directed to fully co-operate with and assist the Enquiry Officers in conducting and completing the enquiry---Interim report submitted by Enquiry Officers had revealed that company and its Directors had submitted false and incorrect information/statements; and also failed to provide the relevant record and information as directed by the Enquiry Officers, despite repeated directive---Company having failed to comply with requirements of S.21 of Securities and Exchange Ordinance, 1969, Rules and Regulations made thereunder, Commission, in exercise of the powers conferred by S.22 of said Ordinance, imposed a penalty of Rs.2 million, payable jointly or severally by the company and its Directors---Penalty of Rs.1 million was imposed on the Chief Executive of the company---Contention of the company (appellant) was that after institution of winding up petition in the court, an enquiry into investors' claims could not be held, was repelled---Section 21 of the Securities and Exchange Ordinance, 1969, did not bar the Commission from conducting an enquiry during pendency of winding up petition before the High Court---Investors had suffered an inordinate delay for settlement of their claims due to the actions of the company---Chief Executive Officer of the company had submitted in proceedings before officer of the Commission that Original Standardized Account Opening Forms of the clients were available with him---Chief Executive Officer had been rightly proceeded against for making false and incorrect statements before the Enquiry Officers---In absence of any reason to take a lenient view, appeal filed by appellants was dismissed, in circumstances.

Javed Gulzar and Khushnood Ahmed for Appellants.

Hasnat Ahmad, Director (ICW) and Tahir Mehmood Kayani, Deputy Director (ICW) for Respondents.

Date of hearing: 6th November, 2013.

2015 C L D 582

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

PAK QATAR FAMILY TAKAFUL LIMITED: In the matter of

Show Cause Notice issue date 31st March, 2014, decided on 21st May, 2014.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 18, 21(5) & 156---Capital contribution by the shareholders' fund to statutory fund, distribution of---Revenue account statement of the participant 'Takaful Funds' of the company for the relevant period, depicted a transaction/contribution of Rs.10,000,000 from the fund to the Group Health of the company---Total amount of capital contributed by the shareholder's fund to the group family, amounting to Rs.8,403,282 was repaid back to the shareholders' fund of the company---No further capital contribution was available in the group family statutory fund to be distributed to another statutory fund of the company---Contribution of Rs.10,000,000 from the group family to the group health of the company, was not available, as there was no outstanding balance of the capital contribution available in the group family, which could have been distributed to another fund---Company had created a right of its own to set off the loss of one supplementary fund with the surplus of another, and that too, in contradiction with the provisions of S.18(1) of Insurance Ordinance, 2000 and S.21(5) thereof---Provisions of S.18(1) of Insurance Ordinance, 2000 required that the assets of a statutory fund should be used/consumed for expenditures of and within the bounds of that statutory fund---Any capital contribution by the shareholders' fund to any of the statutory fund had to be distributed, in the manner as stipulated under S.21(5) of the Insurance Ordinance, 2000--- If there was no capital contribution available in a particular statutory fund, then the assets/funds of that statutory fund could not be distributed to any other statutory fund, even to offset the deficit in such other statutory fund---Default of Ss.18(1) & 21(5) of Insurance Ordinance, 2000 was established as the company's group family had distributed an amount of Rs.10,000,000 to the company's group health over and above the capital contribution---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, but in the present case the Directors had failed to do that---In view of said default, penalty as provided under S.156 of the Insurance Ordinance, 2000, could be imposed on to the company, its Directors and the Chief Executive Officer---Commission, in exercise of the power conferred under S.156 of the Insurance Ordinance, 2000, instead of imposing the maximum penalty, took a lenient view, and condoned the company in circumstances.

Muhammad Kamran Saleem, Chief Financial Officer/Company Secretary, Jehanzaib Ahmed, Head - Legal and Compliance, Mufti Zahid Sangharwi, Head of Shariah Compliance and M. Ahsan Qureshi, Senior Manager - Finance and Accounts attended for Pak Qatar Family Takaful Limited.

Date of hearing: 29th April, 2014.

2015 C L D 612

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

B&B SECURITIES (PRIVATE) LIMITED: In the matter of

Show Cause Notice No.1(9) SMD/MSRD/C&IW/2013 dated 7th October, 2013, decided on 29th November, 2013.

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

----Ss. 6 & 22---Brokers and Agents Registration Rules, 2001, R.8---Central Depositories Act (XIX of 1997), S.28---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Securities and Exchange Rules, 1971, Third Schedule---Involvement of broker company in imposing late payment charges to its clients and irregularities in calculation of 'Net Capital Balance (N.C.B.)---Report submitted by Inspection Team, duly constituted, had revealed---Broker/company had failed to perform its responsibilities by not maintaining proper books of accounts, and not preparing N.C.B. certificate in accordance with Securities and Exchange Rules, 1971---In order to maintain the confidence of investors in the securities market, a number of Rules, Regulations and procedures had been formulated by the Commission, which prescribed the minimum set standards that a broker had to follow---Broker should be perceived as professional that was beyond reproach; and it should perform its functions in a fair, proficient and impartial manner---Violation of the Rules and Regulations, was a serious matter---Commission, taking lenient view to the matter, in exercise of powers under S.22 of Securities and Exchange Ordinance, 1969, imposed on the broker/company, a penalty of Rs.50,000 (Rupees Fifty Thousand only)---Broker company was further directed to submit a compliance report to the Commission within 45 days of the date of order accordingly.

Adnan Mehboob, Chief Executive Officer representing B&B Securities (Private) Limited.

Ms. Najia Ubaid, Deputy Director and Mian Muhammad Imran, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 8th November, 2013.

2015 C L D 621

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

SHAHEEN INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice issue dated 2nd May, 2013, decided on 16th December, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 204-A(1) & 498---Failure to appoint whole time secretary---Company, being a public listed company was required under S.204-A(1) of the Companies Ordinance, 1984 to have a whole time secretary possessing prescribed qualification, but company failed to do so---Objective of the mandatory appointment of a whole time company secretary was to make sure full compliance with all the statutory provisions and the Corporate Laws applicable to the company as being a listed entity---Company which had contravened the provisions of S.204-A(1) of the Companies Ordinance, 1984, Directors and Chief Executive of the company, had made themselves liable for a fine as provided under S.498 of the Ordinance---Company and its Directors had failed to perform their duties with due care and prudence---Directors of the company, who had some fiduciary duties i.e. duties held in trust and some wider duties imposed by statutes, were supposed to be well aware of their legal obligations in connection with statutory requirements of S.204-A(1) of the Companies Ordinance, 1984---Penalty as provided under S.498 of the Companies Ordinance, 1984 could be imposed on to the company, but Commission taking a lenient view, instead of imposing the penalty, condoned the company because company took steps to appoint whole time secretary; and also tried to get fill the vacant position---Company was issued a 'stern warning' that in case of similar non-compliance in future, a strong action would be taken against the company.

Farhan Janjuah, Chief Financial Officer and Company Secretary, Sohel N. Kidwai, Chief Operating Officer, Aijaz Ali Khan, Head of Operation and Imran Hussain, Legal Advisor attended.

Date of hearing: 28th October, 2013.

2015 C L D 634

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

KHAWAJA MUHAMMAD IQBAL, DIRECTOR/CHIEF EXECUTIVE OFFICER OF MAHMOOD TEXTILE MILLS LIMITED: In the matter of

Show Cause Notice No. SMD/BO/Co.222/4(1802)02, dated 30th April, 2014, decided on 3rd June, 2014.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224(4)---Delay in filing returns of beneficial ownership---Director of broker/company, who was required to report changes in beneficial ownership on Form 32 within the period stipulated under S.222 of the Companies Ordinance, 1984, failed to discharge said obligation and filed the return with delay ranging from 246 days to 1,675 days in contravention of S.222(2)(c) of the Ordinance---Said contravention, prima facie attracted penal provisions of S.224(4) of Companies Ordinance, 1984---Director of the company had requested to condone the fault in question, with the plea that same was not committed intentionally---Earlier the Director was almost regular in filing of returns of beneficial ownership---Commission took lenient view of the matter and strictly warned the Director of company to ensure timely compliance of S.222 of the Companies Ordinance, 1984.

2015 C L D 649

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

PAKISTAN GENERAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice issue Date 14th May, 2013, decided on 30th December, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(b), 29, 63(1) & 157---Failure to deposit statutory minimum amount---Company had not made any arrangement to maintain its statutory deposit level as per the provisions of S.29 and S.11 of Insurance Ordinance, 2000, despite warning and advise to meet the shortfall of said amount---Company had persisted said non-compliance for a period of 583 days---Company had deliberately contravened the provisions of Ss.29 & 11(1)(b) of Insurance Ordinance, 2000 for which the Commission took action as provided under Ss.63(1) and 157(1) of Ordinance---Commission, instead of imposing the penalty, took lenient view, condoned the company because the company had misinterpreted the provisions of S.29 of the Insurance Ordinance, 2000, which resulted in shortfall in the statutory deposits; company took immediate steps and removed the deficit in the statutory deposit after receiving the show-cause notice which showed the company's intent in complying with law by removing any contravention and no mala fide intent was noticed on the part of the company in the contravention---Stern warning was issued that in case of similar non-compliance in future; a strong action against the company, would be taken.

Ch. Zahoor Ahmed, Chief Executive Officer attended.

Date of hearing: 11th November, 2013.

2015 C L D 683

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

DARSON SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No. 1(10) SMD/MSRD/C&IW/2013, dated 16th December, 2013, decided on 29th January, 2014.

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

----Ss. 6 & 22---Brokers and Agents Registration Rules, 2001, R.8---Securities and Exchange Rules, 1971, R.8 & Third Sched.---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Irregularities in calculation of "Net Capital Balance" (N.C.B.)---Report submitted by inspection team, duly constituted, had revealed certain irregularities in calculation of "Net Capital Balance" by the company---Inspection report had further highlighted that the company failed to provide requisite information, maintaining segregation of its client's assets and was involved in imposition of late payment charges to its clients---Company had failed to perform its responsibilities by not recording the securities pledged from house account in the books of accounts which was in violation of Securities Exchange Rules, 1971; company failed to not prepare the "Net Capital Balance" in accordance with said Rules; company imposed late payment charges to clients in violation of Securities and Exchange Ordinance, 1969; company did not maintain segregation of client's assets in violation of General Regulations of Karachi Stock Exchange; and failed to provide the information to the Commission which was in violation of the Brokers and Agents Registration Rules, 2001---Brokers should follow the rules, regulations and procedures formulated by the Commission in letter and spirit---Broker company should be perceived as professional with high integrity and it should perform his functions in a fair, proficient and impartial manner---Violation of rules and regulations was a serious matter---Commission in exercise of powers under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.100,000.

Dil-Awayz Ahmed, Manager representing Darons Securities (Private) Limited.

Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 27th December, 2013.

2015 C L D 701

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

ACE SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No.1(2) SMD/MSRD/C&IW/2013 dated 6th November, 2013, decided on 22nd January, 2014.

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

----Ss. 6 & 22---Securities and Exchange Rules, 1971, Third Sched.---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' (N.C.B.) and involvement of the broker company in imposition of late payment charges to its clients---Inspection report, submitted by Inspection Team, duly constituted, had shown irregularities in calculation of 'Net Capital Balance' (N.C.B.)---N.C.B. did not appear to be in accordance with the Third Schedule of Securities and Exchange Rules, 1971---Inspection Report had further highlighted that, the broker company was involved in imposition of late payment charges to its clients---Broker companies, were required to follow the Rules, Regulations and procedures formulated by the Commission in full spirit, so as to ensure the protection of investors' interest---Broker had failed to perform its responsibilities by imposing late payment charges; and not preparing the N.C.B. certificate in accordance with the Securities and Exchange Rules, 1971---Violation of the Rules and Regulations was a serious matter---Commission, in exercise of its powers under S.22 of Securities and Exchange Ordinance, 1969, imposed on the broker company a penalty of Rs.25,000---Broker company was further directed to: (a) comply with the Rules, 1971 and the guidelines issued by the Commission in letter and spirit; (b) discontinue the practice of imposing late payment charges, immediately; (c) maintain proper books of accounts to record for the proprietary and clients' investment and (d) ensure segregation of clients' assets and maintain separate Bank Account for the clients' funds.

Haroon Iqbal, Chief Executive Officer, Jabran A. Sattar, Assistant and Junaid Ali, Consultant representing Ace Securities (Private) Limited.

Muhammad Tanveer Alam, Joint Director and Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 23rd December, 2013.

2015 C L D 738

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

CREATIVE CAPITAL SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No. 1(10) SMD/MSRD/C&IW/2013 dated 4th December, 2013, decided on 8th January, 2014.

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

----Ss. 6(1) & 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' (N.C.B.)---Inspection team after inspecting books and record required to be maintained by the brokers, submitted its report, in which irregularities in calculation of 'Net Capital Balance' (N.C.B.) were observed---N.C.B. was not in accordance with the Third Schedule of the Securities and Exchange Rules, 1971---Said report had further highlighted that the broker company was involved in imposition of late payment charges to its clients---Broker company, had failed to perform its responsibilities by not maintaining proper books of account, and not preparing the 'N.C.B.' certificate in accordance with Rules---Was pivotal for maintenance of investors' confidence that the broker companies should follow the Rules, regulations and procedures formulated by the Commission in full spirit---Broker company should be perceived as professional with high integrity that was beyond reproach; and it should perform its functions in a fair, proficient and impartial manner---Violation of the Rules and Regulations was a serious matter---Commission taking lenient view in the matter, imposed on broker company a penalty of Rs.25,000---Company was further directed to: (a) comply with the Rules, 1971, and the guidelines issued in letter and spirit; (b) discontinue the practice of imposing late payment charges immediately; (c) maintain proper books of account to record for the proprietary and clients' investments and (d) ensure segregation of clients' assets and maintain separate bank account for the clients' funds.

M. Hanif Ashraf, Director and Muhammad Yasin Chaudhry, Independent Consultant representing Creative Capital Securities (Pvt.) Limited.

Muhammad Tanveer Alam, Joint Director and Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 23rd December, 2013.

2015 C L D 754

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

The UNIVERSAL INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 13th August, 2013, decided on 1st January, 2014.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 99(4) & 156---Depositing premium by Insurance Agent after adjusting his outstanding commission from the company and same was admitted by the company---Default of S. 99(4) of the Insurance Ordinance, 2000, having been established, penalty as provided under S.156 of the Ordinance, could be imposed on the company---Securities and Exchange Commission, took a lenient view and condoned the company because the company ensured that such practice would not be repeated in future and that no policy holder was hurt by such adjustment and company had shown its willingness to adopt the provisions of S.99(4) of the Insurance Ordinance, 2000 in letter and spirit---Company was issued a stern warning that in case of similar non-compliance in future, a strong action against the company would be taken.

Amir Raza, Principal Officer attended.

Date of hearing: 28th October, 2013.

2015 C L D 768

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

GHANI OSMAN SECURITIES (PVT.) LIMITED AND HAJI GHANI OSMAN IN HIS CAPACITY AS CHAIRMAN HUM SECURITIES LIMIED AND DAWOOD

EQUITIES LIMITED: In the matter of

Show Cause Notice No. 4(BRK-134)SE/SMD/2001 dated 22nd May, 2013, decided on 25th October, 2013.

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

----S. 22---Brokers and Agents Registration Rules, 2001, R.8---Suspension of registration of the company for non-settling claims of the investors---Company undertook to settle all claims and objections of the investors with regard to transfer of its membership, but despite lapse of more than a year, no serious effort had been made by the company to settle the investors' claims---Almost 170 claims were outstanding and the Commission was continuously receiving more claims, which were being forwarded to the company--- Various compliance letters submitted by the company were merely the lists prepared by the company; and did not contain any supporting evidence including the withdrawal letters from the claimants, which the company was asked to submit on a number of occasions---Non-settlement of investors' claims, was serious matter and its continuance in the business was detrimental to the interest of public in general and capital market in particular--- Commission, in exercise of powers under R.8 of Brokers and Agents Registration Rules, 2001, suspended the registration of the company, with immediate effect and till settlement of all legitimate investors' claims to the satisfaction of the Commission.

Haji Ghani Osman and Khalid Waheed representing Respondents.

Ms. Saima Shafi Rana, Deputy Director assisting the Director (MSRD).

Dates of hearing: 30th May, 18th July, 18th and 24th September, 2013.

2015 C L D 795

[Securities and Exchange Commission of Pakistan]

Before Dr. Joseph Wilson, Chairman and Dr. Shahzad Ansar, Member

MESSRS INDUS MOTOR COMPANY LIMITED: In the matter of

Show Cause Notice No. 15 dated 13th March, 2013, decided on 8th November, 2013.

Competition Act (XIX of 2010)---

----Ss. 2(1)(2), 3(3)(a), 30 & 37---Dominant position, abuse of---Enquiry Committee, duly constituted, submitted its enquiry report, wherein it was stated that company held a substantial market share, and enjoyed economic power in the 1300cc segment of car market; which enabled it to behave independent of its competitors and customers; thereby making it a dominant player in the relevant market of cars---Under the circumstances buyer of the company's product, was in a weaker bargaining position---"Provisional Booking order" issued by the company to its potential buyers, had given the company the sole right to (i) change the price; (ii) design/specification; (iii) delivery schedule without any notice to the buyer; (iv) a conclusive right to interpret the terms of the contract; and (iv) to decide the dispute between a buyer and the company---Such terms created a significant imbalance to the disadvantage of buyer's rights and obligations arising under the contract---Such terms of "Provisional Booking order" being unfair to the buyers, were in contravention of S.3(3)(a) of Competition Act, 2010---Subsequently, the company revised and rectified the draft of "Provisional Booking order"; and such rectification, had put the consumer at equal footing---Initially company had sole and absolute discretion to accept or reject the request of cancellation by the employer; and company had sole right to alter some or all terms and conditions of "Provisional Booking order", and also the right to interpret them conclusively---Such clause in the contract could be used to force the buyer to accept increased cost, or reduced benefits, which was unfair---Such clause had been completely removed from the revised draft of Provisional Booking order---Other condition, whereby any dispute between the customer and the company was to be conclusively decided by the Managing Director of the company, had been amended to refer such dispute to an arbitrator to solve and settle the matter under the Arbitration Act, 1940, giving fair and equal right to both parties i.e. the buyer and the company---Initially the company held sole right to change the design, construction and specification without notice to buyers---Such claim gave power to the company to substitute something different for what it had actually agreed to apply---After rectification, "Provisional Booking order" was revised, which specifically mentioned that company could make minor alteration to the design and construction specification of the vehicle, and make such alteration in the vehicle as required by any Federal or Provincial Legislation--- Initially the company had the sole right to change price of the vehicle without notice to the buyer at the time of delivery---Said lacuna had been removed by explicity mentioning in the revised draft of "Provisional Booking order" that the revision of price would only be subject to a change, if any in Government Levies/taxes or currency fluctuation---"Provisional Booking order" had been amended and rectified to address the competition concerns raised in terms of S.3(3)(a) of Competition Act, 2010---Subject to incorporation of revised terms and conditions, proceedings stood disposed of.

Pervaiz Ghais, Chief Executive Officer, Ms. Anum Fatima Khan, Company Secretary and Yasir Niazi, Resident Director, Islamabad for Messrs Indus Motor Company Limited.

Dates of hearing: 9th April and 19th September, 2013.

2015 C L D 810

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

APEX CAPITAL SECURITIES (PVT.) LTD. (APEX): In the matter of

Show Cause Notice No.4(BRK-178)SE/SMD/2009, dated 30th July, 2013, decided on 10th December, 2013.

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

----Ss. 6 & 22---Central Depositories Act (XIX of 1997), Ss.24 & 28---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 2001, Third Schedule---Mishandling the securities by the company of its clients---Irregularities in calculation of Net Capital Balance (N.C.B.)---Report submitted by the Inspection Team duly constituted, had disclosed that the company was mishandling the securities of its clients---Major irregularities in calculation of 'N.C.B.' on relevant date, were also observed; and it appeared that 'N.C.B.' was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971---Facts, evidence/information available on record, had established that, the company misinterpreted the aging methodology which resulted in overstatement of 'N.C.B.' and that current liabilities were wrongly calculated, as a result 'N.C.B.' submitted by the company was overstated---If the 'N.C.B.' of the company was calculated in strict compliance with the requirements of the Securities and Exchange Rules, 1971, it would have been negative---In many instances, it was established that the company had moved/pledged the shares without proper authority of its clients in its 'House Account'---Such mishandling of clients' securities, was a clear violation of S.24 of Central Depositories Act, 1997, which was punishable under S.28 of said Act---Violation of the Ordinance, Rules and Regulations, was a serious matter---Company, in circumstances, was directed to deposit a sum of Rs.300,000 (Rupees Three Hundred Thousand) under S.22 of Securities and Exchange Ordinance, 1969, and S.28 Central Depositories Act, 1997 by way of penalty---Company was directed to ensure that the shares of the investors be transferred to the respective sub-accounts of the clients at the earliest; practice of keeping shares in the "House Account" be immediately discontinued and to ensure full compliance with the Ordinance, Rules, Regulations and Directives of the Commission, in future.

Rao Naseem Tehsin, Chairman, APEX, Naveed Godil, Director, APEX and Saifullah Farooqui, Accountant, APEX representing APEX.

Ms. Saima Shafi Rana, Deputy Director assisting Director (MSRD).

Date of hearing: 30th September, 2013.

2015 C L D 822

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS MANSOOR ASLAM SERAJ SALEEM SHAHID, CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No.4/BRK-14/SE/SMD/01, dated 24th April, 2013, decided on 31st October, 2013.

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

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 1971, R.2(d) & Third Schedule---Regulations Governing Risk Management of the Exchange, Cl.2.1---Irregularity in calculation of 'Net Capital Balance (N.C.B.)'---Inspection report submitted by Inspection Team, duly constituted by the Commission, had revealed that Net Capital Balance (N.C.B.) of the company as verified and certified by respondent/Chartered Accountants/Auditors was not in accordance with the Third Schedule of the Securities and Exchange Rules, 1971; and was overstated---Responsibility of respondent/Chartered Accountants with regard to submission and ensuring accuracy of 'NCB' certificate was stipulated in Regln. 2.2(c) of the 'Regulations Governing Risk Management of Karachi Stock Exchange, which had stipulated that 'NCB' certificate would be duly verified/audited by the auditor---Auditors/Chartered Accountants were required to ensure that due verification/audit process had been carried out in certifying the 'NCB' calculated---'NCB' had been established to have been overstated by an amount of Rs.191.161 million---Chartered Accountants (Auditors) had admitted the stance of the Commission and requested to take a lenient view into the matter---Respondent, being auditors for certificate of 'NCB', was responsible to independently verify the figures provided by the company for 'NCB', rather than solely relying on a certificate issued by the Chief Executive Officer of the company---Chartered Accountants had failed to perform its duties as auditors for certificate of 'NCB'---Auditors were required to perform further necessary and appropriate assurance procedures, which were not performed---Respondent auditors did not apply necessary procedure while certifying the 'NCB' certificate, which resulted in misrepresentation and overstatement---Auditors seemed to be negligent in performing their professional duties with regard to audit and certification---Since that violation had been noted for the first time, while taking a lenient view, a penalty of Rs.10,000 was imposed on the respondent/Chartered Accountants they were further directed to ensure full compliance with the Ordinance, rules, regulations and directives of the Commission in future, in circumstances.

Muhammad Saleem, Authorized representative of Messrs Mansoor Aslam Seraj Saleem Shahid, Chartered Accountants.

Tanveer Alam, Joint Director (MSRD) and Murtaza Abbas, Deputy Director (MSRD) representing (MSRD).

Date of hearing: 14th May, 2013.

2015 C L D 845

[Securities and Exchange Commission of Pakistan]

Before Imran Iqbal Panjwani, Executive Director (SMD)

FIRST DAWOOD INVESTMENT BANK LIMITED: In the matter of

Application No. Nil, dated 5th September, 2012, decided on 22nd November, 2013.

Debt Securities Trustee Regulations, 2011---

----Reglns. 6(2) & 8(1)---Grant of certificate of registration as a Debt Securities Trustee, application for---Investment Bank, filed application for grant of certificate of registration as a Debt Securities Trustee under Regln.6(2) of the Debt Securities Trustee Regulations, 2012---Representatives of the authorities had observed, that; applicant bank was not compliant with the equity requirements; that several financial institutions had filed complaints with the Commission against the applicant bank for failure to honour its issued guarantees on one pretext or the other; that the Management and sponsors of the applicant bank, had not performed their fiduciary responsibilities with due care and in a professional manner; and that Management and sponsors had been guilty of breach of trust---In view of said adverse findings, and the fact that licences granted to the applicant bank by Commission to undertake the Leasing and Investment Finance Services, had not been renewed---Applicant bank had been declared as defaulter by the Pakistan Credit Rating Agency---Auditor of the applicant, in its report annexed to the financial statements for relevant year, had shown doubt about the applicant bank's ability to continue as a going concern; and the auditor had retained the same status in its report---Allowing the applicant to undertake trusteeship business, was not in the interest of the investors and the capital market---Application of the bank, for registration as a Debt Securities Trustee was refused under Regln.8(1) of Debt Securities Trustee Regulations, 2012.

Rasheed Y Chinoy, Chief Executive Officer, First Dawood Investment Bank Ltd. and Muhammad Rizwan ul Haque, Senior Executive Vice-President, First Dawood Investment Bank Ltd. present at hearing.

Amir M. Khan Afridi, Director (Capital Issues Wing), SMD, Sajid Imran Joint Director (Capital Issues Wing), SMD and Ms. Nazish Zubair, Deputy Director (Capital Issues Wing), SMD assisting the Executive Director (SMD).

Date of hearing: 5th July, 2013.

2015 C L D 910

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Zafar Abdullah, Commissioner (SMD)

NATIONAL ASSET MANAGEMENT COMPANY LIMITED---Appellant

versus

SHAHID NASEEM, EXECUTIVE DIRECTOR, SPECIALIZED COMPANIES DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 15 of 2014, heard on 10th June, 2014.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.282J(1), 282J(2), 282-D, 282M(1)---Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, Rr.5 & 7(3)---NE Regulations, 2008, Regln.4---Cancellation of Licence to undertake Asset Management Service for contravention of Rules and Regulations---Company remained persistently non-compliant of Rules and Regulations despite numerous commitments and assurances towards ensuring compliance---Company had made a number of commitments to raise its equity and size---Company was given a number of opportunities to make up the shortfall, but each time failed to adhere to its firm commitment---Company's licence to undertake Asset Management Services was suspended, but other licence to undertake Investment Advisory Services, remained intact---Since the Directors of the company did not comply with the Rules and Regulations; and continued to operate without compliance to the minimum required equity; and minimum required fund; a penalty of Rs.50,000 was imposed on each of its Directors as well as its ex-Directors---Representative of the company, contended that for the conversion of closed end fund to its open end fund, which was pending approval of the Securities and Exchange Commission of Pakistan; if approved, would enhance the equity to the level of minimum equity requirement and that requirement would be met by specified date---Department accepted the request of company---Impugned order was suspended until specified date.

Rashid Sadiq, Advocate and Asif Mumtaz Mian, Company Secretary for Appellant.

Noman Akhtar, Joint Director (SCD) and Asif Paryani, Deputy Director (SCD) for Respondent.

Date of hearing: 10th June, 2014.

2015 C L D 927

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS S. Z. SECURITIES (PRIVATE) LIMITED: In the matter of

Notice No. 4(BRL-30)/1/2014 dated 9th June, 2014, decided on 26th June, 2014.

Brokers and Agents Registration Rules, 2001---

----R. 8---Central Depositories Act (XIX of 1997), Ss. 24 & 28---Transferring of shares from sub-account to House account---Imposition of charges against account---Complaint against the broker company was, that it received the dividend on shares owned by the complainant, and subsequently imposed unjustified charges against account of the complainant on demand of said dividend; that the broker company transferred complainant's shares from his sub-account to the House Account of the complainant unauthorisedly---Imposition of charges by the broker company on the complainant's sub-account without providing any schedule, was discriminative; and not justified in the light of the Code of Conduct laid down in Third Schedule of the Brokers and Agents Registration Rules, 2001---By doing so the broker company failed to maintain high standard of integrity, promptitude and fairness in the conduct of its business---Considering the broker company's efforts and commitment to settle that matter amicably, Commission taking lenient view, no punitive action was taken under R.8(iv) of Brokers and Agents Registration Rules, 2001 and observed that caution to broker company would suffice---Broker company was directed to fully comply with all the Rules, Regulations and Directives of the Commission in future to avoid punitive action under the law---Broker company had failed to produce any valid written authority and lawful justification for transferring of complainant's shares from his sub-account to his House account---Broker company, in circumstances, moved shares of complainant in violation of S. 24 of Central Depository Act, 1997, which was serious violation---Commission, in exercise of powers under S. 28(2) of Central Depository Act, 1997 imposed a penalty of Rs. 25,000 on the broker company.

Asif Zaheer, Director, Saleem Raza, Company Secretary and Nadeem Shahzad, Trader representatives of the Respondent.

Tahir Mahmood Kiani, Deputy Director representing (BR&ICW).

Date of hearing: 18th June, 2014.

2015 C L D 967

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Zafar Abdullah, Commissioner (SMD)

SHAHEEN INSURANCE COMPANY LIMITED and 7 others---Appellants

versus

DIRECTOR (INSURANCE), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 5 of 2013, decided on 13th February, 2014.

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

----S. 33---Insurance Ordinance (XXXIX of 2000), Ss.11(1)(e), 36, 63 & 156---Failure to fulfil the minimum solvency requirement---Imposition of penalty---Solvency position of the Insurance company had revealed that company was insolvant by an amount of Rs.49,328,754---Company, in circumstances, had contravened the provisions of Ss.36 & 11(1)(e) of the Insurance Ordinance, 2000---Chief Executive and Directors of the company, were issued show-cause notice calling upon them to show as to why penalty as provided under Ss.63(1) & 156 of the Insurance Ordinance, 2000 should not be imposed on them---Counsel for the company accepted that the company had been unable to fulfil the minimum solvency requirement---Vide impugned order penalty of Rs.300,000 was imposed on the company and Rs.100,000 on each of eight Directors, was imposed, total penalty aggregating to amount of Rs.1,100,000---Directors were also directed to take immediate steps to meet the shortfall in their solvency requirement---Sections 11(1)(e) and 36 of Insurance Ordinance, 2000, clearly required insurers to comply with the minimum solvency requirements at all times---Directors of the company were required to act proactively for compliance with the legal requirements---Argument that non-compliance with Ss.36 & 11(1)(e) of the Insurance Ordinance, 2000, was "unintentional and involuntary", was unacceptable; requirements of said section, could not be waved on the basis of proposed business plan---Requirements of minimum solvency level was one of the basic requirement for the registered insurer and the appellant company, ought to ensure its compliance---Authority had already taken a lenient view by not issuing a direction to the company to cease entering into new contract of insurance---Company having failed to comply with the minimum solvency requirement despite clear direction to that effect, impugned order could not be interfered with.

Sohel N. Kidwai, Advocate, Chief Operating Officer, Farhan Janjuah, Chief Financial Officer and Imran Hussain, Legal Advisor for Appellants.

Tariq Hussain, Director (Insurance) and Muhammad Azam Nizami, Deputy Director (Insurance) Department Representatives.

Date of hearing: 27th December, 2013.

2015 C L D 976

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Imtiaz Haider, Commissioner (SMD)

ASKARI GENERAL INSURANCE COMPANY LTD. and another---Appellants

versus

EXECUTIVE DIRECTOR (INSURANCE)---Respondent

Appeal No. 18 of 2012, decided on 23rd April, 2014.

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

----S. 33--- Insurance Ordinance (XXXIX of 2000), Ss.156, 165 & 166---Insurance Rules, 2002, R.23---Issuance of 'No objection certificate' for insurance of Pakistan Air Force Aircrafts---On request of the company for issuance of 'No objection certificate' for insurance of four P.A.F. aircrafts, Commission informed the company that insurance of aircrafts of P.A.F., had to be placed with National Insurance Company Limited (N.I.C.L.), in terms of S.166 of Insurance Ordinance, 2000---Company applied for provisional approval of the Commission for placement of 100 per cent of the risk i.e. aircrafts, facultative abroad---Company had underwritten third party legal liabilities insurance cover for the aircrafts---Commission vide letter had asked the company to submit the acceptance/regret slip issued by 'N.I.C.L.'---Company instead of submitting the required slip, stated that as project was financed out of non-public funds, 'No objection certificate form 'N.I.C.L.' was not required---Show-cause notice was issued to the company under Ss.166 & 156 of the Insurance Ordinance, 2000 and Executive Director of the Commission dissatisfied with the response of the company imposed a penalty of Rs.100,000 on the Chief Executive Officer of the company, and a fine of Rs.200,000 on the company---Aircrafts in question, were public property and "all insurance business" in terms of S.166 of the Insurance Ordinance, 2000 include third party liabilities insurance---Third party liability insurance of aircrafts in circumstances could only be placed with 'N.I.C.L.'---Section 165 of the Insurance Ordinance, 2000 was applicable in a situation when a person and company outside Pakistan would insure a property located in Pakistan---Said section was not attracted to the facts of the present case---Rule 23 of Insurance Rules, 2002, which was made in consonance with S.165(1) of Insurance Ordinance, 2000, prohibited insurance of any property or interest outside Pakistan, but R.23(2) of Insurance Rules, 2002, laid down the condition for exemption---Chief Executive Officer of the company had not caused any loss to the company, or its shareholders, and he acted in good faith by taking responsibility of his actions---Penalty to the extent of Chief Executive Officer, was set aside---Company was strictly directed to comply with the provisions of Insurance Ordinance, 2000 in future.

Pearl Continental Hotel and another v. Government of N.-W.F.P. and others PLD 2010 SC 1004 ref.

Syed Ahmed Hassan Shah and Ashraf Malik, JVP Legal for Appellant No.1.

Abdul Waheed, President and CEO for Appellant No.2.

Muhammad Azam Nizami, Deputy Director (Insurance Division) and Nisar Yousuf Zai, Deputy Director (Insurance Division) for Respondent.

Date of hearing: 4th March, 2014.

2015 C L D 1098

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SCD)

HABIB AHMAD and 5 others---Appellants

versus

DIRECTOR (ENFORCEMENT)---Respondent

Appeal No. 38 of 2011, decided on 30th January, 2014.

Companies Ordinance (XLVII of 1984)---

----Ss. 2(2)(i)(ii), 208 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Investment in associated companies and undertakings---Examination of annual audited accounts, had shown that a loan of Rs.39.7 million was receivable from associated undertaking of the appellant company---Company failed to pass a special resolution for its investment in said associated undertaking---Commission, vide its Notification No.704(1)(11) dated 13-7-2011 had exempted a private limited company, which was not subsidiary of a Public Limited Company, from the application of S.208 of the Companies Ordinance, 1984---Company contended that said exemption which was available to the private companies from 13-7-2011 should also be applicable to cases pending at the time of issuance of said notification dated 13-7-2011---Department's plea was that exemption granted to private companies extended through notification, which being much after cognizance taken in the year 2009, benefit of said notification should not be given to the company---Validity---Statute relating to remedial law, could properly, in several instances be given retrospective operation---Exemption from application of S.208 of Companies Ordinance, 1984, available to the private companies from 13-7-2011, should also be applicable to cases pending at the time of issuance of said notification---Said notification, though was not in field at the time of passing impugned order, but it was in force at the time of passing order---Benefit of exemption was extended from the requirement at the appellate stage to the company---Impugned order whereby penalties were imposed on the company, was set aside, in circumstances.

Commissioner of Income Tax v. Shahnawaz Ltd. and others PLD 1992 SC 920 and Complete Supreme Court cases on Income Tax (1947-1997), Volume II, published by S.A. Salam Publications, 1997 [(1992) 66 Tax 126 (S.C. Pak.)] rel.

Zafar Ullah Shah, FCA and Ms. Nudrat Sultana Alvi for Appellants.

Shahid Javed, Deputy Director (Enforcement) and Haroon Abdullah, Deputy Director (Enforcement) departmental representatives (through Video Conference).

Date of hearing: 11th December, 2013.

2015 C L D 1112

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

Messrs HAROON ZAKARIA AND COMPANY CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No.4(BRK-138)SE/SMD/2002 dated 14th May, 2013, decided on 24th January, 2014.

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, Third Sched.---Irregularities in calculation of 'Net Capital Balance (N.C.B.)'---Report submitted by Inspection Team, duly constituted, had highlighted irregularities in calculation of "Net Capital Balance (N.C.B.)" of the company---All current liabilities, other than those reported under trade creditions, were required to be reported under the head of 'other liabilities'---Company verified certain loan accounts as 'Trade Creditors' overdue by more than 30 days, rather than other liabilities, which were understood resulting in over statement of the 'N.C.B.' which had shown a severe negligence on the part of the company---Submission of the company that the difference in other liabilities was due to difference in interpretation, was not tenable---If 'N.C.B.' was calculated in strict compliance with the requirement of the 1971 Rules, the 'N.C.B.' verified by the company would have been negative---Company did not apply necessary prudence while certifying the 'N.C.B.' certificate, which resulted in misrepresentation and overstatement---'N.C.B.' as certified by the company, was established not in accordance with Third Schedule of 1971 Rules, and the company had provided a statement, which it had reasonable cause to believe to be false or incorrect in material in violation of S.18 of Securities and Exchange Ordinance, 1969---Violation of the Ordinance, Rules and Regulations, though was a serious matter, but considering that the violation had been noted for the first time, Commission, taking lenient view, imposed a penalty of Rs.5,000 (Rupees five thousand only) on the company.

Muhammad Haroon, Partner and Farhan, Partner present at hearing.

Ms. Asima Wajid, Deputy Director-MSRD representing (MSRD).

Date of hearing: 31st May, 2013.

2015 C L D 1172

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

Messrs HIGHLINK CAPITAL (PVT.) LIMITED: In the matter of

Show Cause Notice No.4(BRL-138)SE/SMD/2006 dated 4th October, 2013, decided on 13th November, 2013.

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

----Ss. 18 & 22---Securities and Exchange Rules, 1971, R.4(4)---Unauthorized trading by broker company---Submission of false and incorrect information to the Commission---Securities and Exchange Commission of Pakistan, received complaint regarding unauthorized trading in the account of complainant by broker/company---No trading was made through the account of the complainant maintained with the company since opening of his account in that particular month---Prima facie, it appeared that the broker/company in contravention of S.18 of Securities and Exchange Ordinance, 1969, submitted false and incorrect information to the Commission---Since ledger statement and account balance statements of the complainant provided by the company, did not match with the Stock Exchange trading data of the complainant, it was suffice to believe that broker had provided incorrect information to the Commission with regard to the trading activity in the complainant's account---Stance of the broker that the shares of the complainant were held in trust in its account, was not acceptable---Violation of S.18 of Securities and Exchange Ordinance, 1969 stood established, in circumstances---If any person would contravene or otherwise fail to comply with the provisions of the Ordinance, or any rules, or regulations made thereunder, the Commission, could by order direct such person to pay to the Commission by way of penalty such sum in accordance with S.22 of Securities and Exchange Ordinance, 1969---Violation of the Ordinance, rules and regulations, being a serious matter, Commission had directed the company to pay the Commission by way of penalty a sum of Rupees Five Hundred Thousands (Rs.500,000) on account of violation of S. 18 of Securities and Exchange Ordinance, 1969--- Company in its statement had admitted the receipt of amount from the complainant, which was duly credited in his account, and it had been proved that the broker neither executed any trade in the complainant's account nor placed any share in his sub-account---Broker company directed to pay back said amount to the complainant within 30 days of that order under intimation to the Commission.

Authorized Representatives of Messrs Highlink Capital (Pvt.) Limited and Owais Waheed present at the Hearing.

Ms. Asma Wajid, Deputy Director (BR&ICW) assisting the Director.

Date of hearing: 24th October, 2013.

2015 C L D 1200

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

Messrs DIYANAH ISLAMIC FINANCIAL SERVICES (PVT.) LTD.: In the matter of

Application No. Nil, dated Nil, decided on 31st December, 2013.

Brokers and Agents Registration Rules, 2001---

----R. 5(4)(5)---Renewal of certificate of registration as a broker---Company had prayed for renewal of certificate of registration as a broker---Control of the company was held by a person who failed to abide by the Code of Conduct for brokers, and failed to settle the investor's claims---Such a situation had created serious doubts about the credibility and integrity of the company; which led the Commission to believe that continuation of operations of the company, would harm the interest of the Stock market in general, and investors in particular---Company was not eligible for renewal of registration as a broker---Application of company, was refused in terms of R.5(5) of Brokers and Agents Registration Rules, 2001, which stood cancelled.

Khaleel Mujeeb ur Rehman, Chief Executive Officer representing Diyanah Islamic Financial Services (Private) Limited.

Hasnat Ahmad, Director (MSRD) and Ms. Asima Wajid, Deputy Director (MSRD) assisting the Director/HOD (MSRD).

Date of hearing: 19th December, 2013.

2015 C L D 1285

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

MESSRS LIVE SECURITIES LIMITED: In the matter of

Show Cause Notice No. 4/BRK-138/SE/SMD/2002 dated 14th May, 2013, decided on 25th October, 2013.

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

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Inspection of Books and record required to be maintained by the company---Violation regarding "Net Capital Balance", charging of late payment charges and segregation of assets of the clients of the company---Effect---Inspection report had revealed various prima facie violations regarding "Net Capital Balance", charging of late payment charges and segregation of assets of clients---Company admitted its negligence with regard to obtaining client's mandate on non-judicial stamp paper and gave assurance that in future it would comply with the said requirement---Company's justification regarding "Net Capital Balance" was not tenable---Company had accepted the violations of trading on behalf of the clients through its proprietary account, keeping the clients' securities on its House Account, non-maintenance of collateral account and charging late payment charges to its clients---Penalty of Rs.500,000 was imposed on the company, with directions to the company to the effect; that (i) discontinue the practice of charging the late payment charges to the clients; that (ii) discontinue to trade for the clients through its proprietary account; that (iii) properly maintain collateral account; that (iv) handle the book entry securities in accordance with the regulatory framework; that (v) transfer the securities owned by the investors from the House Account to the respective sub-accounts of the investors and that (vi) regularize its "Net Capital Balance" in line with the requirements of Third Schedule of Securities and Exchange Rules, 1971; (vii) to ensure full compliance with the Ordinance, Rules, Regulations and Directives of the Commission in future.

Altaf Husein, Chief Operating Officer, Muhammad Rizwan, Manager Accounts, Naeem Yahya, Head of Settlement and Raja Izhar Ahmed, Branch Manager, Islamabad authorized Representatives of Messrs Live Securities Limited.

Ms. Asima Wajid, Deputy Director (MSRD) representing MSRD.

Date of hearing: 31st May, 2013.

2015 C L D 56

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani and Sarmad Jalal Osmany, JJ

BANKERS EQUITY (LTD.) and others---Petitioners

Versus

Messrs BENTONITE PAKISTAN LTD. and others---Respondents

Civil Petition No. 752-L of 2010, decided on 12th March, 2013.

(On appeal from the judgment dated 24-2-2010 passed by the Lahore High Court, Lahore in R.F.A. No.579 of 2002)

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

----Ss. 9(1) & (2)---Recovery suit---Non-compliance with Ss. 9(1) & (2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Rectifiable mistake/omission---Recovery suit filed by plaintiff-institution was solely rejected on the ground that it had failed to comply with Ss. 9(1) & (2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Defendant in all fairness admitted that omission/mistake on part of plaintiff-institution was rectifiable and if plaintiff amended the plaint within a period of 15 days, defendant had no objection---Supreme Court in view of the fair stand taken by the defendant set aside the impugned judgment and directed the plaintiff to file amended suit within 15 days---Appeal was allowed accordingly.

Hamid Shabbir Azar, Advocate Supreme Court and Mahmood ul Islam, Advocate-on-Record for Petitioners.

Respondents Nos.2 and 6 in person.

Ijaz Anwar, Advocate Supreme Court and Haji Muhammad Rafi Siddiqui, Advocate-on-Record for Respondent No.4.

Date of hearing: 12th March, 2013.

2015 C L D 101

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Ejaz Afzal Khan and Qazi Faez Isa, JJ

MUHAMMAD ATTIQUE---Petitioner

Versus

JAMI LIMITED and others---Respondents

C.R.P. No.144 of 2010 in C.A. No. 772 of 2005, decided on 24th September, 2014.

(On review against the judgment dated 4-6-2010 passed by this Court in C.A. No. 772 of 2005)

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

----S. 19(2)---Civil Procedure Code (V of 1908), O.XXI---Decree of Banking Court---Execution---Applicability of C.P.C.---Section 19(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, provided that the decree of the Banking Court shall be executed in accordance with the provisions of the Code of Civil Procedure, 1908, or any other law for the time being in force or in such manner as the Banking Court may, at the request of the decree-holder, consider appropriate including recovery as arrears of land revenue---Court had the discretion to adopt any of the said modes but once the court opted to execute the decree in accordance with the provisions of the Code of Civil Procedure, 1908, it could not depart therefrom.

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

----O. XXI, Rr. 54 & 66---Execution of decree---Auction of judgment-debtor's immoveable property---Proclamation of sale---Purpose---Wide publicity---Purpose behind enactment of O. XXI, Rr. 54 & 66, C.P.C., was to give wide publicity to the sale of the property so that maximum number of people may turn up to participate in it and give bids that matched the price the property deserved.

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

----O. XXI, Rr. 54 & 67---Execution of decree---Auction of judgment-debtor's immoveable property---Mode of making proclamation of sale---Directory provision---Scope---Contention that the provisions contained in O. XXI, Rr. 54 & 67, C.P.C., were only directory in nature and not mandatory, thus failure to comply therewith could not undo an auction---Validity---Such contention was correct so long as it did not cause prejudice to any of the stakeholders, but where it was otherwise, failure to comply with the said provisions could not be brushed aside without due application of mind--- Court had to undo a sale if failure to comply with the said provisions caused injustice, as said provisions had been enacted to advance and not impede the cause of justice.

Ghulam Abbas v. Zohra Bibi and another PLD 1972 SC 337 ref.

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

----O. XXI---Limitation Act (IX of 1908), First Sched., Arts. 166 & 181---Execution of decree---Auction of judgment-debtor's property---Judgment-debtor not served---Setting aside of auction---Limitation---Extension in period of limitation---Contention that where a specific period had been clearly prescribed by Art. 166, of the Limitation Act, 1908, for setting aside the sale in execution of a decree, resort could not be had to the residuary Art. 181 to extend the period of limitation--- Validity---Such contention was correct, but where a person affected by the sale had not been served and the proceedings ending in auction had been conducted at his back, Art. 181 and not Art. 166 of the Limitation Act, 1908, would apply.

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

----O. XXI, Rr. 64 & 65---Execution of decree---Auction of judgment-debtor's property---"Sale"---Meaning---Word "sale" meant fall of hammer and not its confirmation by the Court.

Diwan Ghulam Rasul v. Ghulam Qutab-ud-Din AIR (29) 1942 Lahore 142 and Mst. Asma Zafarul Hassan v. Messrs United Bank Ltd. and another 1981 SCMR 108 ref.

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

----O. XXI, R. 66---Execution of decree---Auction of judgment-debtor's property---Proceedings before Executing Court adjourned sine die---Resumption of proceedings---Fresh notice had to be issued to the judgment-debtor on resumption of proceedings before the Executing Court.

(g) Constitution of Pakistan---

----Art. 188---Review of Supreme Court judgment---Scope---Supreme Court could review its judgment or order if an error of law or fact had materially affected the merits of the case.

Commissioner of Income Tax, Peshawar v. Messrs Gul Cooking Oil and Vegetable Ghee (Pvt.) Ltd. and 6 others 2008 PTD 169 ref.

Hamid Khan, Senior Advocate Supreme Court for Petitioner.

Sh. Zamir Hussain, Senior Advocate Supreme Court and Syed Rafaqat Hussain Shah, Advocate-on-Record for Respondents Nos.1 to 7.

Date of hearing: 24th September, 2014.

2015 C L D 150

[Supreme Court of Pakistan]

Present: Jawwad S. Khawaja and Qazi Faez Isa, JJ

ROYAL MANAGEMENT SERVICES (PVT.) LTD. and another---Petitioners

Versus

The CHAIRMAN SECP, ISLAMABAD and others---Respondents

Civil Petitions Nos.978 and 979 of 2014, decided on 23rd October, 2014.

(On appeal from the judgment dated 22-5-2014 in Constitutional Petitions Nos.D-3158 and D-3159 of 2010 passed by the High Court of Sindh, Karachi)

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

----S. 19(1)(b)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 5(5)---Securities and Exchange Commission (Amendment) Act (XVIII of 2013), S. 4---Constitution of Pakistan, Art.185(3)---Management companies ("companies") of Modaraba---Interest of investors, protection of---Misuse/misappropriation of Modarabas by companies---Effect---Removal and substitution of companies with another Modarabas management company---Plea of companies that Registrar of Modarabas had removed and substituted them from management of Modarabas at a time when Securities and Exchange Commission of Pakistan was not properly constituted, as it did not have the prescribed minimum of five or a maximum of seven members on the Board---Validity---Modarabas were managed for the benefit of investors and thus the companies managing them must act solely for the benefit of investors---When Modarabas were being misused/misappropriated by those who were managing them, or in other words the interest of investors was being compromised, the question of composition of the Board faded away---Securities and Exchange Commission (Amendment) Act, 2013 contained a saving and validation clause to cover the deficiency in the constitution of the Board, and the said clause was not assailed before the High Court or the Supreme Court---Even if for argument sake the Board was incomplete at the time when the Registrar of Modarabas passed the order, it would not change the fact that companies in question were not running the Modarabas in accordance with the law, therefore, they had no ground to object to their removal and substitution with another Modaraba management company---Petition for leave to appeal filed by companies was dismissed accordingly and leave was refused.

Muhammad Ashraf Tiwana v. Pakistan 2013 SCMR 1159 ref.

Makhdoom Ali Khan, Senior Advocate Supreme Court and Ch. Akhtar Ali Advocate-on-Record for Petitioners.

Zahid F. Ebrahim, Advocate Supreme Court, Tariq Aziz, Advocate-on-Record, Qaiser Inam, Dy. Director and Ibrar Saeed, L.O. for Respondent No.1.

Nemo for Respondents Nos.2 and 3.

Date of hearing: 23rd October, 2014.

2015 C L D 158

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani, Mian Saqib Nisar and Sh. Azmat Saeed, JJ

MUHAMMAD AHMED KHAN---Appellant

Versus

The BANK OF PUNJAB and others---Respondents

Civil Appeal No.428-L of 2012, decided on 10th June, 2013.

(Against the judgment dated 28-4-2009 of the Lahore High Court, Bahawalpur Bench passed in R.F.A. No.8 of 2007)

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

----S. 9---Recovery suit against partnership---Partnership firm---Partner---Joint and several liability---Scope---Partner having dispute with other partners in the partnership-firm wrote to bank that he would not be liable for any future financing/loan made to the firm---Subsequent to such letter other partners took out a loan from the bank---Effect---Despite the letter partner in question remained a partner in the firm throughout, as there was no proof of dissolution instrument or other legal mode to show that partnership firm had been dissolved---Partner in question would remain jointly and severally liable for the loan taken out by other partners despite the letter written to the bank and despite having a dispute with the other partners could not be exonerated and discharged of his liability as partner of the firm, till the time the firm remained intact---Appeal was dismissed accordingly.

Iftikhar Ullah Malik, Advocate Supreme Court and Mahmudul Islam, Advocate-on-Record for Appellant.

Abdul Hameed Chohan, Advocate Supreme Court for Respondent No.1.

Nasir Mehmood, Advocate Supreme Court for Applicant.

Date of hearing: 10th June, 2013.

2015 C L D 191

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Iqbal Hameedur Rahman and Qazi Faez Isa, JJ

The CHAIRMAN, NATIONAL ACCOUNTABILITY BUREAU---Appellant

Versus

FEHMIDA BEGUM and others---Respondents

Civil Appeal No. 1038 of 2000, decided on 25th November, 2014.

(On appeal from judgment of Lahore High Court, Lahore, dated 30-6-2000, passed in Writ Petition No. 914 of 2000)

National Accountability Ordinance (XVIII of 1999)---

----S. 5(o)---"Person"---Definition---Person standing as guarantor for a loan obtained by the company---Company defaulting in payment of loan---Such person/guarantor liable for prosecution before Accountability Court---Scope---Any person may be a director or employee of the company while at the same time be a guarantor as well---Employee/director in question was the surety or guarantor of the loan facilities etc., availed by the company---According to the terms of the guarantee, employee/director's responsibility under the guarantee was that of a principal debtor and he was liable under the guarantee until all moneys due from the company had been paid, therefore, once the company defaulted in its liability to repay the loan amount, it was the obligation of the said employee/ director to repay the loan amount---High Court was not right in holding that said employee/director, despite being a guarantor, was not liable for prosecution before the Accountability Court---Judgment of High Court was set aside in circumstances---Appeal was allowed accordingly.

Raja M. Ibrahim Satti, Senior Advocate Supreme Court and Fauzi Zaffar, Additional DPG NAB for Appellant.

M. A. Siddiqui, Advocate Supreme Court for Respondents Nos.1 and 2.

Ex parte Respondents Nos.3 to 8.

Date of hearing: 10th November, 2014.

2015 C L D 366

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, C.J., Gulzar Ahmed and Mushir Alam, JJ

CIVIL APPEAL NO.1366 OF 2003

(On appeal against the Judgment dated 17-10-2000, passed by the Lahore High Court, Lahore in W.P. No.3305 of 1995)

AND

CIVIL APPEAL NO.732 OF 2009

(On appeal against the Judgment dated 29-1-2009, passed by the Lahore High Court, Lahore, in E.F.A. No.410 of 2005)

NATIONAL BANK OF PAKISTAN through Attorney and another---Appellants

Versus

PARADISE TRADING COMPANY and others---Respondents

Civil Appeal No.1366 of 2003 and Civil Appeal No.732 of 2009, decided on 16th December, 2014.

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

----S. 58(f)---Mortgage by deposit of title deeds---Equitable mortgage, creation of--- Certified copies of sale/title deed---Original sale deed lost---Equitable mortgage over immoveable property created with delivery of certified copies of sale deed to the bank---Respondent had secured a finance facility from the bank by creating a mortgage over her property---Respondent claimed that original sale deed of the property was lost, therefore she delivered to the bank a duly signed memorandum of deposit of sale deed, certified copies of sale deed along with a copy of an F.I.R. reporting that original sale deed had been lost---Respondent also provided the bank with an affidavit claiming that she was the absolute owner of the property by virtue of a sale deed which had been lost, and that she had not created any lien or charge on the property, and that as and when the sale deed was found, she would deposit the same with the bank---Subsequently respondent defaulted and Banking Tribunal passed decree in favour of bank---Bank initiated auction proceedings for the property, during which objections were filed by purported buyers of the property, who claimed that property in question was sold to them by the respondent; that they were in possession of the original title deeds, and that the property was not validly mortgaged in favour of the bank , as the respondent had not provided original sale deed at the time of creating mortgage---Validity---Documents provided by respondent were sufficient for the bank to have accepted the assurance of respondent that original sale deed had been lost---Probing into the original sale deed was not practically possible for the bank after respondent had deposited such documents, and it could be said that the bank had taken sufficient measures to safeguard its interest---Three essential ingredients necessary for creation of an equitable mortgage stood established i.e., there was an existing debt, there was delivery of documents of title, and there was also an intention that the documents of title were meant as security for the debt---After the bank became aware of the sale of property by respondent it informed the purported buyers of the existence of mortgage and published a public notice in newspapers, and also notified the concerned estate officer---Despite being informed of the existence of the mortgage, purported buyers proceeded to purchase the property from the respondent---Respondent admitted that selling of property to purported buyers was fraud---Purported buyers and respondent actively connived in commission of the fraud to deprive the bank of its valuable security---Purported sale of property in presence of a mortgage could not be allowed to be sustained and was accordingly declared as illegal and void---Supreme Court directed that the bank should proceed with the public auction for the property in accordance with law, and that the bank was free to initiate criminal prosecution against the respondent and other persons involved in the commission of fraud in an appropriate forum.

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

----S. 58(f)---Mortgage by deposit of title deeds---Necessary ingredients.

Requirement of law for creation of a mortgage by deposit of title/sale deed was;

(i) Existence of debt

(ii) Delivery of documents of title

(iii) Intention that the documents of title shall be security for the debt

Said three ingredients were necessarily to be found at the time when the transaction of creation of mortgage took place and in the absence of any proof to the contrary, the three ingredients in the normal course of business would have to be accepted as established.

(c) Banking Tribunals Ordinance (LVIII of 1984) [since repealed]---

----Ss. 6 & 11(3)---Immovable property mortgaged with bank---Decree passed by Banking Tribunal---Auction of immovable property by the bank---Judgment-debtor playing fraud by selling the mortgaged property to purported buyer---Purported buyer of such property would be bound by the decree passed by the Banking Tribunal.

(d) Banking Tribunals Ordinance (LVIII of 1984) [since repealed]---

----S. 11(3)---Immoveable property mortgaged with bank---Decree passed by Banking Tribunal---Auction of immovable property, procedure for---Public auction---Once bank had adopted public auction as procedure for selling mortgaged property, then no other mode or procedure was permissible for selling such property.

Kh. Muhammad Farooq, Senior Advocate Supreme Court for Appellants (in C.A. 1366 of 2003).

Shahid Hamid, Senior Advocate Supreme Court for Appellants (in C.A. 732 of 2009).

Ex parte for Respondents Nos.1 - 3, 8 and 9 (in C.A. 1366 of 2003).

Kh. Muhammad Farooq, Senior Advocate Supreme Court for Respondent No.2 (in C.A. 732 of 2009).

Nemo for Respondent No.4 (in C.A. 1366 of 2003).

Shahid Hamid, Senior Advocate Supreme Court for Respondents Nos.5 and 6 (in C.A. 1366 of 2003).

Dr. Muhammad Akmal Saleemi, Advocate Supreme Court for Respondent No.7 (in both appeals).

Date of hearing: 24th November, 2014.

2015 C L D 1231

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Dost Muhammad Khan and Umar Ata Bandial, JJ

WELLA AKTINEESELLSCHAFT---Appellant

versus

SHAMIM AKHTAR and others---Respondents

Civil Appeals Nos.861 to 863 of 2002, decided on 24th April, 2015.

(On appeal from judgment of High Court of Sindh, Karachi, dated 19-4-2006, passed in Misc. Appeals Nos.2, 3 and 4 of 1989)

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

----S. 37(1)---Trade mark---Continuous non-use of a trade mark for five years---Effect---Removal of trademark from the Register of Trade Marks---Scope---Section 37 of Trade Marks Act, 1940, was a penal provision aimed to work as deterrent for those, seeking registration of any trademark under the said Act with some ulterior motive, which they did not intend to use or there had been in fact no bona fide use of their trade mark in relation to those goods for a specified period---For seeking the relief of removal/revocation of a registered trade mark under S.37(1)(b) of the Trade Marks Act, 1940, specific minimum timeframe of five years had been provided during which there had been no bona fide use of such trademark by its proprietor, which was to be computed from a date one month before the date of application submitted by any aggrieved person in such regard.

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

----Ss. 37(1)(b), 28 & 39---Trade mark---Bona fide non-use of trade marks for over five years due to special circumstances (i.e. ban imposed on import of products by Government)---Trademarks removed from the Register of Trademarks, restoration of---Scope---Appellant-company, which carried on the business of manufacturing and exporting cosmetic items got registered three trademarks, "WELLA with Device", "WELLAFORM" and "WELLAFLEX", and carried out its business in Pakistan---Subsequently appellant-company could not freely sell their products in Pakistan, in relation to which the three Trademarks were registered, from the year 1979 to 1985 due to ban on the import of its products as per the relevant Import Policy Orders issued by the Ministry of Commerce, Government of Pakistan---Respondent, a partnership concern carrying on the business of manufacturing and trading in cosmetics and allied products started using the trademark "WELLA" and subsequently applied for its registration, which application was declined on the ground that it conflicted with the trademarks of appellant-company---Respondent filed rectification applications before the Registrar of Trademarks seeking removal of the trademarks of the appellant-company on the grounds that the appellant-company had registered said trademarks without any bona fide intention to use them and had in fact failed to use them since their registration---Registrar of Trademarks cancelled/removed the trademarks issued in favour of the appellant-company on the ground that in light of extended period of non-use of the trademarks for over five years, sufficient proof existed that the appellant-company had no intention of using them in Pakistan, and that the company neither used, nor took any steps to use them, and even if import of its goods was banned, alternative measures, such as appointing a registered user or assigning their trademarks, could have been adopted, as was being done by other foreign proprietors of trademarks under similar circumstances---Validity---Documentary evidence showed the efforts of appellant-company in making sales and supply of their products in Pakistan under their registered trademarks soon after lifting of ban on import of its products and also making correspondence with businessmen in Pakistan for manufacturing their products under a license etc.---Genuine and sincere efforts were made by the appellant-company for securing business for their products in Pakistan (before and during the ban on import of its products in Pakistan)---Non-use of its trademarks by the appellant-company for a period of over five years was under special circumstances due to a legal bar (i.e. ban on import of its products by the Government) and not due to mala fide, thus, there was a presumption of bona fide non-use of trademarks by appellant-company during such period---When the respondent started using the trademark "WELLA" for their products for the first time, the three registered trademarks of appellant-company were already in field for a considerably long period---In such circumstances, mere assertion of respondent that adoption of its trademark was bona fide and after undertaking due search, was not free from serious doubts---Moreso, in the circumstances when no material in support of such plea was placed on record and the trademarks of the appellant-company were well known and recognized internationally---Observation of Registrar that in case of ban on goods under the import policies issued by the Government, the appellant-company could have appointed some registered user under S. 39 of the Trade Marks Act, 1940, or they could have assigned their trademark by invoking S. 28 of the said Act, or granted license to some person to avoid the penal consequences of S. 37(1)(b) of the same Act, were equally without force as the Trade Marks Act, 1940 did not envisage any such compulsion to avoid the consequence of Government ban, which could be justly and fairly considered as special circumstances in the trade within the meaning of S. 37(3) of the said Act---Registrar of Trademarks had, thus, wrongly invoked the provisions of S. 37(1)(b) of the Trade Marks Act, 1940 for ordering removal of registered trademarks of the appellant-company---Supreme Court restored the registered trademarks of appellant-company---Appeal was allowed accordingly.

Cooper's Incorporated v. Pakistan General Stores and another 1981 SCMR 1039 ref.

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

----S. 37---Trade mark---Removal of trademark from the Register of Trademarks due to its continuous non-use for five years---Burden of proof--- Standard of proof--- Burden of proof as to whether there was no bona fide use of the registered trademarks for a continuous period of five years upto a date one month before the date of the application without any lawful excuse or special circumstances as envisaged under S. 37(3) of the Trade Marks Act, 1940, was squarely upon the aggrieved party/applicant which had submitted the application for removing the trademark from the Register of Trademarks---Such burden was to be proved beyond reasonable doubt so as to invoke the penal consequences under S. 37 of Trade Marks Act, 1940.

Anwar Mansoor Khan, Senior Advocate Supreme Court assisted by Mrs. Umaima Khan, Advocate for Appellant.

Arshad Ali Chaudhry, Advocate Supreme Court/Advocate-on-Record for Respondent No.1.

Ex parte for Respondent No.2.

Date of hearing: 24th April, 2015.

2015 C L D 1245

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar and Mushir Alam, JJ

Messrs FAROOQ GHEE AND OILS MILLS (PVT.) LTD.---Petitioner

versus

REGISTRAR OF TRADE MARKS, TRADE MARK REGISTRY and others---Respondents

Civil Petitions Nos.2066 to 2068 of 2013, decided on 20th January, 2015.

(Against judgment dated 12-9-2013 of High Court of Sindh at Karachi, passed in Miscellaneous Appeals Nos.1, 2 and 3 of 2011)

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

----S. 14---Trade mark, nature of---Scope---Registration of trade mark was not restricted to one word, but it may comprise of composite and/or composition of common to use and/or invented words, coupled with numerical, device, diagram, picture and or any image etc. and/or any combination thereof.

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

----S. 10---Trade mark---'Dominant feature' of a trade mark---Certain trade marks carried one or more prominent features that clearly distinguished goods of one proprietor from their competitors dealing in similar goods---Such distinguishing feature in parlance of intellectual property was termed as 'dominant feature'.

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

----Ss. 8, 10(1) & 14(1)---Constitution of Pakistan, Art. 185(3)---Trade mark, registration of---Similarity in name---Dominant feature of trade mark---Scope---Addition of prefix to a trade mark---Trade marks "HAYAT" and "FAROOQ'S Hayat"---Respondent company applied for registration of the trade mark "HAYAT", while petitioner-company had applied for the trade mark "FAROOQ'S Hayat"---Contention of petitioner-company that the trade marks "HAYAT" and "FAROOQ'S Hayat" were quite distinct and dissimilar and there was no likelihood of confusion and/or deception; that use of prefix FAROOQ'S, the trading name of the petitioner-company to the word 'Hayat', distinguished petitioner's goods from that of respondent-company---Validity---Trade mark "HAYAT" in Arabic, Urdu and English language was used by the respondent-company since 1990 in overseas market and also in Pakistan---Trade mark "HAYAT" was displayed on goods of respondent-company with pictures of vegetables, poultry etc. laid in a peculiar fashion---Petitioner-company had adopted the mark "FAROOQ's Hayat" for same class of goods, by adding "FAROOQ'S" printed in small script as a prefix to the striking and/or dominating feature "HAYAT"---Merely adding a prefix and/or suffix to an already existing trade mark would not save the petitioner-company from the clutches of S. 8 of the Trade Marks Act, 1940, which prohibited registration of a trade mark or a part of trade mark, which was "likely to deceive or cause confusion"---Trade mark "FAROOQ'S Hayat" adopted by petitioner-company encompassed the mark "HAYAT", which was the striking or dominating feature of the trade mark of respondent-company---Trade mark "HAYAT" was already in use and associated with respondent-company since 1990---Adoption of dominant feature "HAYAT" by petitioner-company was not only strikingly similar but was identical---Prefix "FAROOQ'S" as used by the petitioner-company did not eclipse, over shadow or obscures the dominating mark "HAYAT" in a way that may distinguish its goods with that of the respondent-company---Allowing registration of petitioner-company's competing trade mark would not only encourage unscrupulous traders to steal someone else's goodwill and (intellectual) property, but at the same time unwary purchaser would be exposed to more than reasonable probability of confusion and deception---Application filed by petitioner-company for registration of trademark "FAROOQ'S Hayat" had correctly been dismissed by the Registrar of Trade marks---Civil petition for leave to appeal was dismissed accordingly.

Ekhlas Ahmed v. Dae Health Laboratories Limited London 1980 SCMR 625 distinguished.

Uniliver Ltd. v. Sultan Soap Factory PLD 1991 SC 939 ref.

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

----Ss. 8 & 10---Trade Marks Ordinance (XIX of 2001), Preamble---Trade mark, purpose of---Goodwill, protection of---Trade Marks Act, 1940, and Trade Marks Ordinance, 2001, not only protected consumers, but also traders who adopted a particular trade mark, which distinguished their goods, products and services from other competing traders, producers and service providers---Both the laws provided a mechanism, to protect such trade mark and forbade anyone attempting to appropriate to itself and/or to thrive on the goodwill and reputation created by another and/or to deceive a customer in assuming and/or believing that the goods, merchandise and/or services reputed to belong or associated with someone else were his or associated therewith---Whether such representation and/or assumption was fraudulent or not was of no consequence---Law protected honest traders, encouraged due observance of fair play, moral and ethical values in trade and business practices---Courts of law always frowned on unfair trade and business practice, that may tend to encourage malpractice, and/or usurpation of goodwill and market created by someone else---Such wrongdoing could not be termed anything short of robbing someone of his hard earned goodwill and/or rights in (intellectual) property.

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

----Preamble---Copyright Ordinance (XXXIV of 1962), Preamble---"Trade mark right"--- "Copyright"--- Distinction--- Practice of abusing/infringing a trade mark under the garb of copyrights deprecated---Copyright laws aimed to protect original works of art or creative articulation (may be of a trademark) in any tangible medium of expression, whereas, trademark was associated with the goods for the purpose of indicating or so to indicate a connection in the course of trade between the goods and some person having the rights, either as a proprietor or as registered user, to use or apply the trade mark on his goods---Trade Marks Act, 1940 protected the proprietor to use the trade mark on his goods, and prevented other competitors from using and applying identical and/or confusingly similar trade mark on their goods of similar class or description---No prohibition existed under the Trade Marks Act, 1940, for the competitors/traders from making, producing or marketing same or similar goods, and the only restriction placed was on the use and/or adoption of same or deceptively and/or confusingly similar trade mark---Trader may make or market or sell same or similar category of goods falling in same class but under a different brand name or trade mark that clearly distinguished its goods from same category or class of goods---Copyright material could not be allowed to be used as an alternate and/or in substitution for the trade mark, unless, of course, such copyright in the artistic work was also registered under the Trade Marks Act, 1940---Practice of using copyright as a substitute for the trade mark was deprecated by the courts (in Pakistan) and defence of an infringer of trade mark resting on registration of copyright had been sternly rejected in a large number of cases.

Tapal Tea (Pvt.) Ltd. v. Shahi Tea Co. 2002 CLD 1113; Pak Drug House v. Rio Chemical 2003 CLD 1531; Messrs ADT Services AG v. ADT Pakistan (Pvt.) Ltd. 2005 CLD 1546 and Muhammad Wahid v. Adnan Memon 2010 CLD 450 ref.

Syed Arshad Hussain Shah, Advocate Supreme Court for Petitioner (in all cases).

Munawar Ghani, Advocate Supreme Court for Respondents (in all cases).

Date of hearing: 20th January, 2015.

2015 C L D 1268

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Dost Muhammad Khan and Umar Ata Bandial, JJ

UNITED BANK LIMITED---Appellant

versus

FATEH HAYAT KHAN TAWANA and others---Respondents

Civil Appeal No. 2352 of 2008, decided on 13th April, 2015.

(On appeal from the judgment/order dated 5-11-2003 passed by Lahore High Court, Lahore in F.A.O. No.189 of 1994)

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

----S. 48---Limitation Act (IX of 1908), Art. 181---Constitution of Pakistan, Art. 185(3)--- Leave to appeal was granted by Supreme Court to consider whether second execution application filed on 16-1-1989, by appellant during pendency of its first execution application for enforcement of money decree dated 20-1-1981, suffered time bar under S. 48, C.P.C. read with Art. 181 of Limitation Act, 1908.

(b) Banking Companies (Recovery of Loans) Ordinance (XXIII of 1979)---

----S.8(3)---Civil Procedure Code (V of 1908), S. 48 & O. XXI, R. 11---Execution of decree---Second execution application---Ex parte money decree was passed on 201-1-1981, by Banking Court and first application for execution of decree was filed on 27-6-1983, subsequently another application was filed on 16-1-1989---First application was consigned to record as fresh application had been filed and second was dismissed on the ground that it was barred by time---Order passed by Banking Court was maintained by High Court---Validity---First execution application was not disposed of by judicial order, therefore, second execution application filed on 16-1-1989, should plausibly be treated as continuation thereof or ancillary thereto---For ascertaining legal status and effect of proceedings before court of law, it was the content and meaning of judicial orders about such proceedings that were determinative and not the description or name given to proceedings by a party thereto, therefore, pending execution proceedings, descriptions given to by decree holder were inconsequential---Subsequent execution application filed by decree holder was deemed to be pending before Executing Court to be decided on merits---Appeal was allowed.

Mahboob Khan v. Hassan Khan Durrani PLD 1990 SC 778 rel.

Muhammad Yaqoob v. Qudsia Kishwar 1988 MLD 1379 and Amir Begum v. Mir Fateh Shah PLD 1968 Kar. 10 ref.

(c) Administration of justice---

----For ascertaining legal status and effect of proceedings before court of law, it was the content and meaning of judicial orders about such proceedings that were determinative and not the description or name given to proceedings by a party thereto.

Ms. Raisa Sarwat, Advocate Supreme Court for Appellant.

Syed Najamul Hassan Kazmi, Advocate Supreme Court for Respondents Nos. 5 and 6.

Ex parte for Respondents Nos.1 - 4, 7 and 8.

Date of hearing: 13th April, 2015.

2015 C L D 1331

[Supreme Court of Pakistan]

Present: Amir Hani Muslim and Qazi Faez Isa, JJ

COLLECTOR OF CUSTOMS, KARACHI---Petitioner

versus

NAYA DAUR MOTORS (PVT.) LTD. and others---Respondents

Civil Petition No. 121-K of 2014, decided on 11th June, 2015.

(On appeal from the judgment dated 23-1-2014 in H.C.A. No.127 of 2009 passed by the High Court of Sindh, Karachi)

Customs Act (IV of 1969)---

----S. 202(1)---Civil Procedure Code (V of 1908), S. 73(3)---Constitution of Pakistan, Art. 185(3)---Liquidation of company---Distribution of proceeds of sale---Preference to claim of secured creditors over claim of Government (i.e. customs authorities)---Properties of respondent-company were mortgaged with two banks---When the company was liquidated, its properties were put to auction, and the proceeds were paid to the Banks in partial settlement of their claim---Meanwhile customs authorities also passed an order-in-original against the company demanding certain unpaid duties and taxes on imported goods, however such demand could not be met as there was nothing left to pay customs authorities from the proceeds of sale---Contention of customs authorities that in terms of S. 73(3), C.P.C. and proviso to S. 202(1), of the Customs Act, 1969, Government dues (unpaid duties and taxes) would have precedence over the claims of the Banks---Validity---Properties of the company were mortgaged with the Banks considerably before any action was initiated against the company by customs authorities---Suits for recovery and sale of mortgaged properties filed by the Banks against the company were decreed (much) before the proviso to S.202(1), of the Customs Act, 1969, came into effect---Proviso to S. 202(1) of the Customs Act, 1969, was not made to apply retrospectively to cover the claim of the Government (i.e. customs authorities) to a time when the company had executed mortgages in favour of the Banks---Section 73(3), C.P.C. also did not assist the case of the customs authorities since it did not create any priority in the Federal Government against the rights of the Banks---Section 73, C.P.C. sets out the manner in which proceeds of sales in execution proceeding were to be distributed amongst decree-holders, and subsection (3) thereof stipulated that, "Nothing in this section affects any right of Government"---Said provision in itself did not give preferential right to the Government, but it merely stated that if the Government already had "any [preferential or prior] right" S. 73, C.P.C. would not affect the same---In the absence of a specific law that may have given preference to the claims of the Government at the relevant time, priority would depend on which encumbrance was earlier in time---However, where the claim of the Government was contemporaneous with any other claimant, the claim of the Government would prevail---In addition to the fact that the Banks had their claim earlier in time to the Government's claim, the Banks were secured creditors as they held registered mortgages of the company's immovable properties---Claim of the Government also did not charge the said mortgaged properties, which may have created a priority of claim over that of the mortgages (Banks)---Government (i.e. customs authorities) had no entitlement to any amount realized from the sale of the mortgaged properties---High Court thus had correctly disallowed the claim of the customs authorities with regard to the amounts realized from the sale of the mortgaged properties---Petition for leave to appeal was dismissed accordingly.

Vassanbai Topandas v. Radhabai Tirath Das AIR 1933 Sindh 368; Peoples Bank v. Secy. of State AIR 1935 Sindh 232 and Kunwar Ragho Prasad v. Lala Mewa Lal 14 Bom LR 212 at 219 ref.

Raja Muhammad Iqbal, Advocate Supreme Court for Petitioner.

Qadir Bux Umrani, Official Assignee for Respondent No.2.

A.I. Chundrigar, Advocate Supreme Court for Respondents Nos.3 and 4.

Date of hearing: 11th June, 2015.

2015 C L D 1377

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, Iqbal Hameedur Rehman and Maqbool Baqar JJ

Messrs SUMMIT BANK LIMITED through Manager---Appellant

versus

Messrs QASIM AND CO. through Muhammad Alam and another---Respondents

Civil Appeal No. 167 of 2005, decided on 7th April, 2015.

(On appeal against the judgment dated 14-12-2004 of the High Court of Balochistan Quetta in R.F.A. No.58 of 1999)

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

----S. 171---Lien/right of banker to set off---Principle---Banker and customer---Even under the law which provided for recovery through coercive process such as land revenue, determination of amount due is an essential pre-requisite---Bank cannot be conferred with judicial powers for determination of amount due against its customer/borrower---Right/power to sell off is available only where amount claimed is due and is certain and determined by competent judicial forum.

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

----S. 50---Decree, satisfaction of---Legal representatives---Extend of liability---Principle---Pecuniary obligation undertaken by deceased promisor would be binding on his legal representatives to the extent of estate of deceased promisor in their hand.

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

----Ss. 7(4) & 9---Contract Act (IX of 1872), S. 171---Civil Procedure Code (V of 1908), S. 50---Suit for recovery of money---Lien/right to set off---Determination---Legal heirs of deceased loanee---Extent of liability---Outstanding finance facility of father of plaintiffs, after his death was adjusted by Bank seeking to right of set off against funds of plaintiffs---Plaintiffs filed suit for recovery of money against Bank which was dismissed by Trial Court but High Court allowed appeal and decreed the suit in favour of plaintiffs---Plea raised by Bank was that Banking Court was proper forum for determination of dispute between the parties---Validity---Neither there was any adjudication of claim of Bank against principal debtor or against deceased, nor it was judicially determined as to whether plaintiffs had inherited any property from deceased---No question of Bank seeking to right to set off the alleged liability and/or seeking any recovery from plaintiffs without adjudication of such aspect of the matter---Neither there was any question pertaining to 'finance' as defined by S. 9, nor the question as to whether plaintiffs were 'customers' in the context of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, involved in the matter and no documents were executed by plaintiffs securing re-payment of alleged liability---Suit for recovery was filed by plaintiffs for the amount that was deducted out of their monies lying in their account, illegally and unauthorized and thus Banking Court had no jurisdiction in the matter as the same was constituted to adjudicate upon the matter pertaining to 'finance' between bank and its customer---No jurisdictional error having been found in the matter, Supreme Court declined interference in the judgment passed by High Court---Appeal was dismissed.

Punjab National Bank Ltd. v. Arura Mal Durga Das AIR 1960 Punjab 632 ref.

Hadi Shakeel Ahmed, Advocate Supreme Court for Appellant.

Syed Ayaz Zahoor, Advocate Supreme Court for Respondents.

Date of hearing: 7th April, 2015.

2015 C L D 1482

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, Sh. Azmat Saeed and Mushir Alam, JJ

LUCKY CEMENT LTD.---Appellant

versus

COMMISSIONER INCOME TAX, ZONE COMPANIES, CIRCLE-5, PESHAWAR---Respondent

Civil Appeals Nos. 150, 151 and 152 of 2006, decided on 10th July, 2015.

(Against the judgment dated 22-11-2005 of the Peshawar High Court, Peshawar passed in Income Tax Reference Nos.117, 118 and 119 of 2003)

Per Mian Saqib Nisar, J.

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

----Ss. 15 to 28---Constitution of a company---Scope---Memorandum of Association---Articles of Association---Memorandum of Association and Articles of Association when read as a whole were the constitution of the company---Memorandum of Association provided and prescribed the object(s) and the purpose(s) for which the company had been established and constituted, with specific reference to the business and the avocations which it could conduct, carry on and undertake---While the Articles of Association were the organizational and governance rules of the company which primarily dealt with the management affairs.

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

----Ss. 15 to 25---Company---Memorandum of Association---Scope---Anything done by a company which was beyond the scope of its Memorandum of Association was ultra vires and thus could not be given any legal sanctity--- Company could not engage in a business which was not fairly covered by any of its independent objects, or such objects which were ancillary and incidental to those for which a company had been created and its Memorandum of Association was duly recognized and accepted by the regulatory bodies meant for the incorporation of a company and oversight thereof.

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

----Ss. 15 to 25---Company---Memorandum of Association---Main object of a company, interpretation of---Liberal interpretation by the court---Company may incorporate in its Memorandum of Association, besides the main object of the company and its ancillary purposes, certain other objects as well which may be independent of its main object/business---Company thus may have a primary object and purpose, but still there may also be several other objects mentioned in the objects clauses, and after proper construction of such objects, by resorting to the relevant rules of interpretation, it should be considered whether those were ancillary to the main object of the company or could be held to be independent of each other---Memorandum of Association of a company should be read and construed liberally and be given a wide meaning through literal interpretation of the clause---Since objects were considered to be the permissive activities which a company could undertake in order to do its business, the same should not be given a restrictive meaning---In any case, rigid construction of the Memorandum of Association, unless and until inevitable and insurmountable, must be avoided.

(d) Interpretation of statues---

----Prohibitory clause in a statute, interpretation of---Scope---Under the law of interpretation of statutes, a prohibitory clause, couched in the negative language should be construed and applied strictly---Court should assess and ascertain as to what was the real intent and object behind such a clause, what mischief it had to suppress, circumvent and curb--- However, such prohibitory clause should not be construed and interpreted to render any other specific provision/clause as nugatory, rather for all intents and purposes the rules of harmonious interpretation should be adhered and resorted to and all possible efforts should be made to save each and every provision of the statute.

Per Sh. Azmat Saeed and Mushir Alam, JJ. dissenting with Mian Saqib Nisar, J. [Majority view]

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

----Ss. 15 to 25---Income Tax Ordinance (XXXI of 1979) [since repealed], Ss. 30(2)(b), 15(d), (f), 22 & 30---Public limited company---'Income from business' or 'income from other sources', determination of---Memorandum of Association---Objects of a company, interpretation of---Public Limited Company (before commencing its business activities) using its surplus money/reserves to invest in various profitable schemes/banks---Question as to whether income/interest generated from such schemes/banks amounted to 'income from business' or 'income from other sources'---Main and primary object of the appellant-public limited company, in the present case, was to set up and run a cement factory---When the cement plant was under construction, and the business of the company had not yet commenced, the company used money lying in its reserves to invest in certain profitable schemes/banks through fund management arrangements---Company earned income/interest through the said schemes/banks---Assessing Officer (Deputy Commissioner, Income Tax) assessed such income/interest so received by the company as 'income from other sources' under S. 30(2)(b) of the Income Tax Ordinance, 1979 [since repealed]---Appellate Tribunal upheld the decision of the Assessing Officer---Contention of company was that though the primary object and purpose of the company was to establish a cement factory, however since the Memorandum of Association of the company permitted investments to be made for the purposes of its (company's) business to generate income, therefore any income or interest earned and received through such investments should be taxed as 'income from business', as opposed to 'income from other sources'---Validity---[Per Sh. Azmat Saeed, J] Main object of the company in the present case as mentioned in its Memorandum of Association was to install, establish and run a cement manufacturing plant---One of the clauses mentioned in the Memorandum of Association provided that company's object and purpose was also "to invest or otherwise deal with the money of the company in such manner as may from time to time be determined"---However a prohibitory clause was also mentioned in the Memorandum of Association which stated that "notwithstanding anything contained in the …. object clauses of …. Memorandum of Association, nothing [t]herein shall be construed as empowering the Company to undertake or indulge in the business of banking, finance, investment, leasing or insurance, directly or indirectly or any unlawful operations"---Said prohibitory clause stated in unequivocal terms that in spite of anything contained in any of the object clauses in the Memorandum of Association, nothing therein shall continue to empower the company to undertake or indulge in the business of inter alia investment---Such was the clear and unambiguous import and meaning of said prohibitory clause---Company, in the present case, could, thus, invest its money but such a transaction could not be deemed to be business of the company---Consequently, the income derived from such investment could not qualify as income from business and therefore must fall in the category of "income from other sources" in terms of S. 30(2)(b) of the Income Tax Ordinance, 1979 [since repealed]---[Per Mushir Alam, J] During the period or course of setting up of a factory or plant by the company, activity of investing surplus funds of the company and generating any sum, return or interest on such investment, could not be considered as "income from business" under S. 15(d) of the Income Tax Ordinance, 1979 [since repealed]---Company claimed that its surplus funds were employed in a proactive manner in order to generate additional fund by way of portfolio, fund and cash management venture---Such activity was carried out during the period when cement plant/factory was under construction, therefore, the company , could not be said to be carrying on any business at that point of time within the contemplation of S.22 of the Income Tax Ordinance, 1979 [since repealed]---In such circumstances the Appellate Tribunal was right in holding that such income/interest yielded from the investment of the surplus funds of the company fell under "income from other sources" i.e. S. 15(f) of the Income Tax Ordinance, 1979 [since repealed]---Such income was rightly assessed as 'income from other sources" under S. 30(2)(b) of the Income Tax Ordinance, 1979 [since repealed]---[Per Mian Saqib Nisar, J] [Minority view] Primary and main object of the company, in the present case, was to install, establish and run a cement manufacturing plant---Such object, was, however not the only object of the company, rather there were numerous other ventures which were permissible under the objects clause of the company (mentioned in the Memorandum of Association)---Some objects clauses mentioned in the Memorandum of Association were ancillary, but some were vividly and undoubtedly independent---One such independent object clause mentioned in the Memorandum of Association was that the company was empowered to, and one of its purposes and objects was "to invest or otherwise deal with the money of the company in such manner as may from time to time be determined"---Said independent object clause made it clear that investment of the money of the company, surplus or otherwise, for the purpose of earning income, would be within the pail of permissible business activities detailed in the Memorandum of Association---Memorandum of Association of the company in the present case contained a prohibitory clause too which provided that "notwithstanding anything contained in the …. object clauses of …. Memorandum of Association, nothing [t]herein shall be construed as empowering the Company to undertake or indulge in the business of banking, finance, investment, leasing or insurance, directly or indirectly or any unlawful operations"---Said prohibitory clause did not prohibit the company from making any investment of its money and carrying on any activity having no nexus to its main object for generating income--- Said prohibitory clause had been seemingly added purposely in the Memorandum of Association, as an extra precaution to eliminate any doubt that the company while misinterpreting any of its object clause might not undertake and indulge into such business which was expressly covered and fell within the prohibitory domain, thereof; but where business of the company was covered expressly by one or more than one of its lawful objects, and did not clearly and unambiguously fall within the prohibitory clause, it would be beyond the pail of the said prohibitory clause---Section 30(2)(b) of the Income Tax Ordinance, 1979 [since repealed] which dealt with 'income from other sources' was only applicable where the investment of money by a company had not been made as part of its business activities---Where money had been invested by a company in its business, as in the present case, and profit was generated on such an investment, that profit shall, for all intents and purposes, be considered to be the profit earned from business and not from other sources---In the present case, amount of profit earned by the company from the investment made in the various schemes/banks was pursuant to its business activities and, therefore, such profit could not be termed to have been accrued from any other source so as to attract the application of S. 30(2)(b) of the Income Tax Ordinance, 1979 [since repealed] i.e. income from other sources---Appeal was dismissed accordingly.

The Commissioner of Income Tax, East Pakistan, Dacca v. The Liquidator, Khulna-Bagerhat Railway Company Ltd., Ahmadabad PLD 1962 SC 128 distinguished.

Tuticorin Alkali Chemicals and Fertilizers Ltd. v. Commissioner of Income Tax 1997 Supp. (1) SCR 528 = 1998 PTD 900; Commissioner of Income Tax v. Seshasayee Paper and Board Ltd. 156 ITR 543; Genertech Pakistan Ltd. v. Income Tax Appellate Tribunal of Pakistan 2004 SCMR 1319; CIT, Karachi v. Gelcaps (Pvt.) Ltd. 2009 PTD 331 and UCH Power (Pvt.) Ltd. v. Income Tax Appellate Tribunal 2010 SCMR 1236 ref.

(f) Words and phrases---

----"Notwithstanding"---Meaning.

Black's Law Dictionary Ninth Edition ref.

Khalid Anwar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Appellant.

Ghulam Shoaib Jally, Advocate Supreme Court and Raja Abdul Ghafoor, Advocate-on-Record for Respondent.

Date of hearing: 31st March, 2015.