CLD 2017 Judgments

2017 C L D 47

[Competition Commission of Pakistan]

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

UREA MANUFACTURERS: In the matter of

File No.01/UREA/C&TA/CCP of 2010, decided on 29th March, 2013.

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

----Ss. 2(1)(q), 3(3)(a), 30 & 37---Commission's (General Enforcement) Regulations, 2007, Regln.27---Abuse of dominant position---Urea Manufacturing Companies, who were engaged in the manufacturing and sale of fertilizers, were 'undertakings' as defined in clause (q) of subsection (1) of S. 2 of Competition Act, 2010---Competition Commission took notice of the increase in price of 50 Kg urea bags by the urea manufacturing units---Such unprecedented increase in the price of urea appeared to be anti-competitive and Competition Commission appointed an Enquiry Team---Enquiry Committee, was assigned the task to investigate the reasons behind the price hike, and to submit before the Commission; whether the price hike was a result of anti-competitive behaviour adopted by relevant undertakings individually/collectively in violation of provisions of Competition Act, 2010---Commission, also hired an independent consultant, who was given the task to carry out a comprehensive analysis of the prevailing price of urea and determine the rationale, reasonability, or otherwise of the price increase---Enquiry report was submitted before the Commission and with recommendation of the enquiry report, show-cause notices were issued to each of the undertakings---After taking into account factors, namely the effect of alleged gas curtailment, input costs, subsidies, profitability analysis, undertakings appeared to have indulged in the practice of unreasonable price increase---Undertakings being dominant in the relevant market, appeared to have abused their dominant position, both individually and collectively by carrying out unreasonable price increase in urea without any justification, which stood to prima facie violate clause (a) of subsection (3) of S.3 and subsection (2)(1) of said S.3 of the Act---Undertakings replied the show-cause notice and detailed grounds to justify increase in price of urea---'Farmers Associates Pakistan', during said proceedings requested the Commission to allow it to file an intervener application in accordance with Regln.27 of the Commission's (General Enforcement) Regulations, 2007, which request was granted by the Commission and undertaking objected to said intervening application---"Farmers Associates Pakistan" in its written submission, apprised the Commission that it represented a broad cross-section of farmers approximately 1900 hailing from all over Pakistan and that its membership was extended to them without regard to size of members, land holdings, it, in circumstances represented the interests of the farmers of Pakistan in general and its sizable and diverse members' community in particular---Out of seven undertakings, three raised objection that Farmers Associates Pakistan could not be allowed to join the proceedings as an intervener, whereas other parties/undertakings did not press that issue---First issue which arose and needed to be addressed for disposal of the matter was "whether the intervener's application could be allowed in the proceedings under S.30 of the Competition Act, 2010"---Intervention was a method by which a person or undertaking, not involved in the litigation as claimant or defendant, could make representation and submit information/evidence or expertise and could make an effective contribution to the decision-making process---Definition of 'Intervener', which had been laid out in Regln. No.2(1)(i) of Commission's (General Enforcement) Regulations, 2007, clearly spelled out that an intervener, could be either a person or persons or an undertaking to be allowed intervention in any proceedings under said Enforcement Regulations---No prerequisite of being an undertaking to be allowed to join the proceedings as an intervener existed---'Farmers Associates Pakistan'/intervener, being a company limited by guarantee, was a legal person---Major objection raised by undertakings was that "Farmers Associates Pakistan"; did not meet the criteria of being sufficient interest set out under Regln.27 of the Commission's (General Enforcement) Regulations, 2007---Objection was misconceived as said Regulations, had clearly laid out that the Commission could allow any person to intervene in any proceedings as per its own discretion, as long as the intervener was able to satisfy the Commission that it had sufficient interest in the proceedings---Main objective of 'Farmers Association of Pakistan', was to help the socially, economically and technologically backward areas of the agrarian Sector of Pakistan to catch up with modern times---Mandate of said Association was to advocate the views of the farmers before the Government to provide technical advice to the farmers and to offer services to promote agriculture---Primary object of said Association was the advancement of agriculture, which ultimately would translate the welfare of the farmers---Urea was a major input in agriculture and its price had far reaching impact on the utility that a farmer would draw from cultivation---"Farmers Association of Pakistan", representing a large and diverse group of farmers, had sufficient interest in the outcome of proceedings---Objection of parties that "Farmers Association of Pakistan" did not meet the criteria of intervener, was baseless---Objection that "Farmers Association of Pakistan's" intervention was not timely, was misconceived as law did not provide any bar in that regard---No reason lay that why Farmers Association of Pakistan should not be allowed to become an intervener in the case---Objection raised by undertakings regarding the admissibility of intervener, was not tenable---Second issue arose in the case was with regard to "Relevant Market"---Relevant market was defined under S.2(1)(k) of the Competition Act, 2010---Objection of the undertakings was that, Relevant Market should not just constitute locally manufactured urea as determined in enquiry report, but it should also take the imports by Government of Pakistan into account---Government of Pakistan's role, was not that of Commercial entity competing with the manufacturers with the aim and purpose of making profits in the market---Unlike the manufacturers, Government was actually making urea available in its own cost, rather than making any money out of it, in doing so Government of Pakistan, had no intention of gaining greater market share at the expense of urea manufacturers and was hesitant while importing urea as it offered subsidy on its distribution to make it available at affordable price in terms of Government of Pakistan's fertilizer Policy---Government of Pakistan, in fact only would import urea to fulfil a shortage in the market---Government of Pakistan as an importer of urea, could not be considered as actual importer of urea manufacturing units in Pakistan, it would be incorrect to include imported urea in the definition of "relevant market"---Government was offering or supplying urea in exercise of its public power and not carrying out that activity as a commercial activity, urea being on the list of essential commodities ensuring its availability, was part of the essential State function---Import of urea by the Government of Pakistan and its supply in the market, was not deemed to involve a supply of goods and services---Import of urea by Government of Pakistan, could not be considered as part of relevant market---Other issues, were relating to individual and collective dominance and abuse of dominant position---Section 2(1)(e) of Competition Act, 2010, defined individual and collective dominance---If several undertakings together could act to an appreciable extent independent of their competitive, consumers and suppliers they would be deemed collective dominant---Examination report, relied on the earlier finding of the Commission that all the players in the urea market as dominant owing to the captive nature of the market---Urea market was of captive nature and all the undertakings were dominant---Even undertakings having smaller market shares, were able to sustain their business irrespective of increase of cost or other factors primarily because of the captive nature of urea fertilizer maker---Independent of the presumption test based on market share under S.2(1)(e) of the Competition Act, 2010, even deeming test factors, were satisfied in undertakings' dominant position in the relevant market---Before the abuse of dominant position was established, dominance was a pre-requisite for the alleged contravention under S.3 of the Competition Act, 2010---Limiting production or sales, independently would qualify as anti-competitive practices---In the present case, absence of any competitive pressure in the relevant market, undertaking was able to raise its price above a level that competition market would have allowed and that could not be termed as just or fair---Competition Commission held that the undertakings deemed to have abused dominant position in the relevant period by charging unreasonable price in the relevant market in violation of S.3 of Competition Act, 2010---Urea being the essential commodity and significant for Pakistan's economy, subject price increase of urea, was by all means astronomical, unfair and unreasonable---Harm done to the consumer was far more than what could be translated into deterrence through such imports---Competition Commission imposed a penalty of 10% of each of the undertakings turnover, in 2011 i.e. Rupees 3.14 billion on one undertaking and 5.5 billion to other undertaking, was imposed as penalty, for abusing dominant position in violation of S.3(3)(a) of the Competition Act, 2010.

D.G Khan Cement Companies Limited v. Monopoly Control Authority ("MCA") PLD 2007 Lah. 1; PLD 1975 SC 463; 1998 CLC 678; 1996 SCMR 781; PLD 2009 Lah. 57; 2010 CLC 273; Ardeshir Cowasjee v. Karachi Building Control Authority 1995 SCMR 2883; Akzo Nobel Chemicals Ltd. and Akcros Chemicals Ltd. v. Commission of the European Communities Case (T-253/03); Smuck v. Hobson U.S. Court of Appeals, District of Columbia Circuit, 1969. 132 US App. DC 372, 408 F, 2d 175; Hobson v. Hansen; Khadim Hussain and another v. The Additional District Judge, Faisalabad and others PLD 1990 SC 632 and Younus and 9 others v. Pakistan State Oil Co. Ltd. PLD 1988 Kar. 338 ref.

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

----S. 41---Vires of Competition Act, 2010---Constitutional objections in appeal before Appellate Bench of that commission---Validity---Competition Commission observed that it was not for the Commission to address the objections raised as to the constitutional vires of the Competition Act, 2010---Commission must proceed on assumption that the law was validly enacted unless a court of competent jurisdiction would determine otherwise.

Syed Shahid Hussain, Mohammad Munir Malik, GM Marketing, M. Inam ur Rehman, GM Eng., Mohammad Salim Khan, Legal Advisor, Hasnain Ibrahim Kazmi, Advocate Supreme Court and Hafiz Naeem, Advocate on behalf of Messrs Fauji Fertilizer Company Ltd.

Barrister Shahid Raza, Syed Hassan Ali Raza, Advocate, Shakeel Ahmed, Iqbal Hashmi, Advocate, Syed Aamir Ahsan, Brig. Shaukat Yaqub Malik and M. Javed Akhtar, Manager (Planning and Budgeting) on behalf of Messrs Fauji Fertilizer Bin Qasim Ltd.

Andaleeb Alvi on behalf of Messrs Engro Chemicals Ltd.

Salman K. Chima, Ibrahim Chima and Shazil Ibrahim, Advocate on behalf of Pak Arab Fertilizers Ltd.

Salman K. Chima, Ibrahim Chima and Shazil Ibrahim, Advocate on behalf of Fatima Fertilizer Ltd.

Ms. Zainab Qureshi, Raja Muhammad Akram and Co., Ms. Amna Hussain, Taneem Haider, GM Finance and Barrister Haroon Dogar on behalf of Messrs Agritech Ltd.

Uzair Karamat Bhindari, Adil Tirmizi and S.M. Asghar on behalf of Messrs DH Fertilizers Ltd.

Waqqas Ahmad Mir, Advocate on behalf of Messrs Farmer Associates (Guarantee) Ltd.

2017 C L D 189

[Competition Commission of Pakistan]

Before Ms. Vaddiya Khalil, Chairperson, Dr. Shahzad Ansar and Ikram Ul Haque Qureshi, Members

MESSRS SHAFIQUE AND SONS and 2 others: In the matter of

File No.24(10)/Comp-Atlas Honda/OFT/CCP/2013, decided on 30th June, 2016.

Competition Act (XIX of 2010)---

----Ss. 10, 30 & 37---Deceptive marketing practices---Complainant, a public listed company, filed complaint against three undertakings to the effect that said undertakings, had resorted to unauthorized and fraudulent use of the complainant's distinctive logo and registered trade mark on their products; so as to mislead the consumers as to the origin of the products; that such conduct of the said undertakings was capable of causing harm to the business interests and goodwill of the complainant and was violation of S.10 of Competition Act, 2010---Complainant had alleged that undertakings copied its registered logo in a way that motorcycles manufactured by the complainant and those manufactured by the undertakings were indistinguishable---Enquiry in terms of S.37(2) of the Competition Act, 2010 was conducted, which was concluded; based on the prima facie observations of the enquiry report and the recommendations contained therein, the Commission initiated proceedings under S.30 of the Competition Act, 2010 against the undertakings---Show-cause notices were issued to the undertakings and they were required to respond in writing within 14 days and appear before the Commission---Undertakings submitted their written replies to the complainant and show-cause notices wherein they objected to various observations and findings as contained in the enquiry report---Two of the undertakings, to show their bona fide intent, had stopped using the objected logos despite those were entirely different from the device of the complainant---Said two undertakings, in view of the adoptive of new logos and their existing financial situation, had prayed for leniency from the Commission---Other undertaking, had replied that it was not engaged in any deceptive marketing practices as alleged by the complainant, and was conducting its business in a bona fide manner without violation of any law---Two issues were identified by the Commission; (a) "whether the undertakings had resorted to the unauthorized and fraudulent use of the complainant's distinctive and trade mark device within the meaning of scope of S.10(2)(b) of the said Act; and "whether the conduct of the undertakings amounted to the distribution of false or misleading information that was capable of harming the business interests of the complainant within the meaning and scope of S.10(2)(a) the Competition Act, 2010"---Commission concluded that there was no significant likelihood of deception---One out of the three undertakings, could not be held to have resorted to the unauthorized and fraudulent use of the complainant's device within the meaning of S.10(2)(d) of the Competition Act, 2010---Even otherwise the said undertaking had provided its commitment of refraining from using objected logo in future, which it had replaced with new logo---Commission found new logo of said enterprise to be satisfactory---Complainant's allegations against the often one, related to a logo which the complainant no longer employed in its marketing practices in Pakistan as of 1988---From the perspective of unfair competition or a potential distortion of competition in the relevant market of the goods, there could be no positive, conclusive finding against the said enterprise---Commission observed that complainant could well had a case under trademark laws for infringement of its trademark logo---In case of the third undertaking, when the two logos were compared in the presence of the distinctive features and the adjoining brand names of the parties, Commission found no conclusive deceptive on part of the undertaking---Said undertaking, in circumstances, could not be held to have resorted to the fraudulent use of the complainant's device within the meaning of S.10(2)(d) of the Competition Act, 2010; however as a measure of caution the third respondent was strongly advised by the Commission to use its brand name along with the existing logo on all its products and promotional material in order to avoid any future likelihood of deception---Commission further found that the conduct of the undertakings and their use of the objected logos, did not amount to the distribution of false or misleading information, which was capable of harming the business interest of the complainant under S.10(2)(a) of the Competition Act, 2010---Commission did not find all the three undertakings to have engaged in the distribution of any information that had a false or misleading character---Consequently, question of any potential capability of harm being caused to the business interests of the complainant, was not relevant.

2010 CLD 1840 and 2013 CLD 1014 rel.

Umair Mukhtar, Company Secretary, Razi-ur-Rehman, Director Corporate Affairs, Ali Kabir Shah and Ms. Faridah Hemani on behalf of Messrs Atlas Honda Limited.

Sardar Azeem Afrasiyab on behalf of Messrs Shafique and Sons and Pak Hero Industries (Pvt.) Limited.

Rasheed Ahmed Khan and Noman Amin Farooqi on behalf of Messrs United Motors Company.

2017 C L D 229

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Shahzad Ansar and Ikram Ul Haque Qureshi, Members

Messrs SPI INSURANCE COMPANY LIMITED: In the matter of

File No.2(32)/CompCell/CCP/2015, decided on 20th April, 2016.

Competition Act (XIX of 2010)---

----Ss. 2(1)(q), 4(1)(2)(a), 37 & 38---Pakistan Engineering Council Act (V of 1976), S. 8---Pakistan Engineering Council as Association of undertakings--- Status--- Preventing, restricting or reducing competition---Primary issues that required determination in the case were (a) "whether Pakistan Engineering Council, being a statutory regulator, was precluded from the definition of "Association of undertakings"; and (b) whether the impugned provisions of the Bidding Documents, constituted a decision by an association of undertakings with the object or effect of preventing, restricting or reducing competition---Pakistan Engineering Council, was a statutory body, legislated into existence under Pakistan Engineering Council Act, 1976 to regulate the engineering profession in Pakistan---Council was a body constituted of professional engineers, who were involved in a similar trade i.e. the provision of engineering service and was an "undertaking" in terms of S. 2(1)(q) of the Competition Act, 2010---Section 8 of Pakistan Engineering Council Act, 1976, had provided under the heading of "Functions of the Council" that Pakistan Engineering Council, could establish standards for engineering contracts, cost and services---Said provisions allowed Pakistan Engineering Council to formulate the norms to be followed, when engineering services were being procured---Bidding Documents for example, were one manifestation of that statutory intention---Pakistan Engineering Council Act, 1976, in no way permitted Pakistan Engineering Council to determine as to which Insurance Companies could provide bid and performance securities under specific contracts---By specifying that only 'AA' rated insurance companies could provide bid and performance securities; Pakistan Engineering Council did not "Set a standard" as it had claimed---Pakistan Engineering Council under the relevant law had acted in its capacity as the regulator of profession, and not in pursuance of public law powers prescribed by statute---Section 4 of Competition Act, 2010, had provided 'prohibited agreements'; first step in deciding, whether or not Pakistan Engineering Council, was in violation of said provision, was to determine, if it had taken a decision---Pakistan Engineering Council had contended that the "Bidding Document", inclusive of the impugned provisions, were formulated by Pakistan Engineering Council Act, 1976 and Byelaws Committee and approved by the Governing Body, therefore, impugned provisions had, in circumstances, been validly been made with the participation and concurrence of members of Council and constituted decision of Council---Enquiry report had stated that there were currently forty-one non-life insurance companies registered with Securities and Exchange Commission, out of which five had credit rating of 'AA', it appeared that limiting of bid and performance securities to 'AA' rated insurance companies, foreclosed the market to thirty-seven insurance companies, it was, therefore, apparent that, not only was the rating requirement unfounded and baseless, but that was also restrictive trading conditions which had the object of preventing, reducing and restraining competition in the relevant market in violation of Ss. 4(1) & (2)(a) of the Competition Act, 2010---Pakistan Engineering Council, in circumstances, was found to violating S.4 of the Competition Act, 2010---Competition Commission held that impugned provisions were void in terms of S. 4(5) of the Competition Act, 2010---Competition Commission, being empowered to impose a fine under S. 38 of the Competition Act, 2010, and to issue appropriate remedial orders under S. 31 of the Act in case of violation of S. 4 of the Act, Pakistan Engineering Council was directed to pay a penalty of Rs.15,000,000 for each of the two violations for a total of Rs.30,000,000; and amend the impugned provisions to remove the 'AA' rating requirement and submit a compliance report to the Registrar of the Commission within 30 days and refrain from similar practice in future.

Wouters v. Algemene Raad van de Nederlandse Orde can Advocaten available at: http://curia.europa.eu/juris/liste.isf?&num=C-309/99 ref.

Farooq Qasim, Joint Director, Hussain Raza Khan, Manager Coordination and Aslam Ayan, Advocate on behalf of Messrs SPI Insurance Limited.

Engr. M. Mazhar-ul-Islam, Engr. Khadim Hussain Bhatti, Registrar PEC, Engr. M. Musaib Qureshi, Additional Registrar PEC, Sh. Rizwan Nawaz, Advocate, Engr. Abdul Rauf Sheikh, Abdul Jabbar, Executive and Arshad Dad on behalf of Messrs Pakistan Engineering Council.

2017 C L D 354

[Competition Commission of Pakistan]

Before Dr. Joseph Wilson, Chairman and Shahzad Ansar, Member

MESSRS INDUS MOTOR COMPANY LIMITED: In the matter of

F. No. 1(45)/IM/C&TA/CCP/2012, decided on 8th November, 2013.

Competition Act (XIX of 2010)---

----Ss. 2(1)(q), 3(3)(a), 30 & 37---Abuse of dominant position---Terms and conditions stipulated in 'Provisional Booking Order' issued by seller company to its potential buyers for purchase of new car, appeared to create a significant imbalance in the parties' rights in favour of the Seller Motors Company and tantamount to unfair terms as envisaged in S.3(3)(c) of Competition Act, 2010---Enquiry Committee, in its report noted that, seller company, held a substantial market share and enjoyed economic power in the 1300 CC 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---Seller company's buyer was apparently in a weaker bargaining position---Said 'Provisional Booking Order' gave seller company the sole right to; charge the price; design/specification; delivery scheme without any notice to the buyer; a conclusive right to interpret the terms of the contract, and; to decide the dispute between a buyer and seller company---Such terms created a significant imbalance to the disadvantage of buyer's rights and obligations arising under the contract---Terms of said Provisional Booking order prima facie, being unfair to the buyers, were in contravention of S.3(3)(a) of the Competition Act, 2010---Show-cause notice was issued to the seller company---Seller company filed a written response explaining its position and requested to allow opportunity to revive the draft of Provisional Booking Order to rectify the concerns raised by the Commission---Seller company submitted the final revised draft of 'provisional Booking order'---Initially, seller company had sole and absolute discretion to accept or reject the request of cancellation by the buyer; it was at the entire discretion of the seller company and the buyer would be bound to take delivery of the vehicle on full payment of the same---Seller company had rectified that imbalance, not only by relinquishing its unilateral right to reject the request for cancellation by the buyer, but also waiving off any charges in case the application for cancellation was based on an unsatisfactory charge in price or delivery schedule---Such rectification, made by seller company, had put the consumer at an equal footing with regard to aspect of cancellation---Under original Provisional Booking Order, seller company had the sole right to alter some or all terms and conditions of Provisional Booking Order and also the right to interpret them conclusively---Said clause had been completely removed from the revised draft of Provisional Booking Order---Another condition, whereby any dispute between the customer and seller company, was to be conclusively decided by the Managing Director of the company, had been amended to refer such dispute to the arbitrator to resolve and settle matter---Such revision of the terms had given fair and equal right to both the parties---Initially, seller company held the sole right to change the design, construction specification without notice to the buyer---Provisional Booking Order, was revised, which specifically mentioned that seller company, could make minor alterations to the design and construction specification of the vehicle, and would make such alterations in the vehicle as required by any Federal and/or Provincial Legislation---Seller company had sole right to change price of the vehicle without notice to buyer at the time of delivery---Said clause had created uncertainty as to price and buyer was not sure of how much extra amount was to be paid at the time of delivery--- Said lacuna had been removed by explicitly mentioning in the revised draft Provisional Booking Order that revision of price could only be subject to a change, if any in Government levies/taxes and/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 the Competition Act, 2010, in circumstances.

Pervaiz Ghais, Chief Executive Officer, Ms. Anum Fatima Khan, Company Secretary and Yasir Niazi, Resident Director, Islamabad on behalf of Messrs Indus Motor Company Limited.

2017 C L D 789

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Shahzad Ansar and Ikram ul Haque Qureshi, Members

SHOW CAUSE NOTICES ISSUED TO DAIRY COMPANIES FOR DECEPTIVE MARKETING PRACTICES: In the matter of

F. No. 179A/OFT/DAIRYCO/CCP/2015, decided on 18th January, 2017.

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

----Ss. 10, 30 & 37---Deceptive marketing practices---Undertaking which was engaged in the manufacturing, marketing and sale of a range of dairy products, frozen desserts and fruit drinks across Pakistan was alleged to be marketing, 'dairy drinks' or 'dairy liquids', 'tea whitening' as milk or as milk substitutes, while using various proportions of milk extracts/reconstitutes in milk products, which could not be considered, marketed, advertised and sold as milk and/or as milk substitutes---Competition Commission taking suo motu notice, appointed an enquiry Committee to inquire into the matter---Enquiry Committee in its enquiry report, concluded that the undertaking was prima facie engaged in deceptive marketing practices and the Competition Commission could consider initiating proceedings against the undertaking under S.30 of the Competition Act, 2010 for violation of S.10 of the said Act---Undertaking's claim pertaining to its dairy product was ambiguous and confusing---Representing dairy drinks/liquid as milk and its claim that the product was as 'pure/clear as nature' also lacked a reasonable basis as to product's character, method, production process and properties and was in violation of S.10(1)(2)(b) of the Competition Act, 2010---Section 10(2)(c) of Competition Act, 2010, prohibited a false and misleading comparisons of goods or services in the process of advertising---Undertaking filed a commitment before the Competition Commission, that it had removed the comparison with loose milk in its new advertisement/marketing material along with the tagline "Qudrat Sa Shafaf"---Undertaking further submitted that appropriate changes had been made in the website content and it would comply with all directives of the Commission---Said commitment was accepted on the conditions; that undertaking would ensure that all existing and future marketing material, whether printed or in electronic form relating to its Dairy product, would make no comparison of the same with milk; that undertaking would in all its current and future marketing materials relating to its product, would communicate clearly and unambiguously that the product was a dairy drink and not milk; that the undertaking would ensure that existing and future packing of its dairy product would clearly and conspicuously carry the term 'Dairy Drink'; that the undertaking would not display any pictorial illustration in its advertising or marketing material, including the packing of product that it was conceived as "milk by an ordinary consumer; that the undertaking would clearly and conspicuously print an express disclaimer that the product was dairy drink or "milk"---Competition Commission taking lenient view, imposed penalty of Rs.2000,000 (Two Million) on the undertaking, with direction to pay an amount equal to 0.03% of its last turnover for each violation, for a total of Rs.62,292,624 as penalty.

Messrs Reckitt Beneckiser Pakistan Limited: In the matter of 2015 CLD 1864 and Proctor and Gamble Pakistan (Private) Limited: In the matter of 2010 CLD 1696 ref.

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

----Ss. 10, 30 & 37---Deceptive marketing practices---Another undertaking, in the present case, was engaged in the manufacturing, marketing and sale of various dairy products and juices across Pakistan---Said undertaking, subsequently was acquired by another undertaking which was also engaged in the business of manufacturing, marketing and sale of dairy products, juices and beverages across Pakistan---Complaint was made against the undertaking that it was marketing 'dairy drinks' or 'dairy liquid' as milk or as milk substitutes---Competition Commission taking suo motu notice, constituted Enquiry Committee, which submitted report that the undertaking, was prima facie engaged in deceptive marketing practices and that Commission could consider initiating proceedings against it under S.30 of the Competition Act, 2010 for violation of S.10 of the said Act---Enquiry report had revealed that last packing available in the market, did not contain the words 'Dairy Drink'---In absence of such disclosure, it was highly unlikely to ascertain, whether the product was milk or 'Dairy Drink'---Based on prima facie contravention of S. 10(2)(a)(b) of Competition Act, 2010 undertaking was issued the show-cause notice---Last packing available in the market not containing the label "Dairy Drink" to depict the true nature, properties, character and suitability for use of the product, amounted to omission and non-disclosure of material information and was misleading; whether it was 'Dairy Drink' or 'milk'---Term "deceptive marketing practice", had a far wider connotation, as it included written or oral representation or omission of material information in the advertising process---When information material as to the nature and characteristics of the product, were inaccurate or incomplete, it was likely to mislead consumers which could constitute deceptive marketing practices in violation of S.10 of the Competition Act, 2010---Undertaking's failure to disclose and/or omission to label/represent as Dairy Drink, was an affirmative misrepresentation as to the nature, characteristic and intended use of the product which had the potential to create a false or misleading impression on consumer that the product was milk, instead of 'Dairy Drink' or 'Dairy Liquid'---Competition Commission declared that the undertaking's labelling and packaging practices constituted material misrepresentation by the omission of adequate information to the consumer's detriment, and a contravention of S.10(2)(b) of the Competition Act, 2010---Undertaking was directed, to pay Rs.2000,000 (Two Million) as penalty, with directive that any further violation in that regard and deviation from its commitments and the conditions, could attract severe penalties.

American Home Products, 98 F.T.C. (1981) ref.

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

----Ss. 10, 30 & 37---Deceptive marketing practices---Yet another undertaking was engaged in the business of manufacturing, marketing and sale of 'Dairy products, juices and beverage across Pakistan---Complaint was made against the said undertaking that it was marketing 'dairy drink' or 'dairy liquids' as milk or as milk substitutes, while using various proportion of milk extracts/reconstitutes in its products, which could not be considered, marketed, advertised and sold as milk or milk substitutes---Competition Commission taking suo motu notice, constituted Enquiry Committee which after conducting inquiry, submitted enquiry report, according to which, the front side of the packing of the undertaking's product's word 'Qudrat' was printed---Front side of the packing did not mention the word 'milk', 'Dairy Milk' or 'liquid tea whitener'---One side of the packing indicated the words 'U.H.T.', 'liquid tea whitener'---Enquiry report had revealed that in the absence of proper disclosure on the front side of the packing, it was not possible to understand the nature and purpose of the product---Product also contained the picture of pour milk with a tea cup and dissent in a bowl which clearly indicated that product could be used for multi purposes---Undertaking was issued the show-cause notice---Soon after the enquiry commenced, the undertaking submitted that it had stopped its marketing campaign under review and had withdrawn all the materials regarding the marketing campaign under review from the public domain---Undertaking, filed a commitment before the Commission and in terms of said commitment, words "liquid tea whitener", already clearly and conspicuously printed on the front of the new pack and the picture of the dissent had been removed---Undertaking had further committed that it was ready to make further changes as indicated by the Commission---Commission accepted the commitment filed by the undertaking on the conditions; that the undertaking would ensure that all existing and future marketing materials, whether print or electronic, relating to its tea whitener would make no comparison with milk, nor directly or indirectly allude to that comparison; and that the undertaking, would in all its current and future marketing materials, whether print of electronic, relating to its tea whiteners, clearly would communicate, without any doubt or ambiguity that the product was a dairy drink and not milk and that the undertaking would ensure that existing and future packaging of tea whiteners would clearly and conspicuously carry the terms "Tea whiteners" in English and Urdu at the very least on the front and back of the packing--- Undertaking was directed to pay Rs.500,000 (Five lac only) as penalty.

Andaleeb Alvi, VP Legal Affairs, Ahsan Afzal Ahmed, Director Marketing, Faiz Chapra, Manager Legal, Syed Salman Ali, General Manager, Dr. Sarfaraz Ahmed, Manager Regulatory Affairs, Rehan Saeed Khan, GM Corporate Affairs and Imran Ahmed, Director Technical for Messrs Engro Foods Ltd.

Muhammad Imran, Unit Manager Finance, Mujeeb-ul-Haq, Section Manager Taxation and Compliance, Barrister Shahid Raza, Partner and Syed Hassan Ali Raza, Senior Associate for Messrs Fauji Foods Pakistan (formerly Messrs Noon Pakistan Ltd.).

Rafay Azim, Associate for Messrs Orr. Dignam and Co.

Faraz Ahmed, Senior Vice-President Finance and Waqas Qadeer Shaikh, Advocate High Court for Messrs Shakarganj Foods.

2017 C L D 881

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Ikram ul Haque Qureshi, Members

SHOW CAUSE NOTICE ISSUED TO PAKISTAN BAHRIA TOWN (PVT.) LIMITED: In the matter of

F. No. 153/BAHRIA/C&TA/CCP/2016, decided on 27th January, 2017.

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

----S. 3--- Abuse of dominant position--- Competition Commission received an e-mail, highlighting concerns that the residents of a Residential Colony were deprived of any alternate "Cable, Internet and Telephony Services (C.I.T. Services)" provider; that they were forced to subscribe a specific service; and that no other option or substitute was available because the Management of the Colony was not granting "Right of Way" (R.O.W.) to lay down C.I.T. in the Colony---Enquiry Committee concluded that Management of the Colony had exclusive control and dominant position in granting "R.O.W." in the area that its conduct appeared to be violative of S.3(1) read with 3(e), (g) and (h) of the Competition Act, 2010 by applying dissimilar conditions on the other network excluding it to provide its C.I.T. service---Based on the findings of the enquiry report, the Competition Commission issued show-cause notice to the Management of the Colony---One of the main issues involved in the case was; "whether 'Residential Colony' and the specific C.I.T. Operator had been dealt with in accordance with the procedure laid down in Competition Act, 2010"---Held, proceedings were based on an enquiry authorized by the Competition Commission pursuant to S.37(1) of the Competition Act, 2010 and show-cause notice was issued under S.37(2)(b) of the said Act---Commission found it appropriate that there had been no substantive or procedural anomaly during the enquiry stage and during the proceedings---All concerned parties were given ample opportunity of being heard and to present their view both in writing as well as during the conduct of the hearing---Both, the Residential Colony and the C.I.T. Operator had been dealt with in accordance with the procedure laid down in the Competition Act, 2010, in circumstances.

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

----S. 2(1)(K)---Defining and delineating "relevant market"---Object---Objective of defining and delineating the relevant market was to identify the competitive constraints that undertakings might face by identifying actual or potential competitors and preventing them from behaving independently by effective competitive pressure---In view of the competitive dynamics of a particular area, it could narrow down the relevant market in the circumstances of the case and for such purpose, the Competition Commission enquired into the most immediate disciplinary forces imposed on the consumers in terms of demand side substitutability and on the suppliers of a particular goods or services.

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

----S. 2(1)(e)---"Dominant position"---Definition---Allegation of abuse of dominant position by Management of a Residential Colony by depriving the residents of alternate C.I.T. Cable Operator---Definition of "dominant position" of an undertaking as was envisaged under S.2(1)(e) of the Competition Act, 2010, stipulated to identify the relevant market with reference to the relevant product market and relevant geographic market to assess the dominant position of the undertaking---Management of the Residential Colony, had exclusive right to administer the Colony including a grant of "R.O.W." for provision of "C.I.T." services and it had 100% of market share in the relevant market---Besides, the conduct of Management of the Colony inter alia refusal to grant 'R.O.W.' for provisions of 'C.I.T' services to competitors suggested that it had the ability to behave to an appreciation extent, or to any extent, whatsoever, independently of the customers or suppliers, including the resident of the Colony and alternate service provider in the relevant market---Competition Commission, concurred with the determination of dominant position adopted in the enquiry report, both terms of the qualitative and quantitative test---Management of Residential Colony could behave apparently independent of its competitors, customers, consumers and suppliers.

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

----Ss. 2(1)(e) & 3---Dominant position---Allegation of abuse of dominant position by Management of a Residential Colony by depriving the residents of alternate C.I.T. Cable Operator---Preventing, restricting, reducing or distorting competition in the relevant market---Effect---When a dominant undertaking that owned and/or controlled itself uses and had the ability to grant the right to use an essential facility i.e. a facility or an infrastructure without access to which other undertaking could not provide competing services to the end, consumers, refused competitors to access such facility or granted access to competitors only on terms less favourable than those what it gave to others, it placed the undertaking at a competitive disadvantage, which were exclusionary practices and strictly prohibited under S.3(1) read with Ss.3(3)(e) and 3(3)(h) of the Competition Act, 2010---Proprietary rights arising from a utility corridor serving public purpose, whether owned and/or managed by the municipality or a private body, were essentially public utility corridors---Conduct of the Management of Residential Colony was adversely affecting competition in the provision of 'C.I.T.' services within the relevant market i.e. the Residential Colony, had also failed to provide any rational, commercial or objective justification in terms of efficiency gains for its exclusionary and anti-competitive conduct---Such was discoursing the investors to the consumer's detriment and proliferation of 'C.I.T.' services, which in terms was affecting the national economy as well competition inter se the service providers, which was actionable under the Competition Act, 2010---Competition Commission held that the Management of the Residential Colony had abused its dominant position in the relevant market and imposed on the Management a penalty of Rs.2000,000 (Two million rupees)---Competition Commission refrained from imposing higher penalties which ordinarily would have been appropriate considering the impact of exclusionary practices in contravention of S.3 of the Competition Act, 2010 of the act by the Management.

2016 CLD 1688; PLD 2007 Lah. 1; PLD 1975 SC 397; Oberoi Cars Private Limited, New Dehli v. Imperial Housing Ventures Private Limited, Gurgaon (2016) Indlaw CCI 48 and Gajinder Singh Kohli v. Genius Propbuild Private Limited (2016) Indlaw CCI 35 ref.

Amjad Ali, Manager (Services) North and Aftab Ahmed Butt for Bahria Town (Pvt.) Limited.

Sardar Ejaz Ishaq Khan, Advocate Supreme Court and Muhammad Faisal Khan for Messrs Nayatel (Pvt.) Limited.

Ghulam Mustafa, GM Legal, Ch. Badar, Assistant Manager, Legal, Corporate and Commercial Affairs, Amir Shafique, GM (Regulatory Affairs) and Aziz-ur-Rehman, Senior GM (Legal) for Pakistan Telecommunications Company Limited.

Azid Nafeez, Advocate Supreme Court and Gulalay Zeb, Associate for Hassan Kannain Nafeez.

2017 C L D 932

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Shahzad Ansar and Ikram ul Haque Qureshi, Members

SHOW CAUSE NOTICE ISSUED TO PAKISTAN STATE OIL COMPANY LTD. FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 170/OFT/PSO/CCP/2013, decided on 29th November, 2016.

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

----Ss. 10, 28, 30, 33 & 37---Deceptive marketing practices---Company/undertaking, was the largest petroleum distribution and marketing company in Pakistan with petroleum products---Complaint was filed against said undertaking that it was engaged in 'deceptive marketing practices' by distributing false and misleading information to consumers and that distribution of such information was capable of harming the business interests of competing undertakings in violation of S.10 of Competition Act, 2010---Enquiry Committee constituted by the Competition Commission reported that prima facie, the undertaking had been engaged in "deceptive marketing practices" in violation of S.10 of the Competition Act, 2010---Issue for determination was as to "whether the enquiry conducted in the matter and the show-cause notice issued to the undertaking, were in violation of Competition Act, 2010 and principles of natural justice"---Held, proceedings in the case were initiated under S.30 of the Competition Act, 2010---Opportunity of hearing was provided to the undertaking through its authorized representative and material in support of contentions was examined by the Commission---Issuance of show-cause notice to the undertaking was in conformance with the principles of natural justice and fairness---Show-cause notice and the subsequent proceedings, had provided the undertaking ample opportunity to present its case, to adduce evidence and file rebuttals, which they had availed to the fullest---No violation of the Act and the principles of natural justice were violated in the procedure adopted by the Enquiry Officer in circumstances.

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

----S. 10---"Deceptive marketing practices"---Scope--- Company/ undertaking, was the largest petroleum distribution and marketing company in Pakistan with petroleum products---Complaint was filed against said undertaking that it was engaged in 'deceptive marketing practices' by distributing false and misleading information to consumers and that distribution of such information was capable of harming the business interests of competing undertakings in violation of S.10 of Competition Act, 2010---Enquiry Committee constituted by the Competition Commission, reported that prima facie, the undertaking had been engaged in "deceptive marketing practices" in violation of S.10 of the Competition Act, 2010---Question for determination was as to "whether advertisement and marketing campaign of the undertaking relating to its products containing additives constituted deceptive marketing practices which was in violation of S.10 of the Competition Act, 2010"---Held, thorough and vigorous enquiry was carried out by the Enquiry Officer and the enquiry report was well-balanced and well-directed towards the facts of the case, fulfilling the requirement of cogent reasons and sufficient evidence, relating to undertaking's advertising and marketing practices in question---Undertaking's claims and representation during its advertising/marketing campaigns in question, which started in 2003/2004 and continued beyond the enactment of Competition Act, 2010 till at least 2012/2013, with regard to its products constituted the "distribution of false and misleading information to the consumers", including the "distribution of information lacking reasonable basis", related to the character, method, properties, suitability of use and quality of the products, which amounted to deceptive marketing practices in violation of S.10(1)(2)(b) of the Competition Act, 2010---Distribution of information lacking reasonable basis, always harmed consumers as well as business interests of the competing undertakings---Representations, actions and omissions of undertaking, with respect to the impugned claims, therefore were in violation of S.10(1)(2)(a) of the Competition Act, 2010.

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

----S. 10--- Deceptive marketing practices--- Scope--- Company/ undertaking, was the largest petroleum distribution and marketing company in Pakistan with petroleum products---Complaint was filed against said undertaking that it was engaged in 'deceptive marketing practices' by distributing false and misleading information to consumers and that distribution of such information was capable of harming the business interests of competing undertakings in violation of S.10 of Competition Act, 2010---Enquiry Committee constituted by the Competition Commission reported that prima facie, the undertaking had been engaged in "deceptive marketing practices" in violation of S.10 of the Competition Act, 2010---Question for determination was as to whether the "use of branding/insignias being used by the undertaking at its outlets and website after discontinuation of additives in the products, constituted "deceptive marketing" and was in violation of S.10 of the Competition Act, 2010"---Held, both the complainant and the enquiry report had suggested that the same branding/insignias, were being used by the undertaking to date, which it launched in 2003/2004---Complainant had submitted that even after discontinuation of the pre-additized products, the undertaking had continued the use/display of same brands/insignias in its advertisement and marketing campaigns, and at its point of sales to promote the products---Post 2013, the undertaking had not published the fact that it had discontinued the use of additives in the products---Acclaimed efficiency representation made on its website concerning the products properties and qualities, among other things, remained the same in substance, which in terms were deceptive, because the consumers were likely to be under the impression that the product still contained the same added benefit and efficiency, as were introduced in 2003/2004---Burden of proof was on the undertaking as to whether or not it had imparted or was imparting factually correct information having a reasonable basis to its consumers---In pre-2013 marketing claims with regard to products of the undertaking, it was claimed that the use of the products would inter alia, enhance 'fuel economy', led to 'better engine clean up and corrosion control of fuel tanks and piping' and reduce 'exhaust emissions'---In view of the absolute nature of the claims, any consumer could expect that the undertaking had added multifunctional additives in the products and consumer could gain the acclaimed benefits by using them--- Products branding/insignias displayed at the undertaking's point of sales, neither were independent, nor had the reasonable basis regarding the benefits of the use of the products---Omission of the undertaking for not publicizing the fact of discontinuation of the use of additives from products, while retaining the same insignia/branding of its products, amounted to the distribution of materially false or mis-leading information in consumers related to the products character, method, properties, suitability of use and quality which was in violation of S.10 of the Competition Act, 2010---Because of its dominant position, undertaking was likely to enjoy mere trust; its anti-competitive practices were likely to cause more harm to consumers and damage competition, not only in the relevant market, but in the related market and to the competing undertakings---Penalty of Rs.150 million was imposed on the undertaking, with directions to immediately cease the use of 'Green' and 'Premium' in its branding/insignia, including its trademarks/logos in its products and in marketing, advertising packing etc.---Undertaking was further directed by the Competition Commission to inform the general public regarding the discontinuation of the use of additives in the products.

Jamshooro Joint Venture Limited and LPG Association of Pakistan dated 14.12.2009; Rees and others (1994) 1 All E.R. 833; Regina v. Saskatchewan College of Physicians and Surgeons (1996) 58 DLR (2d) 622.52 and Parry Jones v. Law Soceity and others (1969) 1 Ch Division 1 ref.

Asif Aslam, General Manager, Mansoor Ismail, General Manager, Islamabad, Syed Ali Yasir Rizvi, Advocate and Syed Qamar Hussain Sabzwari, Advocate for Messrs Pakistan State Oil Company Ltd.

Iftikhar Ahmad Bashir, Advocate High Court, Jurispak Advocates and Umair Khalid Mirza, Advocate for Inaam Athar Siddiqui.

2017 C L D 1003

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Ikram ul Haque Qureshi, Members

SHOW CAUSE NOTICE ISSUED TO MESSRS JCR-VIS CREDIT RATING COMPANY LIMITED FOR ALLEGED VIOLATION OF SECTION 3 OF THE COMPETITION ACT, 2010: In the matter of

File No. 67/PACRA/C&TA/CCP/2016, decided on 27th January, 2017.

Competition Act (XIX of 2010)---

----Ss. 3, 4 & 37(2)---Abuse of dominant position---Predatory pricing---Complainant, a Credit Rating Company, had alleged that the credit rating award to the respondent, another such company, for proposed issue of sukuk was too low or below the cost bidding in contravention of Ss.3 & 4 of the Competition Act, 2010---Both, the complainant and the respondent had participated in procuring credit rating assignment---Complainant quoted Rs.7.22 million, whereas the respondent quoted a total Rs.1,100 (an initial fee of PKR and surveillance fee of PKR 100 per annum) for the rating assignment spanning 10 years---Complainant, had alleged that the token bid by the respondent was devoid of any legitimate business justification, or lacked a commercial sense thereof and was solely made to oust its competitor from the bidding---Complainant, further alleged that the respondent had acted in contravention of the Competition Act, 2010 and that since the bid was too low, that also amounted to predation in violation of S.3 of the Competition Act, 2010---Competition Commission, on the basis of said allegations, initiated an enquiry pursuant to S.37(2) of the Competition Act, 2010 and appointed Enquiry Committee to investigate the matter for possible violations of provisions of Competition Act, 2010---Enquiry Committee observed that "the general approach with regards to predatory pricing, was that prices were assumed to be predatory if they were below average variable costs; that in such a case, there was no conceivable economic purpose other than the elimination of a competitor, since each item produced and sold, entailed a loss for the undertaking and that in line with said observation, it was concluded that by respondent's own admission, it had submitted a bid that did not reflect its cost, rather it was a token bidding"---One of the material issues that emerged from the facts and submission made by the parties, was as to what was the relevant market and whether the respondent held a dominant position in the relevant market---'Relevant product (or services) market', was determined as the provisions of "credit rating and other allied services"---Conditions for the provision of credit rating services in the country, were uniform and homogenous, as there were no barriers within the territory of Pakistan in terms of geographic location for the competitors, customers and consumers---Relevant geographic market consisted of whole of Pakistan---Complainant and the respondent, both being engaged in the business of credit rating in Pakistan, market for credit rating in Pakistan was highly concentrated; both were providing their services in all categories of rating, such as entity rating, instrument rating, infrastructure project rating, real estate grading, corporate governance rating and financial risk assessment---Both complainant and respondent had market share of 55 percent and 45 percent respectively---Dominant position of the undertakings, did not solely flow from a market share that was a lesser or greater than the 40 percent threshold---Both the complainant and the respondent, held dominant position and were in a position to behave to an appreciable extent independently of their competitors, consumers and suppliers, irrespective of their market share in the relevant market---Complainant had made diverse allegations ranging from unfair, discriminatory and exclusionary conduct, including the predatory pricing to outset the complainant from the relevant market---Section 3 of the Competition Act, 2010, provided a non-exhaustive and illustrative list of abusive conditions---Commission, could take cognizance of other forms of abuses that were not outlined in S.3 of the Competition Act, 2010---Having a dominant position in the relevant market was not condemned by itself---Term "practices" used in S.3 of the Competition Act, 2010, included practice or conduct, or a single time infringement as its core objective was to assess, whether the conduct of a dominant undertaking in the relevant market, was aimed to impair or distort competition in the relevant market---Concept of "predatory pricing" comprised, not only of "predatory prices", but also strategies and exclusionary conduct by the dominant undertakings---No requirement existed that the alleged infringement of S.3 of the Competition Act, 2010, must have been repeated until the eventual closure of the competitor from the relevant market---Final bid submitted by the respondent, therefore, reflected a predatory pricing strategy---Respondent had failed to provide a viable commercial sense or any objective justification in terms of efficiency gained for the same---Commission, found no merit in the argument of the respondent that its quotation of Rs.1.100, was a pro bono and in the national interest---Commission concluded that the respondent had been engaged in predatory pricing in contravention of subsection (3) of Cl.(F) read with subsection 3(i)(2) of S.3 of the Competition Act, 2010---On account of violation of provisions of S.3 of the Competition Act, 2010, a penalty of Rupees Five Hundred Thousand (Rs.500,000) was imposed on the respondent, in circumstances.

62/86 AKZO Chemie BV v. Commission [1991] ECR 1-3359 ref.

Ijaz Ahmed, Advocate Supreme Court, Habib Ahmed, Advocate, Akhlaq Ahmed, Advocate and Mahmoor Ashraf for Messrs JCR-VIS Credit Rating Company.

Rahat Kaunain Hassan, Advocate, Hassan Kaunain Nafees, Ms. Gulalay Zeb, Advocate, Adnan Afaq, Managing Director, Ms. Humera Jamil, Compliance Officer and Hamza Hussain for Messrs Pakistan Credit Rating Company Agency Ltd.

Shakeel Ahmed, Additional DG (Finance) for Neelum Jhelum Hydropower Company (Pvt.) Limited.

2017 C L D 1057

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Shahzad Ansar and Ikram ul Haque Qureshi, Members

SHOW CAUSE NOTICE ISSUED TO MESSRS SOCIETY OF ACCOUNTING EDUCATION FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 185/OFT/CFA/CCP/2015, decided on 14th December, 2016.

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

----Ss. 10 & 37(2)---Deceptive marketing practices---Complainant, a non-stock corporation organized under the laws of Virginia, United States of America and engaged in imparting education and training to students and professionals in the field of investment and financial analysis having gradually extended its operations around the world, including Pakistan--- Respondent, a Society of Accounting Education/undertaking, was a society registered under the Societies Registration Act, 1860 was engaged in the provision of educational services in the field of finance and accounting---Complainant, informed the Competition Commission that respondent undertaking, had been using the complainant's registered trade mark (C.F.A.) to deceive public and promote its business; that respondent undertaking resorted to dissemination of false or misleading information, which was capable of harming the business interest of the complainant---Enquiry in terms of S.37(2) of the Competition Act, 2010 was initiated in the matter, which was concluded vide the enquiry report---Competition Commission, after considering the enquiry report issued show-cause notice to the respondent undertaking---Issue identified for deliberation was "as to whether in presence of suit for permanent injunction against infringement of trademark the jurisdiction of Competition Commission would be barred"---Held, subject proceedings before the Competition Commission, did not have any nexus with the suit proceedings pending before the Additional District and Sessions Judge---Competition Commission observed that the pendency of a civil suit or principle of "res subjudice", as enunciated in S.10 of Code of Civil Procedure, 1908, had no relevance to Commission's proceedings under Competition Act, 2010---Suit for permanent injunction regarding infringement of trademarks was a different subject than the one being considered by the Competition Commission i.e. "whether or not the respondent undertaking had engaged in deceptive marketing practices by using the complainant's trademarks for the purpose of misleading consumers and distorting competition".

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

----S. 10---Deceptive marketing practices---Complainant, a non-stock corporation organized under the laws of Virginia, United States of America and engaged in imparting education and training to students and professionals in the field of investment and financial analysis having gradually extended its operations around the world, including Pakistan--- Respondent, a Society of Accounting Education/ undertaking, was a society registered under the Societies Registration Act, 1860 was engaged in the provision of educational services in the field of finance and accounting---Complainant, informed the Competition Commission that respondent undertaking, had been using the complainant's registered trade mark (C.F.A.) to deceive public and promote its business; that respondent undertaking resorted to dissemination of false or misleading information, which was capable of harming the business interest of the complainant---Enquiry in terms of S.37(2) of the Competition Act, 2010 was initiated in the matter, which was concluded vide the enquiry report---Competition Commission, after considering the enquiry report issued show-cause notice to the respondent undertaking---Question for determination was "as to whether or not the alleged advertisement, marketing material and trademarks used by the respondent undertaking constituted deceptive marketing practices in terms of S.10 of the Competition Act, 2010"---Held, complainant had submitted documentary evidence of its 'application of registration' and 'registration of trade mark, which established the complainant's exclusive right to mark "C.F.A." denoting Chartered Financial Analyst---Respondent undertaking had used different advertising schemes by using the mark "C.F.A." for promotion of its institute/courses, which had never been contested during the enquiry and the proceedings---Respondent undertaking on receipt of "cease and desist" letters from the complainant, changed the designatory letters from C.F.A. to C.F.Ac.---Said claims and the evidence available on record, had clearly established that the respondent undertaking used the registered trademarks of the complainant i.e. 'C.F.A.' in its marketing and other materials---Images retrieved from the respondent's website, the advertisement in newspapers, the evidence or record substantiated complainant's assertions---In order to constitute a violation of S.10 of the Competition Act, 2010, the marketing and advertising, must have the ability to deceive---Use of the trade/service mark by the respondent undertaking, had the ability to deceive the ordinary consumer such as students by giving them false or misleading impression that the respondent, was affiliated with or had expressly been authorized by the complainant; to carry out its program in Pakistan; or that it was otherwise offering a similar qualification as the complainant---Such usage of the trade/service marks had the ability to deceive the students, who could well believe that they were undertaking the 'C.F.A.' program and qualification which was offered by the complainant---Apart from misleading the consumers, such practices had the ability to harm the business of the complainant as well---Usage of the complainant's trade mark "C.F.A." amounted to the dissemination of false and misleading information by the respondent undertaking, capable of harming the business interest of the complainant in violation of S.10(1)(2)(c) of the Competition Act, 2010---Competition Commission had the mandate to protect the consumer from anti-competitive behaviour in the market---Competition Commission, observed that by using the said variation to the 'C.F.A.', respondent had violated S.10 of Competition Act, 2010---Commission directed the respondent to immediately cease the use of the mark 'C.F.A.' in any form whatsoever; that to cease the use of terms 'DCFA, ACFA, FCFA and CFAc', or any other similar acronyms and terms, in any form and to amend its promotional and marketing material accordingly; that to amend its Article and Memorandum of Association to remove any reference to the abovementioned terms; that to file a compliance report with the Registrar to the Commission within a period of thirty (30) days from the date of issuance of present order and was reprimanded from indulging in deceptive marketing practices in future as at the risk of severe penal consequences; that penalties and direction had been imposed after taking into account the seriousness and length of the violations and its impact on the consumers and the interests of the competing undertakings and were proportionate to the contraventions of S.10 of the Act and necessary to restore the fair competition in the relevant market---For each of four violations, a penalty of Rs.5 million was imposed on the respondent.

Dr. Anwar Ali, President, Zahid Rasheed, Advocate, Ch. Amir Javed Warraich and Qazi Imran Zahid, Advocate Supreme Court for Messrs Society of Accounting Education.

Hasan Irfan Khan, Advocate Supreme Court for Messrs Irfan and Irfan.

Saqib Baig, Advocate for Messrs CFA Institute.

2017 C L D 1550

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson and Ikram ul Haque Qureshi, Member

Messrs COLGATE PALMOLIVE FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 173/OFT/COLGATE/CCP/2014, decided on 10th August, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 31, 37 & 38---Deceptive marketing practices---Complainant and the respondent were competitors in the relevant market comprising of household surface cleaning products---Complainant contended that no study or statistical quantification had been provided by the respondent to substantiate its claims in the advertisements of the products, relating to protection against cold and flu, skin infections and food poisoning---Complainant had alleged, that respondent was disseminating misleading information through advertisements which was harmful to the public as well as the business interest of competitors which was a violation of S. 10 of the Competition Act, 2010 and further that respondent had issued a trade letter which stated that its product offered for a lesser price, a quantity of 50ml more than product of the complainant which is not right---Complainant contended that claim which purported to provide ample protection from infections and viruses, even in the presence of its disclaimer, was illegible and not clear and conspicuous; that in absence of the same, said claim of the respondent was deceptive under S.10(1)(2)(b) of the Competition Act, 2010---Respondent submitted that complaint contained inaccurate statements, which had no basis in law and fact and was liable to be discharged---Held, respondent having failed to provide a recognizable substantiation or reasonable basis as to the character, properties and suitability for use of its product, claim of respondent was in clear violation of S.10(1)(2)(b) of the Competition Act, 2010---Comparative claims of respondent relating to price, expiry of the product and leakage and defective packing, lacked a reasonable basis and were, deceptive within the meaning of S.10(1)(2)(c) of the Competition Act, 2010---Advertising claims of the respondent, being false and misleading, were in fact capable of harming the business interests of the complainant as well as other competing undertakings operating in the relevant market---Commission imposed penalty on the respondent of Rs. One million for each of the four counts (advertisements) for the contravention of S.10(1)(2)(b) of Competition Act, 2010---Respondent was further directed to file a compliance report with the Registrar of the Commission within 30 days from the date of issuance of the order.

Messrs China Mobile Pak Limited and Messrs Pakistan Telecom Mobile Limited: In the matter of 2010 CLD 1478 ref.

Agha Shah Walliullah, Khurram Vohra, Azam Khan and Nazakat Hussain on behalf of Colgate Palmolive Pakistan Limited.

Hasan Mandviwala, Mandviwala and Zafar, Advocates and Legal Consultants, Feroz Ahmed, Hasan Paliwalla and Zaki Muhammad on behalf of Messrs Reckitt Benekiser Pakistan Limited.

2017 C L D 1609

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson and Ikram ul Haque Qureshi, Member

MESSRS PROCTOR AND GAMBLE PAKISTAN (PVT.) LIMITED: In the matter of

File No. 174/OFT/P&G/CCP/2014, decided on 20th July, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30 & 37---Deceptive marketing practices---Scope---Principle of "disclaimer/disclosure"---Scope---"Clear and conspicuous" and "placed as close as possible"---Scope---Allegation was that respondent/undertaking in its marketing and advertising claims had represented "safeguard/soap" as Pakistan's No.1 rated anti-bacterial soap; along with a disclaimer/disclosure in the points "based on product in use by AC Nielson in April 14 among 600 + consumers"; which tantamounted to dissemination of false or misleading information to consumers and to the competitors' detriment, in violation of S.10 of Competition Act, 2010---Complainant had further alleged that the respondent's marketing material and advertising claim representing Safeguard as "Pakistan No.1 rated Anti-bacterial Soap" lacked a reasonable basis to substantiate the claim---Complainant, to support its case, had submitted "A.C Nielson's data relating the market share in terms of value share and volume share of the leading antibacterial soaps in Pakistan---Complainant had stated that "Nielson's data reflected the falsity of respondent's claim; whether taken in value share or volume share---Further allegation was that respondent had been marketing 'safeguard' by distributing false or misleading information to consumers without having basis as to the product's character, properties, quality and suitability for use---Complainant, had asserted that the safeguard's TVC aired on various TV Channels, clearly showed that respondent had disregarded the Commission's warning in violation of S.10(3)(a)(b)(c) of Competition Act, 2010---Enquiry Committee submitted its enquiry report pursuant to S.37(2) of Competition Act, 2010, recommending that claim of safeguard as 'Pakistan's No.1 rated anti-bacterial soap' by the respondent in its marketing and advertising campaigns prima facie, amounted to violation of S.10(1) within the meaning of scope of S.10(2)(a)(b)(c) of the Competition Act, 2010---One of the two issues involved in the case, was "whether or not the advertising claim" Pakistan's No.1 rated antibacterial soap and materials submitted by the respondent/undertaking, had a reasonable basis related to the product's character, properties and suitability for use"---Section 10(2)(b) of the Competition Act, 2010 required that the marketing and advertising campaign and claim, made by an undertaking must have a reasonable basis related to product's price, character method or place of production, properties, suitability for use or the quality of goods---Besides, the disclaimer/disclosure associated with the claims, must be 'clear and conspicuous' enough that the targeted consumers could easily notice and easily understand them along with advertising claims---"Deceptive marketing practices" encompassed protection of consumers and competitors from harm caused by the distribution of false and misleading information in the process of marketing and advertising campaigns by another undertaking---All representations, whether intentional or unintentional, that could give false information or idea, or had the likelihood to induce one's conduct, thought or judgment, or had the potential to misinform or misguide due to vagueness or omissions, were materially misleading---Another issue involved in the case was "whether or not the disclaimer/disclosure based on a product in use test by AC Nielson in April 2014 among 600 + consumers" was easily noticeable and easily understandable by consumers to qualify the claim and offset the liability arising out of claim---Principle regarding disclaimer/ disclosure, was that same must be 'clear and conspicuous' and placed 'as close as possible', with the advertising claim---Respondent's disclaimer placed at the bottom of the advertisement was neither easily noticeable/legible nor easily understandable by an ordinary consumer---Most part of the TVC and other marketing and advertising campaign material was in urdu; whereas the disclaimer/disclosure was in English---Respondent had clearly disregarded the Commission's Public notice issued in 2013 to the undertakings to ensure that their marketing and advertising campaigns, did not violate S.10 of the Competition Act, 2010 and in specific claims inter alia, 'No.1 in Pakistan' or No.1 Selling Brand---Respondent's claim that Safeguard was 'Pakistan's No.1 rated antibacterial soap', essentially created a net general impression or conveyed the message that said product was 'Pakistan's No.1 antibacterial soap'---Respondent's claim was both false as well as misleading---Section 10(2)(a) of the Competition Act, 2010 envisaged that the distribution of false or misleading information that was capable of harming the business interests of another undertaking would constitute deceptive marketing practice for the purposes of S.10(1) of the Act---Commission, in view of the violations of S.10 of the Competition Act, 2010, imposed a penalty of Rs. Ten million on the respondent---Respondent was directed to inform the public-at-large, the falsity of its advertising claim that Safeguard was Pakistan's No.1 rated antibacterial soap through appropriate clarification in all Urdu and English dailies and through TV Channels---Respondent was further directed to file compliance report with the Registrar of the Commission within a period of 45 days from the date of issuance of order

Messrs China Mobile Pak Limited: in the matter of dated 29.09.2009; Standard Oil of Calif 84 FTC 1401 (1974), p.1471; Messrs Procter and Gamble Pakistan (Private) Limited: In the matter of dated 23.02.2010 and 2012 CLD 783 ref.

Ms. Amar Abbasi, Legal Counsel, Ahmed Rizvi, Brand Manager, Skin and Personal Care and Saqib Zia, Marketing Director present on behalf of Messrs Proctor and Gamble Pakistan (Pvt.) Limited.

Feroz Ahmed, Legal Counsel, Hasan Paliwalla, Brand Manager, Zaki Muhammad, R&D Manager, Saad Hashmi and Ms. Sana Khan, R&D present on behalf of Reckitt Benckiser Pakistan Ltd.

2017 C L D 328

[Punjab Environmental Tribunal]

Before Justice (R) Ch. Muhammad Younis, Chairperson and Muzaffar Mahmood, Member General

KHALID AHMED and 2 others---Appellants

Versus

ENVIROMENTAL PROTECTION AGENCY, PUNJAB through Director General and 3 others---Respondents

Appeal No.16 of 2016, decided on 19th July, 2016.

Pakistan Environmental Protection Act (XXXIV of 1997) [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)]---

----Ss. 12, 13 & 22---Pakistan Environmental Agency (Review of IEE and EIA) Regulations, 2000, Reglns. 6, 9, 10 & 13---Environmental approval for construction of multi-storeyed hotel---Environmental Protection Agency, granted environmental approval for construction of multi-storeyed hotel (21 upper floors and 3 basements)---Appellants, who were residents of the vicinity, being aggrieved of said environmental approval sought information as to whether any approval had been granted regarding said project; they also requested for providing them certified copies of the approval, if any, but the agency did not respond to their request---Appellants filed appeal on uncertified copy of the impugned order, which appeal was within time---Appeal had been filed on the grounds; that impugned order was passed without application of mind in a cyclostyle generic form, without hearing all the stakeholders as well as the appellants whose quality of life, privacy and constitutional rights were directly affected and violated by the impugned project; that approval was granted on the basis of IEE (Initial Environmental Examination), which was violative of the applicable law, as well as by-laws of the concerned Town; that impugned approval could not be granted with conditions; that EIA (Environmental Impact Assessment) could only be cleared by imposing certain directions; that the project had an adverse environmental effect, so the proponent was required to furnish 'EIA' and not 'IEE'; that no public hearing was conducted before granting said approval---Appellants, who were the neighbours, were not heard and associated in the proceedings---Advisory Committee had also not been constituted as required by law---Appeal filed by the appellants being within time, was liable to be disposed of on merits---Impugned order, though contained a condition to get 'NOC' from immediate neighbours, but neither it was determined as to who were the immediate neighbours from whom the 'no objection certificate' was required nor the impugned order was ever communicated to them so as to safeguard their rights---Section 12 of Punjab Environmental Protection Act, 2012, (as amended), had provided that no proponent of a project would commence construction or operation, unless he had filed with the Provincial Agency an 'IEE' or where the project was likely to cause adverse environmental effect, an 'EIA', and had obtained from Provincial Agency approval in respect thereof---Section 12 as amended would be applicable to the projects and in the manner as could be prescribed by the Regulations---At the time when disputed environmental approval was granted for construction of multi-storeyed hotel, no such regulations had been made and notified by the Provincial Agency with approval of the Provincial Government---Only Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, which were Federal Regulations, were being followed, as Provincial Agency was of the view that said Regulations were protected under Art.270-AA of the Constitution---Environmental Tribunal was of the view that protection under Art.270-AA of the Constitution, was not forever and it could be claimed till the amendment, repeal or alteration of the statute---Provincial Legislature, enacted the Punjab Environmental Protection Act, 2012 making certain modifications in the Federal Statute and after said amendment that enactment, the Rules and Regulations had to be framed under the amended Act---Federal Regulations, 2000 were for the Federal Agency, and not for the Provincial Agency---Said Regulations could be adopted by the Provincial Agency after necessary modification by giving the legal cover, but neither same were modified not adopted, nor any regulations were made and notified with approval of the Provincial Government---Federal Regulations were also inconsistent with the Punjab Environment Protection Act, 2012---In spite of lapse of more than 4 years after promulgations of amended Punjab Environmental Protection Act, 2012 on 18-4-2012, Provincial Agency, could not fulfil its legal obligations for framing necessary Rules and Regulations under the amended enactment as was required by it---Impugned order/approval was without jurisdiction and not sustainable in the eyes of law---Same was set aside and Provincial Agency was directed to frame its own regulations to fulfil its legal obligations, in circumstances.

Shehla Zia's case PLD 1994 SC 693 ref.

Khalid Ishaq, Counsel for Appellants.

Mohsin Sarfraz Cheema, Law Officer for Respondent/EPA.

Ali Usman, Counsel for the Respondent No.4.

2017 C L D 1022

[Federal Shariat Court]

Before Riaz Ahmad Khan, C.J., Dr. Allama Fida Muhammad Khan and Mrs. Ashraf Jahan, JJ

Dr. SHAHID HASAN SIDDIQUI---Petitioner

Versus

STATE BANK OF PAKISTAN and 30 others---Respondents

Shariat Petition No. 3/K of 2008, decided on 15th December, 2016.

(a) Constitution of Pakistan---

----Art. 203-D---Federal Shariat Court (Procedure) Rules, 1981, Rr. 7(d) & (e)--- Repugnancy to injunctions of Islam---Shariat petition---Maintainability---Scope---Federal Shariat Court, jurisdiction of---Scope---Under Art. 203-D of the Constitution, the Federal Shariat Court may, [either of its own motion or] on the petition of a citizen or the Federal Government or a Provincial Government, examine and decide the question whether or not any law or provision of law was repugnant to the Injunctions of Islam, as laid down in the Holy Quran and the Sunnah of the Holy Prophet (pbuh)---Where the petitioner neither challenged any law or provision of law as required under R. 7(d) & (e) of the Federal Shariat Court (Procedure) Rules, 1981, nor gave any particular Nass of the Holy Quran or Sunnah of the Holy Prophet (pbuh) relating to the relevant law or its provisions, supporting the petition, the same would be liable to be dismissed.

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

----S. 33B---State Bank of Pakistan, BCD Circular No.29, dated 15.10.2002 ("the Circular")---State Bank of Pakistan Letter No.BPD/PU 34/SBP Scheme/9584/2005-4199 dated 12.04.2005---Shariat petition---Write-off of Irrecoverable Loans and Advances---Repugnancy to Injunctions of Islam---Impugned circular, whereby guidelines on write-off of irrecoverable loans and advances were issued by the State Bank of Pakistan had already expired with effect from 31.01.2005, and as such was no more in the field---Shariat petition was dismissed accordingly.

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

----S. 33B---State Bank of Pakistan, BPD Circular No.16, dated 14.04.2005---Shariat petition---Federal Shariat Court, jurisdiction of---Scope---Policy of State Bank of Pakistan---Petitioner had challenged policy of the State Bank of Pakistan which being a procedural matter relating to the practical operation/transaction in the Domestic and Foreign Banks operating in Pakistan, was beyond the jurisdiction conferred upon the Federal Shariat Court by the Constitution---Shariat petition was dismissed accordingly.

Petitioner in person.

M. Aslam Butt, Deputy Attorney General and M. Pervez Khan Tanoli, Standing Counsel for Federal Government.

Jam Asif Mehmood, Advocate on behalf of Ahmad and Qutubuddin Saim for Respondents Nos. 2, 7, 12, 13, 17, 19, 20, 22, 23 and 24.

Ghulam Murtaza and Ameer Nausherwan Adil for Respondents Nos. 11, 15 and 29.

Asad Ladha, Advocate on behalf of Salman Akram Raja for Respondents Nos. 1, 4, 5, 6, 9, 18 and 28.

Muhammad Ilyas, Advocate on behalf of A.I. Chundrigar for Respondent No.21.

Naveed-ul-Haq for Respondents Nos. 10 and 25.

Fida Hussain, Law Officer for Respondent No.14.

2017 C L D 1039

[Gilgit-Baltistan Chief Court]

Before Malik Haq Nawaz, J

ZAFAR IQBAL, CHAIRMAN SILK ROUTE DRY PORT TRUST SUST---Petitioner

Versus

PAK. CHINA SOST PORT JOINT STOCK COMPANY (PVT.) through Chairman and 3 others---Respondents

Jud. Misc. No. 1 of 2015, decided on 25th October, 2016.

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

----Ss. 305, 309, 180, 157, 170 & 7---Winding-up of company---Grounds---High Court, jurisdiction of---Company had not submitted statutory report to the Registrar Joint Stock Companies despite notice served upon the company---No annual general meeting of the company was held since 2009---No election of the company had taken place---Proceedings of winding-up could be initiated due to non-holding of statutory meetings or non-delivery of statutory report---High Court had jurisdiction over the matter of petition for winding-up---Jurisdiction once established by a statute could neither be denied nor be taken away by any express or implied contract---Sufficient grounds existed to initiate the winding-up proceedings---High Court ordered for winding-up of the company and appointed official liquidators with direction to take into possession all assets of the company and to proceed with the liquidation---Petition for winding up of company was allowed in circumstances.

2001 YLR 838; PLD 1990 SC 763; PLD 1990 SC 768; 2004 CLD 1723; 2005 CLD 558; 2006 CLD 347 and 2007 CLD 605 ref.

2014 SCMR 13 and 2016 CLD 618 rel.

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

----S. 34---Arbitration agreement---Stay of proceedings---Conditions.

PLD 2016 Pesh. 164 rel.

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

----O. VII, R. 11---Plaint, rejection of---Scope---While deciding application under O. VII, R. 11, C.P.C only plaint and its averments were to be taken into account.

(d) Jurisdiction---

----Jurisdiction once established by a statute could neither be denied nor could be taken away by any express or implied contract.

(e) Cause of action---

----Meaning.

(f) Arbitration---

----Ingredients.

Following are the ingredients of an arbitration:

(a) It is method of dispute resolutions.

(b) The method of an amicable mode of settling the disputes.

(c) The resolution of dispute can be reached by invoking neutral third party.

(d) The neutral third party can be one or more in number.

(e) The neutral party entrusted with the task of solving the dispute is an agreed one by both the disputing parties.

(f) The decision of third party would be binding.

Black's Law Dictionary rel.

Basharat Ali for Petitioner.

Islam-ud-Din for Respondents Nos. 1 to 3.

Sanaullah for Respondent No.4.

2017 C L D 1749

[Gilgit-Baltistan Chief Court]

Before Muhammad Alam and Malik Haq Nawaz, JJ

MOHAMMAD ALI---Petitioner

Versus

KARAKORAM COOPERATIVE BANK LIMITED (KCBL) through General Manager---Respondent

Civil Revision No. 103 of 2016, decided on 27th February, 2017.

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

----S. 9---Civil Procedure Code (V of 1908), S. 47---Suit for recovery of loan amount---Execution petition---Objection---Suit was decreed and judgment-debtor was committed to jail---Judgment-debtor moved petition for suspension of impugned order which was dismissed by Division Bench of Chief Court---Judgment debtor filed another petition which was accepted by the Single Judge of the Chief Court---Validity---Single Judge could not pass conflicting order against orders of the Division Bench of the Chief Court---Both the petitions were similar---Petitioner did not mention in the subsequent petition with regard to filing and dismissal of earlier petition---Petitioner had played foul with the Court and he should be dealt with in accordance with law---Impugned order passed by the Executing Court was upheld---Executing Court would be free to issue non-bailable warrants for the arrest and production of judgment-debtor and pass order of detention of the petitioner in civil prison or any other order in accordance with circumstance of the case---Trial Court might issue process against sureties of petitioner produced before the Single Judge---Revision was dismissed in circumstances.

Amjad Hussain for Petitioner.

2017 C L D 255

[High Court (AJ&K)]

Before Ghulam Mustafa Mughal, CJ

ASKARI BANK LTD. through Branch Manager----Appellant

Versus

Messrs BUKHARI TRAVELS, MIRPUR through Manager----Respondent

Civil Appeal No.33 of 2016, decided on 1st November, 2016.

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

----O. IX, R. 13 & O. XXIX R. 2---Ex parte decree, setting aside of---Summons on corporation---Irregularity in service of summons---Effect---Suit for recovery against Bank was decreed ex parte---Application of Bank to set aside ex parte decree was rejected---Validity---Service on corporation under O.XXIX, R. 2 of C.P.C. could only be effected on the Secretary or any other Director or other principal officer of the corporation or by sending it vide post to the corporation at its registered office---Suit in the present case was filed against the bank, through the Manager of a local branch, however, the Banking Company was not impleaded through its Head Office in the original suit and the service had been effected on the clerk of the local branch of the Bank---Process was thus not duly served in accordance with the mandatory provisions of O.XXIX, R.2, C.P.C.---Ex parte decree, in circumstances, was to be set aside under O.IX, R.13 of the C.P.C.---Appeal was allowed.

Tahir Mehmood v. Abdul Salam and 6 others 2015 YLR 1768; Muzaffar Ali and others v. Dr. Zaffar Ullah Malik 2015 YLR 1332; State Life Insurance Corporation of Pakistan v. Nasim-e-Sahar through legal heirs 1992 CLC 563; PLD 1991 SC 1104; PLD 1987 SC 22; Syed Nisar Hussain Shah v. Sahibzada Abdul Rashid and 2 others 2014 MLD 86; Muhammad Tariq and others v. Abdul Razzaq 2015 CLC 52 and Secretary Education Department Govt. of N.W.F.P Peshawar and others v. Asfandyar Khan 2008 SCMR 287 ref.

Muhammad Ashraf and 8 others v. Azad Govt. and others PLD 1985 AJ&K 102 and State Life Insurance Corporation of Pakistan v. Naseem-e-Sehar through legal heirs 1992 CLC 563 rel.

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

----S. 115---Revisional jurisdiction of High Court---Scope---High Court was vested with revisional jurisdiction and an order which on the face of it was illegal, perverse or a nullity in the eye of law could be recalled in exercise of revisional jurisdiction, notwithstanding the competency of the appeal or suit or an application.

Azad Kashmir Logging and Saw Mill Corporation Ltd. v. Messrs Muhammad Farid Khan and Company Brothers, Contractors AKLASC PLD 1986 AJ&K 228 rel.

Kh. Ansar Ahmed for Appellant.

Masood A. Sheikh for Respondent.

The captioned appeal has been filed against the judgment and order passed by the learned District Judge, Mirpur on 11.01.2016, whereby application for cancellation of ex-parte decree has been rejected.

Precise facts forming the background of the captioned appeal are that Messrs Bukhari Travels, plaintiff/respondent, herein, filed a suit against Askari Bank Limited for recovery of 26,620/- British Pounds along with markup. Defendant was proceeded ex-parte. After recording ex parte evidence, the learned District Judge vide judgment and decree dated 31.08.2013 awarded ex parte decree for recovery of 26620 British Pounds along with markup. The plaintiff moved an application for cancellation of the ex parte decree on 21.02.2014 wherein, it was claimed that two suits titled Askari Bank v. Messrs Bukhari Travels were filed by the defendant against the Bank and both were returned by the Court under Order VII, Rule 10 of the Code of Civil Procedure. It was stated that on 19.02.2014 bank received a notice from High Court, whereupon, it transpired that defendant on being returned has filed suit before High Court. The petitioner/Bank applied for copies of the orders of the Court then it was told by the Clerk that ex-parte decree has been passed against the Bank on 31.03.2013 in the instant suit. It was further stated that actually there were three suits pending against the Bank and the petitioners were under the bona fide impression that all of them have been returned by the Court, hence, nobody appeared on behalf of the Bank. Fact of the matter was that one suit remained pending with District Judge in which petitioner/appellant herein, was proceeded ex parte and ultimately ex parte judgment was passed on 31.03.2013. It was further claimed that absence was neither intentional nor deliberate rather it was under a genuine mistake. It was contended that as the valuable rights of the plaintiff are involved, therefore, ex parte decree may be set aside. It was further stated that application is within limitation from the date of knowledge. Defendant contested the application by filing objections, wherein, it was stated that application is not maintainable under law and is also time barred. It was stated that no sufficient cause has been shown in the application. It was stated that Branch Manager cannot file the application for cancellation of the judgment and decree. As the Bank is banking company and under law after resolution of the Board of Directors as is visualized in Memorandum of Association application for setting aside the ex parte decree can be filed. It was stated that bank was proceeded ex parte on 20.05.2013 and the presence of the Bank Manager is marked in the interim orders recorded in the original file, hence, the facts stated in the application has no substance. The learned District Judge framed issues in light of the pleadings of the parties and treated issues Nos.2, 3 and 8 as preliminary issues and heard the parties. However, it was observed that these issues cannot be resolved without recording evidence. Parties were directed to lead evidence pro and contra. At the conclusion of the proceedings, the learned District Judge Mirpur vide judgment and order dated 11.01.2016 rejected the application on account of limitation.

Kh. Ansar Ahmed, the learned Advocate appearing for the appellant vehemently argued that appellant filed three suits against Bank before the District Judge Mirpur and the same were withdrawn for filing the same at proper forum i.e. before the High Court. He submitted that actually two suits were filed against the bank and the bank was not aware of filing of the 3rd suit and was under the impression that the suits against him have been withdrawn. The learned Advocate argued that the suit against the Bank was filed in violation of Order XXIX of the Code of Civil Procedure, therefore, ex parte proceedings, ex parte decree and rejection of the application were erroneous, perverse and illegal. The learned Advocate contended that the date on which ex parte proceedings were ordered against the bank was not a date of hearing, therefore, all the subsequent proceedings including passing the ex parte decree were nullity in the eye of law and the application was liable to be granted as the same was filed within 3 years. The learned Advocate contended that even otherwise this Court has revisionary jurisdiction and when it is proved from the record that ex parte decree has been passed in violation of mandatory provisions of law and without due service, it can be recalled in exercise of revisional jurisdiction of this Court. The learned Advocate in support of his submissions, placed reliance on following case law:-

1. Tahir Mehmood v. Abdul Salam and 6 others, [2015 YLR 1768];

2. Muzaffar Ali and others v. Dr. Zaffar Ullah Malik, [2015 YLR 1332], 3. State Life Insurance Corporation of Pakistan v. Nasim-e-Sahar through legal heirs, [1992 CLC 563].

In Tahir Mehmood's case, referred to and relied upon by the learned Advocate for the appellant, my learned brother Mr. Justice Azhar Saleem Babar, Judge after considering the relevant law and in the circumstances of the case before him pleased to observe that the date fixed for filing written statement is not a date of hearing.

In Muzaffar Ali's case, it was observed that the date fixed for filing the written statement was not a date of hearing. The reliance was placed on cases reported as PLD 1991 SC 1104 and PLD 1987 SC 22. In Para 13 of the report, it was observed as under:-

"It is a settled principle of law that no period of limitation is prescribed for setting aside ex parte order and the residuary Article 181 of the Limitation Act, 1908 provides a limitation of three years. The learned trial Court erred in law while declaring the application of the petitioners/defendants for setting aside ex parte proceedings as barred by time. No doubt there is a period of limitation has been prescribed for setting aside ex parte decree under Order IX, Rule 13, C.P.C. but as the defendant was proceeded against ex parte on 12.12.1989, which was not a date fixed for hearing, and application was filed for setting aside of said order on 23.07.1990, the learned trial Court was not justified while treating the same as beyond limitation. No doubt the ex parte judgment and decree dated 28.02.1990 has been passed on merit after discussing the ex parte evidence adduced by the plaintiff/ respondent but as observed supra since the above referred ex parte proceedings were of no legal effect therefore, no limitation would run against above referred order, which even could be set aside even under section 151, C.P.C. are taken into cognizance, then residuary Article 181 of Limitation Act, 1908 will govern the issue, which provides three years limitation period."

In State Life Insurance Corporation of Pakistan's case, it was observed that service of process in suit against corporation has got to be effected on Secretary or Director or other Principal Officer of the corporation. It was further observed that service on corporation would not be valid when summonses were not presented i.e. to Secretary or to Director on Principal Officer of such corporation. It was opined that service of summons effected on a clerk of corporation was violative of the provisions contained in Order XXIX, Rule 2 of the C.P.C.

Mr. Masood A. Sheikh, the learned Advocate appearing for the other side, contended that respondent was duly served in this case and he remained present before the Court. However, due to absence the Bank was proceeded ex parte. He submitted that application has been filed after a period of 172 days whereas law requires for filing the same within 90 days. As the application was hopelessly time barred, therefore, findings of learned District Judge Mirpur on the question of limitation were unexceptional and hardly require any interference. The learned Advocate argued that for setting aside ex-parte decree the defendant has to show that his non-appearance on the relevant date was beyond his control and there is sufficient cause for setting aside the ex parte decree, otherwise, he is not entitled to ask for setting aside the ex parte decree passed against him. The learned Advocate further argued that this application has been filed without lawful authority by an unauthorized person. In support of his submissions, the learned Advocate placed reliance on following case law:-

1. Syed Nisar Hussain Shah v. Sahibzada Abdul Rashid and 2 others [2014 MLD 86];

2. Muhammad Tariq and others v. Abdul Razzaq [2015 CLC 52];

3. Secretary Education Department Govt. of N.W.F.P Peshawar and others. v. Asfandyar Khan, [2008 SCMR 287];

I have heard the learned Advocates for the parties and gone through the record of the case.

The contention of the learned Advocate for the appellant that no ex parte proceedings could have been ordered against the appellant on 20.05.2013 because the said date was not a date of hearing of the case, hence, the order of ex parte proceedings which have been culminated into ex parte decree was a nullity in the eye of law and the same was liable to be recalled has a substance. However, for determination of question regarding the date of hearing in particular case one has to refer the previous orders recorded by the Court. For coming to a just conclusion, it is necessary to reproduce the interim orders dated 11.04.2013, 15.04.2013, 29.04.2013 and 20.05.2013, which are as under:

A perusal of the above reproduced interim orders would show that on 11.04.2013 neither plaintiff was present nor any authorized person on behalf of Bank was present, however, Raja Khalid Mehmood, Advocate undertook to produce the power of attorney on the next date of hearing and the Court adjourned the case for producing power of attorney/written statement on 15.04.2013. On 15.04.2013, the position remained the same and an opportunity was granted for filing written statement on 29.04.2013. On 29.04.2013, Raja Khalid Mehmood, Advocate who undertook to produce power of attorney was not appeared however, presence of the Manager of the Bank recorded along with a request for an adjournment for filing written statement which was accordingly granted and the next date of hearing was fixed as 20.05.2013. On this date the plaintiff's counsel was not appeared rather Mr. Farooq Akber Kiani, Advocate was appeared on his behalf but nobody appeared on behalf of the defendant, hence, he was proceeded ex parte.

After going through the record of the case as well as judgment and order passed by the learned District Judge, I am of the view that the application for setting aside the ex parte decree was liable to be accepted in the circumstances of the present case. A perusal of the file of the trial Court reveals that summons has been received by a clerk who was not authorized to receive the same under Order XXIX, Rule 2 of the C.P.C. For appreciation of the matter, Order XXIX, Rule 2 is reproduced as under:--

"2. Service On Corporation.--- Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons may be served ---

(a) on the secretary, or on any director, or other principal officer of the corporation, or

(b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business".

Under the above provision of law a service on the corporation could only be affected on the Secretary or on any Director, or other Principal Officer of the corporation, or by leaving it or sending it by post addressed to the corporation at the registered office, if there is no registered office then at the place where the corporation carries on business. In the present case unfortunately original suit was filed against the Askari Bank Plot No.629-B Jabeer Tower Bank Square Nangi Mirpur Azad Kashmir through its Branch Manager. The Askari Bank Ltd. had its Head Office at AWT Plaza Rawalpindi, was not impleaded as party in the original suit filed by M/s. Bukhari Travels. A perusal of file of the trial Court reveals that service has been effected on a clerk of the local branch, therefore, the process was not duly served in accordance with the mandatory provisions of Order XXIX, Rule 2, C.P.C. It was a sufficient cause for setting aside the ex-parte decree within the ambit of Order IX, Rule 13 of the C.P.C. which reads as under:-

"Setting aside decree ex-parte against defendant.--- (1) In any case in which a decree is passed ex-parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make on order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit…..

..

..

In this case, as noted above the plaint was not properly instituted. The name of Bank Manager was not mentioned. The question that Manager who appeared before the Court was an authorized agent or not, record is silent. The decree in such a case remained un-executable, hence, the learned District Judge failed to consider this aspect of the matter because ex parte decree has been granted in absence of necessary parties (Muhammad Ashraf and 8 others v. Azad Govt. and others, PLD 1985 AJ&K 102). Such an ex parte decree should have been set aside under the inherent jurisdiction and limitation for the purpose of setting aside the decree i.e. 90 days as is enforced in Azad Jammu and Kashmir was not attracted at all. It may also be stated that Askari Bank Ltd. is a banking company which is being run by the Board of Directors. The powers of Board of Directors have been enumerated in Article 126 of the Memorandum of Association of Askari Bank. Under Article 127, the Board of Directors are entitled to institute conduct, defend, compound, abandon any legal proceeding by or against the company or its officer. Under Article 128 the Directors may from time to time by powers of attorney under seal appoint any company, firm or person, or any fluctuating body persons whether nominated directly or indirectly by the Directors to be attorney or attorneys of the company for such purpose and with such powers, authorities and discretions. While exercising these powers through a resolution dated June 21, 2013 the Board of Directors has delegated the powers to the President and Chief Executive of the Askari Bank Ltd. Para 16 of resolution empowers the President to prosecute or oppose all actions, suits and other legal proceedings and demands relating to any matter in which the bank is or may hereafter be interested or concerned. Through the same resolution, para 24 further empowers the President to delegate the powers that have been given or that may henceforth be given to him by the Board of Directors in respect of various matters. As stated above that Askari Bank Ltd. has its registered office at AWT Plaza Rawalpindi was not impleaded in line of the defendants and the service was also not effected in view of the provisions contained in Order XXIX, Rule 2 of C.P.C., therefore, presence of Manager who was not duly authorized cannot be considered as appearance in accordance with law. It is also noticed that Raja Khalid Mehmood one of the Advocates from Mirpur appeared before the Court to produce power of attorney/written statement but subsequently he did not appear. It was enjoined upon the Court to issue fresh process, therefore, without effecting the due service on the Bank ex parte proceedings and decree was a nullity in the eye of law. In the present case, the service has been effected on some clerk who was not authorized to receive the summons on behalf of the Bank in view of Order XXIX, Rule 2 of C.P.C. In case titled State Life Insurance Corporation of Pakistan v. Naseem-e-Sehar through Legal Heirs, [1992 CLC 563]; in an identical circumstances it was observed as under:-

2017 C L D 1493

[Intellectual Property Tribunal, Sindh and Balochistan]

Before Shakil Ahmed Abbasi, Presiding Officer

The STATE through P.S. FIA Corporate Crime Circle, Saddar, Karachi---Complainant

Versus

MUNEEB IQBAL BATLA---Accused

Old Case No. 2582 of 2016 and New Case No. 9 of 2017, decided on 24th April, 2017.

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

----Ss. 66 & 66-A---Criminal Procedure Code (V of 1898), Ss.63, 103 & 265-H--- Selling, distributing and supplying counterfeit electric capacitors---Appreciation of evidence---Accused was found in selling, distributing and supplying electric capacitors which were found counterfeit/infringed ones of the original product of complainant---Accused failed to produce any lawful authority/permission to sale, distribute, supply said capacitors---Accused filed application under S.63, Cr.P.C., wherein he urged that he should be discharged from the FIR as he had not committed any offence, but he himself was an affectee of said crime committed by some other person---Accused did not manufacture the pirated capacitors himself, but was selling them as a retail seller "not knowingly" that same were pirated goods---Said fact was disclosed to Investigating Officer by the accused---Accused, in circumstances, would not fall within the mischief of S.66 of Copyright Ordinance, 1962 as said section qualified the infringement of copyright with the word "knowingly"--- Deficiencies had been found in the prosecution case to the effect that S.103, Cr.P.C., had not been complied as no case property, along with Mashirnama was produced for comparison of registered and (allegedly) pirated artistic work, nor any independent witness appeared to have been cited---Tribunal taking lenient view, convicted the accused till rising of the court and imposed a fine of Rs.1000 with a warning to be careful in future.

(b) Penal Code (XLV of 1860)---

----S. 53--- Sentence, awarding of--- Object--- Purpose of awarding sentence was two fold; firstly it would create such atmosphere which could become a deterrence for the people who had inclination towards crime; secondly to work as a medium in reforming the offender with a warning to be careful in future---Certain facts such as circumstances in which offence was committed and whether the same was committed "deliberately" or otherwise, "knowingly" or "not knowingly" and the age and character of offender, were to be considered while judging the adequacy of sentence to be awarded.

Shoukat Ali Shahroz counsel for Accused.

2017 C L D 1535

[Intellectual Property Tribunal, Sindh and Balochistan]

Before Shakil Ahmed Abbasi, Presiding Officer

The STATE through P.S. FIA Corporate Crime Circle, Saddar, Karachi---Complainant

Versus

TAHIR ALAM and another---Defendants

Criminal Case No. 10 of 2017, decided on 2nd June, 2017.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 56 & 66---Criminal Procedure Code (V of 1898), Ss.249-A & 103---FIR was lodged against accused persons for making, illegally trading/assembly of counterfeit watches of complainant's company in violation of S.66 of the Copyright Ordinance, 1962---Accused were allegedly caught red-handed having in possession of counterfeit watches and FIA authorities had taken action against accused persons while they were committing violation of S.66 of the Copyright Ordinance, 1962---Accused were produced before Judicial Magistrate and two days' remand was granted and accused were released on bail and accused had filed application under S.249-A, Cr.P.C., for their acquittal---Record showed certain deficiencies/defects to the effect that case was pending for last more than one year for recording evidence of prosecution witnesses, but the same could not be produced for one reason or the other which caused delay in disposal of the matter; that the charge along with the pleas of accused persons was conspicuously found missing from the R and P of court file, nor the same had been mentioned in the index sheet; that no independent witness was found mentioned in the Mashirnama; that S. 103, Cr.P.C. which was a mandatory provision was not complied with; that prosecution had not taken any action against the supplier/manufacturer of the alleged infringed/counterfeit product and that no evidence was filed showing registration of copy right in the name of the complainant---Validity---Held, registration of copyright was though not compulsory, but no other evidence was furnished to prove the creation and the use of the alleged infringed/counterfeit artistic work/logo of article of the complainant---Prosecution had failed to make out its case against accused persons beyond reasonable doubt---No offence having been found committed under S.56 of Copyright Ordinance, 1962 attracting provisions of S.66 of the said Ordinance, accused persons merited acquittal---Application filed under S.249-A, Cr.P.C., was allowed by the Tribunal and accused persons who were on bail, their bail bonds were cancelled and sureties stood discharged.

Bilal Rasheed for Accused.

2017 C L D 572

[Islamabad]

Before Aamer Farooq, J

TREK TECHNOLOGIES LIMITED---Petitioner

Versus

ICONDOR TELECOM (PRIVATE) LIMITED and another---Respondents

Company Petition No.08 of 2015 and C.M. 584 of 2016, decided on 16th December, 2016.

Companies Ordinance (XLVII of 1984)---

----S. 305---Civil Procedure Code (V of 1908), O.VII, R.11---Winding up of company---Rejection of petition---Respondent sought rejection of petition on the plea that petitioner did not have any authority to file winding up petition---Validity---For the purposes of deciding application under O. VII, R. 11, C.P.C., the sole element that needed examination was that whether from statement made in winding up petition it was evident that the same was barred by law---Question of ratification did not arise as the resolution was passed and appended prior to filing of winding up petition; whether the resolution was in accordance with Articles of Association could not be determined while deciding application under O. VII, R. 11, C.P.C.---Authorization to attorney/lawyer for filing the petition was a matter between client and lawyer---High Court declined to reject winding up petition---Application was dismissed in circumstances.

Khan Iftikhar Hussain Khan Mamdot v. Messrs Ghulam Nabi Corporation Ltd. PLD 1971 SC 550; GOP v. Premier Sugar Mills and others PLD 1991 Lah. 381; Dr. S. M. Rab v. National Refinery, Limited PLD 2005 Kar. 478; Abdul Rahim and others v. UBL PLD 1997 Kar. 62; Qamran Construction (Pvt.) Limited v. Saleem Ullah and others 2008 CLD 239; 2015 YLR 1105; PLD 2012 Lah. 52; 2015 CLC 1 and 2005 CLD 1208 distinguished.

2005 MLD 1165; 2000 CLC 866; 2011 CLD 1062; PLD 1971 SC 550; 1982 CLC 1275; PLD 1985 Lah. 491; 2000 MLD 587 and 2011 CLD 1062 ref.

Sardar Ijaz Ishaq for Petitioner.

2017 C L D 1237

[Islamabad]

Before Athar Minallah, J

Messrs DEWAN PETROLEUM (PVT.) LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, SECP and another---Respondents

SECP Appeal No. 5 of 2015, decided on 25th January, 2017.

(a) Interpretation of statutes---

----Duty of court---Redundancy---Scope---Provisions of statute have to be construed by reading them as a whole and in a harmonious manner---Court is supposed to construe provisions of a legislative enactment so that it is in consonance with what legislature intended---Every word must be given meaning and effect, since redundancy cannot be imputed to legislature.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Alternate remedy--- Effect---When law provides adequate remedy then Constitutional jurisdiction is exercised sparingly and in exceptional circumstances, such as when the order or action is palpably without jurisdiction, mala fide, void or coram non judice.

Collector of Customs, Customs House, Lahore and 3 others v. Messrs S.M. Ahmad and Company (Pvt.) Limited, Islamabad 1999 SCMR 1381; Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881; Ch. Muhammad Ismail v. Fazal Zada, Civil Judge, Lahore and 20 others PLD 1996 SC 246; Income Tax Officer and another v. Messrs Chappal Builders 1993 SCMR 1108; Commissioner of Income Tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi PLD 1992 SC 847; The Muree Brewery Co. Ltd. v. Pakistan through the Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279; Lt. Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty and others PLD 1961 SC 119 and Tariq Transport Company, Lahore v. The Sargodha-Bhera Bus Service, Sargodha and others PLD 1958 SC 437 ref.

(c) Interpretation of statutes---

----Directory/mandatory provisions---Scope---Statutory provisions can either be treated as 'directory' or 'mandatory'---Statute is understood to be 'directory' when it contains matters merely of directions but not when those directions are followed by an express provision that in default of following them legal consequences would ensue---If consequences are provided for default then such provisions are necessarily to be construed as 'mandatory'.

Black's Law Dictionary (9th Edition); Oxford Advanced Learner's Dictionary (7th Edition); Collector of Customs, Customs House, Lahore and 3 others v. Messrs S.M. Ahmad and Company (Pvt.) Limited, Islamabad 1999 SCMR 1381; Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881; Ch. Muhammad Ismail v. Fazal Zada, Civil Judge, Lahore and 20 others PLD 1996 SC 246; Income Tax Officer and another v. Messrs Chappal Builders 1993 SCMR 1108; Commissioner of Income Tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi PLD 1992 SC 847; The Muree Brewery Co. Ltd. v. Pakistan through the Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279; Lt. Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty and others PLD 1961 SC 119; Tariq Transport Company, Lahore v. The Sargodha-Bhera Bus Service, Sargodha and others PLD 1958 SC 437; Niaz Muhammad Khan v. Mian Fazal Raqib PLD 1974 SC 134; Ghulam Hassan v. Jamshaid Ali and others 2001 SCMR 1001; Syed Zia Haider Rizvi and others v. Deputy Commissioner of Wealth Tax, Lahore and others 2011 SCMR 420; Maulana Nur-ul-Haq v. Ibrahim Khalil 2000 SCMR 1305; Malik Umar Aslam v. Sumera Malik and another PLD 2007 SC 362 and Human Rights Case Nos. 4668 of 2006, 1111 of 2007 and 15283-G of 2010 PLD 2010 SC 759 rel.

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

----Ss. 33 & 34---Companies Ordinance (XLVII of 1984), Ss. 78A, 158, 170 & 180---Annual General Meeting---Restraining order---Dispute was with regard to transfer of shares at forthcoming Annual General Meeting---Respondent company invoked provision of S. 78A of Companies Ordinance, 1984 and finally Appellate Bench of Securities and Exchange Commission of Pakistan in exercise of powers under S. 34 of Securities and Exchange Commission of Pakistan Act, 1997, passed injunctive order restraining appellant company from holding Annual General Meeting---Validity---Commission was not empowered to restrain appellant company from holding its Annual General Meeting on the analogy of powers vested under Ss. 170 & 180 of Companies Ordinance, 1984---Provisions of S. 158 of Companies Ordinance, 1984, were mandatory, particularly the timelines prescribed therein and the same could not be rendered ineffective nor an order be passed having effect of suspending statutory provisions---What could not be done directly could also not be done indirectly---High Court set aside injunctive order passed by Appellate Bench of Securities and Exchange Commission of Pakistan---Appeal was allowed accordingly.

Jahangir Siddiqui and others v. Azgard Nine Limited and others 2013 CLD 1953; United Liner Agencies of Pakistan (Pvt.) Ltd. Karachi and 4 others v. Miss Mahenau Agha and 8 others 2003 SCMR 132; Mian Javed Amir v. United Foam Industries 2016 SCMR 213; Fasih-ud-Din and others v. Government of Punjab and others 2010 SCMR 1778; Black's Law Dictionary (9th Edition) and Oxford Advanced Learner's Dictionary (7th Edition) ref.

Salman Akram Raja and Malik Ghulam Sabir for Appellant.

Syed Ishfaq Hussain Naqvi and Shahzad Ali Rana for SECP.

Syed Ahmed Hassan Shah for Respondent Company.

2017 C L D 1274

[Islamabad]

Before Miangul Hassan Aurangzeb, J

Messrs OIL AND GAS DEVELOPMENT COMPANY LIMITED---Petitioner

Versus

Messrs EXCEL TECHNO SOLUTIONS FZE, U.A.E. and another---Respondents

C.R. No. 362 of 2016, decided on 30th January, 2017.

(a) Banker and Customer---

----Allegation of fraud---Letter of credit---Obligation of Bank---Principle---Law relating to letters of credit was founded on two principles: (i) autonomy of credit; and (ii) doctrine of strict performance---According to first principle, credit was separate and independent from underline contract of sale or other transaction; second principle was that Bank was entitled to reject documents which did not strictly conform with terms of credit--- Only case in which Bank could refuse to pay under letter of credit was where it was proved to its satisfaction that documents were fraudulent and beneficiary/seller was involved in fraud---Bank issuing or confirming letter of credit was not concerned with underline contract between buyer and seller---Obligations of Bank under a letter of credit were created by document itself---Bank was subject to limitations which were given or imposed by provisions in letter of credit---High Court declined to interfere in order passed by Trial Court, as documents on record did not make a prima facie view that fraud was committed by respondent.

U.D.L. Industries Limited v. Hongguang Electron Tube Plant PLD 1997 Kar. 553 distinguished.

Haral Textiles Limited v. Banque Indosuez Belgium, S.A. 1999 SCMR 591; Abdul Kadir Jangda v. My Bank Ltd. 2007 CLD 349; Haroon Rashid Chaudhry v. Muslim Commercial Bank 2006 CLD 1140; Hamzeh Malas and Sons v. British Imex Industries Ltd. 1958 (2) Q.B. 127; Messrs Kohinoor Trading (Pvt.) Ltd. v. Mangrani Trading Co. 1987 CLC 1533; Banque Indosuez Belgium v. Haral Textile Ltd. 1998 CLC 582 and Progressive Fibres Ltd. v. Hyusung Corporation 1999 YLR 478 rel.

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

----O. VI, R. 4---Fraud---Essentials---Full particulars of fraud have to be spelt out with clarity in pleadings so as to meet requirement of law---General allegations in such regard are not sufficient.

Lanvin Traders, Karachi v. Presiding Officer, Banking Court No. 2, Karachi 2013 SCMR 1419; Government of Sindh v. Messrs Engineering Enterprises PLD 2015 Sindh 457; Ghulam Sabir v. Mst. Nur Begum and others PLD 1977 SC 75; Sahib Noor v. Ahmad 1988 SCMR 1703 and Messrs Dadabhoy Cement Industries Limited v. National Development Finance Corporation PLD 2002 SC 500 rel.

Ms. Sara Seerat for Petitioner.

Nadeem Younas, Sole Proprietor Messrs Excel Techno Solutions, FZE for Respondent No.1.

2017 C L D 1411

[Islamabad]

Before Aamer Farooq, J

COBUSSEN PRINCIPAL INVESTMENT HOLDINGS LIMITED through Special Attorney and another---Petitioners

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 3 others---Respondents

Writ Petition No. 1252 of 2015, decided on 11th February, 2016.

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

----Ss. 21 & 23---Constitution of Pakistan, Art. 199---Constitutional petition--- Laches, principle of--- Applicability--- Alteration of memorandum of a company---Change in registered address of a Company---Scope---Petitioners impugned order of Securities and Exchange Commission of Pakistan (SECP) whereby respondent Company was permitted to change its registered address from Punjab to Sindh---Contention of respondents, inter alia, was that the impugned order was passed in the year 2013, while present Constitutional petition was filed in the year 2015, after almost two years, and therefore the bar of laches was applicable---Validity---Petitioners had filed another petition wherein they mentioned the new address of the Company and also appended with the same, a copy of the Form-A of the Company which was filed in the year 2013, showing the new registered address---High Court observed that in such circumstances, it was not possible that petitioners were not aware about change in address of the respondent Company and therefore, the bar of laches was applicable--- Constitutional petition was dismissed, in circumstances.

Pakistan Post Office v. Settlement Commissioner and others 1987 SCMR 1119; Masooda Begum through Legal Heirs v. Government of Punjab PLD 2003 SC 90 and MCB Bank Ltd. v. State Bank of Pakistan 2013 CLD 1895 rel.

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

----Ss. 477, 21 & 23--- Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Alternate remedy---Alteration of memorandum of a company---Change in registered address---Exercise of discretion by Securities and Exchange Commission of Pakistan---Scope---Petitioner impugned order of Securities and Exchange Commission of Pakistan (SECP) whereby respondent Company was permitted to change its registered address from Punjab to Sindh---Validity---Petitioners had an alternate remedy under S. 477 of the Companies Ordinance, 1984 and since the same was not availed, Constitutional petition was not maintainable---High Court observed that Constitutional jurisdiction of High Court under Art. 199 of the Constitution could not be used to circumvent limitation or as a substitute of alternate efficacious remedy available under law---Petitioners had also not shown any prejudice caused to them as a result of the change in address---Constitutional petition was dismissed, in circumstances.

AVM (R) S.J. Raza v. Securities and Exchange Commission of Pakistan 2013 CLD 1886 and Naseemul Ali, Ex. Chief Executive Officer of Trust Management Services Pvt. Ltd. Trust Modaraba v. Executive Director, Securities and Exchange Commission of Pakistan and another 2013 CLD 216 rel.

Ali Raza for Petitioners.

Arshad Nazir Mirza, Mohsin Tayyab and Syed Hassan Ali Raza for Respondents.

2017 C L D 29

[Sindh]

Before Nadeem Akhtar, J

Messrs MEEZAN BANK LIMITED through Attorney---Plaintiff

Versus

A. H. INTERNATIONAL (PRIVATE) LIMITED and 7 others---Defendants

Suit No. B-40 of 2006, heard on 16th August, 2016.

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

----Ss. 9 & 10--- Suit for recovery of finance--- Mandatory requirements---Necessary information, non-mentioning of---Bank filed suit for recovery of finances advanced to defendants against three facilities---Necessary details of finances advanced to defendants were not given, in suit filed by Bank, whereas defendants also failed to give necessary information---Effect---Plaintiff, at the time of filing suit had full opportunity to comply with mandatory requirements of S. 9(2) & (3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but it failed in doing so---Defendants also had full opportunity to comply with mandatory requirements of S. 10(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, at the time of filing application for leave to defend but they failed in availing such opportunity---Plaintiff as well as defendants were bound to face consequences of their non-compliance---High Court dismissed petition for leave to defend the suit filed by defendants as it did not comply with mandatory requirements of S. 10(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and suit was dismissed to the extent of two facilities as plaint did not comply with mandatory requirements of S. 9(2) & (3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in respect of such two facilities---Suit was decreed accordingly.

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

Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651 ref.

Syed Wasi Haider Jafri for Plaintiff.

Abdul Shakoor for Defendants Nos.1, 2, 3, 5 and 6.

Ex parte for Defendant No.4.

Defendant No.7 Askari Commercial Bank Limited, called absent.

Defendant No.8 Citi Bank N.A., called absent.

2017 C L D 270

[Sindh]

Before Sajjad Ali Shah, C.J. and Zulfiqar Ahmad Khan, J

Messrs FAISAL MOTORS----Petitioner

Versus

MODEL COLLECTOR OF CUSTOMS (EAST) and others----Respondents

C.P. No.D-2753 of 2016, decided on 16th August, 2016.

Import Policy, 2013---

----Cl. 2(1)--- "New vehicle"--- Connotation--- Registered vehicle---Petitioner imported 2016 model car from Japan which was already registered there and was driven only 75 kilometers---Authorities declined to allow import of car in question allegedly for the reason that import of registered car did not fall within the meaning of 'new vehicle'---Validity---Held, it was a must for bringing vehicle within the purview of Cl.2(1) of Import Policy, 2013, that vehicle had to have manufacturing date of past twelve months preceding date of importation into Pakistan---Such vehicle was not to be (a) registered in country of export, or (b) not used in country of export, prior to its importation in Pakistan---Mere proof of registration of vehicle prior to its importation in foreign country alone or alternatively its prior use was not conclusive to remove vehicle from importability as 'new vehicle' under Cl.2(1) of Import Policy, 2013---Vehicle in question was manufactured within 12 months from the date of import, though had been registered in country of export (Japan) but being unused and legitimately showing only 75 kilometers on its speedometer, qualified definition of a 'new vehicle' set in Cl.2(1) of Import Policy, 2013---High Court directed the authorities to treat vehicle in question as 'new vehicle'---Constitutional petition was allowed in circumstances.

Shazeb Pharmaceutical Industries Ltd. v. Federation of Pakistan 2006 PTD 2237 ref.

Khawaja Shamsul Islam for Petitioner.

Iqbal Khurram, Asim Mansoor Khan, D.A.G. and Ilyas Ahsan, Principal Appraiser (Legal) for Respondents.

2017 C L D 285

[Sindh]

Before Mahmood A. Khan, J

MCB BANK LIMITED through duly constituted Attorney---Plaintiff

Versus

SAJIDA NQAI RIAZ and 8 others---Defendants

Suit No.67 of 2014, decided on 10th November, 2016.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 82-A, 82-E(4) & (7)---Federal Ombudsman Institutional Reforms Act (I of 2013), S. 18---Civil Procedure Code (V of 1908), O.I, R.10 & O.V11. R.11---Specific Relief Act (I of 1877), S. 42---Suit for declaration, recovery of compensation and damages---Rejection of plaint---Banking Mohtasib, proceedings against---Plaintiff Bank was aggrieved of the order passed by Banking Mohtasib and sought recovery of compensation as well as damages---Validity---Special law only provided complainant an opportunity to approach civil court but not the Bank---Matter decided by special forum could not be allowed to be re-agitated before civil court except by available exception or for want of jurisdiction by special forum and/or mala fides which were not only required to be merely alleged the same were to be referred also in the plaint, failing which the same could not even be brought up in evidence before civil court---In absence of any reference to any alleged mala fide and collusion or connivance in plaint any allowance to mere allegation would be sufficient to treat the whole purpose of creation of special forum redundant---Dispute between plaintiff and defendants stood decided in accordance with and by a special forum created by law---Such exercise was legal and protected by law and did not warrant any claim of damages against Banking Mohtasib and State Bank of Pakistan---Plaintiff failed to show required exception, as such had no cause of action in law as far as the such officials were concerned and they could not be a party to such proceedings and their names were deleted from the list of defendants---Application was disposed of accordingly.

Sultan Muhammad and another v. Muhammad Qasim and others 2010 SCMR 1630; S.M. Shafi Ahmed Zaidi through Legal Heirs v. Malik Hassan Ali Khan (Moin) through Legal heirs 2002 SCMR 338; Messrs Rohi Ghee Industries (Pvt.) Ltd. and others v. Collector of Customs and others 2007 PTD 878; Secretary Economic Affairs Division Islamabad and others v. Anwarul Haq Ahmed and others 2013 SCMR 1687; Karachi Catholic Cooperative Housing Society Ltd v. Mirza Jawad Baig PLD 1994 Kar. 194; Muhammad Asif and another v. Haji Fazal Ahmed and 2 others 2004 CLC 965; Journalist Publication (Pvt.) Ltd., Karachi v. Federation of Pakistan through Secretary, Ministry of Labour and Manpower, Islamabad and 3 others 1992 MLD 465; Hakim Hafiz Muhammad Ghaus v. Province of Punjab 1996 CLC 1382; United Bank Limited through Manager v. Banking Mohtasib Pakistan and another 2006 CLD 1226; Abbasia Cooperative Bank (Now Punjab Provincial Cooperative Bank Ltd.) through Manager and another v. Hakeem Hafiz Muhammad Ghaus and 5 others PLD 1997 SC 3; Shahab-ud-Din and others v. Mariam Bibi 1995 MLD 45; Amber Ahmed Khan v. Pakistan International Airlines Corporation, Karachi Airport, Karachi PLD 2003 Kar. 405; International Cargo Handling Company (Pvt.) Limited v. Port Bin Qasim Authority through Secretary, Bin Qasim Authority PLD 1992 Kar. 65; Shahzad and another v. IVth Additional District Judge, Karachi (East) and 5 others PLD 2016 Sindh 26; Messrs Sakhi Dattar Cotton Industries and Oil Mills through Authorized Partner v. Messrs Mahmood Pvt. Ltd and 4 others 2006 CLD 191; Moinuddin Paracha and 5 others v. Sirajuddin Paracha and 22 others 1994 CLC 247; Babau Rahim Bux v. Wali Mohammad 1992 CLC 1025; Mst.Khursheed Jehan v. Syed Aziz Ahmed Naqvi and 2 others 1990 CLC 1132; Abdul Rahim v. Karachi Development Authority 1988 CLC 1207; Imran Raza Shaikh and 5 others v. Mst. Zarina GuI and 4 others 2003 YLR 943; Province of Punjab through Secretary Excise and Taxation, Punjab, Lahore and others v. Muhammad Ishaq 2001 YLR 2754; Ahmed Ali v. Manzoor Hussain and 8 others 2008 YLR 109; Syed Ikhlaque Hussain Shah v. Sh. Muhammad Bashir and others 2007 CLC 872 and Muhammad Jamil Asghar v. The Improvement Trust, Rawalpindi PLD 1965 SC 698 ref.

Zaheer-ud-Din Minhas holding brief for Ghulam Rasool for Plaintiff.

Noman Jamali for Defendants Nos.1 and 2.

Khalid Hayat for Defendant No.7.

Abdul Razzak for Defendant No.8.

2017 C L D 342

[Sindh]

Before Aqeel Ahmed Abbasi and Abdul Maalik Gaddi, JJ

Messrs DEWAN AUTOMOTIVE ENGINEERING LIMITED FORMERLY DELTA INNOVATIONS LIMITED---Appellant

Versus

Messrs SONERI BANK LIMITED---Respondent

Special High Court Appeal No.32 of 2012, decided on 10th October, 2016.

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

----Ss. 9 & 22---Suit for recovery of finance---Holder of power of attorney---Authority to file plaint---Single Judge of High Court declined to grant leave to defend the suit and decreed the same in favour of Bank---Plea raised by borrower was that the person who instituted suit was not authorized to file the same---Validity---Person who had signed the plaint was holding valid power of attorney by fulfilling all legal requirements and was a competent person who instituted the suit---Borrower had not denied execution of documents in between parties and was not entitled for leave to defend the suit---Borrower did not discharge his obligation as per agreements and the suit was rightly instituted by Bank---Borrower denied claim of Bank and by consent the matter was referred to Chartered Accountant whose report was on record---After receiving report of Chartered Accountant, Single Judge of High Court rightly decreed the suit in favour of Bank---Division Bench of High Court declined to interfere in the judgment and decree passed by Single Judge of High Court---Appeal was dismissed in circumstances.

Deputy Manager PESCO WAPDA Abbotabad and 2 others v. Ali Match (Pvt.) Ltd. and 9 others 2016 CLC 1133; Telecard Limited through Authorized Representative v. Pakistan Telecommunication Authority through Chairman 2014 CLD 415; Hasnain Cotex Ltd. and 2 others v. Jasim Khan 2012 YLR 2743; Messrs Pharmatec Pakistan (Pvt.) Ltd. through Managing Director and 3 others v. Amjid Ali Shah 2016 MLD 1341; Mamdot (Represented by 6 Heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Elbow Room and another v. MCB Bank Limited 2014 CLD 985; Habib-ur-Rehman v. Judge Banking Court No.4, Lahore and another 2006 CLD 217; United Bank Limited, Stock Exchange Branch, Lahore v. S. Khalid Hakeem 2002 CLD 1275; Messrs International Business Centre, through Managing Director and another v. Habib Credit and Exchange Bank Ltd. 2004 CLD 1552; Mst. Bhag Bhari and another v. Fateh Khan and others PLD 1960 (W.P.) Lah. 1216; Mirza Abdul Hamid and another v. The Custodian of Evacuee Property and another PLD 1969 Lah. 404; Messrs Khatri Brothers through Proprietor v. Federation of Pakistan through Secretary, Revenue Division and Chairman Federal Board of Revenue, Islamabad 2010 PTD 1225; Messrs ICEPAC Limited and 2 others v. Messrs Pakistan Industrial Leasing Corporation Ltd. 2005 CLD 1186; Asad Pervaiz and another v. Habib Bank Ltd. through Manager 2005 CLD 1525 and Messrs Bank Al-Falah Limited v. The Presiding Officer and another 2014 CLD 160 distinguished.

Syed Muhammad Abbas Hyder along with Atif Hafeez for Appellant.

Neel Keshav along with Nisar Ahmed Channa, Head Recovery Officer for Respondent.

2017 C L D 380

[Sindh]

Before Irfan Saadat Khan and Zafar Ahmed Rajput, JJ

ADAMJEE POLYCRAFT LIMITED and 3 others---Appellants

Versus

NATIONAL INVESTMENT TRUST LIMITED---Respondent

First Appeal No.50 of 2000, decided on 4th October, 2016.

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

----S. 126---Contract of guarantee---Liability of surety---Principle---Liability of surety is always considered to be co-extensive with that of principal debtor---Guarantors are jointly and severally liable to pay outstanding amount to creditor unless contents of contract provide otherwise---Liability of surety immediately arises after failure on the part of principal debtor to payout legally due liability against him---Creditor in such regard is legally entitled to proceed in case of default of principal debtor against surety/guarantor, as per terms of contract---While determining liability of guarantors/sureties technicalities, unless insurmountable, were not to be taken into consideration.

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

----Ss. 9 & 21---Contract Act (IX of 1872), S. 126---Recovery of finance---Contract of guarantee---Liability of guarantor/surety---Appellants were sponsors of principal borrower company---Suit for recovery of finance was decreed by Banking Court in favour of Bank against principal borrower and its sponsors---Validity---Sponsors, undertaking was an integral part of agreement and the same had to be read in conjunction with agreement entered between principal borrower company and Bank---Sponsors could not absolve themselves from the liability accruing and arising on principal borrower company to be its liability only---Sponsors were co-extensively liable to payout liability of principal borrower company---Terms of sponsors' agreement duly signed had to be read in conjunction with main agreement entered between principal borrower company and Bank---High Court declined to interfere in judgment and decree passed by Banking Court, as there was no legal infirmity found---Appeal was dismissed in circumstances.

E.N.E. KOS 1 Limited v. Petroleo Brasileiro S.A 2012 SCMR 1881; Montage Design Build Through Partner v. The Republic of Tajikistan through The Embassy of Tajikistan and 2 others 2015 CLD 8; Echo West International (Pvt.) Ltd. v. Pakland Cement Ltd. 2008 YLR 206; Haji Naimatullah v. Federation of Pakistan through Secretary Ministry of Defence PLD 2013 Sindh 406; Mst. Ishrat Bano v. Noor Hussain and 2 others 2010 YLR 2452; Ghulam Murtaza v. Abdul Salam Shah and others 2007 SCMR 1062; Raja Ali Shan v. Messrs Essem Hotel Limited and others 2007 SCMR 741; Aurangzeb through L.Rs. and others v. Muhammad Jaffar and another 2007 SCMR 236; Rasheedur Rehman Khan v. Mian Iqbal Hussain PLD 2006 SC 418; Saudi-Pak Industrial And Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Allied Bank of Pakistan 2003 CLD 596; Anwarul Haq v. Federation of Pakistan through Secretary, Establishment Division, Islamabad and 13 others 1995 SCMR 1505 and Abdur Razzaq and 8 others v. Shah Jehan and 5 others 1995 SCMR 1489 distinguished.

United Bank Limited v. Pakistan Industrial Credit and Investment Corporation Ltd. 2002 CLD 1781 and Maharashtra State Electricity Board, Bombay v. The Official Liquidator, High Court, Ernakulam and another AIR 1982 SC 1497 ref.

Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2000 SCMR 619 and Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72 rel.

Asim Mansoor Khan for Appellants.

Muhammad Masood Khan and Muneer Ahmed for Respondent.

2017 C L D 406

[Sindh (Sukkur Bench)]

Before Syed Hassan Azhar Rizvi and Khadim Hussain M. Shaikh, JJ

TARIQUE AZIZ SHAIKH---Appellant

Versus

HABIB BANK LIMITED through Attorney and another---Respondents

1st Civil Appeal No. D-15 of 2014, decided on 23rd September, 2016.

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

-----S. 22---Limitation Act (IX of 1908), Ss. 5 & 29---Appeal filed beyond prescribed period---Condonation of delay---Appellant filed appeal before High Court, 94 days after passing of judgment and 86 days after the decree by Banking Court---Validity---Provisions of S. 5, Limitation Act, 1908, were not applicable to appeal filed under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which was a special law and had itself provided period of limitation for filing appeal to High Court against judgment, decree, sentence or final order passed by Banking Court---High Court declined to condone delay caused in filing of appeal against judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171; Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286 and Messrs Khan Tractors, Alipur Road, Khan Garh District Muzaffargarh through Proprietor and 2 others v. Habib Bank Limited, Railway Road Branch, Muzaffargarh through Manager 2013 CLD 177 rel.

Mushtaque Ahmed Shahani for Appellant.

2017 C L D 427

[Sindh]

Before Zulfiqar Ahmad Khan, J

PAKISTAN PHARMACEUTICAL MANUFACTURERS' ASSOCIATION (PPMA) through Authorized Signatory---Appellant

Versus

The CONTROLLER OF PATENTS and another---Respondents

Misc. Appeals Nos.19 and 20 of 2011, decided on 30th November, 2016.

(a) Words and phrases---

----"Advertised"---Meaning.

Black's Law Dictionary rel.

(b) Words and phrases---

----"Gazette"---Connotation---Gazette is generally understood to be an official government publication containing public notices, notifications and other prescribed matters.

The Chambers Dictionary rel.

(c) Official Gazette Act (XXXI of 1863) [since repealed]---

----S. 1---Gazette---Types and categories---Gazettes are of two types namely 'extraordinary' and 'weekly'---'Extraordinary gazettes' are of three types, wherein in Part-I Act, Ordinances, President's Orders and Regulations are printed; in Part-II Statutory Notifications and SROs are printed; and in Part-III other Notifications and Orders etc. are printed--- Weekly gazettes are of six types ranging from Part-I up to Part-VI.

(d) Notification---

----Connotation--- Notification is an act of notifying or giving notice as given in words or anything which communicated information.

Concise Oxford Dictionary rel.

(e) Words and phrases---

----"Publish"---Meaning.

Concise Oxford Dictionary rel.

(f) Notification---

----Gazette---Date of publication---Proof---Gazetted notification bearing a particular date is presumed to be published on the date indicated thereon unless proved otherwise---If by leading evidence it can be shown by any interested party that gazette was actually published (or made available to public) on a date subsequent to the date indicated on the gazette, then that subsequent date is taken as date of actual publication (i.e. the act of making it public)---Such date is rendered as relevant date from which gazette comes into force.

A. M. Sheikh v. National Refinery Limited 1990 CLC 479; Union of India v. Ganesh Das Bhoraj 2000 (116) ELT 431 and Metro Exporters (P) Ltd. v. Collector of Customs 1997 (94) ELT 427 Tri Del rel.

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

----Ss. 23 & 69(3)---Patent Rules, 2003, R. 17---Opposition---Limitation---Gazette notification, non-availability of---Opposition filed by appellant against patent in question was dismissed by Controller of Patents as the same was barred by limitation---Plea raised by appellant was that as gazette in question was not made available at Patent Office, therefore, delay was caused in filing of opposition---Validity---Such plea held no ground as there was no provision under Patent Laws that gazettes were to be provided at Patent Office or supplied to interested persons---Ignorance of law was no excuse and if everyone would come forward with their own excuses to not have found gazette notifications and attempting condonation of delays in filing any action effectuating from the date of gazette then the purpose of gazette would be frustrated and no uniform legal system could ever operate---High Court declined to interfere in the order passed by Controller Patents---Appeal was dismissed in circumstances.

M. Mehmood Baig for Appellant.

Salim Ghulam Hussain for Respondent No.1.

2017 C L D 451

[Sindh]

Before Nadeem Akhtar, J

BANK OF PUNJAB through Attorney---Plaintiff

Versus

DEWAN SALMAN FIBER LIMITED---Defendant

Suit No. B-19 of 2011, decided on 25th August, 2016.

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

----S. 9---Limitation Act (IX of 1908) S. 3---Suit for recovery of finance---Time barred claims---Duty of Court---Scope---Question of limitation is not a mere technicality but in fact Court is duty bound to look into and decide the question at the earliest stage suo motu or if pointed out by opposite party.

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

----S. 9---Finance facility--- Renewal/rescheduling/restructuring---Effect---Any renewed/rescheduled/restructured finance facility without fresh or further disbursement is not void.

Mushtaq Ahmed Vohra v. Crescent Investment Bank Limited 2005 CLD 444; Habib Bank Limited v. Messrs Qayyum Spinning Limited and others 2001 MLD 1351 and HBL v. Al-Jalal Textile Mill Ltd. 2003 CLD 1007 distinguished.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 = 2012 CLD 337; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation Karachi PLD 2002 SC 500; Messrs Dadabhoy Cement Industries Ltd. and others v. Messrs National Development Finance Corporation 2002 CLC 166 and Citibank N.A. through Branch Manager v. Ameer Alam 2015 CLD 429 rel.

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

----Ss. 3(2), 9 & 10---Limitation Act (IX of 1908), S. 3---Suit for recovery of finance---Time barred claims---Cost of funds---Plaintiff Bank filed suit with regard to recovery of finance facilities advanced to defendant against nine Letters of Credit, Bridge Finance Facility and Running Finance Facility renewed two times---Validity---Bank did not file with plaint any agreement or other document pertaining to Bridge Finance Facility claimed in the suit---No specific agreement, document or terms and conditions of the alleged facility was pleaded in plaint---High Court declined to allow Bridge Finance Facility only on bare and vague statement made that in addition to the facilities of Letters of Credit and Running Finance defendant had also availed Bridge Finance Facility from Bank---Claim of Bank in respect of eight Letters of Credit was rejected as the same was barred by limitation; no specific denial or reply being on record from defendant in respect of ninth Letter of Credit, therefore, Bank was entitled to such amount---Defendant admitted that it had availed Running Finance Facility and also admitted that no repayments were made in that respect---Renewal of the facility on two occasions and execution of agreements and other documents in respect thereof, had also been admitted by defendant---Bank was entitled to recover agreed purchase price which was payable by defendant till the agreed period---Purchase price included mark up and no amount over and above the purchase price could be granted by Banking Court---Cost of funds from the date of default at the rate prescribed by State Bank of Pakistan was allowed under Financial Institutions (Recovery of Finances) Ordinance, 2001, as compensation to financial institution for the finance blocked/stuck up due to breach in fulfilment of obligation by customer---High Court dismissed suit of Bank to the extent of eight Letters of Credit and Bridge Finance but decreed the suit to the extent of ninth Letter of Credit and Running Finance Facility with cost of funds thereon from their respective dates of default---Suit decreed accordingly.

Muhammad Habibullah Siddiqui v. Haji Habib Jafferali and 2 others 1993 MLD 1050; Shaikh Mehboob Ahmed v. Mst. Zahida Begum and 6 others 2006 YLR 711; United Bank Limited v. Kurnool Muhammad Muneer 1991 CLC 1758; United Bank Ltd. v. Messrs Sartaj Industries through Qaisar Iqbal, Managing Partner and 6 others PLD 1990 Lah. 99; Ahmed Khan v. Rasul Shah and others PLD 1975 SC 311; Muhammad Zahoor and another v. Lal Muhammad and 2 others 1988 SCMR 322 and Barkhurdar v. Muhammad Razzaq PLD 1989 SC 749 ref.

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

K.K. Agha along with Ms. Afsheen Aman for Plaintiff.

Adnan I. Chaudhry for Defendant.

2017 C L D 508

[Sindh (Hyderabad Bench)]

Before Muhammad Faisal Kamal Alam, J

SIKANDAR ALI---Appellant

Versus

ALI AKBER---Respondent

Ist Appeal No. 1 of 2016, decided on 18th November, 2016.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 79 & 118---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2---Suit for recovery of money on the basis of negotiable instrument---Leave to defend the suit---Principle---Suit filed by plaintiff on the basis of Bank cheque was decreed in his favour as Trial Court declined to grant leave to defend the suit to defendant---Validity---When triable issues were specifically pleaded in leave to defend application by defendant or pleading of plaint in summary suit itself was vague, which required further proof then leave to defend the suit should be granted to defendant---Defendant neither pleaded nature of triable issues nor had come up with any legal justification that the nature of financial transactions between him and plaintiff was such that it lacked consideration for issuance of subject cheque---Defendant also did not plead such facts which had the quality to rebut presumption of consideration as provided by S. 118 of Negotiable Instruments Act, 1881---Trial Court did not fall into any error while passing order/decree, except to the extent of rate of interest which was awarded at the rate of 8% by invoking S. 79 of Negotiable Instruments Act, 1881, instead of 6%---High Court modified decree to the extent of rate of interest only and remaining decree was maintained---Appeal was dismissed accordingly.

2004 CLC 356; 2009 CLC 308; 2007 YLR 187; 1997 SCMR 943 and 2008 MLD 1448 ref.

Haji Ali Khan and Company v. Messrs Allied Bank of Pakistan Limited PLD 1995 SC 362 rel.

Muhammad Asif Shaikh for Appellant.

Ashfaque Ali Khaskheli for Respondent.

2017 C L D 546

[Sindh]

Before Muhammad Shafi Siddiqui, J

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

Versus

Messrs THREE STAR HOSIERY MILLS (PVT.) LTD. and 5 others---Defendants

Suit No.B-51 of 2009, decided on 25th November, 2016.

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

----S. 10---Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Suit for recovery of finance---Leave to defend the suit---Statement of accounts, defect in---Defendant sought leave to defend the suit on the ground that statement of accounts relied upon by the Bank did not contain name and designation of the officer who prepared the same---Validity---Presumption of correctness was provided under Bankers' Books Evidence Act, 1891, to statement of accounts and was considered to be correct if it was certified by the officer as contemplated under S. 2(8) of Bankers' Books Evidence Act, 1891---Certified copy of additional statement of accounts could not cure the defect as the authority of the officer was only in relation to instituting a suit, verification of plaint, engaging a counsel etc. in terms of Board resolution---Such authority based on Board resolution could not be stretched down to the frame of S. 2(8) of Bankers' Books Evidence Act, 1891---Defendant was entitled for an unconditional leave on such preliminary ground alone---Application was allowed in circumstances.

Ijaz Ahmed for Plaintiff.

Furqan Naveed and Shahid Iqbal Rana for Defendants.

2017 C L D 564

[Sindh (Sukkur Bench)]

Before Syed Hassan Azhar Rizvi and Khadim Hussain M. Shaikh, JJ

Syed GHULAM ALI SHAH---Appellant

Versus

Messrs MCB BANK LIMITED and another---Respondents

1st Civil Appeal No. D-09 of 2014, decided on 3rd December, 2016.

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

----S. 22---Limitation Act (IX of 1908) Ss. 5 & 29(2)---Appeal---Limitation---Delay---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---Maintainability---Provisions of S. 5 of the Limitation Act, 1908 were not applicable to appeal filed under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, as the said Ordinance was a special law, which itself provided period of limitation for filing of appeal against the judgment, decree, sentence, or final order passed by Banking Court.

Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171; Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286 and Messrs Khan Tractors, Alipur Road, Khan Garh District Muzaffargarh through Proprietor and 2 others v. Habib Bank Limited, Railway Road Branch, Muzaffargarh through Manager 2013 CLD 177 rel.

Syed Zaffar Ali Shah for Appellant.

Nemo for Respondents.

2017 C L D 1091

[Sindh]

Before Sajjad Ali Shah, C.J. and Zulfiqar Ahmad Khan, J

ALPHA INSURANCE CO. LTD. through Authorized Representative---Appellant

Versus

Messrs POLY FOILS (PVT.) LTD. through Owner and another---Respondents

M.A. No. 1 of 2015, decided on 30th December, 2016.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Insurance claim---Determination---Limitation---Insured (company) did not provide necessary relevant documents to surveyors, which were mandatory in respect of insurance claim regarding fire when it took place for the second time at the same premises for the same machinery---Insurance Tribunal passed judgment and decree in favour of (insured) company and against the insurance company---Validity---Overwhelming evidence was available in the form of survey reports and various examinations and cross-examinations and the Insurance Tribunal did not apply judicious mind to such evidence---Highest possible claim that any surveyor proposed was in the sum of Rs.1,56,61,621/- but Insurance Tribunal in its order, for no cogent reasons accepted the claim in full to the tune of Rs. 3,41,90,000/- without assigning any reasons---Findings of Insurance Tribunal on the relevant issues were not based on facts as depicted from the records and claim in whole should not have been granted at all, as none of the surveyors recommended the same---Suit against rejection had to have commenced within no more than three months after the rejection and the insured took four months and 18 days---Order which had held that suit was not hit by limitation was not only bad as to the facts rather had failed to apply appropriate law---High Court, in exercise of appellate jurisdiction, set aside judgment and decree passed by Insurance Tribunal against insurance company, resultantly suit was dismissed---Appeal was allowed in circumstances.

Mrs. Nasreen Begum v. State Life Insurance Corporation 2009 CLD 1480; Mst. Nasim Bibi v. State Life Insurance Corporation 2015 CLD 1155 and State Life Insurance Corporation v. Mst. Nasim Begum 2009 CLC 1413 rel.

2014 MLD 1095; 2010 CLC 792; 2010 CLD 1171; EFU General Insurance Limited v. Fahim-ul-Haq 1997 CLC 1441; PLD 1989 Lah. 390; PLD 1982 Kar. 627 and AIR 1940 Bombay 225 ref.

Ms. Shumaila Sagheer for Appellant.

S. Hassan Imam for Respondents.

2017 C L D 1136

[Sindh]

Before Sajjad Ali Shah, C.J. and Zulfiqar Ahmad Khan, J

NOVARTIS AG through Authorized Signatory---Appellant

Versus

NABIQASIM INDUSTRIES (PRIVATE) LIMITED through Chief Executive/Director/Company Secretary and another---Respondents

High Court Appeal No. 134 of 2015, decided on 3rd March, 2017.

Trade Marks Ordinance (XIX of 2001)---

----S. 40---Civil Procedure Code (V of 1908) O. XXXIX, Rr. 1 & 2---Trade mark of a pharmaceutical product---Infringement---Test---Protection against infringement of trade mark---Element of deception and confusion---Public health concerns---Interim relief against use of alleged infringed trade mark, grant of---Scope---Plaintiff, owner and registrant of the registered Trade Mark by the name of the LESCOL, impugned order of Trial Court whereby its interim relief, restraining the defendant from using the name DESCOL for its product, was vacated---Validity---Said two medicines were used for treatment of different ailments and their generic names were also different, therefore a small mistake could be fatal for the user of the medicine(s) and no possibility of deception could be allowed---High Court observed that while public health concerns (drug name mistakes) were not strictly relevant to the issue of trade mark registration, however, the same may be seriously considered when assessing the issue of confusion between names of drugs---When a new entrant in the drug market place adopted an already existing distinctive and established trade mark, a query needed to be made as to why the latter entrant had chosen a trade mark deceptively similar with the one that had existed long before---High Court set aside impugned order of Trial Court and restored the grant of interim relief in favour of plaintiff---Appeal was allowed, accordingly.

2003 CLD 794 distinguished.

Glaxo Laboratories Limited v. Assistant Registrar Trade Marks Karachi PLD 1977 Kar. 858 and Sanofi-Aventis v. GlaxoSmithKline Biologicals SA (2010) 89 CPR (4th) 378 (TMOB) rel.

Amna Salman for Appellant.

Mirza Mehmood Baig for Respondents.

2017 C L D 1148

[Sindh]

Before Muhammad Shafi Siddiqui, J

BANKERS EQUITY LIMITED and 5 others---Plaintiffs

Versus

Messrs PANGRIO SUGAR MILLS LTD.---Defendant

Execution No. 23 of 2008 in Suit No. B-68 of 2000, decided on 20th February, 2017.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, Rr.89, 90 & 92---Execution--- Auction, confirmation of---Objection in shape of affidavit---During execution proceedings, suit property was sold through auction---Judgment debtor filed affidavit containing objections against auction proceedings---Validity---Held, in order to be successful in objections it was inevitable that not only irregularity but material irregularities had to be established leading to fraud which could eventually end up at a substantial loss, as far as judgment debtor was concerned---Judgment debtor did not move application either in terms of O. XXI, R. 89 or 90, C.P.C. purposely and just objected in the shape of affidavit, as either the case was not made out within the parameters of Rr. 89 & 90 of O. XXI, C.P.C. or judgment debtor did not want to entangle itself in the recourse of requirements of such Rules---Judgment debtor failed to substantiate as to what rights were being infringed, the relaxation and restoration of which could enable him to assert the rights---Judgment debtor never objected to de novo re-auction order and fresh public notice which was ordered to be issued which was for a shorter date---High Court declined to interfere with the auction proceedings as urge to claim notice as to terms of such sale proclamation was a futile attempt in such regard--- Sale was confirmed by the High Court in favour of auction purchaser in circumstances.

Zakaria Ghani v. Muhammad Ikhlaq Memon 2016 CLD 480 rel.

Muhammad Ali A. Hakro for Decree Holders.

Asim Mansoor Khan for Judgment Debtor.

Jam Asif Mehmood along with Omer Pirzada for Auction Purchaser.

Abdul Qayyum Abbasi for Applicant/Intervener.

Perwez Chang, Official Assignee.

2017 C L D 1176

[Sindh]

Before Aqeel Ahmed Abbasi and Nazar Akbar, JJ

ARIF OOSMAN---Appellant

Versus

HABIB BANK LIMITED through Recoveries and Litigation Department---Respondent

First Appeal No. 60 of 2014, decided on 30th May, 2017.

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

----Ss. 2(a)(i), 9 & 22 [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Recovery of finance---Transaction outside Pakistan--- Amended provisions of S. 2(a)(i) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Retrospective effect---Bank filed suit against defendant regarding finance which was advanced in a foreign country in the year 1978---Banking Court decreed suit in favour of Bank---Plea raised by defendant was that courts in Pakistan had no jurisdiction to entertain such suit---Validity---Bank, in its plaint had claimed recovery of loan with interest @ 14% per annum which loan was provided in the year 1978---Loan was interest-bearing, therefore, suit was barred by limitation---All acknowledgments to claim of defendant were dated 1991 or prior and suit was filed in year 2000---Even from date of acknowledgment of interest-bearing loan, suit was time barred---Advantage of amendment to Financial Institutions (Recovery of Finances) Ordinance, 2001 to bring their cases in Banking Court in Pakistan on ground that defaulter of loan/finance for time being was resident in Pakistan was subject to law of limitation---High Court in exercise of appellate jurisdiction set aside judgment and decree passed by Banking Court---Appeal was allowed in circumstances.

Nadeem Ghani v. United Bank Limited and others 2001 CLC 1904; Habib Bank Limited v. Highway General Trading Co. and others 2014 CLD 491; Khalid Qureshi and 5 others v. United Bank Limited I.I Chundrigar Road, Karachi 2001 SCMR 103; Mst. Shaheen Noon and another v. Allied Bank of Pakistan through Manager and others 2006 CLD 706; Messrs Industrial Development Bank of Pakistan v. Mst. Rooqaiya Begum and others 1986 CLC 1592; Habib Bank Limited v. Shamim Qureshi PLD 1988 Kar. 481; Industrial Development Bank of Pakistan v. Messrs Naqi Beverages (Pvt.) Ltd. and 7 others 2002 CLD 712; Valuegold Limited and 2 others v. United Bank Limited PLD 1999 Kar. 1; T. Zubair Limited and 2 others v. Judge, Banking Court No.III, Lahore and another 2000 CLC 1405; Bank of America National Trust and Saving Association v. Messrs Saad Company Ltd. 1988 MLD 2285 and United Bank Ltd. v. Haji Bawa Company Ltd. and 3 others 1981 CLC 89 ref.

Abdul Sattar Lakhani for Appellant.

Tasawar Ali Hashmi for Respondent.

2017 C L D 1256

[Sindh]

Before Muhammad Shafi Siddiqui, J

HABIB METROPOLITAN BANK LIMITED---Plaintiff

Versus

Messrs DAGRA TEXTILES (PVT.) LIMITED and 3 others---Defendants

Suit No. B-04 of 2017, decided on 11th April, 2017.

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

----Ss. 16, 23 & 9---Transfer of Property Act (IV of 1882), S. 53---Civil Procedure Code (V of 1908), O.XXXVIII, R. 5---Suit for recovery---Restriction on transfer of mortgaged assets and properties of customer(s) of Financial Institutions---Attachment before judgment/ decree---"Benami" property in the name of an ostensible owner, determination of---Plaintiff Bank, inter alia, sought an injunctive order under Ss. 16(1) & 16(2) Financial Institutions (Recovery of Finances) Ordinance, 2001 to the effect that a property, which was owned by the defendant, and was gifted to his wife; should not be allowed to be transferred to his wife---Contention of plaintiff Bank inter alia was that the subject transfer by the way of gift could only be deemed to be a benami transfer, and was done to deprive the plaintiff Bank from fruits of decree which was likely to be passed in the suit, and further sought impleadment of defendant's wife as party to the suit---Validity---When the loan was rescheduled, subject property did not form part of the security, and prima facie said gift could not be considered as mala fide exercise of right since it was not considered by the plaintiff Bank to form part of any security for repayment of finances---Determination as to whether the property was held as benami by the defendant's wife was an independent exercise which could not form part of proceedings which were governed by the Financial Institutions (Recovery of Finances) Ordinance, 2001 which was special law, and defendant's wife did not come within the definition of "customer", "financial institution" or "borrower"---Order under S. 16(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be made when a property was being alienated, encumbered or otherwise dealt in a manner which was likely to impair or prejudice security in favour of the financial institution---Valuation report provided that mortgage was more than what was being claimed in the suit therefore, the same was not being subjected to impairment---Essential ingredients of S. 16(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were not satisfied and S. 16(2) could not be extended to a bona fide transaction---Subject property was not a hidden property and the plaintiff Bank was not short of securities from the defendants and the same were not subject to impairment---Section 23(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 only prohibited "customer" from transferring any asset which had been given as security to a financial institution after publication of summons per S. 9(5), Financial Institutions (Recovery of Finances) Ordinance, 2001, which was not applicable in the present case and similarly O. XXXVIII, R. 5, C.P.C. was also not applicable---Plaintiff Bank therefore, failed to make out a case for attachment of subject property or impleadment of defendant's wife as party to the suit---Applications were dismissed, in circumstances.

Moinuddin Paracha and others v. Sirajuddin Paracha and others 1993 CLC 1606; Mt. Bhjagabai v. Ghanshamdas AIR (35) 1948 Nagpur 328; Muhammad Nawaz Minhas and others v. Mst. Surriya Sabir Minhas and others 2009 SCMR 124 and Zohair Zakaria v. National Bank of Pakistan 2009 CLD 915 rel.

Saudi Pak Commercial Bank Ltd. v. A.H. International (Pvt.) Ltd. 2007 CLD 175; MCB Bank Limited v. Messrs Atlas Rubber and Plastic Industries Pvt. Ltd. and others 2011 CLD 1550 and Ch. Muhammad Ishaque v. Cantonment Executive Officer, Chunain District Kasur and another PLD 2009 Lah. 240 ref.

Bahzad Haider for Plaintiff.

Salman Akram Butt along with Shoaib Raashid and Shahid Iqbal Rana for Defendants.

2017 C L D 1298

[Sindh]

Before Aziz-ur-Rehman, J

ASKARI BANK LIMITED---Plaintiff

Versus

Syed ZULFIQAR RIZVI---Defendant

Suit No. B-31 of 2012, decided on 17th May, 2017.

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

----Ss. 9 & 10--- Suit for recovery of finance--- Interlocutory application---Scope---No ancillary/interlocutory application filed by defendant can be entertained unless defendant is allowed to defend the suit.

Shaikh Muhammad Usman v. Judge Banking Court-I, Lahore and another 2015 CLD 257 rel.

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

----S. 9---Bankers' Books Evidence Act (XVIII of 1891), S. 3---State Bank of Pakistan, BDP Circular No. 13 dated 30-04-1984 and Circular No. 32 dated 30-11-1984---Suit for recovery of finance---Plea of defendant was that charging of markup was haram (against injunctions of Islam)---Validity---Defendant had not only acted upon the finance agreement but also got himself benefited from renewals of agreements--- Defendant could not be permitted to say that markup charged in terms of finance agreement for renewal was either haram or otherwise Bank's dues were not payable---Defendant at such stage, could not resile from his commitments, undertakings and promises made voluntarily---Acknowledged liability could not be denied merely on strength of evasive and unspecific assertions---Defendant failed to pinpoint any entry in certified statement of accounts as being wrong or incorrect---Entries made in certified statement of accounts attached itself the statutory presumption of truth under Bankers' Books Evidence Act, 1891---Defendant did not specifically dispute any of the entries contained in certified statement of accounts annexed with plaint---Defendant failed to put forward a definite response to accounts of plaintiff Bank which was a compulsory requirement of law---Provision of Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law and provided special procedure for banking suit and under S. 4 of Financial Institutions (Recovery of Finances) Ordinance, 2001, its provisions were to override other laws---Defendant having failed to fulfill mandatory requirements as provided under S. 10(3) & (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, application for leave to defend was rejected---Suit was decreed accordingly. [pp. 1316, 1321, 1323, 1329] B, D, E & F

Messrs Sartaj Industries through Qaiser Iqbal, Managing Partners and 6 others v. United Bank Limited PLD 1990 Lah. 99; Askari Commercial Bank Ltd. v. Hilal Corporation (Pvt.) Ltd. and 6 others 2009 CLD 588 and Apollo Textile Ltd. v. Soneri Bank Ltd. 2012 CLD 337 rel.

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

----S. 118---Negotiable instrument---Presumption---Scope---Statutory presumption vis-à-vis 'consideration', 'date', 'time of acceptance and transfer', 'order of endorsement', 'stamping' and 'holder in due course' of negotiable instrument is attached to a negotiable instrument but same also attracts a special rule of evidence.

Muhammad Arshad and another v. Citi Bank N.A., Lahore 2006 SCMR 1347 and Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143 rel.

Bahzad Haider along with Umair Pirzada and Abid Naseem for Plaintiff.

Hamid Idrees for Defendant.

2017 C L D 1340

[Sindh]

Before Aziz-ur-Rehman, J

UNITED BANK LIMITED---Decree Holder

Versus

Messrs HYDERABAD ELECTRONIC INDUSTRIES LTD. and others---Judgment Debtors

Ex. No. 47 of 1997, decided on 2nd January, 2017.

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

----S. 19---Civil Procedure Code (V of 1908), S. 151 & O. XXI, Rr. 84, 85 & 92---Execution of decree---Sale, confirmation of---Auction purchaser, rights of--- Applicant was auction purchaser of property sold in execution of decree passed by Banking Court---Applicant sought vacant possession of property in question as auction in his favour was confirmed---Satisfaction of final decree and disposal of execution application could not be termed as a valid ground to deprive auction purchaser from his accrued vested rights in respect of subject properties---Vested rights already accrued in favour of auction purchaser and same had also been confirmed/upheld by the Supreme Court---Disposal of execution application could not prejudice or otherwise deprive auction purchaser of his vested rights---Sale certificates in respect of subject properties had already been issued by official of High Court in favour of auction purchaser---Any agreement and/or settlement agreement executed between judgment debtors and decree holder and third party during attachment and operation of status quo order was void and of no legal effect---No one had challenged sale certificates in favour of auction purchaser---High Court directed its official to hand over possession of subject properties to auction purchaser and also to take necessary steps for mutating subject properties in record of rights in favour of/name of auction purchaser---Application was allowed in circumstances.

Mujahid Kareem and others v. NBP through Manager and others 2016 SCMR 66; Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon PLD 2016 SC 229 and Messrs Capital Poultry Feed and Dall Mills and others v. Presiding Officer of Banking Court, Islamabad and others 2016 CLD 1260 rel.

Lilaram v. Ghulam Ali alias Essa through Legal Heirs and others 1991 SCMR 923; Mansab Ali v. Amir and 3 others PLD 1971 SC 124; Abdul Ghaffar-Abdul Rehman and others v. Asghar Ali and others PLD 1988 SC 363 and Muhammad Swaleh and another v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97 distinguished.

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

----O. XXI, Rr. 84, 85 & 92---Sale, confirmation of---Preconditions---Upon acceptance of offer of auction purchaser and deposit of remaining balance amount in compliance with orders of Court, sale of mortgaged property in favour of auction purchaser becomes confirmed.

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

----O. XXI, Rr. 1 & 2---Execution of decree---Out of Court payment---Any payment or adjustment made outside the Court which has not been certified or recorded in terms of O. XXI, Rr. 1 & 2, C.P.C., cannot be recognized by Executing Court.

P. Narasaiah v. P. Rajoo Reddy 1990 MLD 431 rel.

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

----O. XXI, R. 64---Judicial sale, sanctity of---Scope---Sanctity of judicial sale is not only to be maintained but full effect to such judicial sale also needs to be given for restoring confidence of people who wish to purchase properties in Court's auction. [p. 1370] D

Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 rel.

Hamid Idrees for Decree Holder.

Hafiz Abdul Baqi, Raghib Baqi and Khawaja Ishaque Ahmed for Judgment Debtors.

Abid S. Zuberi and Muhammad Haseeb Jamali along with Muhammad Munir Khan, Muhammad Arif Ansari and Suhail Younis Saif for Auction Purchaser.

2017 C L D 1428

[Sindh]

Before Aqeel Ahmed Abbasi and Arshad Hussain Khan, JJ

BANK ALFALAH LIMITED---Appellant

Versus

INTERGLOBE COMMERCE PAKISTAN (PVT.) LTD. and 5 others---Respondents

Spl. H.C.A. No. 282 of 2015, decided on 7th March, 2017.

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

----S. 22---Appeal against interlocutory order of Banking Court under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Bar against---Scope---Rationale behind S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was expeditious disposal of cases and to avoid unnecessary delay which was caused by filing frivolous interlocutory applications---If interlocutory orders were allowed to be challenged before the High Court the very object of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was frustrated---Appellate power conferred on the High Court per S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was therefore restricted only to the extent of entertaining an appeal against a final order and judgment of the Banking Court---Although the phrase "interlocutory order" had not been defined either in the C.P.C. or the Financial Institutions (Recovery of Finances) Ordinance, 2001; but appeals were made competent under the C.P.C. against orders under O. XLIII, C.P.C., but the Legislature under S. 22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 clearly mentioned that no appeal shall lie against an interlocutory order which did not dispose of the entire case---High Court observed that it was clear that the word "interlocutory order" had been used in contradistinction to the term "order" and that the Legislature in order to achieve object that appeal shall lie only against a final order of the Banking Court, further qualified in S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 that the interlocutory order was one which did not dispose of the entire case.

Nazir Ahmed Vaid v. Habib Bank AG Zurich 2005 CLD 1571; Muhammad Khan v. Zarai Tarakiati Bank Limited through President 2014 CLD 1596; Messrs Aziz Flour Mills v. The Industrial Development Bank of Pakistan 1990 CLC 1473; Ali Muhammad Brohi v. Haji Muhammad Hashim PLD 1983 Kar. 527; Pakistan Fisheries Ltd. Karachi and others v. United Bank Ltd. PLD 1983 SC 109; Bank of Punjab v. Messrs AMZ Ventures Limited and another 2013 CLD 2033; Nadeem Athar v. Messrs Dubai Islamic Bank (Pakistan) Ltd. 2013 CLD 805; S. N. Gupta & Co. v. Sandananda Ghose and others PLD 1959 Dacca 330; Union Bank of India, Visakapatnama v. Messrs Andhra Technocrat Industries and another AIR 1982 Andhra Pradesh 408; F. X. Rebello v. Firm Ladhasingh Bedi and Sons AIR (31) 1944 Nagpur 30; Kedarnath Himatsinghka and others v. Tejpal Marudi and others AIR 1935 Patna 219 and Om Prakash and others v. Mohammad Ishaq and others AIR 1933 Allahabad 557 ref.

(b) Words and phrases---

----"Final order"---"Interlocutory order"---Distinction, meaning, scope and nature of---Test for determining what constitutes "final order" in a proceeding---Distinction between determination of a "final order" and an "interlocutory order"---Scope---"Final order" was defined as one which terminated litigation between parties and merits of the case and left nothing to be done but to enforce by execution of what had been determined---Final order was one which finally disposed of the rights of the parties and real test for determining whether an order was final ought to be the question that does a judgment or order, as made, finally disposed of the rights of the parties and if the answer was in the affirmative, then it ought to be treated as a final order and if not, then the same was an interlocutory order---In order to constitute a final order, it was necessary that the same should be one by which the suit or proceeding in either way were finally disposed of---Decision of an important and vital issue which may ultimately affect the fate of the proceedings by itself was not enough and the test to be applied was whether the proceeding was disposed of completely and the case was not kept alive for being dealt within the ordinary way---Final order must contain final adjudication of the matter in contest between parties to an action.

Om Prakash and others v. Mohammad Ishaq and others AIR 1933 Allahabad 557 and Black's Law Dictionary (Sixth Edition) rel.

Arshad Tayyebaly for Appellant.

Zeeshan Abdullah for Respondents Nos.1 and 2.

Ravi R. Pinjani for Intervener Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology (SZABIST).

2017 C L D 1468

[Sindh]

Before Muhammad Ali Mazhar, J

INTERNATIONAL COMPLEX PROJECTS LIMITED AND ANOTHER: In the matter of

J.C.M. Petition No. 24 of 2016, decided on 21st June, 2017.

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

----Ss. 284, 285, 286 & 287---Compromises, arrangements and reconstruction of companies---Power of Court to enforce compromises and arrangements---Provisions for facilitating reconstruction and amalgamation of companies---Jurisdiction of Court under S. 284 of the Companies Ordinance, 1984---Nature---Adjudication of an application under S. 284 of the Companies Ordinance, 1984---Consideration of factors in sanctioning schemes under Ss. 284, 285 & 287 of the Companies Ordinance, 1984---Scope---Where a scheme of arrangement was found to be reasonable and fair, at such juncture, it was not duty or province of the Court to supplement or substitute its judgment against collective wisdom and intellect of all shareholders of the company involved---Nevertheless it was the duty of the court to find out and perceive whether all provisions of law and direction(s) of court had been complied with and when a scheme seemed like it was in the interest of the company and its creditors, same should be given effect---Court had to satisfy and reassure accomplishment of some foremost and rudimentary stipulations such as to consider whether meeting of shareholders was appropriately called and conducted; whether a compromise was a real compromise which was accepted by the competent majority; with such majority acting in good faith and for common advantage and that the actions were reasonable, prudent and proper---Court should also satisfy itself as to whether provisions of the statute had been complied with, whether the scheme was reasonable and practical and whether there existed any reasonable objection to the same---Question as to whether creditors had acted in good faith, and had sufficient information and whether the Court ought to, in public interest, override decisions of the creditors and shareholders; should also be considered---Where all requisite formalities were complied with including the shareholders' approval, Court would not question the commercial wisdom behind a scheme---Role and character of the Court was of a supervisory nature, which was close to judicial review of administrative actions---Court, if found a scheme to be fraudulent or that the same intended to be cloak to cover misdeeds of Directors, then it may reject the scheme---Court could lift the corporate veil for purposes of ascertaining real motive behind a scheme and a scheme must be tested from the point of view of an ordinary reasonable shareholder acting in a business-like manner, considering it with his comprehension and bearing in mind all circumstances prevailing at the time when a meeting was called upon to consider the scheme in question.

A. Ramaiya, Guide to the Companies Act, 17th Edition 2010 and Sidhpur Mills Co. Ltd's case AIR 1962 Guj. 305 rel.

(b) Company---

----Mergers, demergers and acquisitions by or of companies---"Swap ratio", definition and concept of---"Swap ratio" was the exchange ratio in which the shares of a target company were swapped for a share in an acquiring company---Said ratio largely depended on the total value of assets of a target company, though at times it could also depend on negotiations and benefits that acquiring company would be receiving by taking over operations of a target company---"Swap ratio's" rationale was to give investors the same relative value in shares of a new company so that the investment remained relatively unaffected from an investor's perspective---Such arrangement was essential in giving same amount of confidence to investors even after the merger or acquisition went through and at the same time, it was not fair for the investors of the acquiring company to offer high returns for investors of the target company, which is why the "swap ratio" was kept reasonable to maintain an equilibrium between investors of both the companies.

https://www.divestopedia.com/definition/5596/swap-ratio rel.

Arshad Tayyabley and Mikael Azmat Rahim for Petitioners.

Salman Salim Rajan, Assistant Director (LAW), SECP.

2017 C L D 1497

[Sindh]

Before Salahuddin Panhwar, J

MANZAR MASOOD---Plaintiff

Versus

BANK ISLAMI PAKISTAN LIMITED through President---Defendant

Civil Suit No. 428 of 2012, decided on 3rd April, 2017.

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

----S. 7(4)---Banking Court---Jurisdiction, determination of---Pre-conditions.

Whenever there is a default either by customer or financial institution with regard to finance or obligations, arising therefrom upon customer and financial institution; and dispute with regard to existence or otherwise of a finance between customer and financial institution, then it is the Banking Court alone to entertain such a lis for passing appropriate order. Before instituting an application under Financial Institutions (Recovery of Finances) Ordinance, 2001, one is required to prima facie establish that:

i. parties claim within status of 'customer' or 'financial institution' and

ii. dispute related to 'finance' or 'obligation', as defined by Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----Arts. 18 & 59---Opinion of expert---"Relevant fact"---Scope---Opinion of expert has been given status of 'relevant facts' only---Such opinion is always to be considered with great caution and to be taken subject to particular facts and circumstances of a particular case.

Saadat Sultan v. Muhammad Zahur Khan 2006 SCMR 193 rel.

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

----S. 9---Suit for damages---Original title documents, loss of---Innocent negligence in discharge of duty by Bank---Effect---Plaintiff was customer of defendant Bank and had availed financial facility---Plaintiff sought recovery of damages on the plea that defendant Bank had lost original title document handed over at the time of getting finance facility---Validity---Loss of original title document even by Bank had brought depreciation in value of property, quantum whereof was subject to actual and genuine sale consideration---Lost/misplacing of original title document had happened while in the custody and control of defendant Bank and the same depreciated value of property of plaintiff, therefore, plaintiff was entitled for compensation to such and extent---After legally satisfactory completion of transaction between plaintiff (customer) and defendant (Bank) it was obligatory upon defendant Bank to have ensured return of all those things which were meant as 'Amanat' but defendant Bank failed in its obligation/ commitment---Defendant Bank legally could not take plea of innocent negligence in discharge of its bounden legal and moral obligation particularly when its (Bank's) whole business was required full and complete confidence and satisfaction of its customers---Before insisting plea of guilty of innocent negligence, defendant Bank was required to have established its bona fide for which defendant Bank proved nothing substantial---Defendant's witness admitted that loss of original title document was a cause of tension and anxiety, yet attitude of defendant Bank would speak for itself how they had dealt with approaches of plaintiff with regard to his lost original title documents---High Court keeping in view the status of defendant Bank and undisputed high price of property in question, awarded damages to plaintiff for mis-trust---Suit was decreed accordingly.

2012 CLD 483; 2009 CLD 49; 2014 CLC 5; 1970 SCMR 506; Muhammad Yaqoob through L.Rs. v. Feroze Khan and others 2003 SCMR 41; Muhammad Iqbal v. Mehboob Alam 2015 SCMR 21; Malik Gul Muhammad Awan's case 2013 SCMR 507 and Ghulam Mustafa Channa v. MCB Ltd. 2008 SCMR 909 ref.

(d) Damages---

----Compensation--- Quantum--- Failure to determine--- Effect--- In absence of sufficient evidence, plaintiff is not legally entitled to claim amount---Where 'wrong' on the part of defendant is otherwise established then Court cannot leave the wrong-doer go free but should assess a fair compensation.

Mehar Khan and Ahmed Niazi for Plaintiff.

Jaffar Raza for Defendant.

2017 C L D 1642

[Sindh]

Before Muhammad Ali Mazhar and Abdul Maalik Gaddi, JJ

Messrs MEHRAN ELECTRONICS COMPANY through Partner---Appellant

Versus

NATIONAL BANK OF PAKISTAN---Respondent

High Court Appeal No. 449 of 2006, decided on 28th March, 2017.

(a) Malicious prosecution---

----Damages---Dismissal of suit---Effect---Mere dismissal of suit for recovery of disputed amount against plaintiff does not confer any right to sue defendant for damages on basis of malicious prosecution---Prosecution of civil action can only provide a cause for damages for malicious prosecution to opposite side, if same is based on malice of complainant and that too when it is without any reasonable and probable cause.

(b) Words and phrases---

----"Malice"---Defined.

Merriam Webster Dictionary rel.

(c) Malicious prosecution---

----Banker and customer---Plaintiff (customer) filed suit for recovery of damages against defendant Bank on allegation of malicious prosecution, when earlier suit for recovery filed by Bank was dismissed---Single Judge of High Court dismissed suit for recovery of damages---Validity---Defendant Bank, due to some dispute with regard to recovery, filed suit against plaintiff and that earlier suit filed by Bank was not without any probable cause and based upon personal grudge, animosity or some personal benefit---Nothing existed on record to establish any wrongful act committed by Bank or that on account of act of Bank some loss was occasioned by plaintiff---Mere dismissal of suit of defendant Bank for recovery against plaintiff was not a 'legal wrong'---Ingredients to prove malicious prosecution were not fully established---No question had arisen for grant of damages on ground that plaintiff had suffered mental torture, agony and loss of his good health---No medical certificate and expenses for treatment of mental torture, agony or loss of good health was produced in evidence to prove allegations---Division Bench of High Court declined to interfere in the judgment and decree passed by Single Judge of High Court as there was no illegality or error in the same---Intra court appeal was dismissed in circumstances.

Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28 rel.

Sufi Muhammad Ishaque v. The Metropolitan Corporation, Lahore through Mayor PLD 1996 SC 737; Azizullah v. Jawaid A. Bajwa and 3 others 2005 SCMR 1950; Mrs. Zahra Zaidi v. M. Anwar Khan Ghauri 2004 CLC 223; Farrukh Saeed Khan v. Anis-ur-Rehman Bhatti 2006 CLC 440; Kalb-e-Haider and Co. (Pvt.) Ltd. v. National Bank of Pakistan 2016 CLD 183; Ms. Ijaz Dyeing and Finishing Mills' case 2015 CLD 1518; Shafiq Supreme Rice Industries (Pvt.) Ltd. v. Bank Al-Falah Limited 2015 CLD 1211; Angora Textiles Ltd. v. United Bank Ltd. 2015 CLD 1324; Aijaz Mahmood v. Hongkong and Shanghai Banking Corporation 2014 CLD 1244 and Syed Ahmed Saeed Kimrani v. Messrs Muslim Commercial Bank Ltd. 1993 SCMR 441 ref.

(d) Administration of justice---

----Plaintiff/appellant in order to succeed in a case has to stand on his own legs and not to rely on weaknesses of other side.

Md. Anwarullah Mazumdar v. Tamina Bibi and 5 others 1971 SCMR 94 and Mian Iqbal Mehmood Banday v. Muhammad Sadiq PLD 1995 SC 351 rel.

Muhammad Azhar Faridi for Appellant.

Khalid Mehmood Siddiqui for Respondent.

2017 C L D 1659

[Sindh]

Before Aziz-ur-Rehman, J

PAK OMAN INVESTMENT COMPANY LIMITED---Plaintiff

Versus

CRESOX (PVT.) LIMITED---Defendant

Suit No. B-2 of 2014, decided on 26th July, 2017.

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

----Ss. 10, 9, 7 & 2(d)---Suit for recovery---Application for leave to defend---Adjudication of Statement of accounts---Objections regarding entries in statement of accounts---Restructured/re-scheduled finance facilities---Fresh disbursement---Scope---General, vague and evasive denials were no denials and merited no consideration---Parties, in a banking suit, had no option to make general allegations/assertions on aspects of accounts as the Financial Institutions (Recovery of Finances) Ordinance, 2001 bound the parties to be absolute and specific on accounts---Banking Suit was normally a suit on accounts and as such it was obligatory on both parties to definitely plead and specifically state their respective accounts---Restructuring/re-scheduling of amount already availed by a customer was not "disbursed afresh" and in such situations amounts outstanding in statement of accounts was only brought forward in the certified statement of accounts---Repayment schedule was not a notional document but was in fact an inseparable part of the rescheduling---When no entry in statement of account was specifically challenged, then it was to be presumed that the accounts prepared and maintained by plaintiff Bank were correct.

Ghulam Rasool through Legal Heirs and others v. Mohammad Hussain and others PLD 2011 SC 119; Appolo Textile Mills Ltd. v. Soneri Bank Ltd. PLD 2012 SC 268; Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143; Muhammad Arshad and another v. Citibank N.A., Lahore 2006 SCMR 1347; United Bank Limited v. Messrs Sartaj Industries through Qaiser Iqbal Managing Partners and 6 others PLD 1990 Lah. 99 and Askari Commercial Bank Ltd. v. Hilal Corporation (Pvt.) Ltd. and 6 others 2009 CLD 588 rel.

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

----Ss. 10 & 9---Constitution of Pakistan, Arts. 10-A & 4---Right to fair trial and due process of law---Rights of individuals to be dealt in accordance with law---Application for Fundamental Right to fair trial and due process of law---Adjudication of application for leave to defend under S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in view of Arts. 10-A & 4 of the Constitution---Scope---Article 10-A of the Constitution, no doubt, ensured fair trial and due process but same was in accordance with the law/statute under which proceedings were initiated and were dealt with---Leave to defend, in banking matters, needed to be obtained under provisions of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and until and unless such leave was obtained by raising substantial questions of law and fact, defendant could not defend a suit---Defendant, if he/she failed to fulfil the mandatory requirements as provided in S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 or, if no leave to defend was filed within the statutory period of 30 days, then a decree was to be passed by Banking Court in favour of plaintiff---Merely on plea of "fair trial" and "due process", mandatory provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 could not be bypassed or otherwise rendered redundant or ineffective---Article 10-A of the Constitution had to be read and seen in juxtaposition with Art. 4 of the Constitution which provided a right to individuals to be dealt with in accordance with law---High Court observed that if for want of necessary/mandatory requirements, leave to defend was rejected, then an aggrieved person would be entitled to seek redressal in accordance with the right of appeal provided in S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court further observed that a defendant could not be permitted to urge the non-affording of "fair trial" and "due process" on touchstone of Art. 10-A of the Constitution, when pleas raised by such a defendant were not found to be satisfactory or convincing.

Shabbir Ahmed v. Khan Khursheed and 8 others 2012 CLC 1236 rel.

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

----Ss. 4, 2(e), 3 & Preamble---Financial Institutions (Recovery of Finances) Ordinance, 2001---Nature---Effect of S. 4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 on application of other laws---State Bank of Pakistan Circulars could not override provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law that bound a customer inter alia to perform its undertakings and fulfill promises made and provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 in terms of S. 4 of the same overrode all other laws and therefore its provisions required strict compliance---State Bank of Pakistan Circulars being a product of subordinate legislation could in no manner override the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 which was a special law.

Waqar Ahmed for Plaintiff.

Adnan Iqbal Choudhry for Defendant.

2017 C L D 1718

[Sindh (Sukkur Bench)]

Before Syed Hassan Azhar Rizvi and Khadim Hussain M. Shaikh, JJ

Messrs WAQAR AUTOS through Legal Heirs---Petitioner

Versus

PRESIDING OFFICER, BANKING COURT-I, SUKKUR and 3 others---Respondents

C.P. No. D-3424 of 2013, decided on 26th December, 2016.

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

----Ss. 9, 10 & 12---Civil Procedure Code (V of 1908), S. 12(2)---Judgment and decree, setting aside of---Petitioner was widow of defendant and assailed ex parte judgment and decree on the plea that her husband had died during proceedings before Banking Court and she was not impleaded as party---Validity---Defendant died after institution of suit and no application for leave to defend-cum-written statement was filed by him and he was ordered to be proceeded ex parte---Nothing was available on record to suggest that decree was obtained by misrepresentation or fraud and there was no jurisdictional defect in the order passed by Banking Court---Ex facie, no misrepresentation or fraud could be inferred and ingredients for attracting S. 12(2), C.P.C. were lacking in the matter---Application under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001, read with S. 12(2), C.P.C. was filed by petitioner to protract execution of proceedings and to delay satisfaction of decree--- No justification being available for filing such application under S. 12(2), C.P.C. and constitutional petition, High Court declined to interfere in judgment and decree passed by Banking Court--- Constitutional petition was dismissed in circumstances.

Khushi Muhammad v. Mst. Aziz Bibi PLD 1988 SC 259 and Mst. Sakina Bibi v. Muhammad Nawaz and 3 others 2000 SCMR 1051 ref.

Rasool Bakhsh I. Siyal for Petitioner.

Dareshani Ali Haider 'Ada' for Respondent No. 2.

Mian Mumtaz Rabbani, learned D.A.-G.

2017 C L D 1737

[Sindh]

Before Muhammad Faisal Kamal Alam, J

KHALID MEHMOOD and 4 others---Plaintiffs

Versus

Messrs MULTI PLUS CORPORATION PRIVATE LIMITED and 2 others---Defendants

Suit No. 1042 of 2017, decided on 21st July, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 159---Meetings and Procedure---Calling of extraordinary general meeting---Mandatory nature of provisions and prerequisites for calling of extraordinary general meeting in S. 159 of the Companies Ordinance, 1984---Requirement of giving 21 days' notice---Scope---Provision of penalty for non-compliance contained in S. 159 made said section mandatory in nature and an extraordinary general meeting not convened in accordance with mandatory provisions of the Companies Ordinance, 1984 was a nullity in the eye of the law and any business transacted thereat was also illegal.

Murtaza Wahab Siddiqui, M. Asad Iftikhar and M. Yahya Iqbal for Plaintiffs.

M. Zeeshan Abdullah, Saalim Salam Ansari and M. Adnan Abdullah for Defendants Nos. 1 and 2.

2017 C L D 1761

[Sindh]

Before Aziz-ur-Rehman, J

TRADING CORPORATION OF PAKISTAN---Plaintiff

Versus

Messrs RAHAT AND COMPANY---Defendant

Suit No. 196 of 1996, decided on 18th January, 2017.

Civil Procedure Code (V of 1908)---

----O. VI, Rr. 14, 15, O. XIV, R. 5 & O. XXIX, R. 1---Suit by Corporation---Signing of pleadings---Legal issue---Suit for recovery of money was filed by a Corporation---Defendant raised the plea that suit was filed without authorization of Board of Directors of the Corporation and was not maintainable---Validity---Objection of defendant regarding lack of authority of person who signed plaint was nor only an afterthought, highly technical, remote but was irrelevant after merger of the plaintiff Corporation into another Corporation and filing of amended plaint duly signed, verified and filed by an official of the Corporation to which the plaintiff Corporation merged---Official of Corporation to which it was merged, under the resolution of its Board of Directors was duly authorized to do the needful---High Court declined to dismiss suit merely for want of said authorization and that too after filing of amended plaint---Suit was maintainable in circumstances.

Ghulam Hyder Shaikh for Plaintiff.

H.A. Rehmani along with Ms. Naheed Akhtar for Defendant.

2017 C L D 1788

[Sindh]

Before Muhammad Junaid Ghaffar, J

KHAWER HANIF---Plaintiff

Versus

IMRAN HANIF and others---Defendants

Suit No. 2022 of 2015, decided on 6th February, 2017.

Civil Procedure Code (V of 1908)---

----O. XL, R. 1---Partnership business---Receiver, appointment of---Scope---Defendants had already been directed to furnish accounts, profit and loss details on regular basis---Share of plaintiff's profit was being regularly deposited by the defendants before the Nazir of the Court---Plaintiff was withdrawing his share of profit without raising any objection---Where company or a business was running in profits then Court should not appoint Receiver and/or order liquidation of the companies---Appointment of Receiver was not in the interest of all the parties---Prayer for appointing a Receiver did not seem to be valid or justifiable in the present case---Chartered Accountants firm was appointed at the request of plaintiff to conduct an independent audit of accounts, balance sheets and profit and loss statements of partnership concern---Defendants were directed to furnish up-to-date details of accounts, profit and loss statements and balance sheet---Application for appointment of Receiver was disposed of accordingly.

Abdul Hakeem and another v. Abdul Raheem Arif 2001 CLC 365; Asadullah Mirbahar and another v. Mrs. Ayesha Muzahir through Attorney and 9 others PLD 2011 Kar. 151; Media Max (Pvt.) Ltd. through Chief Executive and another's case PLD 2013 Sindh 555; Autotechnik (Pvt.) Ltd. v. Syed Abuzar Bokhari and others 2014 YLR 1199; Faizullah Khan and others v. Mst. Mirzago Begum and others 2015 YLR 1489; Naseeb-ul-Haq v. Raes Aftab Ali Lashari 2015 YLR 550 and Uzin Export Import Enterprises for Foreign Trade v. M. Iftikhar and Company Limited 1987 MLD 140 ref.

Saadat Yar Khan for Plaintiff.

Khadim Hussain Thahim for Defendants Nos. 1 to 3.

Naved Ali for Defendant No.5.

Ajmal Awan for Defendant No. 6.

Ejaz Mubarak Khattak for DHA.

2017 C L D 1

[Lahore]

Before Abid Aziz Sheikh and Shahid Karim, JJ

FAISAL FAROOQ and 3 others---Petitioners

Versus

SHO and another---Respondents

W. P. No. 33423 of 2013, heard on 26th May, 2016.

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

----S. 20(4)---Criminal prosecution---Scope---No prohibition placed under S. 20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, on setting into motion of criminal prosecution under general law and registration of cases under Penal Code, 1860.

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

----S. 20(4)---Criminal prosecution---Banking Court, jurisdiction of---Proceedings under any other law are not prohibited under S. 20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, it merely confers jurisdiction on Banking Court with regard to offences mentioned in Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----S. 20---Criminal complaint, filing of---Locus standi---In order to set into motion proceedings under S. 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, a complaint by an authorized officer of financial institution is sine qua non.

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

----S. 20(1)---Penal Code (XLV of 1860), Ss. 408 & 409---Prosecution---Maintainability---Prosecution against a person other than customer cannot be brought before Banking Court in terms of S. 20(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---In case prosecution is sought to be launched against a clerk or servant of customer or it is sought to be included in prosecuting any of bankers, agents, attorneys or brokers who have committed criminal breach of trust in respect of property, that may only be brought in terms of Ss. 408 & 409, P.P.C. and not under Financial Institutions (Recovery of Finances) Ordinance, 2001---If prosecution is sought to be initiated by any other person other than a financial institution, it can only be done under general law and not under Financial Institutions (Recovery of Finances) Ordinance, 2001---If Muqaddam appointed by Banker is sought to be prosecuted, no prosecution can be brought against Muqaddam under Financial Institutions (Recovery of Finances) Ordinance, 2001, and proceedings necessarily have to be initiated under general law.

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

----S. 20---Quashing of FIR---Principle---Petitioners were accused facing criminal trials/investigations on allegations of commission of banking offences, and they sought quashing of cases---Validity---Power of quash FIR could only be exercised if it was held that criminal offences in respect of which accused were sought to be prosecuted were not borne out or established from the contents of FIR---Such proceedings could not be quashed on the ground that offences mentioned in FIR were also substantially and in large part covered by offences under Financial Institutions (Recovery of Finances) Ordinance, 2001---If offences were made out under Penal Code, 1860, which was a general law, no action would arise for quashing of FIR, and it was to be seen on facts of each case that a case for quashment was made out or not---If intention of legislature was to apply same set of reasoning and procedure in case of offences under Financial Institutions (Recovery of Finances) Ordinance, 2001, a provision to such effect could have been enacted and promulgated in the same terms as in Criminal Procedure Code, 1898---Petitioners did not rely upon any such provision to exist in Criminal Procedure Code, 1898---High Court declined to interfere in the proceedings pending against petitioners--- Constitutional petition was dismissed in circumstances.

Aamer Khurshid Mirza v. The State 2005 CLD 20; Tariq Hameed and 2 others v. Additional Sessions Judge and 5 others 2015 MLD 1188; Habib Bank Ltd. v. Capital City Police Officer and others 2015 CLD 1508; Industrial Bank of Pakistan and others v. Mian Asim Fareed and others 2006 SCMR 483; English Case of Connely (1964) 2 All ER 401; Benton 395 US 784 (1969); Heath v. Alabana 474 US 82, 88 L Ed 2d 387 (1985); Muhammad Bashir v. Station House Officer, Okara Cantt. and others PLD 2007 SC 539; Niaz Ali v. The State PLD 1961 (W.P.) Lah. 269; Ch. Tanveer Khan v. Chairman National Accountability Bureau and others PLD 2002 SC 572; Muhammad Nadeem Anwar v. Securities and Exchange Commission of Pakistan through Director NBFCs Deptt., Islamabad 2014 SCMR 1376; Monica Bedi v. State of Andhra Pradesh (2011) 1 SC Cases 284 and Shaukat Ali and others v. The State and others 2012 CLD 1 ref.

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

----S. 154---Registration of FIR---Principle---If complaint is received by officer in charge of police station, he is obligated to register FIR upon such complaint and is not required to determine truthfulness or falsehood of allegations made against persons against whom complaint was made.

Muhammad Bashir v. Station House Officer, Okara Cantt. and others PLD 2007 SC 539 rel.

Shahid Ikram Siddiqui, Muhammad Imran Malik, Khawaja Saeed ul Zafar, Munawar-us-Salam, Shoaib Rashid, Ahmad Owais, Liaqat Ali Cheema, Muhammad Farooq Bedar, Khawaja Adnan Farooq, Muhammad Yousaf Chaudhry-I, Mian Maqsood Ahmad, Mian Asghar Ali, Rao Athar Ikhlaq, Raja Asif Ali Khan and Asif Afzal Bhatti for Petitioners.

Amir Wakeel Butt, Barrister Saad Ehsan Warraich, Muhammad Akram Pasha, Abdul Hameed Chauhan, Rana Muhammad Asif Iqbal for Respondent-Bank.

Imran Aziz, D.A.G. and Tahir Mehmood Khokhar, Standing Counsel for Respondents.

2017 C L D 162

[Lahore]

Before Shahid Karim, J

ASKARI BANK LIMITED---Plaintiff

Versus

SAGA SPORTS (PVT.) LTD. and others---Defendants

C.O.S. No.35 of 2010, decided on 10th May, 2016.

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

----Ss. 2(e) & 9---Suit for recovery---Claim of liquidated damages on behalf of Financial Institution---Liquidated damages---Nature and scope---Liquidated damages could only be claimed and granted when irrefutable evidence was led in support of such claim and proof was brought forth on record which would establish that such damage had been suffered by the claimant---Liquidated damages had to be contrasted with general damages and were in the nature of special damages which ought to be proven in order to be brought home---Where the plaintiff-Bank could not assert claim of "liquidated damages" by pointing to any portion of the evidence, then such claim of liquidated damages was to be rejected.

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

----Ss. 18, 9 & 7---Qanun-e-Shahadat (10 of 1984), Art. 17(2)(a)---Procedure of Banking Court---Banking documents---Finance agreement/financial documents, proof of---Number of attesting witnesses---Pre-condition---Scope---In all documents related to financial matters, it was the mandate of Art. 17 of the Qanun-e-Shahadat, 1984 that such documents must be proved by the production of two witnesses who had signed such documents in token of its execution.

Hafiz Tassaduq Hussain v. Muhammad Din through Legal Heirs and others PLD 2011 SC 241 rel.

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

----Ss. 9, 10 & 11---Charging of markup by Financial Institutions beyond date of expiry of finance facility---Scope---Financial Institution was entitled to the markup for the period of the finance agreement and not beyond the same.

Ms. Ayesha Hamid for Plaintiff.

Shazib Masud for Defendants.

2017 C L D 179

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

BANK OF PUNJAB---Appellant

Versus

AL-WASAY ENGINEERING (PVT.) LTD. and others---Respondents

R.F.A. No. 117 of 2015, heard on 6th December, 2016.

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

----S. 22 & Preamble---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Appeal---Limitation---Condonation of delay---Scope---Appeal filed under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was governed by a special statute which gave thirty days time period for filing of an appeal and application of S. 5 of the Limitation Act, 1908 was excluded in view of S. 29(2) of the Limitation Act, 1908---Section 5 of the Limitation Act, 1908 was therefore not applicable to filing of an appeal under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Mehreen Zaib-un-Nisa v. Land Commissioner Multan PLD 1975 SC 397 and Shazia Munawar v. Punjab Public Service Commission through Secretary, Lahore PLD 2010 Lah. 160 distinguished.

NIB Bank Ltd. v. Muhammad Zia Ali Qureshi 2016 CLD 2160; Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Messrs Pangrio Sugar Mills Ltd. v. Bankers Equity Ltd. and 5 others 2015 CLD 637 and Tariq Mehmood v. Atlas Bank 2015 CLD 959 rel.

Muhammad Ahmad Pansota for Appellant.

Nasar Ahmad for Respondent No.1.

2017 C L D 186

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

NAZIR RICE MILLS (PVT.) LIMITED---Appellant

Versus

HABIB METROPOLITAN BANK LIMITED---Respondent

R.F.A. No. 371 of 2013, heard on 6th December, 2016.

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

----Ss. 10, 9 & 22---Suit for recovery---Application for leave to defend, dismissal of---Scope---Application of defendants for leave to defend was only allowed to the extent of the issue of "cash liability" and suit was decreed for the remainder amount in favour of the plaintiff Bank---Contention of the defendant, inter alia, was that the impugned order was based on a misreading of the record and that the plaint filed by the Bank was defective---Validity---Perusal of record revealed that the defendant on the one hand negated the authenticity of the Statement of Accounts, on the other hand relied on the same to prove its case, and thus lacked consistency in its stance---No defect in the plaint filed by the plaintiff Bank was pointed out by the defendant and simple denial of execution of documents could not be termed as a plausible defence or an issue which could only be resolved after recording of evidence---Defendant's application for leave to defend was therefore rightly dismissed---Appeal was dismissed, in circumstances.

IGI Investment Bank Limited through Attorney v. Messrs Admore Gas Pvt. Ltd. and another 2014 CLD 1354 rel.

Mian Asghar Ali for Appellant.

Hassan Nawaz Sheikh for Respondent.

2017 C L D 215

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

QALAB HUSSAIN---Appellant

Versus

FAYSAL BANK and others---Respondents

R.F.A. No. 267 of 2013, heard on 6th December, 2016.

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

----Ss. 10, 9 & 22---Suit for recovery---Application of defendant for leave to defend suit was dismissed, and suit was decreed in favour of the plaintiff Bank---Contention of defendant, inter alia, was that the suit had not been competently filed and that the plaintiff-Bank had no cause of action---Validity---Perusal of record revealed that the defendant had not denied availing finance facility from the plaintiff Bank, therefore it could not be said that the plaintiff Bank had no cause of action---Plaint was signed and verified by Branch Manager of the plaintiff Bank who was competent to file the suit under the law---Defendant had not challenged the veracity of documents executed between him and the Bank at any competent forum therefore, defendant's contention that his signatures were forged, had no force---No illegality, therefore, existed in the impugned judgment---Appeal was dismissed, in circumstances.

Muhammad Ajmal Khan v. Zarai Taraqiati Bank Limited 2015 CLD 1197 rel.

Syed Farooq Hussain Naqvi for Appellant.

Azmat Lodhi for Respondent No.1.

Nemo for Respondent No.2.

2017 C L D 223

[Lahore]

Before Shams Mehmood Mirza, J

Messrs IRFAN INDUSTRIES (PVT.) LIMITED through Chief Executive---Plaintiff

Versus

STANDARD CHARTERED BANK through Chief Executive Officer and another---Defendants

C.O.S. No. 54 of 2012, heard on 24th October, 2016.

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

----Ss. 9, 10 & 17---Civil Procedure Code (V of 1908), S. 11 & O. VII, R. 11---Res judicata, principle of---Scope---Rejection of plaint---Effect of decree passed in one suit over the other suit between the same parties---Whether the judgment and decree passed against the plaintiff in the suit filed by the Bank could be considered by the Court in deciding the application for rejection of plaint filed by the Bank in the suit of plaintiff---After the institution of the present suit by the plaintiff, the suit filed by the Bank against the plaintiff was decreed---Statement of account in respect of which the present suit was filed was made available to the plaintiff in the other suit filed by the Bank---Other suit filed by the Bank was contested by the plaintiff as was apparent from the judgment and decree which also showed that the allegations levelled in the present suit were also taken as defence by the plaintiff in the other suit---Court which passed the judgment and decree in the other suit filed by the Bank did not considered the said defence of the plaintiff worthy of merit and accordingly dismissed the application for leave to defend filed by the plaintiff---Validity---Fact that a decree was passed against the plaintiff in the suit of the Bank was not disputed---Certified copy of the judgment and decree passed in the said suit of the Bank was brought on record through the application for rejection of plaint---Court could, therefore, take notice of the said judgment and decree in favour of the Bank and against the plaintiff---By virtue of the said decree, the present suit of the plaintiff had become barred under the principle of res judicata---Application of the Bank was allowed and the plaint was rejected in terms of O.VII, R.11, C.P.C.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O.VII, R.11 & O.XX, R.16---Suit for rendition of accounts along with ancillary reliefs for seeking appointment of Chartered Accountant and declaration---Maintainability--- Contractual relationship between the parties---Effect---Rejection of plaint---Defendant Bank contended that the suit was filed primarily for seeking relief of rendition of accounts which was not maintainable in the law in view of the contractual relationship between the parties--- Plaintiff contended that question of maintainability of the suit was different from rejection of plaint and the exercise of jurisdiction under O.VII, R.11, C.P.C. limited the role of a court to only look at the contents of the plaint---Validity---Suit for rendition of accounts was not maintainable where the parties to the suit were in a contractual relationship---Procedure for regulating the suits for rendition of accounts was provided for in O. XX, R.16, C.P.C.---Said provision pertained to the procedure, and, therefore, did not create any substantive right for a party to seek rendition of accounts by filing suit in every case where such accounts were not provided---Procedure provided in O.XX, R.16, C.P.C. would only apply where there already existed a right to seek rendition of accounts---Rendition of accounts was normally confined to specific cases where relationship was of such a nature that the relief of rendition of accounts would only enable the plaintiff to assert his legal rights---Furthermore, a suit for rendition of accounts could be maintained if the plaintiff indeed had a right to receive an account from the defendant---Such a right could either stem from a statute or it may be based on a relationship that was fiduciary in character--- Right to seek accounts, however, could not be claimed in the present case because the plaintiff did not know the exact amount due to him---suit for rendition of accounts was thus not maintainable---Objection of the plaintiff having no force was accordingly repelled--- Plaint was rejected in circumstances.

Haji Abdul Kareem and others v. Messrs Florida Builders (Pvt.) Ltd. PLD 2012 SC 247; Messrs Friend Engineering Corporation, The Mall, Lahore v. Government of Punjab and 4 others 1991 SCMR 2324; Narandas Morardas Gajiwala v. SPAM Papmmal AIR 1967 SC 333 and K.C. Skaria v. Government of State of Kerala and another AIR 2006 SC 811 ref.

Mrs. Ayesha Hamid for Plaintiff.

Majid Ali Wajid for Defendants.

2017 C L D 246

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

MUHAMMAD AYUB---Petitioner

Versus

JUDGE BANKING COURT GUJRANWALA and others---Respondents

W. P. No. 37827 of 2016, decided on 1st December, 2016.

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

----Ss. 12, 10 & 19---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court---Scope---Suit for recovery was decreed ex parte against the petitioner and subsequently the petitioner filed an application to set aside said ex parte decree---Banking Court, after filing of said application by the petitioner, in the impugned order, directed the court auctioneer to auction the mortgaged property and directed the petitioner for filing reply---Validity---Impugned order was not a final or interim order and merely directed filing of reply and auction of property to the court auctioneer and application of the petitioner to set aside ex parte decree was still pending, therefore, no interference could be made in the said matter---Constitutional petition, being not maintainable was dismissed.

2017 C L D 250

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

RASHID YASIN---Appellant

Versus

DUBAI ISLAMIC BANK and others---Respondents

F.A.O. No. 572 of 2016, decided on 1st December, 2016.

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

----Ss. 9(5) & 12---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---Scope---Setting aside ex parte decree of Banking Court---Limitation---Scope---Suit for recovery was decreed ex parte after the defendant failed to appear and file application for leave to defend before the Banking Court---Application of defendant to set aside ex parte decree was dismissed by Banking Court---Contention of defendant was that notices were not effectively served upon him in any of the modes provided under the law---Validity---Perusal of record revealed that the application of the defendant to set aside ex parte decree was time-barred by almost three years, and no plausible explanation had been provided by the defendant for the same---Before passing of the decree, the defendant was duly served through publication in two newspapers as required by S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and also through bailiff, but neither the defendant nor his agent filed an application for leave to defend---Service had therefore been rightly effected upon the defendant by publication in two newspapers, which was to be deemed to be effective service---Defendant was therefore rightly proceeded against ex parte---Appeal was dismissed, in circumstances.

Ameen Riaz and another v. Alzamin Leasing Modaraba and another 2009 CLC 661; Messrs Naqvi Developers and others v. Habib Bank Limited 2007 CLD 1194; 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.

2017 C L D 267

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

ASIF HAROON BUTT---Appellant

Versus

BARCLAYS BANK LIMITED---Respondent

R.F.A. No.519 of 2013, heard on 5th December, 2016.

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

----S. 22---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Appeal---Limitation---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---Maintainability---Per S. 29(2) of the Limitation Act, 1908; where under a special law or local law, a different period of limitation had been provided, then S. 5 of the Limitation Act, 1908 was not applicable---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law and the Limitation Act, 1908 was a general law, thus S. 5 of the Limitation Act, 1908 was not applicable in filing of appeal under S. 22 Financial Institutions (Recovery of Finances) Ordinance, 2001.

Ch. Kashif Iqbal for Appellant.

Nemo for Respondent.

2017 C L D 280

[Lahore (Multan Bench)]

Before Muzamil Akhtar Shabir, J

Messrs SHANDAR VEGETABLE AND GHEE MILLS through Chief Executive---Petitioner

Versus

Learned JUDGE BANKING COURT NO.II, MULTAN and 3 others---Respondents

W.P. No.15549 of 2013, heard on 14th December, 2016.

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

----Ss. 2(c) & 9---Procedure of Banking Court---Suit for recovery---Necessary parties---Customer and Financial Institution---Scope---Suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance 2001 was between a customer/borrower and the financial institution/Bank---Person who was not a customer in terms of S. 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 cannot be impleaded as a party in a suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001 and any interest in the shape of a right or liability of a third party may be determined during execution proceedings.

National Bank of Pakistan v. Rajby International (Pvt.) Limited through Liquidator and 3 others 2016 CLD 2190; NIB Bank Limited v. Ali Hamid Travels and 3 others 2013 CLD 613 and Muhammad Hanif v. NIB Bank Limited and 4 others 2013 CLD 627 rel.

(b) Contract---

----Essential ingredient of a "contract"---Consent---Basic ingredient of a contract/agreement was consent, which could not be imposed on a party.

Kaleem Ullah Qureshi for Petitioner.

Muhammad Saleem Iqbal for Respondents Nos.2 and 3.

Syed Fayyaz Hussain Zaidi and Syed M. Nabi for Respondent No.4.

2017 C L D 298

[Lahore]

Before Shams Mehmood Mirza, J

Messrs HABIB METROPOLITAN BANK LIMITED---Plaintiff

Versus

Messrs SUBHAN KNITWEAR and another---Defendants

C.O.S. No.98 of 2013, decided on 1st February, 2016.

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

----S. 9---Suit for recovery of loan amount---Leave to appear and defend the suit, application for---Substantial question of fact---Scope---Simple denial of the entries in the statement of accounts was made without providing any reasons therefor---Defendant could not simply put up a denial simpliciter in his application for leave to defend in answer to a claim of financial institution which was backed up by a statement of account and other finance documents---Bare denial of liability was never held to constitute a valid defence in law---Mark-up on the finance facilities had been charged outside the period of finance facility which amounts were deleted from the suit claim---Claim of plaintiff Bank was substantiated by the documents available on record---Defendant had failed to raise any substantial question of fact warranting recording of evidence for its resolution---Petition for leave to appear and defend the suit was dismissed---Suit was decreed in favour of plaintiff Bank and against the defendant jointly and severally with costs of funds.

Hassan Nawaz Sheikh for Plaintiff.

Muhammad Imran Malik for Defendants.

2017 C L D 302

[Lahore]

Before Shahid Karim, J

Messrs MAKMA STEEL CRAFT (PVT.) LTD. and others---Plaintiffs

Versus

ALLIED BANK LIMITED---Defendant

C.O.S. No.46 of 2002, decided on 9th March, 2016.

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

----S. 10---Leave to defend suit---Principle---Mere denial of availing of amount by borrower is not sufficient to entitle him to grant leave to defend.

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

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

----Ars. 117 & 120---Burden of proof---Principle---Normal standard of proof in civil cases is proof on the balance of probabilities or preponderance of probabilities.

Miller v. Minister of Pensions (1947) 2 All ER 372 rel.

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

----Ss. 9 & 10---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Recovery of finances---Misappropriation of pledged goods---Proof---Onus---Bank included amount of pledged goods alleged to have been misappropriated by borrowers in connivance with Muqadam---Validity--Onus or burden of proof to be discharged, regarding misappropriation of pledged goods, was placed on Bank---Bank had to prove that pledged goods were misappropriated by borrowers and conversely there was no onus on borrowers to prove that pledged goods were pilfered by Bank or any of its officers---Inevitable inference was that Bank or any of its officers was not charged with misappropriation or pilferage nor borrowers raised a finger in such regard or made any effort to attempt to fix liability in such regard on Bank---Borrowers had chosen to watch as a bystander and let Bank prove that misappropriation was done by borrowers and in case the onus was not discharged on a balance of probabilities, the question of misappropriation of pledged goods would lose significance---Bank having discharged onus of the issue relating to misappropriation of pledged goods, the same was decided in favour of Bank and against the borrowers---Suit was decreed in favour of Bank accordingly.

Asim Hafeez for Plaintiffs.

Moiz Tariq for Defendant.

2017 C L D 361

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

Messrs IJAZ NIZAM---Appellant

Versus

NIB BANK and others---Respondents

R.F.A. No.961 of 2013, heard on 8th December, 2016.

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

----O. XVII, R. 3---Adjournments---Closure of evidence---Principles---Right to close evidence under O. XVII, R. 3, C.P.C. shall not be exercised unless various opportunities had been granted to the parties who had failed to produce evidence.

Sheikh Khurshid Mehboob Alam v. Mirza Hashim Baig 2012 SCMR 361; Zahoor Ahmed v. Mehra 1999 SCMR 105; Muhammad Arshad Muhammad v. Jahanzeb Khan 2008 SCMR 1335; Ally Brothers and Company v. Federation of Pakistan 2009 YLR 982; Momin Mansib Bokhari v. Habib Bank Limited 2005 CLD 923 and Lyallpur Cotton Mills v. Authority under Payment of Wages Act, Faisalabad 1985 PLC 563 rel.

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

----Ss. 10(11) & 9---Civil Procedure Code (V of 1908), O. XVII, R. 3---Application for leave to defend, acceptance of---Framing of issues and recording of complete evidence of parties---Adjournments---Opportunities to produce evidence---Scope---Application of defendants for leave to defend was allowed, and subsequently, after framing of issues, right of defendants to produce evidence was closed under provisions of O. XVII, R. 3, C.P.C. after granting only one opportunity to the defendants---Validity---Impugned order was passed in haste and the defendants had been knocked out on a hyper-technical ground---Issues, in the present case, had been framed and the case was fixed for cross-examination and evidence of the defendants, when the impugned order was passed---Once leave to defend was granted, per S. 10(11) of the Financial Institutions (Recovery of Finances) Ordinance, 2001; Banking Court was to decide the case after recording of evidence of all parties on all issues framed---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law, and therefore, Banking Court had to follow the strict requirement of S. 10(11) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 for deciding the suit, once leave to defend was granted and after complete evidence was recorded---Impugned order was set aside and case was remanded to Banking Court with the direction to grant one more opportunity to the defendants to produce evidence---Appeal was allowed, accordingly.

Muhammad Younas Chaudhry for Appellant.

Kashif Mukhtar for Respondent No.1.

2017 C L D 397

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

Messrs NAEEM ZAFAR INDUSTRIES and others---Appellants

Versus

BANK OF PUNJAB---Respondent

R.F.As. Nos. 956 and 771 of 2013, heard on 13th December, 2016.

(a) Approbate and reprobate---

----Maxim: "qui approbate and reprobate"---Under the law, one cannot approbate and reprobate at the same time.

Mirza Nasir and 2 others v. Mirza Hakim-ud-Din, Managing Director Jahangir Engineering Company, Gujranwala 2001 MLD 431 rel.

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

----Ss. 9 & 7---Banker's Books Evidence Act (XVIII of 1891), S. 4---Procedure of Banking Court---Statement of Accounts---Presumption of correctness---Scope---"Financial estoppel", concept of---Suit for recovery was decreed in favour of plaintiff Bank---Contention of defendants, inter alia was that the statement of accounts submitted by the plaintiff Bank contained incorrect entries---Validity---Perusal of record revealed that the statement of accounts, in the present case, was correct and that the plaintiff Bank had explained all objected entries and therefore the same did not suffer from any irregularity---Defendants were estopped from challenging the said statement of accounts after having received the same regularly from the time the account was opened by the defendants with the plaintiff Bank---Defendants had knowledge of the entries in the said statement throughout, which were never objected to by them before, therefore the defendants were estopped from now objecting to the same---Under normal banking practice, statement of accounts were mandatory for customers to receive and examine, and if there existed any discrepancy in the same, the Bank was to be informed---Under the Banker's Books Evidence Act, 1891 a statement of accounts had presumption of truth and under the law, said statements had to be presumed to be correct if not challenged by the customer after receiving the same regularly---Minor discrepancies in statement of accounts would not disentitle the plaintiff Bank to claim such amount---Suit was therefore, rightly decreed by Banking Court---Appeal was dismissed, in circumstances.

Crescent Commercial Bank Now Samba Bank Ltd. v. Genertech Pakistan Ltd. 2011 CLD 37; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Pvt.) Limited through Director/ Chief Executive and 3 others 2012 CLD 1302 and Messrs C.M. Textile Mills (Pvt.) Limited, through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587 ref.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Muhammad Arshad and another v. Citi Bank N.A., Lahore 2006 SCMR 1347; Standard Chartered Bank v. Needle Point 2016 CLD 2066; Wazir Khan Store v. UBL 2015 CLD 1729; Muhammad Arshad and another v. Citibank N.A. through Attorney 2005 CLD 1237 and Tariq Javed and another v. National Bank of Pakistan 2004 CLD 838 rel.

Muhammad Qamar-uz-Zaman for Appellants.

Muhammad Akram Pasha for Respondent.

2017 C L D 447

[Lahore]

Before Abid Aziz Sheikh and Shahid Karim, JJ

Messrs HANIF METAL STORE through Proprietor and others---Appellants

Versus

BANK OF PUNJAB through Manager and others---Respondents

Execution First Appeal No. 1017 of 2016, decided on 28th September, 2016.

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

----O. XXI, R. 54 & S. 60---Execution of decree---Attachment of immovable property---Attachment of mortgaged property---Object and scope of attachment---Attachment of immovable property was a protective measure taken by an executing court to keep said property intact so as to enable the decree-holder to satisfy the decree therefrom---Object of attachment was also to give notice to the judgment-debtor not to alienate his property and to the general public so as to not to accept any alienation from such a judgment-debtor---Such precautionary and protective measures were not required regarding mortgaged properties, firstly for reason that when a mortgage decree was passed, there was adjudication on the footing that the property in question belonged to the mortgager and secondly in a mortgage decree, there was final adjudication regarding rights of the judgment-debtor and executing court could not go behind said decree---In execution of a mortgage decree, only the incorporal right was brought to sale and not the physical property whereas in juxtaposition, in execution of a money-decree; the physical or the real property was brought to sale.

Muhammad Shahid v. Sajida Khatoon and others 2004 MLD 296; Union Bank of the Middle East Ltd. v. Sa'ad Carpets Ltd. 1986 MLD 482; Indian Bank, Kowur v. Nallam Veera Swamy and others 2014 AIR CC 2728 (AP) and Punjab and Sindh Bank v. State Bank of India 2002 (I) RCR (Civil) 273 rel.

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

----Ss. 15, 14 & 19---Civil Procedure Code (V of 1908) O. XXI, R. 54 & S. 60---Procedure of Banking Court---Execution of decree of Banking Court---Sale of mortgaged property---Attachment of mortgaged property---No requirement for an order of attachment against a mortgaged property---Scope---Provisions of O. XXI, R. 54 or S. 60 of the C.P.C. did not require attachment of mortgaged property by the Banking Court, therefore, the same was not bound to attach mortgaged property before its sale in execution of decree of Banking Court---Mortgaged property was already secured, therefore, the Banking Court was not required to adopt the protective measure of attachment of such property---In respect of mortgaged property, under the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001; Banking Court was to directly pass an interim or final decree for foreclosure or sale and on such pronouncement/order; the decree shall automatically convert into execution proceedings and no fresh notice was needed to be issued to the judgment-debtor in such regard, but only particulars of the mortgaged property were to be filed by the decree-holder---Under provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 there existed no need for attachment of mortgaged property before its sale in execution.

Messrs Ali Match Industries Ltd. through Managing Director and 3 others v. Industrial Development Bank of Pakistan through Manager and another 1999 MLD 2127; Messrs NIB Bank Limited v. Messrs Apollo Textile Mills Limited and 2 others PLD 2013 Sindh 430 and Gopal Chandra v. Ramesh Chandra and another PLD 1961 Dacca 492 distinguished.

Malik Sultan Amir Awan for Appellants.

2017 C L D 463

[Lahore]

Before Shams Mehmood Mirza, J

SAHIBZADA FAISAL ALI KHAN---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

W. P. No. 23690 of 2011, decided on 15th August, 2016.

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

----Ss. 25 & 25-A---Credit Information Bureau---Object---Main objective of Credit Information Bureau is to part knowledge regarding classification of loans to other banks and financial institutions in respect of customers who have approached them seeking finance facilities.

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

----Ss. 25 & 25-A---Credit Information---Scope---Credit information by banks/other financial institutions is based on guidelines provided for by Prudential Regulations.

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

----Ss. 25 & 25-A---Credit Information---Evidentiary value---Scope---Such credit reports have no evidentiary value and only serve the purpose of informing other financial institutions about credit history of a particular customer who intends to borrow loans/finances from other financial institution.

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

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

----Ss. 25 & 25-A---Credit Information Bureau---Placing name in the list--- Effect--- Placing name of an individual in Credit Information Bureau under Prudential Regulations and S. 25-A of Banking Company Ordinance, 1962, does not result into blacklisting of such individual.

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

----Ss. 25 & 25-A---State Bank of Pakistan Prudential Regulations Nos.3 & 4--- Grant of loan--- Principles--- Prerogative of financial institutions to grant or not to grant a loan to a particular borrower---Even if application of a borrower meets with all prescribed criteria, a financial institution retains full discretion to disallow the same, which decision cannot be assailed before any court of law.

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

----Ss. 25 & 25-A---State Bank of Pakistan Prudential Regulations Nos.3 & 4---Credit Information Bureau---Petitioner was aggrieved of placing of his name on the list maintained by Credit Information Bureau---Validity---Petitioner was granted personal hearing by State Bank of Pakistan and a reasoned order was passed---Lending Bank was obliged to report default of petitioner in pursuance of the mechanism devised by State Bank of Pakistan---No violation of either of Banking Companies Ordinance, 1962, or Constitution of Pakistan took place---State Bank of Pakistan had rightly come to the conclusion that process was duly followed by lending Bank and no violation had taken place---High Court declined interference---Constitutional Petition was dismissed in circumstances.

Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191; Messrs Abdul Aziz Nawab Khan and Company v. Federation of Pakistan, Ministry of Finance and others 2006 CLD 55; Messrs J.S. Developers and another v. State Bank of Pakistan and another Writ Petition No. 1353 of 2014 and Ionic Metalliks and others v. Union of India and others Special Civil Application No. 645 of 2014 ref.

Talat Farooq Sheikh for Petitioner.

Rehan Nawaz for Respondents.

2017 C L D 484

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

ASMA SHOAIB---Appellant

Versus

STANDARD CHARTERED BANK LTD. and others---Respondents

F.A.O. No.656 of 2014, decided on 19th December, 2016.

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

----Ss. 9(5) & 12---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---Setting aside of ex parte decree of Banking Court---Presumption as to the knowledge of the defendant regarding proceedings of Banking Court---Scope---Suit for recovery was decreed ex parte against the defendant---Defendant's application for setting aside of ex parte decree was dismissed---Validity---Impugned order was premised on the presumption that the defendant was aware of the entire proceedings, despite the clear stance of the defendant to the contrary---Reliance of the Banking Court on the proceedings initiated by the defendant's family members could not form basis for raising a presumption in favour of the fact that the defendant was aware of the proceedings of the Banking Court throughout the duration of the same---Publication of notices was made in one English newspaper and not made in any Urdu newspaper and personal service was also admittedly not effected on the defendant---Procedural formalities for service through affixation at the last known address of the person to be served, were not observed in the present case and the Banking Court's view in the impugned order was based on an incorrect view of the facts---Impugned order was set aside by High Court with the observation that the defendant shall be permitted to file application for leave to defend the suit---Appeal was allowed, accordingly.

Muhammad Umer Malik for Appellant.

2017 C L D 496

[Lahore]

Before Shams Mehmood Mirza, J

SILK BANK LIMITED (FORMERLY SAUDI PAK COMMERCIAL BANK LIMITED) through Attorney---Plaintiff

Versus

AL-KHAN CONSTRUCTIONS COMPANY (PVT.) LTD. and others---Defendants

C.O.S. No. 83 of 2012, decided on 9th September, 2016.

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

----S. 10(2)---Limitation Act (IX of 1908), S. 4---Application for leave to defend---Limitation---Summer vacations commenced when time for filing application for leave to defend lapsed---Application for leave to defend was filed immediately after opening of the court---Effect---Such application for leave to defend was not time-barred in circumstances.

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

----S. 10(7)--- Replication--- Scope--- Replication under Financial Institutions (Recovery of Finances) Ordinance, 2001, is limited to entitle plaintiff to bring on record material in order to answer any new ground set up by defendants---Court can look at the documents appended with replication more so when those are relied upon by plaintiff to answer case set up by defendants and are not part of documents required to accompany plaint.

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

----Ss. 9, 10 & 15---Limitation Act (IX of 1908), Art. 132---Suit for sale of mortgaged property--- Limitation--- Suit was filed by Bank on 25-5-2012 for sale of mortgaged property for recovery of suit amount---Validity---Such was a suit for enforcement of mortgage---Limitation period for such suit was 12 years in terms of Art. 132 of Limitation Act, 1908, and period of limitation started to run from the date when money sued became due---Documents available on record had nexus with statements of accounts---Security documents executed by defendants were in consonance with and pursuant to offer letters issued by plaintiff Bank from time to time---Defendants had admitted availing of finance facilities in the application for leave to defend and defence raised by defendants had no substance and merits---Bank failed to make out claim of mark up from the statements of accounts---High Court dismissed application for leave to defend the suit as defendants failed to raise any dispute on facts requiring evidence for its resolution---Suit was decreed in circumstances.

The Bank of Punjab v. Khan Unique 2016 CLD 29; National Bank of Pakistan v. Messrs Sh. Sardar Muhammad and Bros. and others 1987 MLD 109; Union Bank of Middle East Ltd. v. M.Y. Malik Co. and others 1993 MLD 211; Messrs United Bank Ltd. v. Messrs Iftikhar and Company and others PLD 1990 Lah. 111; Muslim Commercial Bank Limited v. Messrs Malik and Company and others 2002 CLD 606 and Tariq Shahbaz Chaudhary and others v. Bank of Punjab and others 2004 CLD 207 ref.

Abdul Hameed Chohan and Ch. Sohail Khurshid for Plaintiff.

Asim Hafeez for Defendants.

2017 C L D 507

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

MAQSOOD HUSSAIN---Appellant

Versus

HABIB BANK LIMITED and others---Respondents

E.F.A. No.1063 of 2016, decided on 5th December, 2016.

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

----S. 19---Execution of decree---Sale/auction of mortgaged property---Objections raised in respect of sale/auction of mortgaged property---Scope---Appellant/judgment-debtor impugned order of Banking Court whereby his application under S. 19(7), objecting to the auction of his mortgaged property was dismissed---Validity---Objection of the judgment-debtor regarding place of auction, which was a branch of the decree-holder Bank; was a substantial objection which was dealt with in a causal manner in the impugned order---Requirement imposed by the Banking Court on the judgment-debtor to deposit one-third of the decretal amount as security before entertaining his application under S.19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was not valid, as no such requirement existed for filing an application under S. 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside impugned order and directed the Banking Court to decide the application of the judgment-debtor afresh in accordance with law---Appeal was allowed, accordingly.

M. Imran Malik for Appellant.

2017 C L D 515

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

BANK OF PUNJAB---Appellant

Versus

Messrs SAADULLAH KHAN and others---Respondents

R.F.A. No. 281 of 2013, decided on 6th December, 2016.

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

----Ss. 13, 9, 7 & 22---Civil Procedure Code (V of 1908), O. VI, R. 17---Suit for recovery---Settlement agreement between the parties---Amendment in plaint---Disposal of suit---Procedure of Banking Court---Exercise of powers by the Banking Court---Scope---Application of plaintiff-Bank seeking amendment in plaint, in a pending suit for recovery, for incorporating settlement agreement between the parties was dismissed by the Banking Court and in the said order, Banking Court disposed of the suit on the ground that the suit had become infructuous---Validity---Impugned order had stated that the settlement agreement did not have any nexus with the suit and that the settlement agreement did not make mention of the suit, however, despite said finding, the Banking Court disposed of the suit on the ground that the parties had settled the suit without permission of the Court, which was a contradiction in terms---Pending suit had to be decided on its merits and no concept of disposing of the suit in the manner done in the impugned order existed, and therefore, the Banking Court could not have disposed of the suit in the said manner ---Application of the plaintiff-Bank for incorporating amendment to the plaint, however, was not tenable as there existed no cause for seeking said amendment and plaintiff-Bank could certainly file a fresh suit in respect of any cause of action under the settlement agreement---Impugned order was set aside to the extent of the disposal of the suit and the dismissal of application under O. VI, R. 17, C.P.C. for amendment of plaint, was sustained---Appeal was partly allowed, accordingly.

Hafeez Saeed Akhtar for Appellant.

Nemo for Respondents.

2017 C L D 521

[Lahore]

Before Shahid Jamil Khan and Muhammad Sajid Mehmood Sethi, JJ

IYAZUL HAQ CHAUDHRY---Appellant

Versus

NIB BANK LIMITED through Authorized Attorney and 4 others---Respondents

R.F.A. No. 49 of 2016, heard on 10th November, 2016.

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

----Ss. 9(5), 10(2) & 22---Leave to defend the suit---Condonation of delay---Defendant was aggrieved of judgment and decree passed by Banking Court after dismissal of his application for leave to defend the suit on the ground of being barred by limitation---Validity---Law had given powers to Court to condone the delay and also to provide a concession to defendant---Object and intention of legislature behind the provision of law was that concession in respect of limitation be provided inasmuch as there was possibility that an aggrieved party might not have knowledge/notice or service through proclamation in newspaper, of proceedings---Provisions of Ss. 9(5) & 10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, with regard to service of defendant were not to be read disjunctive from the rule of natural justice "audi alteram partem"; which was to be read into every statute, regardless of whether or not the same was contemplated in the statute---Delay in filing of proceedings could not be condoned lightly unless there were shown sufficient reasons causing delay---Law of limitation reduced effect of extinguishment of a right of party when significant lapses occurred and when no sufficient cause of such lapses, delay or time barred action was shown by defaulting party---Opposite party was entitled to a right accrued by such lapses and negligence did not constitute sufficient cause to condone delay---Reason for delay that defendant was not served by any mode prior to the date of knowledge of proceedings stated by defendant and such knowledge in judgment and decree passed by Banking Court was not seriously controverted by plaintiff Bank---Application for condonation of delay, was of merely 2-3 days, within the scope of such provision of law---When delay was duly explained by defaulting party, it was his right to have hearing on merits---High Court set aside judgment and decree passed by Banking Court, as a result petition for leave to appear, filed by defendant, was deemed to be pending---Appeal was allowed accordingly.

Mst. Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 SCMR 264 and Fazli Hakeem and another v. Secretary State and Frontier Regions Division Islamabad and others 2015 SCMR 795 distinguished.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Akhtar Kaleem v. Citibank N.A. through Branch Manager 2004 CLD 1361; Chaudhry Muhammad Aslam v. SME Bank Limited through Chairman/President and 2 others 2006 CLD 1301; Abdul Rahim Patel v. Habib Bank Limited through Branch Manager and another 2008 CLD 701; Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171; NIB Bank Limited v. The State and 3 others 2010 CLD 10; Tariq Mehmood v. Atlas Bank Ltd. through Authorized Agent 2015 CLD 959; Naziran Begum and 2 others v. Saleh Muhammad and others 2002 SCMR 37; Mst. Hajra Bibi v. Zarai Taraqiati Bank Limited (ADBP) through Manager 2006 CLD 261; Aamer Enterprises (Pvt.) Ltd. and 3 others v. Messrs United Bank Limited and another 2009 CLD 342; Shahi Textiles and 3 others v. Askari Bank Limited through President 2011 CLD 995 and Combine Products and 3 others v. Messrs SME Leasing Limited 2015 CLD 1188 ref.

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

----S. 5---Condonation of delay---Connected matter already pending---Effect---Determination of question of limitation is discretionary in nature and such discretion could be exercised to condone delay on the ground that connected matter did not involve question of limitation.

Syed Imran Raza Zaidi, Superintending Engineer, Public Health Engineering Circle-I, Gujranwala v. Government of the Punjab through Services, General Administration and Information Department, Punjab Secretariat, Lahore and 2 others 1996 SCMR 645; Commissioner of Income Tax and others v. Messrs Media Network and others PLD 2006 SC 787 and House Building Finance Corporation Ltd. through Manager Law v. Vth Banking Court at Karachi and another 2011 CLD 1056 rel.

Taffazul H. Rizvi for Appellant.

Rana Haseeb Ahmad Khan for Respondents.

2017 C L D 538

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

ASIM RIAZ QURESHI---Appellant

Versus

BANK AL-FALAH LIMITED---Respondent

R.F.A. No.907 of 2013, heard on 8th December, 2016.

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

----Ss. 2(d), 2(e), 9, 7 & 22---Contract Act (IX of 1872) Ss. 20 & 65---Terms "finance" and "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Facility/Agreement of Finance---Mistake as to a matter of fact, essential to the agreement, in finance facility agreement---Obligation of person who has received advantage under void agreement or contract that becomes void---Scope---Caveat emptor, principle of---Applicability---Suit for recovery was decreed against defendant---Contention of defendant was, inter alia, that defendant availed finance for purchase of a plot, and it was the obligation of the plaintiff Bank to check the title of the said plot, and since, the title of the said plot was not clear and seller of the plot was not the actual owner, the finance agreement became void---Validity---Agreement executed between the defendant and plaintiff Bank was a finance agreement rather than an agreement between the seller and purchaser of a plot of land, and the same could not be said to be a void instrument owing to disclosure of fraud at such belated stage---Plaintiff Bank was under no mistake as to the terms of the agreement between the parties, and said agreement was for the facilitation of the specified amount to the defendant to buy a plot of land and thus there was no mistake as to the fact that the defendant was obtaining money from the Bank and the same was clear from the offer letter for the finance facility availed by defendant---Present case was therefore within the ambit of S. 65 of the Contract Act, 1872, and S. 20 of the Contract Act, 1872 was not attracted to the same---Under Ss. 2(d) & 2(e) Financial Institutions (Recovery of Finances) Ordinance, 2001, defendant was bound to return the amount obtained through the finance facility and the plaintiff Bank rightly filed suit for recovery under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Act of the defendant for not having done proper due diligence before purchase of said plot was hit by the principle of caveat emptor, which was "let the buyer be aware"----No illegality existed in the impugned order---Appeal was dismissed, in circumstances.

Mt. Rani Kunwar v. Mahbub Baksh AIR 1930 Allahabad 252; Pullock & Mulla, The Indian Contract Act, 1872, page 463; Agricultural Development Bank of Pakistan v. Malik Iftikhar Ahmed 2002 CLD 1280; Sri Tarsem Singh v. Sri Sukhminder Singh AIR 1998 SC 1400; Manzoor Qadir v. United Bank Limited 2013 CLD 2146; Amtex v. Bank Islami Pakistan Limited 2016 CLD 2007 and Said Azam Khan v. Adam Khan PLD 1999 Pesh. 75 rel.

Wasif Majeed for Appellant.

Haroon Mehmood for Respondent.

2017 C L D 552

[Lahore (Multan Bench)]

Before Ali Baqar Najafi and Muzamil Akhtar Shabir, JJ

Mst. TASLEEM FATIMA and others---Appellants

Versus

BANK OF PUNJAB and others---Respondents

R.F.A. No.53 of 2014, heard on 6th December, 2016.

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

----Ss. 9, 10 & 22---Bankers' Books Evidence Act (XVIII of 1891), Ss.2(8) & 4---Electronic Transactions Ordinance (LI of 2002), S. 3---Suit for recovery of finance---Computer generated document---Unsigned statement of accounts---Defendants were aggrieved of judgment and decree passed by Banking Court and assailed the same on the ground that statement of accounts was not certified as per law---Validity---Defendants did not attach any document in support of their claim and referred to statement of accounts provided by Bank with its plaint which did not fortify their claim---Matter related to calculations only which had already been done by Banking Court---Defendants did not deny any entry in statement of accounts and had not produced any documents to rebut the same, therefore, application for leave to defend the suit was rightly dismissed by Banking Court---Even if statement of accounts did not bear signatures, the same would still have been admissible in evidence as it was electronically computer generated statement and there was no need to put a certificate on such accounts as prescribed by S. 2(8) of Bankers' Books Evidence Act, 1891, and S.3 of Electronic Transactions Ordinance, 2002, was also relevant---Accounts attached with plaint did not suffer from any infirmity and payments made by defendants after expiry period were adjusted in accounts by Banking Court---High Court declined to interfere in the judgment and decree passed by Banking Court---Appeal was dismissed in circumstances.

Habib Metropolitan Bank Ltd. v. Mian Abdul Jabbar Gihllin and another 2013 CLD 88 and The Bank of Punjab through Branch/Chief Manager v. Messrs Khan Unique Developers Pvt. Ltd. through Chief Executive Officer and 9 others 2016 CLD 29 rel.

Malik Sajjad Haider Matila for Appellants.

Muhammad Shakil Ch. for Respondent No.1.

2017 C L D 570

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

MCB BANK LTD.---Appellant

Versus

Messrs GENERTECH PAKISTAN LTD. and others---Respondents

R.F.A. No.320 of 2009, decided on 22nd December, 2016.

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

----Ss. 10 & 9---Civil Procedure Code (V of 1908), O. I, R. 10---Procedure of Banking Court---Application for leave to defend---Plaintiff Bank impugned order of Banking Court whereby one defendant's name was struck off from list of defendants in a suit for recovery, after acceptance of such defendant's application for leave to defend---Validity---Striking off the name of the said defendant from list of defendants in terms of O.I, R. 10 of C.P.C. was not countenanced by law and if leave to defend was granted to said defendant, it was proper that issues be framed and evidence recorded---By making impugned order of deletion of name of defendant from the array of the defendants, the right of the plaintiff Bank to assert otherwise and make out a case to establish liability of said defendant was jeopardized---Impugned order was set aside---Appeal was allowed, accordingly.

Imran Aziz Khan for Appellant.

2017 C L D 587

[Lahore]

Before Shahid Karim, J

Messrs KINGSWAY CAPITAL LLP and another---Petitioners

Versus

MURREE BREWERY CO. LTD. and 10 others---Respondents

C.O. No. 3 of 2016, decided on 28th October, 2016.

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

----Ss. 160, 160A, 31, 28, 196, 290, 86, 92 & 21---Provisions as to the meetings of company and votes---Circumstances in which proceedings of a General Meeting may be declared invalid---Prevention of Oppression and Mismanagement---Increase in authorized capital of the company---Capitalization of the reserves/issuance of bonus shares---Mandatory nature of provisions of Companies Ordinance, 1984 dealing with capitalization of reserves---Alteration of Articles---Non-compliance of S. 160(1)(b) of the Companies Ordinance, 1984---Effect---Petition under S. 160A read with S. 290 of the Companies Ordinance, 1984 inter alia, sought a declaration to the effect that the Extraordinary General Meeting ("EGM") of the Company was invalid on the ground that the notice for said meeting was in violation of mandatory provisions of S. 160(1)(b) of the Companies Ordinance, 1984, as it did not contain statement mentioning special business to be transacted, and furthermore; petitioners sought to restrain capitalization of the reserves by issuance of bonus shares, which it was contended was incompetently done by a resolution of the Board of Directors of the Company in violation of the provisions of the Companies Ordinance, 1984, and which was an alteration of its Articles of Association---Validity---Reading of the relevant clause of the Company's Articles of Association showed that the capitalization of the reserves and any decision with regard thereto would have to be taken in a general meeting and therefore, ostensibly the decision taken by the Board of Directors ran counter to the mandate of said clause of the Company's Articles of Association and the requirement laid out therein---Per S. 31 of the Companies Ordinance, 1984, Memorandum and Articles, when registered, bound the company and members, to observe and be bound by all the provisions of the same, subject only to the provisions of the Companies Ordinance, 1984---Contention of the respondents that S. 86 of the Companies Ordinance, 1984 lay the power with regard to capitalization of reserves with the Board of Directors, and there was no need for a special resolution of general meeting in such regard; was misconceived as the said section related to increase in capital of the company and did not concern itself the capitalization of the reserves, which was the converse of the increase in capital of a company---Directors of a company had been conferred power to declare interim dividend under S. 196 of the Companies Ordinance, 1984 and this was, in essence, what the directors had done through their impugned resolution however, where Articles of Association of a company lay a procedure by which power was to be exercised by the company in a general meeting, then such power to declare interim dividend was always subject to said Articles, which in present case would have to be dealt with in a general meeting and by a special resolution---Contention of the respondent company that in order to increase share capital of a company a mere alteration in the Memorandum of the company was required and no requirement existed for bringing about an alteration in the Articles of Association of the company, since S. 28 of the Companies Ordinance, 1984 was rendered ineffective by specific provisions of S. 92, was not correct as the mere fact that S. 92 did not make a mention of the alteration in the Articles, did not detract from the fact that the alteration in the Articles would be brought about and, therefore, S. 28 of Companies Ordinance, 1984 would be triggered in such circumstances---High Court observed that compliance of S. 28 in the present case was sine qua non for a valid EGM to be held and that the alteration of Articles had to be made and the same was to be done by complying with S. 28 of the Companies Ordinance, 1984---Impugned EGM was declared unlawful and invalid, and notice for the said meeting was declared to be incompetent and in violation of S. 160(1)(b) of the Companies Ordinance, 1984---Directors of the Company were directed to hold a fresh EGM after compliance of S. 160(1)(b) of the Companies Ordinance, 1984 as to the notice and statement---Respondents were restrained from giving effect to any decision taken or resolution passed in the impugned meeting---Petition under S. 160A read with S. 290 of the Companies Ordinance, 1984 was allowed, accordingly.

M. Shahid Saigol and 16 others v. Messrs Kohinoor Mills Ltd. and 7 others PLD 1995 Lah. 264; Lucky Cement Ltd. v. Commissioner Income Tax, Zone Companies, Circle-5, Peshawar 2015 CLD 1482; Gower, Principles of Modern Company Law by Paul L. Davies and Sarah Worthington (Gower), (Tenth edition); Company Law by Len Sealy and Sarah Worthington (9th Edition); Reading Law: The Interpretation of Legal Taxts by Antonin Scalia and Bryan A. Garner; York Buildings Co. v. Mackenzie (1795) 8 Bro. 42; Peter's American Delicacy Co. Ltd. v. Health (1939) 61 CLR 457 (High Court of Australia) and Parashuram Detaram Shamdasani and another v. Tata Industrial Bank, Ltd. and others AIR 1928 Privy Council 180 rel.

Abdul Sattar and another v. Mian Muhammad Attique and another 2010 YLR 616; Muhammad Yaseen Siddiqui v. Tahseen Jawaid Siddiqui 2003 MLD 319 and Muhammad Maroof Ahsan v. Messrs Beach Developers through Partner 2011 MLD 36 distinguished.

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

----Ss. 92, 28 & 21---Power of company limited by shares to alter its share capital---Alteration of Articles---Alteration of memorandum---Section 92 of the Companies Ordinance, 1984 left it to the discretion of a company to increase its share capital which may be done by conferring the authorization in the Articles of Association of a company---Power resided in the company by virtue of its Articles and primary power that S. 92 of the Companies Ordinance, 1984 dealt with was the increase in the share capital of a company which was the alteration of its share capital---Alteration in the Memorandum and the Articles of Association naturally flows from such act of the alteration of the share capital of a company and mere fact that S. 92 of the Companies Ordinance, 1984 did not make a mention of the alteration in the Articles of Association, did not detract from the fact that such alteration will be brought about and, therefore, S. 28 of Companies Ordinance, 1984 would be triggered in such circumstances.

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

----Ss. 92, 28, 21 & Preamble---Fiduciary doctrine in corporate law---Increase in share capital of a company---Issuance of bonus shares---Capitalization of reserves---Alteration of Articles of Association and Memorandum of a Company---Safeguards against majority oppression and abuse of power in a Company---Principles explained.

United States v. Butler 297 US 1, 65 (1936); Reading Law: The Interpretation of Legal Taxts by Antonin Scalia and Bryan A. Garner; York Buildings Co. v. Mackenzie (1795) 8 Bro. 42; Punt v. Symons and Co. Ltd. [1903] 2 Ch. 506 and Peter's American Delicacy Co. Ltd. v. Health (1939) 61 CLR 457 (High Court of Australia) rel.

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

----Ss. 2(1) & 26---Articles of Association of a Company---Nature of Articles of Association---Articles of Association constitute a binding contract between a company and its member and between members inter se---Principles explained.

Viscount Haldane LC in Lennard Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] AC 705; Bratton Seymour Service Co. Ltd. v. Oxborough [1992] BCLC 693 (CA); Wood v. Odessa Waterworks (1889) 42 Ch D 636; Pender v. Lushington (1877) 6 Ch D 70; MacDougall v. Gardiner (1875) 1 Ch D 13 and Hickman v. Kent or Romney Marsh Sheep-Breeders Association [1915] I Ch 881 rel.

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

----S. 86---Further issue of capital---Rights issue---Issuance of bonus shares/capitalization of reserves was out of the purview of S. 86 of the Companies Ordinance, 1984---Interpretation of S. 86 of the Companies Ordinance, 1984---Object, nature and scope of S. 86 of the Companies Ordinance, 1984---Section 86 of the Companies Ordinance, 1984 did not concern itself with the capitalization of reserves which was the converse of the increase in capital of a company---By "rights issue", shares were offered to the members in proportion to the existing shares held by each member and in case the whole or any part of the shares offered under S. 86(1) of the Companies Ordinance, 1984 was declined or not subscribed, then Directors may issue such shares in such manner as may deem fit---Intention expressed in S. 86 of the Companies Ordinance, 1984 clearly was to increase the capital of the company by subscription of shares and offering them to existing shareholders and on the contrary, bonus shares were issued by a capitalization of the reserves of the company for which the shareholders did not pay any cash and they were merely offered such shares out of the reserves with the company---Section 86 encapsulated two things: firstly; it enumerated one of the methods by which the company may increase its share capital; secondly, it conferred pre-emptive rights on the existing shareholders---Section 86 dealt in "rights issue" and was a species of preemption rights---One distinguishing feature was that the "rights issue" would raise new money for the company but bonus or capitalization of reserves issue would not raise any new money--- For all intents, S. 86 rights would be triggered only if the proposed issue is exclusively for cash.

Gower, Principles of Modern Company Law, by Paul L. Davies and Sarah Worthington (Gower) (Tenth edition) rel.

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

----S. 196---Powers of Directors---Power to declare interim dividend---Power to declare interim dividend may vest in the Directors of a company but, in case, the Articles of Association of a company laid down a procedure by which such power was to be exercised by the company in a general meeting, then such power of the Directors to declare interim dividend was always subject to the power laid down in the said Articles---High Court observed that such was the only interpretation of S. 196 of the Companies Ordinance, 1984 which would give purpose to the policy of S. 196 of the Companies Ordinance, 1984 and any other construction would render S. 196(1) of the Companies Ordinance, 1984 and the intention underlying the same, as redundant.

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

----Ss.196 & 249---Powers of Directors---Power to declare interim dividend---Capitalization and bonus shares---Amplification of the term "interim dividend"---Issuance of bonus shares was not dividend distribution---Distinction between capitalization of reserves/issuance of bonus shares and interim dividend in the context of S. 196 of Companies Ordinance, 1984, explained.

Gower, Principles of Modern Company Law by Paul L. Davies and Sarah Worthington (Gower), (Tenth edition) and Case and Materials in Company Law by Len Sealy and Sarah Worthington (9th Edition) (Sealy) rel.

(h) Interpretation of statutes---

----Surplusage canon of interpretation---Words cannot be meaningless, else they would not have been used.

United States v. Butler 297 US 1, 65 (1936) and Reading Law: The Interpretation of Legal Texts by Antonin Scalia and Bryan A. Garner rel.

Jahanzeb Awan, Muhammad Raza Qureshi and Rashid Anwer for Petitioners.

Syed Zulfiqar Abbas Naqvi for Respondents Nos.1 and 3.

Syed Ali Raza for Respondents Nos. 2 and 9.

Adnan ul Haq for Respondent No.11.

Umair Mansoor for SECP.

2017 C L D 631

[Lahore]

Before Shams Mehmood Mirza, J

BANK OF PUNJAB---Plaintiff

Versus

Messrs ANMOL TEXTILE MILLS LIMITED and others---Defendants

C.O.S. No.44 of 2008, heard on 9th May, 2016.

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

----S. 9---Qanun-e-Shahadat (10 of 1984), Art. 130---Suit for recovery of finance---Fact not rebutted---Affidavit---Deponent not cross-examined---Effect---Letters offering facility issued from time to time by plaintiff Bank were accepted by defendants by putting signatures thereon---Testimony of plaintiff's witnesses regarding finance documents under Cash Finance (pledge) Facility, Letters of Credit and their allied documents together with statements of accounts went un-rebutted, as no question was put to them in cross-examination---Effect---Defendants offered no meaningful evidence rebutting claim of plaintiff Bank---Testimony of defendants witness had no nexus with the defence taken in written statement---Witness of defendant was unreliable and could not produce any authorization from defendant to appear on its behalf---Affidavits of remaining defendants were produced but they chose not to appear in witness box to undergo test of cross-examination---Such affidavits of defendants had no value and defendants failed to lead any credible evidence to rebut plaintiff's evidence---High Court decided all issues in favour of plaintiff Bank---Suit was decreed in circumstances.

Abdul Hameed Chohan for Plaintiff.

M. Imran Malik for Defendants.

Moeen Ahmad, Local Commission.

2017 C L D 650

[Lahore]

Before Ibad-ur-Rehman Lodhi, J

Mst. ANWAR BEGUM through L.R.---Appellant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN and another---Respondents

F.A.O No.213 of 2015, decided on 14th October, 2016.

Insurance Act (IV of 1938)---

----Ss. 2(6), 47B & 53---Civil Procedure Code (V of 1908), S. 15 & O.VII, R.10---Insurance claim---Principal civil court---Jurisdiction---Claimant filed suit before Additional District Judge seeking award of interest (liquidated damages) on account of settlement of group claim under S. 47B of Insurance Act, 1938---Additional District Judge returned the plaint under O. VII, R. 10, C.P.C. for filing before civil court---Validity---Ordinary suits were instituted and regulated under Civil Procedure Code, 1908, and were instituted in the court of the lowest grade competent to try it but suits or proceedings instituted under any other special law had to be instituted in the forum specifically provided in such special law---When special law viz. Insurance Act, 1938, provided a forum of 'principal civil court' then such suits or proceedings could not be filed before Court of Civil Judge---High Court set aside order passed by Additional District Judge, as the same was misconceived and was not supported by law---Case was remanded to District Judge to entertain claim filed under Insurance Act, 1938---Appeal was allowed accordingly.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477; State Life Insurance Corporation of Pakistan through Attorney v. Mst. Kaneez Bibi 2014 CLD 1323; State Life Insurance Corporation of Pakistan through Attorney v. Mst. Bashiran Bibi 2015 CLD 342; Patricia Anne Patel v. Gerald Cowling Patel PLD 1972 Kar. 444; Messrs S. Ghulam Dastgir and Sons v. Union Insurance Company of Pakistan Limited PLD 1995 Lah. 290; All India Motor Transport Mutual Insurance Co. Ltd. v. Rapheel George of Bombay Indian Inhabitant AIR 1963 Bombay 7 and Syed Akhtar Hussain Zaidi v. Sheikh Abdul Majeed PLD 1986 Lah. 663 ref.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

2017 C L D 658

[Lahore (Multan Bench)]

Before Aslam Javed Minhas, J

MUHAMMAD IQBAL QURAISHI---Petitioner

Versus

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

W.P. No.13860 of 2015, decided on 4th February, 2016.

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

----S. 20(4) & (6)---Criminal Procedure Code (V of 1898), S. 22-A---Dishonest issuance of cheque to a financial institution---Registration of case---Jurisdiction of Banking Court---Complainant-Bank filed petition under S. 22-A, Cr.P.C. against the petitioner for dishonored cheque---Direction was issued by Justice of Peace to Police for registration of case---Legality---Section 20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was the provision which dealt with dishonest issuance of a cheque towards repayment of a finance or fulfilment of an obligation which was dishonored on presentation---Matter, where cheque was issued to a financial institution and same was dishonored, jurisdiction would lie only with the Banking Court established under the Financial Institutions (Recovery of Finances) Ordinance, 2001 and not before any other court until and unless provided by law by which the financial institution was established---Section 20(6) of the said Ordinance provided that the offences under the Ordinance would be bailable, non-cognizable and compoundable therefore the registration of a criminal case by the local police was not permitted by the law---Constitutional petition was accepted accordingly.

(b) Interpretation of statutes---

----Special law and general law---Special law and general law which were on the same subject were statutes in pari materia which would be read together and harmonized, if possible, with a view to giving effect to both.

(c) Interpretation of statutes---

----Special law and general law---Conflict between---Principle---Where special law was in conflict with general law, special law would prevail.

Malik Sajjad Haider Maitla for Petitioner.

Mansoor Aalam for Respondent No.3.

2017 C L D 663

[Lahore]

Before Shahid Karim, J

ALLIED BANK LIMITED through Attorneys---Plaintiff

Versus

BANKERS EQUITY LTD. through Official Liquidator and anther---Defendants

C.O.S. No. 13 of 2004, decided on 29th December, 2016.

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

----Ss. 18, 9 & 7---Qanun-e-Shahadat (10 of 1984), Arts. 78 & 79---Banking documents---Proof of execution of document required by law to be attested---Execution of guarantee---Suit for recovery---Contention of defendants was that the documents of guarantee purportedly executed by the defendants had not been attested in accordance with Arts. 78 & 79 of Qanun-e-Shahadat, 1984; and therefore could not be used as evidence until two attesting witnesses had been called for purpose of proving its execution---Validity---In the present case, execution of guarantee was not in question, rather defendants had challenged lack of authority on part of officers executing the guarantee and therefore, said situation was not covered by Arts. 78 & 79 of the Qanun-e-Shahadat, 1984.

Qamrul Hasan and another v. United Bank Ltd. and another 1990 MLD 276 and Muhammad Tariq v. Mirza Rashid Akhtar and others 1991 CLC 1697 ref.

Islam ud Din through L.Rs and others v. Mst. Noor Jahan through L.Rs and others 2016 SCMR 986 and State Life Insurance Coporation of Pakistan and another v. Javaid Iqbal 2011 CLD 860 distinguished.

(b) Constitution of Pakistan---

----Art. 10A---Right to fair trial and due process of law---Production of evidence and documents---Administration of justice---Technicalities---Scope---Courts would not be shackled by technicalities in the production of evidence and if the court considered that a particular evidence was necessary for just decision, liberal rules would be employed to enable documents to be produced in evidence and such approach advanced the cause of justice and was in comport with Art. 10-A of the Constitution.

State Life Insurance Corporation of Pakistan and another v. Javed Iqbal 2011 CLD 860 and Sher Baz Khan v. The State PLD 2003 SC 849 rel.

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

----Ss. 7 & 9---Civil Procedure Code (V of 1908), S. 10---Suit for recovery---Defendant under liquidation pursuant to provisions of the Companies Ordinance, 1984---Contention of the defendant was that claim of plaintiff Bank had also been filed before the Official Liquidator of the defendant company and hence per S. 10 of C.P.C. the present suit should be stayed---Validity---Permission for proceeding with the present suit was granted by the Company Bench of the High Court and there was no bar on proceedings being taken for the filing of the suit in the special jurisdiction conferred by Financial Institutions (Recovery of Finances) Ordinance, 2001---Official Liquidator of a company under liquidation was not empowered to decide matters of complex nature which required evidence to be taken down and in all such matters, provisions of Companies Ordinance, 1984 as well required adjudication of claims to be done through suits to be filed by parties in order to establish their claims.

Messrs H & B General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 354 distinguished.

(d) Company---

----Doctrine of Indoor Management---Agent acting on behalf of a company---Agency principles and rules of attribution in relation to contracts to protect third-party interests while dealing with companies and their agents acting within the apparent or ostensible scope of their authority---Actual authority and apparent authority---Principles and comparative statutes and case-law from various jurisdictions, examined.

Gower, Principles of Modern Company Law, Tenth Edition, Paul L. Davies and Sarah Worthington; Lovett v. Carson Country Homes Ltd. 2000 2 B.C.L.C. 196; Uxbridge Building Society v. Pickard [1939] 2 K.B. 248; Armagas Ltd. v. Mundogas SA 1986 A.C. 717 HL; First Energy (UK) Ltd. v. Hungarian International Bank Ltd. [1993] B.C.L.C. 1409 CA; Royal British Bank v. Turquand (1856) 6 E & B 327 Exch. ch.; Mahony v. East Holyford Mining Co. (1875) L.R. 7 H.L. 869; Muhammad Azim v. Pakistan Employees Co-operative Housing Society Ltd. Karachi and 4 others PLD 1985 Kar. 481; West Pakistan Paint Mills (Pvt.) Ltd. v. Muhammad Ashraf Shagufta, Additional District Judge, Lahore 1998 SCMR 380 and The Pakistan Employees Co-operative Housing Society Ltd. Karachi v. Mst. Anwar Sultana and others PLD 1969 Kar. 474 rel.

Salman Akram Raja, Tariq Bashir, A.W. Butt and Bilal Bashir for Plaintiff.

Ghulam Ali Raza for Defendants.

2017 C L D 696

[Lahore]

Before Shahid Karim, J

Mian WAQAR-UD-DIN and 3 others---Petitioners

Versus

Messrs UNITED INDUSTRIES LIMITED and 11 others---Respondents

C.O. No. 35 of 2006, decided on 2nd March, 2016.

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

----Ss. 290 & 291---Prevention of oppression and mismanagement---Application under S. 290 of the Companies Ordinance, 1984---Scope---Order under S. 290 of the Companies Ordinance, 1984 could only be made upon a petition/application presented to the court and after such an application/petition had been presented, the High Court could proceed to consider the various alternate options spelt out in S. 290 of the Companies Ordinance, 1984.

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

----Ss. 305 & 309---Winding-up of company---Circumstances in which company may be wound up by court---Adjudication of application for winding-up a company---Scope---Matters must be decided and rights must be determined and adjudged according to the legal position prevailing on the date of the institution of the proceedings for winding-up and not on the basis of changes which had been introduced pendente lite (during litigation)---Determination as to whether it was "just and equitable" to wind a company up, in terms of S. 305(h) of the Companies Ordinance, 1984 must be based on the circumstances which existed on the date of hearing of an application for winding-up a company and not thereafter, and any thing which took place after proceedings had commenced would not be taken into consideration by the Court, and would not normally augment grounds already taken in such an application.

Ladli Prasad Jaiswal v. The Kamal Distillery Co., Ltd. PLD 1965 SC 221 distinguished.

Shahbazud Din Chaudhry and 27 others v. Messrs Services Industries Textiles Limited and 4 others PLD 1988 Lah. 1 rel.

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

----Ss. 305, 309 & 310---Winding-up of a company---Cases in which companies may be wound-up by court---Determination as to whether it was just and equitable to wind up a company in terms of S. 305(h) of the Companies Ordinance, 1984--- Scope--- Mere allegations of mismanagement or misappropriation of funds by the Directors of company, without more, would not be sufficient ground to wind-up company and similarly, when there were allegations of grouping and partisanship amongst shareholders, the same was not acceptable as sufficient basis to wind up company.

Muhammad Hussain v. Dawood Flour Mill and others 2003 CLD 1429 and Shahamatullah Qureshi v. Hi-Tech Construction (Pvt.) Ltd. 2004 CLD 640 ref.

Ladli Prasad Jaiswal v. The Kamal Distillery Co., Ltd. PLD 1965 SC 221 distinguished.

Hafiz Abdul Rehman and others v. Hafiz Abdul Majeed and others C.O. No. 45 of 2004; Tasnim and another v. Rustom Ali and others 2000 CLC 364; Shahamullah Qureshi v. Hi-Tech Construction (Pvt.) Ltd. 2004 CLD 640 and Shahbazud Din Chaudhry and 27 others v. Messrs Services Industries Textiles Limited and 4 others PLD 1988 Lah. 1 rel.

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

----Ss. 290, 291 & 305--- Prevention of oppression and mismanagement---Remedial discretion of court where there existed unfairly prejudicial conduct in the affairs of a company towards its members/shareholders---Compulsory buy-out of shares at a fair price, as a remedy in cases of oppression/mismanagement/unfairly prejudicial conduct of company towards shareholders/members---Different standards for valuing shares in compulsory buy-out orders---Powers of the court under Ss. 290 & 305 of the Companies Ordinance, 1984 discussed in comparison to similar provisions of laws and jurisprudence of the United Kingdom---Jurisprudence, established principles and case-law, discussed.

Re: Saul D Harrison and Sons PLC (1995) 1 BCLC 14; Re: London School of Electronics Limited (1986) Ch 211; O' Neil v. Phillips (1999) 1 WLR 1092 (House of Lords); Bird Precision Bellows Ltd (1984) Ch. 419; Profinance Trust SA v. Gladstone (2002) 1 WLR 1024; Wholesale Society Ltd. v. Meyer (1959) AC 324 (House of Lords); Gower and Davies' Principles of Modern Company Law (Seventh Edition), p.526 rel.

Imtiaz Rahseed Siddiqui, Shehryar Kasuri, M. Hamza, Raza Imtiaz Siddiqui, Omer Tariq and Jamshed Alam for Petitioners.

Kh. Saeed uz Zafar, Asjad Saeed and Ch. Muhammad Naseer for Respondent No.1.

Rasaal Hassan Syed for Respondents Nos.2, 3 and 7.

Imran M. Sarwar for Respondent No.10.

Umair Mansoor for SECP.

2017 C L D 757

[Lahore (Multan Bench)]

Before Amin-ud-Din Khan and Masud Abid Naqvi, JJ

MUHAMMAD SHAFIQ and others---Appellants

Versus

BANK OF PUNJAB through Manager and others---Respondents

R.F.A. No.115 of 2011, heard on 14th November, 2016.

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

----Ss. 9, 10 & 22---Procedure of Banking Court---Statement of Account---Charging of excess markup---Suit for recovery---Application for leave to defend by the defendants was allowed partially, and suit for recovery was decreed partially against the defendants, who were successors-in-interest of the original defendant (now deceased)---Contention of the defendants' inter alia was that the plaintiff Bank, while filing the suit, did not fulfil requirements of S. 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and that the statement of accounts issued by Bank was not according to law---Validity---Perusal of record revealed that predecessor-in-interest of the defendants had denied the availing of the loan but admitted the execution of documents by seeking exclusion of certain entries from the statement of accounts---Plaintiff Bank could not explain a discrepancy in the statement of account regarding charging of excess markup---Held, that the defendants were entitled for exclusion and deduction of said amount, and the same was deducted from the decretal amount---Appeal was allowed, accordingly.

Muhammad Suleman Bhatti for Appellants.

Muhammad Saleem Iqbal for Respondent No.1.

Mian Muhammad Younas for Respondent No.2.

2017 C L D 766

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

Ch. MAQBOOL AHMAD SAHOOKAR---Appellant

Versus

Messrs NIB BANK and others---Respondents

E.F.A. No.1073 of 2016, decided on 7th December, 2016.

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

----Ss. 19, 9 & 7---Civil Procedure Code (V of 1908) O. XXI, R. 90 & S. 47---Execution of decree of Banking Court---Sale/auction of immovable property---Questions to be determined by the court executing the decree---Application of appellant for setting aside auction proceedings under O. XXI, R. 90, C.P.C. was dismissed---Contention of the appellant, inter alia, was that the auction/sale was confirmed by the Banking Court in favour of the auction-purchaser, which was counter to the earlier order of the Banking Court wherein appellant's application under S. 47, C.P.C. had been adjourned for later determination---Validity---Perusal of orders of Banking Court revealed that the Banking Court had made the confirmation of sale subject to the decision of the application of the appellant under S. 47, C.P.C. and such intent of the Banking Court seemed to be negated by the impugned order; however, the appellant did not raise any substantial grounds other than that issuance of sales certificate could not be issued until the application of S. 47, C.P.C. was decided---Held, such ground could not be the cause to have impugned order set aside---High Court, directed the Banking Court to decide application under S. 47, C.P.C. and thereafter proceed to issue the sales certificate for auction---Appeal was disposed of, accordingly.

2017 C L D 772

[Lahore]

Before Ayesha A. Malik, J

MUHAMMAD AYAZ---Petitioner

Versus

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

W.P. No. 1193 of 2017, heard on 1st February, 2017.

(a) Punjab Environmental Protection Act (XXXIV of 1997) [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)---

----Ss. 16, 22 & 23---Constitution of Pakistan, Art. 199---Constitutional petition---Jurisdiction of High Court---Environment Protection Order---Alternate remedy---Statutory appeal---Scope---Question before the High Court was whether a Constitutional petition impugning actions of Provincial Environmental Protection Agency in pursuance of an Environment Protection Order; was maintainable in view of remedy of appeal available to the petitioner under Ss. 22 & 23 of the Punjab Environmental Protection Act, 1997---Held, that question raised in the Constitutional petition related to interpretation of S. 16 of the Punjab Environmental Protection Act, 1997 and powers of the Provincial Environmental Protection Agency versus power of the Environmental Tribunals to enforce the Environment Protection Order (EPO); and therefore the remedy of appeal under Ss. 22 & 23 of the Punjab Environmental Protection Act, 1997 was not efficacious---Constitutional petition was therefore, maintainable.

Messrs Mega Steel Mills Private Limited v. Government of Punjab through Secretary, Environmental Protection Department, Punjab, Lahore and 6 others 2016 CLC 1095 ref.

(b) Punjab Environmental Protection Act (XXXIV of 1997) [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)---

----Ss. 16, 17 & 21---"Rio Declaration on Environment and Development", United Nations Conference on Environment and Development, ratified by Pakistan on 1.6.1994---Environment Protection Order ("EPO")---Interpretation of S. 16 of the Punjab Environmental Protection Act, 1997---- Nature of powers of the Environmental Protection Agency to seal a premises for non-compliance of the Environment Protection Order---Precautionary principle in cases of environmental harm---Obligations of the state---Scope---Spirit of S. 16 of the Punjab Environmental Protection Act, 1997 was based on the precautionary principle, which required a relevant agency to anticipate the danger and take immediate steps to prevent harm or danger to the environment---Precautionary principle was essentially a tool for ensuring sustainable development and focused on empowering regulators to act in anticipation of environmental harm and ensure that the same did not occur---Pakistan's commitment to uphold sustainable development and the Precautionary Principle was affirmed through ratifications of the "Rio Declaration" and several other international instruments---Certain activity if allowed to go ahead, may cause irreparable damage to the environment and if it was stopped, there may be irreparable damage to economic interest and in case of doubt protection of environment would have precedence over the economic interest---Precautionary principle required anticipatory action to be taken to prevent harm and such harm could be prevented even on a reasonable suspicion and it is not always necessary that there should be direct evidence of harm to the environment---State and its officers must employ measures to achieve environmental justice and preserve the environment---Punjab Environmental Protection Act, 1997 emphasized on immediate measures empowering the EPA to protect the environment where there was imminent threat to the public or cause to believe environmental degradation/pollution would be irreversible and in such cases, enforcement mechanism must act immediately to effectively control the harm and prevent any further degradation---Without said power of enforcement; the issuance of an EPO under S. 16(2) of the Act specifically would become redundant and if the EPO required immediate stoppage or immediate removal of the pollutant then allowing the harm and pollution to continue would defeat the purpose of S. 16(2) of the Punjab Environmental Protection Act, 1997.

Messrs Mega Steel Mills Private Limited v. Government of Punjab through Secretary, Environmental Protection Department, Punjab, Lahore and 6 others 2016 CLC 1095; M.C. Mehta v. Union of India Court 1997 (2) SCC 353; AIR 1997 SC 734; Ms. Shehla Zia and others v. WAPDA PLD 1994 SC 693; Adeel-ur-Rehman v. Federation of Pakistan 2005 PTD 172 and Ali Steel Industry v. Government of Khyber Pakhtunkhwa and another 2016 CLD 569 rel.

Ms. Imrana Tiwana and others v. Province of Punjab and others 2015 CLD 983 distinguished.

(c) Punjab Environmental Protection Act (XXXIV of 1997) [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)---

----Ss. 16, 22 & 23---Constitution of Pakistan, Art. 10A---Fundamental right to fair trial and due process of law---Nature and scope of such right--- Environmental justice--- Strict Liability--- Precautionary principle---Precautionary actions in cases of environmental harm---While due process and the right to a fair trial were embedded in Art. 10A of the Constitution, the objective of such Constitutional protection was to achieve justice and in cases of strict liability, where damage to the environment was irreversible and permanent, immediate action was fortified in order to prevent irreparable damage---In such cases it was necessary to take precautionary measures, which did not immolate or infringe the right to fair trial or due process, but simply ensured that a harm or hazard did not continue during the time spent in due process.

Warid Telecom (Pvt.) Limited v. Pakistan Telecommunication Authority 2015 SCMR 338 and Karnataka Public Service Commission v. B.M. Vijaya Shankar AIR 1992 SC 952 rel.

(d) Punjab Environmental Protection Act (XXXIV of 1997) [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)---

----Ss. 16, 21, 20 & 17---Constitution of Pakistan, Art. 10A---Environment Protection Order ("EPO") issued under S. 16 of the Punjab Environmental Protection Act, 1997---Right to fair trial and due process of law---Jurisdiction and powers of Environmental Tribunals---Precautionary actions in cases of environmental harm---Scope---Petitioner impugned sealing of petitioner's premises for non-compliance of Environment Protection Order issued under S. 16 of Punjab Environmental Protection Act, 1997 on the ground that the same violated his right to fair trial under Art. 10A of the Constitution---Validity---Said contention was not sustainable because public safety, public health and the environment must be protected from irreparable harm and in the present case, the issue of noise pollution and vibrations were exceeding the National Environmental Quality Standards (NEQs), hence the same required immediate action to secure public health and safety especially since the petitioner had failed to rectify the cause of the harm in any manner whatsoever---Contention that power of sealing lay only with the Tribunal and that the Environmental Protection Agency was required to file a complaint under S. 21 of the Punjab Environmental Protection Act, 1997 was misconceived since the same provided that an application could be filed by any officer authorized by the Director General of the EPA if there was reasonable suspicion of his having been involved in contravention punishable under S. 17(1) of the Punjab Environmental Protection Act, 1997 which was available to the EPA in addition to the power it had to execute the measures provided in S. 16(2) of the Punjab Environmental Protection Act, 1997---In the event that there was non-compliance of S. 16(2) of the Punjab Environmental Protection S.16(3) of the same enabled the Environmental Protection Agency to itself take the measures that were prescribed in the Environmental Protection Order---Use of the words "itself take or cause to be taken" in S. 16(3) of the Punjab Environmental Protection Act, 1997 were for the benefit of the environment and empowered the Environmental Protection Agency to enforce its orders in order to stop pollution which caused imminent danger to the people and the locality---High Court held that there was no violation of Art. 10A of the Constitution.

Sharjeel Haider and Muhammad Yasin Hatif for Petitioner.

Mrs. Samia Khalid, AAG along with Asghar Ali Tahir, Deputy Director and Mian Ijaz Ahmad, Deputy Director (L&E), Environment Protection Agency for Respondents.

2017 C L D 827

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

RAZIA BIBI and others---Appellants

Versus

UNITED BANK LIMITED and others---Respondents

E. F. A. No.1058 of 2016, decided on 28th November, 2016.

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

----Ss. 15, 19 & 22---Execution of decree of Banking Court---Sale of mortgaged property--- Non-partitioned property/"joint khata"---Contention of the judgment-debtor was that mortgaged property was a "joint khata", and unless partition of the mortgaged property took place, the same could be auctioned---Validity---Impugned order of the Banking Court dealt with issue of partition of the mortgaged property and no infirmity existed in the said findings---Mortgaged property could, in fact, be put to auction till formal partition takes place---Any person who purchased a property in an auction simply stepped into the shoes of the one of the owners in the "joint khata", whose share of the said property was then sold---Appeal was dismissed, in circumstances.

2017 C L D 833

[Lahore (Rawalpindi Bench)]

Before Atir Mahmood and Mujahid Mustaqeem Ahmed, JJ

JAVED IQBAL---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Manager and others---Respondents

E.F.A. No. 6 of 2015, heard on 21st December, 2016.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), XXI. Rr. 66, 68 & 90---Execution of decree---Auction proceedings---Inherent defects---Effect---Judgment debtor filed objections against auction proceedings, on the ground that no venue of auction was mentioned in the press publication---Objections filed by judgment-debtor were dismissed by Executing Court---By not specifying venue of auction by Executing Court, non-service of notice on the judgment debtor 15 days before publication of proclamation of sale, non-affixation of notice/proclamation at the Court premises of Banking Court and mortgaged property, not strictly adhering to schedule prepared by Executing Court for sale of mortgaged property by Court Auctioneer were inherit defects in auction proceedings---Mandatory provisions of O. XXI, Rr. 66(2) & 68, C.P.C. were offended/violated and serious prejudice was caused to judgment debtor and his rights had been adversely affected---High Court accepted objection petition filed by judgment-debtor and set aside auction proceedings---Appeal was allowed in circumstances.

Mst. Nadia Malik v. Messrs Makki Chemical Industries Pvt. Limited through Chief Executive and others 2011 SCMR 1675; Nadeem Akhtar Tabasum v. Muslim Commercial Bank Limited and others 2014 SCMR 1371; Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. and others v. Allied Bank of Pakistan and another 2014 SCMR 1662; Zulfiqar and others v. Shahdat Khan PLD 2007 SC 582; Sajawal Khan v. Wali Muhammad and others 2002 SCMR 134 and Misal Khan v. Managing Director Corporate Member, Karachi Stock Exchange and 2 others 2011 CLC 1473 ref.

Ch. Farhat Nawaz for Appellant.

Malik Imran Safdar for Respondent No.1.

Abdul Hameed Baloch for Respondent No.1-A/auction purchaser.

2017 C L D 867

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

Messrs ANGORA TEXTILES LTD. and others---Appellants

Versus

NIB BANK LIMITED and others---Respondents

R.F.A. No. 958 of 2013, decided on 8th December, 2016.

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

----Ss. 10 & 9---Procedure of Banking Court---Application for leave to defend, adjudication of---Suit for recovery was decreed after application of defendant for leave to defend was dismissed---Contention of the defendant, inter alia, was that the Banking Court in the impugned order did not take into consideration grounds raised by the defendant in its application for leave to defend---Validity---Defendant had specifically denied in its application for the leave to defend, that machinery which was mentioned in the schedule of the finance agreement relied upon by the plaintiff Bank, was not leased to the defendants in the course of the business and a specific amount sought to be recovered had not been disbursed to the defendants at any stage---Defendant had also raised in its application for leave to defend the ground that the first disbursement was made on 4.01.2005 whereas the sales invoice for machinery, attached by the plaintiff Bank, was dated 13.08.2004; which clearly showed that machinery mentioned in the alleged sales invoice was not purchased against alleged loan facility and furthermore the amount mentioned in the offer letter was materially different from the one claimed by the plaintiff Bank in the suit---All such facts had not been considered by the Banking Court while passing the impugned order and on such account, the impugned order could not be sustained, and was set aside by High Court and matter was remanded for fresh decision on application for leave to defend---Appeal was allowed, accordingly.

Muhammad Imran Malik for Appellants.

2017 C L D 873

[Lahore (Bahawalpur Bench)]

Before Muhammad Sajid Mehmood Sethi and Tariq Iftikhar Ahmad, JJ

Khawaja RAHIM ULLAH and others---Appellants

Versus

BANK OF PUNJAB---Respondent

R.F.A. No. 30 of 2013/BWP, heard on 12th January, 2017.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Application for leave to defend the suit---Requirements---Non-raising of substantial questions---Effect---Defendants were aggrieved of judgment and decree passed by Banking Court---Validity---Defendants, in terms of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were required to disclose in their application for leave to defend the suit, the amount of finance availed, repaid to plaintiff Bank along with dates of payments, other amounts payable to financial institution up to the date of institution of suit and amount, if any, disputed by them as payable to financial institution and facts in support thereof, instead of evasively denying availing facility without any solid basis and proof---Defendants were required under S. 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, to file all such documents along with their application to defend the suit, which in their opinion supported purported questions of law or facts---Defendants failed to comply with the provisions of S. 10(3) (4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and approached the High Court with unclean hands and their defence was not bona fide---Defendants were not entitled to leave to defend and their application was rightly rejected by Banking Court---Plaintiff Bank had disclosed details of amounts of finance facility availed, paid and payable by defendants---Findings rendered by Banking Court were also unexceptionable and based on correct appreciation of available evidence/record and application of relevant law---Appeal was dismissed in circumstances.

Messrs Asia Motor Company through Proprietor and another v. Messrs NIB Bank Limited 2016 CLD 609 and Sheikh Murshid Ali and others v. United Bank Limited 2016 CLD 1471 distinguished.

Ghulam Rasool through L.Rs. and others v. Muhammad Hussain and others PLD 2011 SC 119; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Allied Bank of Pakistan Limited I.I. Chundrigar Road Karachi v. Messrs Kohinoor Cotton Mills Limited, Lahore and 3 others PLD 1985 Lah. 89; Muhammad Akmal and 9 others v. Messrs Grindlays Bank Ltd. and another 1987 CLC 2353; Khursheeda and 3 others v. Haji Qudrutullah and another 1988 CLC 1062; National Bank of Pakistan v. Punjab Buildings Products Ltd. PLD 1998 Kar. 302; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Messrs International Traders through Proprietorship and 3 others v. Union Bank Limited 2003 CLD 1464; Ghulam Abbas v. Manzoor Ahmed and another PLD 2004 Lah. 125; Habib Bank Limited v. Service Fabrics Ltd and others 2004 CLD 1117; National Bank of Pakistan through Zonal Chief and others v. Messrs Power Textile Industries Ltd. through Chief Executive and others 2004 CLD 1239; Bank of Punjab through EVP/General Manager v. Genertech Pakistan Ltd. through Chief Executive and 2 others 2008 CLD 765; Askari Commercial Bank Ltd. v. Hilal Corporation (Pvt.) Ltd. and 6 others 2009 CLD 588; International Finance Corporation v. Sarah Textiles Ltd. and 3 others 2009 CLD 761; Habib Bank Ltd. v. Messrs Doaba Corporation through Proprietor and another 2009 CLD 845; Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856; Habib Bank Ltd. v. Paragon Industries (Pvt.) Ltd. through Chief Executive and 5 others 2009 CLD 1346; Messrs Speedway Fondmetall, Pakistan Ltd. v. NIB Bank Ltd. (Formerly PICIC) 2010 CLD 896; Messrs Berry Food Industries and others v. Muslim Commercial Bank Ltd. 2011 CLD 75; Allied Bank Limited v. Muslim Cotton Mills Private Limited and 3 others 2011 CLD 393; Apollo Textile Mills Ltd. through Chief Executive and Director and 3 others v. Soneri Bank Limited through Manager/Principal Officer 2011 CLD 1655; Habib Metropolitan Bank Ltd. v. Mian Abdul Jabbar Gihllin and another 2013 CLD 88; Elite Publishers Limited and 3 others v. Soneri Bank Limited 2013 CLD 1995; NIB Bank Ltd. v. Highnoon Textile Ltd and 3 others 2014 CLD 763; Messrs Habib Bank Limited through Senior Manager v. Messrs R.G. Match Industries (Pvt.) Ltd. through Chief Executive and 3 others 2014 CLD 1015; The Bank of Punjab through Branch/Chief Manager v. Messrs Khan Unique Developers Pvt. Ltd. through Chief Executive Officer and 9 others 2016 CLD 29; Messrs First Dawood Investment Bank Limited through Authorized Officers/Attorneys v. Mrs. Anjum Saleem and 3 others 2016 CLD 920 and Saudi Pak Industrial and Agricultural Investment Company Limited v. B. A. Rajpoot Steel and Re-Rolling Mills (Pvt.) Limited and others 2016 CLD 465 ref.

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

----Ss. 10 & 22---Appeal---New plea---Principle---Stance which was not taken in leave application could not be allowed to be raised at appellate stage.

Dr. Faiz Rasool and others v. The Askari Bank Limited through Branch Manager/Authorized Attorney 2015 CLD 1710 and Imam Din v. Bank of Khyber, D.I. Khan through Manager 2012 CLD 447 rel.

Aejaz Ahmed Ansari and Muhammad Asif Usman Qureshi for Appellants.

Muhammad Saleem Iqbal for Respondent.

2017 C L D 905

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

UNITED BANK LIMITED---Appellant

Versus

Messrs ALI OIL MILLS AND ICE FACTORY and others---Respondents

R.F.A. No. 1034 of 2012, heard on 13th December, 2016.

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

----Ss. 10 & 9---Application for leave to defend, acceptance of---Jurisdiction of Banking Court---Scope---Plaintiff Bank, impugned order of Banking Court whereby applications for leave to defend of the defendants were allowed and upon such acceptance of the applications, suit against said defendants was dismissed by the Banking Court---Validity---If the Banking Court was of the view that substantial question(s) of law had been raised in the applications for leave to defend, then it was not proper for the court to have proceeded to dismiss the suit and reject the plaint to the extent of the defendants who filed said applications for leave to defend---Banking Court, could have granted leave to defend and subsequent questions were to be determined through regular process after recording of evidence---Impugned order was therefore not countenanced by law and course adopted by Banking Court was clearly unlawful and beyond the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---Impugned order was set aside, and matter was remanded to Banking Court---Appeal was allowed, accordingly.

Mian Waheed Akhtar, Advocate Vice-Counsel for Appellant.

Nemo for Respondents.

2017 C L D 910

[Lahore]

Before Shahid Karim, J

ALLIED BANK LIMITED---Plaintiff

Versus

CHENAB LIMITED and 20 others---Defendants

C.O.S. No. 24 of 2014, decided on 26th December, 2016.

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

----Ss.18, 10 & 9---Suit for recovery---Application for leave to defend---Procedure of Banking Court---Banking documents---Allegation of Financial Institution obtaining signatures of customers on blank documents---Contention of defendants was that plaintiff Bank obtained their signatures on blank documents which was prohibited under S. 18 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Entire liabilities due from the defendants had been brought forth in the last facility offer letter and defendants could not now turn around and say that the basis of the suit was certain blank document(s) obtained by the plaintiff Bank---Defendants had alleged that they had made the entire payment of the liabilities under the finance facilities disbursed and, therefore, the defendants could not blow hot and cold by stating on the one hand that they had repaid the finance facilities availed from the plaintiff-Bank while on the other hand challenging the very documents on which the finance facilities were predicated---Application for leave to defend was dismissed, in circumstances.

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

----Ss. 9 & 7---Banker's Books Evidence Act (XVIII of 1891) S. 4---Procedure of Banking Court---Statement of accounts---Presumption of correctness---Scope---"Financial estoppel", concept of---Test for existence or otherwise, of a corresponding duty, either in contact (by way of implied term) or in tort, owed by a customer to check his monthly (or other periodic) Bank statements so as to notify the Bank of any items which were not authorized by him---Properly-worded clause in the finance agreement between a financial institution and customer could serve the purpose of a conclusive evidence clause and establish an estoppel in respect of a customer notwithstanding that there was no implied duty to check Bank statements by a customer.

Camillo Tank Steamship Co. Ltd. v. Alexandria Engineering Works (1921) 38 TLR 134 per Viscount Cave at 143; Tai Hing Cotton Mills Ltd. v. Liu Chong Hing Bank Ltd. [1986] AC Committee 80; [1985] 2 All ER 947, PC; Paget's Law of Banking, fourteenth edition; Stewart v. Royal Bank of Canada [1930] 4 DLR 694; B and G Construction Co. Ltd. v. Bank of Montreal [1954] 2 DLR 753 and Pertamina Energy Trading Ltd. v. Credit Suisse [2006] SG CA 27 rel.

A.W. Butt and Bilal Bashir for Plaintiff.

Mian Sultan Tanvir for Defendant No.1.

Hassan Attique for Defendants Nos. 17 and 19.

Muhammad Khalil Rana for Defendant No.11.

Jahanzeb Inam for Defendant No.21.

2017 C L D 923

[Lahore]

Before Shahid Karim and Jawwad Hassan, JJ

BANK OF PUNJAB---Appellant

Versus

Messrs SULTAN MOTORS and others---Respondents

R.F.A. No.494 of 2013, decided on 5th December, 2016.

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

----Ss. 2(d), 2(e), 17 & 9---Procedure of Banking Court---Obligation of customer to pay markup for the entire period of the financing agreement---Appellant Bank impugned order of Banking Court whereby its suit for recovery was decreed to the extent of the amount of markup due from the defendants till the date of default, which was less than the markup accrued for the entire period of the financing agreement---Validity---Under the law, the plaintiff was entitled to grant of markup till the period for which the finance agreement was valid and therefore, the decree-holder Bank was entitled to markup till date of maturity of the amount financed---Impugned order was modified to grant the markup for the entire period of the financing agreement---Appeal was allowed, accordingly.

Muhammad Akram Pasha for Appellant.

2017 C L D 926

[Lahore]

Before Shahid Karim and Jawad Hassan, JJ

RAQIYA BEGUM---Appellant

Versus

NATIONAL BANK OF PAKISTAN and others---Respondents

E.F.A. No. 964 of 2013, decided on 8th December, 2016.

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

----Ss. 19, 7 & 9---Civil Procedure Code (V of 1908) O. XXI, Rr. 90 & 89---Execution of decree of Banking Court---Sale of immovable property---Application of the appellant under O. XXI, R. 90, C.P.C. to set aside auction, was dismissed by Banking Court, on the ground that an earlier application filed by the appellant under O. XXI, R. 89, C.P.C. had been withdrawn by the appellant---Validity---One was permitted by law to maintain applications under O. XXI, R. 89 or 90, C.P.C. at his own discretion, and Banking Court merely had to see whether said applications were maintainable and whether proceedings could legally be taken on the same---Banking Court, in the impugned order, without going into maintainability of the application and preconditions of the law for such application, dismissed the same on the ground that the earlier application under O. XXI, R. 89, C.P.C. had been withdrawn by the appellant, and said view of the Banking Court was palpably wrong---Impugned order was set aside, and matter was remanded to the Banking Court with the observation that application of appellant under O. XXI, R. 90, C.P.C. shall be decided on merits---Appeal was allowed, accordingly.

2017 C L D 959

[Lahore]

Before Shahid Karim, J

BANK OF PUNJAB through Lawful Attorney---Plaintiff

Versus

Messrs GAS NATURALE (PVT.) LTD. and 4 others---Defendants

C.O.S. No. 138 of 2010, decided on 4th July, 2016.

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

----O. XXIII, R. 1 & S. 10---Withdrawal and adjustment of suits---Scope and applicability of O. XXXIII, R. 1, C.P.C.---Order XXIII, R. 1(1), C.P.C. gave power to the court, upon its satisfaction, to permit withdrawal of a suit or to permit plaintiff to abandon part of a claim with liberty to institute fresh suit in respect of same subject matter and such permission was to be granted to plaintiff upon requesting the same---Rule 1(3) of O. XXIII, C.P.C., provided that plaintiff who withdrew suit without permission, was precluded from instituting fresh suit in respect of same subject matter---Rules 1(2) & 1(3) of O. XXIII, C.P.C. contained the concept with regard to permission to withdraw a suit in order to file a fresh suit; however the same did not relate to a situation where permission to withdraw a suit had been sought while a fresh suit had already been filed and was pending adjudication before a competent court of law---If O. XXIII, R. 1, C.P.C. was applied to such a situation, then the same would tantamount to playing a fraud upon the provisions of O. XXIII, R. 1, C.P.C.---No occasion to seek permission to withdraw suit and file a fresh suit would arise in case a suit had already been instituted; for it would be otiose for plaintiff to seek permission to withdraw a suit in order to file fresh a suit if such fresh suit had already been instituted and it was S. 10 of C.P.C. that contemplated a situation where two such suits may be pending at the same time---Provisions of O. XXIII, R. 1, C.P.C. could not be stretched to cover a situation where the plaintiff did not require a permission to institute a fresh suit having already instituted such a suit; and if the law did not create a bar or prohibit the adoption of a modus operandi, then the same could not be read in to the C.P.C.

Karamat Ali Khan and another v. Sardar Ali and 29 others PLD 2001 SC(AJ&K) 30; Muhammad Ali and others v. Province of Punjab and others 2009 SCMR 1079; Jeewan Shah v. Muhammad Shah and others PLD 2006 SC 202; Messrs Artisans Craftsmen, Rehabilitation Society and 2 others v. Mst. Asif Jahan Begum and 10 others 1990 MLD 1702; Dr. Akhtar Hussain v. S.M. Hanif and 2 others 1990 MLD 1652; The Commissioner of Income Tax N.C.A. Circle, Karachi and another v. Haji Ashfaq Ahmad Khan and 10 others PLD 1973 SC 406 and Ghulam Nabi and others v. Seth Muhammad Yaqub and others PLD 1983 SC 344 distinguished.

Anjuman Masjid New Town through Secretary and another v. Muhammad Shahid Zaki and 12 others PLD 2011 Kar. 550; Haji Ashfaq Ahmad Khan and others v. Custodian of Evacuee Property, Pakistan and others PLD 1966 Kar. 597 and Irshad Ali v. Islamic Republic of Pakistan and others 1981 CLC 111 per curiam.

Mangi Lal and another v. Radha Mohan and another AIR 1930 Lah. 599(1) and Amir Din Shahab Din v. Shiv Dev Singh Jhanda Singh AIR (34) 1947 Lahore 102 rel.

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

----Ss. 10 & 9---Procedure of Banking Court---Application for leave to defend---Adjudication of application for leave to defend---Non-compliance of essential requirements---Effect---Non-compliance of S. 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 entailed penal consequences specified in S. 10(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001; and such fact of non-compliance was sufficient reason alone to reject an application for leave to defend---Defendant, in a suit for recovery, was not entitled to grant of leave to defend on mere allegation of breach in fulfilment of obligations of a plaintiff/Bank, and the same did not entitle such a defendant to skirt its obligations under the Financial Institutions (Recovery of Finances) Ordinance, 2001 and for it to refuse to repay the amount of finance availed by it.

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

Messrs Menahil Textile Mills (Pvt.) Ltd. through Chief Executive and 3 others v. Muslim Commercial Bank Ltd. 2005 CLD 1787 and Zeeshan Energy Ltd. and others v. Faysal Bank Ltd. 2014 SCMR 1048 distinguished.

Salman Akram Raja and A.W. Butt for Plaintiff.

Shoaib Rashid for Defendants.

2017 C L D 995

[Lahore]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

MARAHABA PAKISTAN INTERNATIONAL and others---Appellants

Versus

HABIB BANK LIMITED and another---Respondents

R.F.A. No. 221 of 2013, decided on 8th March, 2017.

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

----Ss. 2(d)(e), 7(4), 9(1) & 22---'Customer' and 'Finance'---Definition---"Account holder"---Scope---Bank filed recovery suit against appellant before Banking Court on the ground that appellant had received payment in its account from a foreign Bank, through fictitious cheque which the Bank had returned to the foreign Bank---Suit filed by Bank was decreed against defendant---Plea raised by defendant was that Banking Court did not have jurisdiction to try the matter---Validity---Any person, other than as defined in S. 2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not come within the definition of a 'customer'---Merely being account holder of Bank, appellant could not be considered as customer---Amount allegedly credited in the account of appellant on deposit of a cheque did not come within the purview of 'finance'---Any facility defined in definition provided by Financial Institutions (Recovery of Finances) Ordinance, 2001, was covered within the ambit of 'finance'---Opening of account and depositing of amount by an account holder could not be considered as finance---Banking Court had no jurisdiction to try the suit between account holder and banking company where there was no dispute with banking company in fulfilling any obligation with regard to any loan or finance---Dispute under Ss. 7(4) & 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, with regard to fulfilment of conditions of loan and liability arising out of contract executed by Bank and customer could be agitated in Banking Court---High Court set aside judgment and decree passed by Banking Court which was without jurisdiction, as the appellant did not avail any financial facility from Bank and was merely an account holder---Appeal was allowed in circumstances.

Summit Bank v. Qasim and Co. 2015 SCMR 1341; Haji Dad v. MCB 2011 CLD 785; Amitex v. Bankislami Pakistan 2016 CLD 2007; Avari Hotel v. ICP 2000 YLR 2407; Muhammad Khalid v. Prime Bank 2001 YLR 905; Atlantic Carpets through Partner v. Messrs Emirates Bank International 2000 MLD 1850 and Pakistan General Insurance v. MCB 2015 CLD 600 ref.

Saleem Akram Chaudhry for Appellants.

Hassan Iqbal Warraich for Respondents.

2017 C L D 1028

[Lahore]

Before Abid Aziz Sheikh, J

FAYSAL BANK LIMITED through VP/Regional Manager SAM (N)---Plaintiff/Decree Holder

Versus

KNIT KNOT (PVT.) LTD. through Chief Executive and 4 others---Defendants/Judgment Debtors

Ex. A. No. 15-B of 2013 in C.O.S. No. 54 of 2002, decided on 22nd December, 2016.

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

----S. 2(b)(ii)---High Court---Jurisdiction---Scope---High Court while exercising jurisdiction under Financial Institutions (Recovery of Finances) Ordinance, 2001, adjudicate upon civil rights and liabilities of parties and it may be termed as special jurisdiction---High Court possesses all attributes of original civil jurisdiction but under Financial Institutions (Recovery of Finances) Ordinance, 2001, it does not exercise ordinary original civil jurisdiction conferred by C.P.C.

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

----Art. 183---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2(b)(ii) & 19---Execution---Limitation---Scope---Provision of Art. 183 of Limitation Act, 1908, is only applicable when judgment and decree of any High Court is passed in exercise of its ordinary original civil jurisdiction but not where decree is passed in original civil jurisdiction.

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

----Ss. 2(b)(ii), 7 & 19---Limitation Act (IX of 1908), Art. 183---Civil Procedure Code (V of 1908), S. 48(1)---Execution---Second application---Limitation---Judgment debtor assailed second execution application on the plea that it was filed beyond period of six years from the date of decree---Validity---Jurisdiction of High Court under Financial Institutions (Recovery of Finances) Ordinance, 2001, was original civil jurisdiction and not ordinary original civil jurisdiction, therefore, provisions of Art. 183 Limitation Act, 1908, were not attracted---Provisions of S. 48(1)(b), C.P.C. were not applicable and period of limitation for filing second execution application was not calculated from the date of decree under S. 48(1)(a), C.P.C.---Second execution application to execute judgment and decree was barred by limitation for period of 3 years 11 months and 21 days---Execution application was dismissed in circumstances.

Victory Corporation and others v. Emirates Bank PLD 1999 Kar. 391; Dr. Mrs. Tallat Khan and another v. Mrs. Sara Shafqat and 6 others 2000 SCMR 184; Pakistan Fisheries Ltd., Karachi and others v. UBL PLD 1993 SC 109; Adamgee Insurance Co. Ltd. and others v. M.C.B. Ltd. and others 2005 SCMR 318; Brothers Steel Mills Ltd. v. Mian Ilyas Miraj and 14 others PLD 1997 SC 543; Mehboob Khan v. Hassan Khan Durrani PLD 1990 SC 778; Brothers Steel Mills Ltd.'s case PLD 1996 SC 543; PLD 1998 Kar. 391; Habib Bank Ltd. v. Zulfiqar Ali Khan and others 2002 CLD 1758 and Messrs Tri-Star Polyester Ltd. and another v. Citi Bank Ltd. PLD 2001 SCMR 410 ref.

Bilal Kashmiri for Decree Holder Bank.

2017 C L D 1054

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MAZHAR IQBAL POULTRY FARM---Appellant

Versus

ENVIRONMENTAL TRIBUNAL, LAHORE and others---Respondents

Appeal No. 785 of 2011, heard on 2nd February, 2017.

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

----Ss. 21(3)(2) & 23---Order of Tribunal to shift location of poultry farm---"No Objection Certificate" not obtained---No proper waste management system---Poultry farm owner/accused assailed order of Environmental Tribunal and contended that poultry farm was located at an isolated place from dwellings and water channel which had proper waste disposal mechanism of dead birds as per environmental standards---Owner challenged Environmental Protection Order and asserted that he did not require "NOC" as his farm was made prior to the promulgation of Punjab Environmental Protection Act, 1997; that inspection report during complaint proceeding being without notice carried no independent statements of witnesses of locality---Environmental Agency contended that the accused ignored Environmental Protection Order "the order" as there was no proper waste disposal mechanism at poultry farm which was situated near residences and water courses---Validity---Record showed that Tribunal passed the order in presence of accused who admittedly raised no objection at that time nor did he raise any objection against the maintainability of the complaint or the factual report presented by the Committee to the Tribunal---Record also showed that the Punjab Environmental Order was issued against accused long time before requiring him to immediately stop his business because of causing environmental hazardous---Admittedly, "No Objection Certificate" had not been obtained by the accused from the Environmental Protection Agency for carrying out the poultry farm business and despite service of notice on the accused he did not appear in the proceedings leading up to the order---On the basis of statement of accused the Tribunal ordered inspection of the premises and required two witnesses of the locality to verify the version of the accused---In terms of the report there were heaps of burnt poultry waste near the poultry farm and there was no soakage pit available and the workers used the jungle as toilet---Distance of nearby houses was approximately 50 meters from poultry farm and the water channel ran through the farm sheds---Appellant was unable to refute any of the observations made by the inspection team---Presence of the appellant during the time of inspection was not relevant or material to the case as the fundamental objective of the inspection was to determine the condition of poultry farm, its distance from any residential area and to ascertain whether there was a proper waste management system---No illegality had been made out in the order of the Tribunal---Appeal was dismissed accordingly.

Akhtar H. Awan for Appellant.

Ch. Sultan Mehmood, A.A.-G. for Respondents.

2017 C L D 1076

[Lahore]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

RAFAQAT ALI---Appellant

Versus

Messrs UNITED BANK LIMITED---Respondent

F.A.O. No. 70 of 2017, decided on 1st March, 2017.

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

----Ss. 12 & 9(5)---Civil Procedure Code (V of 1908), S. 12(2) & O.IX, R. 13---Suit for recovery of loan amount---Ex parte decree, setting aside of---Requirements---Fraud and misrepresentation---Effect---Contention of the applicant was that he was not residing at the given address and could not be served and decree was obtained on the basis of fraud and misrepresentation---Application for setting aside ex parte decree was dismissed by the Banking Court---Validity---Notices were issued to the applicant at the address provided by him on the form for availing finance facility---Banking Court had adopted all the modes to procure the service of applicant prior to passing ex parte judgment and decree---Applicant had failed to prove the necessary requirement i.e. fraud, misrepresentation and want of jurisdiction for setting aside the impugned judgment and decree---If fraud was alleged in an application filed under S. 12(2), C.P.C. then its necessary ingredients must be pleaded so as to subsequently prove the same---General and bald allegations of fraud and misrepresentation could not form basis to upset a decree otherwise validly passed by a Court of competent jurisdiction---Applicant had failed to prove fraud and misrepresentation by the Bank for obtaining ex parte judgment and decree---Banking Court had rightly dismissed the application for setting aside ex parte decree---No illegality or perversity had been pointed out in the impugned order--- Appeal was dismissed in limine in circumstances.

Muhammad Mobeen v. A.B.N. Amro Bank through Manager 2015 CLD 1904 and Talib Hussain v. Mst. Parveen Akhtar PLD 2013 Lah. 129 ref.

Ireno Wahab v. Lahore Diocesan Trust 2016 CLC Note 85; Mst. Nasir Khatoon's case 2003 SCMR 1050; Dadabhay Cement's case PLD 2002 SC 500 and Riaz Ahmed v. Bank of Punjab 2016 CLD 596 rel.

(b) Interpretation of documents---

----Heading/caption did not matter and it was only the content of the document which had to be considered.

Asif Raza Mir v. Muhammad Khurshid Khan 2011 SCMR 1917 rel.

2017 CLD 1101

[Lahore]

Before Muhammad Qasim Khan and Sardar Muhammad Sarfraz Dogar, JJ

ALAMDAR HUSSAIN---Petitioner

Versus

NATIONAL ACCOUNTABILITY BUREAU through Chairman and others---Respondents

Writ Petition No.5948 of 2016, decided on 19th December, 2016.

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

----S. 9(b)---Bail---Accused cannot be left at the mercy of investigating agency to establish charge of a particular offence against him and to investigate the matter---High Court has ample jurisdiction while deciding bail application after examining available record whether any particular offence under which investigating agency is trying to arrest accused prime facie attracts in circumstances of the case or not.

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

----S. 4---National Accountability Ordinance (XVIII of 1999), S. 3---Overriding effect of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Financial Institutions (Recovery of Finances) Ordinance, 2001 is not only a special law but same being also later in time prevails over provisions of National Accountability ordinance, 1999---To deal with dispute inter se Bank and Customer, Financial Institutions (Recovery of Finances) Ordinance, 2001 has its own comprehensive mechanism to deal with.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 and Mahmood Khan Achakzai and others v. Federation of Pakistan and others PLD 1997 SC 426 rel.

(c) Lenity, rule of---

----Scope---Where accused can be tried or punished under two different statutes then 'Rules of Lenity' (a rule of construction of statutes that criminal statute ambiguities are resolved in favour of defendant or accused) would also attract in favour of accused person.

(d) Administration of justice---

----When law requires a thing to be done in a specific manner, it must be done in that way or not at all.

Raheel Rashid v. National Accountability Bureau, Islamabad through Chairman and 2 others PLD 2005 Lah. 692 rel.

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

----Ss. 3, 9(b) & 31-D---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 4---Pre-arrest bail, confirmation of---Suit for recovery of finance---Wilful default---Petitioner was accused in a reference by National Accountability Bureau on complaint of Bank--- Complainant Bank had earlier instituted recovery suit but later also invoked jurisdiction of National Accountability Ordinance, 1999---Plea raised by accused was that provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 had overriding effect in cases of such wilful default---Validity---National Accountability Bureau did not have authority in the matter and their actions against petitioner led to an inference of mala fide on their part---Finance facility subject matter of National Accountability Bureau reference was duly secured against adequate collateral in addition to other documents---Bank had not claimed that documents prepared for sanction of loan were bogus; property subject matter of mortgage was non-existent; such property was not in specific ownership of petitioner or that the same was already under some encumbrance---Despite such clear position, without touching factual aspects of allegations against customer, action of complainant Bank in filing complaint before National Accountability Bureau and further proceedings by National Accountability Bureau under National Accountability Ordinance, 1999, including attempted arrest of the customer per force of National Accountability Ordinance, 1999, was indicator of mala fide on part of complainant as well as National Accountability Bureau---Pre-arrest bail was confirmed in circumstances.

Muhammad Asif Nawaz v. ASJ and others 2014 PCr.LJ 1 = 2014 CLD 45; Abid Mahmood Malik v. Station House Officer, Police Station Margalla and others 2013 CLD 508; Muhammad Iqbal v. Station House Officer, Police Station Hajipura, Sialkot and 2 others PLD 2009 Lah. 541; Suo Motu No.10 of 2015 out of Civil Petitions Nos.1377 and 1378 of 2015 ref.

Muhammad Amjad Pervaiz, Muhammad Nawaz Chaudhry, Sultan Mehmood Khan and Anwaar Hussain along with the Petitioner.

Syed Faisal Raza Bokhari, Special Prosecutor for NAB with Muhammad Ramzan Khan, Deputy Director/I.O.

2017 C L D 1115

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

ALLIED BANK LIMITED---Plaintiff

Versus

MAQBOOL USMAN FIBERS---Defendant

C.O.S. No. 8 of 2015, heard on 14th February, 2017.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend---Statement of account---Contention of defendant, inter alia, was that there existed objections to the entries in the statement of accounts and certain entries of the finance facilities were not reflected in the account submitted by the plaintiff Bank---Validity---Sufficient admission of liability was available on record coupled with the fact that the defendant had not complied with the necessary requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which did not entitle the defendant from raising objections to entries---Claim of plaintiff was duly substantiated from documents available on record as well as the statement of accounts which had been prepared in accordance with law---Application for leave to defend was dismissed, and suit was decreed, accordingly.

Muhammad Saleem Iqbal for Plaintiff.

Muhammad Manzoor ul Haq for Defendant.

2017 C L D 1122

[Lahore]

Before Amin-ud-Din and Abdul Rehman Aurangzeb, JJ

NAEEM TUFAIL---Appellant

Versus

JUBILEE INSURANCE COMPANY LTD. through Chairman and another---Respondents

Insurance Appeal No. 905 of 2013, heard on 30th March, 2017.

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

----Arts. 78, 79 & 72---Documentary evidence, proof of---Production and admission of documents---Objection against admission of a document---Scope---Although production of a document and admission of a document were two different subjects, a document could be produced in evidence which was always subject to admission as required under Art. 78 of the Qanun-e-Shahadat, 1984---Courts were vested with jurisdiction to ascertain genuineness and authenticity of any document in order to arrive at a just and fair conclusion on the touchstone and parameters of Art. 78 of the Qanun-e-Shahadat, 1984 and when a document had been exhibited in evidence without any objection by the opposite party, the same was deemed to be proven in all respects---Objection as to the authenticity of a document was to be taken at an earlier stage and after a document was admitted in evidence, an objection against admission could not be allowed at any subsequent stage.

Ch. Muhammad Saleem v. Muhammad Akram and others PLD 1971 SC 516 and Muhammad Iqbal v. Mehboob Alam 2015 SCMR 21 rel.

Liaquat Ali Butt for Appellant.

S.M. Mohsin Zaidi for Respondents.

2017 C L D 1140

[Lahore]

Before Abid Aziz Sheikh and Faisal Zaman Khan, JJ

Dr. JAVED IQBAL and 2 others---Appellants

Versus

ASKARI BANK LIMITED through Attorney---Respondent

F.A.O. No. 57 of 2017, decided on 16th February, 2017.

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

----Ss. 9(5) & 12---Civil Procedure Code (V of 1908), S. 12(2)---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---Setting aside of ex parte decree of Banking Court---Presumption as to the knowledge of the defendant regarding proceedings of Banking Court---Suit for recovery was decreed ex parte against defendants---Contention of defendant inter alia was that defendants were not served though any mode prescribed under law as address given in the plaint was not the correct address of the defendants---Validity---Address, given in the plaint, was also mentioned by the defendants in their affidavits for application under S. 12(2), C.P.C. to set aside ex parte decree and contention that plaintiff Bank was informed about change in address vide a letter had no basis as said letter was received by the Bank after passing of the decree---Address of the defendants mentioned in the plaint was their last known address and they were not only served through affixation but also through publication in newspapers---No illegality existed in impugned order---Appeal was dismissed, in circumstances.

2017 C L D 1165

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

MEHRAN GINNING INDUSTRIES and 2 others---Appellants

Versus

SAJID SHAFIQUE and 12 others---Respondents

R.F.A. No. 152 of 1999, decided on 23rd May, 2017.

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

----Ss. 7, 8 & 152---Petition seeking rectification of members' register of a company---Court of original jurisdiction---Scope---Appeal---Scope---When the Company Judge (Single Bench) decided the matter under S. 152(3) of the Companies Ordinance, 1984 against which the appeal laid to the Division Bench of the High Court under S. 152(4) of the Ordinance, then the single Bench which decided the petition was the Court of original jurisdiction---Jurisdiction exercised by the High Court under the Companies Ordinance, 1984 was original jurisdiction, in the sense that the petitions or applications under the various provisions of the Ordinance were entertainable by the High Court as the Court of first instance, hence the appeals against such order, would lie before a Bench of two or more Judges of the High Court.

Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and Messrs Sunrise Textiles Limited and others v. Mashreq Bank PSC and others PLD 1996 Lah. 1 ref.

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

----S. 152---Limitation Act (IX of 1908), First Sched. Art. 151---Order for rectification of members' register of a company passed by Company Judge (Single Bench) in its original jurisdiction under S. 152 of the Companies Ordinance, 1984---Appeal against such order filed before Division Bench of the High Court under S. 152(4) of the Ordinance---Limitation---Article 151 of First Schedule to the Limitation Act, 1908 specifically dealt with the limitation period where an order had been passed by the High Court in its original jurisdiction---When the Company Judge (Single Bench) passed an order under S. 152 of the Companies Ordinance, 1984 in its original jurisdiction, the period of limitation for filing appeal would be (20) twenty days commencing from the date of decree or order, as provided under Art. 151 of First Schedule to the Act.

Haji Ghulam Rasul and others v. Government of the Punjab through Secretary, Auqaf Department, Lahore 2003 SCMR 1815 ref.

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

----S. 5---Condonation of delay---Grounds---Wrong advice or ill advice of the counsel was not a ground for condonation of delay.

Parvez Akhtar v. Dr. Saeed ur Rehman and others 2015 MLD 405 ref.

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

----S. 5---Condonation of delay--- Scope--- In case of time barred proceedings, defaulting party must explain the delay of each day caused in preferring valid proceedings in accordance with law.

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

----S.5---Condonation of delay---"Sufficient cause" and "good faith"---Meaning---Sufficient cause must be shown by the person seeking condonation of delay, which meant "circumstances beyond control of party concerned"---Nothing could be deemed to be done in good faith which was not done with due care and attention.

Mst. Khadija Begum and 2 others v. Mst. Yasmeen and 4 others PLD 2001 SC 355 rel.

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

----S. 5--- Delay by Government in filing appeal---Condonation of delay---Scope---For purposes of limitation the Government could not be treated differently (than other appellants).

Central Board of Revenue, Islamabad through Collector of Customs, Sialkot Dry Port, Samberial, District Sialkot and others v. Messrs Raja Industries (Pvt.) Ltd. through General Manager and 3 others 1998 SCMR 307 ref.

Muhammad Suleman Bhatti, Saqib Aziz, Sarfraz Majid and Ms. Rida Jamshed Hayat for Appellants.

2017 C L D 1196

[Lahore]

Before Habib Ullah Amir, J

MUHAMMAD YASIN---Appellant

Versus

DISTRICT AND SESSIONS JUDGE and others---Respondents

F.A.O. No. 24 of 2017, heard on 27th April, 2017.

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

----Ss. 28(4), Proviso, 27 & 33---Jurisdiction of Consumer Court---Settlement of claim---Limitation period of thirty days to file a complaint---Computation of limitation period---Condonation of delay---Complaint of the complainant was rejected by Consumer Court on ground that the same was time-barred by one day---Contention of complainant, inter alia, was that time was spent in awaiting reply to notice issued to the respondent, which period of the reply should be counted for purposes of limitation---Validity---No denial of the fact that the cause of action arose on 1.05.2016 whereas complainant filed his claim on 01.06.2016 which was one day beyond the period of limitation---Once a complaint was filed after the prescribed period of limitation without an application for condonation of delay, the Consumer Court had no jurisdiction to entertain such a complaint---No illegality therefore existed in the impugned order---Appeal was dismissed, in circumstances.

Coca Cola Beverages Pakistan Limited v. Ashiq Ali PLD 2014 Lah. 196 and Messrs Dawlance Limited Refrigeration Industries (Pvt.) Ltd. through Branch Coordinator v. Muhammad Jameel 2012 CLD 1461 rel.

Ch. Imran Ali for Appellant.

Minam Karim for Respondents.

2017 C L D 1229

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh, J

NATIONAL BANK OF PAKISTAN---Applicant/Decree Holder

Versus

Messrs AL-AZHAR TEXTILE MILLS LIMITED and 9 others---Judgment Debtors

Execution A. No. 2 of 2011 in C.O.S. No.7 of 1998, heard on 9th May, 2017.

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

----S. 7(6)---Civil Procedure Code (V of 1908), Ss. 47, 48 & O. XXI, R. 2---Execution of decree---Limitation---Payment in installments---Proof---Judgment debtor objected to execution application on ground that it was barred by time as period of limitation was to start from date of decree and also maintained that a sum of Rs. 142,296,000 had already been adjusted by decree holder Bank---Validity---Decretal amount was payable in installments and on default, entire decretal amount had become due---Time was to run from date of such default---Decretal amount was payable in installments by 01-01-2014 and execution filed on 27-04-2011 on default was within limitation---Commencement of period of limitation from date of decree was only applicable if payments under decree were recoverable forthwith and not in fifteen years installments---Amount of Rs. 142.296 million was shown to be adjusted by decree holder Bank itself in statement of account---Unless it was established by recording of evidence that said amount was not actually adjusted or paid of, decree holder Bank could not make recovery of said amount through execution in question---High Court dismissed the objection petition to the extent of Rs. 328,434,474 and directed that objection petition for recovery of Rs. 14,22,96,000 shall be decided after framing of issues and receiving of evidence.

National Bank of Pakistan v. Gammon of Pakistan Ltd. 2009 CLD 330; National Bank of Pakistan through S.V.P. SAMG (North) v. Messrs Taj Textile Mills Ltd. through Chief Executive and 4 others 2011 CLD 157; 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; National Bank of Pakistan through Zonal Chief v. Messrs Saif Nadeem Electro Limited and others 2003 CLD 1468; Bank of Credit and Commerce v. Messrs Global Produce 1998 MLD 1759; Sh. Muhammad Ali v. Messrs China Silk House and another 1985 CLC 679; United Bank Limited v. Messrs Tylor and Co. Limited 2002 CLD 917; M. Anwar Saleem v. United Bank Limited and others 2002 CLD 251 and Saudi Pak Kalabagh and others v. Judge Banking Court and others 2008 CLD 431 ref.

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

----S. 47---Execution of compromise decree---Subsequent events between parties---Effect---In absence of any material change in compromise decree, Executing Court is in a position to execute decree under S. 47, C.P.C.---Executing Court can also take into consideration event of agreements and understandings arrived at between decree holder and judgment debtor even after passing of compromise decree.

Industrial Development Bank of Pakistan through Vice-President IDBP v. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. and 9 others PLD 2009 Lah. 176; SAMBA Bank Ltd. v. Messrs Syed Bhais and others 2013 CLD 2080; Messrs Montgomery Flour and General Mills, Sahiwal through Chief Executive v. MCB Bank Ltd. (Formerly Muslim Commercial Bank Limited), Sahiwal through Branch Manager/Attorney and 7 others 2015 CLD 1590; Barkat Ullah through Legal Heirs and 12 others v. Wali Muhammad through Legal Heirs and 3 others 1994 SCMR 1737; Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189 and Habib Ahmad v. Meezan Bank Limited and 5 others 2016 CLD 527 rel.

Muhammad Waseem Shahab for Objector/Judgment Debtor.

Muhammad Saleem Iqbal for Decree Holder Bank/Respondent.

2017 C L D 1247

[Lahore (Multan Bench)]

Before Shahid Karim and Muzamil Akhtar Shabir, JJ

ABDUL SATTAR---Appellant

Versus

The BANK OF PUNJAB through Branch Manager---Respondent

F.A.O. No. 66 of 2011, decided on 23rd January, 2017.

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

----Ss. 9, 12 & 22---Appeal---Ex parte decree, setting aside of---Ex parte decree was passed against appellant and others---Banking Court declined to set aside the same---Validity---Service by either of three modes was considered as good service sufficient to draw an inference that a person was served in due course of law---Publication which was one of the modes of service was also considered as a valid service and it was not necessary to prove service through all three modes simultaneously and any one of them should be sufficient in such regard---Banking Court rightly found that affidavit of Bank manager from whom appellant/judgment debtor obtained knowledge regarding pendency of suit was not filed nor relied upon by him---Other judgment debtors were also served through bailiff and they received summons but did not appear before the Banking Court---Appeal was dismissed in circumstances.

Makhdoom Zafar Iqbal Shah for Appellant.

2017 C L D 1269

[Lahore]

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

Messrs CHIEF SARHAD CARGO SERVICE through Proprietor and others---Appellants

Versus

JUDGE BANKING COURT NO. II, LAHORE and others---Respondents

E.F.A. No. 646 of 2010, heard on 18th November, 2014.

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

----S. 12(2)--- Decree, setting aside of--- Expression 'want of jurisdiction'---Scope---If Court proceeds to act in grave and obvious disregard of a material provision of law the same amounts to 'want of jurisdiction'.

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

----Ss. 17, 22 & 27---Civil Procedure Code (V of 1908), S. 47---Decree---Execution---Date of default, non-mentioning of---During execution proceedings, judgment debtors filed application under S. 47, C.P.C., seeking modification of decree on the ground that it did not provide date of default---Executing Court decided application and held that date of passing of decree was date of default---Plea raised by judgment debtors was that order passed by Executing Court was in violation to S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Any interpretation of decree made by Executing Court under S. 47, C.P.C., was to be made in accordance with mandatory provisions of S. 17 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Any other interpretation made while contravening mandatory provision of S. 17 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was a nullity---Executing Court while passing order in question admitted such fact that Banking Court while passing initial order, date of default mentioned in plaint completely escaped from its notice---Order under appeal passed by Executing Court could be termed as retracing of steps by Banking Court in accordance with law---High Court declined to interfere in execution proceedings---Appeal was dismissed under circumstances.

Zarai Tariqiati Bank Limited through Branch Manager v. Hassan Aftab Fatiana 2009 CLC 36; Habib Bank Limited v. Tauqeer Ahmed Siddiqui and another 2009 CLD 312; Nisar Ahmed Afzal v. Muslim Commercial Bank through Assistant Vice-President/Chief Manager and 14 others 2014 CLD 390; North-West Frontier Province Government, Peshawar through Collector, Abbottabad and another v. Abdul Ghafoor Khan through Legal Heirs and 2 others PLD 1993 SC 418 and Miss Reeta v. Government of Sindh and others 2001 CLC 1825 ref.

Ghulam Hussain Chaudhry for Appellants.

M. Riaz Malik for Respondent No. 2.

2017 C L D 1285

[Lahore]

Before Shezada Mazhar, J

BANK OF PUNJAB---Plaintiff

Versus

POLY PACK PVT. LIMITED and others---Defendants

C.O.S. No. 90 of 2011 and P.L.A. No. 161-B of 2011, decided on 15th December, 2014.

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

----S. 10---Leave to defend, grant of---Setting up a new case by plaintiff--- Effect--- If plaintiff Bank sets up a new case through documents attached with plaint, then defendants are entitled for grant of leave to defend---If the additional documents are nothing but further clarifying the claim made in plaint, then leave cannot be granted.

Sat Narian v. Pheroze Behramji and others AIR 1936 Lah. 35 and Syed Mohsin Raza Bukhari and 4 others v. Syed Azra Zenab Bukhari 1993 CLC 31 rel.

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

----Ss. 9 & 10---Registration Act (XVI of 1908), S. 17---Suit for recovery of finance--- General power of attorney--- Registered document---Board resolution, non-filing of---Defendants resisted suit on grounds that it was not filed by a person duly authorized as no Board resolution was produced---Validity---Suit was filed by duly authorized attorney whose registered power of attorney was attached with plaint---Registered document was per se admissible in evidence, therefore, there was no requirement of filing Board resolution or any other document along with such power of attorney---Requirement of S. 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was of authorized person only and Power of Attorney of authorized person was available on Court file and same was sufficient to fulfil requirement of S. 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---No defense was set up with reference to amount claimed by plaintiff Bank, consequently, application for leave to defend suit was dismissed---Plaintiff Bank had proved disbursement of finance facilities as well as its availing by defendant---Finance agreement expired on 30.06.2008 and plaintiff Bank could not claim markup after said period to which it was not entitled---High Court declined markup after expiry of finance facility agreement---Suit was decreed accordingly.

Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408; Saudi Pak Commercial Bank Ltd. through Attorney v. Nazimuddin and another 2009 CLD 1195; Nusrat Textile Mills Ltd. and 8 others v. United Bank Limited through Attorney 2005 CLD 1421; National Bank of Pakistan through Manager v. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others 2007 CLD 678; Messrs Soneri Bank Limited v. Messrs Compass Trading corporation (Pvt.) Limited through Director/Chief Executive and 3 others 2012 CLD 1302; Messrs C.M (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; PICIC Commercial Bank Limited v. Spectrum Fisheries Limited 2006 CLD 440; National Insurance Corporation and others v. Pakistan National Shipping Corporation and others 2006 CLD 85; Messrs A. M. Industrial Corporation Limited v. Aijaz Mehmood and others 2006 SCMR 437; Messrs First Women Bank Limited v. Registrar, High Court of Sindh Karachi and 4 others 2004 SCMR 108; Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911; Muhammad Nawaz v. Zarai Taraqiati Bank Limited through Manager and 2 others 2013 CLD 1390; National Bank of Pakistan v. Messrs Trend Hosiery (Pvt.) Ltd. and others 2012 CLD 1078; Apollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337; Inam Naqshband v. Haji Shaikh Ijaz Ahmad PLD 1995 SC 314; National Bank of Pakistan v. General Tractor and Machinery Co. Ltd. and another 1996 CLC 79; Louise Anne Fairley v. Sajjad Ahmad Rana PLD 2007 Lah. 300; Sheikh Muhammad Kashif Zia and another v. Bank of Punjab through Constituted Attorney and another 2004 CLD 388 and MCB Bank Limited v. Eastern Capital Ltd. and 7 others 2011 CLD 84 ref.

Hafeez Saeed Akhtar for Plaintiff.

Shahid Ikram Siddiqui and Muhammad Imran Malik for Defendants.

2017 C L D 1382

[Lahore]

Before Shahid Karim, J

ITALFARMACO S.P.A.---Petitioner

Versus

HIMONT PHARMACEUTICALS (PVT.) LTD. and another---Respondents

C.O. No. 751 of 2010, decided on 17th May, 2017.

(a) Words and phrases---

----"Proceedings"---Meaning of---Term proceedings was a compendious term and included all or any causes which were brought before the courts and on which the courts could undertake judicial proceedings---Term "proceedings" included every step taken towards further progress of a case in a Court or Tribunal, from its commencement till its disposal.

State through Advocate-General, N.-W.F.P., Peshawar v. Naeemullah Khan 2001 SCMR 1461 rel.

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

----Ss.80, 90 & 116---Civil Procedure Code (V of 1908) O. VII, R. 11---Use of trademarks and licensees---Grounds for invalidity of registration---Application for declaration of invalidity of trade mark---Bar on filing of application for declaration of invalidity of a trademark before an improper forum created by S. 80(4)(a) of the Trade Marks Ordinance, 2001---Interpretation of S. 80(4)(a) of the Trade Marks Ordinance, 2001---Scope---Respondent sought rejection of application for invalidity of a trademark, filed by applicant inter alia on the ground that proceedings in respect of the trademark in question were pending before the District Court through a suit filed by the respondent, hence under S. 80(4)(a) of the Trade Marks Ordinance, 2001; the same was not maintainable before the High Court---Contention of applicant however, was that the suit before the District Court concerned only the license agreement between the parties and therefore S. 80(4)(a) of the Trade Marks Ordinance, 2001 did not apply---Validity---Prayers made in the proceedings before the District Court if juxtaposed with the present application made it clear that the prayer made by the respondent in suit before the District Court were converse of what the applicant prayed for in the present application and the two were therefore, inextricably linked to one another and could not be separated as a cause of action from each other---Both proceedings were concerned with the trademark in question and purpose of S. 80(4)(a) of the Trade Marks Ordinance, 2001 was for avoiding conflict of judgments by different courts---Crucial words used in S. 80(4)(a) of the Trade Marks Ordinance, 2001 were "concerning the trademark in question" and the same were broad enough to include within them any dispute concerning the trade mark in question, and a holistic and expansive view of the said words should be taken and construction of the same could not be pedantic or narrow---Contention that the absence of the words "as the case may be" from S. 80(4)(a) of the Trade Marks Ordinance, 2001 meant that the applicant had the choice to either make an application for invalidity of a trademark either to the High Court or District Court, was not valid as the same would have the effect the nullifying the intention of the Legislature in providing an exception and would make the entire said exception redundant---High Court observed that it would be proper and would comport with the intention of the Legislature if the present application was heard by the District Court which was already seized of the suits filed by the parties on different aspects concerning the trademark in question---Application under O. VII, R. 11, C.P.C. was allowed, and application for declaration of invalidity of trademark was returned, to be filed before the proper forum.

Jewan and 7 others v. Federation of Pakistan through Secretary, Revenue, Islamabad and 2 others 1994 SCMR 826; Rafiuddin v. Karachi Metropolitan Corporation and 2 others 1994 MLD 874 and Iqbal Begum v. Farooq Inayat and others PLD 1993 Lah. 183 distinguished.

Royal PVC (Pvt.) Ltd. through Authorized Officer v. Registrar of Trade Marks and another 2011 CLD 833 and Messrs H&B, General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 1028 rel.

(c) Interpretation of statutes---

----Redundancy could not be attached to any provisions enacted by the Legislature.

Hassan Irfan Khan for Petitioner.

Bilal Bashir, Nabeel Rafaqat and Nadeem Shehzad Hashmi for Respondents.

2017 C L D 1442

[Lahore]

Before Shahid Karim, J

TARIQ NASIM JAN and others---Petitioners

Versus

AL-HAMRA HILLS (PVT.) LIMITED and others---Respondents

C.O. No. 7 of 2016, decided on 19th June, 2017.

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

----Ss. 290, 309 & 305---Prevention of oppression and mismanagement---Persons competent to make an application to the court under S. 290 of the Companies Ordinance, 1984---Context, meaning, ambit and scope of the terms "creditor" or "creditors" used in S. 290 of the Companies Ordinance, 1984---Maintainability of application under S. 290 of the Companies Ordinance, 1984 by contingent/prospective creditors---Interpretation of S. 290 of the Companies Ordinance, 1984 juxtaposed with S. 309 of the Companies Ordinance, 1984---Question before the High Court was whether applicants who claimed to be contingent creditors of the respondent Company, were competent to make application under S. 290 of the Companies Ordinance, 1984---Validity---Section 290 when contrasted with S. 309 of the Companies Ordinance, 1984 revealed that exclusion of contingent or prospective creditors in S. 290 of the Companies Ordinance 1984 seemed to be deliberate and intentional---By use of the words "including any contingent or prospective creditor or creditors" in S. 309, Legislature conveyed two things; one, that the term 'creditor' comprised and included a contingent and a prospective creditor as well and two that the exclusion of said set of creditors in S. 290 was for a purpose and such right may be conferred or taken away by the Legislature on any of the species of creditor(s)---Addition of the said words in S. 309 of the Companies Ordinance, 1984 achieved the purpose that contingent and prospective creditor(s) be treated as a category of creditors apart and having a weak right to even maintain a petition under S. 305 for winding up of a company as accentuated by proviso to S. 309(d) of the Companies Ordinance, 1984---Section 290 of the Companies Ordinance, 1984 concerned itself with a debt which was "then due" and which had become crystallized on happening of a contingency and not in respect of a debt for which the contingency had yet to happen and when the same had not actually become due---High Court observed that a contingent creditor would not be covered by condition of having an interest equivalent in amount but not less than 20% as stated in S. 290 of the Companies Ordinance, 1984---Application, being not maintainable, was dismissed in circumstances.

Carvan East Fabrics Limited v. Askari Commercial Bank Ltd., Al-Baraka Islamic Bank Ltd. 2006 CLD 895; Palmers Company Law (Geoffrey Morse ed.) (Sweet and Maxwell, Looseleaf Ed. 1992-2009, Volume 2 at para 12.047; Buckley on the Companies Acts (Dame Mary Arden, Dan Prentice and Sir Thomas Stockdale, LexisNexis UK, Looseleaf Ed. 2007, vol. 2 at para 425.19; Black's Law Dictionary; Words and Phrases (Permanent Edition, Volume 10; Words and Phrases (Legally defined, Fourth Edition, Volume I and Lehman Bros International (EU) [2009] EWCA Civ 116 ref.

Creek Marina (Private) Limited v. Pakistan Defence Officers' Housing Authority through Administrator 2012 CLD 1525; Kier Regional Limited v. City and General (Holborn) Ltd. [2008] EWHC 2454 and A. Ramaiya's Guide to the Companies Act, 17th Edition rel.

(b) Interpretation of statutes---

----Intention of the Legislature must be given effect unless it led to absurdity.

(c) Interpretation of statutes---

----Presumption of consistent usage as a canon of statutory interpretation---Scope---Words or phrases were presumed to bear the same meaning throughout a text and a material variation in terms suggested a variation in meaning and a word or phrase was not defeasible by context---Correlative points of the presumption of consistent usage made intuitive sense and preparation of a legal instrument had traditionally been seen as a solemn and deliberative act that required verbal exactitude---Where a word had a clear and definite meaning when used in one part of a document, but had not when used in another, presumption was that said word was intended to have the same meaning in the latter as in the former part---Where a document had used one term in one place, and a materially different term in another, presumption was that the different term denoted a different idea---Presumption of consistent usage applied also when different sections of an Act or Code were at issue.

Interpretation of Legal Texts by Antonin Scalia and Bryan A. Garner; Atlantic Cleaners and Dyers, Inc. v. United States, 286 U.S 427 (1932); Keene Corp. v. United States, 508 U.S 200, 208 (1993) and King v. St. Viscounts' Hospital, 502 U.S 215, 220-21 (1991) rel.

Babar Sattar, Shahzain Abdullah and Asghar Leghari for Petitioners.

Ms. Ayesha Hamid for Respondents Nos. 1 to 4, 7 and 8.

Barrister Hamza Gulzar for Respondents Nos. 5 and 6.

Haroon Duggal for Respondent No.10.

2017 C L D 1483

[Lahore]

Before Muhammad Farrukh Irfan Khan and Habib Ullah Amir, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head/Attorney and others---Appellants

Versus

Mst. SHAZIA MIR ARSHAD---Respondent

Insurance Appeal No. 201 of 2016, heard on 17th May, 2017.

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

----Ss. 79, 118 & 124--- Remedies for non-disclosure or misrepresentation---Payment of liquidated damages on late settlement of claims---Policy not to be called in question on ground of misstatement after two years of said insurance policy coming into effect---Principles of natural justice where insurance claims were repudiated---Opportunity of hearing for people aggrieved of order of repudiation---Scope---Appellant insurance company impugned order of Insurance Tribunal whereby claimant was awarded liquidated damages after her claim was repudiated by appellant insurance company---Contention of the appellant insurance company inter alia, was that the claim was rightly repudiated as the insurance policy was obtained on misinformation and fraud regarding the insured's health---Validity---Per S. 79 of the Insurance Ordinance, 2000; no policy of insurance effected shall after expiry of two years form the commencement date shall, after expiry of two years from which it was effected, be called in question by the insurer and that an insurer may avoid a contract of insurance by reason only of the failure of the insured to comply with the duty of disclosure or by misrepresentation unless said failure was fraudulent or misrepresentation was made fraudulently---Non-disclosure of information about one's health related to facts which were in knowledge of the person making the statement and a person who was himself unaware of his ill health could make an innocent statement that he was not suffering from any illness/disease and such statement could not be used against said person and was only fatal when the person making the statement about his health was deliberately and wilfully suppressing material facts---Insurance policy, in the present case, was repudiated by the appellant insurance company without affording an opportunity of hearing to the claimant and the principles of natural justice were violated---Requirement of law was that before repudiation of a claim, right of hearing must be afforded to the person aggrieved by such order of repudiation---Furthermore, appellant insurance company had not proved that the insured was suffering from any serious ailment at the time of issuance of policy and therefore the claimant was entitled to the insurance claim and liquidated damages--- Appeal was dismissed, in circumstances.

State Life Insurance Corporation of Pakistan through Chairman and another v. Javed Iqbal 2011 CLD 948; State Life Insurance Corporation and others v. Mst. Shumila and others 2013 CLD 1525 and State Life Insurance Corporation v. Mst. Sadaqat Bano PLD 2008 Lah. 461 rel.

(b) Natural justice, principles of---

----Application---Scope---Application of the principles of natural justice---Maxim "Audi alteram partem"---Implied duty to act in accordance with principles of natural justice---Scope---Violation of the principles of natural justice enshrined in the maxim "audi alteram partem" was enough to vitiate even most solemn proceedings and where adverse action was contemplated to be taken against a person, such person had a right to defend such action, notwithstanding the fact that the statute governing his right did not contain provision of the principles of natural justice and even in absence thereof, it was to be considered as a part of such statute in the interest of justice---Principles of natural justice were inbuilt part of civil contracts---Principles of natural justice had to be applied in all kinds of proceedings strictly and departure therefrom would render subsequent actions illegal in the eye of law---In all proceedings by whomsoever held, whether judicial or administrative, principles of natural justice had to be observed if the proceedings might result in consequences affecting the person or property or other right of the parties concerned and said rules applied even though there may be no positive words in a statute or legal document whereby their powers were vested to take such proceedings, for, in such cases such requirement was to be implied into it as the minimum requirement of fairness---Whenever any person or body of persons was empowered to take decision after ex-post facto investigation into acts which would result in consequences affecting the person, property or other right of another person, then in the absence of any express words in such enactment giving such power excluding the application of the principles of natural justice, the Courts were inclined generally into imply that the power so given was coupled with the duty to act in accordance with such principles of natural justice as may be applicable in the facts and circumstances of a case.

Pakistan International Airlines Corporation (PIAC) through Chairman and others v. Nasir Jamal Malik and others 2001 SCMR 934; Hazara (Hill Tract) Improvement Trust through Chairman and others v. Mst. Qaisra Elahi and others 2005 SCMR 678; Abdul Hafeez Abbasi and others v. Managing Director, Pakistan International Airlines Corporation, Karachi and others 2002 SCMR 1034 and The University of Dacca through Vice-Chancellor and the Registrar University of Dacca v. Zakir Ahmed PLD 1965 SC 90 rel.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt for Respondent.

2017 C L D 1525

[Lahore]

Before Shahid Karim, J

ASIAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

W. P. No. 1075 of 2009, decided on 25th May, 2017.

Securities and Exchange Commission (Insurance) Rules, 2002---

----R. 13---Insurance Ordinance (XXXIX of 2000) Ss. 36, 32, 33 & 2(xxxix)---Mutual Insurance Company---Solvency of non-life insurer---Insurers of non-life insurance business to have assets in excess of minimum solvency requirement---Minimum solvency requirement under S. 36 of the Insurance Ordinance, 2000 to apply to all insurance companies, including mutual insurance companies regardless of share capital---Scope---Petitioner, which was a mutual insurance company, impugned R. 13 of the Securities and Exchange Commission (Insurance) Rules, 2002 which imposed minimum solvency requirements upon petitioner in terms of S. 36 of the Insurance Ordinance, 2000---Contention of the petitioner, inter alia, was that it was a mutual insurance company, and did not have paid up capital, therefore it should be absolved from the requirement of minimum solvency as given in S. 36(3)(a) of the Insurance Ordinance, 2000---Validity---Fact that the petitioner was a mutual insurance company did not impact the provisions of S. 36 of the Insurance Ordinance, 2000 so far as it related to minimum solvency requirements and it was not denied by the petitioner that it complied with provisions of S. 32 of the Insurance Ordinance, 2000 which related to admissible assets as the company maintained admissible assets as explicated in S. 33 of the Insurance Ordinance, 2000---No plausible reason existed to connect lack of paid up capital in case of petitioner with the required minimum amount of solvency given in S. 36(3)(a) of the Insurance Ordinance, 2000---For purposes of S. 36 of the Insurance Ordinance, 2000 no distinction could be drawn between an insurer having a share capital and one not having share capital and the requirements of the said section would have to be applied across the board to all insurers---Securities and Exchange Commission of Pakistan could not abolish the condition for minimum solvency on basis of a nuanced categorization and if the same was done, Commission would be travelling beyond its delegated powers as the Rules could only be made to conform to the main statute and not in derogation thereof---Petitioner's challenge to R. 13 of the Securities and Exchange Commission (Insurance) Rules, 2002 was therefore without legal basis---Constitutional petition was dismissed, in circumstances.

Asjad Saeed and Ch. Muhammad Naseer for Petitioner.

Bilal Bashir for Respondents.

2017 C L D 1539

[Lahore]

Before Abid Aziz Sheikh, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

CHENAB LIMITED and others---Defendants

C.O.S. No. 39 of 2013, heard on 14th March, 2017.

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

----Ss. 10 & 9---Procedure of Banking Court---Suit for recovery---Application for leave to defend, grant of---Financial estoppel, concept and effect of---Scope---When a defendant asserted that amount of finance facility was not disbursed to them, they must produce and rely on their current account statement to show inaccuracy and fallacy of the claim of the plaintiff Bank---Failure of defendants to dispute entries on the account statement at the relevant time was hit by principle of financial estoppel as there existed a duty on every Bank to send periodic Bank statements to its customers and when a defendant/customer did not raise any defect in the said statement sent by the Bank, they were estopped to challenge veracity of statement of account---Mere denial of signature on a guarantee was no ground for leave to defend---When a defendant did not deny availing of finance facilities, then per Ss. 10(4) & 10(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 such defendant was obliged to provide details in their applications for leave to defend, of the amount availed, repaid and outstanding amounts and non-compliance of Ss. 10(4) & 10(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 would entail consequences of dismissal of applications for leave to defend.

Messrs Haq Feed Industries Pvt. Ltd. through Chief Executive and 7 others v. National Development Finance Corporation 2007 CLD 975; Faysal Bank v. Generetch Pakistan Ltd. and 6 others 2009 CLD 856; Bankers Equity Ltd. through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Ltd. and 7 others 2003 CLD 931; Askari Bank Ltd. v. Waleed Junaid Industries and 2 others 2012 CLD 1681; Messrs United Dairies Farms Pvt. Ltd. and 4 others v. UBL 2005 CLD 569; Apollo Textile Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Habib Metropolitan Bank Ltd. v. Abid Nisar 2014 CLD 1367; Messrs Dharala Oil Mills v. The BOP through Branch Manager 2014 CLD 153 and Pak Oman Investment Co. Ltd. v. Chenab Ltd. and 9 others 2016 CLD 1903 distinguished.

The BOP v. Messrs Khan Unique Developers Pvt. Ltd. 2016 CLD 29; HBL v. Orient Rice Mill Ltd. and others 2004 CLD 1289; Mst. Zamurd Begum v. IDBP and others 2002 CLD 386; Ghazala Arif v. Union Bank Ltd. 2000 CLC 1201 and Apollo Textile Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 rel.

Khalid Ishaq for Plaintiff.

Mian Sultan Tanvir Ahmad, Sohail Asghar and Muhammad Adnan Amin for Defendants.

2017 C L D 1575

[Lahore]

Before Muhammad Ali, J

EFU LIFE INSURANCE LIMITED through Chief Manager---Petitioner

Versus

ADDITIONAL DISTRICT JUDGE, GUJRANWALA and another---Respondents

Writ Petition No. 3401 of 2017, heard on 2nd March, 2017.

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

----Ss. 122, 2(xlvi) & 121---Civil Procedure Code (V of 1908), O. VII, R. 11---Insurance Tribunal, jurisdiction of---"Policy holder"---Rejection of plaint---Interpretation of S. 122 of the Insurance Ordinance, 2000---Bar on jurisdiction of Civil Court in insurance matters---Scope---Petitioner Insurance Company's application under O. VII, R. 11, C.P.C. for rejection of plaint filed by its customer, was dismissed by Trial Court---Contention of petitioner Insurance Company was that the Civil Court had no jurisdiction and the subject matter of the plaint fell within the statutory jurisdiction of the Insurance Tribunal---Validity---Plaintiff had sought declaration that his insurance policy was still intact and the Insurance Company be directed to pay proceeds under the said policy and ultimate relief sought by plaintiff was payment under the insurance policy---Term "policy holder" defined in Ss. 2(xlvi) & 122 of the Insurance Ordinance, 2000 did not exclude a person whose policy had been cancelled by an insurance company and cancellation of policy did not deprive the Insurance Tribunal from its statutory obligation---Insurance Tribunal alone had the power to determine maintainability of claims brought before it and definition of "policy holder" clearly stipulated that a "policy holder" was a person who had been issued a policy, regardless of the fact that policy had been cancelled or the same subsisted---Even if a policy was cancelled, the same did not debar the "policy holder" to approach the Insurance Tribunal to have such cancellation declared null and void---Civil Court, after creation of Insurance Tribunal, had no jurisdiction to adjudicate matters regarding insurance policy and S. 122(3) of the Insurance Ordinance, 2000 expressly barred jurisdiction of Civil Court regarding claims under an insurance policy---Section 122(1)(a) of the Insurance Ordinance, 2000 conferred upon the Insurance Tribunal the power to entertain claims arising out of or in respect of an insurance policy---Impugned orders were therefore illegal, and were set aside---High Court directed that the plaint of policy-holder plaintiff be returned, to be presented before the competent forum---Constitutional petition was allowed, accordingly.

Abdul Qayoom v. State Life Insurance Corporation through Chairman and 3 others 2011 CLD 1157; Messrs East-West Insurance Company Ltd. through Chairman and another v. Messrs Muhammad Shafi and Company through Managing Partner and 2 others 2009 CLD 960 and Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan through Chairman 2007 CLD 490 rel.

(b) Constitution of Pakistan---

----Art. 199---Civil Procedure Code (V of 1908), S. 115---Constitutional jurisdiction of High Court---Scope---If an order passed in a civil revision under S. 115, C.P.C., was passed in violation of law; the same needed interference of the High Court in exercise of its Constitutional jurisdiction under Art. 199 of the Constitution.

Muhammad Anwar v. Mst. Ilyas Begum and others PLD 2013 SC 255 rel.

Rizwan Hussain for Petitioner.

Muhammad Zakria Ghumman for Respondents.

2017 C L D 1583

[Lahore]

Before Abid Aziz Sheikh, J

Messrs HABIB METROPOLITAN BANK LIMITED---Plaintiff

Versus

Messrs FAIZAN ALI AND COMPANY (PVT.) LTD. through Chief Executive Officer and others---Defendants

C.O.S. No. 13 of 2013, heard on 17th August, 2017.

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

----S. 9---Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Electronic Transactions Ordinance (LI of 2002), S. 12---Suit for recovery of finance---Computer generated statement of accounts---Scope---Computer generated statements of accounts/ledgers of Bank do not need certification under S. 2(8) of Bankers' Books Evidence Act, 1891, or under S. 12 of Electronic Transactions Ordinance, 2002.

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

----Ss.9 & 10---Suit for recovery of finance---Leave to defend the suit---Pledged stock, misappropriation of---Charging of markup beyond finance period---Defendants resisted the suit on the ground that Bank had misappropriated stock pledged with it---Validity---Availability or otherwise of pledged stock was a question that could be determined in execution proceedings at the time when collateral security was required to be accounted for and brought to sale; as such the same alone did not furnish a ground of defence to defendants for grant of leave---Bank was not entitled to markup beyond expiry date of finance agreement, however it could recover cost of funds from date of default---Subject to deletion of amount of markup recovered after expiry date of "Running and Cash Finance Facilities", claim of plaintiff Bank was substantiated by agreements, statement of accounts as well as letters written by defendant itself---Defendant failed to raise any substantial question of fact or law requiring recording of evidence for its resolution---Suit was decreed in circumstances.

Messrs Dhrala Oil Mills through partners/Guarantors and others v. The Bank of Punjab through Branch Manager 2014 CLD 153; Habib Bank Limited v. Messrs Madina Rice Ice Mills Sargodha through Proprietor and others 2015 CLD 829; Pak Oman Investment Company Limited v. Chenab Limited and 9 others 2016 CLD 1903; Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Pvt.) Ltd. through Director/Chief Executive and others 2012 CLD 1302; Elbow Room and others v. MCB Bank Limited and others 2014 CLD 985 and Habib Metropolitan Bank Limited v. Abid Nisar 2014 CLD 1367 distinguished.

The Bank of Punjab through Branch/Chief Manager v. Messrs Khan Unique Developers Pvt. Ltd. through Chief Executive Officer and 9 others 2016 CLD 29; Ghulam Rasool through L.Rs. and others v. Muhammad Hussain and others PLD 2011 SC 119; National Bank of Pakistan v. Ali Akbar Spinning Mills Limited and others C.O.S. No. 126 of 2011; Messrs Crystal Enterprises v. Platinum Commercial Bank Ltd. 2002 CLD 868; Faisal Bank v. Zamindara Rice Mills 2007 CLD 1164 and Messrs Khalid Oil Mills v. Muslim Commercial Bank Ltd. 2005 CLD 1565 rel.

Barrister Hassan Nawaz Sheikh for Plaintiff.

Syed Waqar Hussain Naqvi for Defendants.

2017 C L D 1593

[Lahore (Multan Bench)]

Before Mudassir Khalid Abbasi, J

MUHAMMAD SHAFI---Appellant

Versus

ASHIQ HUSSAIN---Respondent

R.F.A. No. 169 of 2009, heard on 21st March, 2017.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, R. 1---Qanun-e-Shahadat (10 of 1984), Art. 129(g)---Suit for recovery of money--- Dishonoured cheque--- Withholding of evidence---Presumption---Plaintiff filed suit against defendant for recovery of money which defendant obtained as loan and executed cheque in favour of plaintiff---Cheque was dishonoured on presentation and defendant did not repay the loan---Plea raised by defendant was that cheque was one of the three blank signed cheques which he had handed over on intervention of a third person---Trial Court decreed suit in favour of plaintiff---Validity---Holder of negotiable instrument was holder in due course unless it was established that same had been obtained by means of fraud or some unlawful consideration---Presumption was that negotiable instrument was issued against consideration unless rebutted---Onus to prove the same was upon person denying consideration---Appellant in order to rebut amount of consideration could have called the third person in witness box to establish that cheque was not issued for consideration---Best evidence was withheld and inference was to be drawn against defendant---Defendant failed to point out any misreading or non-reading of evidence or any illegality or infirmity in judgment passed by Trial Court which was otherwise well-reasoned and required no interference---Appeal was dismissed in circumstances.

Sughran Bibi v. Mst. Aziz Begum and 4 others 1996 SCMR 137; Muhammad Boota v. Fiaz Ahmed 1979 SCMR 465; Haji Karim and another v. Zakir Abdullah 1973 SCMR 100 and Mst. Surraya Begum v. S. Ghulam Abbas Shah PLD 1974 Notes 38 rel.

Muhammad Zafar Khan Sial for Appellant.

Mahmood ul Hassan for Respondent.

2017 C L D 1607

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

MUHAMMAD NASIR SHEIKH---Appellant

Versus

MUSLIM COMMERCIAL BANK---Respondent

R.F.A. No. 30 of 2014, heard on 10th May, 2017.

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

----Ss. 10 & 9---Limitation Act (IX of 1908), S. 19 & Sched.---Procedure of Banking Court---Suit for recovery---Application for leave to defend---Recovery of dues from credit card liability---Limitation, determination of---Question as to law and fact, necessitating grant of leave to defend---Effect of acknowledgment in writing---Scope---Application for leave to defend was rejected and suit was decreed---Contention of defendant, inter alia, was that the suit was barred by time---Validity---Credit card facility availed by defendant expired on 24.02.2009 and outstanding amount availed during validity of the credit card could be recovered within a period of three years from said date of expiry, which limitation period ended on 20.02.2012; and suit was filed by 16.04.2012 and was therefore not within the period of limitation---Contention of plaintiff Bank that after date of expiry of credit card, an acknowledgement as to defendant's liability was made by him which extended date of limitation under S. 19 of the Limitation Act, 1908; was a mixed question of law and fact and could not be decided without recording of evidence---Impugned decree was set aside and leave to defend was granted to the defendant, and matter was remanded to Banking Court---Appeal was allowed, accordingly.

Sikandar Hayat Bhatti for Appellant.

Khurram Hashmi for Respondent.

2017 C L D 1633

[Lahore]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

MUHAMMAD ARSHAD---Petitioner

Versus

JUDGE BANKING COURT and others---Respondents

W.P. No. 6876 of 2017, decided on 9th March, 2017.

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

----Ss. 10 & 22(1)(6)--- Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Right of appeal, review or revision, absence of---Leave to defend suit, refusal of---Application filed by defendants under S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, seeking leave to defend the suit was dismissed by Banking Court---Validity---No appeal, review or revision was provided under S. 22(1) & (6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, against order accepting or rejecting application for leave to defend---Remedy of appeal, review or revision was explicitly barred against such order and in case a constitutional petition was entertained against such order, it would amount to circumvent intention of Legislature and to frustrate express provision of law---No jurisdictional defect or blatant illegality existed in the order passed by Banking Court---Constitutional petition was dismissed in circumstances.

Bank of Punjab v. International Ceramics Ltd. and 4 others PLD 2013 Lah. 487; Ghulam Sarwar v. National Bank of Pakistan and others 2007 CLD 530; Messrs Mutual Trading Co. (Pvt.) and others v. Messrs Faisal Bank Ltd. 2004 CLD 363 and Allah Ditta v. Additional District Judge and others 1996 MLD 403 rel.

2017 C L D 1639

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

ISHFAQ AHMED and 5 others---Plaintiffs

Versus

HABIB BANK LIMITED and another---Defendants

C.O.S. No. 8 of 2012, heard on 21st February, 2017.

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

----Ss. 2(e) & 9---Civil Procedure Code (V of 1908), O. VII, R. 11---Procedure of Banking Court----Suit for recovery on account of damages resulting from defamation, mental stress, lost opportunity, against defendant Bank---Maintainability---"Obligation", meaning of---Scope---Damages claimed by plaintiff in the suit, were tortious in nature and did not arise from finances availed from the defendant Bank---Keeping in view Ss. 2(e) & 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; suit of plaintiff was not maintainable for recovery of damages and a claim on account of defamation did not come within jurisdiction of Banking Court under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaint was rejected in terms of O. VII, R. 10, C.P.C., accordingly.

Mian Mehmood Ahmad v. Hong Kong and Shanghai Banking Corporation Limited and others 2010 CLD 293 and Messrs Asmar Textile Mills (Pvt.) Limited v. Askari Commercial Bank Limited 2007 CLD 457 rel.

Nemo for Plaintiffs.

Ch. Saleem Akhtar Waraich for Defendants.

2017 C L D 1650

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

ABDUL WAHEED WAJID and others---Appellants

Versus

BANK OF PUNJAB and others---Respondents

R.F.A. No. 248 of 2013, heard on 2nd May, 2017.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Leave to appear, declining of---Effect---Banking Court dismissed petition for leave to appear and the suit was decreed on the same day---Validity---Even in absence of petition for leave to appear, Banking Court was bound to examine the record before passing decree---High Court observed that once petition for leave to appear was filed, its grounds could not be ignored and Court should have considered those grounds even in absence of defendants---Judgment and decree passed against defendants were set aside and case was remanded to Banking Court to decide the same afresh after considering the grounds of petition for leave to appear.

Abid Aziz Khan and others v. Bank of Punjab through Branch Manager 2007 CLD 997 ref.

Muhammad Suleman Bhatti for Appellants.

Sohail Ahmad Janjua for Respondents.

2017 C L D 1657

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza and Abdul Sattar, JJ

Messrs ARBAB COTTON INDUSTRIES AND OIL MILLS through Managing Partner---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager---Respondent

F.A.O. No. 85 of 2013, decided on 21st February, 2017.

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

----Ss. 12, 9 & 22---Procedure of Banking Court---Power to set aside decree---Setting aside of ex parte decree of Banking Court under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Ex parte judgment and decree, in a suit for recovery, passed on merits could not be set aside under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and only remedy available in such a situation was filing of appeal against said judgment and decree---Application for setting aside ex parte decree under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in such circumstances, was not maintainable.

Mst. Tahira Yasmeen and another v. Muslim Commercial Bank through Branch Manager and 6 others 2005 CLD 927; Messrs Sahib Gas Ways through Partner and 4 others v. The Bank of Punjab through Manager 2013 CLD 501 and Messrs Ammar Rice Dealers and 2 others v. National Bank of Pakistan and others 2003 CLD 857 rel.

Sohail Ahmad Janjua for Appellant.

2017 C L D 1701

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza and Abdul Sattar, JJ

ABDUL GHAFOOR and 4 others---Appellants

Versus

BANK OF PUNJAB through Manager---Respondent

R.F.A. No. 99 of 2014, heard on 1st February, 2017.

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

----Ss. 9 & 22--- Limitation Act (IX of 1908), S. 5--- Appeal---Condonation of delay-- Suit for recovery of finance was decreed in favour of plaintiff Bank and defendants filed appeal with a delay of 29 days---Defendants sought condonation of delay on the ground that they did not know about passing of judgment and decree in favour of the Bank--- Validity--- After hearing the arguments of the parties, application for leave to contest the suit was rejected and recovery suit was decreed in favour of Bank---Nothing unusual or abnormal was found on the order sheet of Banking Court to make out a case for extension of limitation---High Court declined to condone delay of 29 days caused in filing of appeal---Appeal was dismissed in circumstances.

Bank of Punjab v. Al-Wasay Engineering (Pvt.) Ltd. and others 2017 CLD 179; Tariq Mehmood v. Atlas Bank Ltd. through Authorized Agent 2015 CLD 959; Messrs Pangrio Sugar Mills Ltd. v. Bankers Equity Ltd. and 5 others 2015 CLD 637; NIB Bank Ltd. v. Muhammad Zia Ali Qureshi 2016 CLD 2160 and Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286 ref.

Muhammad Manzoor ul Haq for Appellants.

Muhammad Saleem Iqbal for Respondent.

2017 C L D 1711

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

ALLIED BANK LIMITED---Plaintiff

Versus

Messrs FATIMA ENTERPRISES LIMITED and others---Defendants

C.O.S. No. 5 of 2015, heard on 21st March, 2017.

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

----S. 9---Procedure of Banking Court---Persons authorized to file suit for recovery on behalf of Financial Institution---Requirements in terms of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 authorized branch manager, an officer authorized by a power of attorney or an officer who was otherwise authorized by a financial institution; to file suit on behalf of such financial institution---Officer of a financial institution who held power of attorney in his/her favour, need not append anything else other than the said power of attorney to demonstrate his/her authority to institute a suit under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; and had the same not been the case, S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 would have required production of further documents other than the power of attorney by the attorney-holder to demonstrate authorization of the person executing power of attorney---Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, an officer of a financial institution, holding power of attorney, was the designated person to file suits on behalf of said Financial Institution.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend, grant of---Entries in the statement of accounts---Contention of defendants, inter alia, was that the statement of accounts accompanying the plaint of financial institution had not been prepared in accordance with law---Validity---Defendants had not impugned even a single entry contained in the statement of accounts, and on perusal of the same, it was clear that the same were prepared in accordance with the Bankers' Books Evidence Act, 1891 and the law---Liability under various finance facilities obtained by defendants stood admitted in the defendant's audited accounts---Defendants had therefore failed to raise any dispute on facts requiring recording of evidence and had not fulfilled the mandatory requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Application for leave to defend was rejected, and suit was decreed, in circumstances.

The Bank of Punjab v. Messrs Khan Unique Developers 2016 CLD 29 rel.

Muhammad Saleem Iqbal for Plaintiff.

Malik Muhammad Kashif Rajwana for Defendants Nos. 1, 2, 3, 6, 7 and 8.

Mian Muhammad Khuram Hashmi for Defendant No. 14.

2017 C L D 1726

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

MUZAMMIL OIL AND SOAP INDUSTRIES (PVT.) LTD.---Petitioner

Versus

NATIONAL BANK OF PAKISTAN and others---Respondents

W.P. No. 4514 of 2013, decided on 22nd March, 2017.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend---Application for defendant, filed during pendency of defendant's application for leave to defend, seeking a direction to the effect that plaintiff Bank reschedule/renew finance facility, was rejected by Banking Court---Validity---During pendency of leave to defend application, defendant was precluded from filing any miscellaneous application and Banking Court, under the Financial Institutions (Recovery of Finances) Ordinance, 2001, had no jurisdiction to direct financial institution to reschedule dues of its customers---Petitioner's application was not maintainable and was rightly declined by the Banking Court--- Constitutional petition was dismissed, accordingly.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction of High Court---Scope---Constitutional petition against an interim order passed by a court acting under a special law, which did not provide a right of appeal, was not maintainable.

Nafees Ahmad Ansari for Petitioner.

2017 C L D 1731

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

SONERI BANK LIMITED---Plaintiff

Versus

Messrs MULTAN RICE MILLS and others---Defendants

C.O.S. No. 1 of 2016, heard on 14th March, 2017.

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

----S. 9---Procedure of Banking Court---Persons authorized to file suits for recovery on behalf of Financial Institutions---Requirements in terms of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---An officer of a financial institution who held power of attorney in his/her favour, need not append anything else other than the said power of attorney to demonstrate his/her authority to institute a suit under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; and had the same not been the case, S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 would have required production of further documents other than the power of attorney by the attorney-holder to demonstrate authorization of the person executing power of attorney---Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, an officer of a Financial Institution, holding power of attorney, was the designated person to file suit on behalf of said Financial Institution.

Ihsan-ul-Haq v. MCB Bank Limited 2016 CLC 187 rel.

Muhammad Saleem Iqbal for Plaintiff.

Nemo for Defendants.

2017 C L D 1745

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

ALLIED BANK LIMITED through General Attorneys---Plaintiff

Versus

Messrs RAFI COTTON INDUSTRIES (PVT.) LIMITED through Chairman and others---Defendants

C.O.S. No. 7 of 2015, heard on 9th January, 2017.

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

----Ss. 2(e), 9 & 10--- Suit for recovery of finance--- Renewal/ rescheduling of loan---Mark up, charge of---In application for leave to defend the suit, defendants raised the plea that Bank could not charge markup for the period of temporary extension in time and also disputed certain debit entries in statement of accounts relied by plaintiff Bank---Validity---Plaintiff Bank was entitled to charge mark-up for the period for which finance facilities were extended and remained operative---Credit of all disputed entries was reflected in statement of account and Bank had substantiated disbursal of amounts under debit entries in question---Defendants failed to raise any dispute in their application for leave to defend regarding their liability---High Court declined to grant leave to defend the suit---Suit was decreed in circumstances.

Habib Bank Limited v. Service Fabrics Limited and others 2004 CLD 1117 and The Bank of Punjab v. Messrs Khan Unique Developers Limited 2016 CLD 29 rel.

Muhammad Saleem Iqbal for Plaintiff.

Muhammad Manzoor-ul-Haq for Defendants Nos. 1 to 3.

Muhammad Mansoor Alam for Defendant No.9.

2017 C L D 1752

[Lahore]

Before Abid Aziz Sheikh and Tariq Saleem Sheikh, JJ

TAHIR RIZWAN---Appellant

Versus

FIRST PUNJAB MODARABA through Branch Manager and 3 others---Respondents

Execution First Appeal No. 2510 of 2015, heard on 6th June, 2016.

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

----Ss. 19 & 22---Contract Act (IX of 1872), Ss. 139, 140 & 141---Execution of decree---Leased assets---Loss caused by financial institution---Objections---Objection petition filed by judgment-debtor was dismissed by Execution Court---Plea raised by judgment debtor was that leased assets constituted prime security and same were lost due to acts of omission and commission by financial institution, therefore, decretal amount stood discharged---Validity---Leased assets did not constitute a security and judgment debtor was not discharged under S. 141 of Contract Act, 1872 owing to mere inaction of financial institution---No evidence was available on record that leased assets had actually been lost, destroyed or misappropriated---Execution proceedings were previously adjourned sine die and Executing Court resurrected them without notice to judgment debtor---Judgment debtor was entitled to notice but objection was merely technical as he had already joined proceedings and was duly represented before Executing Court---No prejudice was caused to the judgment debtor due to non-issuance of notice---High Court declined to interfere in the execution proceedings---Appeal was dismissed in circumstances.

The Central Exchange Bank Ltd. (in liquidation), through the Liquidator, the State Bank of Pakistan, Lahore v. Mst. Zaitoon Begum and others PLD 1968 SC 83; Amrit Lal Goverdhan Lalan v. State Bank of Travancore and others AIR 1968 SC 1432 and State Bank of Saurashtra v. Chitranjan Rangnath Raja AIR 1980 SC 1528 ref.

Imran Malik for Appellant.

A. W. Butt for Respondents.

2017 C L D 1784

[Lahore]

Before Shams Mehmood Mirza, J

The BANK OF PUNJAB through Attorney---Plaintiff

Versus

INSTITUTE OF LEADERSHIP AND MANAGEMENT through Secretary and another---Defendants

C.O.S. No. 39 of 2011, decided on 5th September, 2016.

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

----Ss. 5(8) & 9---Procedure of Banking Court---Amicus curiae, appointment and report of---Scope---Report of an amicus curiae, appointed under S. 5(8) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was akin to report of a local commissioner, which was not binding on the Banking Court and could not be treated as ipse dixit.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend, grant of--- Mark-up beyond the expiry of the finance facility/agreement---Contention of plaintiff Bank was that defendant had kept on availing running finance facility from the plaintiff Bank, therefore, the claim of additional mark-up was justified and that such extensions/renewals of finance facilities constituted a binding agreement between the parties---Validity---Said contention justifying claim of mark-up and recovery of the same without there being a formal finance agreement, prima facie, appeared to be tenuous and in any event, such a claim and reasons put forth for it, could not be adjudicated without recording of evidence and to such extent, application for leave to defend was allowed.

Sardar Qasim Farooq Ali for Plaintiff.

M. Imran Malik for Defendants.

2017 C L D 35

[Peshawar]

Before Yahya Afridi, J

LIAQAT ALI KHAN---Appellant

Versus

Mst. SHAFAQ UROOJ---Respondent

Regular First Appeal No.186 of 2015, decided on 12th August, 2016.

Negotiable Instruments Act (XXVI of 1881)---

----S.4---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1, 2 & 7---Suit for recovery of money---Summery proceedings---Promissory note---Pre-conditions---Suit filed by plaintiff for recovery of money was decreed in her favour by Trial Court---Plea raised by defendant was that promissory note relied upon by plaintiff was in fact an agreement and did not fulfil essential ingredients provided under S. 4 of Negotiable Instruments Act, 1881, therefore, he was prejudiced by trial---Validity---Disputed promissory note was titled to be an Iqrar Nama and also referred to an arrangement regarding transfer of property to a third party, therefore, the same could not be intended by its maker to be a promissory note---Defendant was acknowledging his debt and undertook payment to plaintiff and had also promised to transfer specific piece of land to a third person---Such promissory note could be termed as an acknowledgement of debt or an agreement between parties but the same could not practicably be negotiable by plaintiff---Disputed promissory note was not promissory note within the contemplation of Negotiable Instruments Act, 1881---Trial Court granted leave to defendant and thereafter a proper trial followed within the contemplation of O. XXXVII, R. 7, C.P.C.---Defendant was provided with all opportunity to produce evidence to rebut claim of plaintiff---If Trial Court proceeded to decide the case in summary manner, within the purview of O. XXXVII, R. 2, C.P.C., a case could have been made out in favour of defendant to have been prejudiced---When Trial Court proceeded with suit as an ordinary trial by providing both parties to produce their pro and contra evidence, no question of prejudice to either party could be raised---High Court modified judgment and decree passed by Trial Court only to the extent of charging of interest from the date of filing of suit instead of date of signing of promissory note---Appeal was dismissed accordingly.

Messrs Seri Sugar Mill's case 2013 CLD 1254; Khalid Mahmood's case PLD 2011 Lah. 52; Rashid-ur-Rehman's case PLD 2005 Lah. 416; Bherulal's case AIR (38) 1951 Ajmer 71; Arab Khan's case 2014 CLC 533; Abdul Aleem Butt's case 2015 CLC 1144; Syed Fida-ur-Rehman Shah's case 2012 CLD 842; Muhammad Akbar Khan's case AIR 1936 Privy Council 171; Karam Chand's case AIR 1938 PC 121 and Nanga's case AIR 1962 Rajistan 68 ref.

Chand Bagh's case PLD 2011 Lah. 473; Sheikh Abdul Majeed's case PLD 1988 SC 124; Syed Nazir Hussain Rizvi's case PLD 2005 SC 787; Haji Ali Khan and Company's case PLD 1995 SC 362 and Abdul Karim Jaffarani's case 1984 SCMR 568 rel.

Mazullah Khan Barkandi for Appellant.

Saadatullah Khan Tangi for Respondent.

2017 C L D 184

[Peshawar (Bannu Bench)]

Before Haider Ali Khan, J

Mst. SARDARA---Petitioner

Versus

ZARAI TARAQIATI BANK BRANCH KARAK through Manager and 2 others---Respondents

Civil Revision Petition No.387-B of 2012, decided on 7th April, 2016.

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

----S. 27---Decree, setting aside of---Scope---Applicant moved application before Banking Court for setting aside of judgment and decree on the ground that she was owner in possession of suit property on the strength of decree of civil court---Banking Court returned the said application for presenting the same before civil court---Validity---Property in question had been sold in execution of decree---Said decree passed by the Banking Court had attained finality which could not be agitated before any court/forum---Suit property could not be restored through a civil court decree---Applicant could approach the competent forum applicable thereto for redressal of her grievance---No illegality or irregularity had been pointed out in the impugned findings of facts recorded by the Banking Court---Revision was dismissed in circumstances.

1997 CLC 1342 rel.

Ahmad Jan Khattak for Petitioner.

Aqal Shah Noor for Respondents.

2017 C L D 417

[Peshawar]

Before Ikramullah Khan, J

DUBAI ISLAMIC BANK through Recovery Officer---Petitioner

Versus

The STATE and another---Respondents

Cr. MQP No. 107-P of 2016, decided on 18th November, 2016.

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

----S. 16(3)---Criminal Procedure Code (V of 1898), Ss. 561-A, 516-A, 523 & 550---Car financing---Default in payment of installments of lease money---Recovery/re-possession of car by Agent of Leasing Company/Bank---Quashing of order, application for---Interim custody of car---Scope---Customer committed default in payment of the agreed installment---Bank/petitioner seized the vehicle and gave to the local police---Local police took the said vehicle into possession under Ss. 523/550, Cr.P.C.---Contention of customer was that he was bona fide purchaser of the said vehicle and entitled to get the interim custody of the vehicle---Validity---Local police was not authorized to take over the possession of any movable property seized by the Financial Institution from any customer in terms of S. 16(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---If Financial Institutions transgressed its authority as conferred upon it in terms of S. 16(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in matter of direct power of recovery, such institution would be liable for the consequences as provided by the Ordinance---Local police was directed by High Court to hand over the vehicle to the person, who had handed it over to the police---Petition for quashment was dismissed in circumstances.

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

----S. 16(3)---Criminal Procedure Code (V of 1898), Ss. 561-A, 516-A, 523 & 550---Car financing---Default in payment of installments of lease money---Custody/re-possession of car by Agent of Leasing Company/Bank---Quashing of order, application for---Court in exercise of its criminal jurisdiction under S. 516-A, Cr.P.C., may order for custody and disposal of property pending trial of criminal case, where any property regarding which any offence appeared to have been committed or which appeared to have been used for commission of any offence---Vehicle in question was not subject matter of any offence within the meaning of Penal Code, 1860, petition for quashment was dismissed in circumstances.

Saghir Iqbal Gulbela for Petitioner.

Arshad Ahmad Khan, AAG and Hussain Ali (Counsel for Petitioner in Cr. MQP 118-P of 2016) for Respondents.

2017 C L D 436

[Peshawar]

Before Nisar Hussain Khan, J

Mrs. HIJAB FATIMA TARIQ and 2 others---Petitioners

Versus

KOHAT CEMENT CO. LTD. and others---Respondents

C.M. No. 12-P of 2016, decided on 14th November, 2016.

(a) Interpretation of statutes---

----General and special law---Scope---When a special provision has been enacted by Legislature to cater a particular purpose, the general provision has to make way and special provision would prevail and accordingly applied.

Golden Oraphies (Pvt.) Ltd. and 12 others v. Director of Vigilance, Central Excise, Customs and Sales Tax and others 1993 SCMR 1635 and Federal Bank for Cooperatives, Islamabad v. Ehsan Muhammad 2004 SCMR 130 ref.

(b) Interpretation of statutes---

----Every word employed is of significance and is required to be given due effect---While interpreting a provision of law, it is to be read in totality, in conjunction with its conditionalities---If there is any condition referred in the provision, it cannot be ignored nor can be torn out of context---When provision is plain and simple and tenor of language is couched in clear words, not susceptible to any two interpretations, it cannot be made subject matter of labour of misconceived interpretation.

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

----Ss. 9, 160-A & 179---Election of Board of Directors---Petition for declaration of election invalid---Scope---Civil Procedure Code, 1908, provisions of---Applicability---Scope---Petitioners sought setting aside of election of Board of Directors on the ground that they had 10% of voting power with them as provided under S. 160-A of Companies Ordinance, 1984---Plea raised by company was that 20% voting power was required under the provisions of S. 179 of Companies Ordinance, 1984, for setting aside of election of Board of Directors---Validity---Provision of S. 179 of Companies Ordinance, 1984, would apply to the elections of Board of Directors, being special provision and S. 160-A of Companies Ordinance, 1984, was inapplicable as it was general in nature---Petitioners did not hold required 20% voting power in the company, which was sine qua non for invoking provision of S. 179 of Companies Ordinance, 1984---High Court, while deciding matter before it, as expeditiously as possible, was to follow summary procedure and that under Civil Procedure Code, 1908, i.e. framing of issues and recording of evidence was not to be followed---High Court was to decide the case in the light of available record---High Court declined to interfere in the election of Directors because of petitioner's own deficiency---Petition was dismissed in circumstances.

The State v. Zia ur Rehman PLD 1973 SC 49 and J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. State of Uttar Pradesh and others AIR 1961 SC 1170 rel.

Muhammad Raza Qureshi and Barrister Waqar Ali for Petitioners.

Syed Naeem Bukhari and Yousaf Anjam for Respondents.

2017 C L D 486

[Peshawar]

Before Ikramullah Khan, J

Messrs NIB BANK LIMITED through Authorized Officer/General Attorney---Petitioner

Versus

Mian WISAL BACHA and 2 others---Respondents

Q.P. No. 137-P of 2015, decided on 18th July, 2016.

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

----S. 3---Criminal Procedure Code (V of 1898), Ss. 51, 523 & 550---Finance facility extended to customer by Financial Institution for vehicle---Civil dispute---Seizure of property (vehicle) on default---Scope---Police may seize any property taken under S. 51, Cr.P.C. or stolen or regarding which any offence appeared to have been committed or which appeared to have been used for the commission of the offence---Such power could not be exercised to settle a civil dispute between parties by seizing a vehicle or any other property not either stolen, suspected to be stolen or recovered from an accused---Court shall not legalize the unlawful exercise of power by police or to secure or recover the finance facility extended to a customer by any financial institution---Petition was disposed of by handing over the vehicle to the respondent/customer.

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

----S. 3--- Criminal Procedure Code (V of 1898), Ss. 516-A, 523 & 550---Finance facility extended to customer by Financial Institution---Default---Seizure of vehicle by Financial Institution---Validity---Criminal and civil proceedings against the defaulter---Financial institution may proceed against the defaulter/customer in competent court of law for civil or criminal proceeding subject to any civil or criminal liability that the customer may incur under the contract or rules or any other law for the time being in force---Petitioner/Financial institution instead of invoking the jurisdiction of Banking Court opted to initiate criminal proceeding in term of Ss. 523/550 of Cr.P.C.---Quashment petition was disposed of by handing over the vehicle to the customer accordingly.

Shafiullah Khan for Petitioner.

Mujahid Ali Khan, AAG for the State.

2017 C L D 745

[Peshawar]

Before Mohammad Ibrahim Khan, J

LUQMAN ALI---Petitioner

Versus

The STATE and 2 others---Respondents

Cr. R. No. 49-P of 2015, decided on 7th October, 2016.

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

----Ss. 16, 19 & 9---Criminal Procedure Code (V of 1898), Ss. 516-A & 561-A---Car financing---Default in payment of installment of lease amount---Car was repossessed by the financial institution---Superdari of vehicle---Bank had leased a vehicle in favour of petitioner----Regular installments were being deposited by the petitioner but he defaulted---Vehicle was re-possessed by the Bank authorities and filed suit for recovery against the petitioner, which was decreed---Said decree was converted into execution petition but thereafter execution proceedings were adjourned sine die due to lack of interest by the Bank---Certificate and all the relevant ownership documents of the vehicle had been made part of the proceedings by the Banking Court---Strong presumption was attached to the documents and the judicial proceedings---Petitioner was held entitled to superdari of the vehicle in circumstances---Petition for superdari of the vehicle was allowed accordingly.

Qaiser Shafique Vohra v. The State and another 1991 MLD 2590; Muhammad Imran v. Muhammad Shafique 2005 YLR 1748 and Muhammad Akmal Shah v. DSP and others 2004 PCr.LJ 1 ref.

Muhammad Ramzan v. Lahore Development Authority Lahore 2002 SCMR 1336 rel.

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

----Art. 91---Documents produced in Judicial proceedings---Strong presumption as to the genuineness was attached to the documents, which were given by witness and made part of judicial proceedings.

Naqeeb Ahmad Takkar for Petitioner.

Shakeel Ahmad for the Complainant.

Chaudhry Abdur Razzaq for Respondent No.3.

2017 C L D 1158

[Peshawar]

Before Waqar Ahmed Seth and Muhammad Younis Thaheem, JJ

FAYAZ ALI---Appellant

Versus

Dr. AHMAD KHAN HOTI and others---Respondents

F.A.B. No. 77 of 2009, decided on 14th March, 2017.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, R.89---Execution of decree---Payment by judgment debtor---Auction purchaser, right of---Bid in auction---Scope---Judgment debtors satisfied decree by depositing entire decretal amount---Validity---Bid in auction was considered as an offer only and without its confirmation it did not create any vested right in property for a successful bidder---After submission of auction report and after deciding all objection petitions and before confirmation of auction report, judgment debtors were once again given a chance to either pay decretal amount or property under auction would be transferred to successful bidder---No such stage reached as entire decretal amount was paid to decree holder and after satisfaction of decree, execution petition was correctly and lawfully consigned to record room---High Court declined to interfere in the matter---Appeal was dismissed in circumstances.

Afzal Maqsood Butt v. Banking Court Respondent No.2, Lahore and 8 others 2005 CLD 967 rel.

Aamir Javed for Appellant.

Muhammad Tariq Hoti for Respondents.

The file is currently being updated. Plz try again later. If the link still does not work, report to pakistanlawsite@oratiertechnologies.com

2017 C L D 557

[Punjab Environmental Tribunal]

Before Justice (R) Ch. Muhammad Younis, Chairperson and Muzaffar Mahmood, Member General

Messrs BIG BIRDS POULTRY BREEDERS (PVT.) LIMITED through Authorized Director(s)---Appellant

Versus

DIRECTOR GENERAL, EPA and others---Respondents

Appeal No.89 of 2012, decided on 20th December, 2016.

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

----Ss. 12, 16, 21 & 22---Pakistan Environmental Protection Agency (Review of I.E.E. and E.I.A.) Regulations, 2000, Reglns.11 & 12---Initial Environmental Examination (I.E.E.) report, rejection of---Appellant company contended that it was running poultry farm since 1988 and was carrying out its business of poultry in accordance with applicable laws and requisite bio security safety standards in consonance with the prevalent environmental guidelines; that company had constructed the building well before the promulgation of Pakistan Environmental Protection Act, 1997---Company alleged that two Inspectors who visited the poultry farm, issued arbitrary report and a notice was issued to the company containing baseless allegations and that company was asked to get the environmental approval---Company, just in order to resolve the controversy moved for Environmental Approval and submitted "I.E.E./Initial Environmental Examination" report, which report was rejected on the grounds that the poultry farm/control shed was already under operation in violation of S. 12 of the Pakistan Environmental Protection Act, 1997; that the site was located in residential area as per master plan; that unhygienic scenario prevailed due to control shed and that the local residents were against the establishment of the poultry farm/control shed---Validity---Unit of the company was established much before the promulgation of Pakistan Environmental Protection Act, 1997; and Pakistan Environmental Protection Agency (Review of I.E.E. and E.I.A.) Regulations, 2000, were notified in 2001---No proponent was supposed to know as to what category of projects required the Environmental Approval by submitting I.E.E. and which projects required E.I.A. to be submitted---Penal provisions regarding violation of S.12 of the Pakistan Environmental Protection Act, 1997 could not be invoked in respect of the projects established before 2001---No master plan was available on the record of the EPA and inspite of direction of the Tribunal no such master plan was ever produced---Even otherwise the photographed attached with the appeal, clearly indicated that the project was situated in an agricultural area having no population in the vicinity---Master plan was allegedly prepared by Development Authority but no complaint was ever made to the Authority and no action etc. was ever initiated by the Development Authority for violation of master plan made by the company---No demarcation report or any other report was on the record to prove that the project of the company was located in the prohibited zone as per master plan---'Adverse environmental' effect had not been explained and no details thereof had been given in the report by the District Officer (Environment) which was vague and unfounded, in circumstances---Law Officer was unable to point out or place even a single complaint received from any resident of the locality---District Officer (Environment) also did not record the statement of even a single resident in that respect---No complaint was ever filed by any aggrieved person before the Tribunal against the farm of the appellant---Project in question, was established about two decades ago after fulfilling the legal requirements and after getting the site plan sanctioned, when there was no population/residential area in the surrounding area---Any subsequent change in the status of the area, could not be made basis for dislodging the projects established after incurring huge expenditure and which were operational even in 1998---Impugned order of rejection, was not based on any solid and convincing reasons; rather it had been issued on flimsy grounds---Plea of the company was neither taken into consideration, nor discussed in the impugned order; same was discarded without giving any solid reasons---Impugned order being not sustainable was set aside in circumstances.

Azmat Lodhi, Senior Advocate for Appellant.

Mohsin Sarfraz Cheema learned Law Officer for the EPA.

2017 C L D 1117

[Punjab Environmental Tribunal]

Before Justice (R) Ch. Muhammad Younis, Chairperson and Muzaffar Mahmood, Member (General)

DIRECTOR GENERAL EPA---Petitioner

Versus

Messrs SULTAN INDUSTRIES SIALKOT---Respondent

Complaint No. 1359 of 2012, decided on 1st February, 2017.

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

----Ss. 6, 7, 11 & 16(3)---Criminal Procedure Code (V of 1898), S.265-K---Environmental protection order---Complaint---Application for acquittal---Complaint against accused had been filed with the allegations of commission of offence under S.11 of Punjab Environmental Protection Act, 1997---Complaint had been filed by the Director General Environmental Protection Authority, but it did not bear the signatures of the Director General, rather same had been signed by Deputy Director---Said practice was not approved---Criminal complaint had to be signed and proved by the complainant himself and not any body else---Director General could only delegate the functions under provisions mentioned in Ss. 6 & 7 of Punjab Environmental Protection Act, 1997---If the Environmental Protection Order was issued under the conferred powers, the Director must have mentioned the same in the order itself---Environmental Protection Order was an appealable and quasi judicial order, which must be signed by the Director General--- Environmental Protection Authority, in the present case, did not procure any analysis report to attract the provisions of S.11 of the Punjab Environmental Protection Act, 1997---In absence of analysis report, Environmental Tribunal could not presume that the discharge of waste water of accused unit exceeded the limit---No specification of the proposed treatment plant had been given in the Environmental Protection Order---Construction of settling tanks, could also be considered to be the arrangement made for preliminary treatment of the waste water---No offence under S.11 of the Punjab Environmental Protection Act, 1997 was made out---No likelihood of conviction of accused under S.11 of the Punjab Environmental Protection Act, 1997 existed and to proceed further with the complaint would be a futile exercise---Application under S. 265-K, Cr.P.C., was allowed and accused stood acquitted, in circumstances.

2016 CLD 1628 and 2015 CLD 57 ref.

Miss Amina learned ADPP assisted by Mohsin Sarfraz Cheema, Law Officer for EPA.

2017 C L D 169

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

ASHFAQ AHMED, CHIEF EXECUTIVE and 8 others---Appellants

Versus

The EXECUTIVE DIRECTOR, CORPORATE SUPERVISION DEPARTMENT COMPANY LAW DIVISION---Respondent

Appeal No.3 of 2016, decided on 5th April, 2016.

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

----Ss. 208, 476 & 492---Securities and Exchange Commission of Pakistan (Appellate Bench Procedure) Rules, 2003, R. 17(5)---Investments by Company in an associated companies and undertakings, without the authority of a special resolution---Appellant/company had sold generator having market value of Rs.15 million for Rs.13 million to its associated company---Company provided benefit to associated company by selling generator on credit basis without the authority of a special resolution; which prima facie, contravened the provisions of S.208 of the Companies Ordinance, 1984---Show-cause notice was issued to Directors of the appellant company under Ss.208 & 476 of the Companies Ordinance, 1984---Board of Directors of the company, approved sale of assets on the basis of old quotations which was contrary to the information provided to Executive Director, wherein it was submitted that the assets would be disposed of through tender offers in newspapers---Approval of assets of sale by Board of Directors, on the basis of old quotation, was prima facie, a misstatement---Executive Director of the Commission being dissatisfied with response of Directors, found that violation had been committed by Directors of the company under Ss.208 & 492 of the Companies Ordinance, 1984---Penalty of Rs.25,000 was imposed on Directors of the company individually---Executive Director of the Commission had taken a lenient view while adjudicating the issue and imposed fine under S.492 of the Companies Ordinance, 1984, whereas warning was issued for the violation of S.208 of the Ordinance, 1984, though the violation of S.208 of the Ordinance, was also established---Directors of the company had breached the fiduciary duty by not complying with the requirements of relevant law---Executive Director of the Commission was required to penalize appellants for violation of S.208 of the Ordinance---Appellants had intentionally avoided compliance of the Companies Ordinance 1984---Legal duty or liability, was always needed to be discharged by a person required by law and if not complied, the presumption would be that he had done so wilfully---When requirement of a statute had been violated, there was no need to establish mala fide or mens rea to prove the non-compliance of the provisions---Appellate Bench of the Commission observed that in addition to fine imposed under S.492 of the Companies Ordinance, 1984, it was appropriate to convert the warning for violation of S.208 of the Ordinance into fine---Appellate Bench, in exercise of the powers conferred by R.17(5) of the Securities and Exchange Commission of Pakistan (Appellate Bench Procedure) Rules, 2003 imposed an aggregate fine of Rs.200,000 on all the Eight Directors of the Company---Impugned order of the Executive Director of the Commission was upheld with conversion of warning under S.208 of the Companies Ordinance, 1984 into fine, and appeal was dismissed, accordingly.

1987 MLD 3039 ref.

(b) Administration of justice---

----To administer the justice, law should be followed in its totality---Violation of express provisions of law, could not be tolerated to ensure justice and rule of law---Jurisprudence had envisaged a principle for administration of justice, which required that, if law required that an act must be done in a particular way, it should be done in that manner as prescribed by law.

Muhammad Afzal Awan and M. Sarfraz, Company Secretary for Appellants.

Abid Hussain, Executive Director CSD and Mrs. Amina Aziz, Director CSD for Respondent.

2017 C L D 218

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

PAKISTAN TAX ADVISORS ASSOCIATION---Appellant

Versus

The DEPUTY REGISTRAR OF COMPANIES, C&CD, SECP---Respondent

Appeal No.04 of 2016, decided on 5th April, 2016.

Companies Ordinance (XLVII of 1984)---

----S. 42---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Dismissal of application for grant of licence---'Pakistan Tax Advisors Association', was initially allowed to work, but subsequently was denied the grant of licence under S.42 of Companies Ordinance, 1984---Discretion had been used by Deputy Registrar of companies without application of judicious mind and lacking substantial reasons---Licence was a privilege and not a legal right and issuance or refusal of a licence was discretion of licensor, but a discretion could not be exercised in an arbitrary or fanciful manner---Law mandated its use judiciously in accordance with settled norms of justice and equity---Refusal of licence to the Association on the basis of existence of society registered as 'Pakistan Tax Bar Association' which was neither licensed, nor registered entity, with the Commission, was not a valid reason for use of discretion---Association had categorically mentioned in its correspondence with Deputy Registrar that its object dealt with individuals, like Chartered Accountants, Advocates, Tax Practitioners and students, whereas "Tax Bar Association" had affiliated different Tax Bars of the country; as its members, but Deputy Registrar had not considered that fact while deciding the matter---Conduct of the Deputy Registrar, reflected its failure to use discretion in a careful manner---Case, should have been dealt under S.22(3) of Securities and Exchange Commission of Pakistan Act, 1997, but Deputy Registrar, while deciding the application of the Association, had not provided any opportunity of hearing, which was a gross violation of law---Express bar of S.33 of the Securities and Exchange Commission of Pakistan Act, 1997,on appeal was applicable to the case of Association---Association was advised by the Appellate Bench to approach appropriate forum for grant of relief claimed in appeal---Appeal being not maintainable, was dismissed, in circumstances.

M. Amjad Khan, Advocate Supreme Court, Javed Iqbal Qazi, Chairman, Mian Abdul Ghaffar, President, Advocate High Court and Kh. Riaz Hussain for Appellant.

Mubasher Saeed Saddozai, Director C&CD and Syed Sajjad, Deputy Director C&CD for Respondent.

2017 C L D 248

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

The PAKISTAN MUTUAL INSURANCE CO. (GUARANTEE) LTD. through Chief Executive Officer and 3 others---Appellants

Versus

CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No.40 of 2015, decided on 11th January, 2016.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(F), 12 & 156---Insurance Companies (Sound and Prudent Management) Regulations, 2012, Regln. 2(2)--- Appointment of Directors without approval by an Insurance Company---Company had appointed three persons as Directors without approval---Show-cause notice, was issued to the Directors of the company, calling upon them to show-cause as to why fine as provided under S.156 of the Insurance Ordinance, 2000, should not be imposed for non-compliance with Regln.2(2) of the Insurance Companies (Sound and Prudent Management) Regulations, 2012; read with Ss.11(1)(F) & 12 of the Insurance Ordinance, 2000---Director (Insurance), Securities and Exchange Commission, dissatisfied with the response of Directors of the company, found that appellants, had not only contravened the provisions of law by not seeking approval of the Commission before appointing Directors, but also ignored the Commission's express demand to file a duly completed application for consideration and approval of the Commission---Taking a lenient view, fine of Rs.10,000 was imposed on each of the Directors of the company and Rs.100,000 on the company---Chief Executive of the company, had admitted the default on behalf of the company, and requested for the condonation of penalty; that with effect from 1-10-2015, the company had stopped entering into new contracts of insurance; as such no business was being conducted by the company and that legal process of member's voluntary winding up of the company under S.144 of the Insurance Ordinance, 2000 had been initiated---Chief Executive Officer had confirmed all these facts in writing---Director (Insurance) of the Commission had not objected to any of the grounds for condonation of penalty---Impugned order to the extent of penalty, was set aside and Directors of the company were asked to ensure compliance with the laws and regulations in future till the company was wound up.

Ch. Abdul Karim, CEO Pakistan Mutual Insurance Co. (Guarantee) Ltd. for Appellants.

Hasnat Ahmad, Director (Insurance) and Farrukh M. Qureshi, Deputy Director (Insurance) for Respondents.

2017 C L D 264

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

The PAKISTAN MUTUAL INSURANCE CO. (Guarantee) Ltd. through Chief Executive Officer and 7 others---Appellants

Versus

CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No. 41 of 2015, decided on 11th January, 2016.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 46(1)(b), 51, 63(2)(d), 65, 144 & 156---Failure to submit the statement of assets for solvency by Insurance Company---Company had not submitted the statement of assets for solvency purposes, along with the audit report thereon issued by the company's statutory auditors---Show-cause notice was issued to the Directors of the company, calling upon them to show-cause as to why fine as provided under S.156 of the Insurance Ordinance, 2000, should not be imposed for non-compliance with S.46(1)(b) and S.51 of the Insurance Ordinance, 2000---Director (Insurance), Securities and Exchange Commission, dissatisfied with the response to the show-cause notice, found that Company/Directors, had failed to comply with the requirements of law by not filing statement of assets, for which they were liable to be penalized under S.156 of the Insurance Ordinance, 2000---Instead of maximum fine, a fine of Rs.10,000 was imposed on each of the Directors of the company and Rs.100,000 on the company---Directors of the company were further asked to immediately file the requisite statement of assets---Chief Executive Officer of the company, admitted the default on behalf of the company, but requested for the condonation of penalty; stating that with effect from 1-10-2015, the company had stopped entering into new contracts of insurance and as such no business was being conducted by the company; that in view of the difficult circumstances being faced by the company, the Board of Directors had agreed to initiate the legal process of member's voluntary winding up under S.144 of the Insurance Ordinance, 2000 and provisions of Companies Ordinance, 1984---Director (Insurance) of the Commission did not object to any of the grounds of condonation of fine---Impugned order was set aside to the extent of penalty, and appellants were asked to ensure compliance with the laws and regulations, in future till the company was wound up.

Ch. Abdul Karim, CEO Pakistan Mutual Insurance Co. (Guarantee) Ltd. for Appellants.

Hasnat Ahmad, Director (Insurance) and Farrukh M. Qureshi, Deputy Director (Insurance) for Respondents.

2017 C L D 276

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

IMRAN RAFIQ, NOMINEE DIRECTOR NIT (HASHMI CAN COMPANY LIMITED)---Appellant

Versus

THE COMMISSIONER (SMD) SECP---Respondent

Appeal No.11 of 2016, decided on 28th July, 2016.

Securities Act (III of 2015)---

----Ss. 100 & 160---Failure of company to hold Annual General Meetings, to pay two years annual listing fee and failure to join Central Depository System---Trading of company shares was suspended in consequence of such defaults---Show-cause notice was issued to company, but despite ample opportunities, no one appeared on the behalf of the company; consequence Commission imposed a penalty of Rs.500,000 on the Directors of the company including the nominee Director of the company---Case of nominee Executive Director of the company was that he had very limited role into the affairs of the company and he had raised his concerns through letters/dissenting roles whenever any irregularity or illegality with respect to company came into his knowledge---Commission acknowledged such claim of the appellant---Role of a nominee director was more critical than Executive Director, because he sat on Board of Directors and represented and safeguarded the interest of the institution which nominated him---Non-executive director had no active role in the day to day affairs of the company, he however, had the right to object non-compliance committed by Management of the company---Appellant being nominee Executive Director, had time and again asked the Management of the company to comply with legal requirements, but company failed to comply with---By considering nominee Executive Director's partial compliance, his appeal was allowed and impugned order was set aside to his extent, with direction to appellant to avoid similar non-compliance in future, otherwise strict action would be taken in accordance with law.

Ms. Amna Usmani (Masood Khan and Co, Advocates) for Appellant.

Ms. Ayesha Riaz, Additional Director (SMD) and Haroon Abdullah Abbas, Deputy Director (SMD) for Respondent.

2017 C L D 293

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

The ASIAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED---Appellant

Versus

DIRECTOR (INSURANCE) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.45 of 2015, decided on 28th January, 2016.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 99(4) & 158---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---False statement in documents---Inspection team of the Commission, on inquiry from the company about the gratuity scheme, observed that company was not operating any employment benefit scheme, that company did not pay commission to its agents through cross cheque, rather it adjusted the amount of commission from balance receivables from its agents---Verification of ownership of assets of the company, revealed that company's Motor Cycle, was registered in the name of its employee---Show-cause notice was issued to the company under S.158 of the Insurance Ordinance, 2000---Director (Insurance) of the Commission, being dissatisfied with the response of company, imposed a penalty of Rs.100,000 upon the company vide impugned order---Validity---Violation of law had been committed by the company, while keeping its assets in the name of its employee---Company had violated the express provisions of law, which could not be allowed to ensure justice and rule of law---Legal duty or liability was needed to be discharged as required by law and if not complied, the presumption would be that non-compliance was wilful---When a requirement of a statute had been violated, then there was no need to establish mala fide or mens rea to prove the non-compliance of the provisions---Impugned order was passed with due care by keeping in view principles of legal reasoning to establish the guilt and violation of law by the company---Impugned order, could not be interfered with.

1987 MLD 3039 ref.

M. Faisal Rashid, Director and Zafar Iqbal, Chief Manager for Appellant.

Hasnat Ahmad, Director Insurance Division and Shahid Javed, Deputy Director Insurance Division for Respondent.

2017 C L D 368

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

JS BANK LIMITED---Appellant

Versus

COMMISSIONER COMPANY LAW DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No.01 of 2016, decided on 2nd August, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 57, 59, 60, 63, 472 & 474---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.5(5), 20(6), 22 & 33---SRO 154(1)/2015 dated 19-2-2015---Misstatement in the Prospectus---Powers of Commissioner Company Law Division, Securities and Exchange Commission---Appellant Bank filed application against a company under S. 474 of Companies Ordinance, 1984 which was decided by the Director Enforcement of the Commission and appellant preferred appeal before Appellate Bench of the Commission which remanded the matter to the Commissioner Company Law Division of the Commission to consider the submission of appellant in view of observations made by the Appellate Bench of the Commission---During pendency of the proceedings, as a result of delegation of adjudication powers vide SRO 154(1)/2015 dated 19-2-2015, the matter was finally decided by Commissioner Company Law Division vide impugned order, in which appellant was advised to approach relevant forum for resolution of long outstanding matter in the interest of all stake holders---Validity---Commissioner Company Law Division had powers only to enforce the existing provisions of law, but could not decide disputes between the appellant Bank and the company for which action could be initiated by Commissioner Company Law Division---Commissioner Company Law Division, had no powers to take cognizance of any offence in terms of S.474 of the Companies Ordinance, 1984; such powers only lay with a court of competent jurisdiction---Section 20(6) of Securities and Exchange Commission of Pakistan Act, 1997, only conferred executive powers on the Commission being a public body to maintain the confidence of investors, but did not give powers to determine civil and criminal liability---Appellant Bank had been unable to prove that there was a misstatement in the Prospectus---Any dispute pertaining to subsequent conversion of shares, could only be settled in a court of competent jurisdiction---Commissioner Company Law Division, could not go beyond the ambit of its powers and try to enforce the provisions of the Prospectus, which were subject to different interpretations by both by appellant Bank and the Company---Appellant had also been unable to show that there was breach of any fiduciary duty by the Company in terms of S.196 of the Companies Ordinance, 1984---Commissioner Company Law Division, could only penalize or issue a direction to the Company, if breach of any provision of the law had taken place; which the appellant had failed to substantiate in its appeal---Appellant, had been unable to rebut any of the observations made in the impugned order by the Commissioner Company Law Division on merits---All issues raised in the appeal, had been properly addressed in the impugned order---Appellant, had not been able to satisfy the Appellate Bench of the Commission that Commissioner Company Law Division, had erred in any way in the impugned order---Impugned order was upheld, and appeal was dismissed, in circumstances.

Arif Ghafoor v. Managing Director PLD 2002 SC 13; Shri Mehra, Senior Supdt. v. Unknown AIR 1962 MP 72; Sindh High Court Bar Association and another v. Federation of Pakistan PLD 2009 SC 879; Mir Muhammad Idris and others v. Federation of Pakistan PLD 2011 SC 213; 2005 SCMR 1785 and PLD 1971 SC 252 ref.

Rashid Sadiq, CEO RS Corporate Advisory (Pvt.) Limited for Appellant.

Abid Hussain, Executive Director (CSD), Ms. Ayesha Riaz, Additional Director (CSD) and Ms. Khalida Parveen, Joint Director (CSD) for Respondent No.1.

Babar Sattar, (Ajuris, Advocates and Corporate Counsel) and Anique Salman Malik, (Ajuris, Advocates and Corporate Counsel) for Respondent No.2.

2017 C L D 392

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

AXIS GLOBAL LIMITED---Appellant

Versus

DIRECTOR (MSRD) SECURITIES AND EXCHANGE COMMISSION of PAKISTAN---Respondent

Appeal No.27 of 2013, decided on 22nd January, 2015.

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

----Ss. 6, 16, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Securities and Exchange Rules, 1971, Third Sched.---Central Depositories Act (XIX of 1997), Ss.24 & 28---Irregularities in calculation of "Net Capital Balance" (N.C.B.)---Mishandling securities of the clients by the company---Imposition of late payment charges on the client---Report submitted by Inspection Team, disclosed that company was mishandling the securities of its clients; and was involved in imposing late payment charges on the clients---Major irregularities in calculation of "Net Capital Balance" (N.C.B.) was also observed; and it appeared that 'N.C.B.' was not in accordance with the Third Sched. of Securities and Exchange Rules, 1971---Company had pledged the shares with the banks, without authorization, in sheer violation of S.24 of the Central Depositories Act, 1997---Director (M.S.R.D.) of the Commission, dissatisfied with the response of company to the show-cause notice, held that it was established that in many instances, company had pledged the shares without proper authority of the sub-account holders---Group accounts, though were abolished in 2005, company, did not take serious measures to transfer the securities to the respective sub-accounts---Such mishandling of client's securities, was a clear violation of S.24 of Central Depositories Act, 1997, which was punishable under S.28 of the said Act---Company was directed to deposit a sum of Rs.100,000 under S.22 of Securities and Exchange Ordinance, 1969; and further sum of Rs.300,000 under S.28 of Central Depositories Act, 1997, to the Commission by way of penalty; and ensure full compliance with the Ordinance, Rules, Regulations and directives of the Commission in future---Company had admitted its default by depositing penalty of Rs.55,000 imposed by Central Depositories Act, 1997---Company, could not be reprimanded for the same offence twice---Penalty of Rs.300,000 imposed under S.28 of Central Depositories Act, 1997, was set aside by Appellate Bench and held that company being in breach of Brokers Rules, must pay penalty of Rs.100,000 under S.22 of Securities and Exchange Ordinance, 1969.

Hamad Kehar, Managing Director Axis Global Ltd for Appellant.

Najia Ubaid, Deputy Director (SMD) and Adnan Ahmed, Deputy Director (SMD) for Respondent.

2017 C L D 412

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Akif Saeed, Commissioner (SCD)

ASIAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED---Appellant

Versus

DIRECTOR (INSURANCE)---Respondent

Appeal No.50 of 2013, decided on 10th February, 2015.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 36(3)(a), 46(1)(b), 51(1) & 156---Securities and Exchange Commission (Insurance) Rules, 2002, R.16(1)(b)---Submission of Annual Audited Financial Statements to Commission---Insurance Company, in pursuance of Ss.46(1) & 51(1) of Insurance Ordinance, 2000, filed its Annual Audited Financial statement for the relevant year---Said statements of assets for solvency purposes, showed that company had taken all its available for sale investments at market value---Said statements, revealed that company had an investment property (Land and Building) amounting to Rs.9,180,000, which was previously revalued in the year 2004; and company had booked surplus on revaluation of Fixed Assets amounting to Rs.8,395,000---Company, had not carried out any revaluation of said property since the year 2004; and had not recorded any impairment in the value of said property, if any, which was required under R.16(1)(b) of the Securities and Exchange Commission (Insurance) Rules, 2002---Company, had not stated the carrying amount of the property at cost and, it appeared that company had chosen to follow the fair value model under IAS-40, which was against the provisions of R.16(1)(b) of Securities and Exchange Commission (Insurance) Rules, 2002---Company was required to revalue its investment property at least once in every financial year---Company, in circumstances, had contravened the requirements of the Rules read with S. 156 of Insurance Ordinance, 2000 relating to the recording and reporting of the investment properties---Company had admitted its default---Director Insurance of the Commission, dissatisfied with the response of the company in show-cause notice, vide impugned order imposed fine of Rs.100,000 on the company, with direction to reverse the statements; and book their Investment properties using cost model under IAS-40---Lenient view having already been taken in the matter under S.156 of the Insurance Ordinance, 2000 by not imposing the maximum penalty, appellate Bench declined interference.

Irfan Ilyas, FCA, Ilyas Saeed & Co. Chartered Accounts, A. Rasheed Mirza, CEO, Asian Mutual Insurance Company (Guarantee) Limited and M. Faisal Rashid, Director, Asian Mutual Insurance Company (Guarantee) Limited for Appellant.

Tariq Hussain, Director (Insurance) and M. Azam Nizami, Deputy Director (Insurance) for Respondent.

2017 C L D 420

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Akif Saeed, Commissioner (SCD)

NAIM ANWAR, CHIEF EXECUTIVE OFFICER and another---Appellants

Versus

TARIQ HUSSAIN, DIRECTOR INSURANCE, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No.51 of 2014, decided on 10th February, 2015.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 46(1)(b), 48(1), 51(1) & 156---Securities and Exchange Commission (Insurance) Rules, 2002, Rr.3 & 6---Failure to submit statements forming part of the Regulatory Returns---Insurance company failed to submit four statements; (i) Statement of claim (Form GII) for the year ended 31-12-2012; (ii) Statement of Exposures (Form GI) for the year ended 31-12-2012; (iii) Statement of Assets for Solvency Purposes (Form GI) for the year ended 31-12-2012; and (iv) classified summary of Assets in Pakistan (Form GK) for the year ended 31-12-2012---Company had contravened the provisions of R.3 of Securities and Exchange Commission (Insurance) Rules, 2002 and Ss.46(1)(b) & 51(1) of Insurance Ordinance---Audit Report as required by R.6 of Securities and Exchange Commission (Insurance) Rules, 2002, was also not submitted with the Commission within due time---Director Insurance of the Commission, dissatisfied, with the response of the company, held that default of Ss.46(1)(b) & 51(1) of Insurance Ordinance, 2000 having been established, penalty of Rs.500,000 was imposed on company's Chief Executive Officer, as during the pendency of the proceedings, company had repeated same contraventions---Validity--- Non-compliance, could not be excused on grounds that the company was going through a overhaul--- Keeping in view the fact that the company's compliance had improved, penalty was reduced by Appellate Bench from Rs.500,000 to Rs.2,50,000 with strict warning to comply with the Rules and Regulations in future.

Akbar Naqvi Zaidi, Deputy Managing Director for Appellants.

Tariq Hussain, Director (Insurance) and Arif Nizami, Director (Insurance) for Respondents.

2017 C L D 443

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

INTERMARKET SECURITIES LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP---Respondent

Appeal No.09 of 2016, decided on 22nd June, 2016.

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

----Ss. 15-A to 15-E---Brokers and Agents Registration Rules, 2001, R.8, Third schedule---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Insider Trading---Broker company purchased shares on behalf of a company, in its proprietary account before the opening of trading account/CDC sub-account and started buying of shares on behalf of said company, two days prior to receipt of payment---Show-cause notice was issued to the broker company for alleged involvement in insider trading and violation of the Code of Conduct provided in Third Schedule of the Brokers and Agents Registration Rules 2001---Alleged insider trading was not established, and broker company was exonerated, but penalty was imposed on account of procedural lapses in compliance of Third Schedule of the Brokers and Agents Registration Rules, 2001---Act of broker company to purchase shares of, in its own account was solely to facilitate the said company and broker company had not drawn any consideration/gain while transferring the shares to the company's sub-account---Violation of Brokers and Agents Registration Rules, 2001, though had been established, but taking lenient view, penalty imposed on the broker company was converted into stern warning, that in case of similar non-compliance in future, strict action would be taken against the broker company.

Salman Iqbal Bawaney, Bawaney and Partners and Muhammad Rehan Alam, Manager Finance and Compliance Intermarket Securities Limited for Appellant.

Muhammad Farooq Bhatti, Additional Director (SMD) for Respondent.

2017 C L D 479

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

PAKISTAN OILFIELDS LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, CORPORATE SUPERVISION DEPARTMENT, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.24 of 2016, decided on 1st August, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 204-A & 506-B---Failure to appoint independent share registrar by company---Under S.204-A of the Companies Ordinance, 1984, listed companies would have independent share registrar possessing such qualification and performing such functions as could be specified by the Securities and Exchange Commission---Commission, while exercising its powers conferred under S. 506-B of the Companies Ordinance, 1984, read with its S. 204-A had, directed all the listed companies to ensure compliance with requirements of S. 204-A(2) of the Ordinance and the Balloters and Transfer Agents Rules, 2015, by appointing the share registrar---Appellant company failed to comply with direction given by the Commission, by not appointing the share registrar, within time prescribed---Show-cause notice was served to the Chief Executive of the appellant company---Appellant company was directed by Executive Director of the Commission to make good the default, and ensure compliance with provisions of Companies Ordinance, 1984 and the circular by Commission---Appellate Bench observed that S. 204-A(2) of the Companies Ordinance, 1984, was an absolute requirement of law which all listed companies, must comply, regardless of whether they deem it necessary or not---Interference in the impugned order was declined.

Mir Muhammad Idrees v. Federation of Pakistan PLD 2011 SC 213 and Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879 ref.

Syed Asad Haider, Senior Manager (Legal), Pakistan Oilfields Ltd. and Khalid Nafees Siddiqui, Chief Financial Officer, Pakistan Oilfields Ltd for Appellant.

Abid Hussain, Executive Director for Respondent.

2017 C L D 493

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

MUNAWAR MALIK and 5 others---Appellants

Versus

The COMMISSIONER (SMD), SECP---Respondent

Appeal No.27 of 2016, decided on 28th July, 2016.

Securities Act (III of 2015)---

----Ss. 100 & 160---Failure to hold Annual General Meetings, failure to pay two years annual listing fee and failure to joint Central Depository System---Company, was put on the default counter of 'PSX' due to such failures and trading of company shares, was suspended---Commission, issued a direction under S.100 of the Securities Act, 2015 to the Directors of the company to undo the said defaults, but directors of the company failed to comply with the direction---Chief Executive Officer of the company stated that operation of the company having been closed due to litigation before different courts, company could not pay outstanding dues, and could not hold the Annual General Meetings and after conclusion of litigation, company intended to go into voluntary winding up---In view of failure to comply with directions, show-cause notice was issued under Ss.100 & 160 of the Securities Act, 2015---Case was fixed on various dates, but despite ample opportunities, no one appeared on behalf of the company or its Directors---Commission imposed a penalty of Rs.500,000 on Directors of the company---Directors had requested to waive the penalty which could not be acceded to because being Directors they were under the statutory duty to carry out the affairs of the company strictly in accordance with law, but they had failed---Plea of the Directors that asset and premises of company was under illegal occupation of land grabbers and union leaders, could not be termed as a "ground of escape"---Impugned order to the extent of Directors of the company, was upheld and appeal was dismissed, in circumstances. [pp. 494, 495] A, B & C

Ms. Naheed A. Shahid, (Azizuddin and Shahid Law Associates) for Appellants.

Ms. Ayesha Riaz, Additional Director (SMD) and Haroon Abdullah Abbas, Deputy Director (SMD) for Respondent.

2017 C L D 502

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Zafar Abdullah, Commissioner (SCD)

STATE LIFE INSURANCE CORPORATION OF PAKISTAN---Appellant

Versus

DIRECTOR INSURANCE, SECP and another---Respondents

Appeal No.05 of 2016, decided on 22nd June, 2016.

Insurance Ordinance (XXXIX of 2000)---

----S. 76---Misleading or deceptive conduct of insurer---Director Insurance, vide impugned order, advised the Corporation to make payment of the compensation to Policy holder on account of loss suffered by him as a result of reliance on the deceptive and misleading illustration---Impugned order was passed, while adjudicating a complaint filed by Policy holder against the Corporation---Corporation was not provided opportunity of hearing while deciding the complaint, which amounted to violation of its fundamental right---No one should be condemned unheard---No order affecting the right of a party could be passed without affording opportunity of hearing---Observation made in the impugned order, was violation of principles of natural justice, enshrined through legal Maxim "Audi alteram partem"---Said principle was applicable to judicial as well as non-judicial proceedings---Case was remanded to Director Insurance to consider and evaluate the claims of parties---Director Insurance, was directed to provide adequate opportunity of hearing to both the parties before final adjudication and to address the issue as per his jurisdiction---Order accordingly.

Waqas Asad Sheikh for Appellant.

Hasnat Ahmad, Director Insurance, SECP, Muhammad Mateen Abbasi, Management Executive for Respondents.

Prof. (Retd.) Syed Aijaz Ali Shah for Respondent No.2.

2017 C L D 513

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

SALEEM SUGAR MILLS LIMITED, CHARSADDA, NWFP---Appellant

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECP---Respondent

Appeal No.42 of 2007, decided on 2nd February, 2016.

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

----S. 33---Dismissal of appeal for non-prosecution---Appellant on the date fixed for hearing, failed to appear through his authorized representative, thereafter two hearings were adjourned on the request of representative of the appellant---Appellant again failed to make appearance on another adjourned date of hearing---Appeal was re-fixed for final hearing---Matter was kept pending till 5.00 p.m., but appellant failed to enter appearance despite repeated calls---Such conduct of appellant showed that he was not interested in pressing the appeal---Appeal was dismissed, for non-appearance and non-prosecution, in circumstances.

Nemo for Appellant.

Mrs. Amina Aziz, Director (CSD) for Respondent.

2017 C L D 517

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

CREDIT INSURANCE COMPANY LIMITED---Appellant

Versus

The DIRECTOR (INSURANCE DIVISION) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.42 of 2015, decided on 28th January, 2016.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 46(1)(b), 51 & 156---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to submit Audited Annual Accounts and Regulatory Returns by an Insurance Company---Company, even after lapse of extended period, failed to submit its Audited Annual Accounts and Regulatory Returns for the year ended 31-12-2014 by 30-4-2015---Show-cause notice, was issued to the company under Ss.46(1)(b), 51(1) & 156 of the Insurance Ordinance, 2000---No one appeared on behalf of the company on that date of hearing---Default of S.46(1)(b) and S.51 of the Insurance Ordinance, 2000, having been established, a fine of Rs.100,000 was imposed on the company under S.156 of the Ordinance---Alleged late filing of the Accounts and Returns had been admitted by the company, but company had taken plea that late filing was not a deliberate or wilful, rather it was caused due to change of Management of the company---New Management of the company, was required to submit the Accounts and Returns before expiry of extended time, but it failed in performing its statutory duties---Delay of 36 days in filing said Accounts and Returns could not be ignored, in the circumstances, wherein company had history of non-compliance of same requirement---Legal duty or liability was needed to be discharged as required by law, and if not complied, the presumption would be that non-compliance was wilful---When a requirement of statute had been violated, then there was no need to establish mala fide or mens rea to prove the non-compliance of the provisions---Order imposing penalty was not interfered with and was upheld, in circumstances.

1987 MLD 3039 ref.

Ata Muhammad Khan for Appellant.

Hasnat Ahmad, Director Insurance Division and Shahid Javed, Deputy Director Insurance Division for Respondent.

2017 C L D 531

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

SHIREEN ARSHAD KHAN, CHAIRPERSON AIK HUNAR AIK NAGAR (AHAN)---Appellant

Versus

DIRECTOR, (CORPORATIZATION AND COMPLIANCE DEPARTMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.35 of 2016, decided on 12th July, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 476(3) & 506(2)---Companies (General Provisions and Forms) Rules, 1985, Rr.6(4)(ii) & 35---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Payment of huge remuneration to chairperson of the company in contravention of condition of licence---Company had been paying huge perks to its Chairperson/Director, which constituted a contravention of condition of licence provided in R.6 of the Companies (General Provisions and Forms) Rules, 1985---Director, Securities and Exchange Commission, in exercise of powers conferred under R.35 of Companies (General Provisions and Forms) Rules, 1985, read with S.506(2) of Companies Ordinance, 1984 imposed a penalty of Rs.200,000 on the Chairperson of the company---Chairperson, was held liable to refund the amounts as she received from the company in violation of the conditions of licence and provisions of Memorandum of Association of the company---Under provisions of S.476(3) of the Companies Ordinance, 1984, fine would be imposed after giving the person concerned an opportunity to show cause, as to why he should not be punished for the alleged offence, contravention, default or non-compliance---In the present case, show-cause notice had only been served on Chairperson against whom impugned order was passed---Penal action, in circumstances, could not be taken against Chairperson on whom show-cause notice was not served in accordance with law---Entire proceedings against the Chairperson of the company were void and without lawful authority, in circumstances.

Farooq Hassan Executive Director (Management Association of Pakistan) v. Director (CLD) 2011 CLD 1228; Muhammad Ashraf Tiwana and others v. Pakistan and others 2013 SCMR 1159 and Gharibwal Cement v. Executive Director (Enforcement) SECP 2003 CLD 131 ref.

Ashraf Tiwana for Appellant.

Mubashar Saddozai, Director (CCD) and Ms. Beenish Waqas, Assistant Director (CCD) for Respondent.

2017 C L D 549

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

ETEZAZ UD DIN AHMED---Appellant

Versus

DIRECTOR/HOD (MSRD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No.29 of 2015, decided on 9th February, 2016.

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

----S. 33---Securities and Exchange Ordinance (XVII of 1969), S.22---Brokers and Agents Registration Rules, 2001, R.8---Withdrawal of appeal---Appellant, filed complaint against a company, alleging that appellant had invested a total sum of Rs.4.84 million with the company for stock trading, but the company had failed to trade in his account, and shares were not transferred in his sub-account maintained with the Central Depository of Pakistan---Appellant sought recovery of Rs.2.38 million against his fictitious losses booked by the company and payment of Rs.3.00 million for using his capital for personal gains by the company---Complaint of appellant was forwarded to Stock Exchange for resolution as per its Regulations and Stock Exchange disclosed regulatory violation on the part of company---Show-cause notice was issued to the company and on hearing it admitted the violations, but requested that a lenient view be taken---Director, Securities and Exchange Commission, imposed a penalty of Rs.500,000 on the company---Appellant had contended that he would like to forgive the company in the name of Allah Almighty, and withdrew his appeal---Appellant submitted written letter/request to the Appellate Bench of the Commission confirming his said stance---Appeal was dismissed as withdrawn, in circumstances.

Etezaz ud Din Ahmed, Appellant in person.

Nasir Askar, Director (SMD), M. Arshad, Joint Director (SMD), Tahir Mahmood Kiani, Deputy Director (SMD) and Ms. Nazish Zubair, Deputy Director (SMD) for Respondent No.1.

Dr. Iftikhar Ahmad, CEO, Black Stone Equities (Pvt.) Ltd and Ms. Sara Seerat, Legal Advisor, Black Stone Equities (Pvt.) Ltd for Respondent No.2.

2017 C L D 581

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

Syed MUSHAHID SHAH and 2 others---Appellants

Versus

COMMISSIONER (COMPANY LAW DIVISION), SECP and another---Respondents

Appeal No.43 of 2015, decided on 3rd March, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 242 & 492---Misstatement in accounts by company---Annual Audited Accounts for relevant period, filed under S. 242 of the Companies Ordinance, 1984, revealed that the Accounts of the company were revised without proper disclosures as required by International Accounting Standard 8; Accounting Policies changes in Accounting Estimates and errors---Comparative values for assets, turnover, gross and net profit of accounts indicated apparent misstatements---Show-cause notice was served upon the company, as to why penalty be not imposed under S. 292 of the Companies Ordinance, 1984 for the prima facie violations---Commissioner (Company Law Division) of the Commission, being dissatisfied with response of company to show-cause notice imposed a fine of Rs.500,000, on each of Directors of the company for contravening the provisions of S.492 of the Companies Ordinance, 1984---Company had maintained two books of accounts, showing two versions of accounts; which were different from each other---All other items on the balance sheet and profit and loss were different in both versions of accounts---Directors of the company had tried to justify the existence of two versions of the accounts, with a reason which itself, prima facie, implicated company into other violations of relevant laws---Plea taken by the Directors of the company that the Finance Manager of the company had submitted the first version of accounts without authorization and knowledge of the Directors, could not be acceded, being contrary to the record---Knowledge and involvement of Directors of the company in preparation of two versions of accounts, was established beyond any doubt---Impugned order was silent about the conduct of the Chartered Accountants who audited and verified said versions of accounts---Authorities were directed to proceed in accordance with law against the Chartered Accountants, who gave opinion on fake and bogus accounts of the company---Audit of bogus and fake accounts, being a grave offence, authorities were also recommended to examine both versions of accounts along with history/track of such accounts to determine the guilty party---Authorities, were further directed to take appropriate action under law and forward final findings in that regard to the Institute of Chartered Accountants of Pakistan for initiation of misconduct proceedings against the party at fault.

Muhammad Ali for Appellants.

Abid Hussain, Executive Director CSD and Mrs. Amina Aziz, Director CSD for Respondents.

2017 C L D 636

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

MUJEEB-UR-REHMAN, CHAIRMAN and 4 others---Appellants

Versus

EXECUTIVE DIRECTOR, (CORPORATE SUPERVISION DEPARTMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.07 of 2016, decided on 3rd August, 2016.

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

----Ss. 309, 468 & 492---Winding up of company---Submission of revival plan---Misstatement---Directors, including Chief Executive of the company, submitted a revival plan in the High Court during proceedings filed by the Commission under S. 309 of the Companies Ordinance, 1984 for winding up the company---High Court directed that proposal for revival be presented before the Commission for evaluation about its genuineness--- Based on the revival plan/ presentation, Commission submitted its consent to the High Court for grant of relaxation in time line for revival of the company, subject to certain guidelines and conditions including submission of quarterly review on revival plan---Revival plan was not prepared with due diligence and the information/assertions provided to the Commission by the appellants/Directors of the company---Show-cause notice was issued to the directors of the company for alleged misstatements in terms of S.492 of the Companies Ordinance, 1984 and they were called upon to show-cause---Executive Director of Commission dissatisfied with the response of the Directors of the company, presented a revival plan that was based on unrealistic assumptions, devoid of reasonable prudence and diligence, and misstatements regarding viability of revival of the company---Executive Director of the Commission, in exercise of the powers conferred by S.492 of the Companies Ordinance, 1984, imposed aggregate penalty of Rs.500,000 on the Directors of the company---Concerned Registrar was directed to refer the matter to the relevant court, as the Directors of the company also had made misstatement before the court and avoided winding up in a transparent manner---Validity---Directors of the company, did not exercise due skill and care while submitting the revival plan---Directors of the company should have apprised the Commission fully of the facts and circumstances of the company---Revival plan was a misstatement, which in turn put a halt to the winding up proceedings by the court---Subsequently, creditors' voluntary winding up in terms of S.383 of the Companies Ordinance, 1984 was initiated by associated concern by virtue of common directors, which depicted that directors of the company had avoided a transparent winding up by the court by submitting the revival plan which was not viable---Default of the directors of the company in terms of S.492 of the Companies Ordinance, 1984 having been established, no reason existed to interfere with the impugned order, which was upheld, in circumstances.

(b) Words and phrases---

----"Wilful default"---Meaning.

Oxford Dictionary of Law Fifth Edition ref.

Ch. Shafiq ur Rehman and M. Akram Shaheen, Advocates High Court for Appellants.

Amina Aziz, Director (CSD) and Aqeel Zeeshan, Joint Director (CSD) for Respondent.

2017 C L D 656

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

DEWAN PETROLEUM (PVT.) LIMITED---Appellant

Versus

DIRECTOR, CORPORATISATION AND COMPLIANCE DEPARTMENT, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.57 of 2013, decided on 11th February, 2016.

Companies Ordinance (XLVII of 1984)---

----S. 158---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Holding Annual General Meeting abroad---Company, decided to hold its Annual General Meeting in Dubai---Director, Corporation and Compliance Department of the Commission, vide letter refrained the company from holding such meeting outside Pakistan, stating that holding of a General Meeting in an area not forming part of Pakistan would be questionable in the eyes of law---No provision existed in the Companies Ordinance, 1984, which allowed a private company to hold Annual General Meeting at its discretion---Provision of Companies Ordinance, 1984 extended to the whole of Pakistan only, and holding of meeting outside Pakistan would create legal complication and deprive the shareholders to participate in the said General Meeting effectively and objectively---Representatives of the parties informed the Appellate Bench that overdue Annual General Meeting for the year 2013, had subsequently been held on 30-4-2014 at the company's registered office in Pakistan---Annual General Meeting having already been held at the company's registered office, appeal become infructuous which was dismissed.

Suhaib Ahmad, Deputy Manager Legal, Dewan Petroleum (Pvt.) Ltd. and Mansoor Ahmad Siddiqui, Company Secretary, Dewan Petroleum (Pvt.) Ltd. for Appellant.

Mubasher Saeed, Director (CCD) and Syed Sajjad, Deputy Director (CCD) for Respondent.

2017 C L D 686

[Securities and Exchange Commission of Pakistan]

Before Tahir Mehmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

ANS CAPITAL (PVT.) LIMITED and 5 others---Appellants

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION of PAKISTAN---Respondent

Appeals Nos. 45, 46, 47, 48, 49 and 50 of 2014, decided on 22nd May, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224(4)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.20(b)(c) & 33---Failure to file returns of beneficial ownership within stipulated time---Brokers being directors and beneficial owners of more than ten percent equity in the issuer company, were required to file returns of beneficial ownership on Form 31 and Form 32 for change in their holding within the time stipulated by S.222 of the Companies Ordinance, 1984, but they failed to discharge said statutory obligation; and had not filed returns within prescribed time, committing default which attracted the penal consequences as laid in S.224(4) of the Companies Ordinance, 1984---Director (SMD) of the Commission, dissatisfied with the replies of the brokers to show-cause notice, imposed fine on the brokers---Validity---Company, which was a newly incorporated holding company, set up by reputed sponsors, had not made any sale/purchase transactions since the acquisition of beneficial ownership---Delay in filing of Forms 31 and 32 as required by S.222 of the Companies Ordinance, 1984 within a stipulated time, was not denied by the brokers; but as no sale/purchase transaction was made, said default was not wilful, which could constitute an act which would attract penalty as provided in S.224 of the Companies Ordinance, 1984---Appellate Bench observed that Commission, must achieve uniformity, in how it would perform its functions and exercise its powers as per S.20(6)(c) of Securities and Exchange Commission of Pakistan Act, 1997---Commission, was obliged to maintain consistency in its decisions, but in the present case, different view had been taken on the actions for the same default in the past, which tantamounted to discrimination---Penalty imposed on the brokers, was set aside, in circumstances.

1990 CLC 1008; 1987 MLD 3039; PLD 1985 FSC 126 and Securities and Exchange Commission of Pakistan v. First Capital Securities Corporation Limited PLD 2011 SC 778 ref.

Rashid Sadiq of RS Corporate Advisory (Pvt.) Limited for Appellants.

Imran Inayat Butt, Director (SMD) and Muhammad Farooq, Joint Director (SMD) for Respondent.

2017 C L D 740

[Securities and Exchange Commission of Pakistan]

Before Tahir Mehmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

MARI PETROLEUM COMPANY LIMITED---Appellant

Versus

DIRECTOR (MSSID), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.16 of 2015, decided on 14th May, 2015.

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

----Ss. 15-D(1) & 22---Karachi Stock Exchange Regulations, Reglns.5, 19 & 13(c)---Inside Trading---Failure to furnish required document, paper or information---Brokerage company, vide its letter, informed the Stock Exchange that 'Economic Co-ordination Committee (ECC)', in its meeting had approved the proposal for dismantling of "Mari GPA" and replacing it with Market Oriented Formula---Information with respect to decision that 88% of the undistributed balance, would be transferred to Government of Pakistan (GOP) as redeemable preference share capital, while remaining 12% would be issued to General Public had not been disclosed to the Stock Exchange by the said company---Show-cause notice under S.22 of Securities and Exchange Ordinance, 1969 for violation of S.15-D(1) of the Ordinance and Reglns.5, 19 & 13(c) of Karachi Stock Exchange Regulations was issued to the company---After detailed scrutiny of facts and relevant law, Director (MSSID) of the Commission imposed penalty of Rs. one million on the company---Company had not denied the nature of information as being price sensitive, and its effect on market value of shares and their trading, but case of company was that it was not in the knowledge or information---All the decisions of 'ECC', which were published through Press Release, were in the knowledge of the company, including the decision in question---Point agitated by company regarding veracity of press release and that company had waited till the Official Communication of decision of 'ECC', so as to forward an authentic information and avoided irresponsible and speculative attitude, was inappropriate and could not stand in law, for the reason that party could not be allowed by law to approbate and reprobate at the same time---Where a person relied on one document in respect of a particular transaction, but disputed effectiveness of the same document in relation to the other aspects, such a person could not be allowed to approbate and reprobate.

United Bank Ltd. v. Messrs Sarhad Ghee Mills Ltd. and others 1999 YLR 323 ref.

Shahid Raza, Partner, Orr Dignam and Co., Syed Hassan Ali Raza, Senior Associate, Orr Dignam and Co. and Assad Rabbani, Company Secretary, Mari Petroleum Company Limited for Appellant.

Amir Saleem, Deputy Director (SMD), Aoun Zaidi, Assistant Director (SMD) and Salman Hayat, Assistant Director (SMD) for Respondent.

2017 C L D 751

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

ZILLION CAPITAL SECURITIES (PVT.) LTD.---Appellant

Versus

DIRECTOR (SECURITIES MARKETING DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.04 of 2013, decided on 22nd January, 2015.

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

----S. 22---Brokers and Agents Registration Rules, 2001, Third Schedule, Code of Conduct, Cls. A(2), A(4) & A(5)---Malpractices and non-compliance with statutory requirements---Company, in its proprietary account during relevant period traded 87,200 shares, wherein it bought and sold 43,600 shares of one specific company---Company executed 32 trades in its proprietary account out of which 25 trades matched within a Trading Right Entitlement Certificate Holder/Broker of Stock Exchange---Trading in Proprietary Account by the company consisted of 68% of the total market volume in the script of said specific company during four days period---Buy and sell orders by the company and said broker of Stock Exchange were placed at the same time in such a manner as to ensure that those orders matched with each other---Director (Securities Marketing Division) of the Commission, dissatisfied with the response of the company, held that assertion of the company trading in the scrip of said specific company was overlooked, was not true---Director (Securities Marketing Division) of the Commission in exercise of the powers under provisions of S.22 of Securities and Exchange Ordinance, 1969 imposed a penalty of Rs.200,000 on the company, and company was advised to take immediate measures and put in place proper system and checks to eliminate the occurrence of such instances in future---Validity---Company, had asserted that it was only a matter of coincidence that the scrip was sold by broker of Stock Exchange, it was equally impossible for the company to foresee, who would buy the shares from it on the system---Such trading by the company, in circumstances, was in the normal course of its business---Evidence, was only circumstantial, and did not go far to show that the company was engaged in any malpractice; and violated Cls. A(2), A(4) & A(5) of the Third Schedule of Brokers and Agents Registration Rules, 2001---Impugned order was set aside by Appellate Bench, in circumstances.

Imtiaz Ibrahim, CEO Zillion Capital Securities (Pvt.) Ltd. for Appellant.

Mirza Shoaib Baig, Deputy Director (SMD) and Tayyab Nisar, Assistant Director (SMD) for Respondent.

2017 C L D 759

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Fida Hussain Samoo, Commissioner (Insurance)

SIKANDER MUSTAFA KHAN and 6 others---Appellants

Versus

HEAD OF DEPARTMENT (ENFORCEMENT), SECP, ISLAMABAD---Respondent

Appeal No.24 of 2014, decided on 30th March, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 193, 196, 214, 216 & 476---Code of Corporate Governance, 2012---Transaction with associated companies---Disclosure of interest by Director---Interested Director, limitations of---Three companies, were associated companies of the appellant company, and five of the appellants, being common Directors and being beneficiary owners of the shares in the associated companies, had interest in transaction with associated companies---Appellants in their capacity of Directors of the company, approved the transaction with the associated companies in various meetings, held during each quarter of relevant financial years---Such meetings were attended by all the appellants, including the interested Directors---Interested Directors, despite being interested owing to their common directorship and beneficial shareholding in the associated companies, not only failed to give a notice of their interest in the transaction, with related parties, which were to be approved, but also participated in the proceedings of Directors and voting to approve such transaction---Commission dissatisfied with the response to show-cause notice advised the appellants to be careful in respect of compliance of Ss.193, 214 & 216 of the Companies Ordinance, 1984 in future---In respect of violation of S.196(1) of Companies Ordinance, 1984 by the appellants, a fine of Rs.10,000 was imposed on each of the appellants with the total fine aggregating to Rs.70,000---Validity---Code required approval of related party transaction by the Board of Directors of the company, but in the present case, due to operation of S.216 of the Companies Ordinance, 1984, which prohibited participation and voting by interested Directors, the quorum for Directors, was not competent to approve the transaction---Appellants had violated S.216 of Companies Ordinance, 1984 by participating in meetings, and approving transaction in which they were interested party---Primary legislation, would prevail over secondary legislation in cases there occurred a conflict between the two---Code was part of the listing regulations of the Stock Exchange, and was subordinate legislation; while the provisions of Companies Ordinance, 1984, was primary law---In the present case, the Board of Directors could not approve related party transaction, as the quorum, was not complete---Impugned order could not be interfered with.

Muhammad Ilyas and Imran Ilyas, FCA for Appellants.

Shahzad Afzal, Joint Director (Enforcement) and M. Anwar Hashmi, Deputy Director (Enforcement) for Respondent.

2017 C L D 767

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Fida Hussain Samoo, Commissioner (Insurance)

MAQSOOD ELAHI, CEO/DIRECTOR/COMPANY SECRETARY and 4 others---Appellants

Versus

HEAD OF DEPARTMENT (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.39 of 2014, decided on 19th February, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 218, 242 & 476---Failure to make out disclosures for the remuneration of Chief Executive, Company Secretary and Directors in the Directors' Report---Effect---Examination of the annual audited financial statement for relevant year, filed under the provisions of S.242 of the Companies Ordinance, 1984, had revealed that the Directors' remuneration had not been disclosed in the report---Commission, vide letter, advised the company to furnish evidence of compliance with the provisions of S.218 of the Companies Ordinance, 1984--Company, submitted details of the remuneration paid to the Chief Executive and Directors of the company, but failed to make out disclosures for the remuneration of the Chief Executive and Directors, in the Directors' report; and also failed to provide documentary evidence substantiating that said abstract was circulated to the shareholders of the company, within twenty one days from the date of said variation---Commission dissatisfied with the response of the show-cause notice, found that Chief Executive/Company Secretary and Directors of the company had violated the provisions of law by failing to make out disclosures of Chief Executive/Company Secretary and Directors in the Directors' report; that provisions of S.218 of the Companies Ordinance, 1984 had not been complied with---Penalty of Rs.1000 was imposed on each of the Directors---Directors etc. had accepted the default and had asked for a warning to be issued to them, instead of penalty---Directors contended that it was the responsibility of the Chief Accountant, which the company had hired to ensure compliance of relevant provisions of law; and meet the required accounting standards---Commission was of the view that it was a significant violation of S.218 of the Companies Ordinance, 1984; and that a statutory auditor could not provide consultancy to the company---Company being a Public Limited unlisted company had responsibility to ensure full compliance of the provisions of Companies Ordinance, 1984--- Violations, in circumstances, could not be excused--- Penalty was rightly imposed on the appellants/Directors etc. and said order could not be interfered with, in circumstances.

Appellant No.1 Maqsood Elahi present (through video conferencing) CEO Pak Chromical Ltd.

Ms. Amina Aziz, Director (Enforcement) and Shafiq-ur-Rehman, Deputy Director (Enforcement) for Respondent.

2017 C L D 784

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

M. YOUSUF ADIL SALEEM & CO---Appellant

Versus

DIRECTOR (MSRD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.53 of 2013, decided on 16th March, 2015.

Stock Exchange Members (Inspection of Books and Record) Rules, 2001---

----Rr. 3 & 4---Securities and Exchange Rules, 1971, R.2(d), Third Sched.--- Securities and Exchange Ordinance (XVII of 1969), Ss. 6(1), 18 & 22---Calculation of "Net Capital Balance (NCB)"---Report submitted by Inspection Team to the Commission had revealed that, 'Net Capital Balance (NCB)' of the company, as certified and verified by the appellant was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971; and was overstated---Commission dissatisfied with the response of the appellant imposed penalty of Rs.20,000 on the appellant, with direction to comply with the relevant laws and rules in future---Validity---Prima facie it appeared that Authority had misread the debtor's confirmations which materially affected the allegation of miscalculation of "Net Capital Balance"---Departmental representative, after reviewing the evidence and its own record, conceded to have misread the confirmation---Misreading of debtor's confirmation, had materially affected calculation of "Net Capital Balance"---Authority, misread that the party had confirmed Nil Balance---Such fact was also conceded by the Authority during the hearing of appeal---Perusal of the off Market Transactions Reports, available on Exchange website, also supported the version of the appellant---Appellant, having substantiated its argument with supporting evidence, appeal was accepted and impugned order, was set aside, in circumstances.

Muhammad Akram Swaleh, Nadeem Yousuf Adil, Senior Partner and Shoaib Ghazi for Appellant.

Hasnat Ahmad, Director and Murtaza Abbas, Deputy Director for Respondent.

2017 C L D 822

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

NASIR JAVAID MAQSOOD IMRAN, CHARTERED ACCOUNTANTS---Appellant

Versus

HASNAT AHMED-DIRECTOR (MSCID), SECP---Respondent

Appeal No.22 of 2013, decided on 6th February, 2015.

Companies Ordinance (XLVII of 1984)---

----S. 260---Securities and Exchange Ordinance (XVII of 1969), Ss.6 & 22---Securities and Exchange Rules, 1971, Third Sched.---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Major irregularities in calculation of "Net Capital Balance" (NCB)---Inspection report had highlighted major irregularities in calculation of "Net Capital Balance" (NCB) of the corporation---Such calculation was duly verified and certified by the Chartered Accountant---Net Capital Balance was not in accordance with Third Schedule of Securities and Exchange Rules, 1971---Commission dissatisfied with response of show-cause notice, found that Chartered Accountant, had failed to perform its professional duty with due care; and had shown negligence in verifing the 'NCB', and imposed penalty of Rs.50,000 on Chartered Accountant with direction to ensure full compliance with Ordinance, Rules and regulations and directives of the Commission---Contention of Chartered Accountant, was that penalty should not have been imposed on them as it had not been imposed on other Chartered Accountant firms with similar violations---Validity---Facts and circumstances of each case were different; and that could not be used as a defence in respect of alleged violations---Chartered Accountant had committed violations of the rules and regulations---Taking a lenient view Commission, set aside impugned order to the extent of penalty; and strictly warned the Chartered Accountant to ensure compliance of the Rules and Regulations in the future.

Mohammad Javaid Qasim, Partner, Nasir Javaid Maqsood Imran. M. Hanif, Manager for Appellant.

Adnan Ahmed, Deputy Director, SMD and Ms. Najia Ubaid, Deputy Director, SMD (through video conferencing) for Respondent.

2017 C L D 828

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

NISHAT MILLS LIMITED---Appellant

Versus

DIRECTOR/HOD (MSCID) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.36 of 2012, decided on 14th January, 2015.

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

----Ss. 222(2)(b) & 224(4)---Filing return of beneficial ownership---Limitation---Company was required to file return of beneficial ownership on Form 31, within 30 days of the listing of the Issuer company on Stock Exchange as provided under provisions of S.222(2)(b) of Companies Ordinance, 1984, but it failed to discharge its legal liability within said stipulated time-limit---Said return was filed with the Commission, with a delay of 192 days---Whether there was profit or loss was immaterial being not an ingredient of default under S.222(2)(b) of Companies Ordinance, 1984---Commission had already taken a lenient view by imposing a fine of Rs.20,000---No further fine for the default which continued for 192 days was imposed---In absence of any ground to interfere with the impugned order, appeal was dismissed.

City Equitable Fire Insurance Co. Ltd. Re. 1925 Ch 407, 2005 CLD 333 rel.

(b) Words and phrases---

----"Wilful default"---Dictionary meaning.

Oxford Dictionary of Law Fifth Edition ref.

Rashid Sadiq for Appellant.

Muhammad Farooq, Joint Director and Nazim Ali, Assistant Director for Respondent.

2017 C L D 839

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

SHADMAN COTTON MILLS LIMITED ("SCML") and 4 others---Appellants

Versus

MADAM AMINA AZIZ, DIRECTOR (ENFORCEMENT)---Respondent

Appeal No.28 of 2013, decided on 6th July, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 158 & 476---Companies (General Provisions and Forms) Rules, 1985, Rr.14 & 30---Failure to hold Annual General Meeting within stipulated time---Company was required to hold its Annual General Meeting for the year ended June 30-2012 on or before October 30-2012, but company held the meeting with a delay of 83 days---Appellants/Directors of the company, not only failed to hold Annual General Meeting within stipulated time, but also failed to hold said meeting within extended time period of 30 days---Directors had acted against the fiduciary responsibilities towards the company---Such was an un-rebutted and conclusive evidence of the violation of S.158 of the Companies Ordinance, 1984---Commission, taking lenient view, instead of imposing a maximum fine on the Directors of the company, imposed fine Rs.5,000 on each Directors---No case of appeal against the said order having been made out by the company, no reason existed to interfere with the impugned order of the Commission.

Ashfaq Tola, FCA for Appellants.

Amina Aziz, Director Enforcement for Respondent.

2017 C L D 869

[Securities and Exchange Commission of Pakistan]

Before Tahir Mehmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

EFU GENERAL INSURANCE LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR/SECURITIES MARKET DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.53 of 2011, decided on 3rd March, 2015.

Companies Ordinance (XLVII of 1984)---

----S. 224---Companies (General Provisions and Forms) Rules, 1985, R.16---Insurance company--- Trading by Directors--- Failure of beneficial owner to tender or recover amount of gain---Effect---Company made purchase and sale transaction more than ten percent shareholder of "issuer company", within period of less than six months---Company, on account of said transaction, made gain of Rs.64,894,928 as computed in the manner prescribed in R.16 of the Companies (General Provisions and Forms) Rules, 1985---Company tendered Rs.54,013,826 in favour of the 'issuer company'; whilst, accrual of balance amount of gain Rs.10,881,102 was neither reported by the company, nor its tendering or recovery was intimated to the Commission as provided by S.224(2) of the Companies Ordinance, 1984---Company was intimated that the amount of said balance had vested in favour of the Commission---Validity---Gain would remain under all circumstances property of the company; and would not in any manner vest with the Commission---Demand raised through show-cause notice, had become infructuous---Amount of tenderable gain, was calculated pursuant to the manner provided in R.16(2) of Companies (General Provisions and Forms) Rules, 1985, which had been declared inconsistent with the statute by the Appellate Bench of the Commission in its earlier order---Impugned order was set aside.

Khan Gul Khan and other's case 2010 SCMR 539 and 2011 CLD 907 ref.

Hasan Mandviwala and Naveed-ul-Haq, Advocate Supreme Court for Appellant.

Muhammad Farooq, Joint Director, SMD for Respondent.

2017 C L D 907

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

JAHANGIR ELAHI, CHIEF EXECUTIVE and 6 others---Appellants

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.33 of 2010, decided on 6th July, 2015.

Companies Ordinance (XLVII of 1984)---

----S. 204-A(2)---Failure to appoint Share Registrar by the company---Annual audited accounts revealed that the company had not appointed an independent Share Registrar thus contravening the provisions of S.204-A(2) of the Companies Ordinance, 1984---Commission issued a show-cause notice to the Chief Executive and Directors of the company and being dissatisfied with the response of the Directors of the company, imposed a penalty of Rs.15,000 on the Directors---Directors should have been given an express opportunity of hearing---Impugned order of penalty was set aside, and the case was remanded to the Director Enforcement of the Commission with direction to provide an opportunity of hearing to the Directors of the company in the matter within 30 days and thereafter decide the case afresh in the light of record and the submissions made by the Directors of the Company.

Adil Bandial, Cornelius, Lane and Mufti for Appellants.

Ali Azeem Akram, Director Enforcement and Shahzad Afzal, Joint Director Enforcement for Respondent.

2017 C L D 922

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Fida Hussain Samoo, Commissioner (Insurance)

JAVED ZAMIR AHMED/SECRETARY GENERAL OGAP---Appellant

Versus

TAHIR MAHMOOD, COMMISSIONER SECP, ISLAMABAD and another---Respondents

Appeal No.60 of 2012, decided on 7th April, 2015.

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

----S. 33---Dismissal of appeal for non-appearance/non-persuasion---Previously, when appeal was fixed for hearing, appellant had neither appeared before the Appellate Bench, nor adjournment was sought---Appeal was re-fixed for hearing, and final opportunity was provided to the appellant to appear and defend the case---Appeal was called for hearing at 12.00 pm., representative of the department were present, but neither appellant nor the official respondent, appeared and no further adjournment was sought by either parties---Appeal was dismissed for non-appearance and non-persuasion, in circumstances.

Nemo for Appellant.

Muhammad Siddique, Executive Director (CCD) and Mubasher Saeed, Director (CCD) for Respondent No.1.

Nemo for Respondent No.2.

2017 C L D 925

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

KASB SECURITIES LIMITED---Appellant

Versus

HEAD OF DEPARTMENT SMD (MSRD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.17 of 2014, decided on 25th February, 2015.

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

----S. 33---Before commencement of the hearing of appeal, one of the Members of the Bench, disclosed that counsel for appellant was representing him in a personal case; and deemed appropriate to recuse himself from hearing the matter in the interest of justice---Hearing was adjourned with a direction to the Registrar Appellate Bench to refix the matter before another bench.

Zia-ul-Haq, Tahir Iqbal, Jam Naveed, Asad Shafqat and Sain Hashmi for Appellant.

Ms. Najia Ubaid, Deputy Director, SMD for Respondent.

2017 C L D 927

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Zafar Abdullah, Commissioner (SMD)

PAKISTAN MOBILE COMMUNICATION LIMITED and 9 others---Appellants

Versus

NAZIR AHMED SHAHEEN, EXECUTIVE DIRECTOR (CORPORATIZATION AND COMPLIANCE DEPARTMENT), SECP---Respondent

Appeal No.23 of 2013, decided on 1st January, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 472, 476 & 496---Company was alleged to have been engaged in illegal and unauthorized reward schemes and prize draws, designed to induce the general public; through short messaging system (SMS) to part with their money---Memorandum of the company, did not contain any clause under which the company was authorized to launch the reward scheme---Company had indulged in ultra vires business and transaction in violation of the mandatory provisions of S.496 of the Companies Ordinance, 1984, as said business, seemed to be a parallel business carried out by the company without any authorization---Contention of the company that it could launch the alleged 'reward scheme' in the light of the object of specific clause of its Memorandum of Association did not seem to be plausible---Sole business of the company as per its memorandum of association was telecommunication, and launching of the said 'reward scheme', could not be treated as ancillary or identical business of the company---Authority, had rightly imposed a penalty of Rs.250,000 on the Chief Executive, Rs.50,000 on the company Secretary, and Rs.10,000 each on the Directors of the company, with the total amount aggregating to Rs.370,000 under S.476(1)(c) of the Companies Ordinance, 1984---Chief Executive and other Directors were also further advised to cease continuation of any such reward scheme in terms of S.472 of the Companies Ordinance, 1984.

Warid Telecom and others v. Pakistan Telecommunication Authority, Islamabad 2013 CLD 1085 ref.

Barrister Faisal Khan, Fatim Arbab, PMU and Asad Gulzar, Khan and Muezzin Barristers for Appellants.

Mubashar Saddozai, Director (Corporatization and Compliance Department) and Muhammad Akram, Assistant Director (Corporatization and Compliance Department) for Respondents.

2017 C L D 990

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

IMRAN ZAHID, CHIEF EXECUTIVE, J.A. TEXTILE MILLS LIMITED---Appellant

Versus

HEAD OF DEPARTMENT (ENFORCEMENT)---Respondent

Appeal No.05 of 2014, decided on 15th May, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 233(5) & 492---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Revaluation of fixed assets---Failure to account for the deferred tax impact of the revaluation---Company had revalued its fixed assets by Rs.119 million, and reported an amount of Rs.336 million on account of surplus on revaluation of property, plant and equipment---Company had not accounted the deferred tax impact of the revaluation in accordance with requirements of International Accounting Standard ("IAS")---Response of the company was not found satisfactory, show-cause notice was issued to the company for contravention of S.492 of the Companies Ordinance, 1984---Company having failed to satisfy the Head of Department (Enforcement) of the Commission regarding compliance of the requirements of International Accounting Standard (IAS) and S.492 of the Companies Ordinance, 1984, opportunity of personal hearing was provided--- In view of fact that the financial statements for the year ended 30-6-2013, had been rectified by the company in accordance with requirements of "IAS", and assurance provided the company to remain careful in future, a fine of Rs.30,000 was imposed on the Chief Executive with stern warning to remaining Directors of meticulous compliance with "IAS" and provision of the Companies Ordinance, 1984 in future---Company failed to prepare its financial statements in accordance with Companies Ordinance, 1984---Contention that there would have been no material impact on the presentation of financial position and performance of the company, did not hold ground---Company had violated the express provisions of law, which was not in accordance with justice and rule of law---If law required that an act must be done in a particular way, it should be done in that manner as prescribed by law---Plea that the default was not wilful or intentional, had not been supported by any evidence and submission of company was a mere plea without any justification---No reason existed to interfere with the impugned order.

Ajmal Shahab, Company Secretary and Muhammad Yousaf, Director for Appellant.

Ali Azeem Akram, Director (Enforcement) and Ms. Ayesha Riaz, Joint Director (Enforcement) for Respondent.

2017 C L D 1019

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SMD) and Fida Hussain Samoo, Commissioner (Insurance)

MAQSOOD ELAHI, CEO/DIRECTOR/COMPANY SECRETARY and 4 others---Appellants

Versus

HEAD OF DEPARTMENT (ENFORCEMENT), SECP---Respondent

Appeal No.41 of 2014, decided on 19th February, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 236, 242, 244 & 476---Failure to submit the Director's report while filing Accounts with the Registrar---Enforcement Department of the Commission, while examining the annual accounts of the company for relevant year, observed that the Directors' Report was not annexed therewith to the accounts---Directors of the company had accepted the default, and asked for a warning to be issued instead of imposing a penalty---Contention of the Directors of the company, was that it was the responsibility of the auditors, which the company had hired to ensure compliance of the relevant provisions of the Companies Ordinance, 1984 and that no harm was done and no loss was made by such default---Commission found that the Chief Executive and Directors of the company had violated provisions of Ss.236 & 242 of the Companies Ordinance, 1984; and penalty of Rs.2,000 was imposed on each of the Directors of the company---Validity---Company being a public limited unlisted company had a responsibility to ensure full compliance of the provisions of Companies Ordinance, 1984---Violation of not circulating Directors' report with the accounts, could not be excused, penalty was rightly imposed on the Directors of the company, in circumstances.

Maqsood Elahi, CEO Pak Chromical Ltd. for Appellant No.1 (through video conferencing).

Ms. Amina Aziz, Director (Enforcement) and Shafiq-ur-Rehman, Deputy Director (Enforcement) for Respondent.

2017 C L D 1049

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

HAMEED KHAN AND CO., CHARTERED ACCOUNTANT---Appellant

Versus

HEAD OF DEPARTMENT (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.17 of 2015, decided on 11th August, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 260 & 476---Non-compliance with provisions by Auditors---Imposition of penalty---Appellant/Chartered Accountant, had audited the annual accounts of the company, and had given a positive review report to the members of the company, or statement of compliance prepared by the Board of Directors of the company---Auditors authenticated the statement of compliance and the annual accounts which were to be laid before the members in the general meeting---Statement of compliance contained the information that, the appellant had satisfactory rating under the quality control review (QCR)---Record showed that the Quality Assurance Board of 'ICAP' had removed the name of the Auditors from the list of practicing firms having satisfactory 'QCR'---Auditors, not only authenticated the statement of compliance containing false information, but also accepted their reappointment as auditors of the company in the Annual General Meetings (AGM)---Auditors, while in possession of such material information regarding 'QCR' had provided wrong confirmation to the Board of Directors of the company; and had given positive report to the members on the statement of the compliance which carried a misstatement---Commission issued a show-cause notice to appellant under Ss.260 & 476 of the Companies Ordinance, 1984 to the Auditors---Commission being dissatisfied with the response of the Auditors imposed a fine of Rupees Fifty thousands for contravening S.260 of the Companies Ordinance, 1984---Mala fide intention of the Auditors, was evident from the fact that during the review of the statement of compliance, they failed to correct the record with respect to "QCR" status---Auditors had also failed to produce any order of the court, which barred the Appellate Bench to proceed with the matter---Auditors had not come with clean hands to seek the remedy under S.33 of Securities and Exchange Commission of Pakistan Act, 1997---Previously, Auditors were charged with the same violation, wherein penalty of Rs.100,000 under S. 260(1) of the Companies Ordinance, 1984 was imposed---Impugned order was passed with due care keeping in view the principles of legal reasoning necessary to establish the guilt and violation on the part of Auditors---No reason existed to interfere with the impugned order passed by the Commission, in circumstances.

Atta Muhammad Khan and Abdul Hameed Khan for Appellant.

Imran Iqbal Panjwani, Executive Director (CSD) and Ms. Ayesha Riaz, Joint Director (CSD) for Respondent.

2017 C L D 1073

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

STANDARD CAPITAL SECURITIES (PVT.) LIMITED---Appellant

Versus

DIRECTOR/HOD (MSRD)---Respondent

Appeal No.37 of 2014, decided on 5th March, 2015.

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

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Securities and Exchange Rules, 1971, Third Schedule---Brokers and Agents Registration Rules, 2001, R.8---Irregularities in calculation of "Net Capital Balance (NCB)"---Inspection Report, submitted by Inspection team showed irregularities in calculation of 'Net Capital Balance (NCB)'; that NCB certificate was not in accordance with Third Schedule of the Securities and Exchange Rules, 1971; that the Company did not have 'Know Your Customer' (KYC) and "Customer Due Diligence (CDD)" Policy duly approved from the Board of Directors of the Company; that the company failed to maintain segregations of clients' assets; that company failed to maintain proper books of accounts, and was involved in imposing late payment charges to its clients---Commission, dissatisfied with the response of the company to the show-cause notice, in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed penalty of Rs.100,000---Company was further directed to comply with rules and guidelines in letter and spirit and ensure segregation of clients' assets---Effort, however, had been made by the company to improve its system---Failure of the company to maintain segregation of clients' assets was harmful and detrimental for the interest of the clients, market integrity and transparency, but considering that the company had made an effort to improve its existing system, taking a lenient view penalty imposed was set aside with direction to the company to ensure strict compliance with law and the Rules in letter and spirit

M. Hanif Razzak, FCA and Naushad Chamdia for Appellant.

Mian M. Imran, Deputy Director and Ms. Najia Ubaid, Deputy Director for Respondent.

2017 C L D 1087

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

DJM SECURITIES (PVT.) LIMITED---Appellant

Versus

DIRECTOR (MSCID), (SMD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.65 of 2013, decided on 16th January, 2015.

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

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Brokers and Agents Registration Rules, 2001, R.8---Failure of company to co-operate with Inspection Team of the Commission---Inspection Team, submitted interim inspection report communicating that company had not co-operated with inspectors, in providing requisite information, document and clarification as required under law---Violation of Rules and Regulations, was a serious matter, which entitled Commission to suspend the registration of the company---Commission taking a lenient view, in exercise of the power under S.22 of the Securities and Exchange Ordinance, 1969 imposed a penalty of Rs.100,000 on the company--- Company, in spite of numerous opportunities, had failed to provide the information and documents required by the Inspection Team in timely manner; which had placed restriction on the ability of Inspection Team to perform the initiated inspection---Fact that, the company had subsequently provided the requisite information; and the inspection was completed, penalty imposed on the company, was set aside on the assurance that no such delay would be made in future---Company was strictly warned to be vigilant in future.

Dawood Jan Muhammad for Appellant.

Ms. Najia Ubaid, Deputy Director for Respondent.

2017 C L D 1112

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Chairman and Zafar Abdullah, Commissioner (SMD)

NOVATEX LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, CORPORATIZATION AND COMPLIANCE DEPARTMENT, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD---Respondent

Appeal No.50 of 2012, decided on 9th December, 2014.

Companies Ordinance (XLVII of 1984)---

----S. 237---Consolidated financial statements---Company, applied under S. 237(8) of Companies Ordinance, 1984 for grant of waiver from consolidation of financial statements of the wholly owned subsidiaries---Deputy Registrar of companies, held that the company's stance that consolidation of financial statements of the group companies would have insignificance impact due to disproportionate net equity ratio in respect of subsidiaries, being without any cogent justification, exemption sought by the company under S.237(8) of the Companies Ordinance, 1984, could not be granted---Form 'A' of the annual return of the company showed that all shareholders were individuals; and that no public interest would be affected as a result of waiver from consolidation of financial statements---Financial position, as well as the status of the wholly owned subsidiaries of the company had shown that the consolidation of financial statements of subsidiaries, would have insignificant impact on the financial result of the group---Waiver had been granted to the company from consolidation of wholly owned subsidiaries on the same grounds as in the previous years---Waiver was allowed to prepare consolidated annual financial statements.

M Javed Panni, MJ Panni and Associates (Authorised Representative) for Appellant.

Ms. Sumaira Siddique (Joint Director) and Irfan Afzal (Deputy Director) for Respondent.

2017 C L D 1127

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

GERMAN SHEPHERD DOG CLUB OF PAKISTAN---Appellant

Versus

COMMISSIONER (CLD), SECP and another---Respondents

Appeal No. 26 of 2016, decided on 4th November, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 42 & 439---Companies (General Provisions and Forms) Rules, 1985, R.6---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Grant of licence and direction that the Association be registered as a company with limited liability---Revocation of licence---Club was issued a licence under S.42 of the Companies Ordinance, 1984, in pursuance whereof a company was incorporated---After grant of licence and registration of club as a company, Commissioner (C.L.D.) of the Commission, received a complaint that a club, with the same name, was already in existence since many decades and it had similar object as the present club---Commissioner (C.L.D.) instead of taking any instant action, forwarded the complaint to the club for verification of the alleged concealment of facts---Allegation contained in the complaint was denied by the club---Commissioner (C.L.D.) being dissatisfied with the response of the club issued show-cause notice---Concealment of fact having been proved, Commissioner (C.L.D.) in exercise of powers under S.42(4) of the Companies Ordinance, 1984 revoked the licence granted to the club and advised the Registrar concerned to initiate proceedings under S.439 of the Companies Ordinance, 1984 against the club---Validity---Licence was a privilege or permission granted to the licensee and the person who granted the licence, could revoke that for any reason, even before time and date fixed for its expiration---Prior to revocation of licence, licensor was required to give an opportunity of hearing to the licensee, which in the present case was given to the club---Mechanism provided in S.42(4) of the Companies Ordinance, 1984, being in line with the verdicts of the courts, Commissioner (C.L.D.) had committed no illegality or irregularity by revoking the licence---Section 439 of the Companies Ordinance, 1984, had no relevance to adjudicate the issue of concealment of facts while obtaining the licence under S.42 of said Act---Club should have been dealt only under the mechanism provided under S.42 of the Companies Ordinance, 1984---After revocation of licence, company could not continue its operation without making required amendments in constitutional documents---Impugned order to the extent of revocation of licence, was maintained, but case was remanded to the extent of initiation of proceedings against the Club under S.439 of the Companies Ordinance, 1984, with direction to the Commissioner (C.L.D.) to decide that issue accordingly.

Rashid Hanif, M. Jahanzab Butt, Shahid Saleem and Abrar Bashir for Appellant.

Muhammad Siddique, Executive Director (C&CD), Mubasher Saeed Saddozai, Director (C&CD), Abdul Qayyum, Joint Registrar (C&CD), Syed Ahmad Hassan, Advocate Supreme Court, Imran Hussain, Atiq Akram Khan, Syed Muddassir Rizvi and Hamza Wajid for Respondents.

2017 C L D 1142

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Husain Samoo, Commissioner (Insurance)

PERVEZ AHMED and 6 others---Appellants

Versus

DIRECTOR (CORPORATE SUPERVISION DEPARTMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 46 of 2016, decided on 22nd November, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 196 & 476---Stock Exchanges (Corporatization, Demutualization and Integration) Act (XV of 2012), S. 16---Sale of "Trading Rights Entitlement Certificate (T.R.E.)" without obtaining prior authorization or approval of shareholders---Company sold its "Trading Rights Entitlement Certificate (T.R.E.)" and shares of Stock Exchange to an associated undertaking---Apprehension was that the company had prima facie, violated the provisions of S.196(3)(a) of the Companies Ordinance, 1984; as it disposed of a sizable part of its undertaking without obtaining prior authorization or approval of its shareholders---Plea of appellants/Directors of the company, was that at the time of the sale of 'T.R.E.' certificate the brokerage business of the company was inactive and same was not a significant asset of the company or part of its business activities and that the sale of 'T.R.E.' certificate was never hidden from the shareholders---Director (Corporate Supervision Department) Securities and Exchange Commission, did not fully consider all the facts and circumstances of the present case before imposing penalties; firstly, the "T.R.E." certificate was insignificant in terms of generating revenue; secondly, in terms of S.16 of the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 any person who would retain 'T.R.E.' certificate, had to register as a broker, not later than six months from the date of issuance of 'T.R.E.' certificate; would commence business within the specified time, failing to which would result in lapse of 'T.R.E.' certificate in two years from the demutualization---Company, in the present case, was unable to comply with the requirements of S.16 of the Act and considered it more appropriate to squeeze some value out of it by selling it off before expiry---Case was remanded to the Director (Corporate Supervision Department) of the Commission to reassess the facts of the case.

Adil Bandial for Appellants.

Ms. Amina Aziz, Director and Ms. Zohra Sarwar Khan, Deputy Director for Respondent.

2017 C L D 1191

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner and Fida Hussain Samoo, Commissioner (Insurance) (SCD)

Messrs APOLLO TEXTILE MILLS LIMITED and 7 others---Appellants

Versus

DIRECTOR (CSD)---Respondent

Appeal No. 56 of 2016, decided on 31st October, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 158, 245 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to file interim financial statements (Quarterly Accounts)---Company had failed to file interim financial statements (Quarterly Accounts) with the Commission for relevant period---Show-cause notice was served on the broker company and Director (C.S.D) of the Commission being dissatisfied with the response of the company imposed aggregate penalty on Directors of the company---Validity---Directors of the company had a responsibility as a listed company to file Quarterly Accounts on time---Directors of the company had to ensure that safety mechanisms were in place for protection of sensitive and important data and a data backup mechanism was in place---Impugned order was not a case of double jeopardy but violation of S. 245 of the Companies Ordinance, 1984 was a separate violation from non-holding of Annual General Meeting (A.G.M.) under S.158 of the Companies Ordinance, 1984---Penalties, in circumstances, were rightly imposed on the Directors of the company for violation of S.245 of the Companies Ordinance, 1984.

Adnan Abdullah for Appellants Nos. (i), (iii), (iv), (v), (vi), (vii) and (viii).

Nemo for Appellant No. (ii).

Ms. Amina Aziz, Director (CSD) for Respondent.

2017 C L D 1249

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

AL-QAIM TEXTILE MILLS LIMITED---Appellant

Versus

CORPORATE SUPERVISION DEPARTMENT, SECP---Respondent

Appeals Nos. 47, 48, 49, 50, 51, 52 and 53 of 2016, decided on 2nd November, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 147, 171, 173, 186, 193, 204-A & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to maintain register of members and index; default in complying with the directions of the Commission for holding the meeting; failure of company to cause a fair and accurate summary of the minutes of all proceedings of meetings and failure to have Secretaries---Appeal---Delay---Condonation of delay---Company having violated provisions of Ss.147, 171, 173, 186, 193 & 204-A of the Companies Ordinance, 1984, penalties were imposed on Chief Executive and other Directors of the company, who filed appeals against impugned orders before Appellate Bench of the Commission with a delay of more than six years---Section 33 of the Securities and Exchange Commission of Pakistan Act, 1997 had stipulated only 30 days to file appeal---Application filed by the Directors of the company for condonation of delay, which was allowed by the Appellate Bench and delay was condoned---Plea of the company was that notices having not been served, the matter was proceeded ex parte---Corporate Supervision Department of the Commission, stated that notices were served in accordance with law to the company's registered address and its Directors' addresses, but the Directors failed to join the proceedings---Company having denied any such service of notices, opportunity of fair trial must be given to the company---Technicalities could not be allowed to create any hurdle in the way of substantial justice; law favoured adjudication on merits rather than technicalities---Impugned orders were set aside and matter was remanded to the Corporate Supervision Department of the Commission to decide the same afresh for providing an opportunity of hearing to the company---Company was directed to provide valid postal/contact details to the Commission for necessary correspondence.

Nazir Ahmed Shaheen and Ch. Muhammad Arif for Appellant.

Ms. Amina Aziz, Director (CSD) for Respondent.

2017 C L D 1329

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner CLD and Fida Hussain Commissioner, Insurance

MCB-ARIF HABIB SAVINGS AND INVESTMENTS LIMITED---Appellant

Versus

COMMISSIONER (SCD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Appeal No. 34 of 2016, decided on 3rd February, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 282-D, 282-J & 282-M---Non-Banking Finance Companies and Notified Entities Regulations, 2008, Regln.66-A---Circular No. 23 of 2013, dated 6.12.2013, Cls. (1)(2)(3)---SECP Circular No. 26 of 2015, Cl. (c)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Non-compliance of Regulations---Appellant a non-Banking Finance Company, appointed Bank as one as distributor for its Open End Schemes---Facts revealed that appellant-company, prima facie, had not complied sub-Reglns. (b)(c)(d) of Regln.66-A of the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (NBFC Regulations) cls.(1)(2)(3) of Circular 23 of 2013 and sub-clause (c) of Circular 26 of 2015--- Show-cause notice under Ss.282-J(1), 282-M(1) & 282-D of the Companies Ordinance, 1984 was issued to the company, whereby it was called upon to show-cause as to why penal action could not be taken against it for the said contraventions---Answer to show-cause notice having not been found satisfactory, Commissioner (SCD) of the Commission, in exercise of its powers conferred by Ss.282-J & 282-M of the Companies Ordinance, 1984, imposed aggregate fine of Rs.500,000 on the company---Commissioner (S.C.D.) of the Commission, passed the impugned order for non-compliance of various Regulations---Distribution agreement, did not contain any clause with particular reference to avoidance of fraud and mis-selling by the Distributor, and the offering document, was also not provided to the Commission---Distributor had not used risk profiling questionnaire given by the company and used its own risk profile, as a result, also ignored the main factors of age, source of income and existing investment---Distributor, had not taken reasonable care to ensure suitability of the scheme to the Company---Company was responsible to ensure that updated account opening form was used by the Distributor---Distributor had not provided latest annual/semi-annual accounts to the respondent (investor)---No action had been taken by the Distributor to remove the discrepancies in various documents prior to the respondent accepting investment---Call Back Confirmation (C.B.C.) made to respondent did not mention regarding removal of those discrepancies---Company also failed to send account statement to the respondent, within the stipulated time---Impugned order was upheld by Appellate Bench, in circumstances.

Syed Sohail Ahmed (Head of Compliance, MCB-Arif Habib Savings and Investments Limited) and Iqbal L.L. Bewaney, Counsel for Appellant.

Imran Inayat Butt, Executive Director (SCD) and Javed Akhtar Malik, Joint Director (SCD) for Respondent No.1.

2017 C L D 1371

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

NATIONAL TESTING SERVICE - PAKISTAN---Appellant

Versus

EXECUTIVE DIRECTOR (CCD - REGULATION) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 91 of 2016, decided on 26th December, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 231 & 263---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Inspection of books of accounts by Inspection Team appointed by Securities and Exchange Commission---Inspection Team submitted its report in terms of S.231(5) of the Companies Ordinance, 1984---Executive Director (C.C.D.-Regulation) of the Commission, in view of findings and recommendations of the Inspection Team, appointed Chartered Accountant Company, in exercise of the power conferred on him under S.263 of the Companies Ordinance, 1984 as an Inspector---Said Inspector was directed to carry out investigation into the affairs of the company as per terms of reference (T.O.Rs.)---Inspector was further directed to analyse the (T.O.Rs.), give his findings after meeting all the requirements of law which should be supported with material evidence relied upon by him---Company preferred appeal against the order of Executive Director (C.C.D.), of the Commission on the ground that Director (C.C.D.) did not possess delegated authority under S.231 vis-a-vis the company---Section 263(c) of the Companies Ordinance, 1984, had provided that Commission could appoint one or more competent persons as Inspectors to investigate the affairs---In the present case, investigation was ordered under S.263 of Companies Ordinance, 1984 after first Inspection Report was submitted under S.231(5) of the Companies Ordinance, 1984---Contention of company was that said First Inspection Report, could not be a basis for the investigation, as the delegation of authority to the Director (C.C.D.), by the Commission did not extend to matters relating to companies not having share capital and the company had no share no capital---Contention of Executive Director (C.C.D.), of the Commission was that said matter was not agitated before and that impugned order was an administrative direction against which no appeal lay and that no opportunity of hearing was required to be given to the company---Contention of Executive Director (C.C.D.), was repelled---Appeal was maintainable on the grounds that issue in the case was prima facie ambiguity of delegation of powers and that no opportunity of hearing was provided to the company---Impugned order was set aside and the matter was remanded to the Executive Director (C.C.D), of the Commission to revisit the matter after giving an opportunity of hearing to the company, under the authority of expressed delegated powers.

Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104; General Tyre and Rubber Company of Pakistan Limited v. Bibojee Services (Private) Limited 2002 CLD 1366; Messrs Attock Refinery Limited v. Executive Director, Enforcement PLD 2010 SC 946; Khaqan Industries Ltd. v. Islamic Republic of Pakistan 1979 SCMR 62 and Combined Investment (Private) Limited v. Wali Brothers and others PLD 2016 SC 730 rel.

Hanbal Kahlon, Counsel, Ahmed Hassan Shah, Counsel, Mudassar Rizvi, Counsel and Ahmer Shamsie, Senior Corporate Manager, National Testing Service for Appellant.

2017 C L D 1395

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

ALI ASLAM MALIK, CHIEF EXECUTIVE and 5 others---Appellants

Versus

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

Appeal No. 57 of 2016, decided on 23rd January, 2017.

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

----Ss. 84, 86, 290, 472 & 495---Companies (Issue of Capital) Rules, 1996, Rr.5(v) & 10---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33--- Issuance of shares at discount---Limitation---Commission, on the application of Company accorded approval to issue 333.96 million ordinary shares at 70% discounted price of Rs.3 per share, as 242% right issue---Commission, through said approval, relaxed the mandatory requirements of R.5(v) of the Companies (Issue of Capital) Rules, 1996---Said relaxation was approved, based on an undertaking from the Directors of the company, whereof they submitted that in case the whole or any part of the right shares offered by the Board of Directors of the company was declined, or was not subscribed, the Directors would subscribe or procure subscription for allotment and issue of all such right shares, not taken up by the existing shareholders in terms of S. 86(7) of the Companies Ordinance, 1984---Pursuant to the said approval by the Commission, the company was required to issue right shares within sixty days in terms of S.84(1)(d) of the Companies Ordinance, 1984---Company failed to issue the right shares within said prescribed time and also failed to seek approval of the Commission for extension in time for issuance of right shares---In view of inordinate delay on the part of the company to issue right shares, the Commission, after giving due notice and after considering the company's response, issued an order whereof the Directors of the company were directed to immediately issue shares against the subscription money already received and complete the entire process of issue of right shares---Show-cause notice was served upon the Directors of the company under S.495 of the Companies Ordinance, 1984 as they prima facie failed to comply with the direction issued by the Commission---Executive Director of the Commission, dissatisfied with the response of Directors of the company, imposed a penalty of Rs.50,000 on each of the Directors---Contention of the Directors of the company was that since under S.290 of the Companies Ordinance, 1984 was filed in the High Court by the Commission, impugned order could not have been passed---Filing of petition under S.290 of the Companies Ordinance, 1984 in the High Court, would not entail that the Commission could not exercise its powers for violation of mandatory provisions by the Directors and the company---Matter under litigation in High Court, was distinguishable from the matter of appeal---Directors of the company had failed to justify as to why they were not able to issue right shares within the time prescribed by law---Ultimate responsibility was of the Directors and Bank's failure to subscribe 250 million shares, could not exonerate the Directors of their responsibility---Commission was fully empowered to delegate power to its officers through S.R.Os., which were issued in accordance with provision of law---Contention of the Directors that default was not wilful, or there was no mens rea, would hold little merit, as even though there could not be knowledge or intent, Directors did not exercise the due skill and care required by them as the directors of the company---By not completing the right issue in time, the subscription money withheld by the company of the shareholders and investors without issuing the right shares, despite lapse of mandatory time, was a matter of public interest and could not be condoned under any circumstance---Executive Director of the Commission, having passed the impugned order after following the due process in reasonable time under the circumstances of the case, impugned order could not be interfered with and same was upheld, in circumstances.

Mfmy Industries Ltd. and others v. Federation of Pakistan through Ministry of Commerce and others 2015 SCMR 1550 ref.

(b) Words and phrases---

----'Mens rea'---Meanings, explained.

Black's Laws Dictionary ref.

(c) Words and phrases---

----'Wilful default'---Meaning, explained.

Oxford Dictionary of Law Fifth Edition rel.

Raza Imtiaz Siddiqui, Counsel (Imtiaz Siddiqui and Associates), Mohammad Hamza Sheikh, Counsel (Imtiaz Siddiqui and Associates) and M. Masood, Management Consultant (SHC Consulting (Pvt.) Ltd.) for Appellants.

Ms. Amina Aziz, Director (CSD) and Tariq Ahmad, Joint Director (CSD) for Respondents.

2017 C L D 1416

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Zafar Abdullah, Commissioner (SCD)

UNITED BANK LIMITED---Appellant

Versus

IMRAN INAYAT BUTT, DIRECTOR/HOD (MSRD), SECURITIES MARKET DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 46 of 2015, decided on 24th February, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 224---Companies (General Provisions and Forms) Rules, 1985, R.16---Trading by shareholder of company---Failure to tender amount of gain of such trading to company and intimation to that effect to the Registrar of Companies and the Securities and Exchange Commission---Bank, which was a beneficial owner of more than ten percent ordinary shares of the Issuer Company; made sale and purchase transaction---Ordinary shares of the Issuer Company within period of less than six months and had made gain on account of such transaction---Bank under provisions of S. 224 of the Companies Ordinance, 1984 was required to make a report and tender the amount of such gain to the Issuer Company and simultaneously send an intimation to that effect to the Registrar of Companies and the Commission---Neither the accrual of said gain as reported in Part-D of the prescribed returns of beneficial ownership were filed with the Commission on Form 32, nor was the same tendered to Issuer Company by the Bank---Commission had ample powers under S.224 of the Companies Ordinance, 1984 to take adverse action against any person found in contravention of said section---Transactions in the present case, were done in the ordinary course of business, however, tenderable gains were made on the sale and purchase transaction in the ordinary shares of the Issuer Company within the period of less than six months---Gains made by the Bank, in circumstances, would vest in the Issuer Company---Since the penal provision was stringent in nature, in applying such a provision, there had to be a substantial finding of guilt in relation to the person on whom the fine or penalty was being levied---In the present case, the appellant was a well-reputed Bank and had normally ensured compliance with the provisions of the Companies Ordinance, 1984 and the law; contravention of S. 224 of the Companies Ordinance, 1984, in circumstances, could not be considered to be a wilful or negligent act on the part of the Bank---Impugned order was set aside to the extent of fine imposed on the appellant Bank---Amount of tenderable gain, however, must be tendered to the Issuer Company---Order accordingly.

Mrs. Nasreen Humayun Sheikh v. Executive Director (Securities Department) (SECP), Islamabad (Appeal No. 49 of 2011); Ruhail Muhammad v. Executive Director (SMD) (Appeal No. 46 of 2011); Securities and Exchange Commission of Pakistan through Commissioner v. First Capital Securities Corporation Limited and another PLD 2011 SC 778; Fauji Cement Company Limited v. Director (MSRD) (Appeal No. 44 of 2014); Bankat Lal Baduka v. State AIR 1965 Hyd. 49; Pakistan Indus Promoters Limited v. Monopoly Control Authority 1990 CLC 1008 and Crescent Bolts and Nuts Manufacturing Company v. Registrar, Joint Stock Companies PLD 1959 Kar. 32 and 2005 CLD 333 ref.

Securities and Exchange Commission of Pakistan through Commissioner v. First Capital Securities Corporation Limited and another PLD 2011 SC 778 rel.

Rashid Sadiq, CEO, RS Corporate Advisory (Pvt.) Ltd. and Adnan Afzal, AVP, UBL for Appellant.

Nasir Askar, Director (SMD) and Muhammad Farooq Bhatti, Additional Director (SMD) for Respondent.

2017 C L D 1477

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

MUHAMMAD ABDUL MATEEN, DIRECTOR/ SHAREHOLDER---Appellant

Versus

ARIF KARIM, CEO PROTECH LEATHER APPAREL (PVT.) LTD. and another---Respondents

Appeal No. 89 of 2016, decided on 4th April, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 86, 152 & 468--- Companies (Registration of Offices) Regulations, 2003, Regln.11---Securities and Exchange Commission of Pakistan Act, (XLII of 1997), S.33---Filing of circular with regard to further issue of capital---Circular filed by the company in terms of S.86 of the Companies Ordinance, 1984 and Form III, having been accepted by the Registrar of Companies, appellant a member Director of the company filed complaint with Assistant Registrar challenging the said circular---Assistant Registrar cancelled the recording of both returns and company was given an opportunity to file a revised circular---Company having failed to submit revised circular, Deputy Registrar of the Companies, refused to accept circular and as a consequence Form-A, was also cancelled in terms of S.468 of the Companies Ordinance, 1984 and company was advised to file revised Form-A---Validity---Section 484(4) of the Companies Ordinance, 1984 had provided that "If registration of any document was refused, the company, could either supply the deficiency and remove the defects pointed out, or within thirty days of order of refusal, prefer an appeal"---Only a company could lodge an appeal in terms of S.468(4) of the Companies Ordinance, 1984 whereas appellant was not a company, but Director and shareholder, who was aggrieved by the order of Registrar of Companies---Any dispute relating to facts, forged signatures and other evidence, could only be addressed by a competent court in terms of S.152 of the Companies Ordinance, 1984, if the appellant sought to rectify Register of Members of the company, as the Registrar of the Companies did not have jurisdiction to rule on family disputes or allegations of fraud.

Biotech Energy (Pvt.) Ltd. v. Securities and Exchange Commission of Pakistan W.P. No. 20811 of 2015 and Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. 2003 CLD 309 ref.

Abdul Mateen, Riasat Ali Gondal, Advocate Supreme Court and Muhammad Adnan Rana, Personal Secretary for Appellant.

Asad Javed for Respondent No.1.

Muhammad Siddique, Executive Director (CCD) and Shaukat Hussain, Registrar of Companies (CCD) for Respondent No.2.

2017 C L D 1515

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (C&CD-CLD)

STATE LIFE INSURANCE CORPORATION OF PAKISTAN---Appellant

Versus

COMMISSIONER INSURANCE, SECP and another---Respondents

Appeal No. 58 of 2016, decided on 4th April, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11, 12, 60, 76 & 156---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.20 & 33---Misleading or deceptive conduct of insurer---Jurisdiction of Securities and Exchange Commission---Policy holder obtained insurance policy from Insurance Corporation with an annual premium of Rs.22,188 for a period of ten years---Corporation also provided an illustration to the policy holder whereby the cash surrender value at time of maturity of the policy was shown as Rs.460,000---Policy holder made premium payments for ten years, but upon maturity of the policy, Corporation paid only Rs.282,194 to the Policy holder---Corporation contended that Commission had no jurisdiction to entertain such disputes and that present dispute required recording of evidence which powers vested with the civil court---Commission vide impugned order directed Corporation to settle the grievances of the policy holder and to be careful in future of any such misleading or deceptive conduct towards the policy holders---Validity---Conduct of Corporation was self-explanatory and spoke about the mala fide intention and wilful default because after the detection of Computer Software error, the Corporation never informed the policy holder that the cash surrender value of Rs.460,000 provided in the illustration was caused due to Computer Software error and upon maturity the policy holder would not be entitled of said amount---Policy holder continued to pay the annual premium of the policy, which eventually led the policy holder to suffer the loss on maturity---Securities and Exchange Commission was competent to entertain the complaints of the policy holders and Corporation's argument with respect to lack of Commission's jurisdiction to take cognizance of a dispute between the insurer and the policy holder was not tenable by virtue of S.20(6)(fa) & (g) of Securities and Exchange Commission of Pakistan Act, 1997, which empowered the Commission to monitor the conduct of insurers towards the Insurance Policy holders---Insurance Ordinance, 2000, also empowered the Commission to address the grievance of shareholder as per S.76(4)(5) and S.156 of Insurance Ordinance, 2000---Commission, by virtue of the said provisions, could also award compensation to the aggrieved party and could impose a fine on the party at default, respectively---Commission was competent to entertain and decide the complaint of the policy holder---Insurance Corporation being the largest public sector life insurance entity in Pakistan, was expected that the conduct of such an entity must be in accordance with law and in the interest of policy holders---Present case was a classic example of breach of trust and that act of Corporation could hamper the confidence of existing and potential policy holder---Record had sufficiently proved that the Corporation had violated the relevant provisions of the law---Corporation's deceptive and misleading conduct had infringed the right of the policy holder and it had not come to the Appellate Bench with clean hands---Corporation (appellant) was not entitled for any leniency---Policy holder was entitled to get Rs.460,000 at the time of maturity of policy---Appellant/Corporation had also failed to maintain adequate internal controls and systems as required by Insurance Ordinance, 2000---Fine of Rs. One million was imposed on the Corporation---Order accordingly.

PLD 1964 SC 253 and PLD 1979 Lah. 54 ref.

Waqas Asad Sheikh for Appellant.

Ali Azeem Ikram, Executive Director (Insurance) SECP and Hasnat Ahmad, Director Insurance, SECP for Respondents.

2017 C L D 1580

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Zafar Abdullah, Commissioner (SCD)

KHAWAR ALMAS KHAWAJA, CEO and 6 others---Appellants

Versus

COMMISSIONER (SMD), SECP---Respondent

Appeal No. 22 of 2016, decided on 11th November, 2016.

Securities Act (III of 2015)---

----Ss. 100 & 160---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to pay two years' annual listing fee and join "Central Depository System (C.D.S.)"---Company (broker) was placed on default counter of Pakistan Stock Exchange (P.S.X.) due to its failure to pay two years' annual listing fee and join Central Depository System (C.D.S.)---Trading in company shares was suspended---Commissioner (S.M.D.) of Commission, issued a direction to the Directors of the company under S.100 of the Securities Act, 2015 to take immediate steps to undo said two defaults within 14 days, but they failed to comply with said direction---After issuing show-cause notice to the Directors of the company, case was fixed for hearing, but despite many adjournments, no one appeared on behalf of the company, and Commissioner (S.M.D.) being dissatisfied with the conduct of the Directors of the company, proceeded ex parte and imposed penalties on each Directions---Appellant Bench, found or appropriate to provide a final opportunity of fair trial to the Directors of the company---Appellant Bench was of the view that technical knockout would not serve the purpose of substantial justice---Impugned order was set aside, subject to payment of cost and matter was remanded to the Commissioner (S.M.D.) of the Commission with direction to provide a final opportunity of hearing to the Directors of the company who were also directed to appear on the day and time fixed for hearing---Order accordingly.

Muhammad Aslam Awan, F.C.A. and Tauqeer Hussain for Appellant.

Ms. Ayesha Riaz, Additional Director (CSD), Haroon Abdullah Abbas, Deputy Director (CSD) and Zeeshan Rehman Khattak, Deputy Director (SMD) for Respondents.

2017 C L D 1598

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

MUHAMMAD ADIL, CHIEF EXECUTIVE and 6 others---Appellants

Versus

COMMISSIONER (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 17 of 2016, decided on 11th November, 2016.

Securities Act (III of 2015)---

----Ss. 100, 159 & 160---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to pay annual listing fee and to join the Central Depository System (C.D.S.)---Company (appellant) was placed on the defaulter Counter of Pakistan Stock Exchange (P.S.X.) due to its failure to pay Annual Listing Fee and to join the Central Depository System and the trading of the company shares was suspended---Commissioner (SMD) of the Commission issued a direction under S.100 of the Securities Act, 2015 to the Chief Executive Officer and other Directors of the company to take immediate steps to undo the alleged defaults within 41 days, but it failed to do so---Show-cause notice under S.160 of the Securities Act, 2015 read with S.100 of the Act was served on the company, as to why penal action be not taken against the company---Commission being dissatisfied with the response of the company imposed a penalty of Rs.500,000 on each of the Directors of the company---Counsel for the appellant company, admitted the alleged defaults of the company and requested to take lenient view without contesting the appeal on legal ground---Appellant company was still under suspension due to said defaults; ample time was provided to the company for rectification of default status or submitting any alternative plan, but it failed to do so---Company could not be allowed to linger on its non-compliant status on the PSX to the detriment of its shareholders---Penalty had been imposed on the Directors of the company in their personal capacity for their past conduct with respect to non-compliance of listing regulations since 2006; whereas inability to trade in the scrips was a punishment for the shareholders---Directors had rightly been penalized, in circumstances, and impugned order could not be interfered with.

S. M. Suhail, F.C.A. for Appellants.

Ms. Ayesha Riaz, Additional Director (CSD), Haroon Abdullah Abbas, Deputy Director (CSD), Farrukh Majeed Qureshi, Deputy Director (Insurance) and Shafiq-ur-Rehman, Deputy Director (Insurance) for Respondent.

2017 C L D 1636

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

FIRST NATIONAL EQUITIES LIMITED---Appellant

Versus

NASIR ASKAR, DIRECTOR/HOD, LICENSING AND CAPITAL ISSUE DEPARTMENT, SECURITIES MARKET DIVISION, SECP---Respondent

Appeal No. 16 of 2016, decided on 2nd November, 2016.

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

----S. 22---Securities and Exchange Rules, 1971, R.2(d) & Third Sched.---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Overstating "Net Capital Balance (N.C.B.)"---Net Capital Balance certificate, duly verified/audited of appellant revealed that while calculating the N.C.B., the appellant had excluded/understated its current liabilities amounting to Rs.432 million---Annual audited financial statement of 30-6-2015 of the appellant depicted total current liabilities at Rs.519 million---In calculation of N.C.B., current liabilities of only Rs.87 million was taken into account---Net Capital Balance therefore, was prima facie, overstated---Director/H.O.D. of the Commission, dissatisfied with response to the show-cause notice directed the appellant to recalculate its N.C.B. in accordance with Third Schedule to Securities and Exchange Rules, 1971 and guidance for calculation of N.C.B. issued by the Commission and submit the revised N.C.B. to the Commission by 30-4-2016 positively---Appellant filed appeal against said order, contending that appellant had rightly calculated its Net Capital Balance---Appellant had denied that any additional current liability existed as per the Third Schedule other than Rs.87 million, which had already been accounted for in the calculation of N.C.B.---Appellant, did not provide a revised N.C.B. by 30-4-2016 as instructed by the Commission, instead had filed present appeal---Appellant, however, at the hearing submitted a revised N.C.B. as of 30-6-2016---Matter was remanded to the department to reassess the fresh N.C.B., submitted by the appellant in the interest of justice.

Ali A. Malik, Chief Executive Officer, First National Equities Limited for Appellant.

Nasir Askar, Director (SMD) and Ms. Asima Wajid, Deputy Director (SMD) for Respondent.

2017 C L D 1652

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain, Commissioner (Insurance)

DADABHOY CEMENT INDUSTRIES LIMITED and 7 others---Appellants

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECURITIES AND EXCHANCE COMMISSION OF PAKISTAN---Respondent

Appeal No. 23 of 2016, decided on 20th March, 2017.

Securities Act (III of 2015)---

----Ss. 100, 159 & 160---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 22---Failure to pay listing fee---Appellant company having failed to pay listing fee and clear the outstanding dues to Pakistan Stock Exchange (PSX) to which the company was listed, despite direction of Securities and Exchange Commission within stipulated period, in violation of Securities Act, 2015; a penalty of Rs.500,000 was imposed on each of the Directors of the appellant company---Validity---Appellant company, as a listed company had an obligation to pay the full listing fee at once, and if the Directors of the company did not have the resources, they should not continue as a listed company---Allegations of a conspiracy against the company, were without any substance---Regardless of what was being negotiated with 'PSX', considerable time, i.e. two years since the company was put on the defaulter list, had lapsed---Company had not cleared the outstanding dues to 'PSX' as a result of which trading had not resumed; which was hurting the interest of shareholders, who neither had an opportunity to exit nor were they receiving any return on their investment---Order passed against the company was upheld, in circumstances.

Arsalan Shoeby, Counsel for Appellants.

Ms. Ayesha Riaz, Additional Director (CSD) and Haroon Abdullah, Additional Joint Director (CSD) for Respondent.

2017 C L D 1704

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

AZIZ L. JAMAL, CHIEF EXECUTIVE and 6 others---Appellants

Versus

COMMISSIONER, SECURITIES MARKET DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 20 of 2016, decided on 20th March, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 158---Securities Act (III of 2015), Ss.100 & 159---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Failure to hold Annual General Meeting and default of Listing Regulation by Company---Company had been on the defaulter counter of Pakistan Stock Exchange (PSX), due to failure to hold its Annual General Meeting for two consecutive years; consequently, the trading of the company's shares had been suspended---Securities and Exchange Commission, with a view to restore the company on the normal counter of the (PSX), issued a direction to the Directors of the company to take immediate steps to undo the defaults of the Listing Regulations within 14 days, but they failed to comply with said Directive; consequently a penalty of Rs.500,000 was imposed on each of the Directors of the company---Validity---Company had a good track record and had a successful history where it had always strived to be a law abiding company in terms of its standards of compliance with rules, regulations, procedures and laws---Company was also in the process of re-aligning itself and sorting out its financial difficulties---Benefit would be for the shareholders, who could expect a return on their investments as soon as the company would fully comply with the Listing Regulations and was restored to the normal counter of PSX and trading resumes in company shares---Directors of the company had also satisfactorily shown that they were in the process of fully complying with the Listing Regulations and restoring the company to the normal counter of PSX---Penalty imposed on the Directors of the appellant company through impugned order was converted into a warning and the Directors were directed to ensure compliance of relevant provisions of the law and Listing Regulations in future and restoration in trading of its shares at PSX by removal from defaulters counter.

Khurram Jah, Husein Industries and Aziz Jamal, Husein Industries for Appellants.

Ms. Ayesha Riaz, Additional Director (CSD) and Haroon Abdullah, Additional Joint Director (CSD) for Respondent.

2017 C L D 1715

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

AZIZ L. JAMAL, CEO and 6 others---Appellants

Versus

The DIRECTOR, CORPORATE SUPERVISION DEPARTMENT, SECP---Respondent

Appeal No. 93 of 2016, decided on 20th March, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 245(3) & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Failure to prepare and transmit quarterly/half yearly accounts---Appellant company failed to prepare and transmit three quarterly/half yearly accounts for relevant period to its members and also to file said accounts with the Registrar and Securities and Exchange Commission of Pakistan as required under S.245 of the Companies Ordinance, 1984---Aggregate fine of Rs.210,000 was imposed on the Chief Executive Officer and Directors of the company for said failure---Validity---Appeal filed by the company against impugned order though was barred by time, but in the interest of justice Appellate Bench condoned such delay; so that the Directors of the company could be given an opportunity to present their case on merits---Directors of the company though had failed to comply with the requirements of S.245(3) of the Companies Ordinance, 1984 within the stipulated time, but after pronouncement of the impugned order, Directors of the company had filed required accounts---Non-compliance by the Directors of the company having been admitted, Appellate Bench found no reason to exonerate the Directors from the charge of established violation, however, subsequent compliance by the Directors could be considered as a ground for lenient view---Company except the present violations had a fair compliance history---Conduct of the Directors of the company depicted that they were aware of their obligations towards the affairs of the company and non-compliance of S. 245(3) of the Companies Ordinance, 1984 was not wilful---Plea of the Directors that alleged non-compliance was due to financial and human resource constraints faced by the company, could not be ignored while adjudicating the appeal--- Directors of the company had committed before the Appellate Bench that compliance of relevant legal framework would be ensured in future---Penalty imposed through impugned order, was converted into warning and the Directors of the company were directed to ensure compliance of relevant provisions of law in future and restoration in trading of its shares at Pakistan Stock Exchange (PSX) by removal from defaulters' counter.

Aziz Jamal and Khurram Jah for Appellants.

Ms. Amina Aziz, Director (CSD) for Respondent.

2017 C L D 1728

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

AZIZ L. JAMAL, CHIEF EXECUTIVE and 6 others---Appellants

Versus

DIRECTOR, CORPORATE SUPERVISION DEPARTMENT SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 92 of 2016, decided on 20th March, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 158--- Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to hold Annual General Meeting---Record revealed that company had failed to convene the Annual General Meeting as per requirement of the law---Directors of the company admitted the default, however, they had held Annual General Meeting for the next year---Lenient view had been taken as the company had a good track record and had a successful history where it had always strived to be a law abiding company in terms of its standards of compliance with rules, regulations, proceedings and laws---Company was also in the process of re-aligning itself and sorting out its financial difficulties---Penalty imposed on the Directors of the company through impugned order was converted into a warning and they were directed to ensure compliance of relevant provisions of law in future and restoration in trading of its shares at 'PSX' by removal from defaulters' counter.

Khurram Jah, Husein Industries and Aziz Jamal, Husein Industries for Appellants.

Ms. Amina Aziz, Director (CSD) for Respondent.

2017 C L D 1734

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

ZAHID NAWAB, CEO RESEARCH HUB FOR PAK'S PHYSIOTHERAPY---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 55 of 2016, decided on 20th March, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 42---Companies (General Provisions and Forms) Rules, 1985, R.6(F)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Application for grant of licence under S. 42 of the Companies Ordinance, 1984 was declined by Securities and Exchange Commission of Pakistan---Validity---Contention of applicant that written commitment could only be provided after issuance of licence, had no merits---Applicant must fulfil the requirements of law, so that proposed company was registered in terms of S.42 of the Companies Ordinance, 1984---Rule 6(F) of the Companies (General Provisions and Forms) Rules, 1985 had provided that the promoters or members of an association, desirous of obtaining a licence under S. 42 of the Companies Ordinance, 1984 would make an application to the Commission, which would be accompanied by the estimate of future annual income and expenditure of the proposed company, specifying the sources of income and nature of expenditure must be provided---Failure of applicant to provide the required information, appeal against impugned order was dismissed, in circumstances.

Human Rights for All v. Securities and Exchange Commission of Pakistan in Writ Petition No. 10651 of 2013 rel.

Zahid Nawab, CEO Research Hub for Pak's Physiotherapy for Appellant.

Mubasher Saeed Director (CCD) and Ms. Beenish Waqas, Assistant Director (CCD) for Respondent.

2017 C L D 1780

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Zafar Abdullah, Commissioner (SCD)

IMTIAZ AHMED BHATTI (FORMER CEO PAK KUWAIT TAKAFUL COMPANY LIMITED)---Appellant

Versus

COMMISSIONER INSURANCE, SECP---Respondent

Appeal No. 84 of 2016, decided on 4th January, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(F), 12(1) & 158---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---False statement in document---Board of Directors of the company, appointed another organization to carry out assessment of reserves against claims, examination of said claims, identification of potential phantom and assessment of adequancy of bad debts of the company---Management of the company after carrying out an analysis of the report, identified certain irregularities with respect to contribution due but unpaid, understated claims and reversal of endorsements etc.---Statutory external Auditor of the company had also observed that; "in order to show positive result and to maintain solvency requirements, the company was practising incorrect reporting since 2012"---Commissioner Insurance of the Commission issued show-cause notice to the Directors of the company---Said show-cause notice was not responded by the company and two directors---Commission issued a final hearing notice to the company and the Directors---Company and the Directors, neither responded to the hearing notice nor did attend the hearing---Commission in exercise of powers conferred under S.158 of the Insurance Ordinance, 2000, imposed a penalty of Rs.1,000,000 on the company and a Director---Other Directors of the company were warned to be careful and diligent in carrying out the business of the company---Appellant (Director) had preferred appeal, on the ground that matter was decided ex parte by the Commissioner Insurance, which was against the principles of natural justice and rule of audi alteram partem---Show-cause notice proceedings were concluded in absentia against the appellant---Record had revealed that Commissioner Insurance had provided ample opportunities to the appellant, but he failed to respond to the show-cause notice and appear for personal hearing---Commissioner Insurance was left with no other option, but to decide the case ex parte against the appellant---Previous conduct of the appellant, with respect to proceedings before the Commissioner could not be appreciated---Appellate Bench of the Commission, without going into the merits of the case, found it appropriate to provide a final opportunity of fair trial to the appellant---Subject to payment of a cost of Rs.10,000 impugned order was set aside to the extent of the appellant and matter was remanded to the Commissioner Insurance to decide the same afresh by providing opportunity of hearing.

Barrister Taimur Ali Mirza and Barrister Sajeel Sheryar for Appellant.

Ali Azeem Ikram, Executive Director (Insurance) SECP and Tariq Bakhtawar, Director (Insurance) SECP for Respondent.

2017 C L D 1026

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Fida Hussain Samoo, Commissioner (Insurance)

MOHAMMAD IQBAL KHAWAJA---Appellant

Versus

IMTIAZ HAIDER, DIRECTOR (SMD), SECP and another---Respondents

Appeal No.30 of 2006, decided on 16th March, 2015.

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

----S. 33---Dismissal of appeal for non-appearance and non-prosecution by the appellant---Appeal was fixed for hearing previously on three dates, which was adjourned on the request of the appellant---Appeal was re-fixed for hearing, but no one appeared on behalf of the appellant---Final opportunity of hearing was provided to the appellant in the interest of justice---Appeal was called on adjourned date of hearing at 10.00 a.m., departmental representative was present, but no one appeared on behalf of the appellant and no request for adjournment was received by the office---Matter was kept pending till the close of office timings, but, the appellant failed to enter appearance---Conduct of the appellant showed that appellant was not interested in pressing the appeal---Appeal was dismissed for non-appearance and non-prosecution, in circumstances.

Nemo for Appellant.

Ms. Asima Wajid, Deputy Director (SMD) for Respondent No.1.

2017 C L D 1035

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

ZAHID MAZHAR---Appellant

Versus

ALI AZEEM IKRAM, HEAD OF DEPARTMENT (ENFORCEMENT)---Respondent

Appeal No.44 of 2013, decided on 24th July, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 177, 180, 186 & 476---Retirement of Directors of the company---Failure to hold fresh election for Directors within prescribed period---Last election of the Directors of the appellant company was held on 30-10-2009 for period of 3 years---Retiring Directors were required to hold fresh election, on or before 30-10-2012, but they not only failed to hold election as per prescribed period, but also failed to report the impediments, if any, to the Registrar of the Companies within fifteen days as required under S.177 of the Companies Ordinance, 1984---Commission being dissatisfied with the response of authorized representative of the appellant company to the show-cause notice, imposed a penalty of Rs.10,000 (Ten thousand) on the appellant company, with further direction to hold the election of the Directors within forty five days of the impugned order---Appellant pleaded that major shareholders had reached the settlement to divide the business into two segments---Validity---Plea of the appellant lacked valid and cogent reasoning; as per explicit provisions of law---Major shareholders of the company, could not avoid process of law by their mutual agreement by reaching to the settlement, not to hold the election of Directors---Operation of express provisions of Companies Ordinance, 1984 could not be stopped, except as provided therein---Appellant, could not escape the liability of violations committed in terms of Ss.177 & 180 of the Companies Ordinance, 1984---Default of the appellant company to hold election of Directors had been established and admitted by the appellant, it could safely be concluded that Commission had rightly imposed the penalty on the appellant.

Central Cotton Mills Ltd. v. Naveed Textile Mills Ltd. 1996 MLD 1943 ref.

Ashfaq Tola, FCA for Appellant.

Ali Azeem Ikram, Director (Enforcement), Khalida Parveen, Joint Director (Enforcement) and Ms. Ayesha Riaz, Joint Director (Enforcement) for Respondent.

2017 C L D 1080

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Maqbool Baqar and Faisal Arab, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and others---Petitioners

Versus

Mst. SARDAR BEGUM and others---Respondents

Civil Petitions Nos. 3195-L to 3198-L, 3268-L, 3269-L, 3352-L to 3358-L, 3570 to 3576, 3603, 3604, 3631, 3669 to 3673 of 2016 and 69-L of 2017, decided on 28th March, 2017.

(On appeal against the judgment dated 14.10.2016 passed by the Lahore High Court, Lahore in F.A.O. Nos. 213 to 216, 218, 239 to 258 289 to 292 of 2015)

(a) Insurance Act (IV of 1938) [since repealed]---

----Ss. 2(6) & 46---Civil Procedure Code (V of 1908), Ss. 15 & 20---Claim relatable to a contract for insurance---Correct Court/forum for suing under the provisions of the Insurance Act, 1938 [since repealed]---All claims, whether directly arising from or relatable to a contract of insurance were covered under the provisions of S. 46 of the Insurance Act, 1938---Section 46 of the Insurance Act, 1938 provided that for any relief arising from the contract of insurance, suit was to be filed in the Court of competent jurisdiction, then taking aid from the provisions of S. 20, C.P.C. and keeping in view the pecuniary value of the suit, it was to be filed in a District Court of competent jurisdiction---In the case of principal seat of the Sindh High Court at Karachi or Islamabad High Court, both possessed jurisdiction to act as the principal Civil Court of original jurisdiction, thus suit arising from contract for insurance could be filed in said High Courts subject to territorial jurisdiction and pecuniary value of the suit prescribed under the law instead of the District Court---However, no suit relatable to a contract for insurance could be entertained in the Civil Court---Where a special law determined a place of suing, which in the present case in terms of S. 2(6) of Insurance Act, 1938 could be either the principal Civil Court of original jurisdiction in a district or the special civil jurisdiction of the Sindh High Court and Islamabad High Court, the same would prevail over the provisions of S. 15, C.P.C.---Where, however, a claim was not relatable to a contract of insurance and for some other reason a person sued the insurance company, then obviously the forum provided under the Insurance Act, 1938 would have no application to such suits--- For such suits, the provisions of S. 15, C.P.C., where attracted could be applied.

(b) Interpretation of statutes---

----Provisions of special law override the provisions of the general law to the extent of any conflict or inconsistency between the two.

(c) Appeal---

----Right of appeal was creation of statute and where the legislature did not provide for it, the same could not be claimed as an inherent right.

Syed Waqar Hussain Naqvi, Advocate Supreme Court for Petitioners (in C.Ps. 3195-L to 3198-L/2016).

Ibrar Ahmed, Advocate Supreme Court and Syed Rifaqat Hussain Shah, Advocate-on-Record for Petitioners (in C.Ps. 3268-L, 3269-L, 3669 to 3673/2016 and 69-L/2017).

Jehanzeb Khan Bharwana, Advocate Supreme Court for Petitioners (in C.Ps. 3352-L to 3358-L/2016).

Rana Muhammad Ibrahim Satti, Senior Advocate Supreme Court, Syed Rifaqat Hussain Shah, Advocate-on-Record and Safdar Ali Qureshi, Law Officer, State Life Insurance Corporation for Petitioners (in C.Ps. 3570 to 3576, 3603, 3604 and 3631/2016).

Liaqat Ali Butt, Advocate Supreme Court for Respondents (in C.P. 3195-L/2016).

Nemo for Respondents (in All C.Ps. except C.P. 3195-L of 2016).

2017 C L D 1198

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Faisal Arab, JJ

Syed MUSHAHID SHAH and others---Appellants/Petitioners

Versus

FEDERAL INVESTMENT AGENCY and others---Respondents

Civil Appeals Nos. 2561 to 2568 of 2016 and Civil Petitions Nos. 2779-L to 2785-L, 2793-L, 3182-L, 3183-L, 3224-L, 3225-L, 3328-L, 3253-L, 3299-L, 3300-L, 3345-L, 3553-L to 3557-L of 2016 and Criminal Petition No. 1050-L of 2016, decided on 15th May, 2015.

(On appeal against the judgment dated 26.05.2016, 27.09.2011, 17.11.2016 and 23.06.2016 of the Lahore High Court, Lahore passed in W.Ps. Nos.31284, 35792, 36199, 36555 and 36556 of 2015, 6720/2016, 3932/2011, 36331/2015, 22010/2013, 22011/13, 22013/13, 22015/13, 13821/16, 13845/16, 13855/16, 22012/2013, 9712/2009, 14030/2011, 1379/2011, 4428/2011, 23901/2009, 1456-Q/2012, 15460/2011, 15461/2011, 19532/2014, 14898/2011, 19731/2012, 19732/2012, 19733/2012, 19734/2012 and Crl. Rev.487/2016 respectively)

(a) Law---

----'General' and 'Special' law---Scope and distinction---General law was one that was unrestricted in terms of its applicability to all issues covered by its subject matter, whereas special law may be restricted to certain localities, persons or types of cases---Whether a law was general or special depended on the particular features of the statute in issue and was ultimately a question of relativity between two or more statutes on the common subject matter.

(b) Penal Code (XLV of 1860)---

----Ss. 1(2) & 5---Criminal Procedure Code (V of 1898), Ss. 1(2), 5(1), 5(2) & 29(1)---General law---Scope---Pakistan Penal Code, 1860 and Criminal Procedure Code, 1898 were both general law and would cede to any special law.

(c) Interpretation of statutes---

----Non obstante clause---Scope and definition---Non obstante clause was a phrase used in documents to preclude any interpretation contrary to the stated object or purpose.

Principles of Statutory Interpretation (13th Ed.); Packages Limited through General Manager and others v. Muhammad Maqbool and others PLD 1991 SC 258 and Muhammad Mohsin Ghuman and others v. Government of Punjab through Home Secretary, Lahore and others 2013 SCMR 85 ref.

(d) Interpretation of statutes---

----'General' and 'Special' law---Where there was a conflict between a special law and a general law, the former would prevail over the latter.

Muhammad Mohsin Ghuman and others v. Government of Punjab through Home Secretary, Lahore and others 2013 SCMR 85 ref.

(e) Interpretation of statutes---

----Conflict between two laws providing different punishments for the same offence---Law providing greater punishment must relent in favour of the law ordaining the lesser punishment.

(f) Interpretation of statutes---

----'Special law'---Conflict between two special laws containing overriding clauses---When there were two special laws both of which contained overriding clauses, and there was a conflict between them, generally the statute later in time would prevail over the statute prior in time---Said presumption, however, was not automatic, instead a host of other factors including the object, purpose and policy of both statutes and the legislature's intention, as expressed by the language employed therein, needed to be considered in order to determine which of the two special laws was to prevail.

Shri Ramah-Narain v. The Simla Banking and Industrial Co. Ltd. 1956 SCR 603; Kumaon Motor Owners' Union Ltd. and another v. The State of Uttar Pradesh AIR 1966 SC 785 = [1966] 2 SCR 122; Sarwan Singh v. Kasturi Lal AIR 1977 SC 265; Ashok Marketing Ltd. and another v. Punjab National Bank and others (1990) 4 SCC 406; Slidaire India Ltd. v. Fairgrowth Financial Services Ltd. and others (2001) 3 SCC 71; Bhoruka Steel Ltd. v. Fairgrowth Financial Services Ltd. 5 (1997) 89 Comp Cas 547; Messrs Maruti Udyog Ltd. v. Ram Lal and others (2005) 2 SCC 638; State of Bihar and others v. Bihar M.S.E.S.K.K. Mahasangh and others AIR 2005 SC 1605; Morgan Securities and Credit Pvt. Ltd. v. Modi Rubber Ltd. AIR 2007 SC 683; Employees Provident Fund Commissioner v. O. L. of Esskay Pharmaceuticals Limited AIR 2012 SC 11; State v. Syed Mir Ahmed Shah and another PLD 1970 Quetta 49 and I.G. HQ Frontier Corps and others v. Ghulam Hussain and others 2004 SCMR 1397 ref.

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

----Ss. 4, 7(4), 7(5)(a) & 20---Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), Ss. 4 & 12---Constitution of Pakistan, Arts. 4 & 25---Offence falling under the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 and also under the provisions of Offences in Respect of Banks (Special Courts) Ordinance, 1984---Forum competent to try such offence---Financial Institutions (Recovery of Finances) Ordinance, 2001, shall have an overriding effect in case of such offences---Were both laws to apply concurrently and permit of parallel platforms for the adjudication of offences under both laws then banks/financial institutions would always choose to initiate proceedings under the more onerous law, i.e. Offences in Respect of Banks (Special Courts) Ordinance, 1984---Such an interpretation would give banks/financial institutions unbridled power to choose the forum before which trial of offences should take place, and they would obviously choose the Special Courts under the Offences in Respect of Banks (Special Courts) Ordinance, 1984 being more burdensome and prejudicial to the accused---Natural corollary was that in such circumstances the Financial Institutions (Recovery of Finances) Ordinance, 2001 would, in effect, be rendered redundant, which was not permissible under any principle of interpretation of law, when the courts were trying to reconcile two potentially conflicting laws---To allow forums under both the laws to operate concurrently would offend the provisions of Art. 25 of the Constitution, which provided that all citizens were equal before the law and were entitled to equal protection of the law---In the absence of any defined guidelines on the basis of which cases may be tried under either law, it would tantamount to conferring unfettered discretion on financial institutions to pick and choose the forum as per their free will, which would be violative of the rule against discrimination---Furthermore if both the Financial Institutions (Recovery of Finances) Ordinance, 2001 and Offences in Respect of Banks (Special Courts) Ordinance, 1984 were to enjoy concurrent jurisdiction, citizens alleged to have committed an offence in respect of finances would be left wondering which offence they would be charged with, which court they would be tried in and under what procedure---Such a situation would be an affront to the provisions of Art. 4 of the Constitution.

Waris Meah v. (1) The State (2) The State Bank of Pakistan PLD 1957 SC 157 ref.

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

----Ss. 4, 7(4), 7(5)(a) & 20---Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), Ss. 4 & 12---Criminal Procedure Code (V of 1898), Ss. 1(2), 5(1), 5(2) & 29(1)---Federal Investigation Agency, Act, 1974 (VIII of 1975), S. 3(1)---Banking Companies Ordinance (LVII of 1962), S. 83A---Offence falling within the provision of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Forum competent to try such offence---Whenever an offence was committed by a customer of a financial institution within the contemplation of the Financial Institutions (Recovery of Finances) Ordinance, 2001, it could only be tried by the Banking Court constituted thereunder and no other forum---Special Courts under the Offences in Respect of Banks (Special Court) Ordinance, 1984, the ordinary criminal Courts under the Criminal Procedure Code, 1898, and the Federal Investigation Agency under the Federal Investigation Agency, Act, 1974 read with the Banking Companies Ordinance, 1962 would have no jurisdiction in the matter---Provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were to have an overriding effect on anything inconsistent contained in any other law for the time being in force.

Shahid Ikram Siddiqi, Advocate Supreme Court for Appellants (in C.A. 2561 of 2016).

Shahid Ikram Siddiqi, Advocate Supreme Court for Petitioners (in C.Ps. 3182, 3183, 3224, 3225, 3228, 3299, 3300-L/16) (did not appear on 01.03.2017)

Salman Aslam Butt, Senior Advocate Supreme Court for Appellants (in C.As. 2562-2568 of 2016).

Salman Aslam Butt, Senior Advocate Supreme Court for Petitioners (in C.Ps. 2779-2785, 2793-L of 2016).

Nemo for Petitioners (in C.P. No. 3253-L of 2016).

Haq Nawaz Chatha, Advocate Supreme Court for Petitioners (in C.P. 3345-L of 2016).

Shazaib Masood, Advocate Supreme Court for Petitioners (in C.Ps. 3553-3557-L of 2016) (did not appear on 01.3.2017)

Mian Asghar Ali, Advocate Supreme Court for Petitioners (in Crl. Petition 1050-L of 2016).

Rashdeen Nawaz Qasuri, Advocate Supreme Court, Sardar Qasim Farooq Ali, Advocate Supreme Court and Amir Wakeel Butt, Advocate Supreme Court for Bank of Punjab.

Abdul Hameed Chohan, Advocate Supreme Court for First Women Bank and UBL.

Raja Nadeem Haider, Advocate Supreme Court for Burj Bank.

Nemo for MCB.

Sajid Ilyas Bhatti, DAG and Raja Abdul Ghafoor, Advocate-on-Record for FIA.

Razzak A. Mirza, Additional A.-G., Punjab and Rana Abdul Majeed, Additional P.-G. for the State.

2017 C L D 1405

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Faisal Arab, JJ

Miss RUKHSANA MURRAD and others---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

Civil Appeals Nos. 2105 and 2106 of 2008, decided on 2nd May, 2017.

(On appeal against the judgment dated 18.1.2008 passed by the High Court of Sindh, Karachi in Spl. HCA No. 29/2001 and First Appeal No. 01/1998)

Banker and customer---

----Finance facility availed by loanee from Bank to settle its liability with the State Bank---Bank making payment to State Bank on behalf of the loanee (exporter)---When no finance directly disbursed to the loanee under the finance agreement, question as to whether the finance agreement was of any legal consequence---Exporter executed a finance agreement with the respondent-Bank to avail a running finance facility---To secure the financial facility, exporter pledged its goods, hypothecated its machinery, assigned the proceeds of its life insurance policy, and created an equitable mortgage on subject property---After the exporter failed to repay the finance facility, respondent-Bank filed a suit for recovery in the Banking Tribunal---Exporter claimed that after execution of finance facility, no amount was disbursed and all documents executed in such regard were forged---Banking Court dismissed the suit after holding that no amount was disbursed under the finance agreement---Exporter filed its own suit claiming damages contending that recoveries made under the finance agreement, when no finance was disbursed, caused a huge loss of business to the exporter since subject property was sold for a meagre amount, and proceeds of insurance policy were appropriated by the respondent-Bank---Suit for damages filed by exporter was decreed by the Banking Court---On appeal, the High Court decreed the suit for recovery filed by the respondent-Bank and dismissed the suit for damages filed by exporter---Validity---Case record showed that exporter had been availing various financial facilities under the State Bank's Export Refinance Scheme through the respondent Bank---Export Re-Finance Scheme allowed the exporters to avail finance from State Bank to finance their exports, which was adjustable against export proceeds---Where no exports were made or there was a shortfall, the State Bank imposed a penalty---When the exporter failed to meet its export target a penalty was imposed on it by the State Bank---For purposes of repaying such penalty, financial facility was sanctioned by respondent-Bank to facilitate the exporter to adjust its liability towards the State Bank, and ultimately, it was from the financial facility that the penalty was paid to the State Bank on behalf of exporter---Exporter in such circumstances could not claim that no amount was disbursed after the finance agreement with the respondent-Bank---In its evidence exporter did not deny either the finances availed by it from the State Bank against the Export Refinance Scheme nor the penalty imposed by State Bank under such Scheme---Exporter for four years never protested against adjustment of proceeds of its insurance policy and sale of subject property by the respondent-Bank---High Court had rightly decreed the recovery suit filed by respondent-Bank and dismissed the suit for damages filed by the exporter---Appeal was dismissed accordingly.

Syed Iftikhar Hussain Gillani, Senior Advocate Supreme Court for Appellants.

M. Rasheed Qamar, Advocate Supreme Court for Respondent.

2017 C L D 1459

[Supreme Court of Pakistan]

Present: Gulzar Ahmed, Maqbool Baqar and Sajjad Ali Shah, JJ

MUHAMMAD MOIZUDDIN and another---Appellants

Versus

MANSOOR KHALIL and another---Respondents

Civil Appeals Nos. 149-K and 150-K of 2015, decided on 25th July, 2017.

(Against the judgment dated 29.5.2015 passed by the High Court of Sindh in Appeal No. 29 of 2010)

(a) 'Past and closed transaction', principle of---

----Scope and purpose---Concept of past and closed transaction was evolved to protect and safeguard accrued and vested rights of the parties under a statute which subsequently was found and declared ultra vires, for the simple reason that such declaration was always prospective unless the Court specifically gave a retrospective effect to such declaration, by declaring the statute as non est i.e. it never existed in the eyes of law.

Al-Samrez Enterprise v. Federation of Pakistan 1986 SCMR 1917; Molasses Trading and Export (Pvt.) Ltd. v. Federation of Pakistan 1993 SCMR 1905; Mehram Ali v. Federation of Pakistan PLD 1998 SC 1445; Muhammad Mubeen-us-Salam v. Federation of Pakistan PLD 2006 SC 602; Hussain Badshah v. Akhtar Zaman 2007 PLC (C.S.) 157; Mobashir Hassan v. Federation of Pakistan PLD 2010 SC 265; Al-Tech Engineers and Manufacturers v. Federation of Pakistan 2017 SCMR 673 and Shahid Pervaiz v. Ejaz Ahmed 2017 SCMR 206 ref.

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

----S. 15---Transfer of Property Act (IV of 1882), S. 54---Sale of mortgaged property by Bank through auction---'Past and closed transaction'---Scope---Provisions of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were declared ultra vires the Constitution by the High Court in the case of Muhammad Umer Rathore v. Federation of Pakistan (2009 CLD 257), and subsequently upheld by the Supreme Court in National Bank of Pakistan and 117 others v. Saif Textile Mills Ltd., and another (PLD 2014 SC 283)---Effect---All transactions with respect to sale of mortgaged property which had taken place and were finalized before such declaration by the High Court were to be protected under the principles of "past and closed transactions"---Cases where sale itself had not been challenged, or such challenge had remained unsuccessful, and the sale proceeds stood adjusted towards outstanding liability of the Bank/principal debtor, and sale deed in favour of the auction purchaser stood registered under the provisions of S. 15 of the Ordinance declared ultra vires the Constitution (but possession was not handed over), would also be saved from the effect of such declaration being "past and closed transactions".

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

----S. 54---Sale of immoveable property---Essential elements---Essential elements of sale were, first, the parties; second, the subject matter; third, the transfer or conveyance, and, fourth, price or consideration.

Adnan Iqbal Chaudhry, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Appellants (in C.A. No. 149-K of 2015).

Khalil Ahmed Siddiqui, Advocate Supreme Court for Appellants (in C.A. No. 150-K of 2015).

Mirza Sarfraz Ahmed, Advocate Supreme Court and A.A. Khan, Advocate-on-Record (Absent) for Respondent No.1.

2017 C L D 1707

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, C.J., Amir Hani Muslim and Iqbal Hameed-ur-Rehman, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Appellant

Versus

UNITED BANK LIMITED and others---Respondents

Civil Appeal No. 73-P of 2010, decided on 13th January, 2016.

(On appeal from judgment of Peshawar High Court, Peshawar dated 18.1.2007, passed in FAB No. 35 of 2005)

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

----Ss.15 & 19---Civil Procedure Code (V of 1908), O. XXXIV, R. 13---Two mortgages created over same asset---Sale of mortgaged asset---Distribution of proceeds---Where two mortgages had been lawfully created in respect of same assets of the judgment debtor, if no other terms were specified between the parties to the contrary, unless the decree of first charge was fully satisfied by its sale proceeds, the decree from second charge, even if created with the consent of first mortgagor, would not be executable as it would be only subject to the satisfaction of the first decree/charge.

The State v. Rajah Ram Varu AIR 1966 Andhra Pradesh 233; Union Leasing Ltd. v. Pakistan Industrial Credit and Investment Corpn. Ltd. 2005 CLD 958 and Industrial Development Bank of Pakistan v. Muhammad Ayub Stone Crushers 2009 SCMR 611 ref.

Abdul Rauf Rohaila, Advocate Supreme Court for Appellant.

Muhammad Ajmal Khan, Advocate-on-Record/Advocate Supreme Court for Respondent No. 1.

Ex parte for Respondent No. 2.

2017 C L D 843

[Supreme Court (AJ&K)]

Present: Muhammad Ibrahim Zia and Raja Saeed Akram Khan, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through AVP/Manager---Appellant

Versus

ARSHAD MAHMOOD and others---Respondents

Civil Appeals Nos. 112 and 113 of 2004, decided on 27th April, 2013.

(On appeals from the judgment and decree of the High Court dated 8-10-2004 in Civil Appeals Nos. 7 and 21 of 2001)

(a) Azad Jammu and Kashmir Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (II of 1998)---

----Preamble---Azad Jammu and Kashmir Financial Institutions (Recovery of Finances) (Adaptation and Enforcement) Act, 2002, S. 2(2)---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S. 31---Azad Jammu and Kashmir Government Notification No.L-1/2/97-AJK dated 14-05-1998---Suit for recovery of loan amount---Banking Court established by Federal Government of Pakistan---Trial of Banking cases relating to the territories of Azad Jammu and Kashmir by said court---Effect---Banking Court established by Government of Pakistan decreed the suit for recovery of Bank loan but High Court Azad Jammu and Kashmir Pakistan set aside the said decree---Validity---Jurisdiction could not be conferred upon the Courts by joining the proceedings by the parties nor Courts could be created without law made under the Constitutional provisions---Court so authorized was neither established by the Azad Jammu and Kashmir Government or Azad Jammu and Kashmir Council nor same was in the control of Azad Jammu and Kashmir Government or Council---Conferment of such powers on the authority or person who was neither established nor controlled by the Azad Jammu and Kashmir Government or Council was void---If it had come to the notice of the Court that legislation locked the Constitutional backing or was promulgated without Constitutional competence same should have been declared ultra vires or ignored---Any law which was made without Constitutional competence was void---Authorization to Banking Court established by the Government of Pakistan to try cases relating to the territories of Azad Jammu and Kashmir was void and was to be deemed to be inoperative---Any proceedings conducted or decree passed by such non-existent Court had no legal status or effect---High Court had rightly accepted the appeal in circumstances---Impugned judgment did not suffer from any legal infirmity---Appeal was dismissed in circumstances.

Rai Sahib Ram Jawaya Kapur and others v. The State of Punjab AIR 1955 SC 549; McCarthy and Stone (Developments) Ltd. v. London Borough of Richmond Upon Thames 1994 PTD 1324; Muhammad Nazir Khan v. Azad Government and 4 others 2001 YLR 3271; Muhammad Ashraf and 8 others v. Azad Government of the State of Jammu and Kashmir and 13 others PLD 1985 SC(AJ&K) 102; Kh. Ghulam Qadir and 5 others v. Divisional Forest Officer Demarcation and 3 others 1996 SCR 161; Dr. Mehmood Hussain Kiani v. Azad Government and 26 others 1996 PLC (C.S.) 912; Vice-Chancellor and 3 others v. Muhammad Shahzad Khalid PLD 2001 SC(AJ&K) 21; Khan Iftikhar Hussain Khan of Mamdot (represented by 6 others) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Abdul Karim and 2 others v. Messrs United Bank Ltd. of Pakistan PLD 1997 Kar. 62; Mian Manzoor Ahmed Wattoo v. Federation of Pakistan and 3 others PLD 1997 Lah. 38 and The Commissioner Income Tax and others v. Messrs Saeed Motors Mirpur, Civil Appeal No. 88 of 2002, decided on 1.7.2003 distinguished.

Messrs Jabeer Hotel's case 2001 PLC (C.S.) 11; The State v. Sh. Manzar Masud 1981 PCr.LJ 661; Manzar Masud Sheikh v. Chief Secretary, Azad Government of the State of Jammu and Kashmir, Muzaffarabad 1998 CLC 2966; Robkar Adalat v. Sarfraz Alam Assistant Town Planner Mirpur Dev Authority, Mirpur 1995 CLC 1857; Behram Khurshid Pesikaka v. State of Bombay AIR 1955 SC 123; Moulvi Abdul Qadir v. Moulvi Abdul Wassey and others 2010 SCMR 1877; Muhammad Younas and another v. Election Tribunal, Ferozewala/ Additional District Judge, Ferozewala and others 2004 YLR 1090 and State Bank of Pakistan and others v. Mst. Mumtaz Sultana and others 2010 SCMR 421 rel.

(b) Azad Jammu and Kashmir Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (II of 1998)---

----Preamble---Decree of Banking Court---Appeal---Limitation---Person aggrieved by a decree or order of Banking Court could prefer an appeal before the High Court within thirty days.

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

----S. 42-B---Decision of Supreme Court---Binding effect---Principle of law enunciated by Supreme Court Azad Jammu and Kashmir was binding on all the Courts and functionaries in Azad Jammu and Kashmir.

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

----S. 44---Constitutional jurisdiction---Scope.

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

----S. 12---Exclusion of time in legal proceedings---Time consumed in obtaining certified copies should be deducted while computing limitation.

(f) Jurisdiction---

----Jurisdiction could not be conferred upon the Courts by joining the proceedings by the parties nor Court could be created without law made under the Constitutional provisions.

(g) Estoppel---

----No estoppel against law.

Muhammad Suleman and another v. Javed Iqbal and others PLD 1982 SC(AJ&K) 64 rel.

Haji Ch. Muhammad Afzal, Advocate for Appellant (in both appeals).

M. Reaz Alam and Ch. Jehandad Khan, Advocates for Respondents (in both Appeals).