CLD 2018 Judgments

2018 C L D 292

[Competition Commission of Pakistan]

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

UTILITY STORES CORPORATION OF PAKISTAN (PVT.) LIMITED: In the matter of

F. No. 81/DRL/C&TA/CCP/2016, decided on 15th December, 2017.

Competition Act (XIX of 2010)---

----Ss. 3, 30 & 37---Abuse of dominant position---Undertaking, floated an advertisement, whereby a "Request for Proposal" RFP was issued for the purchase/procurement of "Enterprise Resource Planning" ERP software and related hardware implementation service---Complainant had impugned the "Request for Proposal" on the grounds that through certain clauses in the "RFP", unfair terms and conditions had been imposed, thereby excluding, discriminating and restricting fair participation of local vendors, including the complainant, in the bidding process---Complainant had further alleged that the 'RFP' was tailor-made, so as to select only a specific international vendor; which directly or indirectly, excluded local vendors including the complainant from the market---Undertaking in question was a public sector organization operating and managing a retail chain of about 6,000 stores across Pakistan and fell within the purview of a term "undertaking"---Commission, found that the undertaking 'ERP' software and related equipment, were highly unlikely to be substitutable for other markets and businesses---Undertaking was a dominant one in the relevant market, as it had the ability to work upto an appreciable extent independently of its competitors, customers, consumers or suppliers---Undertaking had a sufficient degree of market power to either adversely affect competition or distort competitive dynamics of the relevant market and had significant market power, while enabled it to favour one or more suppliers over the others---Undertaking had a retail network of around 6,000 stores with annual revenue of approximately sixty billion of rupees, which made it the single largest retail network dealing in household items targeting the lower strata of consumers across the country---Said undertaking also availed direct or indirect State subsidies on regular basis---In presence of valid procurement contract, no other vendor of 'ERP' software would be bidding for the same project and most probably could not even supply after value added services required by the undertaking---Undertaking would continue to have a dominant position in the relevant market by virtue of its number of stores in its network---Pre-qualification mandatory criteria laid down in relevant clauses of 'RFP' were unwarranted and unreasonable, discriminatory and exclusionary in effect and also appeared to favour particular bidders in defiance of the provisions of S.3 of the Competition Act, 2010---Clause 4.2 and clause 5 of the 'RFP' left the actual and potential bidders with uncertainty owing to which an insufficient number of bidders had been able to make meaningful bids; consequently competition in the relevant market was constrained to an appreciable extent in the market of suppliers of 'ERP' software and relative equipment in Pakistan in violation of S.3 of the Competition Act, 2010---Commission had noticed that the technical specifications and the evaluation criteria laid down in relevant clauses of the RFP, were arbitrary, unreasonable, unfair, discriminatory and exclusionary in effect and restricted for opportunity of participation within the competitive bidding process---Commission, directed the undertaking to be mindful of broad guidelines/directions while drafting future tender and to refrain from falling, adopting, implementing or carrying out any activity, in violation of Competition Act, 2010---Commission had passed an interim order which restrained the undertaking from awarding the contract, until the final order from the Commission---In view of the compliance oriented approach of the undertaking and fact that the contract had not been awarded the Commission did not impose any financial penalty---Order accordingly.

Dossani Travels (Private) Limited v. Travel Shop (Private) Limited PLD 2014 SC 1; Hofner and Elser v. Macrotron GmbH [Case C-41/90]; United Brand v. Commission of the European Communities (1978) Case 27/76; Michelin v. Commission [1983] ECR 346 and Genzyme Limited v. Office of Fair Trading ref.

Syed Ahmad Hassan Shah, Advocate Supreme Court, Badar Iqbal Chaudhary, Hasan Kaunain and Nafees (HKN), Hashir Jan, CEO, Isphandyar Tajammal Awan, Director (Legal) and Mian Wajid Ali, Project Officer on behalf of Messrs Digital Research Labs (Pvt.) Limited.

Tariq Hassan, Advocate Supreme Court, Bulent Sohail, Ms. Zarmeeneh Rahim, Hassan and Hassan (H&H), Shakeel Ahmed, GM (IT), Hussain Masood, C.O.O. and Mahmood-ur-Rehman, CFO on behalf of Messrs Utility Stores Corporation of Pakistan (Pvt.) Limited.

Shaukat Ali, Director, Technical/CTO on behalf of Pakistan Software Export Board (G) Limited.

2018 C L D 350

[Competition Commission of Pakistan]

Before Ms. Vadiyya S. Khalil, Chairperson and Dr. Shahzad Ansar, Member

Messrs VISION DEVELOPERS (PRIVATE) LIMITED: In the matter of

F. No. 237/OFT/VISION DEVELOPERS/CCP/2016, decided on 29th December, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 37 & 38---Lahore Development Authority Act (XXX of 1975), Ss.28, 46, 54 & 59---Deceptive marketing practices---Jurisdiction of Competition Commission---Complainant alleged that while marketing the "Park View Villas Scheme", the Developers had resorted to deceptive marketing practices in violation of S.10 of the Competition Act, 2010---Commission initiated enquiry by appointing Enquiry Committee to investigate the matters of alleged violations---Developers having failed to appear despite various opportunities, Commission decided to proceed ex parte---Contentions of Developers were that the Commission had no jurisdiction over the real estate matters and Developers; that all issues pertaining to the real estate sector, especially in Lahore, were to be adjudicated by Lahore Development Authority under Lahore Development Authority Act, 1975---Validity---Objection with regard to jurisdiction of Commission was merely argumentative and based on non-reading, misreading or misinterpretation of the Act and the principles applicable in the matter---Paramount object of Lahore Development Authority Act, 1975 and associated Rules, Regulations and policies administered by the Authority was to ensure sustainable development of the city---Section 46 of Lahore Development Authority Act, 1975 gave its provisions overriding effect---Federal Government had not issued any notification to exempt the real estate sector---Commission had rightly taken cognizance of the marketing practices of the Developers---Non obstante provisions contained in the Lahore Development Authority Act, 1975, made it clear that the Commission was the only forum to probe and initiate enquiries, conduct proceedings and pass orders in case of infringement of provisions of the Act, which inter alia included the deceptive marketing practices---Commission had observed that Developers were engaged in the sale, purchase and development of residential and commercial properties---All commercial and economic activities of the Developers were subject to the provisions of the Competition Act, 2010 and Commission was empowered to take action against any violation thereof---Contentions of the Developers was that Enquiry Committee constituted by the Commission, had no power to investigate into the anticompetitive practice in the real estate sector---Contentions of the Developers, were result of either non-reading and/or gross misinterpretation of relevant law on the subject---Under the provisions of S.28 of the Lahore Development Authority Act, 1975, Commission could conduct enquiries into the affairs of any undertaking and could initiate proceedings in accordance with procedure of the Lahore Development Authority Act, 1975 and take all other actions as could be necessary for carrying out the purpose of the said Act---Commission could delegate any of its powers and functions to its officers and Members---Enquiry Officers, in circumstances, had all the powers to investigate the alleged contraventions---Show-cause notice was issued on the basis of enquiry report---No evidence was available to show that Enquiry Committee had acted in any arbitrary manner---Enquiry Committee had fulfilled the requirements of principles of natural justice---Complainant, who was engaged in the business of developing real estate, assisting individuals and institutional clients, fell within the purview of "undertaking" to file complaint for contravention of provisions of S.37(2) of the Competition Act, 2010---Commission noticed no element of political victimization or harassment affecting the outcome of the enquiry and Developers had adduced no cogent evidence to substantiate the same---Proposed "Park View Villas Scheme" was an unapproved housing scheme and Lahore Development Authority's refusal to grant "No Objection Certificate" to the Developers was based on cogent reason---Advertising campaign launched by the Developers was not only false, but also misleading in character because it had the potential to give an overall impression either that; said scheme was an independently approved housing scheme or same was part/extension of "River Edge Housing Scheme"---Advertised claim of the Developers was false in the sense that it was contrary to the truth or fact, not in accordance with reality or actuality---Developers' representations, omission or practices for purposes of advertisement and promotion of scheme in question, were most likely to mislead actual or potential consumers under the circumstances---Developers had resorted to deceptive marketing practices in violation of S.10 of the Competition Act, 2010---Advertising and marketing campaign, contained both false and misleading claims, which lacked reasonable basis specifically in terms of "character" and "suitability" for use of the scheme---Penalty of Rs.10,000,000 was imposed on the Developers, with direction to inform public-at-large through appropriate clarification in Urdu and two English dailies that 'Park View Villas', was not a housing scheme approved by Lahore Development Authority and not an extention of 'River Edge Housing Scheme' and to refrain from indulging in any form of deceptive practices in future.

[Case-law referred]

Aziz Nishtar, Farhan Maqsood, Ms. Sana Waheed and Nishtar Kamran and Minullah for the Complainant.

Nemo for Messrs Vision Developers (Pvt.) Ltd.

Tariq Muneer, Assistant Director Cantt. Wing for Lahore Development Authority (LDA).

2018 C L D 404

[Competition Commission of Pakistan]

Before Ms. Vadiyya S. Khalil, Chairperson and Dr. Shahzad Ansar, Member

Messrs GREEN FIELD DEVELOPERS (PRIVATE) LIMITED: In the matter of

File No. 190/OFT/GREENCITY/CCP/2015, decided on 21st December, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 37 & 38---Deceptive marketing practice---Allegation was that Developers marketing claim as contained in its advertisement for its housing project amounted to deceptive marketing practices through the distribution of false or misleading information to consumers and/or capable of harming the business interests of competitors, within the meaning and scope of S.10 of Competition Act, 2010---Developer's advertisement about location used the word 'Islamabad' suggestion and giving the consumer the impression that the said housing scheme was located in Islamabad and that it held some form of approval from Capital Development Authority---Project, on the contrary, was situated in District Attock---Developers had been approved only by Tehsil Municipal Authority---Developers had contended that project was located in front of New Islamabad International Airport and was linked to the Kashmir Highway, therefore housing scheme was also located within the domain of Islamabad International Airport---Developers had attempted to create an impression that since the airport was called the New Islamabad Airport---Usage of "Islamabad" with Housing Scheme also suggested that Developers had some form of permission from C.D.A., which certainly was not the case---Use of "Islamabad" in conjunction with Housing Scheme amounted to dissemination of false and misleading information to consumers in terms of S.10 of the Competition Act, 2010---Advertisement in question showed approvals from various government bodies---Developers had given the 'logos' of government bodies erroneously only on the pamphlets---Said practice was false and misleading as no approvals and certifications existed from those public departments---Commission, found that Developers by using various logos of public-sector departments and organizations on various marketing media for the project disseminated false and misleading information to consumers---False and misleading information disseminated by an undertaking to consumers would be capable of harming the business interest of competitors---Commission held that distribution of false and misleading information to consumers was in fact capable of harming the business interests of the competitors---Developers gave an undertaking that it had already removed various unauthorized affiliations, display of logos and websites from brochures and they were willing to remove any other unauthorized logos as per the directions of the Commission and they were not marketing their housing scheme as at Islamabad---Developers committed that in future they would not market their housing society as at Islamabad---Commission held that the undertaking, submitted by the Developers was insufficient and that contravention of S.10(1) of the Competition Act, 2010 stood established---Commission accepted the undertakings of the Developers, imposed penalty and directed the Developers to ensure that it would not use the word 'Islamabad' as part of the name of its housing scheme.

China Mobile Pak Limited and M/s. Pakistan Telecom Mobile Limited 2010 CLD 1478 and Messrs Procter and Gamble Pakistan (Private) Limited 2010 CLD 1695 ref.

Barrister Shoaib Razzaq, Barrister Jawad Khalid Niazi, Raja Soban Hayat and Ms. Fatima Butt on behalf of Green Field Developers (Pvt.) Limited.

2018 C L D 482

[Competition Commission of Pakistan]

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

EDEN BUILDERS (PRIVATE) LIMITED FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 191/OFT/Eden Life/CCP/2015, decided on 15th December, 2017.

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

----Ss. 10, 30, 37 & 38---Defective marketing practices---Powers of Competition Commission---Scope---Competition Commission under provisions of S.37(1) of the Competition Act, 2010, was empowered to conduct enquiries "on its own" into matters relevant to purposes of said Act---Existence of complaint by an undertaking was not a pre-condition for invoking the provisions of the Act---Commission was empowered to initiate proceedings under S.30 of the Competition Act, 2010 in relation to prima facie violation of the substantive provisions of the Act, which pertained to "Defective Marketing Practices" prohibited under S.10 of the Competition Act, 2010---Such proceedings could be initiated against any undertaking regardless of which industry or sector it operated in, as long as it was engaged, directly or indirectly, in the production and supply of goods or provision of services in any identifiable relevant market---Undertaking holding a dominant position was only a prerequisite for establishing a contravention under S. 30 of the Competition Act, 2010 and had no nexus to the matter wherein the issues under contention were those specifically and solely pertaining to S. 10 of the said Act.

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

----Ss. 10, 30 & 37---Defective marketing practices---Respondent/ undertaking, a private limited company was engaged in the development and marketing of residential housing projects---Competition Commission took notice of advertisement published by the respondent, wherein certain absolute marketing claims regarding the legal stand of the scheme, its location, price and development charges payable by consumers, and terms and conditions, had been made out---Enquiry was initiated by the Commission against the respondent---Issue of marketing claim related to the location of housing scheme launched by the respondent---Advertisement of said scheme used the medium of driving time to make an absolute sweeping claim without any qualifier that the site was a 12 minutes driven from a specified place and 5 minutes driven from an enclave and Chak of the city---Initial probe carried out by the Commission led to the result that said scheme was at a distance of approximately 18 km from the specified place, with a drive time of about 20 to 22 minutes at an average speed of 70 km per hour---Absolute claim of the respondent, lacked a reasonable basis as to the character and/or properties of the scheme in specific regard to its relative location---Said claim of the respondent was misleading as it carried with it the tendency to misinform or misguide consumers owing to vagueness and omissions---Advertisement of the scheme in question regarding the issue of the representation of the price of the plots with its illegible disclaimer of additional development charges, not included in the price, was misleading and tantamounted to an omission of material price related information to the ordinary consumer---No Objection Certificate from the relevant Municipal authority for proposed scheme was available, whereas attempts were made to disclose to the public that 'NOC' was granted to another entity giving impression to the public, that approval of C.D.A. for the scheme existed, albeit in another name---Same was a false statement and was violative of S.10(2)(b) of the Competition Act, 2010---Respondent had resorted to deceptive marketing practices in relation to all marketing claims highlighted in the scheme advertisement---Any subsequent representation, disclosures or classifications to make the truth be known to a potential investor after publication of scheme advertisement, was not sufficient to correct the deceptive claim as contained in the advertisement---Consequences of giving false or misleading information, was such that it was always capable of harming the business interests of and resulting in fatal consequences for the competition of the undertaking concern---Respondent/ undertaking, submitted a commitment to the effect that it would comply with any direction of the Commission to remedy any ambiguity and doubt apparent in the advertisement---Said commitment, offered no indication as to how the advertisements, marketing campaign and promotional materials would be amended to remedy the violations---Commission could not ignore the undertaking's earlier conduct and the original scheme advertisement, which in fact and law, was violative of provisions of S.10(1) of the Competition Act, 2010, entailing the imposition of a penalty under S.38 of the Act, 2010---Certain unresolved issues of concern in relation to the amended advertisement and the accompanying commitment still existed---Penalty of Rs.2,500,000 was imposed on the respondent, with direction to file a further amended advertisement with the Registrar of the Commission and also to deposit the penalty imposed on it.

China Mobile Pak Limited and Messrs Pakistan Telecom Mobile Limited 2010 CLD 1478; Messrs Procter and Gamble Pakistan (Private) Limited 2010 CLD 1695; Messrs Wyeth Pakistan Limited against Reckitt Benckiser Pakistan Ltd. 2015 CLD 40; ACCC v. TPG Internet Pty. Ltd. [2013] HCA 54 and In the matter of Show Cause Notice issued to Messrs Tara Crop Sciences (Private) Limited 2016 CLD 105 ref.

Zahoor A. Janjua, Deputy Director (Coord), Agha Ali, Manager (MCS) Customer Services and Imran Anjum Alvi, Advocate Supreme Court for Eden Builders (Private) Limited.

2018 C L D 682

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

TAIZGAM FEED MANUFACTURERS ON COMPLAINT FILED BY MESSRS AL-REHMAN OIL MILLS: In the matter of

F. No. 217/OFT/TAIZGAAM/CCP/2016, decided on 29th December, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 37 & 38---Deceptive marketing practices---Allegation was that respondents had copied complainant's distinct and registered trademark "Taizgaam" in a way that "winda" product marketed by the complainant and the respondents was undistinguishable; that respondents had used deceptively similar product labelling and packing to that of the complainant; thereby creating an impression in the minds of the consumers that their products were actually those of the complainant's; that such conduct of the respondents was violation of S.10 of the Competition Act, 2010---Enquiry was conducted in the matter and Competition Commission initiated proceedings under S.30 of the Competition Act, 2010 against the respondents by issuing show-cause notice---Competition Commission on the basis of inquiry report and pictorial comparison of tags and bags of the complainant's product with that of the respondent's, found that there was an identical usage or exact replica of the trademark and the trade dress of the complainant by the respondents, was materially deceptive and it had a direct bearing on the transactional decision of the ordinary consumer causing undeniable confusion in their minds as to the sources of the product in question---Conduct of said respondent, amounted to unauthorized and fraudulent use of the complainant's trademark packaging and product labelling within the meaning and scope of S.10(2)(d) of the Competition Act, 2010---Other respondent was involved in the practice of copying the complainant's trademark as well as trade dress---Said respondent had introduced a minor differentiation in its brand name, which was clear violation of S.10(2)(d) of the Competition Act, 2010---Yet another respondent was using the exact trademark and product labelling as that of the complainant on the product tag---Similarly all other respondents had also acted in violation of S.10 of the Competition Act, 2010 as there conduct was materially deceptive in terms of unauthorized use of the complainant's trademark as well as trade dress---Respondents had printed trademark registration numbers on their respective packing giving impression to the consumers that their brand name was trademark protected and authentic---Respondents had failed to discharge the burden of providing even the minimum level of substantiation for their claim as to the trademark registration numbers being valid and authentic---Conduct of the respondents, was intended to take advantage of the good-will attached to complainant's trademark and trade dress by misleading the consumer through the use of confusingly similar logos, colour scheme, design as well as language and unauthenticated trademark registration number appearing on the packing---Such conduct was materially deceptive in fact and in law---Clear contravention of S.10 of the Competition Act, 2010 stood established against all the respondents---In the light of the willingness of the majority of the respondents to act in accordance with the directions of the Commission on the one hand and in the interest of justice to deter such practice on the other, respondents were held liable to pay a penalty and same was imposed accordingly; with direction to all the respondents to ensure responsible behaviour in future with respect to the marketing of their business---Respondents were further directed to cease unauthorized use of the complainant's registered trademark and file individual compliance reports and deposit the penalty with the Registrar of the Commission.

Complaint filed by Messrs DHL Pakistan (Pvt.) Ltd.: In the matter of; Show Cause Notice issued to Messrs A. Rahim Foods (Private) Limited: In the matter of; Messrs Pakistan Telecom Mobile Limited: In the matter of; Show Cause Notice issued to Messrs Tara Crop. Sciences (Private) Limited for Deceptive Marketing Practices: In the matter of and Show Cause Notice issued to Paint Manufacturers: In the matter of ref.

Syed Muhammad Junaid Mumtaz, Legal Representative and Muhammad Muneeb Ali, Partner on behalf of Messrs Al-Rehman Oil Mills.

Ghulam Fareed on behalf of Messrs Niaz Corporation.

Muhammad Naveed on behalf of Messrs Hamza Corporation.

Ihsan Maani on behalf of Messrs Muslim Corporation.

Asad Ikram on behalf of Messrs Mian Traders.

Waqas, owner and Mian Akramullah on behalf of Messrs Bahawalpur Oil Mills.

Mubashar Ahmed, Enterpenure on behalf of Messrs Riaz Oil Mills.

Umar and Sajjad on behalf of Messrs Baloch Oil Mills.

Shafiq ur Rehman on behalf of Messrs Azhar Karyana Store.

Haji Abdul Mujeeb on behalf of Messrs Waqas Oil Mills.

2018 C L D 778

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

KITCHEN STONE FOODS ON COMPLAINT FILED BY MESSRS QUICK FOOD INDUSTRIES (PVT.) LIMITED AND MESSRS SEASONS FOODS (PVT.) LIMITED: In the matter of

F. No. 241/OFT/KITCHENSTONE/CCP/2016, decided on 29th December, 2017.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 37 & 38--- Competition Commission (General Enforcement) Regulations, 2007, Reglns. 17 & 18--- Deceptive marketing practices---Allegation of deceptive marketing practices by virtue of advertising and claiming that food products were "100% non-processed" or "Pakistan's first non-processed frozen food"; which was false, misleading, unsubstantiated---Competition Commission initiated enquiry and based on the finding and recommendations of the enquiry report and in the public interest, the Commission decided to initiate proceedings under S.30 of the Competition Act, 2010 and issued show-cause notice to the respondent---All representations; whether intentional or unintentional, which were not easily noticeable or easily understandable to target consumers and could influence their purchasing decision, were materially false and adversely affected competition, were actionable under S.10 of the Competition Act, 2010---Competition Commission, was of the opinion that the respondent's product, could or could not contain entirely synthetic and unnaturally processed ingredients; its advertising claims "100% Non-Processed" and "Pakistan's First Non-Processed Meat", essentially fell within the category of processed meat or meat based products---Respondent's advertising claim amounted to the dissemination of false and misleading information in substance, hence deceptive and in contravention of S.10 of the Competition Act, 2010---Respondent had propagated that processed meat or meat-based products would cause cancer and since its products were 100% non-processed, it had either implicitly or explicitly, claimed that its products did not cause cancer and hence ensuring or enhancing health and safety of its consumers---Competition Commission, noticed that the respondent's advertised claims, pertained to risks associated with (processed) meat and cancer and its targeted audience or consumers being children and parents, respondent ought to possess reasonable basis or prior substantiation in terms of competent and reliable scientific evidence---Respondent, neither had any qualification or qualified staff to conduct such research, nor it had demonstrated that the procedures applied by it were generally accepted in that profession in order to yield accurate results in respect of its product---Respondent's advertisement material lacked a reasonable basis or prior substantiation in terms of competent and reliable scientific evidence---Respondent's representation for the advertisement of its products, was unsubstantiated and deceptive being in contravention of S.10 of the Competition Act, 2010---Respondent was obliged to prove its claims or provide a reasonable basis in terms of competent and reliable evidence, which it had failed to provide---Respondent rendered an unconditional apology and made commitment to discontinue the impugned advertised claims---Respondent had made changes on its product packaging material, including withdrawal of its marketing campaign to the satisfaction of the Commission---Respondent, having been engaged in deceptive marketing practices prohibited under S.10 of the Competition Act, 2010, Competition Commission had imposed penalty of Rs.1,000,000 on the respondent, with direction to refrain from indulging in any form of deceptive marketing practices in future and was forewarned that repetition of violation could attract stricter penalties as per law.

China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478; Beneficial Corp. v. FTC 542 F. 24 611 (3rd Circuit, 1976); American Home Products Corporation v. Federal Trade Commission, 695 F. 2d 681 (1982-83 Trade Cases 65, 801); Messrs Procter and Gamble Pakistan (Private) Limited 2010 CLD 1695; Messrs Colgate Palmolive's case 2017 CLD 1550; Jotun Pakistan (Private) Limited: In the matter of 2015 CLD 1638 and Tara Crop Sciences (Private) Limited: In the matter of 2016 CLC 105 ref.

Ali Kabir Shah, Mohsin Kudwai and Ali and Ali Associates on behalf of Messrs Quick Food Industries (Pvt.) Limited and Messrs Seasons Foods (Pvt.) Limited.

Barrister Raj Adnan Khan, Hasan Ali and Messrs Mandviwalla and Zafar on behalf of Messrs Kitchen Stone Foods.

2018 C L D 844

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

DRY AND ACID-LEAD BATTERY MANUFACTURERS: In the matter of

F. No. 201/COMP/BATTERY MANUFACTURERS/OFT/CCP/2016, decided on 30th March, 2018.

Competition Act (XIX of 2010)---

----Ss. 10, 30 & 37---Deceptive marketing practices---Respondents/ undertakings, were engaged in the business of manufacturing, distributing and selling dry and acid-lead batteries---Complainant, had alleged that respondents did not disclose certain information with regard to capacity and utilization of their products and that respondents were printing randomly generated serial numbers of the battery body, packing and warranty cards, which gave impression that those serial numbers represented the battery capacity---Enquiry Committee appointed by the Competition Commission concluded that undertakings were engaged in making practices by omitting information, such as capacity of battery---Said report supported allegations by the complainant---Commission in proceedings under S. 30 of the Competition Act, 2010 considered the findings of enquiry report, and found that respondents, except one undertaking, had contravened the provisions of S.10(2)(e) of Competition Act, 2010 by omitting to disclose material information related to their products' capacity and characteristics to consumer; that undertaking, had also contravened S.10(2)(c) of the Competition Act, 2010 by engaging in misleading advertisements through various media, distorting the competitive fabric of the market---Respondents/undertakings, during course of proceedings before the Commission had admitted that information pertaining to capacity and usage of their product, was vital for consumers and submitted to withdraw and modify their current advertising and marketing practices---Respondents having undertaken to stop the subject advertisement and marketing practices and had expressed willingness to comply with the provisions of S.10 of the Competition Act, 2010, Commission took lenient view and minimum penalty of Rs. One million on each respondent, was imposed---Respondents, were directed to file compliance report with Registrar of the Commission and also to deposit the amount of penalty within 60 days of the passing of present order.

Messrs China Mobile Pak Limited dated 29.09.2009 (Zong Order): In the matter of; Messrs Proctor and Gamble Pakistan Private Limited dated 20.05.2017: In the matter of; Standard Oil of Calif 84 FTC 1401 and Beneficiary Corp. v. FTC, 542 F. 2d 611 (3rd Cir., 1976) ref.

Mirza Muhammad Saeed for the Complainant.

Mohsin Khan, GM Marketing and Muhammad Iqal, GM Supply Chain for Messrs Atlas Battery Ltd.

Syed Salman Zahoor, Advocate and Regional Sales Manager, Battery Divisions for Messrs Treet Corporation Ltd.

Syed Aminuddin Fakir, Syed Hasan Rezan, Advocates Orr, Dignam & Co. for Messrs Exide Pakistan Ltd.

Muhammad Rehan Akhtar, CFO and Bilal Ahmed, AGM Tax and Corporate for Messrs Pakistan Accumulators (Pvt.) Limited.

Naeem Raza, Head of Marketing and Sales for Millat Industries Products Ltd.

Kashif Ahmed, Zonal Sales Manager for Messrs Century Engineering Industries Ltd.

2018 C L D 873

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

MESSRS RELIANCE PAINTS PAKISTAN: In the matter of

F. No. 31/RP/C&TA/CCP/2015, decided on 30th March, 2018.

Competition Act (XIX of 2010)---

----Ss. 4, 30, 31, 37 & 38---Prohibited agreement---Respondent/ undertaking, was a company engaged in manufacturing and supply of paints and allied products---Complainant who was also active in the business of paints alleged that respondent had fixed minimum retail price at which its dealers or distributors/retailers might sell its products and in case of non-compliance with the price so fixed complainant would suffer---Complainant also alleged that respondent had circulated to all distributors/retailers intimating that its dealers should sell the products only at its fixed retail price---Said practice had been going on for some time and the respondent had on various occasions, cut-off the supply and imposed penalties on dealers who sold at prices other than the respondent's fixed prices---Enquiry Committee, constituted by the Commission concluded that respondent was prima facie involved in imposing a vertical restraint on its dealers by maintaining a minimum sale price, which appeared to be in contravention of S. 4(3)(a) of the Competition Act, 2010---Enquiry Committee concluded that restriction imposed by the respondent on its dealers, not to sell its products to unauthorized dealers, was recommendatory in nature, hence it did not find the same to be in contravention of the provisions of Competition Act, 2010---Enquiry Committee had recommended initiation of proceedings under S.30 of the Competition Act, 2010---Competition Commission was empowered to impose a fine under S.38 of the Act and issue "cease and desist order" under S. 31 if there was violation of S. 4 of the Act---Counsel of the respondent on the basis of the acceptance by Commission amended commitment of the respondent, took the plea that a lenient view be taken in imposition of fine---Commission, while imposing fine, had taken into view the nature of violation, which in the present case, was price fixing---Alleged violation, continued for almost 3 years and was discontinued only after the issuance of the show-cause notice and during hearings before the Commission---Penalty of Rupees five million, was imposed on the respondent, which amount was liable to be deposited within 60 days from the date of order---Respondent was directed to immediately stop contravention of S. 4 of the Competition Act, 2010 and submit compliance report with the Registrar of the Commission within sixty days.

European Commission's Notice on Vertical Restraints of 2010 ref.

Mussadiq Islam, Advocate M/s. Cornelius, Lane & Mufti, Usman Ali, RSM Deco Sales and Ms. Sara Shah on behalf of Messrs Akzo Nobel Pakistan Ltd.

Kamran Idris, GM and Muhammad Imtiazuddin Zubairi, Zubairi Law Associates on behalf of Reliance Paints Pakistan.

2018 C L D 919

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

KAYMU.PK: In the matter of

File No. 202/Kaymu.Pk/OFT/2016, decided on 30th March, 2018.

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

----Ss. 2(1)(q), 10, 30 & 37---Deceptive marketing practices---Complaint against---Undertaking---Complainant had alleged that he ordered a wrist watch from respondent's website, which when delivered, was in a poor condition and was very different as compared to the one shown in the product description on the website---Complainant, further alleged that upon noticing the difference between the ordered watch and delivered one, he raised a dispute with the respondent and the seller and apprised them of the difference between what was ordered and what was delivered, respondent advised the complainant to send the disputed product and it was said that dispute would be resolved within 10 days, but when the complainant contacted representative of the seller it was stated that their address had changed and no new address was given and the seller ceased responding to the complainant---Complainant, alleged that respondent was involved in the distribution of false and misleading information---Competent authority initiated enquiry, which was concluded vide enquiry report---Based upon the conclusion and recommendation of the enquiry report, competent authority approved the initiation of proceedings under S.30 of the Competition Act, 2010---Competition Commission, was empowered to initiate enquiry only on three occasions i.e. (i) on its own motion or (ii) upon a reference filed by the Federal Government, or (iii) on a complaint filed by an undertaking or a registered association of consumers---In the present case the proceedings were initiated on complaint of individual---Complainant had approached the Commission as a "consumer" and not as an "undertaking"---Commission, was not empowered under S.37(2) of the Competition Act, 2010 to proceed with an enquiry on the complaint of the consumer, rather the legislature in all its wisdom had categorically outlined that the complaint was to be filed, either by the 'undertaking' or 'registered association of consumers'---Nowhere in the definition of 'undertaking' the word 'consumer' was used---Consumer protection laws were framed to protect the interests of the consumers---Competition Act, 2010 also provided for protection of consumers---Since, a consumer, did not fall within the purview of the definition of 'undertaking' initiation of the enquiry under S.37(2) of the Competition Act, 2010 on the basis of the complaint in question, was in fact violative of the express provisions of the law---Enquiry in the present case, was not in line with subsection (2) of S.37 of the Competition Act, 2010 and accordingly, no proceedings under S.30 of the Act, could be initiated---Both the enquiry report and show-cause notice, were set aside---Complaint was remanded to the Registrar of the Commission who would place the same before the Competition Commission---Present order would not preclude the Commission from authorizing the conduct of de novo enquiry in the matter in accordance with law.

Muhammad Hussain Patel v. Habib Wali Muhammad PLD 1981 SC 1; Murtaza Flour Mills (Private) Limited v. Federation of Pakistan and others 1996 MLD 1273; Cooperative Insurance Society of Pakistan Limited v. State Life Insurance Corporation of Pakistan 1999 SCMR 2799; Messrs Nawabsons Laboratories (Private) Limited v. Government of Punjab and others PLD 2003 Lah. 115 and National Feeds Limited v. Competition Commission of Pakistan 2016 CLD 1688 ref.

(b) Administration of justice---

----Statute, was a formal expression in writing of the will of the Legislature---When the law required a thing to be done in a particular manner, same must be done accordingly---If the prescribed procedure was not followed it would be assumed that it had not been legally done.

Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore and 2 others PLD 1971 SC 61 rel.

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

----Ss. 2(d) & 37---Competition Commission---Jurisdiction---Scope---Commission was a special quasi judicial law enforcing authority, entrusted with a special mandate and special powers, for which certain conditions had been imposed---For the Commission to exercise such powers i.e. conduct an enquiry, certain conditions codified in S.37 of the Competition Act, 2010 must be met, failing which any action taken or order passed would lack jurisdiction and be void.

National Feeds Limited v. Competition Commission of Pakistan 2016 CLD 1688 ref.

Monis Usman, Director, Jam Zeeshan Ali, Advocate Fazleghani, Advocates on behalf of Keymu.pk (E-Cart Services (Pvt.) Limited).

Complainant in person.

2018 C L D 984

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

PAKISTAN TOBACCO COMPANY LTD.---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN and others---Respondents

Appeal No. 18 of 2017, decided on 27th March, 2018.

Competition Act (XIX of 2010)---

----Ss. 4, 5 & 23---Competition Commission (Appeal) Rules, 2007, R.23(4)---Exemption from S.4 of the Competition Act, 2010 with regard to particular practices or agreement---Commission, in 2009, took suo motu notice of advertisements made in leading newspapers on various dates pertaining to pack prices of cigarette brands---Appellant company, was also one of the undertakings who published such advertisements---Competition Commission, rightly expressed opinion regarding fixation of minimum price by the cigarette manufacturers and reiterated that printing, either the maximum and minimum, retail price, could have their anti-competitive effects; however, if a choice was to be made, it had to be the maximum retail price---Appellate company gave an undertaking to such effect in writing---Office of the Commission, was directed to issue fresh extension in competition certificate to the appellant Company with the condition, that "the parties would not fix minimum resale price of the products, which were subject of the distribution agreement" and ensure compliance of the direction within thirty days---Appellant company, was cautioned not to infringe provisions of S.4 of the Competition Act, 2010 and exploit the exemption so granted by engaging in fixing the minimum retail price with reference to the products, which were subject of their standard distribution agreement---If appellant was found engaged in such practice, the Commission could initiate proceedings against the appellant Company in accordance with law.

Umair Mansoor, Legal Counsel, Shahab Qutab and Usama Jamshed for Appellant.

Noman Amin Farooqi for Respondent No.1 (Competition Commission of Pakistan).

Noman Amin Farooqi for Respondent No.2 (Director-General (Legal and Exemptions) Competition Commission of Pakistan).

2018 C L D 1115

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson and Dr. Shahzad Ansar, Member

MESSRS SHAINAL AL-SYED FOODS FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 205/OFT/SHAINAL/CCP/2015, decided on 30th March, 2018.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 37 & 38---Deceptive marketing practices---Complainant company, engaged in the business of production, marketing and sale of a large variety of food products, contended that it had been using the word "National" as a trademark, house mark, company name and a logo, since 1970---Allegation against respondent was of preparing, packing, marketing and selling imitated food products using a confusingly similar logo "Shainal" and packaging in terms of colour scheme, design and over all get up to that of the complainant's product---Enquiry report revealed that conduct of respondent, prima facie, amounted to passing off its products as that of the complainant's through fraudulent use of complainant's logo, packing, colour scheme and get up of products in violation of S.10(1)(2)(d) of Competition Act, 2010 thus, had the potential to inflict harm upon the good-will and business interest of the complainant and cause confusion among customers through dissemination of fake and misleading information---Deceptive marketing practices had a direct impact on the public-at-large---According to S.10(2)(d) of the Competition Act, 2010, fraudulent use of another's trademark, firm name or product labelling or packing, would constitute a deceptive marketing practice---Respondent had in fact resorted to copying and contravened the provisions of S.10(1)(2)(d) of the Competition Act, 2010---Respondent's trade dress and overall impression of labelling and packaging of the product was deceptively similar to that of the complainant's trademark---Ordinary consumer who would purchase the respondent's product, was likely to be deceived by its packaging, logo and get up---Deceptive similarity in the respondent's trade dress and the complainant, trade dress had the potential to directly or indirectly affect the transactional decision of the consumer to buy the respondent's product, on the misleading pretence as to origin/place of production and quality of the product and hence materially deceptive---Competition Commission was of the view that such conduct of the respondent had resulted in violation of S.10(1)(2)(b) of the Competition Act, 2010---Respondent's practice being inherently deceptive, was in fact capable of harming the business interest of the complainant---Penalty of Rs.5,000,000 (Rupees Five Million) was imposed on the respondent and he was reprimanded to ensure reasonable behaviour in future with respect to marketing their business---Respondent would be made further liable under S.38(3) of the Competition Act, 2010, in case of violation of the present order.

In the matter of Show Cause Notice issued to Zong 2010 CLD 1478; In the matter of Show Cause Notice issued to Messrs A Rahim Foods 2016 CLD 1128; United Biscuits UK (Ltd.) v. ASDA Stores Ltd. [1997]; Colgate Palmolive Co. v. Anchor Health and Beauty Care Pvt. Ltd. 2003 (27) PTC 478 Del; In the matter of Show Cause Notice issued to Messrs Tara Crop Sciences (Private) Limited 2016 CLD 105; In the matter of Show Cause Notice issued to Jotun Pakistan (Pvt.) Limited 2015 CLD 1638 and In the matter of Messrs DHL Pakistan (Pvt.) Ltd. 2013 CLD 1014 ref.

Hasan Irfan Khan, Advocate Supreme Court, Syed Bilal Ahsan, Talal Farrukh Irfan Khan, Ms. Khadija Yasmin, Saqib Asghar and Irfan and Irfan Attorneys at Law for Messrs National Foods Limited.

Ahsan Javed and Hafiz Talab Hassan, Business Consultant for Messrs Shainal Al-Syed Foods Limited.

2018 C L D 1380

[Competition Commission of Pakistan]

Before Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

SHAJARPAK (PVT.) LIMITED: In the matter of

F. No. 268/SHAJARPAK/OFT/CCP/2017, decided on 27th August, 2018.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 31, 32, 37 & 38---Competition Commission (General Enforcement) Regulations, 2007, Reglns. No.25 & 37---Deceptive marketing practices---Complainant, active in the business of manufacturing cotton fabrics and textile products under the trademark "Pasha Fabrics", alleged that respondents, 8 in numbers, were fraudulently using the complainant's registered trademark and copyright trade dress with similar language, layout, getup, colour/colour combination, size, shape and graphics in the sale and promotion of their products; which was misleading the consumers thus violating S. 10(2)(b)(d) of Competition Act, 2010---Enquiry report had concluded that respondents were fraudulently using the complainant's trademark and labelling and packing on similar products---Respondents were engaged in the dissemination of false and misleading information to the consumers' detriment and causing harm to the business of the complainant---Based on the prima facie findings of the enquiry report and the recommendations, the Competition Commission decided to initiate proceedings under S.30 of the Competition Act, 2010---All respondents, except one were found to have contravened the provisions of S.10 of the Competition Act, 2010---Neither the complaint nor the enquiry report had provided any evidence to proceed adversely against said one respondent in the case---Show-cause notice issued to said respondent was disposed of---Four respondents appeared before the Commission and had committed not to repeat the contravention and comply with the provisions of S.10 of the Competition Act, 2010 as well as any direction given by the Commission under the provisions of Regln.37 of Competition Commission (General Enforcement) Regulations, 2007, read with S.38 of the Competition Act, 2010---Commission taking a lenient view imposed penalty of Rs.500,000 each on said respondents---Three remaining respondent having failed to appear before the Commission, were proceeded against under S.30(2)(b) of the Competition Act, 2010 and penalty of Rs.750,000 each was imposed on them---Respondents were directed to refrain from indulging in any form of deceptive marketing practices in future and were forewarned that repeated violation could attract stricter penalties as per the law; non-compliance with the order could result into further liability under subsection (3) of S. 38 of the Competition Act, 2010 to pay an additional penalty amounting to Rs.25,000 per day from the date of the order.

Messrs DHL Pakistan (Pvt.) Limited: In the matter of 2013 CLD 1041; Messrs A. Rahim Food (Pvt.) Limited: In the matter of 2016 CLD 1128 and Colgate Palmolive Co. v. Anchor Health and Beauty Care (Pvt.) Limited (2003) PTC 478 Del ref.

Khwaja Ahmed Imran, Director, Tariq Abdul Quddus, Brand Manager and Qaisar Imam, Advocate for Shajarpak (Pvt.) Limited.

Asif Khan for Messrs Ahmed Pasha Collection.

Mian Nadeem Akhtar for Messrs Aamir Cloth House.

Nemo for Messrs Ramzan Fabrics.

Nemo for Pasha The Designer Fabrics.

Muhammad Riaz for Messrs Sufi Cloth House.

Nemo for Messrs Baba Plastic and Dabha House.

Nemo for Messrs Ahmed Plastic.

Mian Ghulam Rasool, Advocate Supreme Court and Fida Hussain Matta for Messrs Kausar Brother Plastic Center.

2018 C L D 1461

[Competition Commission of Pakistan]

Before Ms. Vidiyya S. Khalil, Chairperson, Dr. Shahzad Ansar and Dr. Muhammad Saleem, Members

SHOW CAUSE NOTICES ISSUED TO MESSRS OPTIONS INTERNATIONAL (SMC-PVT.) LIMITED ON COMPLAINT FILED BY MESSRS STARBUCKS CORPORATION, USA: In the matter of

F. No. 282/STARBUCKS/OFT/CCP/2017, decided on 17th August, 2018.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 31(1)(c), 32 & 38---Competition Commission (General Enforcement) Regulations, 2007, Reglns. 25(3) & 52-A---Deceptive marketing practices---Interim order, grant of---Complainant had alleged that respondent was engaged in dissemination of false and misleading information/claims, representing it an international corporation selling and serving in Pakistan complainant's registered and well-known trademark "Starbucks Cofee" and allied products; whereas it had no authorization or license to use said trademark, and thereby respondent was deliberately engaged in deceptive marketing practices to the complainant's and consumer's detriment in contravention of S.10 of Competition Act, 2010---Complainant also prayed that an interim order under S.32 of Competition Act, 2010 requiring the respondent to refrain from deceptive marketing practices, in order to prevent further irreparable loss and damage to the business and goodwill of the complainant---Validity---Interim order under S.32 of the Competition Act, 2010, could only be pressed upon satisfaction of conditions; firstly, that final order in the proceedings was likely to take time; secondly, that a situation existed or likely to emerge; thirdly that as a consequence of said situation, serious or irreparable damage could occur; fourthly, that interim order was necessary in the public interest; fifthly that concerned undertakings were provided opportunity of hearing---Held, issuance of final order in the present matter could take time, hence, the first condition under S.32 of the Competition Act, 2010, stood satisfied; prima facie findings of the enquiry report along with the evidence were available on the record which inter alia included the registration certificate and the images of the restaurant and café owned and operated by the respondent and the print outs of the respondent's facebook page were presented by complainant's counsel showing that the respondent was using the registered trademark of the complainant; prima facie, contravention of clauses (a) & (d) of subsection (2) of S.10 of the Competition Act, 2010, was made out; since respondent was prima facie using the trademark of the complainant and the trademarks were also registered in the name of complainant, allowing the respondent to continue with the use of complainant's trademark could cause serious or irreparable damage to the business and goodwill of the complainant; Competition Commission could issue an interim order where the issuance of interim order was in the public interest; Commission was entrusted with the role of protecting the consumers from anti-competitive behaviour which inter alia included the deceptive marketing practices being prohibited under S.10 of the Competition Act, 2010; undertaking was rightly restrained from resorting to unfair competitive practice; respondent was directed to refrain from marketing, advertising, producing and supplying coffee and other related products' labelling and packing bearing 'Starbucks' trademark and logo anywhere and not to claim any association or affiliation with the complainant or using the trademarks or logo of complainant on any of its products, till the conclusion of the proceedings under S.30 of the Competition Act, 2010 and until further order---Respondent was cautioned by the Commission that in case any violation of said direction was committed, respondent would be liable to fine of Rs.10,000,000.

Muhammad Saleem Warind v. Mazhar and 2 others 2015 CLD 655; Jubilee Life Insurance Company Limited v. United Insurance Company of Pakistan Limited 2016 CLD 1663; In the matter of Complaint filed by DHL 2013 CLD 1014; 2013 CLD 1014 and Nasrullah v. Province of Balochistan 2000 PLC (C.S.) 769 ref.

Sana Shaikh Fikree, Senior Associate and Sanaya F. Vachha, Associate Vellani and Villani for Messrs Starbucks, USA.

Muhammad Fayyaz Hashmi for Messrs Options International (SMC-Pvt.) Limited.

2018 C L D 725

[Competition Appellate Tribunal]

Before Justice (Retd.) Mian Fasih ul Mulk, Chairperson, Ahmed Owais Pirzada, Member Technical and Justice (Retd.) Miftah-ud-Din, Member Technical

Raja ASIR MUNIR and another---Appellants

Versus

Messrs DHL PAKISTAN (PVT.) LIMITED and 2 others---Respondents

Appeals Nos. 1 and 2 of 2013, decided on 23rd May, 2017.

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

----S. 28(1)---Complaint filed before Competition Commission---"Duly authorized person"---Scope---Company secretary---Complaint was filed by the company secretary, which not only bore the signatures but also the seal of the complainant-company---Certified copy of Board resolution of the complainant-company was also annexed with the complaint---In the said Board resolution along with the company secretary, Chief Executive Officer of the company was also authorized on behalf of company to take all necessary measures, required in such regard before the Competition Commission and all courts, arbitrators, tribunals, forums or any administrative authority---Power of attorney of the counsel was also duly signed by the company secretary who was duly authorized in such regard---Complaint before the Competition Commission had been competently filed in such circumstances.

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

----S. 10(1)--- Appeal before Competition Appellate Tribunal---Fraudulent use of a logo trademark---Deceptive marketing practices---Allegation against appellant-companies was that they used logos and marks, which were identical in colour and style to the respondent-company's trademark, which prima facie gave an impression that the appellants were authorized dealers of the respondent---Competition Commission concluded that the manner in which marks under question were printed and advertised look deceptively similar to the trademark of respondent---Consequently the appellants were penalized vide the impugned judgment---Validity---Although the appellants were doing business in their own name but they were using a logo which was deceptively similar to the respondent's trademark for which no plausible justification had been provided---Appellants had used their logos in a manner identical to that of the respondent with identical colours, schemes and design---Such resemblance between the logos was likely to cause confusion and deception---Appellants had opened outlets and were carrying on their business clearly and openly using the respondent's logo---Such use was unauthorized and constituted an act of deceptive marketing practice within the meaning of S. 10 of the Competition Act, 2010---Impugned findings recorded by Competition Commission were based on proper appraisal of relevant provisions of the law as well as other material brought on record, thus the same had to be maintained---Appeals were dismissed accordingly.

Faraz Fazal Sheikh and Haseeb Ali Quddusi for Appellants.

Amjad Hameed Ghouri for Respondent No.1.

Bulent Sohail for Respondents Nos. 2 and 3.

2018 C L D 759

[Competition Appellate Tribunal, Islamabad]

Before Justice (R) Mian Fasih ul Mulk, Chairperson, Justice (R) Miftah-ud-Din and Ahmed Owais Pirzada, Members Technical

PAKISTAN POULTRY ASSOCIATION---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 9 of 2016, decided on 28th September, 2016.

Competition Act (XIX of 2010)---

----Ss. 4(1) & 4(2)(a)---Appeal before Competition Appellate Tribunal---Preventing, restricting or reducing competition---Poultry Association---Fixing selling prices of live broiler chicken, broiler chicken meat and chicken eggs---Competition Commission vide impugned order held that the Poultry Association's/appellant's action were in violation of S. 4(1) read with S. 4(2)(a) of the Competition Act, 2010 with respect to two distinct markets, and imposed a penalty of Rs. 50 Million for violation in the market for broiler chicken and Rs. 50 Million for the violation in the market for chicken eggs, and the appellant was also ordered to immediately cease and desist from advertising the rates of poultry products as an association---Validity---Concerned Market Committee advertised rates of poultry for a certain city only and for a specific day and date, whereas the advertisements given by the appellant Association clearly indicated that the rates referred in the advertisement were applicable throughout Pakistan and the meat on such rates was available across the country---Advertisements given by the appellant , therefore, were not in line with the concerned Market Committee's decision---By advertising prices of the poultry products in the national press the appellant had clearly prevented, restricted and reduced competition within the relevant market, which was a clear violation of S. 4 of the Competition Act, 2010---Although the appellant had taken the position that no such decision or agreement referred in S. 4 of the Act could be produced or referred by the Competition Commission in its impugned decision, however, the evidence of advertisement given by the appellant, completely fulfilled the conditions referred in S. 4 of the Act with regard to violations adversely affecting the competitive environment in the market---Appellant had, therefore, violated S. 4(1) read with S. 4(2)(a) of the Competition Act, 2010---Findings recorded by Competition Commission were based on proper appraisal of relevant provisions of law as well as other material brought on record, therefore, the same had to be maintained---Appeal was dismissed accordingly.

Ch. Khurshid Ahmed for Appellant.

Azid Nafees for Respondent.

2018 C L D 812

[Competition Appellate Tribunal, Islamabad]

Before Justice (R) Mian Fasih ul Mulk, Chairperson, Justice (R) Miftah-ud-Din and Ahmed Owais Pirzada, Members Technical

HASCOL PETROLEUM LIMITED---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN and 3 others---Respondents

Appeal No. 7 of 2016, decided on 21st December, 2016.

Competition Act (XIX of 2010)---

----S. 11(1)---Appeal before Competition Appellate Tribunal---Acquisition of shares---Anti-competitive foreclosure---Substantial lessening of competition---Pakistan State Oil Company Limited ("PSO") sought approval of the Competition Commission for the acquisition of 63 million (out of 84 million) right shares of Pakistan Refinery Limited ("PRL")---Subsequently Pakistan State Oil Company communicated its intention to acquire an additional 21 million right shares of PRL and sought a conditional approval of the sale as the matter was sub judice before High Court---Appellant-company filed a complaint before the Competition Commission against such intended acquisition of shares---Competition Commission granted unconditional approval of the acquisition by PSO up to 63 million right shares in PRL and conditional approval of up to 21 million right shares in PRL, subject to the final decision of the High Court, with the direction that PRL should not engage itself in any form of exclusionary conduct and should continue to offer the residual Refined Petroleum Products, supplied to Oil Marketing Companies (OMCs), including appellant-company on commercially viable and competitive terms---Contention of appellant-company that impugned acquisition of shares would result in substantial lessening of competition in the relevant market in contravention of S. 11(1) of the Competition Act, 2010; that approval of the subject vertical acquisition/integration could impair competition to a great extent when coupled with PSO's, already existing horizontal powers in the Oil Marketing Companies, where it occupied 59.9 % share, which was likely to lead to anticompetitive foreclosure---Validity---Total PRL shares in the local refined oil market was around 10%, while the remaining demand was met through the supply from the other local players in the refinery business as well as through importation by the Oil Marketing Companies (OMCs)---Total market share of Pakistan Refinery Limited (PRL) for various products was merely 4.2% of the total MOGAS market, 8.54% of the total HSD market, 5.56% of the total Fuel Oil Market and approximately 13.33% of the totals Jet A-1 market---Such position of PRL in the market could not create much impact on competition---Pakistan Refinery Limited (PRL) did not have enough market share to be considered as a primary source of supply for the OMCs---Fear of the appellant that the acquisition of shares by PSO would lead to lessening of competition and anti-competitive foreclosure was unjustified---So far as the quantity of petroleum products being imported by PSO, there was no bar on OMCs to do the same and currently petroleum products were already being imported by the other OMCs as well---Being a big player in the market, PSO could have certain advantages because of its size and the size of its demand, which was a natural phenomenon---However, such status of PSO which it had enjoyed since long did not have an impact on the market which could be considered as alarming---Moreover with the presence of Competition Commission any move that lessened competition could be addressed if the situation so demanded---Competition Commission in its impugned order had analyzed the trend in the sale and purchase between the appellant and PRL, which revealed no discriminatory treatment directed towards the appellant---Appellant could not produce any evidence in support of its allegation of receiving discriminatory treatment from PRL---Commission had further examined the percentage of products imported by the appellant and observed that the appellant would not be affected in the post-acquisition scenario as it did not solely depend upon PRL and its petroleum products supplies---Since the appellant regularly imported and purchased from refineries other than PRL and prices were regulated by Oil and Gas Regulatory Authority, therefore, the possibility to influence prices in the downstream market did not arise---So far as products supplies was concerned, the subject acquisition of shares would not have an impact on competition as the increase in number of shares bore no connection to off-take rights which were dependent upon PSO's market share downstream as per the terms of products supply agreement---Smaller share of PRL in the market and the proposed acquisition of shares was not the kind of impact which could in any case be considered as a threat to the interest of the appellant---No interference was required in the impugned order of the Competition Commission---Apprehensions expressed by the appellant appeared to be recurring in nature, therefore, in future if there was any such evidence of negative impact on the business of appellant, the appellant would be at liberty to approach the competent forum---Appeal was dismissed accordingly.

Ms. Rahat Kaunain Hussain for Appellant.

Noaman Amin Farooqi for Respondent No.1.

Ijaz Ahmed for Respondent No.2.

Maudood Ahmed Khan for Respondent No.3.

Abdul Rehman Khan for Respondent No.4.

2017 C L D 519

[Intellectual Property Tribunal]

Before Shakil Ahmed Abbasi, Presiding Officer

The STATE---Petitioner

Versus

AZMAT ALI and others---Respondents

Criminal Case Nos. 1, 7, 11, 15, 20, 21, 22, 24, 46, 48, 54, 56 and Criminal Misc. Applications Nos. 1 to 12 of 2017, decided on 31st January, 2018.

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

----Ss. 66 & 67---Intellectual Property Organization of Pakistan Ordinance (IV of 2012), Ss.15, 16 & 18---Infringement of copyright---Jurisdiction of Federal Investigation Agency in prosecuting offences under Copyright Ordinance, 1962---Federal Investigation Agency, had no jurisdiction to prosecute offences under Copyright Ordinance, 1962, and all its actions, proceedings initiated and carried, were declared to be illegal and without lawful authority---Prosecutor of the Agency raised contention to the effect that to empower the Agency over copyright offences, was to meet an obligation in Pakistan under International agreements/treaties on Intellectual Property Rights, including copyright---Such contention was misconceived as none of such agreements/treaties cast any obligation on Government of Pakistan to take suo motu/ex-officio action in local or even in foreign copyright infringement matters and assume jurisdiction in every case as if it was an offence against the State---Police was available as an enforcement and prosecution agency should have been geared up and made more effective and efficient to deal with copyright offences, instead of conferring parallel jurisdiction over Federal Investigation Agency, which was meant to deal with/prosecute offences against the State only---One of such measures to make offence of copyright infringement as heinous, the Legislature had already made it cognizable and non-bailable---Even otherwise, the Copyright Ordinance, 1962 by virtue of S.13(d) had taken care of and stipulated such situation, where the State, could itself be an aggrieved party as copyright owner, then in such cases only exercise of jurisdiction by Federal Investigation Agency, would be proper and legal act as prosecution agency---Contention of prosecution in that behalf, was repelled---No situation was visualized under Cr.P.C., enabling an attorney of the complainant to lodge FIR/complaint on his behalf---Such FIR/complaint was nullity in law and any such proceedings were illegal.

[Case-law referred]

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

----Ss. 66 & 67---Criminal Procedure Code (V of 1898), S.249-A---Offences of infringement of copyright---Appreciation of evidence---Person could only be convicted under S.66 of Copyright Ordinance, 1962, if he, knowingly would make infringing copies; involved in distribution of infringed copies; having in his possession any printing plate for the purpose of making infringed copies; and cause any work in which copyright submitted to be publicity performed---Under the Copyright Ordinance, 1962, it was the owner or assignee or licensee of a copyright who was aggrieved on account of the infringement of that right in a particular work---Section 66 of the Copyright Ordinance, 1962, was intended to safeguard the right and interest of such author, assignee or licensee---Section 66 of the Copyright Ordinance, 1962, though, did not contain any word suggesting that only the author, assignee or licensee of the copyright, could take criminal action for infringement of copyright; said section was to be read to imply that the pirating person would be liable to punishment for infringement only if such author, assignee or licensee would seek to claim protection of law---If such person, notwithstanding the infringement, would not choose to take any action for the infringement, there was no harm caused to any one else---Infringement of copyright, was not to be regarded as an offence against the society at large, for which any one could move the machinery of criminal law---In fact, the infringement of copyright in a work would suggest that the infringed work was of value to the society---Dissemination of parts of such a work by pirating the same by another author, could hardly have an adverse effect on the society---Piracy of a work, could adversely affect the financial interests of the author or assignee or licensee therefore, he was alone to be held entitled to claim the protection of criminal law---Person, whose copyright or any other right was not infringed by accused, could not file a complaint under S.66 of Copyright Ordinance, 1962---General principle of criminal law to the effect that "crime can be reported by any person to bring the State machinery into motion" could not be applied in stricto sensu to the limited provisions relating to offences of infringement of copyright or other right conferred by the Copyright Ordinance, 1962, for the reason that in violation or infringement of copyright of a person, would not amount to an offence against public at large---Copyright was personnal right of a person having personal knowledge about its existence and violation by any third person; whereas in terms of S.67 of the Copyright Ordinance, 1962, unless such person would feel aggrieved by violation of his copyright, criminal proceedings, could not be initiated by any other person or agency---In the present cases, prosecution had failed to bring on record any material, which would suggest that the attorneys through whom complaints had been filed, had the personal knowledge of the act, which could be established through their evidence on oath; nor there had been any explanation as to why the owner/assignee/licensee of the copyright had not filed the complaint directly, so that any claim of existence of copyright in his favour and its violation by any person, could be established through primary evidence---Complaint filed through attorney could not be considered as valid complaint, nor the criminal proceedings emanating on the basis of such complaint through attorney, could be treated as lawful proceedings therefore, same were liable to be quashed on that account---In all the cases sureties stood discharged and accused were acquitted---Applications under S.249-A, Cr.P.C., moved by accused persons were allowed by the Tribunal, in circumstances.

[Case-law referred]

Yasin Ali, Counsel for accused Muhammad Arif and Muhammad Saqib.

Waqar Alam Abbasi, Counsel for accused Mushtaq Ahmad.

Hasan Sabir, Counsel for accused Asmatullah.

Nadir Khan Burdi, Counsel for accused Suhail.

Mehmood Baloch, Counsel for accused Muhammad Rafiq.

Nasir Abbas Malik, Counsel for accused Uzair and Junaid Ahmed Butt.

Nasir Rizwan Khan, Counsel for accused Khalil-ur-Rehman and Amjad Ikram.

Bilal Rasheed, Counsel for accused Shahrukh Tahir and others.

Yasin Ali, Counsel for accused Muhammad Imran, Yasir Ali, Yameen Akhter, Arshad A. Rahim and Nauman-ur-Rehman.

Bakhtiar Ahmed Channa, Learned Prosecutor for FIA (in all cases).

2018 C L D 621

[Intellectual Property Tribunal]

Before Shakil Ahmed Abbasi, Presiding Officer

The STATE---Complainant

Versus

NEW NATIONAL STATIONERIES through Proprietor---Accused

FIR No. 25 of 2017, decided on 22nd January, 2018.

Copyright Ordinance (XXXI of 1962)---

----Ss. 56, 66 & 67---Criminal Procedure Code (V of 1898), Ss.173 & 190---Infringement of copyright---Complainant, was representative of the manufacturer who made top quality pencils and other products, with logo and monogram, colour scheme as well as size and shape registered as artistic work under the Copyright Ordinance, 1962---Complainant urged that certain persons/shopkeepers/distributors, were selling similar pencils of similar colour schemes to their brand, in the market for which they had no authority---On the basis of said complaint, Police raided the shop of accused and found branded/similar/duplicate pencils---Act of accused/shopkeeper was an offence falling under Ss.56/66/67 of Copyright Ordinance, 1962---Intellectual Property Tribunal called from Investigating Officer the seized pencils recovered by him from the shop of accused and examined the same with the pencils being manufactured by the complainant and it was found that the title of work "WOW", was not registered, but only the expression/style and getup of the work was registered---Packing, colour scheme etc. of the product revealed vast difference between the pencils manufactured by the complainant and the goods seized from the accused and there was not a remotest chance of causing any confusion or deception between the artistic works appearing on the products of the complainant and of accused being so different from each other---No material evidence was available to connect accused with alleged offence---Charge sheet under S.173, Cr.P.C., submitted by the Investigating Officer, was disapproved and FIR was cancelled under "B" class being totally false and bogus---Tribunal refrained to initiate proceedings under S.182, P.P.C. against the complainant in circumstances.

[Case-law referred]

Saghir Ahmed Abbasi, ADPP for the State.

Miss Zahrah Saleem Vayani for the Complainant.

2018 C L D 48

[Islamabad]

Before Miangul Hassan Aurangzeb, J

Messrs SIS CORPORATION (PVT.) LIMITED through Chief Executive---Petitioner

Versus

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

W.P. No. 4650 of 2016, decided on 29th September, 2017.

(a) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Alternate and efficacious remedy---Scope---Where an alternative and equally efficacious remedy is available to a litigant, he should pursue that remedy and may not invoke special jurisdiction of High Court for issuance of a prerogative writ---Where it is open to aggrieved petitioner to move another court or a Tribunal for obtaining redress in manner provided by a statute, High Court normally does not entertain a petition under Art. 199 of the Constitution and leaves the petitioner to resort to the machinery set up by the statute for redressal of his grievances---Question whether alternative remedy is equally efficacious or adequate or not is a question of fact to be decided in each case and onus lies on petitioner to show that it is not adequate---Existence of an alternative remedy is not an absolute bar to filing petition under Art. 199 of the Constitution but it is a factor to be taken into consideration by High Court while entertaining a constitutional petition.

Messrs KSB Pumps Company Ltd. v. Government of Sindh 2011 MLD 1876; Messrs M.K. International, Local, Agent of Messrs Interman Trading FZE v. Sui Southern Gas Company 2016 CLC 1; Maqbool Associates (Pvt.) Ltd. v. Pakistan Power Park Management Company Ltd. 2015 MLD 1794; Maqbool Associates v. Federation of Pakistan 2016 MLD 2006 and Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport 1998 SCMR 2268 ref.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Writ of mandamus, refusal of---Pre-conditions---To decline grant of mandamus by the High Court the remedy provided under statute to petitioner must be specific, adequate, equally convenient, beneficial and effective---Inadequacy and not absence of alternative remedy determines as to whether a constitutional petition was to be entertained.

Lt. Col. Nawabzada Muhammad Ameer Khan v. Controller of Excise Duty PLD 1961 SC 119; Murree Brewery Co. Ltd. v. Pakistan PLD 1972 SC 279; Town Committee, Gakhar Mandi v. Authority under the Payment of Wages Act PLD 2002 SC 452 and Gatron (Industries) Pvt. Ltd. v. Government of Pakistan and others 1999 SCMR 1072 rel.

(c) Public Procurement Rules, 2004---

----R. 48---Constitution of Pakistan, Art.199---Constitutional petition---Maintainability---Grievance Redressal Committee, non-forming of---Effect---Where there was no Grievance Redressal Committee constituted by procuring agency, when bidder's grievance had arisen, bidder could not be faulted for invoking jurisdiction of High Court under Art 199 of the Constitution.

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

----Art. 95---Civil Procedure Code (V of 1908), O. XXIX, R.1---Power of attorney---Company incorporated abroad---Scope---When a company incorporated abroad, having a place of its business in Pakistan has to invoke jurisdiction of Court in Pakistan on an emergent basis, in such circumstances, asking such foreign entity to have a power of attorney or Board resolution notarized and attested in foreign country and then file such document along with petition or suit instituted in Pakistan would be unreasonable and inequitable---As long as the pleadings showed that legal proceedings are being instituted with proper authorization/authority and that during proceedings such authorization/authority, obtained prior to the institution of proceedings but notarized and consularized subsequently, is brought on record, such proceedings cannot be considered to have been wrongfully instituted.

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

----Art. 95---Power of attorney---Presumption---Power of attorney is to be construed strictly in accordance with its contents and nothing which was not expressly provided therein could be read into it---Power of attorney is not open to liberal interpretation---For a power of attorney to sustain presumption under Art. 95 of Qanun-e-Shahadat, 1984, execution of the same has to be authenticated by Pakistani diplomatic mission in the country where the power of attorney is executed.

Muhammad Yasin v. Dost Muhammad PLD 2002 SC 71; Maqsood Ahmad v. Salman Ali PLD 2003 SC 31; Muhammad Yaseen Siddiqui v. Tehseen Jawaid 2003 MLD 319; Aki Habara Electric Corporation (Pvt.) Limited v. Hyper Magnetic Industries (Pvt.) Limited PLD 2003 Kar. 420; Nawabzada Mir Baloch Khan v. Appellate Election Tribunal PLD 2003 Quetta 35; Surayya Kausar v. Muhammad Asmat Ullah 2000 MLD 507 and Zia uddin Siddiqui v. Rana Sultana 1990 CLC 645 rel.

(f) Public Procurement Rules, 2004---

----Rr. 35, 36 & 48--- Constitution of Pakistan, Art. 199---Constitutional petition---Aggrieved party---Scope---Petitioner was local agent of a foreign company which took part in bidding process---Non-impleading principal company---Petitioner was aggrieved of result of bidding and assailed the same before High Court in its constitutional jurisdiction without impleading the principal foreign company as party to the petition---Plea raised by petitioner was that in the event the contract was awarded to foreign company, petitioner was to perform certain obligations under the contract---Validity---Petitioner could not be allowed to plead the case of foreign company which was one of the three bidders and which was not before the High Court as party to the lis---Plea raised by petitioner was far-fetched an idea to consider it as an aggrieved party---Petitioner was local agent of the foreign company and was not a 'bidder' and therefore, had no locus standi to file constitutional petition---Foreign company did not challenge the award of marks in evaluation process carried out by the authorities, as the company was a necessary party to the constitutional petition but was not impleaded as a party---Petitioner (agent of company) was not able to establish its claim for relief prayed for as the process culminating in award of highest marks to respondent in bid evaluation process conducted by Bid Evaluation Committees constituted by authorities was not illegal, irrational or procedurally improper---High Court in exercise of constitutional jurisdiction declined to interfere in the bidding process--- Constitutional petition was dismissed in circumstances.

Province of Balochistan v. Murree Brewery Company Ltd. PLD 2007 SC 386; Dalmia Cement Limited v. District Local Board, Karachi PLD 1958 (W.P.) Kar. 211; Mian Muhammad Nawaz Sharif v. Federation of Pakistan 1994 CLC 2318; Standard Vacuum Oil Company v. The Trustees for the Port of Chittagong PLD 1961 Dacca 278 and Podder Steel Corporation v. Ganesh Engineering Works AIR 1991 SC 1579 rel.

(g) Tender---

----Judicial review---Scope---Administrative action---Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides---Terms of invitation to tender are not open to judicial scrutiny and Court cannot whittle down terms of tender unless they are wholly arbitrary, discriminatory or actuated by malice.

Techno Time Construction Company v. Punjab Highway Department 2014 MLD 874; Tez Gas (Private) Limited v. Oil and Gas Development Authority PLD 2017 Lah. 111; Meerut Development Authority v. Association of Management Studies (2009) 6 SCC 171; Association of Registration Plates v. Union of India (2005) 1 SCC 679 = AIR 2005 SC 469 and Manzoor Hussain v. Muhammad Siddique 2000 CLC 623 rel.

(h) Pleadings---

----Case beyond pleadings---Scope---Party cannot be permitted to make out a case beyond its pleadings.

(i) Constitution of Pakistan---

----Art. 199---Administrative action---Judicial review---Role of High Court---Scope---High Court while exercising its powers of judicial review of administrative action, does not sit as Court of appeal but only reviews the manner in which decision in question has arrived at---Judicial review is concerned with reviewing not merits of decision which is challenged in a petition but decision making process.

Chief Constable of the North Wales Police v. Evans (1982) 3 All ER 141 and Tata Cellular v. Union of India (1994) 6 SCC 651 rel.

Asma Jahangir, Khurram M. Hashmi and Salman Afridi for Petitioner.

Ms. Sitwat Jahangir, Assistant Attorney-General for Respondents.

Babar Sattar for Respondents Nos. 2 to 7.

Mansoor Hassan Khan and Saqib Majeed for Respondent No. 9.

Zulfiqar Khalid Maluka for Respondent No. 10.

2018 C L D 543

[Islamabad]

Before Athar Minallah and Miangul Hassan Aurangzeb, JJ

MUHAMMAD TARIQ---Appellant

Versus

STANDARD CHARTERED GRINDLAYS BANK LIMITED---Respondent

R.F.A. No. 123 of 2005, decided on 20th December, 2017.

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

----S. 9---Suit for recovery---Default in payment of credit card payments---Plea of appellant/customer that he availed credit card facility of the Bank but there was no agreement with regards to payment of mark-up on outstanding amount, and that a certain part of the outstanding sum consisted of fraudulent transactions, which he had never withdrawn; held, that the appellant had availed credit card facility from the Bank, and after a card was issued to him he had used the same for different transactions---Appellant received his monthly credit card bill and never objected to the allegedly fraudulent transaction, thus, his silence estopped him from questioning said withdrawal---Appellant made no effort to convince the court as to how entries made in statement of accounts were fraudulent or erroneous---Banking Court had rightly decreed the suit for recovery filed by the Bank---Appeal was dismissed accordingly.

Mukhtar Ahmed Tarar for Appellant.

2018 C L D 567

[Islamabad]

Before Mohsin Akhtar Kayani and Aamer Farooq, JJ

Sheikh GHULAM FAROOQ and others---Appellants

Versus

MUSLIM COMMERCIAL BANK, ISLAMABAD and others---Respondents

R.F.As. Nos. 2 of 2016, 6 and 3 of 2011, decided on 14th November, 2017.

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

----Ss. 2 & 9---Banking Court, jurisdiction of---Scope---Loan obtained by appellant by pledging shares with the Bank---Certain other shares ("subject shares") were tendered on trust to the Bank by the appellant---Appellant filed a suit in the Banking Court for recovery of amount of shares tendered on trust with the Bank---Question as to whether such suit was maintainable; held, that there was only one account of the appellant which was with respect to finance facility (loan) allowed to it---Appellant himself admitted that the shares pledged for loan facility were separate from the shares tendered on trust to the Bank, therefore, for purposes of the suit concerning shares deposited on trust the appellant did not fall within the definition of "customer" as provided in S. 2 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Furthermore, the said suit did not arise out of the relationship of a 'customer' and 'financial institution' and did not pertain to a finance facility, therefore, Banking Court had no jurisdiction in the matter as provided in S. 9 of the Ordinance.

Raja Muqsit Nawaz Khan for Appellants (in E.F.A. No. 3 and R.F.A. No. 6 of 2011).

Ali Jamal Salis Khawaja for Appellants (in R.F.A. No. 2 of 2016).

Ali Jamal Salis Khawaja for Respondents (in E.F.A. No. 3 and R.F.A. No. 6 of 2011).

Raja Muqsit Nawaz Khan for Respondents (in R.F.A. No. 2 of 2016).

2018 C L D 668

[Islamabad]

Before Aamer Farooq, J

TREK TECHNOLOGIES LIMITED---Petitioner

Versus

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

C.O. No. 8 of 2015, decided on 17th January, 2018.

Companies Ordinance (XLVII of 1984)---

----Ss. 305, 309, 314(4), 451, 452 & 456---Winding-up of company---Pre-condition---Petitioner was a foreign company and sought winding-up of respondent company on the allegation that it was unable to pay its debts---Validity---If a company did not comply with Ss. 451 & 452 of Companies Ordinance, 1984, it was debarred from agitating any right through legal proceedings with respect to any contract or other transaction---Petitioner company registered abroad did not fulfil requirements of Ss. 451 & 452 of Companies Ordinance, 1984---Implications provided in S. 456 of Companies Ordinance, 1984, ensued the effect whereof petitioner was not competent to file petition for winding up---Appointing any attorney was inconsequential as the attorney was to act on behalf of the company which could not initiate legal proceedings---Petition was dismissed in circumstances.

[Case-law referred]

Sardar Ejaz Ishaq and Umar Tariq for Petitioner.

Babar Sattar, Umar Rehman and Ehsan Ali Qazi for Respondents.

2018 C L D 1152

[Islamabad]

Before Athar Minallah, J

HABIB BANK LIMITED through Litigation Officer---Petitioner

Versus

FEDERATION OF PAKISTAN through President Secretariat Islamabad and 2 others---Respondents

W.P. No. 2700 of 2017, decided on 13th April, 2018.

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

----Ss. 82-A & 82-B---Banking Mohtasib---Jurisdiction---Violations of Regulations or Guidelines issued by the State Bank of Pakistan and all forms of mal-administration falls within the ambit of jurisdiction of Banking Mohtasib---Banking Mohtasib is explicitly empowered to entertain and decide complaints relating to failure on the part of financial institution to act in accordance with Policy Directives or Guidelines issued by the State Bank of Pakistan---Additional grounds are available to Banking Mohtasib to entertain complaints in case of financial institutions established in public sector and the same have been described under S. 82-B of Banking Companies Ordinance, 1962.

(b) Interpretation of statutes---

----Repeal---Actual or implied---Effect---Repeal of an existing law may be amended through express intendment or it may be implied from a statute enacted later in time and which contains provisions that are contrary to those of an earlier Act of Parliament---Necessary conditions for implied repeal of an earlier statute or provision by a later statute are that, firstly the two statutes cannot stand and coexist together, secondly if they stand side by side the same may lead to absurd consequences and thirdly when the entire subject matter of earlier statute of a provision thereof is taken away by later statute---Provisions of later statute must be so inconsistent with or repugnant to those of an earlier enactment that the two would not stand together and only then would the earlier one be deemed to have been impliedly repealed by the later in point of time---New enactment has to be irreconcilably inconsistent with the earlier legislation so that the former is demonstrably seen having been terminated.

Saiyyid Abul A'La MauDoodi and others v. The Government of the West Pakistan and others PLD 1964 SC 673; Messrs Tank Steel and Re-Rolling Mills (Pvt.) Ltd. Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77; Maj. Mehtab Khan v. The Rehabilitation Authority and another PLD 1973 SC 451; Mumtaz Ali Khan Rajban and another v. Federation of Pakistan and others PLD 2001 SC 169 and Tanveer Hussain v. Divisional Superintendent, Pakistan Railways and 2 others PLD 2006 SC 249 rel.

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

----Ss. 82-A & 82-B---Payment Systems and Electronic Fund Transfer Act (IV of 2007), S. 67---State Bank of Pakistan PSD Circular No.03/2015 dated 21.10.2015---Banking Mohtasib, jurisdiction of---Scope---Mal-administration---Violations of Regulations/Guidelines issued by State Bank of Pakistan---Petitioner Bank was aggrieved of decisions made by Banking Mohtasib in favour of customers of the Bank with regard to unauthorized electronic fund transfers---Plea raised by Bank was that Payment Systems and Electronic Fund Transfer Act, 2007, had over-riding effect, therefore, Banking Mohtasib under S. 82-A of Banking Companies Ordinance, 1962, had no jurisdiction in the matter---Validity---Bank, despite its failure to implement directions of State Bank of Pakistan contained in PSD Circular No.03/2015 dated 21.10.2015 or to inform customers regarding risks involved in using the facility, in such an eventuality Bank had kept its customers deprived from putting to use their savings---Cost of litigation had to be borne by the Bank for mal-administration and breach of duty of care on the part of Bank---High Court observed that such was not expected from a commercial entity engaged in carrying on business for profit---Customers were victims of callousness and mal-administration of the Bank, who did not treat its customers fairly and with care---Such conduct of the Bank could not be ignored which led to causing of immense inconvenience, agony and financial loss to customers---High Court imposed cost upon the Bank as it had exposed itself to compensate its customers---Constitutional petition was dismissed in circumstances.

Brig. Sher Ali Baz v. Secretary Establishment Division PLD 1991 SC 143; Wapda v. Muhammad Arshad Qureshi and others 1986 SCMR 18; Syed Mushahid Shah v. Federal Investment Agency 2017 SCMR 1218; Sui Northern Gas Pipeline Ltd v. Wafaqi Mohtasib 2015 MLD 1029; I.G. HQ Frontier Corps v. Ghulam Hussain and others 2004 SCMR 1397; Saiyyid Abul A'La MauDoodi and others v. The Government of the West Pakistan and others PLD 1964 SC 673; Messrs Tank Steel and Re-Rolling Mills (Pvt.) Ltd. Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77; Maj. Mehtab Khan v. The Rehabilitation Authority and another PLD 1973 SC 451; Mumtaz Ali Khan Rajban and another v. Federation of Pakistan and others PLD 2001 SC 169; Tanveer Hussain v. Divisional Superintendent, Pakistan Railways and 2 others PLD 2006 SC 249; Major (Retd.) Ahmed Nadeem Sadal and others v. Federation of Pakistan through Secretary Sports, Islamabad and others 2015 CLC 34; Inyatullah v. Sh. Muhammad Yousaf and 19 others 1997 SCMR 1020; S M. Sohail v. Mst. Sitara Kabir-ud-Din and others PLD 2009 SC 397; Muhammad Azam v. Muhammad Iqbal and others PLD 1984 SC 95; Shahid Orakzai and another v. Federation of Pakistan PLD 2008 SC 77; Mir Sahib Jan v. Janan 2011 SCMR 27; Muhammad Anwar and others v. Mst. Ilyas Begum and others PLD 2013 SC 255; Khurshid Ahmad Naz Faridi v. Bashir Ahmad and 3 others 1993 SCMR 639; The Postmaster-General, Northern Punjab and (AJ&K), Rawalpindi v. Muhammad Bashir and 2 others 1998 SCMR 2386; Muhammad Zia v. Ch. Nazir Muhammad, Advocate and 4 others 2002 CLC 59; Kawasb, AGA and another v. City District Government, Karachi (CDGK) through Nazim-e-Ala and others PLD 2010 Kar. 182; Smt. Satya v. Teja Singh AIR 1975 SC 105; Hindustan Transport Co. and another v. State of UP and others AIR 1984 SC 953 and The Election Commission of India v. Shivaji and others AIR 1988 SC 61 ref.

Syed Ali Zafar and Hafiz M. Kashif for Petitioners.

Hasnain Sikandar, Syed Najam ul Hassan and Abdul Rashid Marwat for Respondents.

Saleem Akhtar, Senior Legal Advisor Banking Mohtasib Pakistan.

2018 C L D 1205

[Islamabad]

Before Muhammad Anwar Khan Kasi, CJ

OFFICIAL ASSIGNEE OF KARACHI---Petitioner

Versus

Mrs. FAUZIA TARIQ and 2 others---Respondents

Writ Petition No. 424 of 2015, decided on 22nd May, 2018.

Companies Ordinance (XLVII of 1984)---

----Ss. 444 & 447---Specific Relief Act (I of 1877), S. 12---Civil Procedure Code (V of 1908), S. 12(2)---Winding-up of unregistered company---Suit for specific performance of agreement to sell---Ex parte decree obtained without permission of Company Judge, setting aside of---Scope---Winding-up of the company was ordered and in the meantime suit for specific performance of agreement to sell was instituted which culminated upon ex parte judgment and decree---Official Assignee, while searching for properties owned by the company came to know the alleged ex parte judgment and decree---Applicant-liquidator (Official Assignee) moved application for setting aside the ex parte judgment and decree which was dismissed---Contention of petitioner was that ex parte decree had been obtained without permission of the Company Judge---Validity---Winding-up of company had been ordered under S. 444 of Companies Ordinance, 1984 prior to passing of ex parte judgment and decree---Permission of Company Judge, in the present case, was mandatory---Ex parte judgment and decree were obtained without fulfilment of legal requirements---Impugned orders passed by the Courts below were set aside and ex parte judgment and decree were set aside---Plaintiff was to fulfil the requirements of S. 447 of Companies Ordinance, 1984 and suit be proceeded in accordance with law---Petition for setting aside of ex parte judgment and decree was allowed in circumstances.

1991 CLC 1148 rel.

Raja Muqsit Nawaz Khan, Advocate Supreme Court for Petitioner.

Syed Asghar Hussain Sabzwari, Advocate Supreme Court for Respondent No.1.

Respondent No.2 ex parte vide order dated 18.3.2016.

Syed Masood Hussain for Respondent No.5.

2018 C L D 1470

[Islamabad]

Before Mohsin Akhtar Kayani, J

Messrs HANI TRADING COMPANY---Petitioner

Versus

MINISTRY OF COMMERCE through Secretary, Islamabad and others---Respondents

Writ Petition No. 1671 of 2018, decided on 4th September, 2018.

(a) Import Policy Order, 2016---

----Cls. 4 & 12---Export Policy Order, 2016---Livestock, import and export---Principle---Petitioner was given permission by authorities to import different livestock but subsequently permission was withdrawn by the authorities---Plea raised by petitioner was that temporary import-cum-export of goods could not be withdrawn---Validity---Import of live animals was permitted in Pakistan subject to quarantine requirements of Animal Quarantine Department of Ministry of National Food Security and Research, Government of Pakistan---Temporary import-cum-export of goods provided mechanism for those goods which were routed through Pakistan and notified under Import Policy Order, 2016---In order to achieve objectives under provision of temporary import-cum-export of goods, importer had to notify his intention to take benefit of said provision---Petitioner had imported sheep and livestock to Pakistan and his intention was reflected in two goods declarations filed by him and attached with petition before High Court whereby, country of destination referred in column No. 20 was Pakistan and even in column No. 28, place of delivery was Pakistan, therefore, no other meaning could be abstracted---Export of goods was to be dealt under Export Policy Order, 2016 wherein livestock fell within banned goods or items and letter dated 9-1-2018 was based only on provision of Import Policy Order, 2016 and same could not be considered as permission to export---Export of livestock in question was banned and petitioner's claim regarding export of livestock was not maintainable---Constitutional petition was dismissed in circumstances.

(b) Interpretation of statutes---

----Words used in a statute---Meaning---Principle---When meaning of any statute is clear and plain language of statute requires no other interpretation, then intention of Legislature conveyed through such language has to be given full effect---Plain and unambiguous words must be expounded in their natural and ordinary sense.

Abdul Jabbar v. Chairman NAB PLD 2016 Pesh. 298; PIAC Karachi v. Wafaqi Mohtashib 1998 SCMR 841; Ghulam Haider and others v. Murad PLD 2012 SC 501 and Baz Muhammad Kakar and others v. Federation of Pakistan PLD 2012 SC 923 rel.

Khawaja Azhar Rasheed for Petitioner.

2018 C L D 15

[Sindh]

Before Muhammad Ali Mazhar, J

ADD OIL (PRIVATE) LIMITED AND ANOTHER: In the matter of

J. Miscellaneous Petition No. 6 of 2017, decided on 13th October, 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---Nature of jurisdiction of Court under S.284 of the Companies Ordinance, 1984---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---If the court found that a scheme was fraudulent or intended to be cloak to recover misdeeds of Directors of company, then it may reject such scheme in the beginning---Court could lift corporate veil for purpose of ascertaining real motive behind the scheme---Correct approach for sanctioning of a scheme was that the same should not be scrutinized in the way of a carping critic, a hairsplitting expert, a meticulous accountant or a fastidious counsel, each trying to find out from his professional point-of-view what loopholes were present in such a scheme; what technical mistakes had been committed; what accounting errors had crept in or what legal rights of one or other sides had or had not been protected; but the same must be done from point of view of an ordinary reasonable shareholder acting in a business-like manner taking with his comprehension and bearing in mind all circumstances prevailing at time when the meeting was called upon to consider the scheme in question.

International Complex Projects Limited and another 2017 CLD 1468 and Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305 rel.

(b) Company---

----Accounting standards--- Financial reporting by companies---"Deferred cost"---Concept and scope---"Deferred cost" was a cost that had already been incurred but could not be charged to expense until a later reporting period and in the meantime it appeared on the balance sheet as an asset---Reason for deferring recognition of cost as an expense was that item had not yet been consumed and from a practical perspective it was customary to charge all smaller costs to expense at once, since they would otherwise require too much effort to track on a long-term basis---Immediate charge-off was only practiced when impact on financial results of a business was immaterial and costs of some expenditure may be deferred when generally accepted accounting principles or international financial reporting standards required that be included in costs of a long-term asset and then charged to expense over a long period of time.

https://www.accountingtools.com/articles/what-is-a-deferred-cost.html rel.

Naveed-ul-Haq for Petitioners.

Salman Saleem Rajan for the Securities and Exchange Commission of Pakistan.

2018 C L D 33

[Sindh]

Before Muhammad Ali Mazhar, J

TPL TRAKKER LIMITED AND OTHERS: In the matter of

J.C. M. No. 48 of 2016, decided on 12th September, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287 & 288---Companies (Court) Rules, 1997, R. 55---Competition (Merger Control) Regulations, 2016, Regln. 5(1)(ii)---Scheme for arrangement---Approval---Petitioner companies prepared scheme for arrangement and sought approval of the High Court---High Court being a sanctioning court noticed that all requisite statutory procedures and formalities were complied with by the companies including holding/convening requisite meetings as contemplated under relevant provisions and Rules and Companies Ordinance, 1984---Scheme setup for sanction was reinforced and fortified by requisite majority which decision was just and fair---Report/minutes of meetings unequivocally conveyed that all essential and fundamental characteristics of attributes of scheme for arrangement were placed before voters at concerned meetings to live up to statutory obligations---Proposed scheme of compromise and arrangement was not found to be violative of any provision of law and/or contrary to public policy---Scheme as a whole looked like evenhanded and serviceable from point of view of prudent persons of business taking a commercial decision beneficial to class represented by them for whom scheme was meant---Once requirements of scheme for getting sanction of court were found to have been met, court had no further jurisdiction to sit in appeal over commercial wisdom of majority of class of persons who, with their open eyes, had given their approval of scheme---Scheme of arrangement was sanctioned in circumstances.

International Complex Projects Limited and another's 2017 CLD 1468 and Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305 ref.

Arshad Tayyabley and Mikael Azmat Rahim for Petitioners.

Imran Shamsi, Deputy Director Law, Securities and Exchange Commission of Pakistan.

2018 C L D 80

[Sindh]

Before Nazar Akbar, J

Agha IMTIAZ ALI KHAN BABAR and 2 others---Plaintiffs

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Water and Power and 2 others---Defendants

Suit No. 859 of 2017, decided on 31st July, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 178, 180, 181 & 183---Public Sector Companies (Corporate Governance) Rules, 2013, R. 5---Specific Relief Act (I of 1877), S.42---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Electric Power Company---Board of Directors of company---Reconstitution of---Removal of a "Nominee Director"---Scope---Suit for declaration---Temporary injunction, grant of---Plaintiffs were nominated as Directors of Electric Power Company---Contention of plaintiffs was that they could not be removed except in accordance with the Companies Ordinance, 1984---Validity---Plaintiffs were not elected Directors of the Company---Notification with regard to appointment of defendant as Director of the Company was impugned in the earlier suit by one of the earlier Nominee Directors but plaintiffs despite having knowledge of the same did not contest the said suit nor attempted to become party in the same to protect their right, if any---Plaintiffs, therefore, had not approached the court with clean hands---Provisions of Ss. 178, 180 or 181 of Companies Ordinance, 1984 were not applicable to the Directors appointed under S. 183 of the Ordinance---Nominee Directors had no vested right to hold the office for any specified period---Powers of "removal" of a "Nominee Director" was inherent power of the Authority which nominated him---Nominee Director would hold the office "during the pleasure" of the Authority which nominated him---Plaintiffs having claimed a definite amount of damages as compensation on account of the alleged omissions or failure of discharge of duty by the Authority, would lose their right to seek restraining orders (injunction) on the ground of irreparable loss---Application for grant of injunction to suspend the impugned notification was refused in circumstances.

Government of Pakistan and 3 others v. Kamruddin Valika 1996 CLC 1086 ref.

Muhammad Mushtaq v. Chancellor, Government College University, Faisalabad 2005 PLC (C.S.) 1300; Syed Muhammad Ayyub (P.S.E.I. Executive Engineer, Irrigation v. The Government of West Pakistan PLD 1957 (W.P.) Lah. 487; The Province of the Punjab v. Ch. Nazir Hussain PLD 1956 (W.P.) Lah. 556 and Mian Muhammad Anwar Monnoo and 2 others v. Kotri Textile Mills Ltd. and 5 others 1990 MLD 348 distinguished.

Bolan Beverages (Pvt.) Limited v. PEPSICO Inc. and 4 others 2004 CLD 1530 rel.

Plaintiff No. 1 in person.

Plaintiff No. 2 in person.

Abdul Salam Memon for Plaintiff No. 3.

Defendant No. 1 in person.

Saleemuddin A. Patoli, Assistant Attorney-General for Defendant No.2.

Ijaz Ahmed Zahid along with Sattar Bux Soomro, Director (Legal), SEPCO, Sukkur for Defendant No.3.

2018 C L D 116

[Sindh]

Before Arshad Hussain Khan, J

Syed ITRAT HUSSAIN RIZVI---Appellant

Versus

Messrs TAMEER MICRO FINANCE BANK LIMITED through Attorney and another---Respondents

Ist Appeal No. 10 of 2009, decided on 3rd March, 2017.

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

----O. XXXVII, Rr. 3 & 2--- Summary procedure on negotiable instruments---Summary suit for recovery---Adjudication on questions of jurisdiction---Application for leave to defend---Scope---In a summary suit under O. XXXVII, C.P.C., in which summons had been issued, defendant was not entitled to appear or defend suit as a matter of course, unless such defendant obtained leave from the court to appear and defend the suit---In default of such defendant's obtaining of leave from the court, allegations of plaintiff shall be deemed to be admitted and the plaintiff shall be entitled to a decree---Till such time that the leave to defend had been granted, a defendant could not even file any interlocutory application in order to agitate the point of jurisdiction of the court, legal effect of promissory note and crossed-cheques issued by defendant in favour of plaintiff.

Messrs United Distributors Pakistan Limited v. Ahmad Zarie Services and another 1997 MLD 1835 rel.

(b) Microfinance Institutions Ordinance (LV of 2001)---

----Ss. 3(2)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2(d), 5 & 9---Civil Procedure Code (V of 1908) O. XXXVII, Rr. 1 & 2---Microfinance institutions---Application of other laws---Default in obligations of customers of microfinance institutions---Non-applicability of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit for recovery filed under O. XXXVII, C.P.C. filed by microfinance institution was decreed---Contention of defendant, inter alia, was that a summary suit under O. XXXVII, C.P.C. filed by a microfinance institution was not maintainable and a suit under Financial Institutions (Recovery of Finances) Ordinance, 2001 should have been filed instead---Validity---Bare perusal of S. 3(2) of the Microfinance Institutions Ordinance, 2001 clearly reflected that Banking Companies Ordinance, 1962 and any other law for the time being in force relating to banking companies or financial institutions shall not apply to microfinance institutions licensed under the Microfinance Institutions Ordinance, 2001 and that microfinance institutions shall not be deemed to be a banking companies for purpose of any law for the time being in force relating to banking companies---Impugned order was therefore, rightly passed---Appeal was dismissed, in circumstances.

Muhammad Ali Waris Lari for Appellant.

Agha Muhammad Saleem Raza for Respondent No.1.

2018 C L D 123

[Sindh (Larkana Bench)]

Before Muhammad Saleem Jessar, J

WASH DEV---Appellant

Versus

GANESO MAL---Respondent

1st Civil Appeal No.S-01 of 2010, decided on 31st March, 2017.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 2 & 3---Summary suit on the basis of cheque---Negotiable instrument---Expert evidence---Scope---Cheque was given status of 'negotiable instrument' which could not be engineered or fabricated as other document(s) declared or qualified as 'negotiable instrument'---Defendant had taken contradictory stance in the present case---No question of issuance of cheque book would arise without having an account opened---Nothing was on record that any FIR was lodged with regard to alleged theft of cheque---Cheque in question belonged to defendant---Defendant could not escape the consequences arising therefrom unless proved contrary which he had failed to do---Mere typographical mistake/error could not decrease the consequences which a 'drawer' had to ensure encashment/payment of amount to the 'holder'---Plea which was not taken before the Trial Court could not be looked into by the Appellate Court---Evidence of an expert was nothing more than confirmatory or explanatory of direct or circumstantial evidence---Such evidence of expert could not be given preference over confidence inspiring and worthy of credence evidence available to prove otherwise---Defendant had not produced any document in support of his claim---Cheque in question was issued by the defendant in favour of plaintiff which was dishonoured by the bank on presentation---Appeal was dismissed in circumstances.

Mohammad Abdullah v. Mohammad Aslam 2014 CLC 1205 and Abdul Rasheed v. Syed Fazal Ali Shah 2016 SCMR 2163 ref.

Taj Muhammad Khan v. Munawar Jan 2009 SCMR 598 and Saadat Sultan v. Muhammad Zahur Khan 2006 SCMR 193 rel.

Bashir Ahmed Dargahi for Appellant.

Gulab Rai "C" Jesrani for Respondent

2018 C L D 250

[Sindh]

Before Aziz-ur-Rehman, J

FIRST DAWOOD INVESTMENT BANK LIMITED---Plaintiff

Versus

NEW ALLIED ELECTRONICS (PVT.) LIMITED and another---Defendants

Suit No. B-13 of 2016, decided on 18th April, 2017.

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

----Ss. 9(5) & 12---Procedure of Banking Court---Suit for recovery---Service of notices on the defendants---Effective service in terms of S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Section 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that service effected in any one of the prescribed modes should be deemed as valid service and where summons/process under law had been issued, service upon defendants should be deemed and considered as "valid service".

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

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

----Ss. 2(e), 9(2) & 10(4)---Banker's Books Evidence Act (XVIII of 1891) S. 4---Procedure of Banking Court---Suit for recovery---Statement of accounts---Presumption vis-a-vis correctness of entries made in statement of accounts certified under S. 4 of the Banker's Books Evidence Act, 1891---Liability of customer---Scope---Presumption vis-a-vis correctness of entries made in statement of accounts which were duly certified under S. 4 of the Banker's Books Evidence Act, 1891, in absence of any opposition, challenge or denial; was not only attached to it, but amount due per said statement of account was deemed to be the correct liability of a customer in a suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Habib Bank Limited through Authorized Attorney v. Haidri Homes through Partners and 3 others 2012 CLD 2016 and United Bank Ltd. v. Messrs Sartaj Industries through Qaisar Iqbal, Managing Partner and 6 others PLD 1990 Lah. 99 rel.

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

----Ss. 2(c), 2(d) & 7---Contract Act (IX of 1872) Ss. 126, 127 & 128---Suit for recovery---Contract of guarantee---Surety, principal debtor and creditor---Consideration for guarantee---Surety's liability---Scope of terms "customer" and "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001---Liability of guarantor---Scope---Liability of guarantor was co-extensive with that of a principal debtor unless in the letter of guarantee, it was provided otherwise---Any promise made, thing done for the benefit of the principal debtor, under law, was sufficient consideration as far as surety was concerned for giving guarantee---Contract for guarantee was a contract to perform a promise and/or to discharge a liability of a third person in case of occurrence of default by principal debtor.

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

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

----Ss. 10 & 9---Procedure of Banking Court---Suit for recovery---Application for leave to defend---Scrutiny of documents by Banking Court---Determination of liability of customer---Scope---Where defendants/customers fail to obtain leave to defend, Banking Court, could on its own scrutinize statement of account or breakup of liabilities placed on record by plaintiff Financial institution in juxtaposition with banking or financial documents.

Waqar Ahmed for Plaintiff.

Nemo for Defendants.

2018 C L D 273

[Sindh]

Before Irfan Saadat Khan and Mahmood Ahmed Khan, JJ

SOUTH ASIA GEOPHYSICAL SERVICES (SAGEO) through Senior Officer---Appellant

Versus

NEW HORIZON EXPLORATION AND PRODUCTION LIMITED (NHEPL) through CEO and another---Respondents

High Court Appeal No. 9 of 2016 in J.M. No. 9 of 2013, decided on 12th May, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 306---Winding-up of company---Liabilities exceeding assets---Proof---Appellant sought winding up of company in question on grounds of weak economic condition but Judge in Chambers of High Court declined the same---Validity---Deliberation to reasonable financial health of corporate body was liable to be considered along with quality of admission as even case of liquidation---Amount of claim did not become payable outright but was to be accepted and approved by management/liquidator and Company Judge respectively as the case could be---Current liabilities of company on year ended 2013 stood in sum of Rs. 217.3 million and assets at Rs. 69.7 million only; liabilities exceeded current assets by Rs. 147.6 million---Said company had lost its substratum and it was in interest of everyone concerned that it be wound-up---Division Bench of High Court directed the company to be wound-up, set aside order passed by Judge in Chambers of High Court and Official Assignee was appointed as liquidator---Appeal was allowed in circumstances.

[Case-law referred].

Dr. Amjad Sarfaraz for Appellant.

Nemo for Respondent No. 1.

Shaukat Hayat Alizai, Joint Director (Law), Securities and Exchange Commission of Pakistan (SECP) along with Muhammad Naeem Khan, Additional Registrar of Companies for Respondent No.2.

Ms. Naheed Perveen, DAG for the State.

2018 C L D 342

[Sindh]

Before Aqeel Ahmed Abbasi and Khadim Hussain M. Shaikh, JJ

CITIBANK N.A.---Petitioner

Versus

Mrs. ANJUM SALEEM and 2 others---Respondents

Constitutional Petition No. D-5993 of 2014, decided on 26th January, 2017.

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

----Ss. 5(3) & 19---Civil Procedure Code (V of 1908), S. 39---Execution proceedings---Transfer to other court---Jurisdiction---Banking Court at place "K" without any application, transferred execution proceedings to Banking Court at place "H"---Validity---Execution application was transferred by Banking Court at place "K" to Banking Court at place "H" on its own motion although S. 39(2), C.P.C. permitted suo motu transfer of a decree by Court which passed decree to a subordinate court of competent jurisdiction---Banking Court at place "H" could not be termed to be a subordinate court of Banking Court at place "K"---No embargo existed on jurisdiction of Banking Court to execute a decree or cause attachment and sale in respect of properties falling outside its territorial jurisdiction---Banking Court at place "K" was a special court constituted under special law and could execute decree by attaching and/or selling properties situated in district "J"---High Court set aside the order passed by Banking Court at place "K" transferring execution application to Banking Court at place "H" for its execution, as same was illegal ab initio---Constitutional petition was allowed accordingly.

Ijaz Ahmed for Petitioner.

Khaleeq Ahmed for Respondents.

2018 C L D 389

[Sindh]

Before Muhammad Shafi Siddiqui, J

GULSHAN WEAVING MILLS LIMITED AND OTHERS: In the matter of

Judicial Company Misc. No. 30 of 2016, decided on 3rd April, 2017.

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---Nature of jurisdiction of Court under S. 284 of the Companies Ordinance, 1984--- Scheme proposing to wind-up company to pay liabilities to creditors---Consent of creditors to scheme of arrangement---Objections by creditors to scheme of arrangement--- Secured and unsecured creditors--- Guarantors' liabilities towards creditors objecting to scheme of arrangement---Scope---Applicant company and consenting creditors of company, sought sanction to scheme of arrangement which was a compromise between the company and such creditors, to clear outstanding liabilities---Objector Bank filed objections to said scheme of arrangement inter alia on ground that it could not bind creditors who did consent to the same---Held, that interest of secured creditors and that of unsecured creditors may be common but only to the extent of sale of mortgaged, pledged and/or hypothecated assets and for distribution of the same on proportionate basis but by entering into scheme of arrangement, statutory rights and remedies of unsecured creditors did not cease at the time of approval for such scheme---Such statutory rights may be of civil or criminal nature and consenting creditors may have been compounding all their rights by sale of assets but consent of some creditors could not curtail legal remedies of any other class of creditors or of the same class which was pursuing civil and criminal remedies against guarantors and sureties, which liabilities of guarantors/sureties could not be wiped out by virtue of compromise between company and consenting creditors---Where scheme of arrangement sought to take away statutory rights of non-consenting creditors of the same class or any other class, majority view of consenting creditors could prevail over minority and release guarantors only in case of variance of terms of repayment and in absence of the same, it did not interfere in any other statutory rights---High Court declined to interfere in decision of creditors who opted for approval of scheme and observed that such decision should only be limited to said creditors and could not trespass rights and obligations arising under law and common interest of consenting creditors which distinguished them from the objector and in absence of any commonality of interest between the objector and consenting secured creditors, scheme of arrangement in the present case would not bind on the objector---Scheme of Arrangement was approved and application was allowed, accordingly.

Writ Petition No. 2713 of 2009; Subramanyia v. Narayanswami AIR (38) 1951 Madras 48 and Venkataswami v. Kotilingam AIR 1926 Madras 184 ref.

Caravan East Fabrics Limited v. Askari Commercial Bank Ltd. 2006 CLD 895 and Commerz Bank AG v. Arvind Mills Ltd. (2002) 110 Camp. Cases 539 Gujrat rel.

Shoaib Raashid for Petitioner No. 1.

Mikael Azmat Rahim for Petitioners Nos. 2 to 9.

S. Imran Ali Shamsi, Law Officer along with Shahrukh Artani, Assistant Registrar SECP for SECP on Court's Notice.

Muhammad Jamshid Malik, Objector Bank of Punjab.

Haroon Shah for Soneri Bank.

2018 C L D 449

[Sindh]

Before Munib Akhtar and Abdul Maalik Gaddi, JJ

DIGRI SUGAR MILLS LIMITED and 2 others---Appellants

Versus

Mian KAMRAN ILAHI through Legal Heirs and another---Respondents

High Court Appeal No.78 of 2014, decided on 19th June, 2017.

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

----S. 182--- Principal and agent---Relationship---Scope---Agreements existed between parties according to which plaintiffs were to facilitate sale of goods on behalf of defendant in the market---Effect---Term 'agent' under S. 182 of Contract Act, 1872 was a person employed to do any act for another or to represent another in dealings with third person and person for whom such act was done or who was so represented was called 'principal'---Agreements provided that plaintiffs would facilitate sale of sugar on behalf of defendant company in market on due dates (dates on which delivery orders could be presented) at market rates or price---Such facilitation was to be regarded as authority for plaintiffs to represent defendant company in its dealings with third persons for sale of sugar---Such clauses of agreement had brought relationship between the parties within the scope of S.182 of Contract Act, 1872 and there was an "agency" between the parties.

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

----S. 202---Interest of agent---Scope---Nothing existed in S.202 of Contract Act, 1872 that requires that interest that agent "himself" must have, should necessarily exist at the very inception or moment "agency" is created.

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

----Ss.2(4), 4 & 58---Contract Act (IX of 1872), S.202---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Future goods---Agency with interest---Plaintiffs specific performance of six agreements between the parties on the basis of which plaintiffs were holding to facilitate sales of sugar on behalf of defendant company in market on due dates (dates on which delivery orders could be presented) at market rates or price---Single Judge of High Court issued interim injunction in favour of plaintiffs---Validity---Contracts were those entered into by plaintiffs while acting as agents and they had no personal liability on such score---If plaintiffs were entered into contracts without disclosing that they acted for a principal, then they were prima facie in breach of the clause of agreement, which provided that all sales would be between the seller and market and the investor would only facilitate the sale---Plaintiffs entered into contracts only as agents and not otherwise---If plaintiffs incurred any personal liability by not disclosing name of their principal (i.e. the defendant company) then they had acted recklessly, in disregard of their contractual commitments and had only themselves to blame for any predicament---Pecuniary compensation could be an adequate relief and plaintiffs were not entitled to specific performance of the agency coupled with an interest and were also not entitled to any injunctive relief---Single Judge of High Court failed to advert to any of such matters or aspects and had erred materially in granting interim injunction in favour of plaintiffs---Division Bench of High Court set aside order passed by the Single Judge of High Court---Intra court appeal was allowed in circumstances.

Re Wait [1927] 1 Ch. 606 and Fospac (Pvt) Ltd. v. Fosrock International and another PLD 2011 Kar. 362 ref.

Ijaz Ahmed Zahid for Appellants.

Haider Waheed and Ahmed Masood for Respondents.

2018 C L D 514

[Sindh]

Before Zulfiqar Ahmad Khan, J

DAWLANCE PAKISTAN (PVT.) LIMITED through Director Admin and another----Plaintiffs

Versus

G-FORCE COMMUNICATIONS through Owner and 2 others----Defendants

Suit No.1604 of 2013, C.Ms. 14412 of 2013, 664, 2274, 3688 and 16752 of 2014 decided on 30th March, 2017.

Copyright Ordinance (XXXIV of 1962)---

----S. 13---Specific Relief Act (I of 1877), Ss.42 & 56---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Suit for declaration and injunction---Interim injunction, grant of---Copyright, ownership---Scope---Plaintiffs were manufacturers of home appliances and defendants were the advertisers---Plaintiff claimed ownership of taglines being used and displayed by them for selling their products---Defendants filed application seeking restraining orders against plaintiffs from using and displaying taglines in question---Validity---Plaintiffs could enjoy physical possession of work created by defendants and did not become owners of copyright in such works---High Court restrained the plaintiffs from using, displaying or selling their products under taglines in question and from using materials detailed in plaint from being reproduced before general public (both nationwide and international) through any forums of media as materials in question were created by defendants---Application was allowed in circumstances.

Atiqa Odho v. R. Lintas (Pvt.) Ltd. PLD 1997 Kar. 57; 2000 CLC 872 and Shakeel Adilzadeh v. Pakistan Television Corporation Ltd. 1989 CLC 2447 ref.

Ali Aziz for Plaintiffs.

2017 C L D 546

[Sindh]

Before Zulfiqar Ahmad Khan, J

ORO INDUSTRIES through Managing Partner and another---Plaintiff/Petitioner

Versus

MUHAMMAD HANIF and others---Defendants/Respondents

Suit No. 2223 of 2015 and Judicial Miscellaneous No. 9 of 2016, decided on 13th June, 2017.

(a) Registered Designs Ordinance (XLV of 2000)---

----S. 3(2)---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Deceptive trademark---Interim injunction, grant of---Plaintiff claimed to be owner of registered trademark 'ORO' (Pencils) and sought injunction against defendant for using getup and design owned by him against trademark 'ZORRO'---Validity---To have a design registered under Registered Designs Ordinance, 2000 and to have monopoly created thereon, it was essential that design must have element of newness or originality under S. 3(2) of Registered Designs Ordinance, 2000---In absence of such newness or originality, no design could be registered---Condition of newness and originality under previous Patents and Designs Act, 1911 was only limited to Pakistan but same was extended globally under Registered Designs Ordinance, 2000---To have a design registered under Registered Designs Ordinance, 2000 design was to be globally new or original---Comparison of rival pencils revealed that defendant had not only used identical color scheme and getup of pencils used by plaintiff as well as its trademark 'ZORRO' embodied plaintiff's complete trademark 'ORO' in full---Unwary purchaser, no doubt, would be deceived on account of startling resemblances between rival pencils---High Court restrained defendant from using deceptively similar 'ZORRO' trademark pencils, embodying typical colour scheme (trade dress) adopted by plaintiff---Application was allowed in circumstances.

Phillips v. Barbro Rubber Company (1920) 37 R.P.C. 233 and Morning Star Cooperative Society v. Express Newspapers Limited 1979 FSR 113 rel.

(b) Registered Designs Ordinance (XLV of 2000)---

----S. 3---Expression 'new or original'---Connotation---Expression 'new or original' appearing in S. 3 of Registered Designs Ordinance, 2000 means that design was invented for the first time or it has not been reproduced by anyone before.

Abdul Hameed Iqbal for Plaintiff.

Abdul Salam Memon for Defendants.

2017 C L D 557

[Sindh]

Before Zulfiqar Ahmad Khan, J

HILTON PHARMA (PVT.) LIMITED through Authorized Officer and others---Appellants

Versus

UCB, SA., (a Belgian Company) and others---Respondents

M.As. Nos. 7, 8 to 33, 61, 62, 77, 78 of 2010 and 47 of 2012, decided on 31st May, 2017.

Patents Ordinance (LXI of 2000)---

----Ss. 13, 16, 1(1)(c), 8, 23, 27, 69(3) & 88---Patent Rules, 2003, Rr. 14(6)(7), 18(8), 21(2), 24(3) & 62---Patent---Object, scope and purpose--- Disclosure, extension in time---Principle---Appellants filed opposition to patents filed by respondents without accompanying statement setting out fully nature of opponent's interest and facts upon which appellant relied---Authorities dismissed opposition filed by appellants---Validity---Concept of patent revolved around fundamental principle that inventor be granted monopoly upon his disclosure to public---Monopoly hinged on disclosure---Monopoly and disclosure were two legs of patent system and one could not stand straight without the other---Under relevant law, a mechanism was provided for filing patent by an inventor, disclosure requirements were given longish period of four months by statute itself and not left to the Rules---Such window was closed after lapse of four months and there was no legal possibility to reopen same as inventor's rights cemented on expiry of four months period, whereafter, inventor was only required to pay ceiling fee and had his patent granted to him, and enjoyed monopoly upon him having made disclosure to public, which disclosure had gone into public domain and people at large were free to use this information, except to reproduce the product or to use the process for commercial gains or in any manner violating scheme envisaged by patent laws---Appellants had clear opportunity to file their opposition within four month's period which they failed to do without providing mandatory statement under S. 18(1)(c) of Patents Ordinance, 2000---If Controller of patents had admitted documents mandated to be filed along with Form-P-7 after expiry of statutory period of four months under S. 21 of Patents Ordinance, 2000, such act would have amounted to enlarged time limit of four months prescribed under S.21 of Patents Ordinance, 2000 of which there was no legal opportunity---Controller's power to enlarge time was only restricted to situations which were described in heading of Form-P-7---Controller had rightly refused opposition filed by appellants as there was no power to extend period for meeting requirement of R. 18(1)(c) of Patents Ordinance, 2000--- High Court declined to interfere in order passed by Controller of Patents---Appeal was dismissed in circumstances.

1987 MLD 509; 1995 MLD 638, 2008 SCMR 1148; 2007 SCMR 307; 2001 SCMR 838; 1988 CLC 1358 and PLD 2002 Kar. 457 ref.

Mirza Mehmood Baig for Appellants.

Mrs. Amna Salman for Respondent No.1.

Salim Ghulam Hussain for Respondent No. 2 (the Controller of Patents).

Qamar-ud-Din for Respondent No. 2 (in M.As. Nos. 15 and 22 of 2010).

Khawaja Shoaib Mansoor for Respondents.

2018 C L D 572

[Sindh]

Before Muhammad Ali Mazhar, J

IGI INSURANCE LIMITED AND 3 OTHERS: In the matter of

J.C. Misc. Note. 1 of 2017, decided on 17th November, 2017.

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

----S. 284---"Mergers" and "acquisitions"---Connotation---Mergers and acquisitions are businesses in which ownership of companies or their operating units are conveyed or conjoined---Such is the amalgamation and integration of two entities into one entity.

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

----S. 284---Demerger---Object and scope---Demerger is a business stratagem in which single business is broken into components; as such it allows a conglomerate to split off its different varieties to invite or prevent acquisition, to raise capital by selling off components that are no longer part of fundamental merchandise line of business or to generate distinct lawful entities to manage diverse managements; it is in fact a method of corporate streamlining and restructuring by dint of which business operations are segregated into one or more components---Demerged company connotes and exemplifies a conglomerate (transferor company) whose undertaking is transferred pursuant to demerger to a resulting company (transferee company).

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

----Ss. 284, 285, 286, 287 & 288---Scheme of amalgamation of companies---Approval of court---Petitioner companies sought approval of court to scheme of arrangement with regards to amalgamation of companies---Validity---Held, it was not function of the court to examine whether there was scope for better scheme---Where court had found that scheme was patently fraudulent, it might not respond or function as mere rubber stamp or post office but could reject scheme of arrangement---Proposed schemes were not found to be violative of any provision of law and/or contrary to public policy but as a whole looked like evenhanded and serviceable from point of view of prudent men of business taking a commercial decision---Once requirements of a scheme for getting sanction of court were found to have been met, court had no further jurisdiction to sit in appeal over commercial wisdom of majority of class of persons who, with their open eyes, had given their approval to scheme---Scheme was approved in circumstances.

International Complex Projects Limited and another's case 2017 CLD 1468 and Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305 ref.

Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506 rel.

Kazim Hasan, Rashid Mahar and Shahan Karimi for Petitioners.

Salman Salim Rajan, Law Officer, SECP.

2018 C L D 716

[Sindh]

Before Muhammad Ali Mazhar, J

ASSOCIATED TEXTILE CONSULTANTS (PVT.) LTD. AND OTHERS: In the matter of

J.C.M. No. 9 of 2017, decided on 22nd November, 2017.

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

----S. 284---Amalgamation of companies---Scheme of arrangement---High Court, jurisdiction of---Scope---Where scheme is found to be reasonable and fair, at that moment in time it is not the sense of duty or province of High Court to supplement or substitute its judgment against collective wisdom and intellect of shareholders of companies involved.

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

----S. 284---Amalgamation of companies---Scheme of arrangement---All indispensable statutory benchmarks and formalities were accomplished and adhered to by petitioners as envisaged under Companies Ordinance, 1984 and enabling rules---Schemes set up for sanction were reinforced and fortified by requisite majority which decision was just and fair---Reports/minutes of meeting unequivocally conveyed that all essential and fundamental characteristics and attributes of schemes were placed before voters in separate meetings to live up to statutory obligations including---Swap ratio was determined by Chartered Accountants and their reports were placed on record---Effect---Proposed scheme as a whole looked like even handed and serviceable from the point of view of prudent men of business taking a commercial decision---Once requirements of a scheme for getting sanction of the Court were found to have been met, Court had no jurisdiction to sit in appeal over commercial wisdom of majority of the class of persons who with their open eyes had given their approval to the scheme---Scheme of arrangement was sanctioned in circumstances.

IGI Insurance Limited and other's case J.C. Misc. No. 1 of 2017; International Complex Projects Limited and other's case 2017 CLD 1468 and Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506 rel.

Raashid Anwer for Petitioners.

Ms. Amber Imran, Chief Financial Officer of Petitioners.

Salman Salim Rajan and Syed Ibad, Law Officers of SECP.

2018 C L D 737

[Sindh]

Before Aqeel Ahmed Abbasi and Arshad Hussain Khan, JJ

GULSHAN WEAVING MILLS LIMITED---Appellant

Versus

AL BARAKA BANK (PAKISTAN) LIMITED and 8 others---Respondents

High Court Appeal No. 262 of 2017, decided on 6th January, 2018.

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

----S. 284---Scheme of arrangement---High Court, jurisdiction of---Scope---Before sanctioning such scheme even though approved by majority of concerned creditors or members, the Court has to be satisfied that the company or any other person moving such application for sanction has disclosed all relevant matters mentioned in proviso to S. 284(2) of Companies Ordinance, 1984.

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

----S. 284---Scheme of arrangement---Clarification introduced in scheme---Scope---Scheme of arrangement was approved by Company Judge by adding clarification to the scheme---Appellants were aggrieved of such clarification introduced by the Court to scheme of arrangements---Validity---Question of viability of scheme was to be judged subject to the condition that scheme sanctioned by majority was also to remain binding on dissenting minority of creditors or members, even though they did not consent to such scheme and to such extent absence of their consent had no effect on the scheme---Even in case of such a scheme of compromise and arrangement put up for sanction before Company Judge, it was to be seen whether proposed scheme was lawful, just and fair to the whole class of creditors or members, including dissenting minority to whom it was offered for approval and which had been approved by such class of persons with requisite majority vote---Company Judge while dealing with issue of such nature was not to act as a court of appeal and sit in judgment over the informed view of concerned parties to the compromise as the same would be in the realm of corporate and commercial wisdom of concerned parties--- Court was not required to unnecessarily disapprove considered opinion and commercial wisdom of majority shareholders or creditors of company unless it was in violation of law and public policy---Jurisdiction of Company Judge in such matters was peripheral and supervisory and not appellate---Division Bench of High Court struck down the clarification as the same was violative of the scheme and scope of S. 284(2) of Companies Ordinance, 1984---Intra-court appeal was allowed in circumstances.

[Case-law referred]

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

----S. 284---Scheme of arrangement---Objection---Scope---Objection to any compromise or arrangement, if any, based on classification, jurisdiction or otherwise must be raised at the earliest opportunity.

[Case-law referred]

Shoaib Rashid and Shahid Iqbal Rana for Appellant.

Arshad Tayyebaly along with Mikael Azmat Rahim and Muhammad Shahid for Respondents Nos. 3 and 8.

Syed Nauman Zahid Ali for Respondent No.7.

Muhammad Jamshed Malik for Respondent No.9.

2018 C L D 799

[Sindh]

Before Muhammad Junaid Ghaffar, J

ASKARI BANK LIMITED---Plaintiff

Versus

DCD SERVICES LIMITED and 3 others---Defendants

Suit No. B-121 of 2011, decided on 11th January, 2018.

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

----Ss. 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Electronic Transactions Ordinance (LI of 2002), S. 7(4)---Suit for recovery of finances---Certified copies---Computer generated documents---Defendants sought leave to defend suit on grounds that Bank did not file certified documents along with plaint---Plea raised by Bank was that same were computer generated and required no certification---Validity---When copies of Bank statement or account were to be annexed with plaint those had to be properly certified by officer as required under Bankers' Books Evidence Act, 1891---Such was mandated for reasons that when same was presented before court in a recovery suit under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 it had attached to it some authenticity---Be it a computer printout or an extract or copy of an account was maintained manually by Bank, condition of its certification was mandatory in both situations---Nothing existed in Electronic Transactions Ordinance, 2002 which had dispensed with certification of document as required under Financial Institutions (Recovery of Finances) Ordinance, 2001, it only recognized that account/Bank statements could be maintained in an electronic form and condition of certification remained valid---Apparently statement of account filed along with plaint did not fulfil mandatory requirement as contemplated under S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Neither same were certified in manner as mandated nor it was brought on record that officers who signed same were competent to do so in law---Prima facie plaintiff Bank failed to meet such requirement at leave granting stage and same entitled defendants for grant of unconditional leave to defend suit as substantial question of fact and law was made out---Application was allowed in circumstances.

[Case-law referred]

(b) Interpretation of statutes---

----"General law" and "special law"---Distinction---General law is one that is unrestricted in terms of its applicability whereas special law may be restricted in nature as to types of persons or cases---Whether law is general or special, depends on particular features of statute in issue and ultimately a question of relativity between two or more statutes on common subject matter.

[Case-law referred]

Jam Asif Mehmood along with Saim Hashmi for Plaintiff.

Tariq Bashir for Defendants Nos. 1 and 2.

Murtaza Wahab for Defendants Nos. 3 and 4.

2018 C L D 823

[Sindh]

Before Mrs. Ashraf Jahan, J

AMAN ELLAHI---Appellant

Versus

The REGISTRAR OF TRADE MARKS and another---Respondents

Miscellaneous Appeal No. 64 of 2017, decided on 12th January, 2018.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 14, 17 & 114---Registration of trademark---Opposition---Appellant was owner of registered trademark 'Cobra' and assailed registration of trademark 'Faster Black Cobra' on grounds of deception---Validity---Main guiding principle to examine genuineness of claim of respondent for registration of its trademark 'Faster Black Cobra' was that upon comparison of the two, court was to be satisfied that there were sufficient features to differentiate between two trademarks phonetically as well as visually so that an unwary buyer of same product was genuinely not confused and misguided due to feature of similarities between the two---Concept of totality of impression, test of average consumer etc., recorded by Registrar of Trademarks in order in question was misconceived and erroneous---Sound reasons disclosed by appellant in his opposition justified grant of such opposition and consequent rejection of application in Class-5 of registration of trademark 'Faster Black Cobra' in favour of respondent---High Court allowed opposition filed by appellant and set aside order passed by Registrar of Trademarks, resultantly application of respondent for registration of trademark was rejected---Appeal was allowed in circumstances.

Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; Seven-Up Company v. Kohinoor Thread Ball Factory and 3 others PLD 1990 SC 313; Shan Food Industries v. Eastern Products (Pvt.) Ltd. and others 2012 SCMR 1504 and Messrs Farooq Ghee and Oils Mills (Pvt.) Ltd. v. Registrar of Trade Marks, Trade Mark Registry and others 2015 CLD 1245 rel.

Tillotts Pharma AG v. GETZ Pharma (Private) Limited 2013 CLD 330; Formica Corporation v. Pakistan Formica Ltd. 1989 SCMR 361; Messrs Master Textile Mills Ltd. v. Master Fabrics 2007 CLD 991 and Abid Aziz Khan and 2 others v. Bank of Punjab 2007 CLD 997 ref.

Khwaja Shoaib Mansoor for Appellant.

Sultan Ahmed Sheikh for Respondent No.1.

Moeen Qamar and Zia-ul-Haq Makhdoom for Respondent No.2.

2018 C L D 838

[Sindh]

Before Muhammad Ali Mazhar, J

TOTAL PARCO PAKISTAN LTD. AND ANOTHER: In the matter of

J. Misc. Petition No. 19 of 2017, decided on 16th January, 2018.

Companies Act (XIX of 2017)---

----Ss. 279, 282, 283, 284 & 285---Sindh Chief Court Rules (OS), Rr.777, 778, 779 & 780---Scheme of arrangement---Sanction---Principles---Petitioners sought sanctioning of scheme of arrangement to transfer business of one company to the other company---Validity---Held, it was not sense of duty or province of Court to supplement or substitute its judgment against collective wisdom and intellect of shareholders of companies involved; it was the duty of Court to find out and perceive whether all provisions of law and directions of Court had been complied with---When the scheme seemed like in the interest of the company as well as in that of its creditors, it should be given effect to---Court would not question commercial wisdom of the scheme---Where scheme was patently fraudulent, Court should not respond or function as mere rubber stamp or post office but reject the scheme---Petitioners, in the present case, had complied with all statutory touchstones and the scheme was exhilarated and fortified by indispensable majority---Report/minutes of meetings discernably communicated that the manuscript of scheme was tabled to voters at meetings for approval---High Court sanctioned the scheme of arrangement as the scheme was not violative of any provision of law---Petition was allowed in circumstances.

IGI Insurance Limited and others J.C. Misc. No. 1 of 2017; International Complex Projects Limited and another's case 2017 CLD 1468; Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305 and Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506 ref.

Taha Alizai for the Petitioners.

Ammar Yasir, Manager Legal of the Petitioners.

Imran Shamsi and Syed Hafiz Ibad, Law Officers, SECP.

2018 C L D 860

[Sindh]

Before Muhammad Junaid Ghaffar, J

MUSLIM COMMERCIAL BANK LTD.---Applicant

Versus

Haji ABDUL RAZZAK through Legal Heirs---Respondents

C.M.A. No. 7655/2009 in Suit No. B-1674 of 1997, decided on 17th January, 2018.

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

----S. 9---Civil Procedure Code (V of 1908), O. XIV, R. 5---Suit for recovery of finance---Framing of issues and additional issues---Principles---Grounds taken in application for leave to defend the suit---Scope---Grievance of plaintiff Bank was that proper issues were not framed therefore, plaintiff sought framing of additional issues---Validity---Court had powers under O. XIV, R. 5, C.P.C. to itself amend issues or fame additional issues and it was imperative on Court to frame such additional issues as could be necessary to determine controversy between the parties---Each and every ground taken in leave to defend application could not become an issue for adjudication though it might be a valid ground for granting leave to defend---Issues already settled could not be adjudicated under Banking jurisdiction conferred under Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court in exercise of powers under O. XIV, R. 5, C.P.C. resettled/amended the issues---Application was allowed accordingly.

[Case-law referred]

Salman Aslam Butt, Mansoorul Arfin along with Shoaib Rashid for Applicant.

Anwar Mansoor Khan along with Bashir Ahmed for Defendants. Saif Akbar for Contemnors Nos. 1 and 2.

Khurram Ashfaq for Faisal Bank.

Samiur Rehman for Intervener.

Shoukat Hayat and Mubin Lakho.

2018 C L D 889

[Sindh]

Before Muhammad Ali Mazhar, J

GAZIPURA SECURITIES AND SERVICES (PVT.) LIMITED: In the matter of

J.C.M. No. 50 of 2016, decided on 22nd November, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 97, 98, 101 & 160(b)---Share capital, reduction in---Principle---Petitioner company sought permission of court to confirm reduction of share capital which had been approved by a special resolution of shareholder of the Company---Validity---Petitioner filed a statement under S.160 of Companies Ordinance, 1984 along with certified true copy of resolution passed by Board of Directors which was passed in extraordinary general meeting held at registered office of the company---Petitioner had complied with all requisite formalities---Reduction of capital did not involve any diminution of any liability in respect of unpaid share capital or payment to any shareholder of any paid up share capital---High Court approved resolution passed in extraordinary general meeting for capital destructuring through reduction of share capital---Petition was allowed in circumstances.

2013 CLD 2156; Westburn Sugar Refineries Ltd. [1951] 1 All ER 881 and British and American Corporation v. Couper [1894] A.C. 399 ref.

Sikandar Khan for Petitioner.

Salman Salim Rajan and Syed Ibad, Law Officers, SECP.

2018 C L D 903

[Sindh]

Before Munib Akhtar and Zulfiqar Ahmad Khan, JJ

Messrs JUBILEE LIFE INSURANCE CO. LTD.---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Law, Ministry of Law and Justice Division and others---Respondents

Constitutional Petitions Nos. D-2261 of 2015, D-2369, D-3149 and D-3150 of 2016, decided on 22nd November, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 127, 130(2), 122 & 75---Securities and Exchange Commission (Insurance) Rules, 2002---Factual controversy---Ombudsman, decision of---Petitioner was an insurance company and assailed order passed by Insurance Ombudsman on complaints filed by legal heirs of insured---Dispute between parties was with regards to non-disclosure of ailments before purchase of insurance policies---Plea raised by petitioner was that Insurance Ombudsman did not have jurisdiction over the matter---Validity---Factual aspect of controversy whether insured had knowledge of their ailments before date of purchase of respective insurance policies, could not be adjudicated by High Court in exercise of jurisdiction under Art. 199 of the Constitution---Respondents committed no illegality in approaching the Ombudsman for redressal of their grievance through mechanism provided under S. 127 of Insurance Ordinance, 2000---Appropriate remedy of challenging orders of Ombudsman, according to S. 130(2) of Insurance Ordinance, 2000 was to file appeal before Securities and Exchange Commission of Pakistan within 30 days---Procedure was governed by Securities and Exchange Commission (Insurance) Rules, 2002---Appropriate remedy provided by law was not adopted by petitioner---Alternate remedy perfectly adequate was available to insurance company and same was not availed for justifiable reasons---Constitutional petition was dismissed in circumstances---W.P. No.21910 of 2009 dissented from.

M. R. Transport Company v. National General Insurance Company Ltd. 2001 CLC 1618; Pakistan International Airlines Corporation v. Air Master (Pvt.) Ltd. and another PLD 2004 Kar. 77; Shafaatullah Qureshi v. Federation of Pakistan PLD 2001 SC 142 and Muhammad Aslam Khan v. Government of Pakistan and others PLD 1993 Kar. 41 distinguished.

W.P. No. 21910 of 2009 dissented from.

Pakistan Packages Private Limited v. Adamjee Insurance Company Ltd. 2014 CLD 913; Shafiq Bibi v. State Life Insurance Company 2015 CLD 1185; Muhammad Imran v. Chief Executive Office 2011 CLD 1170 and East West Life Insurance Company Ltd. v. Mst. Tehmina Bashir 2013 CLD 1742 rel.

Sibtain Muhmud for Petitioner.

Asim Mansoor Khan, Deputy A.-G. for Respondent No.1.

Munir-ur Rehman for Respondent No.3 (in C.P. No. D-2261 of 2016).

Raja Sikandar Khan Yasir for Respondent No.3 (in C.P. No. D-2369 of 2016).

2018 C L D 913

[Sindh]

Before Muhammad Junaid Ghaffar, J

FIRST WOMEN BANK LIMITED through Attorneys---Plaintiff

Versus

Messrs BITA TEXTILE MILLS (PVT.) LTD. through Directors and 6 others---Defendants

Suit No. B-41 of 2016, decided on 9th March, 2018.

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

----Ss. 9 & 10---Suit for recovery of finance---Leave to defend suit---Markup, recovery of---Principle---Application for grant of leave to defend suit---Plea raised by customers was that Bank was charging excessive markup---Validity---Markup was to be paid as per agreement, whereas if finance facility was availed in respect of running finance even beyond date of agreement, borrower was liable to pay markup at least on such running finance availed---Customers kept on availing facility and never objected to any of payments and/or markup---No substantial question of law or fact was raised and all contentions were stereotype and without any substantial material to support the same---Finance facility was availed for which various agreements were signed and properties were mortgaged and hypothecated---High Court declined to grant leave to defend suit---Suit was decreed in circumstances.

Messrs U.I.G. (Pvt.) Ltd. through Director and 6 others v. Bank Al-Falah Ltd. 2015 CLD 452 rel.

S. M. Kazim along with Ms. Farzana Aftab Branch Manager for Plaintiff.

Muhammad Arif for Defendants.

2018 C L D 933

[Sindh]

Before Muhammad Junaid Ghaffar, J

ROYAL RICE MILLERS LIMITED through CEO and 5 others---Applicants

Versus

HABIB METROPOLITAN BANK LTD.---Respondent

J.M. No. 55 of 2014 in Suit No. B-82 of 2010 and Execution Application No. 32 of 2012, decided on 30th March, 2018.

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

----Ss. 9 & 7---Civil Procedure Code (V of 1908), O. V, R. 20---Procedure of Banking Court---Suit for recovery---Service of notices on the defendants---Procedure---Proceedings under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Nature---Filing of application for leave to defend---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Procedure as provided in O. V, R. 20, C.P.C. regarding substituted service and the jurisprudence developed on its interpretation was not relevant for the purposes of banking suits as the only provision applicable thereto vis-à-vis effective service of notice(s) was S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Mubarak Ali v. First Prudential Modaraba 2011 SCMR 2011; Haji Muhammad Yaqoob Akhtar v. Habib Bank Ltd. 2009 CLD 1699; Mst. Zarina Shamim v. Zarai Tarqiati Bank Ltd. 2007 CLD 1371; Shabbir Ahmed v. Zarai Tarqiati Bank Ltd. 2005 CLD 1119; Quetta Silk Center v. Muslim Commercial Bank Ltd. 2003 CLD 254; Zahid Mahmood through Attorney v. Zarai Tarqiati Bank Ltd. 2006 CLD 1403; Shaz Packages v. Bank Al-Falah Ltd. 2011 CLD 790; Muhammad Aslam Tahir v. Union Bank Ltd. 2005 CLD 930; Muhammad Tahir v. Emirates Bank International PJSC 2010 CLD 1057; Karamat Hussain v. Naik Khan Muhammad 1986 CLC 6; Akbar v. Gul Baran 1996 SCMR 1703; Muhammad Anwar v. Abdul Haq 1985 SCMR 1228; Abdul Sattar v. The Bank of Punjab through Branch Manager 2017 CLD 1247; District Bar Association v. Federation of Pakistan PLD 2015 SC 401; Rafaqat Ali v. Messrs United Bank Limited 2017 CLD 1076; Dr. Javed Iqbal and 2 others v. Askari Bank Limited through Attorney 2017 CLD 1140; Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497; Khawaja Muhammad Bilal v. Union Bank Limited through Branch Manager 2004 CLD 1555; Messrs Waris Steel Mills through Proprietor and another v. Silk Bank Limited through Branch Manager 2015 CLD 818; Muhammad Afzal Deura v. Orix Leasing Pakistan and others 2015 CLD 439; Allied Bank of Pakistan Limited v. Sultan Ali J. Lilani 2015 CLD 759 and Messrs Simnwa Polypropylene (Pvt.) Ltd. and others v. Messrs National Bank of Pakistan 2002 SCMR 476 ref.

Gulistan Textile Mills Ltd. v. Soneri Bank Limited 2018 CLD 203 rel.

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

----Ss. 7 & 9---Civil Procedure Code (V of 1908), S. 4 & Preamble---Power of Banking Court---Applicability of the C.P.C. to procedure before Banking Court---Scope---Proceedings not covered under any specific provision of the Financial Institutions (Recovery of Finances) Ordinance, 2001 could be dealt with under the C.P.C.

Muhammad Nawaz v. Allah Diwaya 1996 CLC 1580 rel.

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

----O. VI, R. 17---Pleadings---Amendment of plaint---Notice to opposite party to amend written statement---Scope---Whenever a plaint was allowed to be amended, right accrued to the opposite party to file amended written statement and no dispensation could be made to requirement of mandatory notice of such amendment to the opposite party even if the amendment was of a minor nature.

The Bank of Punjab v. Arif Ali Shah Bukhari 2016 CLD 1301 rel.

Muhammad Salim Thepdawala for Applicants Nos. 1, 3, 4 and 6.

Umer Riaz for Applicants Nos. 2 and 5.

Muhammad Naseer for Respondent.

2018 C L D 972

[Sindh]

Before Muhammad Ali Mazhar, J

CRESS LPG (PVT) LTD. through Authorised Representative---Plaintiff

Versus

M.T. MARIA III through Master/Chief Engineer/Chief Officer and others---Defendants

Admiralty Suit No.1 of 2018, decided on 13th April, 2018.

(a) Carriage of Goods by Sea Act (XXVI of 1925)---

----Sched.---Bill of Lading---Scope---Under modern conditions, bill of lading is usually signed by loading broker but sometimes by master, acknowledging quantity and condition of goods when put on board---Precise effect of such acknowledgment is most important in view of rule of law that ship must deliver 'what she received as she received it, unless relieved by expected perils'---For many purposes possession of bill of lading is equivalent in law to possession of goods---Bill of lading enables holder to obtain delivery of goods at port of destination and during transition it enables him to deliver goods by merely transferring bill of lading---Bill of lading contains (i) consigners and consignee's name, (ii) names of ports of departure and destination, (iii) name of vessel, (iv) dates of departure and arrival, (v) itemized list of goods being transported with number of packages and kind of packaging, (vi) marks and numbers on packages, (vii) weight and/or volume of cargo, (viii) freight rate and amount---Bill of lading serves as proof of ownership (title) of cargo and may be issued either in negotiable or non-negotiable form; in negotiable form it is commonly used in letter of credit transactions and may be bought, sold, traded or used as security for borrowing money---Bill of lading is required in all claims for compensation for any damage, delay or loss; and for resolution of disputes regarding ownership of cargo---Rights, responsibilities and liabilities of carrier and shipper under a bill of lading are governed generally either by older Hague Rules or by more recent Hague-Visby Rules---Bills of lading are one of three crucial documents used in international trade to ensure exporters receive payment and importers receive merchandise---Bill of lading is a writing signed on behalf of owner of ship in which goods are embarked, acknowledging receipt of goods and undertaking to deliver them at end of voyage, subject to such conditions as may be mentioned in bill of lading.

Bramwell in Sewell v. Burdick (1884), 10 App. Cas. at p.105; The Ardennes (Owner of Cargo) v. The Ardennes (Owners), [1950] 2 All ER 517; [1951] 1 K.B. 55, Rodocanachi v. Milburn (1886), 18 Q.B.D. 67; Bradley v. Federal Steam, etc., Co. (1927), 137 L.T. 266, at p.267, Horst v. Biddell Bors, Erichsen v. Barkworth (1858), 3 H. & N.894, [1912] A.C. and The Manual of Ports, Shipping and Admiralty Law by Mohammad Ahsan Ghani Siddiqui rel.

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

----Ss. 3(2) & 4(4)---Sindh Chief Court Rules (O.S.), R. 731---Suit for recovery against vessel and its owner---Arrest of vessel---Plaintiff relied upon bill of lading and sought arrest of vessel for failure to deliver goods---Validity---Bill of lading issued by owner of vessel was not honoured due to alleged non-payment issue whereas plaintiff had fostered plea that entire payment was made---Due to diminishing value and quantity of cargo by flux of time plaintiff claimed actual cost with damages---Principal place of business of all defendants was beyond territorial jurisdiction of High Court and as soon as vessel left, it would be troublesome for plaintiff to salvage and recuperate it's alleged claim---High Court directed owner of vessel to furnish surety equivalent to value of cargo to satisfaction of court and same would remain intact till final adjudication of lis and that on furnishing surety/bank guarantee arrest order would deem to have been recalled and port authorities could allow the vessel to sail--- Application was allowed accordingly.

2013 CLD 1829; V.N. Lakhani and Company v.m. v. Lakatoi Express and others PLD 1994 SC 894; Arshad Corporation (Pvt.) Ltd. v. The Ship Maersk Astro and others PLD 1988 Kar. 515; Jaffer Brothers (Pvt.) Limited v. M.V. Eurobulker II 2002 CLD 926 and Sun Line Agencies Ltd. v. M.V. Psilorits and others 1984 CLC 1553 ref.

Spectre Consulting Limited v. MT Everrich 6 PLD 2018 Sindh 136 rel.

Mohammad Mansoor Mir for Plaintiff.

Aga Zafar Ahmed for Defendants Nos.1 to 3.

Omair Nisar for Defendant No.4.

Nemo for Defendant No.5.

2018 C L D 993

[Sindh]

Before Muhammad Ali Mazhar, J

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Petitioner

Versus

Messrs DADABHOY INSURANCE COMPANY LIMITED---Respondent

J.C.M. No. 19 of 2016, decided on 31st May, 2018.

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

----Ss. 11 & 41---Companies Ordinance (XLVII of 1984), Ss. 305 & 309 [since replaced]---Insurance company---Petition for winding up---Record reflected that the company was communicated that in terms of S. 11 of the Insurance Ordinance, 2000, an insurance company shall at all times ensure compliance with the provisions of the Ordinance relating to minimum paid up share capital, statutory deposit, solvency requirements, obtaining reinsurance arrangements and such other provisions of the Ordinance as were applicable to it but the company failed to meet the minimum paid capital requirement---Company also failed to submit reinsurance treaty arrangements for certain years in violation of S. 41 & S. 11 of Insurance Ordinance, 2000---Company also failed to submit the annual audited accounts/returns and quarterly returns since the year 2001---Record also showed that the company failed to hold annual general meetings; it suspended its business; it failed to appoint its auditor; it failed to reply to show cause notices and failed to attend hearing---Financial situation of the company was bleak as reflected from its financial statement---Company had been delisted from the Stock Exchange since the year 2012---Chances of survival of the company, in such situation, were remote---Continuance of the operations of the company would be prejudicial to the interest of policyholders---Companies Judge appointed Official Assignee as Official Liquidator and directed that the company should be wound-up and that the company shall submit the statement of affairs to the Official Liquidator in accordance with law.

(b) Companies Ordinance (XLVII of 1984) [since replaced]---

----Ss. 305 & 309---Winding-up of a company---Grounds---Instances where courts leaned towards winding-up of a company were, where the patent, which the company had to work on, was not granted; where the bulk of the property of the company had been sold and its liquidity and capital exhausted; where there was no reasonable chance of the grant of a contract or concession which the company was supposed to undertake; where on account of a deadlock in management the company could not carry on business for several years, nor there was any evidence of plans and prospects of revival; where there was suspension of business for over a year, the number of members was reduced to less than two, all Directors but one was absconding and assets were taken over by the lending institution, and the petition by the sole remaining Director for winding-up was admitted; where various Banks and financial institutions refused to advance term loans on account of the antecedents of the managing Director, and by change of management also, the position of the company could not be revived, and where directors of a company which had cheated investors, Banks and financial institutions were also involved in the company.

Guide to the Companies Act, 17th Edition 2010; Haven Gold Mining Co., (1882) 20 Ch D 151; German Date Coffee Co., Re, (1882) 20 Ch D 169; Diamond Fuel Co. (No. 2), (1879) 13 Ch D 400 (CA); Bleriot Mfg. Aircraft Co., (1916) 32 TLR 253; Ramesh G. Bhatia v. Gopala Gases P. Ltd., (1994) 3 Comp LJ 435 (Del); Surendra Kumar Pareek v. Shree Guru Nanak Oils P. Ltd. (1995) 82 Com Cases 642 (Raj); Kerala State Industrial Development Corporation v. Poonmudi Tea Pack Ltd. (1988) 63 Com Cases 575 (1987) 3 Comp LJ 180 (Ker) and Registrar of Companies v. Amit Inter Chemicals P. Ltd., (2003) 42 SCL 743 (All) ref.

(c) Companies Ordinance (XLVII of 1984) [since replaced]---

----Ss. 305 & 309---Winding-up of a company---Non-commencement or suspension of business---Factors to be considered by courts---Mere fact that business had not been commenced within a year or that business had been suspended for a whole year or more by itself was not a ground for a court to order winding up, although they gave the jurisdiction to the court to do so---Inquiry had to be made to find out whether the non-commencement or suspension of business was for some good reason accounting for it---Fact of non-commencement or suspension of business was an evidence which indicated that the company had no intention of carrying on business or that it was not likely to do so---Decisive question was whether there was a reasonable hope of the company commencing or resuming business and doing it at a profit, and whether the substratum of the company had disappeared---Substratum of a company would seem to be gone when the subject-matter of the company had disappeared, or where the object for which it was incorporated had substantially collapsed, or where it was impossible to carry on the business of the company except at a loss and there was no reasonable hope of trading at a profit---Where, however, a company sold its undertaking, but there was still some business which it could carry on, it could not be said that the substratum of the company had disappeared---Winding-up was not appropriate where the Directors in the exercise of their managerial powers decided to dispose of the main but not the sole business of the company.

Registrar of Companies v. Bihar Wire and Wire Products (P.) Ltd., (1975) 45 Com Cases 194 (Pat); Haven Gold Mining Co., (1882) 20 Ch D 151; German Date Coffee Co., (1881-5) All ER Rep 372: (1882) 20 Ch D 169; Amalgamated Syndicate, (1897) 2 Ch 600: (1895-9) All ER Rep 340; Re, Taldua Rubber Co. Ltd., (1946) 2 All ER 763; Kiston & Co. Ltd., (1946) 1 All ER 435; Perfectair Holdings Ltd., 1990 BCLC 423 (Ch D); H.C. Insurance Society Ltd., (1960) 65 CWN 68; Kumarpuram Gopalakrishnan Ananthakrishnan v. Burdwan-Cutwa Rly. Co. Ltd., (1978) 48 Com Cases 211 (Cal); Bombay Gas Company Ltd. v. Hindustan Mercantile Bank Ltd., (1980) 50 Com Cases 202 (Cal); Akola Electric Supply Co. Ltd., (1962) 32 Com Cases 215 : AIR 1962 Bom 133; Davco Products Ltd. v. Rameswarlal Sadhani, AIR 1954 Cal 195; Mohanlal Dhanjibhai Mehta v. Chunilal B. Mehta, (1962) 32 Com Cases 970 : AIR 1962 Guj 269; Janbazar Manna Estates Ltd., (1931) 1 Com Cases 243 : AIR 1931 Cal 692; George v. Athimattam Rubber Co. Ltd., (1965) 35 Com Cases 17 (Ker); George v. Athimattam Rubber Co. Ltd., (1965) 35 Com Cases 17 and Bhartiya Gramin Vikas Vitta Nigam Ltd. (2000) 27 SCL 249 (All) ref.

Khalid Mahmood Siddiqui for Petitioner.

Nemo for Respondent.

2018 C L D 1016

[Sindh]

Before Muhammad Junaid Ghaffar, J

J.S. BANK through Authorized Officers---Plaintiff

Versus

Messrs LANDHI STEEL MILL through Managing Partner and 4 others---Defendants

Suit No. B-43 of 2016, decided on 9th April, 2018.

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

----Ss. 9, 2(a), 2(c), 15 & 19---Civil Procedure Code (V of 1908), O. I, R. 10---Procedure of Banking Court---Suit for recovery of finance---Execution of decree of Banking Court---Sale of mortgaged property---Necessary/proper party--- Determination--- Applicant was not "customer" and sought to be impleaded as party in suit on ground of applicant's interest/ownership stake in mortgaged property---Validity---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law and suit for recovery under said law was between a "Bank"/Financial Institution and a "Customer" wherein such applicant (not customer) could not be made a party, however; such applicant was at liberty to seek appropriate remedy according to law---Application under O. I, R. 10, C.P.C. was dismissed, accordingly.

National Bank of Pakistan v. Rajby International (Private) Limited 2016 CLD 2190 rel.

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

----Ss. 15, 19 & 9---Procedure of Banking Court---Execution of decree of Banking Court---Mortgaged property---Two mortgages created over same asset---Sale of mortgaged property---Distribution of proceeds---Where two mortgages had been lawfully created in respect of same assets of a judgment-debtor; then unless decree of the first charge was fully satisfied by sale proceeds, second charge, even if created with consent of the first mortgager, would not be executable as it would only subject to the satisfaction of the first decree/charge.

Industrial Development Bank of Pakistan v. United Bank Limited 2017 CLD 1707 rel.

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

----Ss. 9, 10 & 24---Limitation Act (IX of 1908) S. 5---Civil Procedure Code (V of 1908), O. V, R. 1---Procedure of Banking Court---Suit for recovery---Service of notices on the defendants---Filing of application for leave to defend---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Condonation of delay by Banking Court---Scope---Proceedings under the Financial Institutions (Recovery of Finances) Ordinance, 2001 were not ordinary proceedings under the C.P.C. and therefore had to be governed within relevant provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001----Financial Institutions (Recovery of Finances) Ordinance, 2001, a special law itself provided mechanism for service and its effect which was not akin to O. V, C.P.C. which dealt with service of summons and substituted service---Although any one of the modes provided for in S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were to be deemed as valid service; however the same was only applicable once summons had been issued in manner prescribed by the Appendix to the C.P.C., and in absence of the same, provisions of S. 9(5) the Financial Institutions (Recovery of Finances) Ordinance, 2001 were to be held as not complied with---Sections 10(2) & 24 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; provided that provisions of the Limitations Act, 1908 were applicable to all suits under the Financial Institutions (Recovery of Finances) Ordinance, 2001 and a suit under S. 9 of the Ordinance may be entertained after expiry of limitation period if plaintiff could satisfy that it had sufficient cause of not filing the same within prescribed period.

Mahboob Ahmed v. Citibank 2002 CLD 1259; Mst. Saeeda v. Habib Bank Limited and 3 others 2002 CLD 1739; Messrs Quetta Silk Centre through Sole Proprietor and 2 others v. Muslim Commercial Bank Limited through Branch Manager/General Attorney 2003 CLD 254; Mirza Musharraf Baig through L.Rs. v. Vth Additional District Judge (South), Karachi and 4 others 2010 CLC 485; Messrs Pangrio Sugar Mills Ltd. v. Bankers Equity Ltd. and 5 others 2015 CLD 637; IGI Investment Bank Limited v Admore Gas (Private) Limited 2014 CLD 658; Messrs Habib Bank Ltd. v. Mahmood Alam Sherani and another 2014 CLD 1499 and My Bank Limited v. Messrs Muslim Cotton Mills (Pvt.) Ltd. through Chief Executive and 3 others 2011 CLD 1721 ref.

Ahmed Autos v. Allied Bank of Pakistan Limited PLD 1990 SC 497; Qureshi Salt and Spice Industries v. Muslim Commercial Bank Limited 1999 SCMR 2353; Union Bank of Middle East Limited v. Zubna Limited PLD 1987 Kar. 206; Khwaja Muhammad Bilal v. Union Bank Limited 2004 CLD 1545; Simnwa Polypropylene (Private) Limited v. National Bank of Pakistan 2002 SCMR 476; Allied Bank of Pakistan v. Sultan Ali. J. Lilani 2015 CLD 759; Dr. Javed Iqbal v. Askari Bank Limited 2017 CLD 1140; Abdul Sattar v. Bank of Punjab 2017 CLD 1247; Hussan Ara v. Bank of Punjab 2006 CLD 1502 and Nazir Hussain v. Bank of Punjab 2007 CLD 687 rel.

Khawaja Shamsul Islam for Plaintiff.

Ms. Naheed A. Shahid for Defendants Nos. 1 to 5.

Naveed-ul-Haq for Intervener (United Bank Limited).

Shaikh F.M. Javed for Intervener (Premier Extractions).

2018 C L D 1040

[Sindh]

Before Aqeel Ahmed Abbasi and Aziz-ur-Rehman, JJ

SHEHRYAR WAQAS MALIK and another---Appellants

Versus

MUHAMMAD ZAFAR ALI KHAN and another---Respondents

Spl. H.C.A. No. 112 of 2017, decided on 29th January, 2018.

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

----Ss. 22 & 4---Civil Procedure (Amendment) Ordinance (X of 1980) S. 15---Interpretation of, and object behind bar of appeal against interlocutory order of a Banking Court under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Applicability of S. 15 of the Civil Procedure (Amendment) Ordinance, 1980 to banking suits---Scope---Logic behind S. 22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to have swift and expeditious disposal of cases filed and dealt with under banking laws as otherwise inordinate delay could be caused by filing of frivolous applications if interlocutory/ad-interim orders were left open for challenge before the High Court in appeal and Constitutional petitions---In view of S. 22 read with S. 4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, S. 15 of the Civil Procedure (Amendment) Ordinance, 1980; allowing for appeal to High Court in certain cases, was not attracted to an interim order passed by a Court exercising Banking jurisdiction.

2006 SCMR 1192; 2006 SCMR 483; 2016 CLD 906; 2004 MLD 113; PLD 2003 Lah. 01; PLD 1968 SC 281; PLD 2014 Kar. 264; 2010 YLR 1819; 2004 MLD 1113; PLD 2001 Kar. 256 and 1989 CLC 1975 distinguished.

Messrs Huffaz Seamless Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419; Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165; Bank AlFalah Limited v. Interglobe Commerce Pakistan (Pvt.) Ltd. and 5 others 2017 CLD 1428 and Pakistan Fisheries Ltd. v. United Bank Limited PLD 1993 SC 109 rel.

Salahuddin Ahmed for Appellants.

Khawaja Shams-ul-Islam along with Imran Raj for Respondent No.1.

Jawad A. Sarwana for Respondent No.2.

2018 C L D 1067

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs BITA TEXTILE MILLS (PVT.) LTD. through Authorized Representative and 4 others---Plaintiffs

Versus

Messrs FIRST WOMEN BANK LIMITED through President---Defendant

Suit No. B-39 of 2016, decided on 9th March, 2018.

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

----Ss. 9 & 10---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for recovery of finances, declaration and injunction---Cross-cases---Leave to defend suit, grant of---Customers, in retaliation, filed suit for declaration and injunction against Bank---Effect---Leave to defend applications in counter suits of financial institution and customers were to be heard and adjudicated independently---Even if leave was granted in one case, it was not necessary that as a corollary, leave in another must be granted as a rule---Mere filing of suit by customers conversely did not entitle them for grant of leave to defend suit of financial institution---High Court allowed financial institution to defend suit and contents of application of financial institution were treated as written statement---High Court declined to grant leave to defend suit filed by financial institution---Suit was decreed in circumstances.

Messrs Malik Israr Salim and Brothers through Proprietor v. Allied Bank of Pakistan Ltd. and 2 others 2006 CLD 85 ref.

National Bank of Pakistan v. Raja Traders 2016 CLD 1938 rel.

Muhammad Arif for Plaintiffs.

S.M. Kazim along with Adnan Ahmed Malik and Ms. Farzana Aftab, Branch Manager for Defendant.

2018 C L D 1088

[Sindh]

Before Munib Akhtar and Omar Sial, JJ

SHAFIQUDDIN MOINEE---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Human Resources Development, Islamabad and 2 others---Respondents

C.P. No. D-1313 of 2013, decided on 12th February, 2018.

Companies Profits (Workers' Participation) Act (XII of 1968)---

----Ss. 2(f) & 3(b)---Sindh Companies Profits (Workers' Participation) Act, 2015 (XVIII of 2016), Ss. 2(h), 3(b), 7(2) & 12(1)---Beneficial legislation---Applicability---Trans-provincial companies---Number of workers, determination of---Principle---Dispute was with regard to percentage of participation of workers in profits of trans-provincial companies---Participation of workers was up to 5% of the profit in the Province of Punjab whereas in Province of Sindh the same was 7% of the profit---Plea raised by industrial establishments was that they were only liable to distribute to workers in the Province of Sindh a proportionate amount calculated on the basis of five percent---Validity---Applying principle of beneficial legislation, the reference to number of workers in first condition must be regarded as referring to the total number of workers all over the country and not merely in the Province of Sindh---Principle of territorial limitation was not violated as it was only to establish parameters that would make the scheme applicable---Such parameters could be based on or take into account the factors that lie outside the Province---Condition which related to value of fixed assets of the company was irrelevant as the same could be located within or outside the Province---Law in the Province of Sindh was to be applied and workers were to get an amount proportionate to their number calculated at 7%---Workers in the Province of Punjab were to get an amount proportionate to their number calculated at five percent and the same was not discriminatory---Legislative competence was exclusively Provincial and territorial extent was limited--- Each Province was entitled to legislate in its own manner in respect of a matter that was exclusively within its domain and it was irrelevant as to where the registered office and/or industrial undertaking of trans-provincial company were located i.e. that same could be located in the Province of Sindh or elsewhere---While making computation, the whole of profits made by company were to be used, regardless of where they were earned in the country---Constitutional petition was disposed of accordingly.

KESC and others v. NIRC and others PLD 2014 Sindh 553; 2015 PLC 1; Sindh Revenue Board and another v. Civil Aviation Authority of Pakistan 2017 SCMR 1344; State of Bombay v. R.M.D. Chamarbaugwala and another AIR 1957 SC 699; Balochistan Workers Federation and others v. Government of Pakistan and others 2014 PLC 351; Dr. Nadeem Rizvi and others v. Federation of Pakistan and others PLD 2017 Sindh 347; Pakistan International Freight Forwarders Association v. Province of Sindh and others 2017 PTD 1; Cole v. Whitfield [1988] HCA 18; (1988) 165 CLR 360; Jindal Stainless Ltd. and another v. State of Haryana and others AIR 2016 SC 5617; (2017) 12 SCC 1; Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. (1920) 28 CLR 129; [1920] HCA 54; Pakistan Engineering Co. Ltd. v. Fazal Beg and others 1992 SCMR 2166; Excise and Taxation Officer and another v. Burmah Shell Storage and Distribution Company of Pakistan Ltd. and others 1993 SCMR 338; Collector of Sales Tax, Gujranwala and others v. Super Asia Muhammad Din and Sons and others 2017 SCMR 1427; 2017 PTD 1756; Inco Europe Ltd. v. First Choice Distribution (a firm) [2000] UKHL 15; [2000] 2 All ER 109; Manga alias Man Singh v. State of Uttarkhand (2013) 7 SCC 629 and Dilip S. Dahanukar v. Kotik Mahindra Co. Ltd. and another (2007) 6 SCC 528 ref.

Ch. Muhammad Ashraf Khan, Nishat Warsi, Obaidur Rehman, Faisal Siddiqui, Ch. Muhammad Rafiq, Asim Iqbal, Muhammad Hamayun Khan, Samiur Rehman, Faisal Mahmood Ghani, Ali Aziz, Ahad Zuberi, Javed Asghar Awan, Muhammad Hamayun, Mumtaz Ali Shah, Amjad Hussain Hashmi, Shahid Ali, Kh. Shaoib Mansoor, Ghulam Murtaza Saryo, Masood Ahmed, Nadeem Ahmed, Salman Mirza, Abid Naseem, Amir Latif, Syed Muhammad Younus, Saad Fayyaz, Hyder Ali Khan, Hussain Ali Almani, Ghulam Hussain Shah, Faiz Durrani, Ghulam Muhammad and Ms. Samia Faiz Durrani for Petitioner (in various petitions).

Salman Talibuddin, Additional Attorney General along with Ms. Alizeh Bashir for Official Respondents.

Kafil Ahmed Abbasi, Mohsin Imam, Sarfaraz A. Metio for FBR/Department.

Mukhtar Simon, Deputy Chief (Legal) Ministry of Human Resources, Government of Pakistan.

Shabbir Shah, Additional Advocate-General Sindh.

Ms. Amber Lakhani for Department of Labour, Government of Sindh.

2018 C L D 1167

[Sindh (Sukkur Bench)]

Before Nadeem Akhtar and Muhammad Faisal Kamal Alam, JJ

NAND LAL---Appellant

Versus

ASKARI BANK LTD. and others---Respondents

1st Civil Appeal No. D-29 of 2015, decided on 15th March, 2018.

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

----O. XXI, Rr. 84, 85 & 86---Sale by auction---Non-deposit of balance amount---Provisions of O. XXI, Rr. 84, 85 & 86, C.P.C. are mandatory in nature and violation of the same particularly non-payment of 75% of balance amount within 15 days is violation of O.XXI, R. 85, C.P.C. which renders the same nullity and Executing court is bound to resale of property in terms of O. XXI, R. 86, C.P.C.

Mst. Nadia Malik v. Messrs Makki Chemical Industries Pvt. Ltd. through Chief Executive and others 2011 CLD 1517 rel.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 85---Execution of decree---Sale, confirmation of---Objections---Judgment debtor sought setting aside of objection on grounds that bid amounts were not deposited in accordance with law---Executing court dismissed objections on grounds that same were not filed under proper provisions of law---Validity---Executing court was duty bound to decide objections of judgment debtor one way or the other on merits through a speaking order---By not doing so a grave illegality was committed by executing court---Order passed by executing court, on the face of it, was erroneous and non-speaking order and was liable to be set aside---Order passed by executing court granting auction purchasers additional time of three days for deposit of remaining 75% amount of their bids and then confirming auction in favour of auction purchasers and issuance of sale certificates were nullity---High Court directed to forfeit 25% of amount deposited by auction purchasers and set aside orders passed by executing court---High Court remanded matter to executing court to resell/re-auction properties in accordance with law---Appeal was allowed in circumstances.

Afzal Maqsood Butt v. Banking Court No 2, Lahore and 8 others PLD 2005 SC 470; Jhanq Textile Industries (Pvt.) Limited through Chief Executive and 6 others v. Pakistan Industrial Credit and Investment Corporation Ltd. and 3 others 2013 CLD 387; Mansoor Khalil v. Muhammad Moizuddin and another 2015 CLD 1535 and National Bank of Pakistan v. Messrs Nasir Industries, Karachi and others 1982 CLC 388 ref.

Muhammad Moizuddin and another v. Mansoor Khalil and another 2017 SCMR 1787; Mujahid Kareem and others v. National Bank of Pakistan through Manager and others 2016 SCMR 66 =¬ 2016 CLD 418; Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others 2016 CLD 480 and Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. and others v. Allied Bank of Pakistan and another 2014 SCMR 1662 distinguished.

Ashok Kumar K. Jamba for Appellant.

Muhammad Shamim Khan for Respondent No.1.

Santosh Kumar, Mukesh Kumar, Mahesh Kumar, Santosh Kumar, Om Parkash, Mrs. Rukhsana, Miss Aisha Begum (deceased), Muhammad Haneef, Abdul Razzak and Abdul Rashid called absent for Respondents 2 to 11(c).

Muhammad Habib Khan for Respondents Nos. 12 and 13.

Banking Court No. 1 at Sukkur for Respondent No.14.

2018 C L D 1183

[Sindh]

Before Muhammad Junaid Ghaffar, J

SONERI BANK LIMITED through Attorneys---Plaintiff

Versus

GREY PRINTERS PVT. LIMITED through Director and 5 others---Defendants

Suit No. B-36 of 2013, decided on 5th April, 2018.

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

----Ss.9 & 10---Negotiable Instruments Act (XXVI of 1881), S. 20---Suit for recovery of finance---Blank documents---Power-of-attorney---Presumption---Bank filed suit for recovery of finance and customer resisted the claim by asserting that documents produced by Bank were blank and suit was filed on the basis of power-of-attorney without any Board resolution---Validity---Held, in banking transactions, even if there were certain documents which were empty/blank or were not properly filled, once the borrower had availed the facility and did not dispute it while availing such facility, then subsequently on default, such objections were not appreciated---Financial Institution could file a suit on the basis of power-of-attorney which was placed on record and general provision of law regarding production of Board Resolution was not applicable---Customer failed to make out a case for leave to defend the suit and statement of account reflected that quarterly markup had been regularly debited in the account and outstanding amount was already included in markup--- Suit was decreed accordingly.

[Case-law referred]

Neel Keshav for Plaintiff.

Abdul Qayyum Abbasi for Defendants.

2018 C L D 1203

[Sindh (Sukkur Bench)]

Before Nadeem Akhtar and Muhammad Faisal Kamal Alam, JJ

ABDUL SAMAD and 3 others---Appellants

Versus

HABIB BANK LIMITED through President and another---Respondents

First Civil Appeal No. D-05 of 2015, decided on 2nd January, 2018.

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

----Ss. 9, 10 & 22---Suit for recovery of money---Decree against dead person---Appellants were successors-in-interest of deceased defendant against whom Banking Court declined to set aside ex parte decree---Validity---Banking Court did not notice repercussions of decree against a dead person which was under execution against his legal heirs and failed to appreciate that suit could be filed only against a living person and suit against a dead person as well as any order, judgment or decree passed against a dead person in such suit was a nullity---High Court set aside judgment and decree passed by Banking Court against predecessor-in-interest of appellants--- Appeal was allowed in circumstances.

M.A. Hakeem for Appellants.

Fayyaz Ahmed Soomro for Respondents.

2018 C L D 1237

[Sindh]

Before Nazar Akbar, J

Sheikh MUHAMMAD JAVAID---Plaintiff

Versus

SARTAJ SAQLAIN and 5 others---Defendants

Suit No.1644 of 2013 and C.M.A. No.14259 of 2017, decided on 17th February, 2018.

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

----Ss. 290 & 309---Specific Relief Act (I of 1877), S. 12---Qanun-e-Shahadat (10 of 1984), Arts. 17 & 79---Limitation Act (IX of 1908), Art. 113 & S. 22---Civil Procedure Code (V of 1908), O. I, R. 10---Suit for specific performance of contract---Impleadment of party during pendency of suit---Limitation, commencement of---Agreement to sell by the Directors of a private limited company---Effect---Document---Proof---Procedure---Private limited company was impleaded as one of the defendants during pendency of suit on 07-09-2015---Suit against the said defendant was to be deemed to have been instituted from the date when company was impleaded as defendant---Plaintiff had stated in the plaint that cause of action had accrued on 26-08-2011---Present suit was time barred against newly impleaded defendant private limited company---Remaining defendants were not owners of the suit property---Suit to compel the said defendants to execute sale in favour of plaintiff was not maintainable---Plaintiff was bound to prove execution of agreement to sell with the lawful owner of suit property---Alleged agreement to sell was not executed by the company or any duly authorized person by the company in accordance with law---Managing Directors of a company had to act on the basis of authorization by the Board of Directors of company or on the basis of its Articles of Association---Even plaint/suit on behalf of a company could not be filed by the Director of a company for its benefit without proper authorization---Nothing was on record with regard to any meeting of the company to propose sale of its property---Even sale consideration was not paid to the company---Immovable property owned by a private limited company could not be sold by its Director---Suit property remained to be the property of company in the record of Security and Exchange Commission of Pakistan---Documents including alleged agreement to sell appeared to be forged and fabricated---Even legal heirs of Director of company could not step into the shoes of Director on his/her death to deal with the assets of a private limited company--- Suit property belonged to a private limited company and possession of plaintiff on the suit property was result of fraud and mismanagement of the assets of private limited company---Plaintiff had not produced any of the marginal witnesses of agreement to sell and payment receipts---Photocopy of document was inadmissible in evidence---Business of registered company was to be transacted through Bank account held by the said company---Any transaction by or between the third party with any person who was even Director of company could not be treated as transaction binding on the company itself---Plaintiff had failed to establish contract with the lawful owner of suit property---Plaintiff had made attempt to misuse the process of court on the basis of forged documents---Court was bound to protect such immovable property owned by the company---Company had abandoned its business and its property should be dealt with in accordance with law---Suit property could only be protected or disposed of by winding-up of the company for the benefits of its affectees, if any---Security and Exchange Commission of Pakistan was directed to initiate proceedings against the company and wind-up the same---Nazir of the High Court was directed to inspect the suit property and take over possession of entire suit property till final order by the Court---Member Inspection Team was directed to examine affidavit filed by the plaintiff in his examination-in-chief on oath and file a complaint against him if any case was made out---Suit was dismissed in circumstances.

Bashir Dawood v. Haji Suleman Goawala and Sons Ltd. and others 2010 CLC 191 rel.

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

----S. 12---Limitation Act (IX of 1908), Art. 113---Suit for specific performance of contract---Limitation---Limitation for filing suit for specific performance of contract was three years from the date fixed for its performance, or, if no such date was fixed, when the plaintiff had notice that performance had been refused.

Wiqas Ahmed Khan for Plaintiff.

Nemo for all Defendants.

2018 C L D 1256

[Sindh]

Before Muhammad Junaid Ghaffar, J

HABIB BANK LIMITED---Plaintiff

Versus

DYNASEL LTD. and 7 others---Defendants

Suit No. B-16 of 2014, decided on 27th April, 2018.

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

----Ss. 7, 9 & 10---Banking Companies Ordinance (LVII of 1962), S. 48(6)---Suit for recovery---Procedure and powers of the Banking Court---Amalgamation of Financial institutions with sanctioning of scheme of amalgamation by the State Bank---Effect on pending suit for recovery by erstwhile Financial Institution---Scope---Question before the High Court was that after the merger of the erstwhile Bank from which defendant obtained finance facilities, should the entire plaint ought to have been amended; and in case it was not, was suit liable to be dismissed---Held, that in such case only title of suit could be permitted to be amended as mere merger did not entitle plaintiff Bank to seek amendment in plaint barring certain exceptions---Plaintiff, in the present case, except change in the name, did not seek any further relief for which plaint might require amendment; and the same also found support in S. 48(6) Banking Companies Ordinance, 1962.

Al-Jehad Trust and another v. Federation of Pakistan and others PLD 2011 SC 811; Messrs United Dairies Farms (Pvt.) Limited and 4 others v. United Bank Limited 2005 CLD 569; Messrs Asia Motor Company and another v. Messrs NIB Bank Limited 2016 CLD 609; Sheikh Murshid Ali and others v. United Bank Limited 2016 CLD 1471; Pak Oman Investment Company Limited v. Chenab Limited and 9 others 2016 CLD 1903; Mst. Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 CLD 189; Industrial Development Bank of Pakistan v. Pakistan Belting (Pvt.) Limited and 5 others 2006 CLC 808; Agricultural Development Bank of Pakistan v. Pak Green Fertilizer Company Limited and another 2000 MLD 1066 and Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 ref.

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

----Ss. 9, 10, 18 & 22---Negotiable Instruments Act (XXVI of 1881), S.20---Suit for recovery of finance---Procedure of Banking Court---Application for leave to defend---Blank documents---Inchoate stamped instruments---Scope---For banking transactions, even when there existed certain documents which were empty/blank or had not been properly filed; once the borrower/customer availed the finance facility and did not dispute the same while availing such facility; objections as to blank documents could not be appreciated or accepted and the same was also catered to by S. 20 of the Negotiable Instruments Act, 1881.

Muhammad Imran v. National Bank of Pakistan 2016 CLD 2093 rel.

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

----Ss. 18(4), 9, 10, 7 & 19---Suit for recovery---Procedure of Banking Court---Application for leave to defend---Mortgaged property---Deficient stamping in documents of mortgaged property---Sub-lease of mortgaged property---Effect---Question as to whether sub-lease of mortgaged property could be done or not was not a question for the Banking Court to adjudicate at the stage of application for leave to defend, as the same pertained to execution of decree proceedings.

Waqar Ahmed for Plaintiff.

Haq Nawaz Chatta for Defendants.

2018 C L D 1273

[Sindh]

Before Ahmed Ali M. Shaikh, C.J. and Omar Sial, J

Syed WAJAHAT HUSSAIN ZAIDI---Petitioner

Versus

BANKING COURT NO. 1 and others---Respondents

Constitutional Petition No. D-1153 of 2016, decided on 11th May, 2018.

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

----S. 20---Quashing of proceedings---Civil and criminal proceedings---Petitioner was customer of Bank who was facing trial in criminal complaint filed by the Bank before Banking Court---Petitioner without seeking remedy before the Banking Court sought quashing of proceedings directly from High Court under constitutional jurisdiction---Validity---Whenever offence was committed by customer of financial institution within the contemplation of Financial Institutions (Recovery of Finances) Ordinance, 2001, it could only be tried by Banking Court constituted thereunder and no other forum---Pendency of civil proceedings relating to same issue was not a bar to commencement or continuation of criminal proceedings---Both proceedings could proceed concurrently as conviction for criminal offence was altogether a different matter from civil liability---Petitioner had approached the High Court directly under Art. 199 of the Constitution for quashing of proceedings of criminal complaint without first exhausting alternate remedies available to him under the law by approaching Trial Court---Such direct approach for quashing, amounted to depriving the other side from presenting its case and or bringing home the guilt of accused---High Court declined to interfere in the matter as petitioner had alternate remedy available to him---Constitutional petition was dismissed in circumstances.

Mushahid Shah v. Federal Investment Agency 2017 SCMR 1218 rel.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Quashing of criminal proceedings---Principle---High Court under Art. 199 of the Constitution has no jurisdiction to resolve disputed questions of facts warranting recording of evidence---If, prima facie, an offence is made out, the normal course of trial before Trial Court cannot be allowed to be deflected except in presence of very exceptional circumstances.

Sami Ahsan for Petitioner.

Syed Muhammad Kazi for Respondent No.2.

Zafar Ahmed Khan, DPG for Respondent No.3.

Ghulam Shabbir Baluch, Assistant Attorney General for Respondent No.5.

2018 C L D 1305

[Sindh]

Before Muhammad Shafi Siddiqui, J

SHEZAN SERVICES LIMITED (Now known as SHEZAN SERVICES (PRIVATE) LIMITED---Appellant

Versus

SHEZAN BAKERS AND CONFECTIONERS (PVT.) LTD. and another---Respondents

Miscellaneous Appeal No. 317 of 2003, decided on 19th May, 2018.

Trade Marks Act (V of 1940)---

----Ss. 10, 65 & 76---Registration of identical or similar trade mark---Prohibition---Scope---Honest concurrent use of a trade mark---Exercise of discretion by Registrar of Trade Marks under S. 10(2) of the Trade Marks Act, 1940---Agreement between parties for use of "goodwill" of a business/trademark---Scope---Question before High Court was as to whether when an agreement whereby goodwill to operate a business by the name and style of the trademark was given by owner to another party; did the same also include use of the trademark, with or without the logo---Held, that word "goodwill" and "trademark" were to be treated as blood relatives and "trademark" was a narrower expression than "goodwill"---"Goodwill" encompassed all narrower dimensions of a business within its own---Goodwill of a premises or of a place would worth nothing in case the subject and essence of such business was extracted and for example, if one excluded name of any good restaurant; then there would remain no other asset except immovable property of such restaurant---Trademark, in the present case, could not be restricted to a simple concurrent use of the inventor and it would come within ambit of honest concurrent use under circumstances described in the agreement between the parties---High Court observed that trademark in such circumstances was an essential ingredient of goodwill; no illegality therefore existed in the impugned judgment--- Appeal was dismissed, in circumstances.

Additional CIT v. Kwality Frozen Foods IT Appeal No. 5023 (Mum.) of 2001 rel.

Seventh Edition of Black's Law Dictionary; Noor Muhmmad v. Civil Aviation Authority 1987 CLC 393; Seven Up Company v. Deputy Registrar Trademark 1987 MLD 91; Cluett, Peobody & Co. v. Assistant Registrar Trademark 1991 SCMR 921 and Tabaq Restaurant v. Tabaq Restaurant 1987 SCMR 1090 ref.

Sultan Ahmed Shaikh and Salman Ahmad Shaikh for Appellant.

Ms. Amna Salman for Respondent No. 1.

Nemo for Respondent No.2.

2018 C L D 1320

[Sindh (Sukkur Bench)]

Before Nadeem Akhtar and Muhammad Faisal Kamal Alam, JJ

NAND LAL and another---Appellants

Versus

ASKARI COMMERCIAL BANK LIMITED and others---Respondents

Ist Civil Appeal No. D-09 of 2011, decided on 15th March, 2018.

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

----Ss. 3(2), 9, 10 & 22---State Bank of Pakistan PPRD Circular No.44, dated 17-12-1998---Suit for recovery of finances---Non-exporting of goods---Suit filed by Bank was decreed in its favour and defendants assailed the same on grounds that penalties awarded by Banking Court were illegal and were not agreed to be paid---Validity---Application for leave to defend filed by defendants and all objections/grounds urged therein by them were rejected by Banking Court---Banking Court was fully justified under S. 10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in proceeding forthwith passed judgment and decree in favour of Bank against defendants---Defendants failed in exporting goods on basis of subject finance facilities which were availed by them from the Bank---Provisions of State Bank of Pakistan PPRD Circular No. 44 dated 17-12-1998 in relation to export finance scheme specifically provided imposition of fine in case direct exporter who had obtained finance under Part IV of the Scheme failed to match his borrowing by his export performance---Bank was entitled only to purchase price agreed in agreement for financing; penalty or forced liability imposed by State Bank of Pakistan, markup on such penalty and cost of funds under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court modified the judgment and decree passed by Banking Court---Appeal was allowed accordingly.

Messrs Dadabhoy Cement Industries Ltd. and others v. Messrs National Development Finance Corporation 2002 CLC 166; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi PLD 2002 SC 500; United Bank Limited v. Messrs Usman Textile and 6 others 2007 CLD 435 and United Bank Limited v. Messrs Blast International (Pvt.) Limited and 6 others 2003 CLD 39 rel.

Ashok Kumar K. Jamba for Appellants.

Muhammad Shamim Khan for Respondents.

2018 C L D 1327

[Sindh (Sukkur Bench)]

Before Nadeem Akhtar and Muhammad Faisal Kamal Alam, JJ

ZARAI TARAKIYATI BANK LIMITED through Authorized Officer---Appellant

Versus

Haji AUDHO through Attorney---Respondent

Ist Civil Appeal No. D-27 of 2015, decided on 8th February, 2018.

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

----Ss. 9(2)(3) & 22---Civil Procedure Code (V of 1908), O. XXIX, R. 1---Signing and verification of plaint--- Authority, absence of---Suit filed by Bank was dismissed by Banking Court on grounds that person who signed and verified plaint was not duly authorized by Bank---Validity---Appellant was a financial institution/company and required to authorize its branch manager, secretary, any Director or other principal officer in terms of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 or O. XXIX, R. 1, C.P.C. to sign and verify plaint and to institute suit on its behalf but such mandatory legal requirement was not fulfilled---Nothing existed on record to substantiate that person who had signed and filed appeal was authorized by appellant to do so---Not only suit but appeal was also filed without proper authorization from appellant Bank---Appellant Bank not only failed to file/produce an authorization or power of attorney at the time of filing of suit and appeal but also failed to show any document to such effect from entire record of suit and appeal---Appeal was dismissed in circumstances.

Khan Iftikhar Hussain Khan of Mambot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550 rel.

Messrs Termizi Oil Industries (Pvt.) Ltd. through Director and 3 others v. Industrial Development Bank of Pakistan through Senior Vice-President 2007 CLD 1509 ref.

Fayaz Ahmed A. Soomro for Appellant.

Respondent called absent.

2018 C L D 1338

[Sindh]

Before Muhammad Iqbal Kalhoro and Mohammed Karim Khan Agha, JJ

ZHV SECURITIES (PVT.) LTD. and others---Petitioners

Versus

FEDERATION OF PAKISTAN and others---Respondents

C.Ps. Nos. D-2821, D-2822 of 2012, D-3989, D-3990, D-4131 of 2013 and D-4047 of 2017, decided on 1st June, 2018.

(a) Interpretation of statutes---

----Conflict of laws---Principles---Special laws and general laws---Applicability of special laws prior and later in time---Intention of the Legislature---Factors constituting correct interpretation to be applied by courts in case of conflict of special laws and general laws---Scope---When a special law and a general law dealt with the same offence, the former shall prevail over the latter and subject shall be dealt with under the special law---Where there existed inconsistency between two laws in respect of punishment and procedure for the same offence, the one granting greater punishment must yield in favour of the law carrying lessor punishment---Inconsistency, however, if existed in respect of the same offence between two special laws having overriding clauses, the later in time being the latest intention of the Legislature shall prevail but such presumption was not automatic and would be subject to determination by many other factors such as the object, purpose and policy of both statutes and Legislatures' intention as expressed by the language used therein---Rule that special law shall prevail over general law was attracted ordinarily when two laws, special and general laws, concurrently applied to and permit of parallel platforms for adjudication of the same offence(s) under both laws---Scope of general law or any special law (prior in time), if was wider than the special law (later in time) dealing with same offences, the former would yield to the latter to the extent of acts and omissions which constituted offences thereunder---Special law, (even later in time) if did not directly and specifically deal with or apply to a particular act which constituted an offence, under a general law, or a special law prior in time, no presumption of latter ceding in favour of former should be read.

C.P. No. D-2668 of 2012; C.P. No. D-5137 of 2017; 2017 SCMR 1218 and Bank Alfalah Limited and others v. Federation of Pakistan and others C.P. No. D-3298 of 2011 ref.

(b) Interpretation of statutes---

----Special law and general law---Conflict between---Punishment---Special law shall prevail over a general law when both were dealing with an act which constituted an offence under both the laws and there was a conflict or inconsistency between them in respect of punishment and procedure for the same offence---If the scope of a general law was wider than the special law, the former would yield to the latter to the extent of acts and omissions which constituted an offence under the latter---If the special law did not directly and specifically deal with or apply to an act or omission which constituted an offence under general law, no presumption of latter ceding in favour of former would be available to the court to read.

(c) Central Depository Act (XIX of 1997)---

----S. 12---Penal Code (XLV of 1860), Ss. 409, 420, 468, 471, 109 & 34---Pledge of book entry securities---Forgery by brokerage and Bank officials in document of sub-account of a client---Registration of FIR---Question as to whether any penal provisions of Central Depository Act, 1997 ("CDC Act") were attached to the present case---Held, that Central Depository Act, 1997 did not envisage any procedure of detention, arrest, investigation, trial, punishment, etc. for a participant who was accused of committing forgery in the documents of a sub-account of his client maintained by him and then on the basis of such forged documents pledging his shares for availing a financial facility not for the purpose as stipulated under S. 12 of the Act but for his own benefit, and then (purposefully) defaulting, leading to selling off shares by the Bank to recover the loan amount---Central Depository Act, 1997 had no provision either to deal with the Bank officials who were either in active connivance with the participant in committing the said offence or did not exercise the due diligence as required of them under the State Bank of Pakistan BPRD Circular Letter No. 15 of 2008, dated 24.6.2008 which always resulted in a person/sub-account holder being deprived of his valuable property---In the present case, precisely the allegations of such nature had been levelled in the impugned FIR against the petitioners some of whom were Bank officials and which did not seem to attract any penal provision of the Act---Offence enumerated in the Central Depository Act, 1997 in such respect was quite distinctive and different in character and implication to the one reported in the impugned FIR and therefore the rule that the said law being special law would override the general law i.e. P.P.C. was not attracted to the peculiar facts and circumstances of the present case---Impugned FIR had been properly and lawfully registered by the Federal Investigation Agency (FIA) and the allegations therein require investigation--- Constitutional petitions were dismissed accordingly.

(d) Federal Investigation Agency Act, 1974 (VIII of 1975)---

----S. 3(1) & Sched.---Offences relating to private Banks---Federal Investigation Agency, jurisdiction of---Scaope---Federal Investigation Agency was competent to inquire into and investigate offence taking place in private Scheduled Banks provided the offence was cognizable under the items listed in the Schedule to the Federal Investigation Agency Act, 1974.

Bank Alfalah Limited and others v. Federation of Pakistan and others C.P. No. D-3298 of 2011 ref.

Shahzeb for Petitioners (in C.Ps. Nos. D-3989, D-4131, D-3990 of 2013, D-2821 and D-2822 of 2012).

Farukh Usman for Petitioners (in C.P. No. D-4047 of 2013).

Shahensha Hussain for Respondent No. 4 along with Younus Saeed.

Ms. Naheed Parveen, DAG.

2018 C L D 1399

[Sindh]

Before Nazar Akbar, J

M. WAQAR MONNOO---Applicant

Versus

FEDERATION OF PAKISTAN through Ministry of Commerce and another---Respondents

Criminal Miscellaneous Application No. 323 of 2014, decided on 4th June, 2018.

(a) Imports and Exports (Control) Act (XXXIX of 1950)---

----Ss. 3, 5-A(8), 5-B(1)(2)(7)---Export (Quality Control) Order, 1973, S.4(a)(b)---Criminal Procedure Code (V of 1898), Ss.265-K & 561-A---Quashing of complaint, application for---Application under S. 265-K read with S. 561-A, Cr.P.C., filed by applicant/exporter for quashing of complaint was dismissal by Special Commercial Court---Complaint was received from a foreign buyer that applicant/exporter, despite having received advance payments, had neither delivered the goods nor refunded the amount---Respondent/Trade and Development Authority (Authority), lodged a complaint to the Special Commercial Authority through Assistant Director for contravention of S.4(a)(b) of Exports (Quality Control) Order, 1973---Applicant/exporter, had challenged the authority of said Assistant Director to lodge such a complaint only on the sole ground that it was filed without proper authorization in terms of S.5-B(1)(2) of the Imports and Exports (Control) Act, 1950---Trial Court dismissed the application which had been impugned in the application---Said authorization was not filed, when detailed parawise comments/reply to application of exporter was filed---Same was only an irregularity which should have been taken care of by obtaining even a fresh authorization, as soon as objection was raised, or authorization should have been placed on record, but that had not been done by the Authority---Conduct of Authority, in pursuing the complaint was that, the element of corruption in the office of Authority could not be ruled out---Grievance of foreign buyer against the applicant/exporter was still intact, since it had not been decided on merits by the Commercial Court, nor dropped by Trade Development Authority, who was under statutory obligation to ensure protection to the foreign buyer from any hardship, cheating and fraud on the part of the exporters in Pakistan---Commercial Court under the scheme of prosecution under Imports and Exports (Control) Act, 1950, was the Court of Session and proceedings were to be governed by Criminal Procedure Code, 1898---Complaint filed by the foreign buyer with the Authority on which enquiry was conducted, had assumed the status of FIR---Applicant/exporter as a result of enquiry was prima facie charged with the offence triable by the Sessions Court---Statutory duty was of the Authority to pursue the case diligently to the logical end---Status of Assistant Director was that of Investigating Officer, who after inquiry had to file challan in the Commercial Court to be prosecuted by the Public Prosecutor---Wilful and mala fide failure of Assistant Director in not filing the basic document of his authorization, had adversely affected the case of foreign buyer as the protection given to the foreign buyer, was taken away---Act of prosecutor could not prejudice the case of an aggrieved party in absence of notice to him---Foreign buyer, should have also been taken into confidence and fully informed about steps taken by the Authority---Buyer was actual the sufferer---Authority was directed to file fresh complaint within 15 days from the date of receiving present order under intimation to the foreign buyer.

(b) Constitution of Pakistan---

----Art. 10-A---Right to fair trial---Scope---Guarantee of a fair trial and due process in terms of Art. 10-A of the Constitution was not limited to the person facing proceedings of civil nature or criminal charge, but was equally extended to complainant party.

Najeeb Jamali for Applicant.

Syed Muhammad Ali for Respondent No.2.

2018 C L D 1439

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

MUHAMMAD NASSER AKHTER through Legal Attorney---Appellant

Versus

BANK ALFALAH LIMITED and 5 others---Respondents

First Appeal No. 195 of 2017, decided on 10th July, 2018.

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

----S. 9---Civil Procedure Code (V of 1908), O. XXI, Rr. 2 & 90---Suit for recovery of loan amount---Auction of mortgaged property by the Banking Court---Objection petition---Banking Court, in execution proceedings, auctioned the mortgaged property and sale was confirmed---Appellant moved objection application to the effect that he was ready to pay the decretal amount but objection petition was dismissed by the Banking Court---Validity---Appellant had not filed appeal against the impugned decree within prescribed period of limitation or at any time thereafter---Appellant remained inextricably involved in the execution and auction proceedings and made applications therein which were duly heard and decided on merit---Appellant had failed to make the mandatory deposit required to prefer present application and had already forgone his right to appeal---Application assailing the execution proceedings and result thereof was not tenable in law--- Appeal was dismissed in circumstances.

NIB Bank Limited v. Apollo Textile Mills Limited 2013 CLD 1398; Asif Ali Khan v. Standard Chartered Bank Limited 2016 CLC 204 and M. Ahmed Sh. v. J.S.B. Bank Ltd. 2012 CLC 477 distinguished.

Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. v. Allied Bank of Pakistan and another 2014 SCMR 1662; Muhammad Rafiq v. Federation of Pakistan and others 2013 CLD 1667; Mian Muhammad Unis Qamar v. Citibank NA 2004 CLD 966; Nanhelal and another v. Umrao Singh AIR 1931 Privy Council 33; Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Limited and 8 others 2000 CLC 1438; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993 and Mumtaz ud Din Feroze v. Sheikh Iftikhar Adil and others PLD 2009 SC 207 rel.

Merajuddin for Appellant.

Haris Rasheed for Respondent No.1.

Abdul Shakoor for Respondent No. 2.

2018 C L D 1478

[Sindh]

Before Aqeel Ahmed Abbassi and Agha Faisal, JJ

MOHAMMAD JAMEEL---Appellant

Versus

ERIDANIA (SUISSE) SA and others---Respondents

High Court Appeal No. 188 of 2018, decided on 22nd June, 2018.

Companies Ordinance (XLVII of 1984)---

----S. 305--- Civil Procedure Code (V of 1908), O. XI, Rr. 66, 68, 89 & 90---Sindh Land Revenue Act (XVII of 1967), S. 3---Winding up of Company---Auction, setting aside of---Objection filed by stranger---Maintainability---Appellant was stranger to proceedings for winding up and he assailed sale through auction of property in question---Plea raised by appellant was that price was inadequate---Validity---Alleged inadequacy of sale price was not a valid ground to set aside auction proceedings---Once a sale was confirmed same had created vested rights in favour of auction purchaser---Auction proceedings in respect of property in question were concluded, sale was confirmed and possession of property along with its title documentation was ordered to be conveyed to auction purchaser thus rights of auction purchaser also merited serious considerations---Division Bench of High Court declined to interfere in auction proceedings as same had attained finality and auction purchaser had a bona fide right in the property---No irregularity or illegality in sale order was noticed and same was in due consonance with law---Intra-court appeal was dismissed in circumstances.

Muhammad Rafiq v. Federation of Pakistan and others 2013 CLD 1667; Nanhelal and another v. Umrao Singh AIR 1931 Privy Council 33; Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Limited and 8 others 2000 CLC 1438; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993 and Mumtaz ud Din Feroze v. Sheikh Iftikhar Adil and others PLD 2009 SC 207 rel.

Ms. Naheed A. Shahid for Appellant.

2018 C L D 1493

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs SYMMETRY DIGITAL (PVT.) LIMITED through Secretary---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

J.C.M. No. 33 of 2014, decided on 14th September, 2018.

Companies Ordinance (XLVII of 1984)---

----Ss. 97, 98, 101 & 102---Reduction of share capital---Principle---Petitioner company sought permission in reduction of paid-up share capital---Validity---Extent and amount of reduction was a domestic matter and so long as there was no injustice to creditors or shareholders High Court was not concerned with precise amount of reduction of capital---All necessary formalities were complied with and Securities and Exchange Commission of Pakistan after checking and ensuring all necessary formalities filed a statement of no objection---No impediment was found to grant such permission as petitioner company had complied with all requisite formalities---High Court approved resolution passed for capital restructuring through reduction of share capital---Petition was allowed.

2013 CLD 2156 rel.

Westburn Sugar Refineries Ltd.'s case [1951] 1 All ER 881; British and American Corporation v. Couper [1894] A.C. 399 and Guide to the Companies Act, 17th Edition 2010 ref.

Muhammad Ishaq Ali for Petitioner.

2018 C L D 1505

[Sindh]

Before Ahmed Ali M. Shaikh, C.J. and Mohammed Karim Khan Agha, J

INTIKHAB A. SYED and others---Petitioners

Versus

CHAIRMAN, NAB and others---Respondents

Constitutional Petitions Nos. D-633 of 2016, D-584, D-585, D-586, D-813, D-1170 of 2013, D-786 of 2012, D-3149, D-8716, D-7058, D-4394 of 2017, D-5148 of 2014, 5856 of 2016 and D-6538 of 2015, decided on 7th May, 2018.

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

----S. 2(a)(g) [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]----National Accountability Ordinance (XVIII of 1999), Ss. 5(r), 25-A & 31-D---Wilful default---Jurisdiction---Significant differences between S. 5(r) of National Accountability Ordinance, 1999 and S. 2(g) of Financial Institutions (Recovery of Finances) Ordinance, 2001[as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)], is that whilst Financial Institutions (Recovery of Finances) Ordinance, 2001 only applies to financial institutions and their customers, whereas National Accountability Ordinance, 1999 is of wider application---Some of the provisions of National Accountability Ordinance, 1999 vis-à-vis wilful default are more advantageous to accused/defaulter as he has safeguard of S. 31-D of National Accountability Ordinance, 1999 and benefit of conciliation committee and ability to make a plea bargain under S. 25(b) of National Accountability Ordinance, 1999---One of the key and most important difference is sentence and disqualification period entailed in each piece of legislation---Period of sentence is up to 14 years imprisonment in National Accountability Ordinance, 1999 whilst in Financial Institutions (Recovery of Finances) Ordinance, 2001 it is up to 7 years imprisonment which is significantly lower--- Disqualification period in National Accountability Ordinance, 1999 is 10 years and disqualification period in Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)], is 5 years.

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

----S. 2(a)(g) [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---National Accountability Ordinance (XVIII of 1999), S. 5(r)---Wilful Default---Law applicable---Provisions of Financial Institutions (Recovery of Finances) (Amendment) Act, 2016 which amended Financial Institutions (Recovery of Finances) Ordinance, 2001 is later in time than National Accountability Ordinance, 1999---Provisions on "wilful default" are similar but not identical in both laws---Parliament was aware of existence of such a similar offence of wilful default in National Accountability Ordinance, 1999 it has deliberated and consciously intended to give preference to offence of wilful default as provided in Financial Institutions (Recovery of Finances) (Amendment) Act, 2016---As a general principle of statutory interpretation, offence of wilful default under Financial Institutions (Recovery of Finances) Ordinance, 2001, prevails to the exclusion of offence of "wilful default" under National Accountability Ordinance, 1999.

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

----S. 2(a)(g) [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---National Accountability Ordinance (XVIII of 1999), Ss. 5(r), 25-A & 31-D---General Clauses Act (X of 1897), S. 6---Wilful default---Forum of trial---Implied repeal, doctrine of---Applicability---Parts of definition of S. 5(r) of National Accountability Ordinance, 1999 relating to wilful default which are covered by definition of 'financial institution' under S. 2(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001 are hit by doctrine of implied repeal---Cases of wilful default have to proceed exclusively under Financial Institutions (Recovery of Finances) Ordinance, 2001 and exclusively before Banking Courts under Financial Institutions (Recovery of Finances) Ordinance, 2001 and not under National Accountability Ordinance, 1999 subject to question of retrospectivity.

State v. Syed Mir Ahmed Shah and another PLD 1970 Quetta 49; Constitutional and Administrative Law" 5th Ed. and Alamdar Hussain's case 2017 CLD 1101 rel.

(d) Interpretation of statutes---

----Act, applicability of---Principle---Any Act takes effect from the date it is promulgated unless it is specifically stated in the Act that it has to take effect from a given date.

Sajid Dadabhoy v. NAB 2015 PCr.LJ 729 and Muhammad Ashfaq v. State PLD 1973 SC 368 distinguished.

(e) Interpretation of statutes---

----Retrospective effect---Applicability---Retrospective effect can only be given to a statute in exceptional cases---Any Act is retrospective or prospective only appears to be whether amendment is procedural only or whether it can be said to effect substantive law and whether holding any Act to be of retrospective effect causes inconvenience or injustice or effects existing vested rights of any parties.

Muhammad Hussain v. Muhammed and others 2000 SCMR 367; Mst. Sarwar Jan v. Mukhtar Ahmed PLD 2012 SC 217; Muhammed Tariq Badr v. NBP 2013 SCMR 214 and MCB Bank Ltd. v. Abdul Waheed Abro 2016 PLC 168 rel.

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

----S. 2(a)(g) [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---National Accountability Ordinance (XVIII of 1999), Ss. 5(r) & 9(a)(viii)---Wilful default---Quashing of proceedings---Petitioners were aggrieved of filing of references by National Accountability Bureau against them for committing offence of wilful default---Petitioners contended that promulgation of Financial Institutions (Recovery of Finances) (Amendment) Act, 2016, barred jurisdiction of National Accountability Bureau in cases of wilful default, as provisions of Financial Institutions (Recovery of Finances) (Amendment) Act, 2016 had retrospective effect---Validity---Provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act 2016] applied to and prevailed over all cases of wilful default under National Accountability Ordinance, 1999 as per definition provided in S. 2(g) of Financial Institutions (Recovery of Finances) Ordinance, 2001 from 13-8-2016 when Financial Institutions (Recovery of Finances) (Amendment) Act, 2016, took effect---Other matters relating to wilful default, inquires, investigations and other proceedings of wilful default not covered by S. 2(g) of Financial Institutions (Recovery of Finances) Ordinance, 2001, [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act, 2016] but covered by S. 5(r) of National Accountability Ordinance, 1999 were continued to be governed by National Accountability Ordinance, 1999---Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by Financial Institutions (Recovery of Finances) (Amendment) Act, 2016] did not have retrospective effect---All complaint verifications, cases pending before Governor State Bank of Pakistan in connection with National Accountability Ordinance, 1999, National Accountability Bureau inquires, investigations and references in respect of offence of wilful default under National Accountability Ordinance, 1999 in existence prior to 13-8-2016 were continue to be governed by National Accountability Ordinance, 1999---Any convictions under National Accountability Ordinance, 1999 were subjected to same sentences, disqualifications etc., as provided in Financial Institutions (Recovery of Finances) Ordinance, 2001 and not under National Accountability Ordinance, 1999---All persons already convicted of offence of wilful default under National Accountability Ordinance, 1999 were to remain convicted and their appeals were to proceed with under mechanism provided in National Accountability Ordinance, 1999---Constitutional petition was dismissed accordingly.

Syed Mushahid Shah v. FIA 2017 SCMR 1218; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; The State v. Maulvi Muhammed Jamil PLD 1965 SC 681; Rana Abdul Ghaffar v. Abdul Shakoor PLD 2006 Lah. 64; Malik Gul Hasan and Co. v. Allied Bank of Pakistan 1996 SCMR 237; The State v. Nasim Amin Butt 2001 SCMR 1083; Hafiz Muhammad Abdullah v. Imdad Ali Shah and another 1972 SCMR 173; Yusuf Ali Khan Barrister-at-law Lahore v. Messrs Hongkonk and Shanghai Banking Corporation Karachi and another 1994 SCMR 1007; Rai Naeem Shahadat v. Mst. Qamar Munir and others 2004 SCMR 412; Air League of PIAC Employees through President v. Federation of Pakistan, M/O Labour and Manpower Division Islamabad and others 2011 SCMR 1254; Badshah Gul Wazir v. Government of Khyber Pakhtunkhwa 2015 SCMR 43; Sarwar Jan v. Mukhtar Ahmed PLD 2012 SC 217; Saeed Ahmed v. The State PLD 1964 SC 266; T. Barai Henry Ah Hoe AIR 1983 SC 150; Taza Khan v. Ahmed Khan 1992 SCMR 1371; Kohinoor Mercantile Corporation v. Hazera Khatoon PLD 1963 Dacca 238; State of Orissa v. M.A. Tulloch AIR 1964 SC 1284; Sona v. The State PLD 1970 SC 264; Waqar Azim v. The State 2002 YLR 1811; I.G. HQ Frontier Corps v. Ghulam Hussain 2004 SCMR 1397; Amjad Hussain v. NAB 2017 YLR 1; Asfandyar Wali Khan v. Federation of Pakistan PLD 2001 SC 607 and Abdul Aziz Memon v. Federation of Pakistan PLD 2013 SC 594 ref.

Mohammad Anwar Tariq and Muhammad Rehman Ghous for Petitioners (in C.Ps. Nos. D-633 of 2016, D-584, D-585, D-586, D-813 and D-1170 of 2013).

Ahmed Hasan Rana for Petitioners (in C.Ps. Nos. D-4394, D-3149 of 2017 and D-786 of 2012).

Mohammad Anwar Tariq for Petitioner (in C.P. No. D-5856 of 2016).

Nabeel Nazeer Ahmed for Petitioner (C.P. No. D-7058 of 2017).

Sami Ahsan for Petitioners (in C.P. No. D-5148 of 2014, D-6538 of 2015 and D-8716 of 2017).

Mohammad Altaf and Yassir Siddiqui, Special Prosecutors, NAB (in all Constitutional Petitions).

Malik Khurshal Khan and Naveed ul Haq for Respondents (in C.P. No. D-633 of 2016).

Khilji Bilal Arif for Respondents (in C.P. No. D-1349 and 4349 of 2017).

Mansoor ul Haq for Respondents (in C.P. No. D-7058 and D-8716 of 2017).

Abdul Aziz Abro for Respondents (in C.P. No. D-5148 of 2016).

Ms. Naheed A. Shahid for Respondents (in C.P. No. D-5856 of 2016).

Mehmood Nazir Rana for the State Bank of Pakistan (in C.P. No. D-633 of 2016).

Salman Talibuddin, Additional Attorney-General for Pakistan along with Ms. Maria Ahmed on Court's Notice.

2018 C L D 1

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

Messrs HILAL CONFECTIONARY (PVT.) LTD.---Appellant

Versus

Messrs NAVEED ENTERPRISES and another---Respondents

R.F.A. No. 107 of 2006, decided on 16th October, 2017.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 2(xxiv), 40, 46 & 42---Trade mark---Infringement/imitation---Disclaimer---Various features of trade mark---Passing off actions---Adjudication of cases involving alleged infringement/imitation of trademark(s)---Determination as to whether there existed imitation/ infringement of trademark---Test and scope---For maintaining a passing off action, registration of a trademark was not a requirement and even if there existed a disclaimer on a product, a passing off action could still be maintained and succeed if claimant succeeded in showing that disclaimed features in the registration had acquired distinctiveness by virtue of use and promotion and enjoyed reputation and goodwill in favour of claimant---Law envisaged each one of the features stated in S. 2(xxiv) of Trade Marks Ordinance, 2001, inter alia, a name, word, figurative element, colour etc., to be mark by itself and any combination of such features would be a mark also---When one feature of a label consisting of a combination of marks was adopted or copied, infringement of such feature (a mark) took place; which was liable to be remedied and it would not be a valid defence by a defendant, that he had not adopted/imitated other features of a mark, which may be different---Infringement could still take place if only word(s) were copied but not the colour scheme, design and get-up, but such infringement was to the extent of such word(s)---Appearance in the market place of a number of infringements/imitations of a trademark did not give justification for a infringer/imitator to claim that original proprietor of trademark had lost such proprietary status---Comparison by a Court between two trademarks was not to be a meticulous comparison for the reason that in order to reach mind of an incautious or unwary purchaser, the test should be if a person would be deceived when he/she saw one trademark in absence of another mark.

Cecil De Cordova and others v. Vick Chemical Company PLD 1951 Privy Council 108; Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; Mehran Ghee Mills (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mills (Pvt.) Ltd. and others 2001 SCMR 967; Burney's Industrial and Commercial Co. Ltd. v. Rehman Match Works PLD 1983 Kar. 357; J/N. Nichols (VIMTO) Plc A Company Incorporated in the United Kingdom v. Mehran Bottlers (Private) Limited, Karachi PLD 2000 Kar. 192; Messrs Hiralal Parbhudas v. Messrs Ganesh Trading Company AIR 1984 Bombay 218; Bashir Ahmed v. Firm Hafiz Habibur Rehman 1980 CLC 1268; Insaf Soap Factory v. Lever Brothers Port Sunlight Ltd. PLD 1959 Lah. 381 and Guardian Fire and Life Assurance Co. v. Guardian and General Insurance Co. Ltd. (1880) 50 L.J. Ch. rel.

M. Tariq Malik for Appellant.

Muhammad Raheel Kamran Sheikh for Respondents.

2018 C L D 28

[Lahore]

Before Ibad-ur-Rehman Lodhi, J

SHEHZAD AKHTAR----Appellant

Versus

MUHAMMAD SALEEM SHAD QURESHI and another----Respondents

Regular First Appeal No.1598 of 2015, heard on 12th September, 2017.

Negotiable Instruments Act (XXVI of 1881)---

----S. 4---Civil Procedure Code (V of 1908), O.XXXVII---Suit for recovery of amount on the basis of "two distinct pro-notes"---Scope---"Pronote"---Essentials---Trial Court declined grant of leave to defend because defendant had failed to file affidavit along with his petition---Trial Court decreed the original amount only and not the profit as mentioned in the pro-notes---Powers of the Court to grant leave to defend---Scope---Defendant contended that he could not attach the affidavit as he was in jail at that time---Validity---Perusal of O.XXXVII, R.3, C.P.C. showed that it consisted of two distinct parts: First, required the filing of application for leave to appear and defend the suit on affidavit, whereas the second part gave power to the Court to grant leave to appear and defend the suit on such other facts as the Court deemed sufficient to support the application---Word 'or' after comma (,) occurring after the word "consideration" in O.XXXVII, R.3, C.P.C. indicated the intention of Legislature that word 'or' was used in disjunctive sense---Legislation could not be alleged to have a careless attitude in use of word 'or' therein---Trial Court, in the present case, had failed to interpret the provision of O.XXXVII, R. 3(1), C.P.C. and had non-suited the defendant only on account of non-submission of the affidavit in support of the petition for leave to appear and defend, without determining other facts, which were placed before Trial Court explaining the reasons for non-submission of the affidavit, thus, a jurisdiction clearly vested in the Trial Court in view of the second part of O.XXXVII, R.3, C.P.C. had not been exercised---Perusal of both the pronotes exhibited by the plaintiffs created impression that the same were not "negotiable instruments" and could not be termed "pronotes" for the reason that the stated transaction through such documents was shown as a loan which was settled to be returnable with a certain amount of profit---Section 4 of the Negotiable Instruments Act, 1881 stipulated essentials of "promissory note" as an "unconditional undertaking to pay"---Pronotes, in the present case, had been entered into on two separate dates but the plaintiffs had claimed decree on the strength of two distinct documents by filing one and the same suit---Execution of two distinct documents on two different dates gave rise to two separate causes of action to claim amount separately on different dates and recovery of both the pronotes could not be claimed by filing a joint suit---Trial Court, while refusing leave to appear and defend the suit to the defendant had, thus, committed an illegality by not attending to the "other facts", which provided a power to such Court to grant leave even in absence of an affidavit of the defendant supporting the application for leave to appear and defend the suit and therefore, the case of the defendant had been prejudiced and miscarriage of justice had been caused to the defendant---High Court remanded the case to the Trial Court and appeal was allowed accordingly.

Salehon and others v. The State PLD 1969 SC 267; Ebrahim Brothers Ltd. v. Wealth Tax Officer, Circle III Karachi and another PLD 1985 Kar. 407; Muhammad Sanaullah v. Allah Din 1993 MLD 399; Bayindir Construction Inc. v. Messrs Haroon Brothers through Proprietor 2002 YLR 3349; A. Rangaswamy v. K. Govindaswamy Naidi and another AIR 1961 Mad. 434; Sarju Sahu and others v. Sukhi Lal and others AIR 1924 Patna 96 and Messrs Hoosen Brothers Ltd., Karachi v. Messrs S. Abdullah & Co. Karachi PLD 1971 Kar. 729 ref.

Ch. Muhammad Rafique Warraich for Appellant.

Ahmad Waheed Khan for Respondents.

2018 C L D 88

[Lahore]

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

Messrs QADOOS BROTHERS POULTRY FARMS through Abdul Qadoos---Petitioner

Versus

JUDGE BANKING COURT NO.1 GUJRANWALA and others---Respondents

W.P. No. 155 of 2015, decided on 17th May, 2017.

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

----Ss. 9, 22 & 27---Civil Procedure Code (V of 1908), O. IX, R. 9---Dismissal of suit for non-prosecution---Restoration---Jurisdiction of Banking Court---Scope---"Final order" occurring in S. 22, Financial Institutions (Recovery of Finances) Ordinance, 2001---Interpretation---Order passed by Banking Court dismissing suit for non-prosecution partook character of an intermediate order which related to procedure and not to substance of dispute involved in the case---Such order, by its very nature, could not finally dispose of rights of parties on merits and also did not deal with ancillary and incidental matters---Powers were granted to Court under Civil Procedure Code, 1908 to dismiss for non-prosecution any suit in which plaintiff had not appeared and a remedy was also provided to delinquent plaintiff to approach to court for recall of such order in case he was prevented by sufficient cause from appearing on appointed date---Such order and remedy provided in Civil Procedure Code, 1908 related purely to procedure and did not entail any adjudication by court on rights of parties---Order dismissing suit for non-prosecution was not within definition of 'final order' as contemplated by S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Bar contained in S. 27 read with S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 could not have any application for excluding powers that inhered in Banking Court to make use of provisions of O. IX, R.9, C.P.C. for recalling of an order dismissing suit for non-prosecution---Term 'final order' appearing in S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 should, therefore, be interpreted in a manner that was consistent with scope, context and principle for which Financial Institutions (Recovery of Finances) Ordinance, 2001 was promulgated---Order through which suit or application for leave to defend was dismissed for non-prosecution did not fall in either of the two categories of orders and such was an intermediate order which fell in between the two---Bar contained in S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was not applicable to such kind of intermediate orders---Banking Court as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001 had necessary power to allow application to restore suit/application for leave to defend dismissed for non-prosecution on sufficient grounds being shown for non-appearance of counsel/party in terms of O. IX, R. 9, C.P.C.---Constitutional petition was dismissed in circumstances.

[Case-law referred]

Tariq Mehmood Bhatti for Petitioner.

Ashar Elahi and Muhammad Adnan Kazmi on behalf of Faysal Bank for Respondents.

2018 C L D 104

[Lahore (Multan Bench)]

Before Shahid Karim and Muzamil Akhtar Shabir, JJ

MUHAMMAD NAWAZ---Appellant

Versus

QAZI MUHMMAD RASHID---Respondent

R.F.A. No. 428 of 2014, heard on 30th March, 2017.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr.1 & 2---Negotiable Instruments Act (XXVI of 1881), S. 118---Recovery of money---Negotiable instrument (Cheque)---Presumption---Plaintiff filed suit for recovery of money on the basis of cheque issued by defendant which was dishonored by Bank and Trial Court decreed the suit in favour of plaintiff---Plea raised by defendant was that the cheque was issued as a guarantee---Validity---Defendant appeared as his own witness and admitted during cross-examination that cheque bore his signatures and he did not file any suit for cancellation of the same---Defendant also admitted that he filed suit for rendition of accounts which was dismissed but he did not file any appeal against the same---Defendant admitted that cheque was given by him although he claimed the same to be as guarantee in blank---Previous business transactions between parties were admitted---Every negotiable instrument was presumed to have been issued against consideration---Although presumption under S. 118, Negotiable Instruments Act, 1881, was rebuttable yet it had to be rebutted by leading cogent evidence---No discrepancy was found in the judgment of Trial Court whereby the same could be declared to have been passed without lawful authority or based on erroneous exercise of jurisdiction---Judgment and decree passed by the Court below were based on proper appreciation of evidence available on record---Appeal was dismissed in circumstances.

Mst. Taj Bibi v. Syed Ahmad Shah 1989 SCMR 1001 ref.

Muhammad Azizur Rehman v. Liaqat Ali 2007 CLD 1605 rel.

Tariq Zulfqar Ahmed Choudhary for Appellant.

Shakeel Javed Ch. for Respondent.

2018 C L D 131

[Lahore]

Before Amin-ud-Din Khan and Abdul Rahman Aurangzeb, JJ

Messrs SHAHEEN INSURANCE COMPANY LIMITED through Assistant General Manager---Appellant

Versus

CELL STAR (FRANCHISE MOBILINK) SUMANDRI ROAD, JHAL CHOWK FAISALABAD through Sole Proprietor---Respondent

Insurance Appeal No. 84 of 2015, heard on 29th March, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Insurance company impugned the order of Insurance Tribunal whereby claim of plaintiff for reclamation of insurance along with liquidated damages was allowed---Contention of insurance company, inter alia, was that the plaintiff's insurance policy had expired and the occurrence, upon which the claim was based, had occurred outside the insured territory and therefore, was not part of the insurance policy of the company---Validity---Perusal of insurance documents revealed that location of the incident fell within the limit of the area which fell within the ambit of the insurance policy, and that insurance policy was a continuation of an earlier policy purchased by the plaintiff, which covered the same specification of the insured area---Genuine loss was obligation to be satisfied under the insurance claim by the insurance policy---Insurance company had unjustifiably repudiated the claim of the plaintiff who fully substantiated admissibility of his insurance claim---Impugned order of the Insurance Tribunal could not be interfered with---Appeal was dismissed, in circumstances.

Amjad Pervaiz for Appellant.

Liaquat Ali Butt for Respondent.

2018 C L D 139

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Messrs AMJAD ALI BRICK-KILN---Appellant

Versus

DIRECTOR-GENERAL E.P.A. and another---Respondents

Environmental Appeal No. 128 of 2009, decided on 20th March, 2017.

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

----Ss. 11, 16, 21 (3) & 23---Brick kiln unit damaging environment by emitting smoke--- Complaint against such unit--- Order of Environmental Tribunal imposing fine and direction to adopt technical measures to reduce the emission---Appeal---Limitation---Condonation of delay---Scope---Appellant's unit was found damaging environment by emitting smoke which resulted into air pollution---Environmental Protection Order was rightly passed in circumstances---Impugned judgment was passed on the basis of evidence of witnesses who were officials---Sufficient evidence was available to prove that appellant was involved in a business which was causing air pollution---Appellant who had violated S. 11 of Pakistan Environmental Protection Act, 1997 was rightly dealt with by the Environmental Tribunal---Present appeal had been filed after a period of more than seven months which was barred by limitation---No application for condonation of delay had been filed along with the appeal showing sufficient cause for delay in filing the same---No illegality or perversity had been pointed out in the impugned judgment passed by the Environmental Tribunal---Appeal was dismissed in circumstances.

Messrs Aziz Flour Mills and 2 others v. The Industrial Development Bank of Pakistan 1990 CLC 1473 and The State v. Asif Adil and others 1997 SCMR 209 ref.

Attique Rehman v. Environmental Tribunal 2009 CLD 1048 and Packages Limited v. DG, EPA 2008 CLD 1160 rel.

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

----S. 23--- Appeal against order of Environmental Tribunal---Limitation---Time for filing appeal against the final order of Environmental Tribunal was thirty days.

Amir Majeed Rana for Appellant.

2018 C L D 153

[Lahore]

Before Syed Mansoor Ali Shah, C.J.

MAPLE LEAF CEMENT FACTORY LTD.---Petitioner

Versus

ENVIRONMENTAL PROTECTION AGENCY and others---Respondents

Writ Petition No.115949 of 2017, heard on 21st December, 2017.

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

----S. 2(xlii)---"Sustainable development"---Four legal elements of 'sustainable development'---Idea of sustainability or sustainable development was hinged on four legal elements; first, the need to preserve natural resources for the benefit of future generations (the principle of intergenerational equity); second, the aim of exploiting natural resources in a manner which was sustainable, or 'prudent', or 'rational', or 'wise', or 'appropriate' (the principle of sustainable use); third, the 'equitable' use of natural resources, which implied that use by one state must take account of the needs of other states (the principle of equitable use, or intergenerational equity); and fourth, the need to ensure that environmental considerations were integrated into economic and other development plans, programmes and projects, and that development needs were taken into account in applying the environmental objectives (the principle of integration).

Philipe Sands- Principles of International Environmental law - frameworks, standards and implementation. @1995. pp.199 & 205 ref.

(b) Interpretation of statutes---

----'Deeming provision'---Where the legislature stated that 'something should be deemed to have been done' which in truth had not been done, it created a legal fiction and in that case, the court was entitled and bound to ascertain for what purposes and between what persons the statutory fiction was to be resorted to and full effect must be given to the statutory fiction and it should be carried to its legal conclusion Court must follow the consequences that flowed from or were ancillary to a deeming provision and was required to recognize and give effect to the same.

Interpretation of Statutes by N S Bindra. Pp 267-268; Understanding Statutes by S.M. Zafar 4th Edition. Pp 92-93; Muhammad Mubeen-us-Salam and others v. Federation of Pakistan through Secretary, Ministry of Defence and others PLD 2006 SC 602; Mehreen Zaibun Nisa v. Land Commissioner, Multan and others PLD 1975 SC 397 and All Pakistan Newspapers Society and others v. Federation of Pakistan and others PLD 2012 SC 1 ref.

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

----S. 12(4)---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Reglns. 11(1), 15 & 16---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA), approval of---Deemed approval through lapse of time---Construction or operation of the project could not commence unless environmental approval was granted by the Provincial Environmental Protection Agency---Section 12(4) of the Punjab Environmental Protection Act, 1997 ('the Act') and Reglns. 11(1), 15 & 16 of Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000 ('the Regulations') provided a strict timeline (of four months) to be followed by the Agency for grant of environmental approval, and in case the same was not granted within such time period, it was considered as deemed approval---Only exception was under S.12(5) of the Act, where the Government in an appropriate case could seek an extension for a maximum of another four months, however, the statutory nature of the deeming provision was equally effective after the expiry of the extended period---Deemed approval under S. 12(4) of the Act was, however, not absolute and was limited to the extent where it did not contravene the provisions of the Act, and the Rules and Regulations made thereunder---Once the Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) received deemed approval, the Agency was empowered to stop the project if it could establish that there had been violation of any provision of the Act or the Rules or Regulations thereunder---Agency could pass an Environmental Protection Order under S.16 of the Act which empowered the Agency to pass a restraining order if any act or omission was likely to occur in violation of the Act, Rules or Regulations or was likely to cause an adverse environmental effect---Deemed approval could not, however, be interfered with by the Agency on the sole ground that written environmental approval was not granted under S. 12(4) in spite of the lapse of the statutory period.

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

----S. 12(4)---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Reglns. 11(1), 15 & 16---Constitution of Pakistan, Arts. 9, 14(1) & 199---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA), approval of---Deemed approval through lapse of time---'Precautionary principle' and 'In Dubio Pro Natura principle'---Scope---In the present case the Provincial Environmental Protection Agency ('the Agency') had failed to complete the review process and pass an order on the Environmental Impact Assessment (EIA) filed by the petitioner within the stipulated time period of four months---Resultantly under S.12(4) of the Punjab Environmental Protection Act, 1997 ('the Act), the EIA was deemed to have been approved---While the EIA filed by the petitioner was deemed to have been approved, however, in the light of a survey being carried out by the Provincial Mines and Minerals Department to delineate positive and negative areas for the grant of mining concessions, further grant of mining concessions to the petitioner in the concerned area may have an adverse environmental effect---Survey was underway and the matter was being overseen by the Supreme Court---Such facts attracted the Precautionary Principle reflected in Principle 10 of the Rio Declaration on Environment and Development, (1992), which principle provided that where there were threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation---Another environmental principle attracted to the present case was "In Dubio Pro Natura" [Principle 5 of the IUCN World Declaration on the Environmental Rule of Law (2016)] i.e., in cases of doubt, all matters before courts, administrative agencies, and other decision-makers shall be resolved in a way most likely to favour the protection and conservation of the environment, with preference to be given to alternatives that were least harmful to the environment, and that actions shall not be undertaken when their potential adverse impacts on the environment were disproportionate or excessive in relation to the benefits derived therefrom---Taking a precautionary approach and relying on the principle of 'In Dubio Pro Nautra', as it was uncertain what the survey of the area might hold, the courts must favour nature and environmental protection---Such approach was also constitutionally compliant as the courts were to protect the Fundamental Rights of the public and in the present case right to life and dignity of the community surrounding the project remained paramount till such time that the Agency was of the view that the project had no adverse environmental effects---High Court directed that without awaiting the survey report, the issue of future mining concessions in the area remained in doubt and uncertain, it was therefore, prudent and wise to adopt a precautionary approach and maintain status quo with respect to the petitioner till the survey report was shared with the Agency by the Provincial Mines and Mineral Department and till such time that the Agency after reviewing the survey report passed a speaking order regarding the status of the deemed approval of the EIA under S.12(4) of the Act; that the Agency once seized of the survey report shall pass appropriate orders within a fortnight thereof, under the Act, considering that the EIA already stood approved under the deeming provision; that the petitioner shall maintain status quo till such time, and that before passing the final order the Agency will confirm if there was any restraining order in such regard passed by the Supreme Court---Constitutional petition was allowed accordingly.

Principle 10 of the Rio Declaration on Environment and Development, 1992 and Principle 5 of the IUCN World Declaration on the Environmental Rule of Law (2016) ref.

Mansoor Usman Awan, Shazeen Abdullah and Hussain Ibrahim for Petitioner.

Asma Hamid and Anwaar Hussain Additional Advocates General, Punjab, Arshad Mehmood, Secretary, Mines and Mineral, Government of Punjab, Zafar Javaid, Director, Mines and Mineral, Government of the Punjab, Muhammad Javaid, Superintendent, Mines and Mineral, Government of Punjab, Mian Ejaz Majeed, Deputy Director (L&E), EPA and Asim Rehman, Deputy Director (EIA), EPA for Respondents.

2018 C L D 199

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

ALLIED BANK LIMITED through Principal Officers---Plaintiff

Versus

Messrs S.G. POLYPROPYLENE PVT. LIMITED through Directors/Chief Executive and 5 others---Defendants

C.O.S. No. 1 of 2015, heard on 29th 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---Officer of a financial institution who held power of attorney in his/her favour, need not append anything else other than the power of attorney to demonstrate his/her authority to institute a suit under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, 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 874 rel.

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

----Ss. 10 & 9---Procedure of Banking Court---Suit for recovery---Application for leave to defend---Defendants, in a suit for recovery, in their application for leave to defend, were precluded from raising any dispute with regard to a liability which was otherwise admitted by them in their audited accounts.

The Bank of Punjab v. Messrs Khan Unique Developers 2016 CLD 29 rel.

Muhammad Saleem Iqbal for Plaintiff.

Riaz ul Hassan Gillani for Defendants.

2018 C L D 226

[Lahore]

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

AURANGZEB---Appellant

Versus

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

Insurance Appeal No. 272 of 2016, heard on 6th February, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122, 123 & 124---Qanun-e-Shahadat (10 of 1984), Arts. 72 & 78---Insurance claim---Documentary evidence---Proof---Documents were taken on record against cost imposed on party during proceedings resultantly claim was dismissed by Insurance Tribunal---Plea raised by plaintiff was that without formal proof of documents same could not be relied upon---Validity---Any document could not be treated as proof merely on the ground that it was admitted in evidence by the Court or by the party without any objection---Provisions of Qanun-e-Shahadat, 1984 must be strictly complied with and if documents were not proved under Qanun-e-Shahadat, 1984 then same could not be even made basis for dismissal or acceptance of claim of plaintiff---High Court declared the process of evidence adopted by Insurance Tribunal as illegal and not maintainable in the eyes of law---Judgment passed by Insurance Tribunal was set aside and case was remanded for decision afresh in accordance with law---Appeal was allowed accordingly.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

2018 C L D 239

[Lahore]

Before Mamoon Rashid Sheikh and Ch. Muhammad Iqbal, JJ

MUHAMMAD ASIF and others---Appellants

Versus

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

Insurance Appeal No. 795 of 2013, heard on 21st March, 2017.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Limitation Act (IX of 1908), S. 14 & Art. 86(a)---Civil Procedure Code (V of 1908) O. VII, R. 11---Claim/application before Insurance Tribunal under S. 118 of the Insurance Ordinance 2000---Limitation, computation of---Exclusion of time of proceeding bona fide in Court without jurisdiction---Rejection of claim by the Insurance Tribunal on ground of limitation---Scope----Appellants impugned order of Insurance Tribunal, whereby it rejected claim of the appellants on ground that the same was barred by time---Validity---Claim was lodged on 14.06.2002 before the competent authority at that time and the Insurance Company repudiated claim of appellants on 27.06.2005 which date should be considered as the accrual of the cause of action, which made the claim of the appellants within time---Insurance Tribunal failed to make out the applicability of S. 14 of the Limitation Act, 1908 while passing the impugned order---High Court observed that even if it was presumed that the claim of the appellant was not filed within time, question of limitation being mixed question of law and fact; should be inquired into and decided after recording of evidence---Impugned order was set aside and application of appellant was remanded to the Insurance Tribunal with direction to decide the same after recording of evidence.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477 distinguished.

Tariq Mahmood Chaudhry, Kamboh v. Najam-ul-Din 1999 SCMR 2396 rel.

Liaqat Ali Butt for Appellants.

Rana Waqas Latif Khan for Respondents.

2018 C L D 242

[Lahore]

Before Abid Aziz Sheikh, J

Messrs BUTT FLOUR MILLS through Proprietor---Petitioner

Versus

GOVERNMENT OF PUNJAB through Secretary Food Department, Punjab and 7 others---Respondents

W. P. No. 24377 of 2017, heard on 19th September, 2017.

(a) State Bank of Pakistan Foreign Exchange Manual of 2017---

----Chap. 12, Cl. (13)--- EPD Circular Letter No. 04 of 2013 dated 8-3-2013---Government of Punjab Food Department Notification dated 19-8-2016--- Export rebate---Export to Afghanistan---'SWIFT' message---Petitioner exported wheat and wheat flour to Afghanistan and claimed export rebate as foreign exchange was received by him in cash---Authorities denied rebate on the plea that petitioner failed to provide 'SWIFT' message as a proof of receipt of payment from abroad---Validity---Once petitioner established that it received export proceeds in cash convertible currencies for exports to Afghanistan, under State Bank of Pakistan Circular, there was no occasion to regret rebate for not producing 'SWIFT' message for payment from abroad---Petitioner was bound to provide other required export documents prescribed in notification dated 19-8-2016 and agreements, to show that export of wheat/wheat flour actually took place to Afghanistan and export proceeds were realized in cash---In absence of any allegation of fraud in export, the other export documents if produced by petitioner were sufficient to establish that export took place against cash receipts which was permissible in law---Order passed by the authorities was set aside as the same was illegal and of no legal effect---High Court directed the authorities to release rebate/security of petitioner subject to condition that petitioner had provided other requisite export documents to establish its export and cash export proceeds except through 'SWIFT' messages--- Constitutional petition was allowed in circumstances.

(b) Public functionaries---

----Determination of rights---Discretion---Scope---Public functionaries vested with power in respect of determination of rights of citizens regarding state resources are required to exercise such power and discretion fairly and properly on judicial principles and keeping in view the relevant considerations having logical nexus with the object of law and not arbitrarily and whimsically.

Muhammad Sadiq v. Taj Muhammad PLD 1994 Lah. 326; Walayat Ali Mir v. Pakistan International Airlines Corporation (PIAC) 1995 SCMR 650; Muhammad Nawaz and others v. Muhammad Sadiq 1995 SCMR 105; MCB v. Muhammad Umar Malik PLD 1993 Lah. 281; Sharfuddin v. The Zonal Municipal Committee District Sindh Karachi 1994 MLD 1062; Muhammad Sadiq v. Taj Muhammad and 2 others 1994 CLC 369 and Lt. Col. (Retd.) M. Zahoor ul Haque v. Quarter Master General and others 1994 CLC 2449 rel.

S. N. Khawar Khan for Petitioner.

Qasim Chohan, Additional A.-G., Hafiz Asif, Law Officer and Zahid Qaiser, D.S. (Food) for Respondents.

2018 C L D 282

[Lahore]

Before Abid Aziz Sheikh and Jawad Hassan, JJ

MUHAMMAD SHARIF and others---Appellants

Versus

MUSLIM COMMERCIAL BANK LIMITED and 5 others---Respondents

Civil Appeal No. 84 of 2017, decided on 8th March, 2017.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree---Death of judgment-debtor---Appellants were legal heirs of deceased judgment-debtor and they were aggrieved of the order passed by Executing Court declining to stay auction proceedings---Validity---Decree could be executed against legal heirs of deceased judgment debtor or their property could be auctioned for the satisfaction of decree passed against deceased--- If deceased had left any assets at the time of his death, decree was to be satisfied from such estate---High Court declined to interfere in the order passed by Executing Court whereby objection petition of appellants was dismissed--- Appeal was dismissed in circumstances.

Summit Bank v. Qasim and Co. 2015 SCMR 1341; Niazul Haq v. Rafi Ahmed Qureshi 2016 MLD 493 and Ameer Begum v. Abid Hussain PLD 2011 Lah. 284 rel.

2018 C L D 289

[Lahore]

Before Amin-ud-Din Khan and Tariq Iftikhar Ahmad, JJ

Mst. RAZIA AMEER---Appellant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and 2 others---Respondents

Insurance Appeal No. 1288 of 2015, heard on 22nd May, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Appeal---Group insurance---Life insurance claim---Payment of liquidated damages on late settlement of claim(s)---Appellant (widow) impugned order of Insurance Tribunal whereby her claim for liquidated damages was denied on the ground that deceased was not a member of the group insurance policy, thus his legal heirs were not entitled to liquidated damages under S. 118 of the Insurance Ordinance, 2000---Validity---Interpretation of S. 118 of the Insurance Ordinance, 2000 made it clear that on completion of all formalities, if a claim was not satisfied/cleared within ninety days without any fault of the claimant, then it was an implied term of every such contract of insurance that liquidated damages had to be granted---Group insurance was designed to provide monetary benefits to family of a deceased employee and during his service period, the deceased, in the present case, had also contributed to the same, and the policy amount had already been received by the appellant, therefore she was also entitled to liquidated damages---Impugned order was set aside, and the appellant (widow) was held entitled to liquidated damages---Appeal was allowed, accordingly.

Liaqat Ali Butt for Appellant.

Faisal Zafar for Respondents.

2018 C L D 383

[Lahore]

Before Shams Mehmood Mirza, J

Messrs BIOTECH ENERGY (PVT.) LIMITED through Chief Executive and 2 others---Petitioners

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Additional Registrar and another---Respondent

Writ Petition No. 20811 of 2015, decided on 14th July, 2015.

Companies Ordinance (XLVII of 1984)---

----Ss. 205, 468 & 152---Constitution of Pakistan, Art. 199---Register of Directors, Officers etc.---Change of Directors of a company---Form-29 under S. 205 of the Companies Ordinance, 1984 containing particulars of Directors and Officers, including the Chief Executive, managing agent, secretary, chief accountant, auditors and legal adviser, or of any change therein---Powers of the Registrar under S.468 of the Companies Ordinance, 1984---Nature---Petitioner impugned letter of Registrar of Companies, Securities and Exchange Commission of Pakistan (SECP), whereby petitioner's request for supply of certified copy of Form-29 was declined---Contention of Registrar was that said certified copy could not be issued on account of a pending complaint by a Director who was removed from her Directorship---Pivotal question was whether the Registrar was empowered to examine legality or validity of transactions/matters incorporated in the returns filed with it by a company---Held, power of delegation contained in S. 468 of the Companies Ordinance, 1984 demonstrated the ministerial nature of work performed by the Registrar under said S. 468 and if the Registrar had been constituted as an authority with powers to decide such vital questions, he would not have been given power to delegate functions of scrutinizing Forms submitted by Companies---Under S. 152 of the Companies Ordinance, 1984, court had power to rectify the register of members and such power was not and could not have been intended to be conferred on Registrar under S. 468 of the Companies Ordinance, 1984---Statutory obligation existed on Registrar to register a return if the same was not defective or incomplete and power to decide on validity of a transaction in a statutory return of such nature should be found elsewhere in the Companies Ordinance, 1984---Registrar had no power to refuse to supply certified copy of a statutory return, once the same was registered---High Court directed that the same be supplied to the petitioner--- Constitutional petition was allowed, accordingly.

Mustafa Ramday and Jahanzaib Inam for Petitioners.

2018 C L D 424

[Lahore]

Before Syed Mansoor Ali Shah, CJ

ASGHAR LEGHARI---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petition No.25501 of 2015, decided on 25th January, 2018.

(a) Constitution of Pakistan---

----Arts. 9 & 14---Right to a clean and healthy environment---Scope---Fundamental Rights, like the right to life (Article 9 of the Constitution) which included the right to a healthy and clean environment and right to human dignity (Article 14 of the Constitution) read with Constitutional principles of democracy, equality, social, economic and political justice included within their ambit and commitment, the international environmental principles of sustainable development, precautionary principle, environmental impact assessment, inter and intragenerational equity and public trust doctrine.

(b) Pakistan Climate Change Act (X of 2017)---

----Preamble---Climate justice---Scope---Judge, duty of---Court must be conscious and alive to the beauty and magnificence of nature, the interconnectedness of life systems on the planet and the interdependence of ecosystems---On a jurisprudential plane, the courts had moved from environmental justice, which was largely localized and limited to Pakistan's own ecosystems and biodiversity on to climate justice.

Ms. Imrana Tiwana and others v. Province of Punjab and others PLD 2015 Lah. 522 and Ms. Shehla Zia and others v. WAPDA PLD 1994 SC 693 ref.

(c) Pakistan Climate Change Act (X of 2017)---

----Preamble---Climate justice---Scope---Climate justice linked human rights and development to achieve a human-centered approach, safeguarding the rights of the most vulnerable people and sharing the burdens and benefits of climate change and its impacts equitably and fairly---Climate justice was informed by science, responded to science and acknowledged the need for equitable stewardship of the world's resources---Climate justice moved beyond the construct of environmental justice, therefore, it had to embrace multiple new dimensions like health security, food security, energy security, water security, human displacement, human trafficking and disasters management within its fold---Climate justice covered agriculture, health, food, building approvals, industrial licenses, technology, infrastructural work, human resource, human and climate trafficking, disaster preparedness, health, etc.

(d) Pakistan Climate Change Act (X of 2017)---

----Preamble---Constitution of Pakistan, Arts. 9 & 14---'Water justice' and 'climate justice'---Scope---Water justice, was a sub-concept of climate justice---Water justice referred to the access of individuals to clean water, more specifically, the access of individuals to clean water for survival (drinking, fishing, etc.) and recreational purposes as a human right---Water justice demanded that all communities were able to access and manage water for beneficial uses, including drinking, waste removal, cultural and spiritual practices, reliance on the wildlife it sustained, and enjoyment for recreational purposes---Right to life and right to human dignity under Arts. 9 & 14 of the Constitution protected and realized human rights in general, and the human right to water and sanitation in particular---In adjudicating water and water related cases, courts had to be mindful of the essential and inseparable connection of water with the environment, land and other ecosystems---Climate justice and water justice went hand in hand and were rooted in Arts. 9 & 14 of the Constitution and stood firmly on Preambluar Constitutional values of social and economic justice of Pakistan.

(e) Pakistan Climate Change Act (X of 2017)---

----Preamble---National Climate Change Policy, 2012, Cls. 1, 2, 3, 4 & 4.1---Constitution of Pakistan, Arts. 9 & 14---Climate change---Standing Committee on Climate Change, formation of---High Court, in order to facilitate the working of the Federal Government, Ministry of Climate Change, Provincial Government, Planning and Development Department, as well as, Council of Common Interests, constituted a Standing Committee on Climate Change, to act as a link between the Court and the Executive and to render assistance to the Federal and Provincial Governments and said Agencies in order to ensure that the National Climate Change Policy, 2012 and the Framework for Implementation of Climate Change Policy (2014-2030) continued to be implemented---High Court directed that the Federal and Provincial Governments and the Council of Common Interests shall engage, entertain and consider the suggestions and proposals made by the Standing Committee; that the said Committee could approach the High Court for appropriate order for the enforcement of the Fundamental Rights of the people in the context of climate change, if and when required, and that if any such application was filed, the case shall be revived and fixed before the Green Bench of the High Court--- Constitutional petition was consigned to record accordingly.

Mansoor Usman Awan, Shehzeen Abdullah and Hussain Ibraheem Muhammad for Petitioner.

Nasar Ahmad, Deputy Attorney General for Pakistan, Ms. Hina Hafeezullah Ishaq, Assistant Attorney General for Pakistan, Dr. Parvez Hassan, Chairman, Climate Change Commission, Ms. Saima A. Khawaja, Advocate/Member, Climate Change Commission, Dr. Muhammad Javed, Director Irrigation Department, Government of Punjab, Dr. Qazi Tallat M. Siddiqui, Deputy Energy Advisor (Civil)/DS(W), Ministry of Water Resources, Islamabad, M. Irfan Tariq, D.G. Ministry of Climate Change, Islamabad and Nisar Ahmad, Director (PDM-II), Ministry of Inter Provincial Coordination, Cabinet Block, Islamabad for Respondents.

2018 C L D 475

[Lahore]

Before Muzamil Akhtar Shabir, J

Mst. SAMEENA ASHFAQ SYED AMIN AL---Petitioner

Versus

GOVERNMENT OF PAKISTAN through Ministry of Finance and 3 others---Respondents

Writ Petition No.26065 of 2012, decided on 8th May, 2017.

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

----S. 21---Locus Poenitentiae---Principle---Scope---Receding back steps is available only where an action or representation is made erroneously.

Muhammad Sidiq through L.Rs. v. Punjab Service Tribunal, Lahore and others 2007 SCMR 318 and Nazir Ahmad Panhwar v. Government of Sindh through Chief Secretary, Sindh and others 2005 SCMR 1814 rel.

(b) Public Debt Act (XVIII of 1944)---

----S. 28---Bahbood Savings Certificates Rules, 2003, R.5---Notification SRO No.(sic.)(I)/2004 dated 20-01-2004--- "Behbood Savings Certificates" purchased on basis of 'Pakistan Origin Card' by husband of a lady who was national of Pakistan---Authorities denied payment of profit under said scheme on ground that scheme was exclusively for Pakistan nationals---Plea raised by petitioner was that payment of profit was practice prevailing in the department---Validity---Department practice against law or rules on subject was not sustainable in eyes of law and could not be implemented as law in force---Husband of petitioner could not have purchased Bahbood Saving Certificates therefore, authorities were entitled to recover excess amount of profit paid to him or petitioner---Petitioner failed to make out any illegality or erroneous exercise of powers vested in authorities as their actions were neither illegal nor without jurisdiction---Constitutional petition was dismissed in circumstances.

Syed Mehmood Akhtar Naqvi v. Federation of Pakistan through Secretary Law and others PLD 2012 SC 1089; Messrs Radaka Corporation and others v. Collector of Customs and another 1989 SCMR 353; Syed Imam Shah and others v. Government of N.-W.F.P. and others PLD 2004 SC 285; Shahida Bibi and others v. Habib Bank Limited and others PLD 2016 SC 995 and Muhammad Anwar and others v. Mst. Ilyas Begum and others PLD 2013 SC 255 ref.

Faisal Zafar for Petitioner.

2018 C L D 506

[Lahore]

Before Ayesha A. Malik, J

MUHAMMAD SHAHID---Petitioner

Versus

PUNJAB ENVIRONMENTAL TRIBUNAL, LAHORE and others---Respondents

Writ Petition No.74381 of 2017, heard on 18th January, 2018.

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

----S. 12---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Regln. 3 & Sched. 1---Punjab Poultry Production Act (XLVII of 2016), Ss. 12, 13 & 14---Control poultry shed---Initial environmental examination and environmental impact assessment, requirements of---Scope---Close proximity of a poultry farm from human settlement was a cause of great concern---Poultry facilities were undoubtedly a source of odor and smell which adversely affected the life and health of the people living in the vicinity---Flies, rodents and other pests were an additional menace to the local area, its health and well-being---Proper areas must be made and control mechanisms put in place for managing and storing poultry feed to avoid flies and other pests---Furthermore water pollution and use of pesticides damaged the surface water and ground water and gave rise to water borne diseases---Other serious impacts on the environment were the disposal of waste water and dead birds---Proponent of a project for poultry shed must provide a detailed dead bird management plan which should not adversely impact the environment---Schedule 1 of the Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000 provided that poultry projects with total cost more than Rs.10 million were required to file initial environmental examination, but the Environmental Protection Agency must in the first instance look at the impact a project had on the environment, before it considered the cost of the project for requirement of initial environmental examination---Section 12 of the Punjab Environmental Protection Act, 1997 was clear that the object of the assessment reports was to ascertain whether there was an adverse impact on the environment, which being mandatory in nature could not be avoided.

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

----S. 12---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Regln. 3 & Sched. 1---Punjab Poultry Production Act (XLVII of 2016), Ss. 12, 13 & 14---Control poultry shed---Initial environmental examination and environmental impact assessment, requirements of---Scope---Plea of petitioner (owner of poultry control shed) that he was not required to file any Initial environmental examination and environmental impact assessment as his project fell below rupees one million, as given in Sched. 1 of the Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000; held, that petitioner commenced construction of his project without an approval from the Environment Protection Agency---Said Agency made two site visits but failed to consider the nature of the project and its impact on the environment and instead recommended in a cursory manner, that measures be adopted to prevent an adverse impact on the environment---Such direction was given without any mention of the probable causes of the impact on the environment---Perusal of the Punjab Poultry Production Act, 2016 revealed that the establishment of a poultry farm had a direct bearing on the environment and therefore would impact the environment---Sections 12, 13, 14 & 15 of the said Act set out the requirements for establishment of a poultry farm and called for biosecurity measures, poultry waste management and reporting in case of poultry disease---All said requirements were directly related to the well-being of the local inhabitants and the environment---Said requirements directly impacted the environment, hence the petitioner was required to file an environmental impact assessment prior to the construction of his project---Furthermore, the distance of the petitioner's poultry farm was 100 meters from a human settlement which was in contravention to the requirement of S.12 of the Punjab Poultry Production Act, 2016, which clearly stipulated that the poultry farm must be 500 meters from human settlements---Said ground in itself was sufficient to restrain the construction of the poultry farm of the petitioner as it was in contravention to the law---Environmental Tribunal had rightly restrained the Environmental Protection Agency from granting any approval to the petitioner with respect to the poultry farm until the matters in issue raised in the complaint were decided---Constitutional petition was dismissed accordingly.

Hafiz Muhammad Saleem for Petitioner.

Kh. Salman Mehmood, A.A.G. along with Nabila, Assistant Director Legal, Environmental Protection Agency, Lahore for Respondents.

2017 C L D 541

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

Messrs MEHR DASTGIR TEXTILE MILLS LTD. through Chief Executive---Petitioner

Versus

PUBLIC AT LARGE and another---Respondents

Civil Original No. 1 of 2016, decided on 20th February, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 309 & 305---Circumstances in which company may be wound-up by Court---Compulsory winding-up---Petitioner company filed petition for compulsory winding-up---Validity---Perusal of balance sheet revealed that assets of the company far exceeded its liabilities and joint Registrar of Companies had also filed petition under Ss. 305 & 309 of the Companies Ordinance, 1984 for compulsory winding-up of the petitioner company---Board of Directors of the petitioner company had filed a special resolution for winding-up---High Court observed that in circumstances, the petition for winding-up was to be allowed, and petitioner company was ordered to be wound-up.

Zafar Iqbal Khan Balouch for Petitioner.

2017 C L D 554

[Lahore (Multan Bench)]

Before Shahid Karim and Muzamil Akhtar Shabir, JJ

Messrs ARBAB COTTON INDUSTRIES AND OIL MILLS through Partner---Appellant

Versus

ASKARI BANK LIMITED through Manager---Respondent

R.F.A. No. 327 of 2014, heard on 7th March, 2017.

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

----Ss. 10, 9 & 22---Procedure of Banking Court---Letter of Guarantee Finance Facility---Application for leave of defendant was rejected and suit was decreed in favour of plaintiff Bank---Contention of defendant inter alia was that the finance facility was adjusted by him and the same was subsequently renewed when defendant never requested the plaintiff Bank to renew the same in his favour---Validity---Availing of finance facility had been admitted to by the defendant and he did not provide in his application for leave to defend as to how the outstanding amount was adjusted, returned and which deposits were made by the defendant, which were not reflected in the statement of accounts---Defendant had failed to comply with requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Application for leave to defend was therefore, rightly rejected by Banking Court---Appeal was dismissed, in circumstances.

Raja Muhammad Majid for Appellant.

Malik Mohammad Kashif Rajwana for Respondent.

2018 C L D 564

[Lahore (Multan Bench)]

Before Shahid Karim and Muzamil Akhtar Shabir, JJ

Messrs METRO PETROLEUM SERVICES through Proprietor and 3 others---Appellants

Versus

ASKARI BANK LIMITED through Branch Manager and 4 others---Respondents

E.F.A. No. 24 of 2016, decided on 21st March, 2017.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908) O. XXI, R. 66---Suit for recovery---Execution of decree of Banking court---Auction of mortgaged property---Setting aside of auction proceedings---Scope---Objection application filed by judgment-debtor against auction of mortgaged property was dismissed---Contention of judgment-debtor inter alia was that the auction was not conducted properly as the property was sold at inadequate consideration---Validity---Inadequacy of auction-price was never a good ground for setting aside auction proceedings since due to intricacies involved in procedure of auction, such properties did not fetch high prices and, in the present case, property had been auctioned at a price higher than the reserve price---Appeal was dismissed, in circumstances.

Muhammad Rafiq through Attorney v. Federation of Pakistan through Secretary, Law and Parliamentary Affairs and 2 others 2013 CLC 1679 and Messrs Ashraf Agro and others v. Habib Bank Limited 2008 CLD 449 rel.

Malik Muhammad Latif Khokhar for Appellants.

Malik Muhammad Kashif Rajwana, M. Rafique Khan and Malik M.H. Rajwana for Respondents.

2018 C L D 587

[Lahore]

Before Shams Mehmood Mirza, J

UNITED BANK LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petition No.37394 of 2015, decided on 29th December, 2017.

(a) Federal Ombudsmen Institutional Reforms Act (XIV of 2013)---

----Ss. 10, 11, 12 & 15---Banking Companies Ordinance (LVII of 1962), Ss.82-B & 82-E---Constitution of Pakistan, Arts. 10A & 175---Banking Mohtasib (Ombudsman), powers of---Question as to whether an administrative tribunal, such as the Banking Mohtasib, could exercise and be vested with judicial power in determining the rights and obligations of the parties---Perusal of Ss.10, 11, 12 & 15 of the Federal Ombudsmen Institutional Reforms Act, 2013 ("the Act") showed that administrative, arbitral, executive and judicial powers were vested in the Banking Mohtasib ("the Mohtasib") even to the extent of rendering decisions against Banks and also finding their officials to be in contempt and depriving them of their liberty---Furthermore, the Mohtasib under the Act had been granted the power of civil court to implement its orders/decisions and recommendations---Powers of the Banking Mohtasib were unguided by any elaborate procedure to be followed from the stage of receiving the complaint till its termination by final decision---Determination made by the Banking Mohtasib on a complaint filed before him partook the character of a judicial decision---Various complaints filed before the Banking Mohtasib involved facts and disputes which could only be adjudicated by a court in terms of Art.175 of the Constitution and not by a non-judicial authority like Banking Mohtasib---In some instances, the Banking Mohtasib had held the banks to be vicariously liable for the fraudulent actions of ex-employees and awarded damages and in many other cases orders had been passed on matters pertaining to allegations of fraud and forgery---In all such cases the parties were at issue with respect to the material facts which would have required recording of evidence by them---Banking Mohtasib, however, passed orders on all such complaints without recording the evidence of the parties by exercising powers, which were made available to the said office by the Banking Companies Ordinance, 1962 ("the Ordinance") read with the Act---Banking Mohtasib exercised judicial functions without being aided by the Civil Procedure Code, 1908 or the Qanun-e-Shahadat, 1984---Powers made available to the Banking Mohtasib in terms of Ss.82B & 82E of the Ordinance read with Ss.10 to 12 of the Act in as much as he was empowered to receive evidence, grant temporary injunctions, implement his orders/decisions, make recommendations and hold a party in contempt of court if the orders/decisions were not implemented were all judicial powers when exercised for adjudication of factual disputes inter se private parties which powers were only available to and could be exercised by courts under Art.175 of the Constitution---Judicial powers could not be granted to the Banking Mohtasib which was a non-judicial authority and was not under the supervision and control of either the Supreme Court or the High Courts---Section 15 of the Act was clearly in conflict with and ultra vires to Art.10-A of the Constitution---Similarly, any provisions contained in Ss. 82B & 82E of the Ordinance which had the trappings of judicial power empowering the Banking Mohtasib to render binding decisions on complicated and disputed questions of fact inter se the parties was to be read down---High Court declared that Ss.10, 11, 12 & 15 of the Federal Ombudsmen Institutional Reforms Act, 2013 were ultra vires the Constitution, and that the Banking Mohtasib could not give any binding decisions on the complaints brought before it involving disputed questions of fact by resorting to the provisions contained in Ss. 82B & 82E of the Banking Companies Ordinance, 1962---Constitutional petitions were allowed in circumstances.

(b) Federal Ombudsmen Institutional Reforms Act (XIV of 2013)---

----Ss. 10, 11, 12 & 15---Banking Companies Ordinance (LVII of 1962), Ss.82B & 82E---Constitution of Pakistan, Arts. 10A & 175---Banking Mohtasib (Ombudsman)---Non-judicial powers---Scope---Judicial powers could not be granted to the Banking Mohtasib which was a non-judicial authority---Insofar as the performance of non-judicial functions by the Banking Mohtasib were concerned, such functions were within the scope and purview of his powers particularly when the exercise thereof related to overseeing the observance by the banks of the policy directives of the State Bank in respect to various banking operations---Similarly, the Banking Mohtasib was also competent and empowered to facilitate amicable resolution of disputes brought before it through consent of the parties---Banking Mohtasib could enquire into complaints of banking malpractices by the officials of the banks involving corruption, nepotism, inordinate delays or inefficiency etc. which did not involve resolution of any disputed factual issues and could make recommendations/suggestions for corrective and remedial measures to be undertaken either by the State Bank or by the administration of the banks in respect thereof.

(c) Words and phrases---

----'Jurisdiction'---Meaning stated.

[Case-law referred]

(d) Words and phrases---

----'Judicial power'---Meaning stated.

[Case-law referred]

(e) Words and phrases---

----'Judicial power' and 'jurisdiction'--- Distinction stated.

(f) Constitution of Pakistan---

----Arts. 175, 212 & 225---Judicial power---Conferring judicial power on an administrative body---Constitutionality---Various provisions contained in Part VII of the Constitution and particularly the language of Art.175 unambiguously affirmed the Courts in which the judicial power of the State shall vest and also limited the jurisdiction to be exercised by them; this also denied the option of vesting of such power and jurisdiction in any other body or authority howsoever named---Parliament could not confer judicial power on anybody or authority or regulate its exercise except in accordance with Art.175 of the Constitution---Legislative authority was only found in Part VII of the Constitution which would vest in the Courts the jurisdiction and judicial power of the State---Barring the courts created under Art.175 and Tribunals constituted under Arts.212 & 225 of the Constitution, it was virtually impossible, to confer judicial functions upon any other body which in its essential character was not a "court" in terms of Art.175 of the Constitution---Administrative bodies could not, in the performance of their functions, exercise any part of the judicial power of the courts created under Art.175 of the Constitution.

[Case-law referred]

(g) Administration of justice---

----'Judicial power' and 'legislative/administrative power'---Distinction---Conclusive and binding determination of disputes between parties was held to be a key feature of judicial power---Ascertaining the existing rights and rendering the consequential declaration in respect thereof by applying the established legal principles was deemed to fall within the purview of judicial power---Decision in respect to new rights and liabilities, on the other hand, with reference to policy considerations was considered to be an exercise of administrative or legislative power.

(h) Court---

----"Court" constituted under a special statute, powers of---Scope---Such court could only function and operate within the confines of the powers granted to it under the special law and could not travel beyond the scope of such powers.

(i) Constitution of Pakistan---

----Art. 199---Constitutional petition---Maintainability---Where the impugned proceedings were coram non judice or the order passed was without jurisdiction, a party could approach the High Court in writ jurisdiction.

Muhammad Wasif Majeed, Imran Aziz Khan, Barrister Muhammad Ahmad Pansota, Shehzada Mazhar, Tehsin Yousaf, Muhammad Asif Ismail, Barrister Haroon Dughal, Azmat Lodhi, Sheikh Muhammad Ali, Munawar ul Islam, Miss Amina Warsi and Ayesha Warsi for Petitioners.

Muhammad Zakria Sheikh Deputy Attorney General.

Shahyar Kasuri, Raza Imtiaz Siddiqui, Ahsan Masood, Rehan Nawaz, Aatif Ali Bukhari, Aish Bahadar Rana, Raja Zafar Iqbal, Usman Ali Cheema, Sajid Ejaz Hotiyana, Syed Ali Akbar Shah, Ali Raza Kabir, Mian Sultan Tanveer Ahmad, Qadeer Kalyar, Rao Orangzeb Rashid, Rai Nazakat Abbas Bhatti, Ch. Muhammad Yaqoob, Muhammad Sohail Dar, Aamer Aziz Syed, Ch. Muhammad Naseer, Amjad Pervez Chaudhary, Fahad Khan, Faisal Naseem Chaudhary, Ch. Tasneem Bari Saleemi for Respondents.

2018 C L D 626

[Lahore]

Before Ayesha A. Malik, J

AL-BARAKA BANK (PAKISTAN) LTD.---Petitioner

Versus

PROVINCE OF PUNJAB through Secretary Food and others---Respondents

Writ Petition No.4562 of 2016, decided on 12th April, 2018.

(a) Punjab Sugar Factories Control Act (XXII of 1950)---

----Ss.13, 16 & 23---Punjab Sugar Factories Control Rules, 1950, Rr.14 & 13---Constitution of Pakistan, Art. 199---Supply of sugarcane to sugar factories/mills---Role of Cane Commissioner---Payment to sugarcane growers within statutorily prescribed time---Statutory retention of title in favour of sugar cane growers after delivery of sugarcane to sugar mills---Superior statutory right of sugarcane growers for recovery of their dues from sugar mills, over secured creditors, such as Banks / Financial institutions---Scope---Question before High Court was whether bags of sugar pledged to Banks/Financial institutions by sugar mills, were amenable to sale by Cane Commissioner whilst exercising powers under the Punjab Sugar Factories Control Act, 1950 in order to satisfy the statutory right of sugarcane growers who had not been paid for sugarcane by Sugar Mills within prescribed statutory period and whether such sugarcane growers had a superior right of recovery over secured creditors---Held, that intent of Punjab Sugar Factories Control Act , 1950 and Rules framed thereunder, in specifying time of 15 days for payment to sugarcane growers was to ensure that cane growers were paid and that price owed to the cane grower was not only secured but also remained enforceable under the Punjab Sugar Factories Control Act, 1950---While recognizing ownership rights of cane growers, Punjab Sugar Factories Control Act, 1950 recognized that a debt was created with respect to price of sugarcane in favour of the cane grower which must be paid within fifteen days and consequently by construing such requirement to be a statutory retention of title clause in favour of the cane grower, special purpose of the Punjab Sugar Factories Control Act, 1950 was achieved---Sections 13 & 16 of the Punjab Sugar Factories Control Act, 1950 and R.14 of Punjab Sugar Factories Control Rules, 1950 gave special treatment to these purchase transaction(s), such that a unpaid cane grower did not transfer title in sugarcane supplied until payment was made in order to ensure compliance of the statutory condition to make payment in fifteen days---High Court observed that a statutory retention of title provision gave the unpaid seller of goods priority over other creditors (secured or unsecured) in the event that buyer failed to pay for the delivered goods, and as such cane growers sought enforcement of their right(s) as owners of the sugarcane---High Court further observed that enforcement of right of sugarcane growers did not prejudice rights of secured creditors (Banks) as the cane growers' sugar could not have been pledged with Banks in the first case; and that the sugarcane growers had necessary security by virtue of law to ensure payment for sugarcane delivered---Constitutional petition was allowed, accordingly.

[Case-law referred]

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

----Ss. 32, 21,22,23 & 24---Payment and delivery of goods---Passing of title of goods---Concept of delivery and passing of title under Sale of Goods Act, 1930---Scope---Delivery of goods and passing of title of such goods, were two separate events and it was not necessary that title was transferred when delivery was made to a buyer---Under Sale of Goods Act, 1930 payment and delivery were concurrent in terms of S.32 whereby unless otherwise agreed, a buyer must pay the seller when possession of goods was taken---General rule was that unless otherwise intended, payment must be made when the goods were delivered.

[Case-law referred]

(c) Interpretation of statutes---

----Purpose of a statute/intent of the law---Construction---Intent of the law must be construed in context of the purpose of the Act and rights and obligations created under the Act---Construction of intent of the law must be such that it gave effect to meaning of the law---Words in a statute were given meaning to by their context and such context included the purpose of the law---Purpose must be derived from the text, not from extrinsic sources such as Legislative history or an assumption about the legal drafter's desire---Purpose must be defined precisely and not in a fashion that smuggled in the answer to the question before the decision-maker and purpose was to be described as concretely as possible and not abstractly---Purpose of a statute shed light on deciding which of the various textually permissible meanings should be adopted.

[Case-law referred]

(d) Maxim---

----Nemo dat qui non habet (he who has not, cannot give)---Rights of unpaid seller(s) under the law---Retention of title clause(s)---Retention of ownership title with unpaid seller(s) after delivery of goods---Priority of unpaid sellers over other creditors, including secured creditors---Recognition of retention of title clauses as commercially viable way to do business on credit---Concept and scope of retention of title clauses and rights of unpaid sellers discussed in light of case-law from various jurisdictions.

[Case-law referred]

Nasar Ahmad and Shazib Masud, Syed Ali Zafar, Mubashar Aslam Zar, Ahmed Pervaiz, Malik Akhtar Javed and Ali Raza Kabir, Ali Ameel Parvez Malik, Syed Hammad Yousaf Gillani, Abdul Hameed Chohan and Sajjad Ali for Banks/Petitioners.

Barrister Rafay Altaf, Ch.Nisar Ahmad Anjum, Asad Jamal Akbar, Muhammad Abdullah Aslam Chaudhary, Amjad Iqbal Khan, Syed Afzal Shah Bukhari, Rai Khurram Mehmood, Ch. Muhammad Asghar, M. Amir Latif Sehr Bhutta, Sardar Zulfiqar Umer Khan Thaheem, Ch. Muhammad Nabeel Ashraf, Rana Mustansar Asif, Rana Muhammad Hussain, Mian M. Hussain Bodla, Shahid Masood Khan, Ch. Faiz-e-Rasool Sidhu, Ch. Akbar Ali Tahir, Mahar Fazal ur Rehman, Sh. Aftab Umar, Munawar Ali Sidhu, Sardar Liaqat Ali Dogar, Muhammad Jahangir Asif, Ch. Muhammad Hussain, Muhammad Anwar Khan and Malik Zulfiqar Ali Khokhar for Cane Growers/Petitioners.

Anwaar Hussain, Additional Advocate General, Mrs. Samia Khalid, Additional Advocate General, Ahmad Hassan Khan, AAG along with Waqas Alam, Cane Commissioner, Punjab and Syed Sibte Hassan Sherazi, Assistant Cane Commissioner, Punjab for Respondents.

Mian Junaid Razzaq, Hammad Khalid Butt and Sardar Tahir Naseem, for Respondent Brother Sugar Mills.

Arshad Nazir Mirza, for Respondent Pattoki Sugar Mills (in W.Ps. Nos.63883/17 and 64911/17.

2018 C L D 678

[Lahore]

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

SILKBANK LIMITED through Authorized Officers---Appellant

Versus

Messrs IMPERIAL AGRO CHEMICAL and 6 others---Respondents

E.F.A. No. 1592 of 2015, heard on 25th April, 2016.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, R. 66---Auction of mortgaged properties on 'as is where is basis'---Connotation---Auction of the mortgaged properties was held by the appellant-Bank in the course of the execution proceedings in which respondent was declared to be successful bidder having purchased the said properties---Auction in favour of respondent was confirmed and the requisite sale certificate was also issued---After issuance of the sale certificate, respondent/auction purchaser filed an application before the executing court complaining that the relevant Development Authority (FDA) refused to transfer the properties in his name on account of outstanding dues and requested the Court to deduct the outstanding dues from the sale proceeds---Executing court accepted the application of the respondent and passed the impugned order for deduction of outstanding dues from the sale proceeds of the auction for their onward payment to Development Authority---Appellant-Bank contended that the auction of the properties took place on "as is where is basis" and as such the executing court without application of mind passed the impugned order--- Validity--- Auction schedule contained the unambiguous stipulation that the properties were being sold on "as is where is basis"---Auction schedule did state that the property was under no lien/encumbrance to the knowledge of the decree holder/Bank---Such stipulation, however, did not absolve the respondent from making the necessary inquiries regarding the dues outstanding in respect of the properties in question before taking part in the auction---Furthermore the relevant Development Authority neither approached the executing court for claiming its dues nor did it have any court order in its favour adjudicating upon the outstanding amount---Outstanding amount owed to the Development Authority did not have preference over the dues of the decree holder Bank which had a mortgage charge over the properties---Executing Court without application of mind mechanically passed the impugned order requiring the outstanding amount allegedly owned towards the Development Authority to be paid from the sale proceeds---Appeal was allowed and the impugned order was set aside.

United Bank Limited v. Al-Noor Enterprises and others 2006 CLC 822; Messrs Julandar (Pvt.) Limited v. Official Assignee and 2 others 2003 CLD 1336; Messrs Industrial Development Bank of Pakistan v. Messrs Maida Limited and others 1994 SCMR 2248 and Collector of Custom Karachi v. Naya Daur Motors (Pvt.) Limited 2015 SCMR 1376 ref.

Abdul Hameed Chohan for Appellant.

Adeel Tareef Sheikh for Respondent No.7.

2018 C L D 711

[Lahore (Multan Bench)]

Before Ali Baqar Najafi, J

MUHAMMAD IQBAL and others---Petitioners

Versus

PAKISTAN FEDERAL SECRETARY and others---Respondents

Writ Petition No.6545 of 2011, heard on 11th October, 2017.

Defence Savings Certificates Rules, 1966---

----R. 2---Post Office Manual, Vol. VI, R. 547---Constitution of Pakistan, Art. 4---Reduction of rate of profit---Maturity of Defence Savings Certificates---Petitioners had purchased Defence Savings Certificates and were aggrieved of reducing rate of profit on their certificates offered to them at time of maturity---Validity---Authorities could not unilaterally change rate of profit to disadvantage of petitioners---Prior to such change, a notice was required to be served upon petitioners to ascertain consent so that they could encash certificates instead of sustaining financial loss---Any change in policy if made by authorities, had to be applied prospectively on certificates purchased subsequent to such policy unless it was otherwise provided therein---Authorities failed to show any such change in policy warranting withholding of agreed amount of profit to petitioners---Authorities were bound under Art. 4 of the Constitution to act in accordance with law and required to make payment on profit mentioned on certificates at time of their maturity---Unilateral reduction in agreed rate of profit was unconscionable, discriminatory, against public policy and unenforceable---High Court directed the authorities to make payments to petitioners on Defence Savings Certificates as mentioned on back of certificates at time of maturity---Constitutional petition was allowed in circumstances.

Makhdoomzada Syed Muhammad Najmul Saqib Mumtaz for Petitioners

Muhammad Wajid Ali Bhatti, Assistant Attorney General with Abaid Ullah, Assistant Superintendent, Post Office, Multan for Respondents.

2018 C L D 734

[Lahore]

Before Shahid Karim, J

AHMAD RAZA and others---Appellants

Versus

EXECUTIVE DIRECTOR (NBFCD) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 7 others---Respondents

Commercial Appeal No. 1 of 2011, heard on 2nd October, 2017.

Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003---

----Rr. 49(3)(4) & 63---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 34---Imposition of fine---Chief Executive Officer of company (appellant) was aggrieved of order passed by Appellate Bench of Securities and Exchange Commission of Pakistan Exonerating Directors of Company and imposing penalty upon the Chief Executive Officer---Validity---Appellate Bench of the Commission wrongly let off the Directors who actually made decision and Chief Executive Officer was made scapegoat though he was not responsible for the actual decision making---Present was a matter of factual inquiry as to whether the Chief Executive Officer took steps to reverse and rectify the situation---Penalty could only be visited if there was contravention of any provision of Rules and not if contravention had already taken place and a person was not able to rectify the same; penalty was only to be imposed for actual contravention and not for lack of effort to correct or reverse the position---Chief Executive Officer could not have been penalised under R. 63 of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003---High Court set aside order passed by Appellate Bench of the Securities and Exchange Commission of Pakistan---Appeal was allowed accordingly.

Muqtadar Akhtar Shabbir for Appellants.

Hassan Zaidi, Dy. Director Legal, SECP for Respondents.

2018 C L D 754

[Lahore]

Before Muhammad Farrukh Irfan Khan and Ch. Muhammad Iqbal, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head/Attorney and others---Appellants

Versus

Mst. NUSRAT BEGUM---Respondent

Insurance Appeal No. 33 of 2016, heard on 1st February, 2018.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Recovery of insurance policy proceeds along with liquidated damages---Dispute whether insurance policy had lapsed at the time of insured's death---Perusal of the record as well as evidence of the parties available on the record showed that the lapsed insurance policy re-commenced before the insured's death in an accident---All the documents for revival after attestation from the concerned Embassy were received by the Branch Manager of the Insurance Corporation who processed the same and after receipt of the amount the said policy stood revived, whereas the insured person/deceased died subsequent to that as such at that time the policy was in vogue---Moreover oral as well as documentary evidence established that deceased obtained insurance policy from the Insurance Corporation which lapsed due to non-deposit of premium but subsequently was revived before the death of the insured person---Sales Manager of Insurance Corporation admitted that the policy stood revived and he himself deposited the amount and fine---Admittedly, policy was revived by the authorized officials of the Insurance Corporation and no action had been taken against the said officials, which led to an irresistible conclusion that no fraud was committed in revival of the insurance policy, as such, the Insurance Tribunal had rightly allowed recovery of policy proceeds along with liquidated damages---Appeal was dismissed accordingly.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt for Respondent.

2018 C L D 766

[Lahore]

Before Shahid Karim, J

MUHAMMAD ISMAIL---Appellant

Versus

ROYAL PVC (PVT.) LTD. through Chief Executive---Respondent

F.A.Os. Nos. 326 and 327 of 2012, decided on 12th February, 2018.

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

----O. XLI, R. 27---Additional evidence, production of---Scope---Additional evidence could not be produced to fill lacuna in a case.

Muhammad Ali v. Qaiser Jehan Begum 2004 CLC 1424 ref.

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

----Ss. 73(1)(a) & 73(1)(b)---Expunction of trademark from trademark register--- Non-usage of the trademark--- Registrar Trademarks expunged the trademark of appellant from the trademark register and retained the trademark of the respondent; held, that the documents submitted by the appellant before the Registrar Trademarks did not establish requirements of clauses (a) & (b) of S. 73(1) of Trade Marks Ordinance, 2001---None of the said documents were proof of usage of mark for the period of first five years---One of the issues framed by the Registrar Trademarks was whether the mark registered in the name of the appellant was liable to be removed from the Register due to non-user of the mark, and the onus for such purposes was placed on the appellant, who failed to discharge that onus---Furthermore the appellant failed to produce invoices showing that he had been supplied raw material for manufacturing purposes---Electricity and gas bills were also not provided to establish that manufacturing facility of the appellant was in operation---Contrarily the respondent produced documents before the Registrar Trademarks which clearly showed that he been in use of the subject trademark as a serious and bona fide manufacturer and that the respondent was registered with the relevant Standards and Quality Control Authority and the Provincial Health Engineering Department as an approved manufacturer---Similarly the respondent was an approved contractor for supply of its products to different departments of Provincial Governments---Moreover the respondents submitted before the Registrar sales tax invoices, sales tax returns and export documents which clearly mentioned the name of the trademark and established that he had been the user of the trademark; that he was a good faith manufacturer, and that he had an operational manufacturing unit---Registrar Trademarks had rightly expunged the trademark of appellant from the trademark register and retained the trademark of the respondent---Appeal was dismissed accordingly.

Nasrullah Khan Babar for Appellant.

Muhammad Saqib Jillani for Respondent.

2018 C L D 830

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Messrs AZHAR & CO. and others---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

E.F.A. No. 42241 of 2017, decided on 4th April, 2018.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), S. 51 & O.XXI, R.37---Execution of decree--- Arrest warrants, issuance of---Principles---Judgment debtors were aggrieved of order issuing arrest warrants by Executing Court without show cause notice to them--- Validity---Prior to passing of order in question, no show cause notice was issued to judgment debtors rather Executing Court relied upon earlier show cause notice and its reply---Every individual had a fundamental right to show cause/explain his position prior to initiation of any coercive measures against him/her---Previously issued show cause notice could not be relied upon on fresh proceedings as the circumstances could vary with the passage of time---Executing Court, if needed, was well within its powers to pass a fresh order for arrest and detention of judgment debtors in civil prison under S. 51, C.P.C. read with O. XXI, R. 37, C.P.C.---High Court directed Executing Court to execute decree through auction of mortgaged property and set aside order with regard to arrest warrants---Appeal was allowed in circumstances.

Syed Salman Haider Jafri for Appellants.

2018 C L D 856

[Lahore]

Before Ch. Muhammad Iqbal and Shahid Bilal Hassan, JJ

ABDUL QAYYUM AKRAM---Appellant

Versus

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

Insurance Appeal No. 797 of 2013, heard on 9th January, 2018.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 115, 122 & 124---Insurance claim---Appellant had filed insurance claim arising out of insurance policies issued prior to date of commencement of Insurance Ordinance, 2000---Claim filed by appellant was dismissed by Insurance Tribunal---Validity---Insurance Tribunal under S. 115 of Insurance Ordinance, 2000 could not assume jurisdiction over claims that had arisen out of insurance policies issued prior to the date of commencement of Insurance Ordinance, 2000---High Court declined to interfere in the said order as there was no illegality committed by Insurance Tribunal nor there was any jurisdictional defect--- Appeal was dismissed in circumstances.

Mst. Robina Bibi v. State Life Insurance and others 2013 CLD 477; Mst. Naseem Begum and others v. State Life Insurance Corporation of Pakistan and others 2014 SCMR 655 and 2014 CLD 1323 rel.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

2018 C L D 886

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza and Abdul Sattar, JJ

Sheikh FAROOQ AHMAD and 2 others---Appellants

Versus

ASKARI BANK LIMITED through Manager/Attorneys---Respondent

R.F.A. No. 262 of 2013, decided on 6th March, 2017.

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

----Ss. 10(4), 9 & 22---Procedure of Banking Court--- Suit for recovery--- Morabaha finance facility--- Admission--- Defendants' application for leave to defend was rejected and suit was decreed in favour of plaintiff Bank---Contention of defendants, inter alia, was that transactions under the Morabaha facility were not substantiated by the plaintiff Bank by way of documentary evidence, and therefore application for leave to defend could not be rejected---Validity---Parties were not at issue with regard to the obtaining of finance facilities, execution of documents thereunder and disbursement of the amount to the defendants---Defendants in their applications for leave to defend gave a chart detailing transactions from time to time, and in view of such admission regarding the transactions, objection regarding non-substantiating of transactions had no force---Defendants had not raised any dispute on facts requiring recording of evidence and therefore application for leave to defend was rightly rejected---Appeal was dismissed, in circumstances.

Muhammad Suleman Bhatti for Appellants.

2018 C L D 898

[Lahore]

Before Shahid Karim, J

MOHAMMAD RAZA---Petitioner

Versus

CRESCENT INDUSTRIAL CHEMICAL LTD. and 5 others---Respondents

Civil Original No. 8 of 2007, heard on 26th September, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 265---Investigation of affairs of company---Petitioner was holding three million shares of respondent company equal to 2.31% of total shares---Grievance of petitioner was that despite induction of billions of rupees into the company, it did not commence business---Validity---Observations made in Director's report itself were sufficient to conclude that not only affairs of company were being conducted and managed as to deprive members of a reasonable return but members of company were not given all information with respect to its affairs which they might reasonably expect---Affairs of company were not being managed in accordance with sound business principles or known commercial practice---Persons concerned in formation of company or management of its affairs were guilty of breach of trust and misfeasance---Substratum of company was lost and financial position of company was as such to endanger its solvency---Investigation of affairs of company was apt and proper---High Court directed Securities and Exchange Commission of Pakistan to appoint one or more competent persons as inspectors to investigate affairs of company and to report thereon---Petition was allowed under circumstances.

Waqqas Ahmad Mir, Noor Bano Khan, Mian Wajahat Ali and Hassan Niazi for Petitioner.

Daud Aziz Khokhar for Respondents Nos. 1, 3 to 6.

Hassan Zaidi, Deputy Director (Legal), SECP.

2018 C L D 911

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MUHAMMAD ASHRAF---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED and 2 others---Respondents

F.A.O. No. 193076 of 2018, decided on 9th April, 2018.

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

----S. 12(2)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9---Ex parte decree, setting aside of---Fraud and misrepresentation---Proof of---Agreement to sell---Scope---Banking Court had found that agreement in favour of applicant was not registered as per requirement of law---Agreement to sell would not create any right or title unless same was registered---Applicant prior to purchase of suit land was having the knowledge that the same was mortgaged in favour of Bank in lieu of loan---Respondent-Bank having right over the suit property should be signatory of alleged agreement to sell---Bank was not party or signatory to the agreement to sell---Necessary ingredients of fraud must be pleaded and proved in the application filed under S. 12(2), C.P.C.---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 respondent Bank for obtaining ex parte judgment and decree against him---Impugned decree had been passed on the basis of Banking documents including finance agreement---Banking Court had rightly dismissed application for setting aside of ex parte judgment and decree---No illegality or perversity had been pointed out in the impugned order passed by the Banking Court---Appeal was dismissed in limine.

Ireno Wahab v. Lahore Diocesan Trust 2016 CLC Note 85; Mst. Nasir Khatoon's case 2003 SCMR 1050 and Dadabhoy Cement's case PLD 2002 SC 500 rel.

(b) Registration Act (XVI of 1908)---

----S. 17---Unregistered agreement to sell---Transfer of right or interest in immovable property on the basis of agreement to sell---Scope---Unregistered agreement to sell was invalid and ineffective to claim right or title in immovable property---Transfer of right or interest in the immovable property would take place only on execution of a regular registered sale deed---Mere agreement to sell would not create interest or extinguish right or title in the immovable property.

2018 C L D 1027

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MOHAMMAD KHALID NAEEM---Appellant

Versus

HABIB BANK LIMITED---Respondent

F.A.O. No. 203 of 2015, decided on 15th February, 2018.

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

----Ss. 5, 12 & 22---Civil Procedure Code (V of 1908), S. 12(2)---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Condonation of delay---Scope---Defendant assailed ex-parte judgment and decree passed against him by Banking Court which was beyond prescribed period of limitation and he sought condonation of delay---Validity---Record did not disclose any element of fraud, misrepresentation or that Banking Court had passed judgment and decree without jurisdiction---Defendant failed to establish such elements required for setting aside judgment and decree passed by Banking Court---Where in a special law or in a local law a different period of limitation was prescribed, then S. 5 of Limitation Act, 1908 was not applicable---Financial Institutions (Recovery of Finances) Ordinance, 2001 was a special law therefore, S. 5 of Limitation Act, 1908 was not applicable for filing of appeal beyond limitation period---High Court declined to interfere in judgment and decree passed against defendant---Appeal was dismissed in circumstances.

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.

Nemo for Appellant.

2018 C L D 1036

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Messrs NICE 'N' EASY FASHION (PVT.) LTD. and others---Appellants

Versus

STANDARD CHARTERED BANK LIMITED---Respondent

R.F.A. No. 629 of 2014, decided on 26th April, 2018.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Leave to defend the suit, refusal of---Effect---Defendants were aggrieved of judgment and decree passed by Banking Court in favour of Bank after refusal of leave to defend the suit---Validity---Banking Court after appreciating the grounds taken by defendants in application under S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, as well as all documents available on record had passed judgment and decree---High Court declined to take any exception to such judgment and decree as there was no illegality in the same and was passed in consonance with the spirit of law---Appeal was dismissed in circumstances.

Citi Bank N.A. A. Banking Company through Attorney v. Riaz Ahmed 2000 CLC 847; Messrs United Dairies Farms (Pvt.) Limited and 4 others v. United Bank Limited 2005 CLD 569 and Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 ref.

Hafeez ur Rehman Chaudhary and Muhammad Akram Saaleh for Appellants.

2018 C L D 1064

[Lahore]

Before Atir Mahmood, J

TANVIR AHMAD BUTT---Appellant

Versus

The DIRECTOR, ORATIER TECHNOLOGIES (PVT.) LTD. PLD PUBLISHERS---Respondent

F.A.O. No. 522 of 2015, decided on 22nd May, 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 complaint---Computation of limitation period---Condonation of delay---Scope---Consumer Court had power to extend the time limit for filing of complaint for up to one year but such extension could only be made when sufficient cause was disclosed for not filing complaint within 30 days, by filing a proper application---Complaint, under the Punjab Consumer Protection Act, 2005, if hit by time limitation, then framing of issues and recording of evidence was of no consequence and such complaint was liable to be dismissed.

2018 C L D 1072

[Lahore]

Before Muhammad Furrukh Irfan Khan, J

Messrs HILAL CONFECTIONARY (PVT.) LTD.---Appellant

Versus

Messrs HAROON SWEET FACTORY and another---Respondents

R.F.A. No. 108 of 2006, decided on 16th October, 2017.

Trade Marks Ordinance (XIX of 2001)---

----S. 21---Copyrights Ordinance (XXXIV of 1962), S. 56---Specific Relief Act (I of 1877), S. 54---Infringement of trademark---Suit for injunction---Plaintiff claimed to be owner of registered trademark of 'Hilal Khopra Candy Sweets' which was also registered under Copyrights Ordinance, 1962---Plaintiff alleged that 'Haroon Khopra Candy Sweets' was identical in packaging, label/wrapper and defendants infringing plaintiff's trademarks rights and also passing off their goods as goods of plaintiff---Trial Court dismissed the suit---Validity---Appearance of number of infringements/imitations of trademarks of wrapper, colour scheme, design or getup in marketplace would not give justification for an infringer/imitator to claim that trademark of original proprietary had lost its propriety status and that due to such reason, imitator/infringer of such trademark or label or wrapper was entitled to continue with its imitation and infringement---When question had arisen whether a mark applied for, had such resemblance to another mark likely to deceive, it should be determined by considering what was leading characteristic of each---One could contain many, even most of same elements, as other and yet leading, or it may be only impression left on mind, might be very different---Critical comparison of two marks might disclose numerous points of difference yet idea which would remain with any person seeing them apart at different times could be same---Mark was infringed if essential features or essentials particulars of same were taken---Colour scheme, design and getup of label/wrapper of defendant was deceptively and confusingly similar or nearly resembled colour scheme, design and getup of label/wrapper of plaintiff and was likely to cause confusion and deception to an unwary purchaser---High Court set aside judgment and decree passed by Trial Court and decreed suit in favour of plaintiff--- Appeal was allowed in circumstances.

Cecil De Cordova and others v. Vick Chemical Company PLD 1951 Privy Council 108; Jamia Industries Ltd. v. Caltex Oil (Pak Ltd. and another PLD 1984 SC 8; Mehran Ghee Mills (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mills (Pvt.) Ltd. and others 2001 SCMR 967; Burney's Industrial and Commercial Co. Ltd. v. Rehman Match Works PLD 1983 Kar. 357; J.N. Nichols (Vimto) Plc A Company Incorporated in the United Kingdom v. Mehran Bottlers (Private) Limited, Karachi PLD 2000 Kar. 192; Messrs Hiralal Parbhudas v. Messrs Ganesh Trading Company AIR 1984 Bombay 218; Bashir Ahmed v. Firm Hafiz Habibur Rehman 1980 CLC 1268; Insaf Soap Factory v. Lever Brothers Port Sunlight Ltd. PLD 1959 Lah. 381 and Sir George Jessel M.R. in Guardian Fire and Life Assurance Co. v. Guardian and General Insurance Co. Ltd. (1880) 50 L.C. Ch. ref.

M. Tariq Malik for Appellant.

Muhammad Raheel Kamran Sheikh for Respondents.

2018 C L D 1086

[Lahore]

Before Ayesha A. Malik and Shahid Bilal Hassan, JJ

ALLIED BANK LIMITED through Authorized persons---Petitioner

Versus

JUDGE BANKING COURT NO.VII, LAHORE and 6 others---Respondents

W.P. No. 110755 of 2017, heard on 12th March, 2018.

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

----S. 16---Attachment before judgment---Principle---Bank, in suit for recovery of finance, filed application seeking attachment before judgment and the same was dismissed by Banking Court---Validity---Banking Court rightly dismissed application of Bank being premature---No reasons were provided in application as to why Bank wanted to secure its finance facility and how it claimed that it had insufficient security to secure its finance facility provided to defendants---Suit was pending and at such stage it could not be said that the suit would be decreed in favour of Bank---Banking Court had rightly dismissed application on the ground that there was no prima facie case made out nor there was any apprehension or probability expressed in application for alienation of the property or that defendants would remove themselves from the jurisdiction of the Court--- Constitutional petition was dismissed in circumstances.

Ashar Elahi for Appellant.

Furqan Naveed for Respondents Nos. 2 to 6.

Barrister Hassan Nawaz for Respondent No.7.

2018 C L D 1149

[Lahore]

Before Shams Mehmood Mirza, J

QASIM ALI---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

W.P. No.1553 of 2015, decided on 3rd April, 2018.

Prize Bond Rules, 1999---

----R.15---Public Debt Act (XVIII of 1944), Ss.2(2)(a)(iv), 23 & 28---Prize bond---Time limitation of six years allowed for presenting prize bond for attaining price---"Prize bond" distinguished from "bearer bond"---Scope---Petitioner impugned R. 15 of the Prize Bond Rules, 1999 on the ground that per S. 23 of the Public Debt Act, 1944, Government could not prescribe time-limitation for presentation of prize bonds to claim prize(s)---Validity---Prize bonds were different specie of bonds than bearer bonds, therefore, S. 23 of the Public Debt Act, 1944 was not applicable on the same---Prize bonds came within purview of S. 2(2)(a)(iv) of the Public Debt Act, 1944 and Government could, in terms of S. 28 of the Public Debt Act, 1944 validly frame rules in respect of its obligations on prize bonds---In the present case claim preferred by the petitioner, for collection of Prize money had become time-barred---Contention that R. 15 of the Prize Bonds Rules, 1999 was in violation of the Public Debt Act, 1944 was without merit---Constitutional petition was dismissed, in circumstances.

Director General National Savings Islamabad v. Balqees Begum and others PLD 2013 SC 174 rel.

Muqtadir Akhtar Shabbir for Petitioner.

Rehan Nawaz for Respondent/State Bank.

2018 C L D 1181

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Messrs AL-SHEIKH INTERNATIONAL KINO FACTORY---Appellant

Versus

NATIONAL BANK OF PAKISTAN and another---Respondents

E.F.A. No. 214570 of 2018, decided on 24th May, 2018.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree---Sale/auction of property---Application for re-evaluation of the property as per market price for the current year---Contention of applicant/judgment-debtor inter alia was that respondent (Financial Institution) itself had assessed the value of the property; market value of the property assessed by Patwari was the latest and liable to be considered for auction of the property---Validity---Valuation of property was assessed by engineering consultants---Judgment-debtor had not raised objection regarding the said evaluation at the time of its filing---Patwari was not the competent authority to assess the market value of the property consisting of land, machinery, building and boundary wall owing to lack of expertise---Application of judgment-debtor was rightly dismissed by the Banking Court---Appeal was dismissed, in circumstances.

2018 C L D 1196

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan, J

MUHAMMAD TUSEEF and 4 others---Petitioners

Versus

STATE BANK OF PAKISTAN and 30 others---Respondents

Writ Petition No. 5591 of 2018, decided on 12th June, 2018.

Microfinance Institutions Ordinance (LV of 2001)---

----S. 3---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2---Microfinance institutions---Recovery of finance---Apprehensions and presumptions---Effect---Petitioners were customers of Microfinance Institutions and they apprehended coercive measures to be adopted for recovery of finance---Validity---Microfinance Institutions were not deemed to be banking companies---Recoveries of loans could not be obtained under Financial Institutions (Recovery of Finances) Ordinance, 2001, by Microfinance Institutions through Banking Courts---High Court declined to issue directions merely on the basis of apprehensions and presumptions of parties--- Microfinance Institutions stated that recoveries would be made through summary suit under O. XXXVII, C.P.C. and they were not harassing petitioners rather they would adopt proper procedure prescribed under the law---Constitutional petition being not maintainable was dismissed.

Syed Itrat Hussain Rizvi v. Messrs Tameer Micro Finance Bank Limited through Attorney and another 2018 CLD 116 rel.

Marhaba Pakistan and others v. HBL and others 2017 CLD 995 ref.

Haroon-ur-Rasheed and Gulzar Hussain Bukhari for Petitioners.

2018 C L D 1214

[Lahore]

Before Shahid Bilal Hassan, J

The LAHORE POLO CLUB through Secretary---Petitioner

Versus

ADDITIONAL DISTRICT JUDGE and 3 others---Respondents

Writ Petition No. 174637 of 2018, decided on 30th March, 2018.

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

----S. 9---Social Club/Association---Disciplinary proceedings against member(s) of a club/association---Jurisdiction of civil court---Scope---Courts generally refused to interfere in decisions of a club on disciplinary matters if given without any irregularity in procedure unless it was proved either that rules were opposed to natural justice or that the same were not followed or that there was malice or mala fides in arriving at decision---Jurisdiction of court in such matters was therefore, limited within a very narrow compass.

(b) Companies Act (XIX of 2017)---

----Ss. 4 & 5---Civil Procedure Code (V of 1908), S. 9 & O. VII, R. 10---Constitution of Pakistan, Art. 199---High Court (Lahore) Rules and Orders, Vol. 1, Chapter 2 & S. 4---Club/Association incorporated as a company---Disciplinary proceedings against member(s) of a club/association---Jurisdiction of Civil Courts to entertain suit seeking to restrain disciplinary proceedings against a member of a club/association existing under the Companies Act, 2017---Special law---Constitutional jurisdiction of High Court---Scope---Petitioner Club, incorporated under the Companies Act, 1913 impugned order of Civil Court whereby it was held that Civil Court had jurisdiction to entertain a suit seeking to restrain disciplinary proceedings against member of the club---Held, that Ss. 4 & 5 of the Companies Act, 2017 barred jurisdiction of Civil Courts in matters pertaining to Companies and word "shall" had been used in the same, which made said provisions mandatory and such bar was also contained in S. 4 of Chapter 2 of Volume-I of the High Court (Lahore) Rules and Orders---High Court observed that provision(s) of a special law always override provisions of a general law to the extent of any conflict or inconsistency between the two---Civil Court, therefore had no jurisdiction to entertain the suit as it had been provided in S. 5 of the Companies Act, 2017 that High Court was the court of first instance to deal with such matters---Impugned orders of the Civil Court were set aside, and plaint of the respondent was returned under O. VII, R. 10 of the C.P.C.--- Constitutional petition was allowed, accordingly.

Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543; Lahore Race Club through Secretary and others v. Raja Khushbakht-Ur-Rehman PLD 2008 SC 707; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd, Lahore and others 2016 SCMR 213 = 2016 CLD 393; State Life Insurance Corporation of Pakistan through Chairman and others v. Mst. Sardar Begum and others 2017 CLD 1080; Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 CLD 1198 and Muhammad Yasin Fecto and another v. Muhammad Raza Fecto and 3 others 1998 CLC 237 ref.

D. M. Malik v. Jockey Club of Pakistan and others PLD 1960 (W.P.) Karachi 325; Khawaja Muhammad Saeed v. Mr. Justice Shabbir Ahmad and 12 others PLD 1965 (W.P) Lahore 92; Mr. Muhammad Jamil Asghar v. The Improvement Trust, Rawalpindi PLD 1965 SC 698; Messrs Chalna Fibre Company Limited, Khulna and 4 others v. Abdul Jabbar and 9 others PLD 1968 SC 381; Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28; Mian Ejaz Siddique and others v. Mst. Kaneez Begum and 2 others 1992 CLC 1658; 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; Muhammad Yasin Fecto and another v. Muhammad Raza Fecto and 3 others 1998 CLC 237; Federation of Pakistan and others v. Messrs Saman Diplomatic Bonded Warehouse 2004 PTD 1189; Hakam and others v. Tassadaq Hussain Shah PLD 2007 Lah. 261; Abdul Majeed and 5 others v. Province of the Punjab through District Collector, Layyah and 4 others 2010 CLC 146; Abdul Ghafar Jangda v. Haji Abdullah Haroon Muslim Gymkhana and 11 others 2011 YLR 2907; ICI Polyester Employees Union (CBA) Registered v. Trustees Union and 2 others 2013 CLD 108 and Sohail Najeeb v. Ministry of Finance and others 2014 CLD 848 distinguished.

Lahore Race Club through Secretary and others v. Raja Khushbakht-ur-Rehman PLD 2008 SC 707; Mehran Ginning Industries and others v. Sajid Shafique and others 2017 CLD 1165; Brothers Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd. Lahore and others 2016 SCMR 213; Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 CLD 1198 and State Life Insurance Corporation of Pakistan through Chairman and others v. Mst. Sardar Begum and others 2017 CLC 1080 rel.

Taffazul Haider Rizvi and Muhammad Usman for Petitioner.

2018 C L D 1228

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MAZHAR JAMIL KALYAR---Appellant

Versus

HABIB BANK LIMITED---Respondent

F.A.O. No. 279 of 2014, decided on 18th December, 2017.

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

----Ss. 9, 10, 12 & 22---Application for leave to defend suit---Ex parte judgment---Limitation period, calculation of---Defendant assailed ex parte judgment against him on the ground that same was passed without exhausting statutory period---Validity---Application for leave to appear and defend suit was filed on 17-02-2011 and same was well within time--- Banking Court calculated limitation period from 17-01-2011 and time for filing of leave to defend suit elapsed on 16-02-2011 but on said date there was public holiday therefore, filing of leave to defend on 17-02-2011 by defendant was well within time---Ex parte judgment and decree was passed by Banking Court without taking into consideration such facts---High Court set aside ex parte judgment and decree passed against defendant---Appeal was allowed accordingly.

Saleem Ahmed v. Zarai Taraqiati Bank Limited through Manager 2007 CLD 872 rel.

Sahara Trading International (Pvt.) Ltd. and others v. Bank Alfalah Ltd. PLD 2004 SC 925 ref.

Mian Zaheer Ahmad for Appellant.

2018 C L D 1233

[Lahore]

Before Mamoon Rashid Sheikh and Ch. Muhammad Iqbal, JJ

Mst. IRSHAD BEGUM---Appellant

Versus

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

Insurance Appeal No. 404 of 2014, heard on 6th March, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118, 121 & 122---Limitation Act (IX of 1908), S. 14 & Art. 86(a)---Civil Procedure Code (V of 1908), O.VII, R. 11---Insurance claim---Computation of period of limitation after promulgation of the Insurance Ordinance, 2000 but before establishment of the Insurance Tribunals under the Insurance Ordinance, 2000---Exclusion of time spent by a claimant pursuing claim via means of Constitutional petition and other modes of litigation---Scope---Claimant could not be penalized due to omission/ inaction of the Government in not timely establishing the Insurance Tribunals under the Insurance Ordinance, 2000---With the view of doing substantial justice, Insurance Tribunal would be in error in not excluding time spent by a claimant in pursuing claim through means of Constitutional petition and other modes, in absence of the establishment of Insurance Tribunals.

Mst. Irshad Begum v. State Life Insurance Corporation and others 2006 YLR 1186; Mst. Rabina Bibi v. State Life Insurance and others 2013 CLD 477 and Haji Abdul Sattar and others v. Farooq Inayat and others 2013 SCMR 1493 ref.

Liaqat Ali Butt for Appellant.

Ibrar Ahmad for Respondents.

2018 C L D 1250

[Lahore]

Before Mamoon Rashid Sheikh and Ch. Muhammad Iqbal, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head/Attorney and another---Appellants

Versus

Mst. SHAHIDA PARVEEN---Respondent

Insurance Appeal No.15 of 2017, heard on 5th April, 2017.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118, 122, 123 & 124---Civil Procedure Code (V of 1908), O.XVI, R.1 & O.XVII, R. 3---Recovery of insurance claim---Striking of right to produce evidence---Insurance company was aggrieved of order passed by Insurance Tribunal closing right to produce evidence on the ground that its witnesses had failed to appear in court---Validity---When a party filed its list of witnesses within statutory period and thereafter regularly deposited diet money and other necessary expenses for summoning of witnesses named in the list through process of Court and had filed application under O. XVI, R. 1, C.P.C. for that purpose, then it was for the Court to ensure presence of witnesses by all means available to it including moving its coercive machinery instead of penalizing party for non-appearance of witnesses---Insurance Tribunal exercised its jurisdiction illegally and with material irregularity by invoking provisions of O. XVII, R. 3, C.P.C., and closing right of insurance company to lead further evidence---High Court set aside order in question and remanded the matter to Insurance Tribunal for decision afresh after recording of evidence---Appeal was allowed accordingly.

Hakim Habibul Haq v. Aziz Gul and others 2013 SCMR 200 ref.

Mst. Bashir Bibi v. Aminuddin and 9 others PLD 1973 SC 45 and Saleem-ud-Din and others v. Government of the Punjab through Secretary Education and others 2009 MLD 635 rel.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt for Respondent.

2018 C L D 1253

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

AYESHA JAVID alias AISHA ALTAF---Appellant

Versus

ASKARI BANK LIMITED---Respondent

E.F.A. No. 195939 of 2018, decided on 12th April, 2018.

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

----S. 12---Civil Procedure Code (V of 1908), S. 12(2)---Ex parte judgment and decree, setting aside of---Fraud and misrepresentation---Principle---Defendant raised plea of fraud and misrepresentation and denied having executed any power of attorney in favour of advocate who appeared in the Court on her behalf---Banking Court declined to set aside ex parte judgment and decree passed against defendant---Validity---Grounds for filing application for setting aside ex parte judgment and decree were that the same was obtained on the basis of fraud and misrepresentation---If fraud was alleged in application for setting aside ex parte judgment and decree, its necessary ingredients must be pleaded, so as to subsequently prove the same---Mere general and bald allegations of fraud and misrepresentation could not form basis to upset a decree otherwise validly passed by Court of competent jurisdiction---Defendant failed to prove fraud and misrepresentation by plaintiff bank for obtaining judgment and decree in question against her, as the same was passed on the basis of banking documents appended with plaint including finance agreement etc.---High Court declined to interfere in ex parte judgment and decree, and Banking Court had rightly dismissed application for setting aside ex parte judgment and decree filed by defendant and there was no illegality or perversity in the order and the same was passed in accordance with law---Appeal was dismissed in circumstances.

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 ref.

2018 C L D 1264

[Lahore]

Before Shahid Karim and Ch. Muhammad Iqbal, JJ

STATE LIFE INSURANCE CORPORATION through Zonal Head---Appellant

Versus

ABIDA FIRDOUS---Respondent

Insurance Appeal No. 156483 of 2018, heard on 16th May, 2018.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 80, 118 & 124---Insurance claim---Pre-insurance ailment---Proof---Insurance Company was aggrieved of acceptance of insurance claim in favour of respondent---Plea raised by Insurance Company was that deceased was suffering from pre-insurance ailment, therefore, she was not entitled to insurance claim---Validity---Claimant proved her case through production of oral as well as documentary evidence while insurance company failed to rebut the claim---Insurance Company was under obligation to prove pre-insurance ailment of the insured---No fraud had been committed by the deceased insured before purchasing insurance policy---Insurance Tribunal had rightly passed order and decree in favour of the claimant after appreciating oral as well as documentary evidence in solitary manners and did not commit any illegality---High Court declined to interfere in the order/decree in question as Insurance Company failed to point out any illegality or material irregularity as well as misreading and non-reading of evidence---Appeal was dismissed in circumstances.

Sughran Bibi v. Mst. Aziz Begum and 4 others 1996 SCMR 137 rel.

Sh. Sajid Mehmood for Appellant.

Liaqat Ali Butt for Respondent.

2018 C L D 1271

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

GULSHAN POLYPACK PVT. LTD.---Appellant

Versus

FAYSAL BANK LIMITED and others---Respondents

E.F.A. No. 107558 of 2017, decided on 2nd April, 2018.

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

----Ss. 19 & 22---Suit for recovery of finance---Execution of decree---Default in payment---Effect---Parties entered into Tripartite Settlement Agreement after suit was decreed in favour of Bank---Judgment debtor failed to comply with terms of the Settlement resultantly Banking Court rejected objections filed in execution proceedings---Validity---When judgment debtors committed default in payment of amount as per specifically mentioned terms and conditions of the agreement, there was no option left with the Banking Court but to proceed further in the matter by rejecting objection petition---High Court declined to interfere in the order passed by Banking Court as there was no illegality or jurisdictional error in the order having been passed in line with the dictates of law---Appeal was dismissed in circumstances.

Ijaz Ahmad Awan for Appellant.

2018 C L D 1279

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Messrs FIRZONQ TANNERIES (PVT.) LIMITED and others---Appellants

Versus

UNITED BANK LIMITED---Respondent

R.F.A. No. 241 of 2013, decided on 16th May, 2018.

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

----Ss. 9, 10 & 22---Finance facility---Proof---Bank filed suit for recovery of finance against defendants---Banking Court declined to grant unconditional leave to defendants and decreed suit in favour of Bank---Validity---Defendants did not produce a single document in support of their claim that they had returned partial disbursed amount which all showed that there was much self-contradiction in stance of defendants---Bank through production of substantial documents, established on record that finance facility was disbursed to defendants and same was withdrawn by them through cheques---Banking Court rightly declined to grant unconditional leave to defendants---High Court declined to interfere in judgment and decree passed by Banking Court as there was no illegality or perversity in the same and had been passed in consonance with law---Appeal was dismissed in circumstances.

Habib Bank Limited v. Messrs Medina Rice and Ice Mills, Sargodha through Proprietor and another 2015 CLD 829; Messrs Bengal Friends and Co. Dacca v. Messrs Gour Benode Shah and Co. and others PLD 1969 SC 477; Messrs Taxila Cotton Mills Ltd. and 10 others v. Allied Bank of Pakistan Ltd. and 4 others 2005 CLD 244 and Lallan Prasad v. Rahmat Ali and another AIR 1967 SC 1322 = 1967 2 SCR 233 ref.

Syed Waqar Hussain Naqvi, Ashiq Hussain Hanjra, Syed Imran Hasan Zaidi and Usman Ghani Chadhar for Appellants.

2018 C L D 1300

[Lahore]

Before Shahid Karim and Ch. Muhammad Iqbal, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Appellants

Versus

MUZAFAR ALI---Respondent

R.F.A. No. 605 of 2014, decided on 14th May, 2018.

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

----S. 118---Qanun-e-Shahadat (10 of 1984), Art. 129(g)---Recovery of insurance claim---Documentary evidence---Documents not exhibited but marked---Effect---Insurance Tribunal accepted claim of respondent---Plea raised by insurance company was that documents were not duly exhibited but were merely marked and relied upon while rendering final judgment---Validity---Marked documents declared that respondent was permanently wheel-chair-bounded and had permanent tetraplegia---Mere failure of a party to get exhibited a document produced voluntarily in evidence by the adverse party formally, would not make any difference---If the document was necessary for just decision of the case, same should be summoned by the Court and treated as evidence in the matter without any formalities--- Insurance company was holding custody of marked documents and had withheld the same malafidely which tantamount to withholding of the best evidence without any reason and it was legally presumed that had that document produced, same would have been used against Insurance company, as enunciated under Art. 129(g) of Qanun-e-Shahadat, 1984---High Court declined to interfere in the judgment passed by Insurance Tribunal as its findings were in consonance with available record and did not suffer from any perversity, illegality, misreading and non-reading of material evidence---Appeal was dismissed in circumstances.

Khurshid Ali and 6 others v. Shah Nazar PLD 1992 SC 822 rel.

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

----Arts. 132 & 133---Fact not cross-examined---Effect---Fact deposed in statement which has not been cross-examined was to be deemed to have been admitted.

Mst. Nur Jehan Begum through L.Rs. v. Syed Mujtaba Ali Naqvi 1991 SCMR 2300 rel.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt for Respondent.

2018 C L D 1311

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MUHAMMAD NAWAZ and others---Appellants

Versus

ROYAL BANK OF SCOTLAND LIMITED and others---Respondents

F.A.O. No. 112716 of 2017, decided on 10th April, 2018.

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

----S. 9---Suit for recovery of loan---Auction of mortgaged property by the Banking Court---Objection petition---Fraud---Proof---Banking Court granted interim relief (suspension of auction) on 23-05-2017 subject to deposit of 50% cash of decretal amount and next date of hearing was fixed as 30-05-2017 but auction of property was completed on 25-05-2017---Contention of petitioners was that objection petition was dismissed without affording proper hearing and Banking Court had failed to appreciate the facts properly---Validity---Petitioners were not afforded time till 30-05-2017 for deposit of 50% cash of decretal amount---Subsequently conducting auction proceedings on 25-05-2017 were not in defiance with the court's order---Applicants had failed to point out any irregularity or fraud in publication or conducting auction of mortgaged property---If fraud was alleged in an objection petition then its necessary ingredients must be pleaded so as to prove the same---General and bald allegations of fraud could not form basis to upset the proceedings otherwise validly conducted by a Court of competent jurisdiction---Petitioners had failed to prove fraud by the Bank---Banking Court had rightly dismissed the objection petition filed by the petitioners---No illegality or perversity was pointed out in the impugned order passed by the Banking Court---Appeal was dismissed in circumstances.

Abid Iqbal Butt for Appellants.

Haseeb Raza for Respondent No. 1.

2018 C L D 1313

[Lahore]

Before Shahid Karim and Ch. Muhammad Iqbal, JJ

Mst. SOBIA BANO---Appellant

Versus

EFU LIFE ASSURANCE LTD. through Chairman and another---Respondents

Insurance Appeal No. 811 of 2016, heard on 7th May, 2018.

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

----Art. 129, Illus. (g)---Non-production/withholding of evidence of vital importance--- Inference--- Non-producing of a material witness/evidence by a party would lead to the presumption that, had the witness been produced, then the said witness would have deposed against such party, and presumption of withholding evidence went against a party.

Sughran Bibi v. Mst. Aziz Begum and 4 others 1996 SCMR 137 rel.

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

----Ss. 80, 122 & 124---Policy not to be called in question on ground of misstatement after two years---Denial of insurance benefits to deceased's widow on ground that deceased had concealed information about deceased's medical condition at time of obtaining of insurance Policy---Validity---Policy was issued on 01.02.2008 and the insured died on 30.07.2010 and under S. 80 of the Insurance Ordinance, 2000 a considerable period of two years had been provided to the insurance company to conduct exhaustive investigation with regard to health issues of deceased but the Company committed negligence in the same therefore, such life insurance policy could not be called into question under S. 80 of the Insurance Ordinance, 2000 --- Appeal was allowed, accordingly.

Abdul Qayyum v. Muhammad Sadiq 2007 SCMR 957 and Gulzar Ahmad and others v. Muhammad Anwar and others 2003 SCMR 1008 rel.

Liaqat Ali Butt for Appellant.

Rizwan Hussain for Respondents.

2018 C L D 1325

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

NISAR AHMAD---Petitioner

Versus

JUDGE BANKING COURT and others---Respondents

Writ Petition No. 37156 of 2015, decided on 2nd April, 2018.

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

----Ss. 9 & 15---Suit for recovery of loan amount---Auction of mortgaged property by the Banking Court---Objection petition---Petition against auction of mortgaged property was dismissed for non-prosecution---Petitioner moved another application for restoration of said petition but same was also dismissed by the Banking Court---Validity---Petitioner failed to produce his counsel for arguments despite having colossal opportunities---Auction proceedings of mortgaged property were conducted in the year 2008 (05-06-2008) under S.15 of the Ordinance whereas the said Section was declared ultra vires the Constitution on 10th of December 2013 by the Supreme Court; as such, the Banking Court had rightly held that auction dated 05-06-2008 had become a past and closed transaction and could not be resurrected---Constitutional petition was dismissed in circumstances.

Majid Salim Kahloon for Petitioner.

2018 C L D 1351

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

AL-RAHEEM RICE MILLS---Appellant

Versus

BANK ALFALAH LIMITED and others---Respondents

Regular First Appeal No. 1 of 2018, heard on 17th September, 2018.

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

----Ss. 9, 10 & 7---Procedure of Banking Court---Filing of a suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit filed by "customer" against "financial institution"---Mandatory requirements of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---"Statement of account", rationale for---Scope---For filing of suits under the Financial Institutions (Recovery of Finances) Ordinance, 2001 there must be a default in fulfilment of an obligation regarding any representation, warranties and covenants by a financial institution or the customer and if the same was not shown in the plaint along with relevant documents, then such suit could not be filed---"Customer", in a suit against a financial institution/Bank had to comply with mandatory requirements of S. 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and support its plaint with a "statement of account" and all other relevant documents relating to grant of finance and mere filing of certificates containing no transactions could not qualify as "statement of account"---Requirement of "statement of account" was applicable to both the "customer" and the "financial institution"---Rationale behind mandatory requirement of filing statement of account was to make the other party aware of, among other things, the amount advanced, mark-up charged, nature of default and the actual amount of the claim in order to enable other party to frame its defence within the limited period prescribed by law and to show reasonable, serious and plausible grounds of contest to be able to seek and obtain leave to defend the suit---Absence of filing the requisite statements of account along with the plaint amounted to absence of providing adequate, proper and reasonable opportunity of defence to the other party.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Muhammad Azam v. Askari Leasing Limited and others 2014 CLD 1462 and Irfan Industries (Pvt.) Limited v. Standard Chartered Bank and another 2017 CLD 223 ref.

Amtex Limited through Director v. Bank Islami Pakistan Ltd. and 8 others 2016 CLD 2007; Gulistan Textile Mills Ltd. v. Askari Bank Ltd. 2013 CLD 2005; Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. and others 2011 CLD 408; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Meezan Bank Ltd. v. A.H. International (Private) Limited and 7 others 2017 CLD 29; Pak Oman Investment Company Ltd. v. Chenab Limited and others 2016 CLD 1903; Elbow Room and another v. Muslim Commercial Bank Limited 2014 CLD 985 and Sheikh Murshid Ali and others v. United Bank Limited 2016 CLD 1471 rel.

Mirza Muhammad Nadeem Asif for Appellant.

Muhammad Farhan Masood for Respondents.

2018 C L D 1417

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

KHURRAM FAROOQ---Appellant

Versus

BANK AL-FALAH LIMITED and another---Respondents

F.A.O. No. 35 of 2017, decided on 3rd October, 2018.

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

----Ss. 10 & 22(6)---Constitution of Pakistan, Art. 199---Power of High Court to convert a non-maintainable appeal into a writ (Constitutional) petition---Recovery suit---Application for leave to defend filed by customer was dismissed by the Banking Court and case was fixed for evidence of the Bank---Customer/appellant filed appeal before the High Court against dismissal of his application---Maintainability---Dismissal of application for leave to defend by the Banking Court and fixing case for evidence of Bank was an interim order---Section 22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 clearly provided that an appeal against such interim order was not maintainable---However, to meet the ends of justice and to thrash out the core issues involved in the matter, the High Court had been bestowed with the powers to convert an appeal into a writ (Constitutional) petition and or treat one kind of proceeding into another---High Court converted the present (non-maintainable) appeal into a writ (constitutional) petition and proceeded into the matter towards the merits of the case.

Mian Asghar Ali v. Government of Punjab through Secretary (Colonies) BOR, Lahore and others 2017 SCMR 118 and Asif Kudia and others v. Messrs KASB Bank Limited and others 2015 CLC 1734 ref.

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

----Ss. 9 & 10---Recovery suit---Application for leave to defend, acceptance of---When the application for leave to defend was accepted, the Banking Court shall treat the application as a written statement, and in its order granting leave shall frame issues relating to the substantial questions of law or fact, and, subject to fulfillment of any conditions attached to grant of leave, fix a date for recording of evidence thereon and disposal of the suit.

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

----Ss. 9 & 10(11)---Recovery suit---Application for leave to defend, dismissal of---Power of Banking Court to forthwith pass judgment and decree---Application of judicial mind---Scope---Where the Banking Court rejected the application for leave to defend or where defendant failed to fulfill the conditions attached to the grant of leave to defend, the Banking Court shall forthwith proceed to pass judgment and decree in favour of the plaintiff and against the defendant---Banking Court while deciding the application for leave to defend or the suit had to take into consideration all the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("the Ordinance") as well as material available on record with the proper application of judicial mind---Application of judicial mind was necessary and the Banking Court, while deciding the case, shall keep in mind the requirements of the provisions of the Ordinance including the entries in the statement of account, examine the expiry of finance agreement, finance amount availed, finance amount paid, markup paid, differences etc. including all the other documents tendered by both the parties by virtue of their respective claims---Banking Court shall further keep in mind that markup more than the agreed rate and/or beyond the agreed period could not be granted to the financial institution---Similarly, no other charges or amounts could be allowed to the financial institution to which the customer had not agreed.

Messrs United Bank Limited v. Banking Court No. II and 2 others 2012 CLD 1556; Silver Oil Mills Pvt. Limited through Chief Executive and 13 others v. Messrs Union Bank Limited through Vice-President and 4 others 2003 CLD 1658 and Emirates Global Islamic Bank Limited v. Muhammad Abdul Salam Khan 2013 CLD 1291 ref.

(d) Administration of justice---

----'Judicial order'---Scope---Judicial order must be a speaking order manifesting by itself that the Court had applied its judicial mind to the issues and points of controversy involved in the cases---Where the order was passed without application of judicial mind, the same was in contravention of law and was not sustainable.

Adamjee Jute Mills Ltd. v. The Province of East Pakistan and others PLD 1959 SC 272; Gouranga Mohan Sikdar v. The Controller Import and Export and 2 others PLD 1970 SC 158; Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 173; Muhammad Ibrahim Khan v. Secretary, Ministry of Labour and others 1984 SCMR 1014; Habib Bank Limited, Lahore v. Messrs Creative Enterprises (Pvt.) Ltd. 2007 CLD 244; Messrs Faisal M. B. Corporation (Pvt.) Ltd. v. Equity Participation Fund 2006 CLD 183; Khalid Shahbaz Chaudhry v. Prime Commercial Bank Ltd. 2005 CLD 629; Messrs Mohib Exports Ltd. v. Trust Leasing Corporation Ltd. 2005 CLD 581; Messrs Sun Rise Textile Ltd. v. Prime Commercial Bank Ltd. 2005 CLD 126 and Messrs Chancellors Overseas v. Muslim Commercial Bank Limited 2004 CLD 811 ref.

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

----S. 10--- Recovery suit---Application for leave to defend, dismissal of---Legality---Impugned order of Banking Court, whereby it dismissed application of customer for leave to defend, had been passed in a sketchy manner consisting of only half a page---Further the grounds taken by the customer in his application for leave to defend had not been tackled with sound reasoning---Impugned order had been passed without application of judicial mind and consequently, it was against the law---High Court set-aside the impugned order, and the case was remanded to the Banking Court with the directions that the court shall take into consideration all the material produced by both the parties as well as the grounds taken and arguments raised and then decide the application for leave to defend afresh after proper application of judicial mind, and that before deciding the case the Banking Court shall issue notice to both the parties and will provide an opportunity of final arguments---Appeal was converted into Constitutional petition and allowed accordingly.

Mirza Muhammad Nadeem Asif for Appellant.

Sheikh Nadeem Ashraf for Respondent.

Rana Shaher Yar, Research Officer, Research Center, Lahore High Court.

2018 C L D 1451

[Lahore]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

GHULAM HAIDER---Appellant

Versus

HABIB BANK LIMITED---Respondent

R.F.A. No. 4 of 2017, decided on 10th September, 2018.

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

----Ss. 10, 9 & 22---Procedure of Banking Court---Suit for recovery---Application for leave to defend, adjudication of---Defendant impugned the order of Banking Court whereby its application for leave to defend was rejected, on the ground, inter alia, that said order did not take into account the plaintiff Bank's failure to produce evidence in support of its claim---Validity---Perusal of record revealed that the plaintiff Bank through production of substantial documents, established that finance facility was disbursed to the defendant and such documents contained signatures of the defendant---Plaintiff Bank also appended with the suit all relevant documents executed between the parties---Application for leave to defend was therefore, rightly rejected---Appeal was dismissed, in circumstances.

Syed Phool Badshah and others v. Agricultural Development Bank of Pakistan through Manager, Peshawar Branch and others 2012 CLD 1608 distinguished.

Rai Fahd Mahmood for Appellant.

2018 C L D 1476

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

UNITED BANK LIMITED---Appellant

Versus

RIAZ HUSSAIN and others---Respondents

R.F.A. No. 33 of 2017, heard on 10th September, 2018.

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

----Ss. 9(2), 7 & 22---Electronic Transactions Ordinance (LI of 2002), S. 4---Suit for recovery---Mandatory requirement of appending statement of account with plaint---Documents/record issued in electronic form---Effect of S. 4 of the Electronic Transactions Ordinance, 2002 on electronically issued statement of accounts---Plaintiff Bank impugned order of Banking Court whereby its suit was dismissed on ground that plaintiff Bank did not comply with S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 by failing to append proper statement of accounts---Validity---Banking Court failed to consider that electronic computer generated statements were admissible in evidence, which were filed with the plaint and duly verified on oath per the mandatory requirement of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court observed that in modern banking, mostly statement of accounts were generated through the information systems, and being an electronic document, such statement of accounts did not require signature as per S. 4 of the Electronic Transaction Ordinance, 2002---All electronic modes were recognized as evidence under S. 4---Impugned order was set aside, and case was remanded to the Banking Court---Appeal was allowed, accordingly.

Mst. Tasleem Fatima and others v. Bank of Punjab and others 2017 CLD 552 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.

Muhammad Aurangzeb Khan for Appellant.

Respondents: Proceeded against ex parte vide order dated 29.5.2018.

2018 C L D 1503

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

SONERI BANK LIMITED through Principle Officers/General Attorneys---Plaintiff

Versus

Messrs BISMILLAH AGRO INDUSTRIES (PVT.) LIMITED through Directors and 2 others---Defendants

C.O.S. No. 4 of 2017, decided on 7th September, 2018.

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

----Ss. 10 & 9---Suit for recovery---Failure of defendant to file application for leave to defend, despite service of notice in prescribed modes---Adjudication of such suit---Scope---Per S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; upon failure of defendants to file application to leave to defend, despite service of summons, allegations of fact in such a plaint shall be deemed to be admitted and a decree may be passed on basis thereof---Notwithstanding the fact that if defendants fail to file application for leave to defend, Banking Court itself was to go through record to satisfy itself regarding veracity of claim put forward by Bank/Financial Institution.

Muhammad Saleem Iqbal for Plaintiff.

Nemo for Defendants.

2018 C L D 145

[Peshawar]

Before Waqar Ahmad Seth and Ijaz Anwar, JJ

ALLIED BANK LIMITED through Manager---Petitioner

Versus

ANTI-CORRUPTION ESTABLISHMENT and 4 others---Respondents

W.P. No. 1087-P of 2013 with I.R., decided on 20th September, 2017.

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

----Ss. 9 & 15---Constitution of Pakistan, Art. 199---Constitutional petition---Civil and criminal proceedings---Petitioner was aggrieved of initiation of criminal proceedings against him on the subject matter of civil litigation pending before Banking Court---Validity---Allowing Anti-Corruption Establishment to proceed with the matter and give certain findings about disputed mortgage would affect outcome of civil suits pending before Banking Court and thereby grave injustice would be done to the parties---When civil suits were pending adjudication regarding authenticity of mortgage deed and specific issue was framed, then such question could be thoroughly thrashed out by Banking Court---Civil litigations regarding loan facility was pending adjudication before Banking Court, therefore, initiating criminal proceedings simultaneously would affect result of civil litigations particularly when validity of mortgage was in dispute---High Court suspended inquiry initiated on the complaint of respondents till final decision of the suits---Petition was allowed in circumstances.

Muhammad Akbar v. The State PLD 1968 SC 281; Abdul Haleem v. The State and others 1982 SCMR 988; Mst. Kausar Zafar Ullah and another v. The State and others 2013 PCr.LJ 301; Muhammad Tufail v. The State and another 1979 SCMR 437; A. Habib Ahmad v. M.K. G. Scott Christain and 5 others PLD 1992 SC 353; Akhlaq Hussain Kayani v. Zafar Iqbal Kiyani and others 2010 SCMR 1835 and Riaz ul Haq v. Muhammad Ashiq Jorah and others 2000 SCMR 991 ref.

Muhammad Akbar v. The State PLD 1968 SC 281 rel.

Qazi Jawad Ehsanullah for Petitioner.

Ishtiaq Ahmad, Abdul Rauf Rohaila and Moinuddin Humayun, A.A.-G. for Respondents.

2018 C L D 168

[Peshawar]

Before Qaiser Rashid Khan and Ijaz Anwar, JJ

ASKARI BANK LIMITED---Appellant

Versus

PANTHER CNG STATION RING ROAD through Managing Partner and another---Respondents

FAB No. 49-P of 2016, decided on 12th October, 2017.

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

----Ss. 2(a)(c), 2(d), 9 & 22---Banking Companies Ordinance (LVII of 1962), S. 33-B---State Bank of Pakistan SMFD Circular No. 11(b), (d) & (v) dated 1-7-2010---Suit for declaration---Circular, implementation of---Plaintiff claimed to be eligible for fiscal relief package under SMFD Circular No. 11 dated 1-7-2010 issued by State Bank of Pakistan and filed suit before Banking Court against financial institution---Suit was decreed in favour of plaintiff and against financial institution---Validity---Incentive scheme notified by State Bank of Pakistan under S. 33-B of Banking Companies Ordinance, 1962 was an obligation purely related to finance/lease therefore, plaintiff had rightly invoked jurisdiction of Banking Court within meaning of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banks, DFIs and MFBs were to seek reimbursement from State Bank of Pakistan-BSC (Bank), as per guidelines mentioned in the Circular on submission of claim, certified by compliance or internal audit as per claims form---High Court observed that there was no financial liability on financial institution and why plaintiff was involved in such litigation---Division Bench of High Court declined to interfere in the judgment passed by Banking Court as the same was based on proper appraisal of evidence on record and there was no misreading or non-reading of evidence on record---Appeal was dismissed in circumstances.

2003 CLC 363; 2012 SCMR 864; United Bank Limited v. Messrs Azmat Textile Mills Limited 2002 CLD 542 and Try Star v. State Bank of Pakistan 2004 CLD 257 ref.

Hazrat Wali Khattak and Abdul Nasir for Appellant.

Ashfaq Ahmad for Respondents.

2018 C L D 218

[Peshawar]

Before Muhammad Younis Thaheem, J

IMRAN AMJAD KHAN---Appellant

Versus

ISLAMIC INVESTMENT BANK LIMITED (IIBL) through Official Liquidator and 4 others---Respondents

CM No. 19-P of 2015 in CC No. 5 of 2005, decided on 3rd November, 2017.

Companies (Court) Rules, 1997---

----R. 3---Exit from Pakistan (Control) Ordinance (XLVI of 1981), S. 2---Exit Control List---Application for removal of name---Application was Chief Executive of company during 1-9-2003 to 9-10-2006 who filed application for removal of his name from Exit Control List during pendency of application for winding-up company---Validity---High Court directed to put names on Exit Control List until directors and officials of company executed heavy amount of surety bonds to satisfaction of High Court with undertaking that whenever such persons were required, they would attend High Court---Petitioner was ready to submit heavy bond as well as undertaking to appear before High Court as and when required---Liberty of a citizen could not be curtailed by mere registration of criminal complaint wherein role attributed to petitioner was of abetment under S. 109, P.P.C.---Securities and Exchange Commission of Pakistan had sent names of 8 persons out of 14 and person who obtained financial facility from company under liquidation had repaid all amount with profit---High Court directed the authorities to remove name of petitioner from Exit Control List---Application was allowed accordingly.

Wajid Shams-ul-Hassan v. Federation of Pakistan PLD 1997 SC 617; Federation of Pakistan through Secretary, M/O Interior v. General (R) Pervez Musharraf and others PLD 2016 SC 570 and Federal Government through Secretary Interior, Government of Pakistan v. Ms. Ayyan Ali and others 2017 SCMR 1179 rel.

Muhammad Tariq Khan Hoti for Appellant.

Barrister Syed Mudassir Ameer, Official Liquidator.

Syed Haziq Ali Shah for Respondents.

2018 C L D 419

[Peshawar]

Before Muhammad Ayub Khan and Ijaz Anwar, JJ

MUHAMMAD NASIM---Petitioner

Versus

KASHIF NASIM and another---Respondents

Writ Petitions Nos. 3204-P and 3207 of 2017, decided on 6th November, 2017.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 2 & 3---Conditional leave granting order---Petitioner/defendant was allowed to defend suit for recovery of money on the basis of dishonoured cheques subject to deposit of suit amount---Validity---In application for leave to defend petitioner had raised number of questions including denial of his signatures on disputed cheques in his application for leave to defend suit---Transaction between parties was in nature of business---Questions so raised in application for leave to defend suit was based on alleged issuance of cheques and same could only be determined after recording of evidence---Defense in application was neither vague nor illusionary---Conditional order of leave to defend was too harsh and order directing for deposit of amount of equal proportion to whole disputed amount, amounted to deprive petitioner from defending suit---High Court reduced the amount ordered to be deposited and modified the conditional order--- Constitutional petition was allowed accordingly.

Fine Textile Mills Ltd. Karachi v. Haji Umar PLD 1963 SC 163; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Habib Bank Limited, Circle Office, Multan v. Al-Qaim Traders and another 1990 SCMR 686; Abdul Rauf Ghauri v. Mrs. Kishwar Sultana and 4 others 1995 SCMR 925 and Balochistan Trading Company v. National Bank of Pakistan and another 1998 SCMR 1899 rel.

2011 MLD 1249; 2013 CLD 1701; PLD 2010 Lah. 219 and 2016 YLR 43 ref.

Jehangir Khan for Petitioner.

Gul Rehman Mehmand for Respondents.

2017 C L D 550

[Peshawar]

Before Qaiser Rashid Khan and Muhammad Younis Thaheem, JJ

SIKANDER SHER---Appellant

Versus

ZARAI TARAQIATI BANK LIMITED through Branch Manager and another---Respondents

F.AB. No. 59 with C.M. No. 261 of 2009, decided on 7th November, 2017.

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

----Ss. 15 & 22---Auction of mortgaged property---Appellant availed financial facility from Bank against mortgage of property---Bank, on default by appellant, auctioned his property without intervention of Banking Court---Validity---Bank could proceed against its defaulter under S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 but after due compliance with mandatory provisions of law---No record or list of any bidders or their details was furnished by Bank while submitting application before Banking Court to get a seal of confirmation of auction proceedings conducted by Bank in respect of mortgaged property of appellant---High Court set aside the order passed by Banking Court and declared the auction proceedings conducted by the Bank as illegal, without lawful authority and of no legal effect---Appeal was allowed accordingly.

Issac Ali Qazi for Appellant.

Nazir Ahmed Awan for Respondent-Bank.

Naqeeb Ahmad Takar for Respondent No. 2.

2018 C L D 835

[Peshawar]

Before Waqar Ahmad Seth and Mohammed Ibrahim Khan, JJ

SADAQAT ALI and another---Petitioners

Versus

DIRECTOR GENERAL FIA, PESHAWAR and others---Respondents

W.P. No. 3739-P of 2015, decided on 7th December, 2016.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 66-A & 66-B---Quashing of proceedings---Factual controversy---Criminal and civil proceedings---Petitioners were facing criminal charges who sought quashing of proceedings on the ground that proceedings before Intellectual Property Tribunal were pending between the parties---Validity---Civil litigation was in progress before Intellectual Property Tribunal---Criminal proceedings were not barred in presence of civil proceedings and both civil and criminal proceedings could proceed simultaneously---Factual controversy was involved in civil litigation---Question of fact could not be resolved under constitutional jurisdiction---Extract in FIR required recording of facts before Trial Court, where it was open that before framing of charge petitioners could file application for their discharge or otherwise under S. 249-A or 265-K, Cr.P.C., for ultimate acquittal---Constitutional petition was dismissed in circumstances.

The State v. Muhammad Amin Haroon 2010 PCr.LJ 518; Mazhar Hussain v. The State PLD 2006 Lah. 631; Dirctor-General Anti-Corruption Establishment Lahore v. Muhammad Akram Khan PLD 2013 SC 401; Haji Sardar Khalid Saleem v. Muhammad Ashraf 2006 SCMR 1192; Col. Shah Sadiq v. Muhammad Ashif 2006 SCMR 276; Muhammad Saleem Bhatti v. Syed Safdar Ali Rizvi 2006 SCMR 1957; Muhammad Mansha v. Station House Officer Police Station Chiniot PLD 2006 SC 598 and Shahnaz Begum v. Hon'ble Judges of High Court of Sindh PLD 1971 SC 677 ref.

Asad Jan for Petitioners.

Muhammad Safdar Khan, Standing Counsel for Respondents.

2018 C L D 870

[Peshawar (D.I. Khan Bench)]

Before Shakeel Ahmad, J

SHAFQATULLAH KHAN---Petitioner

Versus

MUHAMMAD ANWAR---Respondent

C.R. No. 213-D of 2017, decided on 14th December, 2017.

Negotiable Instruments Act (XXVI of 1881)---

----S. 6---Civil Procedure Code (V of 1908), O. VII, R. 10 & O. XXXVII, Rr. 2 & 3---Negotiable instrument---Summary suit on the basis of cheque---Plaint, return of---Scope---Application for return of plaint was moved on the ground that "cheque" was not a "negotiable instrument" and Court had no jurisdiction to adjudicate upon the matter---Trial Court dismissed the said application holding that Court had jurisdiction to adjudicate upon the matter---Validity---"Cheque" would fall within the definition of "negotiable instrument"---Plaintiff could file suit under O. XXXVII, R. 2, C.P.C. on the basis of cheque---Trial Court had rightly dismissed the application filed by the defendant---No illegality, irregularity or jurisdictional defect was pointed out in the impugned order passed by the Trial Court---Revision petition was dismissed in limine.

Nemo for Petitioner/Respondent.

2018 C L D 1137

[Peshawar]

Before Nisar Hussain Khan and Qaisar Rashid Khan, JJ

Messrs SUN MYUNG PAKISTAN ELECTRONICS (PVT.) LTD. through Chief Executive and 5 others---Appellants

Versus

BANK OF KHYBER through Manager and another---Respondents

F.A.B. No. 73 of 2009, decided on 10th May, 2016.

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

----Ss. 10 & 9---Procedure of Banking Court---Statement of Account---Charging of excess markup---Suit for recovery---Application for leave to defend---Scope---Application for leave to defend was not about mere denial of claim of (plaintiff) Financial Institution/Bank by raising routine and perfunctory objections vis-à-vis non-disbursement of finances and allegation of markup upon markup, but instead, accrual of excessive markup, if any---Held, such accrual of excessive markup should be clearly pinpointed and identified by the defendant/customer in the application for leave to defend.

Hidayatullah Khan for Appellants.

Qazi Jawad Ehsanullah for Respondents.

2018 C L D 1374

[Peshawar]

Before Yahya Afridi, C.J. and Syed Arshad Ali, J

MUSLIM COMMERCIAL BANK LIMITED---Appellant

Versus

SHEHZAD ARIF and 2 others---Respondents

F.A.B. No. 23-P of 2015, decided on 22nd May, 2018.

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

----Ss. 10(4), 9 & 7---Procedure of Banking Court---Suit for recovery of finance---Application for leave to defend---Mandatory requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Where defendants/customers had not mentioned in their application for leave to defend, particulars regarding amount of loan/finance obtained by them, and the amount outstanding, then statutory requirements of S. 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were not met.

Muhammad Naeem Bhatti and others v. United Bank Limited and 2 others 2005 CLD 643; Messrs Evergreen Press and 3 others v. Bank of Punjab 2004 CLD 239 and Riaz Ahmad (Rana Riaz Anjum) and another v. The Bank of Punjab 2016 CLD 596 ref.

Aamirullah Chamkani for Appellant.

Muhammad Tariq Khan Hoti for Respondents.

2018 C L D 1409

[Peshawar (Abbottabad Bench)]

Before Lal Jan Khattak and Syed Arshad Ali, JJ

Engineer KAMRAN WAHAB and others---Petitioners

Versus

GOVERNMENT OF KHYBER PAKHTUNKHWA and others---Respondents

W.P. No. 1207-A of 2016, decided on 29th May, 2018.

Khyber Pakhtunkhwa Environmental Protection Act (XXXVIII of 2014)---

----Ss. 6 & 2(pp)--- Constitution of Pakistan, Art. 18--- Right to undertake economic activities---Freedom of trade, business or profession---Environmental impact/pollution---Power of High Court to issue appropriate direction(s) to address adverse environmental impact of economic activities---Scope---Right to undertake economic activities could not be at the cost of the environment and a lurking danger, if ignored, could become a giant in the future---High Court observed that when state machinery remained complacent against environmental impact of certain economic activities, then superior Courts were well within their jurisdiction to issue appropriate directions to a responsible government functionary to regulate a menace which could have adverse effect on human life and nature.

Shehla Zia's case PLD 1994 SC 693; M.C. Mehta v. Union of India Court AIR 1997 SC 734; Adeel ur Rehman and others v. Federation of Pakistan and others 2005 PTD 172; Mazhar Iqbal's case 2017 CLD 1054 and Muhammad Ayaz's case 2017 CLD 1054 rel.

Owais Khan Alizai and Malik Shujaat Ali for Petitioners.

Yasir Zahoor Abbasi, Assistant Advocate-General along with Musharaf Khan, Assistant Director Industries and Adil Ayub, Assistant Commissioner, Haripur for Respondents Nos. 1 to 10.

Naveed Akhtar for Respondent No. 11.

2018 C L D 895

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood Member (General)

DIRECTOR-GENERAL, ENVIRONMENTAL PROTECTION AGENCY, PUNJAB through Assistant Director---Complainant

Versus

Messrs PAK PACKAGES through Owner/Chief Executive---Respondent

Complaint No. 141 of 2017, decided on 26th March, 2018.

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

----S. 21(3)(a)---Criminal Procedure Code (V of 1898), 265-K---Power of court to acquit accused at any stage---Compliance with directions of Provincial Environmental Protection Agency ('Agency') given in Environmental Protection Order ("EPO")---In the year 2012, the industrial plant in question was found to be violating certain provisions of the Punjab Environmental Protection Act, 1997, and in such regard an 'EPO' was also issued by the Agency directing the Chief Executive of the industrial plant (respondent) to comply with the directions therein---Subsequently the concerned District Officer (Environment) wrote a Compliance Status Report of EPO and informed the Deputy Director (L&E) that the EPO had been complied with---Agency went in hibernation for three years, whereafter the Deputy Director (LAB) wrote a letter to the respondent that the Agency's lab team visited the unit on 24-04-2015 to monitor the waste water and the test analysis report was forwarded---Sampling date was mentioned as 24-4-2015---Respondent contended that since the violations of the EPO was complied with in 2012 therefore the Agency with mala fide intention, to keep the issue alive, made a lab report after 3 years and presented present complaint in the year 2017---Validity---Violation of Environmental laws as mentioned in the EPO issued on 2012 were complied with---Only remedy for the Department was to drop the proceedings at that time and if the unit of the respondent was again found in violation of Environmental laws then fresh legal actions could have been initiated against him in accordance with provisions of law---No worthy material was found on record to even frame a charge against the respondent for the present complaint---Environmental Tribunal allowed the application under S. 265-K, Cr.P.C. and acquitted the respondent from the charge, and directed that if the department wanted to proceed against the respondent it may conduct fresh site inspection report and if there were violations of any Environmental laws, it may issue fresh EPO and then submit a complaint before the Tribunal.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

Muhammad Yasin Hatif for Respondent.

2018 C L D 1429

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

PEPSI COLA INTERNATIONAL (PRIVATE) LIMITED through Authorized Officer---Appellant

Versus

The PUNJAB ENVIRONMENTAL PROTECTION AGENCY through Director General and others---Respondents

Appeal No. 21 of 2017, decided on 16th July, 2018.

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

----Ss.6, 7, 20(4) & 31---Environmental Samples Rules, 2001, R.7(1)---S.R.O. No. 528(I)/2001--- Installation of Ambient Air Quality Monitoring Station---Environmental Protection Authority (EPA), while granting approval to the unit of appellant imposed condition that appellant should install Air Quality Monitoring Station---Appellant contended that proposed project of appellant being surrounded by other industrial units, responsibility of the installation of 'Air Quality Monitoring Station' could not be imposed on the appellant---Ambient Air Monitoring was integral part of an effective air quality management system---Location of the monitoring station would depend on the purpose of monitoring---Most of air quality monitoring networks were designed to support human health objectives and monitoring stations were established in population centers---Same could be near the busy road in city centers or at location of particular concern (e.g., a school, hospital, particular emissions sources)---Monitoring stations could be established to dermine background pollution level, away from urban areas and emissions sources---Inclusion of clause of installing of Ambient Air Quality Monitoring Station at the proposed site within 6 months of start of construction activities was well reasoned and not to be interfered---Under Self-Monitoring and Reporting System (SMART), industries were responsible for systematically monitoring their environmental performance and reporting the date to EPA---Under National Environmental Quality Standard (Self-Monitoring and reporting by Industry) Rules, 2001, all industrial units would be responsible for correct and timely submission of Environmental Monitoring Reports to the Federal Agency---Said rules empowered the Director General, who could classify a large industrial unit with very high pollution levels as "Special Industry", and could require environmental monitoring reports for such parameters and at such frequency as the Director-General could require---Said system was comprehensive and industry must come forward for that monitoring---Increased carbon dioxide had made the oceanic water of the world by 30% more acidic---Preventing environmental harm was cheaper, easier and less environmentally dangerous than reacting to environmental harm that already had taken place---Impugned direction was not based on malice, rather it was within the mandate of Environmental Protection Authority (EPA) to impose that condition, while granting approval as a preventive measures for sustainable development---Appellant was to install the monitoring station to monitor the air ambient to be within standards not only for construction phase, but also in the operational phase---Order accordingly.

Shehla Zia's case PLD 1994 SC 693; Ali Steel Industry v. Government of Khyber Pakhtunkhwa and another 2016 CLD 569; M.C. Mehta v. Union of India 1997 (2) SCC 252 and AIR 1997 SC 734 ref.

Majid Jahangir for Appellant.

Mohsin Sarfraz Cheema, Law Officer for EPA.

2018 C L D 1454

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

Messrs UNITED FEEDS (PVT.) LTD.---Appellant

Versus

PROVINCIAL ENVIRONMENTAL PROTECTION AGENCY (EPA) and others---Respondents

Appeal No. 18 of 2016, decided on 19th March, 2018.

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

----S. 12---Project causing adverse environmental effects---Unit, which initially was a Rice Mill and was converted in Poultry Feed Factory and was using animal intestines, creating havoc, bad smell---Inspector had reported that factory was violating S. 12 of the Pakistan Environmental Protection Act, 1997 and that area in question was declared as negative for establishment of industrial unit---Authority on the basis of said report ordered that Management of factory having not obtained environmental approval from the authorities for establishment of Feed Factory had failed to comply with provisions of S. 12 of the Pakistan Environmental Protection Act, 1997---Validity---Section 12 of the Pakistan Environmental Protection Act, 1997 provided that no project would commence the construction or operation, unless it had obtained permission of the Environmental Protection Authority---Said section had clearly mandated that if a project had adverse effect on the environment, Environmental Impact Assessment (EIA), must be filed---Contention of the factory management was that they were not required to file "Initial Environmental Examination (IEE) or 'Environmental impact Assessment (EIA)' as the project did not find mention in the Schedule of the Act---Contention of the management was not correct, the Factory did fall in the Schedule as it involved repacking, formulation or warehouse of agricultural products---Nothing adverse to the environment was allowed to pass through---Management had not obtained approval from the Environmental Protection Agency on both the occasions; Rice Mill and then Feed Factory---Management, in circumstances, had to go through the process of IEE and EIA---No illegality in the act of the Agency taking cognizance and issuing impugned order was found by the Tribunal.

Bandhua Mukti Morcha v. Union of India and others 1984 SCR (2) 67; Shehla Zia v. WAPDA PLD 1994 SC 693; Ali Steel Industry v. Government of Khyber Pakhtunkhwa 2016 CLD 569 and Ms. Imrana Tiwana's case 2015 CLD 983 ref.

Akhtar H. Awan for Appellant.

2018 C L D 1484

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

DIRECTOR-GENERAL EPA---Complainant

Versus

Messrs RB POULTRY FARM NO.1---Respondent

Complaint No. 8 of 2017, decided on 26th July, 2018.

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

----Ss. 8, 11, 12, 16 & 17---Establishment of Poultry Farm without environmental approval---Allegations of foul odour, nuisance causing adverse environmental effects in the locality---Inspector (Environment), who inspected the Poultry Farm found the premises of the Farm was surrounded by agricultural land---Capacity of the Poultry Farm was 5000 chicks---Waste of the Farm was used in the fields as manure---No environmental approval of establishing the Farm had been obtained from Environmental Protection Agency (EPA)---Inspector had observed that waste and dead bodies of chicks emitted bad smell causing adverse effect on the environment---Environmental Protection Order (EPO) was issued to the Farm to remove said defects---Charge was framed against the Poultry Farm under S. 12 of Pakistan Environmental Protection Act, 1997 i.e. establishment of Poultry Farm without obtaining NOC and for failure to comply with the directions contained in EPO---Construction of poultry shed in contravention of the law was a major issue---Said sheds were constructed on agriculture land near the human settlements and commercial activity was undertaken without any permission or conversion of the status of the land---Close proximity of the Poultry Farm from human settlement was a cause of great concern---Flies/rodents and other pests were additional mance to the local area, its health and well being---Section 12 of the Pakistan Environmental Protection Act, 1997, had clearly mandated that if a project had an adverse impact on the environment, EIA/Environmental Impact Assessment must be filed---Admitted facts were, that Poultry Farm was established on agricultural land and there was no management plan for disposal of dead birds---Defence remained unable to create any dent in the departmental case---Management was rightly imposed penalty in circumstances.

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

Amanat Ali Bhatti, DPG with Mohsin Sarfraz Cheema, Law Officer for the EPA.

2018 C L D 20

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Acting Chairman/Commissioner (SCD) and Tahir Mahmood, Commissioner (CCD-CLD)

WORLD CALL TELECOM LIMITED---Appellant

Versus

ASSISTANT DIRECTOR (PRPD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 96 of 2017, decided on 17th October, 2017.

Securities Act (III of 2015)---

----S. 109(1)(h)(iv)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Acquiring ordinary shares of appellant company, acquirer made a public announcement of offer to acquire up to 185,866,042 ordinary shares of appellant company---Acquirer having completed all formalities required of an acquirer under takeover law regime of the Securities Act, 2015, became entitled to transfer of 488,839429 ordinary shares pursuant to the terms of the share purchase agreement entered into between the acquirer and the seller---Seller, accordingly, entered in transaction order in the Central Depository Company (CDC) of Pakistan in favour of the acquirer for transfer of the said shareholding (T.O)---Assistant Director, Securities and Exchange Commission of Pakistan) through its letter directed the appellant company (seller) to ensure the compliance of the Trust Deed before transfer of majority shareholdings to the acquirer---Copy of said direction was also sent to the 'C.D.C.', which vide its most recent communication refused to honour 'T.O' in absence of a specific order by the Securities and Exchange Commission of Pakistan referring to the various correspondence of the respondent---Withholding of transfer of shares in the name of acquirer; when all the legal formalities had been completed under the Securities Act, 2015, was not lawful---Trustees having decided to initiate action as per provisions of the trust deed, Securities and Exchange Commission, was not to become a party and let the courts decide the matter---Impugned letter was set aside---Registrar was directed to send a copy of that order to Chief Executive of the Central Depository Company of Pakistan for transfer of shares in the name of acquirer, subject to completion of all legal/procedural formalities.

Rashid Sadiq, CEO R.S. Corporate Advisory Limited and Sajid Hashmi, Advisor, World Call Telecom Ltd. for Appellant.

Muhammad Farooq, Additional Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 44

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (C&CD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

MUHAMMAD TARIQ MASOOD, CEO SAUDI PAK LEASING COMPANY LIMITED---Appellant

Versus

COMMISSIONER (SPECIALIZED COMPANIES DIVISION, SECP---Respondent

Appeal No. 54 of 2016, decided on 3rd May, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 158 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to convene Annual General Meeting by Company even in extended period of one month---Chief Executive Officer/appellant was responsible to ensure timely preparation of accounts and removal of the objections of the Board of Directors in any appropriate manner, but he failed to perform the required role---Other Directors of the company, were not to be instrumental to violate the mandatory requirements of the law and in case of any objection on the accounts they must act in accordance with law---Default under S. 158 of the Companies Ordinance, 1984 had been established , however, by considering the facts of the case and subsequent compliance of the company, Commission took lenient view---Penalty of fine imposed on the appellant, was converted into a warning and appellant Chief Executive Officer of the company was directed to ensure strict compliance of the relevant provisions of law in future.

Sardar Muhammad Ghazi, Senior Advocate Supreme Court and Ms. Ruqia Samee, Advocate Supreme Court for Appellant.

Ms. Saima Ahrar, Joint Director (SCD) and Muhammad Jahangir, Joint Director (SCD) for Respondent.

2018 C L D 101

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Acting Chairman/Commissioner (SCD) and Tahir Mahmood, Commissioner (CCD-CLD)

TPL TRAKKER LIMITED---Appellant

Versus

ASSISTANT DIRECTOR (PRPD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD---Respondent

Appeal No. 97 of 2017, decided on 17th October, 2017.

Securities Act (III of 2015)---

----S. 109(1)(h)(iv)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Acquisition of an insurance company by another company---Claim for exemption from applicability of Part IX (Takeovers) of the Securities Act, 2015---Scope---Assistant Director, Securities and Exchange Commission of Pakistan, vide impugned letter communicated to the company acquiring the target company that proposed acquisition was not exempted from the applicability of Part IX (Takeovers) of the Securities Act, 2015---Appellant with 24.4% shareholding and another company with 69% shareholding were the major shareholders of the target company and had control---Prior to that appellant had majority shares of 67.4% and control of the said company---Appellant had applied for exemption of Part IX (Takeover) of the target company being a major shareholder under S.109(1)(h)(iv) of Securities Act, 2015---Spirit of S.109(1)(h)(iv) of the Securities Act, 2015 was to avoid any hasty takeover detrimental to the existence and interest of target company---Prior to 9-1-2015, the appellant had been controlling the management of the target company, independently and since that date, it had collective control as a major shareholder---Acquisition of target company would not amount to hasty takeover and it would not harm the interest of the company---Appellant company having control of the target company for more than three years, no reason lay to bar the appellant from acquiring the shares of target company---Appeal was allowed and impugned letter was set aside, with the direction to the appellant to meet the prescribed free float requirement of target company within reasonable time.

Danish Qazi, Company Secretary for Appellant.

Muhammad Farooq Bhatti, Additional Director (SMD), Asif Khan, Deputy Director (SMD) and Moeed Hassan, Assistant Director (PRPD) for Respondent.

2018 C L D 111

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CCD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

The CHIEF EXECUTIVE AND DIRECTORS, MUBARAK TEXTILE MILLS LTD.---Appellant

Versus

ABID HUSSAIN, EXECUTIVE DIRECTOR, CORPORATE SUPERVISION DEPARTMENT, SECP---Respondent

Appeal No. 24 of 2017, decided on 26th September, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 160(8), 196(3) & 231--- S.R.O. No. 1227/2005, dated 12-12-2005---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Sale/disposal of assets of company beyond authorization granted by the shareholders---Effect---Company sought shareholders' authorization for sale/disposal of surplus and obsolete/idle assets in the Annual General Meeting held under S.196(3) of the Companies Ordinance, 1984---Details of assets disposed off had shown that the company had sold the entire plant and machinery, which was beyond the authorization of sale of assets granted by the shareholders in Annual General Meeting---Company also disposed of assets after the lapse of authorization given by shareholders in violation of direction of S.R.O. No. 1227/2015, dated 12-12-2005---Show-cause notice was issued to the Chief Executive and Directors of the company for prima facie contravention of the provisions of S. 196 of the Companies Ordinance, 1984 as no valid authorization was on record from shareholders of the sale of aforesaid assets forming a sizeable part of undertaking---Book value of the assets to be sold for which approval was taken in Annual General Meeting was Rs.9.87 million, which was far lower than the book value of the assets, actually sold i.e. Rs.23.72 million---Threshold fixed by the shareholders for the assets to be sold had been breached by the Directors of the company---Provisions of S.196(3) of the Companies Ordinance, 1984 having been violated, fine of Rs.50,000 was imposed on each Director and aggregate fine of Rs.350,000 was imposed on seven directors---Counsel for directors of the company, having admitted the default, requested for a lenient view of the matter---Amount of penalty was reduced from Rs.50000 to Rs.25,000 per Director, with the aggregate from 350,000 to Rs.175,000---Furthermore Directors were warned to ensure strict compliance of the law, in future.

Faisal Latif, FCA for Appellant.

Abid Hussain, Executive Director (CSD) and Syed Ali Adnan, Joint Director (CSD) for Respondent.

2018 C L D 136

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

UNIVERSAL SERVICE FUND---Appellant

Versus

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

Appeal No. 85 of 2016, decided on 18th January, 2017.

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

----Rr. 21(1)(2) & 25---Companies Ordinance (XLVII of 1984), S.506(2)---Failure to publish, circulate and file "Statements of Compliance" (S.O.C.) and review reports from the Auditor for relevant years---Public sector company, was required to publish, circulate and file "Statements of Compliance" (S.O.C.) and review reports from the Auditor for the years ending 30-6-2014 and 30-6-2015; as required under R.21(1)(2) of the Public Sector Companies (Corporate Governance) Rules, 2013---Company having failed to submit "S.O.C." within the timeframe, a show-cause notice was issued to the company under S. 25 of the Public Sector Companies (Corporate Governance) Rules, 2013 read with S. 506(2) of the Companies Ordinance, 1984---Securities and Exchange Commission of Pakistan and Commissioner (Company Law Division), being dissatisfied with the response of the company, Directors had violated the mandatory requirements of R.24 of the Public Sector Companies (Corporate Governance) Rules, 2013, for not filing the "S.O.C." for the relevant years---Fine was imposed on the company, in exercise of the powers conferred under S.25 of the Public Sector Companies (Corporate Governance) Rules, 2013 read with S. 506(2) of the Companies Ordinance, 1984---Company and its Directors including its Chief Executive, were warned to be careful in future to ensure compliance of the mandatory provisions of the Rules---Company having accepted the default---Validity---Commission authorities had been reasonable in giving the company adequate time to submit the "S.O.C.", but there was unreasonable delay in submitting the same---Delay on the part of the external Auditor, was not a sufficient reason for contravention of Rules---Penalty for contravention of the Rules, which had rightly been imposed on the company, could not be interfered with---Impugned order was upheld by Appellate Bench.

Syed Sibt-e-Hassan Gardezi, General Manager (Law) Universal Service Fund for Appellant.

Mubasher Saeed, Director (CCD) and Ms. Beenish Waqas, Assistant Director (CCD) for Respondents.

2018 C L D 149

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

NADEEM IFTIKHAR---Appellant

Versus

DIRECTOR (CSD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 88 of 2016, decided on 18th May, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 187(J) & 189---Securities and Exchange Commission of Pakistan Act (XVII of 1997), S. 33---Ineligibility of a person to become director of a company---Appellant had been Director of the company since the date of listing of the company---Wife of the Director had been Director of a corporate brokerage house since 18-3-2010---Under provision of S.187(i) of the Companies Ordinance, 1984, no person would be appointed as a Director of a company, if he was engaged in the business of brokerage, or was a spouse of such person, or was a sponsor, director or Officer of a corporate brokerage house---Appellant being the spouse of a person engaged in business of brokerage, appellant was not eligible to be appointed as Director---Appellant's wife being director had the fiduciary responsibility to take decisions on behalf of a Brokerage House---Appellant contention that his wife was a separate legal person was repelled---Appellant, in circumstances had violated the provisions of S. 187(i) of the Companies Ordinance, 1984 from the date when company became a listed company---Fine was rightly imposed on the appellant under S. 189 of the Companies Ordinance, 1984---Impugned order, was not interfered with, in circumstances.

Furqan Naveed for Appellant.

Ms. Amina Aziz, Director (CSD) and Ms. Zohra Sarwar, Deputy Director (CSD) for Respondent.

2018 C L D 197

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain Samoo, Commissioner (Insurance)

NATIONAL TRANSMISSION AND DESPATCH COMPANY LIMITED---Appellant

Versus

CORPORATIZATION AND COMPLIANCE DEPARTMENT, SECP---Respondent

Appeal No. 6 of 2017, decided on 18th May, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 259 & 506(2)--- Public Sector Companies (Corporate Governance) (C & CD) Rules, 2013, Rr.24(1)(2) & 25---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure of company to publish, circulate and file statement of compliance and review report of auditor with Securities and Exchange Commission---Fine of Rs.50,000 was imposed on the Company---Contention of Company was that non-submission of statement of compliance was due to separation of the operation of the Central Purchasing Agency from the Company, which caused legal complications, resultantly annual general meeting was delayed---Validity---Mandatory requirement had been violated in the case, but, default of non-filing by the company was not wilful as the auditors did not authenticate the statement of compliance due to non-finalization of the annual accounts---Penalty imposed on the appellant was converted into a warning with direction to the company to file statement of compliance and review report of the auditors for the relevant year within sixty days of the order and to ensure strict compliance of the relevant provisions of law in future.

Nazir Ahmed Shaheen, Ch. Muhammad Atif and Ijaz Ahmad, NTDC for Appellant.

Abdul Rehman Khan Tareen, Deputy Director (C&CD), SECP for Respondent.

2018 C L D 229

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CCD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

CHIEF EXECUTIVE AND DIRECTORS, MUBARAK TEXTILE MILLS LTD.---Appellant

Versus

ABID HUSSAIN, EXECUTIVE DIRECTOR, CORPORATE SUPERVISION DEPARTMENT, SECP---Respondent

Appeal No. 23 of 2017, decided on 26th September, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 160 & 231---Holding of Annual General Meeting by Company---Lack of quorum---Effect---Inspection of books of company, conducted under S. 231 of the Companies Ordinance, 1984 and review of the company's record of Annual General Meetings, including the attendance sheet disclosed that the quorum of the meeting held for the years 2014 and 2015 was deficient as only nine members were present whereas required quorum was ten members---Fine of Rs.40,000 on each Director of the company and aggregate of Rs.2,80,000 was imposed on seven members---Company's Counsel having accepted the default; penalty imposed was reduced from Rs.40,000 to Rs. 20,000 on each Director and aggregate penalty of Rs.280,000 was reduced to Rs.140,000---Directors of the company were warned to ensure strict compliance of the laws in future.

Faisal Latif, FCA for Appellant.

Abid Hussain, Executive Director (CSD) and Syed Ali Adnan, Joint Director (CSD) for Respondent.

2018 C L D 268

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Fida Hussain, Commissioner (Insurance)

POPULAR SPORTS LTD. and 24 others---Appellants

Versus

ASSISTANT REGISTRAR OF COMPANIES, SECP LAHORE and another---Respondents

Appeals Nos. 59 to 83 of 2016, decided on 18th May, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 38---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Rectification of name of company---Assistant Registrar of the Companies (SECP) observed that companies were inadvertently registered, as same bore close resemblance with the name of already registered Popular Group of Companies---One of the said (popular) Companies applied the Securities and Exchange Commission to direct the said companies to change their names; competent authority directed the companies to change the names of companies within 30 days---Validity---Important aspect of the case, which was necessary for the just adjudication of the matter, having not been taken into consideration by the Assistant Registrar (SECP) case was remanded to him to consider and evaluate the case by calling both the parties along with relevant record and witnesses to support their claim, and decide the matter afresh within sixty days of the order.

Sialkot International Container Terminal Limited through Company Secretary v. Ms. Sidra Mansur, Joint Registrar, Company Registration, Appeal No. 34 of 2015 rel.

Asad Manzoor Butt and M. Wasim for Appellants.

Mubasher Saeed, CCD and Ms. Beenish Waqas, CCD for Respondent No.1.

Idrees Ashraf and Kamran Mughal, Director Coordination, Popular Group of Companies for Respondent No.2.

2018 C L D 285

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CCD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

NEXT CAPITAL LIMITED---Appellant

Versus

COMMISSIONER CORPORATE SUPERVISION DEPARTMENT (CLD), SECP---Respondent

Appeal No. 48 of 2017, decided on 26th September, 2017.

Companies Ordinance (XLVII of 1984)---

----S. 86---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Further issue of capital to increase capital of the company---Company had passed special resolution, whereby Chief Executive Officer (CEO) was granted an option to subscribe 2.00 million ordinary shares of the company at Rs.10 each (the option)---Company, in view of said resolution, entered into a stock option agreement with the CEO, which later on was amended---Chief Executive Officer, as per agreement, had right to subscribe 2.00 million shares of the company within a period of five and half years starting after one year from the date of listing at Stock Exchange---Soon after passing the resolution, the company approached the Securities and Exchange Commission of Pakistan (the Commission), for approval of the option---Company was advised to approach the Commission at the time 'Board of Directors' of the company, would decide to issue shares to CEO---Board of Directors, in its meeting had decided to issue the option to CEO and in that regard, the company filed an application for Commission's approval under first proviso to S.86(1) of the Companies Ordinance, 1984---Said application was rejected by the Commission (Corporate Supervision Department) vide the impugned order---Resolution in question having been passed, without any defect, same could not be invalidated on the ground that it was passed by the company prior to acquiring the listing status---Corporate Supervision Department of the Commission had failed to refer any law or provision to declare the same void or defective---No reason existed to support an apprehension that the approval of the option to CEO would be detrimental to the rights of the company's shareholders---Sanctity being attached with the resolution, same was to be honoured---Conclusion drawn by the Corporate Supervision Department of the Commission in that regard was erroneous---Agreement entered by the company, was binding and for its execution, presence of all or any one of the shareholders, who consented for such agreement through a special resolution, was not required and inclusion of new shareholders having majority shareholding, could not be construed as nullity of the resolution---Company had made appropriate disclosure in prospectus, whereby it had been clearly mentioned that the issuance of shares against the option to CEO would result in dilution of shareholding of the existing shareholders---In view of disclosures made in the prospectus, audited financial statements and Board of Directors decision, impugned order was set aside and appeal was allowed as prayed.

Vaseeq Khalid and Muhammad Najam Ali, CEO for Appellant.

Ms. Amina Aziz, Director (CSD) and Ms. Zohra Sarwar, AJD (CSD) for Respondent.

2018 C L D 346

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CCD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

RIZWAN ALI and 5 others---Appellants

Versus

The COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 68 of 2017, decided on 8th November, 2017.

(a) Securities Act (III of 2015)---

----S. 40-A---Book Building Regulations, 2015, Reglns.2(2), 10 & 11---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33--- Constitution of Pakistan, Art. 10-A--- Investigation under Securities Act, 2015, revealed that appellants who were employees of the company, in violations of Regln.10(iv) of Book Building Regulations, 2015, placed consolidated bids which were beneficially owned by Executive Officer of the company who was "Related Employee of the Company" and he in violation of Regln.11 of Book Building Regulations, 2015 participated in the process through the appellants---Commissioner (SMD), SECP, on alleged violations of Regulations imposed penalty on the appellants---Issue adjudicated by the Commissioner (SMD) was entirely based upon circumstantial evidence---Respondent, concluded that Executive Officer of the company had provided funds to the appellants to execute the bids on his behalf; appellants were deprived of their constitutional right protected under Art.10-A of the Constitution, which guaranteed right to fair trial---No direct evidence was available against the appellants and they had been penalized on the basis of circumstantial evidence---Commissioner (SMD) had failed to connect the chain of circumstantial evidence to establish the violation of Reglns.10, 11 of Book Building Regulations, 2015---Issuance of show-cause notice to the appellants was without any just cause and reason---Impugned order, was set aside in circumstances.

(b) Evidence---

----Circumstantial evidence---Scope---Circumstantial evidence, was to be of a conclusive nature and tendency and it should exclude every possible hypothesis, except the one to be proved---Chain of evidence had to be complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the violator.

Vaseeq Khalid and Danish Qazi, Group General Counsel for Appellants.

Muhammad Farooq Bhatti, Additional Director (SMD), Hafiz M. Wajid Wahidi, Deputy Director (SMD), Asif Khan, Deputy Director (SMD) and Muhammad Hamza Ansar, ME (SSED) for Respondent.

2018 C L D 400

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CCD-CLD) and Fida Hussain Samoo, Commissioner (Insurance)

TPL PROPERTIES (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 69 of 2017, decided on 8th November, 2017.

Securities Act (III of 2015)---

----S. 40-A---Book Building Regulations, 2015, Regln.5---Trusts Act (II of 1882), S.11---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Issuance of prospectus for raising capital---Failure to disclose name of associated companies and associated undertakings in the prospectus---Effect---Appellant company had issued and circulated its prospectus for raising capital---Investigation conducted by the Securities and Exchange Commission revealed that an associated company and associated undertaking subscribed the amount---Appellant, company which was required to disclose the name of its associated companies and associated undertakings, in the prospectus, having failed to do so, Commissioner (SMD) SECP imposed penalty on the company on allegation that company had violated Regln.5(8) of Book Building Regulations, 2015---Regulation 5 of the Book Building Regulations, 2015, prescribed two necessary conditions for the process i.e. disclosure of associated companies and associated undertakings' names and aggregate limit of five percent shares of the process for associated companies and associated undertakings---Appellant had denied the relationship of associated undertaking with the "Funds"; whereas the Commissioner (SMD) had connected the "Fund" with an associated undertaking on the basis of common directorship, common shareholding---"Fund" was a trust and as per law, trust had no owner, partner or Director---Appellant's relation with the "Fund" on the basis of common directorship, common shareholding, was a glaring mistake of fact and law---Trustee had a fiduciary duty towards the trust and the beneficiaries and was required to act in the best interest of the beneficiaries---Any revenue or income generated by a trust could only be used for the purpose of trust and it would have no impact over the business or income of author of trust or trustee---Shares acquired by the "Fund" would not benefit the trustee or author of the trust---'Fund' was not an undertaking of the appellant company and it was not required to disclose the name of the 'Fund' in the prospectus as its undertaking---No violation of the Regln.5(8) of the Book Building Regulations, 2015 having been established, issuance of show-cause notice was without any just cause and reason---Impugned order, was set aside and appeal was allowed, in circumstances.

Vaseeq Khalid and Danish Qazi, Group General Counsel for Appellant.

Muhammad Farooq Bhatti, Additional Director (SMD), Hafiz M. Wajid Wahidi, Deputy Director (SMD), Asif Khan, Deputy Director (SMD) and Muhammad Hamza Ansar, ME (SSED) for Respondent.

2018 C L D 952

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (SCD) and Tahir Mahmood, Commissioner (CLD)

KPMG TASEER HADI AND CHARTERED ACCOUNTANTS and another---Appellants

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 90 of 2016, decided on 9th February, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 255, 260 & 476---Insurance Ordinance (XXXIX of 2000), Ss.11, 12, 36, 46, 48, 51 & 158---Breach of fiduciary duty by auditors---Auditing company, was alleged to have committed breach of fiduciary duty cast upon it by policy holders of the company as well as shareholders and its Engagement Partner---Engagement Partner of auditing company, was allegedly found to have signed audit reports, otherwise than in conformity with the requirements of provisions of law---Aggregate fine of Rs.100,000 was imposed on the Auditing Company which was challenged contending that impugned order failed to establish or even refer to the intention of the appellants and that audit was planned and performed in accordance with the International Standards on Auditing (ISA)---Contention of Auditing Company was that findings of breach of fiduciary duty as well as imposition of penalty on them was wrong and mistaken as information provided to them was deliberately distorted by the Management itself and was not shared with them; and that as the Management had been found guilty in the Commissioner's order for misrepresenting facts and figures, Auditing Company should be relieved of any liabilities; that with respect to the policy holders of the Insurance Company, no loss had been suffered by them at all as all the claims were acknowledged by the company and only recording of claims had been delayed---Validity---Primary responsibility for the prevention of fraud rested with those charged with governance and it was very difficult for an Auditor to detail fraud when Management of the company itself was involved---Recommendations given by the Auditing Company in the Management letters were in line with the observation made during audit---No reason existed to believe that the audit conducted by the Audit Company was not properly planned or performed in accordance with the requirements of International Standards on Auditing (ISA) merely on the ground that they failed to detect Management's material misstatements due to fraud---In the present case, the Management had defrauded not only the Board of Directors of the company, but also the Audit Company through organized scheme of forgery, intentional misrepresentation and failure to record transactions---Said Management had committed fraud in such a sophisticated manner that it had remained undetected even in the SECP's onsite/offsite monitoring---Impugned order, was set aside, in circumstances.

Sherman Securities (Pvt.) Ltd. v. Joint Director (SMD) Securites and Exchange Commission of Pakistan 2012 CLD 612; Kora Khan v. Director-General Agriculture Department, Government of Balochistan 2011 PLC (C.S.) 842; Muhammad Nawaz Sheikh v. Manzar Hussan and others PLD 2011 Lah. 531; Mirza Shaukat Baig and others v. Shahid Jamil and others PLD 2005 SC 330; Nasrullah and another v. Haji Usman Ghani and 5 others 2002 CLC 1925 and Tri-Sure India Ltd. v. A.F. Ferguson and Co. and others 1987 61 CompCs 548 Bom. ref.

Rahat Kaunain, Gulalay Zeb, Maham Ahmad, Counsel Syed Iftikhar Anjum, Muhammad Nadeem and Bakhtiyar Kazmi KPMG Taseer Hadi and Co. Chartered Accountants for Appellants.

Ali Azeem Ikram, Executive Director (Insurance) and Tariq Bakhtawar, Director (Insurance) for Respondent.

2018 C L D 1002

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Acting Chairman/Commissioner SCD and Tahir Mahmood, Commissioner (CCD-CLD)

TRG PAKISTAN LIMITED and another---Appellants

Versus

COMMISSIONER, SECURITIES MARKET DIVISION (SMD), SECP---Respondent

Appeal No. 7 of 2017, decided on 20th December, 2017.

Securities Act (III of 2015)---

----Ss. 97 & 100---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---SRO No. 634(I)/2014, dated 10-7-2014---Appellant company, listed on Pakistan Stock Exchange (PSX), submitted its annual audited accounts for relevant financial year and quarterly accounts, but did not upload the said financials on its website as required under Commission's notification No. SRO No.634(I)/2014, dated 10-7-2014---Company was directed under S.97 of the Securities Act, 2015 to submit clarification in the matter of PSX before the opening of next day trading session, but Commissioner, Securities Market Division (SMD) did not disseminate the said information to PSX before opening of the next day trading session---Commission took cognization of alleged violations and issued show-cause notice to the Company---Commission dissatisfied with the response of the Company, imposed a penalty of Rs.2,000,000 on the Company and Rs.1,000,000 on the Chief Executive of the Company for non-compliance with the directions given under S.100 of the Securities Act, 2015 and providing information under S.97 of the Act, which was incorrect, untrue and misleading---Company and the Chief Executive were also directed to ensure compliance with regulatory framework in letter and spirit in future---Both the appellants stated that the financials were uploaded on the website of the Company when the Commission was brought to their notice by the Commission---Same was also communicate to PSX, vide their letter, wherein the correct address of PSX was conveyed, and it was informed that the financial statements of the Company were accessible---PSX had confirmed to the Commission that Company subsequently the corrected the website---Even though there could have been some delay on the part of the Company to upload the financials, due to the confusion regarding its website, the delay seemed to be unintentional---Penalty for failure to upload the financials on the website, was totally, unjustified, in circumstances---No deliberate false information or concealment of facts existed on the part of the Company, impugned order, was set aside in appeal, in circumstances.

Ms. Rahat Latif, Head of Internal Audit TRG and Vaseeq Khalid, Partner/Lawyer Mohsin Tayebaly and Co. for Appellants.

M. Farooq Bhatti, Additional Director (SMD), Javed Akhtar Malik, Joint Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 1031

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Acting Chairman/Commissioner (SCD) and Tahir Mahmood, Commissioner (CCD-CLD)

TRG PAKISTAN LIMITED and 10 others---Appellants

Versus

DIRECTOR CORPORATE SUPERVISION DEPARTMENT, SECP---Respondent

Appeal No. 45 of 2017, decided on 20th December, 2017.

Companies Ordinance (XLVII of 1984)---

----Ss. 245 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to prepare, transmit and file quarterly accounts---Appellant company, had failed to prepare, transmit and file the accounts for relevant quarters to the shareholders, Registrar of Companies and Securities and Exchange Commission under S.245 of the Companies Ordinance, 1984---Company had also filed half yearly accounts for relevant period with the delay of 129 days---Appellant company under the relevant law, was required to file two sets of accounts i.e. company accounts and consolidated accounts---Exemption granted by the Commission was only to the extent of consolidated accounts of two quarters---Said exemption, would not exempt the company to prepare, transmit and file company's accounts under S.245 of the Companies Ordinance, 1984---Issue of non-filing or exemption to file consolidated accounts, had not been addressed in the impugned order---Grounds of appeal in that regard, were entirely irrelevant in the case---Directors of the company, had admitted that they had not transmitted and filed the company's accounts for relevant quarters to the shareholders, Registrar of Companies and the Commission---Said admissions and record had manifested to understand that violation had been committed by the Directors of the company---Violation of S.245(1) of the Companies Ordinance, 1984, though was established against the Directors of the company, but preparation of said accounts and appellant company's satisfactory compliance history, could be considered as mitigating factors to reconsider the appropriate nature of penalty---Penalty of fine imposed on the Directors of the appellant company, was converted into a warning and Directors, were directed to transmit and file the accounts for relevant quarters in accordance with law and procedure laid down under the Companies Ordinance, 1984 and ensure compliance of S.245 of the Ordinance in future to avoid legal consequences.

Shaikh Mohammad Tanvir (Kreston Hyder Bhimji & Co.) for Appellants.

Ms. Amina Aziz, Director (CSD) for Respondent.

2018 C L D 1061

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Acting Chairman/Commissioner (SCD) and Tahir Mahmood, Commissioner (CCD-CLD)

OMNI CAPITAL MANAGEMENT (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MAREKT DIVISION), SECP---Respondent

Appeal No. 66 of 2017, decided on 2nd November, 2017.

Securities Act (III of 2015)---

----S. 150---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Financial Reporting System (FRS) data, had revealed that appellant company had not filed financial return through said system for relevant quarters and company had also failed to send details of all its Bank accounts with the Head of Department---Appellant company was established to be non-compliant at the time of issuance of show-cause notice and company had accepted that it had not filed quarterly FRs for relevant quarters---Violation of Regulatory Frame Work, being a serious matter, in exercise of powers under S.150 of the Securities Act, 2015, a penalty of Rs.100,000 was imposed on appellant company, with direction to file all overdue financial returns through FRs within 30 days from the date of order---Appellant Company was further directed to ensure strict compliance with the Regulatory Framework in letter and spirit in future---Appellant Company having not discharged its regulatory obligations at the time of passing of impugned order, Commissioner (SMD) had rightly imposed penalty---In absence of any reason to interfere with impugned order, same was upheld, in circumstances.

Imran Mehmood, Manager, Omni Capital Management (Pvt.) Limited for Appellant.

Faisal Nawaz, Joint Director (SMD), Javed Akhtar Malik, Joint Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 1069

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CSD-CLD) and Shaukat Hussain, Commissioner (CCD-CLD)

MAC SECURITIES (PVT.) LIMITED---Appellant

Versus

ASIF JALAL BHATTI, EXECUTIVE DIRECTOR (SMD), SECP, ISLAMABAD and another---Respondents

Appeal No. 38 of 2017, decided on 8th May, 2018.

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

----Ss. 6 & 22---Brokers and Agents Registration Rules, 2001, R.8---Failure to submit financial information through online Financial Reporting System (FRS)---Securities and Exchange Commission of Pakistan, directed all the TREC holders including the appellant company to submit their financial information through online Financial Reporting System (FRS) for the quarter ended on September, 2013---Commission, directed stock exchanges to ensure that all TREC holders must submit their financial returns to the Commission through said reporting system, within stipulated time---Stock Exchanges disseminated the said directions on their websites for information and compliance---Appellant Company had failed to comply with said requirements and Executive Director (SMD), imposed a penalty of Rs.300,000 on the appellant on account of failure to discharge the regulatory requirements---Appellant Company could not be exonerated from established regulatory violations---Past compliance of appellant Company and non-availability of 'KATS' terminal ID password for online filing through FRs, were sufficient mitigating factors for a lenient view---While maintaining the impugned order, amount of penalty was reduced to Rs.1,50,000 in appeal.

Muhammad Javed for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondents.

2018 C L D 1083

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CSD-CLD) and Shaukat Hussain, Commissioner (CCD-CLD)

MIKON SECURITIES (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 90 of 2017, decided on 8th May, 2018.

Securities Act (III of 2015)---

----S. 150---Appellant company, which under the law was required to file quarterly, half yearly, annual accounts and details of its Bank accounts, through online Financial Reporting System (the FRS) for the relevant period, had failed to comply with said requirement despite reminders---Non-compliance by the appellant company, had been established---Commissioner (SMD) of Securities and Exchange Commission imposed penalty of Rs.400,000 on the appellant company---Company, had not started its operation and was in process of licence renewal, Appellate Bench of the Commission, taking a lenient view in the matter, while maintaining the impugned order, reduced the amount of penalty to Rs.200,000.

Muhammad Irfan, CEO for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondent.

2018 C L D 1143

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CCD-CLD) and Tahir Mahmood, Commissioner (CSD-CLD)

FM SECURITIES (PRIVATE) LIMITED through CEO---Appellant

Versus

EXECUTIVE DIRECTOR, SECURITIES MARKET DIVISION (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 27 of 2017, decided on 27th June, 2018.

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--- Net Capital Balance (NCB)---Calculation and determination of---Inspection Team on inspection of books and record of appellant/Trading Entitlement Certificate Holder (TECH), observed that NCB of the company was Rs.4,208,081---Company had stated that its Chief Executive Officer (CEO) had provided loan amounting to Rs.2.5 million to the company in shape of cash and gold---Inspection Team had observed that company did not provide copy of written agreement executed between CEO and company on stamp paper for said loan; that NCB, prima facie, was overstated by Rs.4,280,931 which was violation of R.2(d) of the Securities and Exchange Rules, 1971---Audited accounts of the company had shown that on 30-6-2015 cash in hand was Rs.4,280,931 out of which Rs.25,00,000 had been provided by CEO as a loan to the company and remaining amount of Rs.1,780,931 was the opening balance of cash in hand, brought forward from the previous year accounts---Appellate Bench of the Securities and Exchange Commission had no doubt to believe that Rs.4,280,931 did exist as cash in hand on 30-6-2015---Executive Director (SMD) had primarily one objection that the possession and title of cash and gold, being not transferred in the name of company, could not be used in calculation of the NCB---Appellate Bench was of the view that the agreement and the resolution were sufficient to prove that company had undisputed legal title of cash and gold---Cash and gold were in possession of CEO during inspection and proceedings before the Executive Director of the Commission---For all practical purposes, CEO was the most relevant person to hold the property and assets of a company in his possession as a trust for safe custody---Board of the company had authorized the CEO to hold the cash and gold---No anomaly was found in that regard---Appellate Bench was of the view that company had calculated the NCB in accordance with Third Schedule of the Securities and Exchange Rules, 1971 and Guidelines issued by the Securities and Exchange Commission---Impugned order was set aside and appeal was accepted.

Syed M. Zulqarnain, Fakhar Mirza, CEO for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondent.

2018 C L D 1194

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CCD-CLD) and Tahir Mahmood, Commissioner (CSD-CLD)

SHAUKAT SHAFI SECURITIES (PVT.) LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, (PRPD), SECP, ISLAMABAD---Respondent

Appeal No. 46 of 2017, decided on 21st June, 2018.

Securities Act (III of 2015)---

----S. 150---Securities Brokers (Licensing and Operations) Regulations, 2016, Regln.6(4)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to file online monthly statements of net capital balance and liquid capital---Appellant-company allegedly, in contravention of Pakistan Stock Exchange notice and Regln.6(4) of the Securities Brokers (Licensing and Operations) Regulations, 2016, failed to file online monthly statements of the net capital balance and liquid capital for relevant months, despite reminders; whereupon penalty of Rs.300,000 was imposed on the appellant-company for said failure, after issuance of show cause notice---Appellate Bench of the Commission had observed while adjudicating the matter, that Executive Director of the Commission, had not applied its judicial mind---Executive Director in order to establish the said violation had relied upon Regln.6(4) of Securities Brokers (Licensing and Operations) Regulations, 2016, and the Pakistan Stock Exchange Notice---None of the said provisions, required online filing of statements---Show-cause notice, did not contain any such allegation---Appellate Bench of the Commission being a quasi-judicial body had to see, whether the Adjudicating Authority had applied the relevant law in letter and spirit or failed to demonstrate the desired application of law---Appellant-company had been penalized for the violation, which neither was alleged in the show-cause notice, nor was the same a requirement of law---Entire proceedings against the appellant, including impugned order, were absolute nullity---Impugned order was set aside having been passed without any legal sanction.

Muhammad Aslam Khan (IECnet S.K.S.S.S. Chartered Accountants) and M. Zeeshan for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondent.

2018 C L D 1211

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CSD-CLD) and Shaukat Hussain, Commissioner (CCD-CLD)

JSK SECURITIES LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 91 of 2017, decided on 15th May, 2018.

Securities Act (III of 2015)---

----S. 150---Securities Brokers (Licensing and Operations) Regulations, 2016, Regln.20---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Securities and Exchange Commission Circular No.4 of 2013, dated 16-4-2013---Failure to file quarterly financial returns---Appellant company failed to file quarterly financial returns online, despite the fact that the Commission had arranged the awareness and training for the Trading Right Entitlement Certificate holders---Said failure, prima facie, was a non-compliance with the provisions of sub-regulations 1 & 2 of Regln.20 of the Securities Brokers (Licensing and Operations) Regulations, 2016 and contravention of SECP Circular No.4 of 2013, dated 16-4-2013---Commission in exercise of powers under S.150 of Securities Act, 2015 imposed a penalty of Rs.100,000 on the appellant/Company---Appellant/Company, contended that it could not do so as the online system was giving problems and that its brokerage house staff was not fully aware of the Regulatory requirements---Company must have ensured that all compliances were made in letter and spirit on time---On Company's assurance to fully comply with the Regulatory requirements in future, Commission, taking a lenient view, set aside the impugned order to the extent of penalty and directed the appellant to be careful in future.

Ibrar Bashir, CFO and Haider Ali, Company Secretary for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondent.

2018 C L D 1223

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CSD-CLD) and Shaukat Hussain, Commissioner (CCD-CLD)

Z. M. CAPITAL (PRIVATE) LIMITED---Appellant

Versus

ASIF JALAL BHATTI, EXECUTIVE DIRECTOR, (PRPD) and another---Respondents

Appeal No. 47 of 2017, decided on 15th May, 2018.

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

----Ss. 6(3) & 22---Brokers and Agents Registration Rules, 2001, R.8 & Third Sched.---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to submit financial information---Securities and Exchange Commission, in exercise of powers conferred under S.6(3) of Securities and Exchange Ordinance, 1969, read with Third Sched. of Brokers and Agents Regulation Rules, 2001, had directed all the Trading Right Entitlement Certificate (TREC) holders/brokers to submit their financial information online Financial Reporting System (FRS) within 30 days of the close of each quarter---Commission had also arranged the awareness and training session for 'TREC' holders---Commission vide its letters had directed the Stock Exchanges to ensure the compliance within the stipulated time limit---Despite all said effects, appellant-company failed to file the financial information---Appellant-company, having failed to discharge its regulatory obligations---Executive Director of the Commission (PRPD) in exercise of powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed a penalty of Rs.300,000 on the appellant---Company with direction to file all overdue financial returns---Appellant-company contended in appeal that due to inaction of accountant their Financial Reporting System (FRS) password had expired and subsequently, there was no way for them to submit their financial information online and that they received no assistance from the help disk of the Commission---Appellant-company had submitted previous as well as current FRS on the website of the Commission when the password was renewed---Impugned order was upheld as the violation of Brokers Rules had been established---Appellant-company having subsequently submitted all previous and current FRS, taking a lenient view, penalty was reduced to Rs.150,000 by the Appellate Bench with direction that in case of similar non-compliance in future strict action would be taken in accordance with law.

Muhammad Javed, Messrs Z.M. Capital (Pvt.) Ltd. for Appellant.

Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondents.

2018 C L D 1332

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CCD-CLD) and Shauzab Ali, Commissioner (SCD-S&ED/IE&IR)

PRIME CAPITAL MANAGEMENT (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 42 of 2017, decided on 3rd July, 2018.

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

----S. 33---Appeal---Dismissal of appeal for non-prosecution---When appeal was called for hearing, representative of respondent was present, however, neither anyone appeared on behalf of the appellant nor any request for adjournment was received---Matter was kept pending till the close of official timings, however, the appellant failed to enter, despite calls---From the conduct of the appellant, it appeared that appellant was not interested in pressing the present appeal---Appeal was dismissed for non-appearance and non-prosecution, in circumstances.

Nemo for Appellant.

Kamal Ali, Additional Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 1362

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Chairman/Commissioner (CCD-CLD) and Shauzab Ali, Commissioner (SCD-S&ED/IE & IR)

HG MARKETS (PVT.) LIMITED---Appellant

Versus

MUHAMMAD ASIF JALAL BHATTI, EXECUTIVE DIRECTOR and another---Respondents

Appeal No. 13 of 2017, decided on 13th July, 2018.

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

----S. 22---Commodity Exchange and Futures Contracts Rules, 2005, R. 20---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Failure to manage the account of client and contravention of regulatory framework---Complainant had alleged that his father (client), opened a trading account with appellant Company and two employees of the Company traded commodities in the said account without prejudice, and exhausted all the funds in the account---Commissioner, Securities and Exchange Commission of Pakistan (Commission) served show-cause notice to the appellant under S. 22 of the Securities and Exchange Ordinance, 1969, read with R. 20 of the Commodity Exchange and Futures Contracts Rules, 2005---Executive Director of the Commission being dissatisfied with the response of the appellant, found that the appellant had failed to manage the account in client's best interest and contravened the regulatory framework by not exercising due skill and care in executing the transaction while generating excessive commissions for itself---Under S. 22 of Securities and Exchange Ordinance, 1969 read with R. 20 of Commodities Exchange and Futures Contract Rules, 2005, a penalty of Rs. 150,000 was imposed on the appellant by the Executive Director and the appellant was also directed to refund the amount of commission to the client, under intimation to the Executive Director of the Commission---Validity---Action against the appellant was initiated by Executive Director after careful evaluation of all the facts and circumstances---Client was unaware of the transactions and the appellant exploited his vulnerabilities to its advantage by gaining a considerable amount of commission on the trading in question---Contention of the appellant that default was not "wilfull" held little merit---Appellant did not exercise due skill and care required from it as broker---Section 22 of Securities and Exchange Ordinance, 1969, had provided that penalty could be imposed on any person who would fail to comply with the provisions of said Ordinance or any Rules or Regulations made thereunder---Penalty, in circumstances, was rightly imposed on the appellant---Section 22, however, did not empower Executive Director to give any further directions---Direction by Executive Director to refund the commission to the client under intimation to it, was beyond the scope of S. 22 of Securities and Exchange Ordinance, 1969---Impugned order, however, was upheld to the extent of penalty.

Myzel v. Fields, C.A. Minn. 386 F. 2d 718, 734 and M&B Contracting Corporation v. David Dale and Merrill and others 601 F.Supp. 1106 (1984) ref.

(b) Words and phrases---

----"Wilful default"---Meaning.

Oxford Dictionary of Law, Fifth Edition rel.

(c) Words and phrases---

----"Scienter"---Meaning.

Black Law's Dictionary, Sixth Edition ref.

Arslan Saleem Chaudhry, Advocate High Court (Haidermota BNR & Co.) for Appellant.

Kamal Ali, Additional Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondents.

2018 C L D 1405

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Chairman/Commissioner (CCD-CLD) and Shauzab Ali, Commissioner (SCD-S&ED/IE & IR)

SAKARWALA CAPITAL SECURITIES (PVT.) LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, SECURITIES MARKET DIVISION (SMD), SECP---Respondent

Appeal No. 30 of 2017, decided on 3rd July, 2018.

Securities and Exchange Rules, 1971---

----R. 8(1)--- Securities and Exchange Ordinance (XVII of 1969), S.22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to maintain proper books of accounts---Appellant, having failed to maintain proper books of accounts during relevant period, in contravention of R.8(1) of Securities and Exchange Rules, 1971, show cause notice was served to the appellant---Securities and Exchange Commission of Pakistan (Commission) being dissatisfied with the response of the appellant found that appellant had failed to comply with the requirements of R.8(1) of Securities and Exchange Rules, 1971 and imposed penalty of Rs.200,000---Appellant had accepted the discrepancies in the books of accounts and stated that observations made by the Commission had been addressed---Appellant, however, requested for leniency for waving off the penalty---Validity---Failure of appellant to maintain proper books of accounts and non-compliance of statutory provisions being a serious matter, no leniency could be shown--- Impugned order was upheld by the Appellate Bench.

Ghulam Mujtaba Sakarwala, CEO Sakarwala Capital Securities (Pvt.) Ltd. for Appellant.

Kamal Ali, Additional Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 1501

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CCD-CLD) and Shauzab Ali, Commissioner (SCD-S&ED/IE&IR)

A.H.K.D. SECURITIES (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 51 of 2017, decided on 3rd July, 2018.

Securities Act (III of 2015)---

----S. 150---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---SECP Circular No. 4 dated 16.4.2013---Failure to file quarterly return---Appellant, in contravention of SECP Circular No.4 dated 16-4-2013, had not filed the quarterly financial return through online Financial Reporting System (F.R.S) for relevant quarter---Appellant had also failed to submit details of Bank accounts, a hard copy of half yearly accounts and a hard copy of annual accounts for the relevant year---Securities and Exchange Commission (Commission) issued show-cause notice to the appellant for contravention of S.150(1) & 150(2) of Securities Act, 2015---Appellant failed to reply to the notice---No one appeared on behalf of the appellant on fixed date of hearing, Commission imposed penalty of Rs.1,000,000 on the appellant---Appellant had challenged the impugned order on the ground that show-cause notice was not served in appropriate manner---Representatives of the appellant stated that appellant's office having been closed for the last three years, no service was possible on the said address---Validity---Appellant had not informed the Commission about closure of its office---Plea of the appellant with regard to closure of its office was not tenable---Appellant did not submit the reply to the show-cause notice, nor attended the proceedings---Appellate Bench of the Commission, in view of giving of opportunity of hering to the appellant set aside the order of the Commission with direction to serve the show-cause notice on the appellant at its Chief Executive Officer's (CEO) address as provided by the appellant.

M. Azhar-ul-Hassan and Izhar-ul-Hasan (ITP) for Appellant.

Kamal Ali, Additional Director (SMD) and Asif Khan, Deputy Director (SMD) for Respondent.

2018 C L D 177

[Supreme Court of Pakistan]

Present: Ejaz Afzal Khan, Qazi Faez Isa and Ijaz ul Ahsan, JJ

STATE BANK OF PAKISTAN through Chief Manager, Peshawar and another---Appellants

Versus

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

Civil Appeals Nos. 1406 and 1407 of 2016, decided on 27th October, 2017.

(On appeal from the judgment dated 04.02.2016 of the Peshawar High Court, Peshawar passed in I.C.As. Nos. 6 and 7 of 2012)

(a) Interpretation of statutes---

----Words appearing in a section (of a statute) were to be read in the context in which they were used.

In the matter of the Rev. James Godfrey MacManaway PLD 1950 PC 149 ref.

(b) Interpretation of statutes---

----Reference to dictionary meaning of a word---Propriety---Reading words into an Act unless it was absolutely necessary to do so was contrary to all rules of construction---Reference to dictionaries by the judges, without first examining the statutory provision and its context, was inappropriate---Such an approach may result in incorporating into the legislation something which it did not contain, and what the Legislature did not intend.

Renula Bose v. Manmath Nath, AIR 1945 Privy Council 108, 110 column 2; Rashid Textile v. Labour Union PLD 1963 SC 293; Zulfiqar Ali Babu v Government of the Punjab PLD 1997 SC 11 and Muhammad Ismail v. The State PLD 1969 SC 241 ref.

(c) Companies Act (XIX of 2017)---

----S. 2(1)(50)---"Promoter" of a company---Definition and meaning.

'Palmer's Company Law' (twenty-fourth edition) (Volume 1, 259); Twycross v Grant, 1877, 2 C.P.D. 469, 541 and 'Company Law by Alan Dignam and John Lowry' (Ninth edition, 2016) ref.

(d) Companies Act (XIX of 2017)---

----S. 2(1)(50)---'Promoter'---Fiduciary duty---Scope---Promoters of a company, in the context of company law, stood in fiduciary relationship to it---Promoters had in their hands the creation and moulding of the company; they had the power of defining how, and when, and in what shape, and under what supervision, it shall start into existence and begin to act as a trading corporation---Two fiduciary duties imposed on a promoter were; first, not to make a secret profit out of the promotion of the company without the company's consent; and second to disclose to the company any interest which he had in a transaction entered into by it.

Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218; Palmer's Company Law, Fiduciary Position of Promoters, page 262 and Company Law by Robert Pennington, third edition, page 464 ref.

(e) Companies Ordinance (XLVII of 1984) [since replaced by the Companies Act (XIX of 2017)]---

----Ss. 412 & 413---Delinquent conduct of directors of a company causing it to go into liquidation---State Bank of Pakistan and Securities and Exchange Commission of Pakistan, liability of---Scope---Authority which incorporated or regulated companies or a central bank were not the "promoters" of a company---Role of a regulator of companies and a central bank was altogether different from the promoters of a company envisaged in S. 412 of the Companies Ordinance, 1984---Liability under Ss. 412 & 413 of the Ordinance attached when there was misapplication or retention of the money or property of the company or any misfeasance or breach of trust in relation to the company---Section 412 of the Ordinance stipulated that, if a person had misapplied, retained, committed misfeasance or breach of trust with regard to any money or property of the company he was liable to restore it, whereas S. 413 of the Ordinance provided that if the business of the company was conducted with intent to defraud creditors of the company or any other person, or for any other fraudulent purpose then those who knowingly did so were personally responsible for the debts or other liabilities incurred as a consequence---Statutory regulatory body, such as the Securities and Exchange Commission of Pakistan (SECP), and a central bank established by statute, such as State Bank of Pakistan (SBP), could not be deemed to commit the illegal acts mentioned in the Ss. 412 & 413 of the Ordinance---Phrases, "taken part in the promotion or formation of a company" (in section 412 of the Ordinance) and carrying out "any business of the company" (in section 413 of the Ordinance) did not include the regulator of companies, regulatory authorities or a central bank---Moreover Ss. 412 & 413 of the Ordinance did not mention SBP or SECP particularly nor referred to regulatory authorities and/or a central bank generally---Sections 412 & 413 of the Ordinance were penal provisions, and penal provisions could not be given an extended meaning to include the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan.

(f) Interpretation of statutes---

----Penal provision---Such a provision was to be construed strictly---Where any penal provision was susceptible to two or more interpretations then the one which did not extend the penalty/liability was to be preferred to one that did.

Maxwell on the Interpretation of Statutes (12th edition); M. V. Joshi v. M. U. Shimpi AIR 1961 SC 1494 and Muhammad Ali v. State Bank of Pakistan 1973 SCMR 140 ref.

(g) Interpretation of statutes---

----Judges not to create liability by interpretative techniques; nor try to rectify what they may assume should have been incorporated in a statute.

Duport Steels Ltd v Sirs, (1980) 1 AER 529, 542 and Muhammad Ismail v. The State PLD 1969 SC 246 ref.

(h) Interpretation of statutes---

----Statute dealing with companies---Any word or phrase in such a statute was to be read and understood in the context of the particular section and then in the context of the statute, and, if its meaning remained ambiguous then reference to judicial precedents on company law and legal treatise on company law explaining the said word or phrase may be had, however, if the meaning still eluded one then legal dictionaries and English language dictionaries could be examined.

Syed Ali Zafar, Advocate Supreme Court and Raja Abdul Ghafoor, Advocate-on-Record for Appellant (in C.A. No. 1406 of 2016).

Anwar Mansoor Khan, Senior Advocate Supreme Court, Asim Mansoor Khan, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Respondent No. 1 (in C.A. No. 1406 of 2016).

Mudassar Ameer, Advocate Supreme Court for Respondent No.2 (in C.A. No. 1406 of 2016).

Farooq, Section Officer, Finance Department for Respondent No. 3 (in C.A. No. 1406 of 2016).

Qazi Ehsanullah, Advocate Supreme Court for Respondents Nos.4-6 (in C.A. No. 1406 of 2016).

Respondents Nos. 7, 8, 10 to 28 not represented (in C.A. No.1406 of 2016).

Nemo for Respondent No. 9 (in C.A. No. 1406 of 2016).

Anwar Mansoor Khan, Senior Advocate Supreme Court, Asim Mansoor Khan, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Appellant (in C.A. No. 1407 of 2016).

Mudassar Ameer, Advocate Supreme Court for Respondent No.1. (in C.A. No. 1407 of 2016).

Farooq, Section Officer, Finance Department for Respondents Nos.2 and 3 (in C.A. No. 1407 of 2016).

Raja Abdul Ghafoor, Advocate-on-Record/Advocate Supreme Court for Respondent No.4 (in C.A. No. 1407 of 2016).

Nemo for Respondent No. 7 (in C.A. No. 1407 of 2016).

Respondents Nos. 5, 6, 8-16 not represented (in C.A. No.1407 of 2016).

2018 C L D 203

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Faisal Arab and Ijaz ul Ahsan, JJ

GULISTAN TEXTILE MILLS LTD. and another---Appellant(s)/Petitioner(s)

Versus

SONERI BANK LTD. and another---Respondent(s)

Civil Appeal No.1447 of 2016 Crl. Original Petition No.220 of 2016 in Civil Appeal No.1447 of 2016.

(Against the order dated 16-2-2016 of the High Court of Sindh at Karachi passed in Spl. H.C.A. No.2 of 2016).

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

----Ss. 7(1)(a), 7(2), 16(1) & 19(3)---Civil Procedure Code (V of 1908), S.151 & O. XXXIX, R. 6---Power of Banking Court to order interim sale---Scope---Goods pledged with the Bank, sale of---Question as to whether Banking Court had the power to direct interim sale of goods under the provisions of S. 16 of the Financial Institutions (Recovery of Finances) Ordinance; held, that in terms of S. 16(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the Banking Court did not have any power to sell goods which were pledged, hypothecated etc. prior to passing of the judgment in a suit for recovery through sale filed by the financial institution---Qualified powers given to the Banking Court in such respect had been specifically mentioned in subsections (a) to (d) of S. 16(1) of the Ordinance which were essentially orders of restraint, attachment, transfer of possession and appointment of Receiver(s)---Legislature had permitted a financial institution to sell goods only after it had attained a decree in its favour, for total or partial satisfaction thereof [section 19(3) of the Ordinance]---Absence of the words sale or sell (or any variant thereof) in S.16(1) of the Ordinance coupled with the specificity of the types of orders that a Banking Court could pass under S. 16, spoke of the legislative intent; that sale shall not be permitted during the pendency of a suit for recovery by sale before the Banking Court---Furthermore when S.16 of the Ordinance had provided a comprehensive list of the specific types of orders (which did not include sale of property) that a Banking Court was empowered to pass with respect to property that was pledged, hypothecated etc. prior to the final judgment of a suit for recovery by sale, there was no doubt that such provision was intended to be all-inclusive, leaving no room to read in the power to sell by means of applying the general provisions of the Civil Procedure Code, 1908 i.e. O. XXXIX, R. 6 or the inherent powers under S. 151.

(b) Interpretation of statutes---

----Special law and general law---Principle of harmonious interpretation provided that the special law would take precedence over the general law (generalia specialibus non derogant)---Specific provisions of a special law would displace the general law which shall be deemed to be inapplicable.

Neimat Ali Goraya and 7 others v. Jaffar Abbas, Inspector/Sargeant Traffic through S.P., Traffic, Lahore and others 1996 SCMR 826 ref.

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

----S. 11---Res judicata, principle of---Application of said principle to interlocutory applications---Scope---Section 11, C.P.C, which codified the principle of res judicata, specifically referred to 'suits' and therefore restricted the application of the principle thereto---Interlocutory application could not be regarded as 'suit'; hence, strictly speaking S.11, C.P.C would not be attracted to such application---Nevertheless, the general legal principles of res judicata would most certainly apply---Order passed pursuant to any interlocutory application at one stage of the proceedings would operate as a bar upon similar interlocutory applications made at a subsequent stage of the proceedings based on the general principles of res judicata---Said general rule of res judicata would however not apply where the order on such interlocutory application did not involve any adjudication---Examples of such instances were; where there was no decision on merits, but a mere expression of opinion not necessary for the disposal of the application; where a matter, though in issue had, as a fact, not been heard and decided, either actually or constructively; where a matter in issue had been expressly left open and undecided; where the suit was not pressed; or where the suit was withdrawn; where an application had been decided once, but subsequently a fresh application was made on facts and circumstances different from those which existed earlier; and where an application was dismissed as being premature etc.---Proof of new facts or circumstances was necessary in order to exclude the application from the bar of res judicata in respect of interlocutory applications during the pendency of a suit.

Aruguma Thamviran and others v. Namasivaya Pandara Sannadhi and others AIR 1926 Mad. 162; Jairam Kissan v. Chandrakaladevi and others AIR 1974 Bom 49; Amanullah Khan and others v. Khurshid Ahmad PLD 1963 (WP) Lah. 566; Mst. Sarkar Khano A. Molo v. Abdul Malik Rehmanahtullah Kasim Lakha through L.Rs. and others 2016 YLR 1506; Arjun Singh v. Mohindra Kumar and others AIR 1964 SC 993 and Banwari Lal Radhe Moham v. Punjab State Co-operative Supply and Marketing Federation Ltd. AIR 1983 Delhi 86 ref.

(d) Constitution of Pakistan ---

----Art. 185(3)---Leave refusing order by the Supreme Court---Such an order was not law laid down by the Supreme Court.

Salman Aslam Butt, Senior Advocate Supreme Court and Syed Rifaqat Hussain Shah, Advocate-on-Record for Appellants (in C.A. No.1447 of 2016).

Ms. Sofia Saeed, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Appellants (in Cr. O.P. No.220 of 2016).

Ms. Sofia Saeed, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Respondents (in C.A. No.1447 of 2016).

Salman Aslam Butt, Senior Advocate Supreme Court and Syed Rifaaat Hussain Shah, Advocate-on-Record for Respondents (in Cr. O.P. No.220 of 2016).

2018 C L D 233

[Supreme Court of Pakistan]

Present: Ejaz Afzal Khan, Dost Muhammad Khan and Ijaz ul Ahsan, JJ

SIRAJ AHMED through LRs.---Petitioner

Versus

FAYSAL BANK LIMITED and others---Respondents

Civil Petition No.2064 of 2016, decided on 8th December, 2017.

(Against judgment dated 28-4-2016 of Lahore High Court, Bahawalpur Bench, Bahawarpur passed in EFA No.4 of 2016).

Civil Procedure Code (V of 1908)---

----O. XXI, Rr. 66, 67, 68 & 89---Auction proceedings---Legal and procedural errors during execution proceedings---Reserve price for the property did not appear to have been fixed---Nothing on record indicated that auction was widely publicized through advertisement in the newspapers and affixation of the proclamation/notices on and in the vicinity of the property to be auctioned and on the notice board of the Court house---Subject property was valuable agricultural property and could have attracted many buyers, had it been properly advertised, but the notice of auction was only published in an unknown newspaper, that too a day before the auction, because of which only three persons participated in the auction proceedings---Perusal of notice of auction showed that the same did not take place at the location of the property which was sought to be auctioned---On the contrary, the auction was held in the premises of the Bank, i.e. the decree holder, which by itself made it highly suspect---Evaluation report prepared by an approved firm of Engineers and Architects was placed on record which showed that the property was valued much in excess of the amount paid by the auction purchaser---Subject property was sold at a throwaway price in an auction which did not prima facie appear to be fair, transparent and above board---Serious legal and procedural errors were committed at all stages of the execution proceedings which had caused serious miscarriage of justice---Supreme Court remanded the case to the Executing Court (Banking Court) with the directions that a fresh auction shall be conducted in accordance with law; that the auction purchaser shall have the right to participate in the fresh auction and he shall also be given the right of first refusal if he matched the highest bid; that in the event the auction purchaser did not wish to participate in the fresh auction or exercise his right of first refusal, the Bank shall refund to him the entire amount paid by him together with mark up at the rate fixed by the State Bank from the date of the auction till the amount was refunded to him, and that the Bank shall also have the right to claim cost of funds in accordance with the judgment and decree passed by the Banking Court---Appeal was allowed accordingly.

Lanvin Traders, Karachi v. Presiding Officer, Banking Court No.2 2013 SCMR 1419 ref.

M. Akram Sheikh, Senior Advocate Supreme Court and Syed Rafaqat H. Shah, Advocate-on-Record for Petitioner.

Ch. Faiz Ahmed Sanghera, Advocate Supreme Court for Respondent No.1.

Ch.Ali Muhammad, Advocate Supreme Court for Respondent No.2.

2018 C L D 271

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Faisal Arab, JJ

POSTAL LIFE INSURANCE (PLI), LAHORE---Petitioner

Versus

MUHAMMAD ANWAR and others---Respondents

Civil Petition No. 1287-L of 2017, decided on 18th October, 2017.

(On appeal against the judgment dated 16.02.2017 of the Lahore High Court, Lahore passed in Insurance Appeal No. 13 of 2017)

Insurance Ordinance (XXXIX of 2000)---

----S. 171---Pakistan Postal Services Management Board Ordinance (CXXVI of 2002), Ss. 3(2) & 11(2)(e)---Insurance claim against Postal Life Insurance---Insurance Tribunal, jurisdiction of---Scope---Management Board of Postal Life Insurance (" the Board") was a body corporate, therefore, on the basis of its powers to manage, maintain, control and operate the postal insurance business, the case would fall within the purview of S. 171(2) of the Insurance Ordinance, 2000 and thus, the Insurance Tribunal shall have the jurisdiction to hear and decide the matter.

Sohail Mehmood, DAG along with Abdul Ghafar, Dir, PLI Multan and Dr. Akram Nawaz, Dir. PLI Lahore for Petitioner.

Liaqat Ali Butt, Advocate Supreme Court for Respondent No. 1.

2018 C L D 472

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Ijaz Ul Ahsan, JJ

SUO MOTU ACTION TAKEN UP IN COURT: In the matter of

Suo Motu action, decided on 1st February, 2018.

Constitution of Pakistan---

----Art. 184(3)---Suo motu action by the Supreme Court in relation to bank accounts maintained by citizens of Pakistan in foreign countries without disclosing the same to competent authorities in Pakistan or paying taxes on the same---Supreme Court observed that prima facie, it appeared that such money was siphoned off without the payment of taxes through illegal channels and represented either ill-gotten gains or kickbacks from public contracts; that such money created gross disproportion, inequality and disparity in the society, which warped economic activity and growth, and constituted plunder and theft of national wealth; that the society and economy of the country was being adversely affected by illegal and surreptitious theft of national wealth, which was stashed in foreign countries; that the same could otherwise be utilized for the welfare of the people in projects such as education, health and public welfare, and that such delinquency constituted violation of the Fundamental Rights of the citizens and was a matter of great public importance---Supreme Court directed that the State Bank of Pakistan shall before the next date of hearing submit a comprehensive report regarding steps which had been taken under the International agreements/treaties/protocols to identify the citizens who held accounts in foreign jurisdictions and tax havens; that the State Bank of Pakistan, the Federal Board of Revenue, the Securities and Exchange Commission of Pakistan and the Ministry of Finance shall submit a report about the steps taken, in collaboration with other State institutions, for retrieval of the said money; that the Federal Board of Revenue shall also submit a report providing details of the steps taken on the basis of information available, inter alia, through certain leaked documents that provided details of financial information of thousands of offshore entities, and the action taken against citizens holding properties and bank accounts in foreign countries; that all intelligence agencies of the State and the Federal Investigation Agency shall share all requisite information available with them with the Supreme Court, and that the State Bank of Pakistan, the Federal Board of Revenue, the Ministry of Finance and Ministry of Foreign Affairs shall collaborate with each other, collect and share information and approach the foreign jurisdictions to obtain such/other further information, as may be necessary, through legal and diplomatic channels--- Order accordingly.

2018 C L D 774

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, C.J., Umar Ata Bandial and Faisal Arab, JJ

ZAFAR ALI and another---Appellants

Versus

MUSLIM COMMERCIAL BANK LIMITED and others---Respondents

Civil Appeal No. 57 of 2012, decided on 9th March, 2016.

(On appeal from the judgment of the Lahore High Court, Lahore dated 01.12.2011 passed in F.A.O. No. 317 of 2004)

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, R. 66---Ex parte decree against judgment debtor---Auction of judgment debtor's property on orders of Banking Court and High Court---Bona fide purchaser---Process of auction was set aside on the basis that the ex parte decree passed by the Banking Court was set aside by another Bench of the High Court---Legality---Auction of the disputed property took place through due legal process; full payment of sale consideration was made; sale was confirmed; sale certificate was issued without any objection either from the judgment-debtor or decree-holder; purchase of the auctioned property by the appellants was for valuable consideration and as per the appellants they had also spent huge amount on raising further construction over the disputed property and its renovation---Impugned judgment, lacking any valid justification for rejecting the claim of the auction purchaser/appellants in a routine manner, was liable to be set aside in order to re-examine bona fide nature of their claim---Supreme Court remanded the case to the High Court for fresh disposal on merits and in accordance with law after taking into consideration, whether the appellants were bona fide purchaser of the auctioned property for valuable consideration and in case it was so, whether their rights were not protected under the law in spite of the fact that the judgment and decree passed in the Banking suit was set aside vide another judgment of the High Court separately passed on the same date, which according to the judgment-debtor, remained unchallenged and thus attained finality---Appeal was allowed accordingly.

Hudaubia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Messrs Unicom Enterprises v. Banking Court No. 2, City Court Building Karachi and 2 others 2004 CLC 1452; Mumtaz-ud-Din Feroze v. Sheikh Iftikhar Adil and others 2009 CLD 594 and Muhammad Attique v. Jam Limited and others PLD 2010 SC 993 ref.

Abdul Hameed Chohan, Advocate Supreme Court for Appellants.

Nazir Ahmed Bhutta, Advocate Supreme Court for Respondents Nos. 3 - 5.

Nemo for Respondents Nos. 1 and 2.

2018 C L D 1282

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Ijaz ul Ahsan, JJ

HABIB BANK LTD.---Appellant

Versus

WRSM TRADING COMPANY, LLC and others---Respondents

Civil Appeal No.552 of 2015, decided on 2nd July, 2018.

(Against the judgment dated 10-3-2015 of the Lahore High Court, Lahore passed in R.F.A. No.395 of 2005).

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

----S. 9---Section 9 of Civil Procedure Code, 1908, applicability of---Scope---Where special statutes regulating the civil rights of citizens were silent on some matter the Civil Procedure Code, 1908 would apply and fill the lacunae/vacuum---Civil Procedure Code, 1908, in such regard would apply to all Courts whether of plenary or restricted jurisdiction.

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

----S. 2(a)---"Financial institution"---Scope and meaning---Meaning of "financial institution" under S. 2(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 included financial institutions incorporated in Pakistan, which transacted business both inside and outside Pakistan.

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

----S. 2(c)---Banking Court, jurisdiction of---Scope---Foreign branch of a financial institution incorporated in Pakistan providing finance facility to a customer outside Pakistan---Jurisdiction of the Banking Court extended to such finance facility availed by customer within or outside Pakistan---Fact that the Courts at a foreign country may also have jurisdiction over the parties was not a valid reason to deny the jurisdiction of the Banking Courts in Pakistan---Supreme Court observed that no situation should or ought to be created where citizens of the country availed finance(s) abroad and retreated to the country safe in the knowledge that there was no effective redress against them; that comity amongst nations required that the country do its best to ensure that there was effective redressal and recovery of finances and loans from the defaulting customers of financial institutions.

(d) Interpretation of statutes---

----Amending statute---Court must make every effort to interpret the law in such a manner as to render amendments effective rather than nugatory.

Dr. Raja Aamer Zaman v. Omar Ayub Khan and others 2015 SCMR 1303 ref.

(e) Special court---

----Jurisdiction of---Principles---Factors to be considered by a special court before the assumption of jurisdiction were firstly, whether it had jurisdiction over the subject matter of the lis, and secondly, whether the parties to the lis were subject to its jurisdiction.

Mian Mehmood Ahmad v. Hong Kong and Shanghai Banking Corporation Ltd. through Manager and 6 others 2010 CLD 293 ref.

(f) Private International law---

----Loan facility availed outside Pakistan through a bank incorporated in Pakistan---Debtor residing in Pakistan---Appropriate forum for initiating proceeding for recovery of loan---Principles---Forum which had the most real and substantial connection with the lis must exercise jurisdiction over it---When the bank and debtor were present in Pakistan, then it was the courts in Pakistan which must assume jurisdiction.

Spiliada Mzaritime Corporation v. Cansulex Ltd. (1986) 3 WLR 972 ref.

(g) Administration of justice---

----Procedures and technicalities---Whilst courts ought not to adopt arbitrary procedures and ignore established practices but at the same time court must not become slave to technicalities and create a fetish of procedures to the obvious detriment of litigants.

Ms. Ayesha Hamid, Advocate Supreme Court for Appellant.

Ex parte for Respondents Nos.1 and 3.

M. Shahzad Shaukat, Advocate Supreme Court for Respondent No.2.

Syed Waqar Hussain Naqvi, Advocate Supreme Court for Respondent No.4.

Abdul Hameed Chohan, Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondent No.5.

2018 C L D 1333

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Ijaz ul Ahsan, JJ

GHEE CORPORATION OF PAKISTAN (PRIVATE) LTD.---Petitioner

Versus

SURAJ GHEE INDUSTRIES LTD. and others---Respondents

Civil Petition No 1621-L of 2015, decided on 24th August, 2018.

(Against the judgment dated 27.05.2015 of the Lahore High Court, Lahore passed in C.O. No. 121 of 1994)

Companies Ordinance (XLVII of 1984)---

----Ss. 305, 306, 309 & 314---Petition for compulsory winding up of a company---Maintainability---Dispute between management and purchasers of company---Purchasers filed civil suit to obtain a declaration and injunction in their favour---During pendency of suit dispute was referred for arbitration---Arbitrator issued the award which was subsequently made a rule of the court---Meanwhile the relevant Government Corporation which was in control of the company before its sale to the purchasers filed a petition for compulsory winding up of the company on the grounds that the company was unable to pay its debts, it was unable to pay salaries of its employees, it had suspended its business since May 1993 and it was just and equitable to wind up the company---High Court decided that since an award had been announced on the basis of the dispute between the parties, which had been made a rule of court, the winding up petition could not proceed---Held, that winding up petition was not filed bona fide but as a pressure tactic---Timing of filing of the winding up petition and the dispute raised therein related to the period when the petitioner (Government Corporation) was in control of the company---Disputes arose between the parties which were referred to arbitration and formed the subject matter of the award---Winding up petition had objects and purposes other than those for which the law relating to compulsory winding up had been enacted---Significantly none of the other creditors had approached the Court seeking winding up of the company---Even otherwise, winding up proceedings could not be used as a substitute to a recovery suit---Further, admittedly, the petitioner (Government Corporation) had consented to the disputes being referred to arbitration---In such circumstances, a winding up petition was not competent---Petitioner was also estopped from filing the winding up petition after having consented to getting its disputes resolved through arbitration and having freely participated in it without cavil, demure or protest---Finally, after the award was made a rule of court the petitioner ceased to have locus standi as a creditor---Petition for leave to appeal was dismissed accordingly.

Pakistan Industrial Credit and Investment Corporation Ltd. v. Premium Rubber Belting and Manufacturing Co. Ltd, Karachi PLD 1973 Kar. 326; Adage Advertising v. Shezan International Ltd. 1970 SCMR 184; Hashmi Can Company Limited v. K.K. & Co (Pvt.) Ltd. 1992 SCMR 1006 and Trade and Industry Publications Ltd. v. IDBP PLD 1990 SC 768 ref.

Shahid Hamid, Senior Advocate Supreme Court for Petitioner.

Syed Ali Zafar, Advocate Supreme Court for Respondents.

2018 C L D 1447

[Supreme Court (AJ&K)]

Present: Ch. Muhammad Ibrahim Zia, C.J. and Raja Saeed Akram Khan, J

QURESHI VEGETABLE GHEE AND OIL MILLS LIMITED through Managing Director---Appellant

Versus

HABIB BANK LIMITED through Manager and others---Respondents

Civil Appeal No. 5 of 2018, decided on 30th May, 2018.

(On appeal from the judgment of the High Court dated 15.9.2017 in Civil Appeal No. 250 of 2013)

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

----Ss. 8, 9 & 2(e)---Procedure of Banking Court---Suit for recovery of written-off finances--- Applicability and scope of S. 8 of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Word "obligation" occurring in S. 9, Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Section 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was made only to enable Banks/financial institutions to effect recovery of finance from borrowers, which finance had been written off or adjusted for political reasons which were other than bona fide business considerations---Section 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was not attracted for dismissal of a suit filed by customer against Bank/financial institution---Factual proposition as to whether a written-off amount fell within scope of "obligation" under Financial Institutions (Recovery of Finances) Ordinance, 2001 had to be determined by the Banking Court for which procedure was prescribed under the law.

Sahibzadi Shah Bano Khan v. Messrs City Bank N.A. 2006 CLD 258 rel.

Sh. Masood Iqbal, Advocate for Appellant.