CLD 2019 Judgments

2019 C L D 37

[Competition Commission of Pakistan]

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

Messrs NEUCON PAKISTAN LTD.: In the matter of

File No. 274/FEROZSONS/OFT/CCP/2017, decided on 24th September, 2018.

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

----Ss. 10, 37 & 38---Deceptive marketing practices---Fraudulent case of another's trademark---Complainant had submitted that it was enlisted with the Drug Regulatory Authority as the authorized importer and distributor of pharmaceutical products branded as "BIOFREEZE"---Complainant alleged that respondent was fraudulently using similar deceptive or confusingly similar mark "BYQFREEZ" in relation to similar pharmaceutical preparation in the form of spray and gel so as to pass off them as and for the products of the complainant, which tantamounted deceptive marketing practices in contravention of cl.(d) of subsection (2) of S.10 of Competition Act, 2010---Enquiry report concluded that respondent's unauthorized and dishonest adoption of deceptively and confusingly similar trademark appeared to be fraudulent use of trademark---Respondent appeared to be disseminating, false and misleading information, including its substantially lower pricing in the market to the detriment of consumers and competitors---Based on the said prima facie findings of the enquiry report, Commission initiated proceedings under S.30 of the Competition Act, 2010 against the respondents---Respondent's assertion could not be accepted that its product was branded as "BYQFREEZ HPQR" for the reasons, firstly, the product was widely known and sold under the name of 'Biofreeze' in the market, secondly, the respondent had produced no evidence to show that either physicians or patients/consumers could differentiate the respondent's products as "BYQFREEZ HPQR"; thirdly, the letters "HPQR", were written in much smaller and different than "BYQFREEZ"---Finally, the letters "HQPR", conveyed no useful or extra information to the consumers of ordinary intelligence---Complainant had proved beyond doubt that it was the registered proprietary and right-holder of the trademark "BIO FREEZE" as well as the trade class i.e. green and light blue labeling and packaging of the products in question---Complainant had exclusive right to use the trade mark including trade dress of "BIO FREEZE"---By adoption of an identical trademark i.e. "BYQFREEZ" and the trade dress, the overall get up, respondent had contravened clause (d) of subsection (2) of S.10 of the Competition Act, 2010---Commission, also found that it was highly likely that the consumers would be deceived/misled by false and misleading depictions of the respondent, which would constitute a contravention of S.10 of the Competition Act, 2010---Commission, further found that by resorting to said practices, the respondent had failed to fulfil its obligation to avoid unfair competition and became unjustly rich by encashing on the good-will or reputation of complainant---Commission observed that anyone who chose to use a trademark or a trade dress without the owner's permission, should be mindful not only of the potential liability for infringement under the trademark laws, but also of potential consequences, such as violation of S.10 of the Competition Act, 2010---Complainant had made out its case that he was registered and authorized right-holder of the trademark "BIO FREEZE" and its associated trade dress---Respondent, its proprietors, partners, directors, associates, agents, dealers, among others, were restrained from using the impugned marks "BYQFREEZ" or any other mark with any prefix or suffix and trade dress that was phonetically, visually and constructively similar as that of the complainant' mark "BIO FREEZE" and its associated trade dress---Respondent having undertaking before the Bench of the Commission given that it would not repeat the contravention and comply with the provisions of S.10 of Competition Act, 2010, taking lenient view, penalty of Rs.2,500,000 (Rupees twenty five hundred thousand only) was imposed on respondent, under S. 38 of the Competition Act, 2010, which would be deposited with the Registrar of the Commission within sixty days from the date of the order.

Messrs DHL Pakistan (Pvt.) Limited's case 2013 CLD 1041; Messrs A. Rahim Food (Pvt.) Limited's case 2016 CLD 1128 and Colgate Palmolive Co. v. Ancher Health and Beauty Care (Pvt.) Limited (2003) PTC 478 Del ref.

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

----S. 10--- Deceptive marketing practices--- Deception--- Scope---Section 10 of Competition Act, 2010, would apply to all undertakings in Pakistan, regardless of their size and the way in which they were established and financed---Said provisions of law mandated the Commission to eliminate all causes of consumer deception or deceptive marketing practices---For deception to occur, there must be a representation, omission or practice which was likely to mislead the consumers---Said representation, omission or practice must be "material" one---Advertising statements, disclosures, disclaimers or point of sale representation, inter alia, were the points where consumer first contacted between a seller and buyers---Whether or not a consumer buys a product was immaterial; law could still be violated---Primary purpose of S.10 of the Competition Act, 2010, was to prohibit false and misleading advertisement practices---Question of dilution, ordinary meaning or secondary meanings of words or phrases used in a trademark/trade dress would fall outside the realm of S.10 of the Competition Act, 2010.

Baqar Hasan, Director Legal and Regulatory Affairs and Barrister Haroon Dugal on behalf of Ferozsons Laboratories Ltd.

Siraj Memon, Consultant and Nadeem Hussain Alamgir, Consultant on behalf of Neucon Pakistan Ltd.

2019 C L D 116

[Competition Commission of Pakistan]

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

PAKISTAN TELECOMMUNICATION COMPANY LTD. (PTCL): In the matter of

File No. 2(3)DD(L)/PTCL/COMMISSION/2010, decided on 14th September, 2018.

Competition Act (XIX of 2010)---

----Ss. 3, 30 & 37---Competition Commission (General Enforcement) Regulations, 2007, Reglns.21 & 36---Abuse of dominant position---Complaint against--- Withdrawal of complaint--- Procedure---Complainants filed complaint against respondent/PTCL with Competition Commission for being engaged in abuse of its dominant position in violation of S. 3 of Competition Act, 2010---Enquiry in terms of S. 37(2) of the Competition Act, 2010 was initiated by the Commission---Based upon the conclusions and recommendations of the enquiry report, Commission approved initiation of proceedings under S. 30 of the Competition Act, 2010 and show-cause notice was issued to the respondent---Complainants filed, subsequently, application for withdrawal of complaint---Commission vide letter informed the complainants that it had initiated the enquiry in the matter and that it could permit the withdrawal of the complaint under Regln.26 of the Competition Commission (General Enforcement) Regulations, 2007, however, proceedings or enquiry initiated would not necessarily abate with said withdrawal---Respondent/PTCL had stressed that the complainants having withdrawn their complaint and being no more interested in pursuing the matter even at the enquiry stage, the matter should have been closed by the Commission---Validity---Held, Competition Commission was established with exclusive statutory mandate to provide free competition in all spheres of commercial and economic activities to enhance economic efficiency and to protect consumers from anti-competition behaviour---Under the provisions of S.37(2) of the Competition Act, 2010 it was mandatory obligation of the Commission to conduct an enquiry in the matter complained of, unless it was of the opinion that the complaint was frivolous or vexatious or was based on insufficient facts or was not substantiated with prima facie evidence---Commission, while, allowing the parties to withdraw the complaint, under Regln.21 of Competition Commission (General Enforcement) Regulations, 2007, placed reliance on the categorical stipulation in the same Regulation that the enquiry or the proceedings thereof, would not necessarily abate on such withdrawal and the Commission could proceed in the matter, if so decided by it---Upon conclusion of the enquiry and in pursuance of the provisions of S.37(4) of the Competition Act, 2010, Commission could initiate proceedings under S.30 of Competition Act, 2010, where it was in the public interest to do so as Commission was entrusted with the responsibility of looking after the interest of general public---Unilateral withdrawal of the complaint by the complainants would not prejudice the proceedings against the respondent/PTCL pending before the Commission---Complainants, however, were allowed to withdraw themselves from the proceedings---Proceedings before the Commission in the matter of show-cause notice issued to 'PTCL' for prima facie violation under S.3 of the Competition Act, 2010, were maintainable and would continue in accordance with law.

International Clearing House Agreement inter se LDI Operators: In the matter of 2012 CLD 767; Syed Mushahid Shah v. Federal Investment Agency 2017 SCMR 1218; Alamdar Hussain v. National Accountability Bureau and others 2017 CLD 1101; Mahmood Khan Achakzai v. Federation of Pakistan and others PLD 1997 SC 426; Apollo Textile Mills Limited v. Soneri Bank Limited PLD 2012 SC 268; Nasrullah v. Province of Balochistan 2000 PLC (C.S.) 769; Innayat v. KBCA 1997 CLC 2039; Judicial Activism Panel v. Government of Pakistan and others PLD 2017 Lah. 588 and Sheela Barse v. Union of India and others JT 1988 (3) 15 (SC India) ref.

Assisted by Noman A. Farooqi, Director General (Legal) for the Commission.

Nemo for Messrs LinkdotNet Telecom Ltd.

Faisal Khan, Ikram Ullah Mahar and Umer Tariq on behalf of Messrs Micronet Broadband (Pvt.) Limited.

Nemo for Messrs Nexlinx (Pvt.) Limited.

Ali Raza, Advocate Supreme Court, Ghulam Mustafa, GM (Legal Affairs), Sikandar Naqi, Chief Development Officer, Aziz ur Rehman, Senior Manager Contract and Policy Studies, Ms. Aaminah Azeem, Assistant Manager (Legal), Ms. Anoosh Jaffar, Assistant Manager (Regulatory Affairs) and Ms. Habiba Alvi on behalf of Pakistan Telecommunication Company Ltd. (PTCL).

2019 C L D 164

[Competition Commission of Pakistan]

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

NFC EMPLOYEES CO-OPERATIVE HOUSING SOCIETY LTD.: In the matter of

F.No. 80/NFCEHS/C&TA/CCP/2016, decided on 26th November, 2018.

Competition Act (XIX of 2010)---

----Ss. 2(1)(k), 2(1)(q), 4, 30, 37 & 38---Competition Commission (General Enforcement) Regulations, 2007, Regln.37---Prohibited agreement---Undertaking and relevant market, determination of---Competition Commission received concerns raised by residents of respondent society that they were being forced to subscribe to the sole cable networks and were deprived of the choice of any alternate or competing services provided in the locality---Said residents further alleged that they were being forced to pay whatever subscription amount the "Provider" would charge, regardless of the quality of service being provided---Enquiry Committee, submitted its enquiry report with conclusion that by virtue of the exclusivity agreement arrived at between society and the "Provider", a prima facie contravention of S.4(1)(2)(a)(d) of Competition Act, 2010 was made out against the society and the "Provider"---First issue involved in the case was; whether the society was an "undertaking" within the meaning of S.2(1)(q) of the Competition Act, 2010---Society had submitted that being a co-operative society, it did not fall within the meaning of "undertaking"---Concept of "undertaking" would include every entity; whether natural or legal, as long as it was engaged, directly or indirectly in any commercial or economic activity, regardless of the legal status and way in which it was financed---Competition Act, 2010, had not classified the private economic operators or public entity differently, as long as they were engaged in any commercial or economic activity in a given market, they would fall within the definition of the term "undertaking"---Society, in circumstances, was an 'undertaking' and would remain liable for contravention of Competition Act, 2010---Second issue involved in the case was "what was the relevant market" for the purpose of proceedings---Management of society had asserted that the "Provider" was not the sole service provider, because "PTCL" was also providing similar services to the residents in the society; thereby suggesting that said two services were substitutable---'Relevant market' suggested identification of two or more products belonging to the same market---Relevant market assessment also required determining the geographic market---Business undertakings, subject to competition, must respect two major competitive constraints in terms of demand substitutability and supply substitutability---Market was considered to be competitive, if customers could choose between a range of products/services by reason of their characteristics, prices charged and intended use---Two services were not substitutable from demand side i.e. consumers' perspective---Third issue involved in the case was that, whether the exclusivity granted to the "Provider' by the society for the provisions of Cable TV Services had the object or effect of preventing, restricting or reducing Competition in the relevant market in contravention of S.4 of the Competition Act, 2010---Relevant clauses of agreement arrived at between the society and the "Provider", were; (exclusivity), whereby, during said agreement, no other competitor would be accommodated, subject to the satisfactory performance of the "Cable Network Services"---Clause for renewal of the agreement provided that on the expiry of five years, if some better offer from other cable service was received than the "Provider" Service would have to match the new offer or the society management would be at liberty to hire the services of other better party---Said two clauses had indicated that those were anti-competitive and restrictive of competition---Exclusivity granted to the "Provider" prevented, restricted and reduced competition by imposing respective trading conditions; restricting output as well technical advancement in terms of innovation and efficiencies and investment, in violation of S.4(1)(2)(a)(b)(d) of Competition Act, 2010---Agreement further regulated the future rapports between the parties to the agreement; if same was fulfilled, the "Provider" would continue to enjoy exclusivity or monopoly preventing other Cable T.V. Operators in the relevant market---Competition Commission observed that said clause of agreement had the object as well the effect of reducing, restricting and preventing competition in the relevant market as envisaged under S.4 of the Competition Act, 2010---Clauses of the agreement were violative of S. 4 of the Act and were void in terms of its S.4(3)---Authorized representative of the Society had tendered unconditional apology and submitted its commitment to amend its agreement with the "Provider" to the satisfaction of the Commission---Contravention of S.4(1)(2)(a)(b)(d) of the Competition Act, 2010 having been established; nevertheless, taking into account the compliance oriented approach of the society and its management and commitment not to repeat or indulge in contravention of S.4 of the Competition Act, 2010, Commission took a lenient approach---In pursuant to S.38 of the Competent Act, 2010 and Regln.37 of Competition Commission (General Enforcement) Regulations, 2007, penalty of Rs.1,000,000 (Rupees one Million), was imposed on the society, with direction to file a compliance report in terms of commitment---If non-compliance was not reported, society would be liable to pay a further penalty in amount of Rs.50,000 per day from the date of issuance of order.

Utility Stores Corporation of Pakistan (Private) Limited: In the matter of 2018 CLD 292 ref.

Assisted by Noman A. Farooqi, Director-General (Legal) rendered assistance.

Mumtaz Hussain Baloch, Financial Consultant and Officiating Secretary on behalf of Messrs NFC Employees Cooperative Housing Society (NFCEHSL).

Raza Shahbaz and Asad Iftikhar for Messrs Malik Cable Networks.

2019 C L D 188

[Competition Commission of Pakistan]

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

WATEEN TELECOM LIMITED: In the matter of

No. 52/Wateen/C&TA/CCP/2016, decided on 20th November, 2018.

Competition Act (XIX of 2010)---

----Ss. 2(1)(e), 2(1)(k), 2(1)(q), 3, 30 & 37---Dominant position, abuse of---Respondent company was engaged in the business of providing converged communications telecommunication services, including television, multimedia, voice, internet and enterprise solutions to residents of the locality as well as business organizations---Competition Commission received concerns from numerous residents alleging that due to the absence of any other cable service providers in the area, company was denying them the provision of 'ATV' services on a standalone basis unless subscribed to in a bundled form with its other services which included digital television (DTV), internet---Competition Commission took notice of the violation of S.3 of the Competition Act, 2010, initiated an inquiry in pursuance of S.37(1) of the Act, which culminated into issuance of show-cause notice to the company under S.30 of the Competition Act, 2010---Issues, which needed to be addressed in the proceedings were as to what was the relevant market for the purpose of those proceedings in terms of S.2(1)(k) of the Competition Act, 2010; whether the company held a dominant position in the relevant market in terms of S.2(1)(e) of the said Act; whether the company had abused its dominant position in the relevant market in violation of Ss.3(1)(2) & 3(3)(c) of the said Act---Relevant market in which company operate was an amalgamation of two components, one being the relevant products (goods or service), and other, the relevant geographic market---Enquiry report's identification of the relevant product market, was the market for the provision of ATV Services based on HFC technology, due to the differentiation in characteristics, quality and price which made HFC based ATV Services such that it could not be seen as a substitute for the other types of ATV and DTV Services being offered, such as 'FTTH' or 'IPTV'---Competition Commission must clearly identify the relevant market in which company operated, in order to proceed further as to whether or not a violation of Competition Act, 2010, in fact and in law had been made out---Commission was of the view that the enquiry report had erred in establishing the relevant product and geographic market in the matters; it needed to be established; whether the company held a dominant position in the relevant market---Enquiry report, based on its erroneous identification of the relevant market being that of ATV Services through HFC technology only in the area, had further concluded that the company held a 100% market share therein, being the only such provider of ATV (HFC based) services---Company had outrightly denied holding 100% market share in the relevant market, and had denied being dominant by contending that in the market of all audio visual content, it had a market share of 15% of the area and an overall 30% within the said area---Other than said contested values of market share, the Commission had no other information on record to either rebut or back up the same---Commission observed that based on correct identification of the relevant market being that of TV Services, within the area, there was no evidence which suggested that the company held a dominant position; there existed insufficient evidence on record to conclusively determine the existence of dominance of company in the area---Conclusion of the enquiry report that company was dominant due to 100% market share was untenable and rejected being to an erroneous demarcation of the relevant market and lack of information on record to support the same---Enquiry report had erroneously defined the relevant market---Due to lack of sufficient data and evidence on record, conclusive finding could not be made with regard to issue that whether the company held a dominant position in the relevant market---Company, in circumstances, could not be held to be possessing a dominant position in the relevant market; question of an abuse of dominant position, in contravention of S.3 of the Competition Act, 2010 therefore, would not arise---Show-cause notice issued to the company having no merits was set aside.

Assisted by Noman A. Farooqi, Director-General (Legal) and Ms. Sophia Khan, Deputy Director (Legal).

Barrister Ahmed Pansota, Barrister Daraab Wali Furqan, Barrister Hamna Zain, Haaris Anwar, Head of SME and Consumer Sales and Muzammil Sobhan, System Manager for Wateen Telecom Ltd.

2019 C L D 211

[Competition Commission of Pakistan]

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

MESSRS PAKISTAN SERVICES LIMITED: In the matter of

F. No. 279/PC HOTELS/OFT/CCP/2017, decided on 19th November, 2018.

Competition Act (XIX of 2010)---

----Ss. 10, 30, 32 & 38--- Competition Commission (General Enforcement) Regulations, 2007, Reglns. 25(3) & 26(2)(e)---Deceptive marketing practices---Interim relief, grant of---Allegation was that respondent was engaged in dissemination of false and misleading claims/information, representing itself as a well-known hotel chain in Pakistan; whereas it had no authorization or licence to use the complainant's registered and well-known trademark; thereby respondent was deliberately engaged in deceptive marketing practices to the complainant and consumer's detriment in contravention of S.10 of Competition Act, 2010---Complainant had prayed to the Competition Commission to pass interim order under S.32 of the Competition Act, 2010 requiring the respondent to refrain from displaying the unauthorized/unlicensed use of complainant's registered mark and logo---Complainant had further alleged that despite issuance of show-cause notice, respondent continued to conduct business under the trade mark/brand of complainant resulting in transmission of misleading information to the consumers---Allegation was supported by the presence of evidence including pictures of the premises---Continued use of the complainant's, trademark by the respondent could cause serious or irreparable damage to the business and goodwill of the complainant---Commission could issue interim order under S.32 of the Competition Act, 2010, which was in public interest---Commission, was entrusted with the role of protecting the consumers from anti-competitive behaviour, which inter alia would include the deceptive marketing practices being prohibited under S.10 of the Competition Act, 2010---Commission was right in its stand to restrain the undertaking from resorting to unfair competitive practices---Respondent was directed by the Commission that till the issuance of the final order and conclusion of the proceedings under S.30 of the Competition Act, 2010, respondent would refrain from using the trademarks of the complainant; respondent, was further directed, not to claim any association or affiliation with the complainant during the course of its business activities, till conclusion of the proceedings---Respondent was also directed to file compliance report with reference to said directions within 7 days from the date of order, with the Registrar of the Commission, without fail.

Gulistan Textile v. Soneri Bank 2018 CLD 2013; General (Retd.) Pervez Musharaf v. Pakistan PLD 2014 Sindh 389; ORO Industries v. Muhammad Hanif 2018 CLD 546; Raja Asir Munir v. DHL Pakistan (Pvt.) Limited and others 2018 CLD 725; In the matter of Complaint filed by DHL 2013 CLD 1014; Shainal Al-Syed Foods: In the matter of 2018 CLD 1115; Colgate Palmolive v. Anchor Heal and Beauty (27) PTC 478 DEL and Nasrullah v. Province of Balochistan 2000 PLC (C.S.) 769 ref.

Assisted by Noman A. Farooqi, Director-General (Legal).

Syed Bulent Sohail for Messrs Pakistan Services Limited.

Nasir Ayub Khan and Sardar Mazhar, Hanif ur Rehman, General Manager for Messrs Omni Comm. (Pvt.) Ltd.

2019 C L D 326

[Competition Commission of Pakistan]

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

ALL PAKISTAN NEWS PAPERS SOCIETY (APNS): In the matter of

F. No. 61/ETPB/C&TA/CCP/2016, decided on 6th December, 2018.

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

----Ss. 4(1), 4(2)(a) & 4(2)(f)---Anti-competition---Determination---Evacuee Trust Property Board (ETPB) filed complaint against All-Pakistan Newspapers Society (APNS) to have colluded with other government departments to block its advertisements in all newspapers and periodicals at a dispute over recovering payments---Validity---Rules, regulations and circulars issued by APNS were its decisions and member undertakings, having actual or probable effect of diminishing or preventing competition in relevant market---To operate in relevant market, advertising agencies had to procure APNS accreditation for several aspects---Process of accreditation devised by APNS, its unfettered decision to accept, defer or reject accreditation applications, allowing different credit terms for same business, putting of extraneous conditions of minimum amount of prior business and guarantee of future business as well as constraints imposed on placement of government business by non-accredited agencies among other things, were simply not functions of a trade association and such were devoid of any redeeming virtue---Such process of accreditation was anti-competitive in contravention of Ss. 4(2)(a), 4(2)(f) & 4(1) of Competition Act, 2010--- APNS failed to provide any economic justification or positive correlation between functions of an association and governing conduct of business viz pricing and credit evaluation that involved or effected members and other undertakings---Instead of encouraging members to handle their pricing activities on their own as a normal business conduct, APNS had created a de-facto price alliance between its member undertakings---Credit dispute was commercial/legal matter unquestionably could be accounted for by individual undertakings---No association should adopt a decision or set mechanism to do so---Such practice of APNS amounted to governing freedom of trading activities from advertising agencies and member publications and was anti-competitive in contravention of Ss. 4(2)(a) & 4(1) of Competition Act, 2010---Enabling APNS and its member publications to organize collusive/collective boycotts and place pressure on other undertakings such as clients and advertising agencies was a form of output restriction and anti-competitive by object and same was in contravention of S. 4(2)(c) & S. 4(1) of Competition Act, 2010---Competitive Commission directed APNS and its office bearers to cease and desist from indulging in practices which were found to be anti-competitive and relevant provisions of rules, regulations and circulars issued by APNS were annulled---Show cause notice was disposed of accordingly.

In the matter of Show Cause Notice issued to Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) and its Member Undertakings dated 10th April, 2015, 2016 CLD 298 and In the matter of Show Cause Notice issued to Messrs Pakistan Poultry Association dated 16th August, 2010 2016 CLD 289 ref.

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

----S. 4(2)(a)---Price fixing---Decisions by association---Scope---Price fixing means any term of sale or purchase that may affect price competition in market--- Even selling a product for free might affect price that customer must pay and thus capture by notion of price fixing--- Agreements of undertakings or decisions by association of undertakings to fix prices are universally condemned as they are deemed to substantially lessen or restrict competition in breach of S. 4 of Competition Act, 2010.

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

----Ss. 4(1) & 4(2)(a)---Market economy---Business---Principle---In a market economy, businesses are free to set their prices and discount their goods and services as they deem fit---Business undertakings must set their prices and all other terms of doing business independently of their competitors and trade associations if any.

Noman Amin Farooqi, Director-General (Legal).

Osama Mehboob, Advocate High Court for Evacuee Trust Property Board (Complainant).

Umer Mujib Shami, Secretary General, Mehtab Khan, Chairman Federal Capital Committee and Dr. Tanvir Ahmed Tahir, Executive Director for All Pakistan Newspapers Society (APNS).

2019 C L D 615

[Competition Commission of Pakistan]

Before Dr. Muhammad Saleem andDr. Shahzad Ansar, Members

UNIVERSITY OF MANAGEMENT TECHNOLOGY FOR DECEPTIVE MARKETING PRACTICES: In the matter of

F. No. 247/UMT/OFT/CCP/2016, decided on 26th March, 2019.

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

----Ss. 10 & 30---Competition Commission (General Enforcement) Regulations, 2007, Regln. 58---Deceptive marketing---Incorrect ranking of institution---Complainant sought admission in respondent institution on basis of its advertisement which complainant alleged to be misleading and falsified---Institution assailed show cause notice on grounds that it had committed unintentional mistake and that said mistake had been rectified---Validity---Institution had misled consumers by portraying itself as 2nd best institute in Pakistan and referred to its Business School as best institute whereas SAQS accreditation did not provide ranking of institutes---Said Institution was ranked 23rd by Higher Education Commission (HEC) in preceding year and according to HEC's Quality and Research Based Ranking of Business Education Institutes, name of the institution did not even make it to list---Calling its Business School as best ranked and best accredited school was false and misleading in terms of rankings both within Pakistan and South Asia--- Each claim referred was misleading in terms of properties, characteristics and quality of educational services being provided and accordingly constituted violation of Ss. 10(1) & 10(2)(b) of Competition Act, 2010---Institution, in circumstances, had engaged in deceptive marketing practices prohibited under Ss. 10(2)(b) & 10(1)(a) read with 10(a) of Competition Act, 2010---Commitments and compliance filed by the institution denoted its willingness to conduct its business activities in accordance with provisions of Competition Act, 2010 and associated Rules and Regulations---Commission imposed fine penalty and directed the Institution to refrain from indulging in any form of deceptive marketing practices in future---Commission forewarned the Institution that repeat violations might attract stricter penalties as per law---Complaint was allowed accordingly.

Order of Commission in the matter of Show Cause Notice issued to Messrs Green Field Developers (Pvt.) Limited 2018 CLD 404; Order of the Commission in the matter of Show Cause Notice issued to Messrs Eden Builders (Pvt.) Limited 2018 CLD 482; Messrs Procter and Gamble Pakistan (Private) Limited 2010 CLD 1695; ASA (2017f) ASA Ruling on Complaint ref: A17-393534; Federal Trade Commission, Plaintiff v. DeVry Education Group Inc., formerly known as DeVry Inc., a corporation; DeVry University, Inc., a corporation: and DeVry/New York Inc., a corporation Case No. 2:16-cv-00579-MWF-SS and In the matter of Show Cause Notice issued to Messrs Tara Crop Sciences (Private) Limited 2016 CLD 105 ref.

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

----S. 10(2)(a)---Deceptive marketing---Harm, proof of---Scope---No strict proof of actual harm caused to a competitor is required for determination of a contravention of provisions of S. 10(2)(a) of Competition Act, 2010 as long as it can be shown that such potential harm was capable of possible of being caused or foreseeable.

Ms. Sophia Khan, Prosecutor assisted by Ms. Aish K. Khan on Special Notice under section 53 of Competition Act, 2010.

Asad Manzoor Butt, Advocate Supreme Court and Hassan Fareed for University of Management Technology (UMT).

2019 C L D 667

[Competition Commission of Pakistan]

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

MESSRS SK FARMS AND MESSRS HEALTH FIRST: In the matter of

F. No. 222/OFT/PPA/CCP/16, decided on 26th March, 2019.

Competition Act (XIX of 2010)---

----Ss. 10(1), 10(2)(a), 10(2)(b) & 30---Deceptive marketing---Show cause notice---False or misleading comparison---Respondents were poultry product producers and were issued show cause notices by Competition Commission on grounds that their products were misleading in terms of being labeled 'hormones free' and was falsely compared with other market products---Validity---Claim used by respondents, i.e., 'hormones free' was not deceptive in terms of S. 10(2)(b) of Competition Act, 2010---Such claim was also not in violation of S. 10(2)(c) of Competition Act, 2010 as no comparison was made by respondent in process of marketing or advertising---Commission set aside show cause notices issued to respondents as no violation was made out in the matter vis-à-vis S. 10(2)(b) & (c) of Competition Act, 2010 and no determination under S. 10(2)(a) of Competition Act, 2010 could be made---Complaint was dismissed accordingly.

Yasin alias Ghulam Mustafa v. The State 2008 SCMR 336; Inamul Haq v. The State 1981 SCMR 152; China Mobile Pak Limited and Messrs Pakistan Telecom Mobile Limited: In the matter of 2010 CLD 1478; Messrs Green Field Developers (Pvt.) Ltd.: In the matter of 2018 CLD 404 and Messrs Eden Builders (Pvt.) Limited: In the matter of 2018 CLD 482 ref.

Noman A. Farooqi, Chief Prosecutor-General on Special Notice under section 53 of the Competition Act, 2010.

Ali Kabir Shah, Khali Saleem Malik, Ex-Chairman and Muhammad Irfan Maken, Secretary for Pakistan Poultry Association.

Khurram Qureshi for Messrs SK Farms and Messrs Health First.

2019 C L D 744

[Competition Commission of Pakistan]

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

CABLE MANUFACTURES FOR DECEPTIVE MARKETING PRACTICES: In the matter of

F. No: 176/OFT/ELECTRIC CBLE/CCP/2015, decided on 26th March, 2019.

Competition Act (XIX of 2010)---

----Ss. 10, 30 & 37(1)---Competition Commission (General Enforcement) Regulations, 2007, Reglns. 26(2)(e), 37, 46(2) & Part-IV---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---False advertisement---Deceptive marketing practices---Cash coupon, non-disclosure of---Concealment of material information---Onus of proof---Respondents were cable manufacturers who were issued show cause notices for concealing information from consumers pertaining to existence of cash coupons inside their packaging---Validity---Non-disclosure of token in electric cable packs, was deceptive in that it created ambiguity and was found lacking in having reasonable basis as to price borne by consumer---Consumers were not informed about presence of token and its value and its placement in center of cable made its access to such information further difficult---Onus was on respondents to ensure that no deception resulted through their marketing practices---Such practice could have adverse effect of giving an unfair competitive edge to electric cable manufacturing offering higher token values without disclosures to consumers who bore price---Technicians would naturally have an incentive to purchase cable containing higher token values and other factors such as quality, durability might pale in comparison to such consideration---Practice of omission of material information with respect to tokens in electrical cable packs amounted to misleading consumers, hence was deceptive and in violation of S. 10 of Competition Act, 2010---Commission directed respondents that all advertisements, promotional material or instructional manuals pertaining to electric cable packs, whether electronic, printed or otherwise were to be modified to disclose presence and price/value of token on each pack for consumer---Commission further directed respondents to issue 4 advertisements/public notices to be published at least 15 days interval in at least two Urdu and English newspapers of national circulation making due disclosures to public regarding presence of price/value of token/coupon and category of products in which such tokens were found present---Commission also directed that public notices could be published by respondents on an individual or collective basis and that disclosure with respect to token on electric cable pack should be made with use of bright/conspicuous colors distinct from color of packaging of pack and should be printed in clear, bold and legible size---Complaint was disposed of accordingly. [pp. 757, 759] A, B & C

International Harvester Co: 104 F.T.C. 848 at page 1058; Cliffdale Associates, Inc., 103 F.T.C. 110, (1984) and American Home Products, 98 F.T.C. 136, 370 (1981) ref.

Noman A. Farooqi, Chief Prosecutor-General and Ms. Sophia Khan, Prosecutor on Special Notice under section 53 of the Competition Act, 2010.

Maqsood Afzal, Partner for Messrs Dawn Cables.

Saood Nasrullah Cheema, Advocate Supreme Court for Messrs G.M. Cables and Pipes.

Barrister Adeel Aftab, Zahid Lateef, Zonal Manager and Kamal Mian, Director for Messrs Fast Cables.

Usman Khan and Safdar Javed, Sales and Marketing for Messrs Hitech English Cables.

Miss Misbah ul Islam, Accounts Manager for Messrs Pak Muzaffar Cable.

Sheikh Farooq Elahi and Malik Amir for Messrs Alfa Plus Wire Cable.

Mian Abdul Majeed Qadri and Farooq Majeed for Messrs Falcon Cable.

Ahmed Anwar and Sheikh Muhammad Saeed, Marketing Officer for Messrs Hi Ace English Cable.

Muhammad Shahid, Owner for Messrs Gold Royal Cable.

Naveed Anwar, Owner for Messrs Zafar Cable.

Shahid Maqsood Bhutta for Messrs Nation Cable.

Mian Muhammad Nawaz and Mian Babar Hussain for Messrs Puller Cable.

Ms. Aman Ali, Malik Law Associates for Messrs Welcom Cables.

Nemo for Messrs Dewan Cables.

Zahid for Messrs E-Flux Cables.

Nemo for Messrs Hero Cable.

S.M. Shahid Bukhari and M. Imran Arshad (ITP) for Messrs Lear Cables.

Rana Mukhtar Ahmed, CEO for Messrs Rana Cables.

2019 C L D 785

[Competition Commission of Pakistan]

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

MEDICAL COLLEGES FOR DECEPTIVE MARKETING PRACTICES: In the matter of

F. No. 153/OFT/MEDINST/CCP/14, decided on 26th March, 2019.

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

----Ss. 2(1)(q), 10 & 37(1)---Pakistan Medical and Dental Council Act (XIX of 2012), S. 36-B--- Deceptive marketing---Private medical colleges, accreditation of--- Restrictions on admissions---Effect---Respondent were private medical colleges and complaint was filed against them giving admissions to students even after suspension of admissions from Pakistan Medical and Dental Council (PMDC) due to lack of accreditation of the College---Authorities issued show cause notices to respondents who assailed them on grounds that they had addressed grievances of PMDC and had complied with notices---Validity---Role of PMDC, which was principally mandated to setting national standards for medical education, keeping a Register of medical practitioners and accrediting medical colleges keeping in view quality of facilities, numbers of teachers and other terms and conditions as provided under PMDC laws, Rules and Regulations---Significant part of overall functioning of Pakistan's healthcare system, PMDC continues to play an indispensible role---Accreditation and recognition system that had been put in place by PMDC was essential in ensuring high quality education and to safeguard careers and futures of countless students---Commission was committed to ensuring that no medical institute breached provisions of S. 10 of Competition Act, 2010 by way of advertising recognition or accreditation by PMDC when in fact it did not have necessary endorsement---Commission declared that a case of deceptive marketing in violation of S. 10 of Competition Act, 2010 had been made against the three respondents---Entire case turned on timing of advertisements as they appeared on websites or print media---Sufficient evidence was available to prove that the three respondents had advertised admissions for 2013-2014 session despite instructions by PMDC to these institutes wherein they were directed to cease admissions for session in question based on their questionable and unconfirmed recognition status---Commission imposed fine penalty on three respondents in violation of S. 10 of Competition Act, 2010---Complaint was allowed accordingly.

In the matter of Show Cause Notice issued to China Mobile Pak Limited and Messrs Pakistan Telecom Mobile Limited 2010 CLD 1478; Cliffdale Associates, Inc., 103 FTC 110 (1984) and Hashmat Medical and Dental College v. Pakistan Medical and Dental Council 2018 SCMR 1310 ref.

(b) Administration of justice---

----Verbal information, sanctity of---Scope---Verbal information and verbal proceedings have no sanctity in law---Oral orders and oral enquiries are alien to process of law.

Ahmad Nawaz v. The State PLD 1998 Kar. 180 rel.

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

----S. 37(1)---Enquiry---Electronic evidence, collection of---Principle---Enquiry Committee of Commission must follow a proper mechanism for collection of electronic evidence---Any evidence may lose its credibility if it is not collected in correct form---Important features such as date must be displayed especially if it is of crucial importance to allegations and case at hand.

Shamim Akhter v. Standard Chartered Bank Limited 2014 CLD 1034 and Alamgir Khalid Chughtai v. The State PLD 2009 Lah. 254 rel.

Noman A. Faroooqi, Chief Prosecutor-General and Ms. Sophia Khan, Prosecutor present on Special Notice.

Barrister Adnan Saboor, Rohaila Waqar Warraich, Zubair Ahmed Bhutto and Col. (Retd.) Hukam Dad, Dir (Admn.) for Bhittal Medical and Dental College, Hashmat Medical and Dental College and Abbottabad International Medical College.

Malik Qamar Afzal, Advocate Supreme Court, Dr. Farah Naz Zaidi and M. Naeem Sidiqui, Admin. Officer for Independent Medical College.

Prof. Dr. Sarosh Majid Salaria, Principal and Prof. M. Zaheer Abbasi, Principal for Azad Jammu and Kashmir Medical College.

Qazi Ghulam Raqeeb, Admin. Officer and Muhammad Anwar, Admin. Officer for Women Medical College.

Mehboob Qadir Shah, Secretary, Abid Hussain, Principal and Ali Raza for Pak Red Crescent Medical and Dental College.

Birg. (Retd.) Saeed Ali, Mukhtar Ahmed, Prof. Dr. Syed Qalb e Abbas, Principal, Dr. Haider Abbas, VP, Dr. Khalid, Dir. (Admn) and Dr. Aslam Ashar, Dean for Mohi-ud-Din Islamic Medical College.

2019 C L D 1152

[Competition Commission of Pakistan]

Before Ms. Vadiyya Khalil, Chairperson, Dr. Muhammad Saleem and

Dr. Shahzad Ansar, Members

PHARMA BUREAU: In the matter of

File No. 68/PB/C&TA/CCP/2016, decided on 6th August, 2019.

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

----S. 3(3)--- "Price discrimination"--- "Price Parallelism"---Connotation---Price parallelism means tendency in an oligopoly market for suppliers to charge identical prices and may come about because suppliers recognizing their mutual interdependence desire to avoid price competition---Such actions reduce their profits or they may come about because of deliberate collusion between suppliers to fix prices that maximize their joint profits---Conscious parallelism is a term used in competition law to describe pricing strategies among competitors in an oligopoly that occurs without an actual agreement between players---One competitor takes lead in raising and lowering prices whereas others then follow suit raising or lowering their prices by same amount with understanding that greater profits result---Such practice can be harmful to consumers who, if market power of firm is used, can be forced to pay monopoly prices for goods that should be selling for only a little more than cost of production---Parallelism is very hard to be prosecuted because it may occur without any collusion between competitors---No violation of anti-trust laws occurs where firms independently raise or lower prices but that a violation can be shown when 'plus factors' occur, such as firms being motivated to collude and taking actions against their own economic interests.

Valspar Corporation and Valspar Sourcing, Inc. v. E.I. Du Pont De Nemours and Company, (873 F.3d 185 rel.

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

----S. 3(3)---Price discrimination---Term 'plus factors'---Applicability---Term 'plus factors' refers to economic circumstantial evidence of collusion above and beyond parallel movement of prices by firms in an industry---Plus factors are economic criteria that can assist with diagnosis of collusion.

Re: Baby Food Antitrust litigation 166 F.3d 112 rel.

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

----Ss. 2, 4, 30 & 34---Drugs Act (XXXI of 1976), S. 12---Show cause notice---Anti-competitive practices---Parallel pricing---Plus Factors---Pharma Bureau of Overseas Investors was issued show cause notice for price increase of various medicines by sharing commercially sensitive data for anti-competitive practices---Plea raised by Pharma Bureau was that authorities were already aware of marketing and pricing strategies and that no such action was reflected in enquiry report---Validity---Prices were increased not to avoid price competition but to cope with existing economic challenges such as inflation and Rupee depreciation---Increase in such circumstances was justified as there was imbalance between production/manufacturing cost and selling cost, yielding minimal or no profits to Multinational Pharmaceutical Companies and price increase was not made to maximize joint profits---No exchange of strategic data or commercially sensitive information was available that could lead to coherence among price pattern of Multinational Pharmaceutical Companies operating under forum of Pharma Bureau---Parallel prices increase was not proportionate to a price fixing conspiracy while absence of 'plus factors' i.e., any other additional evidence establishing exchange of information between Pharma Bureau members regarding pricing was not available---Pharma Bureau, as a forum represented interest of various Multinational Pharmaceutical Companies, was engaged in talks with a regulator while they were in process to prepare a pricing policy that was a matter of concern for all parties involved---Exchange of information did not amount to a violation and such a conduct did not amount to conscious parallelism---Price increase was a result of conscious economic factors prevailing and not as a planned strategy involving exchange of trade secrets---Internationally, parallel behaviour itself was not identified as concerted behaviour, though it possessed fine evidentiary value in determining collusion and cartelization, however, same should be complemented by additional evidence which were termed by courts as 'plus factors'---Competition Commission declared that Pharma Bureau was not in violation of S. 4 of Competition Act, 2010 due to lack of substantial evidence indicating parallelism or collusion---Competition Commission set aside show cause notice issued to Pharma Bureau as same could not be held to have violated S. 4 of Competition Act, 2010 by taking any decision which had object of preventing, restricting or reducing competition within relevant market---Proceedings were dismissed accordingly.

Eastern Railroad Presidents Conference et al. v. Noerr Motor Freight Inc., et al., [365 U.S. 127 (1961); Dole Food Company Inc. v. European Commission dated 14.03.2013; Dole Food Company Inc. v. European Commission dated 19.03.2015; Shailesh Kumar v. Messrs Tata Chemicals Limited and others dated 16.04.2013; Order dated 15th December 2017 in the matter of Show Cause Notice issued to Messrs Utility Stores Corporation of Pakistan (Private) Limited 2018 CLD 292; In the matter of show cause notice issued to Messrs Wateen Telecom Limited 2019 CLD 188; Show Cause Notice issued to NFC Employees Co-Operative Housing Society Ltd. 2019 CLD 164 and T-Mobile Netherlands BV, KPN Mobile NV, Orang Nederland NV and Vodafone Libertel NV v. Raad van bestuur van de Nederlandse Mededingingsautoriteit, [2009] ECR 0000 ref.

Pakistan Automobile Manufacturers Authorized Dealers Association 2016 CLC 289; Valspar Corporation and Valspar Sourcing, Inc. v. E.I. Du Pont De Nemours and Company 873 F.3d 185; Re: Baby Food Antitrust litigation 166 F.3d 112 and Imperial Chemical Industries Ltd v. Commission of the European Communities Case 48/69 ECR 1972 Page 00619 rel.

Noman A. Farooqi, Chief Prosecutor General assisted by Aish K. Khan.

Ms. Ayesha Tammy Haq, Executive Director, Pharma Bureau for Pharma Bureau.

Salman Akram Raja, Advocate Supreme Court, Malik Ghulam Sabir, Advocate and Shakeel Mughal, Advocate for Pharma Bureau.

Amanullah, Director Pricing, Abdul Ghaffar, Deputy Director Pricing and Asad Ishaq, Assistant Director Pricing for Drug Regulatory Authority of Pakistan (DRAP).

2019 C L D 1285

[Competition Commission of Pakistan]

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

OIL COMPANIES ADVISORY COUNCIL (OCAC): In the matter of

File No. 186/OGRA/C&TA/CCP/2018, decided on 20th June, 2019.

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

----S. 4---Procurement policy---Competitive process---Object, purpose and scope---Primary objective of an effective procurement policy is promotion of efficiency, i.e., achievement of best 'value for money'---Both public and private undertakings often rely upon a competitive bidding process to achieve better value for money in their procurement activities---Low prices and/or better products are desirable because they result in resources either being saved or freed up for use on other goods and services---Competitive process can achieve lower prices or better quality and innovation only when companies genuinely compete, that is, they set their terms and conditions honestly and independently.

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

----Ss. 4, 30, 37(1) & 38---Anti-Competitive conduct---Show-cause notice, issuance of---Fuel marking contract---Imposing financial penalties---Compliance oriented approach---Principle---Authorities issued show-cause notice to Oil Companies Advisory Council (OCAC) on complaint regarding award and management of Fuel Marking Contract for Superior Kerosene Oil (SKO) to oil producers---Plea raised by Oil Companies Advisory Council was that management of price for Superior Kerosene Oil was maintained by Federal Government and was neither anti-competitive nor violative of S. 4 of Competition Act, 2010---Validity---Actions of Oil Companies Advisory Council not only failed test of state compulsion but were also violative of basic decision and cover whereof was taken by Oil Companies Advisory Council to justify their actions---Activities carried out by Oil Companies Advisory Council were also fundamentally beyond scope of activities that Oil Companies Advisory Council could perform and were listed on their website---Conduct of Oil Companies Advisory Council to take decision regarding procurement of fuel marking services for Fuel Marking Program had object of preventing, restricting or reducing competition in relevant market and accordingly was in violation of S. 4 of Competition Act, 2010---Competition Commission declared that entire process of procurement undertaken by Oil Companies Advisory Council for procurement of Fuel Marking Company was in violation of S. 4 of Competition Act, 2010---Competition Commission annulled Invitation for Expression of Interest for Kerosene Marker Program and any decisions or steps taken thereafter---Competition Commission was empowered to impose financial penalties upon contravening party as per S. 38 of Competition Act, 2010 which may be up to Rs. 75 million or 10% of annual turnover of undertakings concerned---Competition Commission refrained from imposing such penalty on Oil Companies Advisory Council in view of compliance oriented approach and because contract for fuel marking service was not executed---Show cause notice was disposed of accordingly.

Order dated 30th April 2013 in the matter of Show Cause Notice issued to LDI Operators and Order dated 8th March 2009 in the matter of Show Cause Notices issued to Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange 2010 CLD 1410; 2016 CLD 289; Order dated 30th April 2013, in the matter of Show Cause Notice issued to LDI Operators and Order dated 15th December 2017, in the matter of Show Cause Notice issued to Utility Stores Corporation of Pakistan (Pvt.) Limited 2018 CLD 292 ref.

Noman A. Farooqi, Chief Prosecutor General, CCP assisted by Ms. Sophia Khan, Prosecutor, CCP.

Aziz ul Haque Nishtar, Asif Ansari, Secretary and Zawar Haider, Chief Executive Officer for Messrs Oil Companies Advisory Council (OCAC).

Malik Amjad Saleem, Director General (Oil) and Ms. Nayab Sarmad, Deputy Director (R-II) for Ministry of Energy (Petroleum Division).

Sagheer Hussain Malik, General Manager, PTRL and Muhammad Azam Khan, Director General for Messrs Hydrocarbon Development Regulators Institute of Pakistan (HDIP).

Ishtiaq ul Haq, Deputy Executive Director (Oil) for Messrs Oil and Gas Regulatory Authority (OGRA).

Chadwick Crouch, Vice President Sales, Iftikhar Ahmad, Managing Director Middle East and North Africa, Ali Murtaza, Director Def-Tech International and Ahsan Raza Zaidi, Director Finance and Coordination for Messrs Authentix.

2019 C L D 254

[Competition Appellate Tribunal]

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

COLGATE PALMOLIVE (PAKISTAN) LIMITED---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN and another---Respondents

Appeal No. 45 of 2017, decided on 31st October, 2018.

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

----Ss. 10, 14, 24, 30 & 41---Deceptive marketing practices---Imposition of penalty--- Appeal---Constitution of Competition Commission, vires of---Appellant was alleged to be involved in deceptive marketing practices as prohibited under S. 10 of Competition Act, 2010---Competition Commission initiated proceedings against the appellant and vide impugned order held the appellant as having acted in violation of S. 10 of the Competition Act, 2010 and imposed penalty of Rs.10 million---Appellant while challenging the constitution of the Competition Commission had stated that in terms of S.14 of the Competition Act, 2010, Commission would consist of not less than five and not more than seven Members and quorum of meeting was to be three members; whereas while passing the impugned order Commission was consisting of two Members therefore, impugned order was nullity in the eyes of law---Validity---Appellant, could not place any proof before the Appellate Tribunal with regard to the said deficiency of members---Counsel for Competition Commission, had placed on record the copies of the notifications about appointment of the Chairman as well as members of the Commission along with other material, which had clearly shown that during the relevant period the positions were occupied by the incumbent; there was no problem of quorum at all---Quorum of three members was required for the meetings of the Commission, and S.14(7) of the Competition Act, 2010 had provided that no act or proceedings of the Commission would be invalid by reason of absence of a member or existence of any vacancy among its members or defect in constitution thereof---Even to hear an appeal against an order made by any member or authorized Officer of the Commission, S.41(2) of Competition Act, 2010, had provided that the Commission would constitute Appellate Bench, comprising not less than two members to hear such appeal---Two member Bench under the Competition Act, 2010, in circumstances, was competent to hear any matter or appeal for order and such order would be considered a valid order, passed by the competent forum in the eyes of law---Order accordingly.

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

----Ss. 10, 37 & 41--- Deceptive marketing practice--- Inquiry proceedings by the Competition Commission---Appellant raised issue with regard to his non-participation during the proceedings of enquiry ordered by the Commission---Counsel for Commission had placed sufficient evidence on the record showing that the comments had been invited from the appellant on the complaint filed against it and appellant submitted the comments along with necessary material to explain its position---Appellant, during the proceedings, was contacted by the Inquiry Committee for its participation in the proceedings and some representatives of the appellant, held meetings with inquiry Committee to put up the position of the appellant for consideration of the Committee---Said position had clearly indicated that sufficient opportunity had been provided by the Inquiry Committee to the appellant to present its position before the Committee, so that final report could be prepared taking into consideration the position of the appellant---No justification was available with the appellant to contend that it had not been provided an opportunity to participate in the inquiry proceedings.

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

----S. 10(2)(b)---Deceptive marketing practice---Distribution of false or misleading information to consumers---Section 10(2)(b) of the Competition Act, 2010, prohibited distribution of false or misleading information to consumers, including the dissimilation of information that lacked a reasonable basis---In the present case, advertisement with regard to the claim "eliminates 99.9% bacteria", appellant contended that test results as carried out in the laboratory proved his claim that its product had capability to eliminate 99.9% bacteria; however, the Commission's findings were that such claim was not based on the ground realities, therefore, amounted to a violation of S.10(2)(b) of the Competition Act, 2010---Claim of the appellant could be true when there was concentrated usage without dilution in a laboratory environment---Ordinary consumer, would not be aware of the disclaimer on the backside of the packaging at first glance of the product---Such claim of appellant had rightly been declared as distribution of false information---Another claim of the appellant was that "it kills 99.9% bacteria from surfaces leaving floors and household surfaces, clean, shining and germ free", also did not sound convincing---Disclaimer in that regard did not appear in the same font, size as the claim itself; even though it was in close proximity to it---Claim of the appellant could not be considered reliable, in circumstances---Advertising claim also would amount to distribution of false information, in circumstances---Appellant had also claimed in the said advertisement that its product had ability to maintain 24 hours long lasting freshness---Said claim had not been limited or qualified through a disclaimer or otherwise---Appellant had also failed to provide recognizable substantiation or a reasonable basis as to character, properties and suitability for the use of its product---Appellant, in circumstances, was liable to be penalized for a single offence of distributing false information through advertisement---Penalty of Rs.1 million in that behalf was imposed by the Appellate Tribunal against contravention of S.10(1) read with S.10(2)(b) of the Competition Act, 2010 instead of four penalties of Rs.1 million for each false claim.

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

----S. 10(1)(2)(c)---Deceptive marketing practice---False or misleading comparison of goods in the process of advertising---Proof---Appellant against whom complaint of false or misleading comparison of goods in the process of advertising was alleged, claimed that appellant's "Trade Letter" referred in the impugned order was an internal confidential memo only, meant for viewing and training of its employees staff being distributors---Admission on the part of the appellant that its Trade Letter was circulated among persons, responsible for marketing "the product", was sufficient to conclude that violation had in fact been made out due to the inclusion of deceptive comparison therein---Even if the said "Trade Letter" was meant solely for viewing and consumption of distributors, the deceptive comparison had created an impression in their minds as to the harmful effect of another's product, which impression was eventually passed on to the consumers by the sale force marketing appellant's product---Such an activity would amount to deceptive practices within the meaning and scope of S.10(1) in terms of S.10(2)(c) of Competition Act, 2010.

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

----S. 10(2)(a)---Deceptive marketing practice---Distribution of false or misleading information that was capable of harming the business interests of another undertaking---Proof---For proving conduct under S.10(2)(a) of the Competition Act, 2010, it was not necessary to show actual harm to the competitors; but it was sufficient to show the existence of deceptive marketing practice that had the potential to harm the business interest of the competitors---If there existed a contravention of S.10(2)(b) & (c) of the Competition Act, 2010, concurrent violation of S.10(2)(a) of the Act, was also made out---Appellant was also culpable under S.10(2)(a) of the Competition Act, 2010---Appellate Tribunal, taking it a single violation, imposed penalty of Rs.1 million for the contravention of S.10(1) read with S.10(2)(a) of the Act---Impugned order passed by Competition Commission was upheld with the modification that appellant was liable to pay a sum of Rs.3 million in total for each violation of Ss.10(2)(a), 10(2)(b) & 10(2)(c).

Ejaz Ahmed Bhatti for Appellant.

Ms. Sophia Khan for Respondent No.1.

Saad Hashmi for Respondent No.2.

2019 C L D 279

[Competition Appellate Tribunal]

Before Justice (Retd.) Mian Fasih ul Mulk, Chairman, Justice (Retd.) Miftah ud Din and Ahmed Owais Pirzada, Members Technical

GHULAM FAREED and 8 others---Appellants

Versus

COMPETITION COMMISSION OF PAKISTAN and another---Respondents

Appeals Nos. 1, 2, 3, 4, 5, 6, 7, 8 and 9 of 2018, decided on 12th September, 2018.

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

----Ss. 10(1), (2)(d), 37(2), 38(5) & 41---Deceptive marketing practice---Fraudulent use of other's trademark---Imposition of penalty---Complaint against appellants was that they were using the registered Trade Mark 'TAIZGAAM' of the complainant without any permission and legal justification---Complaint was inquired into under S.37(2) of the Competition Act, 2010--- Competition Commission on the basis of inquiry report awarded penalty of Rs.300,000 to each of the appellants---No evidence was available to the effect that appellants had deliberately used the trade mark "TAIZGAAM" to harm the business interest of the complainant---Appellants were using said trade mark since long, even prior to its registration---Appellants, after getting knowledge of its registration had undertaken not to use the same---Reformatory and regulatory object of avoiding deceptive marketing practices had been achieved through undertaking given by the appellants---Appellate Tribunal observed that appellants, if failed to comply with the undertaking given, would be liable to pay a penalty of Rs.100,000 per day from the date of impugned order till actual compliance and initiation of criminal proceedings under S. 38(5) of the Competition Act, 2010---Appeal was partly allowed and order of Competition Commission regarding penalty was set aside, while maintaining the remaining order of the Commission.

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

----Preamble---Spirit of Competition Act, 2010---Act provided free competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anti-competition behaviour---Spirit of Competition Act, 2010 clearly indicates that the objective of the law was to ensure fair business practices.

Muhammad Naveed Farhan for Appellants (in Appeals Nos. 1, to 6 of 2018).

Faisal Iqbal Khan for Appellants (in Appeals Nos. 8 and 9 of 2018).

Ch. Shafiq ur Rehman for Appellants (in Appeal No. 7 of 2018).

Nouman Ameen Farooqi along with Arshad Javed, Deputy Director and Farhan Shah, Assistant Director Legal for Respondent No.1.

2019 C L D 538

[Competition Appellate Tribunal]

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

PAKISTAN STATE OIL LIMITED---Appellant

versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 1 of 2017, decided on 7th November, 2018.

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

----Ss. 10(2)(a)(b), 37(2) & 41---Deceptive marketing practice---Distribution of false or misleading information to consumers---Imposition of penalty---Appeal---Complainant had alleged that the appellant, in order to promote and market its new and enhanced performance products, started its marketing with new brands claiming that its use, both in new and old vehicles, would result in more milage, smooth running; that as a result of that advertising campaign, the complainant and other consumers started using that brand as a preferred choice; that the appellant abruptly and discreetly discontinued the use of those additives, giving a deceptive understanding to consumer and was liable to be proceeded for deceptive marketing practices---Matter was referred to the inquiry committee and on basis of inquiry report, Competition Commission after issuing show-cause notice, found appellant guilty of deceptive marketing practices and ordered to pay a fine of Rs.150 million, with direction to make appropriate changes in the branding insignia---Validity---Competition Commission could initiate proceedings on the basis of a complaint to be made by an undertaking or registered association of consumers; whereas the complainant, in the present case, was neither an undertaking nor a registered association of consumers---Complainant, in circumstances, was not competent to lodge complaint against the appellant---Except news report, there was no other evidence to support the complaint--- Competition Commission, in circumstances, had violated the mandatory provisions of law by initiating proceedings against the appellant on basis of wrong, illegal and no evidence---Important and material points agitated by the appellants were neither inquired into nor any opinion was expressed thereon by the Inquiry committee---Inquiry report was the outcome of one-sided aspect of the case based on mere allegations in complaint without any evidence as well as, without covering or answering the pleas taken by the appellant---Complainant had neither appeared before Competition Commission to depose an affidavit in support of the complaint nor had recorded the statement of any other consumer or undertakings in support of the complaint---Points involved in the case were disputed questions of facts, which could not be resolved without recording pro and contra evidence---No evidence at all having been recorded by the Commission, judgment rendered by Commission was based on no evidence---Nothing on record existed that on account of discontinuance of additives any harm was inflicted to consumers or other competitors---No market data had been collected to show that on account of discontinuance of additives, the appellant had obtained monetary gains through increase of market share or profit or competition had decreased---Complaint was not only wrong, illegal and unjustified, but also devoid of merits which was dismissed, in circumstances.

1993 SCMR 603; PLD 1957 SC 91; 2014 PTD 299; 2016 PLC 296; PLD 1983 Kar. 435; PLD 2016 Sindh 405 and PLD 1985 Kar. 407 ref.

(b) Interpretation of statutes---

----Whenever, a statute limits an act to be done in a particular manner or form, it necessarily includes in itself a negative that the act is not to be done otherwise; it is the principle of logic and common sense and not a technical rule of construction.

(c) Administration of justice---

----If a mandatory condition for exercise of jurisdiction by the court, tribunal or authority was not fulfilled then the entire proceedings, which would follow, would become illegal and suffer from want of jurisdiction/powers---Any order passed in continuation of those proceedings would suffer from illegality and would be without jurisdiction.

Barrister Sara Seerat for Appellant.

Amjad Hameed Ghouri for Respondent No.1.

Iftikhar Ahmed Bashir for Respondent No.2.

2019 C L D 981

[Competition Appellate Tribunal]

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

Messrs ENGRO FOODS PVT. LTD. and 2 others---Appellants

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeals Nos. 2, 7 and 8 of 2017, decided on 16th January, 2019.

Per Justice (R) Miftah-ud-Din, Member Technical; Justice (R) Mian Fasih ul Mulk, Chairman agreeing; Ahmed Owais Pirzada, Technical Member, dissenting. [Majority view]

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

----Ss. 10 & 37(2)--- Competition Commission of Pakistan (General Enforcement) Regulations, 2007, Regln. 23--- Complaint---Maintainability--- Complaint by private person--- Effect--- Appellants were manufacturing tea whiteners who were imposed different penalties by Competition Commission on complaint filed by an individual---Plea raised by appellants was that complaint was neither lodged by an undertaking nor by a registered association of consumers and same could not be entertained---Validity---Complainant was neither an undertaking nor a registered association of consumer, therefore, he was not competent to lodge complaint against appellants---Except e-mail, there was no other evidence in support of complaint---Competition Commission violated mandatory provisions of law by initiating proceedings against appellants on basis of complaint which was incompetent, wrong, illegal and based on no evidence---Relevant evidence to be collected during inquiry was that of consumers and other undertakings and competitors but inquiry report was silent regarding collection of evidence in such connection---Instead of conducting job of collecting evidence in support of complaint, inquiry committee had just made academic discussion to provide a foundation of issuance of show-cause notice and writing judgment by Competition Commission---Competition Appellate Tribunal declared that not only complaint was incompetent but report of inquiry committee was defective, one-sided and based on no evidence---Competition Appellate Tribunal further declared that no evidence was collected during inquiry proceedings nor recorded before Competition Commission to prove allegations of deceptive marketing practices against appellants--- Competition Appellate Tribunal set aside judgment passed by Competition Commission---Appeal was allowed accordingly. [Majority view]

(b) Administration of justice---

----Jurisdiction, exercise of---Scope---If a mandatory condition for exercise of jurisdiction by court, tribunal or Authority is not fulfilled, then entire proceedings which follow becomes illegal and suffers from want of jurisdiction/powers.

Per Ahmed Owais Pirzada, Member Technical disagreeing with Justice (R) Miftah-ud-Din, Member Technical [Minority view]

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

----Ss. 10 & 37(2)---Competition Commission of Pakistan (General Enforcement) Regulations, 2007, Regln. 23---Competition Commission Inquiry (Conduct of Investigating Officer) Rules, 2007, Preamble---Complaint---Maintainability---Complaint by private person---Modifying media campaign during inquiry proceedings---Effect---Appellants were manufacturing tea whiteners who were imposed different penalties by Competition Commission on complaint filed by an individual---Plea raised by appellants was that complaint was neither lodged by an undertaking nor by a registered association of consumers and same could not be entertained---Validity---Inquiry committee complied with formalities prescribed under Competition Commission Inquiry (Conduct of Investigating Officer) Rules, 2007---Inquiry committee relied on documentary evidence made available to it by appellants---Appellants during proceedings before Competition Commission modified their respective publicity campaigns in an attempt to address concerns of Competition Commission---Such conduct of appellants indicated that they had impliedly admitted to the fact that publicity campaigns on which Competition Commission issued them show cause notice was in violation of S. 10 of Competition Act, 2010---Competition Commission had rightly concluded that appellants contravened S. 10 of Competition Act, 2010---Illegalities committed by appellants were proved and judgment/order in question passed by Competition Commission did not require any intervention---Appeal was dismissed in circumstances. [Minority view]

PLD 1963 SC 382; 2010 CLC 797; 2016 SCMR 48; PLD 1973 SC 589; 2015 PTD (Trib.) 589; 2016 SCMR 646 and 2018 CLC 519 rel.

Mansoor Usman Awan, Miss Sabahat Rizvi and Waqas Qadeer Sheikh for Appellants.

Ch. Shafiq ur Rehman for Respondent.

Dates of hearing: 11th, 26th April, 31st May, 26th September, 31st October, 14th November, 2017, 9th January, 14th February, 13th March, 10th April, 28th June, 5th July, 10th, 25th September, 10th October, 14th November and 12th December, 2018.

2019 C L D 1006

[Competition Appellate Tribunal]

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

JCR-VIS RATING COMPANY LTD.---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN and others---Respondents

Appeal No. 6 of 2017, decided on 15th January, 2019.

Competition Act (XIX of 2010)---

----S. 3--- Anti-Competitive bids--- Predatory pricing strategy---Condemned unheard, principle of---Applicability---Appellant had participated in bid---Pakistan Credit Rating Agency filed complaint with Competition Commission that appellant participated in a bid to procure credit rating and it was anti-competitive---Competition Commission terminated bid of appellant on grounds that appellant was guilty of indulging into exclusionary conduct based on predatory pricing strategy---Validity---Competition Commission had only framed issues favourable to complainant and relevant pleas were not reflected in issues framed with the result that appellant had not been afforded an opportunity to lead evidence in support of issues raised---During bidding process agreement was made with Banks and other financial institutions but said process was cancelled by Competition Commission without affording an opportunity of hearing to all concerned---Competition Appellate Tribunal remanded the matter as all concerned had been condemned unheard and that proper issues on contentions of all the parties were neither framed nor answered---Appeal was allowed, in circumstances.

Habib Ahmed Bhatti for Appellant.

Saad Amir for Respondent No.1.

Miss Gulalay for Respondent No.2.

Barrister Farrukh along with Dr. Attique for Respondent No.3.

Dates of hearing: 14th March, 9th, 24th May, 16th June, 13th September, 3rd, 18th, 25th October, 2017, 20th February, 21st March, 10th April, 26th June, 3rd July, 5th August, 16th October, 7th, 20th, 27th November, 5th and 18th December, 2018.

2019 C L D 698

[Sindh Environmental Protection Tribunal]

Before Justice (R) Sadiq Hussain Bhatti, Chairman, Muhammad Arif Khan, Member (Legal) and Abdul Rauf Memon, Member (Technical)

SINDH ENVIRONMENTAL PROTECTION AGENCY through Authorized Officer---Complainant

Versus

Messrs SILVER TEXTILE through Owner and 2 others---Respondents

Complaint No. 26 of 2017, decided on 12th February, 2019.

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

----Ss. 11, 17, 21, 22 & 26(3)---Criminal Procedure Code (V of 1898), S. 265-K---Construction of industrial unit--- Failure to show IEE/EIA approval---Company was tenant of premises wherein an industrial project was being constructed---Complaint was filed by authorities on grounds that gatekeeper did not show them IEE/EIA approval nor let them inspect the project---Validity---Such was mockery of law as neither gatekeeper was owner of premises nor he was representative/ authorized agent of owner---Gatekeeper was simply a low-paid employee meant for menial work and was usually an illiterate person without any authority or supervisory capacity---Tenant of premises was dragged into unnecessary litigation on such flimsy ground---Investigating Officer of case did not make any serious effort to collect tangible evidence which could connect company with violation of Ss. 11, 17(1), 20 & 22 of Sindh Environmental Protection Act, 2014---Company/accused of violation of law was acquitted of charge under S. 265-K, Cr.P.C.--- Complaint was dismissed in circumstances.

Aamir Sheikh, Investigation Officer/Complainant along with Khan Muhammad Bhangwar (APG).

2019 C L D 1209

[High Court (AJ&K)]

Before Azhar Saleem Babar, J

Messrs BANK AL-HABIB LIMITED through Branch Manager and 14 others---Petitioners

Versus

AZAD JAMMU AND KASHMIR EHTESAB BUREAU, MIRPUR through Chairman and 7 others---Respondents

Writ Petition No.375 of 2008, decided on 11th February, 2019.

(a) Azad Jammu and Kashmir Ehtesab Bureau Act (I of 2001)---

----S. 2(ii)---Jurisdiction of the Azad Jammu and Kashmir Ehtesab Bureau----Forgery of signatures on documents by Bank/Financial Institution---Petitioner Bank, inter alia, sought that all proceedings initiated against it, including by the Azad Jammu and Kashmir Ehtesab Bureau, be declared without lawful jurisdiction---Contention of petitioner, inter alia, was that it liquidated the foreign exchange bank account of respondent in view of its default to pay back loan according to the process notified by the State Bank of Pakistan---Validity---Contents of the inquiry conducted into the matter by the Azad Jammu and Kashmir Ehtesab Bureau and Federal Investigation Authority revealed that signatures of the respondent were in fact forged by the petitioner Bank---Petitioner Bank, if it all was authorized to liquidate foreign currency of respondent customer in view of directive of State Bank of Pakistan, even then the same could not have been done by committing forgery, therefore contention that the petitioner Bank was authorized to adjust loan of respondent was not tenable---Objection against jurisdiction of the Azad Jammu and Kashmir Ehtesab Bureau in the present matter was untenable as under S.2(ii) of the Azad Jammu and Kashmir Ehtesab Bureau Act, 2001, said Act shall effect notwithstanding anything contained in any other law and all offences committed after 01.01.1985 had been made triable under the said Act---High Court observed that investigation into officials of the petitioner bank by Azad Jammu and Kashmir Ehtesab Bureau could not be restrained---Writ Petition was dismissed, in circumstances.

Ehtesab Bureau v. Abid Hussain and 3 others decided on 8.9.2014 ref.

PLD 2009 Kar. 638 distinguished.

(b) Administration of justice---

----Continuation of civil suit was no bar to criminal proceedings even if both cases related to the same subject.

2007 MLD 1505 and PLD 208 Lah. 358 rel.

Raja Mohammad Hanif Khan for Petitioners.

Kh. Ansar Ahmed for Respondent No.4.

DCP for Ehtesab Bureau.

2019 C L D 107

[Intellectual Property Tribunal]

Before Shakil Ahmed Abbasi, Chairman

TRADE DEVELOPMENT AUTHORITY OF PAKISTAN FINANCE AND TRADE CENTER through Authorized Officer---Complainant

Versus

RAHIMUDDIN---Accused

Complaint No. 4 of 2014, decided on 8th October, 2018.

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

----S. 5-B---Export (Quality Control) Order, 1973, S. 4(a)---Complaint of Foreign Buyer, lodged by attorney--- Maintainability---Complainant/Foreign Buyer lodged complaint against ex parte, pertaining to delivery of agreed consignment, which was never shipped to the complainant---Complainant had failed to make out a case on facts and grounds and beyond reasonable doubt---Even otherwise his case failed as the importer/original buyer had not lodged the complaint, but his agent; with whom the exporter had no privity of contract---Criminal complaint/FIR could not be lodged by attorney of complainant, but should be filed by the complainant himself---Complaint was lodged by his agent, was illegal and not sustainable in the eye of law---Application under S. 5-B of Imports and Exports (Control) Act, 1950, by the exporter firm stood allowed---Complaint stood dismissed, in circumstances---Accused being on bail, his bail bonds were cancelled and surety was ordered to be discharged by the Tribunal.

2017 YLR 434 and 2014 SCMR 513 ref.

S. Muhammad Ali Ala, Special Public Prosecutor, T.D.A.P., Karachi.

2019 C L D 146

[Intellectual Property Tribunal]

Before Shakil Ahmed Abbasi, Presiding Officer

BRANDS FOR LESS L.L.C.---Plaintiff

Versus

BRANDS 4 LESS through Proprietor/Partner/Owner---Defendant

Suit No. 20 and C.M.A. No. 83 of 2018, decided on 8th October, 2018.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 82 & 86---Ad interim order was issued by the Tribunal in terms O.XXXIX, C.P.C., restraining the defendant/respondent from using the trademark/trade name and imitated bag device along with logo/artistic work and marketing---Defendant prayed for vacation of said order, contending that the plaintiff had no cause of action for grant of injunction as all the three essential ingredients, simultaneously required for such injunction i.e. "prima facie case, balance of convenience and irreparable loss", were missing in his case---Validity---Plaintiff had failed to make out a case for grant of interim relief and none of the essential ingredients for interim relief was available to plaintiff---Even, if, on the test of prima facie case, the plaintiff being owner of well-known mark, though not requiring registration, the two other tests i.e. balance of convenience, irreparable loss, were also to be qualified to bring an infringement suit for an injunctive relief, which otherwise were to be qualified, even by an unregistered Trade Mark owner, while bringing a passing off action and seeking injunctive relief thereof---One's being owner of a well known mark, could be a good ground for the purpose of registration of the same in a territory other than where it was actually registered, but the same could not be a good ground for injunctive relief; unless the ingrediences of balance of convenience and irreparable loss, were established---Section 86(3) of Trade Marks Ordinance, 2001, permitted the owner of well known mark to bring a suit for infringement of the said mark, instead of bringing a passing off action despite being an unregistered owner---Ad interim order, was recalled in terms O.XXXIX, R.4, C.P.C.

Pioneer Cement v. Fecto Cement Ltd. PLD 2013 Lah. 110; Tabaq Restaurant v. Tabaq Restaurant 1987 SCMR 1090; ARC International v. Ahmed Mansoor 2012 CLD 226; Dalda Foods (Pvt.) Ltd. v. Messrs Sheild Corporation Limited 2016 CLD 1864 and El-Baik Food Systems v. Al-Baik Suit No. 35 of 2007 ref.

Anas Habib Magoon assisted by Talib Ali Shah for Plaintiff.

2019 C L D 267

[Islamabad]

Before Miangul Hassan Aurangzeb, J

Mian NASSER HAYAT MAGGO through Attorney---Appellant

Versus

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

Miscellaneous Civil Appeal No. 2 of 2018, decided on 25th January, 2019.

Trade Organizations Act (II of 2013)---

----Ss. 6, 13 & 21---Trade organization---Renewal of licence---Delay in filing of application for renewal of licence--- Adjudication of application for renewal of licence---Duty and obligation of Regulator and Appellate Authority under the Trade Organizations Act, 2013---Scope---Application for renewal of licence of a trade organization must be filed ninety days prior to expiry of such licence and delay in the same could be condoned by the Regulator for a maximum period of thirty days on sufficient cause being shown by an order in writing---Regulator under the Trade Organizations Act, 2013 could not be expected to extend the time period for filing of application for renewal of licence without mentioning "sufficient cause" for such extension via an order in writing and where an applicant does not come up with any sufficient cause, Regulator on its own could not condone delay in filing of such application---Trade organization licensed under the Trade Originations Act, 2013 was expected to strictly comply with the provisions of the said Act and the Regulator and Appellate Authority under the same were also under obligation to pass orders in conformity with the said Act.

Ajmal Ghaffar Toor and Ali Nawaz Kharal for Appellant.

Shumayl Aziz, Assistant Attorney-General for Respondents.

Malik Ghulam Sabir for Respondent No.4.

2019 C L D 355

[Islamabad]

Before Athar Minallah, J

INAM ULLAH KHAN---Petitioner

Versus

AKSA SOLUTIONS DEVELOPMENT SERVICES (PVT.) LTD. and others---Respondents

C.O. No. 1 of 2014, decided on 30th November, 2015.\

(a) Companies Ordinance (XLVII of 1984) [since repealed]---

----Ss. 290 & 291---Prevention of oppression and mismanagement---Adjudication of application under S. 290 of the Companies Ordinance, 1984---Conduct constituting "oppression"---Scope---To constitute "oppression" conduct complained of should at the lowest involve a visible departure from standards of fair dealing and violation of conditions of fair play on which every shareholder who entrusted his money to the company was entitled to rely---Oppression involved lack of probity and fair dealing in affairs of a company to the prejudice of some portion of its members or to public interest and exercise of authority in manner that was burdensome, harsh or wrongful---Oppression was distinct from mere mismanagement and it was not necessary for such conduct to be in breach of law or a statutory provision in order to constitute oppression---Domestic disputes, being outvoted by majority, or loss of confidence, in itself were not sufficient factors for an act or conduct to constitute oppression---Member of company bringing a complaint under S. 290 of the Companies Act, 1984 had to establish that he/she was constrained to submit to something unfair that stemmed from some overbearing act or attitude on part of the oppressor or that conduct complained of lacked probity and fair dealing---Court under S. 290 of the Companies Act, 1984 had to form an opinion in light of the facts of each case whether acts omissions and conduct complained of fell within ambit of oppression.

Taj Woolen Mills Ltd. v. Muhammad Younas PLD 1982 Lah. 664; Muhammad Rafiq Moti v. Pakistan PLD 1983 Kar. 589; Naseer A. Sheikh v. The Commissioner of Income Tax (Investigation) PLD 1992 SC 276; Mathalone and others v. Bombay Life Assurance Co. AIR 1953 SC 385; Nanalal Zaver v. The Bombay Life Assurance Co. AIR 1949 Bombay 56; Neelofar Shah v. Ofspace Pvt. Ltd. 2013 CLD 114; Ch. Muhammad Hussain v. Khaali Paper and Board Mills 2005 CLC 636; National Bank of Pakistan v. Balochistan Wheels Ltd. 2004 CLD 1100; Associated Biscuits International Ltd. v. English Manufacturers Ltd. 2003 CLD 815; Contract Act by Shaukat Mahmood, 7th Edition; Chitty on Contracts, 24th Edition, Volume I: General Principles; Shahbazud Din v. Services Industries PLD 1988 Lah. 1; Needle Industries India Ltd. v. Needle Industries Newey (India) AIR 1981 SC 1298; Messrs Shaheen Foundation v. Capital F.M. Ltd. 2002 CLD 188; Nanamuddin Zia v. Asma Qamar 2013 CLD 1263 and Registrar of Companies v. Pakistan Industrial and Commercial Leasing Ltd. 2005 CLD 463 ref.

Elder v. Elder and Whatson Ltd. (1952) SC 49; Scottish Cooperative Whole Sale Society Ltd. v. Meyer (1958) 3 All ER 66; Mst. Neelofar Shah and another v. Messrs Ofspace (Pvt.) Ltd. and others 2013 CLD 114; In re: Jermyn Street Turkish Baths Ltd. (1971) 3 All ER 184, 199; Ch. Muhammad Hussain v. Khaali Paper and Board Mills 2005 CLD 636; National Bank of Pakistan v. Balochistan Wheels Ltd. 2004 CLD 1100; Associated Biscuits International Ltd. v. English Manufacturer Ltd. 2003 CLD 815; In re: Companies Act, 1973 and another PLD 1983 Kar. 45; N.I.I. Ltd. v. N.I.H. Ltd. AIR 1981 SC 1298; Mohan Lal Chandumall v. Punjab Co. Ltd. AIR 1961 Punjab Haryana 485 and Muhammad Afzal Munsif v. National Finance and Investment Services Ltd. 1998 CLC 695 rel.

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

----Ss. 290, 291 & 196---Oppression and mismanagement---Fiduciary duty of directors---Breach of fiduciary duty constituting oppression within the meaning of S. 290 of the Companies Ordinance, 1984---Scope---Fiduciary duty of directors envisaged that each director shall act for the benefit of the company and shareholders and a director could not place himself or herself in a position where his/her interest and duty would conflict---Interests of shareholders and company shall prevail and dominate over personal interests of the directors and directors had to discharge the onus to establish affirmatively that even if a personal interest had been gained, the same was not a result of conducting affairs of the company or exercising authority in a manner that lacked probity, fair dealing or was burdensome harsh or wrongful---In a situation where a director had directly or indirectly gained personal advantage or interest and there was complaint of the affairs having been conducted in an oppressive manner, it inevitably raised the threshold of establishing that such acts and omissions complained of were in utmost good faith and free from probity or unfair dealing causing prejudice to complainant---Gain of personal interest per se would not constitute breach of fiduciary duty and oppression---Shareholders were entitled to seek special remedies provided for under Ss. 290 & 291 of the Companies Ordinance, 1984 if the complaint related to allegations that affairs were being conducted in an oppressive manner.

Naseer A. Sheikh v. Commissioner of Income Tax (Investigation) and others PLD 1992 SC 276 and Hirsche v. Sins (1894) AC 654 rel.

Babar Sattar for Petitioner.

Mrs. Rahat Kaunain Hassan for Respondent No.3.

2019 C L D 441

[Islamabad]

Before Shaukat Aziz Siddiqui and Athar Minallah, JJ

ALLIED BANK LIMITED---Petitioner

Versus

Messrs FAZAL VEGETABLE GHEE MILLS and others---Respondents

E.F.As. Nos. 7 and 8 of 2013, decided on 17th December, 2015.\

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

----Ss. 17 & 19---Civil Procedure Code (V of 1908), Ss. 47 & 2(2)---Execution of decree of Banking Court---Jurisdiction of Executing Court---Claims by liquidators and employees of a judgment-debtor company---Scope---Appellant impugned order of Executing Court, which whilst executing decree of Banking Court, allowed applications seeking payment of liquidators fee and claims of the Employee's Oldage Benefit Institution (EOBI) contribution of judgment-debtor's employees; from the decree-holder Bank---Question before High Court was whether the Executing Court while executing a decree of Banking Court, could go beyond the scope of such decree---Held, that after a decree had been drawn up, the same had to be executed and such decree was separate and distinct from the judgment---Decree was an expression of conclusively determining matters placed before a Trial Court for adjudication---Even if a judgment and decree were pursuant to an agreement, but terms thereof were not mentioned in the decree, though recorded in the judgment, then such terms could not be read in the decree as having been granted---Executing Court could not extend its jurisdiction to go behind the decree and question its correctness---Exceptions to said rule only existed when a decree was silent regarding as to what property was subject matter of execution or if an execution of the decree was nullity in the eye of law, or the same had been passed by the Court having no jurisdiction or, if execution of such decree would not infringe the legal rights of a decree holder if it was refused to be executed---Applications upon which impugned orders were passed were therefore neither competent nor had any nexus with the execution of the decree and such orders were set aside---Appeal was allowed accordingly.

Ghulam Muhammad v. Sultan Mahmud and others PLD 1963 SC 265; Mst. Ashraf Bibi v. Barkat Ali PLD 1956 Lah. 27; Syed Riaz Ahmad Shah and another v. Dayal Singh College Trust Society and another 1972 SCMR 237; Muhammad Ali and others v. Ghulam Sarwar and others 1989 SCMR 640; Mst. Naseem Akhtar and 4 others v. Shalimar General Insurance Company Ltd. and 2 others 1994 SCMR 22; Fakir Abdullah and others v. Government of Sindh through Secretary to Government of Sindh, Revenue Department Sindh Secretariat and others PLD 2001 SC 131; Allah Ditta v. Ahmed Ali Shah and others 2003 SCMR 1202; Rehmat Wazir and others v. Sher Afzal and others 2005 SCMR 668 and Muhammad Ali v. Zakir Hussain PLD 2005 Lah. 331 rel.

Malik Ghulam Sabir and Barrister Suleman Khan for Petitioner.

Ch. Fayyaz Ahmed Padana and Ms. Shabih Zehra for EOBI.

Muhammad Tariq Khan for Respondents.

Dates of hearing: 16th and 19th November, 2015.

2019 C L D 566

[Islamabad]

Before Noor ul Haq N. Qureshi and Athar Minallah, JJ

DEFENCE HOUSING AUTHORITY, ISLAMABAD---Appellant

Versus

MULTI-NATIONAL VENTURE DEVELOPMENT (PVT.) LTD.---Respondent

I.C.A. No. 433 of 2014, decided on 3rd December, 2014.

(a) Words and phrases---

----"Arbitrator"---Connotation.

"Arbitrator" is 'a neutral person who resolves disputes between parties, especially by means of formal arbitration'. Advance Law Lexicon, 4th Edition defines an arbitrator as 'the person to whose attention the matters in dispute are submitted-a judge of the parties own choosing, whose functions are judicial and whose duties are not those of mere partisan agent, but of an impartial judge, to dispose equal justice to all parties, and to decide the law and facts involved in the matters submitted, with a view to determining and finally ending the controversy.

Black's Law Dictionary, Eight Edition and Advance Law Lexicon, 4th Edition rel.

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

----S. 13---Authority of arbitrator---Scope---Arbitrator is not a mere conciliator---Arbitrator is a judge of the parties and the concept is based on the premise that he or she shall be a third party, seen as non partisan arbiter or referee---Arbitrator cannot be seen as biased, interested, coloured or prejudiced.

(2001) 5 SCC 629 ref.

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

----S. 8---Appointment of employee as an arbitrator---Effect---Scope---Party cannot appoint itself or its employee as an arbitrator, except when the other party has consented, or the conduct of the other party during the course of proceedings, implies consent---Party nominating itself or its employee as an arbitrator, particularly when other party raised an objection, can by no stretch of imagination be termed as nominating or appointing an arbitrator---Such an appointment or nomination is a nullity and will be deemed a failure to appoint arbitrator for the purpose of Arbitration Act, 1940.

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

----S. 8---Power of Court to appoint arbitrator---Appointment of employee as an arbitrator---Effect---Scope---Respondent filed arbitration agreement in the court on failure of appellant to appoint an arbitrator---Single Judge of High Court directed the appellant to appoint an arbitrator, who intimated the name of its employee---Single Judge of High Court appointed sole arbitrator on failure of appellant to appoint an impartial arbitrator---Validity---When parties voluntarily agreed that disputes were to be resolved through arbitration, it was assumed that the person appointed as an arbitrator would be a non-partisan third party---Forum of dispute resolution would become notional, illusory and a sham if the parties were to agree that they themselves would act as arbitrators, or if one of the parties insisted to appoint its employee as an arbiter---Said appointment defeated the legislative intent of Arbitration Act, 1940 and the object of resolving the disputes through arbitration---Intra-court appeal was dismissed.

Province of Punjab v. Sufi Abdul Hameed 2003 CLC 355; Abdul Hakim K. Khan v. Begum Khanum Jan 1989 MLD 1304; Waseem Construction Co. v. Province of Sindh 1983 CLC 3273 and President of India v. Kesar Singh AIR 1966 J&K 113 distinguished.

Crescent Steel and Allied Products Limited v. Sui Northern Gas Pipeline Limited 2013 CLD 1110; Messrs Sarwat Ali and Sons v. General Manager T&T, W.T.R. Quetta 2007 CLC 1499; Federation of Pakistan v. Muhammad Akram Sheikh PLD 1989 SC 689; Muhammad Farooq Shah v. Shakirullah 2006 SCMR 1657; Syed Faqir Shah v. Haji Inayatullah Khan and another 2013 MLD 689; Messrs Bata Shoe Co. (Pakistan) Ltd., Karachi v. The Government of Pakistan PLD 1970 Kar. 784; Nihal Chan and another v. Shanti Lal AIR 1935 Oudh 349; Ghulam Mahomed Khan v. Gopaldas Lalsingh AIR 1933 Sindh 68; Syed Faqir Shah v. Haji Inayatullah Khan 2013 MLD 689; Fauji Foundation through General Manager (Engineering) v. Chanan Din and Sons through Attorney 2013 CLD 2167; Oil and Gas Development Company Limited v. Marathon Construction Company 2013 CLD 1483; Muhammad Farooq Shah v. Shakirullah 2006 SCMR 1657; Ardeshar Irani v. The State of M.P. AIR 1974 Madhya Pradesh 199; Sadat Business Group Ltd. v. Federation of Pakistan through Secretary 2013 CLD 1451; Ghulam Ishaq Khan Institute of Engineering, Science and Technology v. Hassan Construction Co. (Pvt.) Ltd. Engineer and Consultants 1998 CLC 485; Province of Punjab v. Rana and Sons 1996 CLC 69 and Design Group of Pakistan v. Clifton Cantonment Board 1990 MLD 2010 ref.

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

----S. 8---Power of Court to appoint arbitrator---Situations enumerated.

Section 8 deals with situations in which a court may appoint an arbitrator or arbitrators or an umpire:

i. when an arbitration agreement provides that arbitrators are to be appointed with the consent of parties and all of them do not concur in appointments, ii. if an appointed arbitrator neglects, refuses to act or dies and the vacancy is not supplied, and, iii. where the parties or the arbitrators are required to appoint an umpire and do not appoint him.

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

----S. 9---Power of court to appoint new arbitrator or sole arbitrator---Failure of party to appoint arbitrator---Appointment of employee as an arbitrator---Scope---Section 9, Arbitration Act, 1940 applies when an arbitration agreement provides reference to two arbitrators, one to be appointed by each party---Clause (a) of S. 9 empowers the party which has originally appointed an arbitrator to appoint another person if the earlier appointed arbitrator neglects, refuses to act, or is incapable of acting or dies---Clause (b) of said section envisages a situation where one party fails to appoint an arbitrator, either originally or by way of substitution---For such an event to happen the other party is required to serve a notice in writing requiring the party to make an appointment and if the later fails to do so "for fifteen clear days" then in such an event there may be two courses to pursue---Firstly, the party which has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator, or secondly, the Court may set aside such a sole arbitrator, either give sufficient time to the defaulting party to appoint an arbitrator "or pass such order as it thinks fit".

Rashid Mahmood Sindhu for Appellant.

Babar Sattar for Respondent.

2019 C L D 609

[Islamabad]

Before Athar Minallah, J

The IMPERIAL ELECTRIC COMPANY (PVT.) LIMITED---Plaintiff

Versus

ZHONGXING TELECOM PAKISTAN (PVT.) LIMITED and others---Defendants

C.S. No. 61 of 2014 and C.M. No. 284 of 2015, decided on 28th December, 2015.\

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

----S. 2(a)---Arbitration agreement---Nature and concept---Scope---Arbitration is that category of dispute resolution process where the parties make a voluntary choice to have their disputes resolved by an arbitrator rather than through the courts---Arbitration is the submission of a dispute to be decided by a third person---Mechanism for selection of the arbitrator is invariably mentioned in the arbitration clause---Either the parties agree to nominate and appoint an arbitrator or the arbitrator is named in the agreement---Parties may even agree to name an Authority or person from amongst their own officers/officials, and this would not render such an arbitration agreement illegal or against public policy.

Dar Okaz Printing and Publishing Ltd. Liability Company v. Printing Corporation of Pakistan (Pvt.) Ltd. PLD 2003 SC 808 rel.

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

----S. 2(a)---'Arbitration' and 'mediation'---Distinction---Mediation merely endeavours to facilitate the settling of disputes between the parties through the tools of mediation while the arbitration, decide the dispute after holding an inquiry and the parties accept the decision of their chosen person as binding upon them.

Ch. Muhammad Saleem v. Muhammad Akram and others PLD 1971 SC 516 rel.

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

----S. 2(a)---Arbitration agreement---Intention of parties---Scope---Intention of the parties has to be gathered from the language used in the written agreement---Court has to be satisfied that the parties have intended to settle or resolve the dispute through arbitration, i.e. through a person, who, after conducting an inquiry, will give a decision and the same shall be binding on them---Court, in such an eventuality would give effect to said clause as an "arbitration agreement" despite the fact that it may not contain expression as 'arbitration', 'arbitrator' or 'arbitration agreement'.

The Province of the Punjab v. Messrs Irfan & Co. PLD 1956 (W.P.) Lah. 442; Governor-General in Council v. Simla Banking and Industrial Co. Ltd. New Delhi and another AIR (34) 1947 Lahore 215; Shaikh Muhammad Umer v. Zakaria Adamjee Charitable Corporation and another 1988 MLD 1131 and Messrs Jugotekhstil Impex, 61001, Lubijana Yugosalvia v. Messrs Shams Textile Mills Ltd. 1990 MLD 857 rel.

Asim Hafeez for Plaintiff.

2019 C L D 642

[Islamabad]

Before Aamer Farooq, J

Dr. Syed IQBAL RAZA and others---Petitioners

Versus

JUSTICE OF PEACE, ISLAMABAD and others---Respondents

W.Ps. Nos. 3750 and 2633 of 2018, decided on 21st February, 2019.

Intellectual Property Organization of Pakistan Act (XXII of 2012)---

----Ss. 13, 17 & 18---Criminal Procedure Code (V of 1898), S. 22-A---Federal Investigation Agency Act, 1974 (VIII of 1975), S. 3---Ex officio Justice of Peace---Infringement of copyright---Scope---Petitioner complained infringement of copyright and sought direction to FIA under S. 22-A, Cr.P.C. for registration of criminal case---Justice of Peace dismissed the application---Respondent challenged the inquiry being conducted by FIA---Validity---Tribunal created under Intellectual Property Organization of Pakistan Act, 2012 had exclusive jurisdiction to try offences with respect to intellectual property laws---Section 17 of Intellectual Property Organization of Pakistan Act, 2012 provided that Tribunal had, in exercise of its criminal jurisdiction, power to try offences made punishable under Intellectual Property Organization of Pakistan Act, 2012 and for the said purpose, could exercise same powers as were vested in the Court of Session under Cr.P.C.--- Subsection (4) of S. 17 provided that no Court, other than Tribunal, had jurisdiction with respect to any matter to which the jurisdiction of the Tribunal extended under Intellectual Property Organization of Pakistan Act, 2012---Tribunal had been conferred with the power to try an offence---Exclusivity of jurisdiction was provided in subsection (2) of S. 18, Intellectual Property Organization of Pakistan Act, 2012---Section 13(xix) & (xx) of the Act provided powers and functions of Intellectual Property Organization whereunder it had the exclusive power to initiate and conduct inquiries/investigation/proceedings relating to offences arising out of Copyright Ordinance, 1962---No cognizable offence was made out and the order passed by Justice of Peace did not suffer from any error of law---Inquiry being conducted by FIA was declared to be without jurisdiction and lawful authority---Constitutional petitions were disposed of accordingly.

Shahbaz-ud-Din Chaudhry and 3 others v. The Director, FIA, CBC, Lahore and 2 others 1999 YLR 678; The State through P.S. FIA Corporate Crime Circle, Karachi v. Tahir Alam and another 2017 CLD 1535; Majad Ali v. Director General, FIA, Islamabad and 3 others KLR 2016 Criminal Cases 190 and Mst. Bhaitan v. The State and 3 others PLD 2005 Kar. 621 distinguished.

Syed Mushahid Shah and others v. Federal Investigation Agency and others 2017 SCMR 1218; Iftikhar Hussain and others v. Government of Pakistan and others 2001 PCr.LJ 146; The State v. Azmat Ali and others 2017 CLD 519 and Mian Hamza Shahbaz Sharif v. Federation of Pakistan and others 1979 PCr.LJ 1584 ref.

Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447 and The State through Deputy Attorney General v. Muhammad Amin Haroon and 14 others 2010 PCr.LJ 518 rel.

Salman Safdar for Petitioners (in W.P. No. 2633 of 2018).

Raja Rizwan Abbasi for Petitioners (in W.P. No. 3750 of 2018).

2019 C L D 881

[Islamabad]

Before Mohsin Akhtar Kayani and Miangul Hassan Aurangzeb, JJ

Dr. Syed IQBAL RAZA---Appellant

Versus

JUSTICE OF PEACE and others---Respondents

I.C.As. Nos. 102 and 103 of 2019, decided on 30th May, 2019.

Intellectual Property Organization of Pakistan Act (XXII of 2012)---

----S. 13---Copyrights Ordinance (XXXIV of 1962), S. 66---Federal Investigation Agency Act, 1974 (VIII of 1975), S.3 & Entry No. 26, Sched.---Infringement of copyrights---Jurisdiction of FIA to inquire into private disputes relating to copyrights---Powers and functions of Intellectual Property Organization of Pakistan---Initiation and conduct of inquiries and investigations---Exclusive jurisdiction of Intellectual Property Organization of Pakistan to refer complaints to law enforcement agencies---Scope---Appellant had filed a complaint before FIA for registration of FIR against respondent for illegally using his intellectual property rights and other copyrights as safeguarded under the Copyrights Ordinance, 1962---Single Judge of High Court had held that FIA did not have jurisdiction in respect of infringement of copyrights between private parties---Validity---Any person who alleged infringement of copyrights had to approach Intellectual Property Organization of Pakistan created under Intellectual Property Organization of Pakistan Act, 2012 and as provided under S. 13(xix), it was the power and function of the Intellectual Property Organization of Pakistan to initiate and conduct inquiries and proceedings relating to offences in the prescribed manner---Appropriate forum against infringement of intellectual property rights was Intellectual Property Organization, which was empowered to deal with such like issues and as such none of the law enforcement agencies could initiate inquiry in any manner relating to infringement of copyrights unless the same was referred by the Intellectual Property Organization of Pakistan to any law enforcement agency---Appellant had failed to point out any legal defect or jurisdictional error in the impugned judgment, therefore, intra court appeals were dismissed.

Syed Mushahid Shah and others v. FIA and others 2017 SCMR 1218; DG FIA and others v. Kamran Iqbal and others 2016 SCMR 447; The State v. Muhammad Amin Haroon and others 2010 PCr.LJ 518; Iftikhar Hussain and others v. Government of Pakistan and others 2001 PCr.LJ 146 and The State v. Azmat Ali and others 2017 CLD 519 ref.

Raja Rizwan Abbasi, Sohail Akhtar and Ms. Naila Noreen for Appellant (in I.C.As. Nos. 102 and 103 of 2019).

Malik Sajid/Inspector, FIA/ACC, Islamabad Zone for Respondents (in I.C.As. Nos. 102 and 103 of 2019).

2019 C L D 931

[Islamabad]

Before Athar Minallah, C.J.

Dr. OMAR MASOOD and another---Appellants

Versus

Syed AMIR HUSSAIN NAQVI and another---Respondents

F.A.O. No. 22 of 2019, decided on 5th July, 2019.

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

----Ss. 5, 104 & 2(23)---Civil Procedure Code (V of 1908), O. VII, R. 11 & O. XXXIX, Rr. 1, 2---Court as defined in Companies Act, 2017---Scope---Ouster of jurisdiction clause occurring in S. 5(2) of the Act---Nature---Matters under Companies Act, 2017 (Act) which the Court as defined in S. 2(23) of Companies Act, 2017 was empowered to determine by or under Companies Act, 2017---Ouster of jurisdiction of any other court on matters under Companies Act, 2017---Nature of ouster clause contained in S. 5(2) of the Companies Act, 2017---Scope---Appellant which was private limited company impugned the order of Civil Court whereby appellant company was, inter alia, restrained from transferring 50% of its share under O. XXXIX, Rr. 1 & 2, C.P.C. ; and application of appellant company under O. VII, R.11, C.P.C. for rejection of plaint of respondent, was dismissed---Contention of respondent/plaintiff was that through civil suit, he had sought transfer of shares in his name, on basis of settlement deed with the Chief Executive Officer of the Company---Held, that Legislative intent behind provisions of the Companies Act, 2017 was that all matters related to title or transfer of share of a juridical person incorporated under the Act were to be dealt with by Court vested with jurisdiction under S. 5 of the Companies Act, 2017 which was to entertain, or proceed to determine a controversy under Companies Act, 2017---Jurisdiction of the civil court had been expressly ousted under S. 5(2) of the Companies Act, 2017---Mechanism for transfer of shares and consequences of refusal to do so had been prescribed by Legislature in the Companies Act, 2017, along with statutory right of appeal---Suit filed by plaintiff / respondent sought transfer of shares on basis of a settlement deed, which ought to have been dealt with under Companies Act, 2017---Such suit was therefore barred by S. 5(2) of the Companies Act, 2017---Impugned order was set aside and plaint was rejected under O. VII, R. 11, C.P.C.---Appeal was allowed, accordingly.

Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 SCMR 213; Muhammad Mohsin Ghuman and others v. Government of Punjab through Home Secretary, Lahore and others 2013 SCMR 85; Gulistan Textile Mills Ltd. and another v. Soneri Bank Ltd. and another 2018 CLD 203; National Investment Trust Ltd. v. Lawrencepur Woollen and Textile Mills Ltd. 2002 CLC 527; Muhammad Aslam Javed and another v. Malik Ijaz Ahmad and another 2003 CLC 1442; Federation of Pakistan through Secretary Ministry of Petroleum and Natural Resources v. Dewan Petroleum (Pvt.) Ltd., through M.D./Chief Executive and another PLD 2012 SC 189 and Messrs Chaina Fibre Company Limited, Khulna and 4 others v. Abdul Jabbar and 9 others PLD 1968 SC 381 ref.

(b) Interpretation of statutes---

----Ouster of jurisdiction clause---Concept, scope and effect---Legislature was competent to exclude jurisdiction of a court and there existed presumption against ouster of jurisdiction---Any law or statutory provision which denied access to courts was to be construed strictly---Ouster of jurisdiction must be expressly and clearly implied and not readily inferred---Language used by Legislature ought to show express and unequivocal manifestation of Legislative intent to exclude jurisdiction of courts---Language of ouster clause if same was so clear and unmistakable that it left no doubt as to intention of Legislature in ousting jurisdiction in all circumstances, then the same should be given effect and even issues of "mala fide" and "without jurisdiction" would not be open to judicial review; and courts as a result would not be concerned with consequences in such cases---Unless intention of Legislature was so clear that no other meaning could be given to the language used in a statute, jurisdiction of the courts would not be ousted in three categories; which were where there existed an action/order without jurisdiction, or action/order was coram non judice or tainted with mala fide---When Legislature declared an order to be final, it had reference to such order which was within powers of Authority making it, and such authority should have been constituted in accordance with statute and person proceeded against was to be subject to jurisdiction of said Authority and order passed or action taken should be such as could have been made under a statute and if such conditions were fulfilled, then an omission or irregularity committed in following the statutory procedure would not be sufficient ground to avoid giving effect to exclusion of jurisdiction.

Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104; Zafar-ul-Ahsan v. The Republic of Pakistan through Cabinet Secretary, Government of Pakistan PLD 1960 SC 113; Keramat Ali and another v. Muhammad Yunus Haji and others PLD 1963 SC 191; Muhammad Ismail and others v. The State PLD 1969 SC 241; Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1989 SC 26; The State v. Zia ur Rehman and others PLD 1973 SC 49; Allied Bank of Pakistan Ltd. v. Khalid Farooq 1991 SCMR 599; 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; Evacuee Trust Property Board and others v. Ahmed and others 2004 SCMR 440; Munir Hussain Bhatti, Advocate and others v. Federation of Pakistan and another PLD 2011 SC 407; Pir Sabir Shah v. Federation of Pakistan and others PLD 1994 SC 738; PLD 2006 SC 1442; Haisbury's Laws of England, Fourth Edition; Anisminic, Ltd. v. The Foreign Compensation Commission and another [1969] 1 All E.R. 2008 and Re Gilmore's Application [1957] 1 All E.R. 796 rel.

Ms. Zainab Janjua for Appellants.

Moazzam Habib and Ibrar Saeed, Law Officer, SECP for Respondents.

Date of hearing: 5th July, 2019.

2019 C L D 1374

[Islamabad]

Before Miangul Hassan Aurangzeb, J

NADEEM MUMTAZ QURESHI---Petitioner

Versus

PAKISTAN PETROLEUM LIMITED and others---Respondents

W.P. No. 4032 of 2018, decided on 30th September, 2019.

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

----S. 159---Nominee Director---Scope---Nominee directors need not go through process of election envisaged in S. 159 of Companies Act, 2017.

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

----S. 163---Nominee Director, removal of---Process---Process of removal of an elected director envisaged in S. 163 of Companies Act, 2017 does not need to be followed for removal of nominee director.

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

----Ss. 132, 134, 159, 161, 162, 163 & 165---Pakistan Stock Exchange Rules, R. 5.6.4(b)---Public Sector Companies (Corporate Governance) Rules, 2013, R. 3-A(4)--Elected director, removal of---Petitioner was elected director of a company who was removed by Annual General Meeting---Petitioner sought injunction against his removal and also sought declaration against appointment of new Managing Director/Chief Executive Officer of company---Validity---Petitioner was an elected director even though his name was proposed for directorship by Federal Government---Petitioner could not be termed as nominated director since his directorship was by virtue of an election in which he obtained a sizeable number of votes---Petitioner being an elected director, could be removed in accordance with procedure envisaged in S. 163 of Companies Act, 2017 which provided that a company by resolution in general meeting could remove a director appointed under Ss. 157, 161 or 162 of Companies Act, 2017 or elected in manner provided for in S. 159 of Companies Act, 2017---High Court declined to interfere in decision passed by Annual General Meeting for removing petitioner as Director and interference in appointment of new Managing Director/Chief Executive Officer of company as same was rendered infructuous and he was no longer holding said position--- Constitutional petition was dismissed accordingly.

Salahuddin v. Frontier Sugar Mills and Distillery Ltd. PLD 1975 SC 244; Somalingappa Shiva Putrappa v. Shree Renuka Sugars Ltd. (2002) 110 Comp. Cases 371 Karnataka and Shailesh Harilal Shah v. Matushree Textiles Ltd. (1995) 82 Comp. Cases 5 Bombay ref.

Azid Nafees for Petitioner.

Afnan Karim Kundi and Adeel Aftab for Respondents Nos. 1 and 2.

Shahzad Ali Rana and Ibrar Saeed for Respondent No.5/SECP.

Muhammad Nadeem Khan Khakwani, Assistant Attorney-General and Akif Khan, Law Officer for Respondents.

2019 C L D 1

[Sindh]

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

MUHAMMAD AKBAR---Appellant

Versus

MASOOD TARIQ BAGHPATI and others---Respondents

High Court Appeal No. 222 of 2017, decided on 20th February, 2018.

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

----Ss. 14, 15 & 16---Company and its directors---Status---Company is a separate juristic person/legal entity under law and is distinct from its Directors---Company is not a mere alias for its shareholders nor merely an agent for them---Interest of a company and its status under law is quite different from that of its shareholders and Directors---No shareholder/Director of a company can be said as owner of any piece of property in which company itself has an interest---Such distinction is to be observed between company as a legal entity and its rights and that of shareholders and their rights---Property likewise owned by a wife and sons/daughters of judgment-debtor cannot be sold as property of judgment-debtor.

Anjum Rashid and others v. Shehzad and others 2007 CLD 1210 rel.

(b) Damages---

----Breach of contract---Recovery of damages---Proof---Merely claiming damages and losses cannot be granted in absence of any positive evidence---Any party who claims damages on account of breach of contract is required under law to establish contract, breach thereof and extent of damages put forward/claimed in a suit for damages.

Syed Ahmad Saeed Kirmani v. Messrs Muslim Commercial Bank Ltd., Islamabad 1993 SCMR 441 rel.

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

----S. 402---Shops and Establishment Order, 1969, S. 12---Recovery of damages---Wound-up company, liability of---Status of ex-Directors---Plaintiff sought recovery of money against ex-Directors of a company already wound-up in accordance with law---Although claim of plaintiff was settled as full-and-final settlement at time of winding-up of company, yet he filed suit for damages and recovery of money against ex-Directors---Single Judge of High Court dismissed suit on basis of evidence recorded during trial---Validity---Defendants were natural persons and ex-Directors of company in question who could not be treated as same persons like a company---Any legal person though discharged its functions through its Directors, Managers, Agents, Representatives but still two were distinct and never merged into each other rather both remained to continue and retain their respective independent identities and separate personalities---Filing of suit against ex-Directors was not only misconceived but also misleading---Defendants upon passing of winding-up orders ceased to be Directors/divested of all powers to act on behalf of company under liquidation---Division Bench of High Court declined to interfere in judgment and decree passed by Single Judge as same was correct and in accordance with law---Intra court appeal was dismissed in circumstances.

National Development Finance Corporation, Karachi v. Messrs Sindh Glass Industries (Pvt.) Ltd. PLD 1994 Kar. 186 rel.

Appellant in person.

Khadim Ali Metlo for Respondents Nos. 1, 2, 3, 5 and 6.

Nemo for Respondents Nos. 4, 7 and 8.

2019 C L D 27

[Sindh]

Before Kausar Sultana Hussain, J

MARS, INCORPORATED through Authorized Signatory and others--Appellants

Versus

The REGISTRAR OF TRADE MARKS and others---Respondents

Miscellaneous Appeals Nos. 16, 17, 18, 19, 20, 28 of 2007, 6, 27, 81 of 2008 and 1 of 2009, decided on 25th July, 2018.

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

----Ss. 133, 134, 114 & Fourth Sched., Arts. 10, 11---Trade Marks Rules, 2004, Rr. 133 & 134----Trade Marks Act (V of 1940), Ss. 14, 15 & 16---Registration of trademarks---Repeal of the Trade Marks Act, 1940; transition mechanism provided for in Trade Marks Ordinance, 2001 and the Trade Marks Rules, 2004---Scope---Question before High Court was "whether, after repeal of the Trade Marks Act, 1940; pending applications filed for registration of trade marks, under the Trade Marks Act, 1940 and/or for registrations advertised in the Trade Marks Journals after coming into effect of the Trade Marks Rules, 2004; would be governed under the new law or would the old law apply to the same"---Held, that S. 133 read with Art. 10 of the Fourth Schedule to the Trade Marks Ordinance, 2001 provided mechanism whereby transitional matters were to be governed---Article 10(1) of the Fourth Schedule to the Trade Marks Ordinance, 2001 stipulated that an application for registration of a trademark under the old law which was advertised under the Trade Marks Act, 1940 in the manner described in the said Article, would be dealt with under the Trade Marks Act, 1940; and the word "shall" used in said Article; signified that an applicant had no discretion in the said matter---Article 11 of the Fourth Schedule to the Trade Marks Ordinance, 2001 specifically dealt with conversion of pending applications which had not been advertised under S. 15 of the Trade Marks Act, 1940 and for which no order was made for advertisement before commencement of the Trade Marks Ordinance, 2001---High Court observed that R. 134 of the Trade Marks Rules 2004, which provided the form for conversion of pending applications, could not be made applicable to registration applications which were covered under Art. 10 of the Fourth Schedule to the Trade Marks Ordinance, 2001--- Appeal was allowed, accordingly.

(b) Interpretation of statutes---

----"Schedule" to a statute---Statutory force of---Schedule to a statute was integral part of the relevant statute and had the same force as any other part of the statute.

(c) Interpretation of statutes---

----Statuary headings, construction of---Headings in a statute or Rule may be taken into account to ascertain true sense and correct meaning of provisions contained thereunder when they appeared to be self-conflicting or ambiguous---Increased clarity in such cases may be construed when every provision under a specific heading or sub-heading was read in conjunction with such heading or sub-heading---"Heading" was defined as words prefaced to the start of sections of Acts of Parliament which may be used for statutory interpretation.

(d) Natural justice, principles of---

----Effect of repeal of laws/statutory instruments---Accrual of vested right(s)---Scope---Person could not be made devoid of his/her due legal right accrued to such person during currency of a particular legal instrument and thereby such person could not be subject to less beneficial treatment; and departure from such principle was an exception.

2012 MLD 1635 rel.

(e) Interpretation of statutes----

----Construction---Statute was to be read as a whole and every clause of the same was to be construed with reference to context of other clauses of the said enactment.

PLD 2004 SHC 1174; PLD 2003 Kar. 127 and PLD 2004 Pesh. 307 rel.

Mrs. Amna Salman for Appellants (in M.As. Nos. 16, 17, 20, 28 of 2007, M.As. Nos. 6, 27, 81 of 2008 and M.A. No. 1 of 2009).

Salim Gulam Husein for Appellant (in M.A. No. 18 of 2007).

Muhammad Masood Khan for Appellant (in M.A. No. 19 of 2007).

Sultan Ahmed for Respondent No. 1 (in M.As. Nos. 16, 17, 18, 19, 28 of 2007 and M.A. No. 6 of 2008).

Salim Gulam Husein for Respondent No. 1 (in M.A. No. 20 of 2007 and M.A. No 81 of 2008).

Muhammad Ayub for Respondent No. 2 (in M.A. No. 1 of 2009).

Khuwaja Shoaib Mansoor for Respondent No.2 (in M.As. Nos.18 of 2007 and 81 of 2008).

Ferozali K. Allana for Respondent No.2 (in M.A. No. 6 of 2008).

Abdul R. Sattar for Respondent No. 2 (in M.A. No. 19 of 2007).

Abbad ul Hussnain for Respondent No.2 (in M.A. No. 16 of 2007).

Abdul Hameed Iqbal for Respondent No.2 (in M.A. No. 20 of 2007).

2019 C L D 72

[Sindh]

Before Muhammad Junaid Ghaffar, J

PERVEZ ARSHAD and another---Petitioners

Versus

RAUF TEXTILES AND PRINTING MILLS (PRIVATE) LIMITED and 12 others---Respondents

J.C. M. No. 29 of 2016, decided on 11th July, 2018.

Companies Ordinance (XLVII of 1984)---

----Ss. 325, 310 & 309---Application for winding-up of company---Circumstances in which company may be wound-up by Court---Appointment of provisional manager by the Court at an interim stage---Principles and consideration---Exercise of discretion by Court under S. 325 of the Companies Ordinance, 1984--- Scope--- Order for appointment of a provisional manager was only to be passed when, at the interim stage, there were valid and justified grounds available showing that ultimately an order for winding-up would definitely be passed by the Court as provisional manager had the same powers as an official liquidator appointed by a Court through final order of winding-up---Such appointment had serious consequences and if ultimately an application for winding-up a company was dismissed, then there existed no way to undo acts performed by a provisional manager---Such remedy of appointment of provisional manager was an exceptional one and the Court invariably had discretion on the same---Discretion and prerogative vested in the Court under S. 325 of the Companies Ordinance, 1984 was well-tempered by established considerations that such an appointment was a drastic intrusion into affairs of a company and must not be resorted to if other measures would be adequate to preserve the status-quo and therefore an application for such appointment must show valid and good reasons---Considerations for the Court on such appointment were, whether there was a reasonable prospect that winding-up order would be made, whether assets of the company were at risk, the degree of urgency and need for an independent examination of the state of accounts, whether affairs of the company had been carried out casually and without due regard to legal requirements so as to leave the court with no confidence that the company's affairs were properly conducted and finally; whether there was a need to preserve status quo so to ensure least possible harm to all concerned.

The United Bank Ltd. v. Messrs Pak Wheat Products Ltd. PLD 1970 Lah. 235; Pakistan Industrial Credit and Investment Corporation Ltd. Karachi v. National Silk and Rayon Mills Ltd., Lyallpur PLD 1976 Lah. 1538; Messrs Muhammad Baksh and Sons Ltd. and another v. Azhar Wali Muhammad and 11 others 1986 MLD 1870; Mst. Ghazala Zakir v. Muhammad Khurshid and 7 others PLD 1989 Kar. 350; Moinuddin Paracha and 5 others v. Sirajuddin Paracha and 22 others 1994 CLC 247 and Sh. Maqbool Ellahi and 3 others v. Rasul & Co. Ltd. and 2 others PLD 1970 Lah. 539 ref.

Sabir Ahmad and another v. Messrs Najma Sugar Mills Limited 2005 CLD 49; In the matter of Gaya Sugar Mills Ltd. Lakhminarayan Bhadani and others AIR (37) 1950 Patna 237 and Australian Securities and Investments Commission v. Active Super Pty. Ltd. (No. 2) [2013] FCA 234 rel.

Haider Waheed for Petitioners.

Arshad Tayebaly for Respondents Nos. 1, 3, 4 and 11.

Naveed-ul-Haq for National Bank of Pakistan.

2019 C L D 91

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

Syed WAJAHAT HUSSAIN ZAIDI and another---Appellants

Versus

UNITED BANK LIMITED---Respondent

Special High Court Appeal No. 5 of 2017, decided on 24th July, 2018.

(a) Words and phrases---

----"Final order"---Meaning of---Final order was one which terminated the litigation between the parties and the merits of the case and left nothing to be done but to enforce by execution what had been determined.

Black's Law Dictionary (Sixth Edition) rel.

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

----Ss. 22(6) & 22(1)---Interpretation---High Court appeal against interlocutory order---Maintainability---Defendant impugned order of Banking Court, whereby its application seeking restoration of defendant's original application for leave to defend the suit, was dismissed---Contention of defendant, inter alia, was that the impugned order was not sustainable and Banking Court in the impugned order had also imposed costs on defendant, therefore the same could be deemed to be a decree and hence appealable---Validity---No judgment or final determination of any kind whatsoever had been rendered in the present suit and impugned order did not impinge on defendant's right to appeal a judgment, if the same was rendered against defendant---Defendant, in such an appeal, would be at liberty to agitate all applicable grounds---Appeals, being not maintainable, was dismissed, in circumstances.

Nadeem Athar and another v. Messrs Dubai Islamic Bank (Pakistan) Ltd. 2013 CLD 805; Muhammad Khan v. Zarai Tarakiati Bank Limited through President 2014 CLD 1596; Black's Law Dictionary (Sixth Edition); 10 Rang. 335; AIR 1933 PC 58; Asif Kudia v. Messrs KASB Bank Limited and others 2014 CLD 1548 and Bank of Punjab through Authorized Attorney v. Messrs AMZ Ventures Limited and another 2013 CLD 233 rel.

Messrs Baghpotee Services (Private) Ltd. and others v. Messrs Allied Bank of Pakistan Ltd. 2001 CLC 1363 and Bank Alfalah Limited v. Interglobe Commerce Pakistan (Pvt.) Ltd. and 5 others 2017 CLD 1428 distinguished.

Sami Ahsan for Appellants.

Aijaz Ahmed Sheerazi for Respondent.

2019 C L D 134

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

Messrs CRESCENT STAR INSURANCE LTD. through Authorized Officer

and another---Petitioners

Versus

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

C.P. No. D-3710 of 2018, decided on 25th October, 2018.

Insurance Companies (Sound and Prudent Management) Regulations, 2012---

----Regln. 3(ii)---Application for appointment as Director of insurance company---Scrutiny in terms of Insurance Companies (Sound and Prudent Management) Regulations, 2012---Candidate impugned rejection of his application for appointment as Director of insurance company, which rejection was made on the ground that overdue amounts to Banks/financial institutions were detected against the candidate---Contention of candidate inter alia was that said overdue amounts were attributable to companies in which he was Director, and that said companies had been dissolved as per law and ceased to exist---Validity---High Court disposed of petition with direction to Securities and Exchange Commission of Pakistan to decide the application of the candidate afresh after giving him opportunity of hearing and to issue notice to official liquidator of dissolved companies for necessary verification of the record---Constitutional petition was disposed of accordingly.

Saadat Hayat Khan v. Muslim Commercial Bank Limited 2005 CLC 187 rel.

Zeeshan Abdullah along with Samar Abbas for Petitioners.

Syed Hafiz Ibad, Law Officer SECP.

2019 C L D 160

[Sindh]

Before Zulfiqar Ahmed Khan, J

DHANYA AGRO-INDUSTRIAL (PVT.) LIMITED through Attorney---Plaintiff

Versus

QUETTA TEXTILE MILLS LTD. through Chief Executive---Defendant

Suit No. 1694 of 2016, decided on 16th August, 2018.

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

----Ss. 6 & 7---New York Convention, Articles IV & V---Application for enforcement of foreign arbitral award---Legislative intent and policy for enforcement of foreign arbitral awards---Adjudication of application under S. 6 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Foreign arbitral award, as long as it was enforceable, was to be treated as binding for all purposes on persons between whom it was made---Intention of the Legislature whilst enacting Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 was to expedite the process by giving fast-tract enforceability to arbitral awards granted between members of the New York Convention and remedies were made forthcoming in an expeditious manner without any unnecessary loss of time.

Qazi Iftikhar Ahmad along with Muhammad Nazim Khokhar for Plaintiff.

Nemo for Defendant.

2019 C L D 185

[Sindh]

Before Muhammad Faisal Kamal Alam, J

Messrs FINE ENTERPRISES TRADERS through Partner/Representative-- Plaintiff

Versus

Messrs CONSTELLATION CO-OPERATIVE HOUSING SOCIETY LIMITED and 37 others---Defendants

Suit No. 1625 of 2016, decided on 15th August, 2018.

Partnership Act (IX of 1932)---

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXX, R. 1---Suit by a partner on behalf of firm---Maintainability---Partner was not required to have an authority from other partners before initiating any action by way of a suit---No adverse consequence had been mentioned in the provision of O. XXX, R. 1, C.P.C. if compliance was not made---Partner could neither relinquish a claim of the firm nor withdraw a suit or proceeding without the authorization or endorsement of the other partners of a firm.

Messrs Combined Enterprises v. Water and Power Development Authority, Lahore PLD 1988 SC 39 and Zubair Ahmad and another v. Shahid Mirza and others 2004 MLD 1010 ref.

Mueen Qamar for Plaintiff.

Muhammad Nouman Jamali for Defendants Nos. 1, 3, 7, 8, 10, 11, 15, 23, 24 and 25.

Bhajandas Tejwani for Defendant No. 28.

Muhammad Aurangzaib for Defendants Nos. 4, 9, 17, 20, 21, 30 and 31.

2019 C L D 242

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Authorized Officer---Appellant

Versus

ADNAN FAISAL and another---Respondents

High Court Appeal No. 15 of 2012, decided on 2nd August, 2018.

(a) Companies Ordinance (XLVII of 1984) [since repealed]---

----S. 481---Code of Civil Procedure (Amendment) Ordinance (X of 1980), S. 15---Criminal Procedure Code (V of 1898), S. 411-A---Appeal to High Court in certain cases---Appeal from sentence of High Court under S. 411-A, Cr.P.C.---Criminal proceedings initiated under the Companies Ordinance, 1984---Appeal against acquittal of accused in offences arising out of the Companies Ordinance, 1984---Exclusive applicability of S. 481 Companies Ordinance, 1984 in such cases---Scope---Question before the High Court was whether an order for acquittal passed by High Court exercising original criminal jurisdiction in respect of offences arising out of the Companies Ordinance, 1984 could be impugned in appeal before the High Court under S. 15 of the Code of Civil Procedure (Amendment) Ordinance,1980, or under the procedure prescribed by S. 411-A, Cr.P.C.---Held, that impugned order was rendered in exercise of criminal jurisdiction and not civil, and was a final order and not an interlocutory order, therefore S. 15 of the Civil Procedure Code (Amendment) Ordinance, 1980 did not apply---Section 411-A of the Cr.P.C. would also not apply to the impugned order as the unequivocal provisions of the Companies Ordinance, 1984 would override the same---In respect of criminal proceedings arising out of the Companies Ordinance, 1984, S. 481 of the Code would apply vis-a-vis appeals against acquittal notwithstanding anything contained in the Cr.P.C. and thus S. 411-A, Cr.P.C. would not provide a right of appeal in the impugned order---Appeal being not maintainable, was dismissed in circumstances.

Abdul Rahim Khan v. The State 1991 MLD 2448 and Brothers Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 ref.

Syed Ali Nawaz Gardezi v. Lt. Col. Muhammad Yusuf Khan PLD 1962 SC 465; The State v. Abdul Samad and another PLD 1984 Quetta 72 and Gulistan Textile Mills and another v. Soneri Bank Limited and another 2018 CLD 203 rel.

(b) Interpretation of statutes---

----Special law---Maxim Generalia specialibus non derogant---Specific provisions of a special law would displace general law which would be deemed to be inapplicable.

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

Khalid Mehmood Siddiqui for Appellant.

Asghar Kundi and Munir Ahmed for Respondent No.2.

2019 C L D 272

[Sindh]

Before Nadeem Akhtar and Mrs. Kausar Sultana Hussain, JJ

IMRAN HUSSAIN---Appellant

Versus

BANKER'S EQUITY LIMITED through Authorized Representative of the Official Liquidator and 13 others---Respondents

Special High Court Appeal No. 158 of 2015, decided on 27th November, 2018.

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

----Ss. 7(2), 9 & 10(8)---Civil Procedure Code (V of 1908), O.VII, R.11---Procedure of Banking Court---Power of Banking Court to reject plaint if the same did not disclose a cause of action---Scope---Application under O. VII, R. 11, C.P.C. for rejection of plaint was maintainable prior to grant of leave to defend and a suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 could be examined per O. VII, R. 11, C.P.C. and plaint could be rejected or suit could be dismissed in case the same was barred by law.

Gulistan Textile Mills Ltd. v. Askari Bank Ltd. and others 2013 CLD 2005 and National Bank of Pakistan v. Messrs ARK Garments Industry (Pvt.) Ltd. 2015 CLD 179 rel.

Abdul Rahman for Appellant.

2019 C L D 285

[Sindh]

Before Nadeem Akhtar, J

DEUTSCHE BANK AG--Plaintiff

Versus

FATEH TEXTILE MILLS LIMITED---Defendant

Suit No. B-159 of 2010, decided on 26th July, 2016.

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

----Ss. 9(5), 7(2) & 12---Civil Procedure Code (V of 1908), O. XXIX R. 2---Procedure of Banking Court---Suit for recovery---Service of notices/summons on the defendant---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Effective service on corporation, public limited company---Mandatory requirements---Scope---Except for publication in newspapers, all other modes of service provided for in S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 have the common feature that written report/confirmation must come on record before Banking Court to ascertain service or non-service of summons on a defendant either through the bailiff and courier or by acknowledgment due by the registered post---Intention of Legislature was that there must exist sufficient and reliable evidence before Banking Court in order to ascertain whether summons were duly served on defendant or if a defendant refused to receive the same---Order XXIX, Rule 2, C.P.C. specifically provided that statutory provisions regulating service of process where suit was against a corporation, then summons may be served on the secretary or director(s) or principal officer of said corporation or by sending such summons to its registered office and the said provisions of O. XXIX, C.P.C. were specifically applicable to Banking Suits vide S. 7(2) Financial Institutions (Recovery of Finances) Ordinance, 2001---"Public limited company" fell within definition of "corporation" and where requirement of sending summons to registered office of such a company through bailiff and registered post acknowledgment were not fulfilled, then such service would be deemed to be not effected in a valid and proper manner---Appearance of defendant's counsel without issuance of summons in compliance of mandatory requirements of S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 did not make said provision redundant, which was to be complied with in any event to enable the Banking Court to proceed further in the matter.

Mubarak Ali v. First Prudential Modaraba 2011 SCMR 1496; Messrs Sitara Rice Trading and another v. United Bank Limited and another 2011 CLD 254; Messrs Aamer Enterprises (Pvt.) Ltd. and 3 others v. Messrs United Bank Limited and another 2009 CLD 342; Mst. Zarina Shamim v. Zarai Taraqiati Bank Limited through Manager 2007 CLD 1371; Commissioner of Income-Tax, North Zone, West Pakistan v. Messrs Muhammad Idris Barry & Co. PLD 1967 SC 49; Safiullah Siddiqui v. Karachi Electric Supply Corporation Limited 1997 SCMR 926; Messrs Quetta Silk Center through Sole Proprietor and 2 others v. Muslim Commercial Bank Limited through Branch Manager/General Attorney 2003 CLD 254; Muhammad Azwar Siddiqui v. Chief Executive Union Leasing Ltd. and 21 others 2006 CLD 946; Hassan Ara and 8 others v. Bank of Punjab through Manager 2006 CLD 1502; Nazir Hussain and another v. Bank of Punjab through Manager 2007 CLD 687; State Life Insurance Corporation of Pakistan v. Nasim-e-Sahar through Legal Heirs 1992 CLC 563; Messrs Famy Ltd. v. Commissioner of Sales Tax 2002 PTD 102; Muhammad Samin Jan v. Messrs Ferozsons Laboratories Ltd., Nowshera and 2 others PLD 1972 Pesh. 133; Asiatic Steam Navigation Co. Ltd. v. Tribhawandas & Co. AIR 1923 Sind 111; Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171; Mst. Hajra Bibi v. Zarai Taraqiati Bank Limited (ADBP) through Manager 2006 CLD 261; Khawaja Muhammad Bilal v. Union Bank Limited through Branch Manager 2004 CLD 1555 and Messrs International Chrome Tannery and 3 others v. United Bank Limited 2008 CLD 1329 ref.

Asif Kudia v. Messrs KASB Bank Limited 2014 CLD 1548 = 2015 CLC 1734 and Mubarak Ali v. First Prudential Modaraba 2011 SCMR 1496 rel.

A.M. Basit Essani for Plaintiff.

Dr. Muhammad Farogh Naseem for Defendant.

2019 C L D 301

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs PAK BRUNEI INVESTMENT COMPANY LIMITED---Petitioner

Versus

NEW ALLIED ELECTRONICS INDUSTRIES (PVT.) LTD.---Respondent

J.C.M. No. 1 of 2012, decided on 29th November, 2018.

(a) Interpretation of statutes/documents---

----General words did not derogate from special words and if a power or act had been provided for specifically in an instrument, then any subsequent clause in respect of such power or act would not override earlier clause by mere use of the word "notwithstanding"---Non obstante clause could operate as an ouster only if an inconsistency between the same and another provision was found to exist and when there existed a case of irreconcilable conflict.

The State v. Zia-ur-Rahman and others PLD 1973 SC 49 and Packages Limited v. Muhammad Maqbool and others PLD 1991 SC 258 rel.

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

----Ss. 305, 306 & 309---Circumstances in which company may be wound up by Court---Application for winding up a company by creditor---Exercise of discretion by Court where other creditors were opposing or not consenting to winding up of a company that was unable to pay its debts---Scope---Normally, a creditor of a company who cannot get paid his due debt after having served proper notice to said company was entitled ex debito justitiae as between him and the Company, to an order for winding up of said company, yet at the same time High Court was reluctant to grant a winding up petition if other creditors were opposing the same, notwithstanding the fact that under ordinary circumstances, such an order ought to be granted.

Hassan Arif for Petitioner.

Rizwan Ahmed for Respondent.

2019 C L D 352

[Sindh]

Before Zulfiqar Ahmad Khan and Saeed-ud-Din Nasir, JJ

MCB BANK LIMITED---Plaintiff

Versus

EMADUL HASSAN---Defendant

Suit No. 563 of 2007, decided on 15th February, 2016.

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

----Ss.7 & 9---Civil Procedure Code (V of 1908) O. XXXIX Rr. 1 & 2---Power of Banking Court---Suit for recovery---Doctrine of privacy---Privileged and private communication---Interim order of Banking Court---Scope---Question before Banking Court was whether communication vide letter of the Bank to Federal Investigation Agency seeking action against defendant for being a defaulter constituted a violation of interim order of Banking Court whereby said Bank was restrained from projecting defendant as defaulter to the public---Held, that private and privileged communication between a Financial Institution/Bank and Government institution was neither a public announcement, was not intended for public consumption of people-at-large; nor was aimed to be produced and broadcasted to the general public, and thereby remaining a privileged and private communication, the same was protected by doctrine of privacy.

Habib-ur-Rehman along with Hazeez-ur-Rehman and Ghulam Mujtaba Phull for Plaintiff.

Jehanigir Adil Qazi, Authorized Attorney of NIB Bank Limited.

2019 C L D 395

[Sindh (Larkana Bench)]

Before Zafar Ahmed Rajput and Agha Faisal, JJ

SOOFI RICE MILLS through Proprietor and 2 others---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Manager and 2 others---Respondents

First Civil Appeal No. D-3 of 2013, decided on 3rd October, 2018.

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

----O. VIII, R. 6---Suit for recovery of money---Set-off against plaintiff's demands---Essentials---Set-off must be where a suit was one for recovery of money and amount in regard to such set off must be an ascertained sum of money, which must be legally recoverable by defendant(s)---Such amount must be recoverable by defendant from plaintiff(s) and must not exceed pecuniary limits of jurisdiction of the court in which the suit was brought---Both parties must fill, in the defendants claim to set off, the same character they fill in the plaintiff's suit---Set off claim must be pleaded in the manner prescribed in law and within period of limitation prescribed in law.

Civil Aviation Authority v. JAPAK International (Pvt.) Ltd. 2009 SCMR 666; Ahmad Hassan v. Haji Ajab Khan and others 1985 CLC 1575; Lassoo & Sons v. Krishna Bahadur Nepali AIR 1932 Bom. 617; Jitendra Nath Ray v. Jananda Kanta Das Gupta AIR 1936 Cal. 277; Bai Harendra Nath Chaudhury v. Bai Sourindra Nath AIR 1942 Cal. 559; Sarawwathiswani v. Sridhora Siverama Moorthy AIR 1949 Mad. 630; Abdul Majid v. Abdul Rashid and others AIR 1950 All. 201; Shoebanchan Pandey and another v. Madho Sarah Chowbay and others AIR 1952 Pat. 73; Sarangdhar Singh and another v. Lakshmi Narayan Wahi AIR 1955 Pat. 320; Syed Naimat Ali and others v . Dewan Jairam Dass PLD 1983 SC 5; Har Prasad and another v. Firm Ram Sarup Radha Kishen AIR 1924 All 87, 2; Bhikanrao v. Shridhar AIR 1931 Nag. 12; Girdharilal Chaturbhuj v. Surajmal Chauthmal Agarwal AIR 1940 Nag. 177; Sankara Pillai v. Parameswaran Pillai AIR 1959 Ker. 352; AIR 1964 Mad. 108; Syed Ahmad Saeed Kirmani v. Messrs Muslim Commercial Bank Ltd., Islamabad 1993 SCMR 441; Khurshid Ahmed and another v. Khair Din PLD 1962 (W.P.) Lahore 313; Rai Harendra Nath Chaudhury v. Rai Sourindra Nath Choudhury and others AIR (29) 1942 Calcutta 559; (1881) 5 QBD 5691; (1878) 3 QBD 324 and Apollo Textile Mills Ltd. v. Soneri Bank Limited 2011 CLD 1655 rel.

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

----Ss. 15 & 19---Execution of decree of Banking Court---Sale of mortgaged property---Rights of auction-purchaser---Scope---Once a sale had been effected, third party interest intervenes and the same may not be whittled away by resort to procedural incongruities---Auction purchaser acquired valuable rights in a property which could not be easily disturbed and such rights were created upon acceptance of an offer and subsequent confirmation of sale.

United Bank Limited v. Consolidated Exports Limited and others 1996 MLD 1727; 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.

Syed Zahir Hussain Chishti for Appellants.

Bashir Ahmed Dargahi for Respondents.

2019 C L D 458

[Sindh]

Before Nazar Akbar, J

RAJEE (PVT.) LIMITED through Chief Executive---Appellant

Versus

REGISTRAR OF DESIGNS and another---Respondents

Miscellaneous Appeal No. 56 of 2008, decided on 15th January, 2019.

Registered Designs Ordinance (XLV of 2000)---

----S. 10---Registration of design---Cancellation of registration---Grounds for cancellation---Adjudication of application under S. 10 of Registered Designs Ordinance 2000 for cancellation of registered design---Scope---Appellant impugned order of Registrar of Designs whereby appellant's registration was cancelled under S. 10 of the Registered Designs Ordinance, 2000---Validity---Impugned order did not point out as to how in the process of registration there existed a lapse on the part of the Patent Office which showed that the specific substantive requirements of the Registered Designs Ordinance, 2000 were not fulfilled or if the said registration was contrary to public order or morality---Registrar of Designs failed to apply judicial mind to the matter as in the impugned order it was wrongly assumed that a factually incorrect pointation of the interested remained unrebutted and was held to be treated as an "admission" on part of the appellant---High Court observed that the very existence of the word "rejoinder affidavit" in the impugned order indicated that a counter affidavit had been filed by the appellant---Impugned order was set aside and application for cancellation of appellant's design was dismissed--- Appeal was allowed, accordingly.

Messrs MFMY Industries v. Federation of Pakistan 2015 SCMR 1550 rel.

PLD 1996 Kar. 365; PLD 1984 Kar. 245; AIR 1980 Delhi 125 and 1992 MLD 1879 distinguished.

Ms. Tayyaba Saadia for Appellant.

Nemo for Respondent No. 1.

Irfanullah Khan for Respondent No. 2.

Date of hearing: 13th December, 2018.

2019 C L D 492

[Sindh]

Before Nadeem Akhtar and Mrs. Kausar Sultana Hussain, JJ

MCR (PVT.) LIMITED through Authorized Attorney and another---Appellants

Versus

SONERI BANK LIMITED and 2 others---Respondents

First Appeal No. D-28 of 2018, decided on 8th February, 2019.

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

----Ss. 19 & 15---Execution of decree of Banking Court---Sale of mortgaged property---Lease of mortgaged property---Claim(s)/objections of lessee before Banking Court where mortgaged property was leased---Adjudication of such claims---Assumption as to whether lease was bona fide or not---Criteria for determining bona fide of a lease of mortgaged property---Date of creation of lease not the sole determining factor as to bona fide of a lease of mortgaged property---Scope---Use of the word "shall" in S. 19(7)(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 made it mandatory for Banking Court to investigate every claim and objection in respect of attachment or sale of mortgaged property---Banking Court could not dismiss claim/objections of a purported lessee of mortgaged property on ground that existence of lease in their favour did not constitute a claim under S. 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Any claim or objections which were preferred by a lessee of mortgaged property could not be rejected by Banking Court straightaway without first determining whether such lease was bona fide or not---Criteria for determining whether a lease was bona fide or not was contained in S. 15(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 where it was provided that if a lease was created after date of mortgage which appeared to have been created so as to adversely affect value of mortgaged property or to prejudice rights and remedies of the financial institution, then such lease would be presumed to be not bona fide unless proved otherwise---Creation of lease after date or mortgage was therefore not the sole criteria for determining whether a lease was bona fide or not---Once a determination per the criteria was made, Banking Court through a speaking order, would decide if a lease of mortgaged property was bona fide or not.

Qazi Umair Ali for Appellants.

Malik Khushhal Khan for Respondent No.1.

Muhammad Noman Saigal, called absent for Respondent No.2.

Dates of hearing: 25th October, 8th and 9th November, 2018.

2019 C L D 508

[Sindh]

Before Muhammad Junaid Ghaffar, J

SHAHZADA DAWOOD and 7 others---Appellants

Versus

APPELLATE BENCH (SECP) and another---Respondents

M.A. No. 11 of 2013, decided on 1st October, 2018.

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

----S. 208 & proviso---S.R.O. No.819(I)/2007 dated 10.08.2007---Investments in associated companies and undertakings---Mandatory requirements for investments in associated companies and undertaking---Special resolution---Exceptions to such requirements provided by S.R.O. No.819(I)/2007 dated 10.08.2007---Nature of proviso to S. 208(1) of Companies Ordinance, 1984---Scope---Question before the High Court was whether the exception to the requirement of S. 208 of Companies Ordinance, 1984 for passing a special resolution for investment in associated companies and undertakings provided for by S.R.O. No.819(I)/2007 dated 10.08.2007, also applied to the requirement that return on such investment shall not be less than the borrowing cost of the investing company---Held, that S. 208, Companies Ordinance, 1984 was concerned with restrictions in respect of investments to be made in the associated companies or undertakings---Contention that exemption from passing of a Special Resolution provided for in S.R.O. No.819(I)/2007 dated 10.08.2007 also applied from the restriction regarding the manner of investment and its return was not correct---Section 208(1) of the Companies Ordinance, 1984 put a complete restriction on making any such investment except by a Special Resolution, which had been exempted S.R.O. No.819(I)/2007 dated 10.08.2007---However, proviso to S. 208(1) of the Companies Ordinance, 1984 otherwise qualified making of investment in the form of loan by putting an embargo that such return on investment shall not be less than the borrowing cost of the investing company, and the same appeared to be conscious legislation---Primary objective of the same was that no holding company should be permitted to make investment in its wholly owned subsidiary to incur losses on such investment---Exemption under S.R.O. No.819(I)/2007 dated 10.08.2007 was therefore, only in respect of passing of a special resolution and had nothing to do with restriction otherwise provided for in S. 208(1) of the Companies Ordinance, 1984 read with proviso thereof---Statutory proviso must be read together with S. 208(1) of the Companies Ordinance, 1984 failing which the same became redundant and therefore a liberal interpretation of the said proviso would not apply---High Court observed that proviso to S. 208(1) of the Companies Ordinance, 1984 was really not a proviso in the accepted sense but was an independent legislative provision by which, to a remedy which was prohibited by the main part of the section, an alternative was provided.

Collector of Customs Appraisement, Collectorate, Customs House, Karachi v. Messrs Gul Rehman, Proprietor Messrs G. Kin Enterprises, Ghazali Street 2017 SCMR 339; Mst. Nawab Bibi and 3 others v. Ch. Allah Ditta and others 1998 SCMR 2381; Ibrar Hussain and others v. Government of N.W.F.P through Secretary Board of Revenue and others 2001 SCMR 914; Habib Ahmad and 5 others v. Director (Enforcement) 2015 CLD 1098; Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652; State Bank of Pakistan through Chief Manager Peshawar and another v. Securities and Exchange Commission of Pakistan and others 2018 CLD 177 and Gulistan Textile Mills Ltd. and another v. Soneri Bank Ltd. and another 2018 CLD 203 ref.

(b) Interpretation of statutes---

----Construction of language used in a statute---Reading of grammar and punctuation---Scope---Grammar and punctuation had to be given due consideration however there would always be a possibility that a draftsman may have committed a mistake while using the grammar or punctuation and it was in fact pith and substance of the statute being interpreted which always had to be kept in mind and accorded preference as against a mistake in grammar or punctuation.

Bakhsh Elahi v. Qazi Wasif Ali 1985 SCMR 291 and Dr. Muhammad Anwar Kurd v. The State 2011 SCMR 1560 rel.

(c) Interpretation of statutes---

----Construction of "provisos" in statutory provisions---Exception to general rules of interpretation of proviso(s)---Scope---Normally interpretation of a proviso was such that it excluded application of the part of statute to which it was appended---However, there was also an exception to said rule to be applied when main part of the statute had been found to be worded in a manner such that the proviso had to be recognized as a substantive part of the said statute and the same was to be read together---Proviso in exceptional cases could therefore be regarded as falling within or to, the main statute---Proviso, sometimes, was not to be regarded as a "true" proviso but rather as an independent substantive provision in its own right---However, there may be cases in which the language of a statute was so express and clear that a proviso may be construed as a substantive clause---Substance and content of an enactment, not its form, had to be considered, and that which was expressed to be a proviso may itself add to and merely limit or qualify that which preceded it.

Messrs Hamdard Dawakhana v. Commissioner of Income Tax, Karachi PLD 1980 SC 84; Pakistan International Freight Forwarders Association v. Province of Sindh 2017 PTD 1; Commissioner of Income Tax v. Phillips Holzman A.G. Ameejee Valeejee and Sons PLD 1986 Kar. 95; Commissioner of Stamp Duties v. Atwill [1973] 1 All ER 576; Hiralal Rantalal v. State of U.P. and another AIR 1973 SC 1034 and State of Rajasthan v Leela Jain AIR 1965 SC 1296 rel.

Shahan Karimi for Appellants.

Rivi R. Pinjani for Respondents.

Date of hearing: 18th September, 2018.

2019 C L D 523

[Sindh]

Before Mrs. Kausar Sultana Hussain, J

MUHAMMAD AMIR---Appellant

Versus

MUHAMMAD SARFRAZ and another---Respondents

M.A. No. 57 of 2017, decided on 4th June, 2018.

Intellectual Property Organization of Pakistan Ordinance (IV of 2012)---

----S. 19---Limitation Act (IX of 1908) Ss. 14 & 5---Appeals from orders of Intellectual Property Tribunal---Limitation period for filing of appeal under S. 19 of the Intellectual Property Organization of Pakistan Ordinance, 2012---Condonation of delay---Mistake of counsel as ground for condonation of delay---Scope---Intellectual Property Organization of Pakistan Ordinance, 2012 was a special law and itself provided limitation of filing of appeal and as such, it prevailed over the general law of limitation---Filing of appeal mistakenly before a different forum on wrong advice of counsel would not extend period of limitation.

Muhammad Tufail Danish v. Deputy Director FIA and another 1991 SCMR 1841; Khushi Muhammad through LRs and others v. Mst. Fazal Bibi and others PLD 2016 SC 872 and GBPCO and others v. Pakistan Television Corporation Ltd. and others PLD 2018 Lah. 399 rel.

Masood Anwar Ausaf for Appellant.

Ahmed Ali Hussain for Respondent No.1.

Date of hearing: 5th March, 2018.

2019 C L D 531

[Sindh]

Before Muhammad Junaid Ghaffar, J

JUNAID IQBAL---Plaintiff

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman and 5 others---Defendants

Suit No. 1526 of 2018, decided on 26th September, 2018.

(a) Securities Act (III of 2015)---

----S. 143---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Power of the Securities and Exchange Commission ("SECP") to place restriction on business/prohibit a licensed person(s) from certain transactions under S. 143 of the Securities Act, 2015---Remedy of appeal against an order passed under S. 143 of the Securities Act, 2015---Scope---Section 143 of the Securities Act, 2015 was a provision which empowered SECP to act immediately before any final order could be passed, so as to restrain any further damage or loss caused by insider trading or front running, by prohibiting alleged perpetrators from making transactions---Remedy of appeal against such order, being not final in nature, was not available till a final order under other relevant sections of the Securities Act, 2015 had been passed---Only then, a person prohibited from doing business under S. 143 Securities Act, 2015 would have recourse to remedy provided for, but not limited to, appeal under S. 33 of the Securities and Exchange Commission of Pakistan Act, 1997.

(b) Securities Act (III of 2015)---

----Ss. 127, 128, 129 & 130---Insider trading---Suspicious transactions---"Front-running" and "tailgating" practices---Meaning, scope and nature of such transactions, explained.

http://www.cmic.sec.gov.lk/wp-content/uploads/2012/09/Front-running.doc-an-Unethical-Behavior.pdf) rel.

Manzoor Hameed Arain for Plaintiff.

Imran Shamsi along with Tanveer Alam, Additional Director, SECP for Defendant No.1.

Abdul Sattar Pirzada for Defendant No. 6.

Musawir holding brief for Gazain Magsi for Defendants Nos.4 and 5.

2019 C L D 549

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

ABU BAKAR---Appellant

Versus

FIRST WOMEN BANK LIMITED and 3 others---Respondents

First Appeal No. 74 of 2014, decided on 5th October, 2018.

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

----Ss. 10 & 9---Suit for recovery---Application for leave to defend---Procedure of Banking Court---Banking documents---Allegation of Financial Institution forging signatures of customers on certain documents---Substantial questions of fact---Scope---Where creation of a mortgage was admitted, the bald allegation that some of documents were forged was not per se a substantial question of fact in respect of which evidence needed to be recorded in terms of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 SCMR 264 distinguished.

Azhar Faridi for Appellant.

Muhammad Zia Qureshi for Respondent No.1.

Nemo for Respondents Nos. 2 - 4.

2019 C L D 562

[Sindh]

Before Zulfiqar Ahmed Khan, J

Messrs ISMAIL INDUSTRIES LIMITED through Authorized Officer---Plaintiff

Versus

MONDELEZ INTERNATIONAL through Director, Partner, Owner and 2 others---Defendants

Suit No. 112 of 2014, decided on 5th September, 2018.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 42 & 21---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Infringement of trademark---Registered trademark subject to disclaimer---Deceptive packaging/label---Application for temporary injunction in respect of registered trademark---Scope---Plaintiff holding registered trademark of packaging of its brand of biscuits sought to restrain the defendants from interfering in the plaintiff's business---Contentions of the defendant, inter alia, was that it was a global manufacture of biscuits and the plaintiff's product especially, packaging/wrapper, was deceptively similar to theirs and hence they had served notice on the plaintiff to cease use of the same, and they ought not to be restrained in any manner---Validity---Registration certificate of plaintiff, in the present case, was subject to disclaimer which read that the registration shall give no right to exclusive use of all other descriptive words appearing on a label---Registered Trademark, if subject to a disclaimer, would mean that exclusive rights in disclaimed parts were not available to registered proprietor---In case of two competing wrappers / packaging , the principle of "moron in a hurry" was applicable, where the Court had to consider whether a "moron in a hurry" would pick-up goods of plaintiff instead of those of defendant and in the present case, overwhelming similarities existed, and the said test passed along with the trinity test---High Court observed that plaintiff was allowed to use the colour and getup of its product only strictly in accordance with its registered trademark and could not adopt the distinctive colour of the defendants in terms of packaging/wrapper or the biscuits/product itself; and in case plaintiff's colour scheme of packaging and the product chose to sail closer to products/wrappers of the defendant, then passing off action would be sustainable against plaintiff and any continuous use of the trademark by plaintiff ought to be restrained---Where plaintiff aimed to use deceptively similar packaging as the defendants products, and having travelled far away from the registration obtained then application for temporary injunction under O. XXXIX, Rr. 1 & 2, C.P.C. could not be granted, and was dismissed, in circumstances.

2016 CLD 1062 rel.

Mirza Mehmood Baig for Plaintiff.

2019 C L D 583

[Sindh]

Before Muhammad Junaid Ghaffar, J

AKD SECURITIES LIMITED---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Director/HOD (MSDR)---Respondent

M.A. No. S-04 of 2016, decided on 6th October, 2018.

(a) Penalty---

----Imposition of penalty by public/government bodies---Principles---Penalty was to be imposed when there existed a guilty mind present with an element of mens rea and penalty disproportionate to gravity of an offence was as much illegal as the act calling for imposition of the same.

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

----Ss. 29(2) & 34---Investigations and proceedings by the Securities and Exchange Commission of Pakistan (SECP)---Insider trading/market manipulation---Imposition of penalty on brokerage house---Scope---Appellant brokerage house impugned order of SECP whereby penalty was imposed upon it, inter alia, for failure to follow procedures and maintaining record in case of its client who had indulged in alleged insider trading---Contention of appellant was that alleged investigation and order were motivated by mala fide---Validity---Impugned order mentioned appellant's integrity, professionally kept record and compliance without any resistance, and in such circumstances imposition of penalty in the same order did not seem justified---No satisfactory reason was given for issuance of show-cause notice thirty months after the conclusion of the investigation---Primary allegation in respect of market manipulation and heavy trading was dropped against appellant and it was exonerated to such extent in the investigation, therefore, the matter appeared to be one of mala fide as well as discrimination---Impugned order was set aside---Appeal was allowed, accordingly.

Altamash Arab for Appellant.

Khurram Rasheed for Respondent.

2019 C L D 602

[Sindh]

Before Nadeem Akhtar and Mrs. Kausar Sultana Hussain, JJ

AYUB RAZA---Appellant

Versus

BANK AL-FALAH (PAKISTAN) LTD. through President and another---Respondents

Appeal No. 99 of 2018, decided on 6th January, 2019.

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

----Ss. 9(5) & 12---Procedure of Banking Court---Suit for recovery---Service of notice/summons on the defendant---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Change of address of defendant from the one given to Financial Institution at time of availing of finance facility---Scope---Plaintiff Bank, at the time of filing of suit, if it was aware of change of address of defendant and was communicating with defendant at said address, then it was not justified in filing suit and stating the defendant's old address and was duty bound to disclose the new address of such a defendant.

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

----S. 9(5)---Effective service on defendant in terms of S. 9(5) of the Ordinance---Essential.

Section 9(5) of the Ordinance provides the procedure and modes of service of summons in a Suit filed under section 9 of the Ordinance. It provides that on a plaint being presented to the Banking Court, summons in Form No.4 in Appendix 'B' to the Code of Civil Procedure or in such other form as may be prescribed from time to time, shall be served on the defendant (i) through the bailiff or process-server of the Banking Court, (ii) by registered post acknowledgement due, (iii) by courier, and (iv) by publication in one English language and one Urdu language daily newspaper. It is significant to note that except for publication in newspapers, all the first three modes have one distinctive and common feature that a written report/confirmation must come on record before the Banking Court to ascertain service or non-service of summons on the defendant, either through the bailiff and courier service or by acknowledgement due of the registered post. From the above, the intention of the lawmakers is clear that before proceeding further in the Suit, there must be sufficient and reliable evidence before the Banking Court in order to ascertain as to whether the summons were duly served upon the defendant or not, or if he had refused to receive the same.

Mubarak Ali v. First Prudential Modaraba 2011 SCMR 1496 rel.

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

----Ss. 12, 9 & 22---Procedure of Banking Court---Power to set aside decree---Setting aside of ex parte decree of Banking Court under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Adjudication of application under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Adjudication of application under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 required that merits of the case or admission by the defendant could not be looked into as a criteria for deciding said application and Banking Court was only required to see whether grounds urged by defendant for setting aside ex parte decree fell within the scope of S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Malik Muhammad Riaz for Appellant.

Harchand Rai for Respondent No.1.

Banking Court No. II, Karachi for Respondent No.2.

2019 C L D 632

[Sindh]

Before Nadeem Akhtar and Mrs. Kausar Sultana Hussain, JJ

Mst. FARHAT FAREED SHEIKH---Appellant

Versus

NIB BANK LIMITED and 5 others---Respondents

First Appeal No. 100 of 2015, decided on 7th March, 2019.

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

----S. 19(7)---Civil Procedure Code (V of 1908), O. XXI, Rr. 58, 59, 60 & 62---Application for postponement of sale of mortgaged property during execution proceedings---Appellant filed application before the Banking Court seeking postponement of sale of the mortgaged property during execution of decree passed in recovery suit claiming that she had purchased the said property from the judgment-debtor and had also offered to satisfy the decree---Said application was rejected in limine without investigating and determining her claim on the grounds that she was not the customer of the Bank/decree holder and could not be made a party in the execution proceedings---Held, that R. 58 of O. XXI, C.P.C. specifically provided that if any claim or objections were filed by any claimant or objector, the executing court shall proceed to investigate the same with the like power as regards the examination of the claimant or objector, and in all other respects, as if he was a party to the suit---Additionally it was not necessary that the claimant or objector in execution proceedings arising out of banking matters must fall within the definition of a "customer" defined in the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance'), as any person who had a legitimate and subsisting right, title or interest in the pledged, hypothecated or mortgaged property may file an application before the Banking Court under subsection (7) of S. 19 of the Ordinance for investigation of his claim or objections in respect thereof, and may also seek its release from attachment or postponement of its sale under Rr. 58, 59, 60 & 62 of O. XXI, C.P.C.---Once such investigation and determination was made by the Banking Court through a speaking order and as a result thereof if the claim or objections were rejected, only then sale of the property under attachment could be made by the Banking Court, otherwise the sale, without investigation and determination of any pending claim or objections in accordance with law, would be defective and would be open to challenge by the claimant/objector---At the time of making the bid and depositing the auction money in Court, the auction purchaser in the present case had due notice of the claim asserted by the appellant in respect of the mortgaged property---Fact that the property in dispute was mortgaged in favour of the Bank and a decree for the sale of the same had been passed in favour of the said Bank, did not affect the conclusion that title in such property could have been conveyed by the mortgagor/judgment debtor during the pendency of the present proceedings; and, the conveyance of mortgaged property, subject to the mortgage, was not prohibited by the Transfer of Property Act, 1882---Appellant's application/claim could not be rejected by the Banking Court without first investigating her claim and making a proper determination in respect thereof through a speaking order---Impugned sale of mortgaged property was set-aside; the application/claim filed by the appellant was remanded to Banking Court with the directions that the said application shall be decided afresh by investigating her claim in respect of mortgaged property and by making a proper determination in respect thereof strictly in accordance with law through a speaking order within thirty (30) days; that the entire auction money received by Bank from the auction purchaser shall be returned to him along with profit thereon; that since the appellant was willing to purchase the mortgaged property and had also deposited the entire decretal amount, the Banking Court shall be at liberty to record satisfaction of the decree for the said amount or for such amount as may be agreed by the Bank and the appellant, or ordered by the Banking Court, as the case may be; that in such an event, mortgaged property shall be released from attachment and sale certificate in respect thereof shall be issued in favour of the appellant; that if for any reason satisfaction of the decree was not recorded in the said manner and claim of the appellant was rejected after investigation and determination, mortgaged property shall be re-auctioned by the Banking Court strictly in accordance with law, and in such an event, the entire amount deposited by the appellant shall be returned to her forthwith, and that the entire decretal amount deposited by the appellant with the Nazir of the Court shall be transferred by him forthwith to the relevant account of Banking Court, which shall be appropriated/recorded for satisfaction of the decree or shall be returned to the appellant, as the case may be---Appeal was allowed accordingly.

M. S. Bukhari for Appellant.

Abid Hussain for Respondent No.1.

Manzoor Hussain, called absent for Respondent No.2.

Rehmatullah, called absent for Respondent No.3.

Banking Court No. V, Karachi for Respondent No.4.

DIG Karachi East for Respondent No. 5.

SHO Police Station Model Colony Karachi for Respondent No.6.

Jamshed Qazi for Auction Purchaser.

2019 C L D 659

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

PAK LEATHER CRAFTS LIMITED and others---Appellants

Versus

AL-BARAKA BANK LIMITED---Respondent

I.A. No. 15 of 2018, decided on 19th October, 2018.

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

----S. 22---Limitation Act (IX of 1908), Ss. 29(2) & 12(2)---Appeal---Limitation---Appeal presented after the period of 30 days as prescribed by S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Computation of period of limitation---Section 12(2), Limitation Act, 1908, provided that in computing the period of limitation prescribed for appeal, the time requisite for obtaining a copy of the decree appealed from shall be excluded---Section 12, Limitation Act, 1908 was applicable to an appeal under S. 22, Financial Institutions (Recovery of Finances) Ordinance, 2001 by virtue of S. 29(2) of the Limitation Act, 1908.

(b) Interpretation of statutes---

----Deeming provision---Construction---Scope---For construction of a deeming provision, which was a legal fiction, firstly attempt had to be made to ascertain the purpose for which said provision was created.

Jamila Khatoon v. Tajunnisa PLD 1984 SC 208 rel.

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

----S. 12---Limitation, computation of---Principles---Exclusion of time in legal proceedings---Application for obtaining certified copy for purpose of appeal, review etc.---Exclusion of "time requisite" for obtaining a certified copy of the decree---Onus upon/obligations of the applicant---Scope---Once cost for certified copy had been estimated by copyist, the onus for depositing the same was on applicant and assuming that the said applicant remained unaware of the fact that the cost was estimated same day of his/her application, then there existed no rule that made it obligatory upon copyist to communicate to the applicants that such cost had been estimated---Applicant had to demonstrate that they acted diligently and had no control over the "time requisite" for obtaining certified copies---Contention that S. 12(5) of the Limitation Act, 1908 required court-copyist to intimate to applicant the day on which the certified copy would be ready for delivery, even though such applicant had not deposited cost towards the same, was misconceived and absurd---Where applicant had committed delay in depositing cost for certified copy, the said applicant could not then take shelter under S. 12(5) of the Limitation Act, 1908 as such delay on part of applicant could not be termed as "time requisite" for obtaining certified copy within meaning of S. 12 of the Limitation Act, 1908---Limitation was not a mere technicality but a positive law that had to be given effect.

Dr. Ubaidur Raza Khan v. Saghera Bano 1994 CLC 1302 and Arshad Naseemuddin Ahmed v. Javed Baloch 2012 CLC 1293 distinguished.

Safderi Begum v. Amir Ali Tabrezi 1985 CLC 836 and Karimullah v. M. Gulzar Butt 1986 CLC 1653 ref.

Fateh Muhammad v. Malik Qadir Bakhsh 1975 SCMR 157; Jamila Khatoon v. Tajunnisa PLD 1984 SC 208; Ahmed Nawaz v. Muhammad Ayub PLD 1988 SC 258 and Ghulam Qadir v. Sh. Abdul Wadood PLD 2016 SC 712 rel.

Ms. Alizeh Bashir for Appellants.

Syed Aijaz Hussain Shirazi for Respondent.

2019 C L D 675

[Sindh]

Before Muhammad Junaid Ghaffar, J

HASHOO HOLDINGS (PRIVATE) LIMITED---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSIONOF PAKISTAN through Registrar and another---Respondents

M. A. No. 2 of 2015, decided on 4th February, 2019.

(a) Companies Ordinance (XLVII of 1984) [since repealed]---

----S. 224(1), proviso---Trading by directors, officers and principal shareholder---Show cause notice, issuance of---Order-in-original, passing of---Limitation---No limitation was provided for issuance of show cause notice in a matter with respect to S. 224(1) of the Companies Ordinance, 1984---Order in Original could not be set aside or annulled, merely on the ground that it was passed after a delay of six years from the date of first notice.

Assistant Collector of Customs AFU, Airport, Lahore v. Messrs Tripple-M (Pvt.) Ltd. through Managing Director and 4 others PLD 2006 SC 209 ref.

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

----S. 224(1), proviso---Trading by directors, officers and principal shareholder---Proviso to S.224(1) of the Companies Ordinance, 1984---Scope and applicability---Allegation against appellant-company was that it entered into sale and purchase of various shares of company "P", wherein it was a beneficial shareholder in excess of 10%, in four transactions within a period of six months and allegedly made a gain; that in terms of S. 224 of the then Companies Ordinance, 1984 ("Ordinance ") the appellant was required to tender such gain, back to company 'P' and at the same time, was further required to send such intimation to the Registrar of Securities and Exchange Commission of Pakistan (SECP)---Appellate Bench of SECP ordered the appellant to pay such gain/amount to company 'P'---Contention of appellant was that the three of the transactions carried out were bona fide and in good faith, while the fourth was in satisfaction of debt previously contracted, thus they fell within the proviso to S. 224(1) of the Ordinance therefore, any gain made on said transactions could be retained by it and was not to be paid to anyone; that ownership of shares in effect did not change when they were transferred from one group company to another as the same person was 100% owner of the transferee company/appellant-company---Held, that such contention appeared to be misconceived and against the very intent and the need to enact S. 224(1) of the Ordinance---Said section put a restriction on such a transaction barring the proviso and the exception contained therein---Any other act would require the gains to be returned to the issuer company so that it benefitted the entire shareholders of such a listed company; it must not be permitted to capitalize on the profits of others---Benefit of acquisition in good faith in terms of proviso to S.224(1) of the Ordinance was only relatable and applicable in case of satisfaction of a debt previously contracted---Merely saying that the transactions in question were in effect fictional in nature would not suffice--- Gains so made within last six months were to be paid to the listed company i.e. company 'P' and could not be held or remain credited with the buyer or seller as the case may be---In the present case, at least three out of the four impugned transactions did not seem to be acquisition of securities/shares in good faith, and in satisfaction of debt previously contracted---Regarding the fourth transaction, SECP brought on record that firstly, the agreement of debt was between a company 'P' and another company and the appellant was not a party to it; secondly, that the stipulated repayment duration had already expired before the date of first transaction and so it was in respect of an expired loan subscription agreement; hence, the question of good faith could never arise---Fourth transaction, therefore, also did not fall within the exception provided under proviso to S. 224(1) of the Ordinance---Gain made by appellant-company in respect of the four transactions had to be paid to company 'P' in terms of S. 224(1) of the Ordinance---Appeal was dismissed accordingly.

Securities and Exchange Commission of Pakistan through Commissioner v. First Capital Securities Corporation Limited and another PLD 2011 SC 778 ref.

(c) Appeal---

----In an appeal, the entire case and or order was open before the (appellate) Court.

Furqan Ali for Appellant.

Khurram Rasheed for Respondents.

2019 C L D 713

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

P.M. PACKAGES and others---Appellants

Versus

SILK BANK LIMITED---Respondent

First Appeal No. 60 of 2015, decided on 12th February, 2019.

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

----Ss.10, 9 & 22---Suit for recovery---Application for leave to defend---Mandatory requirements of Ss. 9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Defendant impugned order of Banking Court whereby his application for leave to defend was dismissed---Contention of the defendant, inter alia, was that vital questions, including question with regard to insurance stipulation in the finance agreement, were not addressed in the impugned order---Validity---Question as to whether a stipulation in the finance agreement with regard to insurance policy/arrangements had any material effect on the relationship between the parties was required to be addressed in order of Banking Court---Issue of whether plaint of plaintiff Bank was in conformity with mandatory provisions of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was reasonably expected to have been at least addressed and reconciled by the Banking Court for determination of the application for leave to defend, which was not done in the impugned order---High Court observed that Banking Court was required to consider defendant's pleas comprehensively and ought not to reject the same in a perfunctory or cursory manner---Impugned order was set aside, and matter was remanded to Banking Court--- Appeal was allowed, accordingly. [pp. 716, 717, 721] A, B & C

United Bank Limited v. Adamjee Insurance Company Limited 1988 CLC 1660 and Muhammad Naeem Bhatti v. United Bank Limited 2005 CLD 643 distinguished.

Apollo Textile Mills Limited and others v. Soneri Bank Limited 2012 CLD 337; Shaz Packages and others v. Bank Alfalah Limited 2011 CLD 790 and Kinza Fashion (Private) Limited and others v. Habib Bank Limited and another 2009 CLD 1440 rel.

Khaleeq Ahmed for Appellants.

Taimoor Mirza for Respondent.

2019 C L D 733

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

MUHAMMAD ASIF---Appellant

Versus

MCB BANK LIMITED and 3 others---Respondents

First Appeal No. 111 of 2018, decided on 5th April, 2019.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, Rr. 69, 89, 90, 91 & 92---Execution of decree---Auction, setting aside of---Non-deposit of 75% balance bid money---Judgment debtors sought postponement/cancellation of auction on plea of settlement with decree holder---Executing Court dismissed application filed by judgment debtor and also set aside auction proceedings due to non-payment of 75% balance bid money directing for auction of property afresh---Validity---Executing Court itself recorded that condition precedent for entertaining application under O. XXI, R. 69, C.P.C. was deposit of relevant amount and same did not take place on the date so fixed when application was preferred or at any time thereafter---Executing Court not only recognized such material lacuna but had predicted dismissal of application of judgment debtors on such ground---No justification was reflected in the order in question for vitiating auction proceedings on basis of untimely appreciation of an application which was discrepant at time when same was instituted---Vested rights were only created upon fall of hammer and notice to judgment debtors were required to be issued so that objections could have been filed---Auctioneer was required to follow provisions of law and it was duty of court to prevent fraud---Executing Court had inherent powers to scrutinize process of sale which could have been set aside even at post-confirmation stage---Executing Court had rightly dismissed application under O. XXI, R. 69, C.P.C. of judgment debtors but there was no occasion to vitiate auction proceedings---Division Bench of High Court set aside constituent of order in question wherein auction proceedings were nullified---Appeal was allowed accordingly.

Captain-PQ Chemical Industries (Pvt.) Ltd. v. Messrs A.W. Brothers and others 2004 SCMR 1956; Afzal Maqsood Butt v. Banking Court No.2, Lahore and others PLD 2005 SC 470; Messrs NIB Bank Limited v. Messrs Apollo Textile Mills Limited and others PLD 2013 Sindh 430; Messrs Saudi Arabia Airlines v. Messrs International Marketing Corporation and others 2015 CLC 916; Muhammad Afzal Khan and another v. National Bank of Pakistan 2015 CLD 464; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. and others 2003 CLD 1693; Messrs Ripple Jewellers (Pvt.) Ltd. v. First Woman Bank and others 2003 CLD 1318; Marudanayagam Pillani v. Manickavasakam Chettiar AIR (32) 1945 Privy Council 67; Md. Umar v. Moti Chand and others AIR 1952 Patna 244; Haji Zahid Saeed v. Messrs Asif Brothers and others 2015 CLD 40; Kandaswami Mudali v. K.R. Narasimha Aiyar and others AIR 1952 Madras 582; Nand Lal v. Mt. Siddiquan and others AIR 1957 Allahabad 558; Babu Singh v. S. Gurbakhsh Singh AIR 1928 Lah. 249; Messrs Asif Brothers and others v. Muslim Commercial Bank Limited and others 2005 CLD 236; Mrs. Shahida Saleem and another v. Habib Credit and Exchange Bank Limited and others 2001 CLC 126; Abdul Jabbar Shahid and others v. National Bank of Pakistan and others PLD 2019 Lah. 76; Rana Muhammad Naseeb Khan v. Zarai Tarukiyati Bank of Pakistan and others 2007 CLD 466 and Liaqat Ali v. Bashiran Bibi and others 2005 CLC 11 distinguished.

Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Mumtaz-ud-Din Feroz v. Sheikh Iftikhar Adil and others 2009 CLD 594; Muhammad Mohammad Jameel v. Eridania (Suisse) SA and others 2018 CLD 1478 and Rashad Ehsan and others v. Bashir Ahmad and another PLD 1989 SC 146 rel.

Badar Alam for Appellant.

Abid Naseem for Respondent No.1.

Syed Muhammad Kazim for Respondents Nos. 2, 3 and 4.

2019 C L D 760

[Sindh (Hyderabad Bench)]

Before Aziz-ur-Rehman and Muhammad Saleem Jessar, JJ

Messrs CIE COMPUTERS through Proprietor and 2 others---Appellants

Versus

NIB BANK LIMITED through Manager---Respondent

Ist Appeal No. D-44 of 2013, decided on 11th October, 2018.

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

----Ss. 10, 9, & 7---Procedure of Banking Court---Suit for recovery---Application for leave to defend, adjudication of---Pleadings---Scope---Both Financial Institution/Bank and customer were under legal obligation to plead in clear words the amount of finance availed by customer, amount of finance repaid and dates of payments and other amounts pertaining to finance including amounts payable by customer to Bank up to the date of the institution of a suit for recovery---Defendant had been saddled with further responsibility not to only mention/specify the amount of finance, if any, which defendant disputed in addition to facts in support thereof.

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

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

----Ss. 9, 7 & 10---Procedure of Banking Court---Suit for recovery---Computation of decretal amount---Disallowing markup upon markup---Scope---Financial Institutions/Banks could not charge markup over markup on finance availed by a customer or charge markup beyond expiry period of a finance agreement, and if the same had been done, it needed to be disallowed---Amounts received by a Bank/Financial Institution from a customer, under law, could be adjusted against other amounts relating to finance including the lawfully charged markup.

Muhammad Asif Arain for Appellant Altaf Ahmad Shahid Abro for Respondent.

2019 C L D 808

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

NAZLI HILAL RIZVI through Constituted Attorney---Appellant

Versus

BANK ALFALAH LIMITED and others---Respondents

First Appeal No. 14 of 2015, decided on 18th March, 2019.

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

----S. 22---Civil Procedure Code (V of 1908), O. XXI, R. 90---Execution of decree---Setting aside of auction sale---Non-filing of appeal--- Judgment debtor sought setting of sale through auction but her application under O. XXI, R. 90, C.P.C. was dismissed by Banking Court---Validity---No appeal had ever been preferred against judgment and decree delivered by Banking Court in suit within limitation prescribed by Financial Institutions (Recovery of Finances) Ordinance, 2001 or at any time thereafter---Banking Court considered application of judgment debtor notwithstanding the fact that it was discrepant, but dismissed same on merit--- Banking Court had aptly considered issues there-before and delivered order in question upon due consideration of evidence and by application of law---High Court declined to interfere in the matter as judgment debtor was unable to demonstrate any infirmity in order in question as same attempted to frustrate judgment and decree in execution proceedings--- Appeal was dismissed in circumstances

Muhammad Naseer Akhter v. Bank Alfalah Limited and others 2018 CLC 1439 rel.

Muhammad Mohammad Jameel v. Eridania (Suisse) SA and others 2018 CLD 1478; Muhammad Rafiq v. Federation of Pakistan and others 2013 CLD 1667; Nahelal and another v. Umrao Singh AIR 1931 Privy Council 33; Hudaybia Textile Mills Limited and others v. Allied Bank of Pakistan Limited and others PLD 1987 SC 512; 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 ref.

Farhan Zia Abrar for Appellant.

Haris Rasheed for Respondent No.1.

M.R. Sethi for Respondent No. 5.

2019 C L D 828

[Sindh]

Before Nadeem Akhtar and Mrs. Kausar Sultana Hussain, JJ

STATE BANK OF PAKISTAN---Appellant

Versus

MOHAMMAD NAEEM and others---Respondents

High Court Appeals Nos. 226 of 2005 and 74 of 2006, decided on 30th March, 2019.

Banking Companies Ordinance (LVII of 1962)---

----S. 94---Public Debts Act (XVIII of 1944), S. 28---Law Reforms Ordinance (XII of 1972), S. 3---Limitation Act (IX of 1908), Arts. 60 & 71---US Dollar Bearer Certificate Rules, 1991, Rr. 3, 4, 5, 6, 7, 9, 12, 13 & 14---Notification SRO No. 140(I)/91 dated 25-02-1991---Dollar Bearer Certificate, encashment of---Reversal of payment---Duty of State Bank---Plaintiff purchased US dollar bearer certificate from open market and presented it to defendant Bank for encashment---Payment was transferred to plaintiff's account but same was reversed on directions of State Bank of Pakistan on grounds that Certificate was stolen and already encashed to a foreign Bank---Suit filed by plaintiff was decreed in its favour by Single Judge of High Court---Validity---Only ground due to which State Bank had refused to reimburse amount of certificate to defendant Bank for payment to plaintiff was that certificate was stolen instrument and had already been encashed---Prior to presentation of Certificate by plaintiff and its encashment by defendant Bank, State Bank had received information in writing regarding its loss/theft as well as request for stopping payment---State Bank did not notify or circulate such information to defendant Bank although it was required to do so---State Bank was duty bound under Public Debts Act, 1944 to notify loss/theft of Certificate to defendant Bank and also to hold summary inquiry in order to determine claim made in respect thereof---Compliance of such terms was not made by State Bank and FIR lodged by foreign Bank after 55 days of alleged incident was not in existence when certificate was presented by plaintiff or when it was encashed by defendant bank---Burden was on State Bank and defendant Bank to prove that certificate was lost/stolen or it had been encashed and its amount was reimbursed by State Bank prior to date when it was presented by plaintiff---Accepting certificate from plaintiff and encashing same after verification were done by defendant Bank in normal course of its business and within authority granted to it by principal/State Bank---Subsequent act of defendant Bank of reversing/debiting amount from plaintiff's account on ground that principal/State Bank had refused to reimburse amount to it was unjustified and arbitrary and it could not be condoned on ground that it was done by it as an agent on instructions of principal/State Bank---No material whatsoever was produced in evidence to show that State Bank had instructed defendant Bank to reverse/debit amount of certificate from plaintiff's account---Division Bench of High Court declined to interfere in judgment and decree passed by Single Judge of High Court as same was without any misreading or non-reading of evidence and had no illegality or infirmity---Intra-Court Appeal was dismissed in circumstances.

Angbats Aktiebolaget Bohuslanska Kusten Sweden and Bird & Co. Pakistan Ltd. Chittagong v. Central Hardware Stores, Chittagong PLD 1969 SC 463; Bombay Brass Works Co. v. Pakistan and another PLD 1966 Kar. 340; Major (Retd.) Khawaja Muhammad Yousaf and others v. Zila Council and others 2007 SCMR 274; Abdul Abid v. Siddique Moti and another 2003 MLD 1993 and Mst. Ameer Begum through Special Attorney and others v. Abid Hussain (minor) and others PLD 2000 Lah. 284 ref.

Emad-ul-Hassan for Appellant (in High Court Appeal No. 226 of 2005).

Arshad M. Tayebally along with Ms. Heer Memon for Respondent No.1 (in High Court Appeal No. 226 of 2005).

Malik Ghulam Murtaza for Respondent No.2 (in High Court Appeal No. 226 of 2005).

Muneer Ahmed for Respondent No. 3 (in High Court Appeal No. 226 of 2005).

Malik Ghulam Murtaza for Appellant (in High Court Appeal No.74 of 2006).

Arshad M. Tayebally along with Ms. Heer Memon for Respondent No.1 (in High Court Appeal No. 74 of 2006).

Emad-ul-Hassan for Respondent No. 2 (in High Court Appeal No. 74 of 2006).

2019 C L D 853

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

Messrs TEXTILERS (PVT.) LTD. through Authorized Representative and others---Petitioners

Versus

MEEZAN BANK LIMITED and others---Respondents

Constitutional Petitions Nos. D-2102 of 2017 and D-2304 of 2018, decided on 24th December, 2018.

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

----Ss. 2(b) & 22(6)---Jurisdiction of High Court as Banking Court---Scope---Petitioners were aggrieved of orders passed by High Court and assailed the same in Constitutional jurisdiction as no right of appeal was available---Validity---Orders assailed by way of Constitutional petitions were interlocutory orders passed under Financial Institutions (Recovery of Finances) Ordinance, 2001 from which appeal was barred under S. 22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Provision of S. 2(b) of Financial Institutions (Recovery of Finances) Ordinance, 2001 only conferred jurisdiction of Banking Court on the High Court---Conferment of special jurisdiction on the High Court did not open it to a writ under Art. 199 of the Constitution---Writ could not be issued to High Court even where High Court had acted as Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001---Constitutional petition was dismissed in circumstances.

Tank Steel and Re-rolling Mills (Pvt.) Ltd. v. Federation of Pakistan PLD 1996 SC 77 rel.

Gulistan Textile Mills Ltd. v. Soneri Bank PLD 2018 SC 322; Muhammad Shafi v. Attaullah 1984 SCMR 1124; Chief Justice of Pakistan Iftikhar Muhammad Chaudhry v. President of Pakistan PLD 2010 SC 61; Agriculture Development Bank of Pakistan v. Yar Muhammad 2004 CLD 1084; Sheikh Abdul Sattar Lasi v. Judge Banking Court 2007 CLD 69; Habib Bank Ltd. v. Victor Electronics Appliances Industries (Pvt.) Ltd. 2011 CLD 1571; United Bank Ltd. v. Presiding Officer Banking Court No.2 2011 CLD 931; United Bank Ltd. v. Banking Court No.II 2012 CLD 1556; Asif Kudia v. KASB Bank Ltd. 2014 CLD 1548; Balochistan Glass Ltd. v. Bank Al-Falah Ltd. 2015 CLD 52; Balochistan Trading Company v. National Bank of Pakistan 1998 SCMR 1899; Bank of Punjab v. International Ceramics Ltd. PLD 2013 Lah. 487; Pakistan Industrial Credit and Investment Corporation Limited v. Government of Pakistan 2002 SCMR 496; Tri-Star Polyester Ltd. v. Citi Bank 2001 SCMR 410 and Pakistan Fisheries Ltd. v. United Bank Ltd. PLD 1993 SC 109 ref.

Raja Qasit Nawaz for Petitioner (in Constitutional Petition No.D-2102 of 2017).

Abdul Ahad for Respondent No.1 (in Constitutional Petition No.D-2102 of 2017).

Nemo for Respondents Nos. 2 - 3 (in Constitutional Petition No.D-2102 of 2017).

Abdul Ahad for Petitioners (in Constitutional Petition No.D-2304 of 2018).

Raja Qasit Nawaz for Respondents Nos. 1 - 3 (in Constitutional Petition No. D-2304 of 2018).

Nemo for Respondents Nos. 4-5 (in Constitutional Petition No.D-2304 of 2018).

Khawaja Shams-ul-Islam for Inverveners (in Constitutional Petition No. D-2304 of 2018).

2019 C L D 888

[Sindh]

Before Nazar Akbar, J

Messrs PAKISTAN REINSURANCE COMPANY LIMITED through Secretary----Appellant

Versus

TRUSTEE OF PORT OF KARACHI (KPT)----Respondent

IInd Appeal No. 85 and C. M. As. Nos. 7103 and 7104 of 2014, decided on 22nd November, 2018.

Civil Procedure Code (V of 1908)---

----O. XXIX, R. 1---Suit for declaration on behalf of company---Recording of evidence---Procedure---Suit was dismissed on the ground that the person who appeared in the witness box for evidence on behalf of company was not an authorized person---Validity---Defendant in written statement had not challenged the maintainability of the suit for want of mandatory requirement of O. XXIX, R. 1, C.P.C.---Even issue for maintainability of suit was not framed by the courts below---Plaintiff-company was not required to hold a meeting of Board of Directors to decide by a Resolution as to who and how many would be witnesses in a particular suit to appear on behalf of the company---Courts below had erred in law while passing the impugned judgments and decrees---Matter was remanded to the Trial Court with the direction to decide the same afresh on merit on the basis of evidence available on record--- Second appeal was allowed, in circumstances.

Ittehad Chemicals Ltd. v. VIIth Additional District and Sessions Judge and others 2010 CLC 599 ref.

AIR 1991 Delhi 25 and Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 Heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550 distinguished.

Sikandar Khan for Appellant.

Abdul Razzaq for Respondents.

2019 C L D 901

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

Syed NAJAMUDDIN HUSSAIN and another---Appellants

Versus

ASKARI BANK LIMITED---Respondent

First Appeal No. 16 of 2014, decided on 12th February, 2019.

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

----Ss. 9 & 22---Recovery of finance---Suit was decreed by Banking Court in favour of Bank---Validity---Entire finance and security documentation was executed between parties and same was not denied or dispelled by or on behalf of defendants---Schedule attached to finance agreement which required repayment of entire amount by September, 2011, however, same did not materialize---High Court declined to interfere in judgment and decree passed by Banking Court as defendants were unable to identify any infirmity in judgment and decree passed by Banking Court in favour of the Bank---Appeal was dismissed in circumstances.

Warrior Chemical (Private) Limited and others v. National Bank of Pakistan 2012 CLD 1222; Apollo Textile Mills Limited and others v. Soneri Bank Limited 2012 CLD 337; Shaz Packages and others v. Bank Alfalah Limited 2011 CLD 790; Kinza Fashion (Private) Limited and others v. Habib Bank Limited and another 2009 CLD 1440 and Fateh Mohammad and others v. Malik Qadir Bakhsh 1975 SCMR 157 distinguished.

Khaleeq Ahmed for Appellants.

Behzad Haider for Respondent.

2019 C L D 920

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

DAWLANCE PAKISTAN (PVT.) LIMITED through Deputy Manager and another---Appellants

Versus

G-FORCE COMMUNICATION through Owner and 2 others---Respondents

High Court Appeal No. 217 of 2017, decided on 5th April, 2019.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 13, 14 & 15---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Temporary injunction, grant of---Copyright---Allegation of infringement---Counterclaim for ownership of copyright---Temporary injunction to restrain alleged infringement of copyright, mandatory requirements of--- Scope--- Temporary injunction to restrain infringement of copyright could only be granted where copyright was clear---Where claim or counterclaim of a party with regard to infringement of copyright did not pray for any perpetual injunction to restrain the respondents/defendants from using the alleged copyrighted material, then such application for temporary injunction could not be granted to plaintiff who ought to have prayed also for a prepetual injunction to make such plaintiff's relief complete.

Independent Media v. Ali Saleem 2006 CLD 97; Muhammad Kashan v. Coca Cola Corporation Pakistan Ltd. 2014 CLD 1696; Frieha Altaf v. Reckitt Benckiser (Pakistan) Ltd. Suit No. 587 of 2014 and Marghub Siddiqi v. Hamid Ahmed Khan 1974 SCMR 519 ref.

Atiqa Odho v. R. Lintas (Pvt.) Ltd. PLD 1997 Kar. 57; Lever Brothers Pakistan (Pvt.) Ltd. v. Atiqa Odho 2000 CLC 872; Shakeel Adilzadeh v. Pakistan Television Corporation Ltd. 1989 CLC 2447; Muhammad Sohail Tabba v. Pakistan 2019 CLC 93; Marghub Siddiqi v. Hamid Ahmed Khan 1974 SCMR 519 and M. Iftikhar & Co. Ltd. v. Uzin Export-Import Enterprises for Foreign Trade 1986 CLC 303 rel.

Muhammad Ali Aijaz assisted by Sami ur Rehman Khan for Appellants.

Jaffer Raza for Respondents.

Respondent No.3 in person.

2019 C L D 950

[Sindh]

Before Muhammad Ali Mazhar, J

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through additional Registrar---Petitioner

Versus

BEEMA PAKISTAN COMPANY LIMITED through Chief Executive---Respondent

J.C.M. No. 33 of 2007, decided on 21st June, 2019.

Companies Ordinance (XLVII of 1984)---

----S. 305---Insurance Ordinance (XXXIX of 2000), S. 143---Winding-up of company---Inability to meet obligations---Term 'Going Concern'---Applicability---Securities and Exchange Commission of Pakistan sought winding up of respondent company and appointment of provisional managers to take control of affairs of company---Validity---Respondent company was unable to meet its obligations without substantial restructuring or selling of assets as such same had indicated that it was not a 'Going Concern'---Term 'Going Concern' was extremely important to generally accepted accounting principles---Without 'Going Concern' assumption, company wouldn't have ability to prepay or accrue expenses---Conditions that lead to substantial doubt about a "Going Concern" included negative trends in operating results, continuous losses from one period to next, loan defaults, lawsuits against company and denial of credit by suppliers---Respondent company failed to fortify and substantiate that it was a 'going concern' seeing that it was not engaged in insurance business for last several years---High Court ordered respondent company to be wound-up and official assignee was appointed as official liquidator---Petition was allowed accordingly.

Controller of Insurance v. Pakistan International Insurance Company (Pvt.) Limited PLD 1993 Kar. 720; 2008 CLD 214; 2008 CLD 286; 2008 CLD 465; 2005 CLD 636; 2005 CLD 747; 2005 CLD 1291; 2004 CLD 640; 2002 CLD 1794; PLD 2002 SC 1111; 2009 CLD 1106; 2013 CLD 1229; 2013 CLD 1733 and 2011 CLD 1095 ref.

Ijaz Ahmed for Petitioner.

Kazi Sheharyar Iqbal for Respondent.

Mirza Shahnawaz, CEO of the Respondent.

Dates of hearing: 24th September, 29th October, 2018 and 18th February, 2019.

2019 C L D 971

[Sindh]

Before Muhammad Junaid Ghaffar, J

KHAWER HANIF---Plaintiff

Versus

IMRAN HANIF and 9 others---Respondents

Suit No.2022 of 2015, decided on 13th May, 2019.

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

----O. XL, R.1---Receiver, appointment of---Pre-conditions---Court usually do not appoint receiver in respect of businesses which are making profits but at same time, if substantial issues are raised and there is a likelihood that property is in danger or partnership business, if continued in same manner, may deprive excluded partner from his legitimate share, a receiver can be appointed.

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

----O. XL, R. 1---Suit for declaration, permanent injunction and rendition of accounts---Receiver, appointment of---Protection of assets---Partnership concern---Parties were partners in a joint business and plaintiff was dissatisfied with accounts of firm---Plaintiff sought appointment of receiver upon working of business of partnership concern---Plea raised by defendants was that until evidence was recorded and admissibility of the report of Chartered Accountant was decided in terms of Qanun-e-Shahadat, 1984 same did not appear to be just and fair---Validity---Chartered Accountant was appointed by court for its assistance before passing of any order of appointment of receiver---Once report of Chartered Accountant was furnished court was fully competent and was not denuded of its powers to proceed further on the basis of such report---Assets of partnership business were to be collected and preserved as the parties were in dispute with bitter feelings---Plaintiff though had been compensated from time to time but such compensation did not commensurate with accounting figures given by the Chartered Accountant---Reasonable apprehension existed to the effect that partnership property, assets as well as income, were in danger or being misused and dissipated---Receiver was appointed in circumstances.

Muhammad Irfan v. The State 2006 YLR 1506; Faizullah Khan and others v. Mst. Mirzago Begum 2015 YLR 1489; Syed Munawar Hussain Shah v. Syed Nusrat Hussain through L.Rs and others 2014 CLC 945; Abdul Ghani and others v. Abdul Rashid and others PLD 2008 Kar. 443, Media Max (Pvt) Ltd. through Chief Executive v. ARY Communication Pvt. Ltd. PLD 2013 Sindh 555; Sahibzada Ghulam Muhammad Khan v. Nawab Jahangir Khanji and 6 others PLD 2011 Kar. 602; Nelofar Saqib v. Saiban Builders and Developers and others 2011 CLD 341; Asadullah Mirbahar and another v. Mrs. Ayesha Muzahir through Attorney and 9 others PLD 2011 Kar. 151; Muhammad Ayub through L.Rs. v. Muhammad Shafique and others 2010 CLC 551; Anwer Hussain v. Afsar Hussain and 2 others 2019 YLR 442; Bhagawan Ram Kairi v. Radhika Ranjan Das and others AIR 1953 Assam 25; Radha Kanta Pal v. Benode Behari Pal and others AIR 1934 Cal. 444; Muhammad Siddiq v. Muhammad Yaqoob and others PLD 1965 (West Pakistan) 584; Asghar Ali v. Abdul Hussain PLD 1977 Kar. 280; Muhammad Yousuf Burney v. S. Muhammad Ali 1983 CLC 1498 and Halsbury's Laws of England, Vol. 24, paragraph 923, at pages 484 and 485 ref.

Khalid Mehmood Siddiqui, Saadat Yar Khan and Ashraf Yar Khan for Plaintiff.

Khadim Hussain Thahim for Defendants Nos.1 to 3.

Fayaz Ali Metlo for Defendant No.4.

Dates of hearing: 14th, 26th February and 3rd April, 2019.

2019 C L D 993

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

EAST WEST INSURANCE CO. LIMITED---Petitioner

Versus

FEDERAL INSURANCE OMBUDSMAN and others---Respondents

Constitutional Petition No.D-1554 of 2016, decided on 8th February, 2019.

Federal Ombudsman Institutional Reforms Act (XIV of 2013)---

----Ss. 2(a) & 18--- Insurance claim, acceptance of--- Maladministration---Jurisdiction of Ombudsman---Scope---Petitioner was an Insurance Company who assailed directions by Ombudsman to Securities and Exchange Commission of Pakistan to investigate complaint---Validity---Ombudsman seized of complaint was empowered to decide same in accordance with law and not abdicate its role to another authority---Order of the Ombudsman referring matter to Securities and Exchange Commission of Pakistan for further necessary action was not justifiable---High Court set aside order passed by the Ombudsman and remanded matter back to Ombudsman for decision afresh---High Court also directed the Ombudsman to afford an opportunity of hearing to parties--- Constitutional petition was allowed accordingly.

Saiyed Younus Saeed for Petitioner.

Ishrat Zahid Alvi, A.A.G. for Respondent No.1.

Fidaullah Qureshi for Respondent No.2.

Imran Shamsi, Law Officer for Respondent No.3.

Date of hearing: 15th January, 2019.

2019 C L D 999

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

ASKARI BANK LIMITED through Duly Authorized Attorneys---Petitioner

Versus

PRESIDENT OF PAKISTAN through Director (Legal-II) and others---Respondents

Constitutional Petition No. D-4190 of 2016, decided on 5th April, 2019.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 82B, 82D & 82C---Banking Mohtasib---Exercise of powers by Banking Mohtasib---Complaint---Bar on jurisdiction of Banking Mohtasib---Scope---Delay in filing of a complaint, determination of---Condonation of delay by Banking Mohtasib by implication---Scope---Section 82B of the Banking Companies Ordinance, 1962 only barred Banking Mohtasib from entertaining such complaints which had already been disposed of by the State Bank of Pakistan or any other court of Pakistan and pendency of criminal proceedings on the subject matter would not oust jurisdiction of Banking Mohtasib where proceedings were civil in nature---Period prior to intimation by complainant to a Bank of his/her intention to file a complaint did not figure into S. 82D(2) of the Banking Companies Ordinance, 1962 while determining the period of limitation for making complaint to Banking Mohtasib---Banking Mohtasib under S. 82(D) of Banking Companies Ordinance having discretion to condone delay in filing of a complaint before it, it would be deemed by implication, where a complaint had been decided before it, that any delay therein was condoned as such complaint was decided upon by Banking Mohtasib.

Peshawar Electric Supply Company Ltd. v. Wafaqi Mohtasib (Ombudsmen), Islamabad PLD 2016 SC 940 and State Life Insurance Corporation of Pakistan v. Wafaqi Mohtasib 2000 CLC 1593 rel.

Khalid Mehmood Siddiqui for Petitioner.

Shoaib Mirza, Assistant Attorney-General for Respondent No.1.

Nemo for Respondent No.2.

Muhammad Azhar Faridi for Respondent No.3.

Date of hearing: 10th October, 2018.

2019 C L D 1021

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

INTAKHAB HUSSAIN SHAH and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN and another---Respondents

Ist Appeal No. 74 of 2018, decided on 31st May, 2019.

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

----Ss. 19, 9 & 22---Civil Procedure Code (V of 1908), S. 47 & O. XLI, R. 31---Procedure of Banking Court---Suit for recovery---Decree of Banking Court---Execution of decree---Quantification of decretal amount---Finality of decree/order of Banking Court when appeal under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was not filed within period of limitation---Scope---Judgment-debtor impugned order of Banking Court whereby his application under S. 47, C.P.C. was dismissed whereby judgment-debtor challenged quantification of decretal amount----Validity---Quantification of decretal amount was undertaken vide the order of Banking Court against which no appeal was filed and application under S. 12(2) of the judgment-debtor was also dismissed, and such findings had attained finality---Application under S. 47, C.P.C. by judgment-debtor was an effort to assail the judgment of Banking Court, which had attained finality---Role of Executing Court ordinarily did not go beyond decree itself and Banking Court had adhered to such principle in the impugned order---No illegality therefore existed in the impugned order--- Appeal was dismissed, in circumstances.

Syed Muhammad Abbas Haider for Appellants.

Suleman Hudda for Respondent No.1.

Date of hearing: 22nd May, 2019.

2019 C L D 1031

[Sindh]

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

ANEES-UR-REHMAN---Appellant

Versus

FAYSAL BANK LIMITED through Manager---Respondent

I.A. No. 12 of 2018, decided on 15th March, 2018.

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

----Ss. 10, 9, & 7---Civil Procedure Code (V of 1908), O. VII, R. 11---Procedure of Banking Court---Suit for recovery---Maintainability of plaint---Statement of accounts---Scope of suits before the Banking Court---Nature and Scope---Use of the words "the plaint shall be supported" preceding the words "duly certified statement of account" rendered the compliance of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as mandatory and non-compliance of essential requirements of the same would put the plaintiff liable to face consequences---For a Banking Court to assume jurisdiction, it must be established at the very outset that a relationship of customer and financial institution existed between the parties and "default" in respect of finance had been committed---Both "Financial Institution" and "customer" under Ss. 9(3) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 had identical statutory obligations not only to plead but to clearly state information regarding "finances availed" by a defendant, "repayments" made by him, dates thereof and amount of finance yet to be repaid---Scope of a suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 had been well-defined and controversies in a matter had been confined to matters of finance "availed", "claimed" and "disputed" amounts and facts in support thereof and trial before Banking Court had been restricted to "quantum of amounts" claimed and disputed---Banking Suit was therefore a suit for accounts and based on credit, debit and balances entries in books of accounts.

Elbow Room and another v. MC Bank Limited 2014 CLD 985; Banker's Equity Ltd. v. Bentonite Pakistant Limited and others 2003 CLC 931; Apollo Textile Mills Limited and others v. Soneri Bank Limited 2012 CLC 337; Chaudhry Mukhtiar Ahmed v. National Bank of Pakistan and others 2007 CLC 501 and Habib Metropolitan Bank Limited v. Abid Nisar 2014 CLC 1367 rel.

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

----Ss. 10 & 9---Civil Procedure Code (V of 1908), O. VII, R.11---Procedure of Banking Court---Suit for recovery---Application for leave to defend---Rejection of plaint by Banking Court---Question before the High Court was whether the Banking Court, after having granted leave to defend, could reject the plaint of the plaintiff under O. VII, R. 11, C.P.C.---Held, that Banking Court in the first instance had to decide the fate of the application for leave to defend on merits and thereafter it was at liberty to reject the plaint of the plaintiff, if it reached conclusion that the case was liable to be rejected under O. VII, R. 11, C.P.C.---Banking Court however, before giving finding on an application for leave to defend, could not reject plaint under O. VII, R. 11, C.P.C.

Bankers Equity Ltd. and 5 others v. Messrs Bentonite Pakistan Ltd. through Chief Executive and 7 others 2010 CLC 651 rel.

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

----O. VI, R. 17---Pleadings---Amendment in pleadings---Allowing amendment to a plaint in a suit---Exercise of discretion by the Court under O. VI, R. 17, C.P.C.---Principles and scope---Court was vested with power to allow or decline amendments in pleadings at its discretion and allow amendments only if same did not change substance or nature of a suit and such discretion did not bind a court to allow amendments in all cases where an application for the same was filed.

Messrs Maroof Knitwear (Pvt.) Limited through Chief Executive and 8 others v. Allied Bank of Pakistan Limited 2003 CLD 1610 rel.

Haris Rashid Khan for Appellant.

Nemo for Respondent.

Date of hearing: 23rd February, 2018.

2019 C L D 1060

[Sindh]

Before Muhammad Junaid Ghaffar, J

SAMSONITE IP HOLDINGS S.a.r.l. through Attorney and another---Plaintiffs

Versus

FAMOUS BRANDS (PVT.) LIMITED---Defendant

Suit No. 2040 of 2017, decided on 24th July, 2018.

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

----O. VII, Rr. 10 & 11---Return or rejection of plaint---Jurisdiction of court---Scope---Plaint can only be rejected by a court which otherwise has jurisdiction to entertain suit/plaint and decide entire lis on its merits---If during such proceedings an application has been filed by defendant for rejection of plaint on grounds mentioned under O. VII, R. 11, C.P.C., court having such jurisdiction can decide application either way---Once it is pleaded on behalf of defendant that court has no jurisdiction and plaint be returned under O. VII, R. 10, C.P.C., then no application can be entertained under O. VII, R 11, C.P.C. by the same court---By filing such application defendant submits to jurisdiction of court and waives objections to that effect and therefore, cannot press upon an application under O. VII, R. 10, C.P.C. for return of plaint.

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

----S. 86---Trade Marks Rules, 2004, Rr. 11, 71, 88 & Fourth Schedule, Classes 18, 35---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Application for permanent injunction---Trademarks, infringement of---Parallel import---Plaintiffs were international brands who jointly owned and operated use of registered trademarks and were aggrieved of defendant infringing their trademark as well as passing-off same by selling such goods as licensed vendor under name and style of trademark of plaintiffs---Validity---Plaintiffs while making sales to company in another country had already reaped economic benefit from its trademarks through first putting goods on market and then even permitting its further export to defendant in Pakistan and could not be allowed any further benefit or protection to exercise any monopoly rights in relations to those very goods on which once an economic benefit had been earned---Plaintiffs had already made out prima facie case of infringement under S. 86 of Trade Marks Ordinance, 2001 as defendant even after submitting an undertaking before court was still using identical signage for which there was no consent of owner/proprietor of trademark/trade name in relation to goods and services falling within Classes 18 and 35 of Fourth Schedule of Trade Marks Rules, 2004 read with Rr. 11, 71 & 88 of Trade Marks Rules, 2004---High Court restrained defendant and its officers, servants and agents from infringing trademark in question and other marks of plaintiffs---High Court further directed defendant to immediately remove signage being used by them in their outlets---Application was allowed accordingly.

Pioneer Cement Limited v. Fecto Cement Limited and 3 others PLD 2013 Lah. 110; Lucky Enterprises, Goods Forwarding Agency v. Messrs Zeal Pak Cement Factory Ltd. PLD 2013 Sindh 277; Pakistan Industrial Credit and Investment Corporation Ltd. Karachi v. Modern Embroidery and Textile Mills Ltd. Lahore and 6 others PLD 1976 Kar. 249; Kota Sreeramulu v. Kota Sreeramulu AIR 1922 Madras 304; Javed Akhtar Chauhan v. Mumtaz Ali and 2 others 2016 CLD 1706; Bayer AG and another v. Bayhealth Care (Pvt.) Limited and another 2013 CLD 2087; Telebrands Corporation v. Telebrands Pakistan (Pvt.) Limited 2006 CLD 580; Ramrichpal Singh v. Dayanand Sarup AIR 1955 Allahabad 309; Mrs. Farzana v. Muhammad Mateen Khan 2011 CLC 1371; Ahmed Nawaz Jagirani v. Sindh Industrial Trading Estate Ltd. 2017 CLC 40; Asif Islam v. Muhammad Asif PLD 2001 SC 499; Jewan and 7 others v. Federation of Pakistan and 2 others 1994 SCMR 826; Khalid Mehmood v. Shabir Ahmed 2017 MLD 1497; The Commissioner of Inland Revenue v. Muller and Co's Margarine Ltd. [1901] AC 217 (HL); Kerly's Law of Trade Marks and Trade Names (15th Edition) and Samsonite IP Holdings Sarl v. An Sheng Trading Pte Ltd. [2017] SGHC 18 ref.

Omar Soomro for Plaintiffs.

Ms. Amna Salman for Defendant.

Dates of hearing: 16th, 29th March, 19th April and 10th May, 2018.

2019 C L D 1140

[Sindh]

Before Adnan Iqbal Chaudhry, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

TUWAIRQI STEEL MILLS LIMITED and another---Defendants

Suit No. B-58 of 2015, decided on 31st May, 2019.

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

----Ss. 9, 7 & 10---Procedure of Banking Court---Suit for recovery---Computation of decretal amount---Disallowing markup upon markup---Scope---After expiry of markup agreement/finance facility, a Financial Institution did not have the mandate to continue charging contractual markup.

Habib Bank Limited v. Farooq Compost Fertilizer 1993 MLD 1571; United Bank Ltd. v. Usman Textile 2007 CLD 435 and Emirates Global Islamic Bank Ltd. v. Muhammad Abdul Salaam Khan 2013 CLD 1291 rel.

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

----Ss. 133 & 135---Contract of guarantee---Discharge of surety by variance in terms of contract---Rights available to surety under the Contract Act, 1872 could be waived by the surety---Scope---Criteria prescribed under S. 133 of the Contract Act, 1872 for discharge of surety was that there should be a variance in terms of the contract between principal debtor and creditor; and that such variance should have been without surety's consent and it was only then that surety was discharged from transactions subsequent to such variance---Variation of a contract within contemplation of S. 133 of the Contract Act, 1872 meant material variation or alteration in original contract that may prejudicially or adversely affect surety---Defence conferred on surety under S. 133 of the Contract Act, 1872 could be waived by surety through specific agreement in the deed of guarantee provided that such waiver did not defeat any provision of law and such waiver would amount to "surety's consent" within meaning of S. 133 of the Contract Act, 1872 with the result that the surety would not be discharged.

Industrial Development Bank of Pakistan v. Hyderabad Beverages Company (Pvt.) Ltd. 2016 SCMR 451 ref.

Industrial Development Bank of Pakistan v. Hyderabad Beverages Company (Pvt.) Ltd. 2016 SCMR 451; Aftab A. Sheikh v. Trust Leasing Corporation Limited 2003 CLD 702 and Asim Traders v. National Bank of Pakistan 2016 CLD 1654 rel.

Waqar Ahmed for Plaintiff.

Khalid Mehmood Siddiqui for Defendant No.1.

Ghulam Rasool Korai for Defendant No.2.

2019 C L D 1194

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

ENERGY SOLUTION (PVT.) LTD.---Petitioner

Versus

The PRESIDENT OF PAKISTAN through Director (Legal) and another---Respondents

Constitutional Petition No. D-2011 of 2018, decided on 24th December, 2018.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122, 127 & 130---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), Ss. 2, 14 & 24---Federal Insurance Ombudsman, orders of---Appeal before the President of Pakistan---Scope---Petitioner was aggrieved of order passed by the President of Pakistan in setting aside orders of Federal Insurance Ombudsman---Plea raised by petitioner was that the President of Pakistan was not competent forum for appeal and that same should have been filed before the Federal Insurance Ombudsman--- Validity--- Provisions of Federal Ombudsmen Institutional Reforms Act, 2013, insofar as inconsistent with provisions of Insurance Ordinance, 2000, would have primacy over Insurance Ordinance, 2000---Forum delineated vide Federal Ombudsmen Institutional Reforms Act, 2013 for maintaining a challenge to order of Ombudsman was the President of Pakistan---Manner prescribed in law to assail an order of Ombudsman was precisely that which was employed by respondent and same culminated in order in question---High Court declined to interfere in order passed by the President of Pakistan as it did not suffer from any defect in jurisdiction---Constitutional petition was dismissed in circumstances.

Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and others 2001 SCMR 838 and Mir Dost Muhammad v. Government of Balochistan and others PLD 1980 Quetta 1 ref.

Peshawar Electric Supply Corporation Limited v. Wafaqi Mohtasib PLD 2016 Pesh. 185 rel.

Shaiq Usmani along with Ms. Amna for Petitioners.

Liaqat Hussain Sheikh, Assistant Attorney General for Respondents.

Sattar Mohammad Awan for Respondent No.2.

2019 C L D 1205

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

KHURRAM SHEHZAD---Appellant

Versus

UNITED BANK LIMITED---Respondent

First Appeal No. 221 of 2017, decided on 31st May, 2019.

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

----Ss. 10, 9 & 22---Qanun-e-Shahadat (10 of 1984), Art. 84---Suit for recovery---Application for leave to defend---Banking documents---Comparison of signature, writing or seal with others admitted or proved---Opinion of Handwriting Expert---Adjudication by Banking Court----Scope---Defendant impugned order of Banking Court whereby its application for leave to defend, wherein he denied availing the finance facility, was dismissed while relying on opinion of a Handwriting Expert which opinion stated that signatures of defendant were same as those on banking documents---Contention of defendant, inter alia, was that Banking Court could not have dismissed defendant's application for leave to defend without giving him opportunity to cross-examine said Expert---Validity---Article 84 of the Qanun-e-Shahadat, 1984 enabled Banking Court to compare signatures with others admitted/proved and said process was not employed in the present case---Opinion relied upon by Banking Court in the impugned order had not been proven in evidence and issue of authenticity of signatures could not be determined merely on opinion of an Expert and that too without framing issues or leading evidence---Impugned order was therefore not sustainable in law and dismissed, in circumstances.

Shaz Packages and others v. Bank Alfalah Limited 2011 CLD 790; Muhammad Ishaque Qureshi v. Sajid Ali Khan and another 2016 SCMR 192 and Kinza Fashion (Private) Limited and others v. Habib Bank Limited and another 2009 CLD 1440 rel.

Khaleeq Ahmed for Appellant.

Khadim Ali for Respondent.

2019 C L D 1228

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

ABDUL QADEER KHAN DURRANI---Petitioner

Versus

STATE BANK OF PAKISTAN through Governor and 3 others---Respondents

Constitutional Petition No. D-1257 of 2017, decided on 31st May, 2019.

State Bank of Pakistan IH&SMEFD Circular No. 8 of 2011---

----Export Finance Scheme---Imposition of monetary penalty by State Bank of Pakistan---Scope---Petitioner, an exporter, impugned order of State Bank of Pakistan whereby monetary penalty was imposed on exporter on ground that exporter had made false representations to avail Export Finance Scheme--- Validity--- Determination, in the present case, could only be confined to the question of whether rationale employed by State Bank of Pakistan in impugned order was supported by uncontroverted record on file, and such record did in fact support findings recorded in impugned order---Exporter could not provide any justifiable argument with regard to his contention that correct category of penalty was not imposed and therefore, no interference could be made in impugned order---No case warranting Constitutional jurisdiction of High Court was made out by exported---Constitutional petition was dismissed, in circumstances.

Ijaz Ahmed Zahid for Petitioner.

Noman Zahid and M. Younus for Respondent No.3.

Hasan Mandviwala for Respondent No.4.

Iqbal Hussain Bangash, Joint Director, SBP and Faraz Khan Jadoon, Law Officer, SBP for Respondents Nos. 1 and 2.

2019 C L D 1241

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

MOHAMMAD MOAZAM KHAN---Appellant

Versus

MOHAMMAD IQBAL and another---Respondents

First Appeal No. 78 of 2017, decided on 22nd May, 2019.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 4 & 5---Promissory note---Bill of exchange---Determination as to the nature of an instrument---Scope---To determine the nature of instrument where there was a promise to pay, the best way was to see intention of the parties and what the instrument in the common acceptance of men of business or persons among whom the same was commonly used---Ordinarily, in order to amount to a promissory note, an instrument must simply contain a promise to pay and nothing else and true import of words "on demand" was that the debt was due and payable immediately---Such endorsement did not mean that the same was not payable immediately or without any demand---Promissory note typically contained all terms pertaining to indebtedness, such as principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature---Difference between a promissory note and a bill of exchange was that the latter was transferable and could bind one party to pay a third party that was not involved in its creation---Bills of exchange orders a debtor to pay a particular amount within a given period of time issued by a creditor and promissory note was issued by a debtor and was a promise to pay a particular amount of money in a given period---Bill of exchange must clearly detail the amount of money, the date, and the parties involved (including the drawer and drawee)---Bill of exchange ordered a drawee to pay as per the drawer's directions and promissory note, however, was not an order but a promise to pay---Liability of maker of a promissory note was absolute, while that of a drawer of a bill of exchange was conditional and promissory notes could not be payable to their makers, while the drawer and the payee in bills can be the same person.

Muhammad Nawaz v. Abdul Sattar 2000 YLR 2927 distinguished.

Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam 2014 SCMR 1562 rel.

Akhtar Hussain assisted by Younis Shaad for Appellant.

Nemo for Respondent.

2019 C L D 1248

[Sindh (Larkana Bench)]

Before Khadim Hussain Tunio, J

ZARAI TARAQIATI BANK LTD. through President and 2 others---Applicants

Versus

MASOOD AHMED and 2 others---Respondents

Civil Revision Application No. S-08 of 2001, decided on 31st January, 2019.

(a) Jurisdiction---

----Forum/court---Determination---To decide question of jurisdiction criterion is always is law and law alone and it never stands prejudiced by acts/omissions of parties or their counsel and even by consents---Lack of jurisdiction turns any decision into an illegality and court must always show vigilance and legal approach before proceeding further which otherwise is its legal duty so as to avoid a long agony of proceedings resulting into nothing but an illegality.

Multan Electric Power Company Ltd. v. Muhammad Ashiq and others PLD 2006 SC 328 ref.

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

----Ss. 4 & 7---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery of damages---Return of plaint---Civil court, jurisdiction of---Bank financed plaintiff to purchase a tractor which met an accident and was badly damaged---Plaintiff sought recovery of damages from Bank and Insurance Company on account of failure to get it repaired---Suit was decreed by Trial Court in favour of plaintiff and appeal was dismissed by Lower Appellate Court---Validity---Plaintiff claimed damages while basing his claim with reference to finance agreement---Such claim was dependent upon existence or otherwise of such finance/loan therefore, within meaning of S. 4 of Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997, jurisdiction of ordinary civil court was barred---Ordinary civil court had no jurisdiction to try suit as jurisdiction lay exclusively with Banking Court---High Court set aside judgments and decrees passed by both courts below and suit filed by plaintiff was deemed to be pending before Trial Court---High Court directed Trial Court to return plaint under O. VII, R. 10, C.P.C. for want of jurisdiction for presenting same before Banking Court having jurisdiction as per law---Revision was allowed accordingly.

1994 SCMR 18; 1994 MLD 1186; 1981 SCMR 143; S.M. Waseem Ashraf v. Federation of Pakistan 2013 SCMR 338 and Multan Electric Power Company Ltd. v. Muhammad Ashiq and others PLD 2006 SC 328 ref.

Niaz Ahmed M. Shaikh for Petitioners.

Javed Ahmed Soomro for Respondent No.1.

Abdul Rasheed Abro, Assistant Attorney-General for the State.

2019 C L D 1259

[Sindh]

Before Zafar Ahmed Rajput, J

Messrs TEAM NAYYER (PRIVATE) LIMITED through Duly Authorized Representative and another---Plaintiffs

Versus

SAIFY IRON (PVT.) LTD. and others---Defendants

Suit No. 1222 of 2018, decided on 16th October, 2018.

Registered Designs Ordinance (XLV of 2000)---

----Ss. 8 & 2(d)(e)---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Infringement of registered design---Temporary injunction, grant of---Scope---Plaintiff had right to get the alleged design registered---Defendants had not challenged the registered design of plaintiff before relevant forum---No difference existed in the "canopies" prepared by the defendant than the registered design of plaintiff and they seemed to be similar at first impression---Plaintiff had made out a prima facie case for grant of interim injunction being a proprietor of the design and he would suffer an irreparable loss in case of continuation of its infringement---Balance of convenience did lie in favour of plaintiff and defendant had no right to utilize the registered design--- Application for interim injunction was allowed in circumstances.

S. Maqbool Hussain Shah for Plaintiffs.

Ghulam Abbas Pishori for Defendant No.1.

2019 C L D 1267

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

Messrs UNITED MOBILE and 3 others----Appellants

Versus

ABDUL RAUF ESSA and another----Respondents

H.C.As. Nos.86 and 87 of 2013, decided on 31st May, 2019.

Partnership Act (IX of 1932)---

----Ss. 18 & 19---Civil Procedure Code (V of 1908), O. XXIII, R. 3---Partners, liability of---Consent statement---Applicability---Suit for dissolution, rendition of accounts, recovery and injunction was filed by partnership concern and its partners against another partnership concern and remaining partners---Suit was disposed of being compromised on basis of consent given by two partners---Validity---Suit was filed against five persons comprising three natural legal persons and two partnership firms---Consent statements were given by persons who did not fall into either category and were mentioned as partners of a defendant partnership firm---Other than two partners of defendant partnership firm, no other defendant was present or had expressly conveyed his consent for compromise contemplated vide order in question---Appellants were not expressed as parties to order in question---Order in question was void in respect of appellants including defendant firm therefore, no coercive proceedings to implement consent order could have been issued---Division Bench of High Court maintained order in question by Single Judge of the High Court only to the extent of two persons who made statement and set aside same to extent of remaining defendants---Intra-court appeal was allowed accordingly.

Combined Enterprises v. WAPDA Lahore PLD 1988 SC 39; New Era Builders Karachi v. Pakistan Insurance Corporation and another PLD 1977 Kar. 822; Ahmed Khan v. Irshad Begum and others 2007 MLD 331; Muhammad Akram Shaikh v. Pak Libya Holding Company (Private) Limited and others PLD 2010 Kar. 400 and Maulana Attaur Rehman v. Al Haj Sardar Umar Farooq and others PLD 2008 SC 663 ref.

Mushtaq A. Memon and Ishtiaq Memon, Muhammad Anwar Tariq, M. Anas Makhdoom and Ahmed Farhaj for Appellants.

Khalid Jawed Khan Barrister at Law, Salim Thepdawala and Sheikh F.M. Javaid for Respondents.

2019 C L D 1309

[Sindh]

Before Yousuf Ali Sayeed, J

Syed SHOAIB KHURSHEED---Plaintiff

Versus

Messrs AL MAL SECURITIES AND SERVICES LTD. through Company Secretary and 5 others---Defendants

Suit No. 970 of 2009, decided on 7th May, 2018.

Central Depositories Act (XIX of 1997)---

----S. 11---Specific Relief Act (I of 1877), Ss. 42, 54 & 56---Civil Procedure Code (V of 1908), O. XXXIX, R. 1 & 2---Suit for declaration and injunction---Interim, injunction, refusal of---Plaintiff sought direction to Central Depository Company to block sale, purchase, transfer etc., of shares of defendant company---Plea raised by plaintiff was that S. 11 of Central Depositories Act, 1997 was not applicable to dispute between parties---Validity---Scope of S. 11 of Central Depositories Act, 1997 was not confined to precluding rectification of Central Depository Register in only those cases where aggrieved party was an account holder or sub-account holder as such an interpretation would place a stranger to Central Depository System on better footing than an account holder or sub-account holder which would run contrary to spirit and intendment of S. 11 of Central Depositories Act, 1997 negating the very purpose thereof---Wordings of S. 11 of Central Depositories Act, 1997 revealed that two distinct scenarios emerged under cls. (a) and (b) thereof which were to be viewed disjunctively---Grievance of aggrieved party that name of an account holder or sub-account holder was fraudulently entered in Central Depository Register was not predicated on aggrieved party being either account holder or sub-account holder---Where relief of mandatory injunction being a principle relief sought, could not be granted, then a fortiori, a temporary injunction in aid of such final relief, also did not lie---High Court declined to grant interim injunction to plaintiffs and they could pursue this remedy by way of damages---Application was dismissed in circumstances.

Al-Meezan Investment Management Company Ltd. v. Wapda First Sukkuk Company Limited, Lahore PLD 2017 SC 1 ref.

M. Abid S. Zuberi for Plaintiff.

Nemo for Defendants Nos. 1 and 2.

Khilji Bilal for Defendant No. 3.

Jahanzaib Awan for Defendant No.4.

Tariq Qureshi for Defendant No.5.

2019 C L D 1338

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

SHAHNAWAZ JALIL---Appellant

Versus

RANI AND COMPANY and 2 others---Respondents

High Court Appeal No. 359 of 2018, decided on 13th March, 2019.

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

----S. 39---Rights conferred by registration of trademarks---Scope---Appellant assailed order of Single Judge of High Court whereby through an interim injunction, he was restrained from using its registered trademark, notwithstanding the pendency of proceedings before the Registrar, Trademarks where the respondent's opposition to the appellant's trademark was pending adjudication---Validity---Parties were the recorded holders of trademarks, hence were entitled to all the rights and privileges appurtenant thereto---Section 39 of Trade Marks Ordinance, 2001 demarcated a registered trademark to be the personal property of its holder---Trade Marks Ordinance, 2001 contained provisions for recall or invalidation of rights conferred, but such an action could only take place after adjudication before proper forum prescribed in such regard---Person could not be deprived of his property (rights of trade mark) or denied the benefit of his property without due process of law---Appellant was denied the benefit of his property (rights of trade mark) while the due process of law remained to be concluded---Single Judge of High Court while deciding an application for interim injunction proceeded to declare the trademark of appellant deceptively similar to that of respondent despite the fact that the proceedings for that very determination were not only pending before Registrar, Trademarks but also before the Single Judge of the High Court in the suit itself---Interim order did not preserve the corpus of the litigation and on the contrary it granted the final relief at an interim stage conferring unjustifiable entitlement without such right ever being adjudicated by the forum initially seized of the lis, being the Registrar, Trademarks, or even in the suit---Impugned order was not sustainable, hence, the same was set aside---High Court appeal was allowed accordingly.

Aldo Group International AG v. Aldo Shoes 2016 CLD 229 rel.

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

----O. XXXIX, Rr. 1 & 2---Temporary injunction---Purpose---Scope---Interim order pursuant to O. XXXIX, Rr. 1 & 2, C.P.C. is intended to be a preventive or prophylactic remedy for the purposes of preserving the status quo or preserving the corpus of litigation pending final determination.

Islamic Republic of Pakistan and others v. Zaman Khan and others 1997 SCMR 1508 and Rahat Khan v. Tahir Naveed 2009 CLC 433 ref.

Shahzaib Akhtar Khan for Appellant.

Samiullah Siddiqui for Respondent No.1.

2019 C L D 1350

[Sindh]

Before Arshad Hussain Khan, J

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

Versus

ENSHAA HOLDINGS LTD. and another---Defendants

Suit No. B-114 of 2013, decided on 6th August, 2019.

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

----Ss. 2(c) & 9---Civil Procedure Code (V of 1908), S. 151---Suit for recovery of finance---Banking jurisdiction---Scope---Plaintiff filed application under S. 151, C.P.C. for converting suit filed under Banking jurisdiction to one for recovery of money under ordinary civil jurisdiction---Validity---To bring any transaction within purview of Financial Institutions (Recovery of Finances) Ordinance, 2001 and Banking Court, it had to be established firstly, that relationship between parties to such transaction was either that of a 'borrower' or 'customer' who had obtained loan or finance from a banking company; it was only an investment which was made by an investment company regarding which an indemnity was executed by defendants---Plaintiff Bank had paid certain amount to defendants as investment in project and thereafter alleged to have suffered loss---No relationship existed as borrower and customer between plaintiff and defendants whereby plaintiff could invoke Banking jurisdiction of High Court---High Court converted Banking suit to be proceeded as an ordinary civil suit in accordance with law---Application under S. 151, C.P.C. was allowed accordingly.

National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689; Procter and Gamble Pakistan (Pvt.) Ltd. Karachi v. Bank Al-Falah Limited Karachi and 2 others 2007 CLD 1532; Ramzan Ali v. Javed Industries 1999 CLC 1294; Civil Appeal No.1954 of 2002; Marhaba Textile Ltd v. Industrial Development Bank of Pakistan 2003 CLD 1822; National Bank of Pakistan v. Khalid Mehmood 2002 CLD 658; Bank Alflah Limited v. Iftikhar A. Malik 2003 CLD 363; Amanullah Khan v. Government of NWFP 2001 CLC 453; Tahir Tariq Textile Mills (Pvt.) Ltd. v. NDFC 2001 YLR 846; Sherin and 4 others v. Fazal Muhammad and 4 others 1995 SCMR 584; Gul Muhammad v. Muhammad Saddique and others 2001 MLD 1154 and Pakistan General Insurance Company v. Muslim Commercial Bank Limited 2015 CLD 600 ref.

Sarfraz Ali Metlo for Plaintiff.

Naveed ul Haq for Defendants.

2019 C L D 1359

[Sindh]

Before Syed Hasan Azhar Rizvi and Adnan Iqbal Chaudhry, JJ

FEDERATION OF PAKISTAN through Secretary, Ministry of Finance and another---Petitioners

Versus

OFFICIAL ASSIGNEE/OFFICIAL LIQUIDATOR IN THE MATTER OF PAKISTAN FERTILIZER COMPANY LTD. and others---Respondents

Constitutional Petition No. D-1702 of 2007, decided on 17th June, 2019.

Companies Ordinance (XLVII of 1984)---

----Preamble---Constitution of Pakistan, Art. 199(5)--- Constitutional jurisdiction of High Court---"Person" in Art. 199(5) of the Constitution---Definition, scope and effect---Exclusion of High Court from definition of "person" in Art. 199(5) of the Constitution---High Court acting under special jurisdiction---Scope---Question before the High Court was whether the High Court was not to be treated as "High Court" for purpose of Art. 199(5) of the Constitution when the same acted under special jurisdiction as a Company Court under the Companies Ordinance, 1984---Held, that even conferment of special jurisdiction upon High Court did not open it to a writ under Art. 199 of the Constitution and where High Court acted as a Court under the Companies Ordinance, 1984, even then a writ could not be issued upon it in terms of exercise Constitutional jurisdiction under Art. 199 of the Constitution.

Kamaluddin Qureshi v. Ali International Co. PLD 2009 SC 367 and Muhammad Shafi v. Attaullah 1984 SCMR 1124 ref.

Tank Steel and Re-rolling Mills (Pvt.) Ltd. v. Federation of Pakistan PLD 1996 SC 77 rel.

Zahid F. Ebrahim, Additional Attorney General of Pakistan and Kashif Sarwar Paracha, Deputy Attorney General of Pakistan for Petitioners.

Official Assignee/Official Liquidator, Dr. Chaudhry Waseem Iqbal for Respondent No.1.

Ghazanfar Ali Jatoi for Respondent No. 2.

Khalid Jawed Khan for Respondent No. 3.

Nemo for Respondent No. 4.

2019 C L D 23

[Lahore]

Before Shahid Waheed, J

JESS SMITH AND SONS COTTON LLC---Plaintiff

Versus

D.S. INDUSTRIES---Defendant

Civil Original No. 628 of 2014, decided on 12th January, 2018.

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

----Ss. 6, 3, 4, Sched., Arts. III & IV--- Arbitration agreement---Enforcement of foreign arbitral award---Refusal of court to recognize and enforce a foreign arbitration award---Adjudication to determine as to whether arbitration agreement existed between the parties in a proceeding where foreign arbitration award was sought to be enforced---Scope---Refusal of a court to recognize a foreign arbitral award under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 usually involved investigation into disputed questions but it was not in every case that the court would be under obligation to frame issues, record evidence of the parties and follow the procedure prescribed for decision in a suit---Such matters had been left to the satisfaction of the Court under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, which had to regulate its proceedings keeping in view nature of the allegations in pleadings, and court may adopt such mode for disposal as was in consonance with principles of justice and what the circumstances of the case required; and therefore it was within competence of the court to frame formal issues and record evidence in a particular case---Questions as to whether exchange of e-mails and letters available on record constituted arbitration contract/agreement and whether arbitration was conducted according to applicable rules could be questions which cannot be decided without framing issues and adducing evidence.

Qazi Iftikhar Ahmad and Ms. Gohar Batool for Plaintiff.

Waleed Khalid, Furqan Naveed and Muhammad Ali Khan for Defendant.

2019 C L D 55

[Lahore (Multan Bench)]

Before Ali Baqar Najafi and Shahid Mubeen, JJ

Messrs SHAHEEN ENTERPRISES through Partners and others---Appellants

Versus

ALLIED BANK LIMITED through Principal Office/General Attorneys and others---Respondents

Regular First Appeal No. 344 of 2014, heard on 23rd April, 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---Defendants impugned order of Banking Court whereby defendants' application for leave to defend was dismissed and suit was decreed---Contention of defendants, inter alia, was that impugned order was illegal and suit ought to have been dismissed---Validity---Defendants had not denied availing of finance facilities in their application for leave to defend and only alleged that suit was filed three years after expiry of the finance facility, which ground alone was not sufficient for granting leave to defend as suit could be filed by the plaintiff Bank from date of refusal to the defendants to make payments to the plaintiff Bank---Statement of entries were also not denied and therefore, no illegality existed in the impugned order---Appeal was dismissed, in circumstances.

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

Syed Muhammad Asad Abbas for Appellants.

Muhammad Saleem Iqbal for Respondents.

2019 C L D 63

[Lahore (Multan Bench)]

Before Shahid Mubeen and Muzamil Akhtar Shabir, JJ

MCB BANK LIMITED---Appellant

Versus

MUHAMMAD SAEED---Respondent

F.A.O. No. 47 of 2018, decided on 20th August, 2018.

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

----Ss. 7, 10 & 9---Civil Procedure Code (V of 1908), O. XXXIX Rr. 1 & 2---Powers of the Banking Court---Grant of temporary injunction/interim relief by the Banking Court under O. XXXIX, Rr. 1 & 2, C.P.C.---Scope---Banking Court in exercise of its civil jurisdiction had all powers vested in a civil court under the C.P.C. and shall follow C.P.C. with respect to procedure when the same was not provided for in the Financial Institutions (Recovery of Finances) Ordinance, 2001---Power to pass orders relating to grant of interim injunction had neither been prohibited nor had been regulated by any provision of the Financial Institutions (Recovery of Finances) Ordinance, 2001; and therefore Banking Court was vested with powers to grant interim relief as regulated by the C.P.C.---Grant of interim injunction was a part of the working of the judicial system and no separate or specific provision of law was necessary to empower a court to issue an interim order---Banking Court was not required to wait for decision on an application for leave to defend before passing an order for temporary injunction/ interim relief in order to preserve a property as the same would tantamount to putting clog on an inherent power of Banking Court.

The Bank of Punjab through General Attorney v. Malik Umer Farooq 2014 CLD 198; Gulistan Textiles Mills Ltd. and another v. Soneri Bank Ltd. and another PLD 2018 SC 322; Additional Collector-II Sales Tax, Lahore v. Abdullah Sugar Mills Ltd. and others 2003 PTD 1664; Islamia University, Bahawalpur v. Muhammad Hameed Bhatti and another 2004 SCMR 649; Imam Bakhsh and others v. Ghulam Nabi and others 1999 SCMR 34; Additional Collector-II Sales Tax, Lahore v. Messrs Abdullah Sugar Mills Ltd. 2003 SCMR 1026; Commissioner, Khairpur Division, Khairpur and another v. Ali Sher Sarki PLD 1971 SC 242; Sindh Employees' Social Security Institution and another v. Adamjee Cotton Mills Ltd. PLD 1975 SC 32; Molvi Muhammad Yaqub v. Chairman, Election Tribunal, N.W.F.P. and others PLD 1976 SC 625; Sardar Shah Bukhari v. Chief Justice and Judges of the High Court of West Pakistan PLD 1965 SC 479 and Chaudhry Textile Mills Ltd. Lahore v. Central Board of Revenue, Islamabad PLD 1976 Lah. 1392 rel.

(b) Administration of justice---

----What was not prohibited was permitted unless same specifically violated any law or rule.

Mughees Aslam Malik for Appellant.

Ch. Shahzad Aslam for Respondent.

2019 C L D 85

[Lahore (Multan Bench)]

Before Tariq Saleem Sheikh, J

ABDUL REHMAN---Petitioner

Versus

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

W.P. No. 84 of 2016, heard on 25th October, 2017.

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

----S. 20---Criminal Procedure Code (V of 1898), Ss. 22-A & 22-B---Dishonoring of cheque---Ex-Officio Justice of Peace, jurisdiction of---Petitioner was customer of Bank and cheque issued by him was dishonored--- Bank filed application before Ex-Officio Justice of Peace, who on basis of report filed by police directed Station House Officer to register FIR---Validity---Bank had filed a suit against petitioner for recovery of its dues in Banking Court which was still pending, therefore, report was rejected---Ex-Officio Justice of Peace could not lawfully make a direction for registration of FIR where petitioner allegedly had issued a bad cheque for repayment of finance or fulfilment of obligation towards financial institution---High Court set aside order passed by Ex-Officio Justice of Peace---Constitutional petition was allowed in circumstances.

Mureed Hussain v. Additional Sessions Judge/Justice of Peace Jampur and 3 others 2014 PCr.LJ 1146; Khizar Hayat and others v. Inspector-General of Police (Punjab) and others PLD 2005 Lah. 470; Younas Abbas and others v. Additional Sessions Judge, Chakwal and others PLD 2016 SC 581; Union of India v. M.L. Capoor and others AIR 1974 SC 87; Basit Ali v. Additional Chief Secretary and 3 others 2005 YLR 1719; Gouranga Mohan Sikdar v. The Controller of Import and Export and 2 others PLD 1970 SC 158; Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 173; Dost Muhammad Cotton Mills Ltd., Karachi v. Pakistan and 3 others PLD 1976 Kar. 1078; Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268; Zain Yar Khan v. The Chief Engineer, C.R.B.C. WAPDA D.I. Khan and another 1998 SCMR 2419 and Shahzada Zahir Shah and 6 others v. Muhammad Usman Ghani and 3 others 2005 YLR 1394 ref.

Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218 fol.

Fakhar Raza Ajmal for Petitioner.

Sardar Riaz Karim for Respondent No.3.

Muhammad Adnan Latif, DDPP and Munir, ASI for the State.

2019 C L D 113

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

HOUSE BUILDING FINANCE COMPANY LIMITED through Branch Manager---Appellant

Versus

Ms. RUKHSANA MUMTAZ---Respondent

R.F.A. No. 761 of 2016, decided on 26th April, 2018.

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

----Ss. 10, 9 & 22---Application for leave to defend---Adjudication---Principle---Charges imposed by Financial Institution on finance availed by customer---Suit filed by customer seeking declaration that customer was not liable to pay "appreciation charges" on finance facility, was decreed after Banking Court dismissed leave to defend application of defendant Financial Institution---Validity---Suit was decreed by Banking Court without considering arguments raised by defendant in its application for leave to defend and there was nothing before the Banking Court on basis of which it could conclude that said appreciation charges were contrary to applicable State Bank Regulations---Impugned order was set aside and case was remanded to Banking Court---Appeal was allowed accordingly.

Khawaja Muhammad Ajmal for Appellant.

Nazim Ali Awan for Respondent.

2019 C L D 144

[Lahore]

Before Abid Aziz Sheikh and Faisal Zaman Khan, JJ

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

Versus

ADDITIONAL DISTRICT JUDGE and others---Respondents

I.C.A. No. 1056 and W.P. No. 17074 of 2016, decided on 25th September, 2018.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122 & 124---Law Reforms Ordinance (XII of 1972), S. 3---Intra court appeal---Maintainability---Appellant impugned order whereby its Constitutional petition against order of Insurance Tribunal was dismissed---Validity---In the present case, remedy of appeal was available to appellant under S. 124 of the Insurance Ordinance, 2000 and Constitutional petition was filed by appellant against order whereby his claim was rejected by Insurance Tribunal---Since remedy of appeal was available, intra-court appeal was not maintainable---Intra-court appeal was dismissed, in circumstances.

Muhammad Aslam Sukhera and others v. Collector Land Acquisition, Lahore, Improvement Trust, Lahore and another PLD 2005 SC 45 rel.

Ibrar Ahmad for Appellant.

2019 C L D 152

[Lahore (Multan Bench)]

Before Muzamil Akhtar Shabir and Shahid Mubeen, JJ

Mian ASHIQ HUSSAIN and others---Appellants

Versus

FAYSAL BANK and others---Respondents

R.F.A. No. 8 of 2015, heard on 31st May, 2018.

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

----Ss. 10, 9 & 22---Suit for recovery---Adjudication of application for leave to defend---Calculation of markup---Persons authorized to file suit on behalf of Financial Institution---Appeal to High Court---Scope---Defendant impugned the order of Banking Court whereby its application for leave to defend was dismissed and suit was decreed---Contention of the defendant inter alia was that its various objections to the suit filed by plaintiff Bank were not considered in the impugned order---Validity---Objection regarding competency of person filing suit on behalf of plaintiff Bank was not valid as persons filing the suit mentioned therein that they had been duly constituted attorneys and authorized signatories on behalf of plaintiff Bank---Defendant's objection as to statement of accounts being incorrect was also not valid as defendant had not challenged any entry therein and defendant could also not show any entry where markup on markup had been charged---Impugned order however, calculated markup beyond date of expiry of facility, which could not be upheld---High Court, while upholding the impugned order, modified the decree to the extent of deleting markup beyond expiry period of facility----Appeal was disposed of, accordingly.

KSB Bank Limited v. Mirza Ghulam Mujtaba 2011 CLC 461; Bank of Punjab through Branch Manager v. Unique Developers Pvt. Limited 2016 CLD 29; ABL v. Fatima Enterprises Limited 2017 CLD 1711; Messrs Ravi Medical Supplies (Pvt.) Ltd. through Chief Executive and 4 others v. Messrs First Women Bank Limited through Branch Manager 2016 CLD 1726; Habib Metropolitan Bank Limited v. Faizan Ali and Company (Pvt.) Ltd. 2017 CLD 1583 and Pace Pesticides Pvt. Ltd. v. Saudi Pak Commercial Bank Ltd. 2014 CLD 1436 rel.

Muhammad Manzoor-ul-Haq for Appellants.

Syed Waseem Haider for Respondents.

2019 C L D 181

[Lahore]

Before Ayesha A. Malik and Muzamil Akhtar Shabir, JJ

SHAHID SALEEM---Appellant

Versus

BANK AL-FALAH LIMITED---Respondent

R.F.A. No. 1201 of 2016, heard on 20th November, 2018.

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

----Ss. 10, 9 & 22---Suit for recovery---Adjudication of application for leave to defend---Mandatory requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant impugned order of Banking Court whereby suit for recovery was decreed ex parte against him---Contention of defendant was that his application for leave to defend, despite being filed, was not decided by the Banking Court---Validity---Banking Court in the impugned order, neither mentioned that the defendant appeared before the Court; nor that he had filed an application for leave to defend---Perusal of record revealed that application for leave to defend had, in fact, been filed by defendant, which fact was also not denied by plaintiff Bank---High Court observed that without deciding on the application for leave to defend, which was a mandatory requirement, impugned decree could not have been passed by Banking Court and was therefore, set aside---Matter was remanded to Banking Court for decision afresh---Appeal was allowed, accordingly.

Iyaz-ul-Haq Chaudhry v. NIB Bank Limited through Authorized Attorney and 4 others 2016 CLD 1741 rel.

Ch. Imran Arshad Naro for Appellant.

Muhammad Asif Ismail for Respondent.

2019 C L D 205

[Lahore]

Before Amin-ud-Din Khan, J

Chaudhry MUHAMMAD SALEEM---Petitioner

Versus

ADDITIONAL DISTRICT JUDGE SHEIKHUPURA and 10 others---Respondents

Writ Petition No. 64308 of 2017, heard on 16th October, 2018.

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

----Ss. 15(11), 7 (4) & 2(c)(e)---Specific Relief Act (I of 1877), S. 42---Civil Procedure Code (V of 1908), O. VII, R. 10---Sale of property mortgaged with the Bank---Suit for declaration before civil Court---Plaint, return of---Scope---Plaintiff filed suit for declaration before civil court wherein registered sale deed and mortgage of suit property with the Bank was challenged---Defendant moved application for return of plaint stating that Banking Court had exclusive jurisdiction to entertain and try the matter which was accepted and plaint was returned---Validity---Banking Court had exclusive jurisdiction to entertain and try the matter with regard to mortgage of suit property qua securing the loan from a financial institution---No other court could entertain and try the present matter---Mortgage and performance of an undertaking against the mortgagor would fall within the ambit of provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---No defect had been pointed out in the impugned orders passed by the courts below---Constitutional petition was dismissed, in circumstances.

Syed Arif Shah v. Abdul Hakim PLD 1986 Kar. 189 ref.

Amtex Limited through Director v. BankIslami Pakistan Ltd. and 8 others 2016 CLD 2007; Marahaba Pakistan International and others v. Habib Bank Limited and another 2017 CLD 995; Messrs Summit Bank Limited through Manager v. Messrs Qasim and Co. through Muhammad Alam and another 2015 SCMR 1341; Karachi Electric Provident Fund v. National Investment (Unit) Trust and others 2003 CLD 1026 and Abdul Rehman Allana v. Citibank 2003 CLD 1843 distinguished.

Lahore Beverage Company (Pvt.) Limited through Chief Executive v. Muhammad Javed Shafi and 2 others 2008 CLC 759 and Mst. Arif Shams through Special Attorney v. Muhammad Imtiaz Ahsan and 2 others 2012 CLD 483 rel.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction of High Court---Invocation of---Requirements.

For invoking jurisdiction of High Court under Article 199 of the Constitution, the petitioner is bound under the law to show that the courts/forums below have exercised the jurisdiction not vested in them by law or there is some jurisdictional defect in the orders impugned. Alamgir for Petitioner.

Ex parte for Respondent.

2019 C L D 219

[Lahore]

Before Shahid Karim, J

MCB BANK LIMITED through Duly Authorized Attorney---Decree Holder

Versus

EDEN DEVELOPERS (PVT.) LIMITED and others---Judgment Debtors

Execution Application No. 13 of 2017 in C.O.S. No. 50 of 2014, decided on 26th November, 2018.

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

----Ss. 2(b)(i) & 19---Civil Procedure Code (V of 1908), O. XXI, R. 2---Execution of Decree---Executing Court, pecuniary jurisdiction of---Question was whether execution petition could be treated as a separate case within the contemplation of S. 2(b)(i) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---­Execution petition was filed by the Decree Holder Bank in the High Court for a claim of Rs. 63.75 million---Judgment Debtors filed art application before the High Court seeking transfer of the execution petition to the Banking Court on the ground that the High Court could only entertain an execution petition of a claim of above Rs. 100 million---Contention of the Judgment Debtors that since the claim of the Decree Holder Bank in the execution petition was less than Rs. 100 million the same was wrongly filed in the High Court and should have been filed in the Banking Court having pecuniary jurisdiction---Judgment Debtors relied on the definition of the "Banking Court" as given in S. 2(b)(i) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, to argue that the execution petition represents a 'case' in terms of S. 2(b)(i) of the Ordinance, therefore, had to be treated independently as a stand-alone petition and its maintainability had to be adjudged on the basis of execution petition being an independent claim, and since the claim of the Decree Holder Bank did not exceed Rs. 100 million therefore it was ought to be adjudicated by the Banking Court---­Validity---Execution petition of the Decree Holder Bank was covered by O. XXI, R. 2 of C.P.C. as the consent decree in the suit was passed by the High Court for a sum of Rs. 125 million which was partially adjusted by the Judgment Debtors, and therefore, Decree Holder Bank had to file an execution petition for a sum of Rs. 63.75 million, being the remainder of the amount of the consent decree---High Court observed by analogy that had the Decree Holder Bank filed a claim for the execution of the entire amount of consent decree, the Judgment Debtors would have filed a proper intimation informing the Court regarding the moneys which had been paid under the decree and which would be an adjustment as contemplated by O. XXI, R. 2, C.P.C. and which would have resulted in the reduction in the amount of decree which was required to be executed and in that eventuality the Judgment Debtors could not have urged that the claim in the execution having gone below the pecuniary limit ought to be transferred to the Banking Court---High Court held that the payment of money out of court cannot be made the determining forum for execution, otherwise, the entire purpose of enacting O. XXI, R. 2, C.P.C. would be lost and would have the unsavoury effect of causing a fluctuation in the forum with each payment made out of court---Application of the Judgment Debtors was dismissed by the High Court being without merit.

Mashriq Bank v. Messrs Amtul Rehman Industries (Pvt.) Limited and others 2002 CLD 336 applied.

Habib Bank Limited through Attorneys v. Messrs Rehmania Textile Mills (Pvt.) Ltd. Jhang Road Faisalabad and 30 others 2003 CLD 689 distinguished.

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

----O. XXI, R. 2---Order XXI, R.2, C.P.C. enunciates that where any money payable under a decree of any kind is paid out of court or the decree is otherwise adjusted in whole or in part to the satisfaction of the decree holder, the decree holder shall certify such payment or adjustment to the court whose duty is to execute the decree---Judgment debtor shall inform the court of such payment or adjustment and the court shall record the same accordingly after service of notice on the decree holder

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

----S. 19---Automatic conversion of suit into execution---Deeming effect---No specific order made by the Court for conversion of decree into execution---­Execution petition filed by the Decree Holder would be deemed to be in continuation of proceedings under the decree---Validity---Where a consent decree was passed in the suit and no specific order was made by the Court for its conversion into execution, even then, any execution petition filed by the Decree Holder in the case would be deemed to be in continuation of the proceedings under the decree as the tenor of S. 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, was without equivocation and the conversion of suit into execution was statutorily mandated.

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

----Ss. 2(b)(i) & 19---Executing Court pecuniary jurisdiction of---Determining factor---Where the amount of decree passed by the High Court under the Financial Institutions (Recovery of Finances) Ordinance, 2001, was less than the amount claimed in the suit by the Plaintiff and such amount fell below the threshold of the pecuniary limit for the High Court to exercise its jurisdiction, even then, the execution proceedings would be held in the High Court which passed the decree in the first place as the Court which initially assumed the jurisdiction on the basis of the value fixed by the Decree Holder in the plaint was the only forum which had the pecuniary jurisdiction to execute the decree and to decide all ancillary matters relating to the execution, discharge and satisfaction of the decree.

Mashriq Bank v. Messrs Amtul Rehman Industries (Pvt.) Limited and others 2002 CLD 336 applied.

Habib Bank Limited through Attorneys v. Messrs Rehmania Textile Mills (Pvt.) Ltd. Jhang Road Faisalabad and 30 others 2003 CLD 689 distinguished.

Hafeez Saeed Akhtar for Judgment Debtor.

2019 C L D 277

[Lahore]

Before Shahid Karim, J

PAKISTAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED through Chief Executive and another---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Law and Parliamentary Affairs and 4 others---Respondents

W.P. No. 17932 of 2010, decided on 5th November, 2018.

Federal Ombudsman Institutional Reforms Act (XIV of 2013)---

----Ss.17, 24 & 2(c)---Insurance Ordinance (XXXIX of 2000), S. 126---SECP Circular No. 19 dated 30.07.2010---Sharing of costs of Insurance Ombudsman Secretariat by insurance companies---Expenses of Ombudsman Secretariat to be charged upon Federal Consolidated Fund---Scope---Petitioner assailed S. 126(4) of Insurance Ordinance, 2000 whereby costs of Insurance Ombudsman Secretariat had to be borne by insurance companies---Validity---Section 17(2) of Federal Ombudsman Institutional Reforms Act, 2013 provided that the expenses of Ombudsman Secretariat shall be the expenditure charged upon Federal Consolidated Fund and so the expenses were not required to be shared by insurance companies---Section 24 of Federal Ombudsman Institutional Reforms Act, 2013 gave an overriding effect to the provisions of the Insurance Act, 2000 over any other law for the time being in force---Section 24(2) of Federal Ombudsman Institutional Reforms Act, 2013 provided that in case of conflict between the provisions of the Act and the relevant legislation, the provisions of Federal Ombudsman Institutional Reforms Act, 2013 shall prevail---Petitioner had no cause of action after promulgation of Federal Ombudsman Institutional Reforms Act, 2013 and in view of the changed position petition became infructuous and was disposed of accordingly.

Umar Abdullah for Petitioners.

Nemo for Petitioners (in W.P. No. 18723 of 2010 and Crl. Org. No. 1996-W of 2012).

2019 C L D 310

[Lahore]

Before Muhammad Farrukh Irfan Khan and Rasaal Hasan Syed, JJ

STATE LIFE INSURANCE CORPORATION and others---Appellants

Versus

Mst. SAFIA AKHTAR---Respondent

Insurance Appeal No. 203321 of 2018, decided on 15th January, 2019.

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

----S. 122---Limitation Act (IX of 1908), S. 19 & Art. 86(a)---Claim for life insurance---Limitation---Computation of period---Acknowledgment in writing by insurer in relation to life insurance claim---Effect---Claim of policy holder for recovery of insured amount was allowed by Insurance Tribunal---Plea of Insurer was that insurance claim was barred by time---Validity---Insured person died on 23-8-2007, policy holder approached the insurer but her claim was rejected vide letter dated, 13-8-2009---Policy holder testified that Insurer had sought original passport of the insured person on 28-6-2012 which letter referred to another letter issued by Insurer on 30-5-2011, wherein policy holder was reminded to supply documents, so that Insurer could proceed further---Correspondence in the context of S.19, Limitation Act, 1908, held, was an acknowledgement of liability in writing which acknowledgement was made before the expiry of the period of limitation--- Period of limitation got a new lease of life by virtue of said letters, as such the claim filed on 14-9-2013 was within prescribed period of limitation---Appeal was dismissed, accordingly.

State Life Insurance Corporation of Pakistan through Manager State Life Insurance and 2 others v. Arjan Ram and 2 others PLD 2003 Kar. 523; Messrs Norwich Union Fire Ins. Society Limited v. Messrs Zakaria Industries Karachi 1994 CLC 1280 and Behlul v. Quetta Municipal Corporation and another 1997 SCMR 536 rel.

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

----S. 122---Qanun-e-Shahadat (10 of 1984), Art. 71---Claim for life insurance---Concealment of health by insured person---Oral evidence must be direct---Hearsay evidence---Scope---Claim of policy holder for recovery of insured amount was allowed by Insurance Tribunal---Plea of Insurer was that insured person suffered from terminal illness at the time of purchase of policy but said fact was concealed from Insurer---Validity---Onus to prove said issue was on the Insurer, who produced Manager Claims and Death Claim Examiner---Said witnesses produced their inquiry reports in evidence---Inquiry reports were based on pure hearsay as said officers of the Insurer themselves conducted inquiries and recorded statements made by third persons---None of the said persons were directly called in the witness box so as to fulfill the requirements of law which required facts to be proved through direct evidence---Indirect evidence was inadmissible---Testimonies of both the said witnesses were devoid of legal relevance---Insurer was on sufficient notice as to the state of health of insured person at the time policy was sold and a premium was charged accordingly---Appeal was dismissed, accordingly.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt and Usman Ali Butt for Respondent.

2019 C L D 318

[Lahore]

Before Jawad Hassan, J

MUSHTAQ AHMED---Petitioner

Versus

JUDGE, BANKING OFFENCES COURT NO.2, LAHORE and others---Respondents

W.P. No. 57334 of 2017, heard on 18th January, 2019.

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

----Ss. 9 & 20---Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), Ss. 4 & 5---Offences triable under Offences in Respect of Banks (Special Courts) Ordinance, 1984---Jurisdiction of Banking Court---Offence of preparing fraudulent land record documents for obtaining finance facility---Question before the High Court was whether offence of preparing a forged "fard" for obtaining a finance facility/loan from a Financial Institution/Bank, fell within the exclusive jurisdiction of Financial Institutions (Recovery of Finances) Ordinance, 2001, or could the same be tried under provisions of Offences in Respect of Banks (Special Courts) Ordinance, 1984---Held, that in the present case, allegations of making abetment had also been made against Bank Manger and Revenue Officials, which were examined by the Special Court under Offences in Respect of Banks (Special Courts) Ordinance, 1984 and the same ordered the accused to stand trial for said offences---Suit filed before Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001 was different in nature as the issue in the same was default by petitioner/customer and recovery of the same---Complaints before the Special Court, in the present case, were against different parties on different grounds which could not be tried by the Banking Court since it could only try matters covered in S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Offences which fell under purview of Financial Institutions (Recovery of Finances) Ordinance, 2001 were to be tried by Banking Court while other offences not covered by the said Ordinance would be triable under Offences in Respect of Banks (Special Courts) Ordinance, 1984---High Court observed that S. 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 did not cover allegations made in the present case which fell squarely within jurisdiction of Ss. 4 & 5 of the Offences in Respect of Banks (Special Courts) Ordinance, 1984---Constitutional petition was dismissed, in circumstances.

Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218; Naseem A. Sattar and 6 others v. Federation of Pakistan through Federal Secretary, Ministry of Interior, Islamabad and 3 others PLD 2016 Sindh 311 and Asif Mahmood's case 1987 PCr.LJ 896 rel.

Israr Ahmad Qureshi and Sh. Aftab Umar for Petitioner.

Muhammad Nadeem for Respondent No.2.

Ms. Sadia Malik, Assistant Attorney General and Rai Shahid Saleem Khan, Assistant Advocate-General for the State.

Assisted by Rana Shaher Yar, Research Officer/Civil Judge, Lahore High Court Research Centre.

2019 C L D 375

[Lahore]

Before Ayesha A. Malik, Sadaqat Ali Khan and Ali Akbar Qureshi, JJ

Mian AYAZ ANWAR and others---Petitioners

Versus

STATE BANK OF PAKISTAN and others---Respondents

W.P. No. 14172 of 2012, decided on 24th December, 2018.

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

----Preamble---Object, scope and purpose---National Accountability Ordinance, 1999, is a special law promulgated to eradicate corruption and corrupt practices and to hold people accused of such practices accountable---Objective of the law is to protect public money and ensure its recovery---Nature of investigation and inquiry under National Accountability Ordinance, 1999, is therefore, a kind of special dealing with offences which are deemed necessary in order to protect public money and ensure that public exchequer is not deprived of amounts due to it---Law also ensures that cases of corruption and corrupt practices are duly investigated in order to hold accountable persons involved in abuse of authority and office.

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

----S. 2(g) & Preamble---Object, scope and purpose---Financial Institutions (Recovery of Finances) Ordinance, 2001, is a special law promulgated in year 2001 to provide effective remedy for recovery of finances extended by Banks and for fulfillment of obligation defined in S. 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in favour of financial institution---Procedure has been prescribed under Financial Institutions (Recovery of Finances) Ordinance, 2001, to be adopted for the purposes of invoking jurisdiction of Banking Court for recovery of amounts due to financial institution or breach of any obligation as defined under Financial Institutions (Recovery of Finances) Ordinance, 2001---Law prescribes for a special procedure to be followed when filing a suit under Financial Institutions (Recovery of Finances) Ordinance, 2001, and also prescribes for certain offences which are triable before Banking Court---Banking Court is a specialized Court where issue of 'default' can be contested which is established for the purposes to pass judgment and decree for recovery of outstanding amounts in cases of defaults.

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

----S. 2(g)--- National Accountability Ordinance (XVIII of 1999), S.2(r)---"Wilful default"---Scope---Wilful default is a specific offence triable by Banking Court---Provisions of National Accountability Ordinance, 1999, and Financial Institutions (Recovery of Finances) Ordinance, 2001, both are special laws dealing with offence of "wilful default"---Only difference is that National Accountability Ordinance, 1999, deals with the offence to pay which is due by a financial institution whereas Financial Institutions (Recovery of Finances) Ordinance, 2001, gives the Banking Court jurisdiction to determine if a customer has committed any default of an obligation with regard to any finance and has added offence of wilful default as stipulated in S. 2(g) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----Ss. 2(g)(ii)(iii), 9 & 20--- Offences--- Scope--- Offences in S. 2(g)(ii)(iii) of Financial Institutions (Recovery of Finances) Ordinance, 2001, provide for independent offences which can be tried under S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, independent of any determination of default in an obligation to pay---Neither such offences are dependent on civil liability of "default" under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, as they are offences due to the very act of the customer.

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

----Ss. 2(g) & 20(7)---National Accountability Ordinance (XVIII of 1999), Ss. 5(r), 19 & 31D---Constitution of Pakistan, Art. 199---Constitutional petition---"Wilful default", offence of---Jurisdiction to investigate---Scope---Notices of wilful default were issued to all petitioners either under S. 5(r) of National Accountability Ordinance, 1999 or under S. 2(g) of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Petitioners assailed the notices on the ground that National Accountability Bureau did not have jurisdiction in the matter---Validity---Banking Court was a special forum to try offences under Financial Institutions (Recovery of Finances) Ordinance, 2001, and was the proper forum to try offences of wilful default---In such regard in terms of provisions of S. 20(7) of Financial Institutions (Recovery of Finances) Ordinance 2001, once civil liability of default was established the offence of wilfulness could be investigated by Federal Investigation Agency or any other nominated Federal Government agency---Offence under S. 2(g)(ii)(iii) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were not dependent on determination of civil liability and could be investigated in terms of S. 20(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001, by the nominated government agency---In all such cases Banking Court was to try cases of "wilful default" as per S. 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declared that notices issued under Ss. 5(r), 19 & 31D of National Accountability Ordinance, 1999, and notices issued under Ss. 2(g) & 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, were illegal and were set aside---High Court declined to interfere in notices issued under S. 2(g)(iii) of Financial Institutions (Recovery of Finances) Ordinance, 2001, as the same constituted an independent offence---Constitutional petition was allowed accordingly.

Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218; Khan Asfandyar Wali and others v. Federation of Pakistan through Cabinet Division, Islamabad and others PLD 2001 SC 607; Syed Zafar Ali Shah and others v. General Pervez Musharraf, Chief Executive of Pakistan and others PLD 2000 SC 869 and The State through Chairman, NAB and others v. Muhammad Asif Saigol and others PLD 2016 SC 620 rel.

Shahid Ikram Siddiqui, Muhammad Imran Malik, Akif Majeed, Syed Muhammad Mohsin Raza, Salman Akram Raja, Tariq Bashir, Bilal Bashir, Syed Shahab Qutab and Mian Taiq Hassan, Salman Aslam Butt, Munawar-us-Salam, Muhammad Shoaib Rashid, Walid Khalid, Usman Akram Sahi, Furqan Naveed, Arslan Riaz, Mehmood A. Sheikh, Ms. Ayesha Hamid, Atta Mustafa Rizvi, Mian Sultan Tanvir Ahmad, Usman Ali Cheema, Hafiz Mubashr Ullah, Uzair Karamat Bhandari, Mian Muhammad Kashif, Ms. Saba Saeed Sheikh, Ch. Muhammad Amin Javed, Mian Asghar Ali, Nadeem Ahmad Sheikh, Muhammad Ahmad Pansota, Rab Nawaz Baloch, Jameel Ahsan Gill, Asim Ali Chohan, Muhammad Umar Riaz, Ms. Hina Bandealy, Khizar Javed, Haq Nawaz Chattha, Malik Haider Ali Langah, M. Salman Masood, Syed Zeeshan Haider Zaidi, Rao Muhammad Nasir Khan, Salman Safdar, Chaudhry Shahbaz Akhtar, Masood Sadiq, Mian Muhammad Faheem Bashir, Syed Amir Ali Shah, Ashar Elahi, Adnan Kazmi, Ghulam Hussain Chaudhary, Sardar Azeem Afrasiab, Nadeem Irshad, Ch. Amjad Iqbal Sandhu, Mian Zulfiqar Ali and Shahid Mehmood Khan for Petitioners.

Nasar Ahmad, DAG. Mrs. Samia Khalid, Addl. AG and Ms. Shazia Ashraf Khan, AAG for Respondents.

Arif Mehmood Rana, Haroon Rasheed Cheema, Mian Nadeem Ahmad Qazi and Syed Faisal Raza Bukhari for NAB.

Kh. Muhammad Farooq and Abid Hussain for State Bank of Pakistan.

Syed Murtaza Ali Zaidi for MEPCO.

Muhammad Bilal Akhtar and Sheikh Muhammad Ali for NTDC.

Imtiaz Rashid Siddiqui, Shehryar Kasuri, Muhammad Asif Butt, Rana Imtiaz Siddiqui and Jamshid Alam for Bank of Punjab.

Shezada Mazhar and Ghulam Mustafa Malik for Saudi Pak Industrial and Agricultural Investment Company Limited.

Adnan Shuja Butt for Bank of Punjab.

Rashdeen Nawaz Kasuri, Muhammad Akram Pasha, Nadeem Yousaf Rana and Malik Asad Ullah Waghra for Bank of Punjab and Askari Bank Limited.

Hafeez Saeed Akhtar for Saudi Pak Industrial Company and Bank of Punjab.

Nadeem Yousaf Rana for Bank of Punjab and Askari Bank Limited.

Mian Belal Ahmad, Adil Fayyaz, Rashid Mehmood Gill, Waqas Mehmood Gill, A. W. Butt, Nadeem Saeed and Sardar Qasim Farooq Ali for Bank of Punjab.

Muhammad Khalid Sajjad Khan, Advocate for Saudi Pak Industrial and Agricultural Investment Company Limited.

Ahmad Pervaiz and Umar Toor for JS Bank.

Muhammad Raza Qureshi, Rana Haseeb Ahmad Khan, Abdul Ghaffar Malik and Majid Ali Wajid for MCB Bank.

Iftikhar Hussain Shah for NBP Bank.

Husain Ali Ramzan for NIB Bank.

Husnain Ali Ramzan for Summit Bank.

Ch. Hashim Hayat Wathra for Habib Metropolitan Bank Limited.

Saqib Haroon Chishti for Punjab Provincial Cooperative Bank Limited.

2019 C L D 437

[Lahore (Bahawalpur Bench)]

Before Masud Abid Naqvi and Rasaal Hasan Syed, JJ

GHULAM FAREED---Appellant

Versus

MUSLIM COMMERCIAL BANK LTD.---Respondent

E.F.A. No. 21 of 2018, decided on 12th February, 2019.

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

----S. 19---Civil Procedure Code (V of 1908), O. IX, R. 9---Execution of decree of Banking Court---Automatic conversion of decree into execution proceedings before Banking Court---Scope---Non-prosecution of execution of decree of Banking Court---Question before the High Court was whether after dismissal of an execution petition for non-prosecution, and subsequent restoration of the same, was the judgment-debtor required to be put on notice of such restoration---Held, that per S. 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; upon pronouncement of decree of Banking Court, the same shall be converted into execution proceedings without the need to file a separate application for the same, and therefore no fresh notice needed to be issued to the judgment-debtor---Under such special procedure as prescribed by Financial Institutions (Recovery of Finances) Ordinance, 2001, no need existed for decree-holder to file separate petition/application for execution of the decree---Such an application/petition, if filed by decree-holder could at best be construed as a request to activate proceedings for execution, which had to be converted into an execution-petition and taken to its logical conclusion till such time the decree was satisfied, and there existed no room for dismissal of the same for non-prosecution.

Saeed Ullah Paracha v. Habib Bank Limited and others 2014 CLD 582 and Mehboob Khan v. Hassan Khan Durrani PLD 1990 SC 778 rel.

Mian Muhammad Mujahid for Appellant.

2019 C L D 467

[Lahore]

Before Ayesha A. Malik and Asim Hafeez, JJ

ASHIQ HUSSAIN---Appellant

Versus

UBL INSURERS LIMITED through Chief Executive and another---Respondents

Insurance Appeal No. 1677 of 2015, heard on 6th March, 2019.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 123 & 124(2)---Qanun-e-Shahadat (10 of 1984), Art. 129---Insurance policy for indemnification against Burglary and House Breaking---Rejection of insurance claim---Onus of proof---Scope---Claimant impugned order of Insurance Tribunal whereby his claim that he was entitled to benefit of insurance claim under "Burglary and House Breaking" of policy obtained by claimant, was rejected---Validity---Insurance policy mentioned that onus was on claimant to prove that incidence of theft happened consequent to actual forcible and violent entry in his premises---In present case, there were contradictions in statements of witnesses and failure to produce best evidence in terms of Art. 129 of the Qanun-e-Shahadat, 1984 which would lead to adverse inference---Incident of "theft" could not be termed as unlawful breaking into the premises and except the claimant who was beneficiary of the claim, no independent witness was produced to establish factum of forcible and violent entry which constituted the condition precedent for attracting the indemnification clause of the Policy---No misapplication of law was therefore made by the Insurance Tribunal---Appeal was dismissed in circumstances.

United Insurance Co. Ltd. v. Harchand Rai Chandan Lal Appeal (Civil) 6277 of 2014 rel.

Liaqat Ali Butt for Appellant.

Arshad Nazir Mirza for Respondents.

Date of hearing: 6th March, 2019.

2019 C L D 489

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

Messrs DIVINE DEVELOPERS (PVT.) LTD. and others---Appellants

Versus

BANK OF PUNJAB---Respondent

R.F.A. No. 1596 of 2014, heard on 30th January, 2019.

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

----Ss. 3 & 17---Decree of Banking Court---Cost of funds, grant of---Scope----Under S. 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the customer was liable to pay cost of funds from the date of default till realization of the same and it was erroneous for a Banking Court to award cost of funds in a decree to be calculated from the date of filing of suit for recovery.

Habib Bank Limited v. Pak Poly Products (Pvt.) Limited 2013 CLD 1661 and Trycot Synthetic Fiber Company through Proprietor v. Habib Bank Limited 2012 CLD 1670 rel.

Haq Nawaz Chattha for Appellants.

Imran Muhammad Sarwar and Ch. Sohail Khurshid for Respondent Bank.

Date of hearing: 30th January, 2019.

2019 C L D 500

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

MUHAMMAD HAROON---Appellant

Versus

EAST AND WEST INSURANCE COMPANY LIMITED and others---Respondents

R.F.A. No. 199133 of 2018, decided on 14th January, 2019.

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

----Ss. 122, 123 & 124---Qanun-e-Shahadat (10 of 1984), Arts. 78, 73 & 72---Fire Insurance Policy---Surveyor's report, non-production of in evidence---Effect---Production and admission of a document---Proof of signature and handwriting of person---Scope---Policy holder obtained insurance of stock pledged with Bank---During subsistence of insurance policy, fire broke out in the godown resulting in destruction of the pledged stock---Policy holder lodged claim with insurer for payment of insurance amount---Inaction of insurer---Plea of insurer was that at the time of breaking of fire, several other uninsured items were also in the godown---Insurance Tribunal dismissed the petition of policy holder---Validity---Tribunal's findings were based on surveyor's report, hired by insurer, which was never tendered in evidence---Surveyors were not examined by insurer as its evidence---Held; contents of a document (respect in the present case) could be proved by producing the original document itself---If a document was alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as was alleged to be in that person's handwriting must be proved to be in his handwriting---Document could be proved by calling and examining the writer himself---Insurer took frequent adjournments before the Tribunal to produce the surveyors and upon its persistent default the right to lead further evidence was closed, which order, upon challenge by insurer, was upheld by High Court---Surveyor's report, despite being available on record could not be looked at and considered for decision of the case---Tribunal committed a material irregularity by taking into account the contents of surveyor's report which was not tendered in evidence and even its authors were not produced by insurer to prove the contents thereof---Policy holder, on the other hand, was required to produce all record in respect of goods that were burnt in fire incident---Record of Bank, that is, stock register, stock reports, etc were the most relevant documents for ascertaining the description of goods stored in godown---Judgment of Tribunal was silent with regard to policy holder's failure to produce stock reports/stock register, which record was available with the Bank whose guards were allegedly deputed at the godown---High Court set aside the judgment passed by Tribunal and remanded the case for passing a reasoned judgment afresh after consideration of entire record--- Appeal was allowed, accordingly.

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

----Arts. 78, 73 & 72---Production and admission of a document---Proof of signature and handwriting of person---Scope---Contents of a document could be proved by producing the original document itself---If a document was alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as was alleged to be in that person's handwriting must be proved to be in his handwriting---Document could be proved by calling and examining the writer himself.

Siraj Din v. Mst. Jamilan and another PLD 1997 Lah. 633 ref.

Furqan Naveed and Arslan Riaz for Appellant.

Abid Hussain Chaudhary for Respondents Nos. 1 and 2.

2019 C L D 520

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

SHAHID AKHTAR---Appellant

Versus

KHALIDA PARVEEN and others---Respondents

E.F.A. No. 188 of 2014, decided on 15th January, 2019.

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

----Ss. 15 & 22---Sale of mortgaged property---Objection---Bona fide purchaser---Possession of original title deed---Effect---Jurisdiction of Banking Court after validating sale certificate---Functus officio---Scope---Appellants filed application for cancellation of sale certificate---Plea of appellants was that they were bona fide purchasers and the property was not mentioned either in the suit or in the fard taliqa and was introduced for the first time in the auction schedule---Validity---Held; prior to alleged alienation of the property by mortgagor, same had been mortgaged with the Bank which continued to be in possession of the title document ever since---Appellants could not assert title over the mortgaged property ahead of and in preference to the Bank---Appellants could not claim to be bona fide purchasers in view of the fact that the original sale deed of property was tendered with the Bank much earlier to the alleged sale in favour of appellants---Description of property was rightly mentioned while executing memorandum of deposit of title deeds---Mis-description of khasra number in fard taliqa was of no significance and appellants were not labouring under any misapprehension regarding the identity of property---Banking court after issuance of sale certificate had become functus officio qua the mortgaged property---Appeal was dismissed.

Habib Bank Limited v. Syed Muhammad Haroon and 4 others 2009 CLD 140 and Citi Bank N.A. v. Muhammad Akbar and 3 others 2005 CLD 384 rel.

Ch. Muhammad Saeed Gujjar for Appellant.

Muhammad Younas for Respondents.

2019 C L D 526

[Lahore]

Before Abid Aziz Sheikh and Shahid Karim, JJ

Messrs ADAMJEE INSURANCE COMPANY LTD. through Authorized Representative---Appellant

Versus

ZIA ULLAH and another---Respondents

E.F.A. No. 178155 of 2018, decided on 25th February, 2019.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118(2) & 2(viii)---Payment of liquidated damages---Calculation of liquidated damages "at monthly rests at the rate five per cent higher than the prevailing base rate" per S. 118 of the Insurance Ordinance, 2000---Interpretation---Compounding of interest---"Monthly rests", application of---Scope---Compounding of interest was not part of law of Pakistan and law did not countenance compounding of interest as the same resulted in multiplication of liability---Construction that should be put on S. 118(2) of the Insurance Ordinance, 2000 was to calculate liquidated damages separately by adding monthly rests and each calculation of monthly rests was to be added to the next calculation on liquidated damages and would not be added so as to compound the effect of the interest---Base rate for calculation of liquidated damages must therefore be calculated for each monthly rest separately and applied accordingly----Insurance Tribunal must not determine liquidated damages by giving definition of "monthly rests" as a compounding effect.

Messrs State Life Insurance Corporation of Pakistan v. Mst. Anwar Gulzar 2012 CLD 1014 rel.

Imtiaz Rashid Siddiqui and Umer Kasuri for Appellant.

2019 C L D 546

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

Messrs TANVEER SPINNING AND WEAVING MILLS (PVT.) LIMITED---Appellant

Versus

MCB BANK LIMITED and others---Respondents

R.F.A. No. 556 of 2015, decided on 12th February, 2019.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), S. 11---Res judicata, principle of---Applicability---Plaintiff was aggrieved of order passed by Banking Court rejecting his plaint in suit while applying principle of Res Judicata---Defendant Bank had filed suit against plaintiff on basis of running finance facility whereas suit of plaintiff was based on cash finance, as such nature of both suits was different in toto---Claims of plaintiff were different from grounds taken by him against suit filed by defendant in petition for leave to defend---High Court set aside order passed by Banking Court being not justified to pass order on basis of principle of Res Judicata---High Court remanded matter to Banking Court for decision after recording of evidence---Appeal was allowed accordingly.

Modern Knitting and Woolen Spinners (Pvt.) Ltd. and another v. Manzur Ahmed Sheikh and 3 others 2007 CLC 1071 ref.

Muhammad Imran Malik for Appellant.

Hassan Nawaz Shah for Respondent No. 1.

2019 C L D 558

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

MUHAMMAD AMJAD AZIZ---Appellant

Versus

STANDARD CHARTERED BANK PAKISTAN---Respondent

R.F.A. No. 1845 of 2014, decided on 6th February, 2019.

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

----Ss. 3, 9, 10 & 22---Application for leave to defend---Details of accounts, non-mentioning of--- Dual rate of markup---Defendant was aggrieved of judgment and decree passed by Banking Court against him---Plea raised by defendant was that Banking Court did not take into consideration details of markup charged by Bank which was mentioned in application for leave to defend suit---Validity---Defendant did not bring to challenge any entry or statement of account of principal---Although it was stated that not only entire amount of principal was repaid but extra amount had also been paid but defendant did not furnish any details thereof as per requirements of section of Financial Institutions (Recovery of Finances) Ordinance, 2001---Record was not clear as to how Banking Court concluded that an amount of Rs. 1,059,052/- was paid by defendant when no such averment was made in application for leave to defend---Banking Court fell in error to such extent by deducting such amount from claim of Bank---High Court modified judgment and decree to extent of decretal amount together with costs of funds as contemplated by S. 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declared that modified decree be treated as interim decree and leave to defend suit was granted to defendant with regards to balance claim of Bank---High Court directed Banking Court to frame necessary issues with regard to markup component of claim of Bank and to record evidence of parties---Appeal was allowed accordingly.

Trycot Synthetic Fibre Company and another v. Habib Bank Limited 2012 CLD 1670 ref.

Haq Nawaz Chattha for Appellant.

2019 C L D 578

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

PAKISTAN MOBILE COMMUNICATION LIMITED---Appellant

Versus

ABRAR AHMED and 4 others---Respondents

Intra Court Appeal No. 258328 of 2018, decided on 20th February, 2019.

(a) Law Reforms Ordinance (XII of 1972)---

----S. 3---Limitation Act (IX of 1908), S. 5---Intra-Court appeal filed after limitation period---Condonation of delay---Certified copy of judgment received about two months after applying for the same---Perusal of record revealed that the impugned order was dated 13-09-2018 whereas the present intra-court appeal was filed on 19-12-2018, as such there was a delay of about two months and sixteen days in filing the said appeal---Record also depicted that the certified copy of the impugned order was applied on 19-10-2018 which was issued on 18-12-2018 and on the next day sharp i.e. 19-12-2018 the intra-court appeal was filed without wastage of even a single day---Stance of the appellant that though impugned order was dated 13-09-2018 yet the same was made available in the month of December, 2018 was strengthened from the last page of impugned order which reflected on left side the date, 7th December, 2018---Appellant in such circumstances could not be held responsible for the delay in filing the present Intra-court Appeal, therefore, the application for condonation of delay was accepted.

(b) Punjab Environmental Protection Base Transceiver Station (BTS) Regulations, 2012---

----Regln. 1---BTS Tower Policy, 2013 [issued by the Punjab Local Government & Community Development Department through Notification No.SOTAX (LG) 3-4/03 (P-111) dated 12.08.2013], Clause 4---[Punjab] Environmental Protection Act (XXXIV of 1997), S. 12---Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Reglns. 3 & 4 & Scheds. I & II---Punjab Environmental Protection Base Transceiver Station (BTS) Regulations, 2012 ('the 2012 Regulations') and 'BTS Tower Policy, 2013'---No retrospective effect---Base Transceiver Station (BTS) tower erected by a cellular company ('the appellant')---Requirement of obtaining NOC from Environment Protection Agency (EPA)---Admittedly the BTS Tower in question was installed by the apellant and functional since the year 2005---Regulations of 2012 were made by the Environment Protection Agency (EPA) in the year 2012 and the BTS Tower Policy in the year 2013 which were not applicable to the BTS tower of the appellant because they could not be of retrospective effect---In the BTS Tower Policy, 2013 it was mentioned in Clause-4 that for the already installed BTS Towers, the cellular company shall have to bring it in conformity with technical specification provided in the same and in such regard the appellant had already filed application to the concerned EPA---Installation of BTS tower did not fall in Schedule I read with Regulation 3 or Schedule II read with Regln. 4 of the Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, therefore, there was no requirement at the relevant time for the appellant to seek NOC from the EPA for installation of BTS tower---Appellant had now at present stage filed an application to the EPA along with all the requirements including fee etc. for NOC which was still pending---Single Judge had erred in law while holding that the appellant's tower lacked the requirements of the BTS Tower Policy, 2013---High Court directed that the EPA was to process the said application and decide the same within a period of two weeks positively; that in case of being aggrieved by the order likely to be passed by the EPA, either party, had the remedy of appeal under the [Punjab] Environmental Protection Act, 1997---Intra-court appeal was allowed accordingly.

Ahmad Amjad Meer for Appellant.

2019 C L D 595

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

UNITED BANK LIMITED---Appellant

Versus

MUHAMMAD MANZOOR and another---Respondents

Intra-Court Appeal No. 1298 of 2016, decided on 21st February, 2019.

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

----S. 41---Power of State Bank to give directions---Scope---Employee of a private bank---Pensionary benefits---State Bank could not decide the service matters between a Bank and its employees---State Bank could not decide the matters with respect to pensionary benefits of employees of the Banking companies.

Noor Badsha v. United Bank Limited through President and others 2015 PLC (C.S.) 468 and MCB Bank Limited through Authorized Representative v. State Bank of Pakistan through Governor and 2 others 2010 CLD 338 ref.

(b) Constitution of Pakistan---

----Art. 199(5)---'Person'---Scope---Constitutional petition filed against a privatized Bank---Maintainability---Privatized Bank in question was not a person under Art. 199(5) of the Constitution, therefore, the constitutional petition filed against it was not maintainable.

Abdul Wahab and others v. HBL and others 2013 SCMR 1383 ref.

Muhammad Mubashar Aslam for Appellant.

2019 C L D 626

[Lahore]

Before Ayesha A. Malik, J

LAHORE STOCK EXCHANGE---Appellant

Versus

DIRECTOR (ICW) SECP and others---Respondents

Commercial Appeal No. 3 of 2015, heard on 9th April, 2019.

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

----Ss. 22(c) & 34---Brokers and Agents Registration Rules, 2001, R. 7---Unified Trading System Regulations, Reglns. 6.1.1 & 6.1.2---Broker trading on stock exchange without renewal of registration---Penalty imposed on stock exchange---Securities and Exchange Commission of Pakistan ('the Commission') imposed a penalty of Rs. 1 million on (Lahore) Stock Exchange for allowing a broker to continue trading without renewal of its registration in violation of Reglns. 6.1.1 & 6.1.2 of the Unified Trading System Regulations ("Regulations")---Plea of Stock Exchange (appellant) that the broker in question forwarded its application for renewal of registration to the Stock Exchange who then forwarded it to the Commission; that the matter was delayed considerably by the Commission and in the meantime show cause notice was issued to Stock Exchange to show as to why penalty should not be imposed on it; that role of the Stock Exchange was that of a post office, as it was merely to forward the request of the broker for renewal of registration to the Commission, and in fact it was the responsibility of the Commission to renew the registration of the broker, that too within time; that in the event the Commission was unable to renew the registration in time, it must intimate to the Stock Exchange and the broker that the registration had not been renewed or it was still pending---Held, that Regln. 6.1.2 of the Regulations clearly provided that the Stock Exchange or the COMMISSION could suspend use of the terminal immediately if a member or broker did not meet the criteria given under Regln. 6.1.1 of the Regulations---Stock Exchange's contention that it was the responsibility of the Commission to suspend the operation of a member at its terminal was totally misplaced as the Regulations clearly placed this responsibility on Stock Exchange as well as on the Commission---Brokers and Agents Registration Rules, 2001 ('the Rules') provided that the application for renewal of registration was to be forwarded through the Stock Exchange, however the intent of such rule was to enable the Stock Exchange to monitor the eligibility of its broker---Stock Exchange could not exonerate itself from its fundamental responsibility to ensure that every broker was duly registered with the Commission and was operating under a valid registration certificate---Purpose of moving the renewal application through the Stock Exchange was so that the Stock Exchange became aware of the fact that a broker's registration certificate was due to expire within a specified period, hence it could pursue the matter to ensure that the registration certificate was renewed within time---Issue of whether there is a delay on the part of the Commission was totally irrelevant for the purposes of the Stock Exchange, as its primary responsibility as a frontline regulator was to ensure that only registered brokers operated through the Exchange on the Unified Trading System---Basic function of a Stock Exchange was to promote and protect all investors who operated through it for which registration of a broker was a vital requirement---Stock Exchange was found responsible for neglecting its functions and also for violating the Regulations against the interest of the investors, hence a penalty of Rs.1 million was appropriate---Appeal was dismissed in circumstances and the penalty imposed by the Commission was maintained.

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

----S. 22---Penalty for certain refusal or failure---Quantum---Quantum of penalty was based on the circumstances of each case such that it was appropriate and a proportionate amount of penalty, not exceeding the upper limit---Basic objective to impose penalty was to ensure compliance by creating an effective deterrence---In order for the deterrent to be effective it should be of an amount which hurt the offender---Amount of penalty reflected on the seriousness of the infringement, the duration of the infringement, the degree of harm caused, if any, whether actual or potential---Penalty would also reflect on whether the contravention was deliberate or reckless and whether any effort was made to prevent the wrong from continuing---Past history was also relevant along with any precedents on the issue---Penalty was imposed in each case depending on its facts and context and in proportion to the infringement and its impact.

Anwaar Hussain and Mehr Muhammad Iqbal for Appellant.

M. Usman Ghani Rashid Cheema for Respondents.

2019 C L D 651

[Lahore]

Before Ayesha A. Malik and Asim Hafeez, JJ

GULF COMMERCIAL BANK LIMITED---Appellant

Versus

CHAUDHRY CABLES (PVT.) LTD. and others---Respondents

F.A.O. No. 292 of 2007, heard on 4th March, 2019.

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

----Ss. 2(d)(iv) & 9(1)---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 2(f)(i) & 9---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery of finance---Return of plaint---Banking Court, jurisdiction of---Appellant Bank filed suit against respondents for non-payment/clearance of pending bills but the plaint was returned by Banking Court for lack of jurisdiction---Validity---No statement of account of respondent company was attached to show credit of amounts, pursuant to discounting/ negotiation---Mere showing details of drawee could not establish/prove factum of grant of financing by way of discounting/negotiation---Bank had not pleaded that discounting facility was allowed or extended to respondents--- Existence/grant of finance facility to respondents was conspicuous by its absence, which alone denuded Banking Court of any jurisdiction under the law---Bill discounted or purchased constituted finance which overt transaction was lacking in the case---No document was available on record to show that any finance facility, fund or non-fund based, was ever allowed or extended to respondent which disentitled the Bank from invoking jurisdiction under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and Financial Institutions (Recovery of Finances) Ordinance, 2001---No claim could be raised against customer merely on basis of execution of bills of exchange and/or alleged endorsement thereupon by way of acceptance for payment before Banking Court unless it was established that any finance was extended and default in performance of an obligation to repay was committed which essential ingredient was found missing in claim raised by Bank---High Court declined to interfere in order passed by Banking Court whereby plaint was ordered to be returned to be presented before court of competent jurisdiction in wake of lack of requisite jurisdiction of Banking Court to entertain and adjudicate upon claim of bank against respondent---Appeal was dismissed in circumstances.

Majid Ali Wajid for Appellant.

Dr. Muhammad Iftaza Awan for Respondent No.2.

2019 C L D 696

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

ZIA SHAHID WASEER---Appellant

Versus

BANK AL-HABIB and others---Respondents

E.F.A. No. 579 of 2015, decided on 7th February, 2019.

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

----Ss. 22 & 27---Sale certificate---Confirmation of sale---Setting aside of auction proceedings by Banking Court---Finality of order of Banking Court---Scope---Appellant was aggrieved of order of Banking Court whereby auction in favour of appellant was set aside---Validity---Banking Court having confirmed the sale in favour of appellant could not unilaterally set aside the auction proceedings particularly when no objection from any quarter was raised---Banking Court was precluded to set aside the auction proceedings by virtue of S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed and Banking Court was directed to issue sale certificate in favour of appellant.

Rana Waqas Latif for Appellant.

2019 C L D 707

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

Syed OMAR NAZAR SHAH---Petitioner

Versus

BANK OF PUNJAB and others---Respondents

W.P. No. 36365 of 2017, decided on 2nd April, 2018.

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

----Ss. 20 & 9---Suit for recovery---Application for leave to defend---Denial of customer as to availing of finance proceedings---Criminal proceedings under section 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001 for such denial---Scope---Petitioner impugned order of Banking Court whereby complaint of plaintiff Bank to initiate criminal proceedings against defendant on account of defendant's denial of availing finance facility was allowed---Contention of defendant, inter alia, was that it was entitled to raise its defence in the suit and said denial in his application for leave to defend did not constitute an offence under S. 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Suit of the plaintiff Bank was still pending at the stage of application for leave to defend, and Banking Court had yet to decide the same and had not yet considered plea of defendant with respect to denials made in defendant's application for leave to defend---In such circumstances, Banking Court could not have initiated proceedings under S. 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as the entire complaint of plaintiff Bank was presumptive---Question of whether finance was obtained by defendant or not, had not been conclusively adjudicated and if at present stage Banking Court proceeded with the complaint, it would prejudice the case of the defendant in the suit for recovery---Criminal complaint filed by plaintiff Bank was therefore misconceived and Banking Court could not have proceeded with the same---Impugned order was set aside---Constitutional petition was allowed, accordingly.

Shahid Ikram Siddiqui for Petitioner.

2019 C L D 729

[Lahore]

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

MUHAMMAD SHAHBAZ SHARIF---Petitioner

Versus

MEEZAN BANK LIMITED and others---Respondents

E.F.A. No. 928 of 2013, heard on 28th January, 2019.

Civil Procedure Code (V of 1908)---

----S. 51 & O. XXI, R. 37---Execution of decree---Arrest of judgment-debtor---Principle---Judgment-debtor was aggrieved of warrants of arrest issued against him by Executing Court to satisfy decree passed in favour of Bank---Validity---Judgment-debtor himself offered decree-holder Bank to sell his hypothecated two vehicles for satisfaction of remaining part of decree---Judgment-debtor was not given proper opportunity to defend or plead his case before Executing Court in response to notice under O. XXI, R. 37, C.P.C.---Executing Court instead of initiating proceedings of auction of hypothecated property of judgment-debtor by way of auction/sale resorted directly issue warrants of arrest of judgment-debtor and same was not justified---Tendency of adopting such coercive measures was deprecated by High Court---Passing such order against judgment-debtor without first proceeding for disposal of his movable or immovable property was against mandate of law and procedure on subject---High Court set aside warrants of arrest as Executing Court passed order in question against legislative intent and mandate of law---Appeal was allowed in circumstances.

Mirza Shahid Baig v. National Bank of Pakistan and 8 others 2002 CLD 623 rel.

Javaid Anwar Janjua for Petitioner.

Kashif Hussain for Respondents.

2019 C L D 741

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

Mian SHAHID NADEEM---Appellant

Versus

BANK ALFALAH and others---Respondents

E.F.A. No. 1521 of 2015, decided on 22nd January, 2019.

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

----S. 9---Civil Procedure Code (V of 1908), O. XXI, Rr. 66 & 90---Suit for recovery of loan amount---Auction of property of judgment debtor by the Banking Court---Objection petition, filing of---Requirements---Auction of property of judgment debtor was conducted whereafter objection petition was moved but same was dismissed---Validity---Notice under O. XXI, R. 66, C.P.C. was served upon the judgment debtor by the Banking Court---Judgment debtor filed objection petition with regard to evaluation report of reserve price mentioned in the said notice---Banking Court with the consent of the parties appointed evaluators to carry out evaluation and applicant was directed to deposit fee of the evaluator but he did not deposit the same---Banking Court fixed reserve price of the property and appointed a Court Auctioneer to conduct auction---Said order of Executing Court was never challenged which had attained finality---Court Auctioneer conducted auction of property and respondent was declared as highest bidder who deposited the bid price which was more than the reserve price---Petitioner could not be allowed to agitate the non-fulfilment of the requirements ordained by O. XXI, R. 66, C.P.C.---Objection petition moved by the judgment-debtor was not accompanied by the statutory deposit as contemplated by O. XXI, R. 90, C.P.C.---Applicant having also made mandatory deposit of 20% of the sum realized at the sale, appeal was dismissed.

Messrs Nice 'N' Easy (Pvt.) Limited and others v. Allied Bank of Pakistan 2014 SCMR 1662 and Zakaria Ghani and others v. Muhammad Ikhlaq Memon and others PLD 2016 SC 229 rel.

Syed Sajid Ali Bukhari for Appellant.

Asif Ismail for Respondent No.1.

2019 C L D 775

[Lahore]

Before Ayesha A. Malik and Asim Hafeez, JJ

NATIONAL BANK OF PAKISTAN through EVP---Appellant

Versus

ZIA UL HAQ NOON and others---Respondents

R.F.A. No. 1527 of 2015, heard on 13th March, 2019.

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

----Ss. 9 & 22---Contract Act (IX of 1872), S. 7---Qanun-e-Shahadat (10 of 1984), Art. 119---Procedure of Banking Court---Suit for recovery---Guarantor of finance facility---Discharge of guarantee---Acceptance of such discharge by Financial Institution/Bank---Burden of proof as to particular fact---Scope---Plaintiff Bank impugned order of Banking Court whereby defendant, who was guarantor to a finance facility availed by a company, was discharged of his obligation for repayment of amounts, inter alia, on ground of transfer of shareholding of defendant company and provision of additional securities to the plaintiff Bank---Contention of guarantor / defendant, inter alia, was that correspondence and proposals exchanged between parties showed that plaintiff Bank had accepted discharge of guarantee of said defendant---Validity---Proposal for discharge of guarantee would become a binding contract if acceptance of such proposal was absolute and unqualified under S. 7 of the Contract Act, 1872---Nothing, in the present case, showed that plaintiff Bank ever conveyed an absolute and unqualified acceptance of letters addressed and proposals exchanged---Doctrine of acceptance by silence merely for reason that additional properties were provided and accepted by the plaintiff Bank was not tenable---Guarantor defendant, in the present case, failed to establish absolute and unqualified acceptance or even acceptance by way of conduct---Facts regarding acceptance of discharge of defendant's guarantee on part of the plaintiff Bank and entitlement to discharge/release in lieu of any obligation, were relevant facts, which were required to be proved in terms of Art. 119 of Qanun-e-Shahadat, 1984---Impugned order to the extent of guarantor defendant was set aside by the High Court---Appeal was allowed, accordingly.

Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419; Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2006 SCMR 619; Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191; S. Sibtain Fazli v. (1) Star Film Distributors and (2) Muhammad Ali Khan PLD 1964 SC 337; Habib Bank Limited v. Hussain Corporation Ltd. 1994 MLD 2276 and National Bank of Pakistan v. Shogan Int. (Pvt.) Ltd. and others 2005 CLC 1207 distinguished.

Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189 rel.

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

----Ss. 9 & 2(d)---Contract Act (IX of 1872), S. 62---Procedure of Banking Court---Suit for recovery---Finance agreement---Novation, rescission and alteration of finance facility contract on account of change of shareholding of company / agreement between directors---Effect---Bilateral arrangement between in-coming and out-going directors, even if it showed an enforceable understanding, in the absence of creditor/Bank, would not be binding upon the said creditor/Bank.

Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189 rel.

Khalid Ishaq for Appellant.

Muhammad Javed Arshad for Respondents.

2019 C L D 824

[Lahore]

Before Muzamil Akhtar Shabir and Asim Hafeez, JJ

SAJJAD AHMAD---Appellant

Versus

HABIB BANK LIMITED and others---Respondents

F.A.O. No. 30971 of 2019, decided on 21st May, 2019.

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

----Ss. 12 & 9---Criminal Procedure Code (V of 1898), S. 476---Civil Procedure Code (V of 1908) S. 12(2)---Suit for recovery---Ex parte decree---Finality of ex parte decree extends to documents forming basis of judgment and decree of Banking Court---Application under S. 476, Cr.P.C. on account of alleged forgery of documents brought before Banking Court---Proceedings in case of certain offences affecting the administration of justice---Judgment debtor/Appellant's application for setting aside ex parte judgment and decree of Banking Court and initiating proceedings under S. 476, Cr.P.C. accordingly---Scope---Appellant had impugned the order of Banking Court whereby its application under S. 476, Cr.P.C. for initiation of action under Chapter XXII of the Cr.P.C. was dismissed---Contention of Appellant/judgment-debtor was that Banking Court was required to take cognizance of the procedure provided for in Cr.P.C. in view of purported forgery of documents committed by the Bank, which documents formed basis of judgment of Banking Court---Validity---Appellant's application for seeking setting aside of ex parte decree under S. 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was dismissed against which he filed no appeal and thus the decree had attained finality, which finality also extended to documents forming basis of judgment and decree of the Banking Court---Appellant could not now be allowed to make collateral attack to a conclusive judgment of Banking Court when his application under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001 read with S. 12(2), C.P.C. was dismissed---Appellant was therefore estopped from questioning legality of such documents and any determination thereof otherwise could not be made in terms of principle of res judicata---Application of the appellant under S. 476, Cr.P.C. was therefore not maintainable as nothing necessitated initiation of action under Chapter XXII of the Cr.P.C.---Appeal was dismissed, in circumstances.

Zafar Iqbal and another v. Asghar Ali and another 2006 MLD 1739; H. Munawar Ali v. Mst. Sarwar Bano 1989 MLD 4654; Muhammad Shafi v. Deputy Superintendent of Police (Malik Gul Nawaz) Narowal and 5 others PLD 1992 Lah. 178 and Abdul Wahab Khan v. Muhammad Nawaz and 7 others 2000 SCMR 1904 rel.

2019 C L D 840

[Lahore]

Before Ayesha A. Malikand Asim Hafeez, JJ

STANDARD CHARTERED BANK LIMITED---Appellant

Versus

NICE N EASY (PVT.) LIMITED and others---Respondents

E.F.A. No. 1049 of 2016, heard on 17th April, 2019.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66, 84, 85 & 90---Execution proceedings---Auction sale, confirmation of---Change of venue and time of auction---Effect---Substantial injury, proof of---Judgment debtors assailed auction proceedings on grounds that court auctioneers changed venue and time of auction proceedings on such objections, Executing Court set aside auction proceedings---Validity---Nothing was available on record to show any incidence of cartelization amongst bidders---Distress sales could not be compared with the sales where consumers thronged in mass numbers---Conduct of auction sales, at no point in time had judgment debtors endeavored or brought any willing buyer to offer price higher, than fetched at auction sale---Judgment debtor was present at site who refused to sign attendance sheet---Executing court erred in setting aside sale merely on ground that adding conditions of venue was an incurable material irregularity which declaration had been made without appreciating conditions under O. XXI, R. 90, C.P.C. for setting aside auction sale were missing---Unless any material irregularity coupled with substantial injury was shown to have been committed or caused to respondents, no auction sale could be set aside---Before any indulgence was shown it was imperative for judgment-debtor whose liability was being adjusted through sale of property under charge of Bank to make out plausible case to show/establish conduct of material irregularity and resultant substantial injury and such requisite condition precedent remained elusive---High Court set aside order passed by Executing Court of accepting objections and setting aside auction sale as same was illegal and without any basis, justification and without appreciating that no injury, let alone substantial, had been caused to judgment-debtors merely by adding conditions of venue and time of auction---Appeal was allowed in circumstances.

Muhammad Khalil v. Messrs Faisal M.B. Corporation and others 2019 SCMR 321; Afzal Maqsood Butt v. Banking Court No.2, Lahore and 8 others 2005 CLD 967; Fayaz Ali v. Dr. Ahmad Khan Hoti and others 2017 CLD 1158 and Muhammad Attiue v. Jami Limited and others PLD 2010 SC 993 distinguished.

Messrs Nice N Easy Fashion (Pvt.) Ltd and others v. Allied Bank of Pakistan and another 2014 CLD 1404; Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memo and 8 others 2016 CLD 480; Nisar Ahmad Afzal v. Muslim Commercial Bank Ltd, (Civil Petitions Nos.1141 and 1142 of 2016); Jaguar (Pvt.) Ltd. Faisalabad and another v. MCB Bank Ltd, Lahore and others (Civil Petition No.1449 of 2016); National Bank of Pakistan v. Messrs Simnwa Polypropylene (Pvt.) Ltd. through Chief Executive and 6 others 2016 CLD 812; Mumtaz-ud-Din Feroze v. Sheikh Iftikhar Adil and others 2009 CLD 594; Messrs S.M. Nisar and Company through Partner and 4 others v. Banking Court-III, Multan Camp at Sahiwal and 5 others, Mst. Noor Khatoon and others v. Messrs Habib Bank Ltd. and another 2013 CLD 702; Amanul Mulk v. Mian Ghafoor ur Rehman and others 1997 SCMR 1786 and PLD 1972 SC 337 ref.

Asher Elahi and Muhammad Adnan Kazmi for Appellant.

Waqar Mushtaq Ahmad for Respondents Nos. 1 to 3.

Hafeez ur Rehman Chaudhry for Respondent No.5.

2019 C L D 861

[Lahore]

Before Asim Hafeez, J

DEPILEX SMILEAGAIN FOUNDATION---Appellant

Versus

SECURITY AND EXCHANGE COMMISSION OF PAKISTAN and others---Respondents

Writ Petition No. 2162 of 2019, decided on 18th April, 2019.

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

----S. 7--- Securities and Exchange Commission (Commission)---Exercise of discretion---Scope---Exercise of discretion by Commission is guided/determined by facts and circumstances of case but has to be exercised in good faith, without any bias, prejudice or ulterior motives.

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

----Ss. 29 & 34---Companies Act (XIX of 2017), Ss. 256 & 257---Investigation into affairs of company, order of--- Procedural unfairness---Petitioner was aggrieved of authorization of investigation by Securities and Exchange Commission of Pakistan---Plea raised by petitioner was that procedural unfairness was adopted---Validity---No procedural or statutory defect existed in ordering of investigation under S. 29 of Securities and Exchange Commission of Pakistan Act, 1997---Even if there was some alleged procedural unfairness as claimed by petitioner, it would be inconsequential as action taken was merely a preliminary step to collect facts and information which otherwise constituted an exception to claim of procedural fairness---Circumstances existed to proceed the Commission in exercise of powers conferred under S. 29 of Securities and Exchange Commission of Pakistan Act, 1997 therefore, no prejudice was caused merely on ordering of investigation which exercise of power was in accord with mandate of S. 29 of Securities and Exchange Commission of Pakistan Act, 1997---High Court declined to exercise its jurisdiction under S. 34 of Securities and Exchange Commission of Pakistan Act, 1997 which was otherwise premature and not available to petitioner in absence of any order of the appellate Bench of the Commission---High Court declined to interfere in order of investigation as same did not suffer from any illegality, irrationality and procedural impropriety---Constitutional petition was dismissed in circumstances.

Messrs Kaloodi International (Pvt.) Ltd. and another v. Federation of Pakistan and others PLD 2001 Kar. 311; Service Industries Textiles Limited, Lahore v. Securities and Exchange Commission of Pakistan through Chairman, Blue Area, Islamabad and 4 others 2000 MLD 1880; Rohtas Industries Ltd. v. S. D. Agarwal and another AIR 1969 SC 707; (1) University of Dacca through its Vice-Chancellor and (2) The Registrar, University of Dacca v. Zakir Ahmed PLD 1965 SC 90; Mian Miraj Din and others v. Brothers Steel Mills and others 1996 CLC 516; Abdul Majeed Zafar and others v. Governor of the Punjab through Chief Secretary and others 2007 SCMR 330; M.D. The Bank of Punjab and another v. Syed Shahzad Hussain 2006 SCMR 1023; Messrs Dewan Salman Fiber Ltd. and others v. Government of N.W.F.P., through Secretary, Revenue Department, Peshawar and others PLD 2004 SC 441; Messrs Prime Chemicals through Member of Association of Person v. Government of Pakistan through Secretary Finance, Islamabad and 3 others 2004 PTD 1388; Ghulam Sarwar Zardari v. Piyar Ali alias Piyaro and another 2010 SCMR 624; The Murree Brewery Co. Ltd. v. Pakistan through The Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279; Muhammad Anis and others v. Abdul Haseeb and others PLD 1994 SC 539; Writ Petition No. 20088 of 2012; Attock Refinery Ltd. v. Executive Director Enforcement and Monitoring Division, SECP and another PLD 2010 SC 946; Raja Narayanlal Bansila v. Maneek Phiroz Mistry and another 1961 AIR 29; 1961 SCR (1) 417; Barium Chemicals Ltd. and another v. Company Law Board and others AIR 1967 SC 295 (V 54 C 59) and Diamond Industries Limited v. Appellate Bench of the Securities and Exchange Commission of Pakistan and others 2002 CLD 1714 distinguished.

Norwest Holst Ltd. v. Secretary of State for Trade (1978) 3 All ER 280; De Smith's Judicial Review (Sixth Edition); Fayed United Kingdom (1994) 18 E.H.R.R. 393 and Pergamon Press Ltd. Re. (1971) 41 Comp Cases 769 ref.

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

----Ss. 256 & 257---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 29---Investigation into affairs of company---Object and scope---Order of investigation is not an end by itself, it is only a means to find out full facts of acts complained---Investigation is nothing but an exploratory measure to be proved or disproved with reference to facts later on ascertained.

Muhammad Shoaib Rashid and Furqan Naveed for Appellant.

Azmat Hayat Khan Lodhi, Assistant Attorney General of Pakistan for Respondent No. 6.

Ahmad Perviz for Respondents Nos. 1 to 5.

2019 C L D 894

[Lahore]

Before Asim Hafeez, J

LAL DIN---Appellant

Versus

MUHAMMAD SALEEM (DECEASED) through L.Rs. and others---Respondents

R.F.A. No. 57 of 2010, heard on 13th February, 2019.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Qanun-e-Shahadat (10 of 1984), Arts. 119 & 129 Illus. (g)---Recovery of money on basis of promissory note---Appreciation of evidence---Withholding of evidence---Effect---Defendant assailed judgment and decree passed by Trial Court to pay due amount to plaintiff---Validity---Payment of consideration and execution of promissory note, a fundamental component of transaction, were statedly carried out at office and in presence of an advocate whose evidence was crucial---Advocate was not produced to testify as to which withholding evidence suggested adverse inference in terms of illustration (g) of Art. 129 of Qanun-e-Shahadat, 1984---No evidence was produced by plaintiff to prove 'long standing business relation' and purpose of loan, alleged to have been received for purchase of land, which constituted relevant fact, forming part of transaction as alleged in plaint--- Burden to prove such fact was on plaintiff under Art. 119 of Qanun-e-Shahadat, 1984---High Court directed Trial Court to refer matter to Handwriting Expert with admitted and specimen thumb impression for seeking opinion whether promissory note bore thumb impression of defendant set aside judgment and decree passed by Trial Court and remanded matter with a direction---High Court set aside judgment and decree and remanded matter to Trial Court for decision afresh---Appeal was allowed accordingly.

Asif Ali and 6 others v. Saeed Muhammad 2009 CLD 1301; Malik Muhammad Akram v. Khuda Bakhsh 2000 CLC 759; Nasir Ahmad v. Pakland Cement Limited 2001 CLC 1156; Muhammad Aziaur Rehman v. Liaqat Ali 2007 SCMR 1820 and Khan Muhammad Yusuf Khan Khattak v. S.M. Ayub and 2 others PLD 1973 SC 160 ref.

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

----Art. 84---Signatures and thumb impression, comparison of---Responsibility of court---Extent---Exercise to undertake comparison of thumb impression is more convoluted and complex when compared to comparison of signature/writing---Though permissible but such exercise of power and assumption of responsibility by Presiding Officer is termed undesirable.

Rehmat Ali Ismailia v. Khalid Mehmood 2004 SCMR 361 rel.

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

----Art. 59---Handwriting Expert, opinion of---Scope---Opinion of Handwriting Expert, though not having binding value in terms of Art.59 of Qanun-e-Shahadat, 1984 would certainly aid and assist court in determining genuineness or otherwise thumb impression on disputed documents and adjudication of matter.

Mst. Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 SCMR 264 rel.

Azeem ul Haq Pirzada for Appellant.

Tariq Muhammad Iqbal Chaudhry for Respondent.

2019 C L D 912

[Lahore]

Before Ayesha A. Malik and Asim Hafeez, JJ

Rana ADNAN ALI---Appellant

Versus

NATIONAL BANK OF PAKISTAN---Respondent

R.F.A. No. 204 of 2014, heard on 11th March, 2019.

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

----Ss. 9 & 22---Limitation Act (IX of 1908), Arts. 80, 115 & 132---Appeal---Limitation---Finance facility, recovery of---Appellant assailed judgment and decree passed by Banking Court in favour of respondent Bank for recovery of financial facility to appellant on grounds that suit filed by respondent Bank was time barred---Validity---Suit of respondent Bank against appellant was within limitation in terms of Arts. 80 & 115 of Limitation Act, 1908---High Court declined to adjudge sustainability of suit under Art. 132 of Limitation Act, 1908---No information was provided to confirm as to whether respondent Bank or other legal heirs of deceased had filed appeals against judgment and decree---High Court maintained judgment and decree passed by Banking Court as no substantial question of law and fact had been raised to make out case for grant of leave to defend and no case was made out to set aside judgment and decree---High Court, in exercise of appellate jurisdiction, declared that suit filed by respondent Bank was within period of limitation---Appeal was dismissed in circumstances.

Muhammad Sulleman v. Habib Bank Limited 1987 MLD 2757 and Messrs International Business Centre through Managing Director and another v. Habib Credit and Exchange Bank Ltd. 2004 CLD 1552 ref.

Khawar Ikram Bhatti for Appellant.

Nemo for Respondent.

2019 C L D 946

[Lahore]

Before Jawad Hassan, J

MAQBOOL AHMAD and others---Petitioners

Versus

ENVIRONMENT PROTECTION AGENCY and others---Respondents

Writ Petition No. 5119 of 2019, decided on 8th February, 2019.

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

----S. 22---Punjab Mining Concession Rules, 2002, R. 234---Appeal to Environmental Tribunal---Petitioners were aggrieved of letter issued by Environment Protection Department and work order issued by department of Mines and Minerals---Plea of department was that alternate remedy of appeal was available in view of S. 22, Pakistan Environmental Protection Act, 1997 and R. 234 of Punjab Mining Concession Rules, 2002---Validity---Specific remedy of appeal against the impugned letter and work order was available to petitioners which they had not availed rather filed the constitutional petition before the High Court---Reasons advanced by petitioners for not filing the appeals were not persuasive as nobody could be allowed to bypass any provision of law and the procedure laid down for a particular purpose---Constitutional petition was disposed of with direction to approach the relevant forum---Order accordingly.

Dr. Imran Khattak and another v. Ms. Sofia Waqar Khattak, PSO to Chief Justice and another 2014 SCMR 122 rel.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Maintainability--- Alternate remedy---Maintainability---Where alternate remedy was available constitutional petition was not maintainable.

Muhammad Abbasi v. SHO Bhara Kahu and 7 others PLD 2010 SC 969 rel.

Muhammad Nadeem Mehar for Petitioners.

Saeed Anjum, Kanwal Tariq Butt for Respondents.

Ms. Nabila Khalid, A.D. Legal EPA, M. Asraf Inspector Choniyan, EPA, Muhammad Hafeez, Director General, Mines and Mineral, Umar Farooq, Deputy Director, and M. Rashad Bhatti, Law Officer.

2019 C L D 996

[Lahore]

Before Shams Mehmood Mirza and Jawad Hassan, JJ

MUSLIM COMMERCIAL BANK LIMITED---Appellant

Versus

ROBERT FRANCIS---Respondent

R.F.A. No. 1557 of 2014, decided on 30th January, 2019.

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

----S. 3---Limitation Act (IX of 1908), Art. 57---Suit for recovery of amount due under credit card facility---Limitation---Scope---Appellant/Bank filed suit for recovery of amount due under a credit card facility---Banking Court dismissed the suit holding the same to be barred by limitation---Plea of appellant/Bank was that period of limitation for filing of the suit on credit card facility was not provided in the First Schedule to the Limitation Act, 1908 and was thus, governed by the residuary Art. 120 which provided a period of six years---Validity---Article 57 of the Limitation Act, 1908 provided a period of three years "for money payable for money lent" starting from when the loan was made---Article 57 clearly covered the suit for recovery of amount filed by the appellant/Bank---Period of three years was available to the appellant/Bank from the date when last repayment was received by it---Bank having not filed the suit within a period of three years, was rightly held to be barred by limitation by the Banking Court--- Appeal was dismissed accordingly.

Muhammad Suleman v. Habib Bank Limited 1987 MLD 2757 fol.

Ashar Elahi and M. Adnan Kazmi for Appellant.

Respondent was proceeded against ex parte vide order dated 7.5.2015.

2019 C L D 1004

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza, J

SONERI BANK LIMITED through Principle Officer/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 12th March, 2019.

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

----Ss. 9, 7(2) & 12---Procedure of Banking Court---Suit for recovery---Service of notices/summons on the defendant---Effective service in terms of S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, service through any prescribed modes of services was to be deemed valid service.

Messrs Ahmed Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 and Messrs Qureshi Salt and Spices Industries Khushab and another v. Muslim Commercial Bank Limited 1999 SCMR 2253 rel.

Muhammad Suleman Bhatti for Plaintiff.

Muhammad Saleem Iqbal for Defendants.

2019 C L D 1010

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Asim Hafeez, JJ

Messrs BISMILLAH COTTON FACTORY through Proprietor and others---Petitioners

Versus

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

R.F.A. No. 204 of 2006, decided on 7th February, 2019.

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

----Ss. 9 & 24---Guardians and Wards Act (VIII of 1890), S. 7---Recovery of Bank loan---Property of minors---Suit filed by Bank was decreed against defendants by Banking Court---Plea raised by defendants was that charge of mortgage could not have been created upon properties by Bank as same were in name of minors---Validity---Permission/sanction was obtained from Guardian Court and restraint incorporated in Guardianship Certificate was not applied to mortgage under reference in wake of sanction/permission in writing by Guardian Court---No objection was ever raised by defendants to order issued by Guardian Court and mortgage deed regarding property in question was executed after order issued by Guardian Court---Creation of mortgage charge was legal and was enforceable against defendants in terms of judgment and decree passed by Banking Court---High Court declined to interfere as no illegality or defect was pointed out in judgment passed by Banking Court---Appeal was dismissed in circumstances.

Muhammad Suleman Bhatti for Petitioners.

Sohail Ahmad Janjua for Bank of Punjab.

Sardar Riaz Karim for Respondent No.2.

M. Yafis Naveed Hashmi for Respondents Nos. 2, 2(i) to (v).

Mian Ahmad Mehmood for the Applicant.

Date of hearing: 29th January, 2019.

2019 C L D 1026

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza and Shahid Karim, JJ

FAHAD SHAH NAWAZ KHAN KHAKWANI and 2 others---Appellants

Versus

SONERI BANK LIMITED through Branch Manager---Respondent

R.F.A. No. 71 of 2016, decided on 4th March, 2019.

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

----Ss. 10, 9 & 22---Suit for recovery of money---Adjudication of application for leave to defend---Mandatory requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant impugned rejection of application for leave to defend, on the ground that he had in fact repaid the amount (facility) for the first year and had not sought renewal of the same---Validity---Defendant had executed documents in respect of renewal of facility and in its application for leave to defend, had not mentioned the amount of repayment of facility and dates thereof and provided no proof for such repayments---Such failure on part of defendant would attract penal consequences for rejection his application for leave to defend---No illegality existed in impugned order---Appeal was dismissed, in circumstances.

Appollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337 rel.

Abdul Majeed Malik for Appellants.

Muhammad Saleem Iqbal for Respondent.

2019 C L D 1056

[Lahore (Multan Bench)]

Before Shahid Bilal Hassan and Faisal Zaman Khan, JJ

FATIMA ENTERPRISES LIMITED through Chief Executive/Authorized Signatory

and 4 others---Appellants

Versus

ALLIED BANK LIMITED through Branch Manager---Respondent

R.F.A. No. 146 of 2017, decided on 27th March, 2019.

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

----S. 22---Limitation Act (IX of 1908), Ss. 3 & 5---Appeal under S. 22, Financial Institutions (Recovery of Finances) Ordinance, 2001---Limitation---Condonation of delay---Applicability of S. 5 of the Limitation Act, 1908 to appeal filed under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Any appeal filed under a particular law would only be entertained beyond period of limitation and delay condoned, if S. 5 of the Limitation Act, 1908 was made applicable through an enactment otherwise, S. 3 of the Limitation Act, 1908 would become applicable and such an appeal would be dismissed---While Limitation Act, 1908 had been made applicable to proceedings before Banking Court, however the same had not been made applicable to appeals filed under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and therefore, there existed no provision under the Limitation Act, 1908 whereby delay in such an appeal would be condoned---Period of Limitation prescribed under the Financial Institutions (Recovery of Finances) Ordinance, 2001 would prevail and any appeal preferred beyond limitation would not be entertained by court and delay in the same could not be condoned.

(b) Limitation---

----Principles---Condonation of delay---Scope---Delay of each and every day which was caused in availing a remedy was to be explained and even a void order had to be assailed within the period of limitation prescribed under the law.

Asghar Leghari for Appellants.

Muhammad Saleem Iqbal for Respondent-Bank.

2019 C L D 1082

[Lahore]

Before Ayesha A. Malik and Shahid Jamil Khan, JJ

ORIENT POWER COMPANY (PRIVATE) LIMITED---Appellant

Versus

SUI NORTHERN GAS PIPELINES LIMITED through Managing Director, Lahore---Respondent

I.C.A. No.210640 of 2018, decided on 1st August, 2019.

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

----Ss. 3, 2(d) & 4---Arbitration Act (X of 1940), Ss.14, 30 & 33---Enforcement of foreign arbitral award---Exclusive jurisdiction of High Court under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Ouster to jurisdiction of Arbitration Act, 1940 by Recognition and Enforcement (Arbitration Agreement and Foreign Arbitral Awards) Act, 2011---Scope---Question before the High Court was whether there existed any concurrent jurisdiction between High Court under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 and the civil court under the Arbitration Act, 1940; on enforcement of a foreign arbitration award---Held, that allowing a party to seek enforcement of a foreign arbitral award before High Court under Recognition and Enforcement (Arbitration Agreements and Foreign Arbi tral Awards) Act, 2011 while at the same time to allow such parties remedy before civil court to enforce the same award under Arbitration Act, 1940 was totally impractical---High Court held further that per S.3 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, there was no doubt that High Court had exclusive jurisdiction to recognize and enforce foreign arbitral awards.

Taisei Corporation v. A.M. Construction Company (Pvt) Ltd. PLD 2012 Lah. 455 distinguished.

Hitachi Limited and another v. Rupali Polyester and others 1998 SCMR 1618; Taisei Corporation v. A.M. Construction Company (Pvt) Ltd. 2018 MLD 2058; G.M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore and 3 others PLD 1970 Lah. 184), Nan Fung Textiles Ltd. v. Sadiq Traders Ltd. PLD 1982 Kar. 619 and Marines Limited v. Aegus Shipping Co. Ltd and 4 others 1987 CLC 1299 ref.

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

----Ss. 4, 6 & 7---Enforcement of foreign arbitral award---Commercial contracts---Gas Supply Agreement ("GSA")---Arbitration Clause of the GSA---Separate Payment Agreement between the parties to the GSA---Applicability of Arbitration clause of the GSA on the Payment Agreement---Scope---Question before the High Court was whether an Arbitrator appointed under a Gas Supply Agreement between the parties, could also adjudicate/arbitrate and subsequently issue an award on matters arising on a separate Payment Agreement between the said parties---Held, that in the present case, perusal of agreements revealed that the settlement recorded in the Payment Agreement was part and parcel of the obligations under the Supply Agreement and obligation to pay arose out of the Supply Agreement and not the Payment Agreement was which was entered into essentially to facilitate the parties---Fact that Payment Agreement did not contain an arbitration clause or the fact that the same did not make specific reference to arbitration clause in the Supply Agreement; did not mean that Arbitrator under the Supply Agreement lacked jurisdiction on issues under the Payment Agreement as the said Payment Agreement was not an independent contract outside the Supply Agreement and the same was an agreement to make payment pursuant to the obligations under the Supply Agreement on account of one party's default---High Court held that dispute resolution mechanism under the Supply Agreement was applicable to the Payment Agreement and that Arbitrator under the Supply Agreement was well within jurisdiction to make determination in terms thereof.

Messrs MacDonald Layton & Company Limited v. Messrs Association Electrical Enterprises Limited and another PLD 1982 Kar. 786; Syed Arshad Ali v. Sarwat Ali Abbasi 1988 CLC 1350 and Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 57 ref.

(c) Contract---

----Contractual terms--- Commercial contracts--- Gas Supply Agreement---"Take or pay", clause---Meaning, rationale and scope---Take or pay clause was a common term in gas supply agreements which gave buyer an option to take supply of gas or else pay for it but defer taking of gas supply---Rationale behind said clause was to allocate risk over long term contracts as it acted as a risk-sharing mechanism between supplier and buyer where buyer sought stability in supply and some flexibility in prices and seller sought assurance for guaranteed income and the same also provided comfort to investors of natural gas projects that their investments were secure over duration of a contract, as risks were divided between parties and not borne by any one party---Essential feature of "take or pay" clause was the right to take "make up gas" and buyer had the right to take such gas in the succeeding year or any defined period and not at time when payment was due---Take or pay clause was activated when the buyer did not take delivery of the agreed quantity of gas but had paid for it.

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

----S. 74---Compensation for breach of contract where penalty stipulated for---Commercial contracts---Gas Supply Agreement---"Take or pay" clause, nature of---Question before High Court was whether a "take or pay" clause in a gas supply agreement was enforceable as a penalty clause in terms of S.74 of the Contract Act, 1872---Held, that due to a "take or pay clause"; a breach could not be triggered on account of failure to take supply under a Gas Supply Agreement as a buyer under such an agreement had right to exercise option to take gas or invoke the "take or pay" clause---Exercise of either option was valid under a Gas Supply Agreement containing a "take or pay" clause, therefore the same would not constitute a breach thereof---"Take or pay" payment under such an agreement was not due because of a breach or default rather it flowed from a contracting party's valid choice to invoke the right to invoke the take or pay clause---High Court held that "take or pay" clause being a common provision in commercial contracts, especially gas purchase agreements, was valid and enforceable and could not be considered as a penalty provision and did not offend S. 74 of the Contract Act, 1872.

Province of West Pakistan v. Messrs Mistri Patel & Co. and another PLD 1969 SC 80; Syed Sibte Raza and another v. Habib Bank Ltd. PLD 1971 SC 743; Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596; The Bank of Punjab v. Dewan Farooque Motors Limited 2015 CLD 1756 and Atlas Cables (Pvt.) Limited v. Islamabad Electric Supply Company Limited and another 2016 CLC 1833 ref.

Port of Tilbury (London) Ltd. v. Store Enso Transport and Distribution Ltd. (2009) EWCA Civ 16; M&J Polymers Ltd. Imerys Minerals Ltd. (2008) EWHC 344 (Comm); Cavendish Square Holding BV v. Talat EL Makdessi 2016 SCMR 296; Philips Hong Kong Ltd. v. Attoney General of Hong Kong (1993) 61 BLR 41; Prenalta Corporation v. Colorado Interstate Gas Company 944 F.2d 677 (199); Universal Resources Corporation v. Panhandle Eastern Piple Line Company 813 F.2d 77 (1997); Miraka Limited v. Milk New Zealand (Shanghai) Co. Limited [2017] NZHC 2163 and Churchill Falls (Labrador) Corporation Limited v. Hydro Quebec 2019 SCMR 454 rel.

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

----Ss. 7, 6 , 3 & Article V of Sched.---United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York on I0th June, 1958 (the "New York Convention"), Art. V(2)(b)---Refusal to recognition or enforcement of an award contrary to the public policy of a Contracting State under the New York Convention---Meaning and scope of term "public policy"---Interpretation of Art.V(2)(b) of the New York Convention---Non-interference or pro-enforcement policy of the New York Convention---Construction of the "public policy exception" to enforcement of foreign arbitral awards under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Scope---Non-interference or pro-enforcement policy was in itself a policy of Contracting States which was not easily persuaded by public policy exception argument---Defining public policy under Art. (V)(2)(b) of the New York Convention was prerogative of each of Contracting State and was based on the public policy of a State where enforcement was sought---Application of public policy exception was restrictive and limited to exceptional circumstances that affected most fundamental values of a State---Public policy exception had been kept fluid and adaptive and could be invoked in cases of patent illegality and allowed a Contracting State to safeguard its core values and fundamental notions of morality and justice which may change over time---Public policy exception acted as a safeguard of fundamental notions of morality and justice, such that enforcement of a foreign award may offend these fundamentals---Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 encouraged parties to an alternate dispute resolution mechanism for quicker and less costly resolution of disputes and made foreign arbitral award binding on the parties and prima facie as of right, called for recognition and enforcement of foreign arbitral awards---Public policy exception should not therefore become a backdoor to review the merits of a foreign arbitral award or to create grounds which were not available under Art.V of the New York Convention as same would negate obligation to recognize and enforce foreign arbitral awards and such interference would essentially nullify the need for arbitration clauses as parties would be encouraged to challenge foreign awards on the public policy ground knowing that there is room to have the Court set aside the award.

Arbitration and Public Policy in Hong Kong; The Court and the World (2015); International Arbitration: The Coming of a New Age for Asia (and Elsewhere) (2012); Oil and Natural Gas Corporation Ltd. v. Saw Piples Ltd. (2003) 5 SCC 705; Oil and Natural Gas Corporation Ltd. v. Western Geco International Limited (2014) 9 SCC 263; UNCITRAL Guide; Nan Fung Textiles Ltd. v. Sadiq Traders Ltd. PLD 1982 Kar. 619; Haji Abdul Karim and others v. Sh. Ali Muhammad and others PLD 1959 SC 167; Maulana Abdul Haque Baloch and others v. Government of Balochistan through Secretary Industries and Mineral Development and others PLD 2013 SC 641; Shri Lal Mahal Ltd. v. Progetto Granto Spa (2014) 2 SCC 433 at 449 and Phulchand Exports Ltd. v. O.O.O. Patriot (2011) 10 SCC 300 ref.

Parsons and Whittemore Overseas Co. Inc. v. Societe Generals de I'Industrie du Papier PAKTA and Bank of Americal (508 F.2d 969, 974 (2d Cir. 1974); Polytek Engineering Co.Ltd. v. Hebei Import and Export Corp., (23 Y.B. COMM. ARB 666, 666-84); Deutsche Schachtbau-und Tiefbohrgesellschaft m.b.H. v. Ras Ali Khaimah National Oil Co., Shell International Petroleum Co. Ltd. Court of Appeal, Not indicated, 24 March 1987 (13 Y.B. COMM.ARB. 522, 534-35 (1988); Limited v. Nigerian Nat'l Petroleum Corp., (31 YB COMM. Arb. 853, 856); Allsop Automatic Inc. v. Tecnoski snc, Corte di Appello, 22 Y.B.COMM.ARB, 725, 725-26; Ansell S.A. v. OOO Med Bus, Serv., Ruling No.VAS-8786/10, at 2 (2010) and Sultan Textile Mills (Karachi) Ltd. Karachi v. Muhammad Yousuf Shamsi PLD 1972 Kar. 226 rel.

Salman Akram Raja, Faisal Islam, Umer Akram Chaudhary, Ahsan Mahmood, Usman Ali Bhoon, Majid Jehangir, Mian Ahmad Hammad, Shabbir Hussain and Mehrunissa Sajjad for Appellant.

Khawaja Ahmad Hosain, Chaudhry Muhammad Usman, Ms. Faryal Nazir, Zaheer Cheema, Minaam Karim along with Imran Javed, Senior Law Officer in the Office of SNGPL for Respondent.

2019 C L D 1216

[Lahore]

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

UNIVERSAL INSURANCE COMPANY LIMITED---Appellant

Versus

HAMAYUN KHAN---Respondent

Insurance Appeal No. 17353 of 2017, decided on 16th July, 2019.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Insurance claim, settlement of---Payment of liquidated damages on late settlement of claim---Scope---Insurance company impugned order of Insurance Tribunal whereby application of claimant was allowed and he was held entitled to recover loss / damage on account of accident of a truck containing insured container---Contention of Insurance Company, inter alia, was that quantum of damages was incorrectly arrived at by the Insurance Tribunal in the impugned order---Validity---On basis of admitted insurance policy and appointment of surveyor by the Insurance Company, which survey confirmed loss to claimant, there existed no doubt that claimant was entitled to receive at least amount assessed by the surveyor which was payable without any delay---Claimant was also entitled to liquidated damages at five percent higher to the base rate from date of loss till realization in terms of S. 118(2) of the Insurance Ordinance, 2000---High Court observed that findings of the Insurance Tribunal vis-a-vis the quantum of damages were correct and had to be upheld---Appeal was dismissed, in circumstances.

Barrister Nudra Abdul Majeed for Appellant.

2019 C L D 1236

[Lahore]

Before Amin-ud-Din Khan, J

UMAIR SALEEM---Appellant

Versus

IMTIAZ ARSHAD---Respondent

F.A.O. No. 210161 of 2018, heard on 8th April, 2019.

Civil Procedure Code (V of 1908)---

----O. XXXIX, Rr. 1 & 2---Trade Marks Ordinance (XIX of 2001), Ss. 21, 40 & 42---Infringement of registered trade mark---Registration subject to disclaimer---Scope---Appellant assailed order of Intellectual Property Tribunal whereby it had granted temporary injunction and had restrained the appellant from using the trade mark concerned---Validity---Respondent had got his trade mark registered under Class 29 that too with disclaimer---With regard to registration of Class 43 applications of both the parties were in process---Appellant could not be restrained from using the mark which pertained to services for providing food and drinks---Order passed by Intellectual Property Tribunal was not sustainable under the law---Appeal was allowed and the application for grant of temporary injunction was dismissed.

Muhammad Ashraf alias Makkhan v. Muhammad Akram 2016 MLD 389 rel.

Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Pioneer Cement Limited through Company Secretary v. Fecto Cement Limited through Chief Executive Officer and 3 others PLD 2013 Lah. 110; Messrs Hilal Confectionary (Pvt.) Ltd. v. Messrs Naveed Enterprises and another 2018 CLD 1 and Ghulam Mujtaba Paracha v. Muhammad Saleem 2010 CLD 311 distinguished.

Pir Muhammad Masood Chishti, assisted by Barjees Bhatti, Sheraz Khalid and Qamar Hayyat Bhutta for Appellant.

Zubda-tu-Hassan assisted by Khalil Haider for Respondent.

2019 C L D 1254

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Asim Hafeez, JJ

ABDUL SATTAR---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED through Manager/Attorney and 2 others---Respondents

R.F.A. No. 107 of 2017, heard on 24th January, 2019.

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

----Ss.9, 10 & 22---Qanun-e-Shahadat (10 of 1984), Art. 84---Appeal---Suit for recovery of finance---Leave to defend was allowed---Comparison of signatures---Procedure---Bank filed suit for recovery of finance but defendant denied execution of any mortgage deed by him---Banking Court refused leave to defend suit and decreed same in favour of Bank---Validity---Banking Court proceeded to compare signatures of defendants on disputed documents with identity card and petition for leave to defend and such course was available to court under Art. 84 of Qanun-e-Shahadat, 1984---Comparison of signatures could be made with original documents but original documents disputed by defendant were neither produced nor ordered to be produced---Defendant could not be non-suited merely for reason that no effort was made to seek comparison of signatures from Handwriting Expert---Such exercise, if at all intended, could be undertaken once leave to defend was allowed and only then an interlocutory application could be filed---Banking Court had discretion to seek verification of signatures by procuring report of Handwriting Expert for opinion upon grant of leave to defend if it had considered that substantial question of law and fact was raised---Eligibility of questions of law and fact under S. 10(9) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was qualified by enunciating that all such questions of law and fact which required evidence had entitled defendant to grant of leave to defend---High Court set aside judgment and decree passed by Banking Court and unconditional leave to defend was granted---Appeal was allowed accordingly. [pp. 1258, 1259] A & B

Rana Manoon Rasheed v. Kokab Norrani Okarvi and 4 others PLD 1999 Kar. 257 and Mst. Akthar Begum v. Muslim Commercial Bank Ltd. 2001 SCMR 264 rel.

Muhammad Suleman Bhatti for Appellant.

Mughees Aslam Malik for Respondents.

2019 C L D 505

[Peshawar (Bannu Bench)]

Before Muhammad Nasir Mahfooz, J

RASHID AHMAD---Appellant

Versus

Mst. KHURSHEED BIBI and others---Respondents

C.R. No. 85-B of 2014, decided on 28th January, 2019.

Partnership Act (IX of 1932)---

----Ss. 9, 35 & 19---Partnership---Suit for rendition of accounts---Burden of proof---Existence of partnership---Scope---In order to apply the enabling provisions of the Partnership Act, 1932 in a suit for rendition of accounts, it was essential for plaintiff to prove that a partnership firm existed and such firm was engaged in any trade or business or had gained profit or incurred loss---Onus to prove such facts lay on the plaintiff in order to prove that the firm was practically performing business.

Zafar Iqbal and Tariq Qureshi for Appellant.

Umer Farooq and Inamullah Khan Marwat for Respondents.

Date of hearing: 28th January, 2019.

2019 C L D 693

[Peshawar (Bannu Bench)]

Before Muhammad Nasir Mahfooz and Shakeel Ahmad, JJ

ROIDAR ALI KHAN---Appellant

Versus

NATIONAL BANK OF PAKISTAN JADED ABADI BRANCH BANNU through Manager---Respondent

F.A.B. No. 3-B of 2015, decided on 23rd January, 2019.

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

----Ss. 10, 9 & 22---Suit for recovery of amount---Adjudication of application for leave to defend---Defendant impugned rejection of application for leave to defend by Banking Court, on the ground that documents pertaining to alleged facility obtained by defendant were forged and he had availed no such facility---Validity---Defendant in its application for leave to defend suit had not disclosed any plausible defence and only stated stereotypical and vague objections---Defendant did not take plea of alleged forged documents in his application for leave to defend, and the same was also not urged during arguments before Banking Court, and therefore, said plea could not be allowed at the appellate stage---No illegality existed in the impugned order---Appeal was dismissed, in circumstances.

Umar Khan and Muhammad Anwar Khan Mamash Khel for Appellant.

Ihsanul Haq Malik for Respondent.

2019 C L D 80

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

Haji MUHAMMAD ISMAIL PROPRIETOR OF MUHAMMAD ISMAIL CONSTRUCTION COMPANY---Appellant

Versus

DIRECTOR GENERAL EPA and others---Respondents

Appeal No. 55 of 2018, decided on 10th April, 2018.

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

----Ss. 11, 12, 16 & 17---Failure to control excessive black smoke and fly ash and failure to do effective arrangement for disposal of slug and other solid and liquid waste---Sealing of the unit of the Company---Company had installed an Asphalt Plant---Environmental Protection Order (EPO) was issued with the direction; that excessive black smoke and fly ash should be controlled by unit and that effective arrangements be made for safe disposal of sludge and other solid and liquid waste; otherwise stop pollution causing activities on site---Validity---Smoke density of chimney was observed for one hour duration, but inspite of being asked several times, management was reluctant to operate the unit on full capacity---Plant of the company was established in year 2010, without approval---Assistant Director (Environment) asked the management to observe S. 12 of Pakistan Environmental Protection Act, 1997, but no measures were ever taken to mitigate the environmental issue though Management could have adopted best modern available technology---Environmental Protection Authority had the power to seal the unit---Section 16 of the Pakistan Environmental Protection Act, 1997, was based on the precautionary principle, which required the relevant agency to anticipate the danger and take immediate steps to prevent harm or danger to the environment---Precautionary principle, was a tool for ensuring sustainable development---Having found no illegality in the impugned order, appeal was dismissed.

2014 CLC 1151; PLD 1971 SC 550; PLD 2001 SC(AJ&K) 18; Ms. Imrana Tiwana's case 2015 CLD 983 and Muhammad Ayaz v. Government of Punjab and others Writ Petition No. 1193 of 2017 ref.

Rana Shakeel for Appellant.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

2019 C L D 137

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

DIRECTOR GENERAL EPA and others---Complainants

Versus

Messrs HASSAN ICE FACTORY through Proprietor---Accused/Respondent

Complaint No. 73 of 2017, decided on 24th May, 2018.

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

----Ss. 2(1), 6(r), 11, 16 & 17---Leakage of ammonia gas and usage of untreated water---Inspector, District Office (Environment), inspected the unit, an ice factory, found the condition of unit unsatisfactory; leakage of ammonia gas and water being used was untreated---Inspector observed that said factors were causing adverse environmental impact, which could damage the health of the consumers---After giving notice to the unit, Environmental Protection Order (EPO) was issued with allegations that no water purification system had been installed; that no mitigation measures had been taken to control and detect ammonia leakage and waste water; that clean drinking water was not being used for ice making; that sanitary conditions were not satisfactory and that machinery and pipes were rusted---Management of the unit was directed to remove said defects---Defence Counsel was unable to point out any material contradictions in the case of the department about violation of the directions of EPO---Department had proved its case against the unit for violation of S.16 punishable under S.17 of Pakistan Environmental Protection Act, 1997---Respondent unit having failed to install water purification system, fine of Rs.2,00000 (Two lac) was imposed on the respondents.

Mohsin Sarfraz Cheema, Law Officer.

2019 C L D 155

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

DIRECTOR GENERAL ENVIRONMENTAL PROTECTION AGENCY-Complainant

Versus

SHEIKH YOUSAF---Respondent

Complaint No. 1516 of 2012, decided on 5th April, 2018.

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

----Ss. 2, 11, 16 & 17---Prohibition of certain discharges or emission---Environmental protection order---Penalty, reduction in---Tannery was found creating liquid and solid waste and untreated waste water, reportedly discharged into open drains/open plots along the road sides---Adverse environmental impact was created in the form of air, water and land pollution---Tannery management pleaded guilty, admitting that tannery was causing pollution to the environment creating adverse effect by discharging untreated effluent and waste water---No system was installed for proper disposal of waste water---Management admitted that they had failed to comply with the directions of Environmental Protection Order and prayed for lenient view---Environmental Protection Order (EPO) had given directions either to install treatment plant or stop operation of pollution generating activities---Provisions of S.16 of Pakistan Environmental Protection Act, 1997, in circumstances, were violated, as the tannery/unit had not complied with the directions given in EPO, which was punishable under S.17 of the said Act---Tannery, who never challenged EPO at any forum, was fined under S.17 for violating the direction under S.16 of the Pakistan Environmental Protection Act, 1997---Management having admitted and placed himself at the mercy of the Tribunal, therefore fine of Rs.500,000 (Rupees Five Hundred Thousand) was imposed.

Nadeem Waraich, DDPP with Mohsin Sarfraz Cheema, Law Officer for the EPA.

2019 C L D 183

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

NAEEM AFZAL---Complainant

Versus

SECRETARY PRODUCTION AND INDUSTRIES and others---Respondents

Private Complaint No. 58 of 2018, decided on 10th April, 2018.

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

----Ss. 15, 17(2), 22 & 24---Government of Punjab Notification No.(123 of 2016), dated 12-10-2016---Pollution from Motor Vehicle---Jurisdiction of Environmental Tribunal---Scope---Evidence on record had shown violation of S.15 of Pakistan Environmental Protection Act, 1997, which regulated the emission of pollution from motor vehicle---Violation of S. 15 was punishable under S. 17(2) of the Pakistan Environmental Protection Act, 1997 and Environmental Magistrate had the jurisdiction to take cognizance of the offence under S. 24 of the said Act---Government of Punjab vide notification (123 of 2016), dated 12-10-2016 had notified the Provincial Environmental Quality Standards for motor vehicle exhaust and noise---Environmental Tribunal had no jurisdiction to intervene in the complaint---Complainant was at liberty to approach the competent forum under Pakistan Environmental Protection Act, 1997 for redressal of his grievance.

D.G. EPA v. Wi-tribe Lahore 2011 CLD 1138 ref.

Nabeel Javed for Private Complainant.

2019 C L D 208

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

FAISAL IQBAL---Appellant

Versus

ENVIRONMENTAL PROTECTION AUTHORITY through Director General EPA and others---Respondents

Appeal No. 28 of 2017, decided on 21st April, 2018.

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

----S. 22---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Appeal to Environmental Tribunal---Delay, condonation of---Appeal under S.22 of the Pakistan Environmental Protection Act, 1997 was to be filed within 30 days, was filed after more than two months from passing of impugned order along with application for condonation of delay under S.5 of Limitation Act, 1908---Validity---When the relevant law (S. 29(2) of the Act) itself had prescribed period of limitation the benefit of S.5 of the Limitation Act, 1908 was expressly excluded---Benefit of S. 5 of the Limitation Act, 1908, was not available in the present case---Application under S. 5 of the Limitation Act, 1908, was dismissed being not maintainable and appeal was dismissed being barred by time.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Haji Ahmad v. Noor Muhammad 2004 SCMR 1630; City District Government v. Muhammad Saeed Amin 2006 SCMR 676; Abdul Rasheed and another v. Bank of Punjab through Branch Manager 2004 CLD 800; Protein and Fats International (Pvt.) Limited through Chief Executive and 2 others v. Capital Assets Leasing Corporation Limited through Manager 2005 CLD 857; Sikandar Hayat v. Agricultural Development Bank of Pakistan through Manager 2005 CLD 870; Industrial Development Bank of Pakistan v. Rehmania Textile Mills (Pvt.) Limited through Chief Executive and 3 others 2006 CLD 81; Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171 and 2014 CLC 445 ref.

Counsel for Appellant.

Raja Khalid Mahmood for Respondent No.6.

2019 C L D 464

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

PAKISTAN OIL FIELDS POL HOUSE, MORGAH, RAWALPINDI---Appellant

Versus

DIRECTOR GENERAL EPA and others---Respondents

Appeal No. 85 of 2018, decided on 29th October, 2018.

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

----Ss. 12, 22 & 31---Appeal---Non-making of rules---Unapproved rules, displayed on website---Effect---Appellant company filed application seeking approval under S. 12 of Punjab Environmental Protection Act, 1997 for drilling of exploratory well---Authorities granted environmental approval on basis of a condition which was not supported by any Rules duly notified in gazette---Validity---Placing of such material (un-notified rules) on official website of Environmental Protection Agency was misleading---Such practice of Agency was unlawful under S. 31 of Punjab Environmental Protection Act, 1997 which empowered Environment Protection Agency to make rules by notification in official gazette for carrying out purposes of Punjab Environmental Protection Act, 1997---Punjab Environmental Tribunal refrained the Environmental Protection Agency from such unlawful practice of placing unapproved, un-notified Rules, Regulations and Policies on its official website in contravention of statutory provisions of S. 31 of Punjab Environmental Protection Act, 1997---Tribunal struck down condition imposed in environmental approval---Appeal was allowed accordingly.

Counsel for Appellant present.

Mohsin Sarfraz Cheema, Law Officer for EPA.

2019 C L D 498

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

RYK MILLS LIMITED through Authorized Officer---Appellant

Versus

DIRECTOR GENERAL, ENVIRONMENTAL PROTECTION AGENCY and others---Respondents

Appeal No. 37 of 2017, decided on 24th May, 2018.

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

----S. 22---Limitation Act (IX of 1908), S. 5---Appeal---Condonation of delay---Scope---Appeal was filed beyond period of limitation and condonation of delay was sought---Special law had provided different period of limitation for filing appeal---Provision of S. 5 of Limitation Act, 1908 was not attracted to appeal preferred beyond period of limitation provided in special law---Punjab Environmental Tribunal declined to condone delay---Appeal was dismissed in circumstances.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Haji Ahmad v. Noor Muhammad 2004 SCMR 1630; City District Government v. Muhammad Saeed Amin 2006 SCMR 676; Abdul Rasheed and another v. Bank of Punjab through Branch Manager 2004 CLD 800; Protein and Fats International (Pvt.) Limited through Chief Executive and 2 others v. Capital Assets Leasing Corporation Limited through Manger 2005 CLD 857; Sikandar Hayat v. Agricultural Development Bank of Pakistan through Manager 2005 CLD 870; Industrial Development Bank of Pakistan v. Rehmania Textile Mills (Pvt.) Limited through Chief Executive and 3 others 2006 CLD 81 and Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171 rel.

Salman Zaheer Khan for Appellant.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

2019 C L D 555

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

CANTONMENT BOARD SIALKOT---Appellant

Versus

PROVINCIAL ENVIRONMENTAL PROTECTION AGENCY (EPA) and others---Respondents

Appeal No. 34 of 2017, decided on 19th March, 2018.

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

----Ss. 2, 16 & 22---Solid waste, disposal of---Residential areas---Maxim: audi alteram partem---Applicability---Complaint was filed against appellant/Cantonment Board on allegation that Board was dumping solid waste close to residential areas causing adverse environmental effects---Environmental Protection Agency passed order against the Board---Validity---Appellant Board was condemned unheard as Environmental Protection Agency did not act properly and with due diligence as they could have easily hear appellant but appellant was not served at all---Principle of audi alteram partem meant 'hear the other side' and same was fundamental principle of justice---No one ought to be judged without giving opportunity to be heard---Order in question was passed after date of request of appellant for adjournment---Environment Protection Agency could have heard appellant easily in such a situation---Punjab Environmental Tribunal set aside order and remanded matter to Environmental Protection Agency for decision afresh after hearing the appellant---Appeal was allowed accordingly.

The University of Dacca and others v. Zakir Ahmed PLD 1965 SC 90; PLD 2014 SC 585 and 2004 MLD 1377 ref.

2014 CLC 1259; 1993 SCMR 122 and 1986 SCMR 962 rel.

Ch. Muhammad Attique for Appellant.

2019 C L D 647

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

SHAHBAZ ALI HUSSAINI and 6 others---Appellants

Versus

PROVINCIAL ENVIRONMENTAL PROTECTIONAGENCY (EPA PUNJAB) through Director-General and 2 others---Respondents

Complaint No. 8 of 2019, decided on 15th April, 2019.

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

----Ss. 21 & 22 [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012)]---Appeal---Maintainability---Public hearing, non-participation in--- Appellant assailed Environment Protection Order issued in favour of a Sugar Mill for installation of distillery unit---Validity---Appellant was not in communication of order in question rather he was not even addressee of the order directly or indirectly--- Appellant was supposed to be party only at such time when public hearing was conducted but he did not show his concern and had lost opportunity of being party to proceedings or order in question---Alternate remedy under S. 21(3)(b) of Punjab Environmental Protection Act, 1997 was also available to appellant when violation of some environmental laws were causing adverse environmental effects due to operation of unit in area and he could file private complaint---Environmental Protection Tribunal declined to interfere as appeal was not maintainable---Appeal was dismissed in circumstances. [pp. 649, 651] A & B

Faisal Iqbal v. Environmental Protection Authority through Director General EPA and others 2019 CLD 208 rel.

Jamal Abbas Malik for Appellants.

Muhammad Yasin Hatif for Respondent No.2.

2019 C L D 710

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

Messrs MOHAMMAD PARVAIZ POULTRY FARM through Proprietor---Appellant

Versus

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

Appeal No. 9 of 2019, decided on 18th February, 2019.

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

----Ss. 12 & 16 [as amended by Punjab Environmental Protection (Amendment) Act (XXXV of 2012), S. 22]---Environmental Protection Order---Regularizing---Violations of---Appellant was running a Poultry Farm much prior to promulgation of Punjab Environmental Protection Act, 1997---Authorities issued Environmental Protection Order directing appellant to take measures to regularize violations of S. 12 of Punjab Environmental Protection Act, 1997 without providing any timeframe---Validity---Provincial Environmental Agency, under S. 16 of Punjab Environmental Protection Act, 1997 could direct person responsible to take such measures within such period as specified in order---No timeframe was given in Environmental Protection Order in negation of S. 16 of Punjab Environmental Protection Act, 1997---Environment Protection Agency was legally bound to follow provisions of S. 16 of Punjab Environmental Protection Act, 1997 and given time to appellant to take corrective measures---Punjab Environmental Tribunal directed Environment Protection Agency to amend Environment Protection Order by adopting proper procedure and only then could proceed further---Appeal was allowed accordingly.

Mohsin Sarfraz Cheema, Law Officer for EPA.

2019 C L D 907

[Punjab Environmental Tribunal]

Before Shazib Saeed, Chairperson and Muzaffar Mahmood, Member (General)

DIRECTOR GENERAL EPA and others---Complainant

Versus

Messrs SIKANDAR PLASTIC RECYCLING UNIT through Proprietor---Respondent

Complaint No. 55 of 2018, decided on 21st May, 2018.

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

----S. 17(1) [as amended in year 2012]---Environmental Sampling Rules, 2001, R. 2(b)---Noise pollution---Proof---Samples, taking of---Accused was running plastic recycling unit which was located in a residential area and was sent to face trial on charge that his unit was causing adverse social impact---Validity---Complainant agency did not produce any written material that whether authorized person before entering unit had reasonable grounds to believe that offence under provisions of Punjab Environmental Protection Agency Act, 1997 (as amended in year 2012) was being committed therein---Prosecution did not examine any independent witness in whose presence samples were taken---Statements of witnesses were self-contradictory and were not worth reliance---Case of prosecution was pregnant with doubts and defence of accused was more plausible and convincing---No environmental issues in the unit existed and electric load shedding was at its peak therefore, generator was used---No Laboratory report with regards to noise or smoke was filed---No complaint from any private person living in the neighbourhood regarding allegations of environmental protection order was on record---Prosecution acted on presumptions and failed to prove case beyond shadow of reasonable doubt---Accused was acquitted in circumstances.

1999 SCMR 1220 rel.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

2019 C L D 59

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Chairman/Commissioner (CCD-CLD) and Shauzab Ali, Commissioner (SCD-S&ED/IE & IR)

ZARAR A. NASIR (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (INSURANCE), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 70 of 2017, decided on 19th September, 2018.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 59 & 112---Insurance Rules, 2017, Rr. 41 & 47---S.R.O. No.122(I)/2016, dated 12-2-2016 and S.R.O. No.658(I)/2018---Insurance surveyor---Cancellation of licence---Appellant/Surveyor, conducted survey of non-life classes of business---Commission carried out investigation of Insurance Company and as per its report, appellant conducted six surveys of bogus claims and connived with the Company to process such claims---Show-cause notice was issued to the appellant---Dissatisfied with the response of appellant to said show-cause notice, Commissioner (Insurance) held that violation of S. 112(6) of the Insurance Ordinance, 2010 having been established, licence of surveyor was cancelled---Validity---Commissioner (Insurance) had not been able to show beyond any reasonable doubt connivance on the part of surveyor, however, surveyor did not exercise due care and diligence expected from an Insurance surveyor---Commissioner (Insurance) had not specified in show-cause notice and impugned order that as to which licence had been cancelled for which particular class or classes of business---Case was remanded by Security Exchange Commission to Commissioner (Insurance) to conduct fresh proceedings, including issuance of show-cause notice and pass a speaking order within 30 days---Surveyor was also barred from engaging in any insurance survey in respect of all classes of business until conclusion of the proceedings in the matter.

Muhammad Nauman Yahya and Zarar A. Nasir Khan for Appellant.

Hasnat Khan, Director (Insurance) and M. Mateen Abbasi, Management Executive (Insurance) for Respondent.

2019 C L D 449

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SCD) and Tahir Mahmood, Commissioner (Insurance)

SUNRISE CAPITAL (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECP---Respondent

Appeal No. 110 of 2017, decided on 29th January, 2019.

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

----S. 33--- Securities Act (III of 2015), Ss. 79(1), 139(2)(a), 150 & 159---Securities Brokers (Licensing and Operations) Regulations, 2016, Regln. 6(4)---Cancellation of licence---Investigation against stock exchange broker---Non-providing of record---Maintenance of improper record---Appellant was stock exchange broker against whom investigation was initiated on certain violations---Competent authority after issuing show cause notice imposed penalty upon appellant including cancellation of his licence---Validity---Judgment passed by High Court did not bar authorities from taking penal action against appellant vis-a-vis cancellation of licence for non-compliance---Appellant being not aware of review proceedings had no bearing on proceedings against him by authorities and passing of order in question as same was passed after giving fair opportunity of hearing to appellant's representative---It was confirmed by Pakistan Stock Exchange that all claims were fully settled but same had no bearing on facts as appellant had violated relevant provisions of law and also did not comply with earlier orders of the Commission---Appellate Bench declined to unfreeze bank account of appellant and directors and also declined to remove names of appellant's representatives from Exit Control List as such issues were outside ambit of proceedings before Appellate Bench---Appellate Bench advised appellant to pursue issues pertaining to unfreezing of bank accounts and removal of names from Exit Control List at appropriate forums---Appeal was dismissed in circumstances.

M. Azam Khan, CEO Sunrise Capital (Pvt.) Limited for Appellant.

Nasir Askar, Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondent.

Date of hearing: 11th December, 2018.

2019 C L D 589

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SCD) and Tahir Mahmood, Commissioner (Insurance)

LAKHANI SECURITIES (PVT.) LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR (SMD-PRPD), SECP, ISLAMABAD---Respondent

Appeal No. 40 of 2017, decided on 29th January, 2019.

Securities and Exchange Commission of Pakistan Ordinance (XVII of 1969)---

----S. 22---Securities Act (III of 2015), Ss. 79(3) & 138(2)---Pakistan Stock Exchange Rule Book, Clauses 4.18.1, 4.18.2 & 4.24---Brokers and Agents Registration Rules, 2001, R. 8---Appeal---Assets of clients, segregation of---Inspection by Securities and Exchange Commission of Pakistan---Procedure---Appellant was stock exchange broker who was alleged to have violated regulatory framework regarding segregation of client's assets---Authorities issued show cause notice to appellant and being dissatisfied with his reply, penalty was imposed---Validity---Right of inspection to Securities and Exchange Commission of Pakistan was assigned under S. 79(3) of Securities Act, 2015---Inspection procedure was not provided under Securities Act, 2015 therefore, Commission was required to follow inspection procedure laid down under S. 138(2) of Securities Act, 2015---Written order was required under S. 138(2) of Securities Act, 2015 to initiate inspection but Commission did not observe due procedure---Letter whereby officers of Commission were deputed to conduct review could not be termed as written order as it failed to demonstrate reasons which compelled Commission to initiate review and secondly, officer who wrote letter was not competent to write such letter---Neither show cause notice nor order in question alleged any violation under S. 79(3) of Securities Act, 2015---Role of S. 79(3) of Securities Act, 2015 was to extent that review was carried out under this provision of law and it revealed alleged violations of cls. 4.18.1, 4.18.2 and 4.24 of Pakistan Stock Exchange Rule Book---Appellate Bench declared that Securities and Exchange Commission of Pakistan had no authority to initiate review under S. 79(3) of Securities Act, 2015 rendering all proceedings including issuance of show cause notice and pronouncement of order same as void ab inito and same were set aside---Appellate Bench also set aside penalty in exercise of powers under S. 22 of Securities and Exchange Commission of Pakistan Ordinance, 1969 as Pakistan Stock Exchange Rule Book violations were to be penalized under provisions of the same---Without mentioning relevance to the matter, vague reference to S. 22 of Securities and Exchange Commission of Pakistan Ordinance, 1969 and R. 8 of Brokers and Agents Registration Rules, 2001 could not be construed as desirable application of law---Appeal was allowed in circumstances.

Chairman Board of Intermediate Bahawalpur's case 2005 SCMR 728 ref.

Amjad Javaid Hashmi, Shahid Ali Qureshi and Muhammad Yasin Lakhani for Appellant.

Nasir Askar, Director (SMD) and Mehwish Naveed, Management Executive (SMD) for Respondent.

2019 C L D 721

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Commissioner (SCD-PRDD) and Shaukat Hussain, Commissioner (CLD-CCD)

PAKISTAN CREDIT RATING AGENCY LIMITED---Appellant

Versus

PUBLIC OFFERING AND REGULATED PERSONS DEPARTMENT, SECP, ISLAMABAD and another---Respondents

Appeal No. 44 of 2017, decided on 5th April, 2019.

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

----S. 22---Code of Conduct for Credit Rating Companies/Agencies, Cl. 2.3.3(b)---Constitution of Pakistan, Art. 10A---Rating shopping---Non-providing of opportunity of hearing---Fair trial---Scope---Complainant, a credit rating company, alleged that one of its clients had switched over to the appellant for their funds stability rating without obtaining NOC and that appellant accepted the rating assignment in contravention of Cl. 2.3.3(b) of the Code of Conduct for Credit Rating Companies/Agencies---Show-cause notice was issued to the appellant and authorities imposed penalty---Contention of appellant, inter alia, was that authorities did not provide opportunity of hearing to the appellant---Validity---Appellate Bench had earlier remanded the matter to the authorities for hearing the complainant and for examination of conduct of the client---Authorities, upon remand, had heard the complainant but the appellant was not called to join the proceedings---Authorities had not applied judicial mind while passing the order---Fresh opportunity of hearing was the fundamental right of appellant, whether or not it was mentioned in the remand order---Appellant had been condemned unheard---Impugned order was passed in violation of the right to a fair trial as envisaged and guaranteed under Art. 10A of the Constitution---Non-providing of opportunity of hearing was not a matter that could be condoned---Appellate Bench observed that appellant should have been given a fair chance to rebut the allegations of complainant and accepted the appeal and set aside the impugned order.

(b) Code of Conduct for Credit Rating Companies/ Agencies---

----Cl. 2.3.3(b)---Securities and Exchange Ordinance (XVII of 1969), S. 22---Rating shopping---Multiple ratings---Premature termination of rating contract---Scope---Complainant, a credit rating company, alleged that one of its clients had switched over to the appellant for their funds stability rating without obtaining NOC and that appellant accepted the rating assignment in contravention of Cl. 2.3.3(b) of the Code of Conduct for Credit Rating Companies/Agencies---Show-cause notice was issued to the appellant and authorities imposed penalty---Contentions of appellant, inter alia, were that pre-condition of premature termination of rating contract was not met; that it was a case of multiple ratings, which was not prohibited under the Code of Conduct and that authorities failed to prove wilful default of appellant, as required under S. 22 of Securities and Exchange Ordinance, 1969---Validity---Appellant provided rating on August 20, 2015, however, complainant received his client's letter dated August 21, 2015, vide an email dated August 25, 2015 for FSR's withdrawal---Appellant had provided ratings during the existence of the contract between complainant and the client---Client had obtained credit ratings without premature termination of contract with the complainant, therefore, it was a case of multiple ratings, which was not prohibited under the Code of Conduct of Credit Rating Companies/Agencies---Authorities had mentioned in the order that no requirement of Code of Conduct was applicable to the client with respect to acquisition of ratings---Client had disclosed both ratings in its Fund Manager Report and advertisements---Said fact was sufficient to prove that neither the client nor the appellant had any malice or intention to derive undue benefits from the questioned transactions---Appellate Bench accepted the appeal and set aside the impugned order.

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

----S. 22---Credit Rating Companies Rules, 1995, R. 7---Code of Conduct for Credit Rating Companies/ Agencies---Authority of Commission to impose penalty for non-compliance of directives of Code of Conduct for Credit Rating Companies/ Agencies---Scope---Complainant, a credit rating company, alleged that one of its clients had switched over to the appellant for their funds stability rating without obtaining NOC and that appellant accepted the rating assignment in contravention of Cl. 2.3.3(b) of the Code of Conduct for Credit Rating Companies/Agencies---Show-cause notice was issued to the appellant and authorities imposed penalty---Contentions of appellant, inter alia, were that Code of Conduct for Credit Rating Companies/Agencies and Credit Rating Companies Rules, 1995 were not part of Securities and Exchange Ordinance, 1969 or Rules or Regulations made thereunder, therefore penalty could not be imposed for non-compliance of directives of Code under S. 22 of Securities and Exchange Ordinance, 1969---Validity---Credit Rating Companies Rules, 1995 were made under the Securities and Exchange Ordinance, 1969 and the Code of Conduct for Credit Rating Companies/Agencies was issued under Credit Rating Companies Rules, 1995---Code of Conduct for Credit Rating Companies/Agencies was a directive issued by Securities and Exchange Commission of Pakistan in exercise of powers conferred by R. 7 of Credit Rating Companies Rules, 1995---Authorities, in case default was established, could inflict penalty under S. 22 of Securities and Exchange Ordinance, 1969, and Rules or Regulations made thereunder---Code of Conduct for Credit Rating Companies/Agencies did not prescribe any penalty for non-compliance of its directives but S. 22 of Securities and Exchange Ordinance, 1969 was the relevant penal provision to deal with violations of Credit Rating Companies Rules, 1995 and Code of Conduct for Credit Rating Companies/Agencies, if established---Authorities had failed to establish the appellant's default under Cl. 2.3.3(b) of Code of Conduct for Credit Rating Companies/Agencies, therefore, penalty under S. 22 of Securities and Exchange Ordinance, 1969 was not sustainable---Appellate Bench accepted the appeal and set aside the impugned order.

Rahat Kaunan Hassan, Gulalay Zeb and Mohammad Adnan Afaq for Appellant.

Adil Anwar, Director Adjudication (SMD), Nasir Askar, Director (SMD) and Mehwish Naveed, Management Executive (SMD) for Respondent No.1.

Ijaz Ahmed and Sarfraz Ahmed for Respondent No.2.

2019 C L D 816

[Securities and Exchange Commission of Pakistan]

Before Aamir Khan, Commissioner (SCD-PRDD) and Shauzab Ali, Commissioner (SMD)

Haji MUHAMMAD SHAFIQ---Appellant

Versus

REGISTRAR OF COMPANIES, CORPORATIZATION AND COMPLIANCE DEPARTMENT, COMPANY LAW DIVISION, SECP and another---Respondents

Appeal No. 13 of 2018, decided on 18th March, 2019.

Companies Ordinance (XLVII of 1984)---

----Ss. 439(3), 152 & 153---Defunct Company, restoration of---Power of court to rectify Register of Companies---Punishment for fraudulent entries---Jurisdiction of Court---Scope---Appellant's application for restoration of name of defunct company on the Register of Companies was rejected---Plea of appellant was that he was removed from the position of Chief Executive Officer (CEO) of the defunct company and his shareholding was reduced through fraudulent means and forged signatures and that defunct company still owned land, therefore, it was wrongly struck off the Register of Companies---Validity---Defunct company was rightfully struck off the Register of Companies in terms of S. 439(3), Companies Ordinance, 1984---Appellant's assertion that defunct company still owned land or that he was fraudulently removed from the position of CEO and his shareholding was reduced was a matter to be pursued in a court of competent jurisdiction and not before the Securities and Exchange Commission (Commission)---Commission could not of its own volition investigate and establish whether defunct company still owned assets given the dispute between the appellant and respondent---Appellant had initially taken up the matter in the High Court but the matter was not pursued---Appeal was dismissed.

Appellant in person.

Raja Waqar Abid, and Raja Muhammad Khan, Legal Counsel for Appellant.

Abdul Qayyum, Joint Registrar of Companies (CCD-CLD) for Respondents.

2019 C L D 848

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SCD) and Tahir Mahmood, Commissioner (Insurance)

PAK MEEZAN SECURITIES (PVT.) LTD.---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECP---Respondent

Appeal No. 4 of 2018, decided on 7th February, 2019.

Securities Brokers (Licensing and Operations) Regulations, 2016---

----Rr. 9(1), 11 & 5(3)---Securities Act (III of 2015), S. 152---Renewal/cancellation of licence--Applicant was required to submit its application for renewal of licence as securities broker under the Securities Brokers (Licensing and Operations) Regulations, 2016 on or before 21-03-2017---Applicant failed to submit its application within stipulated time---Show cause notice was issued to the applicant whereby it was called upon to explain as to why its licence as a securities broker should not be cancelled in terms of Regulation 11(3)(e) of Securities Brokers (Licensing and Operations) Regulations, 2016 and authorities, being dissatisfied with applicant's response, cancelled its licence---Plea of applicant was that its Chief Executive Officer (CEO) was out of country; he was facing serious family issues and that show cause notice was not issued correctly by the competent authority---Validity---Applicant had not given satisfactory reasons for non-compliance with the provisions of Regln. 9(1) of Securities Brokers (Licensing and Operations) Regulations, 2016---Appellant's argument that CEO was out of the country and was facing serious family issues had no basis in the law as it was not a valid reason in terms of the Regulations---Show-cause notice was issued correctly by the authorities who had relevant powers to issue such notice under the powers delegated by the Securities and Exchange Commission pursuant to SRO No.123(1)/2017 dated 27-02-2017--- Hearing was conducted by Appellate Bench of the Commission pursuant to show cause notice wherein, the applicant's arguments were fully heard---Appeal was dismissed, accordingly.

Asif Malik, CEO Pak Meezan Securities and Shafqat Ali, Advisor, Pak Meezan Securities for Appellant (via video conferencing).

Nasir Askar, Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondent.

2019 C L D 892

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CLD-CCD) and Aamir Ali Khan, Commissioner (SCD-PRDD)

DEWAN ZUBAIR AHMED FAROOQUI and 6 others---Appellants

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 19 of 2016, decided on 26th March, 2019.

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

----S. 33---Appeal---Failure to appear before Bench without sufficient cause---Ex parte proceedings---Appellants had availed successive adjournments on one pretext or the other, spanning over three years---Bench observed that appellants and respondents had a right to be heard and represented by a counsel but at the same time it could not be permitted to defeat the cause of justice by indefinite procrastination by either party---Appellants and their counsel could not be allowed to regulate the proceedings of Bench by their own choice and whims---Rights of each of the parties were equally protected under the law and none of the parties could be permitted to stifle and prolong the proceedings without any sufficient and just cause---Ample opportunities were provided to the appellant to ensure their representation and argue the appeal, however, they failed to join the proceedings---Appellants were proceeded against ex parte and appeal was dismissed.

Fayyaz Haider v. Malik Ishtiaq Hussain 2018 CLC 1981 ref.

Nemo for Appellants.

Mehwish Naveed, Management Executive (SMD) for Respondent.

2019 C L D 916

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Aamir Ali Khan, Commissioner (SCD-PRDD)

PROGRESSIVE FRIENDS FOUNDATION (GUARANTEE) LIMITED---Appellant

Versus

MUBASHER SAEED SADDOZAI, DIRECTOR CCD, SECP---Respondent

Appeal No. 28 of 2017, decided on 26th March, 2019.

Companies (General Provisions and Forms) Rules, 1985---

----Rr. 6(4), 6(3) & 35---Companies Ordinance (XLVII of 1984), Ss. 42 & 506(2)---Violation of conditions of licence---Imposition of fine---Words "such conditions as it may deem fit", occurring in R. 6(3), Companies (General Provisions and Forms) Rules, 1985 and words "besides others", in R. 6(4) of the said Rules---Scope---Appellant had violated the condition imposed under R. 6(4) of Companies (General Provisions and Forms) Rules, 1985 whereby it was required to obtain prior permission of the Securities and Exchange Commission of Pakistan if any of its members intended to exit---Show cause notice was issued and hearing in the matter was held which was attended by appellant's representative---Alleged violation was established, fine was imposed and appellant's CEO and its directors were warned to be careful in future---Plea of appellant was that proper opportunity of hearing was not provided and respondent failed to establish as to which particular clause of R. 6(4) of Companies (General Provisions and Forms) Rules, 1985 was violated---Validity---Appellant's plea with regard to non-providing of opportunity of proper hearing was not tenable because after issuance of the show-cause notice, reasonable time to submit written comments was provided and appellant was given opportunity of hearing---Appellant's other plea that authorities failed to establish as to which particular provision had been violated, was without any merit---Show-cause notice was issued under R. 6 read with R. 35 of Companies (General Provisions and Forms) Rules, 1985 and S. 506(2) of Companies Ordinance, 1984---Rule 6(4) not only imposed particular conditions for a licence but also imposed conditions of S. 42 of Companies Ordinance, 1984 and R. 6(3) of Companies (General Provisions and Forms) Rules, 1985---Rule 6(3) empowered the authorities to impose "such conditions as it may deem fit" whereas R. 6(4) imposed additional conditions for a licence---Words "Besides others" mentioned in R. 6(4) recognized that the authorities were empowered to impose further conditions to issue a licence---Licence granted to appellant stated that the subscriber to the memorandum of association and articles of association could not leave the company without obtaining prior approval of the Commission---Violation committed by appellant was established--- Appeal was dismissed.

Agha Mujeeb Ahmed Khan for Appellant.

Mubasher Saeed, Director (CLD-CCD) and Anas Noman, Additional Director (CLD-CCD) for Respondent.

2019 C L D 966

[Securities and Exchange Commission of Pakistan]

Before Aamir Khan, Commissioner (CLD-CSD) and Shaukat Hussain, Commissioner (Insurance Division)

Messrs DIN CAPITAL LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR, SECURITIES MARKET DIVISION, PUBLIC OFFERING AND REGULATED PERSONS DEPARTMENT, SECP---Respondent

Appeal No. 2 of 2017, decided on 30th April, 2019.

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

----S. 33---Securities and Exchange Ordinance (XVII of 1969), S. 6---Stock Exchange Members (Inspection of Books and Records) Rules, 2001, Rr. 3 & 4---Inspection---Procedure---Scope---Penalty was imposed for non-providing of information/documents to the inspection team---Appellant Company contented that delay in providing information was inadvertent---Authorities contended that delay in provision of information had hampered the ability of inspection team to carry out inspection---Validity---Since the Appellant Company having accepted the default, penalty was reduced by the Appellate Bench.

Ali Nanji, Chief Executive Din Capital Ltd., Ghayasuddin, Director Din Capital Ltd. and Rehan Kayani, counsel for Appellant.

Nasir Askar, Director (SMD), Adil Anwar, Director, Adjudication (SMD) and Ms. Mehwish Naveed, Management Executive, Adjudication (SMD) for Respondent.

Dates of hearing: 11th December, 2018, 22nd and 28th March, 2019.

2019 C L D 1015

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Aamir Ali Khan, Commissioner (SCD-PRDD)

Messrs M. NAZIR AND COMPANY, COST AND MANAGEMENT ACCOUNTANTS through Muhammad Nazir, FCMA---Appellant

Versus

EXECUTIVE DIRECTOR (CORPORATIZATION AND COMPLIANCE DEPARTMENT), SECP---Respondent

Appeal No. 33 of 2017, decided on 9th April, 2019.

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

----S. 492---Constitution of Pakistan, Art. 12---Penalty for false statement---Protection against retrospective punishment---Scope---Name of Company, a Cost and Management Accountants, was removed from the Register of Companies on the basis of Auditor's Certificate that it had no assets and liabilities in the year 2002---Company, in the year 2016, submitted an application for restoration of its name and informed that it had a piece of land which was in the possession of its Chief Executive Officer---Authorities issued show cause notice to the appellant for making false statement in Auditor's Certificate and imposed a fine of Rs.500,000---Plea of appellant was that Authorities had not issued show-cause notice therefore it could have passed the order thereon and that Authorities could not have imposed a fine of Rs.500,000 because at the time of commission of offence, prescribed penalty under S. 492, Companies Ordinance, 1984 was Rs. 20,000---Validity---Commissioner (CLD-CCD) (Authorities) had duly served a show cause notice, thereafter, the Commission delegated the adjudication powers of S. 492, Companies Ordinance, 1984 to the Executive Director of the Commission---Law did not require the authorities to re-issue the show cause notice therefore, authorities had rightly relied upon show cause notice issued by Commissioner (CLD-CCD)---Auditor's certificate was issued on May 14, 2002 and at that time, penalty under S. 492, Companies Ordinance, 1984 was up to three years imprisonment and fine not exceeding twenty thousand rupees, later on, the section was substituted whereby three years imprisonment was abolished and fine was enhanced to one hundred thousand rupees---Penalty was further enhanced to five hundred thousand rupees---Authorities were required to proceed in accordance with the requirements of repealed section---Imposition of Rs. 500,000 penalty was also violation of Art. 12(1)(b) of the Constitution, which prohibited imposition of penalty of a kind different from the penalty prescribed at the time the offence was committed---Authorities were required to call/inspect books of accounts and other relevant record of the company to verify appellant's claim that he had issued Auditor's Certificate after examination of books and records---Appellate Bench observed that if books of accounts and other relevant record had no information with regard to the assets of the company then appellant could not be penalized and vice versa---Appellate Bench set aside the impugned order and remanded the matter with direction to the authorities to call/inspect the books of accounts and other relevant record of the company to verify appellant's claim---Appeal was disposed of, accordingly.

(b) Interpretation of statutes---

----Procedural and substantive civil/criminal provisions---Scope---Provisions which prescribe the rights and liabilities of the parties are known as substantive provisions whereas the provisions which prescribe the procedure to enforce the substantive provisions are called procedural provisions---Any amendment in substantive criminal provisions cannot be applied retrospectively, however, amendments in substantive civil provisions may be enforced retrospectively, if expressly authorized---Amendments in criminal and civil procedural provisions are equally enforceable retrospectively.

(c) Words and phrases---

----Penalty---Meaning.

Black Law Dictionary Eighth Edition rel.

Sardar Azam Mehmood Kasana and Saif Ullah for Appellant.

Mahboob Ahmad, Additional Registrar (CCD-SECP) for Respondent.

Date of hearing: 21st February, 2019.

2019 C L D 1028

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Shaukat Hussain, Commissioner (CLD-CCD)

NOOR AURANGZEB and 2 others---Appellants

Versus

EXECUTIVE DIRECTOR (CORPORATE SUPERVISION DEPARTMENT), SECP---Respondent

Appeal No. 34 of 2018, decided on 15th April, 2019.

(a) Companies Ordinance (XLVII of 1984) [since repealed]---

----Ss. 208, 2(2)(i) & 476---Investments in associated companies and undertakings--- Associated companies--- Common directorship---Appellants were imposed penalty for investing in an associated undertaking without special resolution---Plea of appellants was that the companies were not associated companies and that it was mandatory for a common director to have, directly or indirectly, hold or control at least twenty percent of the voting power shares in two companies or undertakings to declare them associated to each other---Validity---Appellants were directors in both the companies, therefore, common directorship was sufficient to prove the associated relation between the two companies---Appeal was dismissed.

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

----S.2(2)(i)---Associated companies---Section 2(2)(i) of Companies Ordinance, 1984 provides two instances whereby associated relation of two companies or undertakings may be established; firstly, if a person is either owner or partner or director in two companies or undertakings; secondly, if a person, directly or indirectly, holds or controls shares carrying not less than twenty percent of the voting power in two companies or undertakings.

Zahir Shah for Appellants.

Syed Ali Adnan, Additional Director (CSD-SECP) and Jawad Ahmad, Assistant Director (CSD-SECP) for Respondent.

Date of hearing: 25th February, 2019.

2019 C L D 1202

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Chairman/Commissioner (AML) and Aamir Khan, Commissioner (CLD-CSD)

CHIEF EXECUTIVE OF STATE PETROLEUM, REFINING AND PETROCHEMICAL CORPORATION (PRIVATE) LIMITED (PERAC)---Appellant

Versus

COMMISSIONER (CORPORATIZATION AND COMPLIANCE DEPARTMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 12 of 2017, decided on 19th April, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984) [since repealed], S. 506(2)---Public Sector Companies (Corporate Governance) Rules, 2013, Rr. 24 & 25---Appellant was fined for not publishing, circulating and filing the Statement of Compliance (SOC) and Review Report with the Securities and Exchange Commission---Appellant contended that non-compliance of Rules was not a deliberate act but on account of the fact that appellant had no management or Board had become inactive---Validity---Held; so long as the appellant continued to be a legal entity, same must comply with all the requirements of the law regardless of whether it had become a dormant entity---Impugned order was upheld.

Nadeem Ahmed Khan, Legal Counsel, OrrDignam and Co., Karachi for Appellant.

Jawed Hussain, Executive Director (CCD), Ms. Sumera Siddiqui, Additional Director (CCD), Sidney Custodio Pereira, Additional Registrar (CCD) and Abdul Qayyum, Joint Director (CCD) for Respondent.

2019 C L D 1219

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Chairman/Commissioner (AML) and Aamir Ali Khan, Commissioner (CLD-CSD)

PEOPLES STEEL MILLS LIMITED---Appellant

Versus

COMMISSIONER, CORPORATIZATION AND COMPLIANCE DEPARTMENT---Respondent

Appeal No. 5 of 2017, decided on 19th April, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984) [since repealed], S. 506(2)---Public Sector Companies (Corporate Governance) Rules, 2013, Rr. 24 & 25---Appellant was fined for not publishing, circulating and filing the Statement of Compliance (SOC) and Review Report with the Securities and Exchange Commission---Appellant contended that it manufactured strategic supplies for defence, therefore it was a sensitive entity which warranted specialized control environment and that authorities had issued show cause notice under S. 506(2), Companies Ordinance, 1984, however, the impugned order had been passed under S. 508(2), Companies Ordinance, 1984---Validity---Held; said legal defect did not prejudice the rights and liabilities of the parties, therefore, it was curable---Appellant's assertion regarding unique governance structure could not be entertained because it was mandatory for every public sector company to comply with the Public Sector Companies (Corporate Governance) Rules, 2013---Appellant could have asked for exemption under R. 24(3) of Public Sector Companies (Corporate Governance) Rules, 2013, however, no such course was adopted, therefore "unique governance structure" could not be treated as a tool to avoid legal and statutory requirements---Appeal was dismissed.

Muhammad Jawwad Shekha and Salman Ahmed for Appellant.

Jawed Hussain, Executive Director (CLD-CCD), Sidney Custodio Pereira, Additional Registrar (CLD-CCD), Sumaira Siddiqui, Additional Director (CLD-CCD) and Abdul Qayyum, Joint Director (CLD-CCD) for Respondent.

2019 C L D 1234

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Aamir Ali Khan, Commissioner (SCD-PRDD)

NAUMAN MEHMOOD---Appellant

Versus

EXECUTIVE DIRECTOR, CORPORATE SUPERIVISION DEPARTMENT and another---Respondents

Preliminary Hearing of Nauman Mehmood No. 21(8)Misc/ABR/16, decided on 15th March, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984), S. 265---Appeal---Maintainability---Revocation of appointment of Inspector---Scope---Appellant was appointed under S. 265, Companies Ordinance, 1984 to investigate the affairs of a company---Executive Director Corporate Supervision Department, later on, revoked the appointment of Inspectors vide impugned order---Validity---Appointment of a person or a firm as inspector was a "permission" therefore, it could be revoked by the Authority which granted it---Impugned letter was not an order rather it contained information about the inquiries and investigations about Inspectors---Complaint was a request to probe the conduct of the Inspectors therefore, it was not appealable under S. 33 of Securities and Exchange Commission of Pakistan Act, 1997---Impugned order had not imposed any penal liability against the appellant rather it contained a decision to revoke the appointment of Inspectors and direction to refund the initial investigation fee---Revocation of appointment of Inspector was a revocation of permission, therefore, it was not appealable--- Appeal was dismissed in limine.

Nauman Mehmood and Taimoor Zafar for Appellant.

Sidney Custodio Pereira, Additional Registrar (CCD) and Abdul Qayyum, Joint Registrar (CCD) for Respondents.

2019 C L D 1240

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Shaukat Hussain, Commissioner (CLD-CCD)

SAQIB RAZA, DIRECTOR NIMIR INDUSTRIAL CHEMICAL LIMITED---Appellant

Versus

DEPUTY DIRECTOR (CSD), SECP, ISLAMABAD---Respondent

Preliminary Hearing of Saqib Raza No. 2(9)Misc/ABR/18, decided on 26th March, 2019.

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

----S. 33---Appeal---Withdrawal---Appellant, on the date of hearing, neither appeared nor any request for adjournment was recieved---Appellant, later on, informed the Registry on phone call that he was not interested to pursue the appeal and requested to allow its withdrawal---Appellant had reiterated his request via email and letter---Appeal was dismissed as withdrawn.

Nemo for Appellant.

Tariq Ahmed, Additional Director (CSD) and Haris Bin Mohsin, Deputy Director (CSD) for Respondent.

2019 C L D 1266

[Securities and Exchange Commission of Pakistan]

Before Aamir Khan, Commissioner (SCD-PRDD) and Shauzab Ali, Commissioner (SMD)

INCOMEON (PVT.) LIMITED (PROPOSED)---Appellant

Versus

DIRECTOR (CORPORATIZATION AND COMPLIANCE DEPARTMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD

and 3 others---Respondents

Appeal No. 4 of 2017, decided on 11th March, 2019.

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

----S. 33---Appeal---Dismissal of appeal for non-prosecution---Appeal was called for hearing; department representatives were present, however, the appellants and their counsel failed to appear nor they sought adjournment---Appeal was dismissed for non-appearance and non-prosecution.

Nemo for Appellant.

Liaqat Ali Dolla, Registrar of Companies (CCD) and Mahboob Ahmad, Additional Registrar (CCD) for Respondents.

2019 C L D 1281

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Commissioner (CLD-CSD) and Furrukh H. Sabzwari, Chairman/Commissioner (AML)

LAHORE PARKING COMPANY LIMITED---Appellant

Versus

CORPORATIZATION AND COMPLIANCE DEPARTMENT---Respondent

Appeal No. 11 of 2017, decided on 19th April, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984) [since repealed], S. 506(2)---Public Sector Companies (Corporate Governance) Rules, 2013, Rr. 24 & 25---Appellant was fined for not publishing, circulating and filing the Statement of Compliance (SOC) and Review Report with the Securities and Exchange Commission---Appellant contended that non-compliance of Rules was not a deliberate act, rather it was caused due to circumstances beyond the control of the appellant---Validity---Appellant had failed to file the SOC and the Report in a timely manner, however, the requirement was complied through subsequent filing---Appellate Bench took a lenient view and held that such view did not exonerate the appellant from established and admitted violations of the Rules---Appellate Bench converted the penalty of fine into a warning---Appeal was disposed of accordingly.

Wasim Ahmed, Rai Asad Hussain Kharal and Lubna Latif Company Secretary/Law Officer for Appellant.

Jawed Hussain, Executive Director (CLD-CCD), Sidney Custodio Pereira, Additional Registrar (CLD-CCD), Sumaira Siddiqui, Additional Director (CLD-CCD), Abdul Qayyum, Joint Director (CLD-CCD) and Abdul Rehman Khan Tareen, Deputy Director (CLD-CCD) for Respondent.

2019 C L D 1345

[Securities and Exchange Commission of Pakistan]

Before Shauzab Ali, Commissioner (SMD) and Aamir Ali Khan, Commissioner (SCD-PRDD)

Dr. MOHAMMAD AZAM CHAUDHRY and another---Appellants

Versus

COMMISSIONER (CLD), SECP, ISLAMABAD and another---Respondents

Appeal No. 87 of 2016, decided on 11th June, 2019.

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

----S. 33---Appeal---Condonation of delay---New cause of action---Effect---Appellant, promoters of an association, filed revision petition before Commissioner (CLD) of the Commission against an order/letter passed by Deputy Registrar of Companies-CCD whereby he had advised the promoters to obtain a licence from Directorate General of Trade Organization under the Trade Organization Act, 2013---Commissioner (CLD) informed the appellant that the said order (first order) was issued under his express authority and supervision therefore, appellant was advised to file appeal under S. 33 of Securities and Exchange Commission of Pakistan Act, 1997---Deputy Registrar of Companies-CCD contended that the grant of licence under S. 42 of Companies Ordinance, 1984 was refused vide first order, however, appeal was filed against the order of Commissioner (CLD) (impugned order)---Validity---Promoters had filed appeal after pronouncement of impugned order, with the request to set aside both orders---Appeal would have been time barred if the appellant had filed it against the first order, however, the impugned order provided a new cause of action to the appellant---Deputy Registrar of Companies-CCD had not agitated the legal ground of limitation before Commissioner (CLD)---Impugned order enabled the appellant to file appeal within the time stipulated under S. 33 of Securities and Exchange Commission of Pakistan Act, 1997.

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

----S. 42---Power of Commission to dispense with word "Limited" with the name of charitable or other companies---Social services---Welfare of members of the association---Scope---Appellant, promoters of association, assailed order of Deputy Registrar of Companies-CCD whereby he had refused to grant licence under S. 42 of Companies Ordinance, 1984---Contention of Deputy Registrar of Companies-CCD was that the object of the proposed association was to promote services and to protect the interests of medical practitioners whereas S. 42, Companies Ordinance, 1984 allowed formation of associations for social services---Validity---Section 42 of Companies Ordinance, 1984 did not bar the promoters to work and get a licence thereunder for the social welfare of its members, however, it expressly prohibited distribution of dividends to its members---Assertion of Deputy Registrar of Companies-CCD was based on misconception---Appellant was directed to amend its objects to dispel the impression that the proposed association was a trade body---Appeal was disposed of accordingly.

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

----S. 42---Societies Registration Act (XXI of 1860), S. 13---Power of Securities and Exchange Commission to dispense with word "Limited" with the name of charitable or other companies---Dissolution of Association, a registered Society---Conditional licence, grant of---Conversion of Society into a licensed company---Scope---Appellant, promoters of the Association, assailed order of Deputy Registrar of Companies-CCD whereby he had refused to grant licence under S. 42 of Companies Ordinance, 1984---Validity---Appellant wanted to convert the Association registered under the Societies Registration Act, 1860 into a company licensed under S. 42 of Companies Ordinance, 1984---Conversion of existing Association into a licensed company was not possible until it was dissolved as per the procedure envisaged under S. 13 of Societies Registration Act, 1860---Deputy Registrar of Companies-CCD was directed to allow the appellant to seek issuance of a conditional licence---Appellant was required to initiate the dissolution process of the existing Association with immediate effect---Appeal was disposed of accordingly.

Dr. Mohammad Azam Chaudhry, Usman Nawaz Satti, Mohammad Qasim and Rehan Ali Bokhari for Appellants.

Mubashar Saeed Saddozai, Director (CLD-CCD), Anas Noman, Additional Director, (CLD-CCD) and Beenish Waqas, Assistant Director (CLD-CCD) for Respondents.

2019 C L D 1358

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Chairman/Commissioner (AML) and Aamir Khan, Commissioner (CLD-CSD)

SINDH INDUSTRIAL TRADING ESTATES LIMITED---Appellant

Versus

JOINT REGISTRAR OF COMPANIES, CCD, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 8 of 2019, decided on 18th June, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984), S. 42---Power of Commission to dispense with word "Limited" in the name of charitable or other companies---Withdrawal of appeal---Scope---Appellant assailed the decision of competent authority whereby its licence under S. 42(4), Companies Ordinance, 1984 was revoked---Appeal was filed after the expiry of thirty days limitation period provided under S. 33 of Securities and Exchange Commission of Pakistan Act, 1997---Application for condonation of delay, however, failed to provide any plausible reason of delay---Commission, (after hearing the matter) received appellant's request to withdraw the appeal---Appeal was dismissed as withdrawn.

Rahat Aziz, Counsel for Appellant.

Mubasher Saeed, Registrar of Companies and Ms. Saila Jamshaid, Additional Joint Registrar of Companies for Respondent.

2019 C L D 1372

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Chairman/Commissioner (AML) and Aamir Ali Khan, Commissioner (CLD-CSD)

PAKISTAN TOURISM DEVELOPMENT CORPORATION LIMITED---Appellant

Versus

COMMISSIONER (COMPANY LAW DIVISION) CORPORATIZATION AND COMPANIES DEPARTMENT, SECP---Respondent

Appeal No. 29 of 2017, decided on 19th April, 2019.

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

----S. 33---Companies Ordinance (XLVII of 1984), S. 506(2)---Public Sector Companies (Corporate Governance) Rules, 2013, Rr. 24 & 25---Appeal---Penalty for contravention of Rules---Scope---Fine was imposed for not publishing, circulating and filing the Statement of Compliance (SOC) and Review Report with the Securities and Exchange Commission---Appellant company contended that non-compliance of Rules was on account of uncertainty regarding its future of the company as National Accountability Bureau had taken its record into custody---Validity---Appellate Bench taking a lenient view converted the penalty of fine into warning---Appeal was disposed of accordingly.

Abdul Qadeer and Abdul Rehman for Appellant.

Jawed Hussain, Executive Director (CLD-CCD), Sidney Custodio Pereira, Additional Registrar (CLD-CCD), Sumaira Siddiqui, Additional Director (CLD-CCD), Abdul Qayyum, Joint Director (CLD-CCD) and Abdul Rehman Khan Tareen, Deputy Director (CLD-CCD) for Respondent.

2019 C L D 227

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Mushir Alam, Faisal Arab, Sajjad Ali Shah and Munib Akhtar, JJ

SHOAIB ULLAH CHEEMA and others---Petitioners/Appellants

Versus

ADDITIONAL REGISTRAR OF COMPANIES, SECP and others-- Respondents

Civil Appeal No. 1563 of 2014, Civil Petitions Nos. 2215-L of 2017 and 471-L of 2018, decided on 15th January, 2019.

(Against the impugned judgment dated 15.09.2014, 19.06.2017 and 22.02.2018 passed by the Lahore High Court, Lahore in C.O. No.51/2013, C.M. No. 37/2016 in C.O. No. 51/2013 and C.M. No.16/2018 in C.O. No. 51/2013, respectively)

Companies Ordinance (XLVII of 1984)---

----Ss. 10 & 305---Winding up order or any order passed or decision made by the Company Judge after the winding up of a company---Appeal to the Supreme Court---Scope---Section 10(1) of the Companies Ordinance, 1984 provided that it applied to a winding up order as well as any order or decision made in the winding up proceedings after a company had been ordered to be wound up---Resultantly, a winding up order as well as any order passed or decision made by the Company Judge after the winding up of a company should be appealable before the Supreme Court instead of the Division Bench of the High Court. [Ibrahim Shamsi v. Bashir Ahmed Memon (2005 SCMR 1450) held to be good law; Kamaluddin Qureshi v. Ali International Company (PLD 2009 SC 367) overturned].

Kamaluddin Qureshi v. Ali International Company PLD 2009 SC 367 overturned for not being good law.

Ibrahim Shamsi v. Bashir Ahmed Memon 2005 SCMR 1450 held to be good law.

Appellant/Petitioners in person (in C.A. No. 1563 of 2014 and C.P. No. 471-L of 2018).

Nemo for Petitioners (in C.P. No. 2215-L of 2017).

Muqtadir Akhtar Shabbir, Advocate Supreme Court and Nasrullah Khan Babar, Advocate Supreme Court for Respondents.

2019 C L D 294

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Ijaz ul Ahsan and Sajjad Ali Shah, JJ

CONTROL RISK (PVT.) LTD.---Petitioner

Versus

ADDITIONAL REGISTRAR COMPANIES REGISTRATION OFFICE SECP, ISLAMABAD---Respondent

Civil Petition No. 2669 of 2016, decided on 31st October, 2018.

(Against the judgment dated 30.6.2016 of the Islamabad High Court, Islamabad passed in C.O. No. 07 of 2014)

(a) Companies Ordinance (XLVII of 1984) [since repealed]---

----Ss. 305, 309(b) & 309(c)---Petition for winding up of company---Requirements with respect to petitions under Ss. 309(b) & 309(c) of the Companies Ordinance, 1984---Distinction---Subsections (b) and (c) of S. 309 of the Ordinance were distinct and separate from each other, and were neither co-dependent nor did they correspond to any particular part of S. 305 of the Ordinance---If S. 309(c) of the Ordinance was to be made a condition precedent for S. 309(b) that would tantamount to reading the requirements of the former into those of the latter which the Court could not permit.

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

----Ss. 305(f)(i), 305(f)(ii), 305(f)(iv), 305(f)(v) & 309(b)---Winding up of company on petition of Additional Registrar CRO [SECP]---Grounds---Carrying on business not authorized by memorandum, carrying on unlawful activities---As per the Memorandum of Association (MOA) of the petitioner-company its object was to carry on the business of, inter alia, risks assessments; analysis and management; business consultancy; project implementation consultancy, with an emphasis on market entry advisory; project implementation support and risk management consultancy, etc.---Additional Registrar CRO reported that the company was engaged in security related matters, such as provision of security services to foreigners, using trackers during movements, attempting to visit restricted areas, collecting information about armed forces, using fake number plates, which activities/business were not only ultra vires its MOA but also posed a security risk to the country---Additional Registrar sought sanction from the Securities and Exchange Commission of Pakistan (SECP) under S. 309(b) of the Companies Ordinance, 1984 to present a petition before the competent jurisdiction (High Court) for winding up of the petitioner-company, which sanction was granted---Petition for winding up the petitioner-company was allowed by the High Court---Held, that petitioner-company was providing risk management and security-related services to foreign companies and foreign embassies and it had ex-foreign military officials on its payroll---Furthermore, the record clearly suggested that the petitioner's response had throughout been evasive---Reports of intelligence agencies were received in support of the allegations communicated to the petitioner and its representatives were confronted with such reports and were asked to explain whether the provision of risk assessment and intelligence reports with respect to the security scenario in Pakistan fell within the ambit of the MOA, however, the representatives of the petitioner-company were unable to provide a plausible answer in such regard---Petitioner-company was indeed providing services that were beyond the scope of its MOA---High Court had ordered for winding-up of the petitioner-company for cogent reasons which were upheld by the Supreme Court---Petition for leave to appeal was dismissed accordingly.

Barrister Yousaf Khosa, Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Petitioner.

Syed Hamid Ali Shah, Advocate Supreme Court for Respondent.

2019 C L D 348

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Faisal Arab and Ijaz ul Ahsan, JJ

HABIB BANK LTD.---Appellant

Versus

BASHIR AHMAD and others---Respondents

Civil Appeal No. 839 of 2015, decided on 6th December, 2018.

(Against the judgment dated 15.6.2015 of the Lahore High Court, Multan Bench, Multan passed in FAO No.64 of 2015)

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

----S. 19(7)---Auction proceedings set aside by Banking Court---Unjust enrichment of Bank at the cost of auction purchaser---Return of deposited amount to auction purchaser with penalty/mark-up---Appellant Bank being a decree holder placed a mortgaged property owned by the judgment-debtor up for auction to recover the decretal amount---Respondent submitted the highest bid in the sum of Rs.50,50,000---Banking Court confirmed the auction of the property in favour of the respondent (auction purchaser)---On appeal the High Court set aside the order of Banking Court---Respondent thereafter filed an application for return of the auction amount, which was allowed by the High Court, with the direction to the Bank to refund the amount of Rs.50,50,000/- together with 10% mark up as penalty---Held, that respondent was entitled to receive compensation on the amount which he deposited with the Bank by way of price of the auctioned property---Matter of auction of property lingered on in courts for a number of years for no fault of the respondent---Bank had possession and use of the funds (deposited amount) for a period in excess of nine years---During such time surely the money was utilized by the Bank in its business and obviously the Bank earned returns on the same, therefore it would neither be just nor proper to allow the Bank, free use of the money, as it would amount to un­just enrichment at the cost of the respondent (auction purchaser) who was not to be blamed for delay in the legal process---Supreme Court upheld the judgment of the High Court but reduced the amount of penalty/mark up awarded from 10% to 8% per annum---Supreme Court directed that respondent shall now be entitled to recover the entire amount of Rs.50,50,000/- together with penalty mark up calculated @ 8% per annum from the date of deposit till the date of refund.

(b) Administration of justice---

----Act of the Court shall not prejudice any of the parties.

Sardar Riaz Karim, Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Appellant.

Muhammad Suleman Bhatti, Advocate Supreme Court for Respondent No.1.

Ex parte for Respondents Nos. 2 - 8.

2019 C L D 471

[Supreme Court of Pakistan]

Present: Mushir Alam, Faisal Arab and Munib Akhtar, JJ

ABDUL GHAFFAR ADAMJEE and others---Petitioners

Versus

NATIONAL INVESTMENT TRUST LIMITED and another---Respondents

Civil Appeal No. 157-K of 2016 and C.M.A. No. 1865-K of 2018, decided on 3rd April, 2019.

(On appeal against the judgment dated 04.10.2016 passed by the High Court of Sindh, Karachi in First Appeal No. 50 of 2000)

Per Faisal Arab, J; Mushir Alam, J agreeing; Munib Akhtar, J dissenting.

(a) Bankers and customer---

----Contract of indemnity---Finance agreement---Sponsors' Undertaking provided by directors of a company---Sponsor directors personally liable as indemnifiers for amount remaining unsatisfied under the finance agreement---Financial institution (respondent) provided a finance facility to a company---Company went into liquidation and certain part of the finance facility remained unpaid, prompting the financial institution to file a recovery suit---Suit was decreed along with markup---Since there was no likelihood that the financial institution could recover the decretal amount from the company, the decree was also executable against the directors of the company (appellants), who were treated as guarantors under a Sponsors' Undertaking ('the Undertaking') executed contemporaneously by them with the agreement of finance---Directors argued that the courts below erred in treating them as guarantors on the basis of the Undertaking as their liability was that of indemnifiers and that too confined to what had been set out in Clauses 1 to 4 of the Undertaking ('the subject clauses') and nothing more; that as the directors neither committed any breach of the subject clauses of the undertaking nor could it be read as a guarantee towards financial obligation of the company under the agreement of finance, therefore, the courts below erred in ordering recovery of decretal amount from them---[Per Faisal Arab, J (Majority view): Clause 6 of the Undertaking stipulated that the directors shall indemnify and keep the financial institution always safe, harmless and indemnified, whereas Clause 7 stipulated that directors' obligations thereunder were joint and several and binding on them until the investment made by the financial institution in the company was fully satisfied---Text of the Sponsor's Undertaking, made it clearly apparent that it was intended to further secure the finance by seeking personal undertaking from the directors in case it no more remained possible for the financial institution to recover it from the company---Hence it could be said that the directors did give personal assurance to the financial institution that in the event it became impossible for it to recover from the company, it could have recourse against them for the loss so incurred---Sponsors' Undertaking was executed by the directors contemporaneously with the agreement of finance so it could be conveniently said that both the documents were part of the same scheme under which financial institution provided finance to the company---Obligation of an indemnifier was not co-extensive with that of the principal debtor and came into existence only when it no more remained legally possible to recover from the principal debtor---From the contents of Clauses 6 and 7 of Sponsors' Undertaking it was evident that the liability of the directors was not made co-extensive with the company, hence it was a contract of indemnity---In liquidation proceedings, the company had been wound-up and the sale proceeds of all its assets had apparently gone to settle claim of a creditor and the financial institution's decree remained unsatisfied---In such circumstances proper stage to initiate recovery against the directors in their personal capacity as indemnifiers under the Sponsors' Undertaking had thus matured---Only avenue left for the financial institution was to recover its loss from the directors in their capacity as indemnifiers under the Sponsors' Undertaking, which the financial institution could now do by seeking execution of its decree]---[Per Munib Akhtar, J (Minority view): Obligations of the directors were contained in the Clause 5 of the Sponsor's Undertaking which made them "personally liable to all the monetary obligations, detriments, losses that may be sustained by [the financial institution] due to any breach of the covenants herein"---Liability of the directors as regards the monetary losses etc. suffered by the respondent was, thus, conditional upon, and limited to, such being sustained on account of any breach of the covenants i.e. Clauses 1 to 4 contained in the Undertaking---Evidence led at the trial did not show any breach at all of the said Clauses, therefore, insofar as both the directors and the company were concerned, their obligation and liability under Clause 5 was never actualized---No (deemed) event of default occurred under the Undertaking as would, under the Agreement, have allowed the financial institution to demand immediate repayment of the finance from the company, nor were there any monetary obligations, detriments etc. incurred or suffered by the financial institution (on account of the breach of Clauses 1 to 4) as would make the directors liable to it---Clause 6 of the Undertaking was an indemnity clause, but it was ambiguous and uncertain as it neither specified the conduct of the directors or the company which would trigger the application of the said clause, nor specified the conduct against which the financial institution was indemnified---Clause 6 was ambiguous, and that uncertainty left its scope indeterminate---Court did not have to find ways to breathe life into the said provision so as to enable the financial institution to look to the directors in addition to the company for payment of any amounts defaulted by the latter---Sponsor's Undertaking and the finance agreement were part of the same transaction, but only in the sense of relating to the finance that the financial institution proposed to give to the company---Undertaking was not in any legal sense "part" of the finance agreement---Equally, the Undertaking had to be construed and applied on its own terms---Financial institution's obligation to disburse the finance under the finance agreement was, inter alia, conditional upon the directors giving the Undertaking, but that did not make the Undertaking a part of the finance agreement, nor could it affect the legal nature and the proper construction and application of the former---Suit of financial institution against the directors should have been dismissed]---Appeal was dismissed accordingly.

Per Faisal Arab, J

(b) Contract---

----Covenants, interpretation of---While interpreting covenants of a document it was to be seen what was the main purpose and object which brought the parties to the table to sign it---When the real purpose of executing a document became evident, then in what order various covenants were arranged could not be made basis to frustrate it by excluding such covenants from its scope that mattered the most---Hence only that interpretation was to be adopted that served and not vitiated the main purpose with which the document was executed. [Majority view]

Per Munib Akhtar, J

(c) Contract---

----Interpretation---Contract was to be read 'contra proferentem', i.e., when there was any doubt or ambiguity as regards the meaning of it or any words used therein, it would be construed against the person who put it forward.

Co-operators Life Insurance Co. v. Gibbons 2009 SCC 59 and Tam Wing Chuen v. Bank of Credit and Commerce Hong Kong Ltd [1996] UKPC 69 ref.

Per Munib Akhtar, J

(d) Contract---

----Implied terms--- Something ought not to be read or implied into a contract simply because it appeared to be reasonable to do so.

House Building Finance Corporation v. Shahinshah Hamayun Cooperative House Building Society and others 1992 SCMR 19 and West Pakistan Industrial Development Corporation Karachi v. Aziz Qureshi PLD 1973 SC 222 ref.

Per Munib Akhtar, J

(e) Contract---

----Terms, interpretation of---'Joint' and 'several' liability---Meaning---When there was joint liability, each of the parties was liable for the full amount of the claim---Where the liability was several each bore only his own share of the burden of the claim, and was liable accordingly---In case of 'joint and several' liability the effect was the same as liability that was joint.

Arshad Mohsin Tayebaly, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Petitioners.

Muhammad Masood Khan, Advocate Supreme Court for Respondents.

Date of hearing: 31st December, 2018.

2019 C L D 1222

[Supreme Court of Pakistan]

Present: Gulzar Ahmed, Faisal Arab and Sajjad Ali Shah, JJ

NAZLI HILAL RIZVI---Petitioner

Versus

BANK AL-FALAH LTD. and others---Respondents

Civil Petition No. 381-K of 2019, decided on 7th August, 2019.

(Against the judgment dated 18.03.2019 passed by the High Court of Sindh, Karachi in First Appeal No. 14 of 2015)

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 90---Auction proceedings---Objection petition regarding non-serving of notice at address outside Pakistan and not following other legal requirements necessary for the auction---Paper book of present case contained copies of notices that were sent in the execution proceedings to the petitioner/judgment debtor at the address on which she was served when summons was issued in the suit---Said notices included notice for attachment of the mortgaged property, notice for settling the terms of proclamation of sale and notice for sale of the mortgaged property---Thereafter, auction notice was also published in two leading newspapers---Petitioner's address in the suit was her residence in city "K" of Pakistan on which the summons was served and she also filed her leave to defend the said application, thus, it was the petitioner's obligation to place on record her new address for any future service on her, if at all such service was required by law, which she did not do---Advocate who represented the petitioner and other judgment debtors in the suit also continued to appear before the Banking Court even after conversion of suit into execution proceedings that finally culminated in the sale of the mortgaged property---Hence, the petitioner could not feign ignorance about the periodical developments that took place in the proceedings---Question of non-service to the petitioner did not arise at all---Petition for leave to appeal was dismissed accordingly.

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

----Ss. 9 & 22---Suit for recovery of loan---Decree by Banking Court---Execution proceedings---Notice not required---Section 19 (1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 had done away with the general requirement of instituting fresh proceedings for the execution of the decree as provided in the Code of Civil Procedure, 1908---After the banking suit was decreed, the proceedings did not come to an end but stood automatically converted into execution proceedings for which no fresh notice was required to be served.

Muhammad Haseeb Jamali, Advocate Supreme Court and Ghulam Rasool Mangi, Advocate-on-Record for Petitioner.

K.A. Wahab, Advocate-on-Record for Respondent No.1.

Liaquat Hussain Khan, Advocate Supreme Court and K.A. Wahab, Advoate-on-Record for Respondent No.5.

2019 C L D 1263

[Supreme Court of Pakistan]

Present: Mushir Alam and Qazi Faez Isa, JJ

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

Versus

Mst. SHAZIA MIR ARSHAD---Respondent

Civil Petition No. 2609 of 2017, decided on 19th March, 2018.

(Against the judgment dated 17.5.2017 passed by Lahore High Court, Lahore in Insurance Appeal No. 201 of 2016)

Insurance Ordinance (XXXIX of 2000)---

----Ss. 79 & 80---Constitution of Pakistan, Art. 154(3)---Insurance claim--- Mis-statement by deceased insured--- Proof--- Insurance Company was aggrieved of acceptance of insurance claim by Insurance Tribunal in favour of legal heirs of deceased insured---Plea raised by petitioner was that deceased insured fraudulently concealed his actual health state---Validity---Deceased insured was medically examined by a Medical Specialist as approved by petitioner company before the policy was issued---Opinion of Claim Examiner that deceased insured met with accident and fractured his leg in year 1994 had no correlation with cause of death mentioned in death certificate i.e. "Diabetes Mellitus CLO/recompensated liver"---Any subsequent investigation report after the claim was filed by legal heirs of the insured that he was suffering from various ailments and illnesses was not substantiated on record by producing cogent evidence---Insurance Tribunal had rightly held that previous ailments of the insured before the insurance policy were not proved---Supreme Court declined to interfere in the order passed by Insurance Tribunal---Petition for leave to appeal was dismissed in circumstances.

State Life Insurance Corporation of Pakistan and others v. Mst. Shazia Mir Arshad 2017 CLD 1483 and P.C. Chacko and another v. Chairman, Life Insurance Corporation of India and others (2008) 1 Supreme Court Cases 321 ref.

Mushtaq Ahmad Mohal, Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Petitioners.

Liaqat Ali Butt, Advocate Supreme Court for Respondent.

2019 C L D 1283

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, C.J., Sarmad Jalal Osmany and Maqbool Baqar, JJ

FIRST DAWOOD INVESTMENT BANK LTD.---Petitioner

Versus

BANK ISLAMI PAKISTAN LTD.---Respondent

Civil Petition No. 686-K of 2013, decided on 10th June, 2015.

(On appeal against the judgment dated 31.10.2013 passed by High Court of Sindh, Sukkur Bench in I.A. No. 17 of 2012)

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

----S. 9---Recovery of finance---Authority to institute suit---Defendant assailed judgment and decree passed against it by Banking Court on grounds that suit was filed by a person not duly authorized by Bank---Validity---Power of Attorney was issued on behalf of Credit Administration Department and Legal Department and was duly executed by Chief Executive Officer of Bank who had authorized two officers of Bank to file suits for recovery of money and other purposes---Words appearing in Power of Attorney in recitals, i.e., 'on behalf of Legal Department or Credit Administration Department' were merely explanatory, contention that powers of attorney were issued on behalf of the Credit Administration Department and the Legal Department and not by the Bank, thus was negated---Supreme Court declined to interfere in judgments and decrees passed by two courts below--- Petition for leave to appeal was dismissed in circumstances.

Trading Corporation of Pakistan Ltd. v. Haji Khuda Bux Amir Umar Ltd. 2007 YLR 1741; Ediga Seshanna and another v. R. Venkataramana Rao AIR 1941 Madras 60; Notified Area Committee, Okara v. Kidar Nath and others AIR 1935 Lah. 345 and Messrs Muhammad Siddiq Muhammad Umar and another v. The Australsia Bank Ltd. PLD 1966 SC 684 distinguished.

Abdul Hafeez Lakho, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Petitioner.

Muharram G. Baloch, Advocate Supreme Court for Respondent.

2019 C L D 1319

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar, C.J., Umar Ata Bandial and Ijaz ul Ahsan, JJ

SELLING OF NATIONAL ASSETS INCLUDING PIA AT THROWAWAY PRICE: In the matter of

Human Rights Case No. 11827-S of 2018, decided on 3rd September, 2018.

(In the matter regarding Selling of National Assets including PIA at Throwaway Price)

(a) Constitution of Pakistan---

----Arts. 184(3)---Constitutional jurisdiction under Art. 184(3) of the Constitution--- Writ of quo warranto---Locus standi/"aggrieved person"---For issuance of a writ of quo warranto, person/petitioner laying information before Court need not be an aggrieved person.

Farzand Ali v. Province of West Pakistan PLD 1970 SC 98; Muhammad Naseem Hijazi v. Province of Punjab 2000 SCMR 1720 and Hamdullah v. Saifullah Khan PLD 2007 SC 52 rel.

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

----Rr. 5 & 2A---Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015, R.2 & Sched.---Public sector companies---Recruitment and appointment---Appointment of Chief Executive Officer---Fit and proper criteria---Scope---Board of Directors of public sector company owed such company and stakeholders a fiduciary duty, performance whereof was solely for best interest of such company---Such Board of Directors, being responsible for planning, succession and appointment of a public sector company, had to evaluate a potential candidate for appointment on a fit and proper criteria, and must act independently, transparently, totally impartially and in an unbiased manner, so as to select the best and most suitable candidate strictly on merit---Suitability and eligibility of a candidate was ascertained through an objective procedure and appointment thereof needed to have nexus with object of the job.

Muhammad Yasin v. Federation of Pakistan PLD 2012 SC 132 rel.

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

----Rr. 5 & 2A---Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015, Rr. 2 & Sched.---Constitution of Pakistan, Art. 184(3)---Public sector companies---Recruitment and appointment---Appointment of Chief Executive Officer ("CEO") of Public Sector Company---Fit and proper criteria---Evaluation and due diligence by the Board of Directors---Question before Supreme Court concerned purported irregularities identified in appointment of respondent as CEO of the Public Sector Company and as well as his lack of eligibility to hold said office---Held, that work experience of respondent was not in line with what was required by advertisement for the post and he had no experience in the relevant industry---Short-listing of candidates was to be conducted by the Board of Directors but was instead done by a "Selection Committee", consisting of Advisor to the Prime Minister, who was a stranger to the Board, and as such, the working constitution and members of said "Selection Committee" was, ex facie, a highly questionable and dubious exercise---Nothing on record showed that necessary due diligence per the Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015 was undertaken by the Board of Directors or whether fit and proper criteria was adhered to---Supreme Court observed that the appointment of the respondent was arbitrary, illegal and unfair and was in violation of the law and rules applicable thereto---Appointment in question was set aside with immediate effect.

Muhammad Ashraf Tiwana v. Pakistan and others 2013 SCMR 1159; Muhammad Naseem Hijazi v. Province of Punjab 2000 SCMR 1720; Ghulam Rasool v. Government of Pakistan PLD 2015 SC 6 and Mustafa Impex v. Government of Pakistan and others PLD 2016 SC 808 rel.

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

----Rr. 5 & 2A---Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015, Rr. 2 & Sched.---Constitution of Pakistan, Art. 184(3)---Recruitment and appointment made to Public Sector Company---Constitutional jurisdiction under Art.184(3) of the Constitution---Writ of quo warranto---Scope---Constitutional challenge to recruitment and appointment made to public sector companies/ entities---Scope---Until and unless strict compliance with provisions of statutes and rules governing appointment to senior positions in public sector entities were adhered to in letter and spirit, such appointments would always be subject to challenge on ground of arbitrariness and non-compliance with law and settled principles---Personal bias, political affiliations and a lack of empathy, when displayed by those mandated to make such appointments, defeated all ideas, hopes and mechanisms of good governance.

Anwar Mansoor Khan, Attorney General for Pakistan, Syed Asghar Haider, P.G. NAB, Farid-ul-Hassan, Spl. Prosecutor, NAB, Syed Nayyar Abbas Rizvi, Addl. A.G.P. and Naeem Bukhari, Advocate Supreme Court.

Dr. Musharaf Cyan, C.E.O., PIACL (For PIA).

Ms. Asma Bajwa, Chief HR Officer, PIA and Bilal Hassan Minto, Advocate Supreme Court (for Mr. Shujaat Azeem).

Umar Lakhani, Advocate Supreme Court (in HRMA No.249/2018).

Raja Ikram Amin Minhas, Advocate Supreme Court (in HRMA-No.534/2018)

Kh. Azhar Rasheed, Advocate Supreme Court, Junaid Younis, Ex. M.D. PIACL, Nadeem Yousafzai, Ex-M.D. PIACL, Sardar Mehtab Abbasi, Ex-Advisor to PM on Aviation, Muhammad Saeed Tawana, Director Legal for Auditor General and Nayyar Hayat, Ex. M.D. PIACL.