CLD 2020 Judgments

2020 C L D 219

[Competition Commission of Pakistan]

Before Dr. Muhammad Saleem, Dr. Shahzad Ansar and Ms. Shaista Bano, Members

Messrs MIR HASSAN BUILDERS AND DEVELOPERS (PVT.) LIMITED: In the matter of

F.No. 316/MEHER DEVELOPERS/COMP/OFT/CCP/2018, decided on 22nd November, 2019.

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

----Ss. 10 & 59---Trade Marks Ordinance (XIX of 2001), Preamble---Deceptive marketing practices---Competition Act, 2010 to override other laws---Distribution of false or misleading information---Fraudulent use of another's trademark---Pendency of proceedings before court regarding right to use trade mark---Effect---Complainant urged that the respondent had commenced its housing/real estate development business by adopting a trade/service mark and symbol deceptively similar to that of complainant's registered trade/service mark---Respondent contended that the proceedings under the Trade Marks Ordinance, 2001 were pending adjudication before High Court, hence the Commission could not proceed in the matter---Validity---Proceedings pending before High Court under the Trade Marks Ordinance, 2001 pertained to violation of trade mark whereas the proceedings before the Commission were pending adjudication for deceptive marketing practices, which were distinct in nature and were not conflicting---Complainant was a real estate developer which marketed its project under a trade mark duly registered with the tradmarks Registry---Respondent had used the similar name and symbol for marketing and promotion of its real estate project---Respondent had failed to produce any documentary evidence showing authorization for the use of the trade mark---Complainant and respondent were in the business of real estate development in Pakistan---Town marketed by complainant was located in District 'I' whereas town marketed by respondent was located in District 'G'---Use of similar words and symbols could easily deceive an ordinary consumer/investor and he could assume that the projects in both districts were of the same company or at least of the same group---Both parties were operating in the same line of business therefore both companies were targeting the same set of prospective consumers/investors so chances of deception and resultant harm to the competitor were multiplied---Commission held that the respondent was misleading consumers by using a trade name that was deceptively similar to that of complainant's registered trade mark and symbol and that the respondent had resorted to deceptive marketing practices in violation of S. 10 of Competition Act, 2010---Commission imposed penalty on the respondent for violating the provisions of S. 10 of Competition Act, 2010; directed respondent to inform the public at large that its real estate project was not related to that of complainant and reprimanded it to discontinue the use of trade mark of the complainant and not to use it in future without due authorization--- Show cause notice was disposed of accordingly.

Show Cause Notice issued for violation of DHL Trademark: In the matter of 2013 CLD 1014 and Show Cause Notice issued to Messrs Visions Developers: In the matter of 2018 CLD 350 rel.

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

----Preamble, Ss. 59 & 28---Trade Marks Ordinance (XIX of 2001), Preamble---Functions and powers of the Commission---Competition Act, 2010 to override other laws---Decision by Tribunal regarding use of a trade mark---Application of other laws not barred---Scope---Question before Commission was as to whether it could proceed in the matter where proceedings under Trade Marks Ordinance, 2001 were pending before any Tribunal or Court---Validity---Legislature had entrusted the Competition Commission with the exclusive mandate to provide for free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive practices---Commission was mandated under S. 28(1)(a) of Competition Act, 2010 to initiate proceedings in accordance with the provisions of the Act and to make Orders in cases of contraventions thereof---Non-obstante clause of S. 59 of Competition Act, 2010 made it abundantly clear that the provisions and applicability of the Competition Act, 2010 were given an overriding effect over all other conflicting laws in force.

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

----S. 10---Deceptive marketing practices---Liability of advertiser---Net general impression--- Dominant message--- Scope--- Competition Commission, while evaluating the 'net general impression' or dominant message, delineates and examines the express or implied claims contained in an advertisement or promotional campaign, while holding the advertiser liable for both---Advertiser is liable for all such claims if they are false and/or misleading or lack a reasonable basis for the same---Neither proof of intent to disseminate a deceptive claim nor evidence that consumers have actually been mislead is required for an act or omission to constitute violation of S. 10 of Competition Act, 2010.

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

Noman A. Farooqi, Director General (Legal).

Lt. Cdr. (Retd.) Muhammad Rizwan Wilayat, Chief Executive Officer for Meher Developers and Constructions (Pvt.) Limited.

Nemo for Mir Hassan Builders and Developers (Pvt.) Limited.

2020 C L D 277

[Competition Commission of Pakistan]

Before Dr. Muhammad Saleem, Dr. Shahzad Ansar and

Ms. Bushra Naz Malik, Members

SHOW CAUSE NOTICES ISSUED TO NIMKO CORNER MESSRS KARACHI NIMCO: In the matter of

File No. 295/Nimco Corner/OFT/CCP/2017, decided on 23rd December, 2019.

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

----Ss. 10 & 37---Deceptive marketing practices---Enquiry---Laches---Retrospective operation of law---Scope---Complainant alleged that the respondent was disseminating false and misleading information by using virtually identical firm names, trademarks and by copying of distinctive items of product packing---Respondent, while relying on the principle of laches, contended that the complainant had kept silent for several years and had not objected to the infringement of its' rights when the respondent was commercializing its business activities---Validity---Neither S. 37(2) of Competition Act, 2010 nor its any other provision of the Act put any time limitation as to when to file a complaint for violation thereof---Application of Competition Act, 2010 was not only extendable to violations occurring in the present, but, to the violations occurred in the past---Any person violating the provisions of the Competition Act, 2010 could not be allowed to get away with his violation merely on the fact that the time had lapsed---Objection raised by respondent was not tenable and was rejected.

Al-Karam Textile Mills v. Mehtab Chawla 2007 CLD 966 distinguished.

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

----Ss. 10 & 59---Trade Marks Ordinance (XIX of 2001), S. 81---Deceptive marketing practices---Competition Act, 2010 to override other laws---Effect of acquiescence---Scope---Complainant alleged that the respondent was disseminating false and misleading information by using virtually identical firm names, trademarks and by copying of distinctive items of product packing---Respondent, while placing reliance on S. 81 of Trade Marks Ordinance, 2001, contended that its violations were in the knowledge of complainant for over five years and the complainant had not taken any action, therefore, the principle of acquiescence applied to the case---Validity---Onus to discharge the burden of prior knowledge was upon the respondent, however, no evidence was presented to affirm the prior knowledge of infringement for over five years---Competition Commission had exclusive jurisdiction to take action and adjudicate on any matter provided in the Competition Act, 2010---Section 59 of Competition Act, 2010 provided that it had an overriding effect on any law for the time being in force, which inter alia, included Trade Marks Ordinance, 2001---Objection raised by respondent was not tenable and was rejected.

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

----Ss. 10 & 37---Deceptive marketing practices---Enquiry---Mala fide of complainant---Proof---Scope---Complainant alleged that the respondent was disseminating false and misleading information by using virtually identical firm names, trademarks and by copying of distinctive items of product packing---Respondent contended that complaint had filed complaint owing to personal vendetta and business rivalry and that the allegations levelled in the complaint were intended to harm its business reputation---Validity---Exercising any legal right available to a person through quasi-judicial forum, such as the Competition Commission, did not amount to business rivalry---Purpose of S. 10, Competition Act, 2010 was to provide a remedy to an aggrieved person whose rights were infringed by another by resorting to deceptive marketing practices being an unfair mean of distorting competition---Competition Act, 2010 provided a mechanism, such as enquiry process under S. 37, to scrutinize the complaint and check its veracity---Competition Act, 2010 even further provided a due opportunity to the person against whom a complaint was filed to appear and produce his defence---Mere exercise of legal right, in the presence of an extensive process, did not amount to settling personal vendetta---Apart from submissions no other evidence was produced to prove mala fide of the complainant---Mala fide had to be proved through independent and cogent evidence, mere allegation was not sufficient---Complaint was held to be maintainable and filed with bona fide to protect the rights of the complainant in accordance with law.

Zulfiqar Ali v. Province of Punjab 2018 PLC (C.S.) 842 and Shafi Mohammad v. State 2017 YLR 317 ref.

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

----O. VI, R. 4---Particulars to be stated where necessary---Mala fide---Proof---Mala fide has to be proved through independent and cogent evidence, mere allegation is not sufficient.

Zulfiqar Ali v. Province of Punjab 2018 PLC (C.S.) 842 ref.

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

----O. VI, R. 4---Particulars to be stated where necessary---Mala fide---Burden of proof--- Scope--- Burden of proof is on the one who alleges mala fide on the part of complainant or investigating agency.

Shafi Mohammad v. State 2017 YLR 317 rel.

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

----S. 10---Trade Marks Ordinance (XIX of 2001), S. 73---Deceptive marketing practices---Revocation of registration---Common name in the trade--- Scope--- Complainant alleged that the respondent was disseminating false and misleading information by using virtually identical firm names, trademarks and by copying of distinctive items of product packing---Respondent contended that the word 'NIMCO' was generic and common to trade trademark, hence, nobody could claim any right over such particular generic word---Validity---No action was initiated by the respondent under the relevant provisions i.e. S. 73 of Trade Marks Ordinance, 2001 nor any application was filed by him---Jurisdiction of Competition Commission was only limited to the extent of deceptive marketing practices---Respondent was at liberty to take that stance before the Trade Marks Registry in accordance with the procedure provided in Trade Marks Ordinance, 2001---Competition Commission could not entertain the defence taken by the respondent until such direction was issued by the authority concerned, as in the absence of judicial pronouncement, it held no value---Complainant had got its trademark registered and was taking measures for its protection in accordance with law---Competition Commission held that the word 'NIMCO' was not a general descriptive word and the complainant was right in its stead to take appropriate actions in accordance with law to safeguard rightfully earned goodwill, reputation and investments---Competition Commission imposed penalty, reprimanded the respondent to ensure responsible behaviour in future with respect to the marketing of its business and directed the respondent to cease and desist from the use of complainant's registered trademark---Show cause notices were disposed of accordingly.

Backaldrin Osterreich The "Kornsitz" Company GMBH v. Pfahnl Backmittel GMBH, [2014] EUECJ C-409/12 and Hero Motor Ltd. v. Babar Trading and Manufacturing Company 2010 CLD 22 distinguished.

Societe Des Products Nestle S.A. v. Food International (Pvt.) Limited 2004 CLD 1383 rel.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Deceptive similarities in trade dress---Scope---Complainant alleged that the respondent was disseminating false and misleading information by using virtually identical firm names, trademarks and by copying of distinctive items of product packing---Validity---Pictorial comparison of the complainant's and respondent's products led to the obvious conclusion that there existed deceptively confusing similarities in the complainant's and respondent's trade dress---Ordinary consumer, specifically the illiterate, would not be able to distinguish between the products origin but for the brand names evident on the packing---Confusing similarities could mislead the consumer into believing that the source/origin of the respondent's products were in fact the complainant's---Respondent had failed to discharge the burden of providing any level of substantiation for the authenticity of its trade dress to the effect that it would not cause a misleading impression that respondent's products originate from the complainant and hence matched the quality of the complainant's products---Deceptive similarity in the respondent's trade dress and the complainant's trade dress had the potential to directly or indirectly affect the transactional decision of the consumers to buy the respondent's product on the misleading pretence as to the origin/place of production and quality of the product, therefore was materially deceptive---Competition Commission imposed penalty, reprimanded the respondent to ensure responsible behaviour in future with respect to the marketing of its business and directed the respondent to cease and desist from the use of complainant's registered trademark---Show cause notices were disposed of accordingly.

Western Brand Tea v. Tapal Tea (Pvt.) Limited PLD 2001 SC 14 and Mehran Ghee Mills (Pvt.) Limited v. Chiltan Ghee Mills (Pvt.) Limited 2001 SCMR 967 ref.

Show Cause Notice issued to A. Rahim Foods: In the matter of 2016 CLD 1128; Colgate Palmolive Co. v. Anchor Health and Beauty Care Pvt. Ltd. 2003 (27) PTC 478 Del and Show Cause Notice issued to Messrs Shainal Al-Syed Foods: In the matter of 2018 CLD 1115 rel.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Scope---Marketers traditionally focus on designing advertising campaigns and other promotional strategies to promote a brand name---With evolving consumer preferences and laws, presentations, trade dress, have become just as essential for making products and services distinctive and for building brand recall---Cultural diversity of the market makes a compelling case for the importance of product identification by packing and visual impression---Such conduct has resulted in third parties creating look alikes to popular products with similar packaging in order to grab consumers' attention and generate demand for their own products in the market---Law governing the trademark jealously protects the registered trademark for the growth of healthy competition in trade, commerce, industry and those who have invested their money, labour and skills for earning a remarkable reputation should not be allowed to be exploited by rivals who venture to take benefit of the earned reputation by a registered trademark---Object/intention of the Legislature, while enacting the trademark laws, had been primarily focused towards investment and innovation leading to elimination of chances of confusion and deception.

Show Cause Notice issued to Messrs Shainal Al-Syed Foods: In the matter of 2018 CLD 1115 rel.

Arsal Ikram, Assistant Director (Legal) present.

Barrister Abdur Rehman for Messrs Nimco Corner.

Nemo for Nimko Corner.

2020 C L D 394

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS PAKISTANI LEATHER JACKET HOUSE: In the matter of

F. No. 302/PAKISTAN LEATHER/OFT/CCP/2018, decided on 17th September, 2019.

Competition Act (XIX of 2010)---

----Ss. 10 & 31(c)(i)---Deceptive marketing practices---Fraudulent use of another's trademark or packing---Discontinuance of contravention---Scope---Complainant's case was that respondent was disseminating false and misleading information to the consumers by fraudulently using his registered trademark, trade dress and logo on its marketing material, which was capable of harming his business interest---Respondent challenged the evidence collected through enquiry report as mere oral, i.e. evidence without affidavit of the witnesses and contended that after the meeting of Local Market Committee, it had discontinued the old packing and had changed its bill books as well; that it had arranged bags of cloth for packing and had replaced the old packing with the new one; that its products were not exported hence, it would not mention so on the packing and that over complainant's concern it would not use the tag of being registered on the packing---Validity---Bags of complainant as well as the respondent and the certificate of registration of trademark and copyright issued in favour of the complainant were also on record---Proprietor of the respondent had made a statement on oath that the respondent's previous marketing material was in violation of S. 10 of Competition Act, 2010 being similar with the trade dress of complainant's registered packing, trade name and logo---Bench of Competition Commission, in presence of clear and unambiguous admission on behalf of respondent, held that violation of S. 10 of Competition Act, 2010 stood proved---Respondent's contention with regard to oral evidence was contrary to the facts and evidence available on record---Respondent was directed to cease and desist from using the trademark of the complainant or use the packing material similar to that of the complainant or any other undertaking in future---Show cause notice was disposed of accordingly.

Noman A. Farooqi, Legal Advisor and Syed Farhan Shah, Deputy Prosecutor present.

Sohail Raja, Owner and Ms. Urooj Azeem Awan for Messrs Pakistani Leather International (JKT).

Zafar, Advocate High Court and Sheikh Shahid Jan, Owner for Messrs Pakistan Leather Jacket House.

2020 C L D 433

[Competition Commission of Pakistan]

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

Dr. Muhammad Saleem, Members

SHOW CAUSE NOTICE ISSUED TO MESSRS PAKISTAN FLOUR MILLS

ASSOCIATION (PFMA): In the matter of

F. No. 89/PFMA/C&TA/CCP/2016, decided on 13th December, 2019.

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

----S. 2(1)(q)---Terms 'association' and 'association of undertakings'---Scope---Notice was issued to Pakistan Flour Mills Association (PFMA) for anti-competitive practices in market---Objection raised by PFMA was that proceedings against it were not maintainable as it was not an undertaking---Validity---Term 'association' could be of a natural person or legal persons for social causes or economic purposes---For an association to be an undertaking it was to be performing economic functions, i.e., it was engaged in provision of goods or services---For an 'association of undertakings' Legislature had not prescribed any condition---Plain and ordinary language of S. 2(1)(q) of Competition Act, 2010 provided that it should be an association of 'undertakings'---Where members were 'undertakings' within meaning of S. 2(1)(q) of Competition Act, 2010 it was deemed to be an association of undertakings---PFMA was an association of flour millers who were undertakings engaged in production and supply of wheat flour and all other products which were extracted from grinding of wheat--- PFMA was an "association of undertakings" and was therefore an "undertaking" in terms of S. 2(1)(q) of Competition Act, 2010---Proceedings against PFMA were maintainable under circumstances.

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

----Ss. 4 & 38---Anti-competitive practices---Show cause notice, issuance of---Imposition of fine---State Compulsion, doctrine of---Regulatory Conduct Defense---Applicability---Notice was issued to Pakistan Flour Mills Association (PFMA) for anti-competitive practices in market---Contention of authorities was that State Compulsion Doctrine or Regulatory Conduct Defense was not available to Association---Validity---PFMA was not requiring its members to comply with maximum cap determined by Government, in fact, PFMA was fixing one price for all millers and circulating same for compliance---By giving instructions to sell wheat flour at a fixed price, PFMA primarily took away bargaining power from retailers and consumers, vis-a-vis sale and purchase of wheat flour independently---Choice of different prices was not made available to end consumers and accordingly competition in relevant market was distorted---From correspondence available on record it was clear that PFMA platform was also used to discuss sensitive information vis-à-vis prices and supply of wheat flour in open market in year 2013 as well---State Compulsion, Doctrine of or Regulatory Conduct Defense was not available to PFMA as those were not actions of Government which had been circulated rather prices were determined by sharing statistics and other factors on platform of PFMA and subsequently circulated to its member mills for compliance---Government did not compel to circulate prices to flour mills therefore, PFMA had violated provisions of S. 4 of Competition Act, 2010---PFMA by fixing price of wheat flour, providing a platform to share commercially sensitive information and fixing quantities of production of wheat flour which had object of preventing, restricting or reducing competition within relevant market and same was to be condemned per se it was illegal and violative of S. 4 of Competition Act, 2010---Commission was empowered in terms of S. 38 of Competition Act, 2010 to impose such financial penalties upon contravening parties as it would deem fit in circumstances which could be up to Rs. 75 million or 10% of annual turnover of undertakings concerned---Commission imposed maximum fixed penalty of Rs. 75 million on PFMA to be deposited with Registrar of Commission---Competition Commission directed PFMA and all other parties to proceedings which included provincial food departments to be mindful of guidelines or directions while conducting future business and not to hamper competition in relevant market---Commission reprimanded PFMA and was directed to refrain from following, adopting, implementing or carrying out any activity which had constituted a violation of Competition Commission Act, 2010---Show cause notice was disposed of accordingly.

United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940); Catalano, 446 U.S. at 648, Cement Inst., 333 U.S. 683, Sugar Inst., v. United States 297 U.S. 533 (1936), and Plymouth Dealers Ass' n., 279 F.2d at 132 and Arizona v. Maricopa Cty. Med. Soc'y 457 U.S. 332 (1982); Order dated 20 June 2019 in the matter of Show Cause Notice issued to Oil Companies Advisory Council 2019 CLD 1285; Order dated 29th December 2017 passed by the Commission in the matter of Show Cause Notice issued to Messrs Vision Developers (Pvt.) Limited, 2018 CLD 350; Order dated 11 March 2009 passed in the matter of appeal filed by Institute of Chartered Accountants of Pakistan 2009 CLD 638; Order dated 18 March 2009 in the matter of appeal filed by Messrs Karachi Stock Exchange (Guarantee) Limited the Commission 2010 CLD 454; Order dated 10 January 2013 in the matter of Show Cause Notice issued to Institute of Chartered Accountant of Pakistan 2013 CLD 1184; Order dated 10 April 2015 in the matter of Show Cause Notice issued to Pakistan Automotive Manufacturers and Dealers Association and its Member undertakings 2016 CLD 289; Order dated 20 April 2016 in the matter of Show Cause Notice issued to Pakistan Engineering Council 2017 CLD 229; Order dated 6 August 2019 in the matter of Show Cause Notice issued to Pharma Bureau 2019 CLD 1152; Order dated 15 December 2017, in the matter of Cause Notice issued to Utility Stores Corporation of Pakistan (Pvt.) Ltd. 2018 CLD 292; East and West Steamship Co. v. Queensland Insurance Co., 1963 SC 663; University of Punjab v. Mst. Samea Zafar Cheema 2001 SCMR 1506; Muhammad Masud v. Ikramullah Khan PLD 1994 SC 409; Cooperative Insurance Society of Pakistan Limited v. State Life Insurance Corporation of Pakistan 1999 SCMR 2799; Imperial Chemical Industries plc (ICI) v. Commission for European Communities Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C252/99; Osterreichische Volksbanken v Commission for European Communities, Joined Cases C-125/07 P, C-133/07 P, C-135/07 P and C-137/07 P; Coop de France Betail et Viande (formerly Federation Nationale de la Cooperation Betail et Viande (FNCBV)) v. Commission of the European Communities (C-101/07 P) [2008] E.C.R. 1-10193 (ECJ (3rd Chamber)); Case 38549 Architectes Beiges (the Belgian Architects case); Case Comp/AT.39847-E-BOOKS; Case AT.39398 - Visa MIF; United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940); Catalano, 446 U.S. at 648 (1980); Cement Inst., 333 U.S. 683 (1948); Plymouth Dealers Ass' n. v. US, 279 F.2d at 132 - US Court of Appeals Ninth Circuit and Arizona v. Maricopa Cty. Med. Soc'y 457 U.S. 332 (1982) ref.

Noman A. Farooqi, Director General (Legal) assisted by Ms. Shazia Ashraf, Senior Joint Director (Exemptions), Ms. Laila Leghari Assistant Director (Legal) and Ms. Aish K. Khan, Management Executive (Exemptions) present.

Hamood ur Rehman Awan, Advocate Supreme Court for Messrs Pakistan Flour Mills Association (PFMA).

Abdul Jalil, Director Food for Messrs Khyber Pakhtunkhwa Food Department.

Zahid Qaisar, Director Purchases for Punjab Food Department.

Nemo for Balochistan Food Department.

Nemo for Sindh Food Department.

2020 C L D 497

[Competition Commission of Pakistan]

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

COMPLAINT BY MESSRS CATKIN ENGINEERING SALE AND SERVICES (PVT.) LIMITED AGAINST KPK DIRECTORATE OF AGRICULTURE ENGINEERING: In the matter of

File No. 248/Catkin/C&TA/CCP/2019, decided on 16th December, 2019.

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

----S. 37(2)---Enquiry and studies---Opportunity of hearing before recording adverse findings---Scope---Where a complaint is filed and the findings of an enquiry do not indicate any prima facie violation and/or give any adverse findings against the complainant, it would be fair and in accordance with the principles of natural justice that prior to the disposal of the complaint an opportunity of hearing is to be given to the complainant.

Order dated 16 March 2010, in the matter of Appeal filed by Fecto Belarus Tractors (Pvt.) Limited rel.

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

----S. 37(2)---Enquiry and studies---Scope---Mere filing of a formal complaint shall not trigger initiation of formal enquiry in terms of S. 37(2) of Competition Act, 2010---For initiation of the enquiry the complainant in any formal complaint filed with the Commission must satisfy the criteria laid down in the express provision of law, i.e. complaint must be filed by an 'undertaking' or 'a registered association of consumers' and must be substantiated with prima facie evidence, failing which no enquiry can be conducted thereon.

National Feeds v. Competition Commission of Pakistan 2016 CLD 1688 rel.

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

---Ss. 37(2) & 10---Competition Commission---Responsibilities---Enquiry and studies---Deceptive marketing practices---Burden of proof---Scope---Burden of proof, in cases of deceptive marketing practices, is on the undertaking concerned i.e. the manufacturer/seller of goods or provider of services that the claims made by them in the process of marketing about their products and/or services are appropriately substantiated---Complainant in such like matters is considered an informer; this is in line with the mandate of the Commission under the provisions of the Competition Act, 2010---Competition Commission is entrusted with the responsibility of looking after the interest of the general public vis-à-vis anti-competitive conduct and to create a level playing field in order to enhance economic efficiency in all spheres of commercial and economic activity and that too in the public interest.

Order dated 29 September 2009 in the matter of Show Cause Notice issued to China Mobile Pakistan Ltd (Zong) and Pakistan Telecom Mobile Ltd (Ufone) 2010 CLD 1478 rel.

Noman A. Farooqi assisted by Amir Zaman, Deputy Director (Legal) present.

Fawad Ashraf Ghumman, Manager (S&M) for Messrs Catkin Engineering Sale and Services (Pvt.) Limited (Complainant).

2020 C L D 995

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS RECKITT BENCKISER PAKISTAN LTD.: In the matter of

File No. 186/OFT/UNILEVER/CCP/2015, decided on 26th December, 2019.

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

----S. 10--- Deceptive marketing practices---Disclaimer in smaller print---Effect---Contention of respondent in relation to the claims made in the advertisement was that the disclaimer appeared at all necessary stages of the television commercial---Validity---Disclaimer/disclosure printed on the marketing and advertising material was in fine print footnotes or in significantly smaller print and had been inserted in an attempt to offset and/or limit the liability or to qualify the advertising claim---Disclaimer/disclosure must be 'clear and conspicuous' and placed 'as close as possible' to the advertising claim---Laboratory test reports, in the absence of categorical and visible disclaimer, could not cater for the claims made in the advertisement---Respondent had failed to substantiate the claims made in the advertisement with reference to character, properties, suitability for use and/or quality of use and in fact had disseminated false and misleading information to the consumers through its televised advertisement in violation of S. 10(2)(b) of the Competition Act, 2010---Competition Commission imposed penalty and reprimanded the respondent to ensure responsible behaviour in future with respect to marketing.

Order dated 14th September, 2018, In the matter Show Cause Notice issued to Pakistan Telecommunication Company Ltd. 2018 CLD 984; In the matter of Proctor and Gamble Pakistan Pvt. Limited (Head and Shoulder Shampoo) 2010 CLD 1695; In the matter of Show Cause Notices issued to Askari Bank Ltd, United Bank Ltd. My Bank Ltd and Habib Bank Ltd.; In the matter of Show Cause Notice issued to RITS Incorporation Order dated 11 May 2011; In the matter of Show Cause Notice issued to Al-Hilal Industries, 2012 CLD 1861; In the matter of Show Cause Notice issued to Reckitt and Benckiser 2016 CLD 40; In the matter of Show Cause Notice issued to Colgate Palmolive (Max All Purpose Cleaner) 2017 CLD 1550 and In the matter of Show Cause Notice issued to Proctor and Gamble (Safeguard Soap) 2017 CLD 1609 ref.

Order dated 29th September 2009 in the matter of Show Cause Notice issued to China Mobile Pakistan Ltd (Zone) and Pakistan Telecom Mobile Ltd. (Ufone) 2010 CLD 1478 and Colgate Palmolive v. CCP, 2019 CLD 254 rel.

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

----Ss. 52, 51, 48, 37 & 10---Qanun-e-Shahadat (10 of 1984), Art. 9---Deceptive marketing practices---Permitted disclosure---Obligation of confidentiality--- Indemnity--- Enquiry and studies--- Professional communication--- Scope--- Respondent alleged that the Enquiry Committee acted with mala fide by forwarding the documents marked as "Attorney-Client" privileged communication to the complainant for their comments and making the documents part of the Enquiry Report---Validity---Respondent had provided test reports to substantiate its claims made in the advertisement and the reports were forwarded to the complainant for the purpose of carrying out the functions under the Competition Act, 2010---Clause (a) of S. 52 of the Competition Act, 2010 provided that production of a document in the course of proceedings was permitted disclosure---Section 51(1)(c), Competition Act, 2010 provided that where the information so provided was used in course of performance of public functions, mischief clause of S. 51 was not applicable---Respondent had attempted to create an illusion that the Enquiry Committee lacked bona fide or its action suffered from malice---Mere imputation of mala fide or malice against the Officers of Commission was not tenable, in circumstances---Commission found the arguments put up by the respondent to be unfounded and unjustified, in presence of statutory protection under S. 48 of the Competition Act, 2010---Contention of respondent was turned down.

Said Zaman Khan v. Federation of Pakistan 2017 SCMR 1249 rel.

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

----S. 48---Indemnity---Scope---Presumption of bona fide is attached to the actions of the Commission, Members, Officers or Servants of the Commission, unless mala fide is proved through independent and cogent evidence.

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

----S. 10---Deceptive marketing practices---Burden of proof---Scope---Onus to prove and provide reasonable basis for any claim is on the seller/manufacturer and not on the consumer or any third party.

Order dated 16th December 2019, In the matter of Complaint filed by Messrs Catkin Engineering Sale and Services Private Limited Against KPK Directorate of Agriculture Engineering rel.

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

----S. 10---Deceptive marketing practices---Scope---Section 10(2)(b) of Competition Act, 2010 prohibits the distribution of false or misleading information to consumers, including the dissemination of information that lacks a reasonable basis, related to the price, character, method or place of production, properties, suitability for use, or quality of goods.

Order dated 29th September 2009 in the matter of Show Cause Notice issued to China Mobile Pakistan Ltd (Zone) and Pakistan Telecom Mobile Ltd. (Ufone) 2010 CLD 1478 rel.

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

----S. 10---Deceptive marketing practices---"Consumer"---Scope---Term 'consumer' as envisaged in S. 10 of the Competition Act, 2010 is to be construed as 'ordinary consumer' but need not necessarily be restricted to the end consumer of the goods and services---Restricting the interpretation of the term "Consumer" with the use of the word average, reasonable or prudent it will not only narrow down and put constraints on the effective implementation of the provision it would rather be contrary to the intent of law and it would result in shifting the onus from the undertaking to the consumer and is likely to result in providing an easy exit for undertakings from the application of S. 10.

Order dated 29th September 2009 in the matter of Show Cause Notice issued to China Mobile Pakistan Ltd (Zone) and Pakistan Telecom Mobile Ltd. (Ufone) 2010 CLD 1478 rel.

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

----S. 10---Deceptive marketing practices---Substantiation for the claim--- Scope--- Advertiser must have some recognizable substantiation for the claims made prior to making it in an advertisement.

In the matter of Proctor and Gamble Pakistan Pvt. Limited (Head and Shoulder Shampoo) 2010 CLD 1695 and Pfizer, Inc., 81 F.T.C. 23 (1972) rel.

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

----S. 10---Deceptive marketing practices---Visible disclaimer---Scope---Laboratory test reports, in the absence of categorical and visible disclaimer, do not cater for the claims made in the advertisement.

Colgate Palmolive v. CCP, 2019 CLD 254 rel.

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

----S. 10--- Deceptive marketing practices--- Disclaimer--- Scope--- Competition Commission, while evaluating the effectiveness of the disclaimer/disclosure, considers factors such as prominence, presentation, placement or proximity between the advertising claim and the associated disclaimer/disclosure.

In the matter of Epand, Inc. And Ayman A. Difrawi 2016, Case No. 6:16-cv-714-Orl-41TBS rel.

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

----S. 10--- Deceptive marketing practices--- Actual harm to competitors---Scope---Actual harm to the competitors need not be shown in order to prove conduct under S. 10(2)(b) of Competition Act, 2010 but existence of a deceptive marketing practice that has the potential to harm the business interests of the competitors is sufficient.

Order dated 21st December 2012 in the matter of Messrs DHL Pakistan (Pvt.) Ltd. ref.

Order dated 17th March 2015 in the matter of Messrs Jotun Pakistan (Pvt.) Limited rel.

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

----S. 10--- Deceptive marketing practices--- Scope--- Section 10, Competition Act, 2010---Scope---Contravention of S. 10(2)(b), (c) and/or (d) is concurrent violation of S. 10(2)(a) of Competition Act, 2010---Consequence of the distribution of information to the public that is false or misleading is that it is capable of harming the business interests of and results in fatal consequences for the competitors of the undertaking that makes deceptive claims---Scope of S. 10(2)(a) is much wider and far reaching than the other clauses of subsection 10(2)---Instances of misleading information that an undertaking may distribute to target potential consumer may be innumerable and hence be culpable under S. 10(2)(a) but a contravention of S. 10(2)(d) will almost in every circumstance lead to a consequent contravention of S. 10(2)(a), unless there exist exceptional circumstances in a particular case that warrant otherwise---Same rationale is applicable to S. 10(2)(b), as it is to S. 10(2)(d) of the Competition Act, 2010.

Order dated 8th February 2016 in the matter of Show Cause Notice issued to Messrs A. Rahim Foods (Private) Limited fol.

Noman A. Farooqi assisted by Ms. Shazia Ashraf, Senior Joint Director (Exemption), Amir Zaman Deputy Director (Legal) and Arsal Ikram, Assistant Director (Legal).

Barrister Abdullah Munshi, Advocate Supreme Court, Aman Ghanchi, Director and Company Secretary, Ms. Madeeha A. Chaudhry, Legal Manager, Muhammad Muzaffar, Advocate, M. Muzaffar and Associates and Siraj Hassan, Assistant Manager, Legal on behalf of Unilever Pakistan Limited.

Hasan Mandviwala, Advocate, Shajee Hanfi, Advocate, Raheel Hashmi, Advocate Mandviwalla and Zafar, Ms. Zara Khalid, Head of Legal, Humayun Farooq, Director Marketing, Mohsin Hameed, R&D Associate and Ms. Zermina Naveed, Assistant Manager (Legal) for Messrs Reckitt Benckiser Pakistan Limited.

2020 C L D 1148

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS AT-TAHUR (PVT.) LIMITED: In the matter of

F. No. 291/OFT/PDA/CCP/17, decided on 27th December, 2019.

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

----S. 10---Deceptive marketing practices---Distribution of false and misleading information---Net general impression---Claim lacking reasonable basis---False information capable of harming business interests of other undertakings---Scope---Complainant urged that the respondent had resorted to deceptive marketing practices by advertising itself as the only milk declared by Supreme Court to be fit for human consumption---Validity---Ordinary consumer would have gathered the net impression that except the product of respondent all other milk products were harmful for human consumption---Supreme Court had got the tests carried out where some of the samples were found to be unfit, however, subsequently the products of almost all the undertakings were found to be fit for human consumption---False information and omission of material information by the respondent had the tendency to mislead the consumers---Respondent had made a claim in the process of marketing where not just one but perhaps the entire milk producing industry was affected---Commission observed that the respondent had engaged in deceptive marketing practices prohibited under S. 10(1) of the Competition Act, 2010 read with S. 10(2)(a), (b) & (c) of the Act---Commission imposed a penalty on the respondent and directed it to make public announcement, similar to the ones under review, clarifying that the marketing campaign was false and misleading---Show cause notice was disposed of accordingly.

Jamia Industries Limited v. Caltex Oil PLD 1984 SC 8; Utility Stores Corporation's case 2018 CLD 292; NFC Employees Cooperative Housing Society's case 2019 CLD 164; in the matter of Show Cause Notice issued to Dairy Companies Order for deceptive marketing practices 2017 CLD 789; in the matter of Show Cause Notice issued to Vision Developers 2018 CLD 350; In the matter of Show Cause Notice issued to Colgate Palmolive reported as 2017 CLD 1550; In the matter of Show Cause Notice issued to Dry Acid-Lead Batteries Manufacturers 2018 CLD 844; in the matter of Show Cause Notice issued to Kitchen Stone Foods 2018 CLD 778; KRAFT Inc. v. F.T.C. United States Court of Appeals Seventh Circuit Jul 31, 1992 970 F. 2d 311 (7th Cir. 1992); Orders in the matter of Show Cause Notice issued to PSO 2017 CLD 932; FTC v. Freecom Communication United States Court of Appeals, Tenth Circuit Mar 21, 2005, 401 F.3d 1192 (10 Cir. 2005); In the matter of Show Cause Notice issued to 2010 CLD 1454; In the matter of Show Cause Notice issued to Messrs Jotun Pakistan (Pvt.) Limited 2015 CLD 1638; In the matter of Show Cause Notice issued to Messrs Proctor and Gamble Pakistan (Pvt.) Limited 2017 CLD 1609; In the matter of Show Cause Notice issued to Messrs Green Field Developers (Pvt.) Limited 2018 CLD 404; In the matter of Show Cause Notice issued to Messrs Proctor and Gamble Pakistan (Pvt.) Limited 2017 CLD 1609; Gut Springenheide GmbH and Rudolf Tuskv v. Oberkreisdirektor des Kreises Steinfurt - Amt filr Lehensmitteliiberwachung, Case C-210/96, ECR 19981-04657; FTC Policy Statement on Deception dated 14.10.1983 appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984); Order in the matter of Proctor and Gamble Pakistan (Private) Limited (Head and Shoulder Shampoo) 2010 CLD 1695 and In the matter of Show Cause Notice issued to Utility Stores Corporation of Pakistan (Pvt.) Ltd. 2018 CLD 292 ref.

In the matter of Show Cause Notice issued to China Mobile Pak Limited and Pakistan Telecom Mobile 2010 CLD 1478 rel.

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

----S. 10--- Deceptive marketing practices--- Disclaimer--- Omitting material information pertaining to overall context--- Scope---Complainant urged that the respondent had resorted to deceptive marketing practices by advertising itself as the only milk declared by Supreme Court to be fit for human consumption---Contention of respondent was that presence of a conspicuous disclaimer in the form of hyperlink of the Supreme Court's order was sufficient to provide for the basis of the order and that the disclaimer was in itself sufficient to dispel any misleading impression---Validity---Respondent though had used exact verbatim of the Supreme Court's order with reference to a report of laboratory, however, the respondent had omitted material information pertaining to its overall context---Providing a hyperlink to the order of the Supreme Court was not sufficient to correct the overall impression disseminating the post through its main headline---Respondent should not have termed the source as "Supreme Court", rather it should have been labelled as the Laboratory--- Competition Commission held that the respondent through the dissemination of false and misleading information had violated the provisions of S. 10(1) read with S. 10(2)(b) of the Competition Act, 2010.

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

----S. 10---Deceptive marketing practices---Defence of "puffery"---Quantifiable claim---Scope---Complainant urged that the respondent had resorted to deceptive marketing practices by advertising itself as the only milk declared by Supreme Court to be fit for human consumption---Contention of respondent was that statements made in the marketing campaigns were merely opinions and not statements of facts and fell within the purview of "puffery"---Validity---Principle characteristic of any statement qualifying for puffery was that the statement by no means could be quantified---Claims made by the respondent were quantifiable or in fact the claims were used after using some quantifiable techniques by the Laboratories---Respondent had not used any term for exaggeration i.e. 'Best in Pakistan' or 'Best of the Best; or 'Pakistan's Favourite' or 'Pakistan's Preferred'---Claims of the respondent were not its opinions---Commission directed the respondent to make public announcement, similar to the ones under review, clarifying that the marketing campaign was false and misleading--- Show cause notice was disposed of accordingly.

Better Living. Inc. et al, 54 F.T.C. 648; Re the Boston Beer Co. Ltd Partnership 98 F.3d 1970 (Fed. Circ. 1999); Am. Italian Pasta Co. v. New World Pasta Co., 371 F.3d, 387, 391 (8th Cir. 2004); Bisset v. Wilkinson [1927] AC 177) and (Spiller v. Joseph [2010] UKSC 53) and Pizza Hut, Inc. v. Papa John's Int'l - 227 F.3d 489 (5th Cir. 2000) ref.

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

----Ss. 10, 2(1)(q) & 37(2)--- Deceptive marketing practices---Undertaking---Enquiry and studies---Locus standi of Association of undertakings to file complaint---Scope---Complainant, an Association of undertakings, complained that the respondent had resorted to deceptive marketing practices by advertising itself as the only milk declared by Supreme Court to be fit for human consumption---Respondent objected that since the complainant was not an undertaking, therefore, it could not have filed the complaint under S. 37(2) of Competition Act, 2010---Validity---Definition of "undertaking" revealed that the legislature had imposed conditions on legal and natural persons mentioned in S. 2(1)(q), Competition Act, 2010 which was that they must be engaged in provision of goods or services in any manner; whereas, for Association of undertakings no such condition was imposed by the legislature---Plain and ordinary language of the said provision unambiguously provided that it should be an Association of undertakings i.e. where the members were undertakings within the meaning of S. 2(1)(q) of Competition Act, 2010---Complainant was an Association of entities, who were undertakings i.e. engaged in the production and distribution of dairy products---Commission held that the complainant was an "Association of undertakings" and was therefore, an "undertaking" in terms of S. 2(1)(q) of Competition Act, 2010.

Utility Stores Corporation's case 2018 CLD 292; NFC Employees Cooperative Housing Society 2019 CLD 164; In the matter of show cause notice issued to Messrs Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) 2016 CLD 289 and University of Punjab v. Mst. Samea Zafar Cheema, 2001 SCMR 1506 ref.

In the matter of Show Cause Notice issued to Pakistan Flour Mills Association Order dated 13th December, 2019 and East and West Steamship Co. v. Queensland Insurance Co. PLD 1963 SC 663 rel.

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

----Ss. 10 & 37(2)---Companies Act (XIX of 2017), S. 17---Deceptive marketing practices---Enquiry and studies---Effect of Memorandum and Articles---Authorization to file complaint on behalf of company---Scope---Complainant an Association of undertakings, urged that the respondent had resorted to deceptive marketing practices by advertising itself as the only milk declared by Supreme Court to be fit for human consumption---Respondent objected that the complaint was not filed by the authorized person and that under the Articles of Association of the Association no specific authority was bestowed upon the complainant to institute legal proceedings---Validity---Clause 4(v) of the Memorandum of Association of the complainant authorized it to consider and take legitimate steps necessary for starting, promoting, supporting and opposing any measures affecting the business of its members and the trade in general---Clause 5(xiii) of the Memorandum of Association authorized complainant to take such actions as were necessary to raise the status or to promote the efficiency of the Association---Articles of Association authorized the Executive Committee under cl. 26(b) thereof to appoint representatives and conduct all other activities aimed at advancing the object of the complainant---Memorandum of Association and the Articles of Association had given ample powers to the Executive Body to take appropriate actions inter alia institution of legal proceedings before the Commission for alleged violation of the Competition Act, 2010---Objection, being meritless, was turned down.

Abdul Rahim v. United Bank Limited of Pakistan PLD 1997 Kar. 62 rel.

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

----Ss. 1 & 37(2)---Applicability of the Act---Enquiry and studies---Scope---Competition Act, 2010 is applicable on all the undertakings and in terms of the provisions of S. 37(2), Competition Act, 2010, only an undertaking or registered association of consumers can file a complaint with the Commission.

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

----S. 2(1)(q)--- "Undertaking"--- Scope--- Words 'association' and 'association of undertakings' used in S. 2(1)(q), Competition Act, 2010 cannot be used interchangeably and have different meanings.

University of Punjab v. Mst. Samea Zafar Cheema, 2001 SCMR 1506 and Order dated 15 December 2017, in the matter of Show Cause Notice issued to Utility Stores Corporation of Pakistan (Pvt.) Ltd. 2018 CLD 292 ref.

In the matter of Show Cause Notice issued to Pakistan Flour Mills Association Order dated 13th December, 2019 and East and West Steamship Co. v. Queensland Insurance Co. PLD 1963 SC 663 rel.

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

----S. 37(2)--- Companies Act (XIX of 2017), S. 17--- Enquiry and studies---Effect of Memorandum and Articles---Authorization to file complaint on behalf of company---Scope---Company is an artificial legal entity and the kind of operations and functions it can perform are outlined in the Memorandum of Association and the Articles of Association---Memorandum and Articles of Association of a company are its constitution/documents providing and prescribing the objectives and purposes for which the company has been established or created---Company instituting the legal proceedings has to establish that the proceedings have been instituted competently and authorizedly.

Abdul Rahim v. United Bank Limited of Pakistan PLD 1997 Kar. 62 rel.

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

----S. 10---Deceptive marketing practices---Quoting, misstatement of the news agency---Effect---Onus of the misstatement not only falls on the news agency (where a news article is quoted by advertiser), but also on the undertaking which should have read, understood and spread the correct message of the news article.

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

----S. 10---Deceptive marketing practices---"Ordinary consumer", perspective of---Scope---Advertisement has to be construed from the perspective of an 'ordinary consumer'.

In the Matter of Show Cause Notice issued to China Mobile and Pakistan Telecom Mobile 2010 CLD 1478 rel.

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

----S. 10---Deceptive marketing practices---Scope---Section 10(2)(b) of Competition Act, 2010 prohibits dissemination of information to the consumers in the process of marketing that lacks a reasonable basis, related to the price, character, method or place of production, properties, suitability for use or quality of goods.

In the Matter of Show Cause Notice issued to China Mobile and Pakistan Telecom Mobile 2010 CLD 1478 rel.

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

----S. 10---Deceptive marketing practices---Scope---Information/claims disseminated to the public in the process of marketing must have some reasonable basis.

Order in the matter of Proctor and Gamble Pakistan (Private) Limited (Head and Shoulder Shampoo) 2010 CLD 1695 rel.

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

----S. 10--- Deceptive marketing practices--- Potential to mislead consumers---Scope---Advertisement is deceptive if it contains a misrepresentation or omission that is material to consumer's decision to buy or use the product/services likely to mislead consumers acting reasonably under the circumstances to their detriment---Where it is established that such representation has the potential to mislead, there is no legal requirement to prove the actual injury to consumers.

FTC Policy Statement on Deception dated 14.10.1983 appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984) ref.

In the Matter of Show Cause Notice issued to China Mobile and Pakistan Telecom Mobile 2010 CLD 1478 rel.

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

----S. 10---Deceptive marketing practices---Disclaimer---Effectiveness of disclaimer---Scope---Commission while evaluating the effectiveness of disclaimer/disclosure considers factors such as prominence, presentation, placement and proximity between the advertising claim and the associated disclaimer/disclosure---Principle regarding disclaimer/disclosure is that they must be 'clear and conspicuous' and placed 'as close as possible' to the advertising claim.

In the matter of Epand, Inc. And Ayman A. Difrawi 2016, Case No. 6:16-cv-714-Orl-41TBS rel.

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

----S. 10---Deceptive marketing practices---Disclaimer---Purpose of---Scope---Purpose of disclaimer is only to provide additional information and clarity regarding a claim, instead of completely altering the meaning of its overall message---Meaning of the message conveyed in the main claim and the overall advertisement should not be significantly changed when read with information given in the disclaimers.

In the matter of Epand, Inc. And Ayman A. Difrawi 2016, Case No. 6:16-cv-714-Orl-41TBS rel.

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

----S. 10---Deceptive marketing practices---Disclaimer---Vaguely-labeled disclaimer---Scope---Burying material information behind vaguely-labelled hyperlinks or on dense "Terms and Conditions" pages that are more snooze-inducing is unwise.

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

----S. 10---Deceptive marketing practices---"Puffery"---Scope---Puffery is generally intended to base on an expression of opinion not made as a representation of fact---Puffing statements are, while factually inaccurate, so grossly exaggerated that no ordinary consumer would rely on them---Puffing is generally vague and unquantifiable---Any statement of fact which is quantifiable and specific in characteristic is not "puffery".

Re the Boston Beer Co. Ltd Partnership 98 F.3d 1970 (Fed. Circ. 1999) and Am. Italian Pasta Co. v. New World Pasta Co., 371 F.3d, 387, 391 (8th Cir. 2004) ref.

(r) Constitution of Pakistan---

----Part. II, Chap. 1 [Arts. 8 to 28]--- Fundamental Rights---Applicability of Fundamental Rights to companies--- Scope---Fundamental Rights in Part II of Chapter 1 of the Constitution are applicable to 'persons' and 'citizens'---Company i.e. a corporate entity is an artificial person which is created by operation of law cannot hold citizenship of any country---Corporate entities can take benefit of Fundamental Rights where applicable on the 'persons', however, they cannot take benefit from the Fundamental Rights available to the 'citizens'.

(s) Constitution of Pakistan---

----Part. II, Chap. 1 [Arts. 8 to 28]---Fundamental Rights---Scope---Fundamental rights are not absolute and are always subject to reasonable restrictions imposed under law.

Nawabzada Nasrullah Khan v. The District Magistrate, Lahore and The Government of West Pakistan PLD 1965 Lah. 642 ref.

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

----S. 10--- Deceptive marketing practices--- Scope--- Where contravention of S. 10(1) of the Competition Act, 2010 read with S. 10(2)(b) or (c) or (d) exists, a concurrent violation of S. 10(2)(a) is also made out--- Consequence of the distribution of information to the public that is false or misleading is that it is capable of harming the business interests of and resulting in fatal consequences for the competitors of the undertaking making such deceptive claims---Scope of S. 10(2)(a) is much wider and far reaching than the other subsections of S. 10(2) of the Competition Act, 2010---Same rationale is applicable to S. 10(2)(b) of the Competition Act, 2010, as it is to S. 10(2)(d).

In the matter of Show Cause Notice issued to Messrs A. Rahim Foods (Private) Limited 2016 CLD 1128 rel.

Noman A. Farooqi assisted by Ms. Aish K. Khan, Managing Executive.

Babar Sattar, Advocate Supreme Court, Ajuris and Ms. Zainab Mehdi, Advocate, Ajuris for Pakistan Dairy Association.

Barrister Syed Reza Ali, Advocate, Ali & Ali and Syed Shahzeb Kirmani Head of Adinin and HR for Messrs At-Fahur (Pvt.) Limited.

2020 C L D 1361

[Competition Commission of Pakistan]

Before Dr. Muhammad Saleem, Dr. Shahzad Ansar and Ms. Bushra Naz Malik, Members

Messrs SUKKUR TESTING SERVICES (SMC-PVT.) LIMITED: In the matter of

F. No. 336 / SIBA(V)STS / OFT / CCP / 2018, decided on 12th February, 2020.

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

----S. 10---Deceptive market practice---Competition Commission---Jurisdiction---Term 'consumer'---Scope---Competition Commission is mandated under S. 10 of Competition Act, 2010, to protect consumers from anti-competitive practices prohibited---One of such practice is deceptive marketing practices, which is aimed at consumers to make a transactional decision---Important to determine consumer of the purpose of assessment under S. 10 of Competition Act, 2010---Consumer for the purposes of S. 10 of Competition Act, 2010, is an 'ordinary consumer' in contrast to a 'reasonable' or 'prudent' consumer.

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

----Ss. 10 & 37(2)---False and misleading information---Trademark, fraudulent use---Proof---Allegation in complaint was that respondent was disseminating false and mis-leading information to consumers through advertisements bearing name and style similar to that of complainant, to deceive consumers---Enquiry Committee recommended initiating of proceedings against respondent---Validity---Using of similar acronym by respondent gave consumers an impression that advertisement in question either issued by complainant or respondent was somehow associated or affiliated with complainant---Word 'Sukkur' also could confuse consumers about information disseminated through advertisement in question that the services which were offered to attract prospective candidates were by complainant---Respondent did not provide any evidence which substantiate that respondent was associated with complainant---Use of similar acronym and word Sukkur in advertisement in question was conscious attempt by respondent to capitalize on the goodwill and standing of complainant---Respondent violated the provision of S. 10(1) of Competition Act, 2010---Competition Commission imposed token penalty as respondent discontinued violation during enquiry and never repeated violation of Competition Act, 2010--- Complaint was allowed accordingly.

Orders in the Matter of Show Cause Notice issued to China Mobile and Pakistan Telecom Mobile 2010 CLD 1478; In the matter of Show Cause Notice issued to 2010 CLD 1454; In the matter of Show Cause Notice issued to Reckitt Benckiser Pakistan Ltd. 2016 CLD 40; In the matter of Show Cause Notice issued to Dry Acid-Lead Batteries Manufacturers 2018 CLD 844; Order in the matter of Show Cause Notice issued to Tara Crop Sciences 2016 CLD 105; Order in the matter of Proctor and Gamble Pakistan (Private) Limited (Head and Shoulder Shampoo), 2010 CLD 1695; Pfizer, inc., 81 F.T.C. 23 (1972); In the matter of Messrs DHL Pakistan (Pvt.) Ltd, 2013 CLD 1014; In the matter of Messrs Jotun Pakistan (Pvt.) Limited 2015 CLD 1638 and In the matter of Show Cause Notice issued to Messrs A. Rahim Foods {Private) Limited 2016 CLD 1128 ref.

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

----S. 10(2)--- False and misleading information--- Scope---Dissemination of misleading information are likely to cause eventual dilution of brand identity and goodwill of complainant as well as other competing undertakings, which might have been built over the years---Such deceptive claims are capable of influencing consumer purchasing decisions.

Noman A. Farooqi assisted by Arsal Ikram, Assistant Director (Legal).

Mukesh Kumar, Advocate Supreme Court, Engineer Zahid Hussain Khand, Registrar/Director and Muhammad Junaid Dhalet, Assistant Registrar for Messrs SIBA Testing Services Sukkur IBA University.

Ghulam Mujtaba, Owner for Sukkur Testing Services (SMC-Pvt.) Limited.

2020 C L D 1398

[Competition Commission of Pakistan]

Before Ms. Shaista Bano, Chairperson and Ms. Bushra Naz, Member

Messrs THE NEW YORK PIZZA AGAINST MESSRS NEW YORKER PIZZA: In the matter of

File No. 327/New York Pizza/OFT/CCP/2018, decided on 4th June, 2020.

Competition Act (XIX of 2010)---

----Ss. 10 & 37(2)---Deceptive market practice---Proof---Trademark, fraudulent use---Parasitic Copying---Trade Dress---Allegation in the complaint was that respondent was fraudulently using trademark of complainant to deceive consumers---Enquiry Committee did not find any violation of S. 10 of Competition Act, 2010---Validity---Term 'The New York Pizza' was a part of registered trademark in itself---Whether copying of such term was to be dealt with in perspective of Parasitic Copying or not, was an issue which Enquiry Committee did not deliberate on---Parasitic Copying was a serious problem and had already been treated as fraudulent use of another's trademark and dealt with iron hands in earlier matters---Evidence produced by Enquiry Committee during hearing showed that respondent had not only copied brand name but also trade dress of the complainant---Cursory glance of pictures available on record made the Competition Commission to believe that there were some similarities present between trade dresses of both the parties, and the same was over sighted by Enquiry Committee---Fashion in which respondent designed its outlets was identical to Complainant's outlet---Trade Dress included décor or environment in which services were provided and were usually protected under law---Matter was not simple infringement of trademark instead it was Parasitic Copying and it required deeper appreciation of facts and evidence---Competition Commission remanded the matter to Enquiry Commission for decision afresh.

Arsal Ikram, Assistant Director (Legal) assisted by Babar Hussain Shah for The New York Pizza.

2020 C L D 1394

[Gilgit-Baltistan Chief Court]

Before Malik Haq Nawaz and Ali Baig, JJ

PAK QATAR FAMILY TAKAFUL LIMITED---Petitioner

Versus

GOVERNMENT OF GILGIT-BALTISTAN through Chief Secretary and 6 others---Respondents

W.P. No. 21 of 2019, decided on 26th August, 2019.

Companies Act (XIX of 2017)---

----S. 22---Government of Gilgit-Baltistan Order, 2018, Art, 86---Writ petition---Publication of name by a company---Fee on affixing name boards---Scope---Petitioner assailed a notice issued by Director Local Council Board whereby it was asked to pay a certain sum of amount as a shop board fee---Contention of petitioner was that as per S. 22 of Companies Act, 2017, every company was under statutory obligation to display the name of the company outside the registered office---Validity---Chief Court directed the authorities not to charge any fee from the petitioner on account of main board, which was displayed/affixed on the office of the company for the purpose of identification and held that if the company displayed any board at any other place for the purpose of advertisement, the charges would be applied in accordance with the prevalent laws---Writ petition was disposed of accordingly.

Hon'ble Lahore High Court in an Inter Court Appeal No. 50 of 2015 rel.

Zafar Iqbal for Petitioner.

Assistant Advocate-General for Respondents.

Naveed Ahmed, Deputy Commissioner Gilgit in person.

Shah Rukh Chema, Assistant Commissioner Gilgit.

2020 C L D 531

[High Court (AJ&K)]

Before Raza Ali Khan, J

Khawaja MUHAMMAD AKBAR and 4 others---Petitioners

Versus

AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through Secretary Forest, Muzaffarabad and 9 others---Respondents

Writ Petitions Nos. 1011 and 1140 of 2019, decided on 2nd September, 2019.

Azad Jammu and Kashmir Environmental Protection Act (IV of 2000)---

----Ss. 6 & 11---Environmental protection---Extraction of dead trees---Requirements---Contention of petitioners was that tender for extraction of dead trees had been issued without obtaining "No Objection Certificate" from Environmental Protection Agency---Validity---Environmental Protection Agency was bound to render advice and assistance as might be required in environmental matters---If any project was likely to cause any adverse environmental effect then before commencement of the same approval of Environmental Protection Agency was necessary---High Court directed the Environmental Protection Agency to submit report as to how much fallen trees were necessary to be kept on land to maintain the ecosystem and biodiversity--- Environmental Protection Agency without spot inspection and detailed examination had submitted that impugned tender had been issued after obtaining "No Objection Certificate"---Environmental Protection Agency had failed to play the role it was supposed to play under Azad Jammu and Kashmir Environmental Protection Act, 2000---High Court directed that trees marked as diseased, dry, decayed or damaged should not be allowed to cut until committee comprising of District Forest Officer, Assistant Commissioner concerned and representatives of Environmental Protection Agency would make spot inspection and ensure that no green tree had been marked---Petitioners and public at large would be at liberty to bring into the notice of committee if any green tree was marked and in case no action had been taken then they might approach the High Court---Writ petition was disposed of accordingly.

PLD 1994 SC 693 rel.

Mirza Kamran Baig and Raja Zulqarnain Abid for Petitioners.

Muhammad Hanif Khan Minhas, Legal Advisor of the Department.

Raja Kashif Aftab, Assistant Director (Legal) Environmental Protection Agency for Respondent No. 10.

2020 C L D 1088

[High Court (AJ&K)]

Before Raza Ali Khan, J

Messrs MUHAMMAD ATTIQUE ABBASI & CO.---Petitioner

Versus

AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through Secretary, Public Works Department, Muzaffarbad Azad Kashmir and another---Respondents

Writ Petition No. 582 of 2020, decided on 4th May, 2020.

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

----S. 44---Writ petition on behalf of company---Maintainability---Incompetently filed Writ petition---Writ petition filed on behalf of company without requisite authority---Scope---No deliberation could be made on any case until and unless same had been filed competently---Person filing legal proceedings on behalf of a company must be authorized by Board of Directors of such company in a duly convened meeting per the Articles of Association of said company, failing which any proceedings before the court would be a nullity.

Messrs China Machinery Engineering Corporation (CMEC) v. Azad Government and others, Civil Appeal No. 110/2015, decided on 04.06.2016; Khan Iftikhar's case PLD 1971 SC 550; Messrs Razo (Pvt.) Ltd. v. District Karachi City Region Employees Old Age Benefits Institute and others 2005 CLD 1208 and Hasnain Cotex Ltd. and 2 others v. Jasim Khan 2012 YLR 2743 rel.

(b) Administration of justice---

----When law required a thing to be done in a particular manner, then it ought to be done in that manner only, and no resort should be made to any other manner of doing the same.

Mirza Kamran Baig and Raja Zulqarnain Abid for Petitioner.

2020 C L D 15

[Islamabad]

Before Miangul Hassan Aurangzeb, J

OVEX TECHNOLOGIES (PRIVATE) LIMITED---Appellant

Versus

PCM PK (PRIVATE) LIMITED and others---Respondents

F.A.O. No. 140 of 2017, decided on 2nd October, 2019.

(a) Arbitration---

----Arbitration agreement---Object, purpose and scope---Arbitration agreement is contractual basis for resolution of disputes through an arbitration process---Arbitration agreement or an arbitration clause in agreement can define disputes or types of disputes which are agreed to be referred to arbitration by parties thereto---It is for parties to make their own contract and not for court to make one for them as a court can only interpret contract---Question of what disputes fall within terms or scope of a particular arbitration agreement is a matter of interpretation of such an agreement---Parties are free to make their own contracts and are also free to agree as to what matters would be referred to arbitration---Words of arbitration clause which take within its sweep any claim, right or matter in any way arising out of or relating to contract have been upheld by courts to take in all claims which arise out of or pertain to contract---Parties have contractual freedom to select matters or disputes which are to be resolved through arbitration, leaving others to be decided by courts---If arbitration clause excludes certain matters in express terms and leaves them to be decided by courts, no arbitration can arise in respect of such matters---If it is found that arbitration clause does not encompass a dispute raised in a suit, party filing suit cannot be held to have abandoned its right to seek arbitration on matters encompassed by arbitration clause.

Government of N.W.F.P. through Secretary Forests, Peshawar v. The Devli Kund Forests and Multipurposes Cooperative Housing Society Limited 1994 SCMR 1829 and Messrs Harsha Construction v. Union of India AIR 2015 SC 270 rel.

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

----S. 41(b) & Second Schedule, Para. 4---Arbitration---Application of injunction---Invocation of arbitration right---Scope and effect---Parties to arbitration are permitted to invoke jurisdiction of court under S. 41(b) and paragraph 4 of Second Schedule of Arbitration Act, 1940 to apply for injunction---Such right can be exercised either before commencement of arbitration proceedings or during pendency of such proceedings, or even after arbitration award has been rendered---Invocation of such right to obtain interim or conservatory measures does not disentitle a party to an arbitration agreement from enforcing arbitration agreement.

21st Edition of Russell on Arbitration and Messrs Uzin Export and Import Enterprises for Foreign Trade v. Messrs M. Iftikhar & Company Limited 1993 SCMR 866 rel.

(c) Arbitration---

----Waiver of right---Principle---Right to arbitration, like any other contractual right, can be waived---Waiver of a contractual right to arbitration is ordinarily a question of fact---Waiver of right to arbitrate may properly be implied from any conduct which is inconsistent with the exercise of that right---Acquiescence to jurisdiction of a Court may amount to waiver of the right to claim arbitration.

Lakhra Power Generation Company Limited (LPGCL) v. Karadeniz Powership Kaya Bey 2014 CLD 337; Mc Connell v. Merrill Lynch, Pierce, Fenner, & Smith, Inc; Doers v. Golden Gate Bridge, etc. (1979) 23 Cal. 3d 180; De Sapio v. Kohlmeyer (1974) 35 N.Y.2d 402 and United States of America v. Park Place Associates, Ltd. and Christensen v. Dewor Developments (1983) 33 Cal.3d 778 rel.

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

----S. 4---Arbitration Act (X of 1940), S. 34---Specific Relief Act (I of 1877), Ss. 42 & 54---Civil Procedure Code (V of 1908), S. 20 & O. VII, R. 10, O. XXXIX---Suit for declaration and injunction---Arbitration, repudiation of---Return of plaint---Jurisdiction of court---Parties entered into an agreement for services and statement of work and in contract, added arbitration clause for dispute resolution with laws and arbitration to be done according to laws of a foreign State---Plaintiff company, upon dispute and termination of contract, filed suit for declaration and permanent injunction against defendant company---Trial Court returned the plaint on ground that dispute resolution was already available in contract---Plea raised by defendant company was that courts in foreign State had imposed injunction against filing of suits in the matter---Validity---Matters pertaining to injunctive relief were not covered by arbitration clause there was no gamesmanship or bad faith in defendant company invoking jurisdiction of superior court of State of California in order to obtain injunction---Defendant company did not act in the manner inconsistent with arbitration clause of agreement or waived, relinquished or abandoned its right to arbitrate---Defendant company was well within its rights to have sought stay of proceedings in suit instituted by plaintiff company before Trial Court in Pakistan---Valid and subsisting arbitration agreement existed between plaintiff and defendant company and plaintiff company in its suit raised claim arising from and related to agreement---Impleadment of strangers to arbitration agreement in suit posed no impediment in staying proceedings in suit as against defendant company under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---High Court set aside order passed by Trial Court rejecting plaint and allowed application of defendant company under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Appeal was allowed accordingly.

Far Eastern Impex (Pvt.) Ltd. v. Quest International Nederland BV 2009 CLD 153; Cummins Sales and Service (Pakistan) Limited v. Cummins Middle East FZE 2013 CLD 291 and M.A. Chowdhury v. Mitsui O.S.K. Lines Ltd. PLD 1970 SC 373 rel.

Lakhra Power Generation Company Limited (LPGCL) v. Karadeniz Powership Kaya Bey 2014 CLD 337; Mc Connell v. Merrill Lynch, Pierce, Fenner, & Smith, Inc; Doers v. Golden Gate Bridge, etc. (1979) 23 Cal. 3d 180; De Sapio v. Kohlmeyer (1974) 35 N.Y.2d 402; United States of America v. Park Place Associates, Ltd.; Christensen v. Dewor Developments (1983) 33 Cal.3d 778; Lithuanian Airlines v. Bhoja Airlines (Pvt.) Ltd. 2004 CLC 544; Haji Muhammad Ibrahim v. Karachi Municipal Corporation PLD 1960 Kar. 916; W. Bruce Ld. v. J. Strong [1951] 2 K.B. 447; Sandeep Kumar v. Master Ritesh (2006) 13 SCC 567; Paragraph 7-014 of in the 21st Edition of Russell on Arbitration; Eckhardt & Co. v. Muhammad Hanif PLD 1993 SC 42; Hitachi Ltd. v. Rupali Polyester 1998 SCMR 1618; Manzoor Textiles Mills Ltd. v. Nichimen Corporation 2000 MLD 641; Serulean (Pvt.) Ltd. v. Bhoja Airlines (Pvt.) Ltd. 2001 YLR 3150; CGM (Compagnie General Maritime) v. Hussain Akbar 2002 CLD 1528; Lithuanian Airlines v. Bhoja Airlines (Pvt.) Ltd. 2004 CLC 544;Metropolitan Steel Corporation Ltd. v. Macsteel International U.K. Ltd. PLD 2006 Kar. 664; Travel Automation (Pvt.) Ltd. v. Abacus International (Pvt.) Ltd. 2006 CLD 497; Muratab Ali v. Liaquat Ali 2004 SCMR 1124; Rafiq Tabani v. Ghulam Haider Mohtaram 1999 MLD 2915; National Fibres Ltd. v. Karachi Development Authority 1996 MLD 76 and Trustees of the Port of Karachi v. Gujranwala Steel Industries 1990 CLC 197 ref.

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

----O. VII, R. 10---Return of plaint---Duty of Court---Where a Court does not have jurisdiction to entertain a suit, the proper course is to return the plaint for its presentation before a Court of competent jurisdiction.

Rafique Tabani v. Ghulam Haider Mohtram 1998 MLD 2915 rel.

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

----O. XLI, R. 32---Appeal---Powers of Appellate Court---Appeal is continuation of original suit and appellate Court has ample power to scrutinize documents on record in the light of arguments advanced by contesting parties---Appellate Court while hearing appeal against order/judgment or decree of Trial Court, exercises the same jurisdiction which is vested in Trial Court---Lis becomes open in appeal and Appellate Court can do all that the original Court can do.

Gul Rehman v. Gul Nawaz Khan 2009 SCMR 589; Inayat v. Darbara Singh AIR 1920 Lah. 47; North-West Frontier Province Government, Peshawar v. Abdul Ghafar Khan PLD 1993 SC 418; Province of Punjab through Collector Bahawalpur v. Col. Abdul Majeed 1997 SCMR 1692 and CGM (Compagnie General Maritime) v. Hussain Akbar 2002 CLD 1528 rel.

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

----O. XLI, R. 28---Remand of case---Principles---Remand of a case can only be ordered when it becomes absolutely necessary and inevitable in view of insufficient or inclusive material on record---Remand should not be ordered when no evidence is to be recorded or where material on record is sufficient for Appellate Court to decide the matter---Cases cannot be remanded just to prolong litigation between the parties.

(h) Company---

----Legal entity---Shareholders and directors---Status---Company is a separate legal entity distinct from its owners or shareholders or directors or officials or employees---Company has a perpetual existence and can sue and be sued in its own name---Any director or employee of a company is not personally liable for liability of company even if he acted on behalf of the company, conversely, a company is also not liable for the liability of its directors/employees arising out of an act in their individual capacity---Directors of a company are liable for misappropriation of company funds and other misfeasance but not for ordinary contractual liability of the company---Directors or employees of company cannot be fastened with ordinary contractual liability of the company.

Lloyds v. Grace Smith and Co. 1912 AC 716 rel.

Syed Ahmed Hassan Shah and Badar Iqbal for Appellant.

Khurram M. Hashmi and Ramsha Noshab for Respondents.

2020 C L D 121

[Islamabad]

Before Miangul Hassan Aurangzeb, J

KHAMAS SAEED---Petitioner

Versus

DIRECTOR GENERAL OF TRADE ORGANIZATIONS and 4 others---Respondents

W.P. No. 4934 of 2018, decided on 6th November, 2019.

Trade Organizations Rules, 2013---

----Rr. 11, 15 & 13---Trade Organizations Act (II of 2013), Ss. 13, 3 & 4---Trade Organization---Eligibility for membership and licence---Eligibility criteria for participation in electoral process of Trade Organizations---Partnership firm---Requirement that prospective member has a valid National Tax Number and sales tax registration---Petitioner impugned order passed by the Election Commission of the Trade Organization whereby candidature of the respondent partnership firm was allowed, despite petitioner's objection regarding non-fulfilment of requirements of R. 11 of the Trade Organization Rules, 2013---Validity---Rule 11 of Trade Organizations Rules, 2013 provided that for a partnership firm to be eligible to be granted membership of any trade organization, in had to hold a National tax Number (NTN) in name of the business concern and in the present case, there was no evidence that the respondent firm was registered as member of the Trade Organization with its valid NTN on date when its nomination papers were filed---NTN provided by respondents was not registered to the firm but one of its partners under category of "individual"---High Court observed that since NTN of the individual partner was not the NTN of the firm, therefore requirement of R. 11 of the Trade Organizations Rules, 2013 were not fulfiled by the respondent partnership firm for membership of the Trade Organization on date of filing of its nomination papers---High Court set aside impugned order whereby respondent's nomination for election was allowed and remanded the matter to the Election Commission of the Trade Organization to decide objections with regard to respondent partnership firm's candidature---Constitutional petition was allowed accordingly.

Ali Nawaz Kharal and Rana Rashid Javed for Petitioner.

Malik Ghulam Sabir for Respondent No.4.

Muhammad Nadeem Khan Khakwani, Assistant Attorney General.

2020 C L D 151

[Islamabad]

Before Miangul Hassan Aurangzeb, J

GEMALTO MIDDLE EAST FZ-LLC---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary,Finance Division and others---Respondents

W.P. No. 3094 of 2018, decided on 16th October, 2019.

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

----S. 441---Tender bidding process---Term 'legal proceedings'---Applicability---Disability provided in S. 441 of Companies Act, 2017 is with respect to legal proceedings etc., in respect of any contract, dealing or transaction--- Participation in a tender bidding process does not come within the meaning of a "contract", "dealing" or "transaction".

(b) Words and phrases---

----'Transaction'---Meanings.

Black's Law Dictionary (Fifth Edition) ref.

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

----S. 441---Pubic Procurement Rules, 2004, R. 36---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Legal proceedings---Scope---Petitioner participated in a tender bidding process and sought to scrap procurement process and invite fresh tenders---Plea raised by authorities was that constitutional petition was not maintainable---Validity---If term 'any legal proceedings' was to include a petition, a sub-constitutional legislation could not impose a disability on a person from invoking Constitutional jurisdiction of High Court---Petition was filed under Art. 199 of the Constitution seeking writs of Mandamus and Prohibition and petitioner attempted to bring to fore aberrations in tender bidding process adopted by procuring agency for procurement of goods---Petitioner did not seek relief of award of contract in its favour and since its participation in tender bidding process could not be termed as "contract", "dealing" or "transaction", therefore, institution of constitutional petition was not hit by S. 441 of Companies Act, 2017---Preliminary objection taken by authorities to maintainability of petition was spurned---Constitutional petition was maintainable in circumstances.

Arshad Mehmood v. Commissioner/Delimitation Authority PLD 2014 Lah. 221 rel.

(d) Public Procurement Rules, 2004---

----R. 36(a)---Single Stage One Envelope---Procedure---Procuring agency does not violate any provision of Public Procurement Rules, 2004 by requiring pre-qualified bidders to submit their financial quotations only---Such procedure is in accordance with 'Single Stage One Envelop Procedure' as envisaged by R. 36(a) of Public Procurement Rules, 2004.

Shaheen Construction Company v. Pakistan Defence Officers Housing Authority 2012 CLD 1445; Pakistan Defence Officers Housing Authority v. Shaheen Construction Company 2013 CLC 476 and Shaheen Construction Company v. Pakistan Defence Officers Housing Authority 2012 CLC 1434 ref.

(e) Public Procurement Rules, 2004---

----R. 26(3)---Extending validity of bids---Prerequisite---Existence of 'exceptional circumstances' is a prerequisite for requiring bidders to extend validity of their bids---Once a procuring agency complies with requirements of R. 26(3) of Public Procurement Rules, 2004 by recording existence of such circumstances in writing, bidders can be asked to extend validity of their bids---Reasons recorded pursuant to R. 26(3) of Public Procurement Rules, 2004 were justiciable---Recorded reasons have to be such as would make out a case for a necessity in extension in bid validity period.

(f) Public Procurement Rules, 2004---

----R. 4---Procuring ethics---Gifts and gratuities by bidders---Effect---Procuring agency, under R. 4 of Public Procurement Rules, 2004 is obligated to 'ensure that procurements are conducted in a fair and transparent manner'---Ethics is basis on which most of procurement related principles, such as fairness, integrity and transparency are based---Procurement agencies must maintain integrity and show transparency in their behaviour---Procuring agency and/or its employees ought not to accept gifts of items sought to be procured through a tender of for that matter, any gifts from suppliers during procurement process---Making of gifts and gratuities by bidders to procuring agencies or their officers during procurement process was most certainly an unethical business practice and same merits condemnation in strongest terms---Gift made by a supplier to procuring agency may not be with intention of securing a contract but it certainly creates perception of being unethical---Prohibition on bidders to make gifts to procuring agencies or their employees and on procuring agencies or their employees from accepting gifts from bidders during procurement process is implicit in R. 4 of Public Procurement Rules, 2004---Such gifts influence procurement decisions in order to secure contracts---Bidders making gifts to procuring agencies or their employees breach requirements of fairness and transparency in R. 4 of Public Procurement Rules, 2004 and expose themselves not just to be taken to task by law enforcing agencies but also to be disqualified from further participation in procurement process.

(g) Public Procurement Rules, 2004---

----R. 4---Procuring ethics---Free of cost samples---Scope---When free-of-cost samples are supplied pursuant to terms of letter of intent and contract and not pursuant to an unsolicited offer made by supplier, such supplier cannot be said to have committed an unethical conduct in such respect.

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

----S. 441---Pubic Procurement Rules, 2004, Rr. 31 & 36---Procurement process---Awarding of contract---Objection---Bid/pre-qualification documents---Submission after due date---Principles of natural justice---Applicability---Scope---Petitioner participated in a tender bidding process and sought to scrap procurement process and invite fresh tenders on grounds that successful bidder submitted pre-qualification documents after due date and decision of Grievance Redressal Committee (GRC) was violative of principles of natural justice---Validity---Where a procuring agency required bids or pre-qualification documents to be submitted within a stipulated deadline, a bidder could not be permitted to satisfy essential requirements of tender by supplementing its bid or pre-qualification documents along with documents filed after deadline---If principles of natural justice were violated in respect of any decision, it was indeed, immaterial whether same decision would have been arrived at in absence of departure from essential principles of natural justice---Decision taken in violation of principles of natural justice must be declared to be no decision and same was void---Decision of Grievance Redressal Committee taken in violation of principles of natural justice were void---Fact that decision of Grievance Redressal Committee was not challenged by petitioner would not obviate fact that it was void---High Court declared that pre-qualification of respondent company was in violation of terms and conditions of pre-qualification documents consequently, purchase order awarded to respondent was unlawful and of no legal consequences---Constitutional petition was allowed in circumstances.

S.I.S. Corporation (Pvt.) Limited v. Federation of Pakistan PLD 2018 Isl. 150; SIS Corporation (Pvt.) Limited v. Federation of Pakistan 2018 CLD 48; Muhammad Ayub and Brothers v. Capital Development Authority PLD 2011 Lah. 16; Ram Gajadhar Nishad v. State of UP (1999) 2 SCC 486; Monarch Infrastructure (Pvt.) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation (2000) 5 SCC 287; Medical Education Registration of U.K. v. Spackman [1943] 2 All ER 337 and Muhammad Swaleh and another v. United Grain and Fodder Agencies PLD 1964 SC 97 rel.

Trek Technologies Limited v. Icondor Telecom (Private) Limited 2018 CLD 668; Hala Spinning Mills Ltd. v. International Finance Corporation 2002 SCMR 450; Abdul Haque Baloch v. Government of Balochistan PLD 2013 SC 641; China Annag Construction Corporation v. K.A. Construction Co. 2001 SCMR 1877; JDW Sugar Mills Ltd. v. Province of Punjab PLD 2017 Lah. 68; S.I.S. Corporation (Pvt.) Ltd. v. Federation of Pakistan PLD 2018 Isl. 150; Kitchen Cuisine (Pvt.) Ltd. v. Pakistan International Airlines Corporation PLD 2016 Lah. 412; Independent Media Corporation (Pvt.) Ltd. v. Shoaib Ahmed Sheikh 2015 CLD 1448; Shafiq Traders v. Collector of Customs 2007 PTD 2092; Suo Motu Case No. 5 of 2010 PLD 2010 SC 731; SIS Corporation (Pvt.) Limited v. Federation of Pakistan 2018 CLD 48; Telkom SA Limited v. Merid Training (Pty) Ltd. Case No. 27984 of 2010; Mia Corporation (Pvt.) Ltd. v. Pakistan PWD PLD 2017 Isl. 29; Muhammad Ayub and Brothers v. Capital Development Authority PLD 2011 Lah. 16; Ram Gajadhar Nishad v. State of UP (1999) 2 SCC 486; Monarch Infrastructure (Pvt.) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation (2000) 5 SCC 287; Siemens Public Communication Networks Private Limited v. Union of India (2008) 16 SCC 215; AIR CIRO v. Civil Aviation Authority 2017 CLC 126; West Bengal State Electricity Board v. Patel Engineering Company Limited (2001) 2 SCC 451; Habibullah Energy Limited v. WAPDA through Chairman PLD 2014 SC 47; Khawaja Muhammad Asif v. Federation of Pakistan PLD 2014 SC 206; Ramna Pipe and General Mills (Pvt.) Ltd. v. Sui Northern Gas Pipelines 2004 SCMR 1274; Iqtedar Ali Khan v. Department of Mines and Minerals PLD 2004 SC 773; Kay Bee International (Pvt.) Ltd. v. Secretary to the Government of Punjab PLD 2002 SC 1074; Ittehad Cargo Service v. Syed Tasneem Hussain Naqvi PLD 2001 SC 116; Airport Support Services v. The Airport Manager, Quaid-i-Azam International Airport, Karachi 1998 SCMR 2268; Huffaz Seamless Pipe Industries Ltd. v. Sui Northern Gas Pipelines Ltd. 1998 CLC 1890 and Pacific Multinational (Pvt.) Ltd. v. Inspector-General of Police, Sindh Police Headquarters PLD 1992 Kar. 283 ref.

(i) Natural justice, principles of---

----Scope---In all proceedings by whomsoever held, whether judicial or administrative, principles of natural justice have to be observed if proceedings result in consequences affecting person or property or other rights of parties concerned---Without participation of party effected by an order or a decision amounts to an action without lawful authority---Requirement of maxim Audi Alteram Partem is not confined to proceedings before courts but extends to all proceedings by whomsoever held which may affect a person or property or other rights of parties concerned in dispute---Principles of natural justice must be read into each and every statute unless and until it is prohibited by statute itself.

Commissioner of Income Tax East Pakistan v. Fazal ur Rehman PLD 1964 SC 410; University of Dacca and another v. Zain Ahmed PLD 1965 SC 90; Abdul Wadood Khan v. Chief Land Commissioner PLD 1983 SC 183; Pakistan Chrom Mines Limited v. War Risk Insurance 1983 SCMR 1208; Pakistan v. Public at Large PLD 1987 SC 304; Abdul Majeed Zafar v. Governor of Punjab 2007 SCMR 330; Ali Muhammad v. The State PLD 2010 SC 623 rel.

Mansoor Hassan and Saqib Majeed for Petitioner.

Muhammad Nadeem Khan Khakwani, Assistant Attorney-General for Respondents.

Asim Shafi for Respondents Nos. 3 and 4.

Babar Sattar and Zainab Janjua for Respondent No. 6.

Muhammad Khursheed, Deputy Director, P.P.R.A.

2020 C L D 389

[Islamabad]

Before Miangul Hassan Aurangzeb, J

AEHSUN M.H. SHAIKH and others---Appellants

Versus

APPELLATE BENCH NO. IV, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

F.A.O. No. 119 of 2016, decided on 25th November, 2019.

Companies Ordinance (XLVII of 1984)---

----Ss. 237, 476 & 492---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 33 & 34---Concealing of information---Annual Audited Financial Statement---Bankruptcy proceedings, non-disclosure of---Appellants were management of public limited company who were imposed fine penalty by Securities and Exchange Commission of Pakistan (SECP) for showing transactions to its wholly owned subsidiary abroad which had bankrupted in year 2014---Plea raised by appellants was that they were unaware of bankruptcy proceedings till year 2015---Validity---Company of appellants was a public limited company, the consolidated financial statements (annual, half yearly and quarterly financial statements) filed by it were a matter of public record---In its accounts for the period ending on 30-6-2014 and 30-9-2014, company of appellants had shown trading transactions to have been carried out by bankrupted foreign company in huge amounts---Such accounts had shown long term investments and impairment with respect to the bankrupt foreign company---Accounts in addition to company of appellants for the periods ending on 31-12-2014 and 31-3-2015 had shown goodwill for bankrupt foreign company---By not disclosing factum as to the bankruptcy petition and bankruptcy order against foreign company in the accounts of company of appellants, material information was concealed---High Court declined to interfere in concurrent orders passed by SECP as by not disclosing factum as to bankruptcy proceedings and order against subsidiary, appellants concealed vital information in its accounts for periods in question and therefore, rendered themselves liable to imposition of penalty under S. 492 of Companies Ordinance, 1984---Appeal was dismissed in circumstances.

Faisal Iqbal Khan for Appellants.

Shahzad Ali Rana for SECP.

2020 C L D 1250

[Islamabad]

Before Aamer Farooq, J

CRESCENT STAR INSURANCE LIMITED through Official Representative---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Writ Petition No. 2439 of 2020, decided on 24th September, 2020.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 63 & 11---Constitution of Pakistan, Art. 199----Conditions of registration of Insurance Company---Power of Securities and Exchange Commission of Pakistan (SECP) to issue direction to Insurance Companies to cease entering into new contracts of insurance---Nature of powers of SECP under S. 63 of Insurance Ordinance, 2000---Discretionary and obligatory powers of SECP under S. 63 of Insurance Ordinance, 2000---Scope---Word "may" used in S. 63(1) of Insurance Ordinance, 2000 stipulated that it was upon discretion of SECP to issue direction to an insurer to cease entering into new contracts upon existence of "reasonable grounds" and such power was not mandatory or obligatory---Securities and Exchange Commission of Pakistan, however, under S. 63(2) of Insurance Ordinance, 2000 was duty bound to issue direction to an insurer to cease entering into a new contracts provided one of conditions set out in S. 63(2) was met with and therefore exercise of such power to issue directions under S. 63(2) was mandatory---Sections 63(1) & 63(2) of Insurance Ordinance, 2000 were therefore independent of each other, however, even when a direction was issued by SECP upon existence of reasonable grounds under S. 63(1) of Insurance Ordinance, 2000 for violation of conditions of licence provided under S. 11 of Insurance Ordinance, 2000, an opportunity of being heard was to be granted to Insurance Company/insurer in terms of proviso S. 63(2)(d) of Insurance Ordinance, 2000---Constitutional petition was disposed of, accordingly.

Crescent Star Insurance Company Limited v. Securities and Exchange Commission of Pakistan 2011 CLD 173 and Zaigham Ashraf v. The State and others 2016 SCMR 18 rel.

Collector, Sahiwal and 2 others v. Mohammad Akhtar 1971 SCMR 681; Messrs Faridsons Limited, Karachi and another v. Government of Pakistan, through Secretary, Ministry of Commerce, Karachi and another PLD 1961 SC 537 and Federation of Pakistan v. Asad Javed and others PLD 2016 Isl. 53 ref.

Adam Hassan Malik for Petitioner.

2020 C L D 1320

[Islamabad]

Before Miangul Hassan Aurangzeb and Lubna Saleem Pervez, JJ

Messrs ROSE ASSOCIATES---Appellant

Versus

Messrs SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY LIMITED---Respondent

R.F.A. No. 165 of 2013, decided on 28th September, 2020.

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

----Ss. 9 & 10---Suit for recovery of finance---Liquidated damages---Proof---Application for leave to defend was dismissed and suit was decreed in favour of plaintiff Bank along with liquidated damages---Validity---Dismissal of application for leave to defend by Banking Court was not ipso facto proof of Bank having suffered damages due to default of customer in its repayment obligations---In absence of any evidence to substantiate damages suffered by Bank due to customer's default in its obligations, Banking Court could not have awarded liquidated damages in favour of Bank---High Court modified judgment and decree only to the extent of excluding amount of liquidated damages awarded in favour of Bank---Appeal was allowed accordingly.

Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Limited v. Messrs Allied Bank of Pakistan 2003 CLD 596; Messrs HITEC Metal Plast (Pvt.) Ltd. v. Habib Bank Limited PLD 1997 Quetta 87; Allied Bank of Pakistan Ltd. v. Messrs Aisha Garments 2001 MLD 1955; Industrial Development Bank of Pakistan v. Messrs Baloch Engineering Industry (Pvt.) Ltd. 2010 CLD 591; NIB Bank Limited v. Three Star Hosiery Mills (Pvt.) Ltd. 2013 CLD 534; Shadman Electronics Industry (Pvt.) Ltd. v. NIB Bank Limited 2013 CLD 1305; Muhammad Farooq Azam v. Bank Al-Falah Limited 2015 CLD 1439; Pak Libya Holding Company (Pvt.) Ltd. v. Maxco (Pvt.) Ltd. 2016 CLD 1147; Askari Bank Limited v. Saga Sports (Pvt.) Ltd. 2017 CLD 162; National Bank of Pakistan v. Effef Industries Limited 2002 CLD 1431; Industrial Development Bank of Pakistan v. Pak Punjab Carpets 2003 CLD 1703; Hunza Packages (Pvt.) Ltd. v. Orix Leasing Pakistan Limited 2004 CLD 824; Agricultural Development Bank of Pakistan v. Muhammad Anwar 2004 CLD 1150; Agricultural Development Bank of Pakistan v. Zaman Ali 2004 CLD 1649; United Bank Limited v. Hafiz Brothers 2005 CLD 374; Agricultural Development Bank of Pakistan v. Nadir alias Nadir Ali 2005 CLD 1588; United Bank Limited v. Sakeena 2005 CLD 1825 and United Bank Limited v. M. Ismail and Company (Pvt.) Ltd. 2006 CLD 394 rel.

Fahad Ikram for Appellant.

Azid Nafees for Respondent.

2020 C L D 49

[Sindh]

Before Aqeel Ahmed Abbasi and Muhammad Junaid Ghaffar, JJ

FIRST DAWOOD INVESTMENT BANK LIMITED---Appellant

Versus

BANK ISLAMI PAKISTAN LIMITED---Respondent

I.A. No. 17 of 2012, decided on 31st October, 2013.

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

----S. 22---Appeal---Computation of statutory limitation on filing of appeal---Obtaining of certified copy by appellant---Application for obtaining of certified copy of judgment/order, made under bona fide belief, on account of inadvertence of Court could not be treated as redundant where the mistake was primarily on part of the Court---Such appellant could not be penalized for act of Court.

Muhammad Khan v. Fatima Bhai AIR 1930 Naghpur 139; Balwant Rao v. Balmukund and others AIR 1935 Nagpur 109; Punjab Province v. M. Noorullah PLD 1957 (W.P.) Lahore 370 and Muslim Commercial Bank Ltd. v. Aslam Khan 1987 CLC 2043 distinguished.

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

----S. 9---Banking Tribunals' Ordinance (LVIII of 1984) S. 6---Procedure of Banking Court---Persons authorized to file plaint on behalf of Financial Institution---Provision of S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Nature and scope---Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was different and independent from provisions of C.P.C., Banking Tribunals' Ordinance, 1984 and Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 in so far as institution of proceedings by way of filing of plaint was concerned--- Section 6 of the Banking Tribunals' Ordinance, 1984 was not pari materia with S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and basic difference between the two was that under the later, suit could be filed by an authorized officer on basis of power of attorney duly executed in favour of such officer whereas under the first, suit could be filed by Bank with approval of the Board of Directors of the Bank and not otherwise.

Imamdin and 4 others v. Bashir Ahmed and 10 others PLD 2005 SC 418 and M. A. Karim Iqbal v. Presiding Officer Banking Court Nos.3 and 4 others 2003 CLD 1447 distinguished.

Abdul Rahim v. UBL PLD 1997 Kar. 62; Balwant Rao v. Balmukund and others AIR 1935 Nagpur 109; Punjab Province v. M. Noorullah PLD 1957 (W.P.) Lahore 370; Amir Ali Ahmed and others v. HBL 2005 CLD 934; Haji Saghir Ahmed v. UBL 2004 CLD 1334; Silk Bank Ltd. v. Dewan Sugar Mills Ltd. 2011 CLD 436; Khayam Films v. Bank of Bahawalpur Limited 1982 CLC 1275; Noor Rehman v. Sher Muhammad Khan 2004 CLC 349 and Imamdin and 4 others v. Bashir Ahmed PLD 2005 SC 418 ref.

(c) Power of Attorney---

----Interpretation of power of attorney---Role of attorney---Scope---While interpreting contents of a power of attorney, acts done by attorney in furtherance to a main purpose for which said power of attorney had been issued and which acts were for benefit of principal; the same may be protected and considered as valid irrespective of fact that such authority or power was not specifically mentioned in such a power of attorney.

Qadir Bakhsh and 10 others v. Kh. Nizam-ud-Din Khan and 4 others 2001 SCMR 1091 rel.

Salman Talibuddin for Appellant.

Murtaza Wahab for Respondent.

2020 C L D 70

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs SING FUELS PTE LTD.through Duly Authorized Attorney---Plaintiff

Versus

M.V. YASA AYSEN and 4 others---Defendants

Admiralty Suit No. 10 of 2017, decided on 29th August, 2019.

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

----Art. 30---Admission---Prerequisites---Admission must be categorical and undertaken in a clear and express manner.

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

----Ss. 3 & 4---Sindh Chief Court Rules (Original Side), R. 731---Admiralty Jurisdiction of High Court---Recovery of finances---Arrest of vessel---Time charter and demise charter vessel, responsibility of---Plaintiff supplied bunker delivery service and was aggrieved of non-payment of outstanding amounts by charterers and owners of vessel in question---Plea raised by plaintiff was that since owners of vessel in question were informed about bunker services to charterers, they were liable to compensation and damages and sought arrest of vessel in question---Validity---Held, it was always of pivotal importance to first see as to type and nature of charterer vis-à-vis liability of owners and charterers to third parties and to each other---Time Charter mentioned that captain or master was although appointed by owners, yet remained under orders and directions of charterer as regards employment and agency---Ship in question was owner's ship and master and crew were his servants for all details of navigation and care of vessel but for all matters relating to receipt of and delivery of cargo and those earnings of vessel which flew into pockets of charterers---Bunker delivery note clearly and specifically mentioned that supply of bunkers by bunker supplier was on 'Charterers Account' and same was an admitted document by plaintiff---Nothing was placed on record to show that plaintiff ever approached owners of vessel before entering into any contract for supply of bunkers---No consent of owners of vessel was ever sought for making supplies of bunkers and liability of payment on part of owners in case of any default---Those were crucial elements as plaintiff's case as against owners were concerned---Owners had placed on record time charter agreement which clearly provided that bunkers supply and its liability was on account of charterer and not owners---High Court declined to interfere in as plaintiff could not be permitted to take undue advantage under Admiralty Jurisdiction of High Court by arrest of vessel and then compelling and dragging owners to pay amount being claimed when no case for a claim in personam was made out---Suit was dismissed in circumstances.

Messrs V. N. Lakhani & Company v. m. v. Lakatoi Express and 2 others PLD 1994 SC 894 and Clyde Commercial Ltd. v. United States Company (The Santon), 152 Fed.516 (S.D.N.Y.1907) rel.

Henry v. Geoprosco International Ltd. Lloyd's Law Reports 1974 Vol. 2; Re: Dulles' Settlement Trusts Dulles v. Vidler (All England Law Reports (June 14, 1951) Vol. 2; Francis Jackson Developments, Ltd. v. Hall and another (All England Law Reports (June 14, 1952 (Page 2265) Vol. 2; PST Energy 7 Shipping LLC and another v. O W Bunker Malta Ltd and another (Lloyd's Law Reports (2016 Vol. 1 (5); Forsythe International (UK) Ltd. v. Silver Shipping Co. Ltd. and Petroglobe International Ltd. (The "Saetta") (Lloyd's Law Reports (1993 Vol. 2 (268); Bangladesh Shipping Corporation v. M. V. "Nedon" and another PLD 1981 Kar. 246; Yukong Ltd. South Korean Company, Seoul, South Korea v. M. T. Eastern Navigator and 2 others PLD 2001 SC 57; Atlantic Steamer's Supply Company v. m. v. Titisee and others PLD 1993 SC 88; Messrs Naseem Oils through Proprietor v. M. T. Miramis through Master/Chief Officer and 3 others 2012 CLD 1413 and Messrs V.N. Lakhani and Co. v. The Ship Lakatoi Express 1994 CLC 1498 ref.

Omair Nisar for Plaintiff.

Agha Zafar Ahmed for Defendants Nos. 1 to 4.

Nemo for Defendant No.5.

2020 C L D 95

[Sindh]

Before Muhammad Faisal Kamal Alam, J

HAYS TRADING AND SHIPPING through Authorized Representative---Plaintiff

Versus

M.V. MISKI (THE VESSEL) and another---Respondents

Admiralty Suit No. 2 of 2018, decided on 23rd September, 2019.

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

----S. 3---Admiralty Jurisdiction of the High Court---Claims actionable under the said jurisdiction---Scope---Where claim was made against defendants which included the defendant vessel and owner of such vessel, and conclusive evidence was led to establish factum of such ownership and such claim(s) was in respect of the vessel's cargo and ancillary issues thereto, then suit would be maintainable under S. 3 of the Admiralty Jurisdiction of High Courts Ordinance, 1980.

Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. Lahore PLD 1971 SC 550 and Book Payne's Carriage of Goods by Sea, 7th Edition ref.

Dabinovic (Monaco) S.A.M. Authorised Agent of Nafin Naviera-y Financiera LTDA, San Jose (Costa Rica) v. m.v. Pluton 1, Yugoslavian Flag through its Captain and 2 others 1993 MLD 1587 distinguished.

Compagnie Continentale (France) S. A. v. Pakistan National Shipping Corporation and 2 others PLD 1986 Kar. 447 rel.

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

----Ss. 3 & 4---Merchant Shipping Ordinance, 2001 (LII of 2001) Ss. 549, 550 & 551---Admiralty jurisdiction of the High Court---Determination of claims under the said Jurisdiction---Award of damages---Precedence of claims---Maritime liens---Liens for wages of crew and master of a vessel---Claims of the Port Authority to have priority---Scope---Under Admiralty Jurisdiction of the High Court, there were two kinds of damages, either general or special---Special damages were only to be awarded when a party successfully proved actual losses suffered---General damages could be rewarded by invoking rule of thumb if circumstances so warranted---Wages of crew and master of a vessel were covered under Ss. 549, 550 & 551 of the Merchant Shipping Ordinance, 2001 and such category of claims were a "maritime lien", which was charge on the res (vessel) and travelled with such vessel---Such claim had precedence over claim of a mortgagee of a vessel---Charges/dues of a Port Authority were to be ranked at top of all claims provided that such Port Authority had acted diligently.

Abdul Majeed Khan v. Tawseen Abdul Haleem 2012 CLC 749; Bourbon Maritime (Pvt.) Ltd. v. m.v. Salaj and others 2018 SCMR 1828; Twaha v. The Master m.v. 'ASIAN QUEEN' and 2 others PLD 1982 Kar. 749 and Hong Leong Finance Limited v. m.v. Asian Queen through High Court PLD 1991 SC 1021 rel.

Abdul Razzaq for Plaintiff.

Khuram Rashid for Defendants Nos. 1 and 2.

Dr. Chaudhry Wasim Iqbal, Official Assignee.

2020 C L D 110

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

SUKKUR BEVERAGES PRIVATE LIMITED through Manager Admin.---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Finance and 2 others---Respondents

C.P. No. D-8542 of 2018, decided on 12th February, 2019.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 25A & 93C---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9---Recovery of finance---Placement on defaulter list---Pendency of lis---Petitioner was limited liability company which was aggrieved of placement of its name on defaulter list of Electronic Credit Information Bureau (eCIB) of State Bank of Pakistan for nonpayment of outstanding dues---Plea raised by petitioner was that nature of relationship between petitioner and respondent was pending adjudication---Validity---Held, there were no financial agreement regarding relationship between parties as "customer" and "financial institution" within meaning of Financial Institutions (Recovery of Finance) Ordinance, 2001 or otherwise---No security documentation existed purporting to secure any obligation that might have accrued---Placement of name of petitioner by State Bank of Pakistan on its defaulter list/eCIB prior to determination of very agreement in respect whereof a default alleged was unwarranted---High Court directed the State Bank of Pakistan to remove name of petitioner company from its defaulter list/eCIB under advisement to all financial institutions concerned---Constitutional petition was accepted accordingly.

A & A Services through Proprietor v. Federation of Pakistan through Secretary Ministry of Finance and others 2014 CLD 809; New Jubilee Insurance Company Ltd., Karachi v. National Bank of Pakistan Karachi PLD 1999 SC 1126 Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191; Messrs Abdul Aziz Nawab Khan and Company v. Federation of Pakistan, Ministry of Finance and others 2006 CLD 55; Sahibzada Faisal Ali Khan v. Federation of Pakistan and others 2007 CLD 463; Syed Wajahat Hussain Zaidi v. State Bank of Pakistan through Governor and 14 others 2015 CLD 1897 and Multiline Associates v. Ardeshir Cowasjee 1995 SCMR 362 rel.

Barrister Owais Ali Shah and Amir Khosa for Petitioner.

Manzoorul Haq for Respondent No.2.

Asad Rizvi for Respondent No. 3.

Muhammad Saad, CFO of the Respondent No. 3.

Ishrat Alvi, Assistant Attorney General.

2020 C L D 129

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

UNITED BANK LIMITED---Appellant

Versus

GHULAM RAFIQ---Respondent

First Appeal No. 7 of 2017, decided on 8th February, 2019.

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

----Ss. 9, 22 & 24---Limitation Act (IX of 1908), Art. 120---Suit for recovery of finance---Limitation---Failure to seek condonation of delay---Plaintiff Bank was aggrieved of dismissal of suit by Banking Court on ground that it was beyond limitation---Validity---No application for seeking discretionary relief was preferred by plaintiff Bank before Banking Court---Banking Court rightly did not consider delay in filing of suit to be justified---Plaintiff Bank had opportunity to seek condonation of delay from Banking Court under S. 24(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 however, it demonstrably failed to do so---High Court declined to interfere in order passed by Banking Court as same was elaborative of reasoning relied upon to arrive at conclusion stipulated therein and plaintiff Bank was unable to demonstrate any infirmity---Appeal was dismissed in circumstances.

Allied Bank of Pakistan v. Karsaz Corporation and others 1987 CLC 947 distinguished.

MCB Bank Limited v. Messrs Tila Frontier Fruit Company and others 2011 CLD 938 ref.

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

----S. 3---Limitation---Not a question of technicality---Prescriptions of limitation are not technical and ignoring same would render entire law of limitation as redundant.

Awan Apparels (Private) Limited and others v. United Bank Limited and others 2004 CLD 732 rel.

Ghulam Rasool Korai for Appellant.

Respondent in person.

2020 C L D 139

[Sindh]

Before Muhammad Faisal Kamal Alam, J

FAIR SEA INTERNATIONAL FZC---Plaintiff

Versus

MV "MISKI" and others---Defendants

Admiralty Suit No. 7 of 2018, decided on 23rd September, 2019.

(a) Maritime and Shipping---

----"Necessaries" meaning of---Necessaries were goods or materials and in some cases services, provided to a ship for its operation or maintenance---Specific classes of goods, materials and services which qualified as "necessaries" varied to some extent from jurisdiction to jurisdiction, but in general, "necessaries" included such items as bunkers, supplies, repairs towage and stevedoring.

The Maritime and Shipping Dictionary, By Aga Faquir Mohammad, Advocate Supreme Court of Pakistan and British Shipping Laws, General Editor, The Hon. Sir Bushby Hewson Volume 11, The Merchant Shipping Acts rel.

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

----Ss. 3 & 4---Merchant Shipping Ordinance, 2001 (LII of 2001) Ss. 549, 550 & 551---Admiralty Jurisdiction of the High Court---Determination of claims under the said Jurisdiction---Award of damages---Precedence of claims---Maritime liens---Liens for wages of crew and master of a vessel---Claims of the Port Authority to have priority---Scope---Wages of crew and master of a vessel were covered under Ss. 549, 550 & 551 of the Merchant Shipping Ordinance, 2001 and such category of claims, were a "maritime lien", which was charge on the res (vessel) and travelled with such vessel---Such claim had precedence over claim of a mortgagee of vessel---Charges/dues of a Port Authority were to be ranked at top of all claims provided that such Port Authority had acted diligently---In a case for multiple claims, first claims/outstanding dues of the Port Authority had to be settled, then wages/claim of crew as determined should be settled whereafter a mortgagee Bank's claim was to be settled /determined.

Bourbon Maritime (Pvt.) Ltd. v. MV Salaj and others 2018 SCMR 1828; Twaha v. The Master M.V. Asian Queen and 2 others PLD 1982 Kar. 749 and Hong Leong Finance Limited v. M.V. Asian Queen through Nazir High Court PLD 1991 SC 1021 rel.

Syed Noman Zahid Ali for Plaintiff.

Nemo for Defendants.

Dr. Chaudhry Wasim Iqbal, Official Assignee.

2020 C L D 198

[Sindh]

Before Yousuf Ali Sayeed, J

GHULAM ALI P. ALLANA---Plaintiff

Versus

STATE BANK OF PAKISTAN through Governor and another---Defendants

Suit No. 2009 of 2016, decided on 20th February, 2018.

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

----Ss. 25-A, 82-A(iii) & 82-B(v)---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for declaration and injunction---Rejection of plaint---Credit Information Bureau of State Bank of Pakistan, reporting to---Scope---Plaintiff availed finance facility from Bank and suits before banking jurisdiction were pending between the parties---Plaintiff was aggrieved of reporting made by Bank to Credit Information Bureau of State Bank of Pakistan---Plea raised by plaintiff was that during pendency of suits between the parties no such reporting could have been made---Validity---Name of plaintiff was reported by Bank with role of State Bank of Pakistan as that of implementer of Credit Information Bureau framework in terms of S. 25-A of Banking Companies Ordinance, 1962---Dispute of plaintiff was confined to Bank and jurisdiction of State Bank of Pakistan was not ousted---Provisions of S. 82-B(v) of Banking Companies Ordinance, 1962 was not controlled by S. 82-A(iii) of the Ordinance---In presence of a reference to 'violations of banking laws, rules, regulations or guidelines' in S. 82-A(iii) of Banking Companies Ordinance, 1962 same was superfluous for there to be any further mention in latter provision of a 'failure to act in accordance with banking laws and regulations including policy directives or guidelines issued by State Bank from time to time' as was case---Reporting of credit information of plaintiff to Credit Information Bureau was not in itself a banking transaction in strict sense as information stemmed from and related to an underlined transaction of that very nature and description---Plaint was rejected in circumstances.

Azam Wazir Khan v. Messrs Industrial Development Bank of Pakistan and others 2013 SCMR 678; Syed Wajahat Hussain Zaidi through Procurator/Authorized Representative v. State Bank of Pakistan through Governor and 7 others 2016 CLD 1084; Messrs Abdul Aziz Nawab Khan and Company v. Federation of Pakistan, Ministry of Finance and others 2006 CLD 55; Sahibzada Faisal Ali Khan v. Federation of Pakistan and others 2017 CLD 463; Messrs J.S. Developers through Chief Executive and another v. State Bank of Pakistan through Governor SBP and another 2015 CLD 173; Abbasia Coperative Bank (Now Punjab Provincial Cooperative Bank Limited) through Manager and others v. Hakeem Hafiz Muhammad Ghaus and 5 others PLD 1997 SC 3; Abdul Rauf and others v. Abdul Hamid Khan and others PLD 1965 SC 671; Muhammad Jamil Asghar v. The Improvement Trust, Rawalpindi PLD 1965 SC 698; Messrs Arif Builders and Developers v. Government of Pakistan and 4 others PLD 1997 Kar. 627 and Soneri Bank Limited through Constituted Attorneys/Authorized Officers and another v. Messrs Pak Land Corporation (Pvt.) Limited through CEO and 4 others 2013 CLD 1756 ref.

A&A Services through Proprietor v. Federation of Pakistan through Secretary Ministry of Finance and others 2014 CLD 809 distinguished.

(b) Jurisdiction---

----Provision in a sub-Constitutional enactment cannot bar jurisdiction of constitutional court.

Shahid Zahir Abbasi and others v. President of Pakistan and others PLD 1996 SC 632 and Arshad Mehmood v. Commissioner/ Delimitation Authority Gujranwala and others PLD 2014 Lah. 221 rel.

Taimoor Ali Mirza for Plaintiff.

Manzoorul Haque for Defendant No. 1.

Hassan Mandviwala for Defendant No. 2.

2020 C L D 238

[Sindh]

Before Irfan Saadat Khan and Mrs. Kausar Sultana Hussain, JJ

Haji ABDUL RAZZAK (DECEASED) through Legal Heirs---Appellant

Versus

FAYSAL BANK LIMITED---Respondent

Special High Court Appeal No. 203 of 2017, decided on 28th May, 2019.

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

----Ss. 16 & 9---Suit for recovery---Attachment before judgment, injunction and appointment of Receiver---Adjudication under S. 16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Question before High Court was whether an application under S. 16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 could be filed by "customer"/"borrower"---Held, that in a suit filed under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, matter had to be proceeded in view of the provisions of said Ordinance and an application under S. 16 of said Ordinance could only be filed by a financial institution and not a borrower---Contention that if there was no bar in general law, then such application could be allowed, was incorrect and application under S. 16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 filed by a borrower was not maintainable.

Haji Abdul Wali Khan v. Muhammad Hanif 1991 SCMR 2457 distinguished.

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

----Ss. 22 & 9---Civil Procedure Code (V of 1908), O. XXXVIII, R. 5---Suit for recovery---Attachment before judgment---Appeal---Scope---Nature of adjudication under O. XXXVIII, C.P.C.---Application under O. XXXVIII, R. 5, C.P.C. was an extraordinary relief where if Court was satisfied that other party was likely to defeat decree in future then under such special circumstances, Court may pass order with regard to attachment before Judgment---Necessary ingredients were to be fulfilled before grant of application under O. XXXVIII, R. 5, C.P.C. and merely on apprehension alone, such application could not be granted---Nature of an order under O. XVIIII, C.P.C. was penal in nature and adjudication under O. XXXVIII, C.P.C. had to be done with great care and caution---Order made on an application under O. XXXVIII, C.P.C. seeking attachment before judgment, was interim/interlocutory in nature and was not appealable under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Noor Muhammad Lambardar v. Member (Revenue) Board of Revenue, Punjab 2003 SCMR 708 and Bank Al-Falah Ltd. v. Interglobe Commerce Pakistan 2017 CLD 1428 distinguished.

National University of Sciences and Technology (NUST) Islamabad through Registrar and 2 others 2011 YLR 1070; Nadeem Akhtar and another v. Messrs Dubai Islamic Bank (Pakistan) Ltd. 2013 CLD 805; Malik Israr Salim v. Citibank N.A., Lahore and another 2003 CLD 588 and Mazhar Butt v. United Bank Limited and another 2012 CLD 285 rel.

Madhu Limaye v. State of Maharashtre AIR 1978 SC 47; Amar Nath and others v. State of Haryana and others AIR 1977 SC 85; Noor Muhammad Lambardar v. Member (Revenue) Board of Revenue, Punjab 2003 SCMR 708; Bank Al-Falah Ltd. v. Interglobe Commerce Pakistan 2017 CLD 1428; Asif Kudia v. KASB Bank 2014 CLD 1548; Muhammad Ather Hafeez Khan v. Messrs SSANGYONG and Unsmani JV PLD 2011 Kar. 605; Messrs Iram Ghee Mills v. Malaysia International Shipping Corp. 1999 MLD 1434; Bank Al-Falah v. Messrs Callmate Telips Telecom 2016 CLD 1202; Balochistan Glass Ltd. v. Bank Al-Falah Ltd. 2015 CLD 52; Sirajul Haq v. KDA PLD 1994 Kar. 315; V.M. Abdul Rahman and others v. D.K. Cassim and Sons and another AIR 1933 PC 58; Messrs Qadoos Brothers Poultry Farms through Abdul Qadoos v. Judge Banking Court No.1 Gujranwala and others 2018 CLD 88; Ghulam Sarwar v. Abdul Jalil and 2 others PLD 1991 SC 500; Muhammad Khan v. Zarai Tarakiati Bank Limited through President 2014 CLD 1596; Bank Al-Falah Ltd. v. Interglobe Commerce Pakistan 2017 CLD 1428; Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109; Syed Wajahat Hussain Zaidi and another v. United Bank Limited 2019 CLD 91 and Shehryar Waqas Malik and another v. Muhammad Zafar Ali Khan 2018 CLD 1040 ref.

Asim Mansoor Khan for Appellant.

Rashid Anwar for Respondent.

2020 C L D 254

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

MUHAMMAD JAWED through Authorized Attorney---Appellant

Versus

FIRST WOMEN BANK LIMITED and 8 others---Respondents

First Appeal No. 109 of 2018, decided on 5th December, 2019.

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

----Ss. 9, 17 & 19---Civil Procedure Code (V of 1908), S. 47---Suit for recovery---Decree of Banking Court---Execution of decree---Sale of mortgaged property---Auction proceedings---Right(s) of auction-participants---Mere bid did not create any vested rights---Scope---Rights of an auction participant were created upon confirmation of sale by the Executing Court---Bid in an auction was only an offer and it conferred no benefit unless it culminated into issuance of confirmation of sale and confirmation of sale could not merely be claimed as of right---Submission of bid does not vest the bidder with any proprietary rights in a property---Where no confirmation of sale had ever been issued and consequently no sale certificate had been issued, in such a case no rights were created in favour of an auction participant with respect to a mortgaged property that was the subject-matter of auction proceedings.

Nanhelal and another v. Umrao Singh AIR 1931 Privy Council 33; Nazli Hilal Rizvi v. Bank Alfalah Limited and others 2019 CLD 808; Nazli Hilal Rizvi v. Bank Alfalah Limited and others 2019 SCMR 1679; Afzal Maqsood Butt v. Banking Court No.2, Lahore and others PLD 2005 SC 470; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; Muhammad Farooq v. Silk Bank Limited and others (First Appeal 50 of 2018) and Muhammad Khalil v. Faisal M.B. Corporation and others 2019 SCMR 321 rel.

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

----Ss. 17, 19 & 9---Civil Procedure Code (V of 1908), S. 47 & O. XXI, R. 1---Suit for recovery---Decree of Banking Court---Execution of decree---Sale of mortgaged property---Auction proceedings---Continuation of auction-proceedings when judgment-debtor deposited the decretal amount and was no more at default---Scope---Question before High Court was whether auction proceedings could be compelled to continue if during pendency of same, decretal amount was deposited by judgment-debtor----Held, that very concept of execution proceedings was to give effect to a decree and such proceedings subsisted until said decree was satisfied and an array of methods were employed to execute a decree including, without limitation, auction of property securing the debt---Realization of such security was warranted only in event that judgment-debtor was unable or unwilling to satisfy decree by other means and in event a decree was satisfied, by or on behalf of judgment-debtor, there would exist no justification to perpetuate execution proceedings for discharge of debt---No reason existed to compel continuation of execution proceedings once a judgment debtor was no longer at default.

Yawer Kadir v. Banking Court V at Karachi and others 2013 CLD 488 distinguished.

Muhammad Asif v. MCB Bank Limited and others 2019 CLD 733; Mumtaz-ud-Din Feroz v. Sheikh Iftikhar Adil and others 2009 CLD 594 and Habib and Company and others v. Muslim Commercial Bank Limited and others 2019 SCMR 1453 rel.

Khawaja Shamsul Islam and Rahman Aziz Malik for Appellant.

Syed Muhammad Kazim for Respondent No. 1.

Ali Asghar Buriro for Respondents Nos. 2, 4 and 5.

2020 C L D 269

[Sindh]

Before Irfan Saadat Khan and Fahim Ahmed Siddiqui, JJ

FIRST PAKISTAN SECURITY LIMITED and others---Appellants

Versus

BANK ALFALAH LIMITED---Respondent

Spl. H.C.A. No. 57 of 2018, decided on 28th October, 2019.

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

----S. 62---Novation of contract---Where there existed no agreement between parties to a contract with regards to a subsequent offer, then such offer could not be considered as having materialized---Where there was non-acceptance of a subsequent offer by one party to the other party, then there was no novation of contract.

National Bank of Pakistan v. Al-Asif Sugar Mills Ltd. 2001 MLD 1317; Banque Indosuez v. Banking Tribunal for Sindh and Baluchistan 1994 CLC 2272 and Lahore Cantonment Cooperative Housing Society Ltd. v. Dr. Nusratullah Chaudhri PLD 2002 SC 1068 ref.

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

----S. 22---Suit for recovery---Appeal against judgment and decree of Banking Court---Limitation---Computation of---Under S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the conjunction "or" indicated that an appeal under said section could be filed either against a judgment or decree and since appeal could be filed against any final order, hence the period of limitation would start from date of judgment and not on date of decree.

Apollo Textile Mills Ltd. and another v. Soneri Bank Ltd. PLD 2012 SC 268 rel.

Imtiaz Ali v. Atta Muhammad and another PLD 2008 SC 462 ref.

Danish Ghazi for Appellants.

Shahzad Haider for Respondent.

2020 C L D 310

[Sindh]

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

Messrs PAK LAND CORPORATION (PVT.) LTD. through Chief Executive and others---Appellants

Versus

KHADIM ALI SHAH BUKHARI (KASB) BANK LTD. and another---Respondents

I.A. No. 66 of 2013, decided on 9th March, 2018.

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

----S. 22---Civil Procedure Code (V of 1908), S. 12(2)---Judgment and decree, setting aside of---Scope---Provisions of S. 12(2), C.P.C. are applicable in banking matters but in no event can be a substitute of appeal as provided under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Muhammad Yaqoob and others v. Messrs United Bank Limited and others 2007 SCMR 922 rel.

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

----S. 12(2)---Limitation Act (IX of 1908), Art. 181---Decree, setting aside of---Limitation---No period has been prescribed in Limitation Act, 1908, for filing application under S. 12(2), C.P.C.---Residuary Art. 181 of Limitation Act, 1908 governs such like situations which prescribes a maximum period of 3 years.

Sarfraz v. Muhammad Ahmed Khan and another 2001 SCMR 1062 rel.

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

----Ss. 9 & 11---Civil Procedure Code (V of 1908), S. 12(2) & O.XXIII, R. 3---Enforcement of Sharia Act (X of 1991), Ss. 19 & 21---Compromise decree, setting aside of---Non-fulfillment of existing obligations---Plea of Haraam act---Compromise decree was passed by Banking Court, with consent of parties, but on failure of judgment debtors to comply with their obligations, execution proceedings were filed---Judgment debtors sought setting aside of judgment and decree on plea that act of charging markup was Haraam in Islam and on plea of misrepresentation and fraud---Validity---Customers were bound under Ss. 19 & 21 of Enforcement of Sharia Act, 1991 to fulfil their promises, obligations and commitments until an alternative economic system was evolved---Judgment debtors were fully aware of charging of markup under finance agreements duly signed and executed between the parties---Judgment debtors, benefited themselves from financial facilities granted to and availed by them even rescheduling of finance facilities was done at their request---Judgment debtors could not be permitted to take somersault and then allege that markup agreed to and charged in terms of finance agreement was either not payable or otherwise it was Haraam---After passing of compromise decree, judgment debtors could not be permitted to avoid and/or wriggle out of their legal obligations much less after passing of compromise decree---Case of judgment debtors did not fall within scope of S. 12(2), C.P.C. as same could not be extended so as to bring within its ambit 'fraud' and 'misrepresentation' that never happened during course of proceedings---High Court declined to interfere in consent order as same was proper, valid, passed quite in accordance with law---Appeal was dismissed in circumstances.

Sain v. Government of N.W.F.P. through Secretary, Auqaf and 2 others 2005 SCMR 1848 rel.

Ameer Umar and another v. Additional District Judge, Dera Ghazi Khan and others 2010 SCMR 780; United Bank Ltd. v. Messrs Farooq Brothers and others PLD 2002 SC 800; Askari Commercial Bank Limited through Authorized Signatory v. Messrs Bake Line Products through Partners and 5 others 2013 CLD 836 and Dr. M. Aslam Khaki v. Syed Muhammad Hashimi PLD 2000 SC 225 ref.

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

----S. 25---State Bank of Pakistan Act (XXXIII of 1956), Preamble---State Bank of Pakistan Circulars--- Legislative instrument---Scope---Circulars of State Bank of Pakistan are notifications having been issued under powers derived from State Bank of Pakistan Act, 1956/Banking Companies Ordinance, 1962 and have force of law---Circulars of State Bank of Pakistan cannot be termed as Legislative instruments of the nature which can curtail accrued/being accrued 'vested rights' if available under law.

Hala Spinning Mills Ltd. v. International Finance Corporation 2002 SCMR 450 rel.

Shah Faisal Qureshi for Appellants.

M. Ishaque Ali for Respondent No. 1.

2020 C L D 359

[Sindh (Hyderabad Bench)]

Before Fahim Ahmed Siddiqui, J

TELENOR MICRO FINANCE BANK LIMITED through Authorized Person---Applicant

Versus

The STATE and 3 others---Respondents

Criminal Miscellaneous Application No. S-380 of 2018, decided on 21st December, 2018.

Microfinance Institutions Ordinance (LV of 2001)---

----S. 3(2)---Criminal Procedure Code (V of 1898), Ss. 22-A & 22-B---Ex-officio Justice of Peace---Powers of---Registration of FIR---Microfinance Institution not to be deemed to be a Banking Company---Scope---Applicant, a Microfinance Institution contended that company provided loan facility on the collateral of gold ornaments; that it hired the services of respondent for the purpose of verifying the quality of gold ornaments; that a large number of its clients obtained loan facility and became defaulter and when the gold ornaments, deposited by them as collateral, were checked by an independent expert, it was found that the same were artificial, as such, company sought registration of FIR against the respondent---Respondent contended that proper course for the applicant company was to file a suit for damages and that it was a Bank, as such, could not lodge FIR and the only course available to it was to file a private complaint before the Banking Court---Validity---Held, agreement between the applicant company and respondent indicated that the services of respondent were hired as jeweler to check and verify the gold ornaments, which were required to be deposited with the applicant as collateral---Procedure provided for the same was that the customer approached the respondent, where he checked the ornaments and then sealed them in a bag which was handed over to the applicant company in sealed condition at the time of obtaining financing facility---Nonetheless, a good number of customer's ornaments were found fake and imitation, as such the applicant company sustained losses, which was not possible without any criminal folly on the part of respondent---Applicant company was a Micro Finance Institution which could not be deemed to be a Banking Company in view of subsection (2) of S. 3 of Microfinance Institutions Ordinance, 2001---Criminal miscellaneous application was allowed and the SHO concerned was directed to record the statement of the applicant.

Agha M. Saleem Raza for Applicant.

Cheetan S. Kella for Respondent No. 4.

Shawak Rathore, D.P.G. for the State.

2020 C L D 366

[Sindh]

Before Muhammad Shafi Siddiqui, J

Messrs ALLIED BANK OF PAKISTAN---Plaintiff

Versus

Messrs CALLMATE TELIPS TELECOM LIMITED and 3 others---Defendants

Suit No. B-79 of 2010, decided on 6th October, 2016.

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

----Ss. 9 & 10---Suit for recovery of finance---Application for leave to defend---Statement of accounts, non-filing of---Plaintiff Bank filed suit for recovery of finance against defendants but did not append certified copy of statement of accounts---Validity---Bank was required to file such document in support of its claim which according to S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 included but was not limited to statement of accounts duly certified under Bankers' Books Evidence Act, 1891 and also by all other documents relating to grant of finances---Grant of leave to defendant revolved around statement of accounts which could only be basis for claim as made by plaintiff in plaint---In absence of such statement of account, claim could hardly be construed as an amount outstanding as statement of account was a crucial document which went to root of case which was mentioned in plaint but not available on record---High Court granted unconditional leave to defend suit to defendants as plaintiff was unable to rebut contention raised by defendants---Application was allowed in circumstances.

Zahid Hussain for Plaintiff.

2020 C L D 377

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

ASG METALS LIMITED---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Additional Joint Registrar---Respondent

Constitutional Petition No. D-5688 of 2019, decided on 5th December, 2019.

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

----S. 19---Notice by National Accountability Bureau---Purpose---Raison d'etre of S. 19 of National Accountability Ordinance, 1999 is not meant for giving any caution but it is serenely congregated for requiring information for purposes of inquiry or investigation to investigate and unearth any offence.

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

----S. 23---Transfer of property---When void---Principles---Provisions of S. 23 of National Accountability Ordinance, 1999 wreaks and enforces a bar or embargo against transfer or creation of charge on any property while inquiry or investigation or proceedings pending before National Accountability Bureau or court.

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

----Ss. 100, 111 & 112---National Accountability Ordinance (XVIII of 1999), S. 23---Charge, non-registration of---Petitioner was borrower who was aggrieved of non-registering charge in favour of Bank by Securities and Exchange Commission of Pakistan---Validity---Essentially charge was created by a company/borrower with some financial institutions and role of Securities and Exchange Commission of Pakistan was triggered after creation of charge---Matter was in fact between company and financial institutions and if despite creation of charge, Securities and Exchange Commission of Pakistan failed to register charge and tantamount to violation of S. 100 of Companies Act, 2017 in particular when no notice was ever issued by National Accountability Bureau to Securities and Exchange Commission of Pakistan to mark caution against registration of charge---Outcome of overriding effect could not be construed or interpreted in a manner that one statutory body could restrict without caveat another statutory body from performing its statutory obligations emanating from its parent law---Purpose of registration of charge was most importantly defined under S. 100 of Companies Act, 2017 and register of charges was to be kept by Registrar and could be inspected by any person on payment of fees as might be prescribed---Registrar would issue a certificate of registration as registration of charge with Securities and Exchange Commission of Pakistan was meant for safeguarding interest of public at large including financial institutions---Securities and Exchange Commission of Pakistan had no role in creation of charge but they went on board for its registration only---High Court directed authorities to register charge and issue certificate of registration---Constitutional petition was allowed in circumstances.

Mansoorul Arfin for the Petitioner.

Usman Tufail Shaikh for Respondent.

Akram Javed, DPG NAB on Court's Notice.

Ishrat Zahid Alavi, Assistant Attorney General and Hussain Bohra, Assistant Attorney General.

2020 C L D 404

[Sindh]

Before Arshad Hussain Khan, J

SALEEM AKHTAR QURESHI---Plaintiff

Versus

HABIB UR REHMAN---Defendant

Suit No. 1187 of 2018, decided on 20th August, 2019.

Negotiable Instruments Act (XXVI of 1881)---

----S.118---Civil Procedure Code (V of 1908), O. XXXVIII, Rr.3 & 2---Suit for recovery---Summary procedure on negotiable instruments---Application for leave to defend, grant of---Principles---Question before High Court was whether an application for leave to defend should be allowed where factum of execution of cheque was denied by defendant and there existed no arrangement/agreement between the parties requiring consideration---Contention of plaintiff, inter alia, was that said cheque was to be deposited in his account and subsequently be paid to a Bank, as plaintiff had been a guarantor in a finance facility obtained by defendant, upon which defendant had defaulted---Validity---Under S. 118 of the Negotiable Instruments Act, 1881 no doubt a presumption was attached to a negotiable instrument and burden lay upon person denying same to prove such presumption contrary, however said presumption was rebuttable by evidence---In the present case, there was nothing on record to show any agreement/ arrangement between parties whereupon negotiable instrument in shape of a cheque was issued in favour of plaintiff and said cheque was issued without any consideration---Defendant also brought on record evidence to suggest that said cheque had been misplaced and then forged---In absence of any document showing an agreement / arrangement between the parties, the logic for issuance of subject cheque in name of plaintiff, which was to be deposited by plaintiff first in his account and then after encashment thereof, funds were to be paid to the Bank, could only be determined after evidence was led---Requiring deposit of amount of subject cheque in Court would only tantamount to imposing an unduly onerous obligation and would stifle the very grant of leave by rendering it illusory---High Court observed that defendant was entitled to grant of leave to defend, as factum of execution of cheque as well as consideration for payment of said cheque remained clouded and required evidence---Application for leave to defend was allowed, in circumstances.

Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 and Kodak v. Alpha Film Corporation (1930) 2 KB 340 rel.

Mst. Siddiqa Begum and others v. Irshad Ali Shah PLD 1999 Kar. 311; Muhammad Siddique through Legal Representatives v. Mst. Noor Bibi through Legal Heirs and others PLD 2016 Lah. 140; Habib Bux v. Zahoor-Ul-Hassan 1986 CLC 1119; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Abdul Rauf Ghauri v. Mrs. Kishwar Sultana and 4 others 1995 SCMR 925; Khalid Javed Paracha through Authorized Attorney v. Muhammad Khalid 2017 YLR 210; Tasam Ali Bukhari v. Ghulam Mustafa and 4 others 2014 CLC 244; Muhammad Anwar v. Hoechst Pharmaceutical Pakistan (Pvt.) Ltd. and others 1989 MLD 171 and Wash Dev v. Ganvo Mal 2018 MLD 109 distinguished.

Messrs Muslim Commercial Bank Ltd. v. Bank of Credit and Commerce International 1986 MLD 45; Messrs Bashir Engineering Industries and 3 others v. The Muslim Commercial Bank Ltd. and another 1988 CLC 941; Abbas Ali and another v. Asif Abbas and 3 others 2012 CLC 1762; Balooch Akbar Khan v. Muhammad Hussain and another 2004 CLC 356), Manager, Muslim Commercial Bank Limited and another v. Babar 2006 CLC 1309; Asif Nadeem v. Messrs Bexshim Corporation and others 2001 CLC 653; Abdul Karim Jaffarani v. United Bank Ltd. and 2 others 1984 SCMR 568; Pakistan Water and Power Development Authority [WAPDA] v. Messrs Sea Gold Traders through Partners and 2 others 2003 CLD 392; Haji Abdul Wahid v. Hoechst Pakistan Limited and another 1993 CLC 1291; Habib Bank Ltd. v. Asghar Ali and others 1988 CLC 353; Abdul Malik K. Lakha through Legal Heirs v. Abdul Karim K. Kara PLD 2004 Kar. 399 and Muhammad Shafi v. Abdul Shakoor and 2 others 1986 MLD 151 rel.

M. Ishaque Memon for Plaintiff.

2020 C L D 419

[Sindh]

Before Yousuf Ali Sayeed, J

Lt. Col. (Retd.) SHAHID HAMID through Duly Constituted Attorney---Plaintiff

Versus

STATE BANK OF PAKISTAN and 4 others---Defendants

Suit No. 1599 of 2015, decided on 14th June, 2019.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 82-A(3), 82-B(5) & 82-E(7)---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), S. 18---Limitation Act (IX of 1908), Arts. 36, 48 & 60---Suit for declaration, injunction and damages---Unauthorized withdrawal from Bank account---Plaintiff asserted that amount from his account was fraudulently withdrawn---Complaint before Wafaqi Mohtasib was dismissed and thereafter plaintiff preferred civil suit---Validity---Grievance of plaintiff against Bank in relation to transaction was a matter that fell squarely within jurisdiction of Mohtasib---Such jurisdiction according to Ss. 82-A(3) & 82-B(5) of Banking Companies Ordinance, 1962 included enquiring into complaints of banking malpractices, as well as violation of banking laws, rules, regulations or guidelines---Such enactments applied to all banks operating in Pakistan, also extended to entertaining complaints of fraudulent or unauthorized withdrawals or debit entries in accounts---Plaintiff invoked jurisdiction of Mohtasib of his own accord---Proceedings as ensued were not tainted with mala fide on part of adjudicating authority or suffered from any violation of principles of natural justice---Plaintiff did not seek to avail a direct remedy in the form of a suit as an alternative to engaging mechanism of statutory fora but had already availed remedy before Mohtasib and preferred appeal against his decision---Plaintiff sought High Court to exercise jurisdiction so as to sit in appeal over concurrent findings of original and appellate forums albeit that their decisions were competently made in relation to a subject that fell within scope of their jurisdiction and did not offend principles of justice--- Substance of objection that findings recorded were erroneous allegedly being opposed to law and facts could not be countenanced--- High Court declined to interfere in concurrent findings of forums below as suit was clearly barred by limitation in terms of Arts. 36, 48 or 60 of Limitation Act, 1908---Suit was dismissed in circumstances.

Mohsin Shahwani for Plaintiff.

Muhammad Qayyum Abbasi for Defendant No. 2.

Hassan Akbar and Muhammad Imtiaz Khan for Defendant No.4.

2020 C L D 473

[Sindh]

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

ANEES-UR-REHMAN---Appellant

Versus

Messrs FAYSAL BANK LIMITED through Manager---Respondent

C.M.A. No. 1619 and 1st Appeal No. 12 of 2018, decided on 7th October, 2019.

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

----Ss. 10, 9, 7 & 2(d)---Procedure of Banking Court---Suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Nature---Provisions of Ss.9 & 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Mandatory in nature---Banking Suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was well-defined and controversies in such a suit were restricted to "availed", "claimed", or "dispute amounts" and facts in support thereof---Controversial details, unnecessary facts and time for the trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was curtailed by its provisions---Trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was restricted only to claimed or disputed amounts and therefore was a suit of accounts duly based on credit, debit and balance entries properly ledgered and maintained in Books of Accounts---Provisions of Ss.9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 being mandatory, parties were compulsorily obliged not only to plead but also state nature of accounts otherwise such parties were bound to face legal consequences.

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

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

----O. VII, Rr. 11 & 13--- Rejection of plaint---Rejection of plaint under O. VII, R. 11, C.P.C. did not preclude a plaintiff from instituting a subsequent suit on basis of same cause of action under O. VII, R. 13, C.P.C.---Interest of litigants was guarded when an incompetent suit or one which was barred under law, was not allowed to continue as the same could consume valuable time of court and encumber legal proceedings in a futile manner.

S.M. Shafi Ahmed Zaidi through Legal Heirs v. Malik Hassan Ali Khan [MOIN] through Legal Heirs 2002 SCMR 338 rel.

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

----O. VI, R. 17---Pleadings---Amendment in pleadings---Allowing amendment to a plaint in a suit----Order VI, R. 17, C.P.C. not applicable to amendments of order/judgment of a court----Doctrine of functus officio---Scope---Order VI, R. 17, C.P.C. only pertained to amendments in pleadings by either party in such a manner and on such terms which were equitable and just and which were necessary in determining real controversy between parties---Under the garb of O. VI, R. 17, C.P.C. no amendment in "judgment", "decree" or "order" could be made---Adjudicating authority, whether judicial or quasi-judicial, could not change its determination after signing of a judgment or order or decree as then the doctrine of functus officio becomes applicable.

(d) Functus officio, doctrine of---

----Meaning---Doctrine of "functus officio" meant having fulfilled all functions, discharged duty / duties, or discharged office, or accomplishment of purpose, which resulted in something no longer remaining in force or having authority.

Law Lexicon Venkatraramaiya rel.

Appellant in person.

Nemo for Respondent.

2020 C L D 505

[Sindh]

Before Zafar Ahmed Rajput, J

Al-Haj Sheikh ABDUL HAFEEZ and another---Plaintiffs

Versus

SUHAIL ZAMAN and 6 others---Defendants

Suit No.1227 of 2004, decided on 18th November, 2019.

(a) Acquiescence, doctrine of---

----Connotation---Acquiescence occurs when a person knowingly stands by without raising any objection to infringement of his rights, while someone else unknowingly and without malice afterthought acts in a manner inconsistence with his rights---Result of acquiescence is that person whose rights are infringed may lose ability to make a legal claim against infringer---Doctrine of acquiescence infers a form of 'permission' that results from silence or passiveness over an extended period of time---Plea of acquiescence is applicable to suits for which a period of limitation is prescribed by law---Mere delay in asserting right does not constitute acquiescence.

B.L. Sreedhar and others v. K.M. Munireddy (Dead) and others AIR 2003 SC 578; Sailala v. Smt. Ngurtaiveli AIR 1980 Gauhati 70; Talha Sarfraz v. Azad Government of the State of Jammu and Kashmir through Chief Secretary and 16 others 2013 YLR 652; Uda Begam v. Imam-ud-Din and others I.L.R. 1 All 82 and Ramsden v. Dyson 1866 L.R.k 1 HL 129 rel.

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

----Ss. 2(c) & 9---Specific Relief Act (I of 1877), Ss. 39, 42 & 54---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120--- Suit for declaration, injunction, cancellation and damages---Forged General Power of Attorney---Onus to prove---Privity of contract---Suit property was transferred vide registered gift between plaintiffs---Defendants and Bank claimed that property was mortgaged vide General Power of Attorney and that there was privity of contract---Plea raised by defendants was that suit was to be tried by Banking Court---Validity---Where a document was repudiated by its executant or any other claiming under him as a forged document, party claiming under such document would prove that document was genuine---Onus was on beneficiaries as presumption of truth attached to registered document was rebuttable which stood rebutted when a document was repudiated by its executant---Plaintiffs denied execution of General Power of Attorney claiming same to be a forged document, with supportive evidence of forensic expert, therefore, burden to prove its execution shifted on defendants who got benefit out of General Power of Attorney---Defendants and Bank failed to prove execution of General Power of Attorney by producing persons in whose presence same was executed---Court was not bound to presume its execution in favour of attorney with effect that no authenticity could be attached to it being obtained by him fraudulently---Plaintiffs by filing suit on being aware about fraudulent acts and mortgage created in favour of Bank took proper action---Plaintiffs were not beneficiaries of finance facility availed by defendant from Bank and thus were not legally bound to repay the same---Bank acted carelessly while sanctioning finance facility in favor of defendant---Nothing was produced in evidence by it that any physical inspection was made in order to ascertain possession over subject property---Chain of title documents was not demanded from defendant before sanctioning finance facility---Alleged conveyance deed had no legal consequences, equitable mortgage also had no legal effects---Suit was decreed in circumstances.

Abdul Majid Khan v. Towseen Abdul Haleem and others 2012 CLD 06 and Malik Gul Muhammad Awan v. Federation of Pakistan through Secretary Ministry of Finance and others 2013 SCMR 507 ref.

(d) Fraud---

----Legal proceedings--- Effect--- Fraud vitiates most solemn of proceedings---Whenever any transaction is declared null and void then whole series of such order along with superstructure built upon the same is bound to collapse. [p. 517] D

Al-Meezan Investment Management Company Ltd. and 2 others v. WAPDA First Sukuk Company Limited Lahore and others PLD 2017 SC 1; Baja through L.Rs. and others v. Mst. Bakhan and others 2015 SCMR 1704; Lal and another v. Muhammad Ibrahim 1993 SCMR 710; Government of Sindh through Chief Secretary and others v. Khalil Ahmad and others 1994 SCMR 782; John Paul v. Irshad Ali and others PLD 1997 Kar. 267; Ghias-ud-Din v. Iqbal Ahmed and 5 others PLD 1975 Lah. 780 and Mst. Sarwari Begum v. Atta-ur-Rehman 1997 CLC 1500 rel.

Salahuddin Ahmed, Rehan Kiyani and Nadeem Ahmed for Plaintiffs.

Suhail Zaman, Defendant No.1 ex parte.

Sub-Registrar "T" Division-XV, Defendant No.2 ex parte.

Shamim Ahmed, Defendant No.3 ex parte.

Ahmel Kansi for Defendant No.4.

Secretary Board of Revenue Sindh Defendant No.5 ex parte.

Mazhar Hussain Shah Defendant No.6 ex parte.

Sub-Registrar "T" Division 1-B Defendant No.7 ex parte.

2020 C L D 523

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

Messrs KASB INVEST (PVT.) LTD. and another---Petitioners

Versus

The REGISTRAR MODARABA COMPANIES AND MODARABA, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 3 others---Respondents

C.P. No. D-2669 of 2019, decided on 5th December, 2019.

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

----Ss. 20(a) & 3---Regulation of Modaraba Management Companies---Removal of Modaraba Management Companies from managing Modarabas on account of malfeasance/mismanagement---Appointment of Administrator by Registrar---Protection of rights of Modaraba certificate-holders---Petitioner Modaraba Management Company impugned order of Registrar made S. 20(a) of Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, whereby two modarabas were removed from management of petitioner company---Contention of petitioner Company was that alleged malfeasance took place prior to appointment of its current Chief Executive Officer (CEO), and therefore there existed legitimate expectation for said CEO and petitioner company to manage said modarabas removed by impugned order---Validity---Status of the new Chief Executive Officer was not altered by impugned order, however, there existed no vested right of said Chief Executive Officer to merit retention of petitioner company as Manager of two modarabas for which administrator was appointed by Registrar---Such retention of management of said modarabas may have been financially advantageous to petitioner company and by extension, to the new Chief Executive Officer, however, same could not be considered vested right nor could such expectation supersede paramount interest of certificate-holders---High Court observed that interest of certificate-holders was primary duty of Regulator and removal of management of the two modarabas from the petitioner was requirement of law and a proportional action---Constitutional petition was dismissed, in circumstances.

Associated Provincial Picture Houses Ltd v. Wednesbury Corporation (1948) 1 KB 223; Ms. Saba v. The Province of Sindh and others 2020 PLC (C.S.) 113 and Royal Management Services (Private) Limited and another v. The Chairman SECP and others 2015 SCMR 101 rel.

Zeeshan Abdullah for Petitioners.

Furqan Ali for Respondents Nos. 1 and 2.

Saleem Mangrio for Respondent No. 3.

Hussain Bohra, Assistant Attorney-General.

2020 C L D 548

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

FAYSAL BANK LIMITED and another---Petitioners

Versus

BANKING MOHTASIB and others---Respondents

C.Ps. Nos. D-2819 of 2016 and D-7326 of 2018, decided on 26th June, 2019.

Banking Companies Ordinance (LVII of 1962)---

----S. 82---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), Ss. 2(c) & 10---Constitution of Pakistan, Art. 199---Constitutional petition---Banking Mohtasib, jurisdiction of--- Petitioner was account holder in the defendant Bank from which almost her entire amount was fraudulently misappropriated---Banking Mohtasib decided case in favour of petitioner and the President validated the same---High Court in exercise of Constitutional jurisdiction suspended order passed by Banking Mohtasib on grounds that Mohtasib did not have jurisdiction to entertain such matters---Validity---Prima facie it was borne out from order of Mohtasib that culpability was manifest from admitted facts and documents arrayed before Mohtasib---High Court declined to interfere in order passed by Mohtasib as jurisdiction of Mohtasib to entertain, proceed with and decide with complaints was maintained by court and respondent Bank was unable to point out any infirmity in orders passed by Mohtasib and the President---Order of Mohtasib was suspended by High Court however, as a consequence of determination of case, interim orders stood vacated and there was no impediment to enforcement of order of Mohtasib by forum statutorily prescribed in such regard---High Court set aside application for suspension of order of Mohtasib and also directed petitioner to approach Mohtasib for implementation of order under S. 10(2) of Federal Ombudsmen Institutional Reforms Act, 2013---Application was allowed accordingly.

Muslim Commercial Bank Limited v. Federation of Pakistan and others C.P. No. D-905 of 2017 and Soneri Bank v. Pakland Corporation Private Limited and others High Court Appeal No. 51 of 2013 rel.

Kashif Hanif for Petitioner (in C.P. No. D-2819 of 2016) and for Respondent No. 2 (in C.P. No. D-7326 of 2018).

Malik Naeem Iqbal and Khurram Memon for Petitioner (in C.P. No. D-7326 of 2018) and for Respondent No. 2 (in C.P. No. D-2819 of 2016).

Abdul Razzaq for Respondent No. 1 (in both Petitions).

Manzoor-ul-Haq for Respondent No. 3 (in C.P. No. D-7326 of 2018).

Kafeel Ahmed Abbasi, Deputy Attorney General.

2020 C L D 596

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

AKD INVESTMENT MANAGEMENT LIMITED and others---Petitioners

Versus

JS INVESTMENT LIMITED through Chief Executive Officer and 2 others---Respondents

C.P. No. D-5016 of 2019, decided on 5th December, 2019.

(a) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Constitutional petition against private company/persons---Impleading of official respondents in private dispute---Scope---Illusory inclusion of official respondents for invocation of Constitutional jurisdiction of High Court merely to overcome objections of High Court with respect to maintainability of Constitutional petition, had to be disapproved.

Pakistan Olympic Association and others v. Nadeem Aftab Sindhu and others 2019 SCMR 221 and Muhammad Saddiq and another v. Ruqaya Khanum and others PLD 2001 Kar. 60 rel.

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

----S. 88---Power of a company to purchase its own shares---Purchased shares either be cancelled or held as treasury shares---Scope---Companies Act, 2017 recognized acquisition of own shares by a Company for cancellation or for holding as treasury shares---Section 88 of Companies Act, 2017 therefore contemplated two distinct situations, and word "or" used therein signified that such two situations which were disjunctive.

(c) Interpretation of statutes---

----Principles of Construction--- When a statute provided for a particular thing to be done in a specific manner, then it had to be done in such manner and Courts were not designed to legislate but had to interpret statutes according to their ordinary and plain meaning---Courts could not import or supply words or provisions no matter how laudable and desirable doing so appeared---Courts could not put into a statute words which were not expressed and which could not be reasonably implied on any recognized principle of construction.

Zahid Iqbal v. Hafiz Muhammad Adnan and others 2016 SCMR 430; Nadeem Ahmed Advocate v. Federation of Pakistan 2013 SCMR 1062 and Amanullah Khan v. Chief Secretary N.W.F.P. and others 1995 SCMR 1856 rel.

Altamash Arab for Petitioners.

Khalid Jawed Khan for Respondent No. 1.

Tariq Qureshi for Respondent No. 3.

Syed Hafiz Abad, Law Officer for Respondent No. 2.

2020 C L D 634

[Sindh]

Before Irfan Saadat Khan and Fahim Ahmed Siddiqui, JJ

BANK ALFALAH LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Revenue Division and 4 others---Respondents

C.P. No. D-5165 of 2014, decided on 13th November, 2019.

Banking Companies Ordinance (LVII of 1962)---

----S. 33-A---Income Tax Ordinance (XLIX of 2001), S. 176(1)(a)---Protection of Economic Reforms Act (XII of 1992), S. 9---Privileged information---Fishing inquiry---Petitioner Bank assailed notice issued by income tax authorities regarding providing of details in connection with debit/credit card machines installed by petitioner to different commercial establishments at their sale points---Validity---Income tax authorities had vast powers in respect of getting information not only about a taxpayer but also a non-taxpayer in order to bring non-filers in tax net---Income tax authorities were justified under S. 176(1)(a) of Income Tax Ordinance, 2001 in issuing notice to obtain any information or evidence relevant to any tax leviable under Income Tax Ordinance, 2001---Seeking such information did not amount to getting any financial information of clients or private account holders of petitioner Bank---Such information was not privileged by normal banking practice as well as under any statutory obligation under which petitioner was claiming privilege regarding their clients or to term same as fishing expedition---High Court declined to interfere in the matter as there was nothing illegal or unlawful in notice issued by income tax authorities which could render it invalid or void ab initio---Petition was dismissed in circumstances.

Caretex v. Collector Sales Tax and Federal Excise PLD 2013 Lah. 634; Messrs Ghulam Hussain and Co. v. Messrs National Bank of Pakistan 2004 CLD 1640; Caretex v. Collector Sales Tax and Federal Excise 2013 PTD 1536; Mohsin Raza v. Chairman, FBR and others 2009 PTD 1507 and Assistant Director, Intelligence and Investigation v. Messrs B.R. Herman and others PLD 1992 SC 485 ref.

Aijaz Ahmed for Petitioner.

Kafil Ahmed Abbasi for Respondents.

2020 C L D 720

[Sindh]

Before Muhammad Junaid Ghaffar, J

Messrs ALLIED PLASTIC INDUSTRIES (PVT.) LIMITED through Authorized Director---Plaintiff

Versus

Messrs ICC CHEMICAL CORPORATION through CEO and 3 others---Defendants

Suit No. 2150 of 2018, decided on 9th March, 2020.

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

----Ss. 15 & 41---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for declaration, injunction and damages---Sale by description---Buyer's right of examining the goods---Letter of Credit---Interim injunction, grant of---Scope---Plaintiff sought restraining order against the bank from honouring the Letter of Credit and releasing the amount in favour of defendant on the ground that the goods supplied by the defendant did not correspond with the description---Held; that the plaintiff had annexed photographs of supplied products and a cursory look supported the contention of plaintiff that at least the description mentioned on the import documents including Letter of Credit, pro forma invoice and bill of lading should have been mentioned on the goods or their outer packing---Goods in question were not what they were described in the Letter of Credit and the shipping documents---Plaintiff had made out a case for an injunctive relief and balance of convenience was also in its favour, whereas, if the injunction was refused, the plaintiff would suffer irreparable loss and injury as the defendant did not reside within the territorial jurisdiction of the Court and if the amount of Letter of Credit was released, then ultimately if the suit was decreed in favour of plaintiff, the execution would be an exercise in futility---Application for grant of interim injunction was allowed.

National Traders v Hindustan Soap Works AIR 1959 Madras 112; Pan Ocean Enterprises (Pvt.) Limited v. Thai Rayon Company Limited and 5 others PLD 1990 Kar. 395 and Messrs U.D.L. Industries Ltd. v. Hongguang Electron Tube Plant and others PLD 1997 Kar. 553 rel.

Jormal Kasturchand, owner of the firm trading in the name of Vardhman & Co. Rajkot v. Vora Hassanalli Khanbhai, trading in the name of Vora Khanbhai Jiawabhai AIR 1954 Saurashtra 79; West Pakistan Industrial Development Corporation, Karachi v. Aziz Qureshi PLD 1973 SC 222; Abdul Ghaffar Adamjee and others v. National Investment Trust Limited and another 2019 SCMR 812 and Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 ref.

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

----O. XXXIX, Rr. 1 & 2---Letter of Credit---Interim injunction, grant of---Scope---Letter of Credit was a transaction between two banks dependent on the documents and the words in the contract as well as Letter of Credit---If the documents were in order and as per the Letter of Credit, the corresponding Bank was obligated in law to honour the commitment and make payment to the beneficiary, notwithstanding the fact that any defective goods were shipped---Banks dealt with documents and not goods---In the present case, on the first date when suit was brought before the court, honouring of the Letter of Credit was not stopped or disturbed; rather as an ad-interim measure, the bank was directed to honour and encash the Letter of Credit; however instead of paying it to the defendant, it was directed to deposit the same with the Nazir of the Court and such order was complied with and thereafter the amount available with the Nazir was retained by him for the ultimate beneficiary---Objection of the defendant that the order passed by Court would be against international commitments was not valid inasmuch as the banking transaction had been completed and now the dispute was between the plaintiff and defendant i.e. two private contracting parties.

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

----S. 15---Sale by description---Scope---Goods should confirm with their description and the buyer should get what he contracted for; it would not be proper performance of the contract to give goods to the buyer that did not answer the description given in the contract.

National Traders v Hindustan Soap Works AIR 1959 Madras 112 rel.

Qazi Umair Ali for Plaintiff.

Omair Nisar for Defendants Nos. 1 and 2.

2020 C L D 751

[Sindh]

Before Yousuf Ali Sayeed, J

CONISTON LIMITED HONG KONG---Applicant

Versus

PAKISTAN STEEL MILLS CORPORATION (PVT.) LTD.---Respondent

Suit No. 1785 of 2017, decided on 17th February, 2020.

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

----S. 8---Umpire, role of---Principle---Role of umpire comes into play only when arbitrators differ.

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

----Ss. 8(2), 14(2), 30 & 34---Civil Procedure Code (V of 1908), O.VIII, R. 5---Carriage of goods by sea---Award---Objections---Proof---Admitted facts---Effect---Parties entered into contract of Affreighment, whereby plaintiff / claimant was to bring coal under the terms of carriage and the same was to be delivered to defendant company/respondent---Dispute had arisen between the parties and matter was referred to Umpire who announced his award and the same was filed in Court for making the same rule of the Court---Defendant/respondent filed objections and sought setting aside of the same---Validity---Contentions of defendant/respondent were dealt with by the Umpire, who considered that 8 shipments were delivered and on the contrary there was an admission on the part of respondent as to the quantities discharged---Claimant was not required to prove the quantities discharged in the light of O. VIII, R. 5, C.P.C. and the only point remaining unresolved in respect of the consignments was as to the 10% balance freight remaining unpaid---Applicability or non-applicability of foreign law was not of any particular consequence as regards the conclusion reached---Relevant clause of Contract of Affreighment dealt with liability for the cargo and not the freight---Payment of freight could not be avoided as it was the underlying consideration for the carriage of goods by sea---High Court set aside objections raised by defendant / respondent as there was no patent error of any material nature underpinning the award and it was made rule of the Court---Application was allowed in circumstances.

A. Z. Company Karachi v. Government of Pakistan and others PLD 1973 SC 311 and Gerry's International (Pvt.) Ltd v. Aeroflot Russian International Airlines 2018 SCMR 662 ref.

Shaiq Usmani for Applicant.

Agha Zafar S. for Respondent.

2020 C L D 778

[Sindh]

Before Yousuf Ali Sayeed, J

Mrs. SANAM IRSHAD SHAH and 2 others---Plaintiffs

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Manager---Defendant

Suit No. 710 of 2016, decided on 12th December, 2019.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Civil Procedure Code (V of 1908), O. VII, R. 11---Insurance Tribunal---Ouster of jurisdiction of civil court in matters falling within ambit of Insurance Tribunal---Rejection of plaint---Scope---Plaintiffs filed suit for declaration, recovery of insurance claim, and damages against Insurance Company on the ground that they were entitled to be paid proceeds of a life insurance claim after death of the policy-holder---Contention of defendant Insurance Company was that said suit was barred under S. 122 of Insurance Ordinance, 2000---Contention of plaintiffs was that certain letters vide which their claim was rejected by Insurance Company were issued without hearing plaintiffs and in violation of principles of natural justice, therefore jurisdiction of civil court was valid---Validity---Valid constitution and competence of Insurance Tribunal was not in dispute, and plaintiff merely alleged that ouster of jurisdiction envisaged in S. 122(2) of Insurance Ordinance, 2000 would not serve a bar---Letters sent to plaintiffs by Insurance Company were not orders of any authority but merely responses of Insurance Company---Insurance Tribunal was not handicapped in any way from adjudicating upon the matter and question as to whether reasons stated in said letters for rejecting claim were based on any mala fide was to be determined by Insurance Tribunal---Application for rejection of plaint was allowed, in circumstances.

Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan 2007 CLD 490; Messrs. East-West Insurance Company Limited v. Messrs. Muhammad Shafi and Company 2009 CLD 960; Abdul Qayoom v. State Life Insurance Corporation of Pakistan 2011 CLD 1157 and Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 ref.

Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 rel.

Ahmed Ali Hussain for Plaintiffs.

Mian Muhammad Mushtaq for Defendant No. 1.

2020 C L D 808

[Sindh]

Before Yousuf Ali Sayeed, J

Messrs SHAN ASSOCIATES through Sole Proprietor---Plaintiff

Versus

Messrs GETZ PHARMA PRIVATE LIMITED through Chief Executive Officer and 3 others---Defendants

Suit No. 212 of 2019, decided on 9th October, 2019.

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

----S. 34---Stay of legal proceedings---Locus standi---Term 'any party to such legal proceedings in S. 34 of Arbitration Act, 1940 is followed by the qualification 'at any time before filing a written statement or taking any other steps in proceedings'---Only defendant to a suit files written statement, a priori it is apparent that S. 34 of Arbitration Act, 1940, does not cater to an application for the side of a plaintiff.

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

----O.XXXIX, Rr.1 & 2---Suit for declaration and injunction---Interim injunction, refusal of---Bank guarantee, encashment of---Autonomy, principle of---Parties entered into a contract for performance of certain works to be done---Plaintiff issued performance guarantee in favour of defendant company---Dispute had arisen between the parties and defendant called the Bank to encash the guarantee---Validity---Once a call had been made, the Court could not then grant injunctive relief against beneficiary as the right to payment under the instrument already stood crystallized when the call was made---Injunctive relief against issuer could be granted in theory only if fraud exception were satisfied---Merely establishing fraud was not always enough and balance of convenience the harm to beneficiary in preventing Bank from paying weighed against the harm to plaintiff in allowing Bank to pay must justify restraining payment---No distinction could be drawn merely because the bonds were issued by an Insurance Company rather than a Bank---Plaintiff failed to make out a prima facie case for an injunction restraining encashment of bonds---Application was dismissed in circumstances.

Pakistan State Oil Company Limited v. Messrs Jilani (Pvt.) Limited and another 2018 MLD 1770; Ch. Abdur Rauf v. Mrs. Zubeda Kaleem and others 2001 CLC 664 and Arbab Abdul Qadir v. Mst. Bibi Fatima 1984 CLC 546 distinguished.

Pakistan Engineering Consultants v. Pakistan International Airline Corporation and others 1993 CLC 1926; Pakistan Engineering Consultants v. Pakistan International Airline Corporation and others 1989 SCMR 379; Crescent Steel and Allied Products Limited v. Messrs Sui Northern Gas Pipe Line Limited and another 2013 CLD 1110; Messrs Zeenat Brother (Pvt.) Limited v. Aiwan-e-Iqbal Authority through Chairman, Aiwan Iqbal Complex Lahore and 3 others PLD 1996 Kar. 183; Messer Jamia Industries Limited v. Messers Pakistan Refinery Limited, Karachi PLD 1976 Kar. 644; Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191; Messrs National Construction Ltd. v. Aiwan-e-Iqbal Authority PLD 1994 SC 311; PLD 2003 SC 215; PLD 1969 SC 80; RD Harbottle (Mercantile) Ltd v. National Westminster Bank Ltd. [1978] QB 146; Edward Owen Engineering Ltd v. Barclays Bank International Ltd. [1978] QB 159; Alternative Power Solution Ltd v. Central Electricity Board [2015] 1 WLR 697; American Cyanamid Co. v. Ethicon Ltd [1975] AC 396; Tetronics (International) Limited v. HSBC Bank Plc, BlueOak Arkansas LLC [2018] EWHC 201; State of Maharashtra and another v. Messrs National Construction Company, Bombay and another 1996 SCC (1) 735; Hindustan Steel Works Construction Ltd. v. Tarapore & Co. and another 1996 SCC (5) 34; Cargill International v. Bangladesh Sugar and Food Industries Corporation [1996] 2 LLR 524 and Montage Design Build v. The Republic of Tajikistan and 2 others 2015 CLD 8 ref.

Rizwan Ahmed Siddiqui for Plaintiff.

Faisal Siddiqui for Defendants Nos. 1 to 3.

Anwar Kamal for Defendant No. 4.

2020 C L D 829

[Sindh]

Before Muhammad Ali Mazhar and Adnan Iqbal Chaudhry, JJ

Messrs MUSLIM COMMERCIAL BANK LTD. through Lawful Attorney---Petitioner

Versus

FEDERATION OF PAKISTAN through Director, (Legal-II), President's Secretariat and 2 others---Respondents

Constitutional Petitions Nos.D-905, D-6672, D-6673, D-6674, D-6675 and D-4572 of 2017, decided on 5th April, 2019.

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

----Ss. 82A & 82B---Banking Mohtasib---Powers and jurisdiction of Banking Mohtasib---Vicarious liability for acts of employees of Banks---Scope--- Contention that a Bank was not vicariously liable for fraud committed by its employee(s), and that Banking Mohtasib did not have jurisdiction to hold such Bank vicariously liable, was misconceived---Employer's vicarious liability extended also for fraudulent acts of the employee(s) if such fraud was perpetuated in the course of employment, and it did not matter whether such fraud was for employer's benefit or for employee's own---Remedy provided to a complainant against a Bank before Banking Mohtasib proceeded on principle of vicarious liability which was the intent of Legislature manifested in S. 82A(3) of the Banking Companies Ordinance, 1962.

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

----Ss.82B & 82D---Adjudication of complaints by Banking Mohtasib---Recording of evidence---Scope---Under S.82B of the Banking Companies Ordinance, 1962 it was not required that Banking Mohtasib shall decide each complaint after formal recording of evidence but rather intent was to enable Banking Mohtasib, should he so deem expedient in circumstances of a case, to take evidence of any party or witness by way of affidavit---Such intent was manifest when S.82B(4)(c) was read with S. 82D(3) of the Banking Companies Ordinance, 1962---Had the intent of Legislature been that complaints before the Banking Mohtasib could, in each and every case, only be decided after formal recording of evidence, then S. 82D(3) of Banking Companies Ordinance, 1962 would have been omitted---Where findings in the Bank's own internal investigation reports and per acknowledgments made by Bank before Banking Mohtasib, fraud/maladministration was accepted by the Bank, or in cases where fact that Bank's employees were acting in the course of employment when they committed the fraud/maladministration was accepted, then in such cases formal recording of evidence to establish fraud and vicarious liability was not required---Section 82E(1)(c) also enabled Banking Mohtasib to pay reasonable compensation to the complainant.

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

----Ss. 82(E)(1) & 82B---Adjudication of complaints by Banking Mohtasib---Recommendations for implementation by Banking Mohtasib---Mediation of disputes/complaints---Legislative intent behind such mediation---Scope---Words used in S. 82E (1) of Banking Companies Ordinance, 1962 stated that Banking Mohtasib "shall try to mediate", as opposed to "shall mediate", meaning thereby that Legislative intent was only to equip Banking Mohtasib with a tool to resolve a dispute, and not to fetter his jurisdiction to decide a matter---Said provision also manifested that resort to mediation, if any, was envisaged towards end of proceedings just before the Banking Mohtasib "communicates his findings"---Resort to mediation was therefore made dependent on the circumstances of each case, and best judge of such circumstances was the Banking Mohtasib himself---Argument that it was mandatory for the Banking Mohtasib to mediate the dispute before giving a decision was misconceived.

(d) Interpretation of statutes---

----Special law---Non obstante clauses---Construction of non obstante clause in special law in case of conflict between such provisions---Scope---Non obstante clause was triggered only in event of an inconsistency between provisions and where two special laws contained competing non obstante clauses then general rule was that provision latter in time prevailed.

Syed Mushahid Shah v. Federal Investigation Agency 2017 SCMR 1218 rel.

(e) Payment Systems and Electronic Fund Transfers Act (IV of 2007)--

----Ss. 50 & 55---Banking Companies Ordinance (LVII of 1962), S.82A---"Jurisdiction of the Banking Mohtasib" and "jurisdiction under Payment Systems and Electronic Fund Transfers Act, 2007"---Distinction---Scope---Remedy of a suit for damages before a civil court provided under Ss. 50 & 55 of the Payment Systems and Electronic Fund Transfers Act, 2007, and the remedy against banking malpractices, violation of banking laws/regulations, other maladministration etc. before the Banking Mohtasib provided under S. 82A of the Banking Companies Ordinance, 1962, were not inconsistent with each other as both operated in their respective fields and remained available to the aggrieved person envisaged thereunder and one did not exclude the other.

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

----Ss. 10 & 14---Banking Companies Ordinance (LVII of 1962) Ss.82A & 82B---Constitution of Pakistan, Arts. 175, 212, 203 & Fourth Sched.----Establishment and Jurisdiction of Courts under the Constitution---Constitutional provisions relating the Judicature---Nature of quasi-judicial forums---Exercise of powers by quasi-judicial forums did not make the same a "court" or "judicial tribunal" under the Constitution---Jurisdiction and exercise of statutory powers by Banking Ombudsman---Scope---Question before the High Court was whether exercise of certain powers by Banking Ombudsman under Banking Companies Ordinance, 1962; and Ombudsman under Federal Ombudsmen Institutional Reforms Act, 2013 were ultra vires the Constitution since the said forums could not exercise powers of a Court---Held, that Banking Mohtasib under the Banking Companies Ordinance, 1962, and the President acting upon a Representation under the Federal Ombudsmen Institutional Reforms Act, 2013, were the authorities performing quasi-judicial functions---Representation made to the President under S.14 of the Federal Ombudsmen Institutional Reforms Act, 2013 partook of appellate jurisdiction---Quasi-judicial act could be described as product of investigation, consideration, and human judgment, based on some evidentiary facts in a matter in discharge of which there was an element of judgment and discretion---Fact that a quasi-judicial authority had certain attributes of a Court and was required by law to act judicially in the sense of acting fairly and impartially, did not make the same a Court---Fora which were not bound by any law with regards to procedure and evidence, and only settled disputes but did not administer justice according to law, were not Courts---Exercise of quasi-judicial functions by the Banking Mohtasib did not make the same a Court or a judicial tribunal within the meaning of Arts. 175 & 212 of the Constitution---Under Part I of the Federal Legislative List, given in the Schedule to the Constitution, Federal Ombudsman was a separate and distinct legislative field from legislative fields of Administrative Courts and Tribunals for Federal subjects---Federal legislation in respect of Federal Ombudsman was not legislation in respect of a Court pursuant to Art. 175 of the Constitution or Entry No.55 of the Federal Legislative List, nor was it Legislation pursuant to Art. 212 of the Constitution or Entry No.14 of the Federal Legislative List of the Constitution---Banking Mohtasib per se was not a parallel judicial system beyond administrative supervision of the High Court which was exercised under Art.203 of the Constitution and performance of quasi-judicial functions by the Banking Mohtasib did not raise concerns with regards to the separation and independence of the judiciary---Boundaries of a quasi-judicial forum such as the Banking Mohtasib that was permitted to act beyond the purview of Arts. 175, 202 & 203 of the Constitution, were not breached merely by the fact that such forum is conferred with certain powers of a civil court to implement its orders---Fact that a quasi-judicial authority has certain attributes of a Court, does not make the same a Court. UBL v. Federation of Pakistan 2018 CLD 587 dissented from.

Peshawar Electric Supply Company Ltd. v. Wafaqi Mohtasib (Ombudsmen), Islamabad PLD 2016 SC 940; State Life Insurance Corporation of Pakistan v. Wafaqi Mohtasib 2000 CLC 1593; Workers' Welfare Funds v. East Pakistan Chrome Tannery PLD 2017 SC 28; Mir Rehman Khan v. Sardar Asadullah Khan PLD 1983 Quetta 52; Shafatullah Qureshi v. Federation of Pakistan PLD 2001 SC 142; Riaz-ul-Haq v. Federation of Pakistan PLD 2013 SC 501; Khan Asfandyar Wali v. Federation of Pakistan PLD 2001 SC 607; In the matter of: Reference No.02/2005 by the President of Pakistan (re: the Hisba Bill) PLD 2005 SC 873; Mehram Ali v. Federation of Pakistan PLD 1998 SC 1445; Sharaf Faridi v. Federation of Pakistan PLD 1989 Kar. 404; UBL v. Federation of Pakistan 2018 CLD 587; Federation of Pakistan v. Muhammad Tariq Pirzada 1999 SCMR 2744; Dr. Zahid Javed v. Tahir Riaz Chaudhry PLD 2016 SC 637; Shafatullh Qureshi v. Federation of Pakistan PLD 2001 SC 142; Nakkauda Al v. M.F. De S. Jayarane PLD 1950 PC 102; Hafiz Muhammad Arif Dar v. Income Tax Officer PLD 1989 SC 109 and Justice Shaukat Aziz Siddiqui v. Federation of Pakistan PLD 2018 SC 538 rel.

UBL v. Federation of Pakistan 2018 CLD 587 dissented from.

In the matter of: Reference No.02/2005 by the President of Pakistan (re: the Hisba Bill) PLD 2005 SC 873; Riaz-ul-Haq v. Federation of Pakistan PLD 2013 SC 501; Khan Asfandyar Wali v. Federation of Pakistan PLD 2001 SC 607; Mehram Ali v. Federation of Pakistan PLD 1998 SC 1445 and Sharaf Faridi v. Federation of Pakistan PLD 1989 Kar. 404 distinguished.

(g) Interpretation of statutes---

----Implied power(s) in statutory dispute resolution/fact finding bodies---Statutory forum conferred with the power to decide a dispute had the implied power to implement its order.

State of Karnatka v. Vishwabharti House Building Property Society AIR 2003 SC 1043 rel.

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

----S. 12---Banking Companies Ordinance (LVII of 1962) Ss. 82A & 82B---Constitution of Pakistan, Arts. 204 & 199---Power of Ombudsman to punish for contempt---Constitutionality of such power---Scope---Under Art.204 of Constitution while Legislature under said Article could add to what constituted contempt of Court, and it may under Art.204(3) of Constitution regulate power to punish for contempt, but such power to punish remained vested in Supreme Court and High Courts---While Art. 203E(3) of the Constitution did confer on the Federal Shariat Court same power as a High Court to punish for its contempt, nothing in Art. 204 of the Constitution envisaged any sub-constitutional legislation to confer power to punish for contempt on any other Court or authority apart from the Supreme Court and a High Court---Power to punish for contempt could not be conferred by sub-constitutional legislation on any other Court or authority apart from Supreme Court and High Court---Under intent of the Constitution, vesting of such power in a quasi-judicial authority such as the Banking Mohtasib or Federal Ombudsman was ultra vires Art. 204 of the Constitution and therefore S.12 of the Federal Ombudsmen Institutional Reforms Act, 2013 was ultra vires the Constitution.

Baz Muhammad Kakar v. Federation of Pakistan PLD 2012 SC 923; The State v. Khalid Masood PLD 1996 SC 42; Justice Hasnat Ahmed Khan v. Registrar, Supreme Court of Pakistan PLD 2010 SC 806 and Sh. Liaquat Hussain v. Federation of Pakistan PLD 1999 SC 504 rel.

Kashif Hanif for Petitioners (in C.Ps. Nos. D-905, 4572, 6672, 6673, 6674 and 6675 of 2017).

Muhammad Zahid Khan, Shaikh Liquat Hussain and Muhammad Shoaib Mirza, Assistant Attorney Generals for Respondents Nos.1 and 2 in all petitions.

Ayaz Ali Hingoro for Respondent No.3 (in C.P. No.D-905 of 2017).

Shahid Ali Qureshi for Respondent No.3, (in C.Ps. Nos.D-6672 to 6675 of 2017).

Ammar Athar Saeed for Respondent No.3 (in C.P. No.D-4572 of 2017).

2020 C L D 894

[Sindh]

Before Muhammad Ali Mazhar and Agha Faisal, JJ

SALEEM SHEHZADA and others----Petitioners

Versus

PROVINCE OF SINDH through Chief Secretary and others----Respondents

C.Ps. Nos.D-408 and D-2762 of 2011, decided on 23rd April, 2019.

(a) Company---

----Shareholders and directors---Status---Company is a separate juristic person distinct from its shareholders or directors.

Solomon v. Solomon 1897 AC 22; Ikram Bus Service and others v. Board of Revenue West Pakistan PLD 1967 SC 564; Tariq Saeed Saigol v. District Excise and Taxation Officer Rawalpindi 1982 CLC 2387; Shamim-ud-Din v. Federation of Pakistan and others 1995 CLC 299; Tanvir Rasool Roller Flour Mills (Private) Limited v. MAPCO and another 2002 CLD 157; Muhammad Akbar v. Masood Tariq Baghpati and others 2019 CLD 1 and Sultan ul Arfeen and others v. District Officer (Revenue) City District Government of Karachi 2013 CLD 1280 rel.

(b) Sindh Land Revenue Act (XVII of 1967)---

----Ss. 80, 82, 83, 172 & 181---Recovery notice---Maintainability--- Petitioners were ex-directors of a company which company was defaulter of Telecommunication Authority---Petitioners assailed notice of recovery issued by revenue authorities for recovery of outstanding dues against Telecommunication Authority---Validity---No culpability of petitioners was apparent from record nor any show cause notice was ever issued to petitioners---Even no proceedings for determination of any amounts were initiated against petitioners---Entire basis for the notices was order passed by Telecommunication Authority which apportioned no liability upon petitioners---Telecommunication Authority was unable to articulate any justification for initiation of coercive recovery proceedings against petitioners vide notices in question---High Court set aside notices issued by revenue authorities against petitioners as same were without jurisdiction--- Tele-communication Authority could initiate and pursue appropriate avenues of recovery of their dues against company or any other person determined culpable in such regard---Constitutional petition was allowed accordingly.

Abdul Majeed Khan and others v. Maheen Begum and others 2014 SCMR 1524; Mackinnons Mackenzai and Company of Pakistan (Private) Limited v. Eastern Federal Union Insurance Company Limited and others 2002 CLD 779 and Begum Anwar Sultana and others v. Mian Fazal Ahmad and others PLD 1986 Lah. 18 ref.

Raja Qasit Nawaz for Petitioner (in C.P. No. D-408 of 2011).

Ms. Pooja Kalpana for Petitioner (in C.P. No. D-2762 of 2011).

Ishrat Zahid Alvi, Assistant Attorney General, Jawad Dero, Additional Advocate General for Respondents.

Syed Mehmood Abbas for Pakistan Telecommunication Authority.

2020 C L D 904

[Sindh]

Before Muhammad Ali Mazhar and Yousuf Ali Sayeed, JJ

Sheikh KASHIF IMTIAZ---Appellant

Versus

FAYSAL BANK LIMITED and another---Respondents

Ist Appeal No. 86 of 2019, decided on 21st April, 2020.

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

----Ss. 15 & 19---Financial Institutions (Recovery of Finances) Rules, 2018, Rr. 3 & 4---Execution of decree of Banking Court---Sale of mortgaged property---Procedure for sale of mortgaged property---Sale of mortgaged property after decree---Nature and scope of Rr. 3 & 4 of the Financial Institutions (Recovery of Finances) Rules, 2018---Question before High Court was whether procedure prescribed by R. 3 of Financial Institutions (Recovery of Finances) Rules, 2018 for sale of mortgaged property would apply to sale of mortgaged property with as well as without intervention of Banking Court---Held, that S. 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 envisaged dichotomous measures to be adopted for satisfaction of decree in terms of sale, inter alia of mortgaged property with or without intervention of Banking Court---Rules 3 & 4 of Financial Institutions (Recovery of Finances) Rules, 2018, when viewed in prism of such dichotomy, then it was apparent that same would apply only when a financial institution acted to undertake sale of mortgaged property on its own accord without intervention of Banking Court and use of words "where relevant" and term mutatis mutandis signified such interpretation of said Rr. 3 & 4---Rule 3 of Financial Institutions (Recovery of Finances) Rules, 2018, if same were to apply to both situations, (sale of mortgaged property with intervention of Banking Court and without intervention); then R. 4 of same would have only stated said R. 4 would apply to proceedings under S. 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 without further qualification and thus there existed raison d'etre of said R. 4 from a purposive interpretation standpoint.

Muhammad Umar Rathore v. Federation of Pakistan 2009 CLD 257 and National Bank of Pakistan and 117 others v. SAF Textile Limited and another PLD 2014 SC 283 rel.

(b) Interpretation of statutes---

----Statute was to be read as a whole and every part and word thereof was to be given effect---Interpretation that rendered any part of statute redundant was to be avoided---Whilst construing a statute no part of same shall be superfluous, void or nugatory and it was not permissible to hold, while interpreting a statute, that any part thereof or any word used therein was surplusage---Every word of the statute was to be taken into account and meaning was to be given to the same.

Queen v. The Bishop of Oxford (1879) 4 PBD 245 and East and West Steampship Co. v. Queensland Insurance Co. PLD 1963 SC 663 rel.

Nabeel Kolachi for Appellant.

Mujahid Bhatti for Respondent No. 1.

Masood Anwar Ausaf for Respondent No. 2.

Kafeel Ahmed Abbasi, DAG.

Ijaz Ahmed Zahid, Amicus Curiae.

2020 C L D 954

[Sindh]

Before Irfan Saadat Khan and Fahim Ahmed Siddiqui, JJ

BANK ISLAMI PAKISTAN LIMITED through President---Appellant

Versus

MANZAR MASOOD---Respondent

High Court Appeal No. 277 of 2017, decided on 22nd November, 2019.

Banker and customer---

----Suit for damages and compensation by a customer against Bank for misplacing original documents of mortgaged property---Determination of damages and quantum of compensation---Scope---Settled practice that any prospective buyer of an item demanded original documents for such item, therefore a person having original documents could not be put at par with a person who did not have original documents---Such customer of a Bank suffered from inefficiency and negligence of the Bank and had to be compensated---For determination of quantum of compensation, no yardstick could be laid as the same depended on facts of each case.

Muhammad Jaffer Raza for Appellant.

Mehar Khan for Respondent.

2020 C L D 981

[Sindh]

Before Irfan Saadat Khan and Mrs. Kausar Sultana Hussain, JJ

MUHAMMAD SALEEM SHAIKH---Appellant

Versus

Messrs KASB BANK LIMITED---Respondent

Spl. H.C.A. No. 225 of 2015, decided on 3rd April, 2019.

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

----S. 9---Suit for recovery of finance facility---Suit filed by the plaintiff-Bank was decreed with cost of funds---Validity---Parties had entered into agreement with each other and several documents were executed---Defendant had failed to clear out Bank liabilities in due time---No illegality, irregularity, mis-reading or non-reading of evidence had been pointed out in the impugned judgment and decree passed by the Court below---Appeal was dismissed, in circumstances.

Habib Bank Limited v. Messrs Madina Rice and Ice Mills and others 2015 CLC 1808; Messrs Ali Traders Rice Dealer Gujranwala through Sole Proprietor and another v. National Bank of Pakistan 2015 CLD 1; Pakistan through Secretary Communication, Islamabad v. Messrs Habib Insurance Company Ltd., Karachi 1991 CLC 1270; Q.B.E Insurance Ltd. v. The Trustees of Port of Karachi through Chairman and others 1992 CLC 804; A. M. Burq and others v. Central Exchange Ltd. and others PLD 1966 (W.P) 1; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Messrs Bhangoo Farming Services and 2 others v. The Bank of Punjab through Manager 2016 CLD 766; Habib Bank Limited v. Orient Rice Mills Ltd. and others 2004 CLD 1289; Messrs World Trans Logistics and others v. Silk Bank Limited and others 2016 SCMR 800; Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033; Messrs Sadia Industries and 3 others v. Messrs Soneri Bank Limited 2014 CLD 1458; Younas Kamal v. Standard Chartered Bank SBLR 2014 Sindh 1; Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741; Muhammad Arshad and another v. Citibank NA, Lahore 2006 SCMR 1347; Messrs Ibrahim Oil Mills through Proprietor and 2 others v. MCB Bank Limited 2015 CLD 802; Bank of Khyber v. Messrs Spencer Distribution Ltd. and 14 others 2003 CLD 1406; Muhammad Arshad and another v. Citibank NA. Al-Falah Building, Lahore 2006 CLD 1011 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1156 ref.

Ali Raza Habib for Appellant.

Faiz Durrani and Mrs. Samia Faiz Durrani for Respondent.

2020 C L D 1039

[Sindh]

Before Irfan Saadat Khan and Mrs. Kausar Sultana Hussain, JJ

Messrs ABDULLAH LIMITED---Appellant

Versus

MUHAMMAD IRFAN AZAD and 2 others---Respondents

High Court Appeal No. 236 of 2005, decided on 23rd May, 2019.

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

----O. XXIX, R. 1---Suit on behalf of company without the resolution of Board of Directors--- Maintainability--- Managing Director of company filed suit without resolution of Board of Directors, which was dismissed being non-maintainable---Validity---Plaintiff had not been authorized by the company to file the suit---Board of Directors of the company had neither executed any power of attorney in favour of plaintiff nor any Memorandum and Articles of Association had been filed before the Trial Court---Memorandum and Articles of Association filed before Appellate Court could not be relied upon as same was never produced before the Trial Court---No mis-reading, non-reading of evidence or irregularity or illegality had been pointed out in the impugned judgment passed by the Court below---High Court Appeal was dismissed, in circumstances.

Fasihuddin Khan and others v. Government of Punjab and others 2010 SCMR 1778; Sardar Gulab Singh v. Punjab Zamindara Bank, Ltd., Lyallpur through Sardar Desa Singh, Manager and others AIR (29) 1942 Lahore 47; H. M. Ebrahim Sait v. South India Industrials Ltd. AIR 1938 Madras 962; Ram Ragubhir Lal and others v. United Refineries (Burma) Ltd. AIR 1931 Rangoon 139; Government of NWFP and others v. Akbar Shah and others 2010 SCMR 1408; Adusumilli Gopalakrishnayya Garu PLD 1947 Privy Council 180; Messrs Gulf Air v. Messrs Shakil Air Express (Pvt.) Ltd. PLD 2003 Kar. 156; Qamran Construction (Pvt.) Ltd. v. Saleemullah and 2 others 2008 CLD 239; Trading Corporation of Pakistan v. Muhammad Alam 2016 CLC 1573; Abubakar Saley Mayet v. Abbot Laboratories and another 1987 CLC 367; Dumez Borie v. International Forwarders Ltd. NLR 1983 UC 184; Messrs Standard Hotels (Private) Ltd. v. Messrs Rio Centre and others 1994 CLC 2413; Sirajuddin Paracha and 12 others v. Mehboob Elahi and 3 others PLD 1997 Kar. 276; Abdul Rahim and 2 others v. Messrs United Bank Ltd. of Pakistan PLD 1997 Kar. 62; Board of Control for Cricket in Pakistan v. Karachi Development Authority through Director-General and 51 others 1997 CLC 795; National Bank of Pakistan and others v. Karachi Development Authority and others PLD 1999 Kar. 260; Messrs Taurus Securities Limited v. Arif Saigol and others 2002 CLD 1665; Messrs Razo (Pvt.) Limited v. Director, Karachi City Region Employees Old Age Benefit Institution and others 2005 CLD 1208; Messrs Pakistan Oil Mills (Pvt.) Ltd. v. Messrs Peter Shipping Co. Ltd. and others 2005 MLD 1745; Raja Ali Shan v. Messrs Essem Hotel Limited and others 2007 SCMR 741; Bashir Dawood v. Haji Suleman Goawala and Sons Ltd. and others 2010 CLC 191; SDA and others v. HEC 2014 MLD 1110; Bajwa Industries (Private) Limited through Chief Executive v. Muhammad Jehangir 2014 CLC 1151; Unreported judgment in H.C.As. Nos.209 and 215 of 2005 dated 3.2.2015; Haji Abdullah Khan and others v. Nisar Muhammad Khan and others PLD 1965 SC 690; Almas Ahmad Fiaz v. Secretary Government of the Punjab Housing and Physical Planning Development, Lahore and another 2006 SCMR 783; Evacuee Trust Property Board and others v. Mst. Sakina Bibi and others 2007 SCMR 262; Izhar Alam Farooqi, Advocate and another v. Sheikh Abdul Sattar Lasi and others 2008 CLD 149; Muhammad Hashim v. Abdul Majid 1997 CLC 875; Abdul Karim v. Haji Noor Badshah 2012 SCMR 212; Mst. Taj Bibi through L.Rs. v. Rana Salah-ud-Din 2016 CLC 1621; Muhammad Asghar v. Hussain Ahmad and others PLD 2014 SC 89; Anwar Ahmad v. Mst. Nafis Bano through legal heirs 2005 SCMR 152; Unreported order dated 28.10.2010 of Division Bench in H.C.A. No.154 of 2001; Pioneer Cement Limited through Company Secretary v. Fecto Cement Limited through Chief Executive Officer and 3 others PLD 2013 Lah. 110; Federation of Pakistan through Secretary Ministry of Defence and another v. Jaffar Khan and others PLD 2010 SC 604; Muhammad Luqman v. Bashir Ahmad PLD 1994 Kar. 492; Attaullah alias Qasim v. The State PLD 2006 Kar. 206; Hassan Ali and Co. Cotton (Pvt.) Ltd. v. Trading Corporation of Pakistan (Pvt.) Ltd. and another 2016 CLD 2283; Flour Mills Employees' Union v. Karachi Steam Roller Flour Mills Co. Ltd. PLD 1964 (W.P.) Karachi 587; Din Muhammad and another v. Farooq Mirza PLD 1955 Sindh 62; Walton Tobacco Company (Pvt.) Ltd. and others v. Azad Government of the State of Jammu and Kashmir and others 1993 CLC 66; Munir Hussain v. Mst. Mehrun Nisa (through her legal heirs) PLD 1982 Kar. 71; Imam Din and 4 others v. Bashir Ahmed and 10 others PLD 2005 SC 418 and Muhammad Yousuf Siddiqui v. Haji Sharif Khan through L.Rs. and others PLD 2005 SC 705 ref.

Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550 and Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684 rel.

(b) Administration of justice---

----Legal issue could be raised at any stage of proceedings of a case. [p. 1051] C

Shaiq Usmani for Appellant.

Nemo for Respondent No. 1.

Mushtaq A. Memon and Barrister Ishtiaq A. Memon for Respondents Nos. 2 and 3.

2020 C L D 1060

[Sindh]

Before Muhammad Junaid Ghaffar, J

Dr. MUHAMMAD IMRAN QURESHI and 2 others---Petitioners

Versus

MUHAMMAD ASIF and others---Respondents

J.C.M. No. 3 of 2018, decided on 18th November, 2019.

Companies Act (XIX of 2017)---

----Ss. 286 & 301---Winding up of company---Application for---Affairs of a company--- Violation of Articles and Memorandum of Association---Court, jurisdiction of---Scope---Petitioners were holding 33% shares of the company and their grievance was that affairs of the company were being conducting in violation of Memorandum and Articles of Association of the company---Validity---Court, even if was satisfied that a case for winding up was made out, it could not pass such an order which might create extra hardship to its members as well as creditors and power under S. 286 of Companies Act, 2017, could always be exercised by the Court---Even if someone had come to the Court by bringing only winding up petition under S. 301 of Companies Act, 2017, the Court could, after going through the facts and circumstances, pass an order under S. 286 of Companies Act, 2017, by exercising the same on its own in the given facts---To make an order under S. 286 of Companies Act, 2017, Court had to satisfy that the affairs of company were being conducted in a manner warranting exercise of such jurisdiction and the facts justified passing of winding up order on the ground that it was just and equitable that the company should be wound up and lastly the winding-up order would unfairly prejudice the petitioner and other members---Not necessary to establish any personal prejudice for seeking any relief under S. 286 of Companies Act, 2017---High Court directed to conduct audit of accounts of the Company as the same would not cause prejudice to any of the parties and such was fulfilling the requirement of law---Petition was allowed accordingly.

Light Metal and Rubber Industries (Pvt.) Limited and others v. Sarfraz Qaudri 2011 CLD 1485; Kruddson Ltd. Karachi v. Kruddson Ltd. Karachi PLD 1972 Kar. 376; Muhammad Hussain v. Dawood Flour Mill 2003 CLD 1429; Muhammad Aijaz Tahir v. Federation of Pakistan 2014 CLD 1683; Mian Javed Mir v. United Foam Industries Pvt. Limited Lahore 2016 CLD 393; Ladli Prasad Jaiswal v. The Karnal Distillery Co., Ltd. PLD 1965 SC 221; Muhammad Suleman Kanjiani and 3 others v. Dadex Eternit Ltd. and 4 others 2009 CLD 1687; Tasnim and another v. Rustom Ali and others 2000 CLC 364; Mian Waqar ud Din and 3 others v. Messrs United Industries Limited and 11 others 2017 CLD 696; Shahamatullah Qureshi v. Hi-Tech Construction (Pvt.) Ltd. 2004 CLD 640; Khawer Hanif v. Imran Hanif and others 2017 CLD 1788; Pervaiz Arshad and another v. Rauf Textiles and Printing Mills (Private) Limited and 132 others 2019 CLD 72; Registrar of Companies v. Pakistan Industrial and Commercial Leasing Limited 2005 CLD 463; Najamuddin Zia v. Asma Qamar 2013 CLD 1263; Muhammad Anwar Monno v. Waqar Monno 1987 CLC 1943; Muhammad Fikree v. Fikree Development Corporation Ltd 1992 MLD 668; Muhammad Hussain v. Dawood Flour Mill 2013 CLD 1429; Malik Aziz ul Haq v. Crystaline Chemical Industries (Pvt.) Limited 2016 CLD 970; Mst. Khursheed Ismail and others v. Unichem Corporation (Pvt.) Limited and others 1996 CLC 1863; Scottish Co-op. Wholesale Society Ltd. v. Meyer. [1959] AC 324 and Elder v. Elder and Watson Ltd., 1952 Scottish Cases 49 ref.

Zahid S. Ebrahim for Petitioners.

Abid and Zuberi along with Ms. Sana Valika for Respondent No.1.

Ovais Ali Shah for Respondent No.2.

Faisal Siddiqui and Muhammad Vawda for Respondents Nos. 3 and 4.

Sarmad Hani for Respondent No. 5.

2020 C L D 1095

[Sindh]

Before Muhammad Junaid Ghaffar, J

ASIF MANNAAN and 9 others---Plaintiffs

Versus

SULEMAN LALLANI and 9 others---Defendants

Suit No. 579 of 2014 and C.M.As. Nos. 4651, 12391 of 2014 and 588 and 13510 of 2015, decided on 16th April, 2020.

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

----S. 151---Inherent powers of the Court to make such orders as may be necessary for ends of justice or to prevent abuse of process of Court, exercise of---Nature and scope of jurisdiction of civil courts under S. 151, C.P.C.---Appropriate or specific provision if available for a relief being claimed under C.P.C.; then said relief could as a matter of right had to be granted and entertained necessarily under S. 151, C.P.C.---Civil Procedure Code, 1908, was not exhaustive; and did not lay down rules for guidance in respect of all situations nor did it seek to provide rules for decision for conceivable cases---Civil Courts were authorized to pass such orders as may be necessary for ends of justice, or to prevent abuse of the process, but where an express provision was made to meet a particular situation such express provision of C.P.C. must be observed, and departure therefrom was not permissible---Inherent jurisdiction of court to make order ex debito justitiae was undoubtedly affirmed by S. 151, C.P.C., but such jurisdiction could not be exercised so as to nullify other provisions of C.P.C.---Where provision of C.P.C. dealt with expressly with a particular matter, then such provision should normally be regarded as exhaustive---Inherent powers of the Court were in addition to the powers specifically conferred by C.P.C. and were complementary to such powers and therefore it must be held that the Civil Courts were free to exercise same for purposes mentioned in S. 151 when exercise of such powers was not in any way in conflict with what had been expressly provided in C.P.C.---Civil Courts could not make use of special provisions of S.151, C.P.C. where a party had remedy provided elsewhere in C.P.C. and neglected to avail himself of the same and furthermore power under S.151, C.P.C. could not be exercised as appellate power.

Bahadur Rao Raja Seth Hiralal MANU/SC/0056/1961; Subho Ram Kalita v. Dharmeswar Das Koch AIR 1987 Gau. 73 and Nain Singh v. Koonwarjee and others AIR 1970 SC 997 rel.

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

----O. XXXVII, R. 5-- Attachment of property/funds before judgment--- Scope---Application for attachment of property/funds of a defendant was rarely to be granted---For grant of such application averments, at a bare minimum, were required to be so convincing that Court could consider same to be prima facie in nature---Relief of attachment before judgment was a very harsh order to be made against a particular defendant and in granting such relief Court had to be satisfied that plaintiff's case was of prima facie nature and based on an unimpeachable claim(s) in plaint---Furthermore Court must have reasons to believe on basis of material before it, that unless jurisdiction was exercised and orders as solicited were not passed, then there existed a real danger that defendant may remove itself from territorial jurisdiction of Court and an intent to avoid passing of a decree must be clearly shown with reasonable clarity.

(c) Company---

----Principles of corporate governance---Adjudication by courts on matters of shareholder grievance/corporate governance---Judicial oversight on conduct of company's affairs---Scope---For a court dealing with company matters, if the thing complained of before it by minority shareholder(s), was a thing which in substance majority of company was entitled to do, or if something had been done irregularly which majority of the company was entitled to do regularly, or if something had been done illegally which majority of company was entitled to do legally, then there existed no use for litigation with regards to such matter as ultimate end of such matter was only that a meeting had to be called, and then ultimately majority got its wishes---Individual shareholder could not bring an action before courts to complain of an irregularity (as distinct from an illegality) in the conduct of the company's internal affairs provided that such irregularity was one which could be cured by a vote of company in general meeting.

Foss v. Harbottle (1843) 67 ER 189; Mosley v. Alston (1847) 41 E.R. 833; KASB Corporation Limited v. Bank Islami Pakistan Limited 2019 YLR 345; Macdougall v. Gardiner [1875] 1 Ch.D.13 (L. J. Mellish) and Prudential Assurance Co. Ltd. v. Newman Industries Ltd. and others [1982] 1 All ER 354 rel.

Syed Amir Hussain Shah v. Progressive Papers Ltd. and others PLD 1969 Lah. 615; Naveed Textile Mills Ltd., Karachi and 3 others v. Central Cotton Mills Limited, S.I.T.E. Kotri District Dadu and 2 others PLD 1997 Kar. 432; Nizam Hashwani v. Hashwani Hotels Limited and 14 others 1999 CLC 1989; Kohinoor Raiwind Mills Limited through Chief Executive v. Kohinoor Gujar Khan Mills and others 2002 CLD 1314; Muhammad Suleman Kanjiani and 3 others v. Dadex Eternit Ltd. through Chief Executive and 4 others 2009 CLD 1687; Babri Cotton Mills Ltd.'s case 2009 CLD 541; Mst. Sakina Khatoon and 6 others v. S.S. Nazir Ahsan and 17 others 2010 CLD 963; Golden Arrow Selected Stock Funds Ltd. and another v. Clariant Pakistan Ltd. and 9 others PLD 2016 Sindh 50; Foss v. Harbottle (1843) 67 ER 189, Re Lee, Behrens & Co, Ltd. [1932] All ER Rep 889; Edwards and another v. Halliwell and others [1950] 2 All ER 1064 and Re Halt Garage (1964) Ltd. [1982] 3 All ER 1016 rel.

Jaffer Raza and Rabia Khan for Plaintiffs.

Khalid Jawed Khan along with Umer Akhund and Hanif Kamal Alam for Defendants Nos. 1 to 9.

Imran Shamsi for SECP.

2020 C L D 1227

[Sindh]

Before Adnan Iqbal Chaudhry, J

NIB BANK LIMITED through Authorized Officer and Special Attorney---Plaintiff

Versus

Messrs VENUS CHEMICALS PRIVATE LIMITED and others---Defendants

Suit No. B-15 of 2011, decided on 1st June, 2020.

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

----Ss. 9(2) & 10--- Bankers' Books Evidence Act (XVIII of 1891), Ss. 2(8) & 4---Recovery of finances---Leave to defend the suit---Certified copy---Preconditions---Prima facie evidence---Principle---Name and designation of officer certifying statement of account---Defendant sought leave to defend the suit on the plea that certification of statement of accounts did not bear name and designation of official who certified the same---Validity---One of the requirements of 'certified copy' of a statement of account was that the certification thereon should be "dated and subscribed by Principal Accountant or Manager of the Bank with his name and official title"---By virtue of S. 4 of Bankers' Books Evidence Act, 1891, such 'certified copy' was prima facie evidence of the existence of entries it reflected---If statement of account of Bank was not a 'certified copy' as per S. 2(8) of Bankers' Books Evidence Act, 1891, then it could not attract a presumption of correctness and Bank was to prove the same as any other document--- Leave to defend the suit was allowed in circumstances.

Ali Khan and Company v. Allied Bank of Pakistan Ltd. PLD 1995 SC 362 ref.

Soneri Bank Ltd. v. Compass Trading Corporation 2012 CLD 1302; Pak Kuwait Investment Company (Pvt.) Ltd. v. Active Apparels International 2012 CLD 1036 and Elbow Room v. MCB Bank Ltd. 2014 CLD 985 rel.

Syed Hamid Ali Shah for Plaintiff.

Khaleeq Ahmed for Defendant No. 1.

Imtiaz Agha for Defendant No. 2.

Nemo for Defendant No. 3.

2020 C L D 1243

[Sindh]

Before Adnan Iqbal Chaudhry, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

Messrs AMNA EXPORT (PRIVATE) LIMITED and 2 others---Defendants

Suit No. B-4 of 2014, decided on 9th June, 2020.

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

----Ss. 9(2) & 10---Bankers' Books Evidence Act (XVIII of 1891), S. 4---Recovery of finances---Leave to defend the suit---Statements of Accounts---Prima facie evidence---Principle---Bank filed suit for recovery of finance and instead of relying upon original contract between the parties, it relied upon collateral contract on the basis of bills of exchange along with shipping documents which were provided by defendants to the Bank---Validity---Bank opted to rely upon collateral contract, therefore, it was pointless for defendants to assert the collateral contract as defence---Except the acknowledged amount, the statement of account required further proof and it could not be received as prima facie evidence within the meaning of S. 4 of Bankers' Books Evidence Act, 1891---Statement of account comprised of transfer entries which did not reveal the accounts wherefrom those originated---Omission by Bank to support its claim or any part thereof by a duly certified statement of accounts was a non-compliance of mandatory provision of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Leave to defend the suit was granted in circumstances.

United Bank Ltd. v. Taj Seafood Industries PLD 1975 Kar. 410; Habib Bank Ltd. v. Mahmood Ahmed 2004 CLD 1703; BOC Pakistan Ltd. v. National Gases (Pvt.) Ltd. 2013 CLD 889; National Bank of Pakistan v. Shahyar Textile Mills Ltd. 2003 CLD 1370; United Dairies Farms (Pvt.) Ltd. v. United Bank Ltd. 2005 CLD 569; Habib-ur-Rehman v. Judge Banking Court No.4, Lahore 2006 CLD 2017; Elbow Room v. MCB Bank Ltd. 2014 CLD 985 and Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. 2011 CLD 408 rel.

M. Khalid Shaikh for Plaintiff.

Asim Mansoor Khan and Muhammad Muaaz Saqib for Defendants Nos. 1-3.

2020 C L D 1260

[Sindh]

Before Irfan Saadat Khan and Mrs. Kausar Sultana Hussain, JJ

SHER ASFANDYAR KHAN and others---Appellants

Versus

NEELOFAR SHAH and others---Respondents

High Court Appeals Nos. 107, 109 and 114 of 2012, decided on 16th September, 2019.

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

----S. 290---Qanun-e-Shahadat (10 of 1984), Art. 74---Declaration of oppression---Secondary evidence---Effect---Respondent filed application for declaration of oppression against appellant for shattering his confidence by becoming major shareholder in company through fraudulent transfer of shares---Company Judge allowed application filed by respondent---Plea raised by appellant was that photocopies were relied upon by the Company Judge---Validity---Filing of photocopy was permissible proof of furnishing of documents---Provisions of Art. 74 of Qanun-e-Shahadat, 1984 duly considered same as secondary evidence which included copies made from original by mechanical process---Definition of words 'secondary evidence' was an inclusive definition which allowed furnishing of copy made by a copying machine from original---To accept secondary evidence, i.e., certified copy or an accurately compared copy of original of document was a common factor which was also considered to be as good as an original document---Even if originals were not produced before Company Judge, same was not detriment to case of appellant as it was within discretionary power of the Company Judge to call for originals if so desired---Original having not been required by the Company Judge, considering photocopies of agreements, i.e., secondary evidence to be an accurately compared copy/certified copy of original documents which was considered to be as good as original document by the Company Judge---High Court declined to interfere in the matter---Objection was declined in circumstances.

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

----Ss. 10(2), 290, 291 & 292---Qanun-e-Shahadat (10 of 1984), Art. 84---Law Reforms Ordinance (XII of 1972), S. 3--- Appeal---Application for oppression--- Extraordinary General Meeting, conducting of---Comparison of signatures by court---Respondent filed application for declaration of oppression against appellant for shattering his confidence by becoming major shareholder in company through fraudulent transfer of shares---Company Judge allowed application filed by respondent---Plea raised by appellant was that Company Judge was not justified in comparing signatures on agreement himself---Validity---Spirit of Art. 84 of Qanun-e-Shahadat, 1984 was with regard to comparison of signatures and it was not always necessary to refer matter to any Handwriting Expert or any other person--- Court was fully authorized under given facts and circumstances to make comparison of signatures itself---Company Judge compared disputed signatures with record as furnished by appellant, taken from official record of Securities and Exchange Commission of Pakistan (SECP) which could not be considered either non-authentic or that could not be relied upon---Company Judge compared disputed signatures with undisputed signatures and thereafter came to the conclusion that there was no material difference---High Court declined to interfere in such aspect as no material infirmity or illegality was found to be committed by Company Judge---To safeguard interests of company which was paramount consideration by filing an application Company Judge in such regard---While dealing with S. 290 of Companies Ordinance, 1984 it was for court to decide matter as vast powers were given by Legislature to deal with such like situation and pass such orders as court had deemed fit and necessary---Company Judge after making an extensive and lengthy discussion found 'oppression' so as to invoke provisions of S. 290 of Companies Ordinance, 1984 however, not in its entirety but by directing parties to proceed as per directions contained therein through extraordinary general meeting which was to be held under supervision of Official Assignee---Such decision of Company Judge fell under category of regulating conduct of affairs of company as duly mentioned under S. 290 of Companies Ordinance, 1984---Manner and method in which shares were transferred by shareholders to appellant became highly doubtful---Persons to whom 30% shares were intended to be transferred were either architect, chartered accountant or facilitators themselves who had filed certain suits with regard to enforcement of terms of agreement---Shares transferred by shareholders to appellant was without taking into confidence other shareholders who were intended to be given 30% shares by way of compensation or to boost project which was endorsed by SECP---High Court declined to interfere in the judgment passed by the Company Judge---Appeal was dismissed in circumstances.

Mian Javed Amir v. United Foam Industries (Pvt.) Ltd. 2016 SCMR 213; Baz Muhammad Kakar and others v. Federation of Pakistan through Ministry of Law and Justice, Islamabad and others PLD 2012 SC 870; Rehmat Ali Ismailia v. Khalid Mehmood 2004 SCMR 361; Muhammad Kabiruddin v. Muhammad Munirruddin 1993 CLC 747; Muhammad Nurul Haq Mia v. The State PLD 1958 Dacca 341; Muhammad Ali Hemani v. Altaf Fatima 1987 CLC 282; V.B. Rangaraj v. V. B. Gopalakrishnan AIR 1992 SC 201; Crompton Greaves v. Sky Cell Communication Ltd. 115 Company Cases 832 (Madras); IL and FS Trust Co. Ltd v. Birla Perucchini Ltd. AIR (2004) Company Cases Bombay 335; Khurshid Ahmad Khan and another v. Pak Cycle Manufacturing Company Ltd., Shahdara and others PLD 1987 Lah. 1; Syed Akbar Ali v. Mamun Ali Bumasuk (Pvt.) Ltd. and others 2006 CLD 960; Mrs. Saeeda Mahmood and another v. Anas Munir (Pvt.) Ltd. through Chief Executive and others 2007 CLD 637; Agha Bashir Ahmed v. Nippon Bobins (Pvt.) Ltd. 1997 CLC 1205; Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; The Kerala State Electricity Board v. P. Kunhaliumma AIR 1977 SC 282; Faridabad Cold Storage v. Official Liquidator AIR 1978 Delhi 158; Messrs R.C. Abrol Company v. Messrs A.R. Chadha and Company AIR 1978 Delhi 167; Anil Gupta v. Delhi Cloth and General Mills Co. Ltd. (1983) 54 Comp. Ord. Cases 301; Trustees of the Port of Karachi v. Organization of Karachi Port Trust Workers 2013 SCMR 238; Muhammad Fikree and others v. Fikree Development Corporation Ltd and others 1992 MLD 668; Tahir Mahmood Khan and others v. Azad Government and others 2008 CLC 1662; Ali Muhammad and another v. Fazal Hussain and others 1983 SCMR 1239; Haji Muhammad Ashraf v. The State and 13 others 1999 MLD 330; Town Municipal Council v. The Presiding Officer Labour Court AIR 1969 SC 1335; United Liner Agencies of Pakistan (Pvt.) and others v. Miss Mahenau Agha and others 2003 SCMR 132; Pakistan Milk Food Manufacturers Ltd. v. Joint Registrar of Companies PLD 1989 Lah. 539; Re Jermyn Street Turkish Baths Ltd. (1971) 3 All ER 184; Shahamatullah Qureshi v. Hi-tech Construction (Pvt.) Ltd. 2004 CLD 640; Sana Ullah and another v. Muhammad Manzoor and another PLD 1996 SC 256; Mst. Nusrat Khanum v. Liaqat Ali PLD 1994 Kar. 252; Miss Parveen Kassimali Popatiya v. Nizari Cooperative Housing Society Limited, Karachi and 5 others PLD 1994 Kar. 348; A. Qutubuddin Khan v. CHEC Millwala Dredging Co. (Pvt.) Limited 2014 CLD 824; Messrs Waqas Enterprises and others v. Allied Bank of Pakistan and 2 others 1999 SCMR 85; Ghulam Rasool and others v. Sardar-ul-Hassan and another 1997 SCMR 976; Haji Muhammad Khan and 2 others v. Islamic Republic of Pakistan and 2 others 1992 SCMR 2439; Syed Ghulam Shabbir v. Ahmad 2006 YLR 2304; Zafar Yasin and 2 others v. Abdur Rashid Khan through Legal Heirs and 5 others 2003 YLR 2478; Abdul Ghaffar v. Muhammad Sharif 1993 CLC 1779; Muhammad Boota v. Basharat Ali 2014 CLD 63; Pakistan Post Office v. Settlement Commissioner and others 1987 SCMR 1119; Umer Baz Khan through Lhrs v. Syed Jehanzeb and others PLD 2013 SC 268; Ahmed Ali v. Tehsil Nazim, Tehsil Municipal Administration, Tehsil Ghazi, District 2019 CLC 298; Adamjee Insurance Company Limited and others v. Muslim Commercial Bank Limited and others 2005 SCMR 318; Naveed Textile Mills Ltd., Karachi and 3 others v. Central Cotton Mills Limited, SITE, Kotri, District Dadu and 2 others PLD 1997 Kar. 432; Inam Ullah Khan v. Aksa Solutions Development Services (Pvt.) Ltd. and others 2019 CLD 355; Messrs Kingsway Capital LLP and another v. Murree Brewery Co. Ltd. 2017 CLD 587; In re: Messrs K.S.B. Pumps Co. Ltd., Lahore PLD 1974 Lah. 362; Mohammad Mohsin Butt and others v. Mohammad Inayat Butt and others 2005 CLD 747; Nagina Films Ltd. v. Usman Hussain 1987 CLC 2263; Haji Fazal Shah and 2 others v. Shahbaz Khan and 5 others 1995 SCMR 85; United Bank Limited v. Pakistan Industrial Credit and Investment Corporation Ltd. and another PLD 2002 SC 1100; Owaisco v. Federation of Pakistan and others PLD 1999 Kar. 472; Light Metal and Rubber Industries (Private) Limited and others v. Sarfraz Qaudri 2011 CLD 1485; Telecard Limited v. Pakistan Telecommunication, Civil Appeal No.1612 of 2013; Messrs Abdullah Ltd. v. Muhammad Irfan Azad and others, High Court Appeal No.236 of 2005; The President v. Mr. Justice Shaukat Ali PLD 1971 SC 585 and Halsbury's Laws of England, Volume 14 ref.

Elder v. Elder & Watson 1952 SC 49; Re H.R. Harmer Ltd. 1959 1 WLR 62; Re Unisoft Group Ltd. (No.2) 1994 BCC 766; Re Legal Costs Negotiators Ltd. 1999 BCC 547; Muhammad Fikree v. Fikree Development Corporation Ltd. 1992 MLD 668; Shaheen Foundation v. Capital F.M. (Pvt.) Ltd. 2002 CLD 188; R v. Board of Trade 1964 2 All E.R 561; Re Leeds United Holdings plc. 1997 BCC 131; Rajahmundry Electric Supply Corporation v. Nageshwara Rao AIR 1956 SC 213; Registrar of Companies v. Pakistan Industrial and Commercial Leasing Ltd. 2005 CLD 463; Scottish Co. Operative Wholesale Society Ltd v. Meyer 1959 A.C. 324; Shahbazud Din Chaudhry v. Services Industries Textiles Ltd. PLD 1988 Lah. 1 and Associated Biscuits International Ltd. v. English Biscuits Manufacturers (Pvt.) Ltd. 2003 CLD 815 distinguished.

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

----Art. 84---Comparison of signatures---Power of court---Principle---Under provisions of Art. 84 of Qanun-e-Shahadat, 1984 court enjoys plenary powers to compare signatures itself along with relevant record to come to a fair and just conclusion.

S. M. Zahir v. Pirzada Syed Fazal Ali Ajmeri 1974 SCMR 490 and Mst. Ummatul Waheed and others v. Mst. Nasira Kausar and others 1985 SCMR 214 rel.

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

----Art. 72---Proof of documents---Genuineness, determination of---Duty of court---When court is satisfied about genuineness or otherwise of a document, such finding of court is usually not to be interfered with---Court is required to satisfy itself about correctness or genuineness of documents.

Haji Muhammad Khan and 2 others v. Islamic Republic of Pakistan and 2 others 1992 SCMR 2439; Syed Ghulam Shabbir v. Ahmad 2006 YLR 2304; Zafar Yasin and 2 others v. Abdur Rashid Khan through Legal Heirs and 5 others 2003 YLR 2478; Abdul Ghaffar v. Muhammad Sharif 1993 CLC 1779 and Muhammad Boota v. Basharat Ali 2014 CLD 63 ref.

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

----S. 160--- Extraordinary General Meeting--- Preconditions---Shareholder should know what meeting is about so that business of company could be properly transacted and conducted---Meeting which is not held as per S. 160 of Companies Ordinance, 1984 cannot be considered to be validly constituted---Courts are empowered to declare such type of meetings to be invalid, in case they are found to be coram non judice.

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

----S. 290---Oppression in company affairs---Powers of court---Preconditions---Prerequisite for invocation of S. 290 of Companies Ordinance, 1984 falls upon person filing application to prove mismanagement and oppression---Court is fully authorized to pass any order as it thinks fit with regard to regulating conduct of affairs of company or for other aspects.

(g) Administration of justice---

----Jurisdiction of court---Scope---Court has to jealously guard its jurisdiction to deal with lis before it and court could proceed with matter in accordance with law.

Munir A. Malik and Ch. Atif Rafiq for Appellants (in H.C.A. No. 107 of 2012).

Rasheed A. Razvi, Tahmasp R. Razvi and Waleed Rehan Khanzada for Appellants (in H.C.A. No. 109 of 2012).

Kashif Sarwar Paracha for Appellants (in H.C.A. No. 114 of 2012).

Muhammad Masood Khan, Khalid Javed Khan and Muneer Ahmed for Respondents Nos. 1 and 2 (in H.C.As. Nos. 107 and 114 of 2012).

Muhammad Yaseen Azad and Mukesh Kumar G. Karara for Respondents Nos. 1 and 2 (in H.C.A. No. 109 of 2012).

Munir A. Malik and Ch. Atif Rafiq for Respondent No. 3 (in H.C.As. Nos. 109 and 114 of 2012).

Taimoor Ali Mirza and Alizeb Mehak for Respondents (in H.C.A. No. 107 of 2012 for Respondent No. 4 and in H.C.A. No. 109 of 2012 for Respondent No. 7).

Jawad A. Qureshi and Khalid Anwar for Respondents (in H.C.A. No. 107 of 2012 for Respondent No. 3 and in H.C.A. No. 114 of 2012 for Respondent No. 4).

Rasheed A. Razvi, Tahmasp R. Razvi and Waleed Rehan Khanzada for Respondents (in H.C.A. No. 107 of 2012 for Respondent No. 8 and in H.C.A. No. 114 of 2012 for Respondent No. 9).

Sajjad Abbas for Respondents (in H.C.A. No. 107 of 2012 for Respondent No. 6, in H.C.A No. 109 of 2012 for Respondent No. 9 and in H.C.A. No. 114 of 2012 for Respondent No. 6).

Naveed-ul-Haque for Respondents (in H.C.A. No. 107 of 2012 for Respondent No. 7, in H.C.A. No. 109 of 2012 for Respondent No. 10 and in H.C.A. No. 114 of 2012 for Respondent No. 8).

Kashif Sarwar Paracha for Respondents (in H.C.A. No. 107 of 2012 for Respondents Nos. 9, 10 and in H.C.A. No. 109 of 2012 for Respondent No. 4).

2020 C L D 1339

[Sindh]

Before Salahuddin Panhwar, J

Messrs AHMAD TEA LIMITED---Appellant

Versus

Messrs AHMED FOODS INDUSTRIES (PVT.) LIMITED through Secretary or Director or any Principal Officer and another---Respondents

Miscellaneous Appeal No. 26 of 2008, decided on 17th January, 2019.

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

----Preamble & S. 33---Constitution of Pakistan, Art. 18---Registered trademark---Lawful trade or business---Scope---Provisions of Trade Marks Ordinance, 2001 fall within an exception to Art. 18 of the Constitution which otherwise ensures and protects right of every citizen to enter upon any lawful profession or occupation and to conduct any lawful trade or business---Purpose of registration of trade mark is nothing but to ensure a protection to goodwill, name and reputation of a trademark so as to avoid any mala fide move of other competitors to come and take benefit of such name and reputation of the 'Mark' which is not established in a day nor can it be achieved overnight---Such has been the object and purpose of dating a 'Mark' registered under law.

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

----S. 33---Registration of trademark---Object, purpose and scope---Where one chooses a name including personal name for registration thereof for a particular class, object thereof can be nothing but that authorized user wants to have its goods under particular class to be distinctively known/recognized with such 'Mark'---In such eventuality, such 'Mark' is principal or dominative 'Mark'---Any person while purchasing a product/brand is not supposed to minutely examine product/brand handed over to him so as to find out differences into a product in his hand or one which he intends to purchase---Such 'trader' intends to invite consumer to ask for particular goods with such 'Name/Mark' and not necessarily with such 'Label/ Packaging' if goods of same class are being sold from same counter targeting consumers/customers of particular class of general public.

Monters Rolex S.A. v. Asstt. Registrar T.M. PLD 1937 Kar. 199 and Seven up Company v. Kohinoor Thread Ball Factory PLD 1990 SC 313 rel.

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

----Ss. 2(iii) & (xxiv), 22, 33 & 114---Registration of trademark, refusal of---Similarity of name---Registration in foreign countries---Effect---Appellant sought registration of trademark consisting of words 'Ahmad Tea London' on plea that it had been using same since year 1988 and was registered in many countries abroad---Respondent filed opposition on grounds that its trademark had word 'Ahmad' in it which was already registered in Pakistan in same class---Authorities allowed opposition and refused to register trademark of appellant---Validity---Bare look at mark of appellant could not be said to be dissimilar to that of trademark of respondent, i.e., 'Ahmad' for reading and even was phonetically identical---'Tea' would be sold from one and the same counter wherefrom goods of respondent were sold---Appellant had not claimed that respondent was selling its goods at its own 'outlet' and that goods of appellant, i.e., 'tea' would be offered/sold to some other class of public---Prima facie authorities were right in refusing registration of mark of appellant in specific class---Authorities were right in not giving much weight to plea of appellant that 'tea' was a different kind of product from that wherein respondent was dealing because it was not product but class/category for which a 'mark' was registered---Registration of trademark of appellant in other countries was not under dispute---Mark of respondent was already registered and it was dealing in products classified in same class and such dealing internationally in same class was of no help to appellant to deny right of respondent earned by getting its trademark as 'Ahmad' registered---High Court declined to interfere in order passed by authorities---Appeal was dismissed in circumstances.

PLD 1967 Kar. 637; PLD 1969 Kar. 278; 2003 CLD 463; PLD 1985 Kar. 630; 2011 CLD 193; PLD 1987 Kar. 199; PLD 1979 Kar. 83; PLD 1969 Kar. 376; 2013 PTD 372; 2012 CLD 1465; 2004 CLD 1383; PLD 1990 SC 13; 1984 PLD SC 8; PLD 1960 Kar. 355; 2004 CLD 1454; 1980 CLC 1268; M. Sikandar Sultan v. Masih Ahmed Shaikh 2003 CLD 26; M. Sikandar Sultan v. Masih Ahmed Shaikh 2003 CLD 26; Messrs Mehran Ghee Mills v. Messrs Chiltan Ghree Mills 2001 SCMR 967 and PLD 1991 SC 27 ref.

Muhammad Ayub for Appellant.

Jawwad Raza and M.K. Shikho for Respondent No.1.

Saleem Ghulam Hussain for Respondent No. 2.

2020 C L D 1404

[Sindh]

Before Syed Hasan Azhar Rizvi, J

GALLUP BUSINESS RESEARCH SERVICES (PVT.) LIMITED---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

M.A. No. 11 of 2006, decided on 11th November, 2019.

(a) Trade Marks Act (V of 1940)---

----Preamble--- Registration of trade mark---Object, purpose and scope---Object and purpose behind trade mark law is to ensure that a person can benefit from his business reputation which he has developed with hard work and dedication over the years.

(b) Trade Marks Act (V of 1940)---

----Ss. 6, 10 & 76---Trade Marks Ordinance, (XIX of 2001), Ss. 14, 17, 19 & 114---Registration of trade mark---Opposition---Concurrent and honest use---Dispute was with regard to registration of trade mark "Gallup"---Application filed by appellant was dismissed by Registrar of Trade Marks (Registrar) and opposition filed by respondent was accepted---Validity---Appellant and its associated concerns were the only user of trademark "Gallup" in Pakistan since 1981, when they were accepted as the Pakistan member of Gallup International Association and had been extensively and exclusively using the same in its publications and public opinion services in Pakistan--- Such use of trademark in Pakistan was established from documents placed on record---Registration of trademark under S. 10(2) of Trade Marks Act, 1940, allowed registration of a trade mark to an honest concurrent user and in other special circumstances---Unique nature of the matter and appellant's exclusive and extensive use of trade mark "Gallup" in Pakistan over of a period of nearly four decades entitled appellant to registration of trade mark in question in its name---Appellant proved concurrent and honest use of their trade mark "Gallup" for quite a long time, which was not satisfactorily rebutted by respondent---Registrar erred in refusing registration of appellant's trade mark and accepting opposition of respondent and allowing application filed by respondent---High Court in exercise of appellate jurisdiction directed to register trade mark "Gallup" in the name of appellant and set aside the order passed by the Registrar---Appeal was allowed in circumstances.

Pakistan -­Soap Factory v. Chittagong Soap Factory PLD 1970 SC 460; and Lallubhai-Amichand v. The Punjab Aluminium Factory, Gujranwala PLD 1960 Kar. 545 rel.

Basic Trade Mark S.A. v. Kapur and Company 2004 CLD 1454; Wella Aktiengesellschaft v. Shamim Akhtar 2006 CLD 1414; Cluett Peabody and Company Inc. v. Assistant Registrar of Trade Marks 1988 CLC 880; Indus Pencil Industries (Pvt.) Ltd. v. Crescent Pencils (Pvt.) Ltd. 1988 MLD 268; Sanjeda Bano v. Muhammad Saeed Jehangir PLD 1987 Kar. 53; Solo Susice Narodni Podnik v. Sindh Match Works (Pvt.) Limited 1991 CLC 37; Aktiebolaget Jonkoping Valcan, Sweden v. Registrar of Trade Marks, Karachi PLD 1975 Kar. 478; Messrs Sadhana Ausadhalaya v. Messrs Rackitt, Colman, Chiswick Ltd. PLD 1965 Decca 41; In the matter of Applications by the Alligator Company and by the London Waterproof Company (Silkmac) Ld., 1958 R.P.C. 420; In the matter of Application by Brown Shoe Company Inc. 1959 R.P.C. 29; Levi Strauss and Co. v. The Assistant Registrar of Trade Marks 1987 MLD 466; Jehan Khan v. Province of Sindh and others PLD 2003 Karachi 691; Excelsior Cotton Company v. Trading Corporation of Pakistan (Pvt.) Ltd. 2003 YLR Kar. 461 and The Assistant Registrar of Trade Marks, Karachi v. Messrs Lakson Tobacco Company Ltd. 1992 SCMR 2323 ref.

Cooper's Incorporated v. Pakistan General Stores and another 1981 SCMR 1039; Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Abdus Salam and 2 others v. Crown Radio Corporation, Karachi PLD 1973 Kar. 24; Societe De Fabrication Et. De Distribution De Parfumeri Et Cosmetique (Diparco) Societe Anonyme v. Deputy Registrar of Trade Marks, Government of Pakistan and others PLD 1979 Kar. 83; National Detergents Ltd., Karachi v. Nirma Chemical Works, Gujrat State, India and another 1992 MLD 2357; Dabur India Ltd. v. Hilal Confectionery (Pvt.) Ltd. PLD 2000 Kar. 139; Kabushiki Kaisha Toshiba v. Ch. Muhammad Altaf PLD 1991 SC 27; Essa Engineering Industries (Pvt.) Ltd. v. Registrar of Trade Marks and another 2009 CLD 805; Javed Akhtar Chauhan v. JKS (Privates) Limited and others 2016 CLD 2260; Messrs Farooq Ghee and Oils Mills (Pvt.) Ltd. v. Registrar of Trade Marks and others 2015 CLD 1245; unreported judgment In the case of ALDO Group International AG v. The ALDO Shoes (H.C.A. No.309 of 2015), Allergan Inc. v. Milment Oftho - Industries and others AIR 1998 Cal. 261; In the matter of Vitamins Ld.'s Application for a Trade Mark 1956 RPC 1 and Calvin Klein Inc. v. International Apparel Syndicate and others FSR 1995 (515) distinguished.

Ijaz Ahmad for Appellant.

Shoaib Mansoor for Respondent No. 2.

2020 C L D 1434

[Sindh]

Before Abdul Maalik Gaddi and Mrs. Rashida Asad, JJ

Mrs. ADEEBA KHAN---Applicant

Versus

The STATE---Respondent

Criminal Bail Application No. 35 of 2020, decided on 7th April, 2020.

(a) Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984)---

----S. 5---Penal Code (XLV of 1860), Ss. 409, 468, 471, 477-A & 109---Criminal Procedure Code (V of 1898), S. 497---Criminal breach of trust by a clerk or servant, forgery for the purpose of cheating, using as genuine a forged document which is known to be forged, fraudulently destroying or defacing or attempting to destroy or deface or secreting a will etc., abetment---Bail, refusal of---Allegations against the accused was that while holding post as Branch Manager of a Bank, she along with her senior management with their joint consent, embezzled/ cheated/fraud of Rs.4.75 Million against "Term Deposit Certificate" (TDR) invested by the complainant in his account being maintained at said Bank---Accused was specifically nominated in FIR with specific role---First Information Report was corroborated by documentary evidence as well as statement of witnesses recorded under S. 161, Cr.P.C.---Charging S. 409, P.P.C. was a scheduled offence falling under the Offences in respect of Banks (Special Courts) Ordinance, 1984, as same had been committed in connection with the business of a Bank and the same fell within the prohibitory clause of S. 497, Cr.P.C.---Refusal of bail, in circumstances, was a rule and acceptance an exception---Accused was involved in a heinous offence---Not only that, the said offences had also impaired the trust of the people in banking system---In that way, the alleged crime could safely be considered to be a crime against the whole society and granting bail to such like persons would amount to encourage the heinous crimes in the society---Investigating Officer of the case had found the accused guilty for the commission of the offence---Accused had failed to show that her involvement was product of mala fide or ill will on the part of complainant or investigating agency---Bail application was dismissed, in circumstances.

Saeed Ahmed v. The State 1996 SCMR 1132; Tariq Bashir and 5 others v. The State PLD 1995 SC 34; Zaigham Ashraf v. The State and others 2016 SCMR 18; Aman Ullah v. The State and another 2017 YLR 1263; Muhammad Bilal Anwar Shakir v. The State 2017 MLD 1957; Hussain Haqani v. The State 2000 PCr.LJ 161; Chaudhry Shujat Hussain v. The State 1995 SCMR 1249; Chief Manager/Attorney, Allied Bank Limited v. Shahid Ullah and others PLD 2009 SC 446; Muhammad Haseeb Khan and another v. The State through FIA CBC, Karachi 2012 PCr.LJ 1; Muhammad Hanif S. Kalia and 2 others v. The State 2009 PCr.LJ 1192 and Ahmed Khan v. The State 2013 YLR 2233 ref.

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

----S. 497---Bail---Tentative assessment of evidence---Scope---While deciding bail applications, deeper appreciation of evidence was not warranted and only bird's eye view was to be made from tentative assessment of the material available on record.

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

----S. 497---Bail---Scope---Observation, if any, in bail order was tentative in nature and would not affect the merits of the case.

Muhammad Saleem Mangrio and Muhammad Jamil for Applicant.

Muhammad Ahmed, Assistant Attorney General for the State/FIA.

Mohsin Shahwani and Hamid A. Memon for the Complainant.

2020 C L D 1443

[Sindh]

Before Muhammad Junaid Ghaffar, J

PARAMOUNT SPINNING MILLS LIMITED AND OTHERS: In the matter of

J.C.M. Petition No. 5 of 2019, decided on 25th October, 2019.

(a) Administration of justice---

----Court was not required to decide cases on basis of emotions and decisions but were to be given on basis of mandate of law---Court was duty bound to apply law, come what may, and law sometimes may not permit something which ought to have been, but there was very little Court could do about the same---Duty of Court was to apply law and not rewrite what had been enacted by Legislature---Court was to reach decision compelled by law and was required to apply the law as it was, but not as Court wished it to be.

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

----Ss. 279 & 280---Compromise with creditors and members---Scheme of arrangement---Adjudication of petition under S. 279 of Companies Act, 2017---Sanctioning of scheme of arrangement with non-consenting creditors---Approval of scheme of arrangement by "three fourths" of creditors---Scope---Law required that if majority in number representing three-fourths in value of creditors or class of creditors, present and voting, either in person or through proxies, agree to any compromise or arrangement, then same shall be sanctioned by Court---In construing whether a resolution was passed by "three-fourths" majority or not, it was number of secured creditors present in meeting and participating in voting in favour or against which was relevant and on basis of same a scheme was to be approved or disapproved---Any party present in meeting for approval of scheme of arrangement, if same choses to abstain from voting, then such abstention would be of no relevance and it would be as if that such party did not participate in voting---Once a scheme of arrangement or a compromise was agreed upon by a class of creditors and a resolution to such effect was passed by them, then such scheme was binding on all including non-consenting creditors.

Gulshan Weaving Mills Limited v. Al Baraka Bank (Pakistan) Limited and 8 others 2018 CLD 737; In Re: Messrs Pakland Cement Limited 2002 CLD 1392; In Re: Kirloskar Electric Co. Ltd [2003] 116 Comp Case 413; Miheer H Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506; Buckley on the Companies Act, 2006 (UK) 14th Edition; Hindustan Lever and another v State of Maharashtra and another (2004) 9 Supreme Court Cases 438 and Haricharan Karanjai v. Ulipur Bank Ltd. AIR 1942 Calcutta 442 rel.

Muhammad Shoaib Rashid, Muhammad Hamza Khokhar and Shahid Iqbal Rana, for Paramount Spinning Mills Limited/Petitioner No.1.

Arshad Tayabaly, Mikael Azmat Rahim, Ms. Heer Memon, and Ms. Sehar Rana for Petitioners Nos.2 to 14:

Mehmood Ali and Abid Naseem for Bank of Punjab.

Saad Abbasi for SECP.

2020 C L D 1466

[Sindh]

Before Irfan Saadat Khan and Fahim Ahmed Siddiqui, JJ

ALI ASGHAR DAWOOD BHOY through Attorney---Appellant

Versus

IBRAHIM---Respondent

First Appeal No. 154 of 2017, decided on 27th January, 2020.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 2, 3, 5 & O. VII, R. 16---Qanun-e-Shahadat (10 of 1984), Art. 163---Oaths Act (X of 1873), S. 9---Summary suit on the basis of cheque---Negotiable instrument was lost---Proof of---Requirements---Offer for special oath---Withdrawal of---Effect---Petition for leave to appear and defend the suit---Defendant made offer for special oath but same was withdrawn thereafter---Petition for leave to appear and defend the suit was dismissed and suit was decreed by the Trial Court---Validity---Trial Court had power to direct the plaintiff to deposit the negotiable instrument with an official of the Court but it was not mandatory requirement of law---Summary suit was competent on the basis of lost negotiable instrument which had certain legal presumptions---Plaintiff should have established the existence of such instrument as per provisions of Qanun-e-Shahadat, 1984---Plaintiff in the present case, had produced copy of cheque and memo of the Bank which might be considered as secondary evidence---Said cheque was not in the name of plaintiff but it was a bearer cheque---Plaintiff who had filed the suit on the basis of lost instrument must give an indemnity to the satisfaction of Trial Court against the claim of any other person upon such an instrument---No such course had been adopted in the present case and suit could not be proceeded under summary jurisdiction---When plaintiff had no evidence in support of his claim and had sought decision on the basis of an oath then he might place his case on a special oath and if same was denied on oath by the defendant then suit of plaintiff would fail---No such oath had been taken by the plaintiff in the present case and offer was made on behalf of defendant---Plaintiff should have administered oath and in case of non-appearance of defendant, the matter might be decided in his favour---If defendant had withdrawn his offer for special oath before its administration then there would be no question of administering oath---Impugned judgment passed by the Trial Court was set aside and matter was remanded for trial afresh---Present suit would proceed as an ordinary suit and not as a summary suit---Appeal was allowed in circumstances.

Asif Nadeem v. Messrs Bexshim Corporation and others 2001 CLC 653 ref.

S.M. Jahangir for Appellant.

Nemo for Respondent.

2020 C L D 1478

[Sindh]

Before Mohammad Ali Mazhar and Agha Faisal, JJ

Sheikh ADEEL IMTIAZ---Appellant

Versus

FAYSAL BANK LIMITED and 2 others---Respondents

First Appeal No. 203 of 2017, decided on 5th December, 2019.

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

----S. 19(7)(a)---Execution of decree---Objection---Mortgage property---Unregistered gift deed---Objector claimed to be owner of mortgaged property on the basis of unregistered gift deed---Executing Court declined to exclude the property from execution and dismissed the objection petition---Validity---Although the objector claimed title to mortgaged property yet he never sought to file any suit to protect the purported right---Objector, principal judgment debtor, alleged donor and the ostensible landlord of mortgaged property were all immediate family---Absence of knowledge of dealings in mortgaged property was implausible---Matter was patently evident that even after coming to know of the judgment and decree, the objector did not file any appeal there against---High Court declined to interfere in the order passed by Executing Court---Appeal was dismissed in circumstances.

Asghar Bangash for Appellant.

Mujahid Bhatti for Respondent No. 1.

Waqas Asad Sheikh for Respondent No. 2.

Masood Anwar Ausaf for Respondent No. 3.

2020 C L D 1

[Lahore]

Before Jawad Hassan, J

AITEX PAKISTAN---Petitioner

Versus

GOVERNMENT OF PAKISTAN and others---Respondents

Writ Petition No. 39800 of 2019, heard on 29th August, 2019.

(a) Foreign Companies Regulations, 2018---

----Regln. 6---Associations with Charitable and Not for Profit Objects Regulations, 2018, Regln. 5---Companies Act (XIX of 2017), S. 42---Non-Profit Organization ("NPO") and Non-Governmental Organization ("NGO")---Distinction---Generally, 'NPO' was an organization that operated on the principle that no member would receive profits from such organization, and such organization applied its surplus funds on the promotion of its objectives rather than distributing it among the members of such organization---On the other hand, 'NGO' was an association of persons that worked for promoting humanitarian objective instead of a commercial one, and was formed by ordinary citizens that operated autonomously/independently of government---'NGO' and 'NPO' were two of the most common designations which worked towards improving human welfare and betterment of the society, and were often interchangeable.

Advanced Law Lexicon, Volume 3, Published by LexisNexis Non-governmental Organization and Non-profit Organization ref.

(b) Policy for regulation of International Non-governmental Organizations (INGOs) in Pakistan, 2015 [issued by the Ministry of Interior vide notification No.6/34/2015-PE-III dated 01-10-2015]---

----Cl. 2---Entities to which the Policy for regulation of International Non-governmental Organizations (INGOs) in Pakistan, 2015 applied, stated.

Policy for regulation of International Non-governmental Organizations (INGOs) in Pakistan, 2015 [issued by the Ministry of Interior vide notification No.6/34/2015-PE-III dated 01-10-2015] applied to entitles that met the following criteria:

(i) International Non-Governmental Organizations ("INGO") or International Non-Profit Organizations (INPOs) which may not be registered in their home countries as INGOs; which were part of the not for profit sector, and which undertook activities similar to typical INGOs;

(ii) Entitles which received foreign contributions or utilized foreign economic assistance to engage in various development programs in Pakistan;

(iii) Private and self-governing entities which were separate and not controlled by the Government;

(iv) Entities which were not receiving return profits generated to their owners or directors or staff; and

(v) Registered organization with defined aims and objectives.

(c) Associations with Charitable and Not for Profit Objects Regulations, 2018---

----Regln. 5---Foreign Companies Regulations, 2018, Regln. 6---Policy for regulation of International Non-governmental Organizations (INGOs) in Pakistan, 2015 [issued by the Ministry of Interior vide notification No.6/34/2015-PE-III dated 01-10-2015] ('the Policy")---Scope--- International Non-Profit Organization (INPO) and International Non-Governmental Organization ("INGO")---Registration and regulation---Liason office of a foreign based Association operating in Pakistan---Petitioner was a liaison office of a foreign Association and was working in Pakistan---Contention of petitioner that it did not fall under the definition of an 'INGO', and was merely an "INPO", therefore, the 'Policy' for regulation of INGOs did not apply to it---Held, that nothing had been brought on record establishing that the foreign Association was controlled by its Government, and the petitioner had itself admitted that the foreign Association and the petitioner was a private research institute, therefore, for all intents and purposes, it could be stated that the foreign Association was operating as an autonomous body independent of the Government, and could also be categorized as an INGO---In such circumstances the Policy in question for INGOs was applicable to the petitioner, and the petitioner or the foreign Association was required to follow the mandatory provisions of the Policy---High Court directed that the petitioner was to follow the online application procedure under the Policy for its registration, which shall be decided by the Ministry of Interior and the relevant departments strictly within the stipulated period of sixty (60) days under the applicable laws; that in view of the prior functioning of the petitioner in Pakistan, the Government and its relevant functionaries would not obstruct the lawful business of the petitioner till the decision on the online application of the petitioner; that the Securities and Exchange Commission (SECP) was to formulate appropriate Regulations, after following the applicable laws including the 'Policy', which were applicable specifically to INGOs or INPOs---Constitutional petition was dismissed accordingly.

(d) Illegality---

----Illegality could not be allowed to be perpetuated.

Raunaq Ali v. Chief Settlement Commissioner PLD 1973 SC 236 and Ms. Shagufta Hashmat v. Federation of Pakistan through Secretary Cabinet Division 2018 PLC (C.S.) 619 ref.

(e) Administration of justice---

----When law required a thing to be done in a specific manner that should only be done in that specific manner.

(f) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of the High Court---Scope---Regulations made by the Government, interference in---Competent authority was at liberty to regulate its affairs unless such regulation was arbitrary, discriminatory or demonstrably irrelevant to the policy---Regulations could not be interfered on the grounds of mere technicalities.

Dossani Travels (Pvt.) Ltd. v. Travels Shop (Pvt.) Ltd. PLD 2014 SC 1 ref.

Barrister Hassan Nawaz Shaikh for Petitioner.

Ms. Sadia Malik, Assistant Attorney General and Mr. Azmat Hayat Lodhi, Assistant Attorney General with Zulfiqar Ali, Director Board of Investment, Lahore and Ms. Iqra Anum, Section Officer (PE-III), Ministry of Interior, Government of Pakistan, Islamabad.

Muhammad Naeem Akhtar Cheema, Legal Consultant for Secretary Primary and Secondary Health Department.

Umair Ghafoor, Officer State Bank of Pakistan, BSL/ Respondent No.4.

Syed Farhan Shah, Deputy Prosecutor, Competition Commission of Pakistan/Respondent No.5.

Barrister Umair Khan Niazi, Additional Advocate-General.

Shehzad Ata Elahi, Advocate/Amicus Curiae assisted by Usman Virk, Advocate.

Hafiz Muhammad Talha and Muhammad Naveed, Advocates/Legal Advisor for SECP.

2020 C L D 60

[Lahore]

Before Shahid Waheed, J

Messrs RMC CONSTRUCTION COMPANY---Petitioner

Versus

GUJRANWALA DEVELOPMENT AUTHORITY and others---Respondents

Writ Petition No. 47688 of 2019, heard on 23rd September, 2019.

(a) Contract---

----"Mobilization Advance"---Meaning and concept in context of commercial contract---In civil construction projects, an advance was given to a contractor which was known as "Mobilization Advance" and basic purpose of such "Mobilization Advance" was to extend financial assistance within the terms of a contract to the contractor to mobilize the men and material resources for timely and smooth take off of a project.

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

----Ss. 20 & 41---Civil Procedure Code (V of 1908) O. XXXIX, Rr. 1 & 2--- Contract--- Commercial contract--- Construction project---Mobilization advance issued to contractor against Bank guarantee in favour of Development Authority---Arbitration---Referring dispute to arbitrator---Stay/restraining of encashing of Bank guarantees provided by contractor to Development Authority against mobilization advance---Scope---Petitioner/contractor sought quashing of orders of Arbitrator as well as restraining operation of letters issued by Development Authority whereby it sought to encash Bank guarantees provided by petitioner---Validity---Although court was vested with the powers to grant interim relief, but such discretion must be exercised sparingly and only in appropriate cases---Such discretion ought to be exercised in the exceptional cases when there was adequate material on record, leading to a definite conclusion that Development Authority was likely to render entire arbitration proceedings infructuous, by frittering away the properties or funds either before or during the pendency of arbitration proceedings or even during the interregnum period from the date of arbitration award to its execution---Demand of encashing of bank guarantee through impugned letter was to be deemed to be a conclusive evidence regarding failure of the petitioner to comply with contractual terms and thus, Bank was bound to honour commitment made in the guarantee---Such encashment of Bank guarantee could not be put off until the culmination of proceedings of S. 20 of the Arbitration Act, 1940 before Trial Court or the announcement of award to be made by the arbitrators merely on the ground that a dispute existed between the parties to the contract and therefore injunction sought by petitioner/contractor could not be allowed---Constitutional petition was dismissed, in circumstances.

Messrs Jamia Industries Ltd. v. Messrs Pakistan Refinery Ltd., Karachi PLD 1976 Kar. 644; Project Director, Balochistan Minor Irrigation and Agricultural Development Project, Quetta Cantt. v. Messrs Murad Ali and Company 1999 SCMR 121 and Standard Construction Company (Pvt.) Limited v. Pakistan through Secretary M/o Communications and others 2010 SCMR 524 ref.

Pakistan Engineering Consultants v. Pakistan International Airlines Corporation and another 1989 SCMR 379; Messrs National Construction Ltd. v. Aiwan-e-Iqbal Authority PLD 1994 SC 311; District Council, Gujrat v. Iftikhar Ahmad 1988 MLD 1461 and B.S.M. Contractors Pvt. Ltd. v. Rajasthan State Bridge and Construction Corporation Ltd. and another AIR 1999 Delhi 117 rel.

(c) Contract---

----Commercial Contract---Bank Guarantee---Encashment of Bank guarantee---Principles---Commercial transactions must go on the solemn Bank guarantee irrespective of any dispute between contracting parties regarding whether or not the work carried out at a construction site was up to the contractual standard---Banks could not be absolved of their responsibility to meet such obligations---Employer/developer extended facility of Mobilization Advance to a contractor against a Bank guarantee under the assurance that nothing would prevent it from getting it back if contractor committed default in fulfilling its obligations arising out of a contract---Bank guarantee, therefore, constituted an agreement between a Bank and a developer/employer under which there was an absolute obligation on the Bank to make the payment to the employer merely on demand---Banks were prohibited under a Bank guarantee from raising any objections to such payment---Only exceptions were cases where there was established fraud (based on material events and not on bald pleadings in the application for stay) of egregious nature of which Bank had knowledge and where allowing encashment would result in irretrievable injustice to one of the parties concerned, and in such cases Court may interdict encashment of a bank guarantee.

Riaz Karim Qureshi for Petitioner.

Muhammad Arif Raja, Additional Advocate-General with Ch. Muhammad Idrees, Director Engineering and Ali Ahmad, Deputy Director, GDA for Respondents Nos. 1 to 3.

2020 C L D 126

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

MECO (PVT.) LIMITED and others---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

R.F.A. No. 1521 of 2014, heard on 11th June, 2019.

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

----Ss. 9 & 22---Suit for recovery of finance---Leave to defend suit, denial of---Figures not reflected in statement of accounts---Effect---Customers were aggrieved of judgment and decree passed by Banking Court in favour of Bank for recovery of money by dismissing their leave to defend suit---Validity---Banking Court solely relied on tables provided by Bank in order to calculate and determine sum payable by customers to Bank while such tables did not corroborate or correspond to statement of account relied by Bank---Customers showed that amount claimed by Bank was decreed as prayed for but actually Bank wrongly claimed some amount being beyond contract period---High Court, in circumstances, modified judgment and decree passed by Banking Court by deducting the amount accordingly.

Syed Ali Rizvi for Appellants.

Nemo for Respondent.

2020 C L D 147

[Lahore]

Before Jawad Hassan, J

ABDUL WALI through Special Attorney---Petitioner

Versus

STATE BANK OF PAKISTAN through Director Banking Conduct and Consumer Protection Department and 4 others---Respondents

Writ Petition No. 51384 of 2019, decided on 19th September, 2019.

Banking Companies Ordinance (LVII of 1962)---

----S. 41---Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984), S. 5---Punjab Overseas Pakistanis Commission Act (XX of 2014), S. 2(i)---Constitution of Pakistan, Arts. 4, 5, 9, 18, 23, 24 & 260---"Overseas Pakistani"---Grievance, non-redressal of---Petitioner was an overseas Pakistani from whose Pakistani Bank account, significant amount was embezzled---Plea raised by petitioner was that State Bank of Pakistan did not proceed with the matter despite many complaints---Validity---If petitioner was an "overseas Pakistani" as defined under S. 2(i) of Punjab Overseas Pakistanis Commission Act, 2014 then being citizen of Pakistan he had inalienable rights defined under Arts. 23 & 24 of Constitution, i.e., right to acquire, hold and dispose property and its protection---Every citizen had an inalienable right under Art. 4 of Constitution wherever he was and of every other person for the time being within Pakistan to enjoy protection of law and to be treated in accordance with law---High Court directed State Bank of Pakistan to inquire/examine matter and record in detail as per Banking Companies Ordinance, 1962 and after hearing parties, if case was made out against the Bank then grievance of petitioner was to be redressed---Constitutional petition was disposed of accordingly.

Watan Party and another v. Federation of Pakistan and others PLD 2011 SC 997 and Shahid Idrees v. Government of the Punjab and others PLD 2018 Lah. 284 rel.

Muzammil Qasmi for Petitioner.

Ms. Sadia Malik, Assistant Attorney General on Court's call.

2020 C L D 210

[Lahore]

Before Shams Mehmood Mirza, J

ASIF JAVED, ADVOCATE---Petitioner

Versus

BOARD OF DIRECTORS through Chairman Lahore Transport Company and 6 others---Respondents

W.P. No. 1767 of 2019, decided on 19th November, 2019.

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

----R. 5(2)---Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015, Schedules I & II---Appointment of Chief Executive---Procedure---Violations---Petitioner was aggrieved of appointment of respondent as Chief Executive of public sector company on grounds that her appointment was violative of required procedure---Validity---Action of nominating candidates by Board to line ministry was culmination of larger process of selection envisaged by Schedule I to Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015---Recommendation of two names by Board was in clear violation of Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015 which required Board to recommend minimum of three candidates to line ministry for appointment to post of Chief Executive---Recommendation of three names by Board out of short-listed candidates was a mandatory requirement which could not be circumvented by Board by sending names of only two candidates to Chief Minister for appointment---Process for initiating case for appointment to post of Chief Executive of company was not in accordance with manner laid down by Public Sector Companies (Appointment of Chief Executive) Guidelines, 2015 and such aspect of matter completely escaped attention of authorities---High Court declared appointment of respondent to be without lawful authority and of no legal effect---Constitutional petition was allowed in circumstances.

Barrister Sardar Muhammad v. Federation of Pakistan and others PLD 2013 Lah. 343 rel.

(b) Administration of justice---

----When law directs that a particular proceedings would be taken in a particular manner, purport of wording of statute would be taken as indicating intention of lawmaker to exact a strict compliance with its terms.

6 Bac, Abr. 377 rel.

Zaka ur Rehman and Sheraz Zaka for Petitioner.

Hafiz Tariq Naseem, Jawad Tariq Naseem and Muhammad Salman Ullah Khan for Respondent No. 7.

Faisal Hanif for Respondent Nos. 1, 2 and 6.

2020 C L D 249

[Lahore]

Before Shahid Waheed and Masud Abid Naqvi, JJ

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

Versus

Mst. NASREEN BEGUM---Respondent

Insurance Appeal/R.F.A. No. 77885 of 2019, decided on 23rd December, 2019.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 124 & 121---Limitation Act (IX of 1908), S. 5---Appeal to Insurance Tribunal--- Limitation--- Condonation of delay--- Scope---Insurance Ordinance, 2000 was a special law and Insurance Tribunal had been constituted under S. 121 of the same---Provisions of S. 5 of the Limitation Act, 1908 had been specifically excluded from its application on matters being governed by special laws---Where a period of limitation was prescribed under specific provisions of a special or local law, then general principles of law of limitation were not applicable and therefore, provisions of S. 5 of the Limitation Act, 1908 could not be invoked for seeking condonation of delay in filing of appeal under S. 124 of the Insurance Ordinance, 2000.

General Manager v. Mst. Sakina Bibi and others 2012 CLD 1112 and Jubilee General Insurance Co. Ltd. v. Ravi Steel Company 2016 S C M R 1979 rel.

Sh. Shahzad Ahmed for Appellants.

2020 C L D 265

[Lahore (Bahawalpur Bench)]

Before Mujahid Mustaqeem Ahmed, J

GHULAM MURTAZA---Appellant

Versus

MUHAMMAD RAFI---Respondent

R.F.A. No. 100 of 2012, decided on 2nd May, 2018.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Summary suits upon bills of exchange---Presumption as to negotiable instrument---Dishonoured cheque---Endorsement for consideration---Burden of proof---Scope---Plaintiff filed suit for recovery of Rs.5,00,000/- on the basis of dishonoured cheque and claimed that the defendant had borrowed the said amount---Defendant contended that he had issued an open cheque on account of fiscal liability but the liability stood discharged on account of certain transactions and he was liable to pay only Rs. 13,000---Trial Court decreed the suit---Validity---Plaintiff had not mentioned any specific date either in the plaint or in evidence as to when the loan amount was advanced to the defendant---Stance of plaintiff was not believable that just on the request of defendant such a huge amount was advanced without any documentation or even issuance of cheque at that time---Parties had no blood or family relation---Plaintiff contended that cheque was a negotiable instrument and since the defendant had not denied its issuance therefore burden of proof of non-payment of consideration was on the defendant---Presumption under S. 118 of Negotiable Instruments Act, 1881 was not a conclusive presumption of drawing consideration of a negotiable instrument, rather it was rebuttable in nature and initial burden of proving that the negotiable instrument was executed against consideration was on the plaintiff---Plaintiff had failed to discharge the initial onus of passing on Rs. 5,00,000/- to the defendant---Appeal was allowed; impugned judgment and decree was set aside and the suit of plaintiff was dismissed.

Muhammad Aziz-ur-Rehman v. Liaqat Ali 2007 CLD 1605; Muhammad Nawaz v. Qazi Muhammad Rashid 2018 CLC Note 34 and Asif Ali and 6 others v. Saeed Muhammad 2010 CLD 1301 ref.

Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332 rel.

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

----S. 118---Presumption as to negotiable instruments---Dishonoured cheque---Endorsement for consideration---Burden of proof---Scope---Presumption under S. 118 of Negotiable Instruments Act, 1881 is not a conclusive presumption of drawing consideration of a negotiable instrument, rather it is rebuttable in nature and initial burden of proving that the negotiable instrument is executed against consideration is on the plaintiff.

Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332 rel.

Muhammad Saleem Faiz for Appellant.

Ghulam Shabbir Shah for Respondent.

2020 C L D 274

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Muzamil Akhtar Shabir, JJ

Messrs GULISTAN POWER GENERATION LIMITED and 3 others---Appellants

Versus

BANK OF PUNJAB and 2 others---Respondents

R.F.A. No. 872 of 2016, decided on 2nd May, 2019.

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

----Ss.9 & 10---Suit for recovery of finance facility---Leave to defend---Continuing guarantee---Effect of novation of contract---Scope---Appellants assailed judgment and decree passed by Single Judge of High Court and contended that although Single Judge of High Court held that guarantees executed by two of the appellants were continuing guarantees but failed to take into consideration that the finance agreements were subsequently renewed time and again; that the subsequent finance agreements did not mention the guarantees executed by said two appellants; that said two appellants were discharged from payment of the amount of finance as guarantors on account of novation of contract and that said appellants were entitled at least for grant of leave to defend the suit---Validity---Single Judge of High Court had referred to the continuing guarantees of said appellants but the judgment was silent as to the effect of renewal agreements, which only referred to continuing guarantee of another appellant but not of said appellants---Even the plaint was silent to that effect, which only referred to personal guarantees of said appellants up to the renewal agreement---Effect of the non-mentioning of the personal guarantees of said appellants was required to be determined while passing the impugned judgment---Said appellants were at least entitled for grant of leave to defend to establish that their guarantees were discharged---Division Bench of High Court allowed the appeal and applications for leave to defend to the extent of said appellants and remanded the matter to the Single Judge of High Court for further proceedings.

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

----Ss.9 & 10---Suit for recovery of finance facility---Leave to defend---Scope---Appellants assailed judgment and decree passed by Single Judge of High Court---Validity---Single Judge of High Court had properly appreciated the controversy and rightly dismissed their applications for leave to defend as no substantial question of law and facts requiring recording of evidence was raised and application for leave to defend was not in consonance with the provisions of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and was rightly refused---Single Judge of High Court had rightly relied upon the statement of accounts excluding a certain sum of amount as markup charged beyond the expiry period and decreed the suit against two of the appellants jointly and severally---Findings of Single Judge of High Court were in consonance with the material available on record and were well founded, warranting no interference---Appeal was dismissed to the extent of said appellants.

Akif Majeed for Appellants.

A.W. Butt for Respondent No. 1.

Malik Asadullah and Mirza Zeeshan for Respondent No. 2.

2020 C L D 339

[Lahore]

Before Jawad Hassan, J

SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY LIMITED---Appellant

Versus

CHENAB LIMITED---Respondent

Civil Original No. 43 of 2011, decided on 5th December, 2019.

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

----Ss. 305(2) & 308---Power of court to order winding up of a company---Winding up as a 'last resort'---Matters to be considered by the court before ordering winding up---Winding up of a company was to be treated as an extreme remedy and not to be dealt with casually as it would amount to economic death of a running and live commercial organization---Winding up was the last thing that a court would do having regard to its impact and consequences, including, closing down of a unit which produced goods or provided some services; loss of employment of numerous persons and resulting grave hardship to the members of families of such employees; loss of revenue to the State by way of collection that the State could hope to make on account of customs or excise duties, sales tax, income tax, etc.---Effect of winding up must be considered - putting an end to the business or an industry or an entrepreneurship - and the court should not be too keen or too anxious to continue winding up of a company and must give weightage if there was any possibility of resurrecting the company.

Kesar Enterprises Ltd.'s case [2002] 112 Comp Cas 174 (Bom) ref.

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

----S. 313---Power of court to stay winding up of a company---Time period of three years provided under S. 313 of the Companies Act, 2017---Such time period was directory and not mandatory in nature.

J Investment Corporation of Pakistan v. Sunshine Jute Mills Limited 2005 CLD 713 ref.

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

----Ss. 313 & 314---Companies (Court) Rules, 1997, R. 95---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Power of court to stay winding up of a company---Scope---Commercial morality, concept of---Scope---High Court had power to stay the proceedings of a winding up order, even for a limited period of time, on the basis of events or situations that arose or developed after the winding up order, while keeping in mind the relevant facts and circumstances of each case---Even after passing of a winding up order, efforts should be made by the judicial forums to allow the companies to continue running commercially on the grounds that company had improved its commercial viability; or, had acquired the requisite funds to discharge its liabilities and miscellaneous expenditures for its operations; or, the cause for the winding up order had disappeared or was likely to disappear; or the company was able and willing to set its (affairs) right either by arrangement, compromise, settlement or a proposal for the revival of the company---Before passing such an order, the Court must give regard to the benefits and interests - and not merely wishes - of the contributor, creditors and public, in proper circumstances of resumption of the business of the company --- Powers conferred on the court in such regard were discretionary in nature and could only be exercised in furtherance of the broader principles of commercial morality and after bona fides of the parties had been established on the record with regard to the proposed financial status and strength.

Hala Spinning Mills Ltd's case 2002 SCMR 450; Zulfiqar Hussain v. Bambino (Pvt.) Ltd. 2013 CLD 34; J Investment Corporation of Pakistan v. Sunshine Jute Mills Limited 2005 CLD 713; Additional Registrar of Companies, SECP v. Schon Textile Limited 2008 CLD 475; National Bank of Pakistan v. Punjab National Silk Mills Ltd. 1989 MLD 2963; Abdul Rasheed Mughal v. ECSA (PK) (Pvt.) Ltd. 2006 CLD 852; Sevior v. Morga [2012] VSC 480; Prendergast v. Roclcross [2008] NSWSC 14; Navjivan Trading Finance Ptv. Ltd's case, [1978] 48 Comp Cas 402 (Guj); Tata Iron and Steel Co. case, [2001] 104 Comp. Cas. 533 (Guj); American Express Bank Ltd. case, [1999] 96 Comp Cas 841 (Guj.); Kesar Enterprises Ltd.'s case [2002] 112 Comp Cas 174 (Bom) and Messrs Consolidated Exports Ltd. v. Messrs Dyer Textile and Printing Mills Ltd. PLD 1984 Kar. 541 ref.

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

----Ss. 313 & 314---Companies (Court) Rules, 1997, R. 95---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Power of court to stay winding up of a company on the basis of 'commercial morality' and 'public interest'---Scope---Restructuring/rescheduling plan for a company undergoing winding-up---Company in question, which was in the process of winding up, was one of the leading exporters of textile in the country and winding it up would amount to economic death of not only the company but also its employees---High Court observed that in developing countries (like Pakistan), the judicial forums should provide opportunities to the sick industries to revive and to restart their business and to pay off and settle their debts and other liabilities, especially when the banks were also willing and had no objection in such regard---Situation of the company in question had changed after the winding up order, since the banks had shown their willingness to restructure the debts of the company---In view of the Scheme of Arrangement, Restructuring Plan, joint statement and other documents submitted in court and the interest of the creditors, contributors and public, there appeared to be no restriction on the High Court from staying the winding-up---Looking at the present matter pragmatically under the applicable law, in the best interest of commercial morality and condition of textile industry of the country, it would be against the public interest to deny such interim relief to the applicants---Application for interim relief was allowed and the company was temporarily allowed, till the disposal of the main application, to resume its commercial operation and the production units in terms of the undertaking made by the applicants and confirmed by official liquidators.

Salman Aslam Butt, Senior Advocate Supreme Court for the Contributors of Chenab Limited assisted by Shoaib Rashid, Hafsa Ahmad, Manahil Khan and M. Ali Khan, Advocates.

Barrister Mian Sultan Tanvir Ahmad, Advocate Supreme Court for the Shareholders assisted by Mr. Usman Ali Cheema, Advocate.

Abu Bakar, Advocate for Pak Libya.

Majid Ali Wajid, Advocate Supreme Court for MCB Bank.

Muhammad Irfan Hanjra, Advocate Supreme Court.

Aurangzeb Mirza, Advocate/JOL along with Jalal Ahsan, FCA/JOL.

Hafiz Talha for SECP.

Ms. Sadia Malik, Assistant Attorney General.

Barrister Umair Khan Niazi, Additional Advocate-General.

Muhammad Kashif Pasha and Hamid-ul-Rehman Nasir, Civil Judges/Research Officers of this Court.

2020 C L D 368

[Lahore (Multan Bench)]

Before Asim Hafeez, J

Messrs HUSSAIN MILS LIMITED through Authorized Representative---Petitioner

Versus

DIRECTOR GENERAL OF TRADE ORGANIZATION (DGTO) and 4 others---Respondents

Writ Petition No. 12696 of 2019, decided on 4th September, 2019.

Trade Organizations Rules, 2013---

----Rr. 3(2)(b), 11 & 15---Trade Organizations Act (II of 2013), Ss. 3 & 4---Trade Organization---Eligibility for membership and licence---Eligibility criteria for participation in electoral process of Trade Organization---Scope---Conditions prescribed for members of Trade Organizations in terms of R. 3(2)(b) are disjunctive and compliance of any one of them would make an entity eligible for membership or for voting in elections, as the case may be.

Shah Wali and 6 others v. Quetta Chamber of Commerce and Industry and 17 others 2012 CLD 802 rel.

Malik Muhammad Rafiq Rajwana assisted by Malik Muhammad Tariq Rajwana for Petitioner.

2020 C L D 415

[Lahore]

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

Messrs FIQAS (PVT.) LIMITED and others---Appellants

Versus

HABIB METROPOLITAN BANK LIMITED and others---Respondents

R.F.A. No. 897 of 2012, heard on 20th February, 2019.

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

----Ss. 10 & 9--- Suit for recovery of finance facility---Leave to defend---Non-fulfilment of requirements of S. 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Appellants challenged the validity of judgment and decree passed by Banking Court whereby suit for recovery filed by the Bank was decreed---Appellants appeared and filed application for leave to defend the suit with the stance that the Bank had illegally charged the mark-up in violation of terms and conditions of sanctioned advice---Validity---Appellants in their application for leave to defend had admitted the availing of finance facility from the Bank but the application for leave to defend was not as per S. 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Penal clause of S. 10(6), Financial Institutions (Recovery of Finances) Ordinance, 2001 came into play and the applicant's leave to defend was rejected when they failed to comply with the requirements of S. 10(4), Financial Institutions (Recovery of Finances) Ordinance, 2001---Bank had appended the agreement of financing, demand promissory note, letter of hypothecation, letter of guarantee and memorandum of deposit of title deeds with the suit and said documents were not rebutted by the applicants through any evidence, rather they admitted the availing of the finance facility---No document was produced by the applicants which showed any repayment of the amount due against the availed facility from the Bank---Banking Court had rightly passed the impugned judgment and decree while invoking the jurisdiction as envisaged in penal clause of subsection (6) of S. 10, Financial Institutions (Recovery of Finances) Ordinance, 2001 and dismissed the application for leave to defend---Order accordingly.

Shahid Farooq Sheikh v. Allied Bank of Pakistan Limited through Manager 2005 CLD 1489; Messrs Sadia Industries and 3 others v. Messrs Soneri Bank Limited 2014 CLD 1458 and KASB Bank Limited v. Muhammad Ahmed Ansari 2014 CLD 1518 ref.

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

Iftikhar Ullah Malik for Appellants.

Malik Muhammad Umar Awan for Respondent No. 1.

Respondents Nos. 2 and 3 proceeded against ex parte vide Order dated 2.10.2018.

2020 C L D 430

[Lahore (Multan Bench)]

Before Asim Hafeez, J

Messrs PAKARAB FERTILIZERS LIMITED through Duly Authorized Representative---Petitioner

Versus

DIRECTOR GENERAL OF TRADE ORGANIZATION (DGTO) and 4 others---Respondents

Writ Petition No. 12695 of 2019, decided on 4th September, 2019.

Trade Organizations Act (II of 2013)---

----Ss. 14 & 13---Trade Organizations Rules, 2013, Rr. 18, 13, 15 & 11---Powers and functions of the Regulator---Election procedure of a trade organization---Eligibility to vote---Petitioner impugned order of Regulator of respondent trade organization, passed under R. 18(7) of the Trade Organizations Rules, 2013, whereby petitioner was declared ineligible to vote in scheduled elections---Validity---Perusal of record and impugned order revealed that question of eligibility of petitioner to vote was not correctly examined in light of the eligibility criteria prescribed under the law---Determination carried out by Regulator of the respondent trade organization, qua petitioner's eligibility to vote, was erroneous and defective and could not be sustained---High Court set aside impugned order and remanded matter to Regulator with direction to determine the question of petitioner's eligibility in accordance with law and after providing opportunity of hearing to the parties--- Constitutional petition was allowed, accordingly.

Shah Wali and 6 others v. Quetta Chamber of Commerce and Industry and 17 others 2012 CLD 802 rel.

Malik Muhammad Rafiq Rajwana assisted by Malik Muhammad Tariq Rajwana for Petitioner.

2020 C L D 492

[Lahore]

Before Ch. Muhammad Masood Jahangir, J

ZULFIQAR ALI and others---Appellants

Versus

LIAQAT ALI and others---Respondents

E.F.A. No.117859 of 2017, decided on 22nd May, 2019.

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

----S. 128---Civil Procedure Code (V of 1908), S. 145---Surety's liability---Scope---Enforcement of liability of surety---Decree-holder had instituted recovery suit on the basis of cheque---Judgment-debtor was granted leave to defend the suit subject to furnishing surety bonds---Sureties had jointly stood surety and ultimately the suit was decreed---Executing court vide impugned order proceeded to initiate proceedings for the satisfaction of decree against the sureties, which was contested on the grounds that their liabilities stood absolved after the death of the judgment-debtor; that unless the principal debtor was proceeded against in the first instance, the recovery proceedings against sureties were not warranted and that they were not party to the original lis, as such decree was not executable against them---Validity---Sureties had bounded themselves and subsequently it was not open for them to wriggle out of their liability---Prior to discharge of their liability, sureties had no right to dictate terms to the creditor and ask him to pursue his remedy against the principal debtor in the first instance---Section 145, C.P.C. clarified that surety, for the purposes of appeal, would be deemed to be a party to the proceedings---Mere fact that the principal had died did not absolve the surety from performing his contract---Executing court was justified to proceed with the measures for satisfaction of the decree against the sureties---Appeal of sureties having no merit and force, was dismissed.

Mirza Anwar Ahmad v. Habib Bank Ltd., Faisalabad and others 1989 CLC 2441; Muhammad Bashir through Legal Heir v. Zarina Bibi and others PLD 2014 Lah. 429; Khan Muhammad Ishaq Khan v. The Azad Sharma Transport Co. Ltd. and others PLD 1953 Lah. 22 and Mrs. Muhammad Shafi through Agent v. Sultan Ahmed 2000 CLC 85 ref.

Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2006 CLD 687; Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72 and Habib Bank Limited v. Malik Atta Muhammad and 4 others 2000 CLC 451 rel.

Maula Dad v. Wadhawa Singh and others AIR 1924 Lah. 428 fol.

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

----S. 128---Surety's liability---Scope---Surety under the law has no right to restrain an action against him rather having stood guarantor, he substitutes himself for his principal---Contract of guarantee binds the surety in a co-extensive manner.

Mirza Anwar Ahmad v. Habib Bank Ltd. Faisalabad and others 1989 CLC 2441 and Muhammad Bashir through Legal Heir v. Zarina Bibi and others PLD 2014 Lah. 429 ref.

Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2006 CLD 687 and Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72 rel.

Ch. Muhammad Rafiq Warraich for Appellants.

2020 C L D 518

[Lahore (Multan Bench)]

Before Ch. Muhammad Iqbal, J

DUBAI ISLAMIC BANK PAKISTAN and others---Petitioners

Versus

Mst. SAIMA YASIN and others---Respondents

Civil Revision No. 55-D of 2020, decided on 16th January, 2020.

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

----S. 42---Constitution of Pakistan, Art. 24---Suit for declaration---Joint-Bank account---Death of one party to a joint Bank account---Mandate/authority of "Either or Survivor"---Unilateral withdrawal of funds by one joint-account holder after death of second joint-account holder---Constitutional protection of property rights---Islamic Law of inheritance---Scope---Plaintiffs sought declaration to the effect that unilateral withdrawal of funds from joint-account, where deceased account-holder was predecessor in interest of the plaintiffs, was illegal as the plaintiffs were entitled to half of said funds as their inheritance---Contention of defendant Bank, inter alia, was that as per its SOPs (Standard Operating Procedure), a joint account, with mandate/authority of "Either or Survivor" allowed defendant Bank to disburse funds in an account to surviving account-holder---Validity---Mere existence of printed stipulation in account opening agreement/form that a joint account bore characteristic of "Either and Survivor" giving authority to the Bank to disburse available amount to survivor joint account holder, had no sanctity in eyes of law and it was mandatory for Bank to prove said nature of an account---Joint-account holder was debarred to withdraw any amount from such account after death of other joint-account holder without adopting due process of law---With death of an account holder of joint-account, any authorization given by a deceased stood automatically revoked and even a validly authorized person was denuded of such power after death of the principal as all assets of deceased by operation of law stood vested in ownership of legal heirs---Bank or joint account-holder were not empowered to unilaterally operate said account or withdraw any amount until and unless as per law a declaration of the rendition of account was obtained, or succession certificate, letter of administration or probate was issued---Such modus operandi visualized in mandate of "Either or Survivor" account was against fundamental principles of law of power of attorney as well as Islamic Law of inheritance and against Art. 24 of the Constitution---High Court observed that SOP of "Either or Survivor" allowing unilateral withdrawal of the amount of deceased was ultra vires the applicable laws---Suit was rightly decreed by courts below---Revision was dismissed, in circumstances.

(b) Islamic law---

----Inheritance---After death of a Muslim, all moveable or immovable assets/legacy lefty by deceased automatically devolved upon legal heirs by operation of law and rest of the proceedings were mere formalities.

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

----S. 115--- Revision--- Concurrent findings of fact---Concurrent findings of facts did not call for interference by a Court in exercise of jurisdiction of revision under S. 115, C.P.C.

Muhammad Feroze and others v. Muhammad Jamaat Ali 2006 SCMR 1304 rel.

2020 C L D 541

[Lahore]

Before Jawad Hassan, J

PGP CONSORTIUM LTD.---Petitioner

Versus

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

W.P. No. 61480 of 2019, decided on 4th December, 2019.

Companies Act (XIX of 2017)---

----S.448---National Accountability Ordinance (XVIII of 1999), S. 23---Transfer of property void---Registration of charges---Scope---Petitioner sought registration of charge on its assets but Securities and Exchange Commission informed that its request was placed on hold due to caution marked on its assets by the National Accountability Bureau (NAB) under S. 23 of National Accountability Ordinance, 1999---National Accountability Bureau, upon being summoned, responded that it had reservation regarding alienation of shares of only one shareholder of the petitioner who was an accused in an inquiry being conducted by NAB---Petitioner unconditionally guaranteed and undertook not to transfer/alienate any of the shares of accused to third party without prior approval of NAB and showed its willingness in depositing an amount in the court equal to the shares of the accused---High Court, while disposing of the constitutional petition, directed the petitioner to deposit said amount and directed the Securities and Exchange Commission to do what it was required by law to do and register the charge.

Muhammad Azhar Siddiqui, Barrister, M.N. Beg, Mian Shabir, Mian Ali Azhar and Miss Aqsa Jabeen for Petitioner.

Muhammad Wasiq Malik, Senior Prosecutor NAB with Malik Uzair, Assistant Director NAB, Rawalpindi, Barrister Umair Khan Niazi, Additional Advocate General and Ms. Sadia Malik, Assistant Attorney General.

2020 C L D 562

[Lahore]

Before Shahid Karim, J

SERVICE INDUSTRIES LIMITED through Chief Financial Officer---Petitioner

Versus

GOVERNMENT OF PAKISTAN through Secretary and others---Respondents

W.P. No. 54187 of 2019, heard on 3rd March, 2020.

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

----S. 3---Drawback of Local Taxes and Levies Order, 2015 ('the 2015 Order') [introduced by Government of Pakistan through SRO No.415(I)/2015 dated 15.05.2015], Cls. 5(iii) & 5(vii)---Duty drawback, claim of---Whether claim time barred---Irrationality of State Bank of Pakistan (SBP) and Government in denying claim---Held, that State Bank of Pakistan (SBP) itself did not follow the timeframes given in the Drawback of Local Taxes and Levies Order, 2015 (2015 Order) regarding claim of petitioner---Petitioner made its first application for duty drawback claim within time in terms of the 2015 Order; thereafter, SBP took eight months (as opposed to the 30 days provided in the 2015 Order) to raise an objection with regard to the claim and to point out discrepancies---Service promptly replied to the letter of SBP and the discrepancies were rectified---Once again SBP slept over the case and wrote back on a date which too was beyond the prescribed thirty days--- At all times therefore SBP did not feel compelled in following the time frames prescribed by the 2015 Order and in order to cover up its negligence had conveniently shifted the blame to the petitioner to deny its claim---State Bank of Pakistan (SBP) did not feel itself bound by the mandate of timeframes prescribed in the Order 2015 whereas chose to enforce the time limits in respect of petitioner---Such approach was inherently egregious and harmful and led to arbitrary and uncontrolled discretion---Petitioner had not been in breach of its obligations under the 2015 Order in submitting the rectification application on time, therefore, it was entitled to the claim of duty drawback.

In terms of clause 5(vii) of the Drawback of Local Taxes and Levies Order, 2015 ('the 2015 Order'), the applications for duty drawback which contained discrepancies were to be returned by State Bank of Pakistan (SBP) to the authorized banks within thirty days from date of submission of claims. Thereafter it was incumbent upon the authorized bank, after rectification of discrepancies, to resubmit claims within twenty days. In the present case the rule regarding the period of thirty days for removing discrepancies and of twenty days of submission of the application after rectification had not been adhered to by SBP itself so as to lay the foundation for rejection of the claim made by petitioner-company. Certainly, SBP or Government of Pakistan could not say that a part of the notification which imposed an obligation on petitioner as an exporter was to be followed in letter and spirit and the other may be ignored at the whim and choice of SBP. This would make it a case of invidious discrimination liable to result in gross injustice simply because Government of Pakistan and SBP, as dominant players, choose to bend the rules to suit their interests, and correlatively refused to extend the same concession to the petitioner as well.

Case of petitioner was not a case of time barred claim but on the other hand it adhered to the period of twenty days while resubmitting the case after rectifying the discrepancies through its nominated bank. It was in fact SBP which did not follow the prescribed period of thirty days to return the application of petitioner allegedly containing discrepancies.

State Bank of Pakistan (SBP) might have argued a time barred claim of petitioner, had the SBP itself followed the timeline given in the 2015 Order. Doubtless, petitioner made its first application for the claim within time. Thereafter, SBP took eight months to raise an objection with regard to the claim and to point out discrepancies. Service promptly replied to the letter of SBP and the discrepancies were rectified. Once again SBP slept over the case and wrote back on a date which too was beyond the prescribed thirty days. At all times therefore SBP did not feel compelled in following the time prescribed by the 2015 Order and in order to cover up its negligence had conveniently shifted the blame to the petitioner to deny the claim.

Conditions mentioned in the 2015 Order applied respectively to SBP as well as petitioner as an exporter and by its terms did not make a distinction on the relaxation of any particular term of the notification with regard to one or more of the parties. State Bank of Pakistan (SBP) was a government instrumentality and was in a dominant position in the scheme of things. However, neither the law nor the Constitution entitled Government of Pakistan or SBP to use their dominating bargaining power to deny a claim to petitioner while throwing to the winds its own obligations under that notification. It seemed clear that SBP did not feel itself bound by the mandate of thirty days prescribed in the Order 2015 whereas chose to enforce the time limit of twenty days in respect of petitioner. Such approach was inherently egregious and harmful and led to arbitrary and uncontrolled discretion. If allowed to prevail, this approach would result in a bureaucratic stampede of the claims of exporters under the 2015 Order.

Ghaidan v. Godin - Mendoza [2004] UKHL 30; M. Bell, Judicial enforcement of the Duties on Public Authorities to Promote Equality, [2010] P.L. 672; Hewitt v UK (1992) 14 E.H.R.R 657 and R. (on the application of S) v Secretary of State for the Home Department [2006] EWCA Civ 1157 rel.

Conduct of SBP and Government of Pakistan, too was not foreseeable by the petitioner and the open-ended approach of SBP led petitioner to believe that the timelines of the respective acts were no more valid in view of SBP's discretion to depart from it. Thus if the 2015 Order cast a duty on SBP to act within thirty days which was flouted by it capriciously, it could not be said that petitioner must suffer for a purported non-compliance of a few days. The 2015 Order, by its contents, required its enforcement on the basis of substantive equality.

Petitioner resubmitted the application the first time within the time limit of twenty day. It was also done within time the second time. On the third resubmission, SBP refused to process on the plea of being time-barred. The basis of SBP was null and of no effect. Petitioner had not been in breach of its obligations under the 2015 Order in submitting the rectification application on time. It was therefore entitled to the claim of duty drawback made through the form submitted. Constitutional petition was allowed and SBP and Government were directed to process the case of petitioner and to reimburse the claim of duty drawback within a period of one month. [p. 574] K

(b) Notification---

----Statutory notification, terms of---Uniform application---Terms of a notification had to be applied evenly and to all parties to that notification on whom obligations had been cast---Any act which infringed equality and perpetrated unequal treatment in its operation was unreasonable.

(c) Public policy---

----Formal equality--- Consistent and equal enforcement of law---Scope---Formal equality required officials to apply or enforce the law consistently and even-handedly, without bias, as this was fundamental to the notion of the rule of law---Notions of equality and public policy required equality of treatment as between a person (or citizen) and the Government so that the power may not be exercised with unfair discrimination.

A.V. Dicey, The Law of the Constitution, 10th ed. (1959), p.193 and Edwards v SOGAT [1971] Ch. 354 ref.

Mansoor Usman Awan for Petitioner.

Azmat H. Lodhi, Assistant Attorney General for Respondents.

2020 C L D 578

[Lahore (Multan Bench)]

Before Jawad Hassan, J

NAZAR HUSSAIN and others---Petitioners

Versus

NASIR ALI and another---Respondents

Civil Original No. 1 of 2012 and C.M. No. 3292 of 2019, heard on 24th February, 2020.

Companies Ordinance (XLVII of 1984)---

----S. 152---Companies Act (XIX of 2017), S. 126---Limitation Act (IX of 1908), Art. 181---Power of Court to rectify register---Limitation period for filing of an application under S. 152 of Companies Ordinance, 1984---Limitation by implication---Scope---Question before High Court was whether any provision of the Limitation Act, 1908 was applicable for filing of an application under S. 152 of the Companies Ordinance, 1984 (section 126 of Companies Act, 2017)---Held, Art. 181 of Limitation Act, 1908 applied to all applications filed under any statute and was not confined in any manner to merely applications filed under C.P.C.---Application filed under S. 152 of Companies Ordinance, 1984 would come within the ambit of Art. 181 of the Limitation Act, 1908---Application under S. 152 of the Companies Ordinance, 1984 (section 126 of the Companies Act, 2017), therefore, had to be filed within period of three years from the time when right to apply accrued.

Hafeez Ahmad and others v. Civil Judge, Lahore and others PLD 2012 SC 400; Province of Punjab through Collector and others v. Muhammad Farooq and others PLD 2010 SC 582; Mst. Kaneezan Bibi and others v. Muhammad Ramzan and others 2005 SCMR 1534; Riaz Hussain and others v. Muhammad Akbar and others 2003 SCMR 181; Chairman, District Evacuee Trust Committee, Rawalpindi v. Sharif Ahmad and others PLD 1991 SC 246; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 CLD 393; Mrs. Saeeda Mahmood and another v. Anas Munir (Pvt.) Ltd. through Chief Executive, and 6 others 2007 CLD 637 and Syed Akbar Ali v. Mamun Ali Bumasuk (Pvt.) Ltd. and others 2006 CLD 960 distinguished.

National Bank of Pakistan v. Balochistan Wheels Limited and another 2004 CLD 1100; Mehran Ginning Industries and 2 others v. Sajid Shafique and 12 others 2017 CLD 1165; Abdul Kareem Khan v. Messrs Haroon-ur-Rasheed Textile Mills (Pvt.) Ltd. through Chief Executive and 13 others 2015 CLD 719 and Messrs United Foam Industries (Pvt.) Ltd. through Chairman and another v. Messrs Joy Foam (Pvt.) Ltd. through Chief Executive and 6 others 2016 CLD 2325 ref.

Syed Akbar Ali v. Mamun Ali Bumasuk (Pvt.) LTD. and others 2006 CLD 960; Talib Hussain v. Babu Muhammad Shafi and 12 others PLD 1987 Lah. 1; Mrs. Saeeda Mahmood and another v. Anas Munir (Pvt.) Ltd. through Chief Executive, and 6 others 2007 CLD 637; Mian Waheed-ud-Din and others v. Messrs Royal Rice Millers (Pvt.) Ltd. 2015 CLD 1978; M. Imam-ud-Din Janjua v. The Thal Development Authority through the Chairman, T.D.A., Jauharabad PLD 1972 SC 123; Sha Mulchand and Co., Ltd. v. Jawahar Mills Ltd. Salem AIR 1983 SC 98; Anil Gupta v. Delhi Cloth and General Mills Co., Ltd. 1983 (54) Companies Ordinance Cases 301; Syed Mehmood Akhtar Naqvi v. Federation of Pakistan through Secretary Law and others PLD 2012 SC 1089; Messrs Khawaja Auto Cars Limited v. Muhammad Yousuf and others 1991 SCMR 2223; Executive Engineer, Central Civil Division Pak. P.W.D. Quetta v. Abdul Aziz and others 1996 SCMR 610; S. Sajjad Haider v. Government of West Pakistan and another PLD 1967 Lah. 838; Excellent Legal Words and Phrases Volume II by Mian Muhammad Muhibullah Kakakhel, Page No.3879; Commissioner Inland Revenue (Zone-I) LTU, Karachi v. Messrs Linde Pak Ltd. Karachi 2020 SCMR 333 and Messrs United Foam Industries (Pvt.) Ltd. through Chairman and another v. Messrs Joy Foam (Pvt.) Ltd. through Chief Executive and 6 others 2016 CLD 2325 rel.

Zafar Iqbal Khan Baloach for Petitioners.

Tanveer Ahmad and Ijaz Ahmad Toor for Respondents Nos. 1 to 3.

Muhammad Suleman Bhatti assisted by Jawad Younas and Saqib Aziz for Respondent No. 4.

Ahsan Ramzan for SECP with Malik Muhammad Tariq Iqbal, Executive Officer for Respondents.

2020 C L D 604

[Lahore]

Before Shahid Karim, J

U.B. CHEMICAL INDUSTRIES COMPANY LIMITED---Petitioner

Versus

AHMAD NAWAZ and others---Respondents

Civil Original No. 1161 of 2015, decided on 10th December, 2018.

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

----Ss. 14 & 80(1)---Trade mark registration, validity of---Trade mark identical with and similar to an earlier trade mark---Resemblance of words and figurative elements used in both trademarks---Not only the visual appearance of the two trade marks were similar but they also related to the same products and thus an average mind of ordinary intelligence would consider the goods of the respondent as that of the applicant---Registration of trade mark in the name of respondent was likely to deceive or confuse the customers---Trade mark of respondent was declared to be invalid and resultantly struck off the Register of Trade Marks.

Trademark of the applicant carried the word 'Arche' and a figurative element of a peculiar sign made by the hand above the word 'Arche'. Below the word 'Arche' mentioned in English language there was translation of the word in Thai and Siamese languages, which also constituted part of the trademark, which was registered by the applicant on 11-05-1973. Trademark of the respondent registered much later on 03-03-2008 resembled in material particulars with the trade mark of the applicant not only in the word 'Arche' but also in respect of the figurative elements. Prima facie, it seemed that the right of the applicant as claimed by registration of the features of his trade mark i.e. colour, scheme, design and get up and also on account of the prior use of the trade mark was being infringed by registration of the trade mark in the name of the respondent. Two marks in question resembled each other to such an extent that they were likely to deceive the mind of an unwary customer who would have to rely upon the leading characteristics of the mark of the applicant which characteristics were also comprised in and were part of the mark registered in the name of the respondent.

In the present case not only the visual appearance of the two trade marks were similar but they also related to the same products and thus an average mind of ordinary intelligence would consider the goods of the respondent as that of the applicant. Registration of trade mark in the name of respondent was likely to deceive or confuse the customers. Also the applicant was the exclusive user of the trade mark not only in Pakistan but equally in other countries and had acquired the proprietorship of the mark and laid a rightful claim to the intellectual property of the said mark.

Respondent also argued that claim of applicant should be discarded as the pronunciation of the word 'Arche' was 'Archoo' in Thai language. Such argument had no merit as the challenge to a trade mark did not depend upon the pronunciation of a word in a given language but upon other factors.

Trade mark registration of the respondent was declared invalid under the provisions of section 80(1) read with sections 14 and 14(4) of the Trade Marks Ordinance, 2001 and was struck off the Register of Trade Marks. Application was allowed accordingly.

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

----S. 2(xxiv)--- Mark/label--- Essential features, infringement of---Scope---When one feature of a label consisting of a combination of a mark was adopted or copied, infringement of copying of that feature took place which ought to be rectified---When one or more essential features of a mark or a label was infringed, infringement as a whole took place.

Cecil De Cordova and others v. Vick Chemical Co. PLD 1951 Privy Council 108; Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd and another PLD 1984 SC 8; Messrs Mehran Ghee Mills (Pvt.) Ltd. and others v. Messrs Chilton Ghee Mill (Pvt.) Ltd. and others 2001 SCMR 967 and Messrs Hilal Confectionary (Pvt.) Ltd. v. Messrs Naveed Enterprises and another 2018 CLD 1 ref.

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

----Ss. 80(3)(a) & 80(3)(b)---Trade mark, infringement of---Scope and principles---First step in an infringement action was for the similarities and dissimilarities to be considered between registered trade mark and offending trade mark but the decision of the court did not depend upon the number of similarities and dissimilarities alone which was only one of the factors in reaching the ultimate decision---Real question to decide in such cases was to see as to how a purchaser who must be looked upon as an average mind of ordinary intelligence would look to a particular trade mark and what impression he would form by looking at the trade mark---At the heart of such inquiry was that the offending mark was likely to deceive a person and the guiding rule was that the person would be deceived when he saw one trade mark in the absence of another and thus to the mind of an incautious or unwary purchaser the resemblance was likely to cause utter confusion.

Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd and another PLD 1984 SC 8 and Messrs Burney's Industrial and Commercial Co. Ltd. v. Messrs Rehman Match Works PLD 1983 Kar. 357 ref.

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

----S. 2(xxiv)---Mark/label, infringement of---Scope---Marks were remembered by general impressions or by some significant detail rather than by any photographic recollect of the whole---Moreover, variations in details might well be supposed by customers to have been made by the owners of the trade mark they were already acquainted with for reasons of their own---While determining whether a mark bore resemblance to another mark was likely to deceive, the underlying rule was to determine by considering what was the leading characteristics of each of these marks.

Asma Hamid, Ch. Faisal Nawaz, Noor Bano and Syed Qaswar Gardezi for Petitioner.

A.H. Khalid Butt for Respondent No.1.

Sh. Izhar-ul-Haq for FBR.

Tahir Mahmood Ahmad Khokhar, D.A.G. with Tajammal Haider, Assistant Registrar of Trade Mark.

2020 C L D 619

[Lahore]

Before Abid Aziz Sheikh, J

SIEMENS PAK ENGINEERING---Petitioner

Versus

JAPAN POWER GENERATION LIMITED and others---Respondents

C.O. No. 88286 of 2017, decided on 25th February, 2020.

(a) Provincial Insolvency Act (V of 1920)---

----S. 47---Secured creditors (financial institutions) not realizing or relinquishing its security---Option to remain outside winding up---Financial institutions who were secured creditors had option to remain outside the winding up and proceed entirely on the basis of their security [section 47 of the Provincial Insolvency Act, 1920 (Insolvency Act)]--- Where secured creditor had neither realized nor relinquished his security and held the security intact for the satisfaction of his debt, he was required to state the particulars of the security and the value at which he assessed it at the time of distribution of insolvent property and creditors would be entitled to receive dividend in respect of balance due to him after deducting the value of security so assessed.

United Bank Limited v. PICIC and others 1992 SCMR 1731 ref.

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

----S. 390(3)(b)---Provincial Insolvency Act (V of 1920), S. 47---Transfer of Property Act (IV of 1882), S. 58---Winding up---Preferential payments---Assets under floating charge/hypothecation---Secured creditors (financial institutions) opting to remain outside winding up---Question as to whether option of remaining outside the winding up and realizing security would be available to the secured creditors in respect of assets under floating charge of hypothecation.

Secured creditor, who was a mortgagee, remained unaffected by the fact that company had wound up and said secured creditor had the option to remain outside the winding up and may proceed entirely on the basis of his said mortgage security. The mortgage created by company in favour of the financial institutions (secured creditors) constituted a transfer of interest in company's property and what was left with the company was merely an equity of redemption, therefore, unsecured creditors and persons claiming preferential payment under section 390 of the Act could at best lay hand on the equity of redemption for whatever its worth. However, it was not possible for the general and unsecured creditors of the company including claimants under section 390 of the Act to assert a claim on the mortgage property or on the proceeds realized from the sale thereof. This legal position was also supported by express provision of section 58 of the Transfer of Property Act, 1882.

However, the position would be different when creditor was claiming a hypothecation/floating charge on the assets of the company. In contrast to mortgage/fixed charge, hypothecation/ floating charge left the charger free to deal with the charge property in the ordinary course of business without reference to the chargee. A floating charge thus had very practical advantage that it allowed a company to give security over assets, which were continually turned over or used up and replaced as a matter of routine trading. The company could thus raise money on secured loans without removing any of its property from routine business activity and it remained free to continue to deal with the assets for its own benefit in the ordinary course of business.

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

----S. 390(3)(b)---Provincial Insolvency Act (V of 1920), S. 47---Winding up---Preferential payments---Secured creditors (financial institutions) opting to remain outside winding up---Liquidation expense and payment to unsecured creditors---Scope---Fixed charge holder's assets were not subject to claims from liquidator, to fund liquidation expense or payment to preferential or unsecured creditors mentioned in S. 390 of the Companies Act, 2017 however, the amounts realized from floating charge assets could be used for liquidation expense and payment to unsecured creditors as per their priority under S. 390 of the Act---Winding up expense had even higher priority in payments, compared to all other preferential payments, including payment to general creditors under S. 390(3)(b) of the Act, therefore, the funds realized from the assets under floating charge could be utilized for payment towards winding up expense beside payment to general creditors if assets were insufficient.

Barleycorn Enterprises Ltd. Re 1970 CH 465 and J.D. Brian Limited [2011] IEHC 113 ref.

(d) Companies (Court) Rules, 1997---

----R. 257---Companies Act (XIX of 2017), S. 390(3)(b)---Winding up---Preferential payments---Secured creditors (financial institutions) opting to remain outside winding up and realizing charged assets---Requirement to fund winding up expense to maintain, manage and secure the charged assets by the Official Liquidator---Where the winding up expense were utilized to preserve the mortgaged assets which were to be realized by the secured creditors outside the winding up, then secured creditors (financial institutions) were required to bear the winding up expense to manage and preserve those assets till same were realized by the secured creditors as they would be the ultimate beneficiary of such assets exclusively---Secured creditors (financial institutions) may remain outside the winding up and proceed entirely on the basis of their mortgage property, however, they would have to reimburse all the expenses incurred including remuneration of the Official Liquidator, for the management and preservation of the charged properties in favour of secured creditors---However, for future, they may appoint their own staff and employees to preserve and safeguard their mortgage securities from their account at their own risk to avoid winding up expense incurred by Official Liquidator.

New Swadeshi Mills of Ahmedabad Ltd. and Manjushri Textiles v. Unknown 1985 58 Comp Cas 86 Guj; Punjab United Forge Limited v. Punjab Financial Corporation 1993 76 Comp Cas 660 P H, (1993) 103 PLR 75 and Bier v. Chairman and M.D. Adivasi Paper 1999 (3) ALD 655 ref.

Barrister Hassan Nawaz Sheikh, for Official Liquidator (Amar Sanaullah, Advocate).

Saqib Jillani for the Petitioner.

Majid Jehangir and Faisal Islam for Respondent No.5.

2020 C L D 638

[Lahore]

Before Mamoon Rashid Sheikh, C.J., Shahid Waheed, Muhammad Ameer Bhatti, Asim Hafeez and Abid Aziz Sheikh, JJ

MUHAMMAD SHOAIB ARSHAD and another---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Law, Justice Human Rights and Parliamentary Affairs and 4 others---Respondents

Writ Petition No. 33872 of 2019, decided on 10th March, 2020.

Per Asim Hafeez, J: Mamoon Rashid Shiekh, CJ, Shahid Waheed and Muhammad Ameer Bhatti, JJ agreeing "that section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (as amended) was intra vires the Ordinance and the Constitution"; Abid Aziz Shiekh, J. also agreeing that "section 15 of the Ordinance (as amended) was intra vires the Ordinance but subjecting its invocation to a determination by court of customer's default under section 9".

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

----S. 15 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016)]---Financial Institutions (Recovery of Finances) Rules, 2018, R. 3(b)---Civil Procedure Code (V of 1908), O.XXI, Rr. 66 & 90---Constitution of Pakistan, Arts. 10-A & 25---Sale/auction of mortgaged property---Procedure---Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016], vires of---Section 15 of the Ordinance conferred power of sale upon the failure of the mortgagor to pay mortgage money when demanded, but also imposed conditions to be met before power of sale was exercised---Adherence to issuance of notices and conditions prescribed for the mode, conduct and method for sale of the mortgaged properties, was strictly required before customer's/ mortgagor's right to redeem was lost/extinguished and unassailable title in the property was conveyed unto the purchaser---Section 15 of the Ordinance was intra-vires the Constitution.

Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016] equipped the mortgagors with adequate rights and remedies qua the conduct of auction sales of the mortgaged properties, both prior to the conduct of sale and, in particular, after the fall of the hammer. Fundamental right of redemption was acknowledged and secured through provisioning of corresponding remedies to the mortgagor, which inter alia included remedy to raise disputes regarding creation of mortgage and outstanding mortgage money, demanded through statutory notices. The legislature, through section 15 of the Ordinance, had conspicuously provided remedies, before and after the conduct of auction sales. The mortgagor under clauses (a) and (c) of subsection (13) of section 15 may object to the creation of mortgage and quantum of the outstanding mortgage money claimed - sufficiency of the cause to be determined by the Banking Court. In terms of clause (d) of subsection (13) of section 15 the mortgagor could exercise right of redemption of property, subject to the payment of outstanding mortgage money. Banking Courts possessed exclusive jurisdiction in terms of subsection (12) of section 15 to entertain and adjudicate upon the disputes raised. The remedies provided were subjected to the conditions prescribed.

National Bank of Pakistan and 117 others v. SAF Textiles Mills Limited PLD 2014 SC 283 ref.

One of the key requirements for the conduct of auction sale related to the determination and fixation of reserve price before the conduct of auction. Section 15 of the Ordinance catered for the requirement of evaluation of the mortgaged property and provided mechanism of its determination under clause (a) of subsection (4) of section 15 and Rule 3(b) of the Financial Institutions (Recovery of Finances) Rules, 2018 ('the 2018 Rules"). The mortgagor could always object to the evaluation determined for the purposes of fixing reserve price by resorting to remedy under clause (b) of subsection (13) of section 15, and establish fraud and substantial injury to the satisfaction of the Banking Court - a remedy similar in the nature of remedies under subsection (7) of section 19 of Ordinance, and under Order XXI, Rule 66 of C.P.C.

It was important to examine the remedies, provided to the mortgagors under section 15 of the Ordinance, in particular, to object to the conduct of auction sale - after the fall of the hammer. The right of the mortgagor to redeem the property upon payment of outstanding mortgage money was guaranteed and so was the right to seek setting-aside of the auction sale upon establishing element of fraud, resulting in substantial injury, not capable of being compensated by damages. The right to object was preserved by providing a remedy under subsections (14) and (15) of section 15 - remedy in the nature of post-sale objections, having similitude to the remedy under Order XXI, Rule 90 of C.P.C. The remedies provided under subsections (13), (14) and (15) of section 15 were exclusive to the mortgage action and shall be governed subject to the requirements and conditions prescribed under the said section.

National Bank of Pakistan and 117 others v. SAF Textiles Mills Limited PLD 2014 SC 283 ref.

A peculiar and distinctive feature of transaction of mortgage was the right of redemption of mortgaged property, which right was neither available nor could be claimed perpetually - not available for all times to come or infinite. The right of redemption was extinguished or lost, either through a contractual arrangement - executed between the mortgagor and mortgagee subsequent to the mortgage - or upon the sale of the mortgaged property by the mortgagee - financial institution in the present case - in exercise of statutory power conferred, as provided through section 15 of the Ordinance. Section 15 had not affected, prejudiced or taken away the right of the mortgagor to redeem mortgaged property - which rights were available and could be exercised by the mortgagor, in terms of the remedies provided under the law. The law provided the circumstances/situations when right of redemption was lost or would give way to the rights of the prospective purchaser. In this context, section 15 provided two kinds of rights and corresponding remedies; right of redemption of mortgaged property and right to object to the mode, conduct and method of sale conducted - after the fall of the hammer. The legislature had wisely segregated said rights and provided specific remedies for the exercise of each of such right, and indicated the time frame, within which each of above-noted right was exercisable.

The elemental question was whether transaction of mortgage and mortgagor(s) were treated as distinct category of transaction(s) and class of persons for the purposes of enforcement of section 15. Section 15 of the Ordinance only envisaged action against the mortgagor(s) - a category of peculiar transaction and class of person(s) - those who had executed a document, either a mortgage deed or Memorandum of Deposit of Title Deed, and secured payment of the money against specified immovable property. A person who had not mortgaged property (non-mortgagor) was not amenable to the method of recovery provided under section 15. The mortgage transaction possessed a separate, independent and distinctive character, when examined in the context of contractual promises/commitments made by the persons, classified as mortgagors.

Waris Meah v. (1) The State (2) The State Bank of Pakistan and Noor Muhammad v. (1) The State (2) The State Bank of Pakistan PLD 1957 SC (Pak.) 157 and Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218 distinguished.

District Bar Association, Rawalpindi and others v. Federation of Pakistan and others PLD 2015 SC 401 ref.

Section 15 of the Ordinance was not capable of being applied or used in discriminatory manner. In the first place, there was no discretion extended to the financial institution, rather a right otherwise conveyed to the mortgagee in terms of the voluntarily negotiated bargain, had been re-affirmed through a statutory dispensation. The exercise of powers by the financial institution, as mortgagee, were well regulated, structured and accordingly circumscribed. Discretion extended to the financial institution in terms of section 15 was not capable of being employed in discriminatory manner. Mere provisioning of an additional remedy, without prejudice to other remedies available to the financial institution under subsection (16) of section 15 was not per se discriminatory. The remedy provided to mortgagee/financial institution, under section 15, was with reference to a particular transaction and/or a class of person(s), which transaction and class of person(s) were classified on the basis of clearly defined criteria, based on an intelligible differentia, having justifiable considerations and differences.

Ocean Industries Limited and (2) Raza Kazim v. Industrial Development Bank PLD 1966 SC 738 ref.

Notwithstanding self-proclaimed declaration of default of payment and issuance of statutory notices by the financial Institution/ mortgagee - subject to verification and determination of liability by the Chartered Accountant - under subsection (2) of section 15, still the jurisdiction to determine and decide all such disputes, arisen upon issuance of statutory notices, vested with the Banking Court. The mortgagor-cum-customer may always invoke the remedies provided under the Ordinance to challenge the validity of the notices and claim of outstanding mortgage money raised therein, subject to the requirements and conditions prescribed under section 15. No fundamental right would be infringed, or any prejudice caused to the mortgagor upon issuance of notices, merely upon "ipse dixit assertion or statement of default" when remedies were available to the mortgagor to question such declaration of default before publication of terms of sale. The self-proclaimed default by the mortgagee did not adversely affect the rights and remedies available to the mortgagor, which addressed the concern regarding compliance of Article 10-A of the Constitution. Remedies were available and could be invoked accordingly, whereupon the Banking Court may adjudicate upon, depending upon the nature of the claim. Section 15 had not narrowed down or curtailed the scope of remedies rather regulated them, which exercise of discretion by legislature was not unconstitutional.

Section 15 of the Ordinance [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016] had been competently enacted and was in accord with guaranteed fundamental rights. Section 15 of the Ordinance was intra-vires the Constitution.

Shahid Pervaiz v. Ejaz Ahmad and others 2017 SCMR 206; Contempt Proceedings Against Chief Secretary, Sindh and others 2013 SCMR 1752; Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596; Jehangir Mehmood Cheema v. Government of Pakistan, Ministry of Interior through Secretary and 2 others PLD 2015 Lah. 301; Muhammad Jamshed v. Election Appellate Tribunal and others 2018 CLC 1330; Messrs Summit Bank Limited through Manager v. Messrs Qasim and Co. through Muhammad Alam and another 2015 SCMR 1341; Agricultural Development Bank of Pakistan and others v. Abid Akhtar and others 2003 SCMR 1547; A & A Services through Proprietor v. Federation of Pakistan through Secretary Ministry of Finance and others 2014 CLD 809; Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others PLD 2016 SC 229; Abdul Jabbar Shahid and others v. National Bank of Pakistan and others PLD 2019 Lah. 76 and Muhammad Khalil v. Messrs Faisal M.B. Corporation and others 2019 SCMR 321 distinguished.

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

----Ss. 9 & 15 [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Sale/auction of mortgaged property---Remedy under Ss. 9 & 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act, 2016]---Scope---Mortgagor could avail remedies under S. 9 of the Ordinance read with the remedies under S. 15, depending upon the nature of the claim and relief sought---Remedies to be availed by the mortgagor were always and shall be regulated and governed under the conditions prescribed in S. 15, to which exclusive and non-obstante effect was extended under subsection (17) of S. 15---In case of any conflict whatsoever between any provision of the Ordinance, including S. 9 thereof, or any other applicable law and S. 15, it was S. 15, which shall always prevail.

Amtex Limited through Director v. Bankislami Pakistan Ltd. and 8 others 2016 CLD 2007 distinguished.

(c) Constitution of Pakistan---

----Art. 25(1)---Equality before law---Scope---Principle of equality before the law was a basic norm of every legal system, and a stepping stone to access the realm of fundamental rights---No distinction between the citizens / persons was permissible regarding dispensation of law and enforcement thereof, except through a classification/ identification of a particular category or class, formed on the basis of intelligible differentia - distinguishing the persons or things from other category of persons or things consciously missed out.

"Judicial Review of Public Actions" By Mr. Justice Fazal Karim (Second Edition) At Page 1333 (Volume 2); Government of Balochistan through Additional Chief Secretary v. Azizullah Memon and 16 others PLD 1993 SC 341 and Miss Shazia Batool v. Government of Balochistan and others 2007 SCMR 410 ref.

(d) Constitution of Pakistan---

----Arts. 25 & 199---Enactment, vires of---Plea of discriminatory dispensation---Enactment could not be declared unconstitutional on mere apprehension or allegation of discriminatory dispensation thereof.

Jibendra Kishore Achharyya Chowdhury and 58 others v. The Province of East Pakistan and Secretary, Finance and Revenue (Revenue) Department, Government of East Pakistan PLD 1957 SC 9; Lahore Development Authority through D.G. and others v. Mst. Imrana Tiwana and others 2015 SCMR 1739 and Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026 ref.

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

----Ss. 2(c) & 15 [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Sale/auction of mortgaged property--- Customer/mortgagor--- Concurrent use of expressions "customer" and "mortgagor" in subsection (2) of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act, 2016]---Meaning and connotation---For the purposes of invoking remedy under S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the term 'mortgagor', was and shall be treated as 'customer'.

In terms of section 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance'), the definition of 'customer' included a person to whom finance had been extended, i.e. benefactor and the person, who stood surety either through execution of personal guarantee or creation of mortgage charge. The expression mortgagor and mortgagee though not defined in the Ordinance and section 15 thereof would be interpreted in the light of the principle of literal rule of interpretation by giving the expressions plain meaning. Therefore, mortgagor was a surety-cum-customer, who had executed mortgage documents for creation of mortgage against immovable property for securing payment of mortgage money and against whom remedy under section 15 could be invoked provided conditions prescribed therein were met. The remedy provided to the financial Institution under section 15, in addition to other remedies, was with reference to the bargain/transaction negotiated by way of creation of mortgage charge on immovable property for securing the amount subject matter thereof. In these circumstances, irrespective of confusion qua nomenclature of the customer, either benefactor or surety, the remedy could be invoked if there was a transaction of mortgage executed and conditions provided were met. The mortgagor, therefore, for the purposes of section 15 was and shall be treated as customer.

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

----Ss. 2(c) & 15 [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Sale/auction of mortgaged property---Term 'customer'---Scope---Where benefactor of finance was one person and the surety, i.e. executant of mortgage documents, was another person---Whether remedy was to be availed under S. 9 or S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act, 2016]---Held, that in such circumstances if the finance extended was not secured through mortgage charge, the financial institution may invoke the remedy under S. 9 for the purposes of establishing default in the fulfilment of any obligation with regard to finance and remedy under S. 15 was non-existent---In case where finance extended to benefactor was secured through third party mortgage (surety), the financial institution may invoke remedy under S. 15 against said surety, being a customer by virtue of transaction of mortgage---Definition of the customer had to be interpreted and construed accordingly with reference to the subject and context---High Court observed that S. 15 of the Ordinance was not happily worded and had to be construed cautiously and harmoniously to protect the law.

Pakistan Telecommunication Authority (PTA) Islamabad through Chairman v. Pakistan Telecommunication Company Limited, Headquarters, G-8 Markaz, Islamabad 2016 SCMR 69 ref.

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

----Ss. 9 & 15(2) [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Sale/auction of mortgaged property--- Proceedings under S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---[Per Asim Hafeez, J (Majority view): Proceedings could be initiated against the customer under S. 15(2) of Ordinance, without default of the customer being judicially ascertained and determined under S. 9 of the Ordinance---[Per Abid Aziz Shiekh (Minority view): Section 15 of the Ordinance could only be invoked against "mortgagor" to recover mortgage money, if default in payment by "customer" was first determined and established by Court under S. 9 of the Ordinance].

[Per Asim Hafeez, J (Majority view): Expression "in case of default of payment by the customer" employed in subsection (2) of section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016] and the expression "where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance" in section 9 of Ordinance, 2001, were mutually exclusive, conveyed different connotations, applicable to distinguishable circumstances and catered for distinct transactions; one regarding determination of default in fulfilment of obligation with regard to documents relating to grant of finance and other in respect of documents securing repayment of mortgage money. The expression 'fulfilment of any obligation with regard to any finance' in section 9 was conspicuous by its absence in section 15, which distinction in said two sections/methods of recovery was meaningful and subject of intelligible differentia. Under section 15, claim was not with regard to finance but recovery of money secured through mortgage, which distinction was pivotal. The intention of the legislature while using the expression 'default in payment' in subsection (2) of section 15 in the context of customer merely manifested "ipse dixit assertion or statement of failure" by the mortgagee for the purposes of invoking remedy under section 15, which self-proclaimed failure did not require judicial determination, adjudication or pronouncement in terms of section 9 of the Ordinance at that stage. Subjecting the remedy provided to the mortgagee, with respect to distinctively designed and commercially tailored contractual arrangement inter-se mortgagor and mortgagee, to an adjudicatory mechanism provided under section 9 would sabotage legislative intent and defeat the purpose of section 15. Such a construction would render section 15 superfluous and redundant. [Per Abid Aziz Shiekh, J (Minority view): To trigger the provision of section 15 of the Ordinance, the determination of default of payment on part of the customer by a court under section 9 was a condition precedent. Default of customer could only be determined by the court. Section 9 of the Ordinance provided a procedure for filing of suit against the customer where he committed default in fulfillment of any obligation with regard to finance. Further under section 14 of the Ordinance, where suit was for the enforcement of immoveable property, the Court could pass an interim or final decree for foreclosure or sale of mortgaged property. Where in suit filed against customer, default was determined by Court under section 9 of the Ordinance and financial institution had not filed execution for the foreclosure and sale of mortgaged property in pursuant to decree issued under section 14 of the Ordinance, the said financial institution could invoke the provision of section 15 of the Ordinance. This interpretation of section 15 of the Ordinance would provide the due process with the intervention of Court for the "determination of liability" against the customer, before invoking the provision of section 15 of the Ordinance against mortgagor. Any other interpretation of section 15 would render the provision ultra vires of Article 10-A of the Constitution as there would be no due process in determination of the liability against customer before invoking section 15 of the Ordinance against the mortgagor. If such interpretation of section 15 of the Ordinance was not followed, the said provision would not only become harsh, unreasonable, unstructured but would also give arbitrary and unbridled discretion to the financial institutions to discriminate and adopt against certain customers, recovery process under section 15 directly without first determination of default under section 9 of the Ordinance and against other customers through execution of the decree passed under section 9 of the Ordinance. Further if financial institutions were allowed to invoke section 15 of the Ordinance without determination of default under section 9 of the Ordinance, then provisions of section 9 and most of its corresponding provisions in the Ordinance, shall become redundant].

Mian Ayaz Anwar and others v. State Bank of Pakistan and others 2019 CLD 375 distinguished.

(h) Interpretation of statutes---

----Special and general provisions---Special provisions controlled the general provisions.

Brig. Sher Ali Baz and another v. The Secretary Establishment Division and others PLD 1991 SC 143 and Neimat Ali Goraya and 7 others v. Jaffar Abbas, Inspector/Sergeant Traffic through S.P., Traffic, Lahore and others 1996 SCMR 826 ref.

(i) Vires of statutes---

----Statutes dealing with tax, financial and economic matters---Presumption regarding validity of statutes---Survey of case law from Pakistan and foreign jurisdictions highlighting the conventional jurisprudence with regard to the determination of constitutionality or otherwise of the statutes, particularly statutes dealing with tax, financial and economic matters.

Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan through Secretary, M/o Finance, Islamabad and 6 others PLD 1997 SC 582; State of M.P. v. Rakesh Kohli and another 2013 SCMR 34 and R. K. Karanjia v. Union of India AIR 1981 SC 2138 ref.

(j) Financial Institutions (Recovery of Finances) Rules, 2018---

----Rr. 3(a)(iii), 3(b) & 3(c)(iv)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 3(2), 9, 15 & 25 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016)]---Constitution of Pakistan, Art. 24---Financial Institutions (Recovery of Finances) Rules, 2018, vires of---[Per Asim Hafeez, J; (Majority view): Financial Institutions (Recovery of Finances) Rules, 2018 ('the 2018 Rules') [except Rule 3(c)(iv)], were intra-vires the Financial Institutions (Recovery of Finances) Ordinance, 2001 and the Constitution---However, R. 3(c)(iv) of the 2018 Rules, was unconstitutional and ultra-vires the Ordinance, and S. 15 thereof and was contrary to the spirit of public auctions and competitive bidding---Applying the principle of severability of statutes, R. 3(c)(iv) of the 2018 Rules, was severed and the operation and applicability of remaining 2018 Rules was preserved]---[Per Abid Aziz Shiekh, J; partially agreeing with Majority view: Rule 3(c)(iv) of the 2018 Rules, was unconstitutional and ultra-vires the Ordinance]---[Per Abid Aziz Shiekh, J (Minority view): Rule 3(a)(iii) of the 2018 Rules was also beyond the scope of the Ordinance, hence ultra vires the Ordinance and the Constitution.

Per Asim Hafeez, J (Majority view): There was no cavil that rule making power was assigned in terms of section 25 and section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016]. It was incorrect to argue that the framing of Financial Institutions (Recovery of Finances) Rules, 2018 ('the 2018 Rules') exceeded the scope and extent of the Ordinance, and section 15 thereof. The Federal Government had framed the 2018 Rules in exercise of powers under section 25 of the Ordinance, which inter alia included procedures for determination of liability [Rule 3(a)], valuation of property [(Rule 3(b)] and bidding process [Rule 3(c)]. The purpose and objectives of the 2018 Rules was, inter alia, provisioning of procedures for the mode, conduct and method of sale of mortgaged property, in addition to the conditions mentioned in subsection (4) of section 15. Perusal of procedural requirements introduced [by Financial Institutions (Recovery of Finances) (Amendment) Act, 2016] showed reinforcement of rights extended to the mortgagors under (amended) section 15, which procedural requirements in fact placed additional obligations/duties on the financial institutions, reason being to counterbalance the rights extended to the mortgagee, which was allowed to issue notices without the intervention of the court, at that point in time [despite provisioning of remedies to the mortgagor].

The conditions/procedural requirements of seeking determination of outstanding mortgage money by the Chartered Accountant - selection criterion discussed in Rule 3(a)(i) of the 2018 Rules - before issuance of first demand notice had been provided in the 2018 Rules. Seeking determination of outstanding mortgage money was not prejudicial to the rights of the mortgagors. The mechanism provided for determination of outstanding mortgage money through Chartered Accountants created another tier of check on the powers of the mortgagee/financial Institutions and would bring more transparency, fairness and lend credence to the actions of the financial institutions. The determination of outstanding mortgage money by Chartered Accountant did not in any manner curtail or prejudice the rights or remedies of the mortgagor, who may still dispute such determination by invoking the jurisdiction of the Banking Courts under subsection (13) of section 15, subject to the conditions prescribed. It would suffice that adequate remedies were available under section 15 before an adverse action or decision was taken or given effect, notwithstanding determination of amounts by the Chartered Accountants. The critical question was that what prejudice would be caused to the mortgagor upon determination of amounts by Chartered Accountants? The mortgagor had adequate opportunity to question such determinations at the earliest stage, upon issuance of first notice. There was no illegality in the requirement of seeking an endorsement by the Chartered Accountants.

The Financial Institutions (Recovery of Finances) Rules, 2018 [except Rule 3(c)(iv)], were intra-vires the Ordinance and the Constitution.

[Per Asim Hafeez, J (Majority view); Abid Aziz Shiekh, J also partially agreeing: However, there were serious reservations regarding Rule 3(c)(iv) of 2018 Rules, wherein even in the presence of one bidder the financial institution could proceed with the auction sale. The mechanism provided under said rule was against the very concept of the public auctions. The expression "offer equal to - or more than the reserve price" in Rule 3(c)(iv), further sabotaged conventional wisdom and jurisprudence developed that reserve price was only a base price or a starting price. Allowing a bidder to bid for the property by merely offering bid equal to reserve price was negation of concept of ascending price auction i.e. each subsequent bid was required to be higher than the previous bid. Rule 3(c)(iv) of 2018 Rules was unconstitutional, it negates the mandate of Article 24 of the Constitution, and was contrary to the spirit of public auctions and competitive bidding. Rule 3(c)(iv) of the 2018 Rules was ultra-vires and contrary to the mandate of section 15 of the Ordinance]. [Per Abid Aziz Shiekh, J (Minority view): Rule 3(a)(iii) of the 2018 Rules on face of it, was also ultra vires of the Ordinance as there was no authority devolved upon the Chartered Accountant under the Ordinance to determine the liability of the customer or cost of fund under section 3(2) of the Ordinance, which was the exclusive domain of Court under section 9 of the Ordinance.

Applying the principle of severability of statutes, Rule 3(c)(iv) of the 2018 Rules, was severed and the operation and applicability of remaining 2018 Rules was preserved. [Majority view]

Baz Muhammad Kakar and others v. Federation of Pakistan through Ministry of Law and Justice and others PLD 2012 SC 923 ref.

(k) Interpretation of statutes---

----Rules made under a statute---Such Rules had to be interpreted in the context of the purpose and object of the enactment.

Karachi Building Control Authority and 3 others v. Hashwani Sales and Services Limited and 3 others PLD 1993 SC 210 and Maharashtra S.B.O.S. and H.S. Education v. Paritosh, (S.C) AIR 1984 SC 1543 ref.

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

----Ss. 15(11), 15(12) & 22(6) [as amended by the Financial Institutions (Recovery of Finances) (Amendment) Act (XXXVIII of 2016)]---Order passed by Banking Court under S. 15(12) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016]--- Remedy of appeal before High Court--- Inadvertent omission/mistake by draftsmen in S. 22(6) of the Ordinance---Plea that remedy of appeal was available under S. 22(6) of Ordinance, subject to the conditions prescribed therein, and was extended to the orders passed under subsection (12) of amended S. 15 [which conferred jurisdiction on the Banking Courts with regard to all disputes relating to the sale of the mortgaged property]; that the legislature omitted to make requisite amendments in subsection (6) of S. 22 of Ordinance, wherein subsection (12) of amended S. 15 had to be read in place of subsection (11) of original S. 15---Held, that remedy under S. 22(6) of the Ordinance included an order passed under subsection (12) of S. 15---As it appeared to be an inadvertent omission, which could be rectified by the court, the High Court held that subsection (12) of S. 15 was to be read in place of subsection (11) of S. 15 in S. 22(6) of the Ordinance, for all intent and purposes.

Malik Muzaffar Ahmed v. Majlis-e-Ilmi Society through Muhammad Zubair PLD 2016 SC 207 ref.

Per Abid Aziz Shiekh, J.

(m) Constitution of Pakistan---

----Art. 185---Appeal against judgment of High Court---Dismissed by the Supreme Court---Such dismissal did not ispo facto mean that the reasoning adopted by the High Court had been approved.

(n) Constitution of Pakistan---

----Chapt. 1, Pt. II (Arts 8 to 28)---Fundamental Rights---Non-obstante clause in a statute---Such clauses were always subject to the Constitution and could not over-ride Fundamental rights guaranteed under the Constitution.

(o) Constitution of Pakistan---

----Chapt. 1, Pt. II (Arts 8 to 28)---Fundamental rights---Two interpretations of a provision in a statute---Preference---When two constructions were reasonably possible, then preference should be given to one which helped to carry out beneficial purpose of the enactment and ensued smooth and harmonious working of the Constitution and eschew the other which would lead to absurdity and make a Fundamental right nugatory.

Shahid Ikram Siddiqui, M. Imran Malik, Hussain Ismail, Rao Zahid Tasawar, Akif Majeed Butt, Shahzad Ahmad Qureshi and Ms. Iram Shehzadi for Petitioners.

Anwar Mansoor Khan, Attorney-General for Pakistan assisted by Khurram Saeed, Additional Attorney-General, Ch. Ishtiaq Ahmad Khan, Additional Attorney-General, Usman Arif, Deputy Attorney-General and Mr. Azmat Hayat Khan Lodhi, Assistant Attorney-General for Respondents Nos. 1 and 2.

Salman Akram Raja, Advocate assisted by Tariq Bashir, M. Shabbir Hussain, Abuzar Salman Khan Niazi and Rana Shahzad Khalid for Respondents Nos. 3 and 5.

Dr. Pervaiz Hassan, Asad Ahmad Ghani and Raza Mohsin Qizilbash for State Bank of Pakistan (Respondent No. 4).

2020 C L D 728

[Lahore]

Before Muhammad Sajid Mehmood Sethi, J

Messrs TALON SPORTS (PVT.) LIMITED, SIALKOT through Authorized Director---Petitioner

Versus

The STATE BANK OF PAKISTAN, LAHORE and others---Respondents

Writ Petition No. 5517 of 2019, decided on 18th March, 2020.

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

----S. 25A---Constitution of Pakistan, Art. 10A---Power of the State Bank to collect and furnish credit information---Placement of a person/entity on the Electronic Credit Information Bureau ("eCIB")---Exercise of authority by State Bank of Pakistan ("SBP")---Obligation of SBP to ascertain genuineness of information provided by Banks vis-à-vis credit-worthiness of its customers---Scope---Petitioner impugned inclusion of its name in eCIB, which was done subsequent to petitioner and respondent Bank entering into and executing settlement agreement---Contention of petitioner, inter alia, was that petitioner had discharged its liability per Settlement Agreement, after which respondent Bank sent information to SBP for placement of petitioner's name on eCIB, which was against terms of said agreement---Validity---Respondent Bank had not followed instructions of State Bank of Pakistan with regard to clearance of petitioner's name from eCIB---Placement of a name of an alleged defaulter on eCIB list by SBP without verifying genuineness of claim of Bank and without providing such person/entity opportunity of hearing was in violation of Art. 10A of the Constitution---Bank was under statutory duty to provide correct information to SBP and after receipt of final payment from petitioner as stated in Settlement Agreement, it was liable to write letter to SBP to have name of petitioner cleared from eCIB---High Court observed that subsequent wrong negative reporting, after receipt of payment by respondent Bank, appeared to be mala fide and was a fraud on the statute---Placement of name of petitioner on eCIB list by SBP without notice and without ascertaining of genuineness of information, was without lawful authority and set aside---Constitutional petition was allowed, in circumstances.

Messrs Yousaf Sugar Mills v. Trust Leasing Corporation and others 2006 CLD 1191 and AF Industries through Proprietor and 2 others v. Federation of Pakistan 2010 CLD 1765 rel.

Human Rights Commission of Pakistan and 2 others v. Government of Pakistan and others PLD 2009 SC 507; Sarosh Haider v. Muhammad Javed Chundrigar and others PLD 2014 SC 338; Dr. Muhammad Javaid Shafi v. Syed Rashid Arshad and others PLD 2015 SC 212; Pakistan Olympic Association through President and others v. Nadeem Aftab Sindhu and others 2019 SCMR 221; The State and others v. Director-General, FIA and others PLD 2010 Lah. 23; A & A Services through Proprietor v. Federation of Pakistan through Secretary Ministry of Finance and others 2014 CLD 809; Jahangir Mehmood Cheema and another v. Government of Pakistan, Ministry of Interior, Islamabad through Secretary and 2 others 2014 CLD 1384 and Sahibzada Faisal Ali Khan v. Federation of Pakistan and others 2017 CLD 463 ref.

Abdul Aziz Nawab Khan v. Federation of Pakistan, Ministry of Finance and others 2006 CLD 1080; Azam Wazir Khan v. Messrs Industrial Development Bank of Pakistan and others 2013 SCMR 678; Messrs Abdul Aziz Nawab Khan & Company v. Federation of Pakistan, Ministry of Finance and others 2006 CLC 55; Messrs J.S. Developers through Chief Executive and another v. State Bank of Pakistan through Governor SBP and another 2015 CLD 173; Syed Wajahat Hussain Zaidi through Procurator/Authorized Representative v. State Bank of Pakistan through Governor and 7 others 2016 CLD 1084 and Sahibzada Faisal Ali Khan v. Federation of Pakistan and others 2017 CLD 463 distinguished.

(b) Natural justice, principles of---

----When an act inflicted civil consequences on a person in respect of such person's financial dealings, business, property or reputation, then such person was entitled to be afforded opportunity of hearing before such action/order was taken or passed.

(c) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction of High Court--- Judicial review of powers of public entities---Scope---Where power conferred on any public authority was exercised without due care, in bad faith or for any purpose against concept of law, then act of such authority could be struck down by High Court which was equipped with power of judicial review under Art. 199 of the Constitution.

Shahid Ikram Siddiqui for Petitioner.

Zahid Sikandar and Zarish Fatima, Assistant Attorney Generals for Federation of Pakistan along with Ameer Abbas Ali Khan, Assistant Advocate General Punjab, Rehan Nawaz, Advocate for State Bank of Pakistan ("SBP") along with Umair Ghafoor, Officer Legal for Respondents.

Majid Ali Wajid for Respondent No.2/Standard Chartered Bank ("SCB").

2020 C L D 740

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

Messrs TAUNSA GYPSUM (PVT.) LTD. and others---Appellants

Versus

HABIB BANK LIMITED and another---Respondents

Regular First Appeal No. 338 of 2009, heard on 2nd March, 2020.

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

----S. 14---Filing of suit in wrong forum---Principle---Provisions of S. 14 of Limitation Act, 1908 were not applicable where a party claimed that suit was filed in good faith before a court which due to lack of pecuniary jurisdiction could not grant relief.

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

----Ss. 9 & 22---Limitation Act (IX of 1908), S. 14 & Art. 120---Civil Procedure Code (V of 1908), O. VI, R. 17 & O. XLI, R. 23---Amendment in plaint---Pecuniary jurisdiction, change in---Limitation---Plaintiff, a customer was aggrieved of unauthorized debit of foreign currency by defendant Bank from his account---During pendency of suit, plaintiff amended his plaint due to which value of suit increased and same resulted in change of forum---Suit pending before Banking Court was transferred to High Court in its banking jurisdiction and it was dismissed by Single Judge in High Court being barred by limitation---Validity---Held, such was a case where suit was filed in Banking Court keeping in view original valuation of suit as Banking Court had pecuniary jurisdiction to entertain and decide suit---Valuation for jurisdiction was modified only when amendment in plaint was allowed---Amended value exceeded pecuniary jurisdiction which necessitated return of plaint for presentation to court which would have jurisdiction keeping in view amended valuation of suit---Neither S. 14 of Limitation Act, 1908 had application nor circumstances attracted its application to facts of case---No reason existed to move application for exclusion of period consumed in proceedings before Banking Court---Division Bench of High Court set aside judgment and decree passed by Single Judge of High Court as suit was instituted within six years hence issue of limitation was based on misreading of record, misinterpretation and misapplication of law---Division Bench remanded case to Single Judge under O. XLI, R. 23, C.P.C. as findings on other issues were not recorded and suit was dismissed on preliminary point of limitation---Appeal was allowed in circumstances.

Laloo and another v. Ghulaman 2000 SCMR 1058 rel.

Zain Qazi for Appellants.

Nemo for Respondents.

2020 C L D 748

[Lahore]

Before Jawad Hassan, J

AL-ARABIA SUGAR MILLS LTD.---Petitioner

Versus

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

W.P. No. 57647 of 2019, decided on 11th November, 2019.

Companies Act (XIX of 2017)---

----S.100---National Accountability Ordinance (XVIII of 1999), S. 23---Requirement to register a mortgage or charge---Transfer of property void---Scope---Petitioner-company approached Securities and Exchange Commission of Pakistan for registration of the charge of any other financial institution and security documents under S. 100 of Companies Act, 2017 but it was informed that National Accountability Bureau had marked caution on the transfer of properties and shareholding of petitioner under S. 23 of National Accountability Ordinance, 1999---Held, that with concurrence of both parties i.e. the National Accountability Bureau and petitioner-company---High Court directed concerned official of SECP to do what he was required by law to do and register the charge of any other financial institution and security documents of the petitioner-company under Ss. 100, 105 & 448 of the Companies Act, 2017 read with Reglns. 4 & 18 of the Companies (General Provisions and Forms) Regulations, 2018---Constitutional petition was disposed of accordingly.

Salman Aslam Butt, Muhammad Shoaib Rashid and Ahmed Raza for Petitioner.

Zahid Sikandar, Assistant Attorney General, Arshad Qayyum, Special Prosecutor, NAB with Aamir Javed, Assistant Director, NAB.

2020 C L D 766

[Lahore]

Before Abid Aziz Sheikh, J

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Petitioner

Versus

INNOVATIVE INVESTMENT BANK LIMITED---Respondent

C.M.A. No. 31 of 2018 and C.O. No. 46 of 2010, decided on 12th March, 2020.

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

----Ss. 404, 405 & 333---Provincial Insolvency Act (V of 1920), S. 47---Winding up of company---Liquidation---Distribution of liquidation proceeds---Secured creditor---Relinquishment of security by secured creditor---Scope and Effect---Secured creditor would have no prior claim on payments of liquidation proceeds, if such secured creditor had neither realized nor exercised its option to remain outside winding up process, but rather relinquished its security for general benefits of creditors by filing its total claim with official liquidator.

United Bank Limited v. PICIC 1992 SCMR 1731 and PICIC v. Ajma Corporation Ltd. 2014 CLD 1097 rel.

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

----Ss. 333, 421, 284 & 404---Provincial Insolvency Act (V of 1920), S. 61(5)---Winding up of company---Liquidation---Exercise of powers of Liquidator subject to sanction---Determination of classes of creditors in context of Ss. 333(1)(c) & 421(1)(i) of the Companies Ordinance, 1984---Priority of debts in insolvency proceedings---Scope---Commonality of interests held could be considered for treating holders of such interests as one class of creditors---Contention that classes of creditors were only confined to secured, preferred or general (unsecured) creditors was not a complete answer and creditors could be classified other than said categories---While under S. 61(5) Provincial Insolvency Act, 1920 only ratable distribution could be made amongst creditors without preference, however under S. 404 of Companies Ordinance, 1984, law of insolvency was to be observed with regard to "respective right of secured and unsecured creditors"---Said words explained right of class of secured creditors on one hand as against class of unsecured creditors on other hand and did not relate to right of secured creditors inter-se---High Court observed that where classification and distribution of claim in liquidation was inter-se unsecured creditors, provisions of S. 61(5) of Provincial Insolvency Act, 1920 would not apply.

Muhammad Rafique Bhatti v. The Cooperative Judge and others 2016 SCMR 670 distinguished.

People Bank of Northern India Ltd. Lahore v. Lucknow Supgar AIR 1936 Oudh 338; Sovereign Life Assurance Company v. Dodd (1892) 2 QB 573 (89); Gulshan Weaving Mills Limited v. Al-Baraka Bank (Pakistan) Limited 2018 CLD 737; D.A. Swamy v. India Meters Ltd. (1994) 79 Com Cas 27 (Mad) (75); State of Kerala v. Kerala Water Transport Corporation Limited AIR 1967 Kerala 150; Bokiyu Tanneries Ltd. v. Unknown (2006 (89) DRJ 513 (Delhi); Rikhabchand Mohanlal Surana v. The Sholapur Spinning and Weaving (1974) (76) BOM LR 748; Hedge and Golay Limited v. State Bank of India ILR 1987 Kar 2673 and Sec. of State v. Punjab Industrial Bank Limited AIR 1931 Lahore 351 rel.

Sardar Muhammad Ali, Advocate/Joint Official Liquidator.

Khawaja Waheed Raza, Joint Official Liquidator.

Iftikhar Riaz ud Din and Ammer Hamza Dogar for SECP.

Muhammad Asif ur Rehman for IFC.

Umar Sharif for WAPDA.

2020 C L D 784

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

NATIONAL BANK OF PAKISTAN through Branch Manager---Appellant

Versus

MUHAMMAD RAIES AHMAD and others---Respondents

R.F.A. No. 1277 of 2015, heard on 12th February, 2020.

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

----Ss. 3(2) & 17---Decree of Banking Court, execution of---Cost of funds to be computed from date of default till realization of decree---Scope---Banking court will commit error of law if it limited right of decree-holder to realize cost of funds from date of institution of suit instead of entitlement from date of default---Where date of default had not been specifically determined in a decree, then Banking Court as an Executing Court, was competent to determine such date on basis of documents and other materials on record.

Habib Bank Limited through Authorized Attorneys v. Pak Poly Products (Pvt.) Limited and 3 others 2013 CLD 1661 rel.

(b) Administration of justice---

----Adjudication by Court---Court has to take into account evidence led, its relevance to an issue, points urged before a court at time of hearing, decision thereof and reasons in sufficient detail---Any conclusion which did not take note of evidence, and neither took into account any documents which were relevant and did not give plausible or legal reasons for a conclusion, could not be sustained.

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

----Ss. 131---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 3(2) & 17---Contract of guarantee---Personal guarantee---Revocation of continuing guarantee by surety's death---Scope---Factum of death of surety shall only be relevant in absence of any contract to the contrary or in case of continuing guarantee for transactions after death of guarantor---When transaction was made during lifetime of a guarantor and rested on security furnished and did not relate to any future transaction, then liability of either guarantor or his/her legal heirs could not be avoided as it created a charge against assets of a deceased---Only such transaction which took place subsequent to death of guarantor could be exempted.

Muhammad Nadeem for Appellant.

Jamshed Rehman Ullah for Respondents.

2020 C L D 796

[Lahore]

Before Shams Mehmood Mirza, J

HABIB METROPOLITAN BANK LIMITED---Plaintiff

Versus

NAZIR RICE MILLS (PVT.) LIMITED through Chief Executive Officer and others---Defendants

C.O.S. No. 65 of 2012, decided on 9th January, 2020.

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

----Ss. 10, 19 & 16---Contract Act (IX of 1872), Ss. 151, 152 & 172---Suit for recovery---Execution of decree of Banking Court---"Pledge of goods" for obtaining of finance facility from Bank---Pledgee-Bank only having constructive possession of goods---Theft /loss of pledged goods---­Role of muqadam appointed by Financial Institution/Bank---Plaintiff Bank sought to recover finance provided to defendant which was secured against pledge of stocks, and such stocks were stolen from premises of defendant---Contention of defendant, inter alia, was that plaintiff could not recover such finance if pledged stocks could not be returned to defendant on account of theft---Validity---Goods/stocks, in the present, case remained in exclusive ownership and possession of defendant who did not deliver goods in possession of plaintiff Bank but rather gave access plaintiff Bank's muqadam---Muqadam wielded little control of pledged goods and had no obligation or role in security of same and therefore duty of care of plaintiff Bank was diluted when viewed in context of duty to secure stocks against theft---Per S. 151 of the Contract Act, 1872 it was duty of bailee to take care of goods bailed to him and standard duty was cast upon bailee to take such care of bailed goods as man of ordinary prudence would---Such standard was uniform in nature and encompassed all contracts of bailment and pledge was a specie of bailment where goods were given in possession of pledgee as security for repayment of loan---In the present case, possession of plaintiff Bank could only be termed as constructive or notional in view of fact that warehouse/godown in which stocks were stored were situated on site of mills of the defendant/customer---Defendant's employees were guarding said premises and plaintiff Bank's muqadam had no power to stop a robbery/theft at premises--- High Court observed that plaintiff Bank was under no higher duty of care to take care of pledged stock than defendant in whose premises the same were lying and where the robbery took place and thus plaintiff Bank could not be held to be at fault and it could not be said that pledged goods were lost due to negligence of plaintiff Bank---Pledgee would not lose its right to recover money lent to a borrower in case goods were lost on account of borrower's negligence and plaintiff Bank was thus entitled to recover amount of cash from defendants notwithstanding the fact that it was not in a position to return pledged stock of defendant on account of alleged theft---Suit for recovery was decreed, accordingly.

Bassano v Toft [2014] EWHC 377 (QB)]; A. M. Burq and another v. Central Exchange Bank Limited and others PLD 1966 (W.P.) Lah.1 and Messrs World Trans Logistics and others v. Silk Bank Limited and others 2016 SCMR 800 rel.

(b) Words and phrases---

----"Possession"---Meaning---Possession may be defined as present control of a thing on one's own behalf and to the exclusion of all others.

Hassan Nawaz Sheikh for Plaintiff.

Mian Ali Adil for Defendants Nos. 1 to 9.

Majid Ali Wajid for Defendant No. 11.

2020 C L D 865

[Lahore]

Before Jawad Hassan, J

AKT SUGAR MILLS (PVT.) LIMITED and others---Petitioners

Versus

JOINT REGISTRAR OF COMPANIES---Respondent

C.O. No. 43003 of 2019, decided on 3rd October, 2019.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281 & 282---Scheme of Arrangement for merger/amalgamation between two private companies---Legality---Unanimous approval of merger scheme and swap ratio by all the shareholders---No Objections Certificates from creditors and competition regulator---Held, that on directions of the High Court public notices were issued in two newspapers for the purpose of informing general public about the scheme proposing merger of the petitioners-companies and inviting objections to the scheme from members and creditors of the petitioners as well as from any person having interest in the affairs of the petitioners---In addition, notices were also directed to be issued to the Securities and Exchange Commission of Pakistan, the Competition Commission of Pakistan and to the creditors of the petitioners---Petitioners had placed on record "No Objection Certificate" (NOCs) issued by their secured creditors and by the Competition Commission of Pakistan---Chairpersons were appointed on directions of the High Court to supervise the Extraordinary General Meeting of the shareholders of petitioners---Perusal of the peport submitted by said Chairpersons showed that Extraordinary General Meeting of the petitioners was convened at their registered offices and that notices of the meeting were issued by the petitioners company to their shareholders as well as by publication in the two newspapers; that 100% of the shareholders of the petitioners were present at the extraordinary general meeting who voted, unanimously consented and approved proposed Scheme of Arrangement for Merger/Amalgamation of petitioners; that members in extraordinary general meeting were invited to raise any objection qua the basis of swap ratio in the Scheme of Arrangement which, after discussion, was unanimously passed by the members in terms of S. 279(2) of the Companies Act, 2017, and that determination of swap ratio was also calculated by an external auditor---Perusal of the merger contemplated under the Scheme of Arrangement showed that it would have significant benefits for the petitioners and their respective stakeholders, which were stipulated in the scheme of arrangement---All the shareholders of the transferee company (one of the petitioners) had unanimously approved the scheme of amalgamation and, therefore, had approved the swap/exchange ratio---Since the scheme of amalgamation and consequently the exchange ratio had been approved unanimously, there was no reason why their business decision should be interfered with and the Court should therefore proceed on the basis that the ratio of exchange as approved by the shareholders of the transferor company was the fair ratio of exchange---Further, in absence of any challenge from the shareholders of the transferor company, who primarily and exclusively could question the ratio of exchange of shares, the exchange ratio had to be considered as fair and reasonable---Petition was allowed and the Scheme of Arrangement for Merger/Amalgamation of petitioners attached with the report of Chairpersons was sanctioned.

Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230 and Gadoon Textile Mills Limited and 2 others's case 2015 CLD 2010 ref.

Shehzad Ata Elahi for Petitioners.

Hafiz Muhammad Talha for SECP.

2020 C L D 892

[Lahore]

Before Shams Mehmood Mirza and Shahid Karim, JJ

AL-MADINA ALUMINIUM WORK and others---Appellants

Versus

HABIB METROPOLITAN BANK---Respondent

R.F.A. No. 1121 of 2013, decided on 22nd May, 2019.

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

----Ss. 10(4), 9 & 22---Suit for recovery---Leave to defend, application for---Application for leave to defend was dismissed, and suit was decreed in favour of the plaintiff-Bank---Contention of defendants, inter alia, was that their signatures were obtained on blank papers and that after alleged renewal of said finance facility, no disbursement was made to defendants---Validity---Record showed that defendants duly applied for such renewal of finance facility and offer letters issued by plaintiff-Bank were also accepted by defendants by putting their signatures thereon---Transactions were also duly reflected in the statement of accounts and therefore no reason existed to interfere with judgment and decree of Banking Court---Appeal was dismissed, in circumstances.

Hasham Ahmad Khan for Appellants.

2020 C L D 900

[Lahore (Multan Bench)]

Before Jawad Hassan, J

ROOMI FOODS (PVT.) LTD. and others---Petitioners

Versus

JOINT REGISTRAR OF COMPANIES and others---Respondents

C.O. No. 5 of 2019, decided on 26th February, 2020.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281 & 282--- Compromise with creditors and members--- Power of Securities and Exchange Commission (Commission) to enforce compromises and arrangements---Information as to compromises or arrangements with creditors and members---Powers of Commission to facilitate reconstruction or amalgamation of companies---Scope---Petitioner sought sanction of the High Court to a Scheme of Arrangement for bifurcation of its business into two other petitioners-companies---Validity---Petitioners had placed on record no objection certificates issued by their creditors---Petitioners had unanimously approved the scheme of arrangement and share swap arrangement---Shareholders were best judges of their interest and were better informed with the market trends than the Court, which was least equipped in evaluating such trends---No impediment existed in the grant and sanction of the Scheme of arrangement of petitioner company into transferor and transferee company---Petition was allowed and the scheme of arrangement was sanctioned by the High Court.

Fatima Sugar Mills Ltd. and others's case 2014 CLD 26 ref.

Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230 fol.

Gadoon Textile Mills Limited and 2 others's case 2015 CLD 2010 rel.

Malik M. Tariq Rajwana, Barrister Malik Kashif Rafiq Rajwana, Malik Adil Shabbir and Malik M. Hussain Rajwana for Petitioners.

Mian Khurram Hashmi for the Creditor UBL Corporate.

Malik Muhammad Ahsan for Respondent (Meezan Bank).

2020 C L D 919

[Lahore]

Before Shahid Karim, J

DAEWOO PAKISTAN EXPRESS BUS SERVICE LTD. and another---Petitioners

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN (SECP) and others---Respondents

W.P. No. 172335 of 2018, heard on 11th March, 2020.

Companies Act (XIX of 2017)---

----Ss. 221 & 256----Investigation into affairs of company---Accounts of companies---Inspection of books of accounts by the Securities and Exchange Commission of Pakistan (SECP)---Procedural fairness---Power of SECP to initiate proceedings under S. 221 of Companies Act, 2017---Validity of an application of a single shareholder seeking initiation of proceedings under S. 221 of Companies Act, 2017---Constitutional petition---Scope---Question before High Court was whether SECP could exercise its powers under S. 221 of Companies Act, 2017 on complaint filed before it by shareholder of a company who did not have requisite qualification to initiate investigation under S. 256 of Companies Act, 2017---Held, that Ss. 221 & 256 of Companies Act, 2017 were to be read in conjunction with each other---Only manner in which members/shareholders of company could approach for investigation into affairs of company was upon application of a certain number of such shareholders having voting power as prescribed in S. 256 of Companies Act, 2017---On application of a single shareholder without requisite voting power, SECP could not start proceedings in exercise of powers conferred to it under S. 221 of Companies Act, 2017---Commission had authority to proceed in terms of S. 221 of Companies Act, 2017 on its own motion and by forming opinion on basis of material before it and not upon extraneous considerations--- Words "for reasons to be recorded in writing" used in S. 221 of Companies Act, 2017 did not refer to mere reproduction of contents of a letter by a shareholder and such "reasons" did not meet criteria mentioned in the said section---Reasons to proceed under S. 221 of Companies Act, 2017 must necessarily have nexus with the formation of an independent opinion by SECP, which would compel the issuance of notice under S. 221 of Companies Act, 2017.

Writ Petition No. 20088 of 2012 distinguished.

De Smith's Judicial Review (7th Ed.) p.499 rel.

Imtiaz Rashid Siddiqui, Shahryar Kasuri, Raza Imtiaz Siddiqui and Sabeel Tariq Mann for Petitioners.

Kh. Aizaz Ahsan for Respondent No. 6.

Ruman Bilal for SECP.

2020 C L D 945

[Lahore]

Before Shahid Karim, J

Messrs UNITED ETHANOL INDUSTRIES LTD. through Authorized Representative/Chief Executive---Petitioner

Versus

Messrs JDW SUGAR MILLS LTD. through Chief Executive and another---Respondents

C.O. No. 49 of 2009, heard on 27th September, 2016.

Companies Ordinance (XLVII of 1984)---

----Ss. 305 & 314--- Compulsory winding up of a company---Circumstances in which company may be wound up by Court---Creditor seeking winding up of company on account of non-payment of debt---Winding up of commercially solvent company---Scope---Petitioner sought winding-up of respondent company on the ground that said company fell in default of its obligations to pay debt to petitioner--- Validity---Petitioner did not allege that respondent company was insolvent or commercially not unviable and petitioner had also filed civil suit seeking recovery of alleged amount---Company, if it were financially sound, then provisions of the Companies Ordinance, 1984 could not be used as vehicle of oppression and in case a bona fide dispute had been setup, there existed no cause for ordering winding up and parties must be relegated to civil court for determination of respective rights---High Court observed that since bona fide case to be settled by civil court existed and respondent company was commercially sound, thus no merit existed in the present petition---Petition for winding up was dismissed, in circumstances.

Hala Spinning Mills Ltd. v. International Finance Corporation and another 2002 SCMR 450; The Pakistan Industrial Credit and Investment Corporation Limited v. Messrs Electric Lamp Manufacturers of Pakistan Limited 2001 MLD 1885; Faysal Bank Limited through Attorney v. Iram Ghee Mills (Pvt.) Ltd. through Chief Executive 2006 CLD 227; Messrs Central Cotton Mills Ltd. v. Habib Bank Limited 2004 SCMR 1443; Messrs Adage Advertising Lahore v. Messrs Shezan International Ltd. Lahore 1970 SCMR 184 and Messrs Khyber Textile Mills Ltd. v. Allied Textile Mills Ltd. 1989 CLC 1167 rel.

Muhammad Yasin Hatif for Petitioner.

Shehzad Ata Elahi for Respondent No.1.

2020 C L D 963

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

ESSEM HOTELS LIMITED and others---Appellants

Versus

The BANK OF PUNJAB---Respondent

Execution First Appeal No. 64797 of 2019, decided on 6th November, 2019.

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

----S. 15--- Civil Procedure Code (V of 1908), O. XXI, Rr. 66, 67 & 68---Sale of mortgaged property---Proclamation of sale by public auction---Mode of making proclamation---Time of sale---Determination of reserve price---Scope---Appellants assailed order of executing court whereby it had approved the valuation determined by the valuator appointed with the consent of parties---Contention of appellants were that the impugned order was passed in violation of O. XXI, R. 68, C.P.C.; that the impugned schedule of auction was approved without affording opportunity of hearing to the appellants; that mandatory requirements of O. XXI, Rr. 66(2) & 67(2), C.P.C. were not fulfilled; that the description of property given by the Court Auctioneers in the schedule of auction was not correct and that the report of valuators was self-contradictory---Validity---Order relating to appointment of valuator was passed by providing proper opportunity to the parties therefore, it could not be said that the appellants were not provided any opportunity of hearing---Schedule of auction revealed that time and place of auction was mentioned under the heading "Schedule of Auction" and the requirement of O. XXI, R. 67(2), C.P.C. was fulfilled by giving publication of proclamation in the newspaper---Record revealed that the court had appointed several valuators for valuation of property from time to time, and the reports submitted by them reflected the same property---Valuation report and the schedule of auction approved by court mentioned the same property falling under the same khasra number---Impugned order was passed strictly in accordance with law---Appeal, being devoid of any merit, was dismissed in limine.

Muhammad Imran Malik for Appellants.

2020 C L D 977

[Lahore (Multan Bench)]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

The BANK OF PUNJAB---Appellant

Versus

FAZAL ABBAS and another---Respondents

R.F.A. No. 177 of 2018, heard on 8th October, 2019.

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

----S. 9--- Suit for recovery of finance facility--- Mandatory requirements---Scope---Appellant-Bank assailed the dismissal of its suit by the Banking Court---Validity---Bank as per S. 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, while filing the suit was required to specify (a) the amount of finance availed by the respondents (b) amounts paid by the respondents with dates of payment and (c) the amount of finance and other amounts relating to finance payable by the respondents up to the date of institution of the suit but the plaint was silent relating to amount of finance---Bank had mentioned in the plaint only the due amount without mentioning that what was the actual principal amount and out of which how much payment had been made by the respondent and how the claimed amount was due and payable---Bank had not been able to show that the mandatory requirements of S. 9(3) had been properly followed and complied with, therefore, the suit filed by Bank failing to comply with the mandatory requirement of law was liable to be dismissed---Appeal was dismissed.

Apollo Textile Mills Ltd. and others v. Soneri Bank Limited PLD 2012 SC 268 ref.

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

----S. 9---Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Suit for recovery of finance facility---Failure of financial institution to append certified copies of statement of account---Effect---Bank assailed the dismissal of its suit by the Banking Court---Validity---Section 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that plaint had to be supported by statement of accounts, duly certified under Bankers' Books Evidence Act, 1891---Statements of accounts initially appended with the plaint were prepared manually and although signatures of two officers were available on the same but certificate as required under S. 2(8) of Bankers' Books Evidence Act, 1891 was not appended---Said statements were not produced in evidence rather different statements of account which were neither relied upon nor appended with the plaint were produced in evidence, without seeking permission of the Court---Bank had not been able to show that the mandatory requirements of S. 9(2) had been properly followed and complied with, therefore, the suit filed by Bank failing to comply with the aforesaid mandatory requirement of law was liable to be dismissed---Appeal was dismissed.

Apollo Textile Mills Ltd. and others v. Soneri Bank Limited PLD 2012 SC 268 ref.

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

----S. 9--- Suit for recovery of finance facility--- Mandatory requirements---Scope---Plaintiff, as per S. 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, while filing the suit is required to specify (a) the amount of finance availed by the defendant from the Financial Institution (b) amounts paid by the defendant to the Financial Institution with dates of payment and (c) the amount of finance and other amounts relating to finance payable by the defendant up to the date of institution of the suit.

Shahbaz Ali Gurmani for Appellant.

Muhammad Suleman Bhatti for Respondents.

2020 C L D 992

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Mazamil Akhtar Shabir, JJ

Mst. NASRIN---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED through SAM Head Multan and 5 others---Respondents

E.F.A. No. 9 of 2019, decided on 20th November, 2019.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 54---Recovery of finances---Execution of decree---Attachment of property---Mala fide---Suit filed by Bank was decreed and judgment debtor resisted execution of decree on grounds that property in question through inheritance from her husband which property could not be put to auction---Validity---Judgment debtor was trying to frustrate entire execution proceedings and any indulgence at such stage of proceedings could amount to frustrate implementation of decree which otherwise had attained finality---Interference, at such stage, could tantamount to interference in already decided matter which culminated by dismissal of objection petition filed by husband of judgment debtor---Claim of judgment debtor that transfer of property in her name through inheritance of her husband gave her fresh cause of action was without any basis and legal justification---Judgment debtor had stepped into shoes of her husband and could not claim better title or rights in property than her husband and such claim, being without any merit was repelled---High Court declined to interfere in order passed by Trial Court as judgment debtor had failed to point out any illegality, perversity or erroneous exercise of jurisdiction---Appeal was dismissed, in circumstances.

Rana Zia ur Rehman Arif for Appellant.

2020 C L D 1022

[Lahore]

Before Ch. Muhammad Masood Jahangir, J

PAKISTAN TELECOMMUNICATION COMPANY LIMITED through Senior Executive Vice-President---Appellant

Versus

Shaikh MUSHTAQ ALI ADVOCATE---Respondent

F.A.O. No. 168 of 2013, heard on 8th June, 2020.

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

----Ss. 27, 25 & 33--- Jurisdiction of Consumer Court--- Filing of claims---Appellant Company impugned order of Consumer Court whereby complainant's complaint against appellant, a (Telecom Company), for not conducting "lucky prize draw" for various prizes as advertised by appellant, was allowed---Contention of appellant, inter alia, was that Consumer Court had no jurisdiction in the matter---Validity---Complainant had applied for a telephone connection pursuant to advertisement made by appellant, which was duly installed and practically no loss was caused to complainant---Grievance that offer of awarding certain prizes announced in said advertisement was not fulfilled was incompetent and did not attract jurisdiction of Consumer Court---Impugned order was set aside---Appeal was allowed, in circumstances.

Muhammad Akram v. Ehsan Raqib and another Criminal Petitions Nos. 408, 409 and 429 of 2016 rel.

Muhammad Ashraf Mirza, Atif Mohtashim Khan and Rana Muhammad Ashraf Khan for Appellant.

Nemo for Respondent.

2020 C L D 1037

[Lahore]

Before Ayesha A. Malik and Asim Hafeez, JJ

ALLIED BANK LIMITED through Authorized Attorneys---Appellant

Versus

Messrs SHAH NAWAZ TRADERS through Proprietor and 5 others---Respondents

R.F.A. No. 1285 of 2014, heard on 12th February, 2020.

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

----Ss. 10 & 22---Suit for recovery---Leave to defend, grant of---Settlement agreement between Financial Institution and customer---Material changes to the contractual obligations of defendants including guarantors, in a suit for recovery---Questions of law and fact---Scope---Question before High Court was whether a settlement agreement between plaintiff Financial Institution and primary defendant, brought material changes to contractual obligations of other defendants who had given personal guarantee---High court held that said question could not be decided without grant of leave to defend and allowing parties to lead evidence accordingly---Impugned order was set aside, and application for leave to defend was granted---Appeal was disposed of, accordingly.

Industrial Development Bank of Pakistan v. Hyderabad Beverage Company Private Limited and others 2016 SCMR 451 and National Bank of Pakistan through EVP v. Zia ul Haq Noon and others 2019 CLD 775 distinguished.

Abdul Hameed Chohan for Appellant.

Iftikhar Ullah Malik for Respondent No.1.

Ashiq Hussain Hanjra for Respondents Nos. 3 to 5.

2020 C L D 1053

[Lahore]

Before Muhammad Ameer Bhatti, J

The GENERAL MANAGER GULBERG OFFICE OF TCS and another---Appellants

Versus

Syed NAEEM UD DIN---Respondent

F.A.O. No. 176 of 2011, heard on 2nd June, 2020.

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

----S. 13---Liability for faulty or defective services---Scope---Appellant assailed order passed by Consumer Court whereby damages were granted in lieu of claim of the complainant---Respondent had dispatched some documents to a foreign Immigration Tribunal where an appeal for Asylum was pending disposal through appellant, a courier service (TCS) on payment of charges claimed by appellants and receipt was also issued by the appellants---Documents were not transmitted to the destination on the pretext of shortage of payment; as a result whereof immigration appeal was rejected---Validity---Appellants had received/booked the shipment after receiving the requisite charges and issued the receipt in that regard---Appellant was left with no jurisdiction to retain and not to transmit the shipment to the destination for any reason let alone deficiency of charges---Appeal was dismissed.

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

----S. 28--- Settlement of claims--- Non-issuance of notice to the manufacturer or service provider---Effect---Appellant a courier service (TCS) assailed order passed by Consumer Court on the ground that the claim before it was not maintainable without issuing notice under subsection (3) of S.28 of the Punjab Consumer Protection Act, 2005---Validity---Petition before Consumer Court could not be dismissed as incompetent solely for the non-compliance of procedural formalities, in that, it lost its legal significance and cast to the wind when the matter before the Consumer Court was dealt with after receiving the written reply and recording evidence of the parties---Significance of the notice was only to provide opportunity to the manufacturer or service provider to settle the dispute outside court which could even be availed on first appearance in court---Parties were heard at length and no prejudice had occasioned to the appellants for non-compliance of the provisions of subsection (3) of S.28 of Punjab Consumer Protection Act, 2005, therefore, the contention carried no force---Appeal was dismissed.

Ch. Nazir Ahmad Kamboh for Appellants.

Atif Pervaiz Ch. for Respondent.

2020 C L D 1058

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

Messrs ARBAB COTTON INDUSTRIES and another---Appellants

Versus

NIB BANK LIMITED---Respondent

R.F.A. No. 393 of 2014, heard on 19th November, 2019.

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

----S. 9---Suit for recovery of finance facility---Leave to defend the appeal---Scope---Appellants assailed judgment and decree passed by Single Judge of High Court---Validity---Appellants had admitted the availing of finance facilities, execution of documents thereunder and renewal of finance facility---Appellants had failed to raise any substantial question of law and fact requiring grant of leave to defend enabling them to lead evidence in the matter---Appellants had not been able to show that the entries in the statements of account were incorrect and any payment made by appellants was not reflected in the statements---Petition for leave to appeal was rightly dismissed by the Single Judge of High Court---Appeal was dismissed.

Muhammad Masood Sabir for Appellants.

Mughees Aslam Malik for Respondent.

2020 C L D 1086

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

ZOHAIB MODEL INDUSTRIES (PVT.) LIMITED and 2 others---Appellants

Versus

SUMMIT BANK LIMITED---Respondent

R.F.A. No. 123 of 2018, heard on 14th November, 2019.

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

----S. 9---Suit for recovery of finance---Scope---Appellants assailed the judgment and decree passed by Banking Court on the ground that the finance agreement was renewable on year to year basis and after execution of initial agreement for a year, the same was only renewed for the next year, therefore, claim of respondent relating to the period beyond that was not sustainable---Validity---Agreement of finance showed that the finance was availed for a period of three years and not for a period of one year---Appellants had failed to point out any entry in the statements of account that was incorrect or not supported by any document---Appellants had not claimed that any amount deposited by them was not reflected in the statements of account---Entries in statements of account showed that the appellants had availed the finance facility for about three years---Application for leave to defend had failed to raise any substantial question of law or fact requiring grant of leave to defend---Banking Court had rightly decreed the suit---Appeal was dismissed.

Muhammad Aslam Siddiqui for Appellants.

Malik Sajjad Haider Maitla for Respondent.

2020 C L D 1093

[Lahore]

Before Ayesha A. Malik and Jawad Hassan, JJ

UNITED BANK LIMITED---Appellant

Versus

GULL ZAMAN KHAN---Respondent

F.A.O. No. 28169 of 2017, heard on 4th February, 2019.

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

----S. 9---Procedure of Banking Court---Scope---Respondent had filed a suit against the appellant with the averments that he had paid off the entire liability in respect of Credit Card under settlement letter---Banking Court after issuance of summons had proceeded ex parte against the appellant and disposed of the suit---Contention of appellant was that the Banking Court without calling evidence had disposed of the suit whereas argument of respondent was that as per settlement letter, which was acknowledged by the appellant Bank, he had paid off his entire liability---High Court, on the joint request of both the parties, allowed the appeal, set aside the impugned order and remanded the matter to the Banking Court for decision afresh.

Salman Afzal Malik for Appellant.

Asim Khan Sherwani for Respondent.

2020 C L D 1128

[Lahore]

Before Jawad Hassan, J

PRESSON-DESCON INTERNATIONAL (PRIVATE) LIMITED and others---Petitioners

Versus

JOINT REGISTRAR OF COMPANIES---Respondent

C.O. No. 25683 of 2019, decided on 8th June, 2020.

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

----Ss. 279, 280, 281, 282, 283 & 284---Compromise with creditors and members--- Power of Securities and Exchange Commission (Commission) to enforce compromise and arrangement---Information as to compromise or arrangement with creditors and members---Powers of Commission to facilitate reconstruction or amalgamation of companies---Amalgamation of wholly owned subsidiaries in holding company---Scope---Petitioners urged the Court to sanction a Scheme of Arrangement for reconstruction and de-merger---Securities and Exchange Commission took an objection regarding non-disclosure of the transferor company's intellectual property value in the Scheme of Arrangement---Raison d'etre given by the petitioners for non-valuation was that since the beneficial owner of the petitioners/companies was the same family, therefore, valuation was neither required to the Securities and Exchange Commission nor material to the Scheme of Arrangement---Validity---Held; reason given by the petitioners for non-valuation appeared to have due strength---All indispensable statutory benchmarks, requirements and formalities were accomplished and adhered to by the petitioners as envisioned under the relevant provisions of law---Scheme set up for sanction was reinforced and fortified by the requisite majority which seemed to be just and fair---Minutes of meetings unequivocally conveyed that all essential and fundamental characteristics and attributes of scheme was placed before the voters at the concerned meetings to live up to statutory obligations---No impediment existed in the way of grant and sanction of the Scheme of Arrangement---Petition was allowed.

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

----Ss. 279, 280, 281, 282, 283 & 284---Compromise with creditors and members--- Power of Securities and Exchange Commission (Commission) to enforce compromises and arrangements---Information as to compromise or arrangement with creditors and members---Powers of Commission to facilitate reconstruction or amalgamation of companies---Amalgamation of wholly owned subsidiaries in holding company---Scope---Where the Scheme is found to be reasonable and fair, it is not the sense of duty or province of the Court to supplement or substitute its judgment against the collective wisdom and intellect of the shareholders of the companies involved---Nevertheless, it is the duty of the Court to find out and perceive whether all provisions of law and directions of the Court had been complied with and when the scheme seemed to be in the interest of the company as well as in that of its creditors, it should be given effect to---However, the Court has to satisfy and reassured the accomplishment of some foremost and rudimentary stipulations that was to say, the meeting was appropriately called together and conducted; the compromise was a real compromise; it was accepted by a competent majority; the majority was acting in good faith and for common advantage of the whole class; what they did was reasonable, prudent and proper; the Court was also to satisfy itself as to whether the provisions of the statute had been complied with; whether the Scheme was reasonable and practical or whether there was any reasonable objection to it; whether the creditors acted honestly and in good faith and had sufficient information; whether the Court in the public interest ought to override the decision of the creditors and shareholders.

IGI Insurance Limited and 3 others's case 2018 CLD 572; International Complex Projects Limited and another's case 2017 CLD 1468; Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305; Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506; Dawood Hercules Chemicals and others' case 2012 CLD 582 and Gadoon Textile Mills and others' case 2015 CLD 2010 rel.

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

----Ss. 279, 280, 281, 282, 283 & 284---Compromise with creditors and members--- Power of Securities and Exchange Commission (Commission) to enforce compromise and arrangement---Information as to compromise or arrangement with creditors and members---Powers of Commission to facilitate reconstruction or amalgamation of companies---Amalgamation of wholly owned subsidiaries in holding company---Scope---One of the effects of the sanction of the Court is that it becomes binding upon the company and its members including those who voted against the scheme once the scheme of compromise and arrangement is approved by statutory majority it binds the dissenting minority and the company---Court has the power to give effect to all the incidental and ancillary questions in the effort to satisfy itself whether the scheme has the approval of the requisite majority---Court was not to examine whether there was a scope for better scheme---However, where the Court finds that the scheme is patently fraudulent, it may not respond or function as mere rubber stamp or post office but reject the scheme of arrangement.

IGI Insurance Limited and 3 others's case 2018 CLD 572; International Complex Projects Limited and another's case 2017 CLD 1468; Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305; Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506; Dawood Hercules Chemicals and others's case 2012 CLD 582 and Gadoon Textile Mills and others' case 2015 CLD 2010 rel.

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

----Ss. 279, 280, 281, 282, 283 & 284---Compromise with creditors and members---Power of Commission to enforce compromises and arrangements---Information as to compromise or arrangement with creditors and members---Powers of Commission to facilitate reconstruction or amalgamation of companies---Amalgamation of wholly owned subsidiaries in holding company---Scope---Court acts like an umpire in a game of cricket who has to see that both the teams play their games according to the rules and do not over stepped in limits---Propriety and the merits of the compromise or arrangement have to be judged by the parties who, as sui juris with their open eyes and fully informed about the pros and cons of the Scheme, arrive at their own reasoned judgment and agree to be bound by such compromise or arrangement.

IGI Insurance Limited and 3 others's case 2018 CLD 572; International Complex Projects Limited and another's case 2017 CLD 1468; Sidhpur Mills Co. Ltd.'s case AIR 1962 Guj. 305; Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506; Dawood Hercules Chemicals and others's case 2012 CLD 582 and Gadoon Textile Mills and others' case 2015 CLD 2010 rel.

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

----S. 279---Compromise with creditors and members---Scope---Basic requirements of S. 279 of Companies Act, 2017 detailed.

Basic requirements of section 279 of Companies Act, 2017 are as follows;

(i) there must be a compromise/arrangement/Scheme;

(ii) proposed compromise/arrangement was between a company and its creditors;

(iii) application to be made to the Commission;

(iv) Compromise/arrangement supported by meetings;

(v) mandatory filing of material facts relating to the company which is;

(a) financial position;

(b) auditor's report;

(c) latest accounts of the company;

(d) the pendency of any investigation proceedings;

(e) supported by the affidavits.

(f) Company---

----"Merger"--- Marriage of companies--- De-merger--- Corporate divorce--- Meaning--- Scope--- Frequent metaphor of mergers and acquisitions is the marriage of companies---Antonym to marriage is the divorce, and the term "corporate divorce" is used to define how previously merged companies are separated---De-merger is a situation where an entity undertakes a reorganization of its operations and structure, leaving its members in the same economic position as they were immediately before the reorganization---Merger is form of structural readjustment for corporations in which a corporate or trust group splits into two or more entities or groups.

www.businessdictionery.com ref.

(g) Company---

----"De-merger"--- Meaning--- Scope--- Corporate strategy to sell off subsidiaries or divisions of a company is called de-merger.

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

----Ss. 2(16) & 2(23)--- Securities and Exchange Commission (Commission) Commission---Scope---Court---Companies Bench of High Court---Powers given to Commission under S. 2(16) of Companies Act, 2017 have been delegated to the Court vide Finance Division's Notification SRO No. 840(I)/2017 dated: 17th August, 2017---"Court" has been defined in S. 2(23) of Companies Act, 2017, as a "Company Bench of High Court".

(i) Company---

----Valuation--- Action of estimating or fixing the monetary or other value of something, especially by a professional evaluator.

Alococer GA and Woodworth C, "Reasons for Valuation" (2005) Issue 150 Managing Intellectual Property 76-8 ref.

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

----S. 2(g)---"Intellectual property"---Valuation---Scope---Valuation of intellectual property is an act of estimating or fixing the monetary and other values of intellectual property rights (such as patents, copyright, design, trademark, trade secret and other recognized intangible rights).

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

----S. 2(g)---"Intellectual property"---Scope---Intellectual property refers to creation of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce and in general sense, it is used for a set of intangible assets owned and legally protected by a company from outside use or implementation without consent.

Ch. Muhammad Ali and Usman Virk for Petitioners.

2020 C L D 1207

[Lahore]

Before Ayesha A. Malik, J

WASEEM MAJID MALIK---Petitioner

Versus

FEDERATION OF PAKISTAN through Cabinet Secretary and 23 others---Respondents

Writ Petition No. 27842 of 2020, heard on 26th June, 2020.

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

----Ss. 159, 160, 164 & 165---Election of Board of Directors of Company Federal Government members of the Company---Judicial review---Scope---Petitioner intended to contest election of Board of Directors of Company and assailed decision of Federal Government to be represented on Board through contesting of elections---Plea raised by authorities was that Constitutional petition was not maintainable as remedy before Company Judge was available---Validity---Entire dispute was with respect to the decision of Federal Government to participate in elections---Decision and actions of Federal Government was assailed before High Court, therefore, Constitutional petition was maintainable---High Court, in exercise of Constitutional jurisdiction, could determine whether or not Federal Government had acted in accordance with law or whether it had abused its authority---Powers under S. 160 of Companies Act, 2017 vesting with Company Bench of High Court was the power to determine whether or not the elections were conducted under Companies Act, 2017 and did not deal with judicial review of actions or decision of Federal Government challenging as interference in election process---Shareholder had a statutory right under S. 160 of Companies Act, 2017, to ensure that elections of directors were conducted under Companies Act, 2017 as required---Such provision was not available to petitioner to challenge actions of Federal Government---Federal Government was a member of the Company and enjoyed all rights of a member under Companies Act, 2017--- Federal Government could exercise all rights as a member under Companies Act, 2017, which included the right to appoint and remove directors under Companies Act, 2017---Federal Government could either appoint a director on Board of Directors through election under S. 159 of Companies Act, 2017 or through nomination under Ss. 164 & 165 of Companies Act, 2017---Constitutional petition was dismissed in circumstances.

Mian Misbah-ur-Rehman v. Sui Northern Gas Pipelines Limited through Secretary and others Writ Petition No. 21451 of 2019; Mian Misbah-ur-Rehman v. SNGPL and others I.C.A. No.14622/2020; Muhammad Shafique Khan Sawati v. Federation of Pakistan and others 2015 SCMR 851; Mian Javed Amir v. United Foam Industries (Pvt.) Ltd. and others 2016 SCMR 213; M. Fuwad A. Mughal v. Federation of Pakistan and others 2018 YLR 26; Allied Bank of Pakistan Ltd. v. Khalid Farooq 1991 SCMR 599; Munir Hussain Bhatti, Advocate and others v. Federation of Pakistan and another PLD 2011 SC 407 and Arshad Mehmood v. Commissioner/Delimitation Authority, Gujranwala and others PLD 2014 Lah. 221 ref.

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

----Ss. 159, 164 & 165---"Nominee" and "elected directors"---Distinction---Fundamental difference between a nominee director and elected director is that a nominee holds office at the pleasure of the nominator whereas 'elected director' is given a three years tenure under Companies Act, 2017---'Nominee director' has to safeguard interests of its nominator first and foremost whereas 'elected director' has a fiduciary duty to company and all its shareholders---'Nominee director' participates in proceedings of Board of Directors as per terms of its arrangement with nominator to ensure that nominators' investment or interest is safeguarded, to act as a liaison between nominator and company and also consider overall policies and working of company.

Saad Amir for Petitioner along with Petitioner in person.

Ms. Ambreen Moin, DAG along with Umer Saeed Khan, Section Officer (Gas) in the office of Respondent No.2.

Muhammad Raza Qureshi, Asad Raza and Syed Shahid Hussain, for Respondent No. 3, SNGPL with Ahmed Arslan, Chief Law Officer, SNGPL and Imtiaz Mehmood, Company Secretary, SNGPL.

Ruman Bilal and Hafiz Talha for Respondent No. 4 SECP.

Anwaar Hussain, Imran Khan Klair and Mian Saad Ali for Respondent No. 16.

Muhammad Ahmad Qayyum for Respondent No. 21.

Fahad Malik for Respondent No. 22.

Mirza Nasar Ahmad for Respondent No. 24.

2020 C L D 1239

[Lahore (Multan Bench)]

Before Mujahid Mustaqeem Ahmed, J

BANK ISLAMI PAKISTAN LIMITED through Branch Manager/General Attorney/Principal Officer---Petitioner

Versus

DISTRICT SESSION JUDGE, MULTAN and 4 others---Respondents

Writ Petition No. 14675 of 2019, decided on 7th February, 2020.

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

----S. 20---Nature of offences under Financial Institutions (Recovery of Finances) Ordinance, 2001---Forgery by Bank staff---Prosecution under general law---Scope---Question before High Court was whether upon complaint of a customer of a Bank/Financial Institution against such Bank's/Financial Institution's staff for forgery of loan documents, could action against such staff members be initiated under general law, in presence of special law viz. Financial Institutions (Recovery of Finances) Ordinance, 2001---Held, that per S. 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001 all offences enumerated therein related to commission of said offences by customers/loanees and not by staff of Bank/Financial Institution---For prosecution sought to be initiated by any person other than a Financial Institution, then same could only be done under penal laws other than Financial Institutions (Recovery of Finances) Ordinance, 2001--- Constitutional petition was dismissed, in circumstances.

Syed Mushahid Shah and others v. Federal Investigation Agency and others 2017 SCMR 1218 and Faisal Farooq and 3 others v. SHO and another 2017 CLD 1 rel.

Mansoor Alam for Petitioner.

Syed Shehanshah Hussain, Assistant Attorney General with Ijaz Ahmad, Inspector FIA.

2020 C L D 1329

[Lahore]

Before Ch. Muhammad Masood Jahangir and Shams Mehmood Mirza, JJ

AAMER SHAHZAD DHODY---Appellant

Versus

ADAMJEE INSURANCE CO. and others---Respondents

Insurance Appeal No. 355 of 2014, decided on 14th October, 2020.

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

----S. 122---Limitation Act (IX of 1908), Art. 86---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for recovery of insurance claim---Limitation---Rejection of plaint---Mixed question of law and fact---Scope---Appellant insured his vehicle for its transit to another city but the same met with an accident on its way whereupon he approached the insurer for his claim---Surveyor submitted his report and the claim was repudiated---Report was objected and with the intervention of Securities and Exchange Commission of Pakistan, the insurer agreed to have second survey conducted, which was still awaited when the suit for recovery of insurance claim was submitted before the court of law---Insurance Tribunal, on an application, rejected the plaint on the sole ground of limitation---Validity---Insured had admitted the appointment of second surveyor as such the limitation might have stretched until the report was submitted---Issue of limitation was a mixed question of law and fact which could not have been determined without recording of evidence---Appeal was allowed; impugned order was set aside and the Tribunal was directed to decide the matter after receiving and appreciating the evidence.

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

----O. VII, R. 11---Rejection of plaint---Limitation---Scope---Trial Court rejected the plaint on the sole ground of limitation despite the fact that issue of limitation was already framed---Validity---Once issues were framed and court had entered upon recording of evidence, then matter had to be taken on its logical end instead of summary disposal.

Messrs Hoechst Pakistan Ltd. v. Messrs Cooperative Insurance Societies and others 1993 MLD 2464; Irshad Ali v. Sajjad All and 4 others PLD 1995 SC 629 and Haji Abdul Sattar and others v. Farooq Inayat and others 2013 SCMR 1493 ref.

(c) Administration of justice---

----Law favours adjudication of controversy on merit rather to trap the litigants through technicalities.

Jubilee General Insurance Co. Ltd., Karachi v. Ravi Steel Company, Lahore PLD 2020 SC 324 ref.

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

----O. VII, R. 11---Rejection of plaint---Scope---Court while invoking the penal consequences of R. 11 of O. VII, C.P.C. has to confine itself to the contents of the plaint.

Haris Azmat for Appellant.

Ahmad Farooq for Respondents.

2020 C L D 1356

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

SAUDI PAK LEASING COMPANY LIMITED---Appellant

Versus

Messrs AL-KHAN CONSTRUCTION COMPANY (PVT.) LTD. and others---Respondents

Regular First Appeal No. 44 of 2010, decided on 5th March, 2020.

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

----Ss. 9, 7 & 22---Procedure of Banking Court---Lease provided by Financial Institution----"Agreed Loss Value"----Suit for recovery---Lease of vehicle----Default of customer---Termination of lease of vehicle---Overdue installments/rentals---"Agreed Loss Value" in financing agreement, recovery of---Financial Institution/Bank impugned order and decree of Banking Court whereby it was held not to be entitled to recover "Agreed Loss Value" and overdue rentals/installments of customer, after default on part of customer and termination of lease of vehicles provided by Bank to customer---Validity---Financial Institution, being a "leasing company", on termination of such lease, would be entitled to recover "Agreed Loss Value" which would be equivalent to unpaid installments, which in the present case, were overdue rentals and remaining amount of lease finance which was payable in the remaining period of lease---Banking Court in impugned order committed error of law by excluding amount of "Agreed Loss Value" from decree, despite fact that defendant was obligated to pay overdue rentals---Impugned order of Banking Court was modified and Financial Institution/Bank was held to be entitled to receive Agreed Loss value along with overdue rentals inclusive of unpaid installments---Appeal was allowed, accordingly.

Messrs Najia Spinning (Pvt.) Limited and others v. Saudi Pak Leasing Company Limited and others R.F.A. No. 945 of 2011 and Saudi Pak Leasing Company Limited v. Adil Textile Mills Limited and others R.F.A. No.51 of 2015 rel.

Faisal Zafar for Appellant.

Barrister Qadir Bakhsh for Respondents.

2020 C L D 1379

[Lahore]

Before Ayesha A. Malik and Shams Mehmood Mirza, JJ

BRR GUARDIAN MODARABA through Authorized Representative/Manager---Appellant

Versus

ALTAS INSURANCE COMPANY LIMITED---Respondent

F.A.O. No. 67 of 2014, decided on 1st July, 2020.

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

----Ss. 10, 2(f), 9, 7 & 22---Civil Procedure Code (V of 1908) O. VII, R. 10---Procedure of Banking Court----Suit for recovery---Application for leave to defend---Adjudication of application for leave to defend---Return of plaint---Jurisdiction of Banking Court to entertain suits relating to "finance" as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff impugned order of Banking Court whereby plaint of plaintiff was returned by Banking Court on ground that suit in the matter should be filed before Insurance Tribunal---Contention of plaintiff/appellant, inter alia, was that suit was contested by defendant and leave to application was filed, therefore Banking Court could not pass impugned order for return of plaint before decision on application on for leave to defend---Validity---Admitted fact that basis on which suit was filed related to "finance" as defined by S. 2(f) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Without decision on leave application, plaint of appellant could not be returned by Banking Court, and impugned order was therefore an error in law---Impugned order was set aside, and Banking Court was directed to pass decision on application for leave to defend---Appeal was allowed, accordingly.

Sheikh Muhammad Kashif v. Askari Leasing Limited 2004 CLD 1645 and Muhammad Azwar Siddiqui v. Chief Executive Officer Union Leasing Limited 2006 CLD 946 rel.

Abdul Hameed Chohan and Sohail Khursheed for Appellant.

2020 C L D 1392

[Lahore]

Before Masud Abid Naqvi, J

MUHAMMAD JAVED---Appellant

Versus

MUHAMMAD RASHID---Respondent

R.F.A. No.708 of 2011, heard on 13th November, 2019.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Suit on negotiable instrument---Presumptions as to negotiable instrument---Negotiable instrument drawn without consideration---Burden of proof---Scope---Plaintiff/respondent filed suit for recovery of certain amount on the basis of promissory note against the defendant/appellant, which was decreed---Held, that marginal witnesses of the pro note had fully corroborated the version of the plaintiff and had also testified about the execution of pro note---Expert of the Fingerprint Bureau had affirmed that the pro note bore the thumb impression of defendant---Defendant had failed to substantiate his claim that consideration of pro note was not received by him--- Appeal was dismissed.

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

----S. 118---Presumptions as to negotiable instrument---Scope---Initial presumption is that the negotiable instrument is made, drawn, accepted or endorsed for consideration and in a case to the contrary, onus is on the person who is claiming to have executed a guarantee cheque.

Muhammad Azizur Rehman v. Liaquat Ali 2007 CLD 1542 rel.

Shabbir Ahmad Khan for Appellant.

Ch. Amin Rehmat for Respondent.

2020 C L D 1424

[Lahore]

Before Masud Abid Naqvi, J

ABDUL MAJEED AKHTAR---Appellant

Versus

MUHAMMAD ZEESHAN SHOUKAT---Respondent

R.F.A. No. 1190 of 2016, heard on 18th March, 2019.

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Suit on negotiable instrument--- Presumption as to negotiable instrument---Negotiable instrument drawn without consideration---Burden of proof---Scope---Appellant/defendant assailed order passed by Trial Court whereby respondent's/plaintiff's suit for recovery of amount under O. XXXVII, Rr. 1 & 2, C.P.C., was decreed---Validity---Defendant himself had admitted that he had filled and signed the cheque (negotiable instrument in question) but had stated that it was a guarantee cheque---Onus to prove that the cheque was issued as a guarantee was on the defendant, after admission of the execution of cheque, but he failed to prove his version through oral or documentary evidence---Impugned judgment and decree did not suffer from any infirmity, legal or factual, requiring interference, therefore, appeal was dismissed.

Muhammad Azizur Rehman v. Liaqat Ali 2007 SCMR 1820; Muhammad Ali v. Wali Muhammad 2015 CLD 1820; Abdul Karim v. Muhammad Idrees 2014 CLC 1001 and Syed Zawar Hussain v. Syed Riazul Abbas Sherazi 2015 MLD 890 ref.

Muhammad Azizur Rehman v. Liaquat Ali 2007 CLD 1542 rel.

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

----S. 118---Presumption as to negotiable instrument---Scope---Initial presumption is that the negotiable instrument is made, drawn, accepted or endorsed for consideration and in a case to the contrary, onus is on the person who is claiming to have executed a guarantee cheque.

Muhammad Azizur Rehman v. Liaquat Ali 2007 CLD 1542 rel.

Ch. Muhammad Ashraf Jalal for Appellant.

Shahid Mahmood Minhas for Respondent.

2020 C L D 1431

[Lahore (Multan Bench)]

Before Sardar Muhammad Sarfraz Dogar, J

Mst. AYSHA ASIF---Petitioner

Versus

GOVERNOR STATE BANK OF PAKISTAN and others---Respondents

Writ Petition No. 6903 of 2020, decided on 19th June, 2020.

Banker and customer---

----Joint-Bank account---Death of one party to a joint Bank account---Mandate/authority of "Either or Survivor"---Payment of funds to survivor after death of joint-account holder---Authority of bank to block/seize such funds or account(s)---Scope---Petitioner sought direction against seizure of her account which contained funds, which were transferred to her account from a joint-account, after death of joint-account holder as a "one-time transaction" allowed by respondent Bank as per its Standard Operating Procedures (SOPs)---Validity---Contention of respondent Bank that funds were seized/blocked after application was filed by deceased's brother, was not tenable as no proper procedure had been adopted by Bank after issuance of notice by court of competent jurisdiction---Brother of deceased had not adopted the legal requirements therefore funds could not have been seized/blocked--- High Court directed respondent Bank to unfreeze/unblock funds in favour of petitioner under terms and conditions of respondent Bank established between the deceased and petitioner---Constitutional petition was disposed of, accordingly.

Shafique Ahmad v. Public-at-Large and 4 others 2014 YLR 465 rel.

Mian Babar Saleem for Petitioner.

2020 C L D 1462

[Lahore]

Before Jawad Hassan and Masud Abid Naqvi, JJ

The CHAIRMAN, NATIONAL ACCOUNTABILITY BUREAU (NAB)---Appellant

Versus

RAMZAN SUGAR MILLS LIMITED and others---Respondents

I.C.A. No. 49988 of 2020, decided on 14th October, 2020.

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

----Ss. 480 & 100---National Accountability Ordinance (XVIII of 1999), S. 13---Law Reforms Ordinance (XII of 1972), S. 3---Intra court appeal---Requirement to register a mortgage or charge---Appeal against order passed by officer of the Securities and Exchange Commission of Pakistan (SECP)--- Claim or objection against freezing---Maintainability---Scope---Appellant assailed order passed by Single Judge of High Court whereby order of Additional Joint Registrar of Companies was declared to be illegal and he was directed to register the charge---Validity---Order passed by Additional Joint Registrar of Companies was an appealable order in view of S. 480 of the Companies Act, 2017---Appellant had already filed an objection petition under S. 13 of National Accountability Ordinance, 1999 and an appeal under S. 480 of Companies Act, 2017---Proviso to S. 3 of Law Reforms Ordinance, 1972, provided that where appeal, revision or review was provided then intra court appeal was not maintainable---Intra court appeal was dismissed, in circumstances.

SME Bank Limited v. Izharul Haq 2019 SCMR 939 and Muhammad Aslam Sukhera and others v. Collector Land Acquisition, Lahore Improvement Trust, Lahore PLD 2005 SC 45 rel.

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

----S. 3--- Intra court appeal--- Remedy of representation--- Scope---Remedy of representation being equal to remedy of appeal as envisaged under proviso to S. 3 of the Law Reforms Ordinance, 1972 thus debars remedy of intra court appeal.

Muhammad Shakoor v. Federal Public Service Commission through Chairman, Islamabad and 2 others 2003 PLC (C.S.) 414; Yamin v. Mst. Jajan and others 2005 CLC 78; Messrs Shahzadi Polypropylene Industries through Proprietor v. Federation of Pakistan through President and 4 others 2017 PTD 2019; Muhammad Shraf Saeed v. Habib Bank Limited and another 2018 PLC (C.S.) Note 13 and Haji Ahmad Khan and another v. Province of the Punjab and 5 others 2018 PLC (C.S.) 36 ref.

Federation of Pakistan through Secretary Revenue Division, Islamabad and others v. Messrs Sahib Jee and others 2017 PTD 1481 rel.

2020 C L D 134

[Peshawar]

Before Musarrat Hilali and Abdul Shakoor, JJ

AKBAR KHAN---Petitioner

Versus

SAID GUL and 2 others---Respondents

Writ Petition No. 3347-P of 2017, decided on 19th March, 2019.

Constitution of Pakistan---

----Arts. 260 & 199---Constitutional jurisdiction of High Court---Scope---"Holder of public office"---Directors of Public Limited Company---Scope---Question before the High Court was whether for purpose of jurisdiction of High Court under Art. 199 of the Constitution, could a Director of a Public Limited Company be considered a "holder of public office"---Held, that although the term "public office" had not been defined under Art. 260 of the Constitution, it generally referred to any person working in the Public Sector, whether in Parliamentary Government or Municipal institutions, and could be an elected official or person appointed to work in public administration---Director of a Public Limited Company had nothing to do with the Federal, Provincial or Local Governments and therefore was not amenable to Constitutional jurisdiction of High Court.

Petitioner in person.

Barrister Adam Hassan Malik for Respondents Nos. 1 and 2.

Syed Haziq Ali Shah for Respondent No.3.

2020 C L D 251

[Peshawar]

Before Lal Jan Khattak and Muhammad Naeem Anwar, JJ

Ms. SABA GUL---Petitioner

Versus

GOVERNMENT OF PAKISTAN through Secretary Commerce and 3 others---Respondents

Writ Petition No. 6075-P of 2019, decided on 27th November, 2019.

Trade Organizations Act (II of 2013)---

----Ss. 21 & 14---Trade Organizations---Powers and functions of the Regulator---Election procedure of a trade organization---Nomination for elections---Conduct of elections and orders of Election Commission of Trade Organizations--- Appeal under S. 21 of the Trade Organizations Act, 2013--- Alternate Remedy--- Scope--- Petitioner impugned order of Election Commission of respondent trade organization regarding nominations for election of officer-bearers of the Trade Organization---Validity---Section 21 of Trade Organizations Act, 2013 provided specific forum where appeal against such orders would lie and therefore Constitutional petition was not maintainable---Constitutional petition was dismissed, in circumstances.

Barrister Muhammad Yaseen Raza Khan for Petitioner.

Saif ur Rehman, DAG and Qazi Ahmad Saeed for Respondents.

2020 C L D 950

[Peshawar (Abbottabad Bench)]

Before Ahmad Ali, J

MUHAMMAD JAFFAR KHAN---Appellant

Versus

The STATE and another---Respondents

Criminal Appeal No. 21-A of 2019, decided on 24th February, 2020.

Foreign Exchange Regulation Act (VII of 1947)---

----Ss. 19, 23 & 23-A---Offences and penalties under the Foreign Exchange Regulation Act, 1947---Confiscation of Foreign Currency in favour of State---Acquittal of accused after being charged with offences under Foreign Exchange Regulation Act, 1947---Return of confiscated Foreign Currency---Scope---Appellant who was charged with offences under Foreign Exchange Regulation Act, 1947 was acquitted after Trial and impugned order of Trial Court to the extent of confiscation of foreign currency recovered from his premises---Validity---Record revealed that foreign currency had been recovered from premises of appellant in presence of marginal witnesses and after acquittal of the appellant, State had not filed an appeal---High Court modified order of Trial Court with direction to return the confiscated foreign currency to appellant---Appeal was allowed, accordingly.

Nadeem Khan for Appellant.

Touqeer ur Rehman, Assistant Attorney General for the State.

2020 C L D 1232

[Peshawar]

Before Qaiser Rashid Khan and Muhammad Naeem Anwar, JJ

Haji SHER ZAMAN KHAN---Petitioner

Versus

GOVERNMENT OF KHYBER PAKHTUNKHWA through Chief Secretary and 8 others---Respondents

Writ Petition No. 1266-P of 2017, decided on 30th April, 2020.

(a) Constitution of Pakistan---

----Art. 18---Fundamental Right of freedom of trade, business or profession was not an absolute right but subject to law which regulated the business trade or profession of a citizen---Such freedom could be subject to certain guidelines as may be prescribed by law and could be hedged to extent which was lawful.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Judicial review of administrative actions---Principles and scope---High Court while exercising its jurisdiction of judicial review of administrative action could not set aside a well-reasoned, rational and self-explained policy decision of Government---High Court could only interfere where a decision or recommendation of an authority was not in accordance with law or suffered from mala fide or was arbitrary or irrational---Administrative actions were subject to judicial review under grounds of illegality, irrationality or procedural impropriety.

(c) Khyber Pakhtunkhwa Environmental Protection Act (XXXVIII of 2014)---

----Ss. 17, 21 & 22--- Constitution of Pakistan, Art. 199---Environmental Protection Order---Jurisdiction of Environmental Protection Tribunal---Constitutional jurisdiction of High Court---Scope---Alternate remedy availability of---Effect---Question before High Court was whether Constitutional petition impugning Environmental Protection Order issued under S. 17 of Khyber Pakhtunkhwa Environmental Protection Act, 2014 was maintainable in view of presence of alternate remedy in terms of S. 22 of the said Act---Held, that after commencement of Khyber Pakhtunkhwa Environmental Protection Act, 2014, Environmental Protection Tribunal constituted thereunder had exclusive jurisdiction with respect to matters enumerated therein---In presence of alternate remedy provided by law, aggrieved person was legally bound to seek remedy from appropriate forum and therefore Constitutional petition impugning Environmental Protection Order was not maintainable.

Nemo for Petitioner.

Syed Sikandar Hayat Shah, A.A.G. along with Bashir Khan, D.G., EPA for Respondents.

2020 C L D 46

[Punjab Environmental Tribunal]

Before Lubna Ali, Chairperson and Muzaffar Mahmood, Member (General)

Dr. Hafiz MUSHTAQ AHMAD---Appellant

Versus

DIRECTOR-GENERAL ENVIRONMENTAL PROTECTION AGENCY, LAHORE and 5 others---Respondents

Appeal No. 98 of 2019, decided on 15th October, 2019.

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

----Ss. 16 & 22---Punjab Hospital Waste Management Rules, 2014---Disposal of hospital waste---Non-compliance of status report---Locus standi---Appellant was operating a medical unit which was sealed by authorities for improper disposal of hospital waste and directions were issued in such regard---High Court set aside sealing of premises but authorities stopped waste disposal---Validity---Appellant had not challenged order in question before any legal forum and as its legitimacy was intact, it attained finality---Appellant himself had undertaken before High Court to comply with directions issued by department and compliance of instructions contained in order in question were thus binding on appellant---Implementation order did not provide any legal foundation to pass order in question since it was acted upon and exhausted before High Court---Environmental Tribunal set aside notification in question as it was passed in violation of S. 16 of Punjab Environmental Protection Act, 1997---Appeal was allowed accordingly.

Mohsin Sarfraz Cheema, Law Officer for EPA.

2020 C L D 107

[Punjab Environmental Tribunal]

Before Lubna Ali, Chairperson and Muzaffar Mahmood, Member (General)

Messrs SHAHEEN STONE CRUSHER through Owner---Appellant

Versus

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

Appeal No. 174 of 2019, decided on 12th November, 2019.

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

----Ss. 12(4) & 33(f)---Punjab Environmental Protection (Amendment) Act (XXXV of 2012), S. 22---Initial Environmental Examination/ Environmental Impact Assessment (IEE/EIA) Regulations, 2000, Reglns. 9, 12 & 15---Environmental approval---Criminal proceedings, pendency of---Appellant was running stone crusher and sought environmental approval---Environmental Protection Agency returned application till appellant was acquitted from charge of violation of S. 12 of Punjab Environmental Protection Act, 1997---Validity---No departmental or private complaint was pending before Punjab Environmental Tribunal and even if it was pending, there was no justification in returning application till decision of such complaint---No legal provision existed whereby proponent could approach Tribunal for taking action against him for violation of Punjab Environmental Protection Act, 1997---Order passed by Environmental Protection Agency reflected abuse of power and authority and was passed without application of mind---Punjab Environmental Tribunal set aside order passed by agency as same was illegal, void and was not sustainable in eyes of law---Punjab Environmental Tribunal directed agency to proceed on application of appellant for "Environmental Approval" in accordance with law---Appeal was allowed accordingly.

Maple Leaf Cement Factory v. Environmental Protection Agency and others 2018 CLD 153 and United Ethanol Limited v. Environmental Protection Agency Punjab 2015 CLD 1079 ref.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

2020 C L D 960

[Punjab Environmental Tribunal]

Before Lubna Ali, Chairperson and Muzaffar Mehmood, Member (General)

Messrs ASIAN GELATIN INDUSTRIES (AGI) through Proprietor---Appellant

Versus

ENVIRONMENTAL PROTECTION AGENCY, PUNJAB (EPA) through Director General and another---Respondents

Appeal No. 257 of 2019, decided on 20th December, 2019.

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

----Ss. 2(a), 16 & 22---Notification No. 64/DD/(R&I)EPA/19 dated 3.7.2019---Immediate Stoppage Order---Sealing of unit---Appellant was owner of Automated Gelatin Unit against which Immediate Stoppage Order was passed by the Agency---Pleas raised by appellant were that his unit was sealed unlawfully without giving him any opportunity of hearing and that Automated Gelatin Unit was not mentioned in Appendix 'A' of the Delegation of Power Notification dated 18-9-2017, and Deputy Director (Environment) was not empowered to issue Order in question---Validity---Measures which the Agency could direct to be taken by the person concerned were prescribed under S. 16(2) of Punjab Environmental Protection Act, 1997, within such period as were specified in the order---Provision of S. 2(a) of Punjab Environmental Protection Act, 1997, provided for immediate stoppage of activities causing adverse environmental effect but it could not seal the unit---Unit of appellant did not operate manually, therefore, notification dated 3-7-2019 did not empower Deputy Director (Environment) to proceed against such unit---Punjab Environmental Tribunal set aside Immediate Stoppage Order passed against unit of appellant and remanded the matter to the Agency for decision afresh, after fulfilling requirements as contained in S. 16(1) of Punjab Environmental Protection Act, 1997---Appeal was allowed accordingly.

Messrs Noor Poultry Farm v. D.G. EPA Writ Petition No.240084 of 2018 and Mega Steel Mills (Pvt.) Limited v. Government of Punjab through Secretary Environmental Protection Department Punjab and others 2010 CLD 1097 ref.

Muhammad Yasin Hatif along with Seemab Aslam for Appellant.

2020 C L D 362

[Balochistan]

Before Muhammad Hashim Khan Kakar and Rozi Khan Barrech, JJ

YAR MUHAMMAD---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Manager---Respondent

High Court Appeal No. 8 of 2017, decided on 22nd November, 2019.

(a) Interpretation of statute---

----Words used by Legislature---Connotation---Words used by Legislature are to be read and understood in plain and ordinary meanings.

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

----Ss. 9 & 10---Suit for recovery of finance---Leave to defend application, non-filing of---Effect---Defendant was aggrieved of judgment passed by Banking Court decreeing suit for recovery of money filed by Bank---Validity---Defendant according to S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was required to make application for leave to defend suit within thirty days after publication---Defendant, despite lapse of a month and sixteen days after publication had not filed any application for leave to defend which was otherwise beyond prescribed period of thirty days---Bank had fulfilled all requirements of Ss. 9(2) & 9(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 as statement of account and all charged documents were annexed with plaint---Neither defendant had filed leave application as required by Financial Institutions (Recovery of Finances) Ordinance, 2001 nor showed sufficient cause regarding his absence as well as non-appearance of his counsel when suit was fixed before Banking Court---High Court declined to interfere in judgment and decree passed by Banking Court as there was no illegality or material irregularity---Appeal was dismissed, in circumstances.

Ubaidullah Quresh for Appellant.

Talal Rind for Respondent.

2020 C L D 574

[Balochistan]

Before Muhammad Hashim Khan Kakar and Rozi Khan Barrech, JJ

Messrs GHAZI RICE MILLS, SOLE PROPRIETORSHIP GHAZI KHAN LASHARI---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Manager---Respondent

High Court Appeal No. 10 of 2015, decided on 3rd January, 2020.

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

----Ss. 10, 7 & 9---Suit for recovery---Procedure of Banking Court---Application for leave to defend---Mandatory requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope----Section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that a defendant/customer was required to specifically mention amount of finance availed, amounts paid to Financial Institution, dates of payments, and other information, up to date of institution of a suit for recovery---Such requirements had to be fulfilled by a defendant in stricto sensu---Where application for leave to defend contained mere vague averments and simply denied claim of Financial Institution, then such application had to be rejected by Banking Court.

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

----S. 5--- Condoning of delay--- Principles--- Discretion of court, exercise of---Scope---Powers vested in a court to condone delay under S. 5 of Limitation Act, 1908 were discretionary in nature and for exercise of such discretion in favour of any party, Court must be satisfied that delay was beyond control of a party and was not contumacious---Once time began to run, it did not stop and delay of each and every day had to be explained in an application under S. 5 of Limitation Act, 1908.

Muhammad Saleem Lashari and Waleed Baloch for Appellant.

Talat Rind along with Abdul Majeed Umrani, Manager NBP, Dera Allah Yar Branch for Respondent.

2020 C L D 1203

[Balochistan]

Before Jamal Khan Mandokhail and Rozi Khan Barrech, JJ

STATE through Deputy Attorney General for Government of Pakistan---Appellant

Versus

IKRAMULLAH---Respondent

Criminal Acquittal Appeal No. 164 of 2015, decided on 9th August, 2019.

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

----Ss. 17, 18 & 13---Criminal Procedure Code (V of 1898), Ss. 561-A, 249-A & 417---Federal Investigation Agency Act, 1974 (VIII of 1975), Preamble & S. 3---Inherent powers of High Court---Intellectual Property dispute (pirated books)---Power of Magistrate to acquit accused at any stage---Constitution of the Agency---Powers, functions and jurisdiction of Intellectual Property Organization---Dispute between private parties---Scope---Accused was alleged to have been engaged in selling pirated books---FIR was created under Federal Investigation Agency Act, 1974, Preamble of which showed that the agency was created for investigation of certain offences committed in connection with the matters concerning Federal Government and for matters connected thereto---Dispute in the present case was between the private parties in respect of pirated books and their alleged sale in the open market---Complainant was a private organization which was doing business in Pakistan privately and no government work was involved, therefore, FIA had no jurisdiction in respect of infringement of copyright between the private parties as dispute was civil in nature---Tribunal created under Intellectual Property Organization of Pakistan Act, 2012 had the exclusive jurisdiction to try the offences with respect to Intellectual Property laws---Cognizance taken by FIA was illegal and beyond their jurisdiction---Appeal filed under S. 417, Cr.P.C. was converted into an application under S. 561-A, Cr.P.C. and the FIR was quashed.

Syed Iqbal Raza v. Justice of Peace, Islamabad 2019 PCr.LJ 1059 ref.

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

----Ss. 561-A, 249-A & 265-K---Inherent powers of High Court---Power of Magistrate to acquit accused at any stage---Power of Court to acquit accused at any stage---Scope---Section 561-A, Cr.P.C. confers upon High Court inherent powers to make such orders as may be necessary to give effect to any order under the Criminal Procedure Code or to prevent abuse of process of any Court or otherwise to secure the ends of justice---Such powers are very wide and can be exercised by High Court at any time---High Court ordinarily does not quash proceedings under S. 561-A, Cr.P.C. unless Trial Court exercises its powers under S. 249-A or 265-K, Cr.P.C. which are incidentally of the same nature and in a way akin to and co-related with quashing of proceedings as envisaged under S. 561-A, Cr.P.C.---High Court can, in exceptional cases, exercise its jurisdiction under S. 561-A, Cr.P.C., without waiting for Trial Court to pass orders under S. 249-A or 265-K, Cr.P.C. if the facts of the case so warrant to prevent abuse of process of any Court or otherwise to secure the ends of justice.

Syed Iqbal Shah, Deputy Attorney General for Appellant.

Shamsuddin Achakzai for Respondent.

2020 C L D 86

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Chairman/Commissioner (CLD-CSD) and Farrukh H. Sabzwari, Commissioner (AML)

PAKISTAN MOBILE COMMUNICATIONS LIMITED and another--Appellants

Versus

MUBASHER SAEED SADOZAI, DIRECTOR/HEAD OF DEPARTMENT (CCD), SECP---Respondent

Appeal No. 37 of 2018, decided on 30th August, 2019.

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

----S. 33---Companies Act (XIX of 2017), Ss. 240 & 241---Restrictions on declaration of dividend---Dividend to be paid out of profits only---Scope---Appellant a cellular company disposed of its operating fixed assets and declared the substantial part of gains as interim dividend---Commission issued show cause notice for violation of Ss. 240(2) & 241, Companies Act, 2017; imposed fine of Rs. 5,00,000 on the appellant company; directed the company to stop the payment of the questioned dividend; recover and deposit the amount of dividend paid earlier---Contentions of appellant, inter alia, were that it had entered into Business Transfer Agreement with a company (buyer) whereby, passive infrastructure assets (tower assets) and ancillary contracts were transferred to the buyer; that the Master Services Agreement was executed for provision of tower related services which also created value in the buyer thus, the total consideration agreed between the buyer and appellant included an element by way of premium for the said long-term contract; that the respondent had misinterpreted S. 240(2), Companies Act, 2017 and that the gain on sale of capital assets was set off against all the opening accumulated losses---Validity---Towers and attached devices were fundamental to the running of telecom operations of appellant Company therefore, towers, attached devices and associated services were assets of capital nature---Sale consideration received by appellant was the actual cost paid by the buyer to acquire towers---Sale consideration under the Business Transfer Agreement had not categorized the sale transaction into tangible or intangible/intrinsic---Exception contained in S. 240(2) of Companies Act, 2017 was related to the category of companies whose business was buying and selling of immovable property or assets of capital nature---Treatment of profits from the sale of immovable property or assets of a capital nature of such companies was subject to conditions imposed by the exception---Appellant's business did not consist of buying or selling of towers, therefore, it did not fall under the first category of companies that were allowed to pay dividends from the profits raised through sale of immovable property or assets of capital nature---Appellant was unable to demonstrate as to how distribution of dividend was made after adjusting/setting off any loss arising from sale of such capital assets---Reduction of capital was a concept whereby a company reduced its paid up capital or accumulated losses whereas disposal of capital assets did not entitle a company to reduce its paid up capital---Appellate Bench concurred with the findings of Director (CCD), SECP and held that the income from sale or disposal of capital assets of the company could not be distributed among the shareholders, except through winding up of the company---Appeal was dismissed.

Salman Chima, Chima and Ibrahim, Ms. Saima Kamila Khan, Chief Legal Officer, Shafqat Khan, Company Secretary and Asif Ali, Filing Expert for Appellants.

Jawed Hussain, Executive Director (CLD-CCD), Mubasher Saeed, Director (CLD-CCD), Sidney Custodio Pereira, Additional Registrar (CLD-CCD), Ms. Sumaira Siddiqui, Additional Director (CLD-CCD), Abdul Qayyum, Joint Director (CLD-CCD) and Ms. Maheen Najmi, Management Executive (CLD-CCD) for Respondents.

2020 C L D 372

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Chairman/Commissioner (CLD-CSD) and Shauzab Ali, Commissioner (SMD)

CRESCENT STAR INSURANCE LIMITED---Appellant

Versus

COMMISSIONER (INSURANCE) SECP, ISLAMABAD---Respondent

Appeal No. 27 of 2018, decided on 18th December, 2019.

Securities and Exchange Commission (Insurance) Rules, 2002---

----R. 13---Insurance Ordinance (XXXIX of 2000) Ss. 32, 156 & 36---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 13---Conditions imposed on registered insurers---Insurers of non-life insurance business to have assets in excess of minimum solvency requirement---Admissible assets---Advance, determination of---Scope---Insurance Company impugned order of Commissioner (Insurance) Securities and Exchange Commission of Pakistan (SECP), whereby its solvency margin was found deficient and penalty was imposed in terms of R. 13 of the Securities and Exchange Commission (Insurance) Rules, 2002 read with Insurance Ordinance, 2000---Validity---Impugned order had been passed without determining status of "advance" under S. 32 of the Insurance Ordinance, 2002---Commissioner (Insurance) SECP was required to affirm "advance" either as loan or investment and accordingly apply relevant calculation of admissible percentage for purpose of minimum solvency, however the same was not done---Adjudication without application of relevant provisions of Insurance Ordinance, 2000 and calculation of admissible part of advance could not be appreciated as reasonable order---Amount of advance, in the present case, was neither loan nor investment, therefore S. 32(2)(p) & 32(2)(t) of Insurance Ordinance, 2000 were not applicable to appellant's case---Impugned order was set aside and matter was remanded to Commissioner (Insurance) SECP for decision afresh---Appeal was allowed, accordingly.

M. Zeeshan Abdullah and Tanveer Ahmed for Appellant.

Hasnat Ahmad, Director Insurance, SECP and Muhammad Mateen Abbasi, Assistant Director, SECP for Respondent.

2020 C L D 545

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

MS. ZAHIDJEE TEXTILE MILLS LTD. PROVIDENT FUND TRUST---Appellant

Versus

EXECUTIVE DIRECTOR, SECP---Respondent

Appeal No. 13 of 2019, decided on 13th January, 2020.

Companies Ordinance (XLVII of 1984)---

----Ss. 227 & 229---Employees' provident funds and securities---Penalty---Scope---Trustees of the appellant (Trust) were imposed upon penalties for having breached the provisions of S. 227 of the Companies Ordinance, 1984, by maintaining huge amount of funds in the form of cash and cash equivalent whereas they were bound to deposit the fund amount in the special savings account---Validity---Trust had breached the provisions of S. 227 of the Companies Ordinance, 1984 by maintaining substantial amount of funds in the form of cash and cash equivalent when they were duty bound to deposit the fund amount in the special savings account---Contention of appellant that the violation was unintentional and that all funds were subsequently deposited in the Bank had no merit as no evidence was provided to that effect---Impugned order was upheld.

Zahid Imran, Legal Advisor and Naveed Ashraf, Company Secretary for Appellant.

Tariq Ahmed, Additional Director (CSD) and Amir Saleem, Joint Director (CSD) for Respondent.

2020 C L D 614

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

FAWAD YUSUF SECURITIES (PVT.) LTD.---Appellant

Versus

COMMISSIONER, SECURITIES MARKET DIVISION---Respondent

Appeal No. 23 of 2019, decided on 10th January, 2020.

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

----S. 40A---Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018, Reglns. 6 & 21---Customer Due Diligence---Penalty for violation of rules, regulations, directives and notifications---Scope---Appellant was imposed upon a penalty for his failure to comply with the requirements contained in Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018---Contention of appellant was that its inspection had started just after 15 days of the promulgation of regulations, therefore, requiring it to be fully compliant with the regulations was unjustified---Validity---Regulatory requirements prescribed in the regulations were not new as the securities brokers since 2012 had to comply with the regulations of Pakistan Stock Exchange to formulate and implement an effective KYC (Know Your Customer) and CDD (Customer Due Diligence) policy---Appellant, even otherwise, had to ensure full compliance with the regulations at all times---Impugned order was upheld.

Fawad Yusuf, CEO, Fawad Yusuf Securities (Pvt.) Ltd., Shafqat Ali, Consultant, Fawad Yusuf Securities (Pvt.) Ltd., M. Hasnain, Compliance Officer, Fawad Yusuf Securities (Pvt.) Ltd. and Ali Ahmed, Compliance Officer, Fawad Yusuf Securities (Pvt.) Ltd. for Appellant.

Ms. Amina Aziz, Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondent.

2020 C L D 744

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

HASSAN FARHAN MINHAS---Appellant

Versus

JS GLOBAL CAPITAL (PVT.) LTD. and 2 others---Respondents

Appeal No. 50 of 2019, decided on 31st January, 2020.

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

----S. 22---Commodity Exchange and Future Contracts Rules, 2005, R. 20---Regulations Governing System Audit (Regulatory Compliance) of the Brokers of Pakistan Mercantile Exchange Limited, 2012, Regln. 4---Penalty for certain refusal or failure---Brokers to abide by code of conduct---Eligibility for audit---Scope---Appellant complained that his wife had opened a commodity trading account with the respondent and that one of its employees carried out unauthorized trades in her account without possessing the requisite discretionary authority---Executive Director (SMD-PRPD) dismissed the complaint while holding that since the alleged transaction was made during last two years, therefore, respondent was not required to maintain call records as per Regln. 4 of Regulations Governing System Audit of Brokers and that sufficient material was not available on record to prove the claim of appellant---Validity---Correspondence between appellant and respondent showed that respondent had acknowledged the complaint within two years of its filing and therefore, call record should have been retained by him as per Regln. 4 of the Regulations Governing System Audit of Brokers---Appellant, as complainant in the matter, should have been made party to the proceedings by the Executive Director (SMD-PRPD) so that he could have presented his case---Impugned order was set aside and the matter was remanded to the Executive Director (SMD-PRPD) for decision afresh---Appeal was disposed of accordingly.

Appellant present.

Kamran Nasir, CEO, JS Global Capital Ltd., Junaid Mirza, COO, JS Global Capital Ltd. and Tanzeel-ur-Rehman, Head of RMC, JS Global Capital Ltd. for Respondent No. 1

Mohammad Arslan Zafar, Joint Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondents Nos.2 and 3.

2020 C L D 789

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

ADAM SECURITIES LIMITED---Appellant

Versus

COMMISSIONER, SECURITIES MARKET DIVISION, SECP---Respondent

Appeal No. 19 of 2019, decided on 17th January, 2020.

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

----S. 40A---Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018, Reglns. 3, 6, 13 & 21---Penalty for violation of rules, regulations, directives and notifications---Risk assessment---Customer due diligence---Ongoing monitoring---Scope---Appellant was imposed upon penalty for his failure to comply with the requirements contained in Reglns. 3, 6 & 13 of Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018---Validity---Contrary to the contention of appellant, regulatory requirements prescribed in the regulations were not new as the securities brokers since 2012 had to comply with the regulations of Pakistan Stock Exchange to formulate and implement an effective KYC (Know Your Customer) and CDD (Customer Due Diligence) policy---Appellant, even otherwise, had to ensure full compliance with the regulations at all times---Appellant had not fully complied with Regln. 6(8) by not recording the risk rating on the documented forms of its two clients; had not mentioned dates on some of the KYC forms; though had shown that AML/CFT (Anti-Money Laundering and Counter Financing of Terrorism) policy was in place by providing a copy of Board Resolution, however, evidence showed that AML/CFT policy and mechanism for ongoing monitoring of its clients was not in place at the time of inspection which was in violation of Regln. 13; lastly had not fully complied with the requirements of the Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Counter Financing of Terrorism) Regulations, 2018 in letter and spirit--- Impugned order was upheld.

Noman Abdul Majeed, CEO, Muhammad Rizwan Haroon, CFO and Company Secretary, Ali Lakhany, ACA and Syed Ahsan Ali Shah, Advocate High Court for Appellant.

Ms. Amina Aziz, Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondent.

2020 C L D 929

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CLD-C&CD), Farrukh Hamid Sabzwari, Commissioner (SCD, AML) and Aamir Ali Khan, Commissioner (CLD-CSD)

NASIR ALI SHAH BUKHARI and 2 others---Appellants

Versus

The COMMISSIONER (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 21 of 2017, decided on 26th December, 2019.

Per Shaukat Hussain, Commissioner; Farrukh Hamid Sabzwari, Commissioner agreeing; Aamir Ali Khan, Commissioner dissenting. [Majority view]

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

----Ss. 15A & 15E---Prohibition of insider trading---Scope---Allegations against appellant was that he was privy to the scheme of amalgamation of the company before it was made public and that appellant, being an insider, disclosed the scheme to others---Validity---Appellant was sponsor, major shareholder and Chairman/CEO of the Corporation which owned the company, therefore, it was not possible that the company's management had not shared the scheme with him---Involvement of appellant with the investor and regulatory authority was an admitted fact--- Regulatory authority had communicated the refusal of the investor's proposal to the appellant through an e-mail, therefore, the refusal was sufficient to draw an inference that the regulatory authority was about to announce the company's merger into another company--- Majority view of Appellate Bench of the Commission was that the appellant was an insider and he had inside information of the scheme, which was disseminated to others---Respondent had successfully established his case against the appellant--- Appeal was disposed of with majority view of two to one. [Majority view]

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

----Ss. 15A & 15E---Prohibition of insider trading---Transactions executed after disclosure of inside information---Effect---Allegation against appellant was that his real brother had become privy to the inside information and using such information, appellant had avoided a loss by selling shares worth eight million of the company and that he had passed on the inside information to his friend---Validity---Evidence showed that the brother of appellant had become privy to the inside information at 7:30 p.m. and that the appellant on the next day had started trading the company's shares at 9:28 a.m. and had offloaded eight million shares by 12:16 p.m., whereas before that day he had always traded the company's shares after 12 p.m.---Facts and circumstances suggested that the appellant, while acting upon the disclosure of inside information, had indulged in insider trading and had avoided loss---Inside information was announced by the transferee company on the relevant day at 9:36:18 a.m. wherein the phrase "at a token nominal value" was used, which was sufficient reason for a vigilant and prudent investor to believe that the company's equity would be diluted significantly---Majority of Appellate Bench held that the appellant could be held accountable as an insider only for those sale transactions, which were executed prior to 9:36:18 a.m. because information with regard to the scheme was made public after 9:36:18 a.m.---Appellate Bench reduced the penalty imposed on appellant for indulging in insider trading and set aside the penalty imposed on the appellant for sharing inside information with his friend as his friend had started selling shares at 12:33 p.m.---Appeal was disposed of with majority view of two to one. [Majority view]

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

----Ss. 15A & 15E---Prohibition of insider trading---Transactions executed after disclosure of inside information---Effect---Allegation against appellant was that he, while acting on the inside information provided by his friend, had avoided a loss by selling 11,600,000 shares---Validity---Evidence showed that the brother of appellant's friend had become privy to the inside information at 7:30 p.m., the day before, and that the appellant had started selling his shares at 12:33 p.m. and by 2:00 p.m. he had sold his entire shareholding---Inside information was announced by the transferee company on the relevant day at 9:36:18 a.m. wherein the phrase "at a token nominal value" was used which was sufficient reason for a vigilant and prudent investor to believe that the company's equity would be diluted significantly---Respondent had failed to establish a case against the appellant, therefore, impugned order was set aside to his extent---Appeal was disposed of with majority view of two to one. [Majority view]

Per Aamir Ali Khan, Commissioner [Minority view]

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

----Ss. 15A & 15E---Prohibition of insider trading---Scope---Allegation against appellant was that he was privy to the scheme of amalgamation of the company before it was made public and that the appellant, being an insider, disclosed the scheme to others---Validity---Respondent relied on the statement of appellant, made during investigation, wherein he had allegedly admitted that he was privy to the inside information of the scheme---Overall answer of the appellant suggested that he had considered the relevant question in reference to the investor, therefore, it could not have been considered as an "admission"---Regulatory authority had specifically denied the fact that the scheme was shared with the appellant---Letter of the regulatory authority had further stated that refusal of investor's proposal was communicated to the investor with a 'cc' (carbon copy) to the appellant at 7:10 p.m.---Presumption drawn by respondent had lost is evidentiary value in view of the letter of the regulatory authority---Appellant could not be held responsible for dissemination of the inside information of the scheme to others---Respondent had failed to establish "possession of inside information" by said appellant and its "disclosure prior to announcement" to the other appellant---Appellants had successfully made out their case in appeal, therefore, impugned order was set aside and their appeal was accepted---Appeal was disposed of with majority view of two to one. [Minority view]

Per Aamir Ali Khan, Commissioner; agreeing with Shaukat Hussain and Farrukh Hamid Sabzwari, Commissioner

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

----Ss. 15A to 15E---Insider trading---Standard of proof---Scope---Standard of proof under Ss. 15A to 15E is based on the principles of preponderance of evidence.

2013 CLC 203 rel.

Saim Hashmi, Advocate Supreme Court, Faisal Iqbal Khan, Faiza Khan and Mahmood Ali for Appellant.

Adil Anwar, Director Adjudication (SMD), Muhammad Farooq, Additional Director (SMD), Hafiz M. Wajid Wahidi, Deputy Director (SMD) and Mehwish Naveed, Management Executive (SMD) for Respondent.

2020 C L D 967

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (Insurance) and Farrukh H. Sabzwari, Commissioner (AML)

Messrs DIN CAPITAL LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 10 of 2018, decided on 10th October, 2019.

Securities Act (III of 2015)---

----Ss. 150 & 138(5)---Securities Brokers (Licensing and Operations) Regulations, 2016, Reglns. 16, 19 & 13---Pakistan Stock Exchange Limited Regulations, Reglns. 22, 4.12, 4.18, 4.24, 7.5 & 4.17---Central Depository Company of Pakistan Limited Regulations, Regln. 6.2.2---Disciplinary action in respect of licensed person---Scope---Appellant's licence was suspended and a penalty was imposed upon it for operating with an un-registered Agent and branch office; its failure to provide information to inspection team; using Bank account of its client; receiving/making payments in cash from/to clients; executing transactions without permission of the clients; not separating account for proprietary trading; non-registration of director in the Unique Identification Number database; non-implementation of KYC (Know Your Customer) and CDD (Customer Due Diligence) policies; non-maintenance of SAOFs (Standard Account Opening Forms) and discrepancies in CDC-Sub Account Opening Forms---Validity---Appellant had committed violations of serious nature and none of them were redressed---Appellant could not rebut the evidence presented by authorities---Appellate Bench of the Commission observed that since the appellant had shown its willingness to be fully compliant with the law and wanted to surrender its licence, therefore, penalty imposed upon the appellant was significantly reduced---Appeal was disposed of accordingly.

Barrister Rehan Kayani, (Counsel), Ahmed Masood, (Counsel), Ali Nanji, Chief Executive Din Capital Ltd. and Ghayas Uddin, Director Din Capital Ltd. for Appellant.

Ms. Amina Aziz, Director (SMD) and Ms. Mehwish Naveed, Management Executive (SMD) for Respondent.

2020 C L D 1031

[Securities and Exchange Commission of Pakistan]

Before Farrukh Hamid Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CLD-C&CD, Insurance)

Syed MUHAMMAD ALI alias MIR MUHAMMAD ALI KHAN---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 95 of 2017, decided on 21st January, 2020.

Research Analyst Regulations, 2015---

----Rr. 2(d), 2(h), 7 & 10(3)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 2(1)(pb)---Independent Research Analyst---Research Report and contents---Scope---Independent Research Analyst to inform the Commission before commencement of its business---Regulated person---Scope---Appellant, an Independent Research Analyst (IRA), was alleged to have issued Research Reports in violation of sub-regulations (2), (3) & (4) of Regln. 7 of Research Analyst Regulations, 2015 and was imposed upon a penalty---Appellant contended that the Research Analyst Regulations, 2015 were not binding on him because he was neither an IRA nor his written calls were Research Reports; that by incorporating a disclaimer in the written calls he had discharged his duty adequately; that he was not a regulated person within the meaning of S. 2(1)(pb) of the Securities and Exchange Commission of Pakistan Act, 1997; that Securities and Exchange Commission of Pakistan had no power to investigate him as he was not registered or licensed under the Securities and Exchange Commission of Pakistan Act, 1997 and that he was only a teacher offering specialized training to those interested in the stock market---Validity---Contents of appellant's written calls whereby he had rendered B/S/H (buy/sell/hold) or projected PT (price target) of certain securities listed at the Stock Exchange through online portal showed that his calls were Research Reports in terms of Regln. 2(h) of the Research Analyst Regulations, 2015---B/S/H calls or PT of certain securities were not merely for educational purposes rather they were issued to determine and influence the investment decisions of the investors/users of the appellant's online portal---Incorporation of disclaimer in the Research Reports did not exonerate the appellant from compliance of the Regulations and consequences of the violations thereof---Non-registration of appellant under Regln. 10(3) of the Research Analyst Regulations, 2015 did not exempt the appellant from compliance of the Regulations---Appellant was declared to be a regulated person, carrying out a regulated activity as an IRA under the Regulations---Impugned order was upheld and the appeal was dismissed.

Abdul Karim Khan for Appellant.

Osman Syed, Joint Director (Adjudication-I), SECP, Sabeel Ahmed, Assistant Director (SMD), SECP and Ms. Mehwish Naveed, Management Executive (Adjudication-III), SECP for Respondent.

2020 C L D 1051

[Securities and Exchange Commission of Pakistan]

Before Farrukh Hamid Sabzwari, Commissioner (AML) and Shaukat Hussain, Commissioner (Insurance)

CMA SECURITIES (PVT.) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 19 of 2018, decided on 26th September, 2019.

Securities Act (III of 2015)---

----S. 150---Disciplinary action in respect of licensed person---Scope---Appellant company was imposed upon a penalty for its failure to file quarterly financial returns; for not sending details of all its Bank accounts and for not sending hard copy of its half yearly accounts---Commission had issued a reminder to the appellant, however, it had failed to comply with the requirements---Appellant requested for a lenient view on the ground that it had a small setup and that it had no active clients---Validity---Respondent informed the Appellate Bench that the required documents were filed prior to the hearing of show-cause notice and passing of the impugned order---Appellant had complied with the non-compliances mentioned in the show-cause notice with a delay---Appellate Bench, in view of the subsequent compliance, reduced the penalty imposed through the impugned order---Appeal was disposed of accordingly.

Ali Muddassar and Syed Shahzad Ali (Sheikh and Chaudhri, Chartered Accountants) for Appellant.

Ms. Amina Aziz, Director (SMD) and Ms. Mehwish Naveed, Management Executive, SMD) for Respondent.

2020 C L D 1056

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Commissioner, CLD-CSD and Shauzab Ali, Commissioner (SMD)

CRESCENT STAR INSURANCE LIMITED---Appellant

Versus

DIRECTOR (INSURANCE) SECP, ISLAMABAD---Respondent

Appeal No. 112 of 2017, decided on 4th December, 2019.

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

----S. 33---Insurance Ordinance (XXXIX of 2000), Ss. 156 & 61---Appeal to the Appellate Bench of the Commission---Power of Commission to call for information and access---Penalty for default in complying with or acting in contravention of the Insurance Ordinance, 2000---Withdrawal of appeal---Scope---Securities and Exchange Commission advised the appellant Insurance Company to submit its comments in the matter of a complaint, whereby it was alleged that the appellant company had failed to pay a claim of certain sum of amount but no reply was received---Appellant company was directed under S. 61 of the Insurance Ordinance, 2000 (the Ordinance) to submit reply to the complaint but the direction was not complied with---Appellant company was imposed upon a fine under S. 156, of the Ordinance for contravening the provisions of S. 61 of the Ordinance---Validity---Held, delay in payment of insurance claims and non-compliance of regulatory direction was a serious matter which could not be ignored---Appellant company requested the Appellate Bench to allow the withdrawal of appeal---Appellate Bench, without further probe into the merits of the case, dismissed the appeal as withdrawn.

M. Zeeshan Abdullah and Tanveer Ahmed for Appellant.

Hasnat Ahmad, Director Insurance, SECP and Muhammad Mateen Abbasi, Assistant Director, SECP for Respondent.

2020 C L D 1113

[Securities and Exchange Commission of Pakistan]

Before Shaukat Hussain, Commissioner (CLD-C&CD), Farrukh Hamid Sabzwari, Commissioner (SCD-AML) and Aamir Ali Khan, Commissioner (CLD-CSD)

BILAL AURANGZEB NOOR---Appellant

Versus

The COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 9 of 2018, decided on 20th December, 2019.

Per Shaukat Hussain, Commissioner, Farrukh H. Sabzwari, Commissioners agreeing; Aamir Ali Khan, Commissioner, dissenting on the issue of persons "acting in concert" [Majority view]

(a) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----Ss. 5, 2(1)(a) & 21---Securities Act (III of 2015), S. 139---Constitution of Pakistan, Art. 264---General Clauses Act (X of 1897), S. 6---Acquisition of additional voting shares---Investigation---Effect of repeal of law---Scope---Appellant was imposed upon a penalty as it and others while "acting in concert" had acquired 35% of the total issued voting shares of a company without making a public announcement of the offer under S. 5 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 (Takeovers Ordinance)---Validity---Violations pertained to the period when the Takeovers Ordinance was not repealed and was in operation, therefore, by virtue of Art. 264(c) of the Constitution and S. 6(c) of General Clauses Act, 1897 show-cause notice and impugned order were fully protected---Violations of the Takeovers Ordinance were not investigated under S. 139 of Securities Act, 2015, as argued by appellant, as a matter of fact violations of Takeovers Ordinance were exposed during the investigation, therefore, enquiry under S. 21 of Takeovers Ordinance was not necessary---Statements recorded during investigation could not be used as core evidence to penalize the appellant for violations of Takeovers Ordinance---Such statements could be treated as a relevant fact, therefore, to prove violations, the Commissioner was required to rely upon other corroborated and independent evidence---Words 'acquirer' and 'person' had been used interchangeably in the Takeovers Ordinance---Section 5 of the Takeovers Ordinance was applicable to all persons, who acted in concert and it was irrelevant whether all of them had purchased shares of the company with their own resources or funds provided by the appellant---Appellant and others could not be exonerated from the violation of S. 5 of the Takeovers Ordinance, whereby, they while acting in concert and without public announcement of the offer, had acquired 35% voting shares of the company---Appeal was dismissed. [Majority view]

2011 PTD 2297; PLD 1998 SC 1; PLD 2011 SC 260; PLD 1976 SC 6; 2012 CLD 873; 2011 CLD 537; 2010 CLD 262; 2009 CLD 970; 2007 CLD 306 2014 MLD 1515 and 2006 CLD 408 ref.

PLD 1980 Lah. 195; 1992 PTD 1001; PLD 1959 (W.P.) Kar. 94; 2016 PLC 168 and 1997 YLR 1627 distinguished.

Per Aamir Ali Khan, Commissioner [Minority view]

(b) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----Ss. 5, 2(1)(a) & 4---Acquisition of additional voting shares---Acquisition of more than ten percent voting shares of a company---Scope---Appellant was imposed upon a penalty as it and others while acting "in concert" had acquired 35% of the total issued voting shares of a company without making a public announcement of the offer under S. 5 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 (Takeovers Ordinance)---Validity---Allegation of "acting in concert" was not applicable under S. 5 of Takeovers Ordinance rather, it was applicable under S. 4 of the Takeovers Ordinance---Only "acquirer" could be charged with the violation of "acting in concert"---No reason existed to include shareholdings of appellant with that of others to establish the violation of the breach of 25% threshold envisaged under S. 5 of Takeovers Ordinance---Commissioner had failed to establish the entitlement of a particular person who in violation of S. 5 of the Takeovers Ordinance, had directly or indirectly, acquired 35% voting shares of the company---Violation of "acting in concert" could not be attributed to anyone without establishing the entitled person---Appeal was accepted and the impugned order was set aside. [Minority view]

Per Shaukat Hussain, Commissioner, Farrukh H. Sabzwari, Commissioner agreeing; Aamir Ali Khan, Commissioner disagreeing [Majority view]

(c) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----Ss. 5 & 6---Acquisition of additional voting shares---Consolidation of holdings---Scope---Phrase "no person…" used in S. 5 of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 means "no acquirer..."---Such finding is supported by the wording of S. 6(1) of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002---Originally, the word "person" was used under S. 5 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 for the one who acquired more than 25% voting shares of a company, however, while explaining the acquisition requirement of more than 25% voting shares under S. 6(1) of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, the word "person" had been replaced with the word "acquirer"---"Acquirer" or "persons" have been used interchangeably.

(d) Constitution of Pakistan---

----Art. 12--- Protection against retrospective punishment---Scope---Article 12(1)(b) of the Constitution prohibits imposition of a penalty, of a kind different from the penalty prescribed at the time the offence was committed.

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

----Ss. 139 & 137---Investigation---Power of Commission to call for information---Scope---Sections 139 & 137 of Securities Act, 2015 are procedural and can operate retrospectively.

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

----S. 139---Investigation---Scope---Only those offences and violations can be investigated under S. 139 of Securities Act, 2015 which have been committed under the Securities Act, 2015 or any rules or regulations made thereunder.

(g) Interpretation of statutes---

----Law has to be read in its entirety and no provision of any statute is to be read in isolation.

Barrister Faisal Khan, Advocate Supreme Court and Zahir Shah for Appellant.

Adil Anwar, Director Adjudication (SMD), Muhammad Farooq, Additional Director (SMD) and Mehwish Naveed, Management Executive (SMD) for Respondent.

2020 C L D 1223

[Securities and Exchange Commission of Pakistan]

Before Aamir Ali Khan, Commissioner (CLD-CSD) and Farrukh Hamid Sabzwari, Commissioner (SCD-AML)

PAKISTAN TELECOMMUNICATION COMPANY LIMITED---Appellant

Versus

ASSISTANT DIRECTOR (CCD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD---Respondent

Appeal No. 83 of 2019, decided on 26th December, 2019.

Group Companies Registration Regulations, 2008---

----Regln. 8---Income Tax Ordinance (XLIX of 2001), S. 59AA---Application for designation as a group---Group taxation---Delay in removing deficiencies in the application--- Effect--- Appellant's application for designation as a group was dismissed because it had removed deficiencies in its application after lapse of seventeen months---Validity---Impugned order had indicated "late compliance" as the reason for rejection of the application and in the written comments respondent had also stated "post facto", as one of the reasons for rejection of the application---Held; respondent could not proceed beyond primary findings---Observation of "post facto" was not applicable in the case as no time limit was prescribed in the Group Companies Registration Regulations, 2008, whereby the application was not timely---Appellate Bench of the Commission allowed the issuance of designation letter for group taxation.

Shaukat Amin Shah, FCA, Zahid Amin Shah, ITP, Furqan Mahmood, PTCL and Ameer Nawaz, PTCL for Appellant.

Ms. Beenish Waqas, Assistant Director (CCD), SECP for Respondent.

2020 C L D 1255

[Securities and Exchange Commission of Pakistan]

Before Aamir Khan, Chairman/Commissioner (CLD-CSD) and Shauzab Ali, Commissioner (SMD)

NAIM ANWAR, CHIEF EXECUTIVE OFFICER---Appellant

Versus

DIRECTOR (INSURANCE), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 10 of 2017, decided on 18th December, 2019.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 12 & 156---Criteria for sound and prudent management---Penalty for default in complying with, or acting in contravention of the Insurance Ordinance, 2000 (Ordinance)---Scope---Appellant, being Chief Executive Officer of the company, was imposed upon a penalty for deliberately not inviting the complainant, a director, to the meeting of Board of Directors (BOD)---Contentions of appellant, inter alia, were that the respondent had no power to impose penalty for not inviting a Director to the BOD's meetings and that S. 12(1)(a) of the Insurance Ordinance, 2000 was not applicable as the same was concerned with the business of the company---Validity---Appellant was responsible for running the affairs of the company, he would have noticed that the complainant was absent for more than one meetings and it was his responsibility to ensure that the complainant was receiving notices of the BOD's meetings---Appellant was not handling the business of the company with integrity, due care and the professional skills appropriate to the nature and scale of its activities in terms of S. 12(1)(a) of the Insurance Ordinance, 2000 as such penalty was rightly imposed under S. 156 of the Insurance Ordinance, 2000---Impugned order was upheld and the respondent was directed to proceed against the company Secretary in accordance with law.

Zeeshan Abdullah and Tanweer Ahmed, Director Crescent Star Insurance Limited for Appellant.

Hasnat Ahmad, Director (Insurance) and Mateen Abbasi, Assistant Director (Insurance) for Respondent.

2020 C L D 1332

[Securities and Exchange Commission of Pakistan]

Before Farrukh Hamid Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (C&CD, Insurance)

AZEE SECURITIES (PRIVATE) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 103 of 2017, decided on 6th February, 2020.

Securities Act (III of 2015)---

----S. 150---Securities (Leveraged Markets and Pledging) Rules, 2011, R. 34---Pakistan Stock Exchange Limited Regulations, Rglns. 4.18.1(c) & 19.5---National Clearing Company of Pakistan Limited Regulations, 2015, Regln. 12.9.3--- Disciplinary action in respect of licensed person---Prohibition---Segregation of clients' accounts by the broker---Maintenance of collateral account---Obligation of clearing members to collect margins from their clients---Scope---Appellant, a securities broker, was imposed upon a penalty for extending credit to its clients for trading of securities; charging mark-up from its clients in the guise of late payment charges; making payments to clients who were having debit balance; its failure to recover Finance Participation Ratio (FPR); its failure to recover Mark to Market (MtM) losses in form of cash from its clients in Leveraged Market; its failure to recover margins from its clients for the trades executed in the ready market; its failure to recover MtM losses in form of cash from its clients in Future Market and failure to make additional disclosures in quarterly accounts---Validity---Appellant had not denied existence of the violations as such the violations were established, however, the appellant had taken steps to reduce the continued debit balance and had significantly reduced the quantum of mark-up---Appellate Bench, keeping in view the appellant's efforts to comply with the requirements of the Framework reduced the penalty---Appeal was disposed of accordingly.

Abdallah Azzaam Naqvi and Ghazi Naseem, Manager Compliance for Appellant.

Osman Syed, Joint Director (Adjudication-I), SECP, Sabeel Ahmed, Assistant Director (SMD), SECP and Ms. Mehwish Naveed, Management Executive (Adjudication-III), SECP for Respondent.

2020 C L D 1384

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

Messrs DIN CAPITAL LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 59 of 2019, decided on 3rd February, 2020.

Securities Act (III of 2015)---

----S. 150---Securities and Exchange Commission of Pakistan Circular No. 20 of 2017, dated: 30-08-2017---Disciplinary action in respect of licensed person---Unauthorized deposit taking by securities brokers including their representatives and agents---Scope---Appellant was imposed upon a penalty for not crediting funds received from National Clearing Company of Pakistan Limited (NCCPL) to the Bank accounts held for maintaining client funds; obtaining loans from its sponsors/directors; failed to get the Standardized Account Opening Forms (SAOFs) filled in accordance with the regulatory requirements; its failure to provide any evidence of dissemination of Know Your Customer (KYC)/Customer Due Diligence (CDD) policies to its employees; providing unlawful financing to its clients; settling trades on behalf of its clients; making payments to clients despite outstanding debit balances in their accounts and selling shares of one of its clients without his consent---Validity---Appellant had admitted that no evidence was available to prove training of its employees under KYC and CDD policies---Unlawful financing to clients was not justifiable under any circumstances---Contrary to the contention of appellant that loan obtained by it was subordinate to all other indebtedness as per Cl. 1(d)(iii) of Circular No. 20 of 2017, dated: 30-08-2017, the loan agreement had only mentioned future indebtedness and not the existing indebtedness, which was in contravention of the requirements of the said Circular---Appellant had not provided the auditor's certificate for two other loans, in contravention of Cl. 1(a)(v) of the said Circular---Appellant had failed to fully comply with the requirements of the law--- Impugned order was upheld.

Ali Nanji, CEO, Din Capital Limited and Muhammad Ghayasuddin, Director, Din Capital Limited for Appellant.

Osman Syed, Joint Director (Adjudication-1), Muhammad Faisal, Management Executive (Adjudication-I) and Ms. Mehwish Naveed, Management Executive (Adjudication-III) for Respondent.

2020 C L D 1440

[Securities and Exchange Commission of Pakistan]

Before Farrukh Hamid Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (Insurance, C&CD)

WASIF M. KHAN---Appellant

Versus

EXECUTIVE DIRECTOR, CORPORATE AND SUPERVISION DEPARTMENT, SECP---Respondent

Appeal No. 45 of 2018, decided on 30th December, 2019.

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

----S. 33---Appeal to the Appellate Bench of the Commission---Adjournment sine die---Scope---Appellant, being one of the Directors, was imposed a penalty---Appellant contended that he had filed a petition in the High Court for deletion of his name as Director which was pending adjudication and prayed that the proceedings in the appeal might be adjourned till the decision of the High Court---Validity---Held; no restraining order with respect to the proceedings was available before the Appellate Bench of the Commission, however, a decision by the High Court would resolve the controversy pending through the appeal---Appellant and respondent were directed to intimate the Appellate Bench about the decision of the High Court.

Muhammad Saqlain Arshad for the Appellant.

Tariq Ahmed, Additional Director (CSD) and Amir Saleem, Joint Director (CSD) for Respondent.

Date of hearing: 28th November, 2019.

INTERIM ORDER

1. This Order is passed in Appeal No.45 of 2018 filed by Mr. Wasif M. Khan (Appellant) under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997 (SECP Act) against the order (Impugned Order/Letter) dated 04/10/18 passed by the Executive Director, Corporate Supervision Department (Respondent).

2. The brief facts of the case are that Nirala MSR Foods Limited (Company) was required to hold its Annual General Meeting (AGM) for the year ended 30/06/16 on or before 31/12/16, pursuant to section 158(1) of the Companies Ordinance, 1984 (Ordinance). However, records of the Company revealed that it failed to convene the AGM as prescribed under the law. Furthermore, the Company failed to file its interim financial statements pursuant to section 245 of the Ordinance with the Securities and Exchange Commission of Pakistan (the Commission) within the time stipulated for the following quarters:

| | | | --- | --- | | Quarter ended | Filing due on | | December 31, 2015 | February 29, 2016 | | March 31, 2016 | April 30, 2016 | | September 30, 2016 | October 31, 2016 |

1. It was alleged that the chief executive and the directors of the Company had, contravened the requirements of section 158 and section 245(3) of the Ordinance, therefore, a Show Cause Notice dated 24/02/17 (SCN) was issued which was not responded to. Hearing in the matter was fixed for 21/03/17, 16/01/18, and 2/07/18, however, no one appeared. In the circumstances, the Respondent proceeded to issue an ex-parte Order. Therefore, in exercise of powers conferred under section 158(4) of the Ordinance, a fine of Rs 50,000 (aggregate 350,000), whereas, under section 245(3) of the Ordinance, a fine of Rs. 10,000 (aggregate 70,000) was imposed on each of the directors of the Company in the following manner:

Under section 158(4):

| | | | | --- | --- | --- | | S. No. | Names of Directors | Amount in Rupees | | 1. | Mr. Farooq Ahmed | 50,000 | | 2. | Mr. Mehmood ur Rehman | 50,000 | | 3. | Mr. Muhammad Ishaq Malik | 50,000 | | 4. | Mr. Muhammad Taloot | 50,000 | | 5. | Mr. Naseem Akhtar | 50,000 | | 6. | Mr. Shahzad Salim | 50,000 | | 7. | Mr. Wasif M.Khan | 50,000 | | | TOTAL | 350,000 |

Under section 245(3):

| | | | | --- | --- | --- | | S. No. | Names of Directors | Amount in Rupees | | 1. | Mr. Farooq Ahmed | 10,000 | | 2. | Mr. Mehmood ur Rehman | 10,000 | | 3. | Mr. Muhammad Ishaq Malik | 10,000 | | 4. | Mr. Muhammad Taloot | 10,000 | | 5. | Mr. Naseem Akhtar | 10,000 | | 6. | Mr. Shahzad Salim | 10,000 | | 7. | Mr. Wasif M.Khan | 10,000 |

2020 C L D 1470

[Securities and Exchange Commission of Pakistan]

Before Farrukh Hamid Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (C&CD, Insurance)

MOHAMMAD MUNIR MOHAMMAD AHMAD KHANANI SECURITIES (PRIVATE) LIMITED---Appellant

Versus

COMMISSIONER (SMD), SECP, ISLAMABAD---Respondent

Appeal No. 102 of 2017, decided on 29th January, 2020.

Securities Act (III of 2015)---

----Ss. 150 & 64---Securities (Leveraged Markets and Pledging) Rules, 2011, R. 34---Securities Brokers (Licensing and Operations) Regulations, 2016, Regln. 34---Pakistan Stock Exchange Limited Regulations, Reglns. 4.18.1(c) & 19.5---National Clearing Company of Pakistan Limited Regulations, 2015, Regln. 12.9.3---Disciplinary action in respect of licensed person---Licensing requirement---Prohibition---Preparation and submission of financial statements---Segregation of clients' accounts by the brokers---Maintenance of collateral account---Obligation of clearing members to collect margins from their clients---Scope---Appellant, a securities broker, was imposed upon a penalty for extending credit to its clients for trading of securities without registration as Financee/Financier; making margin payments on behalf of its clients'; financing through other than regulated modes; charging mark-up from its clients in the guise of late payment charges; not maintaining collateral account under its participant account; failing to reduce continued debit balances of clients; failing to recover margins from its clients for the trades executed in the ready market; failing to recover Mark to Market (MtM) losses of Future Market, in the form of cash and failing to make additional disclosures in quarterly accounts and providing finance facility to various brokerage houses---Validity---Appellant had not denied existence of the receivables (continued debit balances) from its clients; extending credit to clients through modes other than permissible under R. 34 of Securities (Leveraged Markets and Pledging) Rules, 2011; charging mark-ups on continued debit balance of clients and self-enhancement of Financing Participation Ratio (FPR) ratio to 35% instead of 25%, as provided in National Clearing Company of Pakistan Limited Regulations, 2015---Violations against the appellant were established, however, appellant had significantly reduced the quantum of continued debit balance of clients and mark-up---Appellate Bench, keeping in view, the appellant's efforts to comply with the requirements of the Framework reduced the penalty---Appeal was disposed of accordingly.

Muhammad Munir Khanani, Abdul Razzaq and Abdallah Azzaam Naqvi for Appellant.

Osman Syed, Joint Director (Adjudication-I), SECP, Sabeel Ahmed, Assistant Director (SMD), SECP and Ms. Mehwish Naveed, Management Executive (Adjudication-III), SECP for Respondent.

2020 C L D 1483

[Securities and Exchange Commission of Pakistan]

Before Farrukh H. Sabzwari, Commissioner (SCD, AML) and Shaukat Hussain, Commissioner (CCD, Insurance)

Messrs DIN CAPITAL LIMITED---Appellant

Versus

COMMISSIONER (SECURITIES MARKET DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 54 of 2019, decided on 7th February, 2020.

Securities Act (III of 2015)---

----Ss. 74 & 150---Securities (Leveraged Markets and Pledging) Rules, 2011, R. 34---Brokers and Agents Registration Rules, 2001, R. 12 [since repealed]---Prohibition of insider trading---Standards of conduct---Disciplinary action in respect of licensed person---Prohibition---Brokers to abide by code of conduct---Scope---Appellant was imposed upon a penalty for using clients' accounts for front running and extending funds to the said clients' accounts---Validity---Front running was akin to insider trading and a criminal offence---No evidence was available to suggest that front running had taken place through the appellant---Karachi Automated Trading System (KATS) operator was an employee of the appellant and the appellant should have ensured that proper checks were in place to prevent front running from taking place with its clients' accounts---Appellant had violated the Securities Rules by extending unlawful financing to clients---Appellate Bench, while believing the statement of the appellant that the violations were unintentional and that it was in the process of surrendering its license, reduced the penalty--- Appeal was disposed of accordingly.

Ali Nanji, CEO, Din Capital Limited and Muhammad Ghayasuddin, Director, Din Capital Limited for Appellant.

Osman Syed, Joint Director (Adjudication-1), Muhammad Faisal, Management Executive (Adjudication- I) and Ms. Mehwish Naveed, Management Executive (Adjudication-III) for Respondent.

2020 C L D 737

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, Ijaz ul Ahsan and Munib Akhtar, JJ

MUHAMMAD SALEEM KHAN---Petitioner

Versus

MCB BANK LIMITED---Respondent

Civil Petition No. 3057 of 2019, decided on 3rd December, 2019.

(Against the order dated 27.06.2019 passed by the Lahore High Court, Rawalpindi Bench, Rawalpindi in R.F.A. No. 122 of 2013)

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

----S. 9(2)-Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Suit for recovery of loan---Statement of account submitted by financial institution before the Banking Court---Verification in terms of Bankers' Books Evidence Act, 1891---Scope---In the present case, the account statement submitted before the Banking Court carried a note at the end stating "Certified and verified on Oath that all the entries contained in the statement of account are true copies of the entries contained in ordinary books of the bank maintained and prepared in ordinary course of business and the said books are still in the custody of the bank. These entries have been certified after verification from the original ledger/ bills of the banker"---Said note practically incorporated the language of S. 2(8) of the Bankers' Books Evidence Act, 1891 and therefore met the requirement of law---Furthermore each page of the account statement was duly stamped and initialled by the concerned official of the Bank which amply and adequately met the requirements of the law---Petition for leave to appeal was dismissed and suit of financial institution was held to be pending before the Banking Court.

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

----S. 9(2)-Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)---Suit for recovery of loan---Statement of account submitted by financial institution before the Banking Court---Verification in terms of Bankers' Books Evidence Act, 1891---Scope---Account statement was one comprehensive document containing the entire history of the account containing credit and debit entries in a chronological order and was only required to contain verification at the end of such document.

Abdul Rashid Awan, Advocate Supreme Court for Petitioner.

Barrister Umer Aslam Khan, Advocate Supreme Court for Respondent.

2020 C L D 872

[Supreme Court of Pakistan]

Present: Faisal Arab, Sajjad Ali Shah and Munib Akhtar, JJ

RAHAT AND COMPANY through Syed Naveed Hussain Shah---Appellant

Versus

TRADING CORPORATION OF PAKISTAN STATUTORY CORPORATION, FINANCE AND TRADE CENTRE through Secretary/Chief Executive Officer---Respondent

Civil Appeal No.91-K of 2017, decided on 8th August, 2019.

(On appeal from the order dated 6-11-2017 passed by the High Court of Sindh, Karachi in High Court Appeal No.137 of 2017)

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

----O. XXIX, R. 1--- Suit filed by a company/corporation---Competency---Authorization by Board of Directors---Principles---'Rule of indoor management'---Scope---Principles relating to authorization for filing suit laid down in the judgments reported as Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 and Iftikhar Hussain Khan of Mamdot v. Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 were the correct law and were approved by the Supreme Court accordingly, whereas the view taken in the judgment reported as Abdul Rahim and others v. United Bank Ltd. PLD 1997 Kar. 62 was disapproved and declared as not good law, which ought not to be followed or applied.

According to the 'rule of indoor management' persons dealing with a company were bound to read the public documents of a company, i.e. its Memorandum and Articles of Association, and to satisfy themselves that the transaction entered into or proposed to be entered into was not inconsistent therewith, but they were not bound to do more, nor were they required to enquire into the regularity of the internal proceedings or what had been called 'the indoor management of the company', for, they were entitled to assume that all other things had been done regularly.

Pak Turk Enterprises (Pvt.) Ltd. v. Turk Hava Yollari (Turkish Airlines Inc) 2015 CLC 1 ref.

The principles relating to authorization for filing suit laid down in the judgment reported as Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 ("Australasia Bank"), could be regarded as the general rule, applicable where the defendant in the suit (or other legal proceedings) was a third party, to whom or in relation to whom the rule of indoor management would apply. Where the rule of indoor management applied, even production of the board resolution itself was, strictly speaking, not necessary. All that was required was to see whether, as a matter of form, the Articles of Association had been complied with, and that was all, for which purpose it was only an examination of the Articles that was required. Once it was proved that the power of attorney had been executed and the relevant articles under which the Directors could delegate their respective powers to institute and prosecute suits on their behalf had been proved, it was not necessary to prove the resolution by which the directors had resolved to grant such a power of attorney to the attorney.

Pak Turk Enterprises (Pvt.) Ltd. v. Turk Hava Yollari (Turkish Airlines Inc) 2015 CLC 1; Central Bank of India Ltd. v. Taj ud Din Abdur Rauf and others 1992 SCMR 846; Telecard Ltd. v. Pakistan Telecommunication Authority 2014 CLD 415 and Al-Noor Sugar Mills Ltd. v. Federation of Pakistan and others 2018 SCMR 1792 ref.

Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 approved.

Abdul Rahim and others v. United Bank Ltd. PLD 1997 Kar. 62 disapproved and regarded as not good law

Whereas the principles relating to authorization for filing suit laid down in the judgment reported as Iftikhar Hussain Khan of Mamdot v. Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 ("Khan of Mamdot") could be regarded as a special rule, which applied when the defendant was, for one reason or another, an "insider" (as it were). There, it may be necessary (but this depended on the factual situation) to actually examine and consider whether, in fact or in law, the Board resolution was passed or not and if so, in what manner, e.g., at a properly convened Board meeting. But even this clearly had a factual element. It was only once the facts had been ascertained that the legal consequences that followed could be determined and applied.

Pak Turk Enterprises (Pvt.) Ltd. v. Rturk Hava Yollari (Tarkish Aiurlines Inc.) 2015 CLC 1 ref.

Iftikhar Hussain Khan of Mambdot v. Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 approved.

Abdul Rahim and others v. United Bank Ltd. PLD 1997 Kar. 62 disapproved and regarded as not good law.

Principles relating to authorization for filing suit laid down in the judgments reported as Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 and Iftikhar Hussain Khan of Mamdot v. Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 were the correct law and were approved by the Supreme Court accordingly. Whereas the view taken in the judgment reported as Abdul Rahim and others v. United Bank Ltd. PLD 1997 Kar 62 was disapproved and declared as not good law, which ought not to be followed or applied. Supreme Court further held that anything contained in other judgments of the High Courts, that was inconsistent with what had been held and approved in present judgment must also yield to present judgment, and to that extent must be regarded as disapproved and not good law.

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

----O. XIV, R. 5 & O. XXIX, R. 1---Suit filed by a company/ corporation---Competency---Authorization by Board of Directors---Principles---Additional issue, framing of---Defendant filing an application before the court for framing an additional issue regarding whether the suit filed by company/corporation had been competently filed without authorization by its Board of Directors---Held, that if any objection or application of such nature was filed at any stage (i.e., whether in a written statement at the trial stage or in parawise comments or reply filed at the appellate or other similar stage), the court should refrain from straightaway framing an issue or recording an objection in such regard---Experience showed that such objections were, more often than not, frivolous and an abuse of the process of the court, intended only to delay, derail or frustrate consideration of the dispute on the merits---Court should, if at all it considered it necessary, require the Articles of Association to be produced---If an examination of the same, and an application of the doctrine of indoor management as explicated in the judgment reported as Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 satisfied the Court that the suit/appeal etc. had been properly instituted then any objection taken in such regard should be regarded as concluded in favour of the company/corporation---Only if, after such examination and consideration, the court was of the view, for reasons to be recorded, that the matter still remained unresolved that an issue should at all be framed (or the objection otherwise entertained for further consideration at the appellate etc. stage) and evidence led or the record summoned (as the case may be) and the parties heard accordingly.

Pak Turk Enterprises (Pvt.) Ltd. v. Turk Hava Yollari (Turkish Airlines Inc.) 2015 CLC 1 and Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 685 ref.

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

----O. XI, R.14 & O. XXIX, R.1---Suit filed by a company/corporation without competent authority (i.e., of a proper Board resolution)---Ratification of suit---Scope---Since the matter of ratification of an incompetently filed suit did not arise in the present case, therefore, only a tentative view could be expressed on the matter, which was that any such defect could be cured by subsequent ratification.

Presentaciones Musicales SA v. Secunda and another [1994] 2 All ER 737 and United Bank of India v. Naresh Kumar and others AIR 1997 SC 3 ref.

Amir Raza Naqvi, Advocate Supreme Court for Appellant.

Sarfraz Ali Metlo, Advocate Supreme Court and Dr. Raana Khan, Advocate-on-Record for Respondent.

2020 C L D 1026

[Supreme Court of Pakistan]

Present: Manzoor Ahmad Malik, Syed Mansoor Ali Shah and Sayyed Mazahar Ali Akbar Naqvi, JJ

ADAMJEE INSURANCE COMPANY LTD.---Petitioner

Versus

MUHAMMAD RAMZAN and others---Respondents

Civil Petitions Nos. 1483-L to 1495-L of 2018, decided on 2nd July, 2020.

(On appeal from the orders of Lahore High Court, Lahore dated 30-05-2018, passed in W.Ps. Nos. 215957/2018, 215958/2018, 215959/2018, 215960/2018, 215962/2018, 215963/2018, 215966/2018, 215967/2018, 215969/2018, 215971/2018, 215972/2018, 215973/2018 and 215974/2018).

(a) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Scope--- Sub-constitutional legislation could not curtail or abridge the jurisdiction of a constitutional court---Legislature, being the creature of the Constitution could not take away the jurisdiction of a constitutional court conferred by the Constitution---Sub-constitutional legislation could not control the constitutional remedy available under Art.199 of the Constitution---While the constitutional courts may consider the legislative object and purpose of a statute, still they could not shut their doors to an aggrieved person who invoked the constitutional jurisdiction of the court under Art. 199 of the Constitution.

Arshad Mehmood v. Commissioner/Delimitation Authority Gujranwala and others PLD 2014 Lah. 221; Khan Asfandyar Wali and others v. Federation of Pakistan through Cabinet Division Islamabad and others PLD 2001 SC 607; Mrs. Shahida Zahir Abbasi and 4 others v. President of Pakistan and others PLD 1996 SC 632; Malik Muhammad Mukhtar, through Legal Heirs v. Province of Punjab through Deputy Commissioner (Collector) Bahawalpur and others PLD 2005 Lah. 251; Miss Asma Jilani v. The Government of the Punjab and another PLD 1972 SC 139; Government of West Pakistan and another v. Begum Agha Abdul Karim Shorish Kashmiri PLD 1969 SC 14 and Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1986 SC 26 ref.

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

----S. 124--- Constitution of Pakistan, Art. 199--- Constitutional petition before the High Court against a decision passed by the Insurance Tribunal on a miscellaneous application---Maintainability---Constitutional jurisdiction under Art.199 of the Constitution could be invoked to challenge miscellaneous decisions passed during the course of proceedings before the Insurance Tribunal covered under S.124(1) of the Insurance Ordinance, 2000 (the 'Ordinance')---In the present case, the order of the Insurance Tribunal passed against the insurance-company through which the right to file a written statement had been denied, did not fall within the purview of S.124(2) of the Ordinance and could only be challenged by invoking the constitutional jurisdiction of the High Court under Art.199 of the Constitution---Constitutional court then had to examine whether such a petition met the requirements of Art.199 and required interference in the light of the established jurisprudential principles that guided a constitutional court---Constitutional court may also consider the decision in the overall scheme of the Ordinance under which it arose and give due deference to the legislative object and purpose---Petitions for leave to appeal were converted into appeals and allowed, the order passed by the Tribunal, as well as, the impugned order of the High Court were set-aside and the Supreme Court directed the parties to appear before the Tribunal where the insurance-company would file its written statement and there from the Tribunal shall proceed further and decide the matter strictly in accordance with law.

Hashwani Hotels Limited through Senior Manager v. Sindh Insurance Tribunal, Karachi 2016 CLD 1790 and State Life Insurance Corporation of Pakistan through Chairman and another v. Additional District Judge-I and another 2010 CLD 845 approved.

Farooq Amjad Meer, Advocate Supreme Court for Petitioner (in all cases).

Ms. Tasneem Amin, Advocate-on-Record along with Munir Ahmad Khan Sadhana, AHC (appeared with special permission of the Court).

2020 C L D 1381

[Supreme Court of Pakistan]

Present: Umar Ata Bandial and Amin-ud-Din Khan, JJ

Messrs STATE LIFE INSURANCE CORPORATION OF PAKISTAN and others---Petitioners

Versus

Mst. Begum RASHIDA JAMIL---Respondent

Civil Petition No. 237-L of 2014, decided on 3rd August, 2020.

(Against the order dated 10.12.2013 passed by the Lahore High Court, Lahore passed in R.F.A. No. 1024 of 2012)

(a) Insurance Rules, 2002---

----R. 12---Statement and declaration required of insurance agents---Primary school teacher/insurance agent---Declaration given by insurance agent at time of his re-appointment in the year 2002, that "I am not working for any other insurer and in future also I will not work for any other insurer while associated with the Corporation without written permission of the Corporation"---Whether such declaration covered employment of agent as school teacher---Held, that it was clear that the said declaration given by the deceased-agent at the time of his re-appointment in 2002 did not include any undertaking with reference to his employment with any other private or government entity---In fact, the deceased was a primary school teacher with the Education department of the Provincial Government--- Such employment was not covered by the declaration given by him at the time of his re-appointment---Consequently, the denial of his insurance benefits by the State Life Insurance Corporation on the basis of his previous declaration in 1997 (before re-appointment) was unfair and unlawful---Petition for leave to appeal was dismissed and leave was refused.

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

----S. 115--- Employee of State Life Insurance Corporation ('the Corporation')---Group insurance, self-subscribed compulsory insurance and field self-subscribed group insurance--- Section 115 of the Insurance Ordinance, 2000--- Whether applicable---Perusal of provisions of S. 115 of the Insurance Ordinance, 2000 made it clear that the jurisdiction of the Insurance Tribunal had nexus with the date of issuance of a policy of insurance by the insurer after the commencement of the Insurance Ordinance, 2000---In the present case, three types of insurance schemes were availed by the deceased, i.e. group insurance, self-subscribed compulsory insurance and field self-subscribed group insurance, which were meant for employees and not for policy holders who secured the issuance of life insurance policies from the Corporation---Said schemes were connected with the day to day employment of the deceased and other employees of the Corporation---No policy was issued to the employees in respect of any of said insurance covers provided to employees---Consequently, S. 115 of the Insurance Ordinance, 2000 had no application to the present case---Petition for leave to appeal was dismissed and leave was refused.

Ibrar Ahmed, Advocate Supreme Court for Petitioners.

Liaqat Ali Butt, Advocate Supreme Court for Respondent.

2020 C L D 1427

[Supreme Court of Pakistan]

Present: Umar Ata Bandial and Amin-ud-Din Khan, JJ

NAJAF IQBAL---Appellant

Versus

SHAHZAD RAFIQUE---Respondent

Civil Appeal No. 165-L of 2020, decided on 6th August, 2020.

(Against the judgment and decree dated 05.03.2020 passed by the Lahore High Court, Lahore in R.F.A. No. 209 of 2010)

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

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII---Admittedly the subject cheque belonged to the bank account and cheque book of the defendant---Defendant claimed that the cheque in question was lost and he had reported the matter to the police---When the plaintiff presented the cheque to the bank it was dishonoured on the ground of "insufficient funds" and "payment stopped by the drawer", which fact was supported by the statement of the bank manager---Neither it was the statement of the bank manager nor mentioned on memorandum of refusal of cheque that the cheque did not contain signatures of the defendant---Presumptions mentioned in S. 118 of the Negotiable Instruments Act, 1881 were attached with a negotiable instrument unless proved to the contrary---Said presumptions were to be rebutted by the defendant---When the ground for dishonour of a cheque was "insufficiency of funds" and "stopped payment", there could be no presumption that cheque was not having signatures of the defendant---Defendant had the choice to produce a Handwriting Expert when he disputed his signatures upon the cheque, but he opted not to produce any such expert---Suit filed by plaintiff had been rightly decreed by the High Court---Appeal was dismissed.

Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332; Rohit Bhai Jivanlal Patel v. State of Gujarat and another AIR 2019 SC 1876; Uttam Ram v. Devinder Singh Hudan and another 2019 (10) SCC 287 and Abdul Rasheed v. Fazal Ali Shah 2016 SCMR 2163 ref.

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

----O. XIV, R. 1 & O. XXXVII---Summary suit---Issues, framing of---Defendant raising objection regarding framing of issues for the first time before the Supreme Court---Before the Supreme Court when the pleadings of the parties were in their knowledge and both the parties had led evidence of their own choice in the shape of oral as well as documentary, the objection of non-framing of proper issues was not relevant---Appeal was dismissed.

Jahangir A. Jhoja, Senior Advocate Supreme Court for Appellant.

Imran Muhammad Sarwar, Advocate Supreme Court for Respondent.