CLD 2022 Judgments

2022 C L D 31

[Competition Commission of Pakistan]

Before Ms. Shaista Bano and Ms. Bushra Naz Malik, Members

SHOW CAUSE NOTICE ISSUED TO DEFENCE HOUSING AUTHORITY ISLAMABAD/RAWALPINDI FOR ALLEGED VIOLATION OF SECTION 3 OF THE COMPETITION ACT, 2010: In the matter of

File No. 43/NAYATEL/C&TA/CCP/2016, decided on 3rd June, 2021.

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

----S. 2(1)(k)--- Relevant market--- Product market--- Geographical market---Scope---Product market comprises of all those products that are regarded as interchangeable or substitutable by the consumer by the reason of products characteristics, prices and intended uses---"Geographical market" comprises the area in which the undertakings concerned are involved in the supply of products or services and in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring geographical areas because, in particular, the conditions of competition are appreciably different in those areas.

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

----Ss. 3 & 2(1)(k)---Abuse of dominant position---Relevant market---Product market---Scope---Commission issued show cause notice to the respondent housing authority for violation of S. 3 of the Competition Act, 2010 for not issuing NOC (No Objection Certificate) to a CIT (Cable Internet and Telephony) service provider---Contention of respondent was that Commission lacked the mandate to determine the ROW (Right of Way)---Validity---Product market in the case consisted of grant of ROW to provide CIT services and the relevant geographic market consisted of the area where the respondent had developed the housing societies, as the conditions of competition were sufficiently homogeneous throughout that area and distinct from other neighbouring areas---While CIT service providers needed ROW permit, on a timely basis, any undue or unreasonable delay or restrictive practices on the part of public body or private entity, managing the specified territory could increase the operator's cost of deployment of such network(s)---Modern-day technology development required the CIT services of infrastructure laying that involved civil/earths for infrastructure operation and maintenance---For CIT services providers, ROW could be described as essential facility for laying down their infrastructure across the public and/or private areas for the provision of CIT services to the residents of that area---Respondent was directed to offer to the service provider ROW on terms and conditions which were no less favourable than the terms and conditions to incumbent service providers.

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

----S. 3---Abuse of dominant position---Scope---Commission issued show cause notice to the respondent housing authority for violation of S. 3 of the Competition Act, 2010 for not issuing NOC (No Objection Certificate) to a CIT (Cable Internet and Telephony) service provider---Respondent's management had exclusive rights to administer the housing society including a grant of ROW for provision of CIT services and therefore, had 100% market share in the relevant market---Management of respondent was preventing or restricting, reducing or distorting competition in the relevant market in a systematic manner, inter alia, by favouring its own subsidiary and/or applying dissimilar conditions in relation to two seemingly equivalent transactions by requiring revenue sharing percentage, exclusionary practices in terms of excluding the service provider from the relevant market by not allowing it to lay down its infrastructure in the relevant market, and ultimately refusing to deal on the pretext of potential physical damage to infrastructure and unavailability of space the corridors, which according to respondent had already been occupied by other CIT service providers---Conduct of the management of respondent was adversely affecting competition in the provision of CIT services within the relevant market---Respondent had also failed to provide any rational commercial or objective justification in terms of efficiency gains for its exclusionary and anti-competitive conduct under review---Such was discouraging investors to the consumer's detriment and proliferation of CIT services which in turn was affecting the national economy as well as the competition inter se other service providers which was prohibited under the Competition Act, 2010---Commission observed that the respondent had abused its dominant position in terms of S. 3(1) read with Ss. 3(3)(e), (g) & (h) of the Competition Act, 2010---Respondent was directed to offer to the service provider ROW on terms and conditions which were no less favourable than the terms and conditions to incumbent service providers.

In the matter of Show Cause Notices issued to Jamshoro Joint Venture Ltd (JJVL) and LPG Association of Pakistan (the 'LPG Order') rel.

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

----S. 3---Abuse of dominant position---Scope---When a dominant under taking owns and/or controls and/or itself uses and/or has the ability to grant the right to use an essential facility i.e. the facility or the infrastructure without access to which other undertakings cannot provide competing services to the end consumers, refuses competitors to access such facility or grants access to competitors only on terms less favourable than those which it gives to others, it places the competing undertakings at a disadvantage; these are considered exclusionary practices that are specifically prohibited under S. 3 read with subsection (3) clauses (e) and (h) of the Competition Act, 2010.

In the matter of Show Cause Notice dated April 10, 2008 for Violation of Section 3 of the Competition Ordinance, 2007 M/S Karachi Stock Exchange (Guarantee) Limited; EU Commission's decision dated 21 December 1993 in (IV/34.689) Sea Containers v. Stena Sealink, (1994) OJ L 15/18 and IV/34.801 FAG - Flughafen Frankfurt/Main AG, (1998) OJ L 72/30 rel.

(e) Pakistan Telecommunication (Re-organization) Act (XVII of 1996)---

----S. 27-A---Right of way---Scope---Section 27-A of Pakistan Telecommunication (Re-organization) Act, 2010 provides that every licensee shall have the right to share any Public or Private Right of Way for the purpose of the installation or maintenance of its telecommunication equipment or for the purpose of establishing or maintaining its telecommunication system---For a licensee to enjoy the rights granted under S. 27-A, a request to the owner of such Right of Way is required to be made for approval of the mode of execution of the works it proposes to undertake---Such right is not granted as of right to the licensee but is subject to the approval of the owner of the land in question---Section 27-A also requires that the amount paid by the licensee shall be a reasonable amount assessed by the public authority taking all the relevant factors into account, such as, applicable laws of the public authority and the relevant laws applicable to the district in which such Right of Way is situated---Law also encourages mutual agreement between the parties as to the determination of the fee in question for the ROW.

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

----S. 28---Pakistan Telecommunication (Re-organization) Act (XVII of 1996), S. 4---Functions and powers of the Competition Commission of Pakistan---Functions of the Pakistan Telecommunication Authority---Scope---Legislative scheme under which PTA (Pakistan Telecommunication Authority) operates, contain no provisions that envisage/provide for an enforcement mechanism to remedy anti-competitive practices.

ICH Agreement inter se the LDI Operators 2012 CLD 767 and In the matter of Pakistan Telecommunication Company Limited 2019 CLD 116 rel.

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

----S. 28---Pakistan Telecommunication (Re-organization) Act (XVII of 1996), S. 4---Functions and powers of the Competition Commission of Pakistan---Functions of the Pakistan Telecommunication Authority---Scope---PTA has exclusive mandate to regulate the Telecom Sector through licensing system whereas the Commission has the exclusive mandate of taking cognizance of anti-competitive practices and exercise its enforcement powers thereon in accordance with the Competition Act, 2010---When it comes to the overriding effect, the provisions of the Competition Act, 2010 shall prevail over any other law, if they are in conflict with its mandate i.e. protecting the consumers from anti-competitive behaviours.

ICH Agreement inter se the LDI Operators 2012 CLD 767 and In the matter of Pakistan Telecommunication Company Limited 2019 CLD 116 rel.

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

----S. 3---Abuse of dominant position---Scope---Where a dominant undertaking takes advantage of its dominant position and uses it as a bargaining tool to induce customers to accept certain trading conditions of its choice, such a practice comes under the umbrella of exclusionary practices and such practices are strictly prohibited under section 3of the Competition Act, 2010.

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

----S. 3---Abuse of dominant position---Scope---Refusal to deal or refusal to supply is a behaviour in which a dominant undertaking refuses to sell, supply, or grant access to another firm, or is willing to sell only at a price that is considered "too high", or is willing to sell, supply or grant access only under such conditions that are unacceptable, in addition, refusal can also take the form causing undue delay or otherwise imposing of unreasonable conditions in return for the supply.

Guidance on its enforcement priorities in applying Article 82 (102) of the TFEU, (2009) OJ C 45/7; Notice on the application of the Competition Rules to access agreements in the telecommunications sector, (1998) OJ C 265/02; Case COMP/35.134 in the matter of Trans-Atlantic Conference Agreement (TAC), (1999) OJL 95 and COMP/C-1/36.915, Deutsche Post - Interception of cross-border mail, (2001) O.J. L 331/40. ref.

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

----S. 2(1)(q)---Undertaking---Scope---For an entity to fall in the ambit of the definition of 'undertaking', its involvement in any type of commercial and/or economic activity is sine qua non.

In the matter of Utility Stores Corporation 2018 CLD 292 rel.

Farooq Ahmed, General Manager, Business Development and Regulatory Affairs, Muhammad Nisar Khattak, Law Officer, Muhammad Fahad, Manager Telecom and Khurram Chohan, GM Operations for Defense Housing Authority Islamabad/Rawalpindi and Messrs DHAI Teleman (Pvt.) Limited.

Muhammad Ahmed, Company Secretary for Messrs Nayatel (Pvt.) Limited.

2022 C L D 89

[Competition Commission of Pakistan]

Before Ms. Bushra Naz Malik and Mujtaba Ahmad Lodhi, Members

SHOW CAUSE NOTICES ISSUED TO PAINT MANUFACTURERS FOR NON-COMPLIANCE OF CCP'S ORDER DATED 13-01-2012: In the matter of File No. (150/OFT/PAINTORDER/COMPLIANCE/CCP/13), decided on 13th ctober, 2021.

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

----Chap. II [Ss. 3 to 11]---Prohibition of abuse of dominant position, certain agreements, deceptive marketing practices and approval of mergers---Scope---Competition law revolves around the rectification of anti-competitive practices, one of the underlying principles therein remains that of providing adequate protection to consumers in other words, consumer protection forms a backdrop in the conduct of all proceedings before the Commission.

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

----S. 10---Deceptive marketing practices---Scope---While deliberating upon issues falling within the purview of S. 10 of the Competition Act, 2010, due heed must be paid to each and every aspect of the advertisement while determining its ability to deceive---Failure to fully comply (100%) with the directions of the Commission would allow the persistence of anti-competitive behavior in violation of the Competition Act, 2010 and the Commission's directions (if any), therefore, because the directions of the Commission are based on a holistic conclusion/ solution (comprising of various aspects), partial compliance (irrespective of the particular percentage) will be inadequate.

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

----S. 38--- Penalty--- Opportunity of hearing--- Scope--- Section 38 subsection 1(b) of the Competition Act, 2010 provides that an undertaking can be penalized, after the undertaking concerned has been given an opportunity of being heard, if it is determined that the undertaking has failed to comply with an order of the Commission made under the Competition Act, 2010.

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

----S. 38--- Penalty--- Scope--- Mandate of the Commission is to encourage compliance and promote competition culture within the region---Such is only possible when undertakings comply with the orders given by the Commission in matters where violation of the Act have taken place.

(e) Words and phrases---

----"Study"---Meaning---Scope---Research, examination, identification of aspects or factors of an event or activity.

Black Laws Dictionary rel.

Sultan Babar Mirza, Wahid Qureshi, Mehr Muhammad Iqbal and Aftab Chaudhry, Legal Counsel for Berger Paints Pakistan Ltd.

G. A. Tariq Khan, Advocate Supreme Court, Omar Obaid, Brand Manager and Syed John Alia for Brighto Paints Private Limited.

Muhammad Waseem for Brolac Paints.

Tariq Munir and Muhammad Asghar for Chawla Paints.

Asim Zafar (Retd.), COO and Bilal Kashmiri for Allied Paints Industries Ltd. (Gobi).

Tariq Munir, Muhammad Asghar, Asad ur Rehman, Manger Supply Chain Marketing and Ali Anwar, DGM for Karss Paints Industries (Pvt) Limited (Happilac).

Syed Zia Uddin, CFO and Fawad Ikram, Business Manager for Kansai Paint (Pvt.) Limited.

Tariq Munir and Muhammad Asghar for Rafiq Polymer Industries (King Fisher).

Tariq Munir, Agha Zahid Abbas, Area Marketing Manager and Khwaja Imran, Director for Mansoor Paint Industries (Marvell).

Ahsan Hameed Lilla, Advocate Supreme Court for Nelson Paint Industries.

Tariq Munir and Muhammad Asghar for U.P. Industries (Pvt.) Limited (Silver Sand).

2022 C L D 152

[Competition Commission of Pakistan]

Before Ms. Shaista Bano Gilani and Ms. Bushra Naz Malik, Members

SHOW CAUSE NOTICE ISSUED TO MESSRS QASIM IRON WORKS FOR DECEPTIVE MARKETING PRACTICES: In the matter of File No. 386/DADEX/OFT/CCP/19, decided on 13th September, 2021.

Competition Act (XIX of 2010)---

----S. 10---Deceptive marketing practices---Scope---Complainant had alleged that the respondent was engaged in the practice of deceptive marketing as it was disseminating false, untrue and misleading information regarding the complainant's products through social media wherein the respondent had claimed that the quality of the complainant's products was inferior in comparison with the respondent's similar products, in terms of their quality, efficacy and fitness, without providing any evidence to substantiate the claims---Validity---Overall net general impression generated by the videos in question regarding the respondent's product was that its product was superior to that of the complainant's product---Dissemination of the videos in question had amounted to distribution of false and misleading information to the consumers without a reasonable basis and the videos also showed false and misleading comparison of goods in the process of advertisement which was capable of harming the business interests of the complainant---Record revealed that a daily wage worker of respondent had produced the alleged deceptive videos and had distributed them---Content was removed after the intervention of the respondent's owner---Letter was subsequently issued by the respondent to its distributors prohibiting them from any such activity in the future---Nothing on the record was available to conclusively establish that the respondent itself had produced or disseminated the deceptive videos in question---URL (Uniform Resource Locator) of the official website of the respondent was different from the website wherefrom the deceptive material was disseminated---Complainant had failed to conclusively prove that the alleged WhatsApp groups in which the deceptive videos were shared were created and managed by the respondent---Commission observed that the respondent had a duty to remain vigilant regarding the activities of the distributors of its products, which were essentially acting on its behalf as its representatives and agents---Show cause notice was disposed of accordingly.

Kennol Performance Oil against Messrs Kennol Petroleum (Pvt.) Limited and others (Case No. 344/KENNOL/OFT/CCP/2019): In the matter of rel.

Umer Malik for Messrs Dadex Eternit Limited (Complainant).

Muhammad Qasim, Chief Executive Officer for Messrs Qasim Iron Works (Respondent).

2022 C L D 194

[Competition Commission of Pakistan]

Before Ms. Bushra Naz Malik and Mujtaba Ahmad Lodhi, Members

SHOW CAUSE NOTICES ISSUED TO MESSRS MEDIALOGIC (PVT.) LIMITED, MESSRS PAKISTAN BROADCASTERS ASSOCIATION AND MESSRS BROADCASTERS ADVERTISERS COUNCIL ON THE COMPLAINT FILED BY MESSRS BOL MEDIA NETWORK, MESSRS LABBAIK (PRIVATE) LIMITED AND MESSRS BOL ENTERPRISES (PVT.) LIMITED: In the matter of

File No. 223/Media/C&TA/CCP/2018, decided on 1st December, 2021.

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

----S. 4---Prohibited agreement---Scope---Complainant's allegation was that the respondents had entered into contracts which had the effect of preventing, restricting, and reducing competition within the relevant market---Validity---Relevant market in the matter was provision of television audience measurement data and ratings to TV channels across Pakistan---First agreement excluded non-members of Pakistan Broadcasters Association from receiving ratings from Medialogic and included an extra criteria for non-members to obtain ratings from Medialogic---Along with that, Medialogic was also threatened with monetary consequences if they were to provide ratings to a non-member without prior approval of Pakistan Broadcasters Association---Non-members of Pakistan Broadcasters Association were also excluded from being part of Broadcasters Advertisers Council (second agreement), as there was no representation of them in their constitution, and third agreement prohibited Medialogic from providing services to non-members of Pakistan Broadcasters Association and non-members of Broadcasters Advertisers Council without prior approval from Broadcasters Advertisers Council---Competition Commission observed that the agreements between the respondents had the effect of foreclosing the market and creating barriers to entry for non-members and new market entrants---Commission issued directions of a prohibitory nature to the respondents under S. 31(b) of the Competition Act, 2010---Respondents were warned against engaging in any such activities in the future--- Proceedings were disposed of accordingly.

In the matter of Utility Stores Corporation 2018 CLD 292; In the matter of Show Cause Notice issued to Institute of Chartered Accountants of Pakistan (ICAP) (F. NO. 1(52)/ICAP/C&TA/CCP/ 2012); In the matter of Show Clime Notice issued to Messrs Pakistan Poultry Association dated 16 August 2010 and LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 2014 rel.

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

----S. 2(k)--- Relevant market--- Product market---Scope---Product market comprises of all those products that are regarded as interchangeable and suitable by the consumer by the reason of product's characteristics, prices and intended uses---Whereas, the geographical market comprises the area in which the undertaking concerned are involved in the supply of products or services and in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighboring geographical areas because, in particular, the conditions of competition are appreciably different in those areas.

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

----Preamble & Chap. II [Ss. 3 to 11]---Pakistan Electronic Media Regulatory Authority Ordinance (XIII of 2002), S. 23---Exclusion of monopolies---Prohibition of abuse of dominant position, certain agreements, deceptive marketing practices and approval of mergers---Special and general law---Scope---Competition Act, 2010, is a special law when it comes to matters of competition---Although S. 23 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002, does provide some guidance on the exclusion of monopolies but the Competition Act, 2010, is a special law on this matter as the violations such as abuse of dominant position, prohibited agreements, approval and non-approval of mergers and acquisitions and deceptive marketing practices are covered in detail under the Act to ensure consumer welfare and a free and open market to all competitors---Pakistan Electronic Media Regulatory Authority Ordinance, 2002, contains no provisions which envisage or provide for an enforcement mechanism to remedy anti-competitive practices---Pakistan Electronic Media Regulatory Authority Ordinance, 2002, appears to be a special law when it comes to the regulation of, inter alia, licensed activities---For alleged anti-competitive practices, Competition Act, 2010, is the special law for all such purposes and the Commission has the power to take cognizance of such matters.

ICH Agreement inter se the LDI Operators 2012 CLD 767 and In the matter of Pakistan Telecommunication Company Limited 2019 CLD 116 rel.

Azhar Shamim, Company Secretary and Ms. Naila Naureen, Advocate for Messrs Bol Media Network, Messrs Labbaik (Private) Limited and Messrs Bol Enterprises (Pvt.) Limited.

Barrister Haroon Mumtaz, Cornelius, Lane and Mufti and Salman Danish, Chief Executive Officer for Messrs Medialogic (Pvt.) Limited.

Barrister Waqqas A. Mir, Axis Law Chambers for Messrs Pakistan Broadcasters Association.

Nemo. for Messrs Broadcasters Advertisers Council.

Wakeel Khan, Director General (Media and Broadcasting) for Pakistan Electronic Media Regulatory Authority (PEMRA).

Qamar Abbas, Executive Director for Messrs Pakistan Advertisers Society.

2022 C L D 240

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member

SHOW CAUSE NOTICE ISSUED TO MESSRS HILAL FOODS (PVT.) LIMITED ON COMPLAINT FILED BY MESSRS DABUR INDIA LTD. AND MESSRS DABUR PAKISTAN (PVT.) LIMITED: In the matter of

File No. 349/Dabur/OFT/CCP/2020, decided on 26th August, 2021.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Right based on interim order---Scope---Complaint was grounded on an interim order of the High Court---Complainant's right to use the trademark stemmed through the same order and the respondent's right to use its registered trademark was also sub judice before the High Court---Commission, in order to take cognizance of a matter based on interim orders, would have to wade through questions yet to be settled by the High Court and would require determination of intellectual property rights which was beyond the scope of the Commission---Initiation of the enquiry was not made out in the first place---Show cause notice and the enquiry report were set aside.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Scope---Word "another's" has deliberately been used by legislature so that Commission may only proceed where the fact of ownership of trademark, firm name, product labelling and packaging is not in dispute---Under S. 10 of the Act, there is no room for the Commission to issue declaration as to the legal status of the owner of the trademark---Commission is not a declaratory forum nor a registration authority to be approached, when there is a dispute as to the ownership of the trademark---No provision existed in the Act that empowers the Commission to engage in pursuit of determining the right or legal status of the owner of an intellectual property---Prohibition or violation entailed in S. 10(2)(d) of the Act can in no way be construed to have the effect of creating or declaring the rights.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Scope---Intellectual property rights being a specie of 'property rights' are 'right in rem'---Rights conferred on the owner of the intellectual property are enforceable against anyone and binds the world at large---Non-absolute claim regarding the trademark, firm name, or product labelling and packaging is of no ordinary value, if the non-absolute claim is accepted on the part of Commission, it will lead to declaration of such right---Granting of the proprietary rights in intellectual property is the sole domain of the Intellectual Property Organization and the Commission cannot make any determination in this regard---Fact of absolute ownership can only be presumed by the Commission if the trademark is registered one.

Tara Crop Sciences's case 2016 CLD 105 rel.

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

----Ss. 22 & 18---Application for registration---Earlier trademark, meaning and scope---Intellectual property under intellectual property law is an intangible creation of human intellect which can either be acquired through 'intent to use application' submitted to the concerned intellectual property organization or if there is an adverse claim it can be acquired through the evidence of 'prior use'.

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

----S. 10--- Deceptive marketing practices---Scope---Prohibition as contained in S. 10(2)(d) entails about the responsibility of the undertakings not to engage in deceptive marketing practices by fraudulently using the trademark.

Barrister Asfandyar Khan Tareen, Tareen Chambers for Messrs Dabur Pakistan (Pvt.) Limited.

Khurram Gul Ghory, Zabar Consultants for Messrs Hilal Foods (Pvt.) Limited.

2022 C L D 266

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson, Ms. Shaista Bano and Mujtaba Ahmat Lodhi, Members

ACQUISITION OF ADDITIONAL [ ]%(sic.) SHAREHOLDING OF MESSRS TRI-PACK FILMS LIMITED BY MESSRS PACKAGES LIMITED FROM MESSRS MITSUBISHI CORPORATION: In the matter of

Case No. 1155/Merger-CCP/21, decided on 22nd October, 2021.

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

----S. 11--- Merger, approval of--- Scope--- Acquirer submitted application to the Competition Commission regarding its intention to acquire the shareholding of Target Company and sought approval of the merger---Concerns related to the transaction broadly were that the Acquirer had numerous subsidiaries/associated companies in the downstream packaging market i.e. the related market including one that used Biaxially Oriented Polypropylene (BOPP) films in its packaging material, therefore, the increase in shareholding could increase the market power of the Acquirer and put it in a position where it could foreclose the downstream market and affect competition thereon through anti-competitive practices such as refusal to supply, tie-ins/bundling, predatory pricing, etc.---Acquirer could also, post transaction, impose unilateral effects, i.e., when the merged group was able to profitably reduce the value for money, choice or innovation through its own acts without the need for a co-operative response from the competitors---Transaction raised the likelihood that, following the merger, merging parties and their competitors would be able to possible coordinate their behaviour in an anti-competitive manner, as there were only three big players in the relevant market, potentially driving smaller firms out of the industry due to a highly concentrated market---Held; Commission upon detailed review/perusal of the material, documents and facts on record found merit in the submissions of the Acquirer that the transaction would not adversely impact the competition in the relevant markets because (a) Acquirer was originally and always in charge of the management of the affairs of the Target Company; (b) its associated companies in the packaging business related to inter alia paper and paperboard products, cartons and tissue products and did not use BOPP or Cast Polypropylene (CPP) films as raw materials and such films did not form part of the supply chain for such products and (c) no history of collusion or any other anti-competitive practices was found in the relevant market---Transaction was not likely to substantially lessen competition in the relevant markets, it neither created nor strengthened a dominant position as the Acquirer's position of control would remained in effect---Proposed transaction was authorized.

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

----Preamble & Chap. II [Ss. 3 to 10]---Prohibition of abuse of dominant position, certain agreements, deceptive marketing practices and approval of mergers---Scope---Competition Commission of Pakistan is mandated under the Competition Act, 2010 and the Rules and Regulations framed thereunder to provide for free competition in all spheres of commercial and economic activity, enhance economic efficiency and protect consumers and market players from anti-competitive behaviour in the form of, inter alia, abuse of dominance, deceptive marketing practices and mergers which may substantially lessen competition by creating or strengthening a dominant position in the relevant market. [p. 267] A

2022 C L D 450

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Ms. Bushra Naz Malik, Member

SHOW CAUSE NOTICE ISSUED TO MESSRS NESTLE PAKISTAN LIMITED ON COMPLAINT FILED BY MESSRS PARENTS PAKISTAN (SMC-PRIVATE) LTD.

FOR DECEPTIVE MARKETING PRACTICES: In the matter of

File No. 343/Parents Pakistan/OFT/CCP/2019, decided on 21st February, 2020.

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

----S. 10--- Deceptive marketing practices--- Milk--- Conduct of undertaking---Subsequent compliance---Non-imposition of penalty---Scope---Complainant alleged that the respondent had resorted to deceptive marketing practices by disseminating false and misleading information to consumers in the form of its product packaging, labeling, television commercials, advertisements as well as statements made on its official website and social media platforms---Validity---When all the alleged previous advertisements/campaigns were taken holistically then they definitely cast an impression of the products as milk or some better version of milk---Such impression had the tendency to mislead ordinary consumers into believing that respondent's products were actually milk which could be substituted with regular milk in terms of characteristics, properties and benefits--- Alleged advertisements to the extent stated above, that had been mainly discontinued, did contravene S.10(2)(b) of the Competition Act, 2010---Compliance oriented approach had been adopted by the respondent which was appreciated, therefore, a lenient view was taken and no penalty was imposed where contravention had been made out but it had been rectified and duly addressed---Respondent had provided due disclosures, discontinued the impugned advertising material and had consistently committed to refrain from any such deceptive marketing practices and ensured compliance with the provisions of the Competition Act, 2010---Respondent was strongly cautioned by Competition Commission not to repeat any such conduct in future---Proceedings were disposed off accordingly.

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

----Ss. 2(1)(q), 37 & 10--- Deceptive marketing practices---Undertaking---Enquiries and studies---Registered association of consumers---Scope---Respondent objected to the complaint on the ground that mandatory requirements of S. 37(2) of Competition Act, 2010 were not fulfilled---Contentions of respondent were that the complainant was established to promote, run, manage and maintain educational institutions to impart training to parents and others; that such line of business could not be equated with performing functions as an 'association of consumers'; that the complainant was a single member company and by the very nature of notion, single member companies could not be equated with 'association of consumers' under any law; that there was no evidence on record which showed that the complainant had got itself registered as an 'association of consumers' with any registration authority and that the complainant had got registered just one day before filing the complaint, therefore, it could not be called an 'undertaking' as per S. 2(1)(q) of the Competition Act, 2010---Validity---Functions of the complainant included provision of educational services which brought it in the ambit of an undertaking---Subject of the present complaint was related to nutritional claims made by the respondent, which was again directly related to the function being performed by the complainant i.e. imparting training/ education to parents and others for overall wellbeing of children with specific focus on nurturing social and moral values, health, nutrition and balanced diet--- Objection of the respondent was turned down.

Nemo for Messrs Parents Pakistan (SMC-Private) Ltd.

Farooq Amjad Mir, Senior Advocate Supreme Court, Ms. Zainab Janjua, Advocate High Court, Faisal Raza, Senior Manager Legal Affairs Miss Sameen Sahar, Head of Quality Assurance, Madhan Shahab, Group Technology Manager, Mian Mitha, Corporate Regulatory and Scientific Affairs Manager for Messrs Nestle Pakistan Ltd.

2022 C L D 525

[Competition Commission of Pakistan]

Before Ms. Shaista Bano Gillani and Ms. Bushra Naz Malik, Members

SHOW CAUSE NOTICE ISSUED TO WEIGHT LOSS PRODUCTS MANUFACTURING COMPANIES: In the matter of

File No. 244/OFT/WL/CCP/2018, decided on 18th March, 2022.

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

----S. 10---Deceptive marketing practices---Puffery---Scope---Claim, "reduce 20-30 lb weight immediately by using the capsule twice a day" is a claim, which is measurable and cannot be considered as puffery, because the claim is very specific and quantifiable in terms of what it claims.

Federal Trade Commission v. Sensa Products LLC and others (Case Number: 14-cv-72); Federal Trade Commission v. HCG Diet Direct LLC and Clint Ethington (Case Number: 2:14-cv-00015 NVW); Federal Trade Commission v. The Fountain of Youth Group LLC, LLC and Edita Kaye (Case Number: 3:04-CV-47-J-99HTS) and Federal Trade Commission v. Advanced Patch Technologies and others (Case Number: 104-CV­0670) ref.

Newcal Industries v. Ikon Office 513 F.3d 1038 (2008) rel.

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

----S. 10---Deceptive marketing practices---Puffery---Scope---High sounding claims such as "100% safe and natural" and "lose up to 7-8 kgs fat from tummy, hips, thighs, waist and arms, just in one month" are claims which are specific and cannot be considered as puffery, because the claims are very specific and quantifiable and they become actionable claims under S. 10 of the Competition Act, 2010.

Newcal Industries v. Ikon Office 513 F.3d 1038 (2008) rel.

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

----S. 10---Deceptive marketing practices---"No side effects"---Scope---Product packing claiming "no side effects"---Validity---An undertaking cannot make such claim without providing competent and reliable scientific evidence because such claims give the consumers the idea that they can use the product without any side effects and it may cause serious health issues to common people, for example one of the products of the undertaking contains natural milk to which the allergies to human beings has already been proved worldwide---Such risk is further exacerbated especially in the context of people with certain medical conditions, allergies and illnesses---Undertaking has failed to substantiate the claim made in favour of its product which is highly misleading and can easily deceive consumers.

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

----S. 10---Drugs Act (XXXI of 1976), S. 7---Deceptive marketing practices--- Registration of drugs---Medical products---Puffery---Scope---Claim "prevents diabetes" is something related to medical sciences---In order to substantiate such claims, firstly the product needs to be registered with Drug Regulatory Authority of Pakistan, as the products serving medical purposes need to be registered---Registration criteria is stricter for products claiming to have medical or medicinal purposes as claiming to "prevent diabetes"---Such claim deceives the consumers and does not fall under puffery.

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

----S. 10---Deceptive marketing practices---Scope---An undertaking claimed that its product 'balances Endocrine system, improves circulation, enhances immunity' and 'it can prevent cancer in large intestine'---Commission issued a show cause notice for prima facie violation of S. 10 of the Competition Act, 2010---Undertaking did not submit any reply and also failed to appear before the Commission, hence no substantiations were received for the claims made---Held; it was necessary to examine the claim with respect to the prevention of cancer as cancer being a fatal illness required highest degree of scientific evidence to prove or establish that by taking the product of undertaking regularly, such an illness can be prevented---In absence, of any kind of evidence in support of its claim, the same shall be considered to be false and misleading---Undertaking is liable for violation of S. 10(2)(a) of the Competition Act, 2010.

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

----S. 37---Enquiry and studies---Scope---Competition Commission is empowered to conduct enquiries "on its own" into matters relevant to the purposes of the Act.

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

----S. 30---Proceedings in cases of contravention---Scope---Competition Commission is empowered to initiate proceedings under S. 30 of the Competition Act, 2010 in relation to prima facie violations of substantive provisions of the Act.

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

----Ss. 30 & 37---Proceedings in cases of contravention---Enquiry and studies---Jurisdiction---Intra-provincial matter---Spillover effect---Scope---If Competition Commission of Pakistan wants to take cognizance of an intra-provincial matter it shall have to establish that the activity in question has an effect on trade and commerce beyond the boundaries of a province.

LPG Association of Pakistan v. Federation of Pakistan and others 2021 CLD 214 rel.

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

----Ss. 30 & 37---Proceedings in cases of contravention---Enquiry and studies---Jurisdiction---Intra-provincial matter---Spillover effect---Scope---Where respondents were operating and selling their products all over Pakistan including the Federal Capital, the Commission found it reasonable to believe that the undertakings fulfilled the criteria of spillover jurisdiction.

LPG Association of Pakistan v. Federation of Pakistan and others 2021 CLD 214 rel.

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

----S. 10---Deceptive marketing practices---Scope---An undertaking must determine through scientific and reliable evidence that the claims mentioned on the product are not false.

Federal Trade Commission and State of Connecticut v. Leanspa, LLC and others, (Case No. 3:11-CV-1715 (VLB) rel.

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

----S. 10---Deceptive marketing practices---Scope---An undertaking while making representation must process and rely upon competent and reliable scientific evidence that is sufficient in quantity and quality based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence to substantiate that the representation is true---Competent and reliable scientific evidence means tests, analyses, research or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results.

Federal Trade Commission and State of Connecticut v. Leanspa, LLC and others, (Case No. 3:11-CV-1715 (VLB) rel.

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

----Ss. 30 & 10---Deceptive marketing practices---Proceedings in cases of contravention---Scope---Show cause notice in order to allege S. 10(2)(b) must mention the allegation of dissemination of false or misleading information to the consumers including the distribution of information lacking a reasonable basis, related to the price, character, method or place of production, properties, suitability for use or quality of goods.

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

----S. 10---Deceptive marketing practices---Scope---If undertakings are allowed to advertise their products without reasonable basis, this would put them at an unfair advantage; as consumers would be inclined towards purchasing their products based on false assertions---Prior disclosures and proper product information should be the basis of all the claims.

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

----S. 10---Deceptive marketing practices---False or misleading comparison of goods---Scope---Claim such as "Pakistan's No. 1 Brand" does not appear to attract clutches of S. 10(2)(c) as any comparison with rival products is absent.

In the matter of Show Cause Notice Issued to Messrs Reckitt Benckiser Pakistan Limited 2015 CLD 1864 rel.

Dr. Ijaz Ahmad Watto, Health and Food Manager-Regulatory Affairs for Messrs MPC Health and Foods.

Nemo for Messrs Herb Health Club (Pvt.) Limited.

Mustafa Hemani, Chief Executive Officer for Messrs Hemani International (Pvt.) Limited.

Mohammad Amir Khan, Zonal Sales Manager and Faisal Sarfraz, Legal Counsel for Messrs Al-Mughni Herbs.

Sibt-e-Hassan, Advisor for Messrs Herbs Man Laboratories.

Nemo for Messrs Royal Leaf International.

Irfan Shahid, Chief Executive Officer/Director S&M and Habib Ullah Cheema for Messrs Awami Laboratories.

Hassan Ahmed for Messrs The Vitamin Company.

Sardar Taimoor Aslam, Muhammad Aslam Law Associates for Messrs British Slimming Clinic.

Usman, Proprietor for Messrs Herbo Natural.

Saeed Akthar Khan for Messrs Lasani Pharma (Pvt.) Limited.

Sajid Farooq Hashmi, Head of Legal and Abdul Rashid, General Manager (HRM and Legal) for Messrs Qarshi Industries (Pvt.) Limited.

Amjad Hussain Malik for Messrs Herbal Medicine Pk.

Amjad Hussain Malik for Messrs Babar Herbal and Homeo Clinic.

2022 C L D 670

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member

SHOW CAUSE NOTICES ISSUED TO DEL ELECTRONICS (PVT.) LIMITED AND ANOTHER: In the matter of

Show Cause Notices Nos. 36 and 37 of 2019, decided on 11th March, 2022.

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

----S. 4---Prohibited agreements---Resale price maintenance---Scope---Competition Commission initiated an inquiry into contravention of S. 4 of the Competition Act, 2010 by electric appliance manufacturers, distributors/dealers and their respective trade associations in terms of price fixing/resale price maintenance---Enquiry Committee recommended initiation of proceedings against respondents for violations of S. 4 and show cause notices were issued accordingly---Validity---Resale price maintenance arrangements, in whatever form, i.e. inter alia restricting discounts, fixing the price and/or setting a minimum or maximum price floor/ceiling, clearly fell under S. 4(2)(a) of Competition Act, 2010, amounting to a fixation of the selling price of a product/good and were to be treated 'by object' as anti-competitive as it ultimately impacted both intra-brand and inter-brand competition, in whatever form---Respondents were directed to deposit penalty amount, refund all penalty amounts imposed by them to their respective dealers and to cease such conduct.

Case AT.40465 - ASUS (2018); Case AT.40182 - Pioneer (2018); Case T-17/93 Matra Hachette SA v. Commission of the European Communities; Trade Practices Commission v. Stihl Chain Saws (Aust.) Pty. Ltd. (1978) ATPR 40-091; In Re: Messrs Counfreedise and Timex Group India Case No. 55 of 2017 (2018); Re: Messrs Fx Enterprise Solutions India Pvt. Ltd. v. Messrs Hyundai Motor India Limited Case No. 36 of 2014 (2017); Dr. Miles Medical Co. v. John D Park & Sons Co. 220 U.S. 373 (1911); PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412 (5th Cir. 2010); O'Brien v. Leegin Creative Leather Products Inc. 294 Kan. 318 (Kan. Sup. Ct. 2012) and Continental T. Inc. v. GTE Sylvania Inc. 433 U.S. 36 (1977) rel.

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

----S. 4---Prohibited agreements---Resale price maintenance---Scope---Competition Commission initiated an inquiry into contravention of S. 4 of the Competition Act, 2010 by electric appliance manufacturers, distributors/dealers and their respective trade associations in terms of price fixing/resale price maintenance---Respondent contested that its resale price maintenance arrangement is not an 'agreement' for the purposes of S. 4 of Competition Act, 2010---Validity---Respondent had entered into 'agreements' for the purposes of S. 4, which was wide in its scope and included "any arrangement, understanding or practice, whether or not it is in writing or intended to be legally enforceable"---Respondent had entered into written agreements with dealers---Circulars issued from time to time also fell under the term 'agreement' between the respondents and their dealers, being part of the existing ongoing business relationship between them and they were also duly adopted by the dealers---Respondents were directed to deposit penalty amount, refund all penalty amounts imposed by them to their respective dealers and to cease such conduct.

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

----Ss. 4 & 2(k)---Prohibited agreements---Relevant market---Product market---Scope---Respondent disputed the definition of the relevant market in the Enquiry Report stating that it was not correct as it would include the products manufactured by respondent as well as its competitors operating in Pakistan---Contention was that there existed separate relevant markets for each type of home appliance and the same could be divided into different segments, for example, appliances like air conditioners, refrigerators, deep freezers, television sets and washing machines all fell in separate product categories and were not comparable with one another---Validity---Defining the 'relevant market' was not material for the application of S. 4---Under S. 4, the emphasis was on the restrictive activity or prohibition being carried out through, inter alia, the form of an 'agreement' which might have the object or effect of "preventing, restricting or reducing" competition---Where the very object/nature of the prohibited conduct was anti-competitive, there was no need to assess market definition or evidence of actual competitive harm---Relevant product market for respondent would, as stated in the Enquiry Report, included all its products across its dealer network as, under Cl. 2.1 of its Pricing Policy, no dealer was allowed to sell any of its products below the 'promise price' and respondent had itself admitted in its response to the Enquiry Committee that the price control policy was standardized and applied "across the board for all categories of dealers".

FTC v. Indiana Federation of Dentists 476 US 447 (1986) rel.

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

----Ss. 4 & 2(k)---Prohibited agreements---Relevant market---Geographic market---Scope---Respondent contended with respect to the relevant geographic market that marketing conditions for each type of home appliance were not homogenous across Pakistan and were capable of being affected by multiple factors including local weather conditions and distance from factory to the city of sale, hence, various relevant geographic markets also existed in Pakistan for different appliances---Validity---Respondent's products were already being sold all over Pakistan and the resale price maintenance arrangement was also circulated across its dealership network all over Pakistan, as admitted by the respondent---Respondent was already competing in various cities and it regarded all manufactures of the relevant products as its competitors irrespective of their location---Although buying patterns might differ based on locality, the Commission found merit in the findings of the Enquiry Committee that market conditions across the country were sufficiently homogenous---Commission held that the relevant geographic market was correctly defined by the Enquiry Report and it comprised of the whole of Pakistan.

Case T-229/94 Deutsche Bahn AG v. Commission [1997] ECR 11-1689 rel.

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

----S. 30---Proceedings in case of contravention---Supply of documents---Scope---Respondent filed application for information/ documents relating to authorization/delegation of powers by the Commission under S. 28(2) in favour of the Enquiry Committee to define the relevant market and to carry out a survey; a copy of the survey report/findings, if any; any analysis of consumers and the perspective/statement of consumers, if any, recorded by the Enquiry Committee; the order of the Commission under S. 30(1) and the determination of the Commission under S. 37(4)---Held; a general survey of the market was conducted---All details concerning the same and analysis of the Enquiry Committee was duly shared with the respondents in the form of the Enquiry Report along with all its annexes---Commission, in its meeting had resolved to initiate an enquiry under S. 37(1) into the alleged contravention of S. 4 by electronic appliance manufacturers, distributors/dealers and their respective trade associations and to form an Enquiry Committee for that purpose with the powers of the Commission delegated to it under S. 28(2)---Section 37(4) merely referred to the Commission forming its own opinion to initiate proceedings under S. 30---Considering the findings of the Enquiry Report and the recommendations of the Enquiry Committee, the Commission had resolved in its meeting that proceedings be initiated against respondents under the provisions of S. 30 for prima facie violations of S. 4---Application was disposed of accordingly.

Leegin Creative Leather Products Inc. v. PSKS Inc. 127 US 2705; Case T-17/93 Matra Hachette SA v. Commission of European Communities; Case 243/83 SA Binon & Cie v. SA Agence et messageries de la presse (1985); Continental TV Inc v. GTE Sylvania Inc. 433 US 36 1977; United States v. Colgate & Co 250 ES 300 and National Feeds Ltd. v. Competition Commission of Pakistan 2016 CLD 1688 ref.

Competition Commission of Pakistan v. National Feed Ltd. C.Ps. Nos. 2119 to 2123 of 2016 rel.

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

----S. 33---Qanun-e-Shahadat (10 of 1984), Art. 133---Constitution of Pakistan, Art. 175---Powers of the Commission in relation to a proceeding or enquiry---Cross-examination of enquiry officer---Scope---Respondent sought permission to cross-examine the officers of the Enquiry Committee---Validity---Competition Commission is not a 'court' under Art. 175 of the Constitution of Pakistan---Enquiry stage is a simple fact-finding mission where the Enquiry Committee is not deciding any matter, but only collecting materials for ascertaining whether a prima facie case is made out and serves as the investigative arm of the Commission---Officers of the Enquiry Committee themselves do not provide any personal statements on oath as 'witnesses' or record their own statements as evidence---Any conclusion/analysis of the Enquiry Committee in the Enquiry Report are based on actual documents/evidence collected from an undertaking's own premises or provided by the undertaking itself---Enquiry Report also includes analysis of the market, where required, which is again based on current market conditions and information that is generally publically available or shared with government agencies---Any alleged 'incriminating' material or findings are shared with the undertaking in the form of an Enquiry Report where the undertaking has an opportunity to rebut the same before the Commission by clarifying the same or presenting its own set of facts---Proceedings under the Competition Act, 2010 are not adversarial but inquisitorial in nature---Commission itself cannot be considered to be an 'adverse party' for the purposes of the provisions of the Qanun-e-Shahadat, 1984---Commission is conferred with certain powers of a civil court to the extent of the matters specified therein---Section 33 does not make the Commission a 'court' bound strictly by the laws of evidence---Enquiry officers of the Competition Commission cannot be cross-examined.

LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214; Rehana Ahson and another v. Zulfiqar Mohammad 2021 CLC 901 and Khawaja Imran Ahmed v. Noor Ahmed and another 1992 SCMR 1152 rel.

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

----S. 28---Functions and powers of the Commission---Scope---Commission is not merely a consumer protection regulatory body---Competition issues of any sector in the economy are within the Commission's mandate and it is entrusted to protect consumers from anti-competitive behaviours---Consumer here is not just the end consumer but also includes any/all business entities engaged in the supply chain---Competition Act, 2010 itself is a scheme of competition regulation aimed at improving the economic welfare of the nation as a whole; by deterring a wide range of anti-competitive practices that affect both trade and commerce across Pakistan.

Competition Commission of Pakistan v. National Feed Ltd. C.Ps. Nos. 2119 to 2123 of 2016 rel.

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

----Ss. 4, 5 & 9---Prohibited agreements---Individual exemptions---Criteria for individual and block exemptions---Scope---'By object' restriction under S. 4 of the Competition Act, 2010, in no way hinders an undertaking's obligation to file for exemption and seek clearance from the Commission under S. 5 read with S. 9 of the Competition Act, 2010.

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

----S. 4---Prohibited agreements---Resale price maintenance---Scope---Resale price maintenance arrangement is considered to be an agreement/concerted practice for the purpose of Competition Law and the very nature of a resale price maintenance arrangement, as it restricts the ability of a retailer to determine its resale prices independently in any given circumstance, restricts competition by object.

Vereeniging van Cementhandelaren v. European Communities Case 8/72 (1972); SA Binon and Cie v. SA Agence et inessageries de la presse Case 243/83 (1985); Pronuptia de Paris GmbH v. Pronuptia de Paris Irmgard Schillgalli Case 161/84 (1986); SPRL Louis Erauw-Jacquery v. La Hesbignonne Case 27/87 (1988); Replica Football Kits Decision No. CA98/06/2003 (2003); JJB and Allsports v. OFT [2004] CAT 17 and Argos Limited and others v. Office of Fair Trading [2005] CAT 13 rel.

Haidermota and Co., Advocates for Del Electronics (Pvt.) Limited.

H&M Advocates and Corporate Consultants for Haier Pakistan (Pvt.) Limited.

2022 C L D 790

[Competition Commission of Pakistan]

Before Ms. Shaista Bano and Mujtaba Ahmad Lodhi, Members

SHOW CAUSE NOTICES ISSUED TO MESSRS PAKISTAN CIVIL AVIATION AUTHORITY AND OTHERS:

In the matter of

File No. 146 / HASCOL / C&TA / CCP / 2017, decided on 17th March, 2022.

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

----S. 4--- Prohibited agreements--- Concession agreement---Scope---Complainant made a complaint against the Civil Aviation Authority (CAA) and three companies (respondents) that they were engaged in anti-competitive activities as the CAA had granted exclusive rights in respect of the use of fueling facility at an airport to the respondents due to which they enjoyed a favourable position at the cost of healthy competition within the industry---An agreement in 1961 was entered into by the respondents among themselves for the ownership and operation of fuel tanks constructed and developed by them at the airport---1961 Agreement was to remain enforceable for an indefinite period of time---In 1994, an agreement was entered into between the respondents and CAA for the exclusive use of fuel hydrant system at the airport---Under the 1994 Agreement the respondents were granted absolute exclusivity in respect of the operational management of the fuel hydrant system while the land in question was governed by a separate lease agreement which was signed for a period of 30 years starting from 1992---Validity---1961 Agreement prevented other Oil Marketing Companies (OMCs) to compete for operation and maintenance of fuel farms whereas the 1994 Agreement prevented competition for other OMCs willing to supply jet fuels to airlines at the airport---When both the agreements were looked at in conjunction, they had the effect of excluding competitors for refueling purposes which was prohibited under S. 4 of the Competition Act, 2010---Parties to the agreements were directed to apply to the Commission for retrospective and prospective exemption under S. 5 of the Competition Act, 2010, failing which the exclusivity clauses would be void as S. 4(3) of the Competition Act, 2010---CAA was directed to ensure that operation and maintenance of fuel farms and fuel hydrant system was opened for competition after expiry of the lease agreement---Show cause notice was disposed of accordingly.

PLJ 2010 Lah. 78; NFC Employees Co-operative Housing Society Ltd.'s case 2019 CLD 164 and Oil Companies Advisory Council's case 2019 CLD 1285 ref.

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

----S. 62 & Chap. II [Ss. 3 to 11]---Validation of actions---Prohibition of abuse of dominant position, certain agreements and deceptive marketing practices---Retrospective effect---Scope ---Section 62 clarifies that any such matter, action or conduct which distorts the state of competition in Pakistan on the 2nd October, 2007, or subsequent to the foregoing date shall be cognizable by the Commission---No denying the fact that concluded transactions taking place prior to the 2nd October, 2007 are not cognizable by the Commission, but matters which distort competition and are valid or continue post that date fall within the regulatory prowess of the Commission---Date of execution of any matter or any action is of no concern during the course of proceedings for the purpose of ensuring competition under the Act, if the same matter or action has resulted in distortion of competition after the enforcement of the Act.

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

----Ss. 35(3) & 37---Competition Commission Enquiry (Conduct of Investigating Officers) Rules, 2007, R. 4---Enquiry---Forcible entry---Procedure of the enquiry---Scope---Where the respondents while placing reliance on R. 4, of the Competition Commission Enquiry (Conduct of Investigating Officers) Rules, 2007, had contended that the enquiry committee was supposed to submit the final report within 30 days of their appointment, Competition Commission observed that the Competition Commission Enquiry (Conduct of Investigating Officers) Rules, 2007 were not made for enquiry officer appointed for an enquiry under S. 37 of the Competition Act, 2010 and the provisions relied upon by the respondents were distinctly separate and were of no relevance to the proceedings.

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

----Chap. II [Ss. 3 to 11]---Prohibition of abuse of dominant position, certain agreements and deceptive marketing practices---Scope---Competition Commission is mandated to prohibit and rectify any instance in which the realm of freedom of trade, business or profession is being used as an avenue for the distortion of competition, irrespective of whether it is being done intentionally, unintentionally or negligibly---Undertaking's right to own/operate a particular facility for any commercial purpose cannot be used as a pretext for imposing blockades against its competitors which in turn would consequently place them at a competitive disadvantage.

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

----S. 37---Enquiry---Passing of order before initiation of enquiry---Scope---Respondent asserted that since under S. 37(2) of Competition Act, 2010, an opinion must be backed by prima facie evidence, then the opinion had to be expressed by the Commission through an "order"---Validity---Commission was established to carry out the administrative function of the executive to ensure economic efficiency and promote consumer welfare and in doing so it discharged quasi-judicial functions with the sole objective to regulate anti-competitive behaviour and was not a part of the judicial hierarchy of courts, nor was its' function to exercise judicial power---Commission did not have any inherent powers to pass orders---Commission could only pass orders under Ss. 28, 30, 31 & 36 of the Competition Act, 2010---Section 37(2) provided that upon receiving a complaint, the Commission shall conduct an enquiry unless the Commission formed an opinion that the complaint was frivolous or vexatious or based on insufficient facts, or was not substantiated by prima facie evidence---No mention of passing of an order under S. 37(2) of the Competition Act, 2010.

LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214 ref.

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

----S. 37--- Enquiry--- Scope--- Opinion of the Commission under S. 37(2) of the Act is a tentative estimation of the prima facie evidence/material cited by the complainant in the complaint, which in turn gives rise to a presumption of a contravention of Chap. II of the Act and the exercise of framing of opinion is for taking cognizance to initiate enquiry rather than to conclusively decide the matter.

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

----S. 37--- Enquiry--- Expression 'prima facie evidence'---Scope---Evidence sufficient to give rise to a presumption of the presence of a contravention of the Competition Act, 2010 and is distinct from the evidence required to prove a contravention of the provisions of the Act.

2015 CLC 493 ref.

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

----S. 37---Enquiry---Public interest litigation---Scope---Legislature in all its wisdom has declared that the proceedings before the Commission are public interest proceedings---Public interest proceedings are always inquisitorial in nature, where an authority may engage in fact finding for the promotion of public interest---Commission being bestowed with the inquisitorial jurisdiction is empowered to delineate upon any fact referring towards alleged violation of substantive provisions of the Act, whether or not same is alleged by the complainant---Commission is mandated to ensure healthy and free competition throughout the region, the Commission is a regulatory body which is bestowed with a mantle purposed for the adoption of a pro-active approach to bring all matters and activities distorting competition law in line with the provisions of the Act.

PLD 2011 SC 997 ref.

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

----Ss. 5, 8 & 9---Individual exemption---Block exemption procedure---Criteria for individual and block exemptions--- Concession agreements---Scope---Competition Commission recognizes the necessity of concession agreements in terms of mega-projects of national importance, for example concession agreements for port-terminals or airport fuelling facilities---Commission observed that exemptions under S. 5 or 8 of the Competition Act, 2010, should be applied for as soon as agreements (containing restrictive clauses) have been drafted on the promise that an executed version will also be provided to the Commission immediately upon execution of the agreement---While the Commission allows for exemptions in respect of agreements which satisfy the criteria established by S. 9 of the Competition Act, 2010, the regulation of such exempted agreements is of paramount importance for the diligent safeguard of public interest---Underlying principle justifying the grant of an exemption to an agreement containing restrictive clauses is that pro-competitive effects which the agreement results in will outweigh any distortion to competition law brought about by the same and in turn the public at large will benefit.

Implementation Agreement entered into between Port Qasim Authority and Messrs Engro Vopak Terminal Limited, 1-Link Guarantee Ltd. and Member Banks, Exemption Application of Joint Venture Agreement between Messrs Metro Cash and Carry International Holding B. V. and Thal Limited, and DHA-Wateen Order ref.

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

----S. 2(k)---Relevant market---Scope---Objective of defining the relevant market is to identify both the product and areas within which businesses are competing with each other, this helps in the determination of market share for purposes of S. 3.

In the matter of Amin Brothers Engineering et al. rel.

(k) Constitution of Pakistan---

----Arts. 4 & 5---Rights of individuals to be dealt in accordance with law---Loyalty to state and obedience to Constitution and law---Scope---Rights and duties are two sides of the same coin, meaning that they both go side by side---Any right of a person protected by any statute corresponds an inherent obligation i.e., to recognize the same right for others---Right is an interest which is recognized by the law of the land, however it is pertinent to note that rights are subject to regulation by the law of the land as well---Article 4 deals with right of an individual to be dealt with in accordance with the law, whereas Art. 5 envisages the obedience to the constitution and the law as an inviolable obligation.

2020 CLD 1232 rel.

(l) Interpretation of statues---

----Every statute is presumed to be prospective in nature.

2020 PLD 641 SC rel.

(m) Maxim---

----Nova Constitutio Futuris Formam Imponere Debet, Non Praeteritis---Scope---New law ought to regulate what is to follow, not the past, unless it was given retrospective operation either by express or necessary implication of the legislature.

PLD 2020 S 641 rel.

(n) Words and phrases---

----Prima facie---Connotation---Scope---Sufficient to establish a fact or raise a presumption unless disproved or rebutted; based on what seems to be true on first examination, even though it may later be proved to be untrue.

Black's Law Dictionary rel.

(o) Words and phrases---

----Prima facie case---Connotation---Scope---Existence of legal right which should appear to a prudent mind with a probability of success at the end of the day.

2015 CLC 493 rel.

(p) Words and phrases---

----"Opinion"---Meaning---One's feelings or thoughts about someone or something, rather than a fact.

(q) Administration of justice---

----Adversarial and non-adversarial system---Scope---Adversarial and non-adversarial systems incorporate a wide range of variations---Adversarial system aims to ascertain the truth through open competition between the litigants, furthermore the scope of such proceedings is limited to the claims made by the litigants---Whereas in the case of the non-adversarial system the adjudicatory body is actively involved in investigating the facts adduced before it and is not limited to dominus litis (a person to whom a suit belongs).

PLD 2011 SC 997 rel.

(r) Words and phrases---

----"Concession agreement"--- Meaning--- Scope--- 'Concession agreement' generally refers to an agreement between a government authority and a private entity, through which the government grants certain rights to the private entity for a limited period of time for implementation of infrastructural projects---Private parties, in such circumstances, are provided with a package which is conveniently favourable to the same---Such agreements entail a considerable amount of monetary investment and high-risks.

Ms. Rahat Kaunain Hassan, Senior Partner at Hasan Kaunain Nafees (HKN) [Appeared on 30th April 2019], Ms. Maham Ahmed, Advocate HKN, Zeeshan ul Haq, Advocate HKN, Ms. Gulalay Zeb, Advocate HKN and Shahzeb, Advocate HKN for Messrs Hascol Petroleum (Pvt.) Limited.

Zarin Gul Durrani, Additional Director, Usama Jameshed, Advocate and Muhammad Asim Rashid, Senior Assistant Director (Legal Affairs) for Messrs Pakistan Civil Aviation Authority.

Sultan Mazher Sher, Advocate, Kashif Siddique, General Manager and Syed Sajjad, (Legal Affairs) for Messrs Pakistan State Oil Company Limited.

Ms. Danish Zuberi, Advocate, Ms. Sana Moeen Warraich, Advocate, Ms. Lalarukh Hussain, Head of Legal and Company Secretary, Imran Hussain Qureshi, Head of Corporate Affairs and Government Relations and Farhan Ahmed Khan, Business Manager for Messrs Shell Pakistan Limited.

Asim Nasim, Partner Orr, Dignam & Co., Taha Alizai, Partner Orr, Dignam & Co. and Amin Fakir, Advocate Orr, Dignam, & Co. for Messrs Total Parco Pakistan Limited.

2022 C L D 859

[Competition Commission of Pakistan]

Before Ms. Shaista Bano and Ms. Bushra Naz Malik, Members

Messrs KENNOL PETROLEUM (PVT.) LIMITED AND OTHERS: In the matter of

File No. 344/KENNOL/OFT/CCP/2019, decided on 25th August, 2021.

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

----S. 10--- Deceptive marketing practices--- Fraudulent use of trademark---Scope---Respondents were alleged to have fraudulently used the complainant's trademark---Validity---Pictorial comparison of alleged trademark of respondents and original trademark of complainant leads to the conclusion that there existed similarities in terms of colour, graphics, fonts and placement on the product packaging---Ordinary consumer, specifically the illiterate, would not be able to distinguish between the product's origin or brand names evident on the packaging---Such similarities would mislead the consumer into believing that the source/origin of respondent's products was in fact of the complainant---Respondents were freely riding on goodwill of the complainant by exactly copying its trademark---Competition Commission directed the respondents to cease the usage of contentious trademark of the complainant and ensure that their products were sold in a manner that was distinct in its overall layout so as to be easily distinguishable from the complainant's trademark and products---Respondents were given six weeks time to shut down their website and other social media pages---Such lenient approach was a result of respondents' commitments and their compliance oriented approach--- Show cause notices were disposed of accordingly.

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

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

----S. 10---Deceptive marketing practices---Scope---Clause (d) of S. 10 of the Competition Act, 2010 provides protection to trademarks of undertakings against fraudulent use by other undertakings---Fraudulent use of another's trademark, firm name or product labeling or packaging constitutes deceptive marketing.

In the matter of Messrs DHL Pakistan (Pvt.) Ltd. 2013 CLD 1014 rel.

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

----S. 10--- Deceptive marketing practices--- Scope--- Marketers traditionally focus on designing advertising campaigns and other promotional strategies to promote a brand name, however, with evolving consumer preferences and laws, trademarks have become just as essential for making products and services distinctive and for building brand recall---Cultural diversity in Pakistani markets makes a compelling case for the importance of product identification by packaging and visual impression---Such has resulted in third parties creating lookalikes of popular products with similar packaging in order to grab consumers' attention and generate demand for their own products in the market---Consumers are seriously susceptible and at a serious risk of falling prey to deceptive confusion pertaining to the origin and quality of the products, due to striking similarity in the complainant's and respondent's trademark.

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

----S. 10---Deceptive marketing practices---Vicarious liability---Scope---Undertakings in the market should be vigilant and considerate of their distributors or employees acting on their behalf, they cannot be allowed to resort to any sort of argument which shifts their burden on others and help them to get away---Undertakings must ensure proper training and procedures for their employees and distributors in order to make them aware of what may constitute violation of competition laws and that distributors or employees do not transgress from their domains.

Ms. Melanie Gaboriau International Sale Developer and Saad Nasrullah, Advocate High Court for Kennol Performance Oil.

Qasim Iqbal, Advocate High Court for Kennol Petroleum (Pvt.) Limited, Japan Lube Petroleum and Dewan Oil Store.

2022 C L D 1068

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson, Ms. Shaista Bano, Ms. Bushra Naz Malik and Mujtaba Ahmad Lodhi, Members

PAKISTAN SUGAR MILLS ASSOCIATION (PSMA) AND MEMBER UNDERTAKINGS:

In the matter of F. No. 366/SUGAR ENQUIRY/C&TA/CCP/2020, decided on 12th August, 2021.

[Per Ms. Rahat Kaunain Hassan, Chairperson; Mujtaba Ahmad Lodhi, Member agreeing; Ms. Shaista Bano, Member; Ms. Bushra Naz Malik, Member dissenting.]

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

----S. 4--- Prohibited agreement---Exchange of commercially sensitive information--- Sharing stock information--- Scope--- Competition Commission issued show cause notice to an association of undertakings and member undertakings for making a decision regarding the sharing of stock information, a commercially sensitive information, by all member undertakings with their association and for participation in a series of meetings and communications during which the information was exchanged---[Per Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member (Majority view): Each undertaking had taken part in a concerted action together with its competitors the purpose of which was to influence conduct on the market, including collectively determining exportable surplus of stock, controlling supply thereto and to exploit as well as influence the independent commercial policy of each independent undertaking---Sharing of information had to be treated as per se violation where stock information was the ultimate factor leading to price competition in the relevant market---Competition Commission imposed penalty on the undertakings and directed them to discontinue the violations]---[Per Ms. Shaista Bano, Member and Ms. Bushra Naz Malik, Member (Minority view): Stock information classified by Enquiry Committee as "highly sensitive" was shared with the Cane Commissioners, who shared the data with other agencies and instrumentalities of the Provincial and Federal Governments---Stock information was not of a nature which was only available and known to the undertaking concerned---Enquiry Committee had failed to prove that the stock information was commercially sensitive information.

Information Exchanges between Competitors under Competition Law (2010) ref.

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

----S. 4--- Prohibited agreements---Exchange of commercially sensitive information--- Sharing stock information--- Scope--- Competition Commission issued show cause notice to the undertakings and association of undertakings for making collective decision on what quantities to be recommended for export---[Per Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member (Majority view): Collection of current or real stock position used for the purpose of collectively determining export quantities at association's end was not justifiable and constituted violation of S. 4(1) of the Competition Act, 2010---Such information could allow undertakings to coordinate future sales volumes, export and pricing strategies causing distortion and removing the degree of uncertainty in the domain left for players to compete or decide freely---Competition Commission imposed penalty on the undertakings and directed them to discontinue the violations]---[Per Ms. Shaista Bano, Member and Ms. Bushra Naz Malik, Member (Minority view): Neither the show cause notice nor the Enquiry Report had made specific reference to or confronted the respondents with the allegations in the particular context of the contravention based on the alleged collective determination of export quantities specifically---Neither the association nor any member undertaking had come to any collective "agreement" or "decision" to "fix" the quantity to be sold---Material relied upon in the Enquiry Report to reach contrary conclusion did not show any such "agreement" to "fix" the quantity to be sold---Conclusion in the enquiry report was based on unsubstantiated inferences, which were unwarranted.

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

----S. 4--- Prohibited agreement--- Collusive tendering--- Scope---Competition Commission issued a show cause notice for prima facie violation of S. 4(2)(c) as an association of undertakings and its participating member undertakings were fixing or setting quantity of productions post-bid, despite the tender being competitively awarded to few undertakings, in an attempt to share the profits from the same---[Per Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member (Majority view): Letter from the association to procuring agency revealed that the association itself had admitted that the tender had been allotted to few participants who had quoted large quantities at the minimum rate---Association was actively found to interfere in the competitive process of awarding the tender by stating that the same was extremely unfair and that the law required that all parties who had participated in the tender to be asked to match the lowest established rate---Choice to participate in a competitive bid and the submission of bid rates were all independent commercial decisions to be made by each individual undertaking---Association's conduct negated the whole concept behind a competitive tender by advocating division of the tender amongst all participating undertakings only to take away the award of tender from successful bidders for the clear purpose of accommodating those who were unsuccessful, largely for their own financial security---Competition Commission imposed penalty on the undertakings and directed them to discontinue the violations]---[Per Ms. Shaista Bano, Member and Ms. Bushra Naz Malik, Member (Minority view): No direct evidence was available to prove that the procuring agency had itself asked for the quantity of product to be split between the member undertakings---No contravention of S. 4(1) read with S. 4(2)(c) was made out by the association or member undertakings.

[Per Ms. Rahat Kaunain Hassan, Chairperson and Mujtaba Ahmad Lodhi, Member; Ms. Shaista Bano, Member and Ms. Bushra Naz Malik, Member partially agreeing]

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

----Ss. 4 & 2(1)(k)--- Prohibited agreement--- Relevant market---Geographical market--- Scope--- Undertakings argued that the determination of relevant geographical market as the whole of Pakistan is erroneous due to the fact that regulatory environment is not homogenous in the whole of Pakistan---Validity---Under S. 2(1)(k), emphasis is placed on conditions of competition being 'sufficiently homogenous' and not strictly homogenous---Large buyers and industrial/ commercial consumers purchase sugar directly from the mills---Sugar wholesalers can either purchase directly from the mills or through the mill's designated broker(s) who work on a commission basis---Wholesalers can then sell sugar onwards to sub-dealers or directly to retailers---In a competitive market, mills compete with each other for business based on price and wholesales/commercial consumers lift sugar from the mill offering the most competitive prices---Sugar and sugarcane can move freely throughout the relevant market and are not restricted to one geographical location and sugar produced by a single mill can be sold throughout the relevant market.

United Brands Company and United Brands Continentaal BV v. Commission [1978] ECR 207; Deutsche Bahn AG v. Commission [1997] ECR 11-1689 and Pir Sabir Shah v. Shad Muhammad Khan, Member Provincial Assembly N.W.F.P. PLD 1995 SC 66 rel.

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

----S. 4--- Prohibited agreements--- Spill-over effect--- Scope---Undertakings argued that the show cause notices did not contain the reasons disclosing that the effect of anti-competitive behaviour was spilling over territorial limits of respective provinces---Validity---Spill-over effect was evident to occur or was more pronounced where goods classified as essential commodities were involved due to their wide consumption and their usage as inputs for other industries.

LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214 ref.

Munir Ahmad v. Government of Pakistan and others W.P. No. 3834 of 2020 rel.

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

----S. 28---Functions and powers of the Commission---Scope---It is not duty of the Competition Commission to address the objections raised as to the constitutionality and validity of the Competition Act, 2010.

Pir Sabir Shah v. Shad Muhammad Khan, Member Provincial Assembly N.W.F.P. PLD 1995 SC 66; Akhtar Ali Parvez v. Altaf ur Rehman PLD 1963 Lah. 390; Mehr Dad v. Settlement and Rehabilitation Commissions PLD 1974 SC 193 and Chempak (Pvt.) Ltd. v Sindh Employees' Social Security Institution (SESSI) 2003 PLC 380 ref.

Pir Sabir Shah v. Shad Muhammad Khan, Member Provincial Assembly N.W.F.P. PLD 1995 SC 66 and Muhammad Khan and others v. Province of Punjab and others 2007 SCMR 1169 rel.

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

----Ss. 28, 30, 33, 34, 36 & 50---Competition Commission (Duties and Responsibilities of Registrar) Regulations, 2016, Regln. 5---Functions and powers of the Commission---Delegation of powers---Scope---Undertakings argued that the requisite approval/authority was not duly delegated to the Enquiry Officers, the Registrar and the Secretary of the Commission, hence, the show cause notices issued under S. 30 of the Competition Act, 2010 were invalid---Validity---Section 28(2) of the Competition Act, 2010 had provided the Commission with the power to delegate all or any of its functions and powers to any of its Members or officers as it deemed fit---Commission had delegated all powers under Ss. 33, 36 & 50 of the Competition Act, 2010 to the Enquiry Committee during the course of enquiry, which included the discovery and production of any document or other material object as evidence---Registrar was competent under Regulation 5(m) of the Competition Commission (Duties and Responsibilities of Registrar) Regulations, 2016 to draft and issue the show cause notice with the approval of the competent authority (which was duly given by the Commission in a meeting)---Commission in its meeting and through resolution by circulation had specifically authorized the Secretary to the Commission to issue the authorization for the search and inspections under S. 34 of the Competition Act, 2010.

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

----Ss. 33 & 37---Powers of the Competition Commission in relation to a proceeding or enquiry---Enquiries and studies---Scope---No mandatory legal obligation exists on the part of the Competition Commission, under the Competition Act, 2010 or any subordinate legislation made thereunder, to involve the undertakings at the enquiry stage.

LPG Association of Pakistan and Jamshoro Joint Venture Ltd. Order dated 14 December 2009 ref.

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

----S. 34--- Competition (General Enforcement) Regulations, 2007, Reglns. 2(1)(g) & 26A---Power to enter and search premises---Taking of evidence---Scope---Undertakings argued that the Enquiry Committee could only have impounded or taken information from 'computers', hence, the impounding of mobile phones was not in conformity with the provisions of the Competition Act, 2010 and any evidence used therefrom was inadmissible---Validity---Competition Act, 2010 had envisaged smart phones to fall under the term 'computer' and amounted to computer stored information---Regulation 26A(2)(a) of the Competition (General Enforcement) Regulations, 2007 specified that the Commission could admit evidence taken in the form of verifiable transcripts of tape recordings, unedited versions of video recording, electronic mail, telephone records including authenticated mobile telephone records---Term 'document' had been defined in Regln. 2(1)(g) of the Competition (General Enforcement) Regulations, 2007 as any matter expressed or described upon any substance by means of letters, figures or marks, or by any other means, used or intended to be used for the purpose of recording that matter---Said meaning was of wide import and referred to any material used to record any matter, hence, also included digital forms of documentation such as e-mails, text messages, etc.

(j) Words and phrases---

----"Mobile device"---Meaning.

Black's Law Dictionary; Oxford English Dictionary; Cambridge Dictionary and Collins English Dictionary rel.

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

----S. 33---Customs Act (IV of 1969), S. 155-H---Powers of the Commission in relation to a proceeding or enquiry---Confidentiality of information---Scope---Undertakings argued that export data was illegally obtained from the FBR (Federal Board of Revenue) in violation of S. 155-H of Customs Act, 1969 and the Enquiry Committee was not delegated powers to obtain the same---Validity---Competition Commission observed that it was not within its' purview to determine the legal objections of the FBR under the Customs Act, 1969 or to determine the scope of S. 155-H of Customs Act, 1969.

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

----S. 53---Assistance and advice to the Commission---Scope---Competition Commission by virtue of S. 53 of the Competition Act, 2010 can seek assistance of any authority or agency for the performance of its functions under the Act.

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

----S. 33---Powers of the Commission in relation to a proceeding or enquiry---Scope---Enquiry Committee has the power pursuant to S. 33(1)(a) and (b) to correspond with any authority for the purpose of collecting information in relation to an enquiry proceedings under the Competition Act, 2010.

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

----S. 30---Qanun-e-Shahadat (10 of 1984), Arts. 1(2) & 165---Proceedings in case of contravention---Qanun-e-Shahadat, 1984 to override other laws---Standard of proof---Burden of proof---Scope---Undertakings argued that the Enquiry Report must establish the requisite legal standard for alleged violations of the Competition Act, 2010; that the burden of proof is on the Enquiry Committee to establish the contraventions; that the standard of proof must be that of 'beyond reasonable doubt' and that the presumption of innocence is enshrined under Art. 10A of the Constitution, hence, a fundamental right, the protection thereof being mandatory---Validity---Commission being an Administrative Tribunal and discharging quasi-judicial functions as well as administrative functions, is not bound by the formal laws of evidence and procedure---Nature of the Competition Act, 2010 itself and the penalties imposed are remedial in nature---Standard of proof is not one of 'beyond reasonable doubt' being the criminal standard but one of a civil standard based on the 'balance of probabilities'---Undertakings must adduce evidence, which could rebut the findings on which the Commission or Enquiry Committee forms the basis for its conclusions concerning the alleged anti-competitive conduct---Undertakings must put forward arguments which cast the facts established by the Commission in a different light, allowing another plausible explanation.

Montecatini v. Commission C-235/92 P (1999) [ECJ]; Huls AG v. DSM NV Case C-199/92 P [ECJ] and Muhammad Abid Farooq v. The State and another 2015 PCr.LJ 224 ref.

LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214; Messrs Aimnaz Pvt. Ltd v. Federation of Pakistan through the Secretary, Ministry of Law, Federal Secretariat, Islamabad and 2 others 2018 PTD 1966; NAPP Pharmaceutical Holdings Limited and Subsidiaries v. Director General of Fair Trading 2002 CAT 1; AC-Treuhand AG v. European Commission Case T-27/10 and T-Mobile Netherlands BV v. Raad van bestuur van de Naderlandse Mededingingsautoriteit (Netherlands Competition Authority)

Case C­8/08 rel.

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

----S. 30---Proceedings in case of contravention---Standard of proof---Burden of proof---Scope---Undertakings argued that the burden of proof is on the Commission to establish the contraventions---Validity---Commission, in discharging the burden of proof, can rely on inferences or presumptions that in absence of any countervailing indications, normally flow from a given set of facts and in this connection the existence of the anti-competitive practice or agreement must be inferred from a number of coincidences and indicia---Attention must be given to the scheme/pattern emerging/surfacing from the given set of facts of a case including all the documents and submissions on record.

AC-Treuhand AG v. European Commission Case T-27/10 rel.

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

----Ss. 30 & 4---Proceedings in case of contravention---Prohibited agreements---Standard of proof---Scope---Undertakings argued that the burden of proof is on the Commission to establish the contraventions and that the standard of proof must be that of 'beyond reasonable doubt'---Validity---It is normal for the activities relating to anti-competitive practices and agreements to take place in a clandestine fashion and for documentation to be reduced to a minimum---Even if evidence is discovered, it will normally be only fragmentary and sparse so it is often necessary to reconstitute certain details by inferences---Even if there is fragmentary evidence attached to the Enquiry Report it would be normal for a cartel like arrangement---Commission must consider not only the findings of the Enquiry Report, but submissions and documents put on record by the undertakings and whether the alleged anti-competitive conduct has the object or effect of preventing or reducing competition in the relevant market---Even if the alleged anti-competitive conduct is the result of a single meeting or a single occasion, it would be sufficient to hold an agreement to be prohibited for the purposes of S. 4 of Competition Act, 2010.

T-Mobile Netherlands BV v. Raad van bestuur van de Naderlandse Mededingingsautoriteit (Netherlands Competition Authority) Case C­8/08 rel.

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

----Ss. 4 & 2(1)(k)--- Prohibited agreements---Relevant market---Scope---Defining the relevant market is not essential for the application of S. 4 of the Competition Act, 2010---Under S. 4, the emphasis is on the restrictive activity or prohibition being carried out through, inter alia, the form of an 'agreement' which may have the object of preventing, restricting or reducing competition---As focus is more on the prohibited conduct, the definition of 'relevant market' under S. 4 is for reference purpose only---In particular, in cases where the very object of the prohibited conduct is deemed anti-competitive and the nature of the challenged restraint has the tendency to harm competition, there is no need to assess market definition or evidence of actual competitive harm.

FTC v. Indiana Federation of Dentists 476 US 447 (1986) rel.

(r) Words and phrases---

----"Spill-over"---Meaning.

Oxford Dictionary of Economics by John Black and LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214 rel.

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

----Ss. 4 & 2(1)(b)---Prohibited agreements---Agreement---Scope---Term agreement used in S. 4 has a very wide scope---As per the definition given in S. 2(1)(b), the term "agreement" can refer to any arrangement, understanding or practice---An agreement can take a variety of forms and does not have to conform to the usual notion of a standardized written, binding or legally enforceable instrument---In line with this definition, a practice that has continued over a period of time in a particular market or industry qualifies to be an "agreement" and such an agreement can be scrutinized by the Commission.

National Sulphuric Acid Association [80/917/EEC] ref.

T-Mobile Netherlands BV v. Raad van bestuur van de Naderlandse Mededingingsautoriteit (Netherlands Competition Authority) Case C­8/08; Tobacco Manufacturers Case No. CA98/01/2010/ Case CE/2596-03; Re Nuovo CEGAM, 1984, OJ L 99/29, CMLR 484; Pakistan Jute Mills Association and its Member Mills Order dated 3 February 2011 and IAZ International Belgium NV v. Commission [1983] ECR 3369 rel.

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

----S. 4---Prohibited agreement---Expression 'decision'---Scope---Label of 'decision' is not pertinent and even a letter, rules or recommendation may be considered as 'decision' for the purposes of S. 4.

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

----S. 4--- Prohibited agreements---Association of undertakings---Scope---Decision of an association reflects an understanding between the member undertakings of an association and, if implemented/acted upon by the member undertakings, results in an agreement between the association and the member undertakings.

Banks Order dated 10 April 2008 ref.

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

----S. 4---Prohibited agreement---Association of undertakings---Scope---By being a member of an Association, an undertaking is deemed to have accepted its constitution and to have empowered the Association to undertake obligations on its behalf--- Consequently, even where a member has not expressly approved an anti-competitive agreement concluded by the Association but has not expressly opposed it, the member may be held to have acquiesced to the agreement.

All Pakistan Cement Manufacturers Association ref.

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

----S. 4---Prohibited agreement---Scope---Prohibition contained in S. 4 pertains to 'entering' into a prohibited agreement and the implementation of the same is not required to be established for the purposes of violation being committed.

All Pakistan Cement Manufacturers Association ref.

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

----Ss. 4 & 2(1)(b)---Prohibited agreement---Agreement---Scope---Term 'agreement' as conceived under the Act is very broad and encompasses the 'entering into' any/or all practices, arrangements and understandings that come within the purview of S. 4(1)---When S. 4(1) is read with the definition of 'agreement' in S. 2(1)(b) of the Act contractual elements like offer and acceptance, free consensus of parties, lawful consideration or for that matter enforceability of the agreement itself, are not relevant facts in determining whether any 'agreement' has been entered into---Prohibition under S. 4 pertains to all agreements whether these are: legally enforceable or not, with or without consideration or entered voluntarily or involuntarily.

In re-ICAP Appeal Order dated 11 March 2009 ref.

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

----S. 4---Prohibited agreement---Exchange of commercially sensitive information---Scope---Information exchanges among competitors may fall into three different scenarios; as a part of a wider price fixing or market sharing agreement whereby the exchange of information functions as a facilitating factor; in the context of broader efficiency enhancing cooperation agreements such as joint venture, standardization or research and development agreements; or as a stand-alone practice, whereby the exchange of information is the only cooperation among competitors.

United States v. Container Corp. 393 U.S. 333 (1969) and Information Exchanges between Competitors under Competition Law (2010) ref.

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

----S. 4---Prohibited agreement---Exchange of commercially sensitive information---Scope---Exchange of information can facilitate collusion among competitors by allowing them to establish coordination, monitor adherence to coordinated behaviour and effectively punish any deviations---While assessing the legality of information exchanges, competition agencies take into account the structure of the affected market, levels of concentration, characteristics/nature of the information exchanged and the modalities in which the information exchange takes place.

United States v. Container Corp. 393 U.S. 333 (1969) and Information Exchanges between Competitors under Competition Law (2010) ref.

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

----S. 4---Prohibited agreement---Exchange of commercially sensitive information---Factors to be considered while assessing compatibility of exchange of information, detailed.

While assessing compatibility of the exchange of information between competitors and the potential anti-competitive object or effect of the same, briefly the following factors are considered:

(i) the purpose of the exchange;

(ii) the type of information exchanged - whether public, confidential or sensitive;

(iii) the level of detail of information - whether aggregate or otherwise;

(iv) the frequency of the exchange;

(v) the characteristics of the product in question;

(vi) level of market concentration; and

(vii) importance of the information exchanged for setting of prices, volumes or predicting (forecasting) commercial policies of other players.

Information Exchanges between Competitors under Competition Law (2010) ref.

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

----S. 4---Prohibited agreement---Exchange of commercially sensitive information--- Scope--- Information that can be considered as problematic includes information exchanges among competitors of data regarding future prices and/or quantities (such as future sales, market shares, territories or customer lists); information sharing on current conduct that reveals intentions on future market behaviour (outside pricing and quantity information) or cases where the combination of different types of data enables the direct deduction of intended future prices and quantities to have the object of restricting competition and any exchange of information that may not have the intention of restricting competition but may have that effect.

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

----S. 4---Prohibited agreement---Exchange of commercially sensitive information---Scope---Information exchange is genuinely public if it makes the exchanged data equally accessible to suppliers and customers.

Information Exchanges between Competitors under Competition Law (2010) ref.

[Per Ms. Shaista Bano, Member and Ms. Bushra Naz Malik, Member (Minority view)]

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

----S. 4---Prohibited agreement---Scope---Provisions and language of S. 4(1) read with S. 4(2)(e) do not capture mere exchange of information between competitors---In order to fall within the scope of S. 4(1) read with S. 4(2)(a), at the very least, in addition to direction, clear and convincing evidence of sharing of information, inter se competitor, there must additionally be clear indication that the "object" or "effect" of such exchange is of prevention, restriction or reduction of competition within the relevant market.

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

----S. 4--- Prohibited agreements--- Lobbying--- Scope--- To lobby government for a favourable concession is not per se anti-competitive.

Salman Akram Raja, Advocate Supreme Court, Abuzar Salman Khan Niazi, Ghulam Shabir, Ms. Atira Ikram, Ms. Mehrunissa Sajjad and Raja Muhammad Akram & Co. for Messrs Pakistan Sugar Mills Association.

Abdul Sattar Pirzada, Mamoon Nawaz Chaudhry, Nasir Mahmood and Hafeez Pirzada Law Associates for Messrs Al-Abbas Sugar Mills Ltd., Messrs Al-Noor Sugar Mills Ltd., Messrs Army Welfare Sugar Mills Ltd., Messrs Dewan Sugar Mills Ltd., Messrs Digri Sugar Mills Ltd., Messrs Faran Sugar Mills Ltd., Messrs Habib Sugar Mills Ltd., Messrs Khairpur Sugar Mills Ltd., Messrs Matiari Sugar Mills Ltd., Messrs Mehran Sugar Mills Ltd., Messrs Mirpurkhas Sugar Mills Ltd., Messrs Ranipur Surar Mills Ltd., Messrs Sanghar Sugar Mills Ltd., Messrs Shahmurad Sugar Mills Ltd., Messrs Sindh Abadgar's Sugar Mills Ltd., Messrs SGM Sugar Mills Ltd. and Messrs Tharparkar Sugar Mills Ltd.

Sikandar Bashir Mohmand, Advocate Supreme Court, Mustafa Aftab Sherpao, Mohmand and Sharpao and Barrister Khush Bakht, JK Sugar Mills Ltd. for Messrs Al-Arabia Sugar Mills Ltd., Messrs JK Sugar Mills Ltd., Messrs Adam Sugar Mills Ltd., Messrs Ashraf Sugar Mills Ltd., Messrs Chanar Sugar Mills Ltd., Messrs Etihad Sugar Mills Ltd., Messrs Fatima Sugar Mills Ltd., Messrs Fecto Sugar Mills Ltd., Messrs Hamza Sugar Mills Ltd., Messrs Ittefaq Sugar Mills Ltd., Messrs Rasool Nawaz Sugar Mills Ltd., Messrs Kashmir Sugar Mills Ltd., Messrs Madina Sugar Mills Ltd., Messrs Pattoki Sugar Mills Ltd., Messrs Ramzan Sugar Mills Ltd., MessrsTandlianwala I Sugar Mills Ltd., Messrs Tandlianwala II Sugar Mills Ltd., Messrs Popular Sugar Mills Ltd., Messrs Jahuarabad Sugar Mills Ltd (Kohinoor), Messrs Deharki Sugar Mills Ltd. and Messrs Tandlianwala Sugar Mills Ltd. (Zamand).

Barrister Shazad A. Elahi, Partner, Mussadiq Islam, Senior Associate, Shahmeer Arshad, Associate Cornelius, Lane and Mufti and Maqsood Malhi, Company Secretary/HOD Legal JDW Group for Messrs SW Sugar Mills Ltd. (Chishtia), Messrs Baba Farid Sugar Mills Ltd., Messrs Indus Sugar Mills Ltd., Messrd JDW-I Sugar Mills Ltd., Messrs JWD-II Sugar Mills Ltd., Messrs JDW-III Sugar Mills Ltd., Messrs Layyah Sugar Mills Ltd., Messrs Safina Sugar Mills Ltd., Messrs Noon Sugar Mills Ltd., Messrs Sheikhoo Sugar Mills Ltd., Messrs RYK Sugar Mills Ltd., Messrs Al-Moiz II Sugar Mills Ltd. and Messrs Al-Moiz Industries (Unit-I).

Rashid Sadiq, RS Corporate Advisory for Messr Haq Bahu Sugar Mills Ltd., Messrs Macca Sugar Mills (Pvt.) Limited, Messrs Shahtaj Sugar Mills Ltd. and Messrs Abdullah Shah Ghazi.

Qausain Faisal Mufti, Advocate Supreme Court for Messrs Premier Sugar Mills Ltd., Messrs Chashma I Sugar Mills Ltd. and Messrs Chashma II Sugar Mills Ltd.

Ali Sibtain Fazli, Advocate Supreme Court, Hasham Ahmad Khan, Ali Sibtain Fazli and Associates for Messrs Hunza I Sugar Mills Ltd. and Messrs Hunza II Sugar Mills Ltd.

Mustafa Ali Tariq, Chief Executive Officer, Waseem Saleem, Chief Operating and Finance Officer for Messrs Husein Sugar Mills Ltd.

Barrister Iftikharauddin Riaz, Advocate Supreme Court, Bhindari Naqvi Riaz (BNR) for Messrs Kamalia Sugar Mills Ltd.

Khalid Pasha, General Manager Accounts for Messrs Shakarganj I Sugar Mills Ltd. and Messrs Shakarganj II Sugar Mills Ltd.

Rizwan Ahmed, Assistant Manager General for Messrs Kiran Sugar Mills Ltd.

OMNI GROUP Salman Younas, Group Chief Operating Officer, Kamal Danish, Head of Finance and Business Groups and Zafar, Sugar Division Head for Messrs Khoski Sugar Mills Ltd., Messrs Naudero Sugar Mills Ltd., Messrs New Dadu Sugar Mills Ltd., Messrs Larr Sugar Mills Ltd., Messrs Bawany Sugar Mills Ltd. and Messrs Ansari Sugar Mills Ltd.

Mubashar Ashraf, Company Secretary for Messrs Imperial Sugar Mills Ltd.

Muhammad Ahsan Khan, Advocate High Court for Messrs Abdullah Sugar Mills Ltd. and Messrs Haseeb Waqas Sugar Mills Ltd.

Muhammad Haroon, Legal Advisor for Messrs Khazana Sugar Mills Ltd.

Ali Usman, Advocate High Court for Messrs Chaudhry Sugar Mills Ltd.

Usman Mirza, Chief Finance Officer for Messrs Sakrand Sugar Mills Ltd.

Mohsin Tabbani, Chief Executive Officer for Messrs TMK Sugar Mills Ltd. and Messrs Seri Sugar Mills Ltd.

Nemo for Messrs Najma Sugar Mills Ltd.

Nemo - Published in Newspaper for Messrs Pangrio Sugar Mills Ltd.

Nemo for Messrs Mirza Sugar Mills Ltd.

Nemo - Published in Newspaper for Huda Sugar Mills Ltd.

Nemo for Brother Sugar Mills Ltd.

2022 C L D 1343

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO EIGHT (8) CAMPUSES OF DAR-E-ARQAM SCHOOLS:

In the matter of

F. No. 281/DAR-E-ARQAM.CCP.OFT/17, decided on 8th August, 2019.

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

----S. 10---Deceptive marketing practices---Distribution of false and misleading information---Fraudulent use of another's trademark---Scope---Complainant alleged that the respondents were disseminating false and misleading information to consumers by fraudulently using its trademark, trade name and other distinctive items which amounted to deceptive marketing practices under S. 10 of the Competition Act, 2010---Validity---Complainants had produced the trademarks registration certificate, whereas the respondents had not produced any document in their support which could justify the use of complainant's trademark and trade name---Respondents were blatantly using the complainant's registered trade/service mark without obtaining due authorization from the complainant to thrive on the reputation built by complainant over a period of several years---Only defence which had been made by the respondents was that there was a franchise agreement that allowed them to use the trade name and trademark of the complainant---However, it was not disputed at all by either party that the agreement stood terminated---Respondents had violated S. 10 of the Competition Act, 2010---Competition Commission imposed a penalty on the proprietor of each respondent---Respondents were directed to publish in two newspapers that they had no affiliation with the complainant and refrain from indulging in any form of deceptive marketing practices in the future.

In the matter of Show Cause Notice issued for violation of DHL Trademark 2013 CLD 1014 rel.

2013 CLD 1451 distinguished.

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

----Preamble & S. 10---Deceptive marketing practices---Scope---Apart from providing for free competition in all spheres of commercial and economic activity and to enhance economic efficiency, the scope of the Competition Act, 2010 is also to protect consumers from anti-competitive practices, which inter alia include the deceptive marketing practices.

In the matter of Show Cause Notice issued to Messrs Kamyu.Pk 2018 CLD 919 fol.

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

----S. 10---Deceptive marketing practices---Net general impression---Scope---Competition Commission, in determining whether an advertisement or marketing material (and the advertised claims) amount to deceptive marketing practices, shall evaluate complete advertisement and make an opinion regarding deception on the basis of net general impression conveyed by them and not an isolated script.

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

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

----S. 10---Deceptive marketing practices---Net general impression---Dominant message---Scope---Competition Commission while evaluating the 'net general impression' or dominant message examines express and implied claims contained in an advertisement or promotional campaign while holding the advertiser liable for both---Advertiser is liable for all such claim 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 violations under S. 10 of the Competition Act, 2010.

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

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

----S. 10---Deceptive marketing practices---Distribution of false information---Scope---False information is an oral or written statement or representation that is (a) contrary to the truth or fact and not in accordance with reality or actuality, (b) usually implies either conscious wrong or culpable negligence, (c) has a striker and strong connotation, and (d) not readily open to interpretation.

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

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

----S. 10---Deceptive marketing practices---Distribution of misleading information---Scope---Misleading information may essentially include oral or written statement or representation that is (a) capable of giving wrong impression or idea, (b) likely to lead into error of conduct, thought or judgment, (c) tends to misinform or misguide owning to vagueness or any omission, (d) may or may not be deliberate or conscious, and (e) in contrast to false information, it has less erroneous connotation and is somewhat open to interpretation as the circumstances and conduct of a party may be treated as relevant to a certain extent.

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

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

----S. 10---Deceptive marketing practices---Distribution of false or misleading information---Business interest of another undertaking---Scope---To prove conduct under S. 10(2)(a) of the Competition Act, it is not necessary to show actual harm to competitors---Such is sufficient to show the existence of a deceptive marketing practice that has the potential to harm the business interest of the competitor---Among such deceptive marketing practices is the distribution of claim lacking reasonable basis that is essentially designed and used to gain an unfair advantage over competitor.

In the matter of Show Cause Notice issued to Messrs Jotun Pakistan (Pvt.) Limited 2015 CLD 1638 fol.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Goodwill and the value of trademark---Scope---Part of any business's identity is the goodwill it has established with consumers, while part of a product's identity is the reputation it has earned for quality and value---In a larger sense, trademarks promote initiative and enterprise worldwide by rewarding the owners of trademarks with recognition and financial profit---Trademark protection also hinders the efforts of unfair competitors, such as counterfeiters, to use similar distinctive signs to market inferior or different products or services, this enables people with skill and enterprise to produce and market goods and services in fair conditions, thereby facilitating international trade.

In the matter of Show Cause Notice issued for violation of DHL Trademark 2013 CLD 1014 fol.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Goodwill and the value of trademark---Scope---Essential function of a trademark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin---For the trademark to be able to fulfill its essential role in the system of undistorted competition, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality.

Hoffmann-La Roche [19781 E.C.R. 1139, para. 7 and Philips Electronics NV v. Remington Consumer Products Ltd. [2002] ECR 1-0000 fol.

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

----S. 10---Deceptive marketing practices---Fraudulent use of another's trademark---Goodwill and the value of trademark---Scope---For the guarantee of origin, which constitutes the essential function of a trademark, to be ensured, the proprietor must be protected against competitors wishing to take unfair advantage of the status and reputation of the trademark by selling products illegally bearing it.

Arsenal Football Club v. Matthew Reed [20031 RPC 9 and Loendersloot [1997] E.C.R. 6227 fol.

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

----S. 10---Deceptive marketing practices---Burden of proof---Scope---Onus to prove is on the undertaking against whom deceptive marketing practices is alleged, as the object and purpose of the Competition Act, 2010, is to protect the consumer.

In the matter of Show Cause Notice issued to Messrs Vision Developers 2018 CLD 350 ref.

Matter of China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478 fol.

(l) Words and phrases---

----"Consumer"---Meaning.

Consumer is user of a goods or beneficiary of the services and does not include a person who obtains such goods for resale or for any commercial purpose or is rendering services.

In the matter of Show Cause Notice issued to Messrs Kamyu.Pk 2018 CLD 919 fol.

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

----S. 10---Deceptive marketing practices---"Consumer"---Scope---Term "consumer" under S. 10 of the Competition Act, 2010 is to be construed as an 'ordinary consumer' but need not necessarily be restricted to the end consumer of the goods or services. In the matter of China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478 fol.

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

----S. 37---Enquiry and studies---Initiation of proceedings---Scope---For initiation of the enquiry, any complaint filed with the Commission must satisfy the criteria laid down in the express provision of law, i.e. it must be filed by an 'undertaking' or 'a registered association of consumers' and must be substantiated with prima facie evidence, failing which no enquiry thereon can be conducted.

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

In the matter of Show Cause Notice issued to Messrs Kamyu.Pk 2018 CLD 919 fol.

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

----S. 28--- Functions and powers of the Commission---Scope---Competition Act, 2010, was enacted by the Parliament entrusting the Commission with the exclusive statutory 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 behaviours.

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

----S. 59---Competition Act, 2010 to override other laws---Scope---Section 59 of the Competition Act, 2010 makes it abundantly clear that the provisions and applicability of the Competition Act, 2010 has been given an overriding effect over all other conflicting laws in force.

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

----S. 48---Indemnity--- Scope--- Commission and its officers perform their duties in good faith and any allegation of mala fide must be supported with evidence to prove the existence of unfaithful and devious conduct on the part of the enquiry officers. In the mater of Show Cause Notices issued to Jamshoro Joint Venture Limited and LPG Association of Pakistan, dated 14 December 2009 rel.

(r) Administration of justice---

----Ex-parte proceedings---Scope---Decrees granted against the absentees, without consideration of available record or application of mind vis-à-vis the evidence available on the record, have always been looked upon with dis-favour by the superior courts.

Rehmat Ali v. Additional District Judge, Multan and others 1999 SCMR 900 fol.

(s) Interpretation of statutes---

----Definition from other statute can only be borrowed where both the statutes are pari materia.

Muhammad Hussain Patel v. Habib Wali Muhammad, PLD 1981 SC 1 fol.

(t) Interpretation of statutes---

----Statutes in pari materia---Scope---Statutes in pari materia are statues which are so related as to form a system or code of legislation and when they relate to same persons or things or to the same class of persons or things or have the same purpose or object it is only then that the statutes are called in pari materia.

Murtaza Flour Mills (Private) Limited v. Federation of Pakistan and others 1996 MLD 1273 fol.

(v) Mala fide---

----Mala fide is to be proved through independent and cogent evidence, mere allegations are not sufficient.

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

(w) Mala fide---

----Burden of proof is on the one who alleges mala fide on the part of complainant or the investigation agency.

Shafi Mohammad v. State 2017 YLR 317 ref.

Noman A. Farooqi, Legal Advisor assisted by Ms. Sophia Khan, Joint Director (Legal) and Ms. Aish K. Khan, Management Executive.

Khurram Mehmood Qureshi and Akhtar Bajwa, Director for Messrs Dar-e-Arqam Shools/Dar-e-Arqam Foundation.

Farooq Sadiq, Ms. Wasima Farooq, Razzaq A. Mirza and Fazal Faraz Sheikh for Dar-e-Arqam, I-8 Campus, Dar-e-Arqam,I-10 Campus, Dar-e-Arqam, Khayban-e-Sir Syed Campus, Rawalpindi, Dar-e-Arqam, Hayatabad Campus, Peshawar, Dar-e-Arqam School University Town Campus, Peshawar, New Dar-e-Arqam School Systems, Canal Road, Peshawar, Tarbiyah Schools International, Peshawar and Messrs International Model Tarbiyah (Pvt.) Limited, Islamabad.

2022 C L D 1509

[Competition Appellate Tribunal]

Before Justice Mamoon Rashid Sheikh, Chairperson, Muhammad Asghar Ch., Member Technical-I and Raja Saad Sultan, Member Technical-II

CHAUDHRY SUGAR MILLS---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Diary No. 4 of 2021, decided on 2nd June, 2022.

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

----S. 42--- Constitution of Pakistan, Art. 199--- Appeal to the Competition Appellate Tribunal---Constitutional petition---Alternate remedy---Scope---Appellants assailed order passed by Competition Commission---Contention of appellants, inter alia, was that the validity of impugned order had been assailed before the various High Courts due to non-functioning of the Competition Appellate Tribunal and that the Competition Appellate Tribunal should await the decision of the High Court---Validity---Competition Appellate Tribunal was empowered to hear appeals against orders of the Competition Commission passed by two or more Members or by the Appellate Bench of the Competition Commission---In deciding such appeals, the Competition Appellate Tribunal was empowered to decide all questions of law and facts raised before it including the question of the composition of the Competition Commission---In case an Administrative Court or Tribunal was not available to a litigant for the reason that it is not functional then the litigant who had a remedy before such Administrative Court or Tribunal could not be left in a vacuum for an indefinite period due to the non-establishment of such Administrative Court or Tribunal or in other words a litigant could not be rendered remediless---In such circumstances, whilst acting upon the principle, "ubi jus ibi remedium", that is to say, where there is a right there is a remedy, and in the spirit of Arts. 4 & 10-A of the Constitution---Constitutional petition under Art. 199 was normally entertained by the High Court to provide relief to the litigant---However, once the Administrative Court or Tribunal became functional then under the relevant statute the remedy of litigant ordinarily laid before such Administrative Court or Tribunal established under the statute, inter alia, for the reason that, although the jurisdiction of a High Court under Art. 199 of the Constitution was open ended, yet it was subject to certain limitations mentioned in the said Article, one of which being the availability of other adequate remedy to the litigant---Request of the appellants to adjourn the appeals sine die was declined---Appeals were admitted to regular hearing.

Sarfraz Saleem v. Federation of the Pakistan and others PLD 2014 SC 232 ref.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction--- Stay of proceedings---Scope---Mere filing of an appeal/writ petition before the High Court or a higher forum does not automatically operate as a stay of proceedings unless a specific order has been passed in this respect.

Shah Wali v. Ghulam Din alias Gaman and another PLD 1966 SC 983; H.M. Fazal Zaheer v. Kh. Abdul Harmed and others 1983 SCMR 906 and Muhammad Iqbal v. Additional District Judge, Rahimyar Khan and others PLD 2011 Lah. 497 ref.

(c) Jurisdiction---

----If a Court does not have jurisdiction and it wrongly exercises such jurisdiction then an appeal lies from the decision in the same manner as an appeal lies from a decision with jurisdiction.

Muhammad Ashfaq v. The State PLD 1973 SC 368; Abrar Hassan v. Government of Pakistan and others PLD 1976 SC 315 and Pir Sabri Shah v. Shah Muhammad Khan and another PLD 1995 SC 66 ref.

Ali Sibtain Fazli along with Malik Naeem Ahmed Awan for the Appellants (in Appeals/Diary Nos. 60, 61, 63 and 64 of 2021).

Sajjad Zaidi for the Appellant (in Appeal/Diary No. 04/2021).

Sikandar Bashir Mohmand along with Ms. Khush Bakht on behalf of the Appellants (in Appeals/Diary Nos. 05 to 22 of 2021).

Mamoon M. Chaudhary along with Nasir Mehmood on behalf of the Appellants (in Appeals/Diary Nos. 23 to 45 of 2021).

Shehzad A. Elahi along with Umair Bajwa on behalf of the Appellants (in Appeals/Diary Nos. 46 to 58 of 2021).

Abdul Rafih on behalf of the Appellant (in Appeal/Diary No. 59 of 2021).

Muhammad Yousaf on behalf of the Appellant (in Appeal/Diary No. 62 of 2021).

Aitzaz ul Haq on behalf of the Appellants (in Appeals/Diary Nos. 65 to 68 of 2021).

Shehryar Kasuri on behalf of the Appellants (in Appeals/Diary Nos. 69 to 71 of 2021).

Salman Khawaja and Azim Rashid along with Rashid Sadiq, FCA, on behalf of the Appellants (in Appeals/Diary Nos. 72 to 75 of 2021).

2022 C L D 233

[Sindh Environmental Protection Tribunal]

Before Justice (Retd.) Nisar Muhammad Shaikh, Chairman and Abdul Rauf Memon, Member (Technical)

RAFHAN MAIZE PRODUCTS COMPANY LTD.---Appellant

Versus

DIRECTOR GENERAL, ENVIRONMENTAL PROTECTION AGENCY, GOVERNMENT OF SINDH---Respondent

Appeal No. 4 of 2021, decided on 7th July, 2021.

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

----Ss. 11, 13 & 14---Prohibition of certain discharges or emissions and compliance with standards---Handling of hazardous substances---Prohibition of action adversely affecting Environment---Scope---Appellant assailed order passed by Director General Sindh Environmental Protection Agency whereby he had ordered for immediate stoppage of the production process in the appellant's plant on the allegation that untreated waste water was being discharged into KB Feeder (Kalri-Baghar Feeder)---Held; appellant was willing to functionalize its effluent treatment plant for which the appellant had already initiated corrective measures---Appellant had ensured that it would not discharge untreated waste water, therefore, appellant was allowed to functionalize its waste water treatment plant within specified period---Appellate Tribunal observed that Sindh Environmental Protection Agency, as a statutory body for the implementation of environmental laws, would have no restriction for routine inspection of appellant's plant but the development process of effluent treatment plant would not be unnecessarily hindered---Appeal was disposed of accordingly.

Farhatullah Khan for Appellant.

Imran Ali Abbasi, Deputy Director (Tech. II) Incharge, Regional Office Hyderabad along with Khalid Munir Shah, Assistant Director, Law SEPA, Regional Officer Hyderabad.

2022 C L D 502

[Sindh Environmental Protection Tribunal]

Before Justice (R) Nisar Muhammad Shaikh, Chairman, Muhammad Arif Khan, Member Legal and Abdul Rauf Memon, Member Technical

ARIF BELGAUMI and 4 others---Appellants

Versus

SINDH ENVIRONMENTAL PROTECTION AGENCY (SEPA) through Director General and another---Respondents

Appeal No. 9 of 2020, decided on 9th November, 2021.

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

----S. 17---Sindh Environmental Protection Agency (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2014, Regln. 6---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA)---Scope---Appellants assailed the approval of "Development of Beach" accorded by Sindh Environmental Protection Agency in an Initial Environmental Examination (IEE) on the ground that such project required filing of Environmental Impact Assessment---Validity---Compliance of sub-Regulation (2) of Regln. 6 of Sindh Environmental Protection Agency (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2014 was not possible without following its proviso on the point of recommendations of the Committee and admittedly, there were no recommendations of the Committee and even no such Committee was shown to have been constituted---Sub-Regulation (2) of Regln. 6 empowered the Agency to direct the proponent of a project to file an IEE or EIA or ECL for the reasons to be recorded in such direction---Such reasons could not be recorded without due consideration and justification---Decision of IEE approval was not sustainable in the eyes of law, therefore, the impugned decision was set aside and the matter was remanded to the Agency for decision afresh.

Salim Godil and others v. Province of Sindh and others 2014 CLD 222 and Zahid Javed v. Tahir Riaz Chaudhry PLD 2016 SC 637 ref.

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

----S. 27---Appeals to the Environmental Protection Tribunal---Scope---Section 27 of the Sindh Environmental Protection Act, 2014, provides that any person aggrieved of any order or direction of the Agency may prefer an appeal within 30 days of date of communication of the impugned order or direction to such person.

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

----S. 27---Appeals to the Environmental Protection Tribunal---Limitation---Communication of order---Scope---Authorities/respondents contended that the appeal was barred by time as it was filed after 8 months of the passing of impugned order---Validity---Appellants along with their appeal had annexed the copy of news report through which they had obtained knowledge of the approval, the application and its reminder for supply of copy of IEE (initial Environmental Examination) report and its approval---Such application as well as reminder bore the signatures with stamp of the receiving section of the Agency---Receipt of the application and reminder were nowhere denied by the Agency---Nothing more was needed to establish the appellants' stance on the point of limitation and accordingly, the appeal was held to have been filed within prescribed time of 30 days of the communication of the impugned decision to the appellant party.

(d) Sindh Environmental Protection Agency (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2014---

----Regln. 13---Decision---Signatures on decision---Scope---Initial Environmental Examination approval being a quasi-judicial and appealable order can only be passed and signed by the Director General of the Agency and the Deputy Director is not competent to sign the same.

(e) Administration of justice---

----When a particular thing is required to be done in a particular manner it must be done in the same prescribed manner.

(f) Administration of justice---

----Quasi-judicial powers cannot be delegated and are to be exercised by persona designata mentioned in the statute.

Messrs Fun Infotainment Network v. PEMRA and others PLD 2019 Lah. 486 rel.

Zubair Ahmed Abro for Appellants.

Zain A. Soomro for Respondent No. 2.

Dr. Habib-ur-Rehman Solangi, Deputy Director Law along with Muhammad Azhar Khan, Deputy Director Technical for Respondent No. 1.

Shoaib Qureshi, Assistant Director Technical and Furqan Fazal, Environmental Inspector, SEPA.

2022 C L D 626

[Sindh Environmental Protection Tribunal]

Before Justice (R) Nisar Muhammad Shaikh, Chairman and Abdul Rauf Memon, Member (Technical)

SINDH ENVIRONMENTAL PROTECTION AGENCY through Authorized Officer---Complainant

Versus

Messrs DIAMOND RESIDENCY through Owner/ Chief Executive Officer and another---Respondents

Complaint Case No. 33 of 2017, decided on 22nd December, 2021.

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

----Ss. 17 & 1---Initial environmental examination and environmental impact assessment--- Commencement of the Act--- Prospective application---Scope---Sindh Environmental Protection Agency through its authorized officer filed a complaint alleging therein that the accused had initiated construction of a project of ground plus 16 floors high rise building without seeking environmental approval as required under S. 17 of the Sindh Environmental Protection Act, 2014---Accused sought premature acquittal through an application under S. 265-K, Cr.P.C.---Construction of the project had commenced prior to promulgation of Sindh Environmental Protection Act, 2014---Violation, if any, had constituted an offence punishable under the Pakistan Environmental Protection Act, 1997---Since no action under the Pakistan Environmental Protection Act, 1997, was initiated against the accused on commission of alleged offence, therefore, the penal provisions of the Sindh Environmental Protection Act, 2014 forming a part of substantive law and not procedural one, could not be termed to have retrospective effect as such penal provisions followed by the conviction and punishment, could not take away the right of a person by applying it retrospectively---Sindh Environmental Protection Act, 2014, as per S. 1(3) had come into force at once, replacing the Pakistan Environmental Protection Act, 1997, therefore, it could not have retrospective effect so as to apply it for the past matter, retrospectively---No probability of conviction of accused existed in the case of which the very charge was groundless---Accused was acquitted of the charge.

Ms. Ifat Rana, A.P.G. for the State along with Dr. Habib-ur-Rehman Solangi, Deputy Director Law and Rao Zeeshan Ahmed, Environmental Inspector/I.O. for SEPA.

Farhatullah Khan for Respondent No. 2 along with Respondent No.2.

2022 C L D 1051

[Sindh Environmental Protection Tribunal]

Before Justice (R) Nisar Muhammad Shaikh, Chairman, Muhammad Arif Khan, Member Legal and Abdul Rauf Memon, Member Technical

MADINA BREEDING (PVT.) LIMITED through Authorized Attorney---Appellant

Versus

SINDH ENVIRONMENTAL PROTECTION AGENCY through Director General and another---Respondents

Appeal No. 6 of 2021, decided on 6th July, 2021.

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

----Ss. 17, 21 & 22---Initial environmental examination and environmental impact assessment---Environmental Protection Order---Closure of factory---Scope---Appellant assailed order passed by Director General, Sindh Environmental Protection Agency whereby he had ordered the appellant to forthwith close its business activities of Control Shed Poultry Farm---Validity---Order passed by respondent was beyond the scope of S. 21(2)(a) of the Sindh Environmental Protection Act, 2014---Such order of closure of the unit could only be passed by Environmental Protection Tribunal under S. 22(5)(b) after due trial of the case and on conviction of the accused with punishment on commission of the offence---Appellant, during the course of arguments, had showed his readiness to apply for environmental approval by submitting Environmental Management Plan to the department for due compliance but for this purpose it sought time of 90 days---Impugned order was set aside and the appellant was directed to file Environmental Audit report and Environmental Management Plant before the department within 90 days---Appeal was disposed of accordingly.

Pakistan Mobile Communication v. Abrar Ahmed and 4 others 2019 CLD 578 ref.

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

----S. 1---Sindh Environmental Protection Agency (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2014, Regln. 1---Commencement---Retrospective effect---Scope---Sindh Environmental Protection Act, 2014 and Sindh Environmental Protection Agency (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2014 cannot have retrospective effect.

Pakistan Mobile Communication v. Abrar Ahmed and 4 others 2019 CLD 578 ref.

Meraj ud Din for Appellant.

Khalid Munir Shah, Deputy Director Law for SEPA/ Respondent No. 1.

Imran Ali Abbasi, Deputy Director Technical.

Regional Office, Hyderabad/Respondent No. 2.

2022 C L D 10

[Islamabad]

Before Babar Sattar, J

DALDA FOODS LIMITED through National Sales Manager (North)---Petitioner

Versus

The COMPETITION COMMISSION OF PAKISTAN and others---Respondents

Writ Petition No. 3454 of 2020, decided on 14th September, 2021.

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

----Ss. 28, 30 & 37---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court---Jurisdiction of Competition Commission of Pakistan (CCP)---Judicial review---All functions performed by the Commission amount to exercise statutory authority by public authority---Requirement of reasonability is attached to action of CCP---Such exercise of discretion and authority pursuant to provisions of Competition Act, 2010 is subject to judicial review---Nature of review and manner in which reasonability is to be ascertained depends on particular role discharged by CCP.

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

----Ss. 30 & 37---Competition Commission of Pakistan (CCP)--- Exercise of jurisdiction---Pre-conditions---Competition Commission of Pakistan must ensure that there exists reasonable basis to exercise its statutory authority to intrude into the affairs of an undertaking and employ its resources to inquire into and alleged infraction under Competition Act, 2010--- In exercise of its authority under S. 37 of Competition Act, 2010, CCP is only required to form a preliminary opinion that there exist "facts as appear to constitute a contravention of provision" Competition Act, 2010---In exercise of its powers under S. 30 of Competition Act, 2010, CCP must be "satisfied that there has been or likely to be a contravention of any provision of Chapter II"--- Possibility of infringement provision of Competition Act, 2010 by an undertaking can always exist but such is not sufficient to trigger an investigation under S. 37 of Competition Act, 2010---Commission does not have unbridled authority to order an inquiry on the basis of a hunch alone--- Prior to ordering an inquiry, CCP must determine, in view of the facts before it that a contravention of a provision of Competition Act, 2010 seems plausible based on prima facie evidence---Commission then can order an inquiry to confirm veracity of such plausible cause, which once confirmed would graduate to the stage of proceedings under S. 30 of Competition Act, 2010.

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

----Ss. 30, 33, 36 & 37---Constitution of Pakistan, Art. 199---Constitutional petition---Calling for information relating undertaking--- Refusal to provide information---Sectoral inquiry---Scope---Petitioner undertaking was aggrieved of letters issued by Competition Commission of Pakistan (CCP) asking the petitioner to provide information in the matter of price increase---Plea raised by petitioner was that such requirement of CCP was without any authority---Contention of CCP was that petitioner was not suspected of having breached any provision of Competition Act, 2010, and CCP was conducting a sectoral inquiry and seeking information from all undertakings that formed part of the industry concerned---Validity---Despite broad powers at its disposal, when regulator called for information, it could not compel an undertaking to 'provide answers which might involve an admission' by undertaking to 'the existence of an infringement which the regulator must prove'---Competition Commission of Pakistan did not determine whether it was in possession of facts that prima facie established a plausible case for breach of Competition Act, 2010---Reasoned order was not passed by CCP stating that requirements of S. 37(2) of Competition Act, 2010 stood satisfied, while identified suspected infraction of provisions of Competition Act, 2010 and factual basis of such findings in relation to which information had been sought from petitioner---No special allowance was made under S. 37 of Competition Act, 2010, for a sectoral inquiry nor had prescribed a test for such purpose different from one prescribed in relation to individual undertakings--- Inquiry in question was ordered by CCP for a collateral purpose without satisfying requirements of S. 37 and inquiry ordered was passed in breach of provisions of Competition Act, 2010, and was therefore void---Subsequent orders seeking information from petitioner for the purposes of inquiry and S. 36 of Competition Act, 2010 and order reiterating demand for information was contingent upon and rooted in a void order were not backed by any lawful authority---High Court set aside letter issued by CCP seeking information, letter informing petitioner that inquiry had been ordered by CCP under S. 37 of Competition Act, 2010, and special order passed under S. 36 of Competition Act, 2010, were all set aside--- Constitutional petition was allowed, in circumstances.

National Feeds Limited v. Competition Commission of Pakistan 2016 CLD 1688; Muhammad Yousaf Ali v. Muhammad Aslam Zia PLD 1958 SC 104; Messrs Catkin Engineering Sale and Services (Pvt.) Limited v. Khyber Pakhtunkhwa Directorate of Agriculture Engineering 2020 CLD 497; Assistant Director Intelligence and Investigation, Karachi v. Messrs B.R Herman and others PLD 1992 SC 485; Adamjee Insurance Company Ltd. and others v. Assistant Director, Economic Enquiry Wing, Federal Investigation Agency 1989 PCr.LJ 1921; M.D Tahir, Advocate v. Director State Bank of Pakistan, Lahore 2004 CLD 1680; Dr. Moula Bux and others v. Government of Sindh and others 2000 PLC (C.S.) 905; The State of Maharashtara v. Nagpur Electric Light AIR 1961 Bombay 242; Triplex Safety Glass, [1939] 2 All ER 613; Orkem v. Commission of the European Communities (Case No. 374/87); Competition Commission of India v. Steel Authority of India Limited (2010) 10 SCC 744; Competition Law and Policy in the EC and the UK (Fourth Edition; Rutledge Cavendish 2009; pp 11); Flat Glass Antitrust Litigation 385 F.3d 350; Matsushita Electric Industrial Co. v. Zenith Radio Corporation 475 U.S. 574 and Chocolate Confectionary Antitrust Litigation (801 F.3d 383) ref.

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

----Ss. 30 & 37---Proceedings by Competition Commission of Pakistan (CCP)---Right of hearing to undertaking---Stage---Provision of S. 37 of Competition Act, 2010, does not require an undertaking to be afforded a right to a hearing at the stage of determining whether or not an inquiry is to be ordered---Commission is under an obligation to pass a reasoned order explaining as to how inquiry order is in compliance with the test laid out in S. 37(2) of Competition Act, 2010 and further inform undertaking in question as to what breach is suspected in relation to which information is being sought--- At the culmination of inquiry no adverse order is to be passed against undertaking in question and principle of audi alteram partem is not applicable at such stage---Right of hearing has to be afforded to undertaking under S. 30 of Competition Act, 2010, once CCP decides to initiate proceedings as required by Competition Act, 2010.

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

----S. 37(1) & (2)---Reference by Federal Government---Scope---Reference by Federal Government means a reference approved by Federal Cabinet.

Mustafa Impex, Karachi v. The Government of Pakistan through Secretary Finance, Islamabad PLD 2016 SC 808 rel.

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

----Preamble---Free competition---Fixation of price---Scope---Consumer interest in protection of consumers from anti-competitive practices and abuses remains a key objective of competition law---Simple price competition culminating in lower prices is not the sum total of consumer interest that competition law seeks to serve---Ability to choose from a variety of options, a market structure that facilitates innovation and efficiency in markets etc. are all legitimate interests that competition law and policy seek to promote in the interest of consumers---Object of Competition Act, 2010 is facilitation of free competition in market and not price fixation, stabilization or reduction---Use of regulatory authority flowing from Competition Act, 2010, for the purpose of achieving pricing outcomes is not a legitimate use of such authority.

Feisal Hussain Naqvi and Barrister Saman Mamoon for Petitioner.

Farrukh Shahzad Dall, Assistant Attorney General for Respondents.

Kashif Ali Malik and Qaiser Abbas Gondal for Competition Commission of Pakistan.

2022 C L D 143

[Islamabad]

Before Miangul Hassan Aurangzeb and Tariq Mehmood Jahangiri, JJ

Messrs INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Appellant

Versus

Messrs BLOSSOM TOWEL INDUSTRIES (PVT.) LTD. and others---Respondents

E.F.As. Nos. 6 and 7 of 2011, decided on 18th October, 2021.

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

----S. 19---Execution of decree---Cost of funds, recovery of---Dispute between the parties was with regard to payment of cost of funds for the period beyond the date when they were required to pay amount under the terms of settlement contained in letter of appellant/decree holder Bank---Validity---State Bank of Pakistan had notified rates of cost of funds from time to time but cost of funds demanded by appellant/decree holder Bank at the rate of 12% per annum with effect from 18-10-2007 had contractual force as was apparent from letters of parties---Respondents/judgment debtors were to have raised objection to the condition on which extension in time had been granted to them by appellant/decree holder bank at the stage when letter was sent to respondents/judgment debtors, who did not object to the condition rather acquiesced and accepted the same---Executing Court committed illegality by ignoring the condition on which extension in time for payment of remaining principal amount was granted to respondents/judgment debtors by appellant/decree holder Bank through its letter---High Court directed that respondents/judgment debtors to pay cost of funds for delayed period at the rate of 12% per annum under the terms of agreement and order passed by Executing Court was set aside---Appeal was allowed accordingly.

Mujeeb-ur-Rehman Warraich for Appellant (in the instant appeal as well as for the Respondent in connected E.F.A. No. 7/2011).

Qausain Faisal Mufti for Respondents Nos.1 to 3 (in the instant appeal as well as for the Appellants in connected E.F.A. No. 7/2011).

2022 C L D 291

[Islamabad]

Before Aamer Farooq, J

MEEZAN BANK LIMITED---Petitioner

Versus

The PRESIDENT ISLAMIC REPUBLIC OF PAKISTAN and others---Respondents

Writ Petition No. 2213 of 2021, decided on 21st December, 2021.

Banking Companies Ordinance (LVII of 1962)---

----S. 82-A---Banking Mohtasib---Mal-administration---Contractual liability---Petitioner Bank did not repatriate funds involved in Letter of Credit opened by importer as documents presented by seller Bank abroad were discrepant---Complaint before Banking Mohtasib was decided against petitioner Bank---Validity---Discrepancies in documents were duly noted by petitioner Bank and despite the same the seller authorized Bank to deal further in the matter and make buyer accept the documents---Controversy germinating after tendering documents by seller was spelt out from letter written by Bank to seller---Seller gave consent on email to Bank for release of documents to buyer despite the discrepancies---Such consent and eventual release of documents by issuing Bank to importer/buyer transcended matter beyond the scope of Letter of Credit---Mandate of issuing Bank was to make payment to seller through petitioner Bank upon tendering documents as per the mandate---High Court set aside order passed by Banking Mohtasib as the same suffered from error of law and remanded the matter for decision afresh on the complaint filed against petitioner Bank---Constitutional petition was allowed accordingly.

Intraco Limited v. Notis Shipping Corporation of Liberia (1981) 2 Lloyd Report 256; T.D. Bailey Son and Co. v. Ross T. Smyth and Co. Ltd. (1940) 56 T.L.R. 825 and Messrs SAZCO (Pvt.) LTD. v. Askari Commercial Bank Limited 2021 SCMR 558 ref.

Malik Muhammad Sadique Awan for Petitioner.

Faisal Iqbal Khan for Respondent No. 3.

2022 C L D 432

[Islamabad]

Before Aamer Farooq, J

Messrs RELIEF INTERNATIONAL through Authorized Representative---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 6 others---Respondents

C.O. No. 4 of 2018, decided on 27th January, 2022.

Companies Act (XIX of 2017)---

----Ss. 42, 43 & 305---Associations with Charitable and Not for Profit Objects Regulations, 2018, Cl. 11---Winding up of company---Licence, revocation of---Non-compliance of procedure---Petitioner company was registered and licensed as non-profit entity and sought its winding up---Validity---Petitioner company did not follow procedure under Ss. 42 & 43 of Companies Act, 2017 and Associations with Charitable and Not for Profit Objects Regulations, 2018, which petitioner was required to do so---Licence of petitioner company got expired and was never renewed---Securities and Exchange Commission of Pakistan, in year, 2018, confirmed revocation/expiry of the licence---Petitioner company was required to transfer its assets to another company incorporated under S. 42 of Companies Act, 2017 and furnish report to Registrar and pass resolution for voluntary winding up of the company---If there were assets and liabilities otherwise making an application to Registrar for striking name of petitioner company from the register---Petitioner company was also required to comply with procedure provided in Cl. 11 of Associations with Charitable and Not for Profit Objects Regulations, 2018---Petitioner failed to follow mandatory provision of law and under S. 43(4) of Companies Act, 2017, Security and Exchange Commission of Pakistan was empowered to take appropriate action, including appointment of Administrator for completion of dissolution process---Securities and Exchange Commission of Pakistan could also initiate a petition for winding up under S. 304(c) of Companies Act, 2017, and the same was not required to investigate in affairs of petitioner company---Petition was dismissed accordingly.

Province of Punjab through Secretary Excise and Taxation Department, Lahore and others v. Murree Brewery Company Limited and another 2021 SCMR 305 and Province of Punjab through Conservator of Forest, Faisalabad and others v. Javed Iqbal 2021 SCMR 328 rel.

The Collector of Sales Tax, Gujranwala and others v. Messrs Super Asia Mohammad Din and Sons and others 2017 SCMR 1427; Ghulam Hassan v. Jamshaid Ali and others 2001 SCMR 1001; In the matter of: Messrs Investec Mutual Fund Ltd. 2011 CLD 4; In the matter of: Messrs Progressive Insurance Company Ltd. 2009 CLD 1602; Integrated Technologies and Systems Ltd v. Interconnect Pakistan (Pvt.) Limited through Acting Chief Executive and others 2001 CLC 2019; In re: Synthetic Chemicals Co. Ltd. Karachi PLD 1985 Kar. 193; Pakistan State Oil Company Limited v. Pakistan Oil Pipelines Limited and 6 others PLD 1993 Kar. 322; Messrs Consolidated Exports Ltd v. Messrs Dyer Textile and Printing Mills Ltd. PLD 1984 Kar. 541; The Additional Registrar Company v. Al-Qaim Textile Mills Limited 2021 CLD 931; Dr. Muhammad Imran Qureshi and 2 others v. Muhammad Asif and others 2020 CLD 1960; Messrs Securities and Exchange Commission of Pakistan v. Official Liquidator, Islamic Investment Bank Limited and 10 others 2016 CLD 1164;, Creek Marina (Pvt) Ltd. v. Pakistan Defence Officers' Housing Authority 2012 CLD 1525; Additional Registrar of Companies, Karachi v. Tri Star Power Ltd. 2010 CLD 1115; Additional Registrar of Companies v. Messrs Noorie Textile Mills Ltd. 2010 CLD 143; Shaukat Ali v. Messrs Bawany Sugar Mills Ltd. 2009 CLD 947; Najeeb Fibres (Pvt.) Ltd. v. Tanya Knitwear (Pvt.) Ltd. 2009 CLD 643; PICIC Commercial Bank Ltd. v. Spectrum Fisheries Ltd. 2006 CLD 440; Arshad Tanveer, Chairman, Site Association of Industry v. Sindh Industrial Trading Estates Ltd. 1997 CLC 456; Freewheels (Pvt.) Ltd. v. Veda Mittra AIR 1969 Delhi 258; Salomon v. A Salomon and Company Ltd. (HL 16 Nov 1896); Commissioner of Income Tax v. United Breweries (1973 89 ITR 17 Kar.); Messrs Rajesh and Co. v. Messrs Ravissant Pvt. Ltd. (2012) 171 CompCas 30 (Delhi) and Messrs Convergys Corporation v. Mr. Sreenivasu Ruttala and 4 others, dated 05.08.2016 (High Court Andhra Paredesh) ref.

Nabeel Rehman and Barrister Aqeel Malik for Petitioner.

Ms. Komal Malik Joiya for Respondents Nos. 2 to 6.

Ibrar Saeed for SECP.

Ch. Muhammad Tahir Mehmood, A.A.G.

2022 C L D 492

[Islamabad]

Before Saman Rafat Imtiaz, J

MOL PAKISTAN OIL AND GAS COMPANY through Authorized Officers---Petitioner

Versus

The ISLAMABAD CAPITAL TERRITORY ADMINISTRATION through Chief Commissioner and others---Respondents

Writ Petition No. 3562 of 2020, decided on 28th February, 2022.

Companies Act (XIX of 2017)---

----Ss. 2(17)(35), 434 & 450---Motor Vehicles Ordinance (XIX of 1965), S. 28---West Pakistan Finance Act (XXXIV of 1964), S. 11 & Seventh Sched., Serial No.1 [as amended by section 4 of Finance Act, 2019]---Foreign company--- Professional tax--- Registration of vehicles---Petitioner was a foreign company and aggrieved of demand made by Motor Registration Authority for deposit of Professional tax---Validity---Foreign company was not a company registered under Companies Act, 2017---Foreign companies with place of business established in Pakistan were regulated and required to deliver certain documentation pursuant to Ss. 434 to 450 of Companies Act, 2017 but could not be equated to the status of companies formed and registered under Companies Act, 2017---Foreign companies were incorporated outside Pakistan and registered under applicable law of country of their incorporation---Regarding "company" and "foreign company" under Companies Act, 2017, none of subcategories under Serial No.1 contained in Seventh Schedule to S. 11 of West Pakistan Finance Act, 1964, as substituted vide S. 4 of Finance Act, 2019 applied to a place of business/branch office established by a foreign company in Pakistan as they were only applicable to companies registered under Companies Act, 2017---Demand of professional tax was applicable upon company registered under Companies Act, 2017, having capital exceeding PK Rs.200 million whereas petitioner company was a branch office of a foreign company---High Court set aside issuance of demand notice to petitioner company as the same was ultra vires West Pakistan Finance Act, 1964 duly amended vide S. 4 of Finance Act, 2019---Constitutional petition was allowed accordingly.

Al-karam CNG v. Federation of Pakistan 2011 PTD 1; Lone Cold Storage, Lahore v. Revenue Officers, Lahore Electric Power Company 2010 PTD 2502; Province of Punjab v. Sargodha Textile Mills Limited PLD 2005 SC 988 and Federal Government Employees Housing Foundation v. Malik Ghulam Mustafa 2021 SCMR 201 ref.

Muhammad Hamzah for Petitioner.

Rana Imran Farooq, A.A.G., Barrister Syeda Jugnoo Kazim, State Counsel and Asif Jehangir Khan, Inspector Excise and Taxation Office for Respondents.

2022 C L D 731

[Islamabad]

Before Mohsin Akhtar Kayani, J

PARVAIZ AKHTER BHATTI and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Cabinet Division, Islamabad and 5 others---Respondents

Writ Petitions Nos. 2250, 3512, 4249 of 2019, 1095 of 2017, 171, 476, 533, 1610, 1639 of 2020, Criminal Original No. 47-W of 2020 and Objection Case No. 7150 of 2018, decided on 17th September, 2020.

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

----S. 166---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Constitution of Pakistan, Art. 199---Constitutional petition---Quo warranto---Onus to prove---Dispute was with regard to appointment of respondent as Acting Managing Director of Pakistan Television Corporation---Petitioners contended that respondents nominated by Federal Government were not selected through any public advertisement nor from data bank maintained by Security and Exchange Commission of Pakistan in terms of S. 166 of the Companies Act, 2017--- Validity--- Initial onus was shifted upon respondents/Federal Government to demonstrate that discretionary power exercised by Federal Government before nomination of respondents was considered through a structured concept---Evidence to that extent was to be brought on record, otherwise it would be considered that all respondents were nominated through arbitrary manner on the whims and caprice of Federal Government.

In the matter regarding appointment of Director, PTVC 2019 SCMR 1 and Ghulam Rasool v. Federation of Pakistan PLD 2015 SC 6 rel.

(b) Administration of justice---

----If law prescribes doing of a certain thing in a particular manner then it has to be done in that manner alone.

Muhammad Anwar v. Mst. Ilyas Begum PLD 2013 SC 255 rel.

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

----S. 166---Public Sector Companies (Corporate Governance) Rules, 2013, R. 3(4)---ESTACODE, Serial No. 141---Independent Director---Appointment---Procedure---Legislative intent in S. 166 of Companies Act, 2017 and R. 3(4) of Public Sector Companies (Corporate Governance) Rules, 2013, is to ensure managerial/administrative independence of such Corporation so that they operate through their Board and not by direct intervention of Federal Government---Concept of managerial independence inculcated in Public Sector Companies (Corporate Governance) Rules, 2013, reflects that majority of Directors of Board of Directors are to be independent Directors to maintain balance amongst nominee Directors of Federal Government, who are working on instructions or will of Federal Government, whereas Independent Directors have their own views through which balance has to be maintained amongst the Board for their future business decisions to run Corporation/public sector companies in the best of their ability---Concept of Independent Director has to be seen with reference to their appointment from Data Bank maintained by Security and Exchange Commission of Pakistan---If there is no data, then principle of best of the best for a transparent procedure of appointment should have be considered in line with Serial No.141 of ESTACODE---Such procedure entails publishing an advertisement to gauge talent pool available for such post, filtering and then assessing best candidate for the post in accordance with criteria laid down in the Public Sector Companies (Corporate Governance) Rules, 2013.

(d) Constitution of Pakistan---

----Art. 199--- Constitutional petition---Quo warranto---Qualification of candidate, scrutiny of---Scope---High Court is not equipped with role to scrutinize educational qualification vis-a-vis working experience provided in job description for post in question.

(e) Constitution of Pakistan---

----Art. 199---Constitutional petition---Maintainability---Non-statutory rules---Dispute was with regard to Pakistan Television Corporation Service Rules, which were non-statutory---Effect---High Court applied functional test to deal with maintainability of Constitutional petition---All Rules of an organization, if not approved by Federal Government, considered for internal arrangement and functioning of such organization, were to be called non-statutory rules---While applying such principles, it was clear to hold that PTVC Employees Service Rules were non-statutory in nature---Respondent Corporation through its Board of Directors empowered to amend terms and conditions of their employees, even employees were governed under principle of master and servant---Constitutional petition was not maintainable, in circumstances.

University of the Punjab, Lahore v. Ch. Sardar Ali 1992 SCMR 1093; M.H. Mirza v. Federation of Pakistan 1994 SCMR 1024; Manager, Jammu and Kashmir, State Property in Pakistan v. Khuda Yar PLD 1975 SC 678; Sohail Abbas Bokhari v. Secretary Information and Broadcasting/Chairman PTVC 2009 PLC (C.S.) 565; Muhammad Ramzan v. Federation of Pakistan 2017 PLC (C.S.) Note 71; Muhammad Zaman v. Government of Pakistan 2017 SCMR 571; Pakistan Defence Housing Authority v. Mrs. Itrar Sajjad Khan 2017 SCMR 2010; Muhammad Aslam Khan v. Federation of Pakistan 2013 SCMR 747; ZTBL v. Said Rehman 2013 SCMR 642; Syed Nazir Gillani v. Pakistan Red Crescent Society 2014 SCMR 982; Muhammad Ashraf Tiwana v. Pakistan and others 2013 SCMR 1159 and Muhammad Rafi v. Federation of Pakistan 2016 SCMR 2146 rel.

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

----S. 166---Public Sector Companies (Corporate Governance) Rules, 2013, R. 3(4)---ESTACODE, Serial No. 141---Constitution of Pakistan, Art. 199---Constitutional petition---Quo warranto---Independent Director---Appointment---Return of benefits---Principle---Dispute was with regard to appointment of independent directors and other official in Pakistan Television Corporation---Validity---Public sector companies were not allowed to appoint any person without adhering to the criteria of fit and proper person---Such companies had to act independently, transparently, impartially and in unbiased manner so as to select best and the most suitable candidate strictly on merits---Such persons in public sector companies were required for their responsibility, planning, succession, management and policy decisions in the best interest of company---Nomination made by Federal Government through Prime Minister was to be exercised under structured formula, when summaries of authorities regarding appointment of Members of Board of Directors lacked transparency nor even Members of Board of Directors were selected from data bank maintained by Security and Exchange Commission of Pakistan in terms of S. 166 of Companies Act, 2017---Respondent who was appointed Chairman of the Board received pecuniary benefits while remaining Managing Director of the PTVC for period of 5 months against high salary with other fringe benefits---Respondent Chairman subsequently resigned from his position and was again appointed as Chairman, PTVC for three years without adhering to S. 166(2)(a)(b)(h), (4) & (5) of the Companies Act, 2017 and in violation of R. 2(d) of Public Sector Companies (Corporate Governance) Rules, 2013---Respondent director was in Board of Directors of private company receiving monthly subscription of PTVC in its account---Such company of respondent director had direct substantial business relationship with PTVC, which itself was violation of R. 2(ii) of Public Sector Companies (Corporate Governance) Rules, 2013---High Court declared that appointments of respondents Chairman and Director were illegal---Salary packages of respondents were on higher side which required concurrence of Federal Government on the principle of best practice---High Court directed Federal Government to devise a policy for future appointments to be made in all public sectors companies along with criteria of setting up salary, perks and privileges after consultation with Ministry of Finance and Ministry of Law and Justice---High Court further directed Federal Government to nominate Members of Board of Directors of PTVC in accordance with law, while observing requirements of R. 3(4) of Public Sector Companies (Corporate Governance) Rules, 2013 and Companies Act, 2017---Constitutional petition was allowed accordingly.

In the matter regarding appointment of Director, PTVC 2019 SCMR 1 rel.

Muhammad Ashraf Tiwana v. Pakistan and others 2013 SCMR 1159; Muhammad Yasin v. Federation of Pakistan and others PLD 2012 SC 132; Tariq Aziz ud Din's case 2010 SCMR 1301; Saira Rubab Nasir v. President of Pakistan and others PLD 2020 Isl. 130; Babar Sattar v. Federation of Pakistan and others 2016 CLD 134; Pakistan Defence Officers' Housing Authority v. Lt. Col. Syed Jawaid Ahmed 2013 SCMR 1707; Abdul Wahab v. HBL 2013 SCMR 1383; Pakistan Television Corporation v. Muhammad Babar Zaman 1981 PLC 219; Syed Amjad Ali Shah v. Federation of Pakistan 2005 PLC (C.S.) 199; Muzammal Ahmed Khan v. Imran Meer 2010 PLC (C.S.) 1023; Dr. Shamim Tariq v. IIUI and others 2020 SCMR 568 and Naimatullah Khan, Advocate v. Federation of Pakistan 2020 SCMR 513 ref.

Ali Nawaz Kharal, Danish Aftab, Rana Rashid Javed, Raja Muqsit Nawaz, Hazrat Younis, Muhammad Waqar Rana, Ajmal Ghafaar Toor, Afzal Qadeer Satti, Muhammad Umair Baloch, Saif-ur-Rehman Shah Bukhari, Shah Khawar and Barrister Qasim Nawaz Abbasi for Petitioners.

Ahmad Awais, Shahid Anwar Bajwa, Tipu Salman Makhdoom, Syed Ishfaq Hussain Naqvi, Moin Ahmad, Faiza Naseer, Qamar Inayat Raja, Muhammad Nazir Jawwad, Syed Hamid Ali Shah, Arooj Zaib Abbasi, Ch. Arshad, Zeeshan Ali Syed for Board of Directors, PTVC for Respondents (in respective writ petitions).

Shahid Mehmood Khokhar for MoIB.

Ch. Muhammad Nawaz and Ch. Arshad Farooq for SRBC.

Ibrar Saeed for SECP.

Barrister Muhammad Mumtaz Ali, A.A.G., Yasir Shakeel, AD/M-II, S.O. Litigation, MoIB, Hussain Wazir, Dy. Director, MoIB and Muhammad Javaid, Admin Manager, PBC.

2022 C L D 932

[Islamabad]

Before Sardar Ejaz Ishaq Khan, J

SAMSONS GROUP OF COMPANIES---Petitioner

Versus

PANTHER DEVELOPERS and others---Respondents

Writ Petition No. 4435 of 2021, decided on 17th December, 2021.

(a) Administration of justice---

----Using wrong provision of law in title of application---Effect---Invoking wrong provisions in title to an application does not make the application invalid if it can be sustained on the basis of other provisions.

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

----Ss. 20 & 39(1)(iv)---Civil Procedure Code (V of 1908), O. VII, R. 11---Term "sufficient cause"---Rejection of plaint---Scope---Petitioner/defendant sought rejecting of plaint but Trial Court dismissed that application and allowed respondent/plaintiff to file arbitration agreement---Validity---Provision of O. VII, R. 11, C.P.C. had no place in proceedings under S. 20 of Arbitration Act, 1940---Statutory test of "sufficient cause" stipulated in S. 20 of Arbitration Act, 1940, was to be employed instead---Application under O. VII, R. 11, C.P.C. coming before Court in proceedings under S. 20 of Arbitration Act, 1940 was to be treated as application contesting "sufficient cause" and Court's reasoning and order should center around test of "sufficient cause"---Civil Court was to order or refuse, filing of arbitration agreement under same order by which it disposed of application contesting "sufficient cause", so that it would become an appealable order under S. 39(1)(iv) of Arbitration Act, 1940---Arbitration agreement made by a company with reference to and governed by Arbitration Act, 1940, was to remain subject to Arbitration Act, 1940 and was not brought within company jurisdiction of High Court under Companies Act, 2017, for the sole reason of parties to arbitration agreement or any one of them being a company---High Court declined to interfere in order passed by Trial Court as there was no material irregularity in judgment nor there was any improper exercise of jurisdiction vested in Trial Court---Trial Court did what was required by law to be done within jurisdiction vested under S. 20 of Arbitration Act, 1940---Constitutional petition was dismissed, in circumstances.

2018 CLC 1140; Excel Techno Solutions FZE v. OGDCL and another 2019 CLC 416; A.J. Corporation v. Fauji Fertiliser Bin Qasim Limited 2013 CLD 636 and Tribal Friends Company v. Province of Balochistan 2002 SCMR 1903 ref.

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

----S. 20---Arbitration agreement---Proof---Plea of non est factum---Principle---Plea of non est factum, that is, denial of existence of agreement altogether, is rebuttable by attendant circumstances, including performance by party denying agreement where such performance is not inconsistent with tenor and substance of alleged agreement.

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

----S. 201--- "Indoor management"--- Principle of 'ostensible authority'---Board resolution, absence of---Rectification---Contract made on behalf of a company without authority of board resolution can be ratified by company, including by its conduct---Provision of S. 201 of Companies Act, 2017, does not displace common law doctrines of "ostensible authority" and "indoor management" intended for protection of third parties entering into an agreement with a company in good-faith without notice of lack of authority of executant on behalf of a company.

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

----S. 35 [as amended by Cost of Litigation Act (XVII of 2017)]---Cost of litigation, imposing of---Principle---National justice delivery system, funded by taxpayer's money, with resources stretched to their limits, is not meant to be a playfield for litigants to raise knowingly and willfully all manner of false or frivolous pleas squeezing out time and resources available to Courts to deal with genuine pleas that, though they might not be endorsed by the Court in the end, do raise a triable issue of fact or law raised in good faith---For such triable pleas, only costs under S. 35(i), C.P.C. may be awarded---For pleas that are false, frivolous or vexatious to the knowledge of a party or its counsel, costs under S. 35(iii), C.P.C. are justified.

2022 C L D 1325

[Islamabad]

Before Mohsin Akhtar Kayani, J

JAHANGIR MUGGO and others---Petitioners

Versus

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

W.Ps. Nos. 3321 and 3322 of 2019, decided on 21st July, 2022.

(a) Administration of justice---

----Things have to be done in a manner and mode in which they have been prescribed and all other modes stand excluded if not acted in that manner.

Ajmir Shah, Ex-Sepoy v. The Inspector General, Frontier Corps Khyber Pakhtunkhwa and another 2020 SCMR 2129; Muhammad Hanif Abbasi v. Imran Khan Niazi and others PLD 2018 SC 189; Shahida Bibi and others v. Habib Bank Limited and others PLD 2016 SC 995 and Muhammad Anwar and others v. Mst. Ilyas Begum and others PLD 2013 SC 255 rel.

(b) Interpretation of statutes---

----Special statute--- Interpretation--- Courts usually interpret concept of special provision by excluding general provision in same law.

A. Qutubudin Khan v. CHEC Millwala Dredging Company Pvt. Limited 2014 SCMR 1268; Capt. R. Nayyar Islam v. Judge Accountability Court-III and others 2012 SCMR 669; United Bank Limited v. Mst. Jameela Mumtaz and others 2010 SCMR 229 and Brig. Sher Ali Aaz and another v. The Secretary Establishment Davison and another PLD 1991 SC 143 rel.

(c) Interpretation of statutes---

----Language of statute---Principle---Where plain language of statue admits of no other interpretation than interpretation of legislature conveyed through such language is to be given its full effect.

Ghulam Haider v. Murad through legal representatives PLD 2015 SC 501; Baz Muhammad Kakar v. Federation of Pakistan through Ministry of Law and Justice PLD 2012 SC 923 and Pakistan International Airlines Corporation, Karachi v. Wafaqi Mohtasib 1998 SCMR 841 rel.

(d) Interpretation of statutes---

----Heading of section, language of---Scope---Heading prefixed to section usually control plain words of that provision---Though such is not a hard and fast rule but language implied in heading cannot be used to give a different effect to clear words of section where there cannot be any doubt as to their ordinary meaning.

Iqbal Sing Marwah v. Meenakshi Marwah (2005) 4 SCC 370 and R. Krishnaih v. State of AP AIR 2005 AP 10 rel.

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

----Ss. 221(5) & 256--- Constitution of Pakistan, Art. 199---Constitutional petition--- Affairs of company--- Investigation---Principle---Opinion formation, absence of---Petitioners assailed show cause notices issued to them by Securities and Exchange Commission of Pakistan regarding investigation into the affairs of company in question---Validity---In order to investigate into affairs of company, report under S. 221(5) of Companies Act, 2017, was necessary which had close connection with S. 256 of Companies Act, 2017---Any report complied under such provisions could logically form basis of an investigation sought to be conducted by the Commission into the affairs of company in question---Investigation into affairs of company was a serious matter and entailed consequences, both financial as well as goodwill of that corporate entity---Such powers could not be used lightly by the Commission---Powers to investigate into the affairs of company were circumscribed by provisions of S. 256 of Companies Act, 2017---In case suo motu powers were required to be exercised by the Commission, minimum requirement mentioned in S. 257(1)(13) of Companies Act, 2017 had to be looked into---Such powers were to be preceded by formation of an opinion and thereafter a show cause notice giving the company an opportunity of hearing could be issued---In case there was no formation of opinion by the Commission, investigation could not be initiated in a mechanical fashion---Securities and Exchange Commission of Pakistan failed to prove any opinion which was formulated independently while considering minimum requirement of investigation into the affairs of company excluding orders of Company Judge and no justiciable reasoning was rendered in writing---High Court set aside show cause notices issued by the Commission as order passed by Securities and Exchange Commission of Pakistan by issuing show cause notice was nullity in the eyes of law---Constitutional petition was allowed, in circumstances.

Mian Waqar-ud-Din v. United Industries Limited and others 2017 CLD 696 ref.

Daewoo Pakistan Express Bus Service Ltd. and another v. SECP and others 2020 CLD 919 and Hira Textile Mills Ltd. v. Bank Al-Falah Ltd. 2022 CLD 285 rel.

Sikandar Bashir Mohmand for Petitioners (in W.P. No. 3321 of 2019).

Muhammad Afzal Siddiqui for Petitioners (in W.P. No.3322 of 2019).

Barrister Minaal Tariq for SECP.

Imtiaz Rashid Siddiqui and Syed Hasnian Ibrahim Kazmi for Respondents Nos.3 to 6 (in both Writ Petitions).

Muhammad Afzal Siddiqui for Respondent No. 7 (in W.P. No.3321 of 2019).

2022 C L D 1382

[Islamabad]

Before Arbab Muhammad Tahir, J

SAIF POWER LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

W.P. No. 2607 of 2012, decided on 6th June, 2022.

Companies Ordinance (XLVII of 1984)---

----Ss. 231 & 232---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Investigation of issues of Company---Securities and Exchange Commission of Pakistan (SECP), (Commission), jurisdiction of---Petitioner company was aggrieved of order passed by SECP authorizing Inspectors of Commission to investigate its issues/affairs---Validity---Order of Commission was in the nature of "an administrative order" and Constitutional petition was not maintainable---If orders passed by the Commission in terms of S. 231 of Companies Ordinance, 1984 were subjected to a challenge, that would paralyze functions of the Commission and the Commission could not be expected to perform its regulatory functions---Commission's prime responsibility was of a Regulator to collect information for effective enforcement of laws being administered by it---In absence of such information, Commission could not be expected to make fair and impartial decisions---Concerned/responsible persons were under statutory obligation to fully cooperate in providing such information to Commission as and when it was so required for the purposes of investigation/inspection---Legislature was fully cognizant of critical importance of such provision of information to the Commission prescribed and ascribed not only special status to auditors/inspector but also recommended severe consequences for non-provision of information to auditors/inspectors, a punishment for a term which could extend to one year under S. 232(1) of Companies Ordinance, 1984---Petitioner company was not well within its rights to approach High Court under Art. 199 of the Constitution by way of filing Constitutional petition challenging inspection orders under S. 231 of Companies Ordinance, 1984, just for the reasons that prior to passing of orders in question neither any adequate opportunity of hearing was afforded to the Company nor a show cause notice had been issued to it---High Court declined to interfere in the order issued by SECP--- Constitutional petition was dismissed, in circumstances.

Ofspace (Private) Limited v. Federation of the Islamic Republic of Pakistan through Secretary Ministry of Finance and 3 others 2012 CLD 923; Commissioner of Income Tax and others v. Messrs Media Network and others PLD 2006 SC 787; Mubarak Textile Mills (Pvt.) Ltd. v. Director (Enforcement), Head of Department Securities and Exchange Commission of Pakistan and others 2016 CLD 2293 and Attock Refinery Limited v. Executive Director Enforcement and Monitoring Division, SECP 2010 PLD 2010 SC 946 rel.

Waleed Khalid for Petitioner.

Sultan Mazhar Sher and Syed Nazar Hussain Shah, A.A.G. for Respondents.

2022 C L D 1402

[Islamabad]

Before Miangul Hassan Aurangzeb, J

Haji MUHAMMAD SHAFIQ---Appellant

Versus

The REGISTRAR OF COMPANIES, COMPANY LAW DIVISION SECP and others---Respondents

F.A.O. No. 74 of 2019, decided on 26th July, 2022.

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

----O. VI, Rr. 1 & 2---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Pleadings---Proof---Onus to prove---Pleadings of parties are not evidence, and facts alleged in pleadings must be proved through evidence of a party which claims existence of such facts.

Abdul Wahid v. Mst. Zarmut PLD 1967 SC 153 and Messrs Society Oil Dealers Karachi v. District Judge, Karachi 2003 MLD 205 rel.

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

----Ss. 439(6)---Companies Act (XIX of 2017), S. 425(9)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 34---Appeal---Restoration of company's name---Registrar, jurisdiction of---Dispute was with regard to restoration of name of company in question---Validity---Right to file application under S. 439(6) of Companies Ordinance, 1984, before High Court for restoration of company's name on Register of Companies inhered in company or any member or creditor thereof---Member or a creditor of a company, under S. 425(9) of Companies Act, 2017, was not invested with right to invoke jurisdiction of Registrar or the Commission for restoration of company's name on the Register of Companies---No prohibition existed on any member or creditor for placing information or material before Registrar who could, after conducting such inquiries as he deemed fit, move the Commission to have name of the company restored to the Register of Companies---Inquiry in such regard had already been conducted on the question whether striking off name of the company from Register of Companies was done in accordance with law---Such was done pursuant to orders passed by High Court of other province---Inquiry report to such effect was submitted before that High Court and appellant left that inquiry report unchallenged and lost interest in pursuing his petition before that High Court---Essential grounds on which appellant sought restoration of name of the company on Register of Companies was that it owned assets at the time when it was dissolved pursuant to Company's Easy Exit Scheme---Same ground was taken by appellant earlier before High Court of other province---In absence of any decree from a Court of plenary jurisdiction to such effect company in question owned land when it was dissolved, appellant was estopped from re-agitating same matter before Securities and Exchange Commission of Pakistan and that too almost thirteen years after dismissal of his earlier petition under S. 439(6) of Companies Ordinance, 1984 Ordinance which was earlier dismissed by High Court---Appeal was dismissed, in circumstances.

Raja Waqar Abid for Appellant.

Abdul Rehman Qureshi for Respondent No. 4.

Barrister Minaal Tariq, Special Prosecutor SECP.

2022 C L D 1460

[Islamabad]

Before Athar Minallah, C.J. and Aamer Farooq, J

SAIF UR REHMAN KHAN---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN (SECP) through Chairman and 2 others---Respondents

C.M. No.4289 in Writ Petition No. 2862 of 2021, decided on 26th August, 2021.

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

----S. 41-B---National Accountability Ordinance (XVIII of 1999), S.9---Constitution of Pakistan, Art. 199---Corruption and corrupt practices---Inquiry, investigation and other proceedings in respect of regulated persons---Pre-arrest bail, refusal of---Scope---Accused was alleged to have been involved in cheating the public at large---Material ‎brought on record prima facie showed that ‎‎investments were received from the general public and deposited in bank accounts operated in the ‎‎names of the regulated persons (companies) as ‎well as in the ‎personal name of the accused---Inducement to ‎the public was also through a purported entity, which was not a regulated ‎person as defined ‎under the Securities and ‎Exchange Commission of ‎Pakistan Act, 1997---National Accountability ‎Bureau had initiated an ‎inquiry against the accused relating to alleged ‎acts amounting to the ‎offence of cheating the ‎public at large---Later, the ‎Securities and ‎Exchange Commission of Pakistan (SECP) ‎had ‎sent a reference in exercise of powers conferred ‎under S. 41-B of the Securities and ‎Exchange ‎Commission of Pakistan Act, 1997---Reference ‎was found to be in consonance with the ‎provisions ‎of the Companies Act, 2017 read with ‎the Securities and Exchange Commission of Pakistan Act, 1997--- National Accountability Bureau was vested with the power and ‎jurisdiction to initiate ‎proceedings against the ‎accused for the alleged ‎acts relating to a ‎purported entity other than a regulated person ‎defined under the National Accountability Ordinance, 1999---Likewise, the proceedings pursuant to receiving a reference from the Commission did not suffer from ‎jurisdictional ‎error nor any other legal infirmity---Sufficient incriminating material had ‎been brought ‎on record by the National Accountability Bureau against the accused---Accused was also reluctant to effectively cooperate with the Investigating Officer during the course of investigations---Constitutional petitions seeking pre-arrest bail, challenging call up notices and ‎sending of reference by the SECP were dismissed.

Dr Arsalan Iftikhar v. Malik Riaz Hussain and others PLD 2012 SC 903; Mrs. Shahina Shakeel and another v. The Chairman NAB and others 2020 PCr.LJ 1004; Messrs Memon Motors Private Limited through General Manager v National Accountability Bureau through Chairman and 2 others 2014 PCr.LJ 1378; Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 and Muhammad Nadeem Anwar v. Securities and Exchange Commission of Pakistan through Director NBFCs Deptt., Islamabad 2014 SCMR 1376 ref.

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

----Ss. 41-B, 2(1)(pa), 2(1)(pb), 2(1)(aa) & Sched. I--- National Accountability Ordinance (XVIII of 1999), S. 9--- Corruption and corrupt practices---Inquiry, investigation and other proceedings in respect of regulated persons---Regulated activity---Regulated person---Administered legislation---Scope---Combined reading of the Companies Act, 2017 ‎and the Securities and Exchange ‎‎Commission of ‎Pakistan Act, 1997, shows that the provisions deal ‎with all matters relating to the regulation of ‎incorporated juridical persons and matters ‎incidental and ancillary thereto---Two statutes provide for a comprehensive and self-contained regulatory framework governing the corporate ‎sector and incorporated entities---Heading of ‎S. 41-B of the Securities and Exchange Commission of Pakistan Act, 1997, explicitly restricts the scope of the inquiry, investigation or any other proceedings in respect of a 'regulated person'---Regulated person has been defined under clause (pb) of subsection (1) of S. 2 of the Securities and Exchange Commission of Pakistan Act, 1997---Statutes listed in Schedule I have been declared as 'administered legislation' under S. 2(1)(aa)---Expression 'regulated person', therefore, extends to only such persons or entities which are licensed or registered under the Securities and Exchange Commission of Pakistan Act, 1997 or one of the statutes listed in Schedule I---Section 2(1)(pa) defines the expression 'regulated activity' as any activity which is required to be registered with or licensed by the Commission under the Securities and Exchange Commission of Pakistan Act, 1997 or one of the 'administered legislations'---Scope of the restrictions or powers of the Commission under S. 41-B of the Securities and Exchange Commission of Pakistan Act, 1997 are confined to an inquiry, ‎investigation or any proceedings relating to a ‎regulated person and a regulated activity---Wordings and language used in the two sub-‎sections of S. 41-B further affirms that its scope is confined to an inquiry, investigation or other ‎proceedings relating to any regulatory activity of a ‎regulated person---Plain reading of subsections (1) & (2) of S. 41-B clearly shows that the jurisdiction of the National Accountability Bureau ‎relating to a regulatory activity of a ‎regulated ‎person is not ‎absolutely barred but rather its ‎exercise has been expressly made subject to sending a reference by ‎the ‎Commission---Clear distinction exists in subsection (2) between a ‎‎'party' and the 'Commission'---Such distinction is crucial for ‎discovering the legislative ‎intent.

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

----S. 41-B---National Accountability Ordinance (XVIII of 1999), S.9---Corruption and corrupt practices---Inquiry, investigation and other proceedings in respect of regulated persons---Scope---Plain reading of S. 41-B as a whole unambiguously affirms that the jurisdiction of the National Accountability Bureau is not barred but the proceedings relating to a regulated person under the National Accountability Ordinance, 1999 are subject to receiving a reference from the Commission---Reference in the context of S. 41-B of the Securities and Exchange Commission of Pakistan Act, 1997, is not regarding any matter that falls within the ambit of the powers and jurisdiction of the Commission under the Companies Act, 2017 or Securities and Exchange Commission of Pakistan Act, 1997, as the case may---Reference is, rather, for initiating proceedings and taking action relating to a regulated person for an offence triable under a distinct statute---Incorporated or regulated person may have 'cheated public at large' which is an offence under the National Accountability Ordinance, 1999---No provision exists under the Companies Act, 2017, or Securities and Exchange Commission of Pakistan Act, 1997 empowering the Commission to proceed against the delinquents nor to recover the illegally invested funds of the general public.

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

----Ss. 41-B & 2(pb)---National Accountability Ordinance (XVIII of 1999), S. 9---Corruption and ‎corrupt ‎practices---Inquiry, investigation and ‎other ‎proceedings in respect of regulated persons---Scope---Power and jurisdiction of the National Accountability Bureau is not barred relating to a regulated person and a regulated ‎activity but its ‎‎exercise is subject to receiving a ‎reference from the Securities and Exchange Commission of Pakistan---Restrictions and conditions prescribed under S. 41-B of the Securities and Exchange Commission ‎of Pakistan ‎‎Act, 1997 are not attracted nor ‎applicable in case of persons who do not fall ‎within the ambit of the ‎‎definition of 'regulated ‎person'---SECP enjoys the ‎exclusive power ‎to send a reference ‎and no party ‎before it is ‎competent to put the ‎provisions of the ‎National ‎Accountability Ordinance, 1999, into ‎motion---In ‎order to initiate ‎proceedings against ‎an ‎unregulated person or ‎activity, the exercise of ‎‎power and jurisdiction by ‎the National Accountability Bureau are not subject to ‎a reference by the SECP nor subject to any ‎other condition.

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

----S. 41-B---National Accountability Ordinance (XVIII of 1999), S.9---Corruption and corrupt ‎‎practices---Inquiry, investigation and other proceedings in respect of regulated persons---Scope---Securities and Exchange Commission of Pakistan under S. 41-B of Securities and Exchange Commission of Pakistan Act, 1997, has the exclusive power to send a reference to the National Accountability Bureau for initiating an inquiry, investigation and other proceedings under the National Accountability Ordinance, 1999, relating to a regulated person---Reference would be regarding proceedings relating to the offences of corruption and corrupt practices described under S. 9 of the National Accountability Ordinance, 1999---Powers under S. 41-B of the Securities and Exchange Commission of Pakistan Act, 1997 can be exercised by the Commission notwithstanding proceedings concluded or penalties imposed under the Securities and Exchange Commission of Pakistan Act, 1997, or the Companies Act, 2017, as the case may be.

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

----Preamble, Ss. 26, 84 & 502---Business and objects of a company---Prohibition on acceptance of deposits from public---Penalty where no specific penalty is provided---Scope---Object of promulgating the Companies Act, 2017, has been described in its preamble as to reform and re-enact the law relating to companies and for matters connected therewith---Section 26(2) of ‎Companies Act, 2017 provides that an incorporated company shall not be engaged in a business which is either prohibited or is restricted ‎by any law, rules or regulations, unless necessary ‎license, registration, permission or approval has been obtained or compliance with any other ‎conditions has been made---Section 84(1) of ‎Companies Act, 2017 explicitly provides that no company shall ‎‎invite, accept or renew deposits ‎from the public---Proviso excludes a banking ‎company and such other companies or class of ‎companies or ‎‎such deposits as the Commission ‎may notify in this behalf---Expression 'deposit' has been described in the explanation---Subsection (2) of S. 84 provides that where the ‎company accepts or invites or allows or causes ‎any other person to accept or invite on its behalf, ‎any deposit, the company shall be punishable in the manner described in clauses (a) and (b), as ‎the case may be---Section 502 empowers the Commission to impose a penalty for which no punishment is provided elsewhere in the Companies Act, 2017.

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

----Preamble--- Scope--- Object of the National ‎‎Accountability Ordinance, 1999 has been described in its preamble as to ‎provide for effective measures for the detection, ‎investigation, prosecution and speedy disposal of ‎cases involving corruption, corrupt practices, misappropriation of property, kickbacks, commissions and for matters connected and ancillary or incidental thereto.

(h) Interpretation of statutes---

----Heading of provision is regarded as a key to the interpretation of the provision unless the language used by the legislature is inconsistent therewith---In case of ambiguity the heading can be resorted to for the purposes of interpretation of the provision.

(i) Interpretation of statutes---

‎----Redundancy cannot be attributed to the legislature.

Sardar Muhammad Latif Khan Khosa, Advocate Supreme Court, Sardar Shahbaz Ali Khan, Malik Javaid Iqbal Wains, Syed Mehmood H. Gillani and Ms. Suzain Khattak for Petitioner.

Sardar Muzaffar A. Khan Abbasi, DPGA, NAB, Irfan Ahmed, Spl. Prosecutor NAB, Shahzad Ali Rana and Ibrar Saeed for SECP.

Syed Jamil ur Rehman, A.D. /I.O. NAB.

2022 C L D 1516

[Islamabad]

Before Miangul Hassan Aurangzeb, J

RIZWAN SHOUKAT SILK FACTORY and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Law and Justice Division and 3 others---Respondents

W.Ps. Nos. 2278 and 2714 of 2022, decided on 8th September, 2022.

Trade Organization Act (II of 2013)---

----S. 19(1)(b)---Trade Organization Rules, 2013, Rr. 2 (1)(g), 20(2)(d), 21(5)(b) & 21(9)---Constitution of Pakistan, Arts. 25 & 199---Corporate member---Condition of turnover---Intelligible differentia, principle of---Applicability---Petitioners were members of Chambers of Commerce and were aggrieved of condition of turnover of Rupees 50 million to qualify as a corporate members---Validity---Classification between an associate member and a corporate member made by Trade Organization Rules, 2013, distinguished members of a trade organization with an annual turnover of less than Rs.50 million from those with an annual turnover of more than Rs.50 million---Classification between the two was reasonable and based on intelligible differentia---Such distinction between two groups of members had a rational nexus to the object sought to be achieved by the classification---One of the objects was rotation of office of the President of a trade organization between associate and corporate members where general body of trade organization comprised of at least 50% members from associate class---For nominees of a trade organization for comprising general body of Federation of Commerce and Industry to have at least one nominee from corporate class---Distinction between associate member and corporate member of a trade organization in terms as envisaged by Trade Organization Rules, 2013, was neither in violation of provisions of Trade Organization Act, 2013, nor was it discriminatory in any manner---High Court declined to interfere in order passed by Authorities dismissing complaint against Secretary General, the Chamber of Commerce who did not renew petitioners' memberships in corporate class as the order was in accordance with law and did not suffer from any legal infirmity---Constitutional petition was dismissed, in circumstances.

Messrs Muslim Industry and others v. Director General T.O., Regulator of Trade Organizations and others Writ Petition No.2655 of 2020 rel.

Syed Ahmad Hassan Shah and Babar Iqbal Chaudhry for Petitioners.

Malik Naseem Abbas Nasir Kalwar for Respondent No.2/D.G.T.O.

Salman Jamil, Deputy Director/Deputy Regulator, D.G.T.O.

Malik Shaukat Nawaz, learned Assistant Attorney-General

Muhammad Naveed Khokhar for Respondent No. 4.

2022 C L D 1540

[Islamabad]

Before Aamer Farooq, J

FFCL MANAGEMENT STAFF PENSION FUND TRUST through Secretary---Petitioner

Versus

PRESIDENT OF ISLAMIC REPUBLIC OF PAKISTAN, ISLAMABAD and another---Respondents

Writ Petition No. 2787 of 2017, decided on 25th August, 2022.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 82, 82-A & 82-B---Constitution of Pakistan, Art. 199---Constitutional petition---Mal-administration---Fraud committed by bank manager---Petitioner company was aggrieved of non-payment of interest on its investment---Banking Mohtasib decided the matter in favour of petitioner company and directed the Bank to make payment in question---Appellate Authority set aside order passed by Banking Mohtasib---Validity---Fraud was committed involving branch manager of the Bank along with others---Manager was a representative/agent of the Bank and his actions/inactions had made Bank vicariously liable for such actions/inactions---High Court set aside order passed by Appellate Authority as facts and matter on the basis of S. 82 of Banking Companies Ordinance, 1962, were not clearly examined including jurisdiction/power of Banking Mohtasib to give directions---High Court remanded the matter to Appellate Authority to re-examine the matter--- Constitutional petition was allowed accordingly.

Messrs Muslim Commercial Bank Limited through Lawful Authority v. Federation of Pakistan through Director (Legal-II), President's Secretariat and 2 others 2020 CLD 829; Shafaatullah Quershi v. Federation of Pakistan PLD 2001 SC 142; Sultan Hassan Khan and 2 others v. Mst. Nasim Jahan and 17 others 1994 SCMR 150; Muhammad Siddique v. Federation of Pakistan through Secretary of Law, Justice and Human Rights Division, Islamabad and 3 others 2005 YLR 2859; United Bank Limited v. Federation of Pakistan and others PLD 2018 Lah. 322; Muhammad Aaamir Saeed v. Messrs United Bank Limited through President and 2 others 2008 CLD 1324; Muhammad Moin v. State Bank of Pakistan and others 2009 CLD 899 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.

Syed Hassan Ali Raza for Petitioner.

Muhammad Jawwad Khan Lodhi and Attiq-ur-Rehman Siddiqui, Assistant Attorney General for Respondents.

2022 C L D 61

[Sindh]

Before Muhammad Faisal Kamal Alam, J

Messrs GETZ PHARMA (PVT.) LIMITED and others---Appellants

Versus

NOVARTIS AG and others---Respondents

Judicial Miscellaneous No.08 of 2021 along with Miscellaneous Appeals Nos.68, 71, 73 and 74 of 2018, decided on 2nd September, 2021.

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

----O. XXXIX, R. 4---Injunction, vacation of---Principle---Provision of O. XXXIX, R. 4, C.P.C. can be invoked seeking vacation of previous injunction order when it is unduly harsh and or unworkable, or where injunction order sought to be recalled is ex-parte.

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

----Ss. 7, 23 & 27--- Civil Procedure Code (V of 1908), O. XXXIX, R. 4---Sealing order---Interim injunction, vacating of---Principles---Applicant company was aggrieved of Sealing order passed by Controller Patents in favour of respondent company, with regard to patent in question---Respondent company sought vacation of ad-interim injunction passed against operation of Sealing order of patent in question---Validity---Petition was filed after two years from date of passing of sealing order---High Court left the matter with Trial Court to be determined in main case whether proceedings were hit by laches or not---In intervening period no restraining order was passed in connected appeals, filed after dismissal of opposition by an earlier order of Controller of Patents---Parties were contesting their respective interest in litigation at Lahore by instituting suit in IPT Tribunal before Lahore High Court in which status quo order had been granted--- Patent in question was sealed vide order dated 12-11-2018 after publication, inviting objection, providing opportunity of hearing to all parties concerned, whereafter order rejecting objections was passed, which was subject matter before High Court in connected appeals---Fundamental requirement was completed before issuance of sealing order, which was being enjoyed by respondent company for couple of years, when a restraining order was passed in present proceedings---In terms of Art. 129(e) of Qanun-e-Shahadat, 1984, there was presumption that official acts were regularly performed---Unless act of Controller of Patents in sealing subject patent of respondent company was declared to be illegal in proceedings, Sealing order in question should not have been suspended---Ingredients of balance of convenience and irreparable loss were in favour of respondent company because rights and interest arising out of subject patent, in favour of respondent company were seriously affected, resulting in causing inconvenience to respondent company which would sustain losses---High Court vacated ad-interim injunction passed against operation of Sealing order--- Application was dismissed, in circumstances.

Islamic Republic of Pakistan through Secretary, Ministry of Interior and Kashmir Affairs, Islamabad v. Abdul Wali Khan, M.N.A. Former President of Defunct National Awami Party PLD 1976 SC 57; Mukesh Kumar Ajmera and others v. State of Rajasthan and others AIR 1997 Rajasthan 250; Novartis A.G. v. Union of India and others W.P. No.15736 of 2015; Syed Akbar Ali v. Mamun Ali Bumasuk (Pvt.) Ltd and others 2006 CLD 960; Atco Lab. (Pvt.) Limited v. Pfizer Limited and others 2002 CLD 120; F. Hoffmann-La Roche Ltd. and another v. Cipla Limited 148 (2008) DLT 598; MIPR 2008 (2) 35; Brawn Laboratories Ltd. v. Rhone Poulenc Rorer S.A. and another 1999 IIIAD Delhi 849; 79 (1999) DLT 507; 1999 (49) DRJ 630; F. Hoffmann-La Roche Ltd. v. Cipla Ltd., Mumbai Central CS (OS) No.89/2008 and C.C. 52/2008; Cipla Ltd v. Union of India and others Civil Appeal No.(s).8479-8480 of 2012; Earthfactor (Private) Limited through Director v. Patent Office, IPO-Pakistan through Controller and 2 others 2014 CLD 897; Iyaz-ul-Haq Chaudhry v. NIB Bank Limited through Authorized Attorney and 4 others 2016 CLD 1741; Louise Anne Fairley v. Sajjad Ahmed Rana PLD 2007 Lah. 300; Tajuddin v. Haji Mushtaque and another 1985 CLC 2182; Glaxo Group Limited and 2 others v. Evron (Private) Limited and another PLD 1991 Kar. 252; Age Telefunken Pakistan Ltd v. Electric Concern Corporation 1985 CLC 155; MERC & CO. ING. and others v. Hilton Pharma (Pvt.) Ltd. 2003 CLD 407; Khawaja Tahir Jamal v. Messrs A.R. Rehman Glass 2005 CLD 1768; Messrs Tabaq v. Registrar, Trade Marks, Karachi and another 1987 CLC 738; Smith Kline Beecham Corporation and others v. Pharma Evo (Pvt.) Ltd. 2006 CLD 716; Messrs H&B, General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 1028; Smith Kline and French Laboratories Ltd., and another v. Ferozsons Laboratories Ltd. and another 1992 MLD 2226; Big Birds Poultry Breeders (Pvt.) Ltd. v. Director General EPA 2017 CLD 557; Getz Pharma (Pvt.) Limited through Authorized Signatory v. Servier Laboratories (France) and another 2016 CLD 2229; Muhammad Aslam Mianoor and another v. Messrs Pakistan Cables Ltd. and another 2008 YLR 1536; Muhammad Ismail Zafar and others v. Director-General, Pakistan Telegraph and Telephone Department, Government of Pakistan and others PLD 1967 Kar. 22; Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others 1997 SCMR 1508; Regional Commissioner of Income-Tax Corporate Region, Karachi and 2 others v. Shafi Muhammad Baloch 1998 SCMR 376; Messrs Younus Textile Mills v. Muhammad Fazal Tayyab 2004 MLD 1081; Pakistan Engineering Consultants v. Pakistan International Airlines Corp. and BCCI and others 1993 CLC 882; Kohinoor Soap and Detergents (Private) Ltd., through Chief Executive of the Company v. Basra Soap Factory and 4 others 2002 CLD 1223; Canon Kabushiki Kaisha through Authorized Signatory v. Registrar of Trade Marks and another 2008 CLD 1026; Standard Finis Oil Company and others v. National Detergents Ltd. and 2 others 1984 CLC 781; Dr. Muhammad Anwar Kurd and 2 others v. The State through Regional Accountability Bureau, Quetta 2011 SCMR 1560 and Tariq Hussain v. Subhan Ali and 6 others 2019 CLC 1592 ref.

Faisal Siddiqui, Saad Fayaz and Amna Anjum for Appellants (in Judicial Miscellaneous No.08 of 2021).

Amna Salman Ahmed, Shahjahan Khan and Muhammad Shaikh for Respondent No. 1 (in Judicial Miscellaneous No.08 of 2021).

Nemo for Respondent No. 2 (in Judicial Miscellaneous No.08 of 2021 along with Miscellaneous Appeals Nos. 08, 68, 71, 73 and 74 of 2018).

Mirza Mehmood Baig and Hanya Haroon for Intervener (in Judicial Miscellaneous No.08 of 2021).

Khurram Gul Ghory and Saira Sheikh for Appellants (in Miscellaneous Appeal No. 68 of 2018).

Amna Salman Ahmed, Shahjahan Khan and Muhammad Shaikh for Respondent No. 1 (in Miscellaneous Appeal No. 68 of 2018).

Faisal Siddiqui, Saad Fayaz and Amna Anjum for Appellants (in Miscellaneous Appeal No. 71 of 2018).

Amna Salman Ahmed, Shahjahan Khan and Muhammad Shaikh for Respondent No. 1 (in Miscellaneous Appeal No. 71 of 2018).

Mirza Mehmood Baig and Hanya Haroon for Appellants (in Miscellaneous Appeal No. 74 of 2018).

Amna Salman Ahmed, Shahjahan Khan and Muhammad Shaikh for Respondent No. 1 (in Miscellaneous Appeal No. 74 of 2018).

Mirza Mehmood Baig and Hanya Haroon for Appellants (in Miscellaneous Appeal No. 73 of 2018).

Amna Salman Ahmed, Shahjahan Khan and Muhammad Shaikh for Respondent No. 1 (in Miscellaneous Appeal No. 73 of 2018).

2022 C L D 118

[Sindh (Sukkur Bench)]

Before Muhammad Junaid Ghaffar and Zulfiqar Ali Sangi, JJ

ZARAI TARAQIATI BANK LIMITED through Manager/Authorized Officer and others---Appellants

Versus

YASEEN DAHRI and another---Respondents

First Civil Appeals Nos. D-27 and D-28 of 2018, decided on 27th October, 2021.

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

----Ss. 15, 24, 9, 7 & 22---Limitation Act (IX of 1908) Ss. 19, 5 & 132---Procedure of Banking Court---Sale of mortgaged property by Financial Institution without intervention of court---Limitation period for sale of mortgaged property under S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001----Scope---Question before High Court was whether Financial Institution could take recourse under S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 for sale mortgaged property after expiry of period of limitation prescribed under Art. 132 of Limitation Act, 1908---Held, that maximum limitation to file suit for recovery under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was 12 years as provided by Art. 132 of Schedule to the Limitation Act, 1908 and same stood expired in the present case---Contention that S. 15 of said Ordinance, was an independent remedy available for Financial Institution and same could be invoked notwithstanding expiry of period of limitation for filing suit for recovery was not valid---Recourse to said S. 15 of the Ordinance would also be hit by law of limitation inasmuch same was an alternate course of action available to Financial Institution to seek recovery of loan amount in addition to suit under S. 9 of said Ordinance---High Court observed that same period of limitation would apply to recourse under S. 15 of the Ordinance, as it did to filing of suit under S. 9 of said Ordinance---Recourse to S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was therefore not available to appellant Financial Institution in the present case, as limitation period had expired---Appeal was dismissed, in circumstances.

National Bank of Pakistan and 17 others v. SAF Textile Mills Ltd. and another PLD 2014 SC 283 rel.

(b) Interpretation of statutes---

----Construction of statutes prescribing limitation---Scope---Limitation laws were statutes of repose, designed to quieten title and to bar stale and waterlogged disputes and were to be strictly complied it---Statutes of limitation by their very nature were strict and inflexible---Law of limitation did not confer a right, and it only regulated the rights of parties---Such regulatory enactments could not be allowed to extinguish vested rights or curtail remedies unless all conditions for such extinguishment of rights and curtailment of remedies were fully complied with in letter and spirit---No scope in law of limitation existed for any equitable or ethical construction; and justice equity and good conscience did not override law of limitation and thus such laws ought to be construed strictly.

Khushi Muhammad v. Mst. Fazal Bibi PLD 2016 SC 872 and Muhammad Shoaib Arshad v. Federation of Pakistan 2020 CLD 638 rel.

Faheem Majeed Memon for Appellants (in 1st Civil Appeals Nos. D-27 and D-28 of 2018).

Ashok Kumar K. Jamba for Respondents (in 1st Civil Appeals Nos. D-27 and D-28 of 2018).

2022 C L D 161

[Sindh]

Before Syed Hasan Azhar Rizvi, J

ASSOCIATED CONSULTING ENGINEERS ACE LIMITED AND ACE ARCHITECTURAL AND TOWN PLANNING SERVICES LIMITED: In the matter of J.C.M. Petition No. 3 of 2021, decided on 31st August, 2021.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Merger and demergers---Objections to scheme of arrangement by the Securities and Exchange Commission of Pakistan ("SECP")---Scope---Petitioner public limited companies sought sanction for scheme of arrangement whereby specific portions of an undertaking by one petitioner would stand transferred/demerged to and vested in the other petitioner public limited company---Contention of SECP, inter alia, was that various objections arose from such demerger/scheme---Petitioner's contention, inter alia, was that objections by the SECP were of a formal nature and inconsequential to purpose of merger and demerger and that such arrangement had been approved by the shareholders---Validity---High Court observed that no material on record suggested that said scheme was unjust, unfair, against public interest, or in violation of any law---High Court further observed that all formalities under the law had been completed therefore objections of the SECP were liable to be overruled and scheme of arrangement sought was sanctioned---Petition was allowed, accordingly.

Gadoon Textile Mills Limited and 2 others' case 2015 CLD 2010 rel.

Mikael Azmat Rahim and Sehar Rana for Petitioners.

2022 C L D 180

[Sindh]

Before Syed Hasan Azhar Rizvi, J

GUL AHMED TEXTILE MILLS LIMITED AND OTHERS: In the matter of

J.C.M. No. 14 of 2021, decided on 29th October, 2021.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Merger and demergers---Sanction of the court---Petitioner public and private companies sought sanction of the court for a scheme of arrangement whereby undertakings of some petitioner companies would be demerged and vested in the other petitioner companies and additionally sought confirmation for reduction in issued and paid-up share capital of one of the petitioner companies--- Validity--- Securities and Exchange Commission of Pakistan (SECP) made only formal observations in the matter which were not against said scheme and were inconsequential---Indispensable statutory benchmarks and formalities had been accomplished and adhered to by petitioners as envisioned under Companies Act, 2017 and the enabling Rules and requisite majority of shareholders was also obtained---Report of Chairman conveyed that all essential and fundamental characteristics and attributes of proposed scheme were placed before voters in separate meetings to live up to statutory obligations---Proposed scheme looked evenhanded and serviceable from point of view of a commercial decision---Once requirements for a scheme for getting sanction of court were found to have been met, then court would have no further jurisdiction to sit over the commercial wisdom of majority of the class of persons who had approved said scheme---No material on record revealed that the said scheme was either against public interest or in violation of law---Scheme was sanctioned, accordingly.

Mikael Azmat Rahim and Umar Memon for Petitioners.

2022 C L D 256

[Sindh]

Before Zafar Ahmed Rajput, J

MUHAMMAD LAEEQ and 34 others---Petitioners

Versus

SINDH ALKALIES LIMITED and 2 others---Respondents

J.C.M. No. 37 of 2003, decided on 19th March, 2021.

Companies Ordinance (XLVII of 1984)---

----Ss. 305, 309, 311, 404 & 405---Insolvency (Karachi Division) Act (III of 1909), S. 48 & Second Schedule, Rr. 10, 11---Liquidation of assets of company---Debt, proof of---After the respondent company was wound up, the official assignee/official liquidator invited claims from creditors to distribute assets of the company---Applicant Banks filed their claims as secured creditors---Validity---Applicant Banks claimed their charge over auctioned land but in pleadings of their respective Banking suits they did not claim any such charge against auctioned property---No decree existed in favour of applicant Banks for receiving decretal amount through sale of auctioned land---Finance of applicant Banks was secured against other immovable land of respondent company through a charge/mortgage---Insolvency Rules in winding up of company were applicable under S. 404 of Companies Ordinance, 1984---Procedure for admitting secured creditors for the value of claim was provided in Second Schedule enacted under S. 48 of Insolvency (Karachi Division) Act, 1909---No such procedure was applied by secured creditors, therefore, R. 16 of Second Schedule to Insolvency (Karachi Division) Act, 1909, had come in action---Admitted amount of applicants as secured creditors was considered as un-secured however their claims would be paid after preferential claim was released under S. 405 of Companies Ordinance, 1984---High Court directed the official assignee to proceed further for renewal of lease of immovable properties of the company in liquidation---Application was disposed of accordingly.

Pakistan Industrial Credit and Investment Corporation Limited v. Messrs Ajma Corporation Ltd. 2014 CLD 1097 rel.

Nemo for Petitioner No. 1.

Shahryar Mirza and Mrs. Noor Naz Agha for Petitioners Nos. 2 to 35.

Nemo for Respondents Nos. 1 and 2.

Ejaz Ahmed Sheerazi for claimant Faysal Bank Limited.

Muhammad Imtiaz Khan for claimant National Bank Limited.

Chaudhry Waseem Iqbal, Official Assignee/Official Liquidator.

2022 C L D 282

[Sindh]

Before Syed Hasan Azhar Rizvi, J

INTERNATIONAL COMPLEX PROJECTS LIMITED AND OTHERS: In the matter of

J.C.M. No. 12 of 2021, decided on 3rd November, 2021.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Merger and demergers---Sanction of the court---Scope---Petitioner public and private limited companies sought sanction for scheme of arrangement whereby specific portions of an undertaking by one petitioner would stand transferred/demerged to and vested in the other petitioner company--- Validity--- Indispensable statutory benchmarks and formalities had been accomplished and adhered to by the petitioners as envisioned under the Companies Act, 2017 and the enabling Rules and requisite majority of shareholders was also obtained---Proposed scheme looked evenhanded and serviceable from point of view of a commercial decision---Once requirements for a scheme for getting sanction of court were found to have been met, then court would have no further jurisdiction to sit over the commercial wisdom of majority of the class of persons who had approved said scheme---No material on record revealed that the said scheme was either against public interest or in violation of law---Scheme was sanctioned, accordingly.

Mikael Azmat Rahim for Petitioners.

2022 C L D 302

[Sindh]

Before Salahuddin Panhwar, J

GOHAR MANZOOR FCA---Appellant

Versus

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN through Secretary---Respondent

M. A. No. 55 of 2010 and C.M.A. No. 1453 of 2012, decided on 21st September, 2020.

(a) Chartered Accountants Ordinance (X of 1961)---

----Ss. 20-A & 20-B--- Professional misconduct by Chartered Accountant--- Facts, etc. to be laid before the Investigation Committee---Enquiry by the Investigation Committee---Suo motu initiation of proceedings---Effect---Appellant assailed order passed by the Council of Institute of Chartered Accountants of Pakistan whereby he was held guilty of professional misconduct and was imposed upon a penalty of reprimand by name---Validity---Complaint moved by Securities and Exchange Commission of Pakistan (SECP) was considered and the Council was of the opinion that there was no misconduct on the part of appellant, however, suo motu action was initiated by the Investigation Committee for imposing penalty---Investigation into allegation of professional misconduct could not be held unless the procedural formalities were complied with, which were (a) a complaint with all relevant and necessary facts laid before the Investigation Committee, (b) the Investigation Committee formed opinion that such complaint required investigation and (c) Investigation Committee had given a notice to such person---Word 'shall' was used in Ss. 20-A & 20-B of Chartered Accountants Ordinance, 1961, which required strict adherence to the prescribed procedure---Departure from prescribed procedure was against the settled principle of law of things required to be done in the manner should be done in the same manner or not at all---Impugned order to the extent of imposing penalty was set aside--- Appeal was disposed of accordingly.

Institute of Chartered Accountants of Pakistan through Secretary v. Abu Bakar Bilwani 2009 CLD 735 and 2005 CLD 737 rel.

(b) Chartered Accountants Ordinance (X of 1961)---

----Ss. 20-A & 20-B--- Professional misconduct by Chartered Accountant--- Facts, etc. to be laid before the Investigation Committee---Enquiry by the Investigation Committee---Scope---If an investigation is not initiated/held, as required by Ss. 20-A & 20-B of the Chartered Accountants Ordinance, 1961, such investigation cannot be said to have been legally processed and action in consequence to such investigation cannot be legally stamped.

Kanwar Majid for Appellant.

Muhammad Ali Talpur for Respondent No. 1.

2022 C L D 315

[Sindh]

Before Adnan Iqbal Chaudhry, J

Messrs FOREL INTERNATIONAL TRADING and others---Plaintiffs

Versus

WAQAS AHMED JAT and others---Defendants

Suit No. 308 of 2021, decided on 14th October, 2021.

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

----S. 7---Federal Investigation Agency Act, 1974 (VIII of 1975), S. 5---Civil Procedure Code (V of 1908), O. VII, R. 11---Specific Relief Act (I of 1877), S. 56(e)---Original civil jurisdiction---General and special law---Civil Court, jurisdiction barred---Hawala/hundi and money laundering, suspicion of--- After conducting inquiry, Federal Investigation Agency ("FIA") had issued an order to freeze Bank accounts of the plaintiffs---Plaintiffs filed suit for declaration that such inquiry offended their fundamental rights; that notices under S.160, Criminal Procedure Code, 1898 and freezing of Bank accounts were mala fide/without jurisdiction; for injunction to set-aside freezing order; and for damages for loss caused to business/reputation/mental anguish---First Information Report was launched alleging that the accused had opened fake Bank accounts to route transactions which were offences under Pakistan Penal Code, 1860 and also scheduled offences under the Offences in Respect of Banks (Special Courts) Ordinance, 1984---Validity---First Information Report was presented before Special Court and said Court had taken cognizance of the matter and the plaintiffs had also surrendered before the Court for pre-arrest bail---Freezing order passed by the "FIA" was subject to the orders of the Special Court---Bank accounts of the plaintiffs are movable property within the meaning of S. 7 of the Offences in Respect of Banks (Special Courts) Ordinance, 1984---Said Ordinance being special law, power to lift the freezing order of the plaintiffs' Bank accounts lay exclusively with the Special Court---Question whether the transactions in the Bank accounts of plaintiffs were unlawful, would squarely fall within the exclusive jurisdiction of the Special Court under the Offences in Respect of Banks (Special Courts) Ordinance, 1984---Jurisdiction of Civil Court to grant relief against freezing of the plaintiffs' Bank accounts was impliedly barred---High Court rejected the plaint under R. 11 of O. VII, Cr.P.C.

National Accountability Bureau v. Zahida Sattar PLD 2001 Kar. 256 rel.

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

----S. 8---Malicious prosecution---Damages, claim for---Suit for damages against Federal Investigation Agency ("FIA") for initiation of inquiry and passing order of freezing Bank accounts---Scope---Suit for damages could circumvent the bar of S. 8 of the Federal Investigation Agency Act, 1974---Cause of action for such a suit would only arise if and when the prosecution against the plaintiffs failed.

Khawaja Shams-ul-Islam for Plaintiffs.

Anwar Kamal, Assistant Attorney General for Pakistan along with Waqas Ahmed Jat, Enquiry Officer, FIA for Defendants 1-5.

Nemo for Defendants 6-10.

2022 C L D 352

[Sindh]

Before Muhammad Iqbal Kalhoro and Shamsuddin Abbasi, JJ

MIRPURKHAS SUGAR MILLS LIMITED and 17 others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Law and Justice and 2 others---Respondents

Constitutional Petitions Nos. D-110, D-149, D-164, D-196 and D-360 of 2010, decided on 17th January, 2022.

(a) Constitution of Pakistan---

----Art. 18---Trade and business regulation of---Right---Regulating trade and business is not mere a formality but a requirement arising out of the Constitution itself.

(b) Constitution of Pakistan---

----Art. 142---Federal and Provincial laws---Subject matter---Phrase "subject to the Constitution"---Scope---Words 'Subject to the Constitution' mean that exercise of jurisdiction thereunder is not independent of other provisions of the Constitution---As such the same does not imply that Art. 142 of the Constitution in terms of its position or import is subordinate or subservient to the remaining provisions of the Constitution---Words in question only signify that where the Constitution itself creates a specific bar to a legislative authority or lay out a manner for exercise of such authority different than being employed, then such authority must be exercised in the manner as prescribed and permitted or not at all---Unless the Constitution itself creates a specific bar over exercise of such authority, the authority exercised as such under this provision would be construed unhindered and absolute.

Lahore Development Authority through D.G. and others v. Ms. Imrana Tiwana and others 2015 SCMR 1739; Jadab v. H.P. Administration, (1960) 3 SCR 755 and Second G.T.O. v. Hazareth AIR 1970 SC 999 rel.

(c) Constitution of Pakistan---

----Arts. 142 & 143---Federal and Provincial laws---Residuary jurisdiction---Object, purpose and scope---Competency to legislate---Preconditions---Besides conferring on Parliament and Provincial Assembly power of legislation in specified areas, provision of Art. 142 of the Constitution stipulates residuary jurisdiction for both the legislatures to exercise in such circumstances---When a subject is diversified and is not covered by any of the entries in Legislative Lists is termed as a residuary subject falling within residuary jurisdiction---Purpose of conferral of such jurisdiction on the Legislature is to enable it to meet a contingency arising out of dynamics of ever evolving and changing society which entail an appropriate legislative measure not otherwise specifically set out in the book---Residuary jurisdiction is resorted to only as a last resort when all entries in Legislative List(s) are exhausted, and yet subject matter of legislation is not addressed---Legislative inability over a given subject has to be established first before residuary jurisdiction is claimed over it---To determine which particular legislature is competent to legislate on a given subject involves predetermination of so many factors such as origin of the subject in Legislative List, its various themes and topics, mandate under the Constitution, legislative ability and inability, territorial bounds, etc.---In a case where both Federal and Provincial Legislatures claim jurisdiction over same subject and make a law on it, and there is a conflict between two laws, in terms of Art. 143 of the Constitution, to the extent of such repugnancy, the Federal law prevails.

Messrs Sui Southern Gas Company Ltd. and others v. Federation of Pakistan 2018 SCMR 802 and Elahi Cotton v. FOP PLD 1997 SC 582 rel.

(d) Constitution of Pakistan---

----Art. 18 & Federal Legislative List, Entry No. 58---Right to do lawful trade etc.---Federation, duty of---Principle---Duty is cast upon Federation to not only look over right to do lawful trade, etc. by creating conducive conditions but also to regulate it through legislative instrument in the interest of free competition---When a business activity traverses bounds of a Province physically and effectively, it appears to be only Federation, given its territorial expanse, competent to regulate it---Along with Art. 18 of the Constitution, recognizing right of an individual to lawful profession or trade, Entry 58 in Federal Legislative List covers the matters which under the Constitution are within the legislative competence of Parliament or relate to Federation---Federal Government is relevant and competent to supervise and enforce control over national economy, while Provinces to operate within their respective boundaries as a single economic unit but without discriminating between goods manufactured within its boundaries and the goods not so manufactured---Idea of free trade, commerce and intercourse throughout Pakistan, even otherwise, by its very connotation and reach is directly related to the Federation.

2020 SCMR 1 and PLD 2012 SC 224 rel.

(e) Constitution of Pakistan---

----Arts. 18 & 151(1)---Expression "shall be free"---Scope---Expression "shall be free" does not mean stark and bald freedom without any restriction---Unqualified freedom in any sphere including trade can never be acknowledged by the Constitution, as the same may result, with regard to trade, into anticompetitive behaviour etc. compromising the goal of free competition set out in Art. 18 of the Constitution.

Pakistan Tobacco Co. Ltd. v. Government of N.W.F.P. PLD 2002 SC 460 rel.

(f) Interpretation of statutes---

----Intent of Legislature---Determining factors---In order to know true intent of Legislature, conditions inducing its necessity; the scheme behind it coupled with context of the issue being addressed; subject it seeks to cover; and any other provision either adding or enlarging its purport and scope or providing continuity to it, have to be taken into account.

(g) Interpretation of Constitution---

----Parliament is the supreme law-making body and is duly empowered by the Constitution to exercise its authority as and when needed to meet an exigent situation.

(h) Constitution of Pakistan---

----Art. 142---Words "subject to the Constitution"---Scope---Words 'subject to the Constitution' implies that it cannot be read in isolation of other provisions of the Constitution, nor can be applied independently---If on a subject a Province wishes to assume jurisdiction under Art. 142 of the Constitution, it has to specifically fall within its legislative domain in addition to be independent of all provisions conferring such jurisdiction either explicitly or implicitly upon Federation---Province has no jurisdiction to make a law in derogation of such rule, and if however a law is made as such, its validity would not be without a question.

(i) Administration of justice---

----When a right is conferred upon a person by any law, certain duties upon him at the same time are pieced together to regulate it.

(j) Interpretation of Constitution---

----"Pith and substance", principle of---Applicability---Stretching of meaning---Limit---Constitution is a living and organic document prone to evolve and adapt to new circumstances even if it is not formally amended---Courts are required to adopt a broad based, dynamic, and progressive approach---Words either in the entries or in any provision of the Constitution are to be given a dynamic interpretation in keeping pace with development of society and exigencies of time---Entries do not confer any legislative power but only point out to the broad fields/legislative heads in which legislative powers can be exercised---Words have to be given ordinary, grammatical and natural meaning and cannot be construed in a narrow or pedantic manner---Limit to which a word can be stretched for a meaning is determined by the principle of 'pith and substance'---Pith detonates 'essence of something' or the 'true nature', while substance means 'most significant or essential part of something'---As such the doctrine is applied to ascertain purpose of a given law, its essential character and whether subject matter legislated on is related to Federation or not---By applying the doctrine, basic purpose and effect of the law are discovered and so also so the fact as to which level of government has jurisdiction or authority to frame the law---It can also be found out whether legislation, under challenge, made by one of the Legislatures, is rightly enacted or it has trespassed or encroached upon domain of other Legislature---By applying the doctrine, it can be determined whether or not Parliament has the authority to deal with a given subject.

Messrs Sui Southern Gas Company Ltd. and others v. Federation of Pakistan 2018 SCMR 802; Sh. Abdur Rehim, Allah Ditta v. Federation of Pakistan PLD 1988 SC 670; PIDC v. Pakistan 1992 SCMR 891; Nishat Tek Ltd. v. FOP PLD 1994 Lah. 347; Navinchandra Mafatlal v. C.I.T. (1954) 26 ITR 758 (SC) and L.P. Varghese v. ITO AIR 1981 SC 1922 rel.

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

----Preamble---Free competition, providing of---Consumer protection---Scope---Intent of Legislature is to make an overarching law, national in character, for creating conditions conducive for free competition in all spheres of commerce with a view to enhance economic efficiency---By its regulatory mechanism, Competition Act, 2010, prohibits and discourages anticompetitive ways with aligned purpose of ensuring free competition to ultimately secure consumer protection---Consumer's protection, among others, signifies free flow and easy availability of goods required by him in the market without any hindrance, and his freedom to choose among them what is best for him in terms of price and quality.

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

----Ss. 3, 4, 10 & 38---Free competition, maintenance of---Proceedings, nature of---Provisions of Ss. 3, 4 & 10 of Competition Act, 2010, are preventive in nature, serve to promote free competition by reining in abuse of dominant position, prohibiting agreements preventing or reducing competition within the market, and deceptive marketing practices---Goal is to protect interest of consumers and public at large and advance healthy and free market competition---For such purpose, provisions encapsulating monetary penalties have been provided under S. 38 of Competition Act, 2010---Principally, provisions of Ss. 3, 4 & 10 of Competition Act, 2010, are remedial measures meant to denude an undertaking or an association of undertakings of unlawful gains made in violation of law; there is no criminal offence under the provision of Competition Act, 2010 until and unless there is a failure to comply with orders of the Commission.

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

----Ss. 3, 4, 10, 38 & 62---Constitution of Pakistan, Arts. 13, 18, 142, 143 & 151---Civil Procedure Code (V of 1908), S. 11---Sugar industry--- Legislation, competence of---Free competition---Proceedings---Principles of "double jeopardy" and "res-judicata"---Applicability---Petitioners were sugar mills and their Association who assailed show cause notices issued by authorities on the ground that it was a Provincial subject and Federal laws were not applicable---Validity---Held, it was the Parliament, with jurisdiction all over the country, to legislate over the subject when it related to sugar mills---Undertaking having presence in more than one province physically and effectively, to ensure free competition in trade, commerce, etc. was duty and domain of the Federation---Federal law enacted by Parliament could meet the issue and serve national economy for assigned purpose, which was what the scheme of Arts. 18 & 151 of the Constitution, which had stipulated: free trade, commerce and intercourse throughout Pakistan with free competition and consumer protection---Any past proceedings by the Commission against Sugar Mills Association, mother association, would not render proceedings against petitioners to find out their part, if any, in prohibited agreements either nullity in the eyes of law or hit by doctrine of "double jeopardy" or "res judicata"---If any undertaking was found in breach of a provision of the Competition Commission Act, 2010, it was to be held accountable for its individual act but when it had committed such breach in its dual capacity i.e. individual and a part of the Association, such undertaking could be made answerable separately for its actions---Neither petitioners were prosecuted and punished or acquitted for any offence under the provisions of Competition Act, 2010, a condition precedent to attract doctrine of "double jeopardy", nor they were tried on same issues directly and substantially in an earlier suit between them and the Commission, therefore, neither doctrine of "double jeopardy" nor doctrine of "res judicata" was attracted---Petitioners and the Association were independent entities (undertakings) under Competition Act, 2010, therefore, proceedings against one were not likely to set out applicability of principle of "res judicata" to proceedings against the other---Parliament had power to legislate on subject of free competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anticompetitive behavior---For such purpose, Competition Act 2010 enacted by Parliament (or the previous Ordinances, 2007, 2009 and 2010) was a valid piece of legislation and covered inter-provincial trade, commerce and intercourse throughout Pakistan---Under S. 62 of Competition Act, 2010, anything done, actions taken, orders passed, instruments made, notifications issued, agreements made, proceedings initiated, process or communication issued, powers conferred, assumed or exercised, by the Commission or its officers on or after 2.10.2007 were deemed valid and legal---High Court declined to interfere in the matter as show cause notices issued to petitioner sugar mills individually or Association based on Enquiry Report were validly issued and did not suffer from any illegality or jurisdictional defect or incompetency---Provinces had also the same legislative power to introduce and ensure regime regarding free competition to achieve the objectives, among others, set out in Competition Act, 2010 for enhancing economic efficiency and protecting consumers from anticompetitive behaviour in respect of an economic activity strictly confined within their territorial limits physically and effectively---Constitutional petition was dismissed, in circumstances.

Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879; 2007 PTD 2356; Federation of Pakistan and others v. M. Nawaz Khokhar and others PLD 2000 SC 26; 1998 SCMR 1729; PLD 2013 SC 501; PLD 2020 SC 1; PLD 1998 SC 1445; 2003 PCr.LJ 277; PLD 1963 SC 486; PLD 2012 SC 923; 1993 SCMR 1589; PLD 1998 Lah. 203; 1978 SCMR 292; PLD 2007 Pesh. 179; 1989 CLC 2103; PLD 2010 SC 265; PLD 2006 SC 697; 2019 PTD 1774; 2019 SCMR 924; 1993 SCMR 29; PLD 1992 SC 847; PLD 2011 SC 44; PLD 2019 Sindh 516; PLD 2006 SC 230; 2021 CLD 214; PLD 2018 Lah. 762; 2019 CLC 1761; 2019 CLD 626; 2018 PTD 1966; 2018 PTD 2026; Messrs Sui Southern Gas Company Ltd. and others v. Federation of Pakistan 2018 SCMR 802; AIR 2003 SC 1044; PLD 2017 Lah. 230; PLD 1998 Lah. 296; 1998 SCMR 1729; 2018 SCMR 1956; PLD 1998 SC 161; PLD 1997 SC 426; 2018 SCMR 1856; PLD 2000 SC 26; 2005 PTD 122 and Islamabad Feeds (Pvt.) Ltd.'s case W.P. No.4942 of 2010 ref.

(n) Interpretation of Constitution---

----Occupied filed and repugnancy, doctrines of---Distinguished---Doctrine of occupied field relates to those legislative entries of Province which are expressly made subject to a corresponding entry in the concurrent list---Such doctrine is merely concerned with legislative power and starts off when Federal Legislature legislates and frames the law on a subject and occupies the field and no room or space is left for Provincial Legislator to enter the field---Even when the field is not occupied by a Federal law and Provincial Legislature first legislates in respect of a field hitherto unoccupied, and then Federal Legislature makes a law on the very subject---Such law being passed by dominant legislature pushes aside the Provincial law to the extent it is in conflict with it---In such a situation, however, doctrine of repugnancy and not the doctrine of occupied field comes into play---Very thin line of difference exists between doctrine of repugnancy and doctrine of occupied field, where occupied field ends, repugnancy starts---Repugnancy arises when there is an actual conflict between two legislations, one enacted by a Provincial Legislature and the other by Parliament, and both are competent to do so---Doctrine of occupied field has nothing to do with conflict of laws between Province and Center; it is concerned only with existence of legislative power, while repugnance is with exercise of legislative power that is shown to exist---Normally, when there is a conflict, Courts try to construe Federal law and Provincial law on the same subject harmoniously---When Parliament tries to occupy the field, being the supreme law-making body in Constitutional scheme, it prevails over Provincial law regardless of whether it precedes or succeeds Federal law---Such rule of propriety and supremacy regarding Federal law is aptly encoded in Art. 143 of the Constitution---Court to trump a Provincial statute at the anvil of doctrine of occupied field has to see that both the Provincial and Federal legislature are competent to legislate on the subject; provincial statute in pith and substance is compatible or in pari materia with Federal statute; Provincial law is subsequent to the Federal law etc.

Cycle Engineering Co. v. Cowburn (1926) 27 CLR 466, 488; Fundamental Laws of Pakistan (1958 Ed.) at page 251 by Mr. A. K. Brohi and Justice Muhammad Munir in his Commentary on 'Constitution of the Islamic Republic of Pakistan', edited by Mian Bashir Ahmed, has commented at page 693 rel.

(o) Interpretation of statutes---

----Presumption---Applicability---Presumption always leans in favour of Constitutionality and legality of a statute---Where two opinions are possible, one, favouring validity of law has to be adopted---Such presumption is considered rebuttable and prone to discard and disgorge when the person challenging the law succeeds in establishing discrimination among the persons or objects who are similarly placed; particulars of discrimination; arbitrariness and irrationality in classification or selection of the person or goods or activity; or is able to show that the law is violative of any of the fundamental rights or provisions of the Constitution.

(p) Interpretation of statutes---

----Deeming clause---Applicability---Not uncommon to use a deeming provision in any statute to give validity to a situation which did not exist but by a deeming provision is assumed to exist and therefore validated.

Mehreen Zaibun Nisa v. Land Commissioner, Multan and others PLD 1975 SC 397; Muhammad Mubeen-us-Salam and others v. Federation of Pakistan and others PLD 2006 SC 602; Federation of Pakistan and others v. Mian Muhammad Nawaz Sharif and others PLD 2009 SC 644 and Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905 rel.

(q) Constitution of Pakistan---

----Art.151(2)---Freedom of trade, commerce and intercourse---Scope---Provision of Art. 151(2) of the Constitution explicitly confers legislative power on Parliament to regulate freedom of trade, commerce and intercourse between one province and another or within any part of Pakistan.

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

----Ss. 3, 4 & 10---Constitution of Pakistan, Arts. 140-A, 141 & 151---Anti-competitive conduct---Inter-provincial trade---Measures---Where an alleged anticompetitive conduct is not affecting trade and commerce of another province and is exclusively confined to a Province, the Federation has no mandate to intervene and control it because such conduct has nothing to do with 'inter-provincial trade and commerce', stipulated in Entry 27 and Art. 151 of the Constitution and any intervention by the Federation would be against combined spirit of Arts. 140-A & 141 of the Constitution---If any act or omission, translated as anti-competitive behaviour, is although committed within geographical boundaries of a Province has spillover effect into territorial limits of another province or a territory, would fall not only within executive competence of the Federation to regulate but also within its exclusive legislative mandate to legislate on.

Abdul Sattar Pirzada and Mamoon N. Chaudhry for Petitioners (in C.Ps. Nos. D-110 and 149 of 2010).

Ali Ahmed Turabi holding brief for Moin Azhar Siddiqui for Petitioners (in C.Ps. Nos. D-196 and 360 of 2010).

Shahan Karimi and Rashid Mahar for Petitioners (in C.P. No. D-2642 of 2012).

Amel Khan Kasi and Waqar Ahmed for Respondent No. 3 (in C.Ps. Nos. D-149, 164, 196 and 360 of 2010).

Munir A. Malik for Respondent No. 2 (in C.P. No. D-2642 of 2012).

Khalid Javed Khan, Attorney General for Pakistan along with Kashif Sarwar Paracha, D.A.G. and Hussain Bohra, Assistant Attorney General.

2022 C L D 443

[Sindh]

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

ALI ASLAM MALIK---Petitioner

Versus

NATIONAL ACCOUNTABILITY BUREAU through Chairman and others---Respondents

Constitutional Petitions Nos. D-7437 of 2015 and D-1401 of 2019, decided on 12th June, 2020.

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

----Ss. 2(pa), 27 & 41-B [as inserted by Securities and Exchange Commission of Pakistan (Amendment) Act (XXXVI of 2016)]---National Accountability Ordinance (XVIII of 1999), S. 18(g)---Constitution of Pakistan, Art. 199--- Constitutional petition--- Quashing of proceedings--- Regulated activity--- Liability, determination of---Pendency of civil suit---Petitioners were Stock Exchange Brokers and were alleged to have caused loss to State exchequer by selling shares in question at very low price---Petitioners sought quashing of proceedings before National Accountability Bureau (NAB) on the plea that it was a regulated activity and forum to inquire into such matters was Securities and Exchange Commission of Pakistan---Validity---Dispute between parties was one pertaining to rate that shares in question were sold by petitioners---Suit was already pending in High Court for determination of amount at which the shares were to be sold---Liability of petitioners, if any towards shareholders was disputed between the parties---Many factors and market conditions existed that were to be taken into account before liability of petitioners could be affixed---Such was an ongoing process and was to reach finality when pending suit for determination of liability was decided---Securities and Exchange Commission of Pakistan was best placed to determine in the first instance, whether an offence or fraud had taken place--- Securities and Exchange Commission of Pakistan was granted substantial powers under S. 27 of Securities and Exchange Commission of Pakistan Act, 1997, to investigate whether any regulated person was engaged in committing fraud, misfeasance or other misconduct in carrying out a regulated activity, which was the complaint against petitioners---Securities and Exchange Commission of Pakistan for the purpose of investigation could seek assistance of any other investigating agency or bureau under S. 29(4) of Securities and Exchange Commission of Pakistan Act, 1997--- Securities and Exchange Commission of Pakistan had extensive powers to investigate the matter and if needed could file a reference with NAB---As no reference was made by Securities and Exchange Commission of Pakistan, proceedings against petitioners were void ab initio and were quashed--- Petition was allowed, in circumstances.

Syed Mushahid Shah and others v. Federal Investigating Agency and others 2017 SCMR 1218 ref.

State v. Imam Baksh 2018 SCMR 2039 rel.

Mian Ali Ashfaq and Shazib Masud for Petitioner.

Sattar Muhammad Awan, Special Prosecutor NAB along with Karim Bakhsh, I.O.

Syed Imran Ali Shamsi, Law Officer for SECP.

2022 C L D 511

[Sindh]

Before Muhammad Faisal Kamal Alam, J

HILAL FOODS (PRIVATE) LIMITED through Group Head Legal and Company Secretary---Plaintiff

Versus

DANPAK FOOD INDUSTRIES (PRIVATE) LIMITED through Director---Defendant

Suit No. 1758 of 2019, decided on 16th August, 2021.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 40 & 67---Copyright Ordinance (XXXIV of 1962), Ss. 56 & 60---Specific Relief Act (I of 1877), S. 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Infringement of registered trade mark---Suit for permanent injunction and damages---Unfair competition---Copyright when infringed---Civil remedies for infringement of copyright---Temporary injunction, refusal of---Scope---Plaintiff alleged that the mark used by defendant was nearly identical, confusingly and deceptively similar to that of plaintiff's, visually as well as phonetically, besides the design, get up and colour scheme of both the marks were identical, hence, the defendant was deceiving customers---Validity---Held, in a shop if different bubble gums were displayed of different manufacturers, including that of plaintiff and defendant, prima facie, an unwary buyer/consumer of an average intelligence would not be confused between the chewing gum of defendant as that of the plaintiff---Defendant was not passing off its products as those of plaintiff's, thus, it could not be ignored that the defendant had got registered a trade mark for its product, which factor weighed in favour of defendant---Balance of convenience, which was one of the basic ingredients for grant of injunction at present was not in favour of plaintiff, rather leaned towards defendant---Question of irreparable loss could not be determined now but was to be decided at the later stage of the trial---Since all the basic elements for grant of injunction were not present, injunction application was dismissed.

Messrs Western Brand Tea, Karachi v. Messrs Tapal Tea (Pvt.) Limited Lahore and another PLD 2001 SC 14; Messrs Burney's Industrial and Commercial Co. Ltd v. Messrs Rehman Match Works PLD 1983 Kar. 357; J&P Coats Limited and another v. Messrs Golden Thread Industries through Proprietor 2011 CLD 811; Muhammad Rafiq v. Muhammad Ali 1986 CLC 2621; Syed Muhammad Maqsood v. Naeem Ali Muhammad 1985 CLC 3015; Abdul Jabbar and another v. Ahmad Jan] PLD 1973 Kar. 289; Federal Mogul Products Inc. USA v. Taha Industries 2005 CLD 802; Messrs Chas A. Mendoza v. Syed Tausif Ahmad Zaidi and 2 others PLD 1993 Kar. 790; The Welcome Foundation Limited v. Messrs Karachi Chemical Industries (Private) Limited 2000 YLR 1376; N.R. Dongre and others v. Whirlpool Corporation and another (1996) 5 Supreme Court Cases 714; Telephone Soap v. Messrs Lever Brothers 1994 CLC 2135; Jazaa Foods (Pvt.) Limited through Authorized Representative and another v. Junaid Jamshed (Pvt.) Limited through Chief Executive Officer and 2 others 2021 CLD 362; Messrs Shaukat Soap and Ghee Industries (Pvt.) Ltd. v. Messrs Shaukat Brothers Soap Manufactures (Pvt.) Ltd. 2016 CLD 1036 and Messrs Mehran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mill (Pvt.) Limited and others 2001 SCMR 967 distinguished.

Abdul Wahid v. Haji Abdur Rahim and another PLD 1973 SC 104 and Pakistan Drug House (Pvt.) Limited v. Rio Chemical Company and another 2003 CLD 1531 ref.

Abdul Sattar Pirzada, Mamoon N. Chaudhry and Gibran Karim Pirzada for Plaintiff.

Khalid Hidayat Khan for Defendant.

2022 C L D 630

[Sindh]

Before Syed Hasan Azhar Rizvi, J

In re: NINA INDUSTRIES LIMITED AND 6 OTHERS

J.C.M. Petition No. 49 of 2016, decided on 25th October, 2021.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287 & 288---Companies (Court) Rules, 1997, R. 55---Scheme of Arrangements---Settling of liabilities---Court, jurisdiction of---Commercial wisdom of parties---Petitioner company due to financial constraints sought approval of Court for Scheme of Arrangements to settle all its secured creditors whereas unsecured creditors could file suit for recovery---Validity---Indispensable statutory benchmarks and formalities were accomplished and adhered to by petitioners as envisioned under relevant provisions of Companies Act, 2017 and the enabling rules---Scheme set up for sanction was reinforced and fortified by requisite majority and the decision was just and fair--- Report of the Chairman unequivocally conveyed that all essential and fundamental characteristics and attributes of the Scheme were placed before the voters in separate meetings to live up to statutory obligations---Proposed Scheme as a whole looked like evenhanded and serviceable from the point of view of prudent men of business, taking a commercial decision---Once requirements of a scheme for getting sanction of Court were found to have been met, the Court had no further jurisdiction to sit over commercial wisdom of majority of class of persons who with their open eyes had given their approval to the Scheme---High Court sanctioned the Scheme of Arrangements as there was no material on record to suggest that the Scheme was against public interest or in violation of any law---Petition was allowed, in circumstances.

Gulshan Weaving Mills Limited and other's case 2018 CLD 389 and Paramount Spinning Mills Limited and other's case 2020 CLD 1443 rel.

Ch. Atif Rafiq for Petitioner No. 1.

Ms. Heer Memon for Petitioners Nos. 2 to 7.

Zeeshan Abdullah for Saudi Pak Bank Limited.

Aijaz Hussain Shirazi for Pak Libya Holding Company.

Manzar Bashir for State Life Insurance Corporation.

Ghulam Muhammad for Gadoon Textile Mills Limited Objector/Claimant.

Abid Nasim for Bank of Punjab.

Zia-ul-Haq Makhdoon and Azhar Mehmood for Purchaser.

2022 C L D 652

[Sindh]

Before Mohammed Karim Khan Agha and Kausar Sultana Hussain, JJ

WAQAR ZAKA---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Law and Justice

and Parliamentarian Affairs and 6 others---Respondents

Constitutional Petition No. 7146 of 2019, decided on 20th October, 2021.

Crypto currency---

----Legality of---Scope---Petitioner wanted to open the business concerning crypto currency exchange in Pakistan---State Bank of Pakistan stated that crypto currency was not legal tender in Pakistan; that the use of crypto currency in any form was also a difficult task to regulate; that at this point in time no such regulations existed and that under the law it was not even made clear whether any trade in crypto currency which was not legal tender was allowable---FIA had lodged FIRs against persons transacting crypto currency business and crypto miners for being in violation of State Bank of Pakistan circulars---High Court noted that a number of countries were allowing such trade and since Pakistan was a progressive country and needed to keep up with global banking practices it might want to consider the legality of certain types of crypto currency being transacted in the country provided that a proper regulatory framework was put in place---Since use of crypto currency was a relatively new form of banking/business transaction and much thought and consideration was required to be taken as to whether any form of crypto currency was to be permissible, as such, a committee was ordered to be set up to consider whether it was both viable and advisable; whether as a matter of policy the Government of Pakistan might consider introducing some kind of crypto currency business in Pakistan.

Petitioner in person.

Irshad Ali, Assistant Attorney General.

Ms. Seema Kamil, Deputy Governor, Raza Mohsin Qizlibash, Director Legal, Sohail Jawaid, Executive Director, Alam Zaib, Law Officer and Atif Uddin, Legal Counsel, State Bank of Pakistan.

2022 C L D 775

[Sindh]

Before Omar Sial, J

STATE BANK OF PAKISTAN through Director---Applicant

Versus

BANKERS EQUITY LIMITED (BEL) and 3 others---Respondents

Criminal Original Miscellaneous Application No. S-8 of 1999, decided on 1st February, 2022.

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

----S. 83---Criminal Procedure Code (V of 1898), S. 561-A---Quashing of proceedings---Scope---Accused sought quashing of proceedings initiated on a complaint filed by State of Bank of Pakistan (SBP) under subsections (1) and (1-A) of S. 83 of Banking Companies Ordinance, 1962---Accused person's involvement in alleged misreporting could only be determined after the evidence was led at trial---Prima facie it appeared from a tentative assessment of the record that the company was short on its liquidity requirement---Company had made several promises and representations to the SBP for raising its liquidity---Accused was the financial head at that time and had confirmed that a subordinated loan had been received---Loan was also reflected in the company's financial statement---Such had turned out to be wrong---Accused did have a case to answer and the charge was not groundless nor was it certain that a conviction could not take place---Whether there was mens rea or not could only be determined after analyzing the available evidence---When the Single Judge of High Court after holding a hearing had already ordered that a triable case was made out and that a charge should be framed, it was not open to the Bench as a Single Judge to sit over the order of the predecessor Single Judge---Division Bench observed that it did not have jurisdiction to adjudicate a plea for quashing the proceedings---Application was dismissed, in circumstances.

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

----Ss. 561-A & 221---Quashing of proceedings---Charge---Scope---Where a court has ordered that a charge should be framed then it is not open to the successor Judge to sit over the order of his predecessor and quash the proceedings.

Mrs. Ismat Mehdi for Applicant.

Nemo for Respondents Nos. 1 and 2.

Zulfiqar Langhar and Javaid Zaheer for Respondent No. 3.

Karim Bux, Associate of Qazi Abdul Hameed for Respondent No. 4.

2022 C L D 872

[Sindh (Hyderabad Bench)]

Before Nadeem Akhtar and Adnan-ul-Karim Memon, JJ

Syed AMEER ALI through Attorney and 2 others---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager---Respondent

First Appeal No. D-39 of 2021, decided on 30th March, 2022.

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

----Ss. 9, 10 & 22---Recovery of finance---Relationship of financial institution and customer---Conditional leave---Furnishing Bank guarantee---Principle---Appellant/defendant was granted conditional leave to appear and defend the suit subject to deposit of Bank guarantee in excess of amount claimed by plaintiff Bank---Appellant/defendant failed to deposit Bank guarantee and suit was decreed in favour of Bank---Validity---Appellant/defendant denied relationship of financial institution and customer between parties---Such was a substantial question that required evidence---Banking Court was not justified in imposing condition of furnishing Bank guarantee for amount exceeding that claimed in suit---Discretion exercised by Banking Court was improper and such condition was harsh---Appellant/defendant had already mortgaged his agricultural land with respondent/plaintiff as security---Judgment and decree in question was passed only as a consequence of non-fulfillment of harsh condition--- At the time of grant of leave to defend the suit, imposition of condition was discretion of Court but such discretion was to be exercised judiciously according to facts and circumstances of case and condition, if any, should not be harsh---High Court set aside judgment and decree passed against appellant/defendant and remanded the matter to Banking Court for trial afresh---Appeal was allowed, in circumstances.

Abdul Karim Jaffarani v. United Bank Limited and 2 others 1984 SCMR 568 rel.

Imran Ali Borano for Appellants.

Yasir Tahseen Talpur for Respondent.

2022 C L D 894

[Sindh]

Before Muhammad Iqbal Kalhoro and Kausar Sultana Hussain, JJ

PAKISTAN MICROFINANCE BANK LIMITED through Authorized Representative and others---Petitioners

Versus

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

C.P. No. D-6796 of 2021, decided on 28th February, 2022.

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

----S. 3---"Microfinance Institution" and "Microfinance Bank"---Distinction---Microfinance Institution is a different entity than Microfinance Bank---Microfinance Institution licensed under Microfinance Institutions Ordinance, 2001, has been taken out of definition of a banking company under S. 3 of Microfinance Institutions Ordinance, 2001 and not Microfinance Bank.

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

----Ss. 3, 22 & 28---Penal Code (XLV of 1860), S. 409---Federal Investigating Agency (Enquiries and Investigation) Rules, 2002, R. 5---Criminal breach of trust---Inquiry into offence---Microfinance Bank, action against---Petitioner assailed inquiry proceedings on a complaint of selling gold of complainant---Petitioner contended that the company was a Microfinance Institution and not Microfinance Bank---Validity---Provisions of Microfinance Ordinance, 2001 did not have overriding effect on other laws--- Alleged offence was not recognized as a contravention within its pale of jurisdiction so as to extend protection to petitioners under S. 3 of Microfinance Ordinance, 2001---Allegations against petitioners constituted offence under S. 409, P.P.C. which was scheduled offence under Federal Investigating Agency Act, 1974---Procedure to be followed in the wake of some contraventions cognizable and punishable was provided in Ss. 22 & 28 of Microfinance Ordinance, 2001 and not the offences defined in other laws including allegations of fraudulently usurpation of gold kept as trust by an entity professing to be Microfinance Bank---High Court declined to interfere in inquiry proceedings initiated by Federal Investigating Agency against petitioners---Constitutional petition was dismissed, in circumstances.

2017 SCMR 1218; 2018 PLC (C.S.) 1264; 2011 YLR 337; 2020 CLD 359; 2018 PCr.LJ 1676; PLD 2020 Sindh 601 and 2016 SCMR 447 ref.

Syed Ali Ahmed Zaidi for Petitioners.

Irfan Ahmed Memon, D.A.G. along with I.O., SI, Sabeen Ghori, FIA for Respondents.

2022 C L D 902

[Sindh]

Before Mohammed Karim Khan Agha and Kausar Sultana Hussain, JJ

ARIF KAMAL and another---Appellant

Versus

The STATE---Respondent

Criminal Appeals Nos. 44, 64 to 68 of 2010, decided on 3rd December, 2021.

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

----Ss. 4 & 5---Penal Code (XLV of 1860), Ss. 420, 468, 471, 477-A & 34---Prevention of Corruption Act (II of 1947), S. 5(2)---Appreciation of evidence---Jurisdiction of Banking Courts---Prosecution case was that the accused being employee of Insurance Company prepared and approved fake and bogus claims in collusion and connivance with co-accused persons, which cheques in respect of such fake and bogus forged claims were paid into Bank accounts and withdrawn by bogus beneficiaries, which caused loss to the Insurance Company---In the present case, the main accused was an employee of an insurance company namely State Life Insurance Corporation (SLIC) who allegedly defrauded the insurance company by illegally authorizing claims to individuals/ organizations which were then paid into Bank accounts individuals/organizations and the same money was withdrawn by co-accused beneficiaries of the scam---None of the accused were bankers and there was no evidence on record that any person associated with any banking company played an illegal role in the fraud for instance illegally opening Bank accounts in the name of beneficiaries or knowingly allowing those Bank accounts to be operated by illegal beneficiaries---Loss was caused to the insurance company and not to the Banks or any of its customers---Since the complaint and the illegal acts had been carried out by persons not engaged in the business of banking prima facie the Offences in Respect of Banks (Special Courts) Ordinance, 1984 (Ordinance) did not apply to the accused persons unless the offences so charged could be found to have been committed, in respect of or in connection with the business of a Bank so as to bring the offences so charged within the definition of a scheduled offence---High Court observed that record showed that there was no allegation that either the Bank or any of its employees were a part of the scam who for instance illegally opened bogus accounts in favour of illegal beneficiaries---No banker had been sent up to stand trial for committing any illegality in respect of that case and the Bank officials appeared to have acted in a bona fide manner---No loss had been caused to the Bank and as such based on the particular facts and circumstances of that case, it could not see how the offences allegedly committed fell within the term in respect of or in connection with the business of a Bank---Offences were clearly related to the business of an insurance company and its employees who allegedly committed the illegality through which the Banks were an unwitting conduit performing there functions as they were obliged to do under the law and there own SOP's---Under said circumstances, the special Court under the Ordinance had no jurisdiction to hear and decide the such cases---Appeals were allowed and accused were acquitted by setting aside the convictions and sentences recorded by the Trial Court.

Sikandar Ali v. The State 1989 PCr.LJ 613; Mushtaq Hussan Shah v. The State 1986 Law Notes (Lahore) (91); Shafique Anwar Qureshi v. The State PLD 1985 Jour. 66; The State v. Ghulam Rabbani and others 1986 PCr.LJ 2096; A. Habib Ahmed v. M.K.G. Scott Christian and 5 others PLD 1992 SC 353; Karachi College Teachers Co-Operative Housing Society v. Judicial Magistrate XVI East Karachi and another 2011 YLR 1825; National Bank of Pakistan v. Nazir Ahmed alias Kashif Nadeem 1995 SCMR 669; Allied Bank Limited through Authroised Officer v. Sikandar Ali and 4 others PLD 2013 Sindh 374; Amjid Ali and another v. The State and another 2013 YLR 548; Allied Bank Limited v. Sikandar Ali and 5 others 2013 CLD 1339; Al Arfan Electronics Trading LLC v. The State and 7 others 2012 YLR 353; Nasir Ali Jatt v. The State 2011 YLR 255; Ch. Muhammad Asif v. The State 2004 PCr.LJ 464; Mushtaq Hussain Shah v. The State 1986 PCr.LJ 567 and Ghulam Mustafa v. Presiding Officer, Special Court (Offences Against Banks), Rawalpindi 2003 MLD 841 ref.

Shafique Anwar Quershi v. State PLD 1985 Jour. 66; Mustaq Hussain Shah v. The State 1986 PCr.LJ 567; Sikander Ali v. The State 1989 PCr.LJ 613 and A. Habib Ahmed v. M.K.G.Scott Christian PLD 1992 SC 353 rel.

Ms. Humaira Nadeem Rana for Appellants (in Criminal Appeal No. 44 of 2010).

Ijaz Ahmed along with Waqar Ahmed, Amici Curiae appointed by the Court (in Criminal Appeals Nos. 44, 64 to 68 of 2010).

Mukesh Kumar Khatri for Respondents (in Criminal Appeals Nos. 44, 64 to 68 of 2010).

Gul Faraz Khattak, Assistant Attorney General for the State (in Criminal Appeals Nos. 44, 64 to 68 of 2010).

Mrs. Rana Khan for Appellants (in Criminal Appeals Nos. 64 to 68 of 2010).

2022 C L D 918

[Sindh]

Before Syed Hasan Azhar Rizvi, J

Mian ASAD OMER MAGGO---Plaintiff

Versus

HEWLETT-PACKARD SINGAPORE (SALES) PTE LIMITED and 4 others---Defendants

Suit No. 12 of 2013, decided on 22nd December, 2021.

Civil Procedure Code (V of 1908)---

----O. I, R. 10(2)---Contract/partnership---Application filed by one of the defendants/a foreign Company to delete its name from array of the defendants on the ground that it had no privity of contract with the plaintiff; that the Company neither conducted its business nor had any operations (in Pakistan) within the jurisdiction of the Court; that plaintiff had no cause of action against the Company; that the plaintiff had never been induced by the Company to enter into contractual relationship with any of the defendants; that no document had been attached with the plaint by the plaintiff showing that the Company was a shareholder of the defendant or having any privity of contract with the plaintiff; that the Company was neither necessary nor proper party for effective disposal of the suit---Held, that it was stated in the written statement of the defendant/Company that the plaintiff was awarded certificate in November, 2009, for establishment of the brand stores of the defendant/Company in Pakistan; that plaintiff was nothing more than an authorized reseller of the Company who could seek and obtain discounts or commissions without the existence of a definitive contract; that such a certified reseller under valid contract could directly import from the Company, maintain a stock locally and sell the same; that despite the termination of the contract the plaintiff continued to retain signage, illegally holding himself out in the vein of a partner of the Company; that State Bank of Pakistan did not communicate/correspond with the Company; and that the Company was an entity outside the jurisdiction of the State Bank of Pakistan---Written statement stated that High Court could not exercise jurisdiction, as Cl. 25(g) of the contract expressly barred the same---Application was granted accordingly.

Mari Gas Company Ltd. v. Byco Petroleum Pakistan Ltd. PLD 2013 Sindh 314; Tajuddin v. Ferozuddin Ahmed 2010 YLR 256; Muslim Commercial Bank Ltd. v. Sajida Naqi Riaz 2019 CLC 1371; Nazar Gul v. Maymar Housing Service (Pvt.) Ltd. and 4 others 2019 MLD 212 and Razia Begum v. Iqbal Begum and 7 others PLD 1957 (W.P.) Lahore 1040 rel.

Furqan Ali for Plaintiff.

Rashid Mehar for Defendant No. 2(a).

2022 C L D 955

[Sindh]

Before Irfan Saadat Khan and Muhammad Faisal Kamal Alam, JJ

WEST WHARF WAREHOUSE COMPANY (PRIVATE) LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

C.P. No. D-5604 of 2018, decided on 4th November, 2021.

Companies Ordinance (XLVII of 1984)---

----S. 80 & Form XXIX---Petitioner company, a warehouse keeper---Change of name of company---Scope---Petitioner company was aggrieved of notice issued by Karachi Port Trust directing it to change its name---Validity---Official documents concluded that petitioner company was a family concern and there was no transfer of shares for consideration---Such was transmission of shares/devolution of shares by way of inheritance---When Board of Karachi Port Trust had already conveyed its approval for renew of lease then there was no justification for raising demand to change name of petitioner company---High Court set aside such demand of Karachi Port Trust as the same was illegal, unjustified and arbitrary---High Court directed Karachi Port Trust to process renewable lease of petitioner company---Constitutional petition was allowed accordingly.

Behzad Haider for Petitioner.

Khursheed Javed, Deputy Attorney General for Respondent No.1.

Muhammad Sarfraz Sulehry for Respondent No. 2.

2022 C L D 999

[Sindh]

Before Muhammad Shafi Siddiqui, J

In re: ALI HUSAIN RAJABALI LIMITED

J.C.M. No. 3 of 2020, decided on 28th January, 2022.

Companies Act (XIX of 2017)---

----S. 89---Reduction in share capital---Scope---Petitioner sought confirmation of the Court to reduction of paid up capital---Validity---In case of confirmation of resolution of reduced share capital the questions for consideration are, should the Court refuse its sanction to the reduction out of regard to the interest of those members of the public who may be induced to take shares in the company; is the reduction fair and equitable between different classes of shareholders; whether the reduction is shared by all; is it designed to work justly and equitably; whether it does not involve diminution of the liability in respect of unpaid capital or payment of any shareholder of any paid up capital; and there is evidence regarding loss of capital and non-representation of available assets---None of said impediments exist in the case of petitioner's company and consequently in view of proposed reduction in the share capital, as resolved by the company itself, apparently seems to be just, fair and reasonable and not likely to adversely affect the interests of shareholders who have themselves resolved to the approval of the scheme of reduction---Proposal of reduction of share capital is confirmed in terms of the requirements of Companies Act, 2017---Petition stands disposed of accordingly.

Sikandar Khan for Petitioner.

Saad-ur-Rasheed Abbasi, Law Officer for Securities and Exchange Commission of Pakistan on Court's Notice.

2022 C L D 1008

[Sindh]

Before Syed Hasan Azhar Rizvi, J

STATE BANK OF PAKISTAN---Applicant

Versus

Messrs PIONEER ALLIANCE PVT. LTD.---Respondent

J.C.M. No. 45 of 1992, decided on 9th December, 2021.

Banking Companies Ordinance (LVII of 1962)---

----Ss. 61 & 63(9)---Companies Ordinance (XLVII of 1984), S. 391---Winding up proceedings---Claim settlement of---Applicants objected to claim of Official Liquidator over property in question on the plea that they were bona fide purchasers of property in question from previous owner---Validity---If Official Liquidator had any interest in asset in question or its assets including the subject property, they could have filed an application to become a party in civil suit pending before civil Court---Official Liquidator, at relevant time did not deem it fit to become a party---Neither any application under S. 12(2), C.P.C. was filed in case the decree was allegedly obtained through fraud nor the same was challenged either prior to or even after it had attained finality---Report of Official Liquidator substantiated the averments of applicants that seller was in occupation of subject property as owner and no proceedings were pending against the property in question---Applicants/objectors were bona fide purchasers of subject property from its previous lawful owner, and the applicants purchased after due diligence and fulfillment of all codal formalities---All documents enclosed with application also fully supported claim of applicants/ objectors---Application was allowed, in circumstances.

Saadat Yar Khan and Ashraf Yar Khan for Applicant.

Dilawar Hussain, Official Liquidator.

2022 C L D 1017

[Sindh]

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

Mirza SHAHNAWAZ AGHA---Petitioner

Versus

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

Criminal Revision Applications Nos. 108, 109 and 110 of 2019, decided on 16th February, 2022.

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

----Ss. 30 & 37---Companies Ordinance (XLVII of 1984), Ss.270 & 281---Penal Code (XLV of 1860), Ss. 409, 420, 468, 471 & 477-A---Criminal Procedure Code (V of 1898), Ss. 265-K & 439---Criminal breach of trust, cheating, forgery, using forged document and inquiry into affairs of company---Acquittal, refusal of---Conclusion of trial---Accused was facing trial on the complaint filed by Securities and Exchange Commission of Pakistan---Validity---Held, it was after an investigation held in accordance with provisions of Companies Ordinance, 1984, that complaint was filed in Trial Court---In accordance with S. 270 of Companies Ordinance, 1984, if from an inspection report, it appeared to the Commission that any person, in relation to the company whose affairs had been investigated, was guilty of any offence for which he was criminally liable, the Commission could prosecute such person---In accordance with S. 281 of Companies Ordinance, 1984, any inquiry or investigation under S. 263 of Companies Ordinance, 1984 on application by members or report by Registrar and any consequential action taken was not to be affected by a petition of winding up submitted in Court---No ground existed entitling accused to acquittal under S. 265-K, Cr.P.C., allegation against him was that he had committed fraud, misappropriation and criminal breach of trust with the company in question in connection with purchase and re-purchase of a property, details of which allegations were contained in complaint filed by Securities and Exchange Commission of Pakistan---Allegations in complaint required evidence to be led before the same could be adjudicated upon---Held, further that it could not be said at the early stage that charge was groundless and there was no possibility of conviction---All prosecution witnesses had been examined in trial therefore, trial was to be concluded--- Revision was dismissed, in circumstances.

Kazi Shehryar Iqbal for Applicants.

Imran Ali Shamsi, Special Public Prosecutor, SECP and Syed Ebad-ur-Rehman for Respondent.

Muhammad Ahmed, Assistant Attorney General.

2022 C L D 1032

[Sindh]

Before Muhammad Shafi Siddiqui, J

NUTRICO MORINAGA (PVT.) LIMITED AND ANOTHER:

In the matter of J.C.M. No. 33 of 2021, decided on 15th February, 2022.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 285---Merger of companies---Scheme of arrangement---Approval of---Principle---Petitioner companies sought their merger with approval of scheme of arrangements filed by them---Validity---To question merger it was to be seen from perception that a wise group of businessmen had taken a decision considering all its pros and cons---While taking such decision there were chances of success and failure but then while questioning such decision bona fide was the real litmus test---Businessmen could take decision foreseeing future aspect---Court could only see that all legal formalities were fulfilled and that the scheme was neither unjust nor unfair or against national interest---Wisdom of decision of businessmen could not be challenged as by doing that Court would be overriding such wisdom which was their prerogative---Report of Chartered Accounts was very material who were engaged for calculating swap ratio in respect of envisaged scheme of arrangement---High Court declined to interfere in scheme of arrangement filed by petitioner companies---Petition was allowed accordingly.

Brooke Bond (Pakistan) Limited v. Aslam Bin Ibrahim 1997 CLC 1873 rel.

Mikael Azmat Rahim for Petitioners.

Saad-ur-Rasheed Abbasi, Law Officer, SECP.

2022 C L D 1042

[Sindh]

Before Muhammad Iqbal Kalhoro and Abdul Mobeen Lakho, JJ

ASKARI BANK LIMITED---Appellant

Versus

TARA CHAND---Respondent

Criminal Acquittal Appeal No. 797 of 2019, decided on 18th March, 2022.

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

----S.20(1)(a) & (b)---Criminal Procedure Code (V of 1898), S.265-K---Wilful default---Appreciation of evidence---Appeal against acquittal---Prosecution case was that respondent availed finance facilities but did not adjust their liabilities and committed default in fulfilling the financial and contractual obligations---Respondent was acquitted by Trial Court in exercise of S. 265-K, Cr.P.C.---Validity---Trial Court recorded acquittal of the respondent on two grounds, firstly, that the FIA Forensic Laboratory had opined that loan papers contained fake signatures of respondent and secondly that respondent was out of country at the relevant time---As per S. 510, Cr.P.C., in case of report of Chemical Examiner, Assistant Chemical Examiner, Serologist, Finger-print and Firearm Expert appointed by Government or of the Chief Chemist of Pakistan Security Printing Corporation Limited, if any report was issued by the said named officers in respect of various fields of sciences mentioned in it then their report could be produced in evidence without calling them and could be used as evidence in any inquiry or trial or other proceedings under Criminal Procedure Code---Handwriting science was a completely different field and a different science than the other mentioned categories of sciences--- As such, the opinion/report of the handwriting expert could not be relied upon without examining its author and without taking the same on record and exhibiting in order to provide an opportunity to the other side to cross-examine him---Record reflected that the Trial Court had acquitted the respondent while considering his travel history obtained from the FIA---However, it was observed that an attempt to disprove or at least to challenge the authenticity of document should have been provided to the other side---Plea of alibi could be substantiated through leading evidence which an accused shall, no doubt, enjoy but at his turn within meaning of S. 265-F of the Code---Law favoured the disposal of cases on merits---However, it was in the interest of justice that both the parties should be provided opportunity to prove their versions by producing evidence---High Court observed that duty of the court was not only to protect innocent, but also to punish the guilty---Main consideration to be kept in view would be whether the continuance of the proceedings before the Court would be futile exercise, wastage of time and abuse of process of court or not---If on the basis of facts admitted and present on record no offence could be made out, then it would amount to abuse of process of law to allow the prosecution to continue with the trial---Record reflected that the present case was based upon documentary evidence and the evidence was yet to be recorded against the accused/respondent---Admittedly there was no bar of limitation as to the trial or the stage of the proceedings for filing an application for acquittal of the accused, but propriety required that fair opportunity should be provided to the complainant Bank to prove its case by producing evidence---Circumstances established that the jurisdiction under S. 265-K, Cr.P.C. had not been exercised properly by the Trial Court---Thus, acquittal appeal was allowed by setting aside the impugned order and matter was remanded to the Trial Court, which shall proceed from the stage at which the case stood when the application of accused/respondent under S. 265-K, Cr.P.C. was decided.

Abid Nasim for Appellant.

Tariq Hussain for Respondent.

Irfan Ahmed Memon, D.A.G.

2022 C L D 1055

[Sindh]

Before Muhammad Shafi Siddiqui, J

MFG INSURANCE COMPANY LIMITED---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

J.C.M. No. 38 of 2021, decided on 15th February, 2022.

Companies Act (XIX of 2017)---

----S. 89---Reduction of Share Capital---Principle---Petitioner company sought reduction of share capital---Principle---Validity---Confirmation of resolution of reduced share capital questions for consideration were, should the Court refuse its sanction to the reduction out of regard to the interest of those members of public who could be induced to take shares in the company; was reduction fair and equitable between different classes of shareholders; whether reduction was shared by all; and was it designed to work justly and equitably and whether it did not involve diminution of liability in respect of unpaid capital or payment of any shareholder of any paid up capital; and there was evidence regarding loss of capital and non-representation of available assets---None of such impediments existed---Proposed reduction in share capital, as resolved by petitioner company itself, was just, fair and reasonable---Such reduction was not likely to adversely affect interests of shareholders who had themselves resolved to approval of scheme of reduction---High Court confirmed proposal for reduction of share capital in terms of the requirements---Petition was allowed accordingly.

Aman Aftab for Petitioner.

Nemo for Respondent.

2022 C L D 1063

[Sindh (Hyderabad Bench)]

Before Zulfiqar Ahmad Khan, J

Mst. KANWAL---Appellant

Versus

Dr. MUHAMMAD SUHAIL---Respondent

Ist Appeal No. 37 of 2003, decided on 25th April, 2022.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Suit for recovery of money on the basis of negotiable instrument---Promissory Note---Presumption---Respondent/plaintiff sought recovery of money on the basis of Promissory Note issued by appellant/ defendant---Suit was decreed in by Trial Court in favour of respondent/plaintiff---Plea raised by appellant/defendant was that it was duty of respondent/plaintiff to adduce evidence by bringing any marginal witness to prove Promissory Note in question---Validity---Provisions of S. 118 of Negotiable Instruments Act, 1881, were couched in negative language as it required that unless contrary was proved, presumption would be that negotiable instrument was made or drawn for consideration---Appellant/defendant did not come to court for herself, rather appointed her husband as attorney, who admitted execution of Promissory Note---No witness was produced by appellant/defendant, thus no evidence was led by her in regard to satisfy requirements of S. 118 of Negotiable Instruments Act, 1881---No need to bring any evidence on contract---Trial Court formulated appropriate issues and after placing reliance on evidence adduced, decided such issues very eloquently---Respondent/plaintiff was not duty bound to adduce evidence by bringing any marginal witness to prove that consideration had been paid---Onus fell on the party denying consideration---High Court declined to interfere in judgment and decree passed by Trial Court---Appeal was dismissed, in circumstances.

Mst. Sughran Begum and 11 others v. Haji Mir Qadir Bakhsh and 2 others PLD 1986 Quetta 232 and Muhammad Azizur Rehman v. Liaquat Ali 2007 CLD 1542 ref.

Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam 2014 SCMR 1562; Muhammad Ashiq and another v. Niaz Ahmed and another PLD 2004 Lah. 95 and K. M. Muneer v. Mirza Arshad Ahmed PLD 1964 (W.P) Karachi 172 rel.

Muhammad Sulleman Unar for Appellant.

D.M. Madhwani for Respondent.

Wali Muhammad Jamari, Assistant A.G.

2022 C L D 1478

[Sindh]

Before Aqeel Ahmed Abbasi and Mrs. Rashida Asad, JJ

BANKERS EQUITY LIMITED through Official Liquidator---Appellant

Versus

BANK AL-FALAH LIMITED and others---Respondents

Ist Appeal No. 49 of 2007, decided on 4th November, 2021.

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

----Ss. 2(c), 9 & 22---Civil Procedure Code (V of 1908), S. 12(2)---Suit for recovery of finance---Relationship of customer---Proof---Judgment and decree of Banking Court was assailed on the plea that appellant was not customer of plaintiff Bank---Validity---No relationship existed between appellant and respondent bank as of customer and financial institution under Financial Institutions (Recovery of Finances) Ordinance, 2001---Appellant did not execute any guarantee nor stood as a mortgager in respect of such finance facility---Banking Court passed judgment decree jointly and severally against appellant as well, which was contrary to the factual and legal position---Respondent Bank while extending short term finance facility to its customer, did not take due care to secure amount and its repayment by getting necessary legal documents including a guarantee and instead of recovering defaulting amount from its customer, roped appellant in suit while treating appellant as customer (guarantor) on the basis of some letters and correspondence between the parties---High Court set aside judgment and decree passed by Banking Court against appellant, as the same was wrongfully passed by treating appellant as a customer in terms of S. 2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed, in circumstances.

Asim Mansoor Khan for Appellant.

Ms. Heer Memon for Respondent No. 1.

2022 C L D 1499

[Sindh]

Before Aqeel Ahmed Abbasi and Mahmood A. Khan, JJ

MCB BANK LIMITED through Authorized Attorney---Appellant

Versus

IQBAL AHMED and 6 others---Respondents

Ist Appeal No. 22 of 2019, decided on 3rd March, 2022.

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

----Ss. 19 & 22---Execution of decree---Release of property from attachment---Decree holder bank was aggrieved of order passed by Banking Court releasing property in question from attachment---Validity---No mortgage could be created in respect of a property, the title whereof did not vest in mortgager---No person could transfer a right or title to another better than what he himself possessed---Either with the collusion of decree holder and judgment debtor or on account of gross negligence by bank officials who failed to observe legal procedure and due care while accepting subject property for purpose of mortgage, the Bank failed to appreciate that at that time subject property was not owned by mortgager as the same was already sold out to respondents through registered indenture of sub-lease---Even site inspection was not conducted by bank officials, so that possession and title of subject property could have been ascertained at the relevant time---Provisions of S. 19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001 were fully attracted---High Court declined to interfere in the matter as Banking Court was justified to pass order in question and to issue direction for release of subject property from attachment---Appeal was dismissed, in circumstances.

Syed Daanish Ghazi for Appellant.

Asad Kazmi for Respondents.

2022 C L D 1523

[Sindh]

Before Aqeel Ahmed Abbasi and Abdul Mobeen Lakho, JJ

SAEED AKHTAR and 2 others---Appellants

Versus

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

Ist Appeal No. 94 of 2018, decided on 22nd March, 2022.

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

----Ss. 2(c), 9, 19 & 22---Civil Procedure Code (V of 1908), S. 12(2)---Banking suit---Scope---Party not part of Banking suit---Appellant claimed to be owner of mortgaged property, who sought setting aside of attachment order passed by Banking Court after the suit was decreed in favour of bank---Banking Court declined to set aside judgment and decree passed in favour of bank---Validity---Judgment and decree and order for attachment of mortgaged property passed during execution proceedings as well as orders dismissing application of appellant could not be assailed by appellant in such proceedings---Scope of banking suit was limited to the extent of a dispute between customer and financial institution in respect of finance so advanced and its recovery in case of default---Appellants were strangers to suit proceedings who failed to establish their nexus with banking suit filed for recovery of amount by respondent Bank against its customer under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declined to interfere in the orders passed by Banking Court---Appeal was dismissed, in circumstances.

Ghulam Murtaza for Appellants.

Adil Khan Abbasi for Respondent No. 1.

Muhammad Masood Ali Khan, Abdul Hameed Khan and Khakhan Babar Mughal for Respondents Nos. 2 and 3.

Abdul Shakoor for Respondent No. 4.

2022 C L D 1

[Lahore]

Before Ayesha A. Malik and Shams Mehmood Mirza, JJ

NAVEED MASOOD MALIK---Appellant

Versus

BANK ALFALAH LIMITED bthrough Branch Manager and others---Respondents

R.F.A. No. 338 of 2015, heard on 6th October, 2021.

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

----S. 10(8)---Leave to defend the suit, grant of---Principle---Opinion formed by Banking Court under S. 10(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001, for grant of leave is dependent on the contents of plaint, application for leave to defend and reply thereto---Banking Court is bound to consider in totality the case set up by plaintiff and defence of defendant in making a determination that a substantial and genuine question of fact has been raised on the basis of available record requiring trial for its decision thereby denying a summary judgment in favour of plaintiff---Quality of defence must be of such a nature as to carry some plausible degree of conviction---Defence raised by defendant must be more than an arguable case.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Leave to appeal, refusal of---Defence version---Appellant/borrower was aggrieved of order passed by Trial Court dismissing application for grant of leave to defend the case---Plea raised by appellant/borrower was that his business partner was not arrayed as co-defendant---Validity---Appellant/borrower and his business partner availed finance facility from respondent/Bank for which property of appellant/borrower was mortgaged as security---Any person who made payment of markup under finance facility and at the same time denied having no connection with it was not setting forth a genuine defence---High Court refused to accept version of facts made by appellant/borrower when record had contradicted the same---Appellant/borrower did not raise any substantial, genuine defence on facts necessitating recording of evidence as involvement of appellant/borrower in transaction of finance was substantiated by payment made by him for adjustment of markup--- No genuine dispute of facts if record did not support a finding in favour of appellant/borrower---Defence raised by appellant/borrower was neither genuine nor bona fide---High Court declined to interfere in the order passed by Trial Court---Appeal was dismissed, in circumstances.

Messrs Visiontex, Partnership Firm through Partner and others v. Habib Bank Limited 2016 CLD 62; Milkhiram (India) Pvt. Ltd. v. Chamanlal Brothers AIR 1965 SC 1698 and Nityananda Ghose v. Rajpur Chhaya Bani Cinema Limited AIR 1953 Cal 208 ref.

Barrister Khurram Raza for Appellant.

Muhammad Riaz and Rana Mudassar for Respondent No.1 Bank for Respondents.

2022 C L D 84

[Lahore]

Before Abid Aziz Sheikh and Muhammad Sajid Mehmood Sethi, JJ

MUHAMMAD SALEEM and 3 others---Appellants

Versus

PAK BRUNEI INVESTMENT COMPANY LTD. through Chief Manager/President---Respondent

F.A.O. No. 40322 of 2020, heard on 26th October, 2021.

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

----Ss. 9, 10, 7 & 22---Court Fees Act (VII of 1870), S. 7---Suits Valuation Act (VII of 1887), S. 8---Civil Procedure Code (V of 1908), O. VII, R. 11---Procedure of Banking Court---Determination of pecuniary jurisdiction---Rejection of plaint by Banking Court --- Application for leave to defend---Scope---Plaintiff impugned order of Banking Court whereby plaintiff's suit against Financial Institution was rejected on ground of lack of pecuniary jurisdiction---Validity---Pecuniary jurisdiction had to be determined with reference to valuation given in plaint, and if Banking Court disagreed with valuation assessed by plaintiff, it should fix value of suit under provisions of Suits Valuation Act, 1887 after holding inquiry and collecting material as deemed expedient by Banking Court, and thereafter matter could have been referred to court of competent jurisdiction---After examining the plaint, once Banking Court had proceeded to issue summons to defendant, and application for leave to defend had been filed, then Banking Court could not take any further steps under C.P.C. without first deciding application for leave to defend under S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Impugned order was made without first deciding application for leave to defend, and therefore Banking Court had gone outside scope of S. 10(8) of the Ordinance---Impugned order was set aside, and Banking Court was directed to decide application for leave to defend and only thereafter in case leave to defend was granted, it could frame issue with regard to pecuniary jurisdiction---Appeal was allowed, accordingly.

Messrs SUI Northern Gas Pipelines Ltd. through Deputy Chief (Legal) v. Muslim Commercial Bank Ltd., AVARI Hotel Branch, Lahore through Manager and another 2006 CLD 816; Bank of Punjab through Attorney v. Manzoor Qadir and another 2021 CLD 1037; Sherin and 4 others v. Fazal Muhammad and 4 others 1995 SCMR 584; Rashid Ahmad v. Haq Nawaz and others 1982 CLC 9; Muhammad Riaz Aslam v. Muhammad Akhtar and 2 others 1993 CLC 1391; Shafi-ur-Rehman and 2 others v. Fateh Muhammad PLD 2002 Kar. 511; Messrs M.M.K. Rice Mills v. Grays Leasing and others 2006 CLD 1147; Ghulam Hussain v. Sardar Fateh Khan 2009 YLR 1797; Sardar Zulfiqar Ali Khan and 8 others v. Malik Sajid Bashir 2013 YLR 942; Ms. Namoos Zaheer v. Azfar Hussain and another 2016 CLC 1425; Farzand Ali and others v. Bashir Ahmad 2016 YLR 1233; Al-Raheem Rice Mills v. Bank Alfalah Limited and others 2018 CLD 1351 and Muhammad Saee Khan v. Judge Banking Court and 3 others 2021 CLD 536 ref.

Zahid Zaman Khan and others v. Kha Afshar and others PLD 2016 SC 409; Bahadur Khan and 6 others v. Muhammad Anwar and others 2017 YLR 179; Dilawar Khan and 3 others v. Muhammad Zahir Ali and another 2019 CLC 79; Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245; Sheikh Muhammad Kashif v. Askari Leasing Limited through Manager/Chief Executive of Branch/Recovery Officer 2004 CLD 1645; National Bank of Pakistan through Zonal Head and Constituted Attorney v. Messrs Suraj Ghee Industries Limited through Executive Director 2005 CLD 1201; Muhammad Azwar Siddiqui v. Chief Executive Union Leasing Ltd. and 21 others 2006 CLD 946; PASSCO v. Omer Bilal Traders (Pvt.) Limited 2007 CLD 492; Amanullah Khan v. Habib Bank Limited 2014 CLD 1181; Anees-Ur-Rehman v. Faysal Bank Limited through Manager 2019 CLD 1031; BRR GUARDIAN MODARABA through Authorized Representative/Manager v. ALTAS Insurance Company Limited 2020 CLD 1379 and Bank of Punjab through Attorney v. Manzoor Qadir and another 2021 CLD 1037 rel.

Muhammad Imran Malik and Kamran Bashir Mughal for Appellants.

Asad Javed, Sikandar Abbas and Barrister Ameer Abbas Ali Khan, A.A.G. for Respondent.

Research by:

Muhammad Imran Sheikh, Additional District Judge/Senior Research Officer and Ahmad Zia Ch., Civil Judge / Research Officer, LHCRC.

2022 C L D 114

[Lahore]

Before Jawad Hassan, J

AZGARD NINE LIMITED and others---Petitioners

Versus

REGISTRAR OF COMPANIES and others---Respondents

Writ Petition No. 66045 of 2020, decided on 12th October, 2021.

Constitution of Pakistan---

----Art. 199---Constitutional petition---Affixation of stamp on certified copies---Scope---Petitioners sought declaration to the effect that the act of Registrar of Companies in fixing a note on the certified copies of their corporate record to the effect that the Securities and Exchange Commission of Pakistan (SECP) did not take the responsibility of its genuineness as an investigation/inquiry was pending finalization by the Commission/NAB/FIA, etc. was illegal, without lawful authority and of no legal effect---Contention of petitioners was that the note on the documents of the petitioner would create a negative impact regarding its responsibilities and credentials amongst the business community---Validity---High Court observed that the matter was concluded by the NAB against the petitioner and the issue was no more alive, therefore, with the concurrence of counsel for the parties, by issuing the writ of mandamus under Art. 199(1)(a)(i) of the Constitution, the respondent was directed to do what he was required by law to do and not to fix stamped note on certified copies of corporate record of the petitioners obtained from the Office only---Petition was disposed of accordingly.

Dr. Kumail Abbas Rizvi v. University of Punjab and others 2017 PLC (C.S.) 569 = PLJ 2017 Lahore 250 ref.

Al-Arabia Sugar Mills Ltd. v. Securities and Exchange Commission of Pakistan and others 2020 CLD 748 and PGP Consortium Ltd. v. Securities and Exchange Commission of Pakistan and others 2020 CLD 541 rel.

Tariq Kamal Qazi, Senior Advocate Supreme Court assisted by Farah Malik for Petitioners.

Ms. Sadia Malik, Assistant Attorney General for Pakistan.

Jam Khalid Farid, Assistant Advocate-General.

Ruman Bilal and Asif Muzaffar Sheikh for the SECP.

2022 C L D 123

[Lahore]

Before Jawad Hassan and Sultan Tanvir Ahmad, JJ

FAYSAL BANK LIMITED---Appellant

Versus

SAJJAD ASLAM and others---Respondents

E.F.A. No. 242230 of 2018, decided on 21st June, 2021.

Civil Procedure Code (V of 1908)---

----O. XXI, Rr. 66 & 90---Execution of decree---Auction proceedings---Sale, setting aside of---Substantial injury to judgment debtor---Proof---Auction purchaser was aggrieved of order passed by Executing Court declining to confirm sale in his favour---Validity---If any occurred irregularity was noticed by Executing Court, it must have discussed its impact, effect or substantial injury caused by judgment debtor---In order to succeed it was mandatory for judgment debtor to satisfy the Court on merits that the sale should be set aside on the ground of material irregularity, or fraud in publishing or conducting it---Judgment debtor was to satisfy the Court that he had sustained substantial injury by reason thereof---Mere an irregularity, even if material should not suffice unless it could be shown that material loss had been caused---No such irregularity was committed by Court Auctioneer which had caused substantial injury to judgment debtor---High Court set aside the order passed by Executing Court and confirmed sale in favour of auction purchaser--- Appeal was allowed, in circumstances.

Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others PLD 2016 SC 229 rel.

Haseeb Raza for Appellant.

Ghulam Hussain Chaudhary for Appellant in E.F.A. No.246935 of 2018 and on behalf of Respondent No.2 in the main case (E.F.A. No.242230 of 2018).

2022 C L D 137

[Lahore]

Before Ch. Muhammad Iqbal, J

SAJJAD AHMAD SALEEM and others---Petitioners

Versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN and others---Respondents

C.R. No. 46895 of 2021, heard on 23rd August, 2021.

Industrial Development Bank of Pakistan Ordinance (XXXI of 1961)---

----S. 39---Execution of decree---Sale of mortgaged property---Frustrating execution proceedings---Petitioners claimed to be bona fide purchasers of suit property and sought permission to deposit decretal amount in installments--- Executing Court dismissed the application---Validity---Petitioners were strangers to the lis and had no locus standi to file application in question for making deposit of decretal amount in installments---Such proceedings were tainted with mala fide to frustrate execution proceedings pending since 4-4-1991---Petitioners failed to point out any illegality or material irregularity in the order passed by Executing Court---Revision was dismissed, in circumstances.

Industrial Development Bank of Pakistan through Deputy Chief Manager v. Saadi Asmatullah and others 1999 SCMR 2874; Pakistan International Airlines Corporation v. Aziz ur Rehman Chaudhary and another 2016 SCMR 14; Mst. Zaitun Begum and others v. Agha Qasim Ali and others 1990 SCMR 1613; Abdul Hameed through L.Rs. and others v. Shamsuddin and others PLD 2008 SC 140; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2006 YLR 2938; Muhammad Yousaf and 2 others v. Muhammad Alam Usmani and others 2007 YLR 2735; Muhammad Yousaf v. Irfan and 4 others 2009 YLR 1688; Riaz Hussain and 2 others v. Mst. Waso and others 2010 YLR 2846; Moulvi Muhammad Ishaq and another v. The P.O.F 1989 SCMR 1052; Pir Khan through this Legal Heirs v. Military Estate Officer, Abbottabad and others PLD 1987 SC 485; Tehsil Municipal Administration and another v. Chaudhry and Co. through Farhat Mehmood Bhalli and others 2005 SCMR 1361; Messrs Irisma International, Karachi and 3 others v. United Bank Limited, Karachi and another 2007 SCMR 1271; Muhammad Hanif Abbasi v. Imran Khan Niazi and others PLD 2018 SC 189; Muhammad Chiragh-ud-Din Bhatti v. The Province of West Pakistan (Now Province of Punjab) through Collector, Bahawalpur and 2 others 1971 SCMR 447; Muhammad Akhtar and others v. Abdul Hadi and others 1981 SCMR 878 and SME Bank Limited through President Islamabad and others v. Izhar ul Haq 2019 SCMR 939 ref.

Muhammad Yaseen Chughtai for Petitioners.

Faisal Yaqoob Khan for Respondent No. 1.

2022 C L D 149

[Lahore]

Before Jawad Hassan and Muzamil Akhtar Shabir, JJ

HOUSE BUILDING FINANCE COMPANY LIMITED through Duly Authorized Officer/A.V.P. (Legal)---Appellant

Versus

Khawaja JAVAID IQBAL---Respondent

R.F.A. No. 124683 of 2017 and Cross Objection No.152237 of 2018, decided on 7th October, 2021.

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

----Ss. 9, 7 & 22 ---Procedure of Banking Court---Suit for recovery---House Finance---Default by customer---Scope---Defendant/customer impugned order of Banking Court whereby suit filed by plaintiff Bank was decreed---Contention of defendant, inter alia, was that the Banking Court did not properly examine the record and had not scrutinized the statement of account filed by plaintiff Bank while passing impugned order---Validity---Perusal of record revealed that Banking Court had rightly computed outstanding amount owed by defendant and no discrepancy was pointed out by defendant in statement of account filed by plaintiff bank, therefore Banking Court was justified on relying upon the same for determination of decretal amount---No illegality existed in impugned order---Appeal was dismissed, in circumstances.

Khawaja Muhammad Ajmal for Appellant.

2022 C L D 164

[Lahore]

Before Shams Mehmood Mirza, J

S. ZAFAR SHAH AND COMPANY through Partner---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman---Respondent

Commercial Appeal No. 3 of 2013, decided on 8th April, 2021.

Companies Ordinance (XLVII of 1984)---

----Ss. 255 & 260---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 34---Companies Act (XIX of 2017) S. 249---Audit of companies---Duties of auditor---Penalty for non-compliance with provisions by auditors---Violation of International Standard on Auditing ("ISA")---Scope---Appellant accounting firm impugned order of Securities and Exchange Commission of Pakistan (SECP) whereby show-cause notice was issued to it and subsequently penalty was imposed on it by holding that appellant committed violations of S. 255 of Companies Ordinance, 1984 and ISA, while conducting audit of a company---Contention of appellant, inter alia, was that show-cause notice was not issued with lawful authority as SECP was not regulator for the appellant and could not hold it to account for auditing standards and alleged ISA violations---Validity---Auditors report must violate provisions of the Companies Ordinance, 1984 for SECP to exercise jurisdiction over it and impose penalty---Section 234 obligated auditors to follow International Accounting Standards however, no provision existed in Companies Ordinance, 1984 dealing with auditing standards, and a provision dealing with such auditing standards was only inserted in Companies Act, 2017---Appellant was therefore justified in asserting that SECP had no jurisdiction/authority to impose penalty on account of its alleged failure to observe provisions of ISA, as at relevant time, Companies Ordinance, 1984 did not contain any provision for enforcing such auditing standards---Proceedings against appellant were therefore nullity in eye of law and were set aside---Appeal was allowed, accordingly.

Qadir Bakhsh and Rashid Mehmood for Appellant.

2022 C L D 176

[Lahore]

Before Ali Baqar Najafi, J

Messrs SHANN'S COSMETICS AND CHEMICALS through Managing Partner---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

F.A.O. No. 95 of 2008, decided on 7th May, 2021.

Trade Marks Ordinance (XIX of 2001)---

----Ss .8(a), 10(1)(2), 21 & 114---Registration of trade mark---Deception and confusion---Principle---Objection to registration of trade mark--- Appellant claimed to be owner of registered trade mark "Soft Touch" and filed his objection to registration of trade mark "Sweet Touch" by respondent---Authorities dismissed the objection and application for registration of trade mark filed by respondent was allowed---Validity---Where two marks were not identical, the crucial point requiring consideration was that it should so nearly resemble that it would likely to deceive or cause confusion in course of trade---Unwary or incautious or careless or unguarded purchaser was likely to be misled or deceived into purchasing goods of person keeping in view the vast difference in literary ratio and condition of like in Pakistan as compared to developed countries---Appellant had been using trade mark "Soft Touch" since long which was not only distinctive but was continuously in use and respondent realizing such fact had copied it to "Sweet Touch" in order to deceive customers---High Court set aside the order passed by authorities---Appeal was allowed, in circumstances.

Messrs Burney's Industrial and Commercial Co. Ltd. v. Messrs Rehman Match Works PLD 1983 Kar. 357 and U.B. Chemical Industries Company Limited v. Ahmad Nawaz and others 2002 CLD 604 ref.

Messrs Hilal Confectionary (Pvt.) Ltd. v. Messrs Naveed Enterprises and another 2018 CLD 1; Messrs Mehran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mill (Pvt.) Limited and others 2001 SCMR 967; Muhammad Ashraf alias Makkhan v. Muhammad Akram 2016 CLD 437; Messrs Hero Motors Ltd. through Authorized Signatory v. Babar Auto Trading and Manufacturing Company through Proprietor 2010 CLD 22 and General Biscuit and another v. English Biscuit Manufacturers (Private) Limited through Chief Executive/Director/Manager 2004 CLD 680 rel.

Usman Nassir Awan and Babar Afzaal for Appellant.

2022 C L D 190

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

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

Versus

Mst. SAWARNA BIBI---Respondent

Insurance Appeal/R.F.A. No. 63517 of 2020, heard on 14th September, 2021.

Insurance Ordinance (XXXIX of 2000)---

----S. 118---Application on behalf of deceased husband for payment of group claim amounting Rs. 12,50,000/- along with liquated damages since the date of her husband's death till realisation---During pendency of case before Insurance Tribunal appellant/company made payment of the claimed amount---Tribunal found that appellant company was liable to payment of liquidated damages on the said principal amount and directed payment thereof---Held, that no specific analysis had been made of evidence in respect of issue framed regarding liquidated damages, on the basis of which the claim of damages was being allowed---Very act of payment of principal amount by the appellant/company was taken as withdrawal of the stance of company in the written reply and automatically entitled the respondent to liquidated damages on the principal amount---No specific issue was framed on the question of admissibility of liquidated damages---Adverse inference drawn by the Tribunal a priori on the predicated of mere payment of the insurance amount during pendency of case did not shine as an instance of safe administration of justice---Appeal was allowed accordingly.

Sheikh Shahzad Ahmad for Appellants.

Liaqat Ali Butt for Respondent.

2022 C L D 229

[Lahore]

Before Ayesha A. Malik and Shams Mehmood Mirza, JJ

HABIB BANK LIMITED---Appellant

Versus

COMMON TRADERS (PVT.) LIMITED and others---Respondents

E.F.A. No. 1163 of 2014, decided on 6th October, 2021.

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

----Ss. 22 & 19---Civil Procedure Code (V of 1908), O. XLI, R. 20---Limitation Act (IX of 1908), S. 22---Procedure of Banking Court---Suit for recovery---Decree of Banking Court---Adjudication of appeal against decree of Banking Court---Adding of necessary party to appellate proceedings under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Appellant Bank sought to add name of respondent to appeal against decree of Banking Court, and said respondent was defendant in suit filed by appellant Bank---Per S. 22 of Limitation Act, 1908, limitation started to run against newly added respondent on date he was so impleaded---Appeal, in the present case, was filed in year 2014 and application under O. XLI, R. 30, C.P.C. to add respondent, was filed in the year 2020, after a delay of six years, when appeal against said respondent had become barred by limitation---Said respondent was necessary party as impugned order of Banking Court was passed in his favour with direction to appellant Bank to release said respondent's personal guarantee and property---In absence of said respondent, impugned decree of Banking Court could not be set aside as he was beneficiary of said order---Application under O. XLI, R. 20, C.P.C. and main appeal were dismissed, in circumstances.

Mst. Murad Begum and others v. Muhammad Rafiq and others PLD 1974 SC 323; Mst. Baqbool Begum and others v. Gullan and others PLD 1982 SC 46 and Mst. Sardar Begum v. Muhammad Anwar Shah and others 1993 SCMR 360 distinguished.

Shoaib Ahmed Faridi v. United Bank Limited 2007 CLD 835; Mst. Murad Begum and others v. Muhammad Rafiq and others PLD 1974 SC 322 and Mst. Maqbool Begum and others v. Gullan and others PLD 1982 SC 46 rel.

Ashar Elahi for Appellant.

2022 C L D 251

[Lahore]

Before Abid Aziz Sheikh and Muhammad Sajid Mehmood Sethi, JJ

SME BANK LIMITED through Branch Manager---Appellant

Versus

Messrs PUNJAB STORE through Proprietor and another---Respondents

R.F.A. No. 40272 of 2021, decided on 29th September, 2021.

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

----Ss. 3 & 9---Suit for recovery---Running Finance Facility with multiple renewal/enhancement was availed by respondents---Banking Court held the suit infructuous and disentitled appellant/Bank---Validity---Record showed default on the part of respondents in repayment of obligations within stipulated time whereupon Banking Court was obliged to pass decree to that effect and grant cost of funds as per law---Default in discharge of such obligation not only incurred the cost of funds under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but was also actionable under S. 9 of the Ordinance---Appeal was allowed and appellant's suit was decreed to the extent of cost of funds from the date of default till the date of realization to be determined/calculated by Banking Court as per law.

Habib Bank AG Zurich through Manager v. Mustafa Shamsuddin Ghatilla and 2 others 2003 CLD 658 distinguished.

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

----S. 3---Banking court, power/duty of---Section 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was not procedural in nature as the same imposed pecuniary burden on defaulting customer and entailed substantive obligation---Banking Court had been empowered to award cost of funds as compensation to financial institution for finance blocked/stuck up due to breach in the fulfillment of obligation by customer, after determining the date of default.

Habib Bank Limited through Authorized Attorneys v. Pak Poly Products (Pvt.) Ltd. and 3 others 2013 CLD 1661; Shamil Bank of Bahrain E.C. v. MianAyaz Anwar and 6 others 2015 CLD 893; Ghulam Jaffar Phulpoto v. Messrs Allied Bank Ltd. and another 2015 CLD 1416; Bank Alfalah Ltd. v. Syed Zulfiqar Ali Rizvi and 3 others 2016 CLD 618; Pak Libya Holding Company (Pvt.) Ltd. v. Maxco (Pvt.) Ltd. and 2 others 2016 CLD 1147; Bank of Punjab through Attorney v. Dewan Salman Fiber Ltd. 2017 CLD 451; Messrs Habib Metropolitan Bank Ltd. v. Messrs Faizan Ali and Company (Pvt.) Ltd. 2017 CLD 1583; Messrs Divine Developers (Pvt.) Ltd. and others v. Bank of Punjab 2019 CLD 489; Messrs CIE Computers through Proprietor and 2 others v. NIB Bank Ltd. through Manager 2019 CLD 760 = 2020 PCTLR 1278; National Bank of Pakistan through Branch Manager v. Muhammad Raies Ahmad and others 2020 CLD 784; Muhammad Saleem Shaikh v. Messrs Kasb Bank Ltd. 2020 CLD 981 and Orix Leasing Pakistan Ltd. v. Ms. Muhammad Noor Dairies and 3 others 2021 CLD 1027 rel.

(c) Interpretation of statutes---

----Mandatory provisions--- When a statute would create rights/ obligation and prescribed the mode of its enjoyment of enforcement, such provision was considered mandatory and that the Legislature intended compliance of such provision to be essential to the validity of the act/proceedings.

The Construction of statutes by Earl T. Crawford (Chapter XXIV) and Mandatory and Directory or Permissive Statutes, 2014 ref.

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

----S. 3--- Mandatory nature--- Interpretation of statutes--- Strict adherence---Scope---Section 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001 being mandatory in nature, was required to be strictly adhered to/followed/enforced without interpreting/construing the same in any manner liberally.

Muhammad Yousaf Chaudhary for Appellant-Bank.

Ghulam Hussain Chaudhary for Respondent No.2.

Barrister Ameer Abbas Ali Khan, Assistant Advocate General on Court's call.

Ahmad Zia Ch., Civil Judge/Research Officer, LHCRC and Muhammad Imran Sh., Additional District Judge/Senior Research Officer, LHCRC for Research.

2022 C L D 261

[Lahore (Multan Bench)]

Before Sohail Nasir and Ahmad Nadeem Arshad, JJ

MCB BANK LIMITED---Appellant

Versus

Messrs MUSHTAQ AND COMPANY and 2 others---Respondents

Execution First Appeal No. 1 of 2020, decided on 27th October, 2021.

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

----Ss. 19, 9 & 22---Civil Procedure Code (V of 1908), S. 48---Limitation Act (IX of 1908), S. 3 & Art. 181---Procedure of Banking Court---Suit for recovery---Decree of Banking Court---Execution of decree with or without intervention of Banking Court---Nature of execution proceedings in Banking Cases---Applicability of limitation on execution proceedings under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Appellant decree-holder Bank impugned order of Banking Court whereby its application for revival of execution proceedings was dismissed on ground that same was barred by limitation---Validity---Under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was clear that decree-holder was empowered to adopt any means for realization of decree, with or without intervention of court and it was not possible that if decree-holder sought to satisfy decree without intervention of court, then doors were permanently closed for it adopt satisfaction of decree through intervention of court if the decree-holder was unable to materialize satisfaction of decree without intervention of court---Appellant decree-holder Bank had filed application for revival of execution proceedings which was within limitation prescribed by Art. 181 of Schedule to Limitation Act, 1908---Under Financial Institutions (Recovery of Finances) Ordinance, 2001, there existed no requirement for a decree-holder to file separate execution petition as it was duty of Banking Court itself to convert a suit into execution proceedings after decree---Application filed by appellant in present case, at most could be pursued to trigger machinery of court and start execution proceedings for realization of decree and thus such application could not be hit by law of limitation or S. 48 of C.P.C.---In the present case, decree remained unsatisfied and mortgaged property as a result could also not be redeemed, therefore impugned order left both parties remediless which could not be allowed---Impugned order was set aside, and execution proceedings were revived before Banking Court--- Appeal was allowed, accordingly.

Mughees Aslam Malik for Appellant.

Ali Raza Alvi for Respondents Nos. 1 and 2.

Ch. Hassan Mehmood for Respondent No. 3.

2022 C L D 279

[Lahore]

Before Shahid Waheed and Ch. Muhammad Iqbal, JJ

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

Versus

Mst. SHAMA FATIMA---Respondent

Insurance Appeal No. 50534 of 2020, decided on 2nd November, 2021.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Life Insurance---Accidental death indemnity and death benefit, claim of---Payment of liquidated damages on late settlement of claims---Scope---Appellant Insurance Corporation impugned order of Insurance Tribunal whereby application of claimant under S. 118 of the Insurance Ordinance, 2000 was allowed and she was held entitled to receive insurance claim along with liquidated damages on account of accidental death of her husband/deceased---Contention of Insurance Corporation, inter alia, was that claimant had not provided FIR, post-mortem report and other documents to prove that the insured deceased had died in a road accident, therefore impugned order of Insurance Tribunal ought to be set aside---Validity---Contention of Insurance Corporation was not tenable as sole witness for the Insurance Corporation stated that he had investigated death of the insured and found it to be due to road accident---Appellant Insurance Corporation had not made the case that the said witness was in league with claimant or that he made statements against the facts, so statement of said witness excluded necessity of the documents required by the appellant Insurance Corporation and was therefore sufficient to conclude that the insured had met an accidental death---Claimant was therefore entitled to receive accidental death indemnity and death benefit---No illegality existed in impugned order---Appeal was dismissed, in circumstances.

Sheikh Shahzad Ahmad Pasha for Appellants.

Liaqat Ali Butt for Respondent.

2022 C L D 285

[Lahore]

Before Shahid Karim, J

Messrs HIRA TEXTILE MILLS LTD. through Authorized Representative---Petitioner

Versus

BANK AL-FALAH LTD. through President/ Branch Manager and others---Respondents

Writ Petition No. 47655 of 2021, decided on 15th September, 2021.

Companies Act (XIX of 2017)---

----Ss. 256 & 257---Affairs of company, investigation of---Filing of complaint---Locus standi---Petitioner company assailed show cause notice issued by Securities and Exchange Commission of Pakistan to appoint inspectors to investigate its affairs---Validity---If at all Securities and Exchange Commission of Pakistan (Commission) was to investigate into the affairs of a company on an application, it must be an application made by one of the persons or entities mentioned in S. 256 of Companies Act, 2017 and none else---Respondent Banks were not entitled to make an application under S. 256 of Companies Act, 2017---Cognizance of matter relating to investigation could not be taken by a circuitous route, that is, by firstly receiving a complaint and thereafter (upon finding it to be outside the ambit of S. 256 of Companies Act, 2017) invoking its powers under S. 257 of Companies Act, 2017, whimsically and unreasonably, to serve a notice on petitioner company---Power to be exercised by the Commission under S. 257 of Companies Act, 2017 had to be preceded by formation of an opinion and thereafter a show cause notice giving the company an opportunity of hearing could be issued---No formation of opinion by the Commission against petitioner company which was conspicuous by its absence---High Court set aside the show cause notice as the Commission acted mechanically on a complaint filed by creditors of the company which was reflexively treated and did not apply its mind while forming an opinion--- Constitutional petition was set aside, in circumstances.

Muhammad Imran Malik, Akif Majeed, Hasan Ismail and Sardar Munir Hassan Dogar for Petitioner.

Ahmad Raza for Respondent No. 2.

Ruman Bilal for SECP.

2022 C L D 297

[Lahore]

Before Abid Aziz Sheikh and Muhammad Sajid Mehmood Sethi, JJ

INDUSTRIAL DEVELOPMENT BANK LIMITED (FORMERLY INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN) through Authorized Officer/Attorney---Appellant

Versus

Ch. NAZAR MUHAMMAD through Legal Heirs and others---Respondents

R.F.A. No. 98 of 2015, decided on 9th December, 2021.

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

----Ss. 9 & 22--- Suit for recovery of finance--- Amendment of pleadings---Enlargement of claim---Appellant/Bank assailed judgment and decree passed in its favour seeking enhancement of decretal amount---Validity---During pendency of suit appellant/Bank filed application for amendment in plaint, which was dismissed by Single Judge of High Court by holding that since principal debtor-company had already been wound up by the order of High Court, therefore, appellant/Bank could not be allowed to enlarge its claim against more respondents---Parties could not be permitted to go beyond what they had set up in their pleadings---During judicial proceedings neither any party could be allowed to adduce evidence in support of a contention not pleaded by it nor could the decision of case rest on such evidence---It was discretion of Court to permit or refuse amendment in pleadings---Court was not bound to allow amendment in all cases---Division Bench of High Court declined to interfere in judgment and decree passed by Single Judge of High Court---Appeal was dismissed, in circumstances.

Abdul Haque and others v. Shaukat Ali and 2 others 2003 SCMR 74; Muhammad Wali Khan and another v. Gul Sarwar Khan and another PLD 2010 SC 965; Abrar Ahmed and another v. Irshad Ahmed PLD 2014 SC 331; Combined Investment (Pvt.) Ltd. v. Wali Bhai and others PLD 2016 SC 730; Muhammad Yaqoob v. Mst. Sardaran Bibi and others PLD 2020 SC 338; Shumail Waheed v. Rabia Khan 2021 MLD 252; Harihar Prasad Singh v. Balmiki Prasad Singh AIR 1975 SC 733; Maqboolunnisa v. Mohd. Saleha Quaraishi [1998 (9) SCC 585; Abdur Rashid alias Muhammad Rashid v. Muhammad Hanif and 2 others 1994 SCMR 2035; Bootay Khan and 12 others v. Allah Rakha and 43 others 2000 SCMR 1631; Messrs Trans Oceanic Steamship, Co. Ltd. and another v. Messrs Tayoob Moosa & Co. PLD 1959 (W. P.) Karachi 399; Muhammad Essa v. Mst. Haseena Begum Through Her 7 Legal Heirs 1987 CLC 1723; Munawar Mehmood and another v. Nadeem Siddiqui and others 2011 CLC 130; Messrs Maroof Knitwear (Pvt.) Limited through Chief Executive and 8 others v. Allied Bank of Pakistan Limited 2004 SCMR 111; Abaid Ullah Malik v. Additional District Judge, Mianwali and others PLD 2013 SC 239; Abdul Rasheed through L.Rs. and 7 others v. Muhammad Akhtar and another 2018 YLR 2482; Anees-Ur-Rehman v. Faysal Bank Limited through Manager 2019 CLD 1031 and Faisalabad Electric Supply Company Limited v. Munir Ahmad Ranjha and others 2020 CLC 68 ref.

Sardar Mashkoor Ahmad and M. Javed Aslam for Appellant.

Afzaal Hussain Hashmi for Respondent No. 8.

Respondent No. 4 in person.

Ch. Suhail Khurshid for Respondent No. 14.

Research by:

Muhammad Imran Sheikh, Additional District Judge/Senior Research Officer and Ahmad Zia Ch., Civil Judge/Research Officer, LHCRC.

2022 C L D 309

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

POSTAL LIFE INSURANCE (PLI) and others---Appellants

Versus

MUHAMMAD ISHAQUE BUTT---Respondent

Insurance Appeal No. 210412 of 2018, decided on 26th October, 2021.

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

----Ss. 118 & 124--- Life insurance--- Repudiation of claims---Concealment of facts by insured---Scope---Appellant Insurance Corporation impugned order of Insurance Tribunal whereby claim of claimant was accepted by Insurance Tribunal and he was held entitled to benefit of the life insurance policy of the deceased---Contention of appellant Insurance Corporation, inter alia, was that the insured / deceased had committed concealment of facts and therefore claim could not be paid, which fact was ignored in impugned order---Validity---Repudiation of claim of claimant by appellant Insurance Corporation required a much more rigorous standard of proof to dislodge such claim, than was applied by insurance corporation in the present case---No default in payment of premiums by deceased and inquiry conducted by appellant Insurance Corporation to repudiate claim was based on mere assumptions without any credible evidence---Insurance Tribunal had therefore rightly appraised the evidence and documents, and concluded that basis on which falsification of information was being claimed was not sufficient to negate claim---No illegality therefore existed in impugned order---Appeal was dismissed, in circumstances.

Postal Life Insurance (PL1), Lahore v. Muhammad Anwar and others Civil Appeal No. 1287-L of 2017 rel.

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

----S. 72---Life insurance---Payment of claims---Nomination by policy holder---Nature of nomination in insurance policies---Scope---Nomination by itself only conferred right to collect the money for an insurance claim but did not operate as either a will or gift and could not deprive legal heirs of nominator, who were otherwise entitled to inherit assets of a deceased insured person---Nominee was entitled to collect amount of claim as trustee for benefit for all legal heirs and would be responsible for disbursement of the awarded claim along with liquidated damages.

Mst. Amtul Habib and others v. Mst. Musarrat Parveen and other PLD 1974 SC 185 rel.

Asad Ali Bajwa, Dy. Attorney General and Mian Ehtisham Ahmed, Assistant Attorney General with Shaukat Hayat, Assistant Director and Abid Ibrahim, Assistant Superintendent (Office), Postal Life Insurance Company for Appellants.

Liaquat Ali Butt for Respondent.

2022 C L D 320

[Lahore (Multan Bench)]

Before Sohail Nasir and Ahmad Nadeem Arshad, JJ

VITAL CHEMICALS CORPORATION and 2 others---Appellants

Versus

SILK BANK LIMITED---Respondent

Regular First Appeal No. 72 of 2019, decided on 26th October, 2021.

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

----Ss. 148 & 172---"Bailment" and "pledge"---Distinguished---Slight difference between bailment and pledge is that in the case of bailment deposit of goods is for a certain purpose to be returned after the purpose is accomplished but in case of pledge, goods are deposited as security to be kept till payment of debt is effected or a promise for which the goods were pledged is performed---Pledge is kind of bailment and security.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), Ss. 148 & 172---Recovery of finance---Pledged goods---Protection, responsibility of---Appellants/judgment debtors availed finance facility from respondent Bank---Suit filed by Bank was decreed against appellants/judgment debtors---Pledged goods were seized by government authorities on the allegation that the goods were stored without proper registration---Plea raised by appellants/judgment debtors was that Bank could not recover financial facility until Bank had returned the stocks---Validity---Stocks were in possession of appellants/judgment debtors from where it was taken into custody by authorities---Such was duty of appellants/ judgment debtors to provide necessary details with relevant documents to the authorities in order to get back the custody of stocks---Appellants/judgment debtors failed to perform their duties therefore, they could not get benefit of their own wrongs---Banking Court had rightly decided such issue against appellants/judgment debtors, as there was no illegality, irregularity, mis-reading and non-reading of evidence while rendering such findings---Appeal was dismissed, in circumstances.

Messrs World Trans Logistics and others v. Silk Bank Limited and others 2016 SCMR 800; A. M. Burg v. Central Exchange Bank Ltd. PLD 1966 (W.P) Lah. 1 and Habib Bank Limited v. Orient Rice Mills Ltd. and others 2004 CLD 1289 ref.

Muhammad Suleman Bhatti and Iftikhar Majid for Appellants.

Sajid Ali Chaudhary for Respondent.

2022 C L D 338

[Lahore]

Before Jawad Hassan, J

CRESCENT JUTE PRODUCTS LIMITED through Chief Executive Officer, Lahore---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Law, Justice and

Parliamentary Affairs, Islamabad and 4 others---Respondents

Writ Petition No. 225428 of 2018, decided on 26th October, 2021.

Companies Ordinance (XLVII of 1984)---

----Ss. 305 & 485---Constitution of Pakistan, Art. 199---Constitutional petition---Alternate and efficacious remedy---Right of appeal---Role of Security and Exchange Commission of Pakistan---Petitioner company was aggrieved of sanction order issued by respondent authorities to present a petition for winding up (petitioner) company---Validity---Petitioner had remedy of appeal against sanction order before a Bench of two judges of High Court in the capacity of appellate jurisdiction under S. 485 of Companies Ordinance, 1984---When an alternate remedy was available to petitioner but was not availed by him, it was to be determined whether petition under Art. 199 of the Constitution was competent or not---Extra ordinary jurisdiction was conferred in High Court under Art. 199 of the Constitution to pass appropriate directions in the nature of mandamus, certiorari, prohibition, quo warranto and habeas corpus subject to fulfilling requirements laid down under Art. 199 of the Constitution---In order to invoke such extra-ordinary jurisdiction, petitioner was bound to also establish that he had no alternative and efficacious remedy under ordinary law---If petitioner failed to fulfill such mandatory criterion requirement, then all other grounds which favoured him had lost significance and did not merit any consideration---Extra-ordinary remedy could not be sought and secured when ordinary remedy was well available---Purpose behind establishment of Security and Exchange Commission of Pakistan was to beneficial regulation of capital markets and superintendence and control of corporate entities in a manner which must equally secure rights and interest of every stake-holder involved in the process---High Court declined to interfere in the matter as petitioner had adequate and efficacious remedy available to it---Constitutional petition was dismissed in circumstances.

Joint Registrar of Companies v. Sh. Fazal Rehman & Sons Ltd. 2008 CLD 465; In re: Alliance Motors (Pvt.) Ltd. 1997 MLD 1966; The Tariq Transport Company, Lahore v. The Sargodha-Bhera Bus Service, Sargodha, (2) The Regional Transport Authority, Lahore and (3) the Provincial Transport Authority, Lahore PLD 1958 SC (Pak) 437; National Steel Rolling Mills and others v. Province of West Pakistan 1968 SCMR 317; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Muzafar Ali v. Muhammad Shafi PLD 1981 SC 94; Hussain Bakhash v. Settlement Commissioner, Rawalpindi and others PLD 1970 SC 1; Longmans English Larousse (Page-1031); The Cambridge English Dictionary (Page-358); Stroud's Judicial Dictionary of Words and Phrases, (Eighth Edition, Volume 3 Page-2639); Words and Phrases, Permanent Edition (Volume 38, Page-361); The Black's Law Dictionary (Ninth Edition, Page-1458) and Advanced Law Lexicon (4th Edition, Volume 4 Page-4346) ref.

Rana Aftab Ahmad Khan v. Muhammad Ajmal and another PLD 2010 SC 1066; Ghulam Sarwar v. National Bank of Pakistan and others 2007 CLD 530; Iram Shahzadi v. Government of Punjab through Chief Secretary and others PLD 2021 Lah. 24; Maqbool Ahmad and others v. Environment Protection Agency and others 2019 CLD 946; Imran Hafeez v. Pakistan Electronic Media Regulatory Authority (PEMRA) through Chairman and 3 others PLD 2019 Lah. 587; Eastern Testing Services (Pvt.) Ltd. v. Securities and Exchange Commission of Pakistan and others 2016 CLD 581; President, All Pakistan Women Association, Peshawar Cantt. v. Muhammad Akbar Awan and others 2020 SCMR 260; The Additional Registrar Company v. Al-Qaim Textile Mills Limited 2021 CLD 931; Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447; Saudi Pak Industrial and Agricultural Investment Company Ltd v. Chenab Limited 2020 CLD 339 and The Additional Registrar Company v. Al-Qaim Textile Mills Limited 2021 CLD 931 rel.

Saad Rasool, Shan Saeed Ghuman and Muhammad Waseem A. Rana for Petitioner.

Ms. Sadia Malik, Assistant Attorney General for Pakistan for Respondent No.1.

Adil Bandial with Sajjad Ali, Asad Hussain, Hashim Rathore, Zubair Ahmed and Maham Kashif for Respondents Nos.3 to 5.

Ibrar Saeed, Director Law, SECP with Hafiz Talha, Advocate/Legal Advisor for SECP.

2022 C L D 408

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

POSTAL LIFE INSURANCE (PLI)---Appellant

Versus

MUHAMMAD IQBAL---Respondent

Insurance Appeal No. 360 of 2016, decided on 26th October, 2021.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 124---Life insurance---Repudiation of claims---Liquidated damages---Concealment of facts by insured---Scope---Appellant Insurance Corporation impugned order of Insurance Tribunal whereby claim of claimant was accepted by Insurance Tribunal and he was held entitled to benefit of the life insurance policy of the deceased---Contention of Insurance Corporation, inter alia, was that claimant had concealed material facts in proposal forms for insurance policies, and hence insurance contracts stood repudiated---Validity---Inquiry conducted by Insurance Corporation, on which basis claim was repudiated, was conducted without associating claimant and did not provide any credible documentary evidence and it was motivated only by an effort to negate claim---Documents pertaining to insurance policy were expected to have undergone due and proper scrutiny and in the present case, policy was issued after obtaining report from field officer, and no objection as to falsification by deceased policy-holder was raised at that time---Findings recorded in impugned order were therefore neither inaccurate nor any specific instance of misreading or misapplication of law was found---Appeal was dismissed, in circumstances.

Postal Life Insurance (PLI), Lahore v. Muhammad Anwar and others Civil Appeal No. 1287-L of 2017 rel.

Asad Ali Bajwa, Dy. Attorney General and Ehtisham Ahmed, Assistant Attorney General with Shaukat Hayat, Assistant Director and Abid Ibrahim, Assistant Superintendent (Office), Postal Life Insurance Company, Lahore for Appellants.

Ibrar Ahmad and Rao Muhammad Sarwar Ali for Respondent.

2022 C L D 425

[Lahore]

Before Shahid Karim and Rasaal Hasan Syed, JJ

ASKARI GENERAL INSURANCE COMPANY LIMITED through President/Chief Executive Officer---Appellant

Versus

ISLAM LUBRICANTS (PVT.) LIMITED through Director and 2 others---Respondents

R.F.A. No. 1054 of 2016, decided on 13th October, 2021.

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

----S. 77---Construction of ambiguities in favour of policy holder---Insurance policy---Depreciation clause, non-insertion of---Effect---Question before High Court was whether the insurance policy had depreciation clause or not---Argument on behalf of the insurer related to general practice whereby a depreciation clause was to be read in all matters relating to insurance claim---Validity---Insurer was specifically required by the Insurance Tribunal to establish whether there was a depreciation clause in the insurance policy or not---None had been demonstrated to exist in the contract of insurance and so it could not be argued by the insurer that such a clause must be read in all insurance policies---Tribunal had rightly returned the finding in favour of insured and against the insurer.

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

----S. 122---Insurance policy---Fire and property damage---Deduction on account of debris---Scope---Deduction on account of salvage/debris of building and machinery was disallowed by the Insurance Tribunal on the ground that it was to be taken by the insurer and same could not be assessed to be deducted from the total amount of assessed losses---Validity---Said holding had no basis and was not borne out of the record---Said issue was dependent upon who kept the salvage and in the present case, there was no evidence to suggest that it was retained by the insurer---Surveyors were quite justified to deduct salvage from the claim on the notion that it would be retained by the claimant---Same could not have been added back on the misplaced plea that as the claimant was not willing to retain salvage, hence the salvage/debris (outcome of incident of fire) would be collected by the insurer---Impugned judgment to the extent of grant of claim in respect of salvage was set aside.

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

----S. 118---Civil Procedure Code (V of 1908), O. XIV, R. 1---Payment of liquidated damages on late settlement of claims---Framing of issues---Scope---Insurer challenged the relief granted by the Insurance Tribunal with regard to liquidated damages---Validity---No specific issue was framed by the Tribunal for the grant or otherwise of liquidated damages under S. 118 of the Insurance Ordinance, 2000---Such a claim by its very nature required evidence to be led and proof that the claimant in the given case was entitled to the payment of liquidated damages on late settlement of claims---Mere fact that the claim was settled belatedly did not ipso facto and without more gave rise to the payment of liquidated damages under S. 118 of the Insurance Ordinance, 2000---Insurer was willing to make payment of the claim based on surveyor's report which was not agreed by the claimant and so the claimant chose to file an application to the Insurance Tribunal---Since the course of litigation was adopted by claimant, the insurer was left with no choice but to defend its stance before the Tribunal---Relief granted by the Insurance Tribunal with regard to liquidated damages was set aside.

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

----S. 118--- Payment of liquidated damages on late settlement of claims---Production of evidence---Scope---Claimant and the insurer may disagree on a myriad of issues relating to payment on a policy issued by the insurer such as the time when the payment becomes due, the precise payment to be made to the claimant and whether if at all the claim is due to the claimant or not---All of these issues may give rise to triable issues for which evidence and proof is required---Sum of liquidated damages cannot follow as a matter of course as soon as the payment on a policy becomes due in the estimation of the claimant.

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

----S. 118--- Payment of liquidated damages on late settlement of claims---Scope---Purpose of S. 118 of the Insurance Ordinance, 2000 is to contain an inbuilt procedure for imposition of damages upon an insurer which shows contumacy and deliberate intent in denying the legitimate claim of a person---Such is not applicable in a case where no contumacy and deliberate evasion is proved and the insurer merely sets up a bona fide defence regarding the claim of a person.

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

----S. 118--- Payment of liquidated damages on late settlement of claims---Production of evidence---Scope---Provisions of S. 118 of Insurance Ordinance, 2000 reveal that entitlement of claimant is assured unless insurer proves that such failure was due to circumstances beyond his control---Said argument is further bolstered by the condition "if he fails to make the payment within a period of ninety days from the day on which the payment became due…"---Payment becomes due only upon its determination by a competent forum provided by law and in particular, if a dispute arises over the claim, that is, only when the claim crystallizes and a person becomes entitled to it---In a nub, the issue regarding grant or refusal of liquidated damages is a matter of evidence and no decree can be passed unless a claim is established on a balance of probabilities.

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

----S. 118--- Payment of liquidated damages on late settlement of claims---Production of evidence---Scope---Section 118 of Insurance Ordinance, 2000 makes the payment of liquidated damages an implied term of every contract---Underlying precondition for payment of liquidated damages is to establish that breach of a promise has occurred--- Such would require evidence to be taken down.

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

----S. 118---Civil Procedure Code (V of 1908), O. XIV, R. 1---Payment of liquidated damages on late settlement of claims---Framing of issues---Scope---Insurance Tribunal in all applications must frame a specific issue with regard to the grant or refusal of liquidated damages under S. 118 of the Insurance Ordinance, 2000---If an amount is admitted to be due to a person by the insurer under a claim that amount should be deposited in a profit bearing account at the first opportunity by the Insurance Tribunal and to that extent the insurer should not be held liable for liquidated damages in any case.

Mrs. Asma Hamid for Appellant.

Syed Nasir Ali Gillani for Respondent No. 1.

Zaeem Sarwar Dar for Respondent No. 2.

Ruman Bilal for SECP.

2022 C L D 448

[Lahore]

Before Syed Shahbaz Ali Rizvi, J

IFFAT IQBAL---Appellant

Versus

The STATE and others---Respondents

Criminal Appeal No. 79160 of 2021, decided on 10th February, 2022.

Anti-Money Laundering Act (VII of 2010)---

----Ss. 3, 4 & 8---Income Tax Ordinance (XLIX of 2001), Ss. 192 & 192-A---Attachment of Bank accounts allegedly used for money laundering---Legality---Bank accounts in question were allegedly joint accounts in the name of the appellant-lady and an accused, against whom an FIR was registered under different provisions of the Anti-Money Laundering Act, 2010 and the Income Tax Ordinance, 2001---Appellant and said accused were in a partnership, and the partnership deed showed that appellant was the owner of 20 % of the joint business while accused owned 30 % share of the same---As per same deed, the Bank accounts were to be operated by all the partners singly or jointly---Admittedly the appellant was the wife of accused's brother and during investigation it stood established that actually the accused ran the whole business---Keeping in view such facts, the impugned order of attaching the Bank accounts of the appellant-lady for 180 days did not suffer from any illegality or impropriety requiring interference by the High Court---Appeal was dismissed.

Barrister Danyal Ijaz Chadhar for Appellant.

Malik Abdullah Raza for Respondent.

2022 C L D 468

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

TARIQ IQBAL MALIK---Petitioner

Versus

Messrs MULTIPLIERZ GROUP PVT. LTD. and 4 others---Respondents

Civil Original No. 5 of 2021, decided on 1st March, 2022.

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

----Ss. 257 & 256---Investigation of company's affairs in other cases---Intertwined, doctrine of---Scope---Petitioner sought direction to the SECP (Securities and Exchange Commission of Pakistan) to start investigation into the affairs of the respondents under S. 257(1)(a)(ii) of the Companies Act, 2017 ('the Act')---Held, that petitioner, under the 'doctrine of intertwined', had to fulfill the requirements of S. 256 regarding locus standi of being member, qualification of member and company against whom the relief was being sought---Petitioner had no nexus with the respondents' companies, not being member of any of the company---Petitioner had filed the petition solely under S. 257 of the Act without fulfilling its preconditions---In case parties/persons having no link or nexus to the affairs of a company (by way of either membership/shareholding/holding office) were allowed to invoke the provisions of both Ss. 256 & 257 and other related provisions of the Companies Act, 2017 to have the affairs of a company investigated on account of matters that purely pertained to their commercial and business dealings with such a company, would in turn not only open flood-gates of litigation, but would also lead to; (i) a situation where the affairs of any company would be investigated in every such instance where there was an alleged breach of contract by the company in its business dealings with third party and; (ii) disputes in the normal course of business between a company and third party would end up requiring investigations into the affairs of a company, and; (iii) the laws and statutes dealing with and providing for legal remedies based on contract, sale of goods, specific performance etc. would more or less be rendered redundant---Petitioner had not approached the Commission to address any grievance and had directly knocked on the doors of the Court for issuance of direction without showing any proof of allegations or establishing himself to be member of such company---Petition was dismissed.

Mohammad Raza v. Crescent Industrial Chemical Ltd. and 5 others 2018 CLD 898; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd. Lahore and others 2016 SCMR 213; Abdul Kareem Khan v. Messrs Haroon-Ur-Rasheed Textile Mills (Pvt.) Ltd. through Chief Executive and 13 others 2015 CLD 719; Light Metal and Rubber Industries (Private) Limited and others v. Sarfraz Qaudri 2011 CLD 1485 and Brother Steel Mills Ltd. v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 ref.

Depliex Smileagain Foundation v. Security and Exchange Commission of Pakistan and others 2019 CLD 861; Hira Textile Mills Ltd. v. Bank Al-Falah Ltd. 2022 CLD 285 and Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 SCMR 213 rel.

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

----Ss. 256 & 257---Investigation of company's affairs in other cases---Scope---Power conferred on (Securities and Exchange Commission of Pakistan) to investigate a company's affairs under S. 257 of the Companies Act, 2017 is without prejudice to its powers under S. 256---Although Ss. 256 & 257 are closely tied in, the power flows out of entirely different circumstances for the Commission to start an investigation---Section 256 is engaged on the happening of an event; either on an application by members (holding certain threshold voting power) or on a report compiled under S. 221(5) or by the Registrar under S. 254(6)---Thus, if at all the Commission seeks to investigate into the affairs of a company on an application, it must be an application made by one of the persons or entities mentioned in S. 256 and none else---Section 257 envisages formations of opinion by the Commission as a pre-condition and that opinion must be based on the Commissions' own inquiry and by application of independent mind---Cardinal feature of any exercise of power under S. 257 is that a fact specific balancing exercise is to be conducted by the Commission uninfluenced by an external source---Even the cognizance of a matter relating to investigation cannot be taken by a circuitous route, that is, by firstly receiving a complaint and thereafter (upon finding it to be outside the ambit of S. 256) invoking its powers under S. 257, whimsically and unreasonably, to serve a notice---To reiterate, any power to be exercised by the Commission under S. 257 has to be preceded by formation of an opinion and thereafter a show cause notice giving the company an opportunity of hearing can be issued.

Depliex Smileagain Foundation v. Security and Exchange Commission of Pakistan and others 2019 CLD 861; Hira Textile Mills Ltd. v. Bank Al-Falah Ltd. 2022 CLD 285 and Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 SCMR 213 rel.

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

----Ss. 256 & 257---Investigation of company's affairs in other cases---Scope---Bare perusal of Ss. 256 & 257 of the Companies Act, 2017 ('the Act') reveals that by and large protection is afforded to the rights and interests of the members of the company and it is necessary to collate S. 257 with S. 256 as the powers in these provisions are closely tied in and seemingly overlap---Investigation into the affairs of a company is a serious matter and entails consequences both financial and ones relating to goodwill of a corporate entity and these powers cannot be lightly used by the High Court---Therefore, the Commission (Securities and Exchange Commission of Pakistan), when deciding whether to order investigation into the affairs of the company under Ss. 256 & 257, may have to consider and weigh multiple factors, which inter alia includes the nature of the complaint and its source---Such exercise of discretion by the Commission has to be guided/determined by the facts and circumstances of the case and has to be exercised in good faith, without any bias, prejudice or ulterior motives---However, in terms of clause (a) of subsection (1) of S. 257, the Commission is obligated to appoint inspectors for conduct of investigation, if ordered by the Court of competent jurisdiction or upon passing of special resolution by the company---Accordingly, the power to appoint an Inspector under Ss. 256 & 257, vests with the Commission on an application by a member of the company or the Registrar of the Commission.

Depliex Smileagain Foundation v. Security and Exchange Commission of Pakistan and others 2019 CLD 861; Hira Textile Mills Ltd. v. Bank Al-Falah Ltd. 2022 CLD 285 and Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 SCMR 213 rel.

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

----Ss. 256 & 257---Investigation of company's affairs in other cases---Scope---Sections 256 & 257 of the Companies Act, 2017 being intertwined with one another, cannot be read in isolation to one another---Both sections are in pari materia and thus must be construed together---Ultimate outcome of the provisions being intertwined with one another leads to the conclusion that in order to invoke S. 257, it is mandated that any complainant must have some form of link or nexus to the affairs of a company---Section 256 categorically clarifies that the link or nexus required to have the affairs of any company investigated is the holding of membership in such company in the manner as is categorically mentioned in S. 256 of the Act.

Depliex Smileagain Foundation v. Security and Exchange Commission of Pakistan and others 2019 CLD 861; Hira Textile Mills Ltd. v. Bank Al-Falah Ltd. 2022 CLD 285 and Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 SCMR 213 rel.

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

----Preamble---Scope---Legislative intent of the Companies Act, 2017---Such intent is clear and obvious from the Preamble to the Act that it has been enacted to reform company law with the objective of facilitating corporatization and promoting development of corporate sector, encouraging use of technology and electronic means for protecting interests of shareholders, creditors, other stakeholders and general public, inculcating principles of good governance and safeguarding minority interest in corporate entities and providing an alternate mechanism for expeditious resolution of corporate disputes and matters arising out of or connected therewith.

Barrister Asim Muzaffar Khan for Petitioner.

Nemo for Respondent No.1.

Syed Ishtiaq Haidar, Advocate Supreme Court for Respondent No.2.

Barrister Syed Ali Rizvi and Osama Shahid Khawaja for Respondents Nos.3 and 4.

Ibrar Saeed, Director SECP with Adeel Peter, Advocate/Legal Advisor for the Respondent No.5/SECP.

Malik Ahtesham Saleem, Assistant Attorney General of Pakistan.

2022 C L D 604

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

FAUJI CEMENT COMPANY and another---Petitioners

Versus

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

Civil Original No. 1 of 2022, heard on 2nd March, 2022.

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

----Ss. 279, 280, 281 & 282---Compromise with creditors and members---Reconstruction or amalgamation of companies---Scope---Petitioners sought sanction of the High Court to a Scheme of Arrangement and for their merger---Validity---All indispensable statutory benchmarks, requirements and formalities had been accomplished and adhered to by the petitioners as envisioned under the relevant provisions of law, including the holding/convening of the requisite meetings as contemplated under the relevant provisions and rules and the resolutions passed by the members had already been highlighted---Proposed scheme was not found to be violative of any provision of law and/or contrary to public policy but as a whole looked like evenhanded and serviceable from the point of view of a prudent man of business taking a commercial decision beneficial to the class represented by him for whom the scheme was meant---Once the requirements of a scheme for getting sanction of the Court was found to have been met, the Court would have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes had given their approval of the scheme---No objection to the scheme of arrangement and no mistake, conspicuous, detectable shortcoming or flaw had further been pointed out in the matter---Petition was allowed and the scheme was sanctioned.

Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230; "Roomi Foods Pvt. Ltd. v. Joint Registrar of Companies 2020 CLD 900; Messrs Fazal Cloth Mills Ltd. v. Messrs Fazal Weaving Mills Ltd. 2021 CLD 182; Presson Descon International Pvt. Limited and others v. Joint Registrar of Companies 2020 CLD 1128 = PLD 2020 Lah. 869 and DILSONs (Private) Limited and others v. Securities and Exchange Commission of Pakistan and another 2021 CLD 1317 rel.

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

----Ss. 133, 134 & 137---Calling of extra-ordinary general meeting---Provisions as to meetings and votes---Proxies---Scope---Subsection (2) of S. 133 of the Act specifically states that the Board may at any time call extra-ordinary general meeting---Subsection (4) of S. 133 deals with the requirement of statement of objects of requisition of any such meeting along with requirement of signatures of requisitionists on any such requisition---According to subsection (4) of S. 134, members of a company may participate in the meeting personally, through video link or by proxy---Subsection (9) of S. 134 envisages that on a poll, votes may be given either personally or through video link or by proxy---Proxies are defined in subsection (1) of S. 137 according to which a member of a company entitled to attend and vote at a meeting of the company may appoint another person as his proxy to exercise all or any of his rights to attend, speak and vote at a meeting.

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

----S. 137---Proxies---Meaning---Scope---Person representative of the shareholder who may be described as his agent to carry out a course which the shareholder himself has decided upon.

Cousins v. International Brick Co. (1931) 2 Ch. 90 = (1932 2 C Comp Cas 108 (CA); Halsbury's Law of India, Volume-27 (Companies and Corporations), Page-333; Gower's Principles of Modern Company Law, Tenth Edition, Page-443; Partnership and Company Law, Page-197 and Lt. Gen. (Retd.) Shah Rafi Alam and others v. Lahore Race Club and others 2004 CLD 373 rel.

Rashid Hanif, Advocate Supreme Court, Tariq Nasir Zufar, Javaid Akhtar, Rohma Habib and Hamid Nawaz for Petitioners.

Respondents by:

Ibrar Saeed, Director SECP with Adeel Peter, Advocate/Legal Advisor for SECP.

Hasan Ahsan Mian, Advocate/Law Officer for Competition Commission of Pakistan.

Malik Ahtesham Saleem, Assistant Attorney General of Pakistan.

2022 C L D 622

[Lahore (Multan Bench)]

Before Ch. Muhammad Masood Jahangir and Muhammad Raza Qureshi, JJ

Syed GUL HASSAN GILLANI and 2 others---Appellants

Versus

HOUSE BUILDING FINANCE CORPORATION LIMITED through Branch Manager---Respondent

R.F.A. No. 180 of 2015, heard on 24th November, 2021.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Repayment of installment---Effect---Petition for leave to appear---Necessary ingredients---Appellant/borrower assailed judgment and decree passed by Banking Court in favour of House Building Finance Corporation---Validity---Appellant/borrower in his petition for leave to appear alleged repayments to respondent/plaintiff conceding availing of finance facility in question and execution of security documents---Instead of throwing potent challenge through relying upon counter accounts, not even a single entry contained in statement of accounts annexed with plaint was challenged---Statement of accounts filed by respondent/plaintiff was in conformity with requirement of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, bearing certification at the foot under Bankers' Books Evidence Act, 1891---Petition for leave to appear failed to identify a challenge to principal amount or that the mark-up was exaggeratedly charged or was charged beyond contractual period---High Court declined to interfere in judgment and decree passed by Banking Court and decreed the suit as the same did not suffer from any legal infirmity--- Appeal was dismissed in circumstances.

Messrs Visiontex, Partnership Firm through Partner and others v. Habib Bank Limited 2016 CLD 62; Naveed Masood Malik v. Bank Alfalah Limited and others R.F.A. 338 of 2015; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 and National Bank of Pakistan v. Messrs Kohinoor Spinning Mills and others 2021 CLD 1112 rel.

Muhammad Ramzan Khalid Joyia for Appellants.

Ch. Muhammad Masud Sabir for Respondent.

2022 C L D 638

[Lahore (Multan Bench)]

Before Anwaar Hussain, J

MUHAMMAD ASHRAF---Appellant

Versus

Sh. MUHAMMAD AKRAM and others---Respondents

F.A.O. No.50 of 2013, heard on 14th December, 2021.

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

----S. 28---Limitation Act (IX of 1908), S. 19---Settlement of claims---Limitation---Effect of acknowledgment in writing---Scope---Appellant got booked his commodities through cargo service of respondents---Cargo of the respondents was stolen away---Respondents admitted the claim of appellant and issued a cheque, which was dishonoured on its presentation---Legal notice was served upon the respondents that was followed by filing of the claim in the Consumer Court---Consumer Court dismissed the claim on the ground that it was barred by time in terms of subsection (4) of S. 28 of Punjab Consumer Protection Act, 2005---Appellant claimed extension in period of limitation on the ground that when the respondents were approached, without issuing a formal written notice, they solicited time from the appellant to trace the goods but later on admitted the claim and handed over a cheque---Validity---Even if the cheque was taken as an acknowledgment, it was issued after expiry of the specified period of thirty days---Fresh cause of action on the basis of acknowledgment would have come into play had the cheque been issued before the expiration of the thirty days---Appeal was dismissed.

M.S. Port Services (Pvt.) Ltd. v. Port Qasim Authority PLD 2012 Sindh 182 ref.

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

----S. 28---Settlement of claims---Limitation---Scope---Punjab Consumer Protection Act, 2005, has been enacted with an avowed aim to protect the consumers and their rights as is evident from the reading of the preamble of the Act, the businesses and the interest of the society are also required to be safe-guarded---Both the rights of the consumers and those of society and/or businesses have to be protected simultaneously---Under the Act, on one end of the fulcrum is the objective to provide a speedy and effective remedy to the consumer and on the other end is the consideration to ensure that the businesses are not burdened by the time barred cases---Scheme of law envisaged under the Act is unequivocal in this regard.

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

----S. 28(1)---Settlement of claims---Limitation---Scope---Legislature in terms of S. 28 of the Act has provided the entire mechanism, along with time-limit of thirty days from the accrual of cause of action, for filing the claim before the Consumer Court---Time-limit of thirty days has been provided for filing of the claim with the condition that prior to filing of the claim and after the accrual of cause of action, a written notice is to be sent to the manufacturer of goods or service provider, as the case may be, requiring him to rectify the breach and compensate the claimant.

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

----S. 28(2)---Settlement of claims---Notice---Limitation---Scope---Subsection (2) of S. 28 obligates manufacturer and/or provider of services to reply the notice within fifteen days from receipt of the notice---Claimant, in a case under the Act, has to put forth his claim in a written notice within such period of time that enables the manufacturer of goods or the service provider, as the case may be, to respond within fifteen days thereafter so that in case of default on part of the said manufacturer or the service provider to respond within said period of fifteen days, the claimant can approach the court within thirty days commencing from the date of accrual of cause of action.

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

----Ss. 28(1) & 28(2)---Settlement of claims---Cause of action---Notice---Limitation---Scope---Cause of action accrues in favour of a claimant, the moment goods or services provided turn out to be defective and/or in violation of the provisions of the Act---Service of written notice upon the manufacturer or provider of service, envisaged under the Act, is a mechanism and procedure set out by the Legislature for the redressal of such cause of action prior to approaching the judicial forum i.e. Consumer Court---If the manufacturer and/or provider of services admits the claim of the claimant on receiving the written notice and compensate the claimant to the satisfaction of the latter, the cause of action, as a natural corollary, comes to an end---Conversely, the denial of the claim or no response to the written notice keeps the limitation running.

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

----Ss. 28(1) & 28(4)---Settlement of claims---Cause of action---Limitation---Scope---Argument that as no limitation is provided for issuance of written notice under subsection (1) of S. 28 of the Act, the same could be issued at any time and limitation of thirty days provided under subsection (4) of S. 28 starts running only after issuance of the written notice since the cause of action is recurring in such like cases had no force---Such an argument is misconceived and if accepted, would defeat the purpose of time-limitation provided by the legislature under subsection (4)---While the remedy to the consumers for their protection has been provided under the Act, the legislature could not have left it open-ended at the will of the claimant to serve written notice whenever he feels convenient---Rather, the written notice is to be served immediately on the accrual of cause of action.

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

----S.28(4)---Settlement of claims---Limitation---Condonation of delay---Scope---Given the nature of the Act, as a special statute, the legislature has not only provided special limitation period for filing claim under the Act, but has also vested jurisdiction in the Consumer Court to condone delay in filing the claim in cases where sufficient cause for such delay is established to the satisfaction of the Consumer Court.

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

----S. 28(4)---Settlement of claims---Limitation---Scope---In terms of second proviso to subsection (4) of S. 28 of the Act, delay can be condoned for a period of sixty days beyond period of warranty/ guarantee provided under the contract between the parties or deemed to be one year from the date of purchase of product or provision of services where no such warranty or guarantee is provided and for this purpose filing of formal application for condonation of delay is not required---Unless the Consumer Court is approached by a claimant with the application for condonation of delay or extension of time period specified in subsection (4) of S. 28 of the Act, a time barred claim cannot be entertained---Second proviso to subsection (4) vests discretion in the Consumer Court to extend time limit but the said proviso cannot and should not be read in isolation from the first proviso---Provisos to subsection (4) cannot be so interpreted as to make subsection (4) itself redundant, which provides limitation period of thirty days as 'the specified period' for filing of the claim---Natural interpretation is that the first proviso modifies the scope and effect of subsection (4) to the extent that the general period of limitation provided under subsection (4) may be relaxed/extended/modified in cases where the Consumer Court is satisfied that there was sufficient cause for not filing the complaint within the specified time and the second proviso to subsection (4) of S. 28 of the Act is a qualifying provision, which limits the discretion vested in the Consumer Court through first proviso qua 'the specified period' and gains traction from the use of words "such extension" in the second proviso---Proviso is applicable only to such provision which precedes it, thus, it is subsection (4) which precedes the provisos and therefore, both the provisos have to be read in conjunction with the main provision i.e., subsection (4).

Coca-Cola Beverages Pakistan Limited v. Ashiq Ali PLD 2014 Lah. 196; Tanvir Ahmad Butt v. The Director, Oratier Technologies (Pvt.) Ltd. 2018 CLD 1064 and Al-Ghazi Tractor Limited through Manager and 2 others v. Peer Muhammad Ali 2019 CLC 580 ref.

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

----S. 28(4)---Settlement of claims---Limitation---Scope---Subsection (4) of S. 28 stipulates limitation period of thirty days, the first proviso provides for situation in which such limitation period may be relaxed and delay can be condoned and refers back to limitation period by using the words 'the specified period' whereas the second proviso places an embargo on the maximum time for which 'the specified period' could be extended under first proviso by use of words "such extension" in the second proviso.

Coca-Cola Beverages Pakistan Limited v. Ashiq Ali PLD 2014 Lah. 196; Tanvir Ahmad Butt v. The Director, Oratier Technologies (Pvt.) Ltd. 2018 CLD 1064 and Al-Ghazi Tractor Limited through Manager and 2 others v. Peer Muhammad Ali 2019 CLC 580 ref.

(j) Interpretation of statutes---

----Proviso---Scope---Proviso is applicable only to such provision which precedes it.

(k) Interpretation of statutes---

----Proviso---Scope---Proviso in a statute by no means can be construed in a manner so as to make the main section redundant.

Province of Sindh through Chief Secretary and others v. M.Q.M. through Deputy Convener and others PLD 2014 SC 531 ref.

Enmay Zed Publications (Pvt.) through Director-General v. Sindh Labour Appellate Tribunal through Chairman and 2 others 2001 SCMR 565 and Dr. Muhammad Anwar Kurd and 2 others v. The State through Regional Accountability Bureau, Quetta 2011 SCMR 1560 rel.

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

----S. 19---Effect of acknowledgement in writing---Scope---Bare reading of the subsection (1) of S. 19 of the Limitation Act, 1908, leads to the ineluctable conclusion that fresh cause of action on the basis of acknowledgment comes into play only if such acknowledgement is made before the expiration of the period prescribed for a suit or application.

M.S. Port Services (Pvt.) Ltd. v. Port Qasim Authority PLD 2012 Sindh 182 ref.

(m) Limitation---

----Condonation of delay---Scope---Delay of each and every day has to be explained by filing an appropriate application while seeking condonation of delay.

Syed Athar Hassan Shah for Appellant.

Syed Fayyaz Hussain Naqvi and Syed Sibt-e-Nabi Abidi for Respondents.

2022 C L D 718

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

Lt. Gen. (Retd.) MAHMUD AHMAD AKHTAR and another---Petitioners

Versus

Messrs ALLIED DEVELOPERS (PVT.) LTD. through Chief Executive and 3 others---Respondents

Civil Original No. 14 of 2009, heard on 25th January, 2022.

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

----Ss. 152 & 76--- Power of Court to rectify register---Transfer of shares and debentures--- Scope--- Petitioners invoked original jurisdiction of the High Court under S. 152 of the Companies Ordinance, 1984 for rectification of register of shareholders---Contention of petitioners was that their father at the time of his death was holding 1400 shares of the respondent company but when they approached Securities and Exchange Commission of Pakistan (SECP) for transfer of shares they fell in knowledge about illegal transfer of 1400 shares---Validity---Perusal of report filed by the SECP and the contents made by the petitioners clarified that the shares of the deceased were illegally and fraudulently transferred---Record was silent about the mode of transfer or instrument through which 1400 shares were transferred in accordance with S. 76 of the Companies Ordinance, 1984 requiring a duly stamped transfer deed executed by the deceased along with the original share stamps---No transfer deed or any original script of copies thereof was filed with the petition at any later stage---Requirement of S. 76 of the Companies Ordinance, 1984 was not complied with, which was mandatory in nature and in absence of such compliance no transfer of shares was effective---Petition was allowed.

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

----Ss. 152 & 7---Power of Court to rectify register---Jurisdiction of the Court---Scope---Literal study of S. 152 read with S. 7 of the Companies Ordinance, 1984 provides a right of an aggrieved person to make an application before the High Court for the purposes of rectification of register of members or register of debenture holders of a company in a case where name of a person is fraudulently or without sufficient cause was entered in or omitted from said registers---On such application, the High Court is also empowered to decide any question relating to the title of any person who is party to the application and generally may decide any question which is necessary or expedient to decide for rectification of the registers---Accordingly, the High Court has power to either refuse the application or order rectification of registers on payment of any damages to be paid by the company to the aggrieved person and make order as to the costs in its discretion.

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

----Ss. 152 & 9---Power of Court to rectify register---Procedure of the Court---Scope---Application shall be preferred before the High Court by the aggrieved person or any member of the Company for "rectification" of the register---Though S. 152 of the Ordinance gives wide power to the High Court to rectify the register of members, yet the jurisdiction of the High Court is summary in nature, as emerges in S. 9(3) of the Ordinance.

Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 CLD 393; Messrs Ammonia Supplies Corporation Private Ltd. v. Messrs Modern Plastic Containers (Pvt.) Ltd. AIR 1994 Delhi 51 and Messrs Ammonia Supplies Corporation Ltd. v. Messrs Modern Plastic Containers Ltd. AIR 1998 SC 3153 rel.

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

----S. 152---Power of Court to rectify register--- Scope---By virtue of S. 152 of the Ordinance, the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or debenture-holders or alleged members or debenture-holders, or between members or alleged members, or debenture-holders or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectification of the register---Since S. 152 of the Ordinance has provided a special remedy to resolve disputes erupting between the Company and the members under the Ordinance, the High Court being the court of "original jurisdiction" under the Ordinance is empowered to entertain the application for correction/rectification of the register of members.

Mehran Ginning Industries and 2 others v. Sajid Shafique and 12 others 217 CLD 1165; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 CLD 393; Messrs Ammonia Supplies Corporation Private Ltd. v. Messrs Modern Plastic Containers (Pvt.) Ltd. AIR 1994 Delhi 51 and Messrs Ammonia Supplies Corporation Ltd. v. Messrs Modern Plastic Containers Ltd. AIR 1998 SC 3153 rel.

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

----S. 152---Power of Court to rectify register---Scope---Section 152 of the Ordinance empowers the Court to decide any question relating to "rectification" of the Register---Any question raised within the peripheral field of rectification, it is the High Court under S. 152 alone which has the exclusive jurisdiction---Plain reading of the word "rectification" itself connotes some error, which has crept in requiring correction---Error would only mean everything as required under the law has been done yet by some mistake the name is either omitted or wrongly recorded in register of the Company.

Lahore Race Club v. Raja Khushbakht-ur-Rehman PLD 2008 SC 707 ref.

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

----S. 152---Power of Court to rectify register---Scope---If the name of any person is fraudulently or without "sufficient cause" entered in or omitted from the Register of Members, the aggrieved person can apply to the Court for rectification of Register and the Court after enquiring into the matter may order rectification of Register if it is satisfied that the aggrieved person is entitled to such relief.

Muhammad Hussain v. Dawood Flour Mill 2003 CLD 1429 fol.

M. Imam-ud-Din Janjua v. The Thal Development Authority PLD 1972 SC 123 rel.

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

----Preamble & S. 6---Procedure of the Court and appeal---Scope---Preamble of the Companies Act, 2017 protects the interests of shareholders, creditors, other stakeholders and general public and provides an alternate mechanism for expeditious resolution of corporate disputes---However, S. 6(11) of the Act clearly states that the company matters have to be decided within a period of 120 days and the Court concerned shall fix the date and S. 6(7) of the Act speaks about allocation of time for hearing the case.

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

----S. 7---Jurisdiction of the Court---Scope---Jurisdiction exercised by the High Court under the Ordinance is original jurisdiction, in the sense that the petitions or applications under the various provisions of the Ordinance are entertain-able by the High Court as the Court of first instance.

Mehran Ginning Industries and 2 others v. Sajid Shafique and 12 others 217 CLD 1165 fol.

Malik Qamar Afzal, Advocate Supreme Court with Malik Shehryar Afzal, Raja Asjad Iqbal Satti and Malik Sabir Hussain for Petitioners.

Malik Ahtesham Saleem, Assistant Attorney General.

Respondents Nos.1 to 3 Ex parte.

Adeel Peter for Respondent No. 4.

2022 C L D 769

[Lahore (Bahawalpur Bench)]

Before Safdar Saleem Shahid, J

HABIB BANK LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petition No. 3848 of 2021, heard on 7th September, 2021.

Banking Companies Ordinance (LVII of 1962)---

----S. 82-D--- Federal Ombudsmen Institutional Reforms Act (XIV of 2013), S. 9---Constitution of Pakistan, Art. 175---Banking Mohtasib---Powers---Dispute, determination of---Jurisdiction---Petitioner Bank was aggrieved of order passed by Banking Mohtasib directing petitioner to make good loss caused to complainant---Validity---Banking Mohtasib had only power to entertain complaint and then to formulate recommendation in view of inquiry or report and then to submit it before concerned authority---Matters to decide rights or penalizing parties was specific prerogative of Courts---Loss to complainant was pointed by bank official so inquiry could be sent to the authority---Banking Mohtasib by exercising his capacity under S. 82-B of Banking Companies Ordinance, 1962, could not decide the matter as it related to judicial side---Banking Courts were constituted under law to deal with such matters---High Court set aside orders passed by Banking Mohtasib and maintained by appellate authority, as such orders were against law and in violation of Art. 175 of the Constitution---Constitutional petition was allowed in circumstances.

United Bank Limited v. Federation of Pakistan and others 2018 CLD 587 rel.

Rao Amer Faraz for Petitioner.

Muhammad Shahid Akhtar, Assistant Attorney General for Federation of Pakistan.

2022 C L D 779

[Lahore (Multan Bench)]

Before Sultan Tanvir Ahmad, J

KHAN MUHAMMAD---Appellant

Versus

MUHAMMAD ASLAM---Respondent

R.F.A. No. 64 of 2018, heard on 18th November, 2021.

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

----Ss. 4, 13 & 118---Qanun-e-Shahadat (10 of 1984), Art. 17---Suit for recovery---Negotiable instrument, attestation of---Respondent/plaintiff alleged that the appellant borrowed certain amount from the respondent; that he signed/issued promissory note and receipt in presence of witnesses; that the appellant refused to return the said amount---Suit was decreed by Trial Court---Appellant/defendant contended that upon signatures by the witnesses, promissory note stood converted into the surety bond, therefore lost its knack of negotiable instrument; that a litigation was already pending between father of the appellant and the respondent which was also brought on record; that parties having bitter relationship could not possibly enter into the transaction involving mutual trust; that there were discrepancies in the evidence including the difference of time of lending money that normally the people do not have such a huge amount at the houses---Validity---Promissory Note was not defined in the Stamp Act and for the purposes of definition/explanation of promissory note the Stamp Act was dependent on the Negotiable Instruments Act, 1881 (Act, 1881)---Act, 1881, was not just enacted as amending statute but also to define cheques, bill of exchange and promissory notes, but to lay the whole law regarding the said instruments---Sections 4 & 13 of Negotiable Instruments Act, 1881, did not provide for any requirement of attestation by witnesses or attestation if made by witnesses having some consequences and bearing on the nature of the instrument---Not necessitating such attestation on the promissory note simply had effect that requirement of Art. 17(2)(a) of the Qanun-e-Shahadat, 1984, was not mandatory to be fulfilled---If attestation was made, it would not automatically stand converted into a Bond, which by its own nature and characteristics and purpose was distinct from promissory note---Intention of parties could also be seen as to whether the instrument was intended to be a negotiable instrument or it was just a certificate of debt or contained merely an obligation to pay or to do something upon happening or not happening of certain event---Disputed promissory note had fulfilled all requirements---Two witnesses supported the stance of respondent and also deposed that thumb impression was given on the promissory note---Documents showed that parties did not involve in direct litigation between them, who were close relatives---Appellant had denied to avail opportunity of having comparison of thumb impression--Presumption was that negotiable instrument was made/drawn for consideration; and that holder thereof was a holder in due course---Appellant though adopted the stance that the negotiable instrument/promissory note was forged one but he never reported such incident to the authorities or taken any step to initiate criminal proceedings against the respondent despite lapse of several years----Appellant also did not make any effort to get instrument cancelled on the civil side---Appeal was dismissed accordingly.

Muhammad Ashraf v. Muhammad Boota, Civil Appeal No. 1784 of 2009 passed by Supreme Court dated 05-06-2014; Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam 2014 SCMR 1562 and Najaf Iqbal v. Shazad Rafique 2020 SCMR 1621 rel.

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

----Ss. 4 & 13---"Cheques", "bill of exchange" and "promissory notes"---Definitions---Scope---Definitions of the instruments contained in Negotiable Instruments Act, 1881 (Act, 1881), carried no ambiguity and were exhaustive in nature, leaving hardly any room to overstretch, spruce, narrow-down or borrow further words/explanation, besides contained therein---Said approach was further clarified from reading of S. 13(1) of the Act, 1881, which started with word 'means' instead of word 'include'---Unlike bond, promissory note was an unconditional note/written promise, signed by the maker to pay absolutely and in any eventuality, a certain sum either to, or to the order of, certain persons or the bearer of the instrument.

Dossabhai Hirchand v. Virchand Dalchharam and another AIR 1919 Bombay 73 rel.

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

----Ss. 4 & 13---Promissory note---Ingredients of---Promissory note is an instrument having ingredients: (i) must be in writing; (ii) contains undertaking of payment of money; (iii) undertaking must be unconditional; (iv) sum should be determined, and (v) such instrument must be signed by the maker.

Tariq Mehmood Dogar for Appellant.

Muhammad Zafar Khan Sial for Respondent.

2022 C L D 821

[Lahore]

Before Jawad Hassan, J

ABDULLAH KHAN USMANI---Petitioner

Versus

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

Civil Original No. 227628 of 2018, heard on 16th March, 2022.

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

----S. 126---Limitation Act (IX of 1908), Art. 181---Power of Court to rectify Register---Limitation---Scope---Petitioner being one of the Directors of the company had 29,900 shares out of 30,000, he proceeded abroad for a few years and upon his return he gained knowledge about the transfer of his 29,900 shares in the name of respondents, as such, he sought rectification of the Register of Members---Respondents produced minutes of Board of Director's meeting, whereby it was resolved that the petitioner had voluntarily resigned from his post and the transfer deed was also produced---Validity---Held, it could not be said that petitioner's 29,900 shares were transferred fraudulently or without sufficient cause and no valid reason or evidence was provided by the petitioner to substantiate his claim---Application filed by petitioner after a period of ten years from the date of transfer i.e. accrual of right to file application was time barred---Petitioner at one point was Director of the company who had submitted annual returns and at that stage, his contention that he had gained knowledge of alleged transfer through the website of a Ministry, was not convincing in the sense that the petitioner was not a layman---Law itself had given several directions for a Director to keep in touch with the company record, inspect registers of directors and documents, file statutory annual returns once in each year which then became public record---Company registers were open to inspection by members under Ss. 74(4) & 124 of Companies Act, 2017 (of the Act)---Under S. 130 every company was bound to prepare and file an annual return once in each year---Under S. 205 of the Act changes in the names of Directors were to be duly notified to Securities and Exchange Commission of Pakistan (SECP)---Petitioner's company ran a Pakistan business of travel agency which required a yearly licence but nothing was placed on record by the petitioner---Respondents had proved that they were running the business activities after renewal of its licence---Petition was dismissed.

Dr. Syed Sibtain Raza Naqvi v. Hydrocarbon Development and others 2012 SCMR 377 and Nazar Hussain and others v. Nasir Ali and others 2020 CLD 578 rel.

Bakhsha and others v. Chugatta 2002 SCMR 1353 rel.

(b) Words and phrases---

----"Fraud"---Connotation.

A knowing misrepresentation or knowing concealment of a material fact made to induce another to act to his or her detriment. Fraud is usually, a tort, but in some cases (especially when the conduct is willful) it may be a crime.

Black's Law Dictionary 11th Edition fol.

A reckless misrepresentation made without justified belief in its truth to induce another person to act.

Black's Law Dictionary 11th Edition fol.

A tort arising from a knowing or reckless misrepresentation or concealment of material fact made to induce another to act to his or her detriment. Additional elements in claim for fraud may include reasonable reliance on the misrepresentation and damages resulting from this reliance.

Black's Law Dictionary 11th Edition fol.

Unconscionable dealing; esp., in contract law, the unfair use of the power arising out of the parties relative positions and resulting in an unconscionable bargain.

Black's Law Dictionary 11th Edition fol.

Fraud at common law is a false statement. Fraud in equity has often been used as meaning unconscientious dealing.

William R. Arson, Principles of the Law of Contract 263 (Arthur L. Corbin ed., 3d Am, ed. 1919 fol.

Fraud means and includes, inter alia, the suggestion as a fact of that which is not true, by one who does not believe it, to be true, and the active concealment of a fact by one having knowledge or belief of the fact.

Allah Wasaya and 5 others v. Irshad Ahmad and 4 others 1992 SCMR 2184 fol.

Fraud vitiates all solemn acts and any instrument, deed or judgment or decree obtained through fraud is a nullity in the eye of law and can be questioned at any time so much so that they can be ignored altogether by any court of law before whom they are produced in any proceedings.

Mst. Zulaikhan Bibi through LRs and others v. Mst. Roshan Jan and others 2011 SCMR 986 fol.

Fraud encompasses all acts and omissions whether by suppression of truth or suggestion of fact, which are deliberate and intended to cause benefit to oneself and to cause the other to suffer a loss or the risk of loss. It includes the element of intent and the actual act or omission which follows from such an intent. However, in circumstances there may not be a deliberate intent, yet the act or omission may be so reckless so as to constitute fraud. Where allegation of fraud is raised, such an allegation must be specific and must be proved by the party alleging such a fraud.

Allah Wasaya and 5 others v. Irshad Ahmad and 4 others 1992 SCMR 2184; Mst. Zulaikhan Bibi through LRs and others v. Mst. Roshan Jan and others 2011 SCMR 986 and Habib Ahmad v. Meezan Bank Limited and 5 others 2016 CLC 351 rel.

Fraud is the intentional use of deception, trickery or perversion of truth for the purpose of inducing another to part with some valuable right or thing belonging to him or to give up a legal right.

Frank Kofi Otuo v. Watch Tower Bible and Tract Society of Britain [2019] EWHC 1349 (QB) fol.

Fraud is proved when it is shown that a false representation has been made knowingly or without belief in its truth or recklessly, careless whether it be true or false.

Superwood Holdings Plc v. Sun Alliance (1995) 3 IR 303 rel.

First, in order to sustain an action of deceit, there must be proof of fraud and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (1) knowingly or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false.

Superwood Holdings Plc v. Sun Alliance (1995) 3 IR 303 fol.

Fraud in ordinary speech means the using of false representations to obtain an unjust advantage. Likewise in law 'fraud' is proved when it is shown that a false representation has been made knowingly or without belief in its truth, or recklessly, careless whether it be true or false.

Derry v. Peek (1889) 14 App Cas 337 fol.

[1978] Ch. 262/[1978] 2 W.L.R. 866 ref.

Fraud, connotes an element of intent and the acts/omissions. The intent must be to benefit oneself or to cause loss or the risk of loss to another. The act must be one which is false, coupled with the mental element of being aware that the act being done is false or misleading. Similarly, the omission must also be deliberate and with the intent of causing a loss or misleading another.

AIR 2003 ALL 337 and AIR 1914 Sindh 28 ref.

(c) Words and phrases---

---"Fraudulent act"---connotation.

Conduct involving bad faith, dishonesty, a lack of integrity, or moral turpitude.

Black's Law Dictionary 11th Edition fol.

Conduct satisfying the elements of a claim for actual or constructive fraud. Black's Law Dictionary 11th Edition fol.

(d) Words and phrases---

----"Fraudulent purpose"---Meaning---Scope---Intention to go beyond the bounds of what ordinary decent people engaged in business would regard as honest.

[1984] 2 W.L.R. 815 rel.

(e) Words and phrases---

----"Fraudulent alienation"---Connotation.

The transfer of an interest in property with an intent to defraud others, esp. creditors and lien-holders.

Black's Law Dictionary 11th Edition fol.

The transfer of an estate asset by the estate's administrator for little or no consideration.

Black's Law Dictionary 11th Edition fol.

(f) Words and phrases---

----"Fraud by misrepresentation"---Explanation---Scope---Person is held to have committed fraud by misrepresentation if he dishonestly makes a false representation and intends by that misrepresentation to, (a) make a gain for himself, or (b) to cause a loss to another or to expose another to risk of loss---Representation is held to be false if, (a) it is untrue or misleading, and (b) the person making it knows that it is, or might be untrue or misleading.

(g) Words and phrases---

----"Fraud by abuse of position"---Connotation---Scope---Person is found to have committed Fraud by abuse of position if he occupies a position in which he is expected to safeguard or not to act against the financial interests of another person, and such a person dishonestly abuses that position and intends by means of that position to (i) make a gain for himself or another, or (ii) to cause loss to another or to expose another to a risk of loss---Person may be regarded as having abused its position even though his conduct amounted to omission rather than act.

(h) Words and phrases---

----"Fraud by failing to disclose information"---Scope---Person is considered to have committed fraud by failing to disclose information if he dishonestly fails to disclose to another person information which he is under a legal duty to disclose and intends by failing to disclose such information (i) to make a gain for himself or another, or (ii) to cause loss to another or to expose another to risk of loss.

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

----S. 126---Power of Court to rectify Register---Scope---Literal study of S. 126(1)(a) of the Companies Act, 2017, provides a right to make an application before the Court for the purposes of rectification of Register of Members or Register of Debenture holders of a company in a case where name of a person "fraudulently" or "without sufficient cause" was entered in or omitted from said Registers.

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

----S. 126---Power of Court to rectify Register---Expression 'without sufficient cause'---Scope---Litigant is merely required to show that his name was removed 'without sufficient cause', and no express provision stipulates that a litigant must have acted in 'good faith'.

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

----S. 126---Power of Court to rectify Register---Expression 'without sufficient cause'---Scope---Expression 'without sufficient cause' connotes that in the opinion of the Court a good or justifiable reason was not provided for removing the name of a member from the Register of the Members.

Ata Ullah Malik v. The Custodian Evacuee Property, West Pakistan and Karachi, Sardar Battan Singh Harnam Singh PLD 1964 SC 236; Khushi Muhammad v. Mst. Fazal Bibi PLD 2016 SC 872; Muhammad Anwar v. Mst. Ilyas Begum PLD 2013 SC 255 and Abdul Majid and others v. Mst. Zubeda Begum 2007 SCMR 866 ref.

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

----S. 126---Power of Court to rectify register---Expression 'without sufficient cause'---Scope---Whilst interpreting the phrase 'without sufficient cause' in the context of S. 126 of the Companies Act, 2017, the question before the Court is whether a justifiable cause has been provided for the act of removing a member from the register of members or whether a justifiable excuse is provided for failing to enter the name of a member in the register.

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

----S. 17---Memorandum and Articles---Scope---If, in the event the money payable by a subscriber in pursuance of his undertaking in the Memorandum of Association against the shares subscribed is not paid within thirty days of incorporation of the Company, then in such circumstances the shares are deemed to be cancelled and the name of such a subscriber by virtue of law is to be removed from the Register of Members the consent of such a member is not required.

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

----S. 285---Power to acquire shares of members dissenting from scheme or contract---Scope---Where a scheme or contract involving the transfer of shares of any class of shares in the Company to another Company has been approved by shareholders of the selling company, then the Company purchasing the said shares may issue a notice to the dissenting shareholder refusing to sell his shares with the intention to acquire such shares and the transferee Company shall be entitled and bound to acquire the shares as per the terms of the scheme or contract and the Securities and Exchange Commission may order that the said shares be transferred to the transferee company---Name of the dissenting shareholder shall be omitted from the register without his consent and the name of the transferee company added, in circumstances.

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

----S. 286---Application to Court---Scope---Where a petition is filed under S. 286 on the grounds that the affairs of the Company are being conducted in a manner that is prejudicial to the interests of the Company or its members, and that the affairs as conducted constitute oppression, then the Court under S. 286 of the Companies Act, 2017 is empowered to order for the compulsory purchase of shares of any members by the other members---Purchase of share, in circumstances, is non-consensual, as it is solely made on the basis of the order of the Court ultimately however, if any such order is made by the Court, then such a transfer shall also be recorded by the Company and any change of shareholders/members shall also be duly added in the Register of Members.

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

----Ss. 119, 183 & First Sched., Table A, Reglns. 47 & 50---Register of Members---Powers and duties of Board of Directors and Directors---Scope---Requirement to maintain a Register of Members is provided under S. 119 of the Companies Act, 2017, which provides that a company shall maintain a Register of all Members of the company---As per Regulations for management by a company, contained in the First Schedule Table-A, of the Act, Regln. 47 thereof provides the duties and responsibilities of a director of the company according to which the directors of the company may exercise all such powers of the company as are not specifically required to be exercised in a general meeting including the business of the company---Further, Regulation 50 provides that the directors shall comply with all the provisions of the Act pertaining to the Register of Directors and Members---Although S. 119 of the Act itself does not stipulate any express requirement to the scope that a register shall be maintained or names shall be entered or omitted only through a general meeting, thus as per S. 183 of the Act, such powers must be exercised by the Board of Directors of the company who may authorize any officer of the company to maintain the register and as such make addition or omission from the same and the same power would be exercised by the directors of the company or any person authorized by the Board of Directors with prior authorization through a Board resolution---Basic position arises that usually name of a member is only added or omitted where a transfer of shares has taken place and in such a situation a name of a member (the transferor) is omitted whilst the name of the new member (the transferee) is added---Mode of adding or omitting a member from the register shall then be in compliance with the requirements of Ss. 74, 76 & 77 of the Act.

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

----S. 76---Restriction on transfer of shares by the members of a private company---Scope---Process for transfer of shares as mentioned in S. 76 of the Act must be complied with i.e. a notice must be issued to the Board of Directors by the prospective selling member indicating an intention to sell the shares, the Board of Directors upon such a requisition shall offer the shares to all the shareholders in proportion to their existing shareholding, upon acceptance by the shareholders of the offer so made a duly recognized instrument of transfer shall be executed between the parties (a share transfer deed).

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

----Ss. 74, 75, 76 & 126---Transfer of shares and other securities---Board of Directors not to refuse transfer of shares---Restriction on transfer of shares by the members of a private company---Power of Court to rectify register---Scope---Executed instrument of transfer, as per S. 74, shall after completion of procedure detailed in S. 76 be submitted to the company to register the same and to add and omit the name of the transferee and the transferor as the case may be---Subsequently, when a duly executed transfer deed signed and stamped by the transferor and transferee is tendered to the Board of Directors of a private limited company, then in such circumstances the Board as per Ss. 74 & 75 of the Act is bound to register the transfer of shares i.e. to add and omit the name of the transferee and the transferor respectively and failure of the Board to register the same shall grant the aggrieved party the right to move the Court under S. 126 for rectification of the Register of Members.

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

----Ss. 74 & 126---Transfer of share and other securities---Power of Court to rectify Register of Members---Fraudulent transfer---Scope---Where a transfer deed is executed with the forged signatures of a transferee and then presented to the company for registration in the register; in such case, the company cannot question the genuineness or validity of the transfer deed, unless there is an apparent defect in the same, thus where the transfer deed so presented bearing the forged signatures of the transferee is presented to the company and the company proceeds to omit the name of the transferee shareholder and adds the name of the transferor on the basis of this fraud, then in such circumstances the name of the transferee member would have been omitted without his consent and snatched his legal title from him---Such a member shall have the remedy to appear before the appropriate forum, for cancellation of such a fake and bogus transfer deed and for rectification of the register under S. 126 of the Act.

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

----S. 76---Restriction on transfer of shares by the members of a private company---Scope---Company cannot register transfer of shares i.e. cannot add the name of the transferee or omit the name of the transferor unless a proper instrument of transfer duly stamped and signed by the transferor and transferee has been delivered to the company along with the script.

Alliance Textile Mills Limited and 8 others v. Mrs. Naheed Kayani and 9 others 2015 CLD 1532 ref.

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

----Ss. 74, 76 & 62---Transfer of shares and other securities---Restriction on transfer of shares by the members of a private company---Shares certificate to be evidence---Scope---Name of a shareholder can be added or omitted by the Board of Directors by way of passing an ordinary resolution specifying that the name of such a member be added or such a member be omitted where the mode is through the transfer of shares as mentioned in S. 76---Mode of adding or removing such a name from the register is where the Board of Directors as per S. 74 has received an application along with a duly executed instrument of transfer signed and stamped by the transferor and transferee for the registration of shares, it enters the name in the register or omits from the same---Instrument of transfer, as stipulated in the Act, is the share transfer deed and the title to the shares is established through the share certificate issued under S. 62 of the Act.

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

----Ss. 74, 75, 62, 126 & 127---Transfer of shares and other securities---Board of Directors not to refuse transfer of shares---Shares certificate to be evidence---Power of Court to rectify register---Punishment for fraudulent entries in and omission from register---Scope---Legal title to the shares is conferred by entry of the name in the Register of Members, whereas beneficial ownership is conferred when share certificates are issued---Consent of the members is seemingly evident, since the act of adding or omitting is merely being done on the basis of a consensual agreement submitted by the members---Powers of the Board to arbitrarily add or omit the names is further made subject to the provisions of S. 126 of the Act, which provides that a member may move the Court to have register rectified where his name has been added or omitted without a sufficient cause or fraudulently---Thus, inherently the power of the Board to alter the register is greatly curtailed, since on account of removing a member without any justifiable reason or fraudulently, the Directors may be exposed to the penal provisions of S. 127 of the Act and although the Board may practically do such an act, it would albeit be considered as illegal---In the normal course of business the name of a member cannot legally be removed without his consent.

Muhammad Sohail Butt v. Capital Insurance Company Limited and another 2007 CLD 1487 ref.

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

----S. 62---Shares certificate to be evidence---Scope---Share certificate specifying the shares held by a person shall be prima facie evidence of title of the person to such shares.

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

----S. 126---Limitation Act (IX of 1908), Preamble---Power of Court to rectify register---Limitation---Limitation Act, 1908 is applicable on petition under S. 126 of the Companies Act, 2017 and the limitation starts to run from the time when the right to apply accrues and not from the date of knowledge.

Nazar Hussain and others v. Nasir Ali and others 2020 CLD 578 rel.

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

----S. 5---Extension of period in certain cases---Condonation of delay---Sufficient cause---Scope---Sufficient cause means circumstances that are beyond the control of the parties.

Ata Ullah Malik v. The Custodian Evacuee Property, West Pakistan and Karachi, Sardar Battan Singh Harnam Singh PLD 1964 SC 236 rel.

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

----Ss. 5 & 14---Civil Procedure Code (V of 1908), O. IX, Rr. 4 & 9---Expression 'sufficient cause', explained---Scope---In the context of sections 5 and 14 of the Limitation Act, 1908, 'sufficient cause' is interpreted narrowly in a sense that negligence or lack of due diligence on part of a party would render it unable to show that sufficient cause existed, this is so primarily owing to the phrase 'good faith' as used in S. 14 of Limitation Act, 1908---'Sufficient cause' as used in O. IX, Rr. 4 & 9, C.P.C., is interpreted rather liberally so even in circumstances where a party has acted with negligence or failed to exercise due care, the Court may still decide that sufficient cause exists to allow the restoration of a suit or allow a party to pay the requisite court fee, as the circumstances may be.

Abdul Majid and others v. Mst. Zubeda Begum 2007

SCMR 866 ref.

(aa) Words and phrases---

----"Sufficient cause"--- Connotation--- Scope--- "Sufficient cause" means a good cause, a just cause, a lawful cause, and there is no hard and fast rule and no absolute criteria can be set forth as to what constitute 'sufficient cause'---What is a 'sufficient cause' always depends upon the facts of the case, however a party must show a legally sufficient reason as to why a request should be granted or the inaction/omission should be excused, i.e. the judicial conscience of the Court must be satisfied with justifiable reasons.

Muhammad Anwar v. Mst. Ilyas Begum PLD 2013 SC 255 fol.

(bb) Words and phrases---

----'Sufficient cause'---Connotation---Scope---Ultimately the discretion lies with the Court to decide based upon the facts of the case as to whether such satisfactory or acceptable reasons/justifications have been provided so as to constitute a 'sufficient cause'.

Rai Muhammad Riaz (decd) through L.Rs. and others v. Ejaz Ahmed and others PLD 2021 SC 761 ref.

(cc) Words and phrases---

----'Sufficient cause'---Connotation---Scope---Sufficient cause connotes a justifiable excuse, cogent reasoning, convincing reasoning, reasoning that in the opinion of the Court is satisfactory for a certain act or a justifiable explanation for an omission.

Dr. Syed Sibtain Raza Naqvi v. Hydrocarbon Development and others 2012 SCMR 377 rel.

(dd) Words and phrases---

----'Sufficient cause'---Connotation---Scope---Sufficiency of a cause depends upon the facts and circumstances of each case and it is for the conscience of the Court to decide as to what constitutes sufficient cause.

Mian Muhammad Nawaz Sharif v. The State PLD 2009

SC 814 fol.

(ee) Words and phrases---

----Sufficient cause---Connotation---Scope---Sufficient cause means something that is a satisfactory explanation for the Court for an action or some omission, it may be a justifiable reason, a cogent reason, a reason which satisfies the Court that a certain action should have been taken or a certain omission was justifiable/excusable---Whether sufficient cause is shown for an act or an omission depends upon the facts of the case and it is at the discretion of the Court to decide whether it is satisfied that sufficient cause has been shown for an action or a justifiable excuse is provided for an inaction.

Ram Nath Sao and Ram Nath Sahu v. Gobardhan Sao and others (2002); Mst. Khadija Begum and 2 others v. Mst. Yasmeen and 4 others PLD 2001 SC 355; Rai Muhammad Riaz (decd) through L.Rs. and others v. Ejaz Ahmed and others PLD 2021 SC 761; Dr. Syed Sibtain Raza Naqvi v. Hydrocarbon Development and others 2012 SCMR 377 and Mian Muhammad Nawaz Sharif v. The State PLD 2009 SC 814 ref.

Omar Tariq Shamim, Muhammad Umer Qureshi, Barrister Maryam Hayat, Ms. Saira Khalid Lodhi and Muhammad Imran Shamsi for Petitioners.

Ibrar Saeed, Special Public Prosecutor/Director Law, SECP with Ruman Bilal, Hafiz Talha and Mian Ijaz Yousaf, Advocates/Legal Advisors for the SECP the Respondent No.1.

Salman Mansoor, Advocate Supreme Court assisted by Abdul Majeed and Usman Gulzar for the Respondents Nos. 2, 3 and 7.

Ex parte Respondent No.4.

Ms. Sadia Malik, Assistant Attorney General for the Respondent No.5/Ministry of Religious Affairs, Islamabad.

Shezada Mazhar, Advocate Supreme Court/Amicus Curiae assisted by Shahrazi Sajid, M. Jawwad Khan Lodhi, Khawaja Haseeb Ahmad and Raja Shamsher for Respondents.

2022 C L D 877

[Lahore]

Before Shahid Karim and Muzamil Akhtar Shabir, JJ

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

Versus

PERVAIZ AHMAD---Respondent

R.F.A. No. 762 of 2016, decided on 8th March, 2022.

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

----Ss. 9 & 22---Suit for recovery of finance---Markup---Quantum---Appellant/House Building Finance Corporation was aggrieved of not awarding of markup beyond period of agreement and other charges---Validity---Banking Court rightly declined claim of appellant/company in respect of markup beyond period of agreement as well as other charges which were sought to be included in the claim---High Court modified judgment and decree passed by Banking Court---Appeal was allowed accordingly.

Kh. Muhammad Ajmal for Appellant.

2022 C L D 892

[Lahore]

Before Shams Mehmood Mirza and Rasaal Hasan Syed, JJ

HOUSE BUILDING FINANCE CORPORATION---Appellant

Versus

AMIR RAFI and others---Respondents

R.F.A. No. 214476 of 2018, decided on 31st March, 2022.

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

----Ss. 3, 9 & 22---Suit for recovery of finance---Cost of funds---Future rent--- Insurance charges--- Appellant/House Building Finance Corporation was aggrieved of judgment and decree passed by Banking Court wherein insurance charges and future rent were declined---Validity---Claim of insurance charges were liable to be paid by respondent/borrower and was validly claimed by appellant/ Corporation---Banking Court had allowed costs of funds, therefore, appellant/Corporation was not entitled to claim future rent---Cost of funds were allowed from date of suit which was to be allowed from the date of default in terms of S. 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court modified judgment and decree passed by Banking Court---Appeal was allowed accordingly.

Khawaja M. Ajmal for Appellant.

2022 C L D 900

[Lahore]

Before Masud Abid Naqvi, J

BUSHRA BIBI and others---Petitioners

Versus

ADDITIONAL DISTRICT JUDGE and others---Respondents

Writ Petition No. 22594 of 2019, decided on 30th September, 2021.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 29 & 29-A---Civil Procedure Code (V of 1908), O. XXXVII, R. 2--- Summary suit for recovery of money---Liability of legal representative signing---Signature essential to liability---Scope---Respondent filed a summary suit for recovery of amount mentioned in cheque along with mark up against the legal heirs of the executant---Trial Court framed a preliminary issue regarding liability of petitioners to be sued---Validity---Petitioners who were neither makers, drawers, or endorsers nor acceptors of cheque and even presentation for encashment and dishonouring of the alleged cheque during life time of executant could not have legally authorized respondent to institute suit under O. XXXVII, R. 2, C.P.C., against petitioners, hence, the suit was not maintainable before the Trial Court---Writ petition was accepted and the Trial Court was directed to return the plaint.

Nasir Iqbal v. Bushra Bibi and others ref.

Malik Shahbaz Ahmad for Petitioners.

2022 C L D 925

[Lahore]

Before Jawad Hassan, J

ABB POWER AND AUTOMATION (PRIVATE) LIMITED and others---Petitioners

Versus

JOINT REGISTRAR OF COMPANIES and others---Respondents

C.O. No. 45269 of 2021, decided on 13th December, 2021.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281 & 282---Compromise with creditors and members---Reconstruction or amalgamation of companies---Scope---Petitioners (Companies) sought sanction of the High Court to a Scheme of Arrangement and for their merger---Held, that shareholders had unanimously consented and approved proposed Scheme of Arrangement for merger of petitioners in their meetings held at their respective offices---All secured creditors had given their NOCs (No Objection Certificates) to the mentioned Scheme---Petitioners were wholly owned subsidiary of a company and all the shareholders and Board of Directors of the petitioners had unanimously approved the Scheme of merger therefore, there was no reason to interfere with their business decision---All indispensable statutory benchmarks, requirements and formalities had been accomplished and adhered to by the petitioners as envisioned under the relevant provisions of law, including the holding/convening of the requisite meetings as contemplated under the relevant provisions and rules and the resolutions passed by the members had already been highlighted---Proposed scheme was not found to be violative of any provision of law and/or contrary to public policy but as a whole looked like evenhanded and serviceable from the point of view of a prudent man of business taking a commercial decision beneficial to the class represented by him for whom the scheme was meant---Once the requirements of a scheme for getting sanction of the Court was found to have been met, the Court would have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes had given their approval of the scheme---No objection remained against the scheme of arrangement and no mistake, conspicuous, detectable shortcoming or flaw had further been pointed out in the matter---Petition was allowed and the Scheme was sanctioned.

DILSONs (Private) Limited and others v. Securities and Exchange Commission of Pakistan and another 2017 CLD 1317; Roomi Foods (Pvt.) Ltd. and others v. Joint Registrar of Companies and others 2020 CLD 900; In the matter of International Complex Projects Limited and another 2017 CLD 1468; Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230; Messrs Fazal Cloth Mills Ltd. v. Messrs Fazal Weaving Mills Ltd. 2021 CLD 182 and Presson Descon International Pvt. Limited and others v. Joint Registrar of Companies 2020 CLD 1128 = PLD 2020 Lah. 869 rel.

Usman Akram Sahi, Munawar us Salam, Advocates Supreme Court with Hassan Pervaiz for Petitioners.

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

2022 C L D 949

[Lahore (Multan Bench)]

Before Muhammad Shan Gul, J

SHAHID AKHTAR---Appellant

Versus

MUHAMMAD AZAM ABBAS---Respondent

Regular First Appeal No. 24 of 2017, heard on 2nd December, 2021.

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

----O. XXXVII, R. 1---Cheque dishonoured---Suit for recovery was filed by the appellant alleging that he was an electrician; that he lent/loaned an amount of Rs.15,00,000/- to respondent in presence of two witnesses; that respondent was in need of money for purpose of going abroad; that respondent executed the cheque in issue for repayment which was dishonoured on account of insufficient funds---Respondent, in his written statement, denied receiving any amount and presented photocopy of an application filed by him before concerned Police Station complaining that leaflets of his cheque book gone missing---District Court dismissed the suit---Validity---One witness being star witness of appellant was declared hostile by the appellant himself and had not been produced for the purpose of cross-examination, therefore the testimony thereof could not be relied upon---Other witness being the real brother of the appellant did not have any idea about the reason for the alleged loan or about the monthly income of his brother earned so as to be placed in a position to lend such an amount of money, therefore his testimony was not helpful in proving the case---Respondent produced copy of the application preferred to concerned Police Station about loss of leaflets from his cheque book---It did not appeal to reason that an electrician with no Bank account, no property and with no apparent high source of income could dole out huge amount by way of loan---Major contradictions existed in the evidence of the appellant, appearing as witness, about who filled up the cheque---Said witness was not an independent witness being real brother of the appellant; not aware of the monthly income of the appellant to show him financially comfortable and in position to lend the amount of money in question; was absolutely ignorant about why the loan was extended; hence, his testimony casted serious doubts about his presence during the course of alleged transaction---Appellant had to discharge initial burden of proof and which onus could have shifted onto the respondent in the event that the appellant discharged the initial burden---Non-existence of consideration was so probable in the case that no prudent man could have believed the existence thereof---Appellant failed to discharge onus of proof, could not establish

his case and therefore, the onus never shifted---Appeal was dismissed accordingly.

Rab Nawaz Khan v. Javed Khan Swati 2021 CLD 1261; Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332 and Asif Ali and 6 others v. Saeed Muhammad 2009 CLD 1301 rel.

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

----S. 118--- Presumption of correctness---Rebuttable, nature of---Scope--- Party had to stand on its own base---Party could not be allowed to unjustly enrich itself simply on account of the presumption of correctness---Presumption under S. 118 of the Negotiable Instruments Act 1881 is not a conclusive presumption rather it is rebuttable in nature and initially burden of proving that the Negotiable Instrument was executed against consideration is on the plaintiff.

Ghulam Murtaza v. Muhammad Rafi 2020 CLD 265 rel.

Malik Muhammad Latif Khokhar for Appellant.

Nemo for Respondent.

2022 C L D 962

[Lahore (Multan Bench)]

Before Muhammad Raza Qureshi, J

Rana GHAFOOR ALI---Petitioner

Versus

PROVINCE OF PUNJAB through Secretary Ministry of Environment Government of Punjab and 2 others---Respondents

Writ Petition No. 17726 of 2021, heard on 8th December, 2021.

(a) Constitution of Pakistan---

----Arts. 4 & 10-A---Rule of law---Applicability---State, responsibility of---Mandate of law has always aimed to secure inviolable Constitutional rights of every citizen available for protection under doctrine of access to justice---State functionaries were obliged to follow mandate of law in its letter and spirit---Every citizen under Arts. 4 & 10-A of the Constitution has right to be provided a right to due process of law, right of hearing and right to explain fact as well as law---Such object can only be achieved if someone is confronted with an allegation against him, otherwise, an action or notice in failure to provide a right to due process of law would not only be violative of fundamental rights but also against statutory provisions of law.

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

----Ss. 7 & 16---Constitution of Pakistan, Art. 199---Constitutional petition---Environmental protection order---Mandatory provisions, non-compliance of---Effect---Petitioner was running a brick kiln and notice imposing fine upon him was issued by authorities for violations of laws---Plea raised by petitioner was that brick kiln was inoperative and fine was imposed without compliance of mandatory provisions--- Validity--- Without following mandate of law contained in S. 16 of Pakistan Environmental Protection Act, 1997, direct issuance of recovery notice burdening petitioner with penalties and fines in absence of Show Cause Notice not only betrayed mandate of justice but was also violative of his fundamental right---Notice in question was issued without first satisfying flow of statutory measures for confronting petitioner with allegations against him or granting him an opportunity to satisfy whether he had violated provisions of law, SOPs or orders of High Court---High Court set aside notice in question as the same was suffering from jurisdictional defect and was unlawful---High Court remanded the matter to the authorities for compliance in accordance with law---Constitutional petition was allowed accordingly.

Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and 3 others 2001 SCMR 838 rel.

(c) Interpretation of statutes---

----Appeal, remedy of---Scope---Every fiscal law or regulatory statute and any law of such nature may provide a remedy of appeal against a lawful notice or legal action but under the law, there cannot be any remedy against a wrongful, illegal or unlawful notice.

(d) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Alternate remedy, principle of---Applicability---High Court has judicial power to intervene in cases of wrongful exercise of statutory power in excess of jurisdiction, illegal exercise of discretion or abuse of power, procedure and course---Any other interpretation of scope of power of High Court under Art. 199 of the Constitution may amount to restricting, limiting and ousting jurisdiction of High Court---Where condition precedents described by law for issuance of recovery notices are not enforced and actions assailed suffer from mala fide in law, the rule of alternate remedy does not remain a rule of law as barring jurisdiction as through said rule Courts regulate its own jurisdiction.

Edulji Dinshan Limited v. Income Tax Officer PLD 1990 SC 399; Messrs Kamran Industries v. The Collector of Customs (Exports), Karachi PLD 1996 Kar. 68; Muslimabad Cooperative Housing Society Ltd. v. Mrs. Siddiqa Faiz and others PLD 2008 SC 135 and Messrs Pak-Saudi Fertilizers Ltd. v. Federation of Pakistan and others 2002 PTD 679 rel.

Khalid Masood Ghani, Chaudhary Muhammad Shahid Ansari and Abdul Rehman Khan Laskani for Petitioner.

Muhammad Shahid Riaz, Assistant Advocate General with Zafar Iqbal, Deputy Director, Environment Protection Agency, Multan for Respondents.

2022 C L D 981

[Lahore (Rawalpindi Bench)]

Before Mirza Viqas Rauf and Raheel Kamran, JJ

AISHA RAHMAN---Appellant

Versus

ALLIED BANK LIMITED and others---Respondents

F.A.O. No. 51 of 2021, decided on 31st January, 2022.

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

----S. 19(7)---Limitation Act (IX of 1908), First Schedule, Art. 166---Civil Procedure Code (V of 1908), S. 47 & O. XXI, R. 89---Execution of decree---Auction proceedings---Objections, filing of---Limitation---Appellant filed objections to auction proceeding for sale of mortgaged property---Executing Court dismissed objection petition on the ground of limitation---Validity---Auction in question was held on 15-02-2021 and application under O. XXI, R. 89, C.P.C. was filed on 5-04-2021, whereas sale was confirmed by Banking Court on 23-4-2021---No order was passed by Banking Court before 23-4-2021 whereby bid of respondent was expressly accepted by Court---Order dated 23-4-2021 contained that for the purpose of limitation, Executing Court held that sale was to have taken place on 15-2-2021 i.e. date of fall of hammer and not acceptance of the offer, such finding was contrary to legal position in O. XXI, R. 89, C.P.C.---High Court set aside order passed by Executing Court and period of 30 days limitation prescribed under Art. 166 of First Schedule to Limitation Act, 1908 was to run from date of sale i.e. 23-4-2021---High Court remanded the matter to Executing Court for objection application to be decided afresh---Appeal was allowed accordingly.

Muhammad Attique v. Jami Ltd. and others PLD 2019 SC 993; Muhammad Jawed v. First Women Bank Ltd. and others 2021 CLD 39; Muhammad Ashraf v. UBL and others 2019 SCMR 1004; Muhammad Khalil v. Messrs Faisal M.B. Corporation and others 2019 SCMR 321; Messrs Habib and Company and others v. Muslim Commercial Bank Limited and others PLD 2020 SC 227; Azam Wazir Khan v. Messrs Industrial Development Bank of Pakistan 2013 SCMR 678; Nand Lal and another v. Askari Commercial Bank Limited and another 2018 CLD 1320; United Bank Limited v. Messrs Blessed International (Pvt.) Limited and 6 others 2003 CLD 39; United Bank Limited v. Messrs Usman Textiles and 6 others 2007 CLD 435; A.M. Rice Corporation v. Bank of Punjab 2005 CLD 1569; Habib Bank Limited v. Mst. Parveen Qasim Jan and others 2014 SCMR 322; Mst. Shaista Bibi and another v. Superintendent, Central Jail Mach and 2 others PLD 2015 SC 15; Messrs Fazal Sons and 3 others v. Muslim Commercial Bank 2015 CLD 1699; Habib Bank Limited v. Karachi Pipe Mills Ltd. 2006 CLD 842 and Tristar Industries (Pvt.) Limited v. State Bank of Pakistan 2004 CLD 257 ref.

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

----S. 10(1)---Term "judgment debt"---Scope---"Judgment debt" is decretal amount and mark up visualized under S. 10 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, is included in the same.

Cambridge dictionary, "judgment debt" and Collins English dictionary defines "judgment debt" rel.

Habib Ahmed Bhatti and Raja Zaheer-ud-Din Babar for Appellant.

Malik Muhammad Siddique Awan for Respondent No. 1.

Barrister Sardar Umer Aslam for Respondent No. 2.

2022 C L D 1002

[Lahore (Multan Bench)]

Before Abid Hussain Chattha and Muhammad Raza Qureshi, JJ

Messr CHOUDHARY RICE MILLS through Partners and 3 others---Applicants

Versus

The BANK OF PUNJAB through Principal Officer/Constituted Attorney---Respondent

R.F.A. No. 90 of 2019, heard on 22nd March, 2022.

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

----Ss. 9 & 10---Procedure of Banking Courts---Leave to defend---Scope---Appellants assailed judgment and decree passed by Banking Court whereby the suit filed by Bank was partially decreed---Validity---Appellants had conceded the banker-consumer relationship, the availing of finance facilities and executing the security documents to secure the repayments of amounts availed by the appellants---Petitions for leave to appear filed by appellants did not fall in the exceptions justifying the grounds for grant of appellants' petitions---Mandatory requirements of S. 10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 had not been complied with by the appellants---So far as contention of appellants that amounts deposited by them towards satisfaction of their availed finance facilities were embezzled and an FIR in that respect was lodged, was concerned High Court observed that the FIR was lodged against employees of the Bank and not against the Bank---Inherent fallacy existed in the arguments of the appellants that pendency of those proceedings constituted a ground for grant of appellants' petitions for leave to appear---Banking court had rightly dismissed the appellants' petitions for leave to appear---Appeal was dismissed.

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

----S. 10---Leave to defend---Scope---Absence of meeting mandatory requirements of S. 10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 i.e. disclosing summary of substantial questions of law as well as facts in respect of which in the opinion of the defendant evidence needed to be recorded; failure to tabulate honest disclosure about the amount of finance availed by the defendant; failure to allege the amount of finance payable by defendant; and not disclosing the amount of finances disputed by the defendant, has a consequence in law---Imperative for defendant to fulfill all these mandatory requirements and a combined reading of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, discloses that the failure of compliance of mandatory subsections entail penal consequences.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856 and National Bank of Pakistan v. Messrs Kohinoor Spinning Mills and others 2021 CLD 1112 ref.

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

----S. 10---Leave to defend---Scope---Where defendant had filed two petitions for leave to appear and had submitted that both should be read together, High Court observed that in terms of law, such expectation from the Court was not tenable.

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

----S. 10---Civil Procedure Code (V of 1908), O. XXXVII, R. 3---Leave to defend---Scope---Defendant showing defence on merits to have leave to appear---Scope---Raising a plausible defence is a test for grant of leave in a suit under O. XXXVII of C.P.C. as grant of leave is a rule under the said law, whereas under Financial Institutions (Recovery of Finances) Ordinance, 2001, the grant of leave to appear is an exception.

Hafiz Kaleem Ullah Qureshi for Applicants.

Muhammad Saleem Iqbal for Respondent.

2022 C L D 1013

[Lahore (Multan Bench)]

Before Sohail Nasir and Ahmad Nadeem Arshad, JJ

HABIB BANK LIMITED through Manager---Appellant

Versus

MUHAMMAD HUSSAIN through Legal Heirs and another---Respondents

F.A.O. No. 44 of 2021, heard on 23rd November, 2021.

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

----Ss. 9, 10 & 22---Limitation Act (IX of 1908), Art. 181---Suit for recovery of finance---Suit dismissed for absence of plaintiff---Restoration---Date not fixed for hearing---Suit filed by appellant/Bank was dismissed due to its absence on the date it was fixed for attendance of respondents/defendants---Validity---Suit could not be dismissed, if date was not for hearing---Such dismissal had no legal effect and there was no limitation to run against such order, which was void, a nullity and not permissible---Such order of dismissal could be set aside by invoking provision of S. 151 C.P.C.---No limitation provided elsewhere in Limitation Act, 1908 or under S. 151, C.P.C., therefore, in the light of Art. 181 of Limitation Act, 1908, period of three years was available for such type of applications---Appellant/Bank moved application for restoration of the suit and condonation of delay which was supported by affidavit and there was no reason for Banking Court to disbelieve that affidavit---Law favours adjudication on merits and dismissal for non-prosecution should be an exception and not a rule---Court was not to be very strict in such regard---Litigant was not to be deprived of hearing unless there has been something equivalent to misconduct or gross negligence on his part---High Court set aside the order passed by Banking Court as there was no such finding against appellant/ Bank and suit was restored---Appeal was allowed, in circumstances.

Mian Khurram Hashmi for Appellant.

Mian Tahir Iqbal for Respondents.

2022 C L D 1021

[Lahore]

Before Shams Mehmood Mirza and Rasaal Hasan Syed, JJ

MUHAMMAD ASIF---Appellant

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED through Manager---Respondent

E.F.A. No. 74940 of 2019, heard on 17th February, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), S. 51, O. XX1, Rr. 37 & 40---Execution of decree---Arrest and detention of judgment debtor---Principle---Auction of mortgaged property, interference with---Proof---Judgment debtor was aggrieved of issuance of warrants of arrest against him for causing obstruction in auction of mortgaged property---Validity---In absence of any affidavit of any of the residents of locality supporting decree holder's plea of influence of judgment debtor to prevent sale and without inquiry or taking steps for ensuring success of auction, decision to shift from auction of mortgaged property to arrest and detention of judgment debtor, when there was no defect in title and when decretal debt could not be recovered from sale proceeds by auction of mortgaged properties, order issuing arrest warrants could not be countenanced---High Court directed Banking Court to execute decree firstly through auction of mortgaged properties and set aside orders of arrest and detention of judgment debtor---Appeal was allowed, in circumstances.

Messrs 3-A Trade Impex through Partner and 2 others v. Askari Commercial Bank Ltd. through Branch Manager 2005 CLD 1379; Abdul Basit Zahid v. Modaraba Al-Tijarah through Chief Executive and 2 others PLD 2000 Kar. 322; Muhammad Mobeen v. A.B.N. Amro Bank Ltd. through Manager 2015 CLD 1904; Dr. Rauf Ahmad Azhar v. Banking Court No.11, Lahore and 6 others 2007 CLD 964; Aftab Saleem Choudhary and another v. Soneri Bank Limited through Attorneys 2005 CLD 401 and Precision Engineering Ltd. and others v. The Grays Leasing Limited PLD 2000 Lah. 290 ref.

Messrs Azhar & Co. and others v. National Bank of Pakistan 2018 CLD 830 rel.

Ch. Imran Arshad Naro for Appellant.

Muhammad Asif Ismail for Respondent.

2022 C L D 1026

[Lahore]

Before Ch. Muhammad Masood Jahangir, J

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

Versus

Mst. RAZIA BEGUM through Legal Heirs/Representative---Respondent

Regular First Appeal No. 26584 of 2021, heard on 22nd February, 2022.

Insurance Ordinance (XXXIX of 2000)---

----S. 79---Insurance claim, recovery of---Scope---Insurer company assailed judgment and decree passed by Trial Court in favour of respondent/plaintiff allowing her insurance claim of her deceased husband---Validity---Policy was a bilateral contract executed among insurer and insured under strict compliance of special law---Insurer was to reprobate its act/contract per S. 79 of Insurance Ordinance, 2000, which had a limited authority and could be exercised where either insured avoided its obligation in exposing required particulars or acted with fraud or misrepresentation to deceit the insurer before finalization of the contract---Such option could be availed by insurer within two years of effectiveness of policy---Policy in question was executed on 1-10-1999, and insurer at the most within next two years i.e. till 30-9-2001, could repudiate the same---Despite that claim was submitted on 20-01-2001, it was declined on 27-12-2002, beyond provided period, when the insurer had already lacked authority to such effect---High Court imposed cost on appellant/insurer company, as family of insured was forced to initiate litigation for totally unjustified act of repudiation of the insurer and the same took more than two decades to decide the matter up till High Court---Appeal was dismissed, in circumstances.

State Life Insurance Corporation of Pakistan v. Atta ur Rehman 2021 SCMR 1347 and Messrs Pakistan Agro Forestry Corporation Ltd. v. T.C. Paf Pakistan (Pvt.) Ltd and others PLD 2003 Kar. 284 ref.

Ibrar Ahmad for Appellants.

Liaqat Ali Butt, Usman Ali Butt and Muazzam Ali Butt for Respondent.

2022 C L D 1035

[Lahore]

Before Shahid Bilal Hassan and Masud Abid Naqvi, JJ

SEPCO-III ELECTRIC POWER CONSTRUCTIONS CO. LTD.---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Energy and 2 others---Respondents

I.C.A. No. 68823 of 2021, decided on 13th December, 2021.

(a) Tender---

----Bank guarantee---Encashment of---Principle---Appellant company executed Bank Guarantee in favour of respondent Authority---Grievance of appellant was that en-cashing of Bank guarantee was in direct contradiction of provisions of tender---Validity---Bank Guarantee was an independent/autonomous contract between Bank and Customer---Bank authorities were to construe it independent of principle/primary contract---Bank Guarantee furnished by the Bank contained undertaking and had imposed absolute obligations on the Bank to pay the amount, irrespective of any dispute between the parties to the principle contract---Absolute obligation existed upon the Banker to comply with terms as enumerated in Bank Guarantee and to pay amount stipulated therein---Bank could not be prevented by the party at whose instance Guarantee was issued, from honouring the credit guaranteed---Respondent Authority vide a letter conveyed to the Bank about intentional failure/alleged violation of appellant/bidder, as per tender-document clauses during validity of bid with the request to en-cash Bank Guarantee---Bank issuing Guarantee was not concerned with underlying contract between the parties as obligations arising under the Bank Guarantee were independent of the obligations arising out of specific contract between parties---Division Bench of High Court declined to interfere in the matter---Intra Court Appeal was dismissed, in circumstances.

2010 SCMR 523; PLD 2012 Lah. 503; PLD 2010 Pesh. 110; 2012 CLD 1734; 2017 CLC 178; 2014 SCMR 676; PLD 2017 SC 83 and 2016 CLD 1833 ref.

Messrs National Construction Ltd. v. Aiwan-e-Iqbal Authority PLD 1994 SC 311; Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 and Atif Mehmood Kiyani and another v. Messrs Sukh Chain Private

Limited, Royal Plaza, Blue Area, Islamabad and another 2021 SCMR 1446 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Contractual rights, commitments, undertakings and obligations---Scope---Contractual rights, commitments, undertakings and obligations have to be enforced through courts of ordinary jurisdiction and should not be interfered with by High Court while exercising its constitutional jurisdiction especially in those matters arising out of contractual obligations---Violation of contract or failure to abide by terms and conditions mentioned therein or to honour obligations arising out of an agreement cannot be decided in exercise of Constitutional jurisdiction---High Court observed that Superior Courts should not involve themselves into investigations of disputed question of fact which necessitate taking of evidence---Such can more appropriately be done in ordinary civil procedure for litigation by a suit---Extraordinary jurisdiction under Art. 199 of the Constitution is intended primarily, for providing expeditious remedy in a case where illegality of action of executive or other Authority can be established without any elaborate enquiry into complicated or disputed facts.

Salman Aslam Butt, Shoaib Rashid and Ahmad Raza for Appellant.

Ahmad Pervaiz and Saffi ul Hassan along with Ghulam Nabi Ch., Chief Law Officer, NTDC for Respondent No.2.

Mustafa Ramday for Respondent No.3.

Adnan Ahmad Ch., A.A.G. for Respondent No.1.

2022 C L D 1048

[Lahore]

Before Shahid Bilal Hassan and Masud Abid Naqvi, JJ

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

Versus

Mst. MAI BHAGAN---Respondent

R.F.A. No. 30227 of 2020, heard on 24th May, 2022.

Insurance Ordinance (XXXIX of 2000)---

----S. 79---Insurance claim---False information---Scope---Insurance company assailed judgment passed by Insurance Tribunal in favour of respondent/applicant allowing insurance claim of her deceased husband---Plea raised by Insurance company was that facts stated by deceased insured were false---Validity---Deceased husband of respondent/applicant himself filed application to Chairman Insurance Tribunal conceding about furnishing of incorrect details of insurance policy---Insurance company issued insurance policy on the basis of false information---Deceased insured was not owner of any land and was just holding land on lease---Such fact was also confirmed from deposition of attorney of respondent/applicant---High Court set aside judgment passed by Insurance Tribunal---Appeal was allowed, in circumstances.

Malik Muhammad Faisal and another v. State Life Insurance Corporation through Chairman and 2 others 2008 SCMR 456 ref.

Sh. Shahzad Ahmad Pasha for Appellants.

Respondent proceeded against ex parte vide order dated 11.04.2022.

2022 C L D 1058

[Lahore]

Before Safdar Saleem Shahid, J

HUMAYUN MIRZA---Petitioner

Versus

STATION HOUSE OFFICER, POLICE STATION SHAHPUR SADAR, TEHSIL SHAHPUR, DISTRICT SARGODHA and 8 others---Respondents

Writ Petition No. 41397 of 2020, decided on 23rd February, 2022.

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

----S. 2(c)---Criminal Procedure Code (V of 1898), S. 22-A---Penal Code (XLV of 1860), S. 409---Criminal breach of trust by public servant, or by Banker, merchant or agent---Scope---Petitioner assailed order passed by Ex-officio Justice of Peace whereby his application under S. 22-A, Cr.P.C. was dismissed on the ground that the matter came within the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---Case of petitioner was that a sugar mill had obtained the facility of loan from petitioner/Bank by pledging sugar bags---Bank appointed surveyors for security of the stock but during joint inspection came to know that the pledged sugar bags were missing---Bank alleged that the sugar bags were misappropriated/ sold/alienated by respondents/ proposed accused persons---Financial Institutions (Recovery of Finances) Ordinance, 2001 was only applicable where there was a relationship of customer and financial institution between the parties---Proposed accused persons did not come within the definition of customer---Surveyor, by virtue of its appointment, had become an agent of the Bank and had to act in accordance with such agency---Constitutional petition was accepted and the SHO was directed to record statement of petitioner.

Faisal Farooq and 3 others v. Station House Officer and another 2017 CLD 1 rel.

Muhammad Jawad Khan Lodhi for Petitioner.

Malik Javed Ali Dogar, Assistant Advocate-General and Ghulam Muhammad, ASI.

2022 C L D 1279

[Lahore]

Before Jawad Hassan, J

TARIQ AZIZ and others---Petitioners

Versus

MAKHDUM AHMED MAHMUD and others---Respondents

C.O. No. 73846 of 2021, heard on 18th April, 2022.

(a) Words and phrases---

----Material Irregularity--- Meaning.

Advanced Law Lexicon 4th Edition Volume 1 and Abdul Khaliq v. Judge Family Court 2003 MLD 1120 rel.

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

----Ss. 136 & 160---Contract Act (IX of 1872), S. 4---Election---Revocation of agreement---Pre-condition---Corporate democracy, principle of---Applicability---Petitioners assailed election of Stewards of Race Course Club on the plea that they had informed respondent regarding contesting of election and sought return of their withdrawal letters---Validity---Only requirement for communication of revocation of proposal was that the same came into knowledge of the person to whom it was made---Revocation of withdrawing from contesting elections made by petitioners to respondent was duly communicated to him and came into his knowledge who himself admitted such factum in his affidavit---Respondent at one hand did not handover withdrawal letters of petitioners before holding of Annual General Meeting (AGM) and on the other hand, elected ten candidates as Stewards without consent and without giving right to vote---Such act of respondent was not only violative to Art. 27 of Articles of Association of the Club but also was against principle of corporate democracy denying right of vote of petitioners to participate in AGM---Court was empowered under S. 160 of Companies Act, 2017, to declare election of all directors or any one or more of them invalid if it was satisfied that there had been material irregularity in its holding---High Court declared that proceedings at AGM were not in accordance with law and were invalid in terms of S. 136 of Companies Act, 2017---High Court also declared that in terms of S. 160 of Companies Act, 2017 elections of directors were invalid---High Court directed respondents to hold AGM afresh for the elections of Stewards of the Club in accordance with law and Articles and Memorandum of Association of the Club---Constitutional petition was allowed accordingly.

New Law Lexicon Webster's Dictionary as: "The state of knowing, cognition, understanding" and National Investment Trust Ltd. v. Al-Qaim Textile Mills Ltd. 1999 CLC 926 rel.

Parshuram Dattaram Shamdasani and others v. Tata Industrial Bank Ltd. and others AIR 1925 Bombay 49; Syed Zafar Ali Shah v. Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and others PLD 2015 Isl. 156; Mirza Tahir Beg v. Syed Kausar Ali Shah and others PLD 1976 SC 504; Lucky Cement Ltd. v. Commissioner Income Tax, Zone Companies, Circle-5, Peshawar 2015 CLD 1482; Mian Muhammad Ilyas Mehraj and 17 others v. Appellate Bench No. III, Securities and Exchange Commission of Pakistan, Islamabad and 6 others 2009 CLD 883; Lt.-Gen. (Retd.) Shah Rafi Alam and others v. Lahore Race Club and others 2004 CLD 373 and Nawab Begum's case PLD 1974 Lah. 344 ref.

Feisal Hussain Naqvi, Advocate Supreme Court assisted by Omer Ghias for Petitioner.

Jahanzeb Sukhera, Barrister Mehek Zafar, Haider Najfi, Osama Qamar and Fareeha Arif for the Respondents Nos.2, 4, 6 to 9 and 14.

Aftab Gull, Advocate Supreme Court for the Respondent No.8.

Altaf ur Rehman, Advocate Supreme Court for the Respondent No.12.

Ms. Sadia Malik, Assistant Attorney General for Pakistan.

Waqar Saeed Khan and Mohammad Osman Khan, Assistant Advocate Generals Punjab.

Ibrar Saeed, Special Public Prosecutor/Director Law, SECP along with Hafiz Talha, Advocate/Legal Advisor for SECP on Court's Call.

2022 C L D 1310

[Lahore (Multan Bench)]

Before Sohail Nasir and Shakil Ahmad, JJ

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

Versus

Mst. SHAHIDA PARVEEN---Respondent

R.F.A. No. 232 of 2019, decided on 1st March, 2022.

Insurance Ordinance (XXXIX of 2000)---

----S. 121---Constitution of the Insurance Tribunal---Scope---Appellants assailed order passed by Additional District Judge whereby their application for setting aside the ex-parte proceedings and order was dismissed---Contention of appellants was that the Additional District Judge was not a notified Tribunal in terms of S. 121 of the Insurance Ordinance, 2000---Report sought from the District and Sessions Judge concerned confirmed the contention of the appellants---High Court observed that the impugned order could not be defended---Appeal was allowed, impugned order was set aside, and it was directed that application filed by appellants would be deemed to be pending and would be decided by the Insurance Tribunal duly notified in accordance with law.

Malik Muhammad Tariq Rajwana for Appellants.

2022 C L D 1318

[Lahore (Bahawalpur Bench)]

Before Safdar Saleem Shahid, J

MUHAMMAD AFZAL---Appellant

Versus

MUHAMMAD ASLAM---Respondent

R.F.A. No. 1 of 2021, decided on 28th September, 2021.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2---Recovery of money---Negotiable instrument---Expression "until the contrary is proved"---Scope---Presumption conclusive/rebuttable---Suit filed by respondent/plaintiff was decreed in his favour for recovery of Rs.4,000,000/- on the basis of Bank cheque which was dishonoured on presentation---Validity---Conclusive presumption was not envisaged under S. 118 of Negotiable Instruments Act, 1881, about drawing consideration etc. of negotiable instrument---Such presumption was rebuttable in nature and such was clear and obvious from the expression "until the contrary is proved" used in S. 118 of Negotiable Instruments Act, 1881---Respondent/plaintiff failed to prove his case as setup and that as to why he had paid a huge amount of Rs. 4,000,000/- to appellant/defendant simply on his request who had no blood or family relationship with him---High Court reversed findings of Trial Court on relevant issues and the same were decided in favour of appellant/defendant---High Court set aside judgment and decree passed by Trial Court, as it failed to appreciate evidence on record and committed an error while passing judgment and decree---Appeal was allowed, in circumstances.

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

Muhammad Arslan Asghar Ch. and Sardar Muhammad Afzaal for Appellant.

Muhammad Asif Mehmood Pirzada and Ch. Sajad Haider Duggal for Respondent.

2022 C L D 1340

[Lahore (Multan Bench)]

Before Abid Hussain Chattha, J

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head---Petitioner

Versus

KAUSAR PARVEEN and 2 others---Respondents

W.P. No. 203 of 2013, heard on 12th May, 2022.

(a) Insurance Ordinance, 2000 [as amended, 2011]---

----Ss. 121, 125 & 127(2)---Maladministration---Group Insurance, payment of---Insurance Ombudsman---Jurisdiction---Respondent (widow) claimed an amount of Rs. 240,000/- admissible and payable to her on account of Group insurance of her late husband---Petitioner (Insurance Corporation) admittedly had paid an amount of Rs.50,000/- as Group Insurance and declined the remaining claim of respondent, which constrained respondent to file a complaint before the Wafaqi Mohtasib which was decided against respondent---Respondent agitated the matter before Provincial Mohtasib which was also decided against the respondent---Respondent, filed a representation before the Governor of Punjab which was accepted---Validity---Insurance was a regulated business and governed under the Insurance Ordinance, 2000---Aggrieved person was provided remedies to invoke the jurisdiction of Insurance Tribunal constituted under S. 121 of the Insurance Ordinance, 2000 (the Ordinance) or the Insurance Ombudsman appointed under S. 125 of the Ordinance---Section 127 of (the Ordinance) provided that the Insurance Ombudsman may on a complaint by an aggrieved person undertake an investigation into any allegation of mal administration on the part of any insurance company if the matter did not fall within the jurisdiction of the Wafaqi Mohtasib or was not sub-judice before any Court of competent jurisdiction---Issue raised in the present petition was covered under the definition of "Maladministration" stipulated in Ss. 127(2) & 128 of (the Ordinance) empowered a Court to refer any matter to the Insurance Ombudsman for inquiring therein and passing of an appropriate order---Petitioner Company did not raise the issue of jurisdiction before Wafaqi Mohtasib, Provincial Mohtasib or Governor of Punjab although the forums did not have the jurisdiction to decide the matter---Petition was disposed of by the High Court with direction that the same was converted into a representation in the form of complaint along with its annexure and transmitted to the Insurance Tribunal to decide the same in accordance with law.

(b) Jurisdiction---

----Jurisdiction, not conferred by law, does not vest jurisdiction in any forum---Issue of jurisdiction ought to be raised at the first instance.

Malik Muhammad Tariq Rajwana for Petitioner.

Bilal Amin for Respondents.

2022 C L D 1374

[Lahore]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

NATIONAL BANK OF PAKISTAN through Branch Manager---Appellant

Versus

DATA LABORATORIES (PVT.) LTD. through Chief Executive and 3 others---Respondents

R.F.A. No. 897 of 2016, heard on 1st June, 2022.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), XVII, R. 3---Recovery of finances---Right to produce evidence, closure of---Direction to decide case---Effect---Appellant/Bank was aggrieved of closure of its right to produce evidence by Banking Court---Plea raised by appellant / bank was that five opportunities were granted to produce evidence during a period of 16 days---Validity---Banking Court decided the matter in undue haste in order to comply with direction of High Court to finalize the matter till a specific date---Sufficient opportunities were not provided to appellant/Bank to produce retired bank official in evidence---Evidence of such official was required for just decision of the matter and would have helped the Court to reach at proper conclusion of the same---High Court set aside order passed by Banking Court regarding closing right of appellant/Bank to produce evidence, as such order was neither based on proper exercise of jurisdiction nor based on thorough appreciation of record available before Banking Court---High Court remanded the matter to Banking Court for decision on merits after providing opportunity to parties to produce their evidence---Appeal was allowed accordingly.

Zahoor Ahmed v. Mehra through Legal Heirs and others 1999 SCMR 105; Pervaiz Afzal and others v. Sheikh Hussain Ali and another 1994 CLC 951; Shams-ud-Din v. Muhammad Sharif PLD 1996 Lah. 210; Zohra Bibi and another v. Haji Sultan Mehmood and others 2018 SCMR 762; Mst. Bundi Begum v. Munshi Khan and others PLD 2004 SC 154; Muhammad Anwar Khan and 5 others v. Ch. Riaz Ahmad and 5 others PLD 2002 SC 491; Evacuee Trust Property Board through Assistant Director Evacuee Trust Properties, Gujrat v. Muhammad Siddique alias Bandoo and others 1995 SCMR 1748; Mir Mazar v. Azim PLD 1993 SC 332; Master Musa Khan and 3 others v. Abdul Haque and another 1993 SCMR 1304; Manager, Jammu and Kashmir, State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678; Imtiaz Ahmad v. Ghulam Ali and others PLD 1963 SC 382; H.M. Saya and Co., Karachi v. Wazir Ali Industries Ltd. Karachi and another PLD 1969 SC 65; Muhammad Ijaz Ahmad Chaudhary v. Mumtaz Ahmad Tarrar and others 2016 SCMR 1 and Zahid Zaman Khan and others v. Khan Afsar and others PLD 2016 SC 409 ref.

Ms. Ambreen Mueen and Ms. Javaria Latif for Appellant.

Respondents ex parte.

2022 C L D 1395

[Lahore]

Before Muhammad Sajid Mehmood Sethi and Muhammad Raza Qureshi, JJ

Mian FURQAN IDREES and others---Applicants

Versus

JS BANK LIMITED and others---Respondents

R.F.A. No. 208787 of 2018, decided on 13th October, 2021.

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

----Ss. 9 & 22---Contract Act (IX of 1872), Ss. 129, 133, 135 & 136---Suit for recovery of finance---Maintainability---New management, liability of---Liability of surety---Appellants/defendants were guarantors who assailed judgment and decree passed against them by Banking Court---Plea raised by appellants/defendants was that after their resignation from Board of Directors of the company, new management was responsible for finances availed from respondent/Bank---Validity---Condition precedent for maintaining a suit under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 by a financial institution was commission of default by a customer in fulfilment of any obligation with regard to a finance---Neither members of new management fell within the definition of 'customer' who would have committed any default nor any finance was extended by respondent /bank to members of new management nor they ever defaulted in fulfillment of any obligation---Members of new management never executed or replaced guarantees executed by appellants/defendants---Principal debtor company was separate juristic person and its liability could not be transferred to its shareholders---Members of new management were only shareholders and not guarantors---Banking Court rightly dismissed suit against new management---Mandate of law contained in provisions of Ss. 129, 133, 135 & 136 of Contract Act, 1872 created a right in favour of surety which was private in nature---Parties by fiction of law were allowed to surrender, relinquish or waive those rights by agreeing with each other---Members of new management did not fall within the definition of 'customer', therefore, their non-impleading was neither malicious nor unlawful---Resignations of appellants/defendants from directorship or selling project of principal debtor company to third party or transferring shares in their favour had not absolved appellants/defendants from their liability as guarantors' liability as the same was coextensive with that of principal debtor company and they were jointly and severally liable to pay decretal amount---No restructuring or rescheduling between respondent/Bank and new management, therefore, appellants' liability as guarantors never stood discharged---High Court declined to interfere in judgment and decree passed by Banking Court as there was no legal infirmity in it---Appeal was dismissed, in circumstances.

Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72; Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2006 SCMR 619 and Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166 rel.

Ijaz Ahmad Awan, Nauman Mushtaq Awan and Mehwish Tahira for Applicants.

Ahmad Pervaiz for Respondent/Bank.

Respondents Nos. 2 and 3 ex parte.

2022 C L D 1412

[Lahore]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

Messrs AGMORE INTERNATIONAL (PVT.) LIMITED and 2 others---Appellants

Versus

BANK OF PUNJAB through Branch Manager and another---Respondents

F.A.O. No. 10741 of 2019, heard on 31st May, 2022.

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

----Ss. 9, 12 & 22---Recovery of finances---Ex-parte decree, setting aside of---Authority to file suit---Service of process---Change of address---Effect---Suit filed by respondent Bank was decreed ex-parte by Banking Court in favour of respondent Bank and against appellants/defendants---Plea raised by appellants/defendants was that the suit was not filed by person competent to file the same nor process was not served upon them---Validity---Plaint was filed by respondent Bank through branch manager in terms of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appellants/ defendants were under obligation to intimate Bank about change of their address but such obligation was not discharged and change of address was not conveyed---Such omission on the part of appellants/defendants was fatal and they were to suffer for the same---Appellants/defendants could not claim setting aside of decree on ground that due to change of address, they were not properly served---High Court declined to interfere in judgment and decree passed by Banking Court---Appeal was dismissed, in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497; Abdul Sattar v. Bank of Punjab through Branch Manager 2017 CLD 1247; Naseem Ullah Khan v. United Bank Limited 2007 CLD 1552 and Dr. Javed Iqbal and 2 others v. Askari Bank Limited through Attorney 2017 CLD 1140 rel.

Khawar Ikram Bhatti for Appellants.

Abdul Hameed Chohan for Respondent No. 1.

2022 C L D 1430

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

ASAD MAHMOOD and 4 others---Petitioners

Versus

GOVERNMENT OF PUNJAB through Chief Secretary Punjab, Lahore and 20 others---Respondents

Writ Petition No. 2656 of 2021, heard on 26th January, 2022.

(a) Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000---

----Sched. II--- Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA)---Stone crushing unit---Scope---Any natural or legal person who proposes or intends to undertake a project, including stone-crushing, is required to obtain IEE approval---Such approval is a preliminary environmental review of reasonably foreseeable qualitative and quantitative impacts on environment of a proposed project to determine whether it is likely to cause an adverse environmental effect for requiring preparation of an environmental impact assessment---If such project is likely to cause adverse environmental effect, which includes pollution as well as impairment of or damage to environment, human health, safety, biodiversity or property, or falls under Sched. II of Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, such person is required to obtain EIA approval, which is environmental study comprising collection of data, prediction of qualitative and quantitative impacts, comparison of alternatives, evaluation of preventive, mitigatory and compensatory measures, formulation of environmental management and training plans and monitoring arrangements, and framing of recommendations and such other components as may be prescribed---Businesses of crushing limestone or allied projects have to obtain such approvals in accordance with so listed requirements of law.

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

----S. 12--- Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Sched. II---Punjab Mining Concession Rules, 2002, Rr. 234 & 235---Constitution of Pakistan, Art. 199---Constitutional petition---Locus standi---Efficacious and alternate remedy---Petitioners assailed stone crushing units established by respondents on the plea of absence of proper approval by relevant authorities---Validity---Petitioners invoked Constitutional jurisdiction of High Court under Art. 199 of the Constitution and they had to establish that their legal or fundamental rights guaranteed under the Constitution were violated---Petitioners were to prove their locus standi to seek direction to authorities in such regard under denial of their legal rights, if any---Such was a sine qua non for initiation of proceedings under Art. 199 of the Constitution that petitioners had a locus standi to institute such proceedings---Petitioners were to be an aggrieved party from actions of respondents---Specific remedy under Rr. 234 & 235 of Punjab Mining Concession Rules, 2002 and S. 12 of Pakistan Environmental Protection Act, 1997, was available to petitioner---Instead of availing specific remedy petitioners assailed Constitutional jurisdiction of High Court---In the wake of an alternate efficacious remedy available to a litigant, jurisdiction of High Court under Art. 199 of the Constitution could not be invoked---High Court directed petitioners to approach concerned authorities for redressal of their grievance and concerned authorities would redress their grievance---Constitutional petition was disposed of accordingly.

Ms. Shehla Zia and others v. WAPDA PLD 1994 SC 693; Suo Motu Case No.13 of 2009 PLD 2011 SC 619; New Murree Project's case 2010 SCMR 361; Human Rights Case No.318 of 1993 2021 SCMR 512; Haji Mullah Noor Ullah v. Secretary Mines and Minerals and 3 others 2015 YLR 2349; M.C.R. (Pvt.) Ltd., Franchisee of Pizza Hut v. Multan Development Authority and others 2021 CLD 639; Constructor Association of Pakistan through Secretary General v. Pakistan Engineering Council (PEC) through Chairman and another PLD 2020 Isl. 199; M. Tariq Asad, Advocate Supreme Court v. Federation of Pakistan through Federal Secretary and 6 others PLD 2020 Isl. 338; Dr. Moinuddin Shaikh v. Federation of Pakistan through Federal Secretary, Water and Power, Islamabad and 10 others PLD 2019 Sindh 506; Muhammad Gul v. Government of Khyber Pakhtunkhwa through Chief Secretary and others PLD 2019 Pesh. 184; Sajjad Ahmad v. Government of Khyber Pakhtunkhwa through Chief Secretary and 8 others 2020 CLC 360 and Chenab Flour and General Mills and others v. Federation of Pakistan through Secretary Revenue Division and others PLD 2021 Lah. 343 ref.

Mian Fazal Din v. Lahore Improvement Trust, Lahore PLD 1969 SC 223; Montgomery Flour And General Mills Ltd., Montgomery v. Director, Food Purchases, West Pakistan and others PLD 1957 (W.P) Lahore 914; Dr. Imran Khattak and another v. Ms. Sofia Waqar Khattak, PSO to Chief Justice and others 2014 SCMR 122; Hafiz Hamadullah v. Saifullah Khan and others PLD 2007 SC 52; N.W.F.P. Public Service Commission and others v. Muhammad Arif and others 2011 SCMR 848; Indus Trading and Contracting Company v. Collector of Customs (Preventive) Karachi and others 2016 SCMR 842; Dr. Sher Afgan Khan Niazi v. Ali S. Habib and others 2011 SCMR 1813 and Muhammad Abbasi v. SHO Bhara Kahu and 7 others PLD 2010 SC 969 rel.

Ch. Muhammad Nisar Ali and Muhammad Ishaq Hanjra for Petitioners.

Mujeeb-ur-Rehman Kiyani, Additional Advocate-General with Izhar-ul-Haq, Assistant Director, Environment Protection Department, Jehlum and Muhammad Aamir Shafiq, Assistant Director, Mines and Minerals, Jehlum.

Malik Kamran Khursheed, Deputy Director Legal, WAPDA.

Tahir Malik, Deputy Attorney General and Malik Ahtesham Saleem, Assistant Attorney General of Pakistan.

Syed Moazzam Ali Rizvi for the Respondents Nos.7 and 8.

Malik Fazal-ur-Rehman for Respondent No.21/IESCO.

Ch. Muhammad Hussain, Advocate Supreme Court for all Private Respondents.

Raja Zaheer-ud-Din Babar, Advocate Supreme Court on Court's Call.

Rashid Mehmood, Research Officer, Lahore High Court, Rawalpindi Bench.

2022 C L D 1454

[Lahore]

Before Shams Mehmood Mirza and Faisal Zaman Khan, JJ

FIRST PUNJAB MODARABA (FPM) through General Power of Attorney---Appellant

Versus

Messrs AFTAB (PVT.) LIMITED through Chief Executive and 2 others---Respondents

E.F.A. No. 117828 of 2017, heard on 16th June, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XLI, R.5---Limitation Act (IX of 1908), S. 15 & Art. 181---Execution of decree---Limitation---Pendency of appeal---Effect---Appellant Bank sought execution of decree which petition was dismissed by Banking Court as barred by time---Plea raised by Bank was that execution was sought after decision in appeal---Validity---Mere filing of appeal was not to operate as stay of proceedings under decree appealed from---No embargo on rights of decree holder to initiate execution proceedings against judgment debtor, that too, from the date of accrual of right---When stay was granted by court regarding execution of decree, time of continuance of that order was excluded under S. 15 of Limitation Act 1908, from period of limitation for filing execution petition---No stay order was granted by High Court for suspending decree nor stayed of execution proceedings which could be excluded from period of limitation for seeking execution of judgment and decree passed by Banking Tribunal---Decree continued to maintain its identity and was capable of execution from the day the right accrued to appellant Bank---Appellant Bank failed to file execution within the period of limitation as contemplated in Art. 181 of Limitation Act, 1908, which commenced from the day the right accrued, therefore, execution petition was barred by time---Even under special procedure provided in S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 operation of judgment and decree under execution could not be stayed nor execution proceedings were suspended by Appellate Court or Executing Court---Proceedings under execution were to go on and mere pendency of appeal did not itself operate as a stay---Appellant Bank sought execution of judgment and decree passed by Banking Tribunal and even if rule of merger was applied, appellant Bank was to seek execution of appellate judgment and decree, which was never sought---High Court declined to interfere in the matter as execution petition was not maintainable--- Appeal was dismissed, in circumstances.

Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241; Muhammad Nazir and another v. Qaiser Ali Khan and 4 others 2003 SCMR 436 and Bakhtiar Ahmed v. Mst. Shamim Akhtar and others 2013 SCMR 5 ref.

Nadeem Saeed for Appellant.

Muhammad Imran Malik for Respondents.

2022 C L D 1473

[Lahore]

Before Shahid Jamil Khan and Ahmed Nadeem Arshad, JJ

Messrs IQBAL MINING CO. through Partners and 6 others---Appellants

Versus

PUNJAB ENVIRONMENTAL PROTECTION AGENCY and 4 others---Respondents

Environmental Appeal No. 18780 of 2019, heard on 18th January, 2022.

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

----Ss. 11, 12 & 16---Prohibition of certain discharges or emissions---Initial environmental examination and environmental impact assessment---Environmental protection order---Scope---Appellant assailed order passed by Environmental Tribunal operative part of which revealed that the untreated waste water of coal mine was being discharged into local drain and low lying areas and piles of coal debris of mine and rain water could affect the nearby soil adversely and that there was also violation of Ss. 11 & 12 of Punjab Environmental Protection Act, 1997, for not obtaining Environmental Approval/submitting IEE (Initial Environmental Examination)---Contention of appellant was that the Tribunal, under S. 16 of the Punjab Environmental Protection Act, 1997, could have directed for mitigation instead of passing order for establishing treatment of solid waste management plan---Validity---Object of Punjab Environmental Protection Act, 1997, was to ensure protection of environment including soil from toxic material in the waste of any project---Spirit of S. 16 of the Punjab Environmental Protection Act, 1997, was based on the precautionary principle which required the relevant agency to anticipate the danger and take immediate steps to prevent harm or danger to the environment---Direction qua solid waste management plan could be issued by the Environmental Protection Agency---Appeal was dismissed.

Muhammad Yasin Hatif, Seemab Aslam and Shahzad Ahmed Malik for Appellants.

Rao Muhammad Akram Khurram, A.A.G. and Ms. Nabila Khalid, Assistant Director (Law) EPA for Respondents.

2022 C L D 1494

[Lahore (Multan Bench)]

Before Abid Hussain Chattha and Anwaar Hussain, JJ

Messrs S.G. POLYPROPYLENE (PRIVATE) LTD. through Directors/Chief Executive and 3 others---Appellants

Versus

ALLIED BANK LIMITED through Principle Officers/General Attorneys and 2 others---Respondents

R.F.A. No. 188 of 2017, heard on 20th September, 2022.

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

----Ss. 9 & 10--- Suit for recovery of finance--- Leave to defend---Scope---Appellants assailed judgment and decree passed by Banking Court whereby the suit for recovery instituted by bank was decreed---Validity---Sanctioning and availing of the Letter of Credit Facility was not denied in the PLA (Petition for Leave to Appear)---Mere bald and general assertion that blank documents were executed by the appellants could not be accepted against the executed finance and security documents appended with the plaint---Partial payments made regarding the Letters of Credit in question by one of the appellants was admitted---Appellants, in their PLA, had not fulfilled the requirements of Ss. 10(4), 10(5) & 10(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 thereby entailing penal consequence by way of rejection of the PLA as stipulated in S. 10(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---No substantial question of law and fact was raised in the PLA necessitating the grant of PLA and recording of evidence---Banking Court had lawfully and rightly passed the decree in favour of the bank---Appeal was dismissed.

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

----S. 9---Civil Procedure Code (V of 1908), O.II, R. 2---Suit for recovery of finance---Suit to include the whole claim---Separate suit for each finance facility---Scope---Appellant contended that the Bank had filed separate suits regarding various finance facilities which act was hit by the provisions of O. II, R. 2, C.P.C.---Validity---Each finance facility might give rise to an independent cause of action, therefore, the contention that separate suits could not be filed under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which was a special law, was misconceived---Such was primarily for the reason that default with reference to a particular facility could take place on different dates giving rise to an independent cause of action---Moreover, each facility might be backed by some common and different banking documents and even statement of accounts with respect to each facility was maintained separately---Objection of the appellant was turned down.

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

----S. 9---Civil Procedure Code (V of 1908), Os. XXXIV & XXXVII---Suit for recovery of finance---Suit relating to mortgages of immovable property---Summary procedure on negotiable instruments---Scope---Appellant objected that the suit filed in Banking Court was not competent since it was filed under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with Os. XXXIV & XXXVII of C.P.C.---Validity---Contention of the appellant was without force as mere mentioning of provisions of law in the title of the suit was immaterial---Even otherwise, provisions of the C.P.C. were applicable as far as the same were not expressly excluded by the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and mentioning of related Orders of the C.P.C. did not amount to any illegality---Objection of the appellant was turned down.

Sardar Riaz Karim for Appellants.

Muhammad Saleem Iqbal for Respondents.

2022 C L D 1528

[Lahore (Bahawalpur Bench)]

Before Sultan Tanvir Ahmad and Ahmad Nadeem Arshad, JJ

Messrs PAKISTAN GENERAL INSURANCE LIMITED---Petitioner

Versus

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

Writ Petition No. 4776 of 2009, heard on 14th April, 2022.

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

----S. 33(1)---Insurance Ordinance (XXXIX of 2000), S. 130 (2)---Alternate and efficacious remedy, availability of---Performance bond---Encashment---Petitioner assailed order passed by Ombudsman directing it to encash performance bond---Appeal filed by petitioner under S. 130(2) of Insurance Ordinance, 2000 was dismissed---Validity---Matter was not of insurance claim and complaint lodged by respondent was non-payment of unconditional and irrevocable performance bonds executed by petitioner---Petitioner repudiated claim of performance bonds without any lawful excuse---Performance guarantee, letter of credit and Bank guarantee were autonomous and independent contracts and the same were irrevocable in character---Petitioner did not deny execution of irrevocable and independent contracts of performance bonds---Contractors did not complete their work/job within stipulated period, even extended period more than actual/agreed time---According to performance bonds petitioner was not righteous to raise any query about terms and conditions or obligations in between the parties---Petitioner had undertaken to pay on first written demand without cavil or argument and without needing to prove or to show grounds or reasons for demand of encashment---No factual controversy was present between parties which required recording of evidence---Petitioner was not justified in repudiating claim, which was act of dishonesty and mal-administration on its part---Petitioner under the same hierarchy, also filed appeal against order in original, wherein they did not raise any objection upon jurisdiction, which had been agitated in Constitutional petition---Petitioner failed to avail alternate remedy in the form of appeal against order of SECP under S. 33(1) of Securities and Exchange Commission of Pakistan Act, 1997---Ultimate appellate jurisdiction also rested with High Court under S. 34(1) of Securities and Exchange Commission of Pakistan Act, 1997--- Constitutional petition was dismissed, in circumstances.

Messrs Capital Insurance Co. Ltd. v. Securities and Exchange Commission of Pakistan and 4 others 2013 CLD 1075; S.M. Waseem Ashraf v. Federation of Pakistan through Secretary, Ministry of Housing and Works, Islamabad and others 2013 SCMR 338; Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881 and Securities and Exchange Commission of Pakistan v. Mian Nisar Elahi and others 2009 CLD 1442 rel.

Muhammad Basit Babar Chughtai for Petitioner.

Muhammad Ismail Makki for Respondent No. 1.

2022 C L D 1549

[Lahore (Multan Bench)]

Before Abid Hussain Chattha, J

MASOOD FABRICS LIMITED through Chief Executive and 10 others---Petitioners

Versus

JOINT REGISTRAR OF COMPANIES---Respondent

Civil Original No. 2 of 2022, heard on 28th June, 2022.

Companies Act (XIX of 2017)---

----Ss. 270, 280, 281, 282 & 284---Scheme of arrangement and merger---Scope---Petitioner companies sought their merger on the basis of scheme of arrangement filed in Court---Validity---Extraordinary general meetings of petitioner companies were held wherein 100% of the shareholders were present---All shareholder by voting unanimously, consented to and approved scheme of arrangement for rearrangement and reconstruction of companies in question---All formalities with respect to holding of such meetings were duly complied with---Competition Commission of Pakistan conveyed its authorization to the scheme of arrangements---Scheme of arrangement was acceptable to shareholders, creditors and regulators---Scheme of arrangement was not prejudicial to the members of petitioner companies---High Court was satisfied with merits of scheme of payment which was placed on record in report of Chairmen duly signed by them---High Court sanctioned scheme of arrangement---Petition was allowed accordingly.

Salman Aslam Butt, Muhammad Tariq Rajwana and Barrister Qasim Imran Ali for Petitioners.

Adil Shabbir for Respondent.

Iqbal Ghous, Assistant Registrar of Companies, SECP, Multan.

Malik Kashif Rafiq Rajwana and Mian Babur Saleem, Advocates/Co-Chairmen appointed by the Court.

2022 C L D 1555

[Lahore]

Before Abid Aziz Sheikh and Asim Hafeez, JJ

HOUSE BUILDING FINANCE CORPORATION through Branch Manager---Appellant

Versus

ABDUL SATTAR ANJUM---Respondent

R.F.A. No. 1168 of 2016, decided on 22nd September, 2022.

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

----S. 22---Limitation Act (IX of 1908), Ss. 5 & 29---Appeal---Limitation---Condonation of delay---Scope---Period of limitation for filing an appeal has been provided in the Financial Institutions (Recovery of Finances) Ordinance, 2001, itself, thus the provision of S. 5 of the Limitation Act, 1908, is not applicable in view of S. 29(2)(b) of the Limitation Act, 1908---Application for condonation of delay in filing appeal was dismissed as being not maintainable along with the appeal.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; General Manager v. Mst. Sakina Bibi and others 2012 CLD 1112; Allied Bank Limited through Tariq Mehmood Sheikh SAM and Mujtaba Gillani AVP-SAM Branch Authorized Attorney v. Messrs Shahabad Textiles (Pvt.) Ltd. through Chief Executive and Director 2012 CLC 817 and Messrs Friends International (Pvt.) Limited through Director and 2 others v. Allied Bank of Pakistan Limited through Manager and 5 others 2004 CLD 817 ref.

Khawaja Muhammad Ajmal for Appellant.

2022 C L D 1562

[Lahore (Multan Bench)]

Before Abid Hussain Chattha and Anwaar Hussain, JJ

Messrs MIQ (PVT.) LIMITED through Chief Executive/Directors and 2 others---Appellants

Versus

HABIB METROPOLITAN BANK LIMITED through Manager---Respondent

R.F.A. No. 357 of 2021, heard on 14th September, 2022.

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

----S. 9---Recovery of finance---Statement of account---Disputed entries---Appellants contended that certain debit entries in the statement of account were unlawful---Held; appellants had not disclosed as to how each debit entry was unlawful---Mere general and bald allegation that a particular entry was unlawful did not advance the cause of the appellants---No document was appended with the PLA (Petition for Leave to Appear) to dislodge the presumption of truth attached to the statement of accounts---Bank, in its reply had duly explained each and every entry---Said entries were either charges which were initially incurred by the bank for and on behalf of the appellant company and later recovered on the strength of the financing documents such as, valuation charges paid to the evaluator, payment to Advocate for legal opinion and payment of fee to SECP for registration of charges, etc---Some of the payments were regarding markup unpaid by the appellant which were debited from the principal account and credited into the separate markup account---Appeal was dismissed.

Muhammad Aslam Siddiqui for Appellants.

Muhammad Saleem Iqbal for Respondent.

2022 C L D 80

[Peshawar]

Before Qaiser Rashid Khan and Muhammad Naeem Anwar, JJ

Messrs VISION 2000 + PHARMACEUTICALS through Managing Partner, Peshawar

and 10 others---Appellants

Versus

HABIB BANK LIMITED---Respondent

F.A.B. No. 37-P of 2015, decided on 5th December, 2019.\

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

----Ss. 5(8), 9 & 22---Suit for recovery of finances---Charging of markup---Mode, determination of---Appellants/defendants were aggrieved of judgment and decree passed against them by Banking Court---Plea raised by appellants / defendants was that charging of markup was not in accordance with Standard Banking Practice and Procedure as well as State Bank of Pakistan Regulations--- Validity--- Without appointment of competent and professional banker well conversant with banking practice and procedure and mode of charging of markup in accordance with terms and conditions of Sanction Advice/ Advices within the meaning of S. 5(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Controversy between parties could not be resolved merely on the basis of evidence so recorded before Banking Court---High Court set aside judgment and decree passed against appellants/defendants and remanded the matter to Banking Court for decision afresh after recording of evidence---Appeal allowed accordingly.

Aamir Javed and Ashfaq Ahmad for Appellants.

Umar Farooq Adam and Hamid Ali for Respondent.

2022 C L D 227

[Peshawar]

Before Qaiser Rashid Khan, C.J. and S.M. Attique Shah, J

GENERAL MANAGER, HOUSE BUILDING FINANCE COMPANY LTD., PESHAWAR through Law Manager/Branch Manager---Appellant

Versus

MUHAMMAD FAYAZ KHAN---Respondent

F.A.B. No. 28-P of 2016, decided on 15th December, 2021.

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

----Ss. 9 & 22---Limitation Act (IX of 1908), Art. 132---Enforcement of money charged on immovable property---Limitation---Appellant was House Building Finance Company and suit filed by the Company was dismissed by Banking Court on the ground of limitation---Validity---Held, in the event of failure on the part of respondents/defendants to pay off their liabilities, the appellant/company should have filed recovery suits against them within twelve years as envisaged under Art. 132 of Limitation Act, 1908---Such period of limitation was provided when money sued for had become due so as to enforce payment of money charged upon immovable property---As against the same, appellant company filed recovery suits beyond the prescribed period of limitation---Banking Court had rightly appreciated question of limitation while handing down the findings whereby recovery suit was dismissed as time barred---Appeal was dismissed, in circumstances.

Ahmad Saleem Khan for Appellant.

Nemo for Respondent.

2022 C L D 238

[Peshawar]

Before Qaiser Rashid Khan, C.J. and S.M. Attique Shah, J

ZARAI TARAQIATI BANK LIMITED through Branch Manager---Appellant

Versus

SAMI ULLAH---Respondent

F.A.B. No. 12-P with C.M. No. 297-P of 2021, decided on 8th December, 2021.

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

----Ss. 19 & 22---Limitation Act (IX of 1908), Art. 181---Execution of decree---Possession of suit property---Limitation---Appellant Bank itself purchased suit property during auction in execution of decree passed against respondent/borrower---After confirmation of auction proceedings, Sale Certificate was issued in favour of appellant Bank on 28.1.2002, whereby sale had become absolute---Application for possession of acquired property was preferred by appellant Bank on 13.1.2020---Application filed by appellant Bank was dismissed as time barred---Validity---Appellant Bank was required to file such application within three years from date of issuance of Sale Certificate but they preferred to file such application after over seventeen and a half years and that was how Banking Court held the application barred by time---High Court declined to interfere in the order passed by Banking Court as such finding did not suffer from any illegality---Appeal was dismissed, in circumstances.

2022 C L D 522

[Peshawar]

Before Qaiser Rashid Khan, C.J. and S M Attique Shah, J

INDUSTRIAL DEVELOPMENT BANK LIMITED through Officer Incharge---Petitioner

Versus

Messrs KAGHAN GHEE MILLS (PVT.) LIMITED through Chief Executive and 2 others---Respondents

F.A.B. No. 25-P of 2021, decided on 12th January, 2022.

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

----Ss. 9, 19 & 22---Suit for recovery of finance---Execution proceedings---Restoration of suit---Appellant/Bank filed suit against respondent/defendant which suit was decreed with consent of both the parties---During execution proceedings, appellant/Bank sought restoration of suit for its decision on merits---Validity---Appellant/Bank itself did not perform its legal obligation as per settlement deed during proceedings of recovery suit before Banking Court---Neither appellant/Bank made request for sine die adjournment of suit at relevant time nor filed fresh suit on account of default in payment of installments of agreed amount by respondent/defendant---Rather appellant/Bank happily received settled amount during execution proceedings---Executing Court right turned down application of appellant/Bank for revival of original suit as Executing Court could not modify decree and go beyond the same---High Court declined to interfere in the order passed by Executing Court as the same did not suffer from any illegality, misreading or non-reading of record---Appeal was dismissed, in circumstances.

Ch. Ahmed Nawaz v. Province of Punjab through Land Acquisition Collector, Jhelum and others 2015 SCMR 823 rel.

2022 C L D 1566

[Peshawar]

Before Musarrat Hilali, J

Messrs PHANDU FILLING STATION through CEO---Petitioner

Versus

GOVERNMENT OF PAKISTAN through Secretary Industries and Production, Department of Explosives, Ministry of Industries and Production, Islamabad and 5 others---Respondents

C. R. No. 68-P of 2021, decided on 1st April, 2022.

Trade Marks Ordinance (XIX of 2001)---

----S. 40---Constitution of Pakistan, Art. 18---Freedom of trade, business or profession---Using another's trademark---Scope---Every citizen has the right to enter upon any lawful trade or business, however, it does not allow unauthorized use of another's trade mark to capture consumer attention as using another's trade mark is much like posting a sign with another's trade in front of one's store just to confuse or deceive the buyer.

Javed Iqbal Gulbela for Petitioner.

Salim ur Rehman and Qazi Baber Irshad, D.A.G. for Respondents.

2022 C L D 184

[Punjab Environmental Tribunal]

Before Justice (Retd.) Syed Iftikhar Hussain Shah, Chairperson and Muhammad Irfan, Member (General)

AYAZ AHMAD MALIK and 4 others---Appellants

Versus

ENVIRONMENTAL PROTECTION AGENCY, GOVERNMENT OF PUNJAB through Director General and 3 others---Respondents

Appeal No. 61 of 2019, decided on 22nd June, 2021.

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

----S. 12--- Constitution of Pakistan, Arts. 9 & 14--- Initial environmental examination and environmental impact assessment---Security of person---Inviolability of dignity of man---Construction of educational institution---Inconvenience to neighbours---Scope---Appellants (neighbours) assailed approval granted by Environmental Protection Agency for construction of Multi-Storey School building---Validity---Plots which were purchased by the proponent were reserved for school---After functioning of school the flow of traffic would increase in the locality which would affect the environment but this effect was not quantified or ascertained---Such apprehended effect was not violative of fundamental right to life unless it was shown by placing incontrovertible material before the Environmental Tribunal that the same would lead to hazardous effects on environment and would seriously affect human living---Approval of project was granted by strictly complying with Punjab Environmental Protection Act, 1997 and regulations framed thereunder with conscious application of mind, considering all relevant material and attending circumstances---Project had neither contravened fundamental rights nor human dignity---Appeal was dismissed.

2017 CLD 2772; PLD 2017 Lah. 1 and 2008 SCMR ­468 distinguished.

Ali Usman for Appellants.

Mohsin Sarfraz Cheema, Law Officer for the EPA.

Abuzar Sulman Khan Niazi for the Respondent No. 4.

2022 C L D 128

[Balochistan]

Before Jamal Khan Mandohail and Muhammad Kamran Khan Mulakhail, JJ

Messrs S.Q. CORPORATION through Proprietor and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Internal Affairs, Government of Pakistan, Islamabad and others---Respondents

C. P. No. 1494 of 2020, decided on 30th June, 2021.

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

----Ss. 8, 9 & 20--- Financial Institutions (Recovery of Finances) Rules, 2018, R. 5---Quashing of criminal proceedings---Wilful default, investigation of---Determination of liability---Petitioners availed finance facility but due to their failure to repay within time, respondent Bank filed complaint with Federal Investigation Agency to investigation offence of wilful default---Plea raised by petitioners was that before determination of liability under civil law, criminal proceedings of wilful default could not be initiated---Validity---Federal Investigation Agency was empowered under Financial Institutions (Recovery of Finances) Rules, 2018, to investigate complaints filed by financial institutions in the matters of wilful default in adjustment of any financial liability---Offence of wilful default under S. 20(8) & (9) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was a cognizable and non-bailable in nature and could be tried by Banking Court constituted under Financial Institutions (Recovery of Finances) Ordinance, 2001---Jurisdiction of Federal Investigation Agency was not precluded from conducting inquiry on complaint filed by respondent Bank---Complaint filed by respondent Bank was pre-mature as the same was filed prior to fixation of civil default---High Court quashed the complaint as suit for recovery of finance was pending before High Court---Respondent Bank could file fresh complaint after the suit was decided and liability of default was fixed against petitioners and only then Federal Investigation Agency was empowered under R. 5 of Financial Institutions (Recovery of Finances) Rules, 2018 to conduct inquiry on the complaint---Constitutional petition was allowed, in circumstances.

Asfandyar Wali v. The Federation of Pakistan and others PLD 2001 SC 607; The State through Chairman NAB and other v. Muhammad Asif Saigol and others PLD 2016 SC 620; Syed Muhammad Shah and others v. Federal Investment Agency and others 2017 SCMR 1218 and Mian Ayaz Anwar and others v. State Bank of Pakistan 2019 CLD 375 rel.

Zayyad Khan Abbasi for Petitioners.

Ghulam Mustafa Buzdar, D.A.G. for Respondent No. 1.

Respondent No. 4 in person along with Hameedullah, Assistant Director FIA, Balochistan, Quetta.

Abid Hussain for Respondent No. 5.

2022 C L D 169

[Balochistan]

Before Abdullah Baloch, J

MUHAMMAD YASEEN---Petitioner

Versus

WALI MUHAMMAD and 3 others---Respondents

Civil Suit No. 3 of 2013, decided on 14th September, 2021.

Companies Ordinance (XLVII of 1984)---

----Ss. 7 & 42---Trade Organization Act (II of 2013), S. 7---Suit---Cancellation of incorporation certificate---Registration of Trade Organization---Plaintiff assailed incorporation certificate issued to defendant under S. 42 of Companies Ordinance, 1984 and was also aggrieved of cancellation of registration under S. 7 of Trade Organization Act, 2013---Validity---Plaintiff was timely informed by the authority that defendant had applied for issuance of a license under the provisions of Trade Organization Act, 2013 and Rules---Application of defendant was properly processed, publication was made and after observing all codal formalities and deposit of requisite fee the license was duly issued to defendant in accordance with law and rules, where neither in Trade Organization Act, 2013 nor in Trade Organization Rules, 2013 availability of name from Securities and Exchange Commission of Pakistan was a pre-requisite for obtaining license of trade organizations---Remedy under the provisions of Trade Organization Act, 2013 provided to aggrieved person for redressal of his grievance was available but plaintiff failed to avail available remedy for redressal of his grievance in accordance with law---High Court declined to interfere in registration of trade organization---Suit was dismissed, in circumstances.

Tariq Ali Tahir and Barkhurdar Khan for Petitioner.

M. Mehmood Sadiq Khokar, Mst. Shehnaz Rana and Barrister Iftikhar Raza Khan for Respondents.

Jameel Bostan, Assistant Attorney General and Abdul Rehman Khan, Deputy Registrar, SECP for the State.

2022 C L D 332

[Balochistan]

Before Muhammad Kamran Khan Mulakhail and Rozi Khan Barrech, JJ

ASAD JAVED----Appellant

Versus

AHMED SHAH----Respondent

R.F.A. No.14 of 2018, decided on 28th September, 2021.

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

----S. 118---Civil Procedure Code (V of 1908). O. XXXVII, R. 2---Cheque dishonoured---Plaintiff filed suit for recovery of amount of Rs.20,80,820/- allegedly paid to Defendant for starting business---Plaintiff contended that defendant issued to him a cross cheque which was dishonoured for insufficient balance---Defendant contended that the said cheque was stolen by the brother of the plaintiff---Trial Court decreed the plaintiff's suit---Validity---Plaintiff's witness deposed before Trial Court that the plaintiff was his relative; that respondent and appellant were present in the office of plaintiff; that defendant obtained a loan from plaintiff amounting to Rs.20,80,820---Appellant stated that said cheque was actually issued to the brother of the Plaintiff, and he, in a concealing manner, took the cheque; and that he had given a loan of Rs.3000 to the brother of the plaintiff---Such stand of the appellant/defendant was contradictory to his very stance---One could not steal a thing that did not exist---To support the claim of stealing/theft it was always necessary to establish the existence of an allegedly stolen thing, else the claim of theft should not stand even if it was admitted by an alleged thief---Such assertion did not stand to reason as to how the cheque, without the consent of its maker, was in possession of the respondent---No cogent evidence had been produced by the appellant that he had not issued a cheque nor signed---Record did not show that the cheque was torn out of his cheque book and it did not pertain to the account maintained by him in the Bank---Mere denial that he had not issued the cheque would not be sufficient---In case of negotiable instrument, it was the defendant who was duty-bound to prove contrary, because the presumption was attached to the negotiable instrument---Story cooked up by the plaintiff had not been supported by any cogent evidence---Plaintiff had failed to rebut the statutory presumption raised under S. 118 of the Negotiable Instruments Act, 1881---Appeal was dismissed accordingly.

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

----S. 118---Cheque---Execution of---Presumption---Scope---Cheque, in law, had been given the status of negotiable instrument, which, however, could not be engineered/fabricated as other document(s), declared/qualified as 'negotiable instrument'---Proper execution would normally require only two parties i.e. taking out the cheques from the cheque-book, which was believed to be in the safe hands of the account holder, and signing/execution thereof---No other person could perform such part except by stealing, defrauding, or finding a lost one, which claims should always be upon the person who otherwise was expected to keep cheque in safe hands.

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

----S. 118---Cheque, execution of---Burden of proof---Presumption, rebuttables, nature of---Scope---Initial presumption is that a negotiable instrument/cheque is made, drawn, accepted or endorsed for consideration---Although such presumption is rebuttable, the onus is on the person denying consideration to allege and prove the same---Where execution of negotiable instrument is admitted, the burden of proof of non-payment of consideration will lie on the executant.

Mrs. Zarghoon Barreach for Appellant.

Khurram Javed Malik for Respondent.

2022 C L D 484

[Balochistan]

Before Muhammad Kamran Khan Mulakhail and Rozi Khan Barrech, JJ

The STATE through Deputy Attorney General---Appellant

Versus

ZAHID KHAN and others---Respondents

Criminal Acquittal Appeals Nos. 207, 257, 258 and 259 of 2020, decided on 30th September, 2021.

(a) Administration of justice---

----Practice and procedure---Ancillary proceedings---Scope---Such proceedings or action does not overrule a provision of substantive law, which cannot be defeated nor any such direction can be made by giving it an overriding effect over substantive provision of Act in question.

(b) Foreign Exchange Regulations Act (VII of 1947)---

----Ss. 4(1), 5, 23 & 23-A(6)---Criminal Procedure Code (V of 1898), S. 417---Appeal against acquittal---Foreign currency, recovery of---Requisite authorization, absence of---Effect---Accused persons were acquitted by Trial Court as there was no requisite authorization by Federal Government or State Bank of Pakistan to register FIR in question---Validity---Where law had provided a specific procedure or mechanism intended to be undertaken against a person by any forum either judicial, quasi-judicial or executive, if such action was patently illegal or against mandate of law on the subject, specially the express provisions and implied spirit of statute, which if allowed to stay intact, would tantamount to/and would cause serious breach of legal rights of a citizen, High Court under its Constitutional jurisdiction could come for his rescue---Complainant made departure from mandatory provision of Foreign Exchange Regulations Act, 1947, and had committed a serious illegality, which if allowed to stay would amount to serious breach of legal fundamental right of citizen guaranteed by the Constitution---Federal Investigation Agency did not act in the manner prescribed by law, therefore, maxim "justice should prevail no matter if the heaven falls" had come to play---High Court declined to interfere in acquittal of accused persons recorded by Trial Court---Appeal was dismissed in circumstances.

2013 PCr.LJ 12; 2017 PCr.LJ 69 and 2018 YLR 2668 ref.

Muhammad Anwar and others v. Mst. Ilyas Begum and others PLD 2013 SC 255 rel.

Hameedullah Babar, Assistant Director (Legal) FIA for Appellant (in Criminal Acquittal Appeals Nos. 207, 257, 258 and 259 of 2020).

Faiz Ahmed for Respondent (in Criminal Acquittal Appeal No. 207 of 2020).

Naveed Ahmed Muhammad Hassani for Respondent (in Criminal Acquittal Appeal No. 257 of 2020).

Muhammad Zakir Kakar for Respondent (in Criminal Acquittal Appeal No. 258 of 2020).

Muhammad Sultan Afridi for Respondent (in Criminal Acquittal Appeal No. 259 of 2020).

2022 C L D 1311

[Balochistan]

Before Muhammad Kamran Khan Mulakhail, J

Hafiz ZUBAIR and another---Petitioners

Versus

Mst. HAZAR NAZ and 13 others---Respondents

Civil Revision No. 169 of 2021, decided on 30th November, 2021.

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

----S. 5---Specific Relief Act (I of 1877), S. 42---Civil Procedure Code (V of 1908), S. 9 & O. VII, R. 10---Suit for declaration---Courts to try all civil suits unless barred---Jurisdiction of the Court and creation of Benches---Scope---Where plaintiffs had filed a suit for declaration before the civil court and had sought declaration of title of their predecessor-in-interest as Director of a private limited company and profit as per his shares, High Court observed that matter squarely fell within the jurisdiction of Company Judge---No court other than the High Court had jurisdiction to entertain the matter---High Court remanded the matter to the Trial Court to decide the question of jurisdiction.

Dr. Omar Masood and another v. Syed Amir Hussain Naqvi and another 2019 CLD 931 rel.

(b) Jurisdiction---

----Whenever a challenge is made to the jurisdiction of the Court, such Court in the first instance is obliged by law to decide the matter of its jurisdiction by taking into account all the relevant facts.

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

----O. VII, R. 10---Return of plaint---Jurisdiction---Scope---Courts have inherent jurisdiction to decide the question of their own jurisdiction with respect to a specific matter and jurisdiction of a Court is initially determined by the pleadings of the parties---If the Court reaches upon the conclusion that it does not have the jurisdiction to decide the lis before it, the Court should return the plaint under O. VII, R. 10, C.P.C. because decision will have a binding force only when same is passed by a Court of competent jurisdiction.

Sardar Ahmed Haleemi for Petitioners.

Ewaz Zehri for Respondents Nos. 1 and 12.

Tahir Iqbal Khattak, Assistant Attorney General and Shahid Javed Baloch, Assistant Advocate General for the State.

Dr. Parvaiz Ahmed Khilji present on Court's Notice.

2022 C L D 1448

[Balochistan]

Before Muhammad Hashim Khan Kakar and Abdullah Baloch, JJ

HABIB BANK LIMITED---Petitioner

Versus

MUHAMMAD AYUB MENGAL and others---Respondents

C.Ps. Nos. 121 of 2021, 872 of 2020 and (s) 173 of 2019, decided on 19th July, 2021.

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

----S. 9---Banking Companies Ordinance (LVII of 1962), S. 82-D---Constitution of Pakistan, Art. 199---Constitutional petition---Federal Ombudsman, decision of---Account holders filed complaints against petitioner Bank that funds were transferred from their accounts unauthorizedly through Internet Banking Funds Transfer---Banking Mohtasib accepted claim of respondents/account holders and directed petitioner Bank to compensate them---Validity---Petitioner Bank failed to detect fraud timely and to initiate criminal proceedings through FIA against beneficiaries---High Court declined to interfere in the order passed by Banking Mohtasib as there was a gross negligence on the part of petitioner Bank---No material illegality or irregularity in the order passed by Banking Mohtasib---Constitutional petition was dismissed, in circumstances.

Ajmal Khan Kasi for Petitioner.

Sana Ullah Ababaki, Additional Attorney General and Syed Iqbal Shah, Deputy Attorney General for the State.

Respondent No. 1 in person (in C.P. No. 121 of 2021).

Respondent No. 1 in person (in C.P. No. 872 of 2020).

2022 C L D 413

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, Syed Mansoor Ali Shah and Muhammad Ali Mazhar, JJ

SAIF UR REHMAN KHAN---Petitioner

Versus

CHAIRMAN, NATIONAL ACCOUNTABILITY BUREAU, NAB HEADQUARTER, ISLAMABAD and others---Respondents

Civil Petitions Nos. 5178, 5179 and 5180 of 2021, decided on 22nd September, 2021.

(Against the orders dated 26.08.2021 of the Islamabad High Court, Islamabad passed in W.Ps. Nos. 1244, 1242 and 2862 of 2021)

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

----Ss. 84, 264(3), 482, 496(1)(d) & 500---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 37 & 41B---National Accountability Ordinance (XVIII of 1999), Ss. 9(a)(ix) & 9(a)(x)---Penal Code (XLV of 1860), Ss. 405 & 415---Defrauding and cheating the public at large---Inducing and luring members of the public to invest money in companies by way of a 'Ponzi/pyramid scheme'---Bar contained in Ss. 37 & 41B of the Securities and Exchange Commission of Pakistan Act, 1997 and S. 482 of the Companies Act, 2017---Scope---Whether National Accountability Bureau (NAB) could inquire into and investigate the commission of the alleged offences without a reference from the Securities and Exchange Commission of Pakistan ('the SECP')---Held, that in the present case there was no bar for the NAB to inquire into and investigate the commission of alleged offence under S. 9 of the National Accountability Ordinance, 1999 by the petitioner and to proceed further against him under the said Ordinance---Bar contained in Ss. 37 & 41B of the Securities and Exchange Commission of Pakistan Act, 1997 ('the SECP Act') and S. 482 of the Companies Act, 2017 ('the Companies Act') were not attracted to the present matter---Question of cheating the public at large and of breach of trust did not fall within the domain of Companies Act or SECP Act, but squarely falls under the NAB Ordinance---Therefore, the SECP sending a reference to the NAB or the NAB taking cognizance on the basis of the reference had little significance in the facts and circumstances of the present case, when NAB could have taken cognizance on their own---Proceedings conducted by the NAB, in the present matter, against the petitioner were not without lawful authority.

As per the material collected by the National Accountability Bureau (NAB) so far, money from the investors has been received not only in the Bank accounts of the registered companies but also in the personal accounts of the accused-petitioner and his family members as well as of their unregistered companies, which does not fall within the domain of the Securities and Exchange Commission of Pakistan (SECP). The actions taken by the SECP under the Companies Act, 2017 ('the Companies Act') in the present matter, relates to the alleged illegal acts of the registered companies and their directors, not to those alleged illegal acts that have been done by the petitioner and his family members in their personal capacity.

Even as to registered companies, under section 264(3) of the Companies Act a person who forms a company for any fraudulent or unlawful purpose, or carries on unauthorized business, is liable to be proceeded against for any other action provided in any other law for the time being in force, in addition to the action taken under subsection (1) of that section. Likewise, under section 500 of the Companies Act a person who acts as a director or officer of the company and is responsible for carrying on any business or any transaction which is ultra vires of the company is also personally liable for the liabilities and obligations arising out of such business or transaction. These provisions leave little doubt to find that there is no bar for the NAB to inquire into and investigate the commission of alleged offence under Section 9 of the NAB Ordinance by the petitioner and to proceed further against him under that Ordinance.

The bar of section 41B of the Securities and Exchange Commission of Pakistan Act, 1997 ('the SECP Act') pleaded on behalf of the petitioner is not attracted to the present matter. Section 41B relates to "any regulated activity, regulated securities activity, transaction, process or permission granted under this Act or any administered legislation". The petitioner has failed to show that the allegations against him falls within the scope of any of the said matters. Similarly, the bar of section 37 of the SECP Act and section 482 of the Companies Act pleaded by the petitioner is also not attracted to the investigation of the allegations against him by the NAB or taking cognizance of the alleged offences punishable under the NAB Ordinance by the Accountability Court, as the provisions of the said sections of both the Acts relate to taking cognizance of any offence punishable under those Acts, not to the offences punishable under other laws.

Another contention raised on behalf of the petitioner was that the provisions of the Companies Act and the SECP Act have effect notwithstanding any other law for the time being in force and are to prevail over the provisions of the NAB Ordinance. The question of taking precedence of those Acts over the NAB Ordinance does not arise unless it is shown that the offences of cheating as defined in section 415 of the P.P.C. and thereby dishonestly inducing members of the public at large to deliver any property including money or valuable security to any person and criminal breach of trust as defined in section 405 of the P.P.C. with regard to any property including money or valuable security entrusted by members of the public at large, as defined and made punishable under the NAB Ordinance, are also punishable under the Companies Act and the SECP Act. [p. 421] D

The provisions of section 496(1)(d) of the Companies Act referred to on behalf of the petitioner relate to any fraudulent scheme, artifice or practice that is employed in the course of business of the company. It is not the petitioner's case that it was the business of the petitioner's companies to invite and accept deposits from the public as those companies were admittedly not the banking companies; therefore, the alleged Ponzi scheme was not employed by the companies in the course of business of those companies. Therefore, prima facie the mischief addressed in the Companies Act and SECP Act has a limited scope restricted to invitation of deposits by companies, which can be both through fraud or by a bonafide mistake. Both said laws in no way impede NAB to assume jurisdiction under section 9(a)(ix) and (x) of the NAB Ordinance. The NAB enjoys a totally different jurisdiction, which does not overlap with the Companies Act or SECP Act. The question of cheating the public at large and of breach of trust does not fall within the domain of Companies Act or SECP Act, but squarely falls under the NAB Ordinance. Therefore, the SECP sending a reference to the NAB or the NAB taking cognizance on the basis of the reference has little significance in the facts and circumstances of the case, when NAB could have taken cognizance on their own.

The provisions of section 84 of the Companies Act referred to on behalf of the petitioner relate to mere inviting or accepting deposits from the public; they do not relate to commission of offence of cheating and criminal breach of trust in relation to the money deposited by the public. A company may invite and accept deposits from the public without any intention of committing, or actual commission of, cheating and criminal breach of trust in relation to the deposits of the public. In other words, if cheating and/or criminal breach of trust is not committed, or alleged to have committed, in inviting and accepting deposits, such act of a company and its officer in default is though still punishable under section 84 of the Companies Act, but it is not punishable under the P.P.C. or the NAB Ordinance. And, conversely the offences of cheating and criminal breach of trust in relation to inviting and accepting deposits from the public, which are punishable under the P.P.C. and the NAB Ordinance, are not punishable under section 84 of Companies Act. There is thus no conflict between the provisions of section 84 of the Companies Act and the provisions of section 9 of the NAB Ordinance, and the question of giving precedence to one over the other does not arise.

It cannot be said that the proceedings being conducted by the NAB, in the present matter, against the petitioner are without lawful authority. Petitions for leave to appeal were dismissed and leave was refused.

(b) Constitution of Pakistan---

----Art. 13(a)---Protection against double punishment---Scope---Double jeopardy, principle of---Scope of Art. 13(a) of the Constitution stated.

Article 13(a) of the Constitution provides that no person shall be prosecuted or punished for the same offence more than once. The expressions "prosecuted" and "same offence" used in Article 13 are of vital significance in determining the scope of the protection guaranteed. The expression "prosecuted" means prosecuted on a charge of criminal nature before a Court of law; it does not include prosecution on the basis of breach of some code of conduct by a disciplinary authority or breach of some regulatory framework by an administrative authority. The expression "same offence" means offence constituted of the same ingredients and does not mean "same matter" or "same facts". The ingredients of the offence earlier charged and the offence subsequently charged should be the same, to attract the bar of Article 13, in the sense that the facts constituting the offence earlier charged were also sufficient to justify the conviction of the offence subsequently charged.

Jehangir Badar v. Chairman, NAB 2004 SCMR 1632 and Hoot Khan v. NIRC PLD 1977 Kar 145 ref.

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

----Ss. 264(3) & 500---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 37 & 41B---Constitution of Pakistan, Art. 13(a)---National Accountability Ordinance (XVIII of 1999), S. 9---Protection against double punishment---Scope---Double jeopardy, principle of---Defrauding and cheating the public at large---Inducing and luring members of the public to invest money in companies by way of a 'Ponzi/pyramid scheme'---Plea of accused petitioner that in view of the proceedings conducted by the Securities and Exchange Commission of Pakistan (SECP), the second proceedings by the National Accountability Bureau (NAB) regarding the same matter would amount to double jeopardy and thus infringe his fundamental right to protection against double punishment guaranteed by Art. 13 of the Constitution---Held, that SECP was not a court of law, nor were the offences under the Companies Act, 2017 for which it had imposed penalties on the accused-petitioner and his companies constituted, of the same ingredients as that of the offence defined in S. 9 of the National Accountability Ordinance, 1999---Shield of Art. 13 of the Constitution was therefore not available to the petitioner to prevent the proceedings against him under the National Accountability Ordinance, 1999---Petitions for leave to appeal were dismissed and leave was refused.

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

----Ss. 264(3) & 500---National Accountability Ordinance (XVIII of 1999), S. 9---Criminal Procedure Code (V of 1898), S. 498---Constitution of Pakistan, Art. 185(3)---Pre-arrest bail, refusal of---Defrauding and cheating the public at large---Inducing and luring members of the public to invest money in companies by way of a 'Ponzi/pyramid scheme'---National Accountability Bureau (NAB) had recorded the statements of many affectees of the alleged fraud of the accused-petitioner and collected the credit and debit record of the Bank accounts operated by the petitioner and his family members as well as the tax record of the petitioner and his alleged shell companies, and the record of the properties in name of the petitioner---During inquiry the NAB found that about 57 Bank accounts had been used for collecting money from the investors, out of which 26 were in name of the petitioner, his wives and son, 18 were in the name of registered companies and 16 in the name of unregistered companies---Petitioner, his wives and son, being the authorized signatories, also operated the accounts in the name of registered and unregistered companies---In view of the said material collected by the NAB so far, the accusation against the petitioner was well founded, and his custody was also required by the NAB for the purpose of completing investigation of the case---Accused-petitioner was refused pre-arrest bail---Petitions for leave to appeal were dismissed and leave was refused.

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

----Ss. 264(3) & 500---Constitution of Pakistan, Art. 185---National Accountability Ordinance (XVIII of 1999), S. 9---Criminal Procedure Code (V of 1898), S. 498---Supreme Court deciding petitions for leave to appeal filed against short orders of the High Court, in circumstances where High Court had not yet given the detailed reasons for its short orders---Propriety---In the present matter the High Court had not yet given the detailed reasons in support of the impugned short orders---Although the Supreme Court ordinarily waits for the detailed reasons before deciding the appeals or the petitions for leave to appeals filed against the short orders passed by the High Courts, but the peculiar facts and circumstances of a case, as those of the present case, may justify departure from this rule of practice and propriety, which is neither a rule of law nor is an absolute one and, like most of the rules, admits exception(s)---Present case involves a bail matter, which is usually considered as an urgent one; the arguments advanced by counsel for the parties mainly relates to the scope and applicability of certain legal provisions, and not to deep appraisal of the disputed facts and the evidence thereon; and the Supreme Court having heard the arguments of counsel for the parties in detail and perusing the material available on record with their able assistance, had reached a conclusion which is no different from the one arrived at by the High Court in its short orders---In such circumstances, it was not necessary to wait for the detailed reasons to be given by the High Court in support of the impugned short orders before pronouncing the present decision---Petitions for leave to appeal were dismissed and leave was refused.

Muhammad Latif Khan Khosa, Senior Advocate Supreme Court and Malik Javed Iqbal Wains, Advocate Supreme Court along with petitioner for Petitioner.

Sattar Awan, Special Prosecutor, Irfan Naeem Mangi, D.G. NAB, Fayaz Ahmad Qureshi, D.G. H.Q. NAB. Sardar Muzaffar Ahmad Khan, DPGA. Syed Jamil-ur-Rehman, A.D., M. Adil Shehzad, A.D. NAB, Shahid Islam, A.D. NAB, Haider Azmat, A.D. NAB, Qasim Hussain, ASI, M. Sadiq, H.C., Farrukh Abbas Shah, H.C., Abid Nazir, Constable and Abrar Hussain Shah, Constable for the NAB.

2022 C L D 615

[Supreme Court of Pakistan]

Present: Maqbool Baqar and Sayyed Mazahar Ali Akbar Naqvi, JJ

MUHAMMAD MULTAZAM RAZA---Petitioner

Versus

MUHAMMAD AYUB KHAN and others---Respondents

Civil Petition No. 3795 of 2021, decided on 8th November, 2021.

(Against the judgment dated 26.02.2021 of the Islamabad High Court, Islamabad passed in F.A.O. No. 57 of 2020)

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

----Ss. 17(4), 18 & 39---Trade Marks Ordinance (XIX of 2001), Ss. 24(5) & 40---Civil Procedure Code (V of 1908), O. VII, R. 10---Co-ownership of trademark---Infringement of registered trademark---Passing off---Intellectual Property Tribunal ('the Tribunal'), jurisdiction of---One of the co-owners (respondent) of the registered trademark "Ranchers", without consent of the other co-owner (petitioner) entered into a tripartite Joint Venture Agreement (JVA) and allowed use of the registered trademark "Ranchers"---Petitioner contended that his partnership firm with the respondent could not have participated in the said JVA without the consent of the petitioner; that by having agreed to extend to a third party, the right of master franchising "Ranchers" unilaterally, and without the consent of the petitioner, the third party had clearly infringed the registered trade mark jointly owned by the petitioner and respondent, against the clear restriction imposed by subsection (5) of section 24 of the Trade Marks Ordinance, 2001 ('the Ordinance 2001"); that respondent and the third party had incorporated a Private Limited Company by the name of "Ranchers Cafe (Pvt.) Ltd.", mainly for the same business as was being conducted by partnership of petitioner and respondent under its trade mark "Ranchers"; that use of the trade mark/name, "Ranchers", by the said company, would create an impression and lead to a belief that the entity was not different from, "Ranchers" jointly owned by the petitioner and respondent, and such would "amount to passing off the trade mark registered in the name of the partnership---Tribunal returned the plaint under Order VII, Rule 10, C.P.C., on the grounds that since the trade mark had not been physically used by the third party in the course of trade, the suit was not maintainable within the meaning of section 46(1) & (2) of the Ordinance 2001, and that since the dispute was between the respondent and petitioner, as co-owners of a trade mark, any violation of section 24(5) read with section 69 of the Ordinance 2001 could not be agitated before the Tribunal---Held, that respondent without the petitioner's consent granted master franchise rights in respect of the subject trade mark to the third party, which was clearly violative of section 24(5) of the Ordinance 2001 and clearly entitled the aggrieved co-proprietor i.e. the petitioner to initiate infringement proceedings---Furthermore use of the name "Ranchers Café (Pvt.) Ltd." by the company incorporated by the respondent and a third party was clear infringement of the trade mark "Ranchers" as described/explained by section 40 of the Ordinance 2001---Both acts complained of by the petitioner before the Tribunal had in clear terms been described by sections 24 & 40 of the Ordinance 2001, respectively, as infringement of registered trademark and as provided therein were actionable thereunder---Petitioner's case thus undoubtedly fell within the exclusive jurisdictional ambit of the Tribunal as laid down by sections 17, 18 & 39 of the Intellectual Property Organization of Pakistan Act, 2012 ('IPO Act 2012')---Petition for leave to appeal was converted into appeal and allowed, and the case was remanded to the Tribunal to proceed in accordance with law.

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

----Ss. 24 & 40---Infringement of registered trademark---Passing off---Scope---Use of trade mark can also be attributed to the person who has got to the stage where he can be seen objectively to have committed himself to use the mark that is to carrying his intension to use the mark into effect---Use of trade mark can therefore be demonstrated also through the intention to offer the goods and services and/or services which are manifested through preparatory steps which show an objective commitment to using the trade mark.

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

----Ss. 17(4) & 18---Trade Marks Ordinance (XIX of 2001), S. 40---Infringement of registered trademark---Passing off---Intellectual Property Tribunal ('the Tribunal'), jurisdiction of---Passing off action may either be a passing off action simplicitor or an action of infringement of trade mark coupled with passing off---Where the case of passing off action is based on infringement of trade mark, such suit shall necessarily require determination of the question whether there had been any infringement of the trade mark and where infringement of trade mark is alleged the suit must, in view of sections 17, 18 & 39 of the Intellectual Property Organization of Pakistan Act, 2012, be instituted before the Tribunal notwithstanding that the allegations in the suit were coupled with the allegation of passing off.

Afnan Karim Kundi, Advocate Supreme Court and Syed Rifaqat Hussain Shah, Advocate-on-Record for Petitioner.

Zia ur Rehman Tajik, Advocate Supreme Court and M. Sharif Janjua, Advocate-on-Record for Respondents.

2022 C L D 656

[Supreme Court of Pakistan]

Present: Qazi Faez Isa and Yahya Afridi, JJ

Mrs. NAILA NAEEM YOUNUS and others---Petitioners

Versus

Messrs INDUS SERVICES LIMITED through Chief Executive and others---Respondents

Civil Petition No. 4296 of 2019, decided on 28th April, 2022.

(On appeal against the order dated 01.10.2019 passed by the Lahore High Court, Lahore, in C. O. No. 31 of 2015)

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

----S. 126---Companies Ordinance (XLVII of 1984) [since substituted by the Companies Act, 2017], Ss. 152 & 153---Limitation Act (IX of 1908), First Sched. & Art. 181---Fraudulent transfer of shares---Rectification of company's register, application for---Limitation period---Article 181 of the First Schedule to the Limitation Act, 1908 does not apply to applications filed under the company law including one for rectification of company's register of members or debenture-holders---Legislative intent is not to prescribe a period of limitation for filing such rectification application.

Neither the Limitation Act, 1908 nor the Companies Ordinance, 1984 prescribes a particular period within which an application for the rectification of the company's register of members or debenture-holders is to be filed.

M. Imam-ud-Din v. Thal Development Authority PLD 2012 SC 123 and Naeem Finance Ltd. v. Bashir Ahmad Rafiqui PLD 1971 SC 8 distinguished.

Fraudulent changes made to the register and omissions therefrom are both categorized as offences in the Companies Ordinance, 1984 ('the Ordinance'). There is no limitation period in Pakistan to prosecute and punish a crime.

When section 152 of the Ordinance is read with the section following it i.e. section 153 it removes all doubts, that the legislative intent was not to prescribe a period of limitation in filing a rectification application, or to make it subject to Article 181, or to any other provision of the Limitation Act, 1908.

Significantly, Article 181 of the Limitation Act, 1908 does not state that it also applies to applications filed under the company law.

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

----Preamble---Companies Ordinance (XLVII of 1984) [since substituted by the Companies Act, 2017], Preamble---Companies are governed by their own self-contained law, which special law should not be overridden, or its scope curtailed, unless the legislative intent to do so is evident---Such legislative intent, must be unambiguously clear when adversely affecting proprietary rights.

(c) Interpretation of statutes---

----When more than one interpretation is fairly and reasonably possible, then that which leads to manifest absurdity or injustice must be avoided.

Hakman v. Satto PLD 1958 (W.P.) Lahore 936 ref.

Barrister Khurram Raza, Advocate Supreme Court, Ch. Akhtar Ali, Advocate-on-Record for Petitioners along with Petitioner No. 3.

Muhammad Khalid Ch., Advocate Supreme Court for Respondents Nos. 1 - 3.

Barrister Minal Tariq, Assistant Director Litigation, SECP for Respondent No. 4.

2022 C L D 970

[Supreme Court of Pakistan]

Present: Qazi Faez Isaand Yahya Afridi, JJ

SHEZAN SERVICES (PRIVATE) LIMITED---Appellant

Versus

SHEZAN BAKERS AND CONFECTIONERS (PRIVATE) LIMITED and another---Respondents

Civil Appeal No. 57-K of 2018, decided on 9th June, 2022.

(On appeal from the judgment dated 14.05.2018 of the High Court of Sindh, Karachi passed in Misc. Appeal No. 317 of 2003)

(a) Trade Marks Act (V of 1940) [since repealed]---

----Ss. 6, 8(a) & 10(1)---Revised Trade Marks Rules, 1963 [since repealed], R.11 & Fourth Sched., Class 29---Trademark "Shezan"---No distinctiveness in the trade mark sought to be registered---Trademark identical to already registered trademarks---Likelihood of customers being deceived---Contravention of sections 8(a) & 10(1) of the Trade Marks Act, 1940---Application for registration of trademarks dismissed.

Admittedly, the respondent/applicant was not the proprietor of the word 'Shezan' nor of 'Shezan'. The respondent (or its purported predecessor, a partnership firm) had also not first registered the trade mark 'Shezan'/Shezan. A private limited company "Shahnawaz Limited" was the inventor and proprietor of the word 'Shezan' and label Shezan, and was also the first to have registered them, which was on 30 September 1958, that is, thirty years before the respondent submitted the Application with the Registrar to seek the registration of the trademark 'Shezan'. The trade mark registrations of 'Shezan'/Shezan (altogether seventy-five) were held by the appellant, including in class 29 since 30 September 1958. There was no distinctiveness in the trade mark, the registration whereof was sought by the respondent through the Application, therefore, it did not merit registration.

Section 6 of the Trade Marks Act, 1940 ('Act') mandates the distinctiveness requisite for registration. However, the Application of the respondent sought registration of 'Shezan'/Shezan which had no distinctiveness, and in fact was identical to subsisting registrations. Therefore, the Application of the respondent had to fail on this ground too.

The respondent was also prohibited to obtain registration of the trade mark 'Shezan'/Shezan because the trade mark it wanted to be registered was identical to already registered trade marks. To allow the respondent to register the same trade mark ('Shezan'/Shezan), and in the same class of goods in respect whereof the appellant held registrations, would definitely deceive the customers of the appellant's goods, as they would assume they were buying the appellant's goods, which would contravene section 8(a) of the Act.

The Application of the respondent could also not be allowed because it had sought registration of a trade mark which was identical to already registered trade marks, belonging to the appellant, and, obtaining such registration was not permissible under subsection (1) of section 10 of the Act.

The present case was also not one in which the respondent was an honest concurrent user nor did it attract any of the other exceptions mentioned in subsection (2) of section 8 of the Act, which may have justified the acceptance of the Application of the respondent.

An Agreement signed between the predecessors of the appellant and the respondent was relied upon by the respondent to allege that pursuant to the said Agreement the 'Shezan'/Shezan trade marks had been assigned to the respondent. This was simply incorrect. The said Agreement stated that "Shezan Limited" was 'running two restaurants … together with a bakery' and these businesses were sold to a partnership firm. The respondent, which is a private limited company, contended that it was the successor-in-interest of the said partnership firm but did not produce any proof in this regard. However, despite the absence of such proof an opportunity was provided to the respondent to establish its succession to the said firm, however, the respondent failed to file any certificate of incorporation and certificate issued by the Registrar of Firms of "Shezan, Lahore" or a copy of its partnership deed. Assuming that the requisite documents were filed, and on their basis the respondent was able to show that it had some connection with the said firm, it would still not change the outcome of the present case, because the respondent could not legally have got the trade mark 'Shezan'/Shezan registered in its name.

Besides the Agreement was in respect of the sale of the certain businesses, and was not for the sale (or assignment) of 'Shezan'/Shezan trade mark(s).

Significantly that the partnership firm, who the respondent claims to have succeeded, did not itself seek registration of the trade mark 'Shezan'/Shezan, nor called upon the other party to the Agreement to assign to it the said trade marks. The respondent's claim was also undermined by the fact that it was only after about fourteen years of the execution of the Agreement that it submitted the Application. This confirmed that neither the said partnership firm nor the respondent had ever considered or understood that through the Agreement the 'Shezan'/ Shezan trade marks were transferred, assigned or relinquished in favour of the said firm.

Appeal was allowed. Consequently, the Application of the respondent for registration of trademark was dismissed with the direction that the respondent shall pay the costs of the appellant throughout.

(b) Trade Marks Act (V of 1940) [since repealed]---

----S. 5(1)---Revised Trade Marks Rules, 1963 [since repealed], R. 11 & Fourth Sched.---Trademark, registration of---Scope---Merely because a proprietor of a trade mark had not obtained registration in a particular class, or in respect of certain goods mentioned in that class, would not on this basis alone entitle another to obtain registration in respect of that class, or in respect of other goods mentioned in such class.

Sultan Ahmed Sheikh, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record (absent) for Appellants.

Hassan Irfan Khan, Advocate Supreme Court, Mrs. Amna Ahmed, Advocate Supreme Court (through video-link from Karachi) assisted by Saqib Asghar, Advocate High Court and Muhammad Iqbal Ch., Advocate-on-Record (absent) for Respondent No. 1.

Ex parte Respondent No. 2.

2022 C L D 1296

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, Sajjad Ali Shah and Munib Akhtar, JJ

PAK LEATHER CRAFTS LIMITED and others---Appellants

Versus

AL-BARAKA BANK PAKISTAN LIMITED---Respondent

Civil Appeal No. 24-K of 2019, decided on 4th August, 2022.

(Against the order dated 19-10-2018 passed by the High Court of Sindh at Karachi in F.A. No. 15 of 2018)

(a) Interpretation of statutes---

----Deeming provision in a statute---While interpreting deeming provisions in a statute the Court is bound to ascertain the limits, purpose and object for which the legislature had created the fiction by adopting deeming provision.

Mehreen Zaibun Nisa v. Land Commissioner, Multan and others PLD 1975 SC 397; Begum B.H. Syed v. Mst. Afzal Jehan PLD 1980 SC 29 and Muhammad Mubeen-us-Salam v. Federation of Pakistan PLD 2006 SC 602 ref.

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

----S. 22---Limitation Act (IX of 1908), S. 12(5)---Appeal against judgment of Banking Court---Limitation period, commencement of---Time consumed by appellant in payment of fee/cost for certified copies of the decree passed by Banking Court---Whether such time could be excluded under section 12(5) of the Limitation Act, 1908 while computing the period of limitation---Held, that mere filing of an application for obtaining certified copies (without payment of fee/cost) would not suffice to stop the period of limitation---Filing of application for obtaining certified copies pre-supposes the payment of cost for obtaining them---Application for certified copies referred to is not entertained and/or processed till the prescribed fee/cost is paid---Subsection (5) to section 12 of the Limitation Act, 1908 provides commencement of period of limitation from the day actually intimated to the applicant to be the day on which the certified copy will be ready for delivery.

Legislature by introducing subsection (5) to section 12 of the Limitation Act, 1908 ('the Act') eliminated the controversy regarding the term "time requisite" and defined the term by laying down that the "time requisite" for obtaining a certified copy of the decree, order or such other prescribed proceedings, would be deemed to be the time intervening between the day on which an application for certified copy is made and the day actually intimated to the applicant to be the day on which the certified copy is ready for delivery. The interpretation that mere filing of an application (for obtaining certified copies without payment of fee/cost) would suffice to stop the period of limitation would be against the spirit and purpose for which the legislature has created the fiction. Besides, this interpretation would not only render the scheme of law behind the Limitation Act, 1908 as redundant but at the mercy of the litigant. Filing of application for obtaining certified copies pre-supposes the payment of cost for obtaining them. Admittedly, the application for certified copies referred to is not entertained and/or processed till the prescribed fee/cost is paid and in case such interpretation is accepted that mere filing of application would stop the period of limitation then by not paying the prescribed fee/cost one could prolong the period of limitation, which would be against the intention and purpose of the legislation. This interpretation not only appears to be against the reasons and object of the law of limitation but would substantially frustrate it.

Subsection (5) to section 12 of the Act provides commencement of period of limitation from the day actually intimated to the applicant to be the day on which the copy will be ready for delivery. Intimation of the day on which the copy will be ready for delivery by the very language adopted by subsection (5) appears to be an intimation of a future date, a date expected by the office by which it would be in a position to make the copy ready for delivery. It does not envisage a notice after the certified copy is ready for delivery. It is a date intimated to the applicant after he has effectively made the application for the certified copies i.e. upon payment of cost/fee to be a date acknowledging receipt of cost/fee and providing a date on which copy would be ready for delivery.

Since the burden is upon the applicant to demonstrate that the copies were not ready on the day intimated to the applicant, therefore, in case of non-delivery of certified copy on the date intimated to the applicant, in order to eliminate the controversy and to discharge his burden the applicant should accordingly take a fresh date so that the dispute of applicant having different date and the copy containing different date of "copy ready for delivery" comes to an end.

Hassan Khurshid Hashmi, Advocate Supreme Court for Appellants.

Ghulam Mohiuddin Qureshi, Advocate Supreme Court for Respondent.

2022 C L D 1415

[Supreme Court of Pakistan]

Present: Qazi Faez Isa and Yahya Afridi, JJ

FIRST DAWOOD INVESTMENT BANK LTD., KARACHI---Appellant

Versus

BANK OF PUNJAB through President, Lahore---Respondent

Civil Appeal No. 1003 of 2019, decided on 18th August, 2022.

(Against the order dated 23.01.2019 passed by the High Court of Sindh at Karachi in J. C.M. No. 55 of 2009).

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

----Ss. 305(e) & 306(1)(a)---Winding up of company---Default in payment of debt---Presumption after serving of notice---Legislature has, vested the creditor with an advantage, that when the creditor has served upon a company, a statutory notice under S. 306(1)(a) to pay its debt, and the company has neglected to pay the debt, within the stipulated thirty days, a presumption by a legal fiction is created in favour of the creditor, that the company is unable to pay its debt due to the creditor.

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

----S. 306(1)(a)---Winding up of company---Default in payment of debt---Phrase 'neglect to pay' used in section 306(1)(a) of the Companies Ordinance, 1984 ('the Ordinance)---Words 'neglect to pay' expressed in S. 306(1)(a) of the Ordinance, refers to a refusal of the company to pay without any reasonable cause---If the company raises a bona fide dispute, as to its liability to pay the amount claimed by the creditor, then in that case, there can be no 'neglect to pay' by the company, within the meaning of S. 306(1)(a).

In Re: London and Paris Banking Corporation (1874) LR 19 Eq 444,445; Palmer on Company Precedents (17th Edition, Part: II) and Messrs Platinum Insurance Company Limited v. Daewoo Corporation PLD 1999 SC 1 ref.

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

----Ss. 305(e), 306(1)(a) & 309---Winding up of company---Default in payment of debt---Principles pertaining to winding up of a company that is unable to pay its debt, and the presumption of law deeming the company of being unable to pay its debt in such commercial state, as provided in S. 305(e) & S. 306(1)(a) of the Companies Ordinance, 1984 stated.

Following are some of the general principles pertaining to winding up of company that is unable to pay its debt, and the presumption of law deeming the company of being unable to pay its debt in such commercial state, as provided in section 305(e) and section 306(1)(a) of the Companies Ordinance, 1984 ('the Ordinance') respectively:

(i) That if a debtor company is merely unwilling to pay its debts but otherwise is commercially solvent, then the normal remedy available to a creditor is a suit for the recovery of the amount and not a petition for winding up;

(ii) That if the Court finds that the negligence on the part of the debtor company to pay the sum demanded in terms of clause (a) of subsection (1) of section 306 of the Ordinance is not on account of want of commercial solvency, but because of bona fide dispute based on a substantial ground as to the entitlement of the creditor to the amount demanded, application under section 306 read with section 309 of the Ordinance will not be sustainable. The question whether a dispute raised by the company regarding the claimed debt is bona fide or not depends upon the circumstances of each case. It will always be a question of fact, as to whether the company has a bona fide dispute to the debt claimed by the creditor-petitioner. The litmus test, however, would be to adjudge, whether the dispute raised by the company is only to avoid payment of the debt, and is not based on a substantial ground. In cases where the company sets up a bona fide dispute, based on a substantial ground, to the debt claimed by the creditor, the company court is to refuse an order of winding up. The principle on which the company courts are to act, in this regard, is to see: first, whether the dispute raised by the company is one of substance; secondly, whether the dispute is likely to succeed in point of law; and, thirdly, whether the company has adduced prima facie proof of the facts on which the dispute depends. If the facts of the case suggest that the debt is substantially disputed, then to continue with the winding-up proceedings would be an abuse of the process of the court;

(iii) That clause (a) of subsection (1) of section 306 of the Ordinance raises a presumption as to the fact that the debtor company is deemed to be unable to pay its debts, if in spite of the receipt of demand in terms of the above clause, the debtor company neglects to pay the sum demanded within thirty days of the receipt of notice of demand, or neglects to secure or to compound for it to the reasonable satisfaction of the creditor. But this presumption is rebuttable by the debtor company, if it can show that it is commercially solvent and is in a position to meet its liability on due dates;

(iv) In cases where there is a mere omission of the company to comply with the statutory notice, it would not always lead to the conclusion that the company had admitted its liability and is unable to pay the debt. The fundamental question to be decided, in order to bring about the enforcement of the deeming provisions of section 306(1)(a) of the Ordinance, is whether there exists any debt or not, which the company is liable to pay to the petitioning-creditor. If there is a genuine dispute to the very existence of the debt, the question of applying the deeming provision, that the company is unable to pay its debt, would not arise. On the other hand, in cases where there is non-compliance of the statutory notice demanding payment of the debt owed by the company, and the company has placed no material before the company court to be satisfied that there is a bona fide dispute to the claim of the creditor or that the company is solvent and able to pay the debt, then the company court may pass a winding-up order; and

(v) High Court in its winding up jurisdiction cannot conduct a detailed analysis and minute examination of the facts to determine the complex questions of law, as to the liability arising under a contract of guarantee or some other financial contract; and more so, when debt claimed by the creditor is disputed on the grounds that prima facie make out a bona fide dispute; and thus, in such circumstances, the High Court should show restraint from passing a winding up order of the company, as the proper forum for determination of such a bona fide dispute is the civil court or the banking court, as the case may be.

Messrs Platinum Insurance Company Limited v. Daewoo Corporation PLD 1999 SC 1; Wimco Ltd. v. Sidvink Properties Ltd. (1996) 86 Comp. Cas. 610; Advent Corporation Ltd. 1969 Comp. Cas 463; Madhusudan Gordhandas & Co. v. Madhu Woollen Industries (1972) 42 Comp. Cas. 125 and Mann v. Goldstein (1968) 1 W.L.R. 1091 ref.

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

----S. 305(e)---Winding up of company---Default in payment of debt---Word "may" used in S. 305 of the Companies Ordinance, 1984 ('the Ordinance') for the company court to admit the winding-up petition---Connotation and scope---Word 'may' clearly denotes the discretionary nature of the jurisdiction vested in the company court to pass a winding-up order---Company court must, first and foremost, be fully cognisant that it is called upon to examine the merits of the need of a winding-up order, and not settling disputes of a civil nature that may arise out of a contract or obligations arising under an agreement.

Kamadenu Enterprises v. Vivek Textile Mills P. Ltd. (Kar.) (1984) 55 Comp. Cas. 68 ref.

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

----Ss. 305(e), 306(1)(a) & 309---Petition for winding up of company due to default in payment of debt---Maintainability---Pending civil suit does not bar a petition for winding up of a company.

Muhammad Ali Raza, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Appellant.

Khurram Raza, Advocate Supreme Court and M. Ozair Chughtai, Advocate-on-Record (absent) for Respondents.

2022 C L D 1486

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, Syed Mansoor Ali Shah and Munib Akhtar, JJ

EFU GENERAL INSURANCE LIMITED---Petitioner

Versus

ZHONGXING TELECOM PAKISTAN (PRIVATE) LIMITED (ZTE) and others---Respondents

Civil Petition No.607 of 2021, decided on 8th June, 2021.

(On appeal from the judgment dated 12.11.2020 passed by the Islamabad High Court, Islamabad in R.F.A. No. 196 of 2015.).

Contract Act (IX of 1872)---

----S. 126---Demand guarantee/performance bonds---Enforcement of such instruments---Principles relating to enforcement of rights and liabilities of surety/Bank, principal debtor and creditor under demand guarantee stated.

Demand guarantees are regarded as being in nature similar to letters of credit, and the guarantee constitutes an autonomous contract between the issuer and the beneficiary. One aspect of the law relating to letters of credit is the rule of strict compliance. The documents presented by the beneficiary to the issuing (or, if such be the case, confirming) bank must comply strictly with the terms thereof. If so, the bank is (subject to exceptions) bound to pay. If not, the bank is bound to refuse payment. Now, the key document (indeed, in most instances the only document) in respect of a demand guarantee/performance bond is the demand itself.

Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 = 2003 CLD 1 ref.

The demand actually made must closely track the requirements of the bond/guarantee in order to be compliant with the same. Court should initially proceed on the basis that strict compliance is required. If this test is not met it is then for the party claiming otherwise to show that the test of substantial compliance should be applied in the facts and circumstances of the case, while keeping in mind the actual text of the bond/guarantee. However, it should be kept in mind that the threshold required for the party to succeed on such a submission is a high one and is not to be lightly or easily accepted by the Court. There must be clear justification (which must be recorded in appropriate reasoning) for the Court to so hold, i.e., to uphold the claim notwithstanding that the rule of strict compliance has not been met.

The Modern Contract of Guarantee by O'Donovan and Phillips, 3rd English ed. (2016) and Franz Maas (UK) Ltd. v. Habib Bank AG Zurich [2001] Lloyd's Rep. Bank 14 2001 CLC 89 ref.

In the present case, the demand purportedly made by the respondent/telecommunication company fell far short of what was required. It was obviously not in strict compliance with the terms of the guarantee since that required a categorical statement in the demand that the contractor (who was contracted by the respondent to do civil works and installations for the respondent under a contract) had breached the contract. Such statement was entirely missing. Nothing was shown as would justify the application of the rule of substantial compliance, but even there the case of respondent would have failed. This is for the reason that the purported demand did not remotely come near, let alone cross, the threshold required for such compliance. The letter in question was in substance nothing but a request for further extension in the validity period of the guarantee. The guarantee, had been extended many times before and it seems that all that the respondent was really looking for was another such period. The statement at the end ("this letter may be treated as notice for encashment of guarantee") was essentially an afterthought, designed to cover the respondent's position if the extension was not granted. The purported demand was not in accordance with what the law required. Therefore, the petitioner/insurance company had no obligation to pay and could not be held liable to the respondent.

Munawar-us-Salam, Advocate Supreme Court for Petitioner.

Mir Afzal Malik, Advocate Supreme Court for Respondent No.1.

2022 C L D 1557

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah and Ayesha A. Malik, JJ

Messrs KHALID SIRAJ TEXTILE MILLS LIMITED, LAHORE and others---Petitioners

Versus

ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Civil Petition No. 835 of 2022, decided on 26th October, 2022.

(Against the Order dated 20.01.2022 of the Lahore High Court, Lahore passed in Civil Original No. 64572 of 2019)

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

----Ss. 301(m) & 304---Compulsory winding up of a company by Court which has shut down its business for several years---Scope---Court ordering winding up of company in haste by ignoring its revival business plan and the fact that it had become operational and profitable---Propriety---Petition for winding up the petitioner-company was filed by the Additional Registrar, Securities and Exchange Commission of Pakistan (SECP)---Court ordered compulsory winding up of the company on the ground that the business operations of the company had been shut down since November, 2013, which fell under section 301(m) of the Companies Act, 2017 ('the Act')---Held, that admittedly the company shut down its business in 2013 and despite all efforts the business remained closed till the year 2021---Company executed a business plan whereby they leased the factory for 3 years in order to generate funds, which was then to be reinvested in the company in order to make the factory functional---Recent financial reports tendered by the company showed that it had generated business and was making profit---Therefore, for all intent and purposes, the company had revived its business in the year 2021---Such revival took place between the time when the winding up petition was filed in 2019 and the final winding up order was passed by the Court in 2022---Fact that the SECP opted to ignore the revival plan reflected on their unnecessary focus on winding up the company rather than working on the revival of the company's business---In the present case, the SECP focused more on the fact that the business operations were shut down in November, 2013 notwithstanding the fact that they waited more than six years before filing the winding up petition and it took two years with just a few hearings for the order of winding up to be passed---Court acted in haste not only in passing an order for winding up but also ignored the contents of the (revival) business plan which indicated that the company had become operational and had made some profits as per its annual audit report of June, 2021---Over 350 persons were employed with the petitioner-company who would lose their jobs on the winding up of the company---All such facts were relevant to the winding up petition and in the very least, the High Court should have satisfied itself that the business remained closed even in 2022 when the order was passed---Petition for leave to appeal was converted into appeal and allowed, and impugned order of winding up passed by the High Court was set aside.

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

----Ss. 301 & 304---Compulsory winding up of a company by Court---Petition for winding up a company filed by the Securities and Exchange Commission of Pakistan (SECP)---Protection of interest of shareholders and encouraging revival of companies facing financial crunch---SECP must protect the interests of the shareholders of the company and moreso where the SECP seeks winding up of a company, at its own instance---SECP must consider all relevant facts and record and if there is a chance of avoiding winding up then it should consider that option rather than push for winding up---Encouraging businesses is in the public interest---So the commercial operations of a business must be preserved and protected such that it is able to revive itself when faced with financial hardships---SECP, in this regard, should make all efforts to ensure that companies are able to run their business and can improve their commercial viability especially when there is a financial crunch---Winding up a business has serious consequences both economic and social and even though this is a matter for the discretion of the judge, winding up should be ordered with extreme caution, as a last resort, when it is evident that the business cannot be saved.

Barrister Haris Azmat, Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Petitioners.

Tariq Aziz, Advocate Supreme Court and M. Jahangir, Joint Director (SECP) for Respondents.