CLD 2023 Judgments

2023 C L D 64

[Competition Commission of Pakistan]

Before Ms. Rahat Kunain Hassan, Chairperson and Mujtaba Ahmed Lodhi, Member

JOINT VENTURE BETWEEN MESSRS TARIQ GLASS INDUSTRIES LIMITED AND MESSRS ICI PAKISTAN LIMITED: In the matter of

Case No. 1268/Merger-CCP/22, decided on 7th July, 2022.

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

----S. 11---Merger, approval of---Scope---Applicants jointly submitted an application concerning their intention of creating a joint venture company---Partner 1 was a glass manufacturer, which distributed and exported float glass, tableware, container ware and opal glass---Partner 2 was involved in the business of polyester staple fiber, soda ash, chemicals, pharmaceuticals, nutraceuticals, animal health products and agri-science---Partner 1 was a dominant player in the relevant market i.e. float glass---Partner 2 was a dominant player in the upstream soda ash (an essential ingredient for production of float glass) market---Commission observed that certain issues might arise concerning the subject transaction, such as; subject transaction might put partner 2 in a position in which it could set preferential prices/terms of its business dealings with partner 1; partner 2 might also impose exclusionary terms of sale where the float glass manufacturers might be foreclosed from purchasing soda ash from other sources; and both partners could agree on customer/territorial restrictions related to the sale of float glass, fixing or setting the quantity of production, limiting technical development and/or investment---Commission upon detailed review/perusal of the material, documents and facts on record found that partner 2 might have less incentive to take part in any anti-competitive conduct as its sales of soda ash did not account for a substantial part of its turnover and such sales were not limited to glass manufacturer but were made various customers in numerous industries; float glass manufacturers could obtain soda ash from sources other than partner 2 on competitive pricing conditions---Merger was approved subject to the conditions that the undertakings would not impose any exclusive/restrictive conditions and/or enter into any agreements amongst each other and/or rival undertakings which might be anti-competitive in nature; that partner 1 would not impose any conditions on the joint venture company in relation to production, supply and/or distribution of their respective products; that the partners would not apply any dissimilar conditions, such as preferential treatment on the same type of transactions and that the partner 2 would not refuse to supply soda ash to rival undertakings of partner 1 and it would also not restrict partner 1 from acquiring soda ash from its rival undertakings.

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

----Preamble--- Scope--- Competition Commission of Pakistan is mandated under the Competition Act, 2010 read with Rules and Regulations framed thereunder to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency, protect consumers and related market players from anti-competitive behaviour including abuse of dominance, deceptive marketing practices and mergers which may substantially lessen competition.

Mohammad Baig, Deputy Managing Director, Waqar Ullah, Assistant Managing Director (Finance), Mohsin Ali, Company Secretary and Rashid Sadiq, Partner RS Corporate Advisory Legal Counsel (through video link) on behalf of Messrs Tariq Glass Industries Limited.

Asif Jooma, Chief Executive Officer (through video link), Eqan Ali Khan, GM, Ms. Laila Bhatia Bawany, General Counsel and Company Secretary and Umair R. Vadaria, Partner-Pinjani and Vadaria for Messrs ICI Pakistan Limited.

2023 C L D 114

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS BERGER PAINTS PAKISTAN LTD.: In the matter of

F. No. (411) / OFT / Diamond Paints / CCP / 2021, decided on 11th November, 2022.

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

----S. 10---Competition (General Enforcement) Regulations, 2007, Reglns. 30 & 32---Deceptive marketing practices---Commitments---Acceptance of commitments---Scope---Complainant alleged that the respondent had engaged in anti-competitive practice(s) by making a substantial and quantifiable claim regarding its product as "No. 1 Emulsion in Pakistan"---Contention of complainant was that such claim was not a mere puffery, being quantifiable claim that was false/misleading---Respondent agreed to rectify and address the concerns of the Commission---Validity---Presenting the impugned logo in the manner used was capable of misleading the ordinary consumer that respondent's emulsion was No. 1 in the emulsion paint market or that the product was better in ranking as a whole from the other competitors in the market---Such in turn, had the potential to harm the position and ranking of other players in the market, thereby giving the respondent an unearned competitive edge---Such certainly was capable of harming the business interest of other undertakings---Competition Commission, being satisfied with the respondent's commitment and compliance decided not to impose any penalty---Proceedings were disposed of accordingly.

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

----S. 28---Functions and powers of the Commission---Seeking advice from the Commission---Scope---Competition Commission is not a clearance agency to approve a certain advertisement/logo in terms of its compliance with competition law, however, the Commission can be contacted in an advisory role as per S. 28(1)(d) read with the guidelines in this regard.

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

----S. 10---Trade Marks Ordinance (XIX of 2001), S. 39---Deceptive marketing practices---Rights conferred by registration of trade mark---Scope---Competition Commission is not concerned with whether a trademark logo has been registered or not but is rather concerned with the representation of its logo by an undertaking while advertising the product being deceptive in any manner---Even if an undertaking has a registered trademark logo under the relevant laws, it would not absolve any party from complying with the relevant provisions of S. 10 of the Competition Act, 2010.

Ms. Momna Taufeeq, Ahmed Hassan and Muhammad Abdullah for Messrs Diamond Paints Industries (Pvt.) Limited.

Ahmad Hassan Khan, Mehr Muhammad Iqbal, Advocate Supreme Court and Abdul Wahid Qureshi, Director Finance for Berger Paints Pakistan Ltd.

2023 C L D 148

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS NELSON PAINT INDUSTRIES (PVT.) LIMITED: In the matter of

File No. 391 / Nelson Paint / OFT / CCP / 2021, decided on 1st December, 2022.

Competition Act (XIX of 2010)---

----S. 10---Deceptive marketing practices---Information capable of harming business interests of another undertaking---Information lacking reasonable basis---Scope---Complainant complained that the respondent illegally capitalized on the COVID-19 pandemic by falsely advertising certain paint products to offer COVID-19 protection---Respondent contended that it manufactured an anti-bacterial paint which contained a substance called Benzalkonium Chloride (BKC) and that it had already stopped the alleged advertisements---Validity---Laboratory reports only pertained to the efficacy of BKC against bacteria and microbes but not against viruses, particularly COVID-19---Marketing practice of the respondent was to the prejudice and injury, not only of the consumers, but, also to other undertakings---Respondent had violated S. 10(2)(b) along with S. 10(2)(a) of the Competition Act, 2010---Respondent had contended that the sales of the product were minimal, however, record revealed that a significant portion of such sales was made to a hospital on 50% discount-purportedly as a Corporate Social Responsibility---Other studies showed BKC to have toxic elements that might cause respiratory issues---Respondent was also a major local player in the industry---Competition Commission imposed a minimal penalty, directed the respondent to withdraw any or all the batches of the products and inform the hospital regarding inefficacy of the claims---Show cause notice was disposed of accordingly.

Show Cause Notice issued to Messrs Reckitt Benckiser Pakistan Ltd. on the Complaint filed by Messrs Square Distribution and Marketing System (Pvt.) Ltd dated 9 February 2021 (the "Strepsil Order") rel.

Hammad Saeed for Messrs Nippon Paint Pakistan (Pvt.) Ltd. (Complainant).

Ahsan Hameed Lillah for Messrs Nelson Paint Industries (Pvt.) Ltd. (Respondent).

2023 C L D 429

[Competition Commission of Pakistan]

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

SHOW CAUSE NOTICE ISSUED TO MESSRS PESHAWAR ELECTRIC SUPPLY COMPANY LTD.: In the matter of

F. No. 382/PESCO/C&TA/CCP/2020, decided on 13th December, 2022.

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

----Ss. 3 & 2(k)---Abuse of dominant position---Relevant market---Scope---Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010---Contention of respondent was that it did not operate in the relevant market and was active in a separate market altogether---Validity---Issue at hand did not concern supply/distribution of electricity but the public right of way to be/or being provided by respondent---Electricity distribution facilities covered an area of approximately 78,088 sq. km, which further strengthened the aspect of dominance of the respondent in the relevant market of right of way as it owned/managed a significant number of electric poles and no other adequate substitutes were available in the relevant market---Respondent's argument was rejected.

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

----Ss. 3 & 2(k)---Abuse of dominant position---Relevant market---Substitutability---Scope---Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010---Contention of respondent was that the complainants had substitutes for right of way---Validity---Developing and digging underground passages required heavy investment cost and prior approvals from the relevant authorities and there also existed practical impediments for laying down underground cables such as lack of access to corridors/green belts on road, streets, etc---As for PTCL (telecommunication company) poles, the same were customized to PTCL's own requirements i.e. installed at the end of PTCL's underground network of cables---Streetlight poles were not a suitable substitute due to being scattered, positioned in different areas and not being available in all areas---Respondent's argument was rejected.

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

----S. 3---Abuse of dominant position---Price discrimination---Scope---Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had committed price discrimination by charging different prices for the same service from the complainants as compared to the price charged from normal TV cable operators---Validity---Respondent charged complainants PKR 100 per pole/structure, while TV cable operators paid only PKR 10---Such discriminatory conduct was solely for the reason of the dominant position it held rather than for any objective reasons and could be deemed to be exploitative and harmful for undertakings deploying Aerial Optical Fiber Cable---Respondent was found to have acted in violation of S. 3(3)(b) of the Competition Act, 2010---Respondent was directed to provide access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.

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

----S. 3---Abuse of dominant position---Unfair trading conditions---Scope---Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had imposed unfair conditions on the complainants by stipulating 10 minutes free advertising for it and free internet facility for its offices on top of charging a rent for use of the relevant service---Validity---Conditions appeared onerous and not freely negotiated upon by the parties concerned---It could also be treated as an added barrier for undertakings to compete effectively and efficiently in the market for provision of internet cable and telephony services---In terms of monetary value, it was also an added cost---Competition Commission declared that the contravention in terms of S. 3(3)(a) of the Competition Act, 2010 had been committed by the respondent---Respondent was directed to provide access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.

Case T-139/98 Amministrazione Autonoma dei Monopoli di Slato (AAMS) v. The European Commission [2001] and Ravinder Singh Bawa and Oil and Natural Gas Corporation Limited Case No. 13 of 2022 rel.

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

----S. 3---Abuse of dominant position---Refusal to deal---Scope---Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010---Contention of respondent was that it had annulled the Pole Renting Policy---Complainants claimed that refusal to provide right of way amounted to refusal to deal in violation of S. 3(3)(h) of the Competition Act, 2010---Validity---Section 27A of the Pakistan Telecommunication (Re-organization) Act, 1996 and Policy Directive issued by the Federal Government had imposed a legal obligation on the respondent to provide right of way---Conduct of the respondent was discriminatory as admittedly, decommissioning notices related to the removal of cables were only sent to the complainants---No other action was taken against normal cable TV operators---Annulment of the Pole Renting Policy and denial of right of way might not be a 'classic refusal to deal' under S. 3(3)(h) on the part of respondent i.e. solely based on a monopolistic intent to of keeping the facility/poles for its own commercial benefit or to strengthen its own dominant position, nevertheless, a clear contravention of S. 3 of the Competition Act, 2010, was established through the respondent's discriminatory and unfair conduct concerning the complainants---Respondent was directed to restore access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.

Case C-280/08 P, Deutsche Telekom v. Commission, ECR 1-09555 rel.

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

----S. 2(k)---Relevant market---Scope---Relevant market definition for the purposes of competition law is an open definition and revolves around the concerned product/service being offered, taking into consideration both demand-side and supply-side factors.

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

----S. 3---Abuse of dominant position---Unfair trading conditions---Scope---Term "unfair trading conditions" is indeed wide in scope and deals with either or both exclusionary and exploitative forms of abuse of dominance---It includes unfairly coercing customers by forcing an entity to sell services against their will and unfairly taking advantage of one's superior bargaining position to impair free decision making of a transacting party.

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

----S. 3--- Abuse of dominant position--- Scope--- Section 3(3) is not exhaustive and only enumerative---Section 3 prohibits any abuse by an undertaking that is in a dominant position.

Case AT 39523 - Slovak Telekom [2014] and Case C-165/19 P Slovak Telekom v. European Commission [2021] ref.

Sultan Mazhar Sher, Advocate Supreme Court, Irfan Reayat, Chief Law Officer, PESCO, Aslam Khan Gandapur, Chief Operating Officer, Ishfaq, Director Safety and Atif Jawad, Safety Department for Messrs Peshawar Electric Supply Company Limited.

Muhammad Ahmed, Company Secretary and Ms. Zainab Janjua, Advocate High Court Ajuris for Messrs Nayatel (Pvt.) Limited.

Shahid Rafique Dogar, Assistant Manager (Legal and Regulatory Affairs) and MNA Rehan, Advocate AQLAAL for Messrs Cyber Internet Services (Pvt.) Limited.

2023 C L D 475

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Ahmed Qadir, Director General

ACQUISITION OF UPTO % SHAREHOLDING OF MESSRS CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED BY MESSRS PAKISTAN STOCK EXCHANGE LIMITED FROM MESSRS ALLIED BANK LIMITED AND MESSRS IGI INVESTMENTS (PRIVATE) LIMITED: In re

Case No. 1346/Merger-CCP/22, decided on 21st March, 2023.

Competition Act (XIX of 2010)---

----Ss. 11 & 31(1)(d)(i)---Competition (Merger Control) Regulation, 2016, Regln. 6---Pre-merger proceedings---Acquiring of shares---Pakistan Stock Exchange intended to acquire total shares of Central Depository Company (CDC) from two seller companies---Validity---Intention of acquisition is based on two circumstances i.e. where parties have signed a share purchase agreement, or have agreed in principle to proceed with the transaction---Provision of S. 11(2) of Competition Act, 2010, deals with a situation where an undertaking intends to acquire and provision of S. 11(3) of Competition Act, 2010, deals with the situation where the concerned undertaking agrees in principle or signs a non-binding letter of intent---Intent to acquire more shares in CDC as disclosed in Pakistan Stock Exchange's financial statement, did not attract pre-merger notification requirement, until willingness of the seller existed---Phase II review was not tenable to the extent to allow clearance for subject transaction and review remaining potentially acquisitions up to the extent of percentage so mentioned---Competition Commission was not empowered to treat such transaction in piecemeal and the same was contradictory to the stance of Pakistan Stock Exchange, where it had itself stated that such a transaction was not at all certain and would require a number of steps to be consumed before Pakistan Stock Exchange would be in a position to submit a pre-merger application and such was premature---Competition Commission could not assume or approve a transaction hypothetically---In regulatory scheme, timeline envisaged was not followed, therefore notwithstanding the regulatory intent, the Commission could not proceed on mere assumption in the absence of willing sellers---Competition Commission restricted Phase II review to the extent of Pakistan Stock Exchange's acquiring specified percentage of shareholdings in CDC---Current acquisition of specified percentage of share-holdings taking the total share-holding to a specific percentage in CDC did not raise any competition concern and would not lead to any material change in control in CDC or lessening of competition in the relevant market---Proposed transaction was authorized under S. 31(1)(d)(i) of Competition Act, 2010---In subject transaction, the matters that might fall outside the scope of Commission's purview remained subject to applicable laws---Application was disposed of accordingly.

Farrukh H. Khan, Chief Executive Officer, Nadir Rehman, Chief Operating Officer, Dr. Fakhara Rizwan, Company Secretary, Tariq Qureshi, Director General Manager, Vaseeq Khalid, Partner, Mohsin Tayebaly & Co. and Ms. Eman Siddique, Associate, Mohsin Tayebaly & Co. for Pakistan Stock Exchange Limited.

Badiuddin Akber, Chief Executive Officer and Shariq Jafrani, Chief Financial Officer, Company Secretary and Head of Legal for Central Depository Company of Pakistan Limited.

2023 C L D 1266

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Ahmed Qadir, Director General (Policy)

MERGER OF MESSRS PAKARAB FERTILIZERS LIMITED WITH AND INTO MESSRS FATIMA FERTILIZER COMPANY LIMITED: In the matter of

Case No. 1367/Merger-CCP/2023, decided on 13th July, 2023.

Competition Act (XIX of 2010)---

----Ss. 3, 11 & 31---Merger of companies---Post-merger risks---Determination---Petitioners/companies applied for permission of their merger---Held, that there could not be any lessening of competition as both the groups had decisive influence over both the Merger Parties---Both the companies were being managed by common Chief Executive Officer, having same brandings and common distribution network---There was dependency of one party's operations on other party's assets and finances as well as profit sharing by both the parties on its production---Product lines of NP and CAN were being offered by two separate companies, ultimate controlling groups of the entities were same, therefore, AHG and FG were the sole producers of NP and CAN fertilizers and both the groups had decisive influence over the operation of Merger Parties---In post-merger scenario the Merger Parties consolidated their operation on papers in the form of surviving entity (FFCL) and post-merger risk of elimination of competitive constraints did not arise---Competition law was concerned with behaviour of an undertaking and conduct between undertakings that would ordinarily pursue an economic aim that was separate from that of its competitors (and would thereby have been in competition with each other) which was not the case in instant matter---Proposed transaction and consummated transaction were authorized under S. 31(1)(d)(i) of Competition Act, 2010---Competition Commission disposed of proceedings under S. 11(12) of Competition Act, 2010---Merger was allowed accordingly.

Asad Murad, Chief Operating Officer, Kashif Mustafa, General Manager Finance and Muhammad Afzaal, Senior Manager Finance on behalf of Fatima Fertilizer Company Limited.

Muhammad Musharraf Khan, Chief Financial Officer for Pakarab Fertilizers Limited.

2023 C L D 1443

[Competition Appellate Tribunal]

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

Messrs PAK MUZAFFAR CABLES---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 7 of 2022, decided on 14th July, 2023.

Competition Act (XIX of 2010)---

----Ss. 10, 30 & 37---Deceptive marketing practices---Competition Commission imposed penalty upon electric cable/wire manufacturing company (appellant) who had adopted the practice of inserting cash/cash coupons of various denominations in the packing of the electric wire cable bundles without any indication of availability of scheme---Enquiry report found that due to omission of disclosure about the coupons, the actual consumers remained unaware and the benefit ultimately transferred to electricians---Appellant had committed violation of deceptive marketing in terms of Ss. 10(1), 10(2)(a) & 10(2)(b) of the Competition Act, 2010---Although the appellant claimed that the disclosures of tokens/cash coupons were available on the wrappers of cable packaging, but the claim could not be proved before Enquiry Committee or the Commission---Moreover, the undertakings submitted by the appellant indicated that they had contravened the provisions of the Competition Act, 2010 and did deceptive marketing practices enclosing cash coupons without disclosures on the wrapping of packaging---Compliance and commitment also clearly showed said violations---Competition Appellate Tribunal maintained the impugned judgment, imposing penalty upon the appellant, passed by the Competition Commission---Appeal filed by the electric cable manufacturing company was dismissed, in circumstances.

Faisal Iqbal Khan for Appellant.

Daniyal Hassan assisted by Hassan Ahsan Mian and Haider Imtiaz, Law Officers for Respondent.

2023 C L D 1461

[Competition Appellate Tribunal]

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

AUGUSTA ACQUISITION B.V AND UBER TECHNOLOGIES INC.---Appellants

Versus

COMPETITION COMMISSION OF PAKISTAN and another---Respondents

Diary No. 9 of 2020, decided on 22nd June, 2022.

Competition Act (XIX of 2010)---

----Ss. 11 & 42---Merger of undertakings---Consenting statement---Withdrawal of proceedings---Appellant company made statement to withdraw proceedings pending before Competition Appellate Tribunal---Effect---In view of such statement of appellant company there was no live issue in appeal---Competition Appellate Tribunal highlighted important issue pointed out by Competition Commission regarding ride sharing market which was a developing section and could also fetch a significant Foreign Direct Investment (FDI) and provide for new employment opportunities---Such increasingly important developing segment of economy had no regulatory legal framework in place and the Commission rightly recommended to propose a modern regulatory law for regulation of section in question to take care of licensing and issuing certificate of roadworthiness of vehicles---Appeal was dismissed accordingly.

Jahanzeb Awan and Uzair Shafi for Appellants.

Haider Imtiaz, Law Officer for Competition Commission of Pakistan.

2023 C L D 1501

[Competition Appellate Tribunal]

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

Messrs NATION CABLE---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 2 of 2022, decided on 14th July, 2023.

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

----S. 42---Appeal---New ground---Scope---Parties cannot depart from pleadings---Ground not taken in pleadings regarding a factual position cannot be allowed to be taken at subsequent stage---If there is contradiction or inconsistency in pleadings and arguments, then such argument has to be disregarded by Court---No new evidence beyond the scope of pleadings is permissible to be brought on record and Court should not consider such evidence.

Muhammad Yaqoob v. Mst. Sardaran Bibi and others PLD 2020 SC 338 and Sardar Muhammad Naseem Khan v. Returning Officer, PP-12 and others 2015 SCMR 1698 rel.

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

----Ss. 10(1), (2) & 42--- Competition Commission (General Enforcement) Regulations, 2007, Reglns. 33 & 37---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Deceptive marketing practices---False or misleading information to consumers---Onus to prove---Commitment by undertaking---Scope---Appellant was aggrieved of penalty imposed by Competition Commission for committing deceptive marketing by non-disclosure of presence of cash coupons inside packing bundle without any advertisement--- Validity--- Presence of material information, which had beneficial value for consumer, must be communicated---Onus was on the undertaking to disseminate all material information in relation to a product to consumer---Such omission on the part of appellant by not disclosing presence of cash coupons was distribution of misleading information---Such omission constituted deceptive marketing practice and violated Ss. 10(1) & (2)(b) of Competition Act, 2010---Aim of Competition Act, 2010, was to provide free competition in all spheres of commercial and economic activity---If undertakings were allowed to advertise their products without reasonable basis and prior disclosures, such would put them at unfair advantage, as they would take benefit of their omissions---Such omissions would also be capable of harming business interest of other undertakings---Appellant filed commitment before the Commission but had taken contradictory stance and also raised fresh ground of mistaken identity, which was neither raised in appeal nor before the Commission---Competition Appellate Tribunal declined to interfere in the order as the Commission already took a lenient view and had imposed lesser penalty keeping in view the commitment made by appellant---Appeal was dismissed accordingly.

Muhammad Aslam v. Member (Colonies) Board of Revenue Punjab, Lahore 2019 CLC 1141; Daugherty v. American Honda Motor Co, Inc (2006) 144, 4th Cir., 824, 825; International Harvester Co. 104 F.T.C. 949 Page (1058); Cliffdale Associates, Inc. 103 F.T.C. 110, (1984); American Home Products, 98 F.T.C. 136, 370 (1981) and Colgate Palmolive (Pakistan) Limited v. Competition Commission of Pakistan 2019 CLD 254 ref.

Shahid Masood Bhutta for Appellant.

Daniyal Hassan, Hassan Ahsan Mian, Law Officer and Haider Imtiaz, Law Officer for Respondent.

Dates of hearing: 12th January, 16th February, 8th, 30th March, 15th June, 5th July and 11th October, 2022.

C.M.A. No. 1 of 2022

2023 C L D 1528

[Competition Appellate Tribunal]

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

Messrs DAWN CABLE---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 1 of 2022, decided on 14th July, 2023.

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

----Preamble---Competition Act, 2010 ensures that all commercial and economic activity is conducted fairly and without anti-competitive behavior in order to promote increased economic efficiency and to protect consumers---Provisions of Competition Act, 2010, prohibit undertakings from such actions which constitute abuse of market dominance, prohibited agreements and deceptive marketing practices.

(b) Words and phrases---

----False---Defined.

Black's Law Dictionary rel.

(c) Words and phrases---

----Misleading---Defined.

Black's Law Dictionary rel.

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

----Ss. 10(1), (2) & 42--- Competition Commission (General Enforcement) Regulations, 2007, Reglns. 33 & 37--- Deceptive marketing practices---False or misleading information to consumers---Commitment by undertaking---Scope---Appellant was aggrieved of penalty imposed by Competition Commission for committing deceptive marketing by non-disclosure of presence of cash coupons inside packing bundle without any advertisement--- Validity--- Appellant inserted cash coupons in packaging of electric cable bundles without proper disclosure---In order to make purchase decision, such information must be considered as material information that could impact consumers purchase decision, who was acting reasonably under the circumstance---Material information about product included details such as product specifications, pricing, product benefits and warranties---Appellant did not disclose presence of cash coupons on product packing or on any other promotional material---Material information was omitted by appellant with the intention of deceiving consumer in order to benefit electricians who were primary source of consumer purchase decision---Competition Appellate Tribunal declined to interfere in the order as the Competition Commission appropriately considered commitment filed by appellant and had imposed minimum penalty in accordance with Regln. 37 of Competition Commission (General Enforcement) Regulation, 2007, as compared to other undertakings of same industry who did not cooperate with the Commission--- Appeal was dismissed accordingly.

International Harvester Co, 104 F.T.C. 949 (1058); Cliffdale Associates, Inc. 103 F.T.C. 110 (1984) and American Home Products, 98 F.T.C. 136, 370 (1981) rel.

Barrister Syed Waqas Pirzada for Appellant.

Daniyal Hassan and Hassan Ahsan Mian, Law Officer for Respondent.

2023 C L D 1556

[Competition Appellate Tribunal]

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

RANA ELECTRIC STORE---Appellant

Versus

COMPETITION COMMISSION OF PAKISTAN---Respondent

Appeal No. 3 of 2022, decided on 14th July, 2023.

Competition Act (XIX of 2010)---

----Ss. 2, 3, 10, 30, 37 & 42---Deceptive marketing practices---Share market of an undertaking (company)---Dominant position, abuse of---Relevant market---Scope---Competition Commission ('the Commission') imposed penalty of Rs. 500,000/= upon electric cable/wire manufacturing company (appellant) who had adopted the practice of inserting cash/cash coupons of various denominations in the packing of the electric wire cable bundles without any indication of availability of scheme---Plea of the appellant was that the Commission overlooked its market share and imposed penalty was disproportionate to their market share---Validity---To prove deceptive practices, the US Federal Trade Commission had established key elements which were; firstly, there must be a representation that was likely to mislead consumer; secondly, it was important to evaluate whether the consumer was acting reasonably in the circumstances and; thirdly, the representation must be material in nature---While Ss. 2(1)(e) & 2(1)(k) of the Competition Act, 2010, defined the dominant position and the relevant market, S. 3 of the Competition Act, 2010, dealt with abuse of dominant position and it also mentioned the practices which constituted an abuse of dominant position and it also mentioned the practices which constituted an abuse of dominant position---Deceptive marketing practice was not included in the "practices" referred in S. 3(3) of the Competition Act, 2010---Abuse of dominant position by an undertaking could be relevant in misleading representations, where the aim was to keep the potential competitors out of the market---Purpose of said abuse of dominant position was to maintain and firm market power by preventing new entrants---Whereas, in the present case, the appellant was involved in deceptive marketing practice with intention to mislead an ordinary consumer---"Market share" was not relevant in cases involving deceptive marketing practices---In terms of S. 10(2)(b) of the Competition Act, 2010, the market share was not considered as a significant factor in assessing deceptive practices, unless there was an abuse of dominant position involved, which was not the case in the present appeal---However, the market share of an undertaking engaged in deceptive marketing practices could be considered as relevant in cases in assessing the potential harm caused to the business interests of other undertakings in terms of S. 10(2)(a) of the Competition Act, 2010, therefore, the market share was not considered as a relevant factor in deciding the issue of deceptive marketing practice---Impugned order revealed that the undertakings which did not follow a compliance oriented approach before the Commission, a penalty of Rs. 5 million was imposed on them, on the other hand, the undertakings including the appellant which committed to comply with the directions of the Commission, a lesser penalty of Rs. 500,000/= was imposed---No illegality or infirmity having been noticed in the impugned order passed by the Competition Commission---Appeal was dismissed, in circumstances.

AstraZeneca AR and AstraZeneca Plc v. European Commission, Case C-457/10 (Para 68) ref.

Abdul Wahab for Appellant.

Daniyal Hassan and Hassan Ahsan Mian, Law Officer for Respondent.

2023 C L D 946

[Environmental Protection Tribunal]

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

ABDUL QAYOOM and another---Appellants

Versus

SINDH ENVIRONMENT PROTECTION AGENCY through D.G. and another---Respondents

Appeal No. 5 of 2022, decided on 15th April, 2023.

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

----Ss. 26 & 27---Environmental issues---Proceedings before Courts and forums---Locus standi---Respondents objected to maintainability of appeal on the plea that appellants had no locus standi to file the appeal---Validity---Concerned citizens were not prevented from placing their grievances before competent Courts or high forums, even if they were not direct affectees but noticed that environmental issues were handled wrongly or unjustifiably with illegality and irregularity etc.---Appellants had a right to approach Environmental Protection Tribunal as aggrieved persons and concerned citizens having sufficient interest and locus standi to be heard in the matter---Appeal was maintainable, in circumstances.

Syed Haroon Ahmed v. Messers Dadex Eternit Ltd. through Chairman and another 2010 CLD 1555 and Ms. Imrana Tiwana and others v. Province of Punjab and others 2015 CLD 983 rel.

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

----Ss. 26 & 27--- Sindh Environmental Protection Agency (Environmental Assessment) Regulations 2021, Regln. 17---Environmental issues--- Environment Impact Assessment (EIA)---Conditional approval---Appellants assailed EIA approval accorded by Environmental Protection Agency to Proponent for construction of Malir Expressway Project--- Validity--- Approval was subject to numerous conditions, which were total 30 in number, therefore, such approval was conditional one---Most of the environmental issues were addressed in such conditions, compliance and implementation of which was responsibility of respondents---Overall object, necessity and importance of project could not be denied---Purpose for such mega project expressway was to provide support to bulk and heavy vehicles that transport goods from Karachi Port, KICT, Kiamari Terminal, etc. to other parts of the country---Need for corridor in question was highlighted in Traffic Master Plan prepared by Japan International Cooperation Agency (JICA) in 2012 titled as Karachi Transportation Improvement Project---After about ten years, the Project was being executed to avoid heavy traffic from entering and clogging main arteries of the city---Such vehicles were currently using main roads and combined with traffic of city, were creating a compounded pollution effect--- If the bulk material transport was provided as separate bypass to access rest of the country, pollution effect would be reduced--- On account of tremendous increase in population, a rapid increase of ancillary vehicles in the city resulted in a lot of pressure on city's infrastructure and surroundings, therefore, the situation demanded construction of expressway to cater extreme need of public at large---Project in question was not a private or commercial but was a public road and an initiative of Provincial Government---Expressway was for the larger interest of general public and it would permanently bring savings in terms of fuel and time of public traveling to any place of the country---It was to avoid unsustainable load on existing roads specifically of Landhi and Korangi Industrial Area, which were being used at maximum limit, having no more capacity of expansion or enlargement---Project in question would certainly reduce huge burden at least from the roads of such areas, which had resulted in serious issue of traffic congestion as well as heavy pollution--- Damage of any kind caused and likely to be caused to people of project area and surroundings and for the loss of any type already sustained or to be sustained by project affectees and all other issues concerning the environment and socioeconomic related matters which would arise due to construction of the project, could not be left unattended without redressal of the grievances and implementation of the same---Environmental Protection Tribunal directed the authorities to constitute/notify Complaint Redressal and Implementation Committee (CR&IC) for redressal of such issues---Appeal was disposed of accordingly.

Ardeshir Cowasjee and 10 others v. Karachi Building Control Authority and 4 others 1999 SCMR 2883; H.M. Saya & Co., Karachi v. Wazir Ali Industries Ltd., Karachi and another PLD 1969 SC 65; Pakistan Defence Officers Housing Authority v. Federation of Pakistan through Secretary, Ministry of Environmental Protection and 6 others PLD 2014 Sindh 511; Feryal Ali Gauhar and others v. Environmental Protection Agency, Punjab and others 2016 CLD 1011; Syed Haroon Ahmed v. Messrs Dadex Eternit Ltd. through Chairman and another 2010 CLD 1555; Arif Belgaumi and others v. Sindh Environmental Protection Agency and another 2022 CLD 502; PLD 2007 Kar. 293; Ms. Salma lqbal Chundrigar and others v. Federation of Pakistan through Secretary, Ministry of Environmental Protection, Islamabad and others 2009 CLD 682; Lahore Development Authority and others v. Ms. Imrana Tiwana and others 2015 SCMR 1739; 2021 SCMR 305; 2021 SCMR 328; Pakistan Defence Officers Housing Authority v. Sindh Environmental Protection Agency and 2 others 2015 CLD 772; Imrana Tiwana and others v. Province of Punjab and others 2015 CLD 983; Zain Yar Khan v. The Chief Engineer C.R.B.C. WAPDA, D.I. Khan and another 1998 PLC (C.S.) 1484; Capital Development Authority and another v. Shaheen Farooque and another 2007 SCMR 1328; Chairman State Life Insurance Corporation and others v. Hamayun Irfan and 2 others 2010 PLC (C.S) 1183; Amanullah Khan v. Federal Government of Pakistan and others PLD 1990 SC 1092; Pakistan through The Secretary, Ministry of Finance v. Muhammad Himayatullah Farukhi PLD 1969 SC 407; Sindh Irrigation and Drainage Authority v. Government of Sindh and others 2022 SCMR 595; Abid Hussain and others v. P.I.A.C. and others 2005 SCMR 25; Lahore Development Authority and another v. Muhammad Tariq Niaz 2020 SCMR 1957; Mst. Arshan Bai through Mst. Fatima Bai and others v. Moula Bakhsh through Mst. Ghulam Safoor and others 2003 SCMR 318; The State v. Asif Adil and others 1997 SCMR 209; Muhammad Yaqoob v. Mst. Sardaran Bibi and others PLD 2020 SC 338; Moiz Abbas v. Mrs. Latifa and others 2019 SCMR 74; 2007 CLD 1358; PLD 2011 Karachi 132; Muhammad Tariq Abbasi and others v. Defence Housing Authority and others 2007 CLC 1358 and 2011 SCMR 1743 ref.

(c) Sindh Environmental Protection Agency (Environmental Assessment) Regulations, 2021---

----Regln. 17---Approval, cancellation of---Principle---Approval can be cancelled if conditions of approval have not been complied with or the information supplied by Proponent in the approved EIA or EMP is incorrect.

Zubair Ahmed Abro along with Ms. Palvasha Shahab for Appellants.

Ravi R. Pinjani for Respondent No. 2.

Habib-ur-Rehman Solangi, Deputy Director Law along with Mubarak Ali, Deputy Director Technical/Authorized Officer, SEPA for Respondent No. 1.

2023 C L D 383

[Punjab Environmental Tribunal]

Before Justice (R) Syed Iftikhar Hussain Shah, Chairperson and Muhammad Irfan, Member (General)

DIRECTOR GENERAL, ENVIRONMENTAL PROTECTION AGENCY, PUNJAB--Complainant

Versus

Messrs UNITED ETHANOL LIMITED, TEHSIL SADIQABAD DISTRICT RAHIM YAR KHAN through Chief Executive---Respondent

Complaint No. 531 of 2012, decided on 13th December, 2022.

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

----Ss. 17 & 21---Qanun-e-Shahadat (10 of 1984), Arts. 75, 76 & 129 illustration (g)---Environmental Protection Order, violation of---Documentary evidence---Photocopies---Benefit of doubt---Accused was proceeded against by Punjab Environmental Tribunal for violating Environmental Protection Order---During the trial, prosecution placed on record photocopies of necessary documents---Validity---Primary and best evidence was withheld by prosecution by not submitting original Environmental Protection Order and Original Compliance Status Report---Documents were to be proved by primary evidence under Art. 75 of Qanun-e-Shahadat, 1984 except the cases mentioned in Art. 76 of Qanun-e-Shahadat, 1984---Prosecution withheld primary evidence and only produced photocopies of Environmental Protection Order and Compliance Status Report---Prosecutor failed to satisfy the Tribunal as to where were the original documents and why those were not produced---Photo copies were not admissible in evidence and prosecution did not prove its case in accordance with Art. 76 of Qanun-e-Shahadat, 1984---Prosecution failed to prove its case against accused beyond shadow of doubt and accused was acquitted of the charge---Complaint was dismissed, in circumstances.

2022 MLD 1941; 2021 CLC 1348; PLD 2010 SC 604 and 2011 SCMR 1009 rel.

Mohsin Sarfraz Cheema, Law Officer for EPA.

Hina Sahar, ADPP for the State.

2023 C L D 420

[Insurance Tribunal Lahore]

Before Justice (R) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

MUHAMMAD UMAR---Petitioner

Versus

IGI and others---Respondents

Case No. 16 of 2023, decided on 10th March, 2023.

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

----S. 72---Nomination by policy holder---Scope---Section 72 of the Insurance Ordinance, 2000, authorizes and empowers the policy holder to nominate the person or persons to whom the money secured by the policy shall be paid in the event of the policy holder's death---However, this provision of the law does not exclude the legal heirs from inheriting the assets, including the policy proceeds, of the deceased in accordance with the principles of Islamic Law---Constitution guarantees that no law can be made which is contrary to the Injunctions of the Quran and Sunnah, which stipulate that the legal heirs of a deceased Muslim will inherit their assets according to the principles of Islamic Law---Nominee is only supposed to collect the policy proceeds and disburse them among the legal heirs---Furthermore, the nominee must not exclude or deprive the legal heirs of the fruits of the policy.

PLD 1991 SC 731 distinguished.

Mst. Ameer Khatoon v. Mst. Shamim Akhtar and others 2005 SCMR 512; Mst. Amtal Habib and others v. Mst. Musarat Perveen and others PLD 1974 SC 185 and State Life Insurance Corporation of Pakistan through Zonal Head Lahore v. Rabia Jamshaid and others C.P No.1810 of 2011 rel.

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

----S. 72---Nomination by policy holder---Scope---Role of the nominee is simply to collect the proceeds of the policy as a trustee and then distribute it among the legal heirs of the insured person.

Mst. Ameer Khatoon v. Mst. Shamim Akhtar and others 2005 SCMR 512; Mst. Amtal Habib and others v. Mst. Musarat Perveen and others PLD 1974 SC 185 and "State Life Insurance Corporation of Pakistan through Zonal Head Lahore v. Rabia Jamshaid and others C.P No.1810 of 2011 rel.

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

----S. 72---Nomination by policy holder---Scope---Section 72 of the Insurance Ordinance, 2000, empowers the policy holder, when effecting the policy or at any time before the policy matures for payment, nominate a person or persons as the beneficiary of the policy to whom the money secured by the policy shall be paid in the event of the insured person's death.

Usman Ali Butt for Petitioner.

Barrister Mian Hammad Ahmad for Respondents Nos. 1 and 2.

Nemo for Respondent No. 3.

2023 C L D 456

[Insurance Tribunal Lahore]

Before Justice (R) Ali Akbar Qureshi, Chairman Zafar Iqbal Tarar, Member (Legal)

Mst. KHADIJA AKHTAR---Petitioner

Versus

DAWOOD FAMILY TAKAFUL---Respondent

Case No. 31 of 2022, decided on 1st March, 2023.

Insurance Ordinance (XXXIX of 2000)---

----S. 122---Insurance claim---Scope---Insurance Company approached a medical college to provide coverage for the annual fees of students---Along with the Group Family Takaful coverage plan, it was a condition precedent that students also purchase the Salamati Plan, whereby the company provided life coverage to the students---Petitioner, through her father, deposited the first premium for both policies---Later, her father died and the petitioner approached the Insurance Tribunal after her insurance claim was not taken note of---Argument of the insurance company was that the father of the petitioner had failed to pay the second premium within the stipulated time, causing the policy to lapse---Validity---Process of the two policies was completed when the consideration of the contract was paid and accepted by the insurance company---Both policies were silent about the date of premium payment, whereas the Salamati Plan document bore the date of premium payment as the 25th of February each year---First premium was paid against a receipt on 18-2-2020, indicating that the period was to be started from that date until 25-2-2021---Contract had to be construed and interpreted objectively---Father of the petitioner had died on 21-3-2021 within the grace period of 25-2-2021 to 25-3-2021, making the insurance company responsible, according to the terms of the policy documents, for paying the annual fee of the petitioner's MBBS (four-year) program---Petition was allowed.

Muhammad Shahnawaz and 44 others v. Karachi Electric Supply Company and others 2011 PLC (C.S.) 1579 and Universal Insurance Company and another v. Karim Gul and another PLD 2021 SC 906 rel.

Haris Iftikhar for the Petitioner.

Ms. Iqra Riaz and Abdul Hameed Chohan for Respondent.

2023 C L D 544

[Insurance Tribunal, Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

JUBILEE LIFE INSURANCE---Petitioner

Versus

SUMERA IMRAN---Respondent

Case No. 10 of 2023, decided on 31st March, 2023.

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

----Ss. 116 & 118---Payment of money in Tribunal---Payment of liquidated damages on late settlement of claims---Scope---Applicant filed an application under S. 116 of the Insurance Ordinance, 2000 to deposit the amount of the death claim of an insured person---Validity---Firstly, the insurance company had failed to make the payment to the claimant or deposit it in the Tribunal within nine months, as required by S. 116 of the Insurance Ordinance, 2000---Secondly, the company intentionally and deliberately retained the due amount for a long time, in order to utilize it in its business for profit or to retain it in its bank accounts to earn interest, which was not permitted by law---As a result, the insurance company was directed to pay the sum assured along with liquidated damages under S. 118 of the Insurance Ordinance, 2000, excluding the grace period of nine months provided in S. 116---Application was disposed of accordingly.

State Life Insurance Corporation and another v. Mst. Razia Ameer and another Civil Appeal No. 929 of 2017 rel.

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

----S. 116---Payment of money in Tribunal---Scope---Section 116 of the Insurance Ordinance, 2000, provides a procedure to the insurance company to pay the policy proceeds in the Insurance Tribunal instead of retaining the same itself, in case, it is not possible for the insurance company to discharge its liability in the normal circumstances---First part of subsection (1), S. 116 to provides a complete procedure to make the payment in the Tribunal from the date of maturing the policy, whereas, the second part of the subsection mandates that the insurance company shall apply to the Tribunal for the payment of the policy proceeds from the date on which notice of such maturity is given.

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

----S. 116---Payment of money in Tribunal---Scope---Simple reading of S. 116 reveals that the policy proceeds (including all claims) are to be paid to the policy holder or the legal heirs in time and in case of delay, the profit/interest earned by the insurance company while retaining the same is also to be paid to the insured person or the legal heirs as the case may be---Further, if the proceeds are deposited with the Tribunal by the insurer, the same is to be invested by the Tribunal in government securities under S. 116(5) so that the policy holder, or the legal heirs as the case may be, could avoid the effect of devaluation of the amount.

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

----Ss. 116 & 118---Payment of money in Tribunal---Payment of liquidated damages on late settlement of claims---Scope---Although, there is slight difference between Ss. 116 & 118 but while deducing the analogy from S. 118 as regards the due date to make the policy proceeds/death claim by the insurer is almost the same---In S. 116, the payment becomes due when the policy matures or from the date of which the notice of such maturity is given to the insurer and further, if the insurance company is satisfied that the payment of claim is not possible to the policy holder or the nominee, the same is to be paid in Tribunal according to the terms of the section.

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

----Ss. 116 & 118---Payment of money in Tribunal---Payment of liquidated damages on late settlement of claims---Scope---On the due date i.e. on the expiry of grace period (nine months), the amount of the death claim becomes the ownership of the legal heirs and they are entitled to receive the amount along with profit/interest incurred thereon earned by the insurance company from the date due, till its realization.

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

----S. 118---Payment of money in Tribunal---Payment of liquidated damages on late settlement of claims---Scope---Scheme of Insurance Ordinance, 2000, provides that the policy proceeds including the death claim should be paid to the claimant forthwith, when the same becomes due---No such provision is available in the Ordinance which permits the insurer to retain the due amount for an indefinite period and if the insurance company retains the due amount for no reason against the spirit of scheme of law that will always be at the risk and responsibility of the Insurance Company---It is the responsibility of the insurer to pay the due amount to the claimant within time and if any delay occurs, the insurer is liable to pay the liquidated damages or all the profits incurred on the due amount attracted immediately after due date.

PLD 2022 Lah. 188 ref.

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

----S. 118---Payment of liquidated damages on late settlement of claims---Scope---The moment the insured person dies, the succession opens and the policy proceeds or the amount of the death claim vests and devolves upon the heirs of the deceased like the property, moveable or immoveable, by operation of law as provided by the Principles of Islamic Law.

(h) Words and phrases---

----'Due'---'Owed'---Meaning.

When some of money is due, it must be paid immediately.

Something due or owned-something that rightly belongs to one payment or obligation required by law.

To somebody as a debt because it is his right or because he has done something to observe it.

Owing is a debt-payable required or expected in the prescribed, normal or logical course of events.

OXFORD Advance Learner's Dictionary; PLD 2022 Lah. 188; Askari General Insurance Company Ltd. v. Islam Lubricants Private Ltd. 2022 CLD 425; State Life Insurance Corporation and another v. Mst. Razia Ameer and another Civil Appeal No.929 of 2017 and Merriam Webster Dictionary rel.

Qaisar Ameen Rana for Petitioner.

Nemo for Respondent.

2023 C L D 583

[Insurance Tribunal, Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

ABDUL BASIT---Petitioner

Versus

STATE LIFE INSURANCE---Respondent

Case No. 4 of 2022, decided on 19th January, 2023.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122 & 118--- Insurance claim--- Life insurance policy---Limitation---Communication of claim to insurer---Delay in settlement of claim---Scope---Wife of petitioner purchased a policy from the respondent and paid first premium, but unfortunately, after about 03 months, she died---Petitioner reported the matter and filed the claim to recover the policy proceeds in the office of the respondent under S. 118 of the Insurance Ordinance, 2000---Respondent instead of deciding the claim within the stipulated period of 90 days kept pending the same for more than 03 years and finally repudiated the same---Contents of the repudiation letter did not disclose the cause or reason on the basis of which, the claim of the petitioner was refused---Deputy Manager, Claim Examiner, while appearing before the Tribunal had admitted that the inquiry conducted by the respondent was based on hearsay evidence and he had not recorded that statement of parents of the deceased or of any other relative---Respondent had categorically admitted the fact of conducting the medical/clinical investigation by its authorized and hired doctor---Such investigation could not be called into question---Respondent had failed to prove that any material fact was concealed by the insured lady at the time of purchasing the product of the respondent---Petitioner had successfully proved his case, therefore, his case was decreed.

2021 SCMR 1347 rel.

Liaqat Ali Butt for Petitioner.

Sh. Shahzad Akram for Respondent.

2023 C L D 613

[Insurance Tribunal, Lahore]

Before Justice (Retd.) Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

NADEEM AHMAD---Petitioner

Versus

STATE LIFE INSURANCE CORPORATION---Respondent

Case No. 127 of 2022, decided on 19th January, 2023.

Insurance Ordinance (XXXIX of 2000)---

----S. 122---Civil Procedure Code (V of 1908), O. XVI, R. 1---Insurance claim---Summons to attend to give evidence or produce documents---Life insurance policy---Pre-insurance ailment, claim of---Scope---Respondent filed an application for summoning of three doctors and record keeper of the hospital along with record of the deceased (insured person) in the Tribunal---Ground for filing of application was that the insured person had pre-insurance ailment which was not disclosed to the respondent---Validity---Respondent had admitted that the deceased was medically examined before issuance of the policy---When the insured was medically examined and found fit by the doctors of the insurer before issuing the policy, subsequently, the insurer could not avoid the policy on the ground of pre-insurance ailment---In such circumstances, summoning of the doctors along with medical record as respondent's witnesses would be a futile exercise---Application was dismissed.

State Life Insurance Corporation v. Atta-ur-Rehman 2021 SCMR 1347 rel.

Muhammad Usman Ali Butt for Petitioner.

Sh. Shahzad Ahmad for Respondent.

2023 C L D 647

[Insurance Tribunal, Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

RANA BASIT RICE MILLS---Petitioner

Versus

UNIVERSAL INSURANCE CO. LTD. and another---Respondents

Case No. 279 of 2022, decided on 4th April, 2023.

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

----S. 115--- Application of Pakistani law to policies issued in Pakistan---Scope---Marine Insurance Policy---Plain reading of S. 115 of the Insurance Ordinance, 2000, shows that it is a non-obstante clause, which provides that notwithstanding anything to the contrary, contained in the policy or any agreement relating thereto, the holder of the insurance policy issued by an insurer in respect of insurance business transacted in Pakistan after the commencement of the Ordinance, shall have the right to receive payment in Pakistan of any sum secured thereby and to sue for any relief in respect of the policy in any tribunal---Further if suit is brought in Pakistan, any question of law arising in connection with any such policy shall be determined according to the law in force in Pakistan---However, there is an exception to this section by way of proviso that this section shall not apply to a policy of Marine insurance---This simply means that if in the Marine Insurance Policy it is specifically provided that payment can be received or suit can be filed in any other country, this non-obstante provision of section 115 of the Insurance Ordinance, 2000, will not override such Marine Insurance Policy---Obvious purpose of proviso to section 115 of the Insurance Ordinance is to avoid any kind of interference with the normal business of Marine Insurance, in as much as Marine Insurance Contracts are international in scope and most of the time are for the benefit of the consignee abroad who have option of stipulating clause in the Marine Insurance Policy mentioning place where such contracts are intended to be carried out between the parties.

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

----S. 122---Insurance claim---Scope---Insurance Tribunal has the exclusive jurisdiction to hear cases of all kinds of insurance, including life, general and marine.

Liaqat Ali Butt for the Petitioner.

Rana Muhammad Arshad Khan for Respondents.

2023 C L D 1156

[Insurance Tribunal Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

Mst. RAZIA AMEER---Decree Holder

Versus

STATE LIFE INSURANCE---Judgment Debtor

Case No. 31 of 2023, decided on 26th June, 2023.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122, 75, 118(1) & 118(2)---Limitation Act (IX of 1908), First Sched., Part IV, Arts. 86-a & 86-b---Insurance petition---Insurance claim, payment of---Liquidated damages, computation of---Time period whereafter Liquidated damages become due---Scope---During the currency of the insurance petition, State Life Insurance Corporation ('the Corporation') paid the petitioner (widow/nominee of the insured) an amount on account of group insurance claim, but after almost five years of death of the insured---Matter pertaining to the liquidated damages was, however, later finalized having remained pending up to the Supreme Court---Liquidated damages were decreed and the decree-holder filed execution petition before the Insurance Tribunal ('the Tribunal') for recovery of liquidated damages up to time of finalization of matter before the Supreme Court---Objection of the judgment-debtor/corporation was that the petitioner was not entitled to claim the liquidated damages after the date on which she had happily received the principal amount of group insurance---Validity---Section 118(1) of the Insurance Ordinance, 2000 ('the Ordinance 2000') revealed that the policy holder was required to file the claim in prescribed manner to the Insurance Company('the Company') in terms of Arts. 86-a & 86-b of Part IV of First Schedule of the Limitation Act, 1908; and the Insurance Company was bound to make payments within 90 days; failing which the Company would have to pay liquidated damages as provided under S. 118(2) of the Ordinance 2000---Liquidated damages were payable for the period during which the failure (of the Company) continued, meaning thereby that the Company would be penalized by imposing liquidated damages for the period, the amount which was required to be paid to the policy holder/nominee/legal-heir(s), was retained by the Insurer/Company, for no reason but, in order to earn the profit by utilizing the same in commercial activities or investing or retaining in bank---Petitioner/decree-holder, in the present case, had received the proceeds of group insurance(principal amount); thus, neither principal amount was retained nor utilized by the judgment-debtor/Corporation, which was not liable to pay liquidated damages after the date when the principal amount had been paid to the petitioner---Petitioner/decree-holder was only entitled to receive the liquidated damages from the date of filing of the claim with the Corporation till the date when the principal amount was received by her, excluding period of 90 days available to the Corporation to decide the claim under S. 118 of the Insurance Ordinance, 2000; Insurance Tribunal directed the Judgment-debtor/Corporation to submit cheque after calculating the amount of liquidated damages for the said period---Execution petition was disposed of accordingly.

Usman Ali Butt for Decree Holder.

Muhammad Ahmad for the Judgment Debtor.

2023 C L D 1215

[Insurance Tribunal Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

Haji BASHARATULLAH---Decree Holder

Versus

STATE LIFE INSURANCE---Judgment Debtor

Case No. 29 of 2023, decided on 26th June, 2023.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122, 75, 118(1) & 118(2)---Limitation Act (IX of 1908), First Sched., Part IV, Arts. 86-a & 86-b---Insurance petition---Insurance claim, payment of---Liquidated damages, computation of---Time period whereafter Liquidated damages, become due---Scope---Insurance petition filed by the petitioner/policy holder was accepted by the Insurance Tribunal ('Tribunal') against which State Life Insurance Corporation ('the Corporation') preferred appeal before the High Court---During the currency of the appeal, the Corporation deposited policy proceeds with the relevant registry of the High Court, which amount was received/withdrawn by the petitioner though proper channel---Matter pertaining to the liquidated damages was, however, later finalized having remained pending up to the Supreme Court---Liquidated damages were decreed and the decree-holder filed execution petition before the Insurance Tribunal (' the Tribunal') for recovery of liquidated damages up to time of finalization of matter before the Supreme Court---Objection of the judgment-debtor/corporation was that the petitioner was not entitled to claim the liquidated damages after the date on which he had happily received/withdrawn the amount of policy proceeds having been deposited with the High Court by the judgment-debtor/Corporation---Validity---Section 118(1) of the Insurance Ordinance, 2000 ('the Ordinance 2000'), revealed that the policy holder was required to file the claim in prescribed manner to the Insurance Company ('the Company') in terms of Arts. 86-a & 86-b of Part IV of First Schedule of the Limitation Act, 1908; and the Insurance Company was bound to make payments within 90 days; failing which the Company would have to pay liquidated damages as provided under S. 118(2) of the Ordinance 2000---Liquidated damages were payable for the period during which the failure (of the Company) continued, meaning thereby that the Company would be penalized by imposing liquidated damages for the period, the amount which was required to be paid to the policy holder/nominee/legal-heir(s), was retained by the Insurer/Company, for no reason, but in order to earn the profit by utilizing the same in commercial activities or investing or retaining in Bank---Petitioner/decree-holder had received/withdrawn the policy proceeds from the High Court having been deposited by the Judgment-debtor/Corporation; thus, neither principal amount was retained nor utilized by the judgment-debtor/Corporation, which was not liable to pay liquidated damages after the date when the amount of policy had been received by the petitioner---Petitioner/decree-holder was only entitled to receive the liquidated damages from the date of filing of the claim with the Corporation till the date when the principal amount was received by him, excluding period of 90 days available to the Corporation to decide the claim under S. 118 of the Insurance Ordinance, 2000---Insurance Tribunal directed the Judgment-debtor/Corporation to submit cheque after calculating the amount of liquidated damages for the said period---Execution petition was disposed of accordingly.

Usman Ali Butt for Decree Holder.

Muhammad Ahmad for the Judgment Debtor.

2023 C L D 1283

[Insurance Tribunal Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

ASMA QAMAR---Petitioner

Versus

JUBILEE LIFE INSURANCE---Respondent

Case No. 287 of 2022, decided on 19th July, 2023.

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

----Ss. 75, 76, 77, 118 & 122---Insurance claim---Utmost good faith---Deceptive marketing conduct---Language used in the policy documents---Interpretation of the contract (policy documents) executed between the policy-holder and Insurance Company---Claim of the petitioner (policy-holder) was that she was entitled for recovery of assured amount/sum on attaining maturity of her insurance policy as per the policy documents---Contention of the respondent (insurance company) was that the petitioner was entitled for surrendered value only in light of nature of insurance policy being Unit link policy---Validity---Respondent/company, submitted that there was a schedule annexed with policy, and that the policy proceeds were to be paid according to the said schedule---Said schedule only spoke about different amounts which were to be paid in different years to the policy holder on surrendering the policy, whereas in the present case, the petitioner was claiming the policy proceeds on the maturity of the policy which was mentioned in the policy schedule---Business of insurance was based on the principle of "utmost good-faith" and the law required each party to act towards other party in respect of any matter arising in relation to the insurance with utmost good-faith---Policy documents, in the present case, although were signed by the petitioner/policy-holder but the same, on the face of it, were deceptive and mis-leading because the technicalities used in said documents had neither been explained nor disclosed to the policy-holder---Besides, in the written statement respondent/company had nowhere claimed/mentioned that the respondent/company or its agent had fulfilled the responsibilities as required by the law, therefore, respondent/company had failed to discharge its obligations as enshrined in S. 75 of the Insurance Ordinance, 2000---Section 77 of the Insurance Ordinance, 2000 required that while constructing or drafting the policy documents (proposal form and claim forms etc.) a reasonable effort should be made to use plain and simple language---Contract (policy documents) was to be construed and interpreted objectively and the policy-holder was entitled to take benefits of the ambiguities created by the respondent/company in light of principle of contra-proferentem---Petitioner on the maturity of the policy had, admittedly, duly applied to the respondent/company for payment of policy proceeds on printed forms, namely "Request Form for Policy Maturity Proceeds"---It was nowhere mentioned in said printed forms, having been provided by the respondent/company, that on maturity of the policy, the policy holder would receive surrender value instead of the sum assured---Payment of total premium by the petitioner was proved from the contents of the policy and she had applied on the printed forms of the company after eight days of attaining maturity of term of policy, therefore, the petitioner was entitled to receive total sum assured amount of Rs.800,000/- along with liquidated damages under S. 118 of the Insurance Ordinance, 2000---Respondent/company knowing that the petitioner was entitled to the sum assured as per terms of the policy documents unnecessarily delayed the matter for a long time and dragged the petitioner into litigation, therefore, petitioner was also entitled for the costs---Insurance petition was allowed with costs of Rs.50,000.

Muhammad Shahnawaz and 44 others v. Karachi Electric Supply Company and others 2011 PLC (C.S.) 1579 and Universal Insurance Company and another v. Karim Gul and another PLD 2021 SC 906 ref.

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

----Ss. 75, 76, 77 & 122---Insurance claim---Utmost good faith---Deceptive marketing conduct---Language used in the policy documents---Interpretation of the contract (policy documents) executed between the policy-holder and Insurance Company---Complaints against the Insurance companies for the mechanism being adopted from the time of selling policy to the maturity stage---Validity---Insurance Tribunal, on perusal of the policy documents and their contents, had found the same as deceptive and misleading---Terms/technical words (such as "term", "termination date", "not Applicable", "benefit type", "FIB") were used without explaining their (technical words') meanings---Almost all the pages of the documents were in English language, with only a little portion in Urdu language, using the smallest font of typing, which might hardly be understood by even the agents hired by the Insurance Companies themselves ---Training and education of such agents was not at par--- By adopting such ways, Insurance Companies were totally ignoring the ratio of education in the country and interest of the policy holder by violating the mandate and spirit of S. 76 of the Insurance Ordinance, 2000 and had adopted misleading and deceptive market conduct to sell the package and gain a substantial amount---Almost in all cases pending before the Insurance Tribunal, the policy holders were complaining that the purchasers were not being provided the complete information regarding the nature of the policy, instead wrong verbal information was extended and only a video of 2 or 3 minutes was shown to them---Tribunal, while allowing present insurance claim with costs, also passed directions to the SECP (being Regulator of Insurance Companies) to convey certain instructions to insurance companies, inter alia, for drafting policy documents in easily readable English as well as Urdu languages explaining relevant terms; which shall be explained by the trained agents while making video recordings at the time of explaining packages to policy purchasers.

Mirza Muhammad Qamar for Petitioner.

Barrister Hamza Basharat for Respondent.

2023 C L D 1319

[Insurance Tribunal Lahore]

Before Justice (Retd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member (Legal)

NARGIS BANO---Petitioner

Versus

PAK QATAR FAMILY TAKAFUL---Respondent

Case No. 12 of 2022, decided on 23rd June, 2023.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 122, 75, & 118---Qanun-e-Shahadat (10 of 1984), Arts. 78 & 79---Insurance petition---Life insurance policy---Claim, repudiation of---Concealment pertaining to medical condition of the insured---Proof---Liquidated damages, award of---Petitioner was widow/nominee of the insured/policy-holder who passed away just after payment of the first premium---Insurance company paid the petitioner the cash value of the policy (Rs. 64,624/-) only and repudiated the death claim on the ground that deceased was suffering from pre-insurance ailments (heart, diabetes etc.) which were not declared by him at the time of his health declaration while purchasing the policy---Validity---Insurance company produced its Regional Sales Manager as a witness who admitted that neither he investigated the claim nor he conducted any inquiry of the death claim---No medical record was produced by the respondent/ company, instead the petitioner produced the record-keeper of the respondent/company who produced the same (medical record) showing that the deceased remained under treatment before his death---Respondent/company had neither produced any medical record of the insured prior to the insurance policy nor any doctor to prove its contention in accordance with Arts. 78 & 79 of the Qanun-e-Shahadat, 1984---Respondent/company though produced its investigation report but neither produced the Claim Examiner who prepared the said report nor produced any neighbor on whose statement the report was prepared---Respondent/company failed to discharge the onus of the pre-insurance ailment of the deceased---Both the parties were bound to make correct declarations, however the respondent/company failed to prove that the deceased made material concealment pertaining to his medical condition---Payment of cash value to the petitioner amounted to the admission of the claim by the respondent/company as, If the claim was liable to be rejected by the respondent/company on ground of pre-insurance ailment, the petitioner was not entitled even to cash value of the policy---It appeared that the respondent/company tried to pacify the petitioner by paying meager amount of cash value of the policy---Regarding liquidated damages, the petitioner could not be held responsible for a long delay in recovery of her claim, instead it was respondent/company who occasioned delay by rejecting her claim, so she was entitled to recover the liquidated damages from the respondent/company as provided under S. 118 of the Insurance Ordinance, 2000, from 90 days after filing the claim---Petitioner had successfully proved her claim against the respondent/company---Insurance Tribunal decreed the claim as prayed for with costs along with liquidated damages.

Mirza Javed Mukhtar for Petitioner.

2023 C L D 1

[Islamabad]

Before Babar Sattar, J

Messrs SHAHEEN CHEMIST through Proprietors and 3 others---Appellants

Versus

ZAHID MEHMOOD CHAUDHRY and another---Respondents

C.M.A. No. 6 of 2022, decided on 28th July, 2022.

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

----Ss. 17, 18, 19 & 39---Trade Marks Ordinance (XIX of 2001), S. 117---Infringement of property rights---Forum of adjudication---Implied repeal, doctrine of---Applicability---Dispute was with regard to forum of trial whether it was Intellectual Property Tribunal or District Judge---Validity---Provision of S. 117 of Trade Marks Ordinance, 2001, could not coexist with Ss. 17 & 18 of Intellectual Property Organization of Pakistan Act, 2012---No matter what interpretation of S. 18(1) of Intellectual Property Organization of Pakistan Act, 2012, was adopted, doctrine of implied repeal would need to be applied given that at the time of promulgation of Intellectual Property Organization of Pakistan Act, 2012, as Trade Marks Ordinance, 2001 was not explicitly amended---Intellectual Property Organization of Pakistan Act, 2012, was a special law later in time to Trade Marks Ordinance, 2001---Provision of S. 39 of Intellectual Property Organization of Pakistan Act, 2012, was a non-obstante provision clearly providing that provisions of Intellectual Property Organization of Pakistan Act, 2012, would have effect notwithstanding anything inconsistent with them in any other law for the time being in force and such provisions would trump provisions of Trade Marks Ordinance, 2001 to the extent of any inconsistency---Provisions of Ss. 17 & 18 of Intellectual Property Organization of Pakistan Act, 2012, contradicted Ss. 117, 80 & 73 of Trade Marks Ordinance, 2001 to the extent that the latter provisions vested in District Court or a High Court jurisdiction to adjudicate proceedings seeking statutory remedies provided under Trade Marks Ordinance, 2001---No piecemeal adjudication of Intellectual Property claims in relation to same trademark as was obvious from provisions of Ss. 73 & 80 of Trade Marks Ordinance, 2001---Same intent was evident from S. 18 of Trade Marks Ordinance, 2001, which had provided that all claims in relation to Intellectual Property Laws, whether to prevent infringement of Intellectual Property Rights or to seek other statutory remedies provided under Intellectual Property Laws, such as that of seeking the revocation of a trademark or a declaration of invalidity of a trademark, fell within the exclusive domain of Tribunal---High Court set aside judgment and decree passed by District Judge as all suits and other civil proceedings seeking enforcement of statutory remedies provided under Intellectual Property Laws were to be instituted and decided by the Tribunal, which had exclusive jurisdiction to undertake such adjudication in view of Ss. 17 & 18 of Intellectual Property Organization of Pakistan Act, 2012, read together with S. 39 of Trade Marks Ordinance, 2001---Appeal was allowed accordingly.

Italfarmaco S.P.A v. Himont Pharmaceuticals Private Limited and another 2017 CLD 1382; Messrs H&B, General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 1028; Dr. Syed Iqbal Raza and others v. Justice of Peace, Islamabad and others 2019 CLD 642; State through Deputy Attorney General v. Ikramullah PLD 2021 Bal. 1; Muhammad Multazam Raza v. Muhammad Ayub Khan and others 2022 SCMR 979; Mahile Engine Components Japan Corporation v. Azam Autos and others Suit No.2058 of 2019 and Messrs Federal Bank for Co-operatives v. Commissioner of Income Tax, Companies Zone 2021 PTD 1203 rel.

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

----S. 18(1)--- "Infringement"--- Applicability--- Use of word "infringement" in S. 18(1) of Intellectual Property Organization of Pakistan Act, 2012, is in ordinary sense of the word---As the term is not defined in Intellectual Property Organization of Pakistan Act, 2012, it is to be given its ordinary dictionary meaning to mean contravention, violation, transgression, breach etc.---Ordinary textual meaning accorded to S. 18(1) of Intellectual Property Organization of Pakistan Act, 2012, leads to the conclusion that all actions for breach of provisions of Intellectual Property Laws, including suits and proceedings seeking remedies under provisions of Intellectual Property Laws are to be instituted and decided by the Tribunal alone.

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

----Preamble---Object, purpose and scope---Purpose of Intellectual Property Organization of Pakistan Act, 2012, is to consolidate Intellectual Property Regime to create an Intellectual Property Organization for administration and enforcement of Intellectual Property Laws and the Tribunal for adjudication of all civil and criminal matters arising in relation to Intellectual Property Laws.

Barrister Talha Ilyas Sheikh for Appellants.

Muhammad Junaid Akhtar Khokhar for Respondents.

2023 C L D 92

[Islamabad]

Before Miangul Hassan Aurangzeb and Arbab Muhammad Tahir, JJ

AMJAD HAMEED GONDAL and another---Appellants

Versus

Raja MUHAMMAD ILYAS---Respondent

R.F.As. Nos. 76 and 77 of 2009, decided on 11th August, 2022.

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

----S. 118--- Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Negotiable instrument--- Presumption--- Onus to prove--- Initial presumption under S. 118 of Negotiable Instruments Act, 1881 is that a negotiable instrument/cheque is made, drawn, accepted or endorsed for consideration---Such presumption is rebuttable but onus is on the person denying consideration to allege and prove the same---Where execution of negotiable instrument is admitted, burden of proof of non-payment of consideration lies on the executant.

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

----O. XXXVII, R. 2---Negotiable Instruments Act (XXVI of 1881), S. 4---Recovery of money---Negotiable instrument---Effect---Suit under O. XXXVII, R. 2, C.P.C. can be filed in respect of negotiable instruments which includes promissory notes as defined under S. 4 of Negotiable Instruments Act, 1881.

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

----O. XXXVII, R. 2---Negotiable Instruments Act (XXVI of 1881), Ss. 4 & 118---Suit for recovery of money on the basis of promissory note---Proof---Appellants/defendants were aggrieved of judgment and decree passed by Trial Court in favour of respondent/plaintiff---Validity---Suit filed by respondent / plaintiff on the basis of promissory note which was Iqrarnama (Agreement), whereby appellants/defendants undertook to pay loan amount---Post-dated cheques were self-executable documents and suit was maintainable under O. XXXVII, R. 2, C.P.C.---Iqrarnama (Agreement) was executed as an additional security in respect of same loan amount---Execution of such Iqrarnama (Agreement) did not render the suit liable to be returned under O. VII, R. 10, C.P.C.---Procedure prescribed by O. XXXVII, C.P.C. was that appellants/defendants were not, as a matter of right, entitled to appear or to defend, but if they deserved to be heard, they had to apply to Trial Court for permission to appear and defend within 10 days of service of summons as envisaged by Art. 159 of Limitation Act, 1908---Till such time as leave to defend was granted appellants/defendants could not even file interlocutory application in order to agitate point of jurisdiction or to question transactions between parties or to challenge validity and legal effect of promissory note and crossed cheque issued by them in favour of respondent/plaintiff---High Court declined to interfere in judgment and decree passed by Trial Court as respondent/plaintiff established his claim against appellants/defendants through production of convincing and cogent evidence whereas appellants/defendants failed to controvert respondent/plaintiff---Appeal was dismissed, in circumstances.

Hatimbhai v. Karimbhai 1993 MLD 988; Sindh Engineering and Bangle Works Hyderabad and others v. Habab Bank Ltd. PLD 1993 Kar. 38 and Messrs Nagina Cotton Industries and others v. Cotton Export Corporation of Pakistan 1994 CLC 2281 rel.

Majid Nadeem Bhatti for Appellants.

Qazi Sheharyar Iqbal for Respondent.

2023 C L D 387

[Islamabad]

Before Mohsin Akhtar Kayani, J

AIR BLUE (PVT.) LIMITED through M.D. and others---Petitioners

Versus

JUDGE CONSUMER COURT (WEST), ISLAMABAD and others---Respondents

Writ Petitions No. 1422 and 2579 of 2019, decided on 21st October, 2022.

Islamabad Consumer Protection Act (II of 1995)---

----S. 2(c) & (e)---Carriage by Air Act (IV of 2012), Ss. 4, 33 & 34---Constitution of Pakistan, Art. 199---Constitutional petition---Consumer rights---Travel by air---Liability of airline---Forum of adjudication---Petitioner/Airline was aggrieved of proceedings initiated under Islamabad Consumer Protection Act, 1995, for imposing damages upon it for loss of baggage of respondent/passenger---Validity---Manner of determining liability of a carrier and quantum whereof were matters covered by the First Schedule to the Carriage by Air Act, 2012---Person, for whose benefit such claim could be made, came within the ambit of Second Schedule---In either case general provisions of law stood excluded and matter was to be determined within the four corners of Carriage by Air Act, 2012, read with its Conventions referred to in the Schedules---Said Act was special act and only provided mechanism to quantify damages under terms of Conventions---There was no exclusion provision in Carriage by Air Act, 2012, to exclude jurisdiction of any other court, tribunal or forum---Legislative intent was to be considered accordingly and claim submitted against petitioner required no interference---Consumer or complainant or any passenger who suffered loss at the hands of any carriage by air company or airline could either approach Consumer Court to claim his original amounts of loss suffered as consumer or could claim further damages, special damages, pecuniary damages from plenary court of civil jurisdiction---Rights of consumer with reference to damages or loss suffered could only be calculated on the yardstick provided in Carriage by Air Act, 2012---High Court declined to interfere in proceedings pending adjudication before Court under Islamabad Consumer Protection Act, 1995--- Constitutional petition was dismissed, in circumstances.

Evacuee Trust Property Board v. Mst. Sakina Bibi 2007 SCMR 262; The Gujranwala Central Co-operative Bank Ltd. Hafizabad v. Muhammad Feroze PLD 1969 SC 252; Chalna Fiber Company Ltd. v. Abdul Jabbar PLD 1968 SC 381; Regional Manager, Adamjee Insurance Company Ltd. v. Presiding Officer, District Consumer Court, Lahore and 3 others 2012 CLD 846; Pakistan Mobile Communication Ltd v. Judge District Consumer Court, Gujranwala and 3 others PLD 2015 Lah. 204 and Dr. Naheed Fatima and 3 others v. Messrs Pakistan International Air Corporation (PIAC) through Chairman and another PLD 2011 Kar. 514 ref.

Muhammad Ikhlaq Awan for Petitioners.

2023 C L D 627

[Islamabad]

Before Miangul Hassan Aurangzeb and Arbab Muhammad Tahir, JJ

MCB BANK LIMITED---Appellant

Versus

TARIQ AHMED KHAN LODHI and others---Respondents

R.F.A. No. 45 of 2013, decided on 17th April, 2023.

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

----S. 22---Contract Act (IX of 1872), S. 141---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for recovery of finance---Rejection of plaint---Surety, liability of---Plaintiff/Bank was aggrieved of rejection of its plaint by Banking Court---Validity---Provision of S. 141 of Contract Act, 1872 had no implication as an entitlement was given to the surety to the benefit of every security which the creditor had against principal debtor at the time when contract of suretyship was entered into---Surety was discharged to the extent of value of security---Appellant/Bank did not try to make recoveries from the company as it was one of the petitioners in liquidation petition---Liability of directors who executed memoranda of deposit of title deeds would stand reduced to the extent of the amount recovered by appellant/Bank in the liquidation proceedings from the total amount of company owed to appellant/Bank---Directors of the company who executed memoranda of deposit of title deeds could not be totally absolved from their liability simply on the ground that the appellant/Bank/creditor was able to recover its debt partially in liquidation proceedings or that the liquidation Court had ordered that the decree obtained by the creditor could not be executed against assets of the company---Such partial recovery did not put at naught liability of directors who had executed memoranda of deposit of title deeds for securing repayment of company's debt to appellant/Bank---High Court set aside order passed by Banking Court and remanded the matter for decision afresh---Appeal was allowed accordingly.

Abdul Ghaffar Adamjee v. National Investment Trust Ltd. 2019 SCMR 812; Sultan-ul-Afreen v. District Officer (Revenue), City District Government, Karachi 2013 CLD 1280 and Mubarak Ali v. First Prudential Mudaraba 2006 CLD 927 rel.

Taimoor Aslam Khan for Appellant.

Respondents ex parte.

2023 C L D 679

[Islamabad]

Before Miangul Hassan Aurangzeb, J

NATIONAL HIGHWAY AUTHORITY (NHA) through Chairman---Petitioner

Versus

Messrs SAMBU CONSTRUCTION CO. LIMITED and 2 others---Respondents

C.R. No. 233 of 2016, decided on 7th February, 2023.

Arbitration Act (X of 1940)---

----Ss. 30, 33 & 39---Rules of Procedure for the Functions of the Disputes Review Expert, R. 9(c), (d)---Civil Procedure Code (V of 1908), S. 115---Arbitration---Revisional jurisdiction---Concurrent findings of Courts below---Petitioner Authority awarded contract to respondent company---Dispute between the parties was decided by an arbitrator---Objections against award announced by arbitrator were dismissed by Trial Court as well as Lower Appellate Court and award was made rule of the Court---Validity---If on reappraisal of evidence, a different view is possible, High Court cannot substitute its own view and upset findings of fact concurrently arrived at by the Courts below---Such findings can only be interfered with if the Courts below had misread the evidence or had committed a jurisdictional error--- Dispute between the parties could not be resolved without the assistance of Dispute Review Expert (DRE)---It was for such reason that respondent company referred the dispute to DRE under specific clause of the Conditions of Particular Application---Just like rule 9(c) of Rules of Procedure for the Functions of the Disputes Review Expert, the provision of R. 9(d) of Rules of Procedure for the Functions of the Disputes Review Expert also does not prescribe any time limit within which a party can refer a dispute to DRE---Contractual provisions which placed a time limit on a party's right to initiate a dispute resolution process had to be strictly construed--- Reference of dispute to DRE did not offend any provision of Conditions of Particular Application read with Rules and Procedures for the Functions of the Disputes Review Expert---High Court in exercise of revisional jurisdiction declined to interfere in the award made rule of the Court---Revision was dismissed, in circumstances.

Universal Insurance Company v. Karim Gul 2021 CLD 1189; Co-operators Life Insurance Co. v. Gibbons [2009] 3 SCR 605; Muhammad Akhtar v. Mst. Manna 2001 SCMR 1700 and Abdul Hakeem v. Habibullah 1997 SCMR 1139 rel.

Barrister Asghar Khan, Ali Roshan Gillani and Atif Waheed for Petitioner.

Barrister Muhammad Mumtaz Ali for Respondent No. 1.

2023 C L D 1025

[Islamabad]

Before Aamer Farooq, C.J. and Saman Rafat Imtiaz, J

TANVIR HUSSAIN MANJI---Petitioner

Versus

NATIONAL ACCOUNTABILITY BUREAU through Chairman and another---Respondents

Writ Petition No. 2908 of 2014, decided on 4th May, 2023.

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

----S. 25(b)---Contract Act (IX of 1872), S. 16(3)---Constitution of Pakistan, Art. 199---Constitutional petition---Plea bargain---Incidental charges---Scope---Undue influence---Proof---Petitioner accused before National Accountability Bureau (NAB) who entered into plea bargain with NAB but assailed imposition of 15% incidental charges over and above the liability so determined---Validity---National Accountability Bureau had no right to demand such incidental charges either in law or equity---Petitioner while he was deprived of his freedom agreed to the same which indicated use of undue influence---Such use of authority resulted in an unfair advantage over the other---National Accountability Bureau obtained an unfair advantage over the petitioner by extracting an amount from him not otherwise due by using its dominant position over petitioner---"Incidental charges" as part of plea bargain were unconscionable---According to S. 16(3) of Contract Act, 1872, burden of proof that contract was not induced by undue influence was on the person who was in a position to dominate the will of another when he entered into contract with such person and where transaction had appeared to be unconscionable---National Accountability Bureau was unable to explain what incidental charges, if any, were incurred in respect of a plea bargain---Law did not authorize NAB to charge the same and NAB had failed to discharge its burden of proof---Public functionaries were expected to act fairly and justly and could not be allowed to profit from predicament of a person in their custody---High Court condoned delay in invoking Constitutional jurisdiction by petitioner---In absence of law and/or expenses incurred by NAB, the clause of plea bargain whereby petitioner agreed to pay incidental charges was unenforceable for lack of free consent---High Court declared that such clause of plea bargain entered into by petitioner was void to the extent of 15% incidental charges and the same could not be recovered from petitioner---Constitutional petition was allowed, in circumstances.

Asghar Ali v. National Accountability Bureau 2016 PCr.LJ 477; Haji Khan Muhammad v. Government of Pakistan, National Accountability Bureau 2013 PCr.LJ 1571; Zaheer Afzal Chatha v. National Accountability Bureau 2018 PCr.LJ Note 9; Pakistan Agriculture Storage v. Crescent Jute Products 2004 CLD 849; Pakcom Limited and others v. Federation of Pakistan and others PLD 2011 SC 44; Amber Ahmed Khan v. Pakistan International Airlines, Karachi Airport Karachi PLD 2003 Kar. 405; A.R. Azhar v. Pakistan through Chairman Railway Board P.W.R. Lahore and 5 others 1980 PLC (C.S.) 139 and Zahid Shafiq v. National Accountability Bureau (W.P. No. 3068 of 2016) rel.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Laches, principle of---Applicability---Laches may be condoned where act of which petitioner is aggrieved is patently illegal and/or to avoid grave injustice.

Abdul Majid v. Mst. Zubeda Begum 2007 SCMR 866 and Hafiz Muhammad Sharaf-ud-Din v. District Judge, Khushab 2015 MLD 1081 rel.

Abid Jalil for Petitioner.

Muhammad Rafay Maqsood, Special Prosecutor, NAB and Zahid Usman, A.D./I.O., NAB for Respondents.

2023 C L D 1064

[Islamabad]

Before Mohsin Akhtar Kayani, J

IRFAN AHMAD CHATTHA and another---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Energy (Power Division), Pak Secretariat, Islamabad and others---Respondents

Writ Petition No. 3970 of 2022, decided on 2nd May, 2023.

Companies Act (XIX of 2017)---

----Ss. 157, 163, 166 & 508(2)---Corporate Governance Rules, 2013, Rr. 2(25), 2-C, 3-A(1) & (3)---Constitution of Pakistan, Art. 199---Constitutional petition---Nominee Director---Removal---Doctrine of pleasure---Applicability---Petitioners were nominee directors who were aggrieved of their removal from the Board of Directors---Validity---Nominee Director had no personal right to claim benefit of tenure available to other Directors---Even removal of Nominee Directors was based upon doctrine of pleasure---Petitioners had rightly been removed which was the prerogative of nominating body i.e. Federal Government---It was not constitutional mandate of Courts to run and manage public or private institutions or to micro-manage them or to interfere in their policy and administrative internal matters---Courts neither enjoyed such jurisdiction nor possessed requisite technical expertise in such regard---Courts should step in only when there arise justiciable disputes or causes of action between parties involving violation of Constitution or law---Removal of petitioners by their nominating body was the sole authority of that body within their policy domain to either allow petitioners to continue as members of Board of Directors or to remove them or to reconstitute the Board---Such action of authority could not be called in question by petitioners---High Court declined to interfere in the matter as petitioners failed to highlight their vested right as they were appointed by Federal Government and were not Independent Directors---Constitutional petition was dismissed, in circumstances.

Babar Sattar v. Federation of Pakistan and others 2016 CLD 134; Malik Muhammad Bashir Lakhesar, Assistant Advocate General, Punjab v. Government of Punjab and others 2019 PLC (C.S.) 266; Agha Imtiaz Ali Khan Babar and 2 others v. Federation of Pakistan through Secretary Ministry of Water and Power and 2 others 2018 CLD 80; Nadeem Mumtaz Qureshi v. Pakistan Petroleum Limited and others 2019 CLD 1374; Khyber Medical University and others v. Aimal Khan and others PLD 2022 SC 92 and Waseem Majid Malik v. Federation of Pakistan 2020 CLD 1207 rel.

Petitioner in person.

Usman Rasool Ghumman, A.A.G. for Federation.

Taimoor Aslam Khan and Mudassar Abbas for Respondent No.2.

M. Ishaq Khan and Malik Qamar Afzal for Respondents Nos.11 and 12.

Barrister Haris Azmat and Barrister Faiza Asad for Respondents Nos.6, 7 and 14.

Farrukh Aftab, Director (Legal), FESCO.

Shafqat Abbas Tarrar and Asia Batool for Respondents Nos.8 and 9.

Nauman Munir Parahca for Respondents Nos. 5, 19 and 13.

2023 C L D 1189

[Islamabad]

Before Saman Rafat Imtiaz, J

SHAHEEN FREIGHT SERVICE (SFS) through General Manager---Petitioner

Versus

MOL PAKISTAN OIL AND GAS CO. B.V. (MOL) through Chief Executive and others---Respondents

Writ Petitions Nos. 3024 and 3175 of 2022, decided on 19th April, 2023.

(a) Partnership Act (IX of 1932)---

----Ss. 18 & 19---Constitution of Pakistan, Art. 199---Constitutional petition---Partner of a firm---Locus standi to file petition---Respondents objected to maintainability of petition on the plea that petitioner was partner of firm and was not authorized to file constitutional petition---Validity---Act of a partner binds the partnership firm except that such implied authority does not empower him to take the steps as are listed under S. 19(2) of Partnership Act, 1932---Filing of a constitutional petition was not included amongst the steps which a partner was not empowered to take pursuant to his implied authority---Petitioner as a partner was an authorized person to file the petition---Constitutional petition was maintainable, in circumstances.

Creative Electronics and Automation v. Commissioner Lahore 2013 CLC 1547 and Messrs Fine Enterprises Traders through Partner/ Representative v. Messrs Constellation Co-Operative Housing Society Limited 2019 CLC 1472 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Relief, moulding of---Scope---Failure to expressly assail order in question in prayer clause was not fatal---In view of the contents of memo of petition and oral submissions, High Court was not precluded from passing judgment in respect of order in question as additional relief was available on merits---Any additional or adequate relief may be granted even if not specifically prayed for, if the same is borne out of the contents of the pleadings, as a court, in aid of justice, is vested with unfettered powers.

Syed Ali Raza Kirmani v. Election Tribunal, Punjab Bar Council 2019 CLC 340; Ahmad Nawaz Khan v. Muhammad Jaffar Khan 2010 SCMR 984; Syed Phool Badshah v. ADBP through Manager, Peshawar Branch 2012 SCMR 1688; Mst. Zahida Begum v. Ashfaq Ahmed PLD 2020 Lah. 684 and Mst. Noor Elahi v. Muhammad Abbas 2022 YLR 2383 rel.

(c) Public Procurement Rules, 2004---

----Rr. 3 & 48(7)---Constitution of Pakistan, Art. 199---Constitutional petition---Terms "procurements" and "procuring agency"---Scope---Petitioner company assailed bidding process and had filed a complaint for redressal of grievance against finalization of bid tender which was rejected---Petitioner company filed an appeal under R. 48(7) of Public Procurement Rules, 2004, before Public Procurement Regulatory Authority but did not decide grievance of petitioner company---Respondent/Operator contended that it was not a public procurement nor the respondent was a procuring agency---Validity---Mere fact that steps toward "procurement" were carried out by respondent/Operator designated under Petroleum Concession Agreement to carry out Joint Operations who was not a "procuring agency" did not mean that such procurement was not a "public procurement" made by a "procuring agency" as defined in Public Procurement Regulatory Authority Ordinance, 2002---Joint Operations including transportation were conducted and financed by all three of the Working Interest Owners pursuant to Petroleum Concession Agreement and not just the respondent/Operator---One entity out of three Working Interest Owners was designated for carrying out leg work involved in Joint Operations but essentially it was all three of the Working Interest Owners who conducted the joint operations and financed them---Any step carried out by the respondent/Operator toward joint operations was on behalf of itself as well as the other Working Interest Owners---Respondent/Operator was not a procuring agency and was an Operator under Petroleum Concession Agreement, who was carrying out joint operations to be conducted by the Working Interest Owners---Complaint sent by petitioner company to the respondent / Operator was for all intents and purposes a grievance to Grievance Redressal Committees of Working Interest Owners who were "procuring agencies"---Decision of the respondent/Operator constituted decision of such respondents against which an appeal was provided for under R. 48(7) Public Procurement Rules, 2004---High Court set aside order in question and the matter was remanded to Public Procurement Regulatory Authority to decide grievance of petitioner company on merits---Constitutional petition was allowed accordingly.

Ghani Gases Limited v. Federation of Pakistan PLD 2016 Lah. 207; Salahuddin v. Frontier Sugar Mills and Distilery Ltd. PLD 1975 SC 244; Pakistan International Airlines v. Tanveer ul Islam PLD 2010 SC 676; Pakistan Olympic Association v. Nadeem Aftab Sindhu 2019 SCMR 221; Dr. Muhammad Khan Shar v. President, Pakistan Medical Association Center 2022 MLD 626; Abdul Wahab v. Habib Bank Ltd. 2013 SCMR 1383; Noor Badshah v. United Bank Limited 2015 PLC (C.S.) 468; Anoosha Shaigan v. Lahore University of Management Sciences PLD 2007 Lah. 568; Aown Abbas Bhatti v. Forman Christian College PLD 2018 Lah. 435; Salman Rashid v. University of Management and Technology 2002 CLC 1328; Printing Corporation of Pakistan v. Province of Sindh PLD 1990 SC 452; Creative Electronics (Pvt.) Limited v. Government of Pakistan PLD 2020 Isl. 319; National Institutional Facilitation Technologies (Pvt.) Ltd. v. The Federal Board of Revenue PLD 2020 Isl. 378; West Bengal Electricity Board v. Patel Engineering AIR 2001 SC 682; Rana Basit Rice Mills Private Limited v. Shaheen Insurance Company 2021 SCMR 1413; Creative Electronics and Automation v. Commissioner Lahore 2013 CLC 1547 and Messrs Fine Enterprises Traders through Partner/Representative v. Messrs Constellation Co-Operative Housing Society Limited 2019 CLC 1472 ref.

Misbah ul Mustafa (for Petitioner in W.P. No. 3024 of 2022 and for Respondent No.4 in W.P. No.3175 of 2022).

Umair Majeed Malik and Noman A. Farooq (for Respondent No.1 in W.P. No. 3024 of 2022 and for the Petitioner in W.P. No. 3175 of 2022).

Syed Sabee-ul-Hassan (for Respondent No.2 in W.P. No.3024 of 2022 and for Respondent No.5 in W.P. No.3175 of 2022).

Khurram M. Hashmi (for Respondents Nos. 7, 8, 9, and 10 in W.P. No.3024 of 2022 and for Respondent No. 5 in W.P. No.3175 of 2022).

Ms. Azra Batool Kazmi, A.A.G.

Ex parte for Respondents Nos.3 and 5 (in W.P. No.3024 of 2022).

Nemo for Respondent No.4 (in W.P. No.3024 of 2022).

2023 C L D 1249

[Islamabad]

Before Babar Sattar, J

ANWAR BAIG, CHAIRMAN CONSERVANCY MANAGEMENT COMMITTEE (CMC) and 4 others---Petitioners

Versus

GOVERNMENT OF PAKISTAN through Secretary Ministry of Climate Change

and 2 others---Respondents

Companies Original No. 7 of 2021, decided on 25th November, 2022.

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

----Ss. 42 & 286---Company with charitable and not for profit objects---Mismanagement of affairs---Invoking jurisdiction of High Court---Principle---Rule of Indoor Management---Applicability---Petitioners were members of Board of Directors of respondent company who alleged mismanagement in its affairs---Validity---Provision of S. 286 of Companies Act, 2017, retained right for minority shareholders and reduced threshold test from twenty percent of issued capital of respondent company to ten percent---Underlying rationale for prescribing a threshold to establish locus standi of minority shareholders to petition the Court and seek prevention against oppression and mismanagement was to ensure that not every grievance of an individual member was brought before High Court, as rule of indoor management was to remain alive and well---It was for such purpose that S. 286 of Companies Act, 2017 provided a mechanism empowering High Court to interfere with management of a company without requiring that the company be wound-up---Purpose of such provision was to protect interests of certain stakeholders, such as minority shareholders and creditors who had no general ability to exercise supervisory authority over Board of Directors or avail processes available within shareholders democracy to protect their interests---Respondent company was licensed under S. 42 of Companies Act, 2017, by SECP to pursue not-for-profit objects---According to Articles of Association of respondent Company, it was a public company limited by guarantee not having a share capital---While the Articles conceive that respondent company can have members, such members do not own share capital of the company---As respondent company did not have a share capital, such members therefore could not meet threshold test of owning ten percent of shareholding of the company as prescribed in S. 286 of Companies Act, 2017---Even if petitioners were members of respondent company in addition to being Directors, given that they did not own ten percent of paid-up share capital of the company, they would not qualify to file a petition under S. 286 of Companies Act, 2017---Petitioners had no locus standi to invoke jurisdiction of High Court under S. 286 of Companies Act, 2017---Petition was dismissed, in circumstances.

Nadeem Kiani v. Messrs American Lycetuff Private Limited and others 2021 CLD 7; Ch. Muhammad Azam Cheema v. Province of Punjab and others 1997 CLC 970; Foss v Harbottle (1843) 2 Hare 461; Burland v Earle [1902] AC 83 and Edwards v Halliwel [1950] 2 All ER 1064 rel.

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

----Ss. 42, 43 & 44---Associations with charitable and not for profit objects---Regulator's powers---Scope---Scheme as prescribed in Ss. 42, 43 & 44 of Companies Act, 2017, creates no rights for directors of such company to seek court intervention for the purposes of preventing oppression and mismanagement by fellow Board Members.

Qazi Ghulam Dastgir and Ghazanfar Abbas Jaffari for Petitioners.

MNA Rehan for Respondent No.2.

Adeel Peter for Securities and Exchange Commission of Pakistan.

Azra Batool Kazmi, Assistant Attorney General.

Naeem Ashraf Raja, Director and Syed Ali Raza Zaidi, Deputy Director (Legal), Ministry of Climate Change.

2023 C L D 1324

[Islamabad]

Before Miangul Hassan Aurangzeb, J

NAUMAN SAFDAR---Appellant

Versus

CITI LAB (COMPUTERIZED INNOVATIVE TESTS AND INVESTIGATION LAB)---Respondent

F.A.O. No. 76 of 2021, decided on 19th January, 2022.

Trade Marks Ordinance (XIX of 2001)---

----S. 40---Infringement---Proof---Appellant was aggrieved of grant of interim injunction by Intellectual Property Tribunal in favour of respondent---Validity---In order to make out a case for infringement under S. 40(4) of Trade Marks Ordinance, 2001, it had to be shown that appellant used in the course of trade mark which was identical with or deceptively similar to respondent's registered trade mark or was using it in relation to goods or services which were not similar to those for which respondent's trade mark was registered---Provision of infringement would apply where trade mark was a well-known trade mark or had a reputation in Pakistan, and use of the mark, was without due cause, took unfair advantage of, or was detrimental to distinctive character or repute of the trade mark---Services offered by appellant and respondent were the same i.e., medical/laboratory services therefore, use of name "CITI LAB" by appellant prima facie resulted in confusion and deception which in turn would be detrimental to the respondent who had a registered trade mark "CITI LAB" since the year 2000 albeit in Class Heading-1---High Court declined to interfere in the order passed by Intellectual Property Tribunal as there was no illegality in the same---Appeal was dismissed, in circumstances.

Soneri Travel and Tours Ltd. v. Soneri Bank Limited 2011 CLD 193 and Shan Foods Industries v. Eastern Products (Pvt.) Ltd. 2012 SCMR 1504 rel.

Misbah-ul-Mustafa for Appellant.

Shaharyar Sohail for Respondent.

2023 C L D 1348

[Islamabad]

Before Arbab Muhammad Tahir, J

ARBAZ RAHIM---Appellant

Versus

The MANAGER/INCHARGE CAREEM and another---Respondents

Criminal Appeal No. 211 of 2022, decided on 17th February, 2023.

Islamabad Consumers Protection Act (III of 1995)---

----Ss. 2(f)(i), 6 & 8---Consumers protection---Unfair trade practice---Caveat emptor, doctrine of---Scope---Terms and conditions of agreement---Necessary party, non-summoning of---Appellant/ complainant alleged that driver of respondent/service provider demanded and received amount which was much more than the estimated/settled charges of ride---Driver of respondent/service provider did not attend Trial Court and complaint was dismissed on the ground of terms and conditions agreed by parties---Validity---Reliance of respondent/service provider on terms and conditions of agreement, which otherwise did not form part of its general representation/ advertisement itself was actionable as defined in S. 2(f)(i) of Islamabad Consumers Protection Act, 1995---Such terms and conditions of agreement, if otherwise generally not represented to consumers through advertisements, could not be subsequently relied upon to avoid liability under Islamabad Consumers' Protection Act, 1995---Respondent/ service provider could not use such terms and conditions of agreement as concealed dagger to exploit consumers and defeat the ends of justice---Consumer protection laws were enacted to safeguard rights of consumers from exploitative, unscrupulous and unfair trade practices---Doctrine of "caveat emptor" was gradually replaced by modern age consumer protection laws, which had burdened vendors with certain responsibilities to ensure fair trade practices in market---Purpose of such legislative instruments could not be defeated through adhesion contracts---Dismissal of complaint without obtaining version of driver of respondent/service provider was pre-mature---Trial Court should have decided grievance after exhaustive inquiry under applicable law and made every possible endeavor to trace whereabouts of driver of respondent/service provider---Dismissal of complaint in cursory manner, when existence of substance involved in lis had been admitted, was not warranted---High Court set aside order dismissing the complainant and remanded the matter to Trial Court for decision afresh, after taking version of driver of respondent/service provider---Trial Court could seek assistance of agencies of Federal Government mentioned in S. 6(2) of Islamabad Consumers Protection Act, 1995, to procure attendance of driver of respondent / service provider---Appeal was allowed accordingly.

Uber Technologies Inc. and others v. David Heller 2020 SCMR 1279 rel.

Muhammad Hussain Shad and Sufyan Haider for Appellant.

2023 C L D 1365

[Islamabad]

Before Miangul Hassan Aurangzeb, J

CHINA WATER AND ELECTRIC CORPORATION (CWE) P.R. CHINA---Applicant

Versus

NATIONAL HIGHWAY AUTHORITY, ISLAMABAD---Respondent

C.S. No. 118 of 2016, decided on 27th September, 2023.

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

----S. 6(1)---United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention), Art. V(1)(e)--- International Chamber of Commerce Rules of Arbitration, Art. 35(6)---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 120---Interim arbitration award---Scope---Enforcement of award---Proof---Onus to prove---Applicant company sought recovery of interim arbitration award passed in its favour and against respondent/National Highway Authority---Contention of respondent/Authority was that interim award was not enforceable---Validity---In order to be recognized and enforced under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, an award must be (i) an arbitral award for the purposes of New York Convention; and (ii) a foreign arbitral award within the meaning of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Interim Award satisfied both the requirements---No distinction between interim awards and final awards was made under the provisions of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 and New York Convention---High Court could refuse recognition and enforcement under Art. V(1)(e) of New York Convention of such foreign arbitral award that had not yet become binding on the parties---Interim Award in question was not conditional or contingent on materialization of an eventuality in order for it to become binding---Until Interim Award was set aside or suspended by a competent authority of the country in which, or under the law of which it was made, such interim award remained binding on the parties---By agreeing for arbitration to be conducted in accordance with Rules of Arbitration of International Chamber of Commerce, parties had in effect agreed that Interim Award was binding on them---Every award was binding on parties under Art. 35(6) of International Chamber of Commerce Rules of Arbitration---By submitting dispute to arbitration under Rules of Arbitration of International Chamber of Commerce, parties had undertaken to carry out any award without delay---Burden was on respondent/National Highways Authority to furnish proof on the grounds listed in Art. V(1) of New York Convention of having been satisfied in order for recognition and enforcement of Interim Award to be refused---High Court recognized interim award as respondent/ Authority was not able to discharge the burden---High Court directed to execute interim award along with interest at the rate of 6% per annum from the date of award till the date of payment---Application was allowed, in circumstances.

PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation 2015 SGCA 30; Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty. Ltd. (XX Y. B. COM. ARB. 628 (1995)); Hall Steel Company v. Metaloyd Ltd. (XXXIII Y.B. COM. ARB 978 (2008)); Drummond Ltd. v. Instituto Nacional de Concesiones (XXXVII Y.B. COM. ARB 205 (2012)); Alcatel Space, S. A. v. Alcatel Space Industries (XXVIII Y.B. COM. ARB 990 (2003)); CE International Resources Holdings LCC v. SA Minerals Ltd. (2012 US Dist. Lexis 176158 (SDNY)); Tabular Holdings Pty Ltd. v. DBT Technologies Pty Ltd [2013] ZAGPJHC 155; Abdul Qayyum v. Niaz Muhammad 1992 SCMR 613; Ch. Muhammad Siddique v. Anwar Shah 1991 CLC Note 368; Polydefkis Corp. v. Trans Continental Fertilizer Co. (1996 WL 683629 (E.D.Pa. Nov. 26, 1996); British Ins. Co. of Cayman v. Water Street Ins. Co. (93 F. Supp. 506); Blue Sympathy Shipping Co. Ltd. v. Serviocean Int'l (1994 WL 597144); Cairo Court of Appeal, 7th Commercial Circuit, Case No.44/134 JY, Decision dated 9 May 2018 and CVG v. CVH [2022] SGHC 249 ref.

Barrister Aleem O. Shahid and Fazal Maula for Applicant.

Rizwan Faiz Muhammad and Muhammad Afzal Shinwari for Respondent.

Assisted by Barrister M. Usama Rauf, Law Clerk.

2023 C L D 1400

[Islamabad]

Before Miangul Hassan Aurangzeb and Arbab Muhammad Tahir, JJ

CHINA INTERNATIONAL WATER AND ELECTRIC CORPORATION (CWE) P.R. CHINA---Applicant

Versus

NATIONAL HIGHWAY AUTHORITY---Respondent

Execution Application No. 9 of 2019, decided on 4th October, 2023.

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

----S. 31---International commercial contracts---Law applicable---Place of arbitration, selection of---Principle---Arbitration agreement, which creates rights and obligations of parties to submit disputes to arbitration and to abide by award, is an agreement severable from substantive contract in which it is embedded---Agreement is also capable of surviving termination, repudiation and frustration of substantive contract---Arbitration agreement is considered to have a distinct life of its own, it can be governed by a proper law of its own which need not be the same as the law governing substantive contract---Where there is no express choice of law governing arbitration agreement, presumption would be that the parties intended for law chosen to govern the substantive contract to be the law governing the arbitration agreement---Proper law of arbitration agreement governs obligation of parties to submit disputes to arbitration, and to honour an award---This has to be distinguished from curial law of arbitration, which governs conduct of individual reference---Procedural law of arbitration which is also called "lex arbitri" or "curial law" deals with a range of issues including the form and validity of arbitral award; and finality of award, including any right to challenge award in Courts of the place of arbitration---In order to determine curial law in absence of an express choice by parties, it is first necessary to determine the seat of arbitration---This is so because where parties do not choose curial law, the law of seat of arbitration would be the curial law which governs arbitration proceedings---Seat of arbitration is a location selected by parties as the legal place of arbitration, which consequently determines procedural framework of arbitration---Contracting parties have freedom to agree on seat of arbitration---Where parties make no such agreement, the seat may be determined by arbitral tribunal or administering arbitral institution in accordance with and subject to arbitration rules chosen by the parties---Where this is also not done the place where the arbitration is conducted is the seat of arbitration.

Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb [2020] UKSC 38; Hitachi Limited v. Rupali Polyester 1998 SCMR 1618; Naviera Amazonica Peruana S.A. v. Compania International de Seguros del Peru [1988] 1 Lloyd's Rep 116; Enercon GmbH v. Enercon India Ltd [2012] 1 Lloyds Rep 519 and Shashoua v. Sharma [2009] EWHC 957 rel.

(b) United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention)---

----Art. V(1)(e)---Word "law"---Connotation---Word "law" employed in Art. V(1)(e) of New York Convention refers to lex arbitri or curial law i.e. law of seat of arbitration and not the proper law governing the Contract or arbitration agreement.

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

----Ss. 3(3)(a) & 6---Foreign arbitral award---Recognition and enforcement---Expression "as nearly as may be"---Scope---Mere fact that in terms of S. 3(3)(a) of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 High Court is to follow the procedure "as nearly as may be" provided for in C.P.C. does not mean that application under S. 6 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 is to proceed strictly like a suit or that an order for the recognition of a foreign arbitral award is to be accompanied or followed by a decree---Expression "as nearly as may be" makes it permissible for High Court to deviate from procedural requirements in C.P.C.

Mehmood-ul-Hassan Babar Khan v. Liaqat Ali Kareem 2002 YLR 2227 and Farooq Ahmed Sheikh v. Privatization Commission 2006 CLD 1130 rel.

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

----S. 6(1)---Arbitration Act (X of 1940), Ss. 30 & 33---United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention), Art. V(1)(e)---Foreign arbitral award---Misconduct---Proof---Appellant/National Highway Authority was aggrieved of Foreign arbitral award passed against it in proceedings held in Paris, France---Appellant assailed the award on the plea of misconduct before District Judge Islamabad but the application was dismissed---Validity---New York Convention did not permit any review of merits of award to which it applied---Grounds on which recognition and enforcement of a foreign arbitral award could be refused were exhaustively set out in Art. V of New York Convention---Even in cases where any of such grounds were satisfied, High Court could proceed to recognize and enforce the award--- Use of word "may" in Arts. V(1) & (2) of New York Convention made refusal to recognize and enforce an award permissive and not mandatory---Grounds on which recognition and enforcement of award could be refused under Art. V of New York Convention did not include an erroneous decision in law or in fact by Arbitral Tribunal--- High Court, while deciding an application under S. 6 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 was not to review merits of Arbitral Tribunal's decision---High Court directed to execute the award and accorded recognition to the award, as none of the grounds envisaged by Art. V of New York Convention for refusing to enforce a foreign arbitral award were satisfied by appellant/National Highway Authority---Appeal was dismissed, in circumstances.

Orient Power Company (Private) Limited v. Sui Northern Gas Pipeline Limited PLD 2019 Lah. 607; Taisei Corporation v. A.M. Corporation Company (Private) Limited 2018 MLD 2058; Bharat Aluminum Co. v. Kaiser Aluminum Technical Service Inc. (AIR 2012 SC (Supp) 44); Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (335 F 3d 357); Karaha Bodas Co. LLC (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara - Pertamina (Indonesia) (Yearbook Comm. Arb'n Vol.XXVIII (2003) Page 752); International Electric Corporation v. Bridas Sociedad Anonima Petroleva, Industrial Y Commercial (745 F Supp, 178 SDNY 1990); International Standard Electric Corp. (US) v. Bridas Sociedad Anonima Petrolera (Argentina) (1992) VII Ybk Comm Arb 639; Louis Dreyfus Commodities Suisse S.A. v. Acro Textile Mills Ltd. PLD 2018 Lah. 597 and POSCO International Corporation v. Rikans International PLD 2023 Lah. 116 ref.

Century Indemnity Company et al. v. Axa Belgium (11 Civ. 7263 (JMF)); Oberlandesgeriht [OLG], Celle, Germany, 31 May 2007, 8 Sch 06/06; Jess Smith and Sons Cotton LCC v. DS Industries 2019 CLD 23; Messrs Tradhol International SA Sociedad Unipersonal v. Messrs Shakarganj Limited 2023 CLD 819; Yusuf Ahmed Alghanim & Sons, W.LL v. Toys "R" Us, Inc. (XXIII Y.B. COM. ARB. 1058 (1998)); Noble Chartering Inc. v. Awan Trading Co. (Pvt.) Ltd. PLD 2012 Sindh 114; A. Meredith Jones & Co. v. Usman Textile Mills Ltd. 2002 CLD 1121; Gol Linhas Aereas SA v. Matlin Patterson Global Opportunities Partners (Cayman) II LP and others [2022] UKPC 21; Shipowner v. Time Charterer, Oberlandesgericht (6 Sch 3/98, XXV Y.B. COM. ARB. 641 (2000)); National Highway Authority v. Lilley International (Pvt.) Ltd. 2020 CLC 608 and National Highway Authority v. Messrs Sambu Construction Co. Ltd. 2023 SCMR 1103 rel.

Javaid Akhtar, Zakir Hussain Baig and Hamid Nawaz for Applicant.

Rizwan Faiz Muhammad and Barrister Afzal Khan Shinwari for Respondent.

Assisted by Barrister M. Usama Rauf, Law Clerk.

2023 C L D 33

[Sindh]

Before Muhammad Shafi Siddiqui, J

NP WATERPROOF INDUSTRIES (PRIVATE) LTD. and 4 others---Petitioners

Versus

NP SPINNING MILLS LIMITED and 2 others---Respondents

J.C.M. No. 18 of 2021, decided on 6th October, 2022.

Companies Act (XIX of 2017)---

----Ss. 78 & 286--- Transfer of shares to successor-in-interest---Procedure---Personal law, applicability of---Scope---Dispute was with regard to transfer of shares of company in favour of successors-in-interest of deceased share-holder---Objection raised by respondents was that minimum threshold of holdings and paid up capital of company was not matched by petitioners---Respondents further contended that neither Succession Certificate nor any lawful award was filed by petitioners in their favour---Validity---Case where an entity was created by a special law, it was to be dealt with within that frame of special law---No provision of special Act would take away any of their right under general law but it laid down a procedure of its own because the entity was creation of company law---Successor who intended to take advantage of any of its shareholding left by deceased had to go through a process prescribed by S. 78 of Companies Act, 2017 which had provided that shares or other securities of deceased member would be transferred on application duly supported by Succession Certificate or by lawful Award, as the case could be in favour of successors to the extent of their interest and their names were to be entered in Register of Companies---Officials of Securities and Exchange Commission of Pakistan (SECP) might not be aware of devolvement of shares amongst legal heirs and also as to who were the legal heirs to whom shares were devolved---Law had set a mechanism for transfer of shares, which was dependent on a Succession Certificate or lawful award by a Court of law---Majority shareholders' rights and their decision taken in such regard could not be ordinarily objected unless a significant number of shareholders, which was prescribed as 10% of the issued share capital of company, was achieved---If such minority shareholders were allowed to object and interfere in decisions of majority shareholders, business of the company would not function---Held, it was always wisdom of majority shareholders and insofar as decision of company was concerned, unless prerequisite of Ss. 78 & 286 of Companies Act 2017 were met, interference in the business affairs was not appropriate---Petitioners did not file a succession petition in respect of shares which were claimed after demise of their predecessor-in-interest---Suit for administration was pending which was filed by one of the respondents who claimed administration of moveable and immovable assets left by deceased shareholder---Requisite compliance was not made in terms of S. 78 of Companies Act, 2017---Proceedings for oppressive conduct by majority shareholders under S. 286 of Companies Act, 2017 were not maintainable--- Petition was dismissed, in circumstances.

Abdul Kareem Khan v. Haroon-ur-Rasheed 2015 CLD 719; Malik Aziz ul Haq v. Crystal Line Chemical Industries 2016 CLD 970; Hassan Al-Adawi v. Hama International (Pvt.) Ltd. 2009 CLD 1043; Nadeem Kiani v. American Lycetuff (Pvt.) Ltd. 2021 CLC 7; Saghir Ahmed Soofi v. Saga Sports (Pvt.) Ltd. 2005 CLD 1875; Ghulam Ali v. Mst. Ghulam Sarwar Naqvi PLD 1990 SC 1; Mst. Suban v. Allah Ditta 2007 SCMR 635; World Wide Agencies Pvt. Ltd. v. Mrs. Margarat T. Desor 1990 AIR 737; Rajkumar Devraj and Rajkumari v. Jai Mahal Hotels 2006 134 CompCas 405 CLB; Muhammad Fikree v. Fikree Development Corporation PLD 1988 Kar. 446; Abid Hussain v. Shri Jaspal (Company Appeal No.1/2013) of Uttaranchal High Court; Aruna Oswal v. Pankaj Oswam (Civil Appeals 9340, 9399 and 9401 of 2019) of Supreme Court of India; Anup Kumar Agarwal v. Crystal Thermotech Ltd. (Company Appeal No.17/2016) and Yamini Bipinchandra Shah v. Trimbak Estate Pvt. Ltd. (Company Appeal No.250/2018) of Indian Tribunal ref.

Arshad Tayebaly and Ms. Heer Memon for Petitioners.

Omer Soomro, Danish Nayyer and Zahid Hussain Sahito for Respondents.

2023 C L D 125

[Sindh]

Before Muhammad Shafi Siddiqui, J

PAKISTAN BEVERAGE LIMITED---Plaintiff

Versus

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

Suit No. 1225 of 2022, decided on 12th October, 2022.

Specific Relief Act (I of 1877)---

----Ss. 42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for declaration and permanent injunction---Interim injunction, refusal of---Banking Policy and Regulation Department (BPRD) Circular, assailing of---Government policy---Restriction on import of goods---Plaintiff company assailed BPRD Circular imposing restriction on import of goods from abroad---Plea raised by plaintiff company was that due to restriction on import, defendant Bank refused to open letter of credit in favour of its foreign suppliers---Validity---Local Bank could provide services at the doorstep of its customers and could never say no to their elite customers based on their own understanding---International commitment of foreign exchange could not be read isolating trade policies---Nothing could turn on the draft LC, which was a Bank Form and could have been signed anytime, anywhere---Letter of credit was in itself an independent contract between issuing Bank and advising Bank for its onward payment to the supplier---On the strength of concluded contract between buyer and supplier commitment for repayment via LC could not be said to be a concluded contract---Plaintiff company failed to make out a prima facie case for injunction---Balance of inconvenience was also not in favor of plaintiff company and there was no irreparable loss to be caused to plaintiff company, as it was a matter of policy in terms of which certain restrictions were introduced on imports---No concluded terms of remittance via Letter of Credit were concluded prior to cutoff date, and there was no retrospective applicability of circular in question to the contract between supplier and plaintiff and any such restrictions as notified in the circulars in question---Application was dismissed, in circumstances.

Khalid Jawed Khan along with Hanif Faisal Alam for Plaintiff.

Muhammad Zubair Hashmi and Qazi Ayazuddin Qureshi, Assistant Attorney General for Defendant No. 1.

Ghulam Ali Khan for Defendant No. 2.

2023 C L D 162

[Sindh]

Before Muhammad Shafi Siddiqui, J

JOHNSON CONTROLS PAKISTAN (PVT.) LTD. through Authorised Representative---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Registrar of Companies---Respondent

Judicial Companies Miscellaneous No. 01 of 2020, decided on 21st September, 2022.

Companies Act (XIX of 2017)---

----Ss. 301(a) & 304---Winding up of company---Liabilities less than assets---Petitioner was a defunct company which seized its operations and was not carrying any business in Pakistan---Petitioner company did not have any employees, offices or major assets in Pakistan---Auditors of petitioner company were also of the opinion that it was not a going concern---According to last audited annual financial statement total assets were less than current liabilities and the company was running into loss every year---Shareholders of petitioner company, through special resolution, resolved to file application for liquidation, winding up and dissolution---High Court appointed official liquidator to assume charge of the company and proceed with winding up affairs of the company, as the company was liable to be wound up---Petition was allowed accordingly.

Basil Nabi Malik for Petitioner.

Saad-ur-Rasheed Abbasi, Law Officer for Respondent.

2023 C L D 170

[Sindh]

Before Muhammad Shafi Siddiqui, J

AMER TEX (PVT.) LTD. AND 6 OTHERS: In the matter of

Judicial Companies Miscellaneous No. 8 of 2022, decided on 1st September, 2022.

Companies Act (XIX of 2017)---

----Ss. 279, 283 & 465(4)---Companies (General Provision of Forms) Rules, 2018, Regln. 14---Scheme of Arrangement---Shares, non-adjustment of---Respondent objected to Scheme of Arrangement on the plea that his correct shareholding pattern was not provided---Validity---Objection of insignificant number of shares, under S. 465(4) of Companies Act, 2017 and Regln. 14 of Companies (General Provision of Forms) Rules, 2018, for demerging undertaking was insignificant and the same could be reconciled in next year---Scheme of Arrangement/Demerger undertaking in view of understanding of directors was to promote business avenues and apparently not against public interest or violation of law---High Court declined to sit over the wisdom of directors to conduct business in accordance with law as the scheme of Arrangement/Demerger undertaking was at par with requirement of law---Petition was allowed in circumstance.

Raashid Anwar for Petitioners.

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

2023 C L D 181

[Sindh]

Before Ahmed Ali M. Shaikh, C.J. and Yousuf Ali Sayeed, J

KSE STOCKBROKERS ASSOCIATION and 63 others---Petitioners

Versus

CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN (SECP)

and others---Respondents

Constitutional Petition No. D-3821 of 2016, decided on 13th April, 2022.

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

----Ss. 21(2) & 40-B--- Constitution of Pakistan, Art. 199---Constitutional petition---Training of employees---Policy decision---Scope---Petitioner/Association of Stock Exchange Brokers was aggrieved of Circulars issued by Securities and Exchange Commission of Pakistan (Commission) for imposing conditions to impart training to their employees/personnel of brokerage houses acting as intermediaries---Plea raised by petitioner was that such order was a policy decision to be taken by Securities and Exchange Policy Board---Validity---Circulars in question reflected that the same essentially sought to implement a regime for enhancing quality and competence of personal operating in financial markets by educating them and furthering their understanding of applicable rules and regulations laying down statutory regulatory framework governing relevant sectors so as to thereby augment their performance as well as advance the cause of protecting interest of investors---Subject of circulars was not identified by the Commission as matter of policy for consideration by the Board---Commission was not denuded of its competency in view of the wording of S. 21(2) of Securities and Exchange Commission of Pakistan Act, 1997---High Court declined to interfere in the matter--- Constitutional petition was dismissed circumstances.

Yousuf Ali for Petitioners.

Furqan Ali for Respondents Nos. 1, 3 and 4.

Masood Anwar Osaf for Respondent No. 5.

Khaleeq Ahmed, D.A.G.

2023 C L D 219

[Sindh]

Before Muhammad Shafi Siddiqui, J

DIN FARM PRODUCTS (PVT.) LIMITED: In the matter of

Judicial Companies Miscellaneous No. 2 of 2022, decided on 19th September, 2022.

Companies Act (XIX of 2017)---

----S. 89---Paid up capital, reduction in---Pre-conditions---Scope---Petitioner company sought confirmation of reduction in paid up capital---Validity---In case for confirmation of resolution of reduce share capital, question for consideration were; should the Court refuse its sanction to the reduction out of regard to the interest of those members of public who were induced to take shares in the company; was reduction fair and equitable between classes of shareholders; whether reduction was shared by all; was it designed to work justly and equitably; and whether such reduction did not involve diminution of liability in respect of unpaid capital or payment of any shareholder of any paid of capital---Evidence regarding loss of capital was present and non-representation of available assets---None of such impediments existed in the case of the Company---Proposed reduction in share capital was resolved by the company itself, which would not adversely affect the interest of shareholders---High Court approved the scheme of reduction and the proposal for reduction of share capital was confirmed---Petition was allowed accordingly.

Waqas Asad Sheikh for Petitioner.

Saad-ur-Rasheed Abbasi, Law Officer on Court's Notice.

2023 C L D 225

[Sindh]

Before Muhammad Shafi Siddiqui, J

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

Versus

NATOVER LEASE REFINANCE LIMITED through Administrator---Respondent

Judicial Companies Miscellaneous No. 35 of 2009, decided on 6th October, 2022.

Companies Ordinance (XLVII of 1984)---

----S. 282-J(3)---Winding up of company---Misappropriation of funds---Intricate questions---Determination---Veil of incorporation---Effect---Security and Exchange Commission of Pakistan as regulator of respondent company sought its winding up mainly on misappropriation of public funds as there was some dispute over ownership of a property---Validity---Veil of incorporation under such circumstances was inevitable to be pierced/lifted---Under the umbrella of a corporate entity fraud could not be allowed to be nourished and grow---Intricate questions required trial and forensic auditing of both the companies before such questions could be answered---Forensic audit and trial jurisdiction of High Court was only be to the extent of Company under liquidation---Numerous questions were present, which needed determination before property in question could be cleared and that was after forensic audit and recording of evidence/cross-examination--- Entire exercise of forensic audit and recording of evidence could not take more than five months; i.e. two months for forensic audit and three months for recording evidence---High Court decided to hear winding up petition in the light of forensic audit and evidence---High Court directed to maintain status quo by parties in respect of property in question---Petition was adjourned sine die in circumstances.

Littlewoods Mail Order Stores Ltd v. IRC [1969] W.L.R. 1241, 1254 and United State v. Milwaukee Refrigerator Co. (1905) 142 Fed:247 ref.

None for Petitioner SECP.

Zeeshan Abdullah along with Adnan for Legal Heirs of Applicant/purchaser Asim.

Habib Ahmed for auction purchaser.

Younus Memon holds brief for S. Nouman Zahid for Applicant Standard Chartered Bank.

Darvaish Mandhan for Applicant Nadeem H. Sheikh.

Muhammad Akram Tariq for Applicant Ms. Shehnaz Sheikh.

Ch. Waseem Iqbal, Official Assignee/Liquidator.

2023 C L D 241

[Sindh]

Before Muhammad Shafi Siddiqui, J

TOTAL PARCO PAKISTAN LTD. AND TOTAL OIL PAKISTAN (PVT.) LTD.:In the matter of Judicial Companies Miscellaneous No. 29 of 2015, decided on 28th September, 2022.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287 & 288---Sindh Chief Court Rules (O. S.), Rr. 777, 778, 779 & 780---Company (Court) Rules, 1997, Form 21---Civil Procedure Code (V of 1908), S. 151---Scheme of Arrangement---Implementation---Transfer fee of properties adjusted in Scheme of Arrangement---Petitioner company was aggrieved of demand of transfer fee raised by authorities with regard to properties received as a result of Scheme of Arrangement from "Transferor Company"---Validity---Form 21 of Companies (Court) Rules, 1997 provided that all liabilities and duties of transferor company were to be transferred without further act or deed to transferee company---Such was pursuant to S. 287(2) of Companies Ordinance, 1984 transferred to and became liabilities and duties of transferee company---Such was not a conveyance or sale deed under Transfer of Property Act, 1882, which required registration and stamping under Registration Act, 1908 and Stamp Act, 1899, before Sub-Registrar---Scheme of Arrangement was not required to be registered under enactments of Registration Act, 1908 and Stamp Act, 1899, before Sub-Registrar---Such was approved by a Court of law as an instrument confirming scheme and forwarded to any authority concern in the format as defined in Form "A"---Transfer under Scheme of Arrangement was not in pursuance of Land Grant Policy, therefore, charges as were claimed for transfer of plot were not applicable on such count also---High Court directed the Authority that claim of transfer fee from merged entity in respect of plot was unjustified and unlawful---Application was allowed in circumstances.

Abraiz Ali Khan for Petitioner.

Munawar Ali for Respondent.

2023 C L D 253

[Sindh]

Before Muhammad Shafi Siddiqui, J

BANKERS EQUITY LIMITED through Official Liquidator---Plaintiff

Versus

GALADARI CEMENT (GULF) LIMITED and others---Defendants

Suit No. B-02 of 2017, decided on 19th November, 2022.

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

----S. 9---Civil Procedure Code (V of 1908), O. I, R. 10---Suit for recovery of Bank loan---Necessary and proper party---Scope---Suit filed by plaintiff/Bank was pending and applicant/intervener was another Bank who filed application to be impleaded as plaintiff as necessary and proper party having pari passu charge over the properties---Validity---Presence of applicant intervener was neither beneficial, nor necessary, as it was the parties to suit which could assist the Court in reaching to a conclusion for an effective decree, considering claim of plaintiff and defendant, likely to be passed in proceedings---Provision of O. I, R. 10, C.P.C. essentially sought to adjudged claim of an individual or entity as to be one whose presence before Court was necessary in order to enable the Court to effectually and competently achieve upon and settle all questions involved in the suit---Plaintiff/Bank and applicant/intervener could have been sailing in the same boat in the sense that they had respective claims for the recovery against defendants based on their respective share/bite/pari passu charge, over the properties but those independent claims could not become a claim in the suit in question---High Court declined to implead applicant/intervener as party to proceedings---Application was dismissed in circumstances.

Uzin Export Import Enterprises v. Union Bank of Middle East Ltd. PLD 1994 SC 95 and Pakistan Banking Council v. Ali Maohtaram Naqvi 1985 SCMR 714 rel.

Salman Hamid for Intervener/Applicant.

2023 C L D 265

[Sindh]

Before Muhammad Shafi Siddiqui, J

PAKISTAN SUGAR MILLS ASSOCIATION through Authorized Representative and 5 others---Plaintiffs

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Law and Justice, Government of Pakistan and 2 others---Defendants

Suits Nos. 2272, 2273, 2455 and 2474 of 2021, decided on 13th June, 2022.

Competition Act (XIX of 2010)---

----Ss.14, 24 & 28---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Interim injunction, grant of---Reading down, principle of---Applicability---Casting vote---Procedure to cast---Dispute was with regard to casting of vote by Chairperson for second time as there was equality of votes---Chairperson had cast vote second time in exercise of powers under Ss.24 (1)(5)(6) & 28 of Competition Act, 2010---Validity---Any member on the Commission was to be free from any preconceived or predetermined thoughts---Conclusiveness of dispute in the mind of a member before sitting on Commission, was a loss to ensure fair trial and due process and such situation could be idealized close to parti pris---Judge or a member in a quasi-judicial proceeding, untying naughts should not be the one already utilized---Such would negate the assurance of fair trial and due process guaranteed under Art. 10-A of the Constitution---If statute required a decision started from a query, investigation, report, proceedings and/or then adjudication by any odd number of judges, with its lower and upper cap, it should be seen that each member was of independent and impartial mind and should not be carrying any weight of preconceived conclusion---Such situation of even number of members of commission in a quasi-judicial proceeding should not have happened---In the event of equality of votes reached the Chairman/Chairperson and/or any other member already rendered opinion, could not be saddled with additional responsibility to cast a vote to untie knot as it would destroy balance of each independent judicial mind being applied to a triable question under adjudication---Provision of S. 24(5) of Competition Act, 2010 was to be read down to administrative functions and operations of Commission only arising under Competition Commission (Conduct of Business) Regulations, 2007 and was distinguished by the other regulation i.e. Competition Commission (General Enforcement) Regulations, 2007---Option of carrying out such exercise of casting vote again was not available in view of understanding of law---High Court granted injunction to the extent of casting vote decision of Chairman/Chairperson, excluding casting vote decision of Chairperson, as it was a split decision by 2 v. 2---Application was allowed accordingly.

Chittaranjan Cotton Mills Ltd. v. Staff Union PLD 1971 SC 197; Muhammad Ashraf Tiwana v. Pakistan and others 2013 SCMR 1159; Institute of Architects, Pakistan (Lahore Chapter) v. Province of Punjab PLD 2016 Lah. 321; Sardar Sher Bahadur Khan v. Election Commission of Pakistan PLD 2018 SC 97; Ibrahim & Sons v. Punjab Text Book Board 2006 SCMR 875; Chief Kwame Asante, Tredahone v. Chief Kwame Tawia 9 DLR 686 (PC); Aam Log Ittehad v. The Election Commission of Pakistan PLD 2022 SC 39; Mrs. K.L. Sahgal v. State of U.P. and others AIR 1965 All. 465; Dr. Zahid Javed v. Dr. Tahir Riaz Chaudhry PLD 2016 SC 637; H.M. Abdullah v. Income Tax Officer 1993 SCMR 1195; Collector of Customs v. Askari Cement (Pvt.) Limited 2020 SCMR 649; Murlidhar v. University of Karachi PLD 1966 SC 841; Abdul Wahab v. Secretary Government of Balochistan 2009 SCMR 1354; Al-Jehad Trust v. Federation of Pakistan PLD 2011 SC 811; Government of the Punjab v. Abdur Rehman 2022 SCMR 25; Justice Qazi Faez Isa v. President of Pakistan PLD 2022 SC 119; Naveed Asghar v. State PLD 2021 SC 600; LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214; Dr. Syed Muhammad Ali Shah v. Chairman Pakistan Cricket Board 2010 MLD 1241; Federation of Pakistan v. M. Nawaz Khokhar PLD 2000 SC 26; Haroon-ur-Rashid v. LDA 2016 SCMR 931; Total PARKO Pakistan Limited v. Pakistan PTCL 2021 CL 576; Pakistan v. Hazrat Hussain 2018 SCMR 939; Mahindra Electric Mobility Ltd. v. Competition Commission of India 2019 SCC Delhi 8032 and Shobhana Shankar Patil v. Ramchandra Shirodkar AIR 1996 Bombay 217 ref.

Makhdoom Ali Khan, Khawaja Aizaz Ahsan and Sami-ur-Rehman for Plaintiffs (in Suit No.2272 of 2021).

Abdul Sattar Pirzada and Mamoon N. Chaudhry for Plaintiffs (in Suits Nos. 2273, 2455 and 2474 of 2021).

Muhammad Ahmed, Assistant Attorney General for Respondent No.1 (in all suits).

Faisal Siddiqui, Saad Fayaz and Shakoor Zulqarnain for Defendants Nos. 2 and 3 (in all suits).

2023 C L D 313

[Sindh]

Before Zulfiqar Ahmad Khan, J

ATIF AHMED and another---Plaintiffs

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN ("SECP") through Chairman and 5 others---Defendants

Suit No. 311 of 2022, decided on 1st July, 2022.

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

----O. XXXIX, Rr. 1 & 2---Interim injunction, grant of---Principles---Relief of injunction is discretionary and is to be granted by any court according to sound legal principles and ex-debito justice---Existence of prima facie case is to be judged or made out on the basis of material/evidence on record at the time of hearing of injunction application and such evidence of material should be of the nature that by considering the same, court should or ought to be of the view that plaintiff applying for injunction was in all probability likely to succeed in the suit by having a decision in his favour---Term "prima facie case" is not specifically defined in Civil Procedure Code, 1908 but consensus is that in order to satisfy about existence of prima facie case, pleadings must contain facts constituting existence of right of plaintiff and its infringement at the hands of opposite party---Balance of convenience is that if an injunction is not granted and suit is ultimately decided in favour of plaintiff, inconvenience caused to plaintiff would be greater than that would be caused to defendant, if the injunction is granted---Plaintiff was to show that inconvenience caused to him would be greater than that which may be caused to defendant---Irreparable loss is meant to be the loss, which is incapable of being calculated on the yardstick of money---Injunction is equitable remedy and accordingly is to conform to maxim of law of equity that "he who seeks equity must do equity".

Al-Tamash Medical Society v. Dr. Anwar Ye Bin Ju 2017 MLD 785; Shahzad Trade Links v. MTW Pak Assembling Industries Pvt. Ltd. 2016 CLC 83 and Sayyid Yousaf Hussain Shirzai v. Pakistan Defence Officers' Housing Authority and others 2010 MLD 1261 rel.

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

----S. 14(5)(a)---Specific Relief Act (I of 1877), Ss. 42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Corporate Governance Regulatory Framework and Regulations 8 & 9 of Prudential Regulations For Corporate/Commercial Banking/DFI, Cl. G-5(2)(3)(4)---Suit for declaration, injunction and recovery of damages---Interim injunction, refusal of---Shares of bank, acquiring of---Principle---Plaintiffs were aggrieved of public announcement regarding eligibility to acquire 51% shares of bank in question---Validity---Section 14(5)(a) of Banking Companies Ordinance, 1962, clause G-5(2)(3)(4) of Corporate Governance Regulatory Framework and Regulations 8 & 9 of Prudential Regulations For Corporate/Commercial Banking/DFI mandated that a person eager to acquire share of any company/bank had to undergo fit and proper test in advance before acquiring the same---Prior approval of State Bank of Pakistan was required for any change in existing sponsor shareholdings---Bank in question had to ensure to give prior intimation to State Bank of Pakistan before dealing with any investor and was to seek State Bank of Pakistan's approval for allowing due diligence---Plaintiffs failed to make out prima facie case and in fact balance of convenience was in favour of defendants---No question of sustaining any irreparable injury was ascended to plaintiffs---High Court declined to grant interim injunction in favour of plaintiffs---Application was dismissed in circumstances.

2019 YLR 345; PLD 2019 SC 43; PLD 2016 Sindh 50; PLD 2018 Sindh 222; 2010 MLD 1267; (1992) 1 SCC 719; 2013 CLC 454; PLD 2018 Lah. 198; 1998 MLD 362; PLD 1971 SC 376; PLD 1986 Kar. 574; Abu Dhabi Medical Devices Co. L.L.C. v. Federation of Pakistan 2010 CLC 1253; Taylor v. Salmon and Messrs Getz Pharma (Pvt.) Limited and others v. Novartis AG and others 2022 CLD 61 ref.

(c) Administration of justice---

----Technicalities---Scope---Prescriptions of statute are not mere technicalities and disregard thereof would render entire process into miscarriage of justice. [p. 324] C

Haider Waheed, Ahmed Masood, Zoha Sirhindi, Munim Masood, Muhammad Altaf, Agha Mustafa Durrani and Samil Malik Khan for Plaintiffs.

Ijaz Ahmed for Defendant No.2 along with Atifuddin, Legal Counsel of SBP.

Tariq Qureshi for Defendant No.3 along with Ghulam Akbar Lashari.

Jahanzeb Awan for Defendant No.4 along with Rashid Mahar, and Muhammad Usman Ahmed.

Wasiq Hussain Malik for Defendant No.6.

Raza Mohsin Qizilbash, Director (Legal), SBP.

Muhammad Akhtar Javed, Director Banking Policy Regulation Department, SBP.

Syed Shahzad Akram, Attorney of Summit Bank.

2023 C L D 338

[Sindh]

Before Muhammad Faisal Kamal Alam, J

EAST RICE COMPANY (PVT.) LTD. and others---Plaintiffs

Versus

MOON RICE CORPORATION and others---Defendants

Suit No. 471 of 2022, decided on 19th July, 2022.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 52 & 67---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Registration of trade mark---Interim injunction, refusal of---Revocation proceedings, pendency of---Plaintiffs claimed that trade mark "HAMZA" was wrongly registered in favour of defendant as it was not registerable---Validity---Trademark of defendant was registered against which revocation proceedings were initiated and were sub judice---Plaintiffs did not contest proceedings before Registrar when trademark in question was in process of registration---Certificate of registration appended with counter affidavit of defendant had a disclaimer that registration of trademark would give no right to exclusive use of word "HAMZA" except substantially as shown on the label---With counter affidavit of defendant, it was also attached copyright registration in artistic word entitled "HAMZA"---Basic ingredients for grant of an injunctive relief were not present in the case of plaintiffs as it was defendant who was the holder of registered trademark and not the plaintiffs---Application was dismissed in circumstances.

Messrs Ghulam Muhammad Dossul & Co. v. Messrs Vulcan Co. Ltd. and another 1984 SCMR 1024; Messrs Hub Pak Salt Refinery through Duly Authorized Partner v. National Foods (Pvt.) Limited 2008 CLD 190; Alle Nora Beauty Salon and Parlour through Partner and others v. Qurat-ul-Ain Munsoor and others 2016 CLD 1062; Messrs Master Textile Mills Ltd. through Duly Authorized Signatory v. Master Fabrics through Managing Partner and 5 others 2007 CLD 991; Dulda Foods (Private) Limited v. Messrs Shield Corporation Limited 2016 CLD 1864; Abdul Wasim v. Messrs Haico through Sole Proprietor Partner and 2 others 2002 CLD 1623; Nadeem and others v. Malik Ehsan Ulluh and others 2006 CLD 234; Messrs Ostindo International Austrailia v. Messrs Alfarid Corporation Limited and others Suit No.2270 of 2015 and Mehran Spice and Food Industries v. Muhammad Nudim Khan and others Suit No.2561 of 2015 ref.

Ms. Amna Salman Ahmed along with Saifullah Sachwani and Muhammad Shaikh for Plaintiffs.

Mirza Mehmood Baig and Alizeh Mehak for Defendant No. 1.

Salim Ghulam Husein along with Tajammul Haider, Assistant Registrar for Defendant No. 2.

Nemo for Defendants Nos. 3 and 4.

2023 C L D 352

[Sindh]

Before Ahmed Ali M. Shaikh, C.J. and Yousuf Ali Sayeed, J

KHURSHEED ANWAR HABIB---Applicant

Versus

MUHAMMAD AMIN and another---Respondents

Criminal Revision Application No. 86 of 2015, decided on 13th August, 2021.

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

----S. 10-A---Criminal Procedure Code (V of 1898), Ss. 200 & 439---Penal Code (XLV of 1860), Ss. 406 & 420---Criminal breach of trust and cheating---Appreciation of evidence---Appeal against acquittal---Complainant Bank assailed judgment passed by Trial Court whereby accused was acquitted of the charge---Validity---Complaint and statement recorded under S. 200, Cr.P.C. were couched in general terms so as to broadly mention that accused "approached the Bank" but did not disclose details of what transpired on relevant date in terms of identifying who was responsible for custody of documents and/or instrumental in their release---When accused approached complainant Bank for release of documents, he could not have demonstrated such urgency as to prevail upon complainant Bank's functionaries to accede to release of documents without following necessary formalities by way of securing prior payment, as required under the Contract, or at least marking a lien over the account to be debited---Run of the mill customer of complainant Bank could scarcely have had such leverage as to prevail on its functionaries to make an accommodation of that nature, and neither the period of his banking relationship nor statement of account had suggested any special circumstances due to which accused would have been able to command such privilege---Presumption of double innocence had arisen in favour of acquitted accused and interference could be warranted only when decision to that effect was found to be capricious, arbitrary and perverse---High Court declined to interfere in judgment of acquittal passed by Trial Court---Revision was dismissed in circumstances.

State v. Abdul Khaliq PLD 2011 SC 554 rel.

Shaukat Hayat for Apllicant.

Khaleeque Ahmed for Respondent No. 1.

Ch. Muhammad Waseem, Assistant Attorney General for Respondent No. 2.

2023 C L D 366

[Sindh]

Before Muhammad Shafi Siddiqui, J

Messrs AGP LIMITED through Authorized Representative and another---Plaintiffs

Versus

Messrs GALAXY PHARMA (PRIVATE) LIMITED and others---Defendants

Suit No. 2707 of 2021, decided on 15th September, 2022.

Specific Relief Act (I of 1877)---

----Ss. 42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for declaration, injunction and recovery of damages---Interim injunction, grant of---Necessary ingredients---Proof---Plaintiff was a pharmaceutical company who had conferred rights upon defendant in respect of distribution of products in Pakistan and some of the products were registered in the name of defendant by issuance of registration letters---Plaintiff company claimed for transfer of earlier registered product in its favour from defendant---Validity---Principal operators informed Drug Regulatory Authority that plaintiff was their affiliated who terminated distribution agreement with defendant for distribution of products---Principal operator and plaintiff had a new agreement to distribute the products within the territory of Pakistan and four specific drugs were highlighted---Plaintiff was again authorized by foreign principal, which facts were communicated to Drug Regulatory Authority of Pakistan---In absence of any contract between foreign principal and defendant it was a matter of serious concern if defendant would continue to manufacture, market and sell product of foreign principal without its permission and authorization---Plaintiffs disclosed a prima facie case with balance of inconvenience and irreparable loss in their favour---High Court granted interim injunction to plaintiffs against defendant--- Application was allowed in circumstances.

Abdul Sattar Pirzada and Mamoon N. Chaudhry for Plaintiffs.

Haroon Dugal for Defendant No.1.

Hafiz Bilal Bin Akbar, Deputy Director Legal DRAP.

Qazi Ayazuddin, Assistant Attorney General.

2023 C L D 417

[Sindh]

Before Muhammad Shafi Siddiqui, J

G.A. ENTERPRISES (PRIVATE) LIMITED AND 2 OTHERS: In the matter of

J.C.M. No. 47 of 2021, decided on 20th February, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282 & 283---Scheme of arrangement---Scope---Petitioner companies sought approval to transfer the entire undertaking of two companies to third company---Validity---Under the Scheme of Arrangement, the entire undertaking and business of the two companies, including their assets, rights, properties, benefits, powers, privileges, contracts, liabilities, encumbrances, obligations, and dues, would be transferred, vested, and assumed by the third company---Additionally, the Scheme of Arrangement would result in the cancellation of the share capital of the transferor companies, causing them to cease to exist or be dissolved without winding up---Scheme of Arrangement had taken care of the members, creditors, employees, and shareholders of the transferor companies, ensuring the security of their rights and interests---If the business of the transferor companies were to continue, the merged entity would need to amend its memorandum and articles of association to accommodate such activities---Petitioner Companies had fulfilled all the necessary legal formalities, including holding separate meetings of shareholders and board of directors, and publishing and issuing notices to the SECP---As the High Court could not challenge the judgment of the petitioners in approving the Scheme of Arrangement, therefore, the petition was allowed.

Fahem Ahson Hashmi and Ms. Sanaya Vachha for Petitioners.

2023 C L D 426

[Sindh]

Before Muhammad Shafi Siddiqui, J

ASSOCIATED CONSULTING ENGINEERS ACE LIMITED AND 4 OTHERS: In the matter of

Judicial Companies Miscellaneous No. 45 of 2021, decided on 2nd February, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Merger and demergers---Scope---Petitioners sought approval of Scheme of Arrangement, which involved the demerger of four portions of an undertaking from the transferor company and their merger into four transferee companies, while the remaining undertaking was to stay with the transferor company---Validity---Separate meetings were held for the members of the transferor and transferee companies, and 100% of the members had approved the Scheme of Arrangement---Secured creditors had not raised any objections and certificates to that effect were placed on record---Scheme of Arrangement was arrived at by a majority and no objections were raised by the entire body of shareholders, ensuring the protection of their interests---Scheme of Arrangement and demerger of the undertaking was found to be in compliance with the requirements of the law---As a result, the petition was allowed.

Mikael Azmat Rahim for Petitioners.

Ibad-ur-Rehman, Law Officer on Court's Notice.

2023 C L D 454

[Sindh]

Before Muhammad Shafi Siddiqui, J

MUHAMMAD SHAFI TANNERIES (PRIVATE) LIMITED AND 2 OTHERS: In the matter of

J.C.M. Petition No. 44 of 2021, decided on 17th February, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Merger and demergers---Scope---Petitioners requested for Court's approval of a Scheme of Arrangement, which involved specific portions of undertakings of companies Nos. 1 and 2 vesting in company No. 3, while the companies Nos. 1 and 2 would continue to operate as going concerns, as well as company No. 3 with their existing names, without any of them being dissolved---Cumulative effect of this arrangement would be a reduction in shareholders' equity of companies Nos. 1 and 2, particularly in their issued and paid-up share capital---Consequently, the shares of company No. 3 would be allotted to those transferring shareholders whose shares in companies Nos. 1 and 2 were cancelled owing to reduction in issued and paid-up share capital---Petitioners had completed all necessary legal formalities, including holding separate meetings of shareholders and creditors and publishing and issuing notices to the Securities and Exchange Commission of Pakistan---As there no obstacles to granting the petition, same is allowed.

Mikhael Azmat Rahim for Petitioners.

Ibad-ur-Rehman, Law Officer for the SECP.

2023 C L D 464

[Sindh]

Before Muhammad Shafi Siddiqui, J

HABIB METROPOLITAN MODARABA MANAGEMENT COMPANY (PRIVATE) LIMITED AND 2 OTHERS: In the matter of

J.C.M. Petition No. 18 of 2022, decided on 7th February, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 282, 283 & 285---Scheme of arrangement---Scope---Petitioners requested the Court's approval of Scheme of Arrangement, which involved merging company No. 3 into company No. 2 through the management of company No. 1---Scheme of Arrangement provided for the transfer, vesting, and assumption of the entire undertaking and business of company No. 3, including its assets, rights, properties, benefits, powers, privileges, contracts, liabilities, encumbrances, obligations and dues by company No. 2---Consequently, company No. 2 would operate under its name, while company No. 3 would stand dissolved without being wound up---Scheme of Arrangement safeguarded the rights and interests of members, creditors, employees and certificate holders---No objection certificate was secured from Securities and Exchange Commission of Pakistan (SECP) and secured creditors---Petitioners completed all necessary legal formalities, including holding separate meetings of certificate holders and board of directors and publishing and issuing notices to the SECP---No certificate holder of any of the companies objected to the scheme---As there were no obstacles to granting the petition, it was allowed.

Mikael Azmat for Petitioner.

Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 521

[Sindh]

Before Aqeel Ahmed Abbasi and Kausar Sultana Hussain, JJ

ANJUM SALEEM---Appellant

Versus

CITI BANK and another---Respondents

First Appeal No. 5 of 2018, decided on 2nd November, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, Rr. 66 & 90---Execution of decree---Sale, objections to---Inadequate price---Appellant/judgment debtor after confirmation of sale through auction and delivery of possession assailed auction proceedings on inadequacy of sale price---Validity---Auction proceedings in respect of property in question were conducted, sale was confirmed and possession of suit property along with its title/documentation was conveyed/transferred to auction purchaser---Rights of such auction purchaser could not be disregarded---Order confirming sale through auction had attained finality and appellant/judgment debtor failed to raise any logical and legal ground, which required interference of High Court in bona fide rights of auction purchaser---High Court maintained the order passed by Executing Court as the same was in consonance with law---Appeal was dismissed, in circumstances.

PLD 2003 SC 500; PLD 2014 SC 283; Mst. Anwar Sultana v. Bank Al-Falah Ltd. and others 2014 SCMR 1222; Mumtaz-ud-Din Feroz v. Shaikh Iftikhar Adil and others 2009 CLD 594; Mst. Noor Khatoon and others v. Messrs Habib Bank Ltd and another 2013 CLC 702; Muhammad Rafiq through Attorney v. Federation of Pakistan through Secretary and others 2013 CLD 1667 and Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan and others PLD 1987 SC 512 ref.

United Bank Limited v. Messrs A.Z Hashmi (Pvt.) Limited and others 2000 CLC 1438 rel.

Jawaid Farooqui for Appellant.

Waqar Ahmed for Respondent No. 1.

Ayatullah Khawaja for Respondent No. 2.

2023 C L D 530

[Sindh]

Before Muhammad Shafi Siddiqui, J

MCKINSEY AND COMPANIES PAKISTAN (PRIVATE) LIMITED through Authorized Representative---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman---Respondent

Miscellaneous Appeal No. 2 of 2022, decided on 13th February, 2023.

Companies Act (XIX of 2017)---

----Ss. 2(49), 225(2) & 228(1)---Exemption from disclosures---Principle---Remuneration of directors---Exemption was sought on the count that disclosure of remuneration of CEO/director was a cause of concern---Validity---Such financial statement would reveal such facts for public and would then be available for public inspection---It was not a cause where exemption could be granted in public interest---Appellant was a company whose shares were held by holding company and was incorporated abroad---Appellant was not a company strictly in terms of S. 2(49) of Companies Act, 2017, which even itself had restricted right to transfer its shares which rested with holding company---Company which was a subsidiary, whose shares were held by a holding company and consolidated financial statements of the group was attached with financial statement of that holding company, then such consolidated financial statement of the group would serve as a single enterprise and such consolidated financial statement would comply with disclosure requirement of relevant law and financial reporting standards notified by the Commission---Holding company had not discharged such obligations, if at all it was under such duty---Holding company did not disclose such data in consolidated financial statements of the group and presented as those of single enterprise and that such would be within domain of Securities and Exchange Commission of Pakistan, so the purpose of non-disclosure of the remuneration of CEO or director of relevant company whose shares were held, would be inconsequential---If the requirement of S. 228(1) of Companies Act, 2017, was achieved by any means, application then for such exemption would stand matured for consideration---Appeal was rejected, in circumstances.

Mayhar Kazi for Appellant.

S. Imran Ali Shamsi, Law Officer for Respondent.

2023 C L D 541

[Sindh]

Before Aqeel Ahmed Abbasi and Kausar Sultana Hussain, JJ

MUHAMMAD ABDUL QAYYUM SHAIKH and another---Appellants

Versus

AHMAD CONSTRUCTION CO. LTD. and 8 others---Respondents

Ist Appeal No. 51 of 2018, decided on 24th November, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. I, R. 10---Execution of decree---Third party rights---Appellants/interveners sought permission to be impleaded as a party to execution proceedings on the plea of being rightful owner of suit property---Validity---Legal status of appellants/interveners was that they had no concern with grievance of parties to the suit---Bank filed suit for recovery of amount borrowed by defendant in years 1976 and 1977 and its execution was also disposed of---In disposed of matter appellants/interveners could not be joined as party---Executing Court rightly dismissed application of appellants/interveners filed under O. I, R. 10 C.P.C., who could move Civil Court having jurisdiction in the matter---Appeal was dismissed, in circumstances.

Mirza Sarfraz Ahmed for Appellants.

Attorney of Respondent No. 4, Syed Zulfiqar Abbas Zaiid and Respondent No. 6, Abdul Mateen present in person.

2023 C L D 570

[Sindh]

Before Adnan Iqbal Chaudhry, J

MOHAMMAD AHMAD ANSARI---Plaintiff

Versus

INTERGLOBE COMMERCE PAKISTAN (PVT.) LTD. and others---Defendants

Suit No. 1529 of 2018, decided on 13th June, 2022.

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

----S. 12---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for specific performance of agreement---Interim injunction, grant of---Lifting of "veil of incorporation"---Scope---Plaintiff claimed that the Company, a family-owned business, violated an Undertaking that entitled each brother to a 25% share in Company's assets---Despite entrusting control to a brother (defendant), the plaintiff alleged that the defendant failed to uphold the agreement---In 2005, the company sold its 'Islamabad property' and divided the proceeds among the brothers---Subsequently, they agreed to sell the 'Clifton property', but a lawsuit arose due to a delay in the sale agreement---Ultimately settled in 2018, the buyer deposited funds with the Court for release to the Company---Plaintiff sought his rightful share, filing a lawsuit to halt the release of funds deposited with the Court and to enforce the Undertaking---Validity---Plaintiff had prima facie demonstrated that the Company and its shareholders had acted upon the Undertaking by treating the immovable assets of the Company as the joint assets of the brothers---But what still remained to be seen was whether that practice of the parties was sufficient justification for a Court of law to ignore the corporate personality of the Company so as to enforce the Undertaking against the Company---Answer to such question would in turn determine the ownership of the sale proceeds of the Clifton property lying with the Court---Till such time, the plaintiff had made out an arguable case for preserving the sale proceeds---Application was disposed of by restraining the Company from obtaining release of sale proceeds.

President v. Mr. Justice Shaukat Ali PLD 1971 SC 585; Central Board of Revenue v. S.I.T.E. PLD 1985 SC 97; Nagina Films Ltd. v. Usman Hussain 1987 CLC 2263; Union Council Ali Wahan, Sukkur v. Associated Cement (Pvt.) Ltd. 1993 SCMR 468 and Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. PLD 1965 SC 221 rel.

Theresa Henry v. Calixtus Henry 2010 1 ALL ER 988; U.I.G. (Pvt.) Ltd. v. Muhammad Imran Qureshi 2011 CLC 758; V. B. Rangaraj v. V. B. Gopalakrishnan AIR 1992 SC 201; Commissioner of Income Tax, Calcutta v. Associated Clothiers Ltd. AIR 1963 Calcutta 629; Calcutta Tramways Co. Ltd. v. Commissioner of Wealth Tax AIR 1972 SC 2600; Anjum Rashid v. Shehzad 2007 CLC 1414 and Neelofar Shah v. Ofspace (Pvt.) Ltd. 2013 CLD 114 ref.

(b) Company---

----Doctrine of separate legal entity---Scope---Identity of a company as a juristic person and consequently its assets are separate from the identity and assets of its shareholders.

(c) Company---

----Doctrine of separate legal entity---Lifting of "veil of incorporation"---Scope---Instances of piercing or lifting the veil of incorporation are by way of an exception to the general rule that at law a company is a person separate and distinct from its shareholders.

Salomon v. A. Salomon and Co. Ltd. (1897) AC 22 ref.

(d) Company---

----Doctrine of separate legal entity---Lifting of "veil of incorporation"---Scope---Number of circumstances are by now recognized as grounds for lifting the veil of incorporation, including the circumstance where the arrangement between the company and the shareholders is such which makes the business, the business of the shareholders---At the same time, actual instances of lifting the veil of incorporation are few and far between---Whether the Court lifts the veil of incorporation or not, actually depends on the facts and circumstances of each case.

Union Council Ali Wahan, Sukkur v. Associated Cement (Pvt.) Ltd. 1993 SCMR 468 rel.

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

----S. 304---Partnership Act (IX of 1932), S. 44---Petition for winding up of Company---Dissolution of partnership by the Court---Scope---In a particular case the principles of dissolution of partnership may be applied if the apparent structure of the private limited company is not the real structure and on piercing the veil of incorporation the Court finds that in reality it is a partnership.

Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. PLD 1965 SC 221 and Nagina Films Ltd. v. Usman Hussain 1987 CLC 2263 rel.

Qazi Umair Ali for Plaintiff.

Muhammad Zeeshan Abdullah and Adnan Abdullah for Defendant No. 1.

Abdul Qayyum Abbasi for Defendant No. 2.

Taimur Ali Mirza for Defendant No. 3.

Nemo for Defendant No. 4.

2023 C L D 616

[Sindh]

Before Muhammad Shafi Siddiqui, J

RAZAQUE STEELS (PVT.) LTD. AND ANOTHER: In the matter of

J.C.M. No. 12 of 2022, decided on 2nd March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 285---Compromise with creditors and members---Reconstruction or amalgamation of companies---Scope---Petitioners sought sanction of the High Court to a Scheme of Arrangement---In terms of the Scheme of Arrangement entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, liabilities, obligations and dues of the transferor company would be transferred to and vested in and assumed by the transferee company against the allotment and issue of shares to the former's shareholders---Transferor company would cease to exist without winding up and its shares shall stand cancelled---Transferor company was a subsidiary of the transferee company which held 96% of the issued and paid up share capital of the transferor company; its balance shares were held in equal proportions by two persons who were the legal and beneficial owners of 100% issued and paid up share capital of the transferee company---No shares of transferee company were required to be issued to the shareholders of transferor company---Not a single shareholder or secured creditor of any of the two petitioners had objected to the scheme---Petition was allowed, in circumstances.

Mikael Azmat Rahim for Petitioners.

Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 624

[Sindh]

Before Muhammad Shafi Siddiqui, J

AWWAL MODARABA MANAGEMENT LIMITED AND 3 OTHERS: In the matter of

Judicial Companies Miscellaneous Petition No. 16 of 2022, decided on 2nd March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 283 & 505---Competition Act (XIX of 2010), S. 11---Compromise with creditors and members---Reconstruction or amalgamation of companies---Approval of mergers from Competition Commission, exemption from--- Scope--- Petitioners (Modaraba Companies) sought sanction of the High Court to a Scheme of Arrangement---In terms of the Scheme of Arrangement entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, liabilities, encumbrances, obligations and dues of the petitioners Nos. 2 & 3 would be transferred to and vested in and assumed by petitioner against the issuance of certificates of petitioner No. 4 to certificate holders of petitioners Nos. 2 & 3 in terms as set out in the Scheme of Arrangement---Petitioner No. 4 would act accordingly as a going concern whereas the petitioners Nos. 2 & 3 would cease to exist without winding up---Members, employees and certificate holders, etc. of the petitioners Nos. 2, 3 & 4 would remain secured and their rights and interests were taken care of in the Scheme of Arrangement and so also the sole secured creditor who had also given its no objection---Petitioners were exempt from obtaining an approval to the merger from the Competition Commission of Pakistan in terms of S. 11 of the Competition Act, 2010---Not a single certificate holder of any of the petitioners objected to the scheme---Petition was allowed.

Faiz Durrani for Petitioners.

Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 639

[Sindh]

Before Muhammad Shafi Siddiqui, J

LUCKY LANDMARK (PVT.) LTD. AND ANOTHER: In the matter of

J.C.M. No. 13 of 2022, decided on 2nd March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 285---Compromise with creditors and members---Reconstruction or amalgamation of companies---Scope---Petitioners sought sanction of the High Court to a Scheme of Arrangement---In terms of the Scheme of Arrangement entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, liabilities, encumbrances, obligations and dues of the transferor company would be transferred to and vested in and assumed by the transferee company against the allotment and issue of shares to shareholders of the transferor company---Transferee company would act accordingly whereas transferor company would cease to exist without winding up and its shares held by the shareholders would stand cancelled---All issued share capital of both the companies was wholly owned by a parent company, thus, no shares of transferee company were required to be issued to shareholders of the transferor company---Not a single shareholder or secured creditor of any of the two petitioners had objected to the scheme---Petition was allowed, in circumstances.

Mikael Azmat Rahim for Petitioners.

Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 644

[Sindh]

Before Muhammad Shafi Siddiqui, J

AWWAL MODARABA MANAGEMENT LIMITED AND 2 OTHERS: In the matter of

J.C.M. No. 9 of 2022, decided on 2nd March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 505---Competition Act (XIX of 2010), S. 11---Competition (Merger Control) Regulations, 2016, Regln. 6---Compromise with creditors and members---Reconstruction or amalgamation of companies---Approval of mergers from Competition Commission, exemption from---Scope---Petitioners (Modaraba Companies) sought sanction of the High Court to a Scheme of Arrangement---In terms of the Scheme of Arrangement entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, liabilities, obligations and dues of the transferor company would be transferred to and vested in and assumed by the transferee company against the issuance of certificates to the former's certificate holders---Transferee company would act accordingly as a going concern whereas the transferor company would cease to exist without winding up---Members, employees and certificate holders, etc of both the companies would remain secured and their rights and interest were taken care of in the Scheme of Arrangement---Both the companies had secured creditors---Parent company of the transferor and transferee companies, which was vested with the rights of their management had got the requisite No Objection Certificate from the Registrar Modaraba, Securities and Exchange Commission of Pakistan (SECP)---Petitioners were exempt from seeking an approval regarding their merger from the Competition Commission of Pakistan in terms of S. 11 of the Competition Act, 2010 and Regulation 6 of the Competition (Merger Control) Regulations, 2016---Not a single certificate holder of any of the petitioners had objected to the

scheme--- Petition was allowed, in circumstances.

Faiz Durrani for Petitioner.

Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 652

[Sindh]

Before Muhammad Shafi Siddiqui, J

NADEEM POWER GENERATION (PVT.) LTD. AND ANOTHER: In the matter of

J.C.M. No. 1 of 2022, decided on 12th December, 2022.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281 & 282---Merger of companies---Object, purpose and scope---Petitioner companies sought approval of Scheme of their merger---Validity---Approach was channelized to ascertain (i) whether statutory requirements were complied with and (ii) to determine whether the scheme as a whole had been arrived at by the majority, bona fide and the interest of whole body of shareholders in whose interest the majority purported to act, and (iii) whether scheme was such that fair and reasonable shareholder would consider it to be for the benefit of the company for himself---No objection from any quarter had come forward while all requisite formalities had been fulfilled---Wise group of businessmen had taken decision considering all its pros and cons and while taking such decision there were chances of success and failure but then while questioning such decision the bona fide was the real litmus test---Businessman takes decisions foreseeing the future aspect whereas the Court can only see if all 4 legal formalities have been fulfilled and that the scheme is neither unjust nor unfair or against the national interest---Court cannot challenge wisdom of a decision of businessman as by doing that the Court would be overriding the wisdom of a businessman and their prerogative---Report of Chartered Accountants was also very material who were engaged for calculating the swap ratio in respect of envisaged scheme of Amalgamation/Merger---High Court approved the scheme of Merger as there was no impediment---Petition was allowed, in circumstances.

Saleem uz Zaman for Petitioners.

Ibad-ur-Rehman, Law Officer for Securities and Exchange Commission of Pakistan.

2023 C L D 670

[Sindh]

Before Zulfiqar Ahmad Khan, J

DOLLAR INDUSTRIES (PVT.) LIMITED through Authorized Signatory/Director and another---Plaintiffs

Versus

KAMRAN AKHLAQ---Defendant

Civil Suit No. 142 of 2012, decided on 15th September, 2022.

Copyright Ordinance (XXXIV of 1962)---

----Ss. 56, 60, 60A, 66 & 72---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Intellectual property---Infringement of copy right work---Plaintiffs claimed to be the first original creator, adopter, sole owner and exclusive right holder of a cartoon character named "Dollar Mascot" and its various forms and variation including colour scheme and artistic work which was duly registered under Copyright Ordinance, 1962---Plaintiffs alleged that defendant in order to deceive and cause confusion amongst the buyers displayed, uploaded and offered for sale the same cartoon character and its various forms/modes through an internet website---Validity---Offering independent protection to fictional characters would limit the pool of raw material and would do a great disservice to public---Main concern of copyright law was to promote progress of arts and at the same time to secure an everlasting source of revenue for the creator of a fictional characters---Defendant infringed copyrighted work of plaintiffs, as he took entire work from plaintiffs' platform and offered it for sale (or downloads) to third parties, not only infringing copyright but at the same time inducing dilution of plaintiffs' trademark rights in that character---Where a copyright in any way was infringed, its owner was entitled to all such remedies by way of injunction, damages and accounts--- Civil remedies for such infringement were provided in S. 60 of Copyright Ordinance, 1962, whereas S. 60A of Copyright Ordinance, 1962, offered special remedies to apply to a court for immediate relief, notwithstanding regular proceedings in the form of a suit or civil proceedings which were not initiated by then---Eventualities as to how a copyright work stood infringed were enumerated in S. 56 of Copyright Ordinance, 1962, while S. 66 of Copyright Ordinance, 1962, was responsible for punishment, and S. 72 of Copyright Ordinance, 1962, suggested procedure for criminal cases---Defendant left no stone unturned to infringe plaintiffs' copyrighted work and scheme of law fully supported the plaintiffs---Suit was decreed, in circumstances.

Nichols v. Universal Pictures Corp., 45 F.2d 119, 7 U.S.P.Q. 84 (2d Cir. 1930); 216 F.2d 945, 950 (9th Cir. 1954); Walt Disney Productions v. Air Pirates, 581 F.2d 751; Detective Comics, Inc., v. Bruns Publications, 111 F.2d 432; Copyrightability of Cartoon Characters by Cathy J. Lalor PTC Research; Foundation of the Franklin Pierce Law IDEA: The Journal of Law and Technology; 2003 CLD 1531; Ferozsons Pvt. Ltd. v. Dr. Col. Retd. K.U. Kureshi 2003 CLD 1052 and Sid & Marty Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157 ref.

Rafiq Ahmed Kalwar for Plaintiffs.

Nemo for Defendant.

2023 C L D 691

[Sindh]

Before Muhammad Shafi Siddiqui, J

Dr. AMIR BUX CHANNA through Attorney and another---Petitioners

Versus

ISRA ISLAMIC FOUNDATION (GUARANTEE) LTD. through Secretary and others---Respondents

Judicial Company Miscellaneous No. 29 of 2020, decided on 9th December, 2022.

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

----S. 286---Affairs of company---Coram to file application---Threshold of 10% of membership---Application was filed by two members which met the criteria but one petitioner withdrew and a new member was inducted---Objection was raised by respondent to maintainability of application---Validity---Maintainability of application was to be judged on the day it was presented---After withdrawal of one member it was cured by a bona fide attempt when a new member was added as co-petitioner---Application was maintainable in circumstances.

(b) Isra University Act (V of 1997)---

----Ss. 7(1) & 30---Foundation formed under the Companies Law---Vacancies of university, filling of---Nomination and appointment---Distinguished---Respondent university was a private institution and petitioners assailed its affairs regarding filling of vacancies, number of its members and finances etc.---Validity---Fundamental difference between nomination and an appointment was that the former represented interest of the nominating authority and was to serve at its pleasure whereas the latter was in relation to an independent position and was to serve in accordance with terms and conditions of the post to which he or she was appointed---Private universities are regulated and governed but cannot be taken over---Respondent university was a statutory body but it remained a private university (since it had been established by the Foundation and not the State) and did not perform any sovereign functions though operate and function within the frame of Isra University Act, 1997---Superior Courts have consistently refused to issue writs of quo warranto to private universities even though they were established through statutes---If High Court was to approve nomination of Chancellor by the Foundation, subject to approval and appointment by Board of Governors of University, it would amount to rewriting S. 7(1) of Isra University Act, 1997---There was no such requirement in S. 7(1) of Isra University Act, 1997, or any other provision as the same would destroy the distinction between 'nominate' and 'appoint' that had been intentionally created by the Legislature in Isra University Act, 1997 and every person to be nominated under the Isra University Act, 1997, would then also have to be appointed by the Board of Governors---This would necessitate rewriting of all provisions that related to nominated posts under Isra University Act, 1997 and defeat the purpose and intent of Isra University Act, 1997, which was to provide the Foundation a role in the affairs of the University through Chancellor and instead would make the foundation subservient to the Board of Governors---Such appointment of Chancellor would destroy the very fabric that had distinguished nomination and appointment---High Court restored the Foundation to its original members as it stood in year 2011 prior to induction of new members---High Court declared that the council so restored would be at liberty to amend Memorandum and Articles of Association and consequently induct any or as many member council as the amended Articles permitted---High Court directed that the restored council would announce a date of meeting for nominating a Chancellor and until then Registrar of University was to perform daily functions in routine; that audit of Foundation (IIF) would be conducted for last ten years and claim of rent was neither illegal nor illogical but should be fair as far as quantum was concerned---Application was allowed accordingly.

Rajahmundry Electric Supply Corporation Ltd. v. A. Nageshwara Rao AIR 1956 SC 213 (215 Para 5); Jagdish Chand Mehra v. New India, Embroidery Mills AIR 1964 Punjab 401 (Page 402 Para 7); Prof. Dr. Asad Aslam Khan v. Government of Punjab 2021 PLC (C.S.) 304; Waseem Majid Malik v. Federation of Pakistan 2020 CLD 1207; Dr. Muhammad Iqbal Zafar v. The Province of Punjab 2019 PLC (C.S.) 63; Salman Shahid v. University of Management and Technology 2022 CLC 1328; Aown Abbas Bhatti v. Forman Christian College PLD 2018 Lah. 435 and Anoosha Shaigan v. Lahore University of Management Sciences PLD 2007 Lah. 568 ref.

(c) Interpretation of statutes---

----Reading down, principle of---Applicability---Principle of reading down is applied when a provision is capable of more than one interpretation and one or more of those interpretations would render the other provisions either redundant or illusory or in conflict with main frame of the Statute---In such cases, Courts read down the provision in a manner that saves the provision.

Peoples University of Medical and Health Sciences for Women v. Pakistan Ministry of Health PLD 2021 Sindh 256; Muhammad Arif Ice Factory v. Federation of Pakistan 2021 PTD 1608 and Province of Sindh v. M.Q.M. PLD 2014 SC 531 rel.

Arshad Tayebally and Omer Memon for Petitioners.

Raashid Anwar for Respondent No. 1.

Mamoon N. Chaudhry for Respondent No. 2.

Nemo for Respondent No.3.

2023 C L D 718

[Sindh]

Before Aqeel Ahmed Abbasi and Arshad Hussain Khan, JJ

KESC LABOUR UNION through Chairman and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Cabinet Secretary and others---Respondents

Constitutional Petitions Nos. D-1511 of 2005, D-3775, D-3776 of 2012, D-3767 and D-3818 of 2015, decided on 21st January, 2021.

(a) Privatization Commission Ordinance (LII of 2000)---

----S. 25---Privatization Commission (Modes and Procedures) Rule, 2001, R. 6---Constitution of Pakistan, Arts. 153 & 173---Karachi Electric Supply Company Limited---Process of privatization, challenge to---Petitioners sought a declaration that the privatization process of Karachi Electric Supply Company Limited (KESC) by the Privatization Commission, including the transfer of shares and management to the respondent consortium, was illegal, void, and without legal effect---Validity---Approval from the Council of Common Interests (CCI) was obtained in 1993, and post-facto approval was also received in 2006---CCI's formal approval was granted twice, fulfilling the requirements of Article 153 of the Constitution for KESC's privatization---Decision to privatize KESC was prompted by significant financial losses, reaching around PKR 16 billion annually, escalating to approximately PKR 80 billion in 2002---As a result, the Federal Government initiated the privatization process---First attempt to privatize KESC was made in March 2002 under S. 25 of the Privatization Commission Ordinance, 2000---Strategic investors were invited to express their interest in acquiring 51-73% of KESC's share capital---Only two parties submitted their expressions of interest, and when both were requested to submit a statement of qualification (SOQ), only one party complied by the closing date---Privatization Commission's pre-qualification committee reviewed the SOQ but the party withdrew during the due diligence phase---Subsequently, the Federal Government re-launched the privatization process in September 2003, inviting fresh expressions of interest from potential investors---Five parties submitted their EOIs, and four out of five parties submitted their SOQs---Financial Advisor assessed the SOQs and identified three parties as suitable to proceed to the next stage---However, one party later withdrew from the bidding process, leaving only two---Parties were allowed to belong to multiple consortia as long as the lead bidder in each consortium was different---Prior to the bidding, a reference price of PKR 1.30 per share was approved by the Cabinet Committee on Privatization, which remained confidential---Bidding began in 2005, and each party was required to deposit PKR 100 million as earnest money and subscribe to redeemable preference shares worth PKR 4.38 billion in KESC---Both parties submitted their bids, and the highest bid was accepted---Unfortunately, the highest bidder disappeared without making the balance payment, resulting in the forfeiture of the earnest money---Consequently, the second attempt to privatize KESC was unsuccessful---Under Rule 6 of the Privatization (Modes and Procedures) Rules, 2001, the Privatization Board opted for a negotiated sale---Unsuccessful bidder (original consortium) was given the opportunity to match the previously offered bid by the highest bidder---Unsuccessful bidder, after obtaining permission to form a new consortium, formed it accordingly and the same expressed its willingness to match the bid---Cabinet Committee on Privatization approved the transaction and forwarded it for Cabinet ratification---Eventually, the transaction was completed---Overall, the official respondents substantially complied with the relevant constitutional articles and legal provisions of the Privatization Commission Ordinance, 2000, and Privatization Commission (Modes and Procedures) Rule, 2001, during the privatization process of KESC---Petitioners, failed to provide evidence demonstrating that the Federal Government's privatization of KESC was unconstitutional, illegal, or violated the principles of natural justice---Constitutional petitions were dismissed, in circumstances.

Wattan Party through President v. Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others PLD 2006 SC 697 and Dr. Akhtar Hassan Khan v. Federation of Pakistan and others 2012 SCMR 455 rel.

(b) Constitution of Pakistan---

----Arts. 173 & 9---Privatization Commission Ordinance (LII of 2000), S. 25---Power to acquire property and to make contracts---Right to electricity---Karachi Electric Supply Company Limited---Process of privatization, challenge to---Federal Government retaining regulatory control over privatized assets---Petitioners sought a declaration that the privatization process of Karachi Electric Supply Company Limited (KESC) by the Privatization Commission, including the transfer of shares and management to the respondent consortium, was illegal, void and without legal effect---Objection has been raised by petitioners to the effect that electricity being an essential service cannot be privatized as it is the responsibility of the State to provide all the essential services to the citizens and protect the fundamental right as guaranteed under the Constitution including the right to life---Validity---Certain percentage of shares of KESC had been sold/transferred to a private company, whereas, the Government was still the shareholder and had regulatory control over the affairs of the Company under Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997---NEPRA being the regulator maintained supervisory control over the functions of KESC---Constitutional petitions were dismissed, in circumstances.

(c) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Constitution of Pakistan, Art. 173---Privatization of "National Asset"---Scope---Executive, duty of---Even if there is no specific embargo under the Constitution or the Privatization Commission Ordinance, 2000, along with the Privatization (Modes and Procedures) Rules, 2001, restricting the sale or transfer of a "National Asset" that holds a strategic position and relates to the exercise of sovereign rights by the State, the Executive must exercise extraordinary caution and due care---Executive should ensure that, in the guise of privatizing, a public asset supposedly in the public interest and citing financial exigency, it does not diminish or affect the sovereign rights of the State, its obligation to provide essential services and the safeguarding of fundamental rights of citizens---This caution is necessary to avoid losses to the public exchequer and to ensure the generation of profits.

Atique Hussain and another v. Federation of Pakistan through Secretary, Ministry of Communication and 2 others 2005 CLC 1931 rel.

Calicon (Pvt.) Ltd. v. Federal Government of Pakistan and others 1996 MLD 705 ref.

(d) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Constitution of Pakistan, Art. 199---Karachi Electric Supply Company Limited---Process of privatization, challenge to---Judicial review---Scope---Petitioners sought a declaration to the effect that the process of privatization of Karachi Electric Supply Company Limited (KESC) adopted by the Privatization Commission and KESC, including the transfer of shares and management to the respondent consortium, was illegal, void and of no legal effect---Respondents attacked the maintainability of the petition---Validity---Privatization of KESC under the Privatization Commission Ordinance, 2000, was a matter of public interest and could be regarded as a simple transaction involving the transfer of shares from one company to another---On the contrary, considering the government's clear stance on privatization and the sale and transfer of shares to the respondents, it was evident that the matter held public importance---Therefore, the transaction, which entailed scrutiny of constitutional, legal and procedural aspects, could be subjected to judicial review by the High Court under Art. 199 of the Constitution.

Wattan Party through President v. Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others PLD 2006 SC 697 rel.

(e) Privatization Commission Ordinance (LII of 2000)---

----Ss. 28A, 29 & 30---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Process of privatization, challenge to---Scope---Once the process of privatization of a public asset has been challenged by any citizen of Pakistan as pro bono in a public interest litigation, for being violative of the Constitutional mandate and contrary to the legal requirements as per Privatization Commission Ordinance, 2000, then the same cannot be entertained or decided by the High Court while exercising limited jurisdiction in terms of Ss. 28-A, 29 & 30 of the Privatization Commission Ordinance, 2000, read with Privatization (Modes and Procedures) Rules, 2001---Any citizen having locus standi to file a constitutional petition for seeking enforcement of fundamental rights, under Art. 199 of the Constitution can file a constitutional petition for the scrutiny of the process of privatization of a public asset---Objection raised by respondents as to maintainability was overruled.

Wattan Party through President v. Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others PLD 2006 SC 697 rel.

(f) Constitution of Pakistan---

----Arts. 173, 142 & Fourth Sched. Pt. II, Entry No. 4---Legislation relating to electricity---Parliament, authority of---Scope---As per Art. 142(a) of the Constitution, the Parliament has exclusive power to make laws with respect to any matter in the Federal Legislative List, whereas, as per Entry No.4 of Part-II of Fourth Schedule to the Constitution electricity is the subject matter of Federal Legislative List, therefore, any legislation relating to electricity falls within the domain of the Legislative Authority of the Parliament---Article 173(1) of the Constitution, gives powers to the Federation and to the Provinces to exercise executive authority, subject to any Act of the appropriate legislature, to grant, sell, disposition or mortgage any property vested in and to purchase or acquisition of any property on behalf of the Federal Government or as the case may be the Provincial Government and also to make contract.

Wattan Party through President v. Federation of Pakistan through Cabinet Committee of Privatization, Islamabad and others PLD 2006 SC 697 rel.

(g) Constitution of Pakistan---

----Art. 9---Security of person---Right to electricity---Scope---Right to electricity is a part of right to life, which includes right to quality of life, hence part of fundamental right of a citizen of Pakistan---To provide electricity to the citizen is the responsibility of a State, whereas, electricity service is part of essential services to be provided by the State to its citizens.

(h) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction---Public interest litigation---Bona fide of petitioner---Discretion of court---Scope---Any individual or small group of persons, in the garb of public interest litigation, cannot be allowed to invoke the constitutional jurisdiction of High Court under Art. 199 of the Constitution, on mere allegation of mala fide in respect of any decision of the executive authority, whereas, Courts are required to exercise restraint, and should ensure that unless there is a matter of public interest or enforcement of fundamental rights, only then its discretion under Art. 199 of the Constitution should be invoked and exercised by the Courts---In such type of cases, extra caution and care has to be exercised, and unless good faith on the part of petitioner is established and the matter is found to be of a public interest, and the respondent is not in a position to distinguish that the impugned transaction does not suffer from any jurisdictional defect or patent illegality, the Courts may not encourage frivolous litigation between the parties and cause miscarriage of justice.

(i) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction---Public interest litigation---Subsequent event, notice of---Scope---High Court while exercising jurisdiction, particularly in cases relating to public interest litigation, can take cognizance of subsequent events during pendency of lis before it, in order to do complete justice, however it is to be done without changing the complexion of proceedings.

Salahuddin Ahmed along with Saifullah Abbasi for Petitioners.

Petitioner in person (in Constitutional Petition No. D-3818 of 2015).

Abdul Sattar Pirzada for Respondent/Privatization Commission along with Mamoon Chaudhry and Qazi Umair Ali.

Sajid Zahid along with Taha Alizai, Zeeshan Khan and Jawad Raja for Respondent No. 10.

Kashif Hanif for Respondent/NEPRA.

Omer Soomor along with Danish Nayyer for Respondent.

Aemal Kansi for Respondent along with Ms. Sehar Rana along with Syed Irfan Ali Shah, head of Legal Affairs, K. Electric.

Malik Naeem Iqbal for Respondent.

Hassan Ali for Respondent No. 6.

Muhammad Aminullah Siddiqui, Assistant Attorney General.

Saifullah, A.A.G.

2023 C L D 867

[Sindh]

Before Irfan Saadat Khan and Sana Akram Minhas, JJ

ANWAR AHMED ANSARI---Appellant

Versus

PAK LIBYA HOLDING CO. (PVT.) LTD. and 2 others---Respondents

First Appeal No. 15 of 2020, decided on 23rd May, 2023.

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

----Ss. 19 & 22--- Limitation Act (IX of 1908), First Sched. & Art. 166--- Civil Procedure Code (V of 1908), S. 12(2) & O. XXI, R. 89---Execution of decree---Sale, assailing of---Limitation---Deposit of auction money---Effect---Appellant/judgment debtor was aggrieved of dismissal of his application under O. XXI, R. 89, C.P.C. and auction of mortgaged house was maintained by Banking Court--- Earlier appeal against dismissal of application under S. 12(2), C.P.C. filed by appellant/judgment debtor for getting judgment and decree set aside was withdrawn by him---Validity---Appellant/judgment debtor filed application under the provisions of O. XXI, R. 89, C.P.C.---Appellant/judgment debtor was afforded opportunity and means under O. XXI, R. 89, C.P.C. for setting aside sale after it was validly carried out by making payment of amount specified in proclamation of sale minus any amount received by decree holder since date of proclamation of sale along with a further sum of 5% of purchase money for payment to auction purchaser---In order to avail such opportunity, appellant/ judgment debtor was required under Art. 166 of Limitation Act, 1908 to file application as well as make deposit within a period of 30 days from the date of sale---As soon as appellant/judgment debtor withdrew his appeal, Banking Court's order dismissing application under S. 12(2), C.P.C. had attained finality---Such dismissal order could not be attacked and interfered with or made ineffective subsequently, by direct or indirect means, in a collateral proceeding---Having deposited entire bid money within the time stipulated by law, and in addition, upon confirmation of sale by Banking Court, auction purchaser had acquired valuable rights in subject property---Such rights of auction purchaser, lawfully conferred by the Court, had to be protected and could not be taken away---High Court declined to interfere in the order passed by Banking Court---Appeal was dismissed, in circumstances.

Muhammad Khalil v. Faisal M.B. Corporation 2019 SCMR 321; Anwar Ahmed Ansari v. Pak Libya Holding Co. (Pvt.) Ltd. and another First Appeal No.219 of 2017; Asma Zafarul Hasan v. United Bank Ltd. 1981 SCMR 108; Yasmeen Yaqoob v. Allied Bank 2007 CLD 1511; Muhammad Ikhlaq Memon v. Zakaria Ghani PLD 2005 SC 819 and Habib and Company v. Muslim Commercial Bank 2019 SCMR 1453 ref.

Asma Zafarul Hasan v. United Bank Ltd 1981 SCMR 108; Muhammad Ikhlaq Memon v. Zakaria Ghani PLD 2005 SC 819; Anwar Sultana v. Bank Al-Falah 2014 SCMR 1222; Zakaria Ghani v. Muhammad Ikhlaq Memon PLD 2016 SC 229; Muhammad Ikhlaq Memon's case PLD 2005 SC 819; Zakaria Ghani's case PLD 2016 SC 229; Muhammad Suleman v. Allied Bank 1987 CLC 1338; Hudaybia Textile Mills v. Allied Bank PLD 1987 SC 512; 1991 SCMR 51 and Ghulam Qadir v. Abdul Wadood PLD 2016 SC 712 rel.

Muhammad Saleem Mangrio for Appellant.

Aijaz Shirazi for Respondent No. 1.

Khaleeq Ahmed for Respondent No. 2.

2023 C L D 883

[Sindh]

Before Muhammad Shafi Siddiqui, J

FOUNDATION SECURITIES (PVT.) LTD. AND ANOTHER: In the matter of

J.C.M. No. 14 of 2022, decided on 13th March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282 & 285---Compromise with creditors and members---Reconstruction or amalgamation of companies---Scope---Petitioners sought sanction of the High Court to a Scheme of Arrangement---In terms of the Scheme of Arrangement entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, trading terminals, servers, back-office system, trademarks, patents, liabilities, obligations and dues of the transferor company would be transferred to and vest in and assumed by transferee company against allotment and issue of shares---Ratio of shares and scheme was based on the recommendation of the Chartered Accountants after considering the financial positions of the companies---Transferee company would act accordingly whereas the transferor company would cease to exist without winding up and its shares held by shareholders would stand cancelled---Creditors of the petitioners had consented to the Scheme of Arrangement---Not a single shareholder of any of the two petitioners had objected to the scheme--- Petition was allowed, in circumstances.

Abdul Rehman for Petitioners.

S. Ibad-ur-Rehman, Law Officer for SECP on Court's Notice.

2023 C L D 905

[Sindh]

Before Aqeel Ahmed Abbasi and Kausar Sultana Hussain, JJ

KHURRAM MUGHAL through duly Constituted Attorney---Appellant

Versus

Mrs. NAUREEN MUGHAL and another---Respondents

First Appeal No. 59 of 2022, decided on 12th December, 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---Leave to defend the suit, grant of---Negotiable instrument---Presumption---Pleading of another suit---Dishonored bank cheque---Parties were ex-husband and wife and suit was filed by respondent/plaintiff for recovery of money on the basis of dishonored Bank cheques---Trial Court relied upon written statement of appellant/defendant (husband) filed in another suit filed by respondent/plaintiff (wife) against her previous father-in-law---Trial Court declined to grant leave to defend and suit was decreed in favour of respondent/plaintiff---Validity---Presumption under S. 118 of Negotiable Instruments Act, 1881 was attached to negotiable instrument and burden was upon the person denying the same to prove to the contrary---Such presumption was rebuttable by evidence---Parties were spouse at the relevant time, so there could be probability of stance taken by husband---Without providing opportunity to appellant/ defendant to prove his stance through leading evidence his stance could not be discarded straight away on the basis of presumption that the version of appellant/defendant would be wrong or erroneous---Respondent/plaintiff denied claim of appellant/defendant through her counter affidavit but it was difficult at such stage to decide such dispute in absence of evidence of the parties---Trial Court denied leave to defend application of appellant/defendant on the premise of relying on contents of written statement of appellant/defendant allegedly filed by him in another suit, instituted by respondent/plaintiff against her former father-in-law---Trial Court while dismissing application to defend the suit filed by appellant/defendant, did not consider legal status of the pleadings of another suit---When no evidence is recorded, then contents of written statement could not be treated as proved and believable, as true and correct---Contents of pleadings of any other suit could not be considered in another matter for deciding fate of it, which suits have no nexus with each other---Prima facie there was substantive dispute between parties, which required deeper inquiry---High Court remanded the case with direction to Trial Court to decide leave to defend application of appellant/defendant afresh---Appeal was allowed accordingly.

2001 CLC 653; 2004 CLC 356; 2020 CLC 1289; 1991 CLC 442 and Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 rel.

Shehzeb Akhtar Khan for Appellant.

Muhammad Faisal Khan for Respondent No. 1.

2023 C L D 920

[Sindh]

Before Muhammad Shafi Siddiqui, J

The BANK OF PUNJAB through authorized Attorney---Plaintiff

Versus

Messrs HASCOL PETROLEUM LIMITED through CEO/MD---Defendant

Suit No. D-39 of 2021, decided on 6th February, 2023.

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

----Ss. 3, 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), S. 4---Suit for recovery of finances---Indoor management, doctrine of---Authority to file suit---Principle---Leave to defend the suit, refusal of---Effect---Suit for recovery of two finance facilities was filed by Bank against defendants---Validity---Statement of account was duly verified under Bankers' Book Evidence Act, 1891 and entries therein were not consciously and lawfully disputed by defendants---Authority of person filing plaint on the strength of Power of Attorney was the question of doctrine of indoor management, that was concerned with authorization and was never considered as substantial question of law---Authorization from Power of Attorney was recognized in terms of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and on account of principle of Indoor Management, it was only the principal who could object to it---Defendants neither denied execution of agreement nor challenged authority to execute agreement with them on behalf of plaintiff bank---This was not a question of law that could form substantial question out of the pleadings in consideration of law of Financial Institutions (Recovery of Finances) Ordinance, 2001 and execution of documents in particular---Defendants availed two facilities i.e. Letter of Credit and Running Facility---High Court declined to grant leave to defendants and suit was decreed along with cost of funds in terms of S. 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was decreed accordingly.

Apollo Textile Mills Ltd. v. Soneri Bank Ltd. PLD 2012 SC 268; Dewan Automotive Engineering Ltd. v. Soneri Bank Limited 2017 CLD 342; Ehsan-ul-Haq v. MCB Bank Limited 2016 CLD 1874 and KASB Bank Limited v. Mirza Ghulam Mujtaba 2011 CLD 461 rel.

Bahzad Haider for Plaintiff.

Ms. Alizeh Bashir for Defendant.

2023 C L D 1040

[Sindh]

Before Irfan Saadat Khan and Arshad Hussain Khan, JJ

SILK BANK LIMITED---Appellant

Versus

ZAFAR MEHMOOD SHAIKH and another---Respondents

First Appeal No. 72 of 2012, decided on 15th June, 2023.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), O.XX, Rr. 4 & 5---Suit for recovery of finance---Appreciation of evidence---Judgment---Failure to give reasons---Appellant/Bank was aggrieved of judgment and decree passed against it by Banking Court---Validity---Issues were decided by Banking Court only on the basis of affidavit-in-evidence without giving own findings and recording own reasons before deciding the two issues in affirmative---Decision on three issues, having factually admitted position, was given accordingly, as such issues did not require any deliberation/decision on the part of Banking Court---For decision on remaining issues, Banking Court either reproduced facts of case, extracts from depositions, cross-examination, or contents of letters furnished during the course of arguments---Judgment, to some extent, lacked independent decision on the issues---Though Banking Court was justified in reproducing contents of affidavit-in-evidence, cross-examination, other depositions, contents of letters, etc. and other various documents produced before it but judgment should also carry reasons for deciding issues, which aspect was lacking in the matter---Though judgment was quite elaborate in nature but the same mainly contained reproductions, and aspects of giving reasoning of eleven issues framed in the matter were wanting---Banking Court did not properly adjudicate upon the matter which needed proper decision on the issues so framed in the suit---High Court set aside judgment and decree passed against appellant/Bank and matter was remanded to Banking Court for decision afresh---High Court directed Banking Court to give independent reasonings and decision on the issues except those which were factually admitted---Appeal was allowed accordingly.

Hakim Muhammad Buta and others v. Habib Ahmed and others PLD 1985 SC 153; Ghulam Muhammad and others v. Malik Abdul Qadir Khan PLD 1983 SC 68; Khairati and 4 others v. Aleem-ud-Din and another PLD 1983 SC 69 and Almas Ahmed Fiaz v. Secretary Government of the Punjab 2006 SCMR 783 ref.

Moulvi Iqbal Haider for Appellant.

Shabbir Ahmed Shaikh for Respondent No. 1.

Nemo for Respondent No. 2.

2023 C L D 1088

[Sindh]

Before Muhammad Shafi Siddiqui, J

SPI INSURANCE COMPANY LIMITED AND THE UNITED INSURANCE COMPANY OF PAKISTAN LIMITED: In the matter of

J.C.M. No. 49 of 2021, decided on 23rd January, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 285--- Scheme of Merger---Approval---Duty of Court---In terms of the Scheme of Merger entire undertaking and business including assets, rights, properties, benefits, powers privileges, contracts, liabilities, encumbrances, obligations and dues of company were to be transferred to other company---Validity---Approach of Court was channelized to ascertain; (i) whether statutory requirements were complied with and; (ii) to determine whether the scheme as a whole was arrived at by the majority, bona fide and the interest of whole body of shareholders in whose interest the majority purported to act and; (iii) whether scheme was such that fair and reasonable shareholder would consider it to be for the benefit of the company and for himself---No objection from any quarter had come forward while all requisite formalities were fulfilled and no exception could be taken---To understand the concept, it was to be seen from the perspective 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---Businessman could take decision foreseeing future aspect and Court could only see that all legal formalities were fulfilled and that the scheme was neither unjust nor unfair or against national interest but could not challenge wisdom of a decision of businessman as by doing that Court would be overriding wisdom of a businessman and their prerogative---Report of Chartered Accountants was very material who were engaged for calculating swap ratio in respect of envisaged scheme of Merger---High Court allowed merger of the companies in question as there was no impediment in the Scheme of Merger---Petition was allowed accordingly.

Ali Ibrahim for Petitioners.

Syed Ibad, Law Officer, SECP.

2023 C L D 1094

[Sindh]

Before Zulfiqar Ahmad Khan, J

ZUBAIR AHMED---Appellant

Versus

SINDH ENVIRONMENTAL PROTECTION AGENCY through Chief Secretary

and others---Respondents

Miscellaneous Appeal No. 67 of 2021, decided on 2nd February, 2023.

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

----S. 18---Strategic environmental assessment---Publication of policy---Scope---Whenever any policy, plan, program or legislation is proposed, it must be translated into the national as well as provincial language and reproduced side by side in the draft and also published on the respective website in all three languages (English-Sindhi-Urdu), so that the essence of having public consensus thereto could be achieved---Understanding the law or policy is the first step towards adhering to the principles of fair trial as enshrined in the Constitution and to foster the rule of law.

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

----S. 23---Provisions applicable to making of rules or bye­laws after previous publication---Scope---Section 23 of the General Clauses Act, 1897, provides that Rules, Regulations and Bye-laws can only be made after previous publication.

Appellant in person.

2023 C L D 1111

[Sindh]

Before Muhammad Shafi Siddiqui, J

CHANCELLOR MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD AND OXFORD UNIVERSITY PRESS PAKISTAN (SMC-PRIVATE) LIMITED: In the matter of

J.C.M. No. 4 of 2022, decided on 3rd March, 2023.

Companies Act (XIX of 2017)---

----Ss. 279, 280, 281, 282, 283 & 285---Sindh Chief Court Rules (O.S), R. 781---Companies (Court) Rules, 1997, R. 19---Competition (Merger Control) Regulation, 2016, Regln. 5---Scheme of Merger---Approval---Duty of Court---Pre-merger clearance, requirement of---Principle---Sanction of Scheme of Arrangement meant for amalgamation of petitioner companies was sought---Securities and Exchange Commission of Pakistan pressed pre-merger clearance---Validity---Company in which other company was to be merged was a wholly owned subsidiary of Oxford Publishing Limited, which in turn was a wholly owned subsidiary of the University of Oxford, thus belonged to the same economic group as merging company (University of Oxford)---Such merger fell within the exemptions set out under Regln. 5 of Competition (Merger Control) Regulations 2016 and pre-merger clearance was not required---Scheme of Merger, pursuant to S. 282(1)(c) read with S. 282(9) of Companies Act, 2017, provided transfer of the whole undertaking and property and liabilities in Pakistan of the University of Oxford which was a body corporate and hence the transferor company---"Reasons" for such transfer and benefits were never considered for a judicial review as it was their wisdom, which could not be challenged---Only thing which was important for the Court to see was whether the merger was lawful and had undergone requirement of law---Scheme of Arrangement under consideration was approved as was done by petitioner companies and the creditors, which was fair and reasonable and was not against public or any individual's interest---All financial and other related information including last audited accounts and unaudited accounts of petitioners were disclosed and no investigation proceedings were pending before any forum including Securities and Exchange Commission of Pakistan---Petition was allowed accordingly.

Muhammad Abdur Rahman for Petitioners.

Syed Ibad, Law Officer, SECP.

2023 C L D 1124

[Sindh]

Before Irfan Saadat Khan and Arshad Hussain Khan, JJ

MOHAMMAD IFTIKHAR---Appellant

Versus

Messrs FIRST DAWOOD INVESTMENT BANK LTD. through Authorized Officer/Attorney and 2 others---Respondents

First Appeal No. 46 of 2017, decided on 13th March, 2023.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), S. 12(2) & O. IX, R. 13---Suit for recovery of finances---Judgment, setting aside of---Fraud and misrepresentation---Proof---Settlement, concealing of---Appellant/defendant did not appear in Banking Court and suit to his extent was decreed---Plea raised by appellant/defendant was that respondent/Bank concealed fact of settlement arrived at by him---Validity---Simply by moving an application on the grounds of fraud and misrepresentation to cover his negligence to pursue the matter and to make an attempt to neutralize vires of judgment subsisting against borrowers would not protect them from the repercussion, which were bound to follow them---In absence of any convincing evidence, no misrepresentation or fraud could be alleged to have been contrived by respondent/Bank to obtain a decision in its favour, which came into being mainly due to failure of appellant/defendant to put up appearance before the Court in pursuance of the notices and summons issued to him---Banking Court considered material facts including settlement between the parties---Amount paid by appellant/defendant was deducted from the amount claimed by respondent/Bank---Nothing was available on the record, which could show that appellant/defendant while acting upon settlement reached between him and the Bank in year 2013 had either fulfilled terms of that settlement and/or had paid outstanding amount due against him to respondent/Bank---In absence of any proof in respect thereof, filing of application under S. 12(2) of C.P.C. lacked bona fide on the part of appellant/defendant---High Court declined to interfere in order passed by Banking Court as there was no concealment of facts and/or misrepresentation on the part of respondent/Bank as alleged by appellant/defendant---Appeal was dismissed, in circumstances.

Messrs Watan Construction Company Government Contractor v. Government of Khyber Pakhtunkhwa through Secretary Public Health Engineering Department and 4 others 2013 CLC 1028; Progressive Engineers Alliance Limited v. Pakistan Steel Mills Corporation Ltd., Bin Qasim (PIPRI) Karachi 1990 ALD 709(2) and Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166 distinguished.

Messrs First Dawood Investment Bank Limited through Authorized officers/attorney v. Mrs. Anjum Saleem and 3 others 2016 CLD Sindh 920 and Messrs Allied Bank Limited v. Messrs Golden Eagle Enterprises and 9 others 1999 MLD 64 rel.

Shaikh Adnan Usman for Appellant.

Khalil Ahmed Siddiqui as well as Mehran Khan, A.A.G. for Respondents.

2023 C L D 1136

[Sindh]

Before Kausar Sultana Hussain, J

PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY---Plaintiff

Versus

Mst. GUL RUKH SAMINA BUTT and others---Defendants

Execution No. 81 of 2001 and Suit No. 112 of 2006, decided on 28th November, 2022.

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

----S. 27---Specific Relief Act (I of 1877), Ss. 42 & 54---Civil Procedure Code (V of 1908), S. 11, O. VII, R. 11---Suit for declaration and injunction---Rejection of plaint---Res-judicata, principle of---Applicability---Plaintiff/DHA claimed that allotment of plot in question in the name of original allotee and then its transfer by him in the names of his sons by way of Gift (Hiba) was done in violation of Bye-Laws of predecessor society of plaintiff/DHA, which plot was cancelled and subject allotment and then transfer of plot in the names of his sons was based on forged documents, fraud and in contravention of Bye-Laws of the Society---Defendant/Bank sought rejection of plaint on the plea that there was no cause of action and principle of res-judicata was applicable---Validity---Although, cancellation of plot by plaintiff/DHA was set-aside by High Court in earlier proceedings but in compliance of High Court's order plaintiff/DHA after adopting legal formalities again cancelled it---Plaintiff/DHA thereafter filed instant suit in order to seek declaration of validity of cancellation order passed by it subsequently---Plaintiff/DHA had cause of action to file the instant suit---Earlier suit whereby first cancellation of plot's order passed by plaintiff/DHA was challenged, was dismissed for non-prosecution---Present suit filed by plaintiff/DHA was for seeking declaration in respect of validity of cancellation of plot order of plaintiff/DHA, injunction and cancellation of mortgaged documents deposited by defendant/allottee in defendant/ Bank at the time of borrowing amount and it had no nexus with a previous suit filed by Bank for recovery of amount as that suit was between Bank and borrower for recovery of amount and the documents which were mortgaged had already been cancelled even before creation of mortgage of documents of plot in question---Such fact was not liable to be considered for rejection of plaint---Plea of res-judicata under S. 11, C.P.C was also not applicable as High Court in its earlier order quashed initial cancellation order but in the same order plaintiff/DHA was set at liberty to initiate any other action against defendants under the law and to decide it after hearing all the concerned parties---High Court declined to reject the suit---Application was dismissed, in circumstances.

1986 MLD 1398; 1988 CLC 606; 2003 YLR 1760; 2003 1570; 2000 MLD 421, PLD 1992 Kar. 304 and H.M. Saya and others v. Wazir Ali Industries Limited PLD 1969 SC 65 ref.

Abdul Haleem Siddiqui for Plaintiff (in Suit No. 112 of 2006).

Ms. Lubna Aman for Decree Holder (in Execution No. 81 of 2001) and for Defendant No. 4 (in Suit No. 112 of 2006).

2023 C L D 1220

[Sindh]

Before Muhammad Shafi Siddiqui, J

The HUB POWER COMPANY LTD. and 2 others---Plaintiffs

Versus

CHINA POWER HUB GENERATION COMPANY (PRIVATE) LIMITED and 3 others---Defendants

Suit No. 1797 of 2022, decided on 7th December, 2022.

(a) Interpretation of document---

----Letter of credit---Principle of autonomy---Applicability---In Letter of Credit transaction, Principle of autonomy is a cardinal principle---Principle of autonomy governs international trade through commitments of financial institutions as undertaken---Such undertaking makes the documentary credit as a powerful tool in financing international trade---In contract between issuer Bank and beneficiary, the bank is obliged to pay the beneficiary if documents are presented for credit drawing, regardless of any dispute between the beneficiary and the applicant.

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

----Ss. 42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for declaration and injunction---Interim injunction, refusal of---Encashing Standby Letter of Credit---Principle of autonomy---Plaintiff company was aggrieved by a call to encash Standby Letter of Credit (SBLC) by defendant company---Contention of plaintiff company was that the project was essentially completed in year 2019 when its commercial operation started and despite such fact the lenders refused to acknowledge date of completion of project and in consequence whereof plaintiff company was open to risk of encashment of subject SBLC---Validity---Principle of autonomy stemed from the fact that system of documentary credits in international trade was developed to give to seller on assurance that no sooner the holder of such credit documents presented the conforming documents, he would be paid before he parted with control of goods/services/performances, regardless of any dispute that one might have with the buyer regarding performance of contract---SBLC evolved as one of the kind of Letter of Credit and formed an independent guarantee such as performance bond/suretyship guarantee---If a document was labeled as standby and beneficiary presented it for encashment, it was unlikely that a judicial interference is made to investigate any extraneous facts, not in the court's jurisdiction---Rules in relation to independent guarantee were similar to those of commercial Letter of Credit---It was the autonomy of credit that governed events and governing principle was that independent guarantee just like commercial credit was an irrevocable undertaking of Bank and was to be dealt with independently under law--- High Court declined to grant interim injunction in favour of plaintiff company--- Application was dismissed, in circumstances.

EFU General Insurance Ltd v. Zhongxing Telecom Pakistan (Pvt.) Ltd and others 2022 SCMR 1994; BS Mount Sophia Pte Ltd. v. Join-Aim Pte Ltd. (2012) SGCA 28; State Life Insurance Corporation of Pakitan v. Rana Muhammad Saleem 1987 SCMR 393; Messrs Uzin Export v. Messrs M. Iftikhar 1993 SCMR 866; FAL Oil Company Ltd. v. Pakistan State Oil Company Ltd PLD 2014 Sindh 427; Mir Jeeand Badini v. Model Collectorate of Custom Appraisement and others 2020 PTD 213; Sazco (Pvt) Ltd v. Askari Commercial Bank Ltd. 2021 SCMR 558; Sambu Construction Co. Ltd v. Laraib Energy Ltd. 2021 CLC 1914; Wartsila Pakistan (Pvt.) Ltd. v. Gul Ahmed Energy Ltd. and another Order dated 28.3.2019 passed in Suit No.2349 of 2018; Allied Plastic Industries (Pvt.) Ltd. v. ICC Chemicacl Corporation 2020 CLD 720; SepcoIII Electric Constructions Co. Ltd. v. Federation of Pakistan PLD 2022 Lah. 628; Bharat Aluminum Co. v. Kaiser Aluminum Technical 2012 9 (SCC) 5252; Shipyard K. Damen International v. Karachi Shipyard Engineering 2003 CLD 1; Messrs EFU General Insurance Ltd v. Messrs Duty Free Shops Ltd 2013 CLD 1313; UCP 600 Article 14-A, corresponding provision of UCP 500 Article 13; United City Merchants (Investments) Ltd v. Royal Bank of Canada (1983) 1-AC 168 183 (Lord Diplock); United Trading Corporation SA v. Allied Arab Bank Ltd and others [1985] 2 Lloyd's Rep 554, 561; Bocotra Construction Pte Ltd v. A-G (No.2) (1995) 2SLR 733; GHL Pte Ltd v. Unit Track Building Construction Pte Ltd and another (1999) 4SLR 604 (16); Douphin Case (2000) 1 SLR 657 (4); Eltraco International (2000) 4SLR 290 (30); Bolivinter Oil SA v. Chase Manhattan Bank [1984] 1 All E.R. 351 by Sir John Donaldson, Master of Rolls; Edward Owen Engineering Ltd. v. Barclays Bank International Ltd [1978] 1 All E.R. 976 = [1977] 3 W.L.R. 764; R.D. Harbottle (Mercantile) Ltd v. National Westminister Bank Ltd [1977] 2 All E.R. 862 = [1977] 3 W.L.R. 752; Howe Richardson Scale Co. Ltd v. Polimex-Cekop and National Westminister Bank Ltd (June 23, 1977: Bar Library Transcript No.270), by Roskill Lj; Wartsila Pakistan (Pvt.) Ltd. v. Gul Ahmed Energy Ltd. and another (Unreported). Order dated 28.3.2019 passed in Suit No.2349 of 2018 and Bharat Aluminum Co. v. Kaiser Aluminum Technical [2012 (SCC) 552 Supreme Court of India] ref.

Rashid Anwar for Plaintiffs.

Zahid F. Ebrahim for Defendant No. 1.

Ch. Atif Rafiq for Defendants Nos. 2 and 3.

2023 C L D 1259

[Sindh]

Before Irfan Saadat Khan and Zulfiqar Ahmad Khan, JJ

The DIRECTORATE OF INTELLECTUAL PROPERTY RIGHTS and others---Petitioners

Versus

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

Constitutional Petitions Nos. D-533 of 2020, D-8477 and D-8478 of 2019, decided on 6th December, 2022.

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

----Ss. 16 & 18---Customs Act (IV of 1969), S. 194---Release of imported goods--- Solange method---Doctrine of Comity---Applicability---Dispute pertained to forfeiture and seizure of imported goods under Intellectual Property Organization of Pakistan Act, 2012---On the contrary Customs Appellate Tribunal directed the authorities to release the consignment---Validity---Solange method at its core is considered to be an example of judicial comity which is understood to be an inherent part of tasks and functions of a judge or arbitrator aiming to resolve disputes in conformity with principles of justice---Such principle is applied when such Courts and Tribunals are determining whether or not to exercise their jurisdiction in a specific case brought before them---Doctrine of comity, and application of Solange method dictated that trade mark infringement dispute was exclusively adjudicable within the jurisdictional competence of Intellectual Property Tribunal, whose verdict would prevail upon any order or proceedings adjudicated under competing jurisdiction of Customs Tribunal or any matter decided by the customs authorities within the ambit of Customs Act, 1969, pertaining to intellectual property laws---High Court directed Customs authorities to disregard departmental original as well as appellate orders or even Customs Appellate Tribunal's orders/judgment in presence of any contradictory order or judgment passed by Intellectual Property Tribunal, unless there were orders passed by any appellate forum or a Court made available to it which prevented performance of the acts mandated by any order or judgment of Intellectual Property Tribunal---Constitutional petition was allowed accordingly.

Dr. Shahnawaz Memon, Malik Abdul Sami, Zuhaib Akhtar and Ms. Fouzia Murad for Petitioners (in C.P No.D-533/2020 and for Respondent No.2 in C.Ps. Nos.D-8477 and D-8478 of 2019).

Mrs. Masooda Siraj and Javed Hussain for Respondent No.7 (in C.P No.D-533 of 2020 and for Respondents Nos.3 and 4 in C.Ps. Nos.D-8477 and D-8478 of 2019).

Iftikhar Hussain Qureshi for Respondent No. 4 (in C.P

No.D-533 of 2020 and for in C.Ps. Nos.D-8477 and D-8478 of 2019).

Amjad Hayat and G.M Bhutto, Assistant Attorney General.

2023 C L D 1511

[Sindh]

Before Muhammad Junaid Ghaffar, J

WARTSILA PAKISTAN (PVT.) LIMITED through Authorized Representative---Plaintiff

Versus

GUL AHMED ENERGY LIMITED and another---Defendants

Suit No. 2349 of 2018, decided on 5th April, 2019.

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

----S. 13---'Letter of Credit' and 'Bank Guarantee'---Distinction---In a letter of credit, payment is made by bank, as it becomes due and does not wait for default of applicant and beneficiary to invoke undertaking---Conversely, a bank guarantee becomes effective, when applicant defaults in making payment to beneficiary---Letter of credit ensures payment of amount as long as services are performed in a defined manner---Unlike, bank guarantee mitigates loss, if parties to the guarantee do not satisfy stipulated conditions---Letter of credit is appropriate for import and export business---In contrast, a bank guarantee suits government contracts.

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

----S. 13---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Interim injunction, refusal of---Performance guarantee/ Letter of Credit---Encashment---Plaintiff company sought encashment of its invoices for services provided to defendant company from bank on the basis of a document alleged to be a Performance Guarantee issued by Bank---Contention of defendant company was that there was no Performance Guarantee issued by Bank rather there was a Letter of Credit issued---Validity---Claim of plaintiff company was seriously disputed by defendant company on the ground that total amount owed by plaintiff company to defendant company was much more than their claimed amount, and even if a set-off was allowed, plaintiff company still owed more than Rs.800 million---Such disputed facts could not be resolved at injunctive stage and required parties to lead evidence---Letter of Credit had per se no nexus with payments claimed by plaintiff company---Relief of injunction was an equitable relief---Conduct of party seeking such relief had to go through a threadbare scrutiny before any such discretionary jurisdiction could be exercised in its favor---While considering application for grant of injunction, Court not only had to take into consideration basic elements regarding existence of a prima face case, balance of convenience and irreparable injury but it also had to take into consideration conduct of parties as grant of injunction was otherwise an equitable relief---Plaintiff company made an attempt to conceal material facts by withholding complete document i.e. Annexure "G", and only part of it (amendment) was filed while filing the suit and had obtained ad-interim injunction---Authorized person of plaintiff company concealed and furnished false information as well as false affidavit in violation of Ss. 177, 181, 182, P.P.C. and other enabling provisions and also committed contempt in the face of the Court with such conduct and act---High Court declined to grant interim injunction in favour of plaintiff company and against defendant company--- Application was dismissed, in circumstances.

Haral Textile Mills Limited v. Banque Indosuez Belgium, S.A. and others 1999 SCMR 591; Pakistan Engineering Consultants v. PIA and others 1993 CLC 1926; Pakistan Engineering Consultants v. PIA and others 1989 SCMR 379; Shaukat and Raza (Pvt.) Ltd. v. Pakistan Steels Corp. Ltd and others 1988 CLC 342; Eckhardt and Company and another v. Muhammad Hanif PLD 1986 Kar. 138; Kohinoor Trading (Pvt.) Limited v. Mangrani Trading Co. and 2 others 1987 CLC 1533; East Girand Savings Association v. Citizens National Bank, 593 F 2d 598 (5th Cir, 1979); Bank of North Carolina v. Rock Island Bank, 570 F 2d 202 (7th Cir, 1978); Prudential Insurance Company of America v. Maquette National Bank of Minneapolis, 419 F Supp 734 (1976); Wichita Eagle and Beacon Publishing Co v. Pacific National Bank of San Francisco, 493 F 2d 1285 (9th Cir, 1974); Gilchrist B. Stockton v. First Union National Bank of Florida 700 So 2d 394 (Ct App Fla, 2001); Republic National Bank v. Northwest National Bank, 578 SW 2d 109 (Ex, 1978) and The new ICC Uniform Rules for Demand Guarantees [1992] LMCLQ 190 ref.

Mansoor Ali Ghanghro and Syed Maqbool Hussain Shah for Plaintiff.

Khalid Anwar, Rashid Anwar, Yousuf Naseem and Anas Makhdoom for Defendant No. 1.

Altaf Ahmed Saher for Defendant No. 2.

2023 C L D 14

[Lahore]

Before Abid Aziz Sheikh and Muhammad Sajid Mehmood Sethi, JJ

BANK ALFALAH LIMITED, LAHORE through Muhammad Rafiq and Syed Aqeel Abbas---Appellant

Versus

PUNJAB SMALL INDUSTRIES CORPORATION through Managing Director---Respondent

Regular First Appeal No. 29881 of 2017, heard on 13th October, 2021.

(a) Interpretation of document---

----Terms for settlement of contract---Scope---When parties sign a document containing terms on which, both the parties agree, the invitation to treat or correspondence led parties to stage at which, they signed the contract, does not have precedent and the signed document is binding on the parties.

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

----S.62---Alteration and novation of contract---Difference---Difference existed between alteration and novation of contract in S. 62 of Contract Act, 1872---Novation is complete substitution of original contract with a new contract---Original contract remains no more in existence and parties are not required to perform that---Contrarily an alteration of a contract is variation, modification or change in one or more respects which introduces new elements into details of contract, cancels some of them but leaves the general purpose and effect undisturbed---Generally modifications are read into and become part of original contract---Original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications---Those of the original terms which cannot make sense when read with the alterations must be rejected.

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

----S. 62---"Alteration" and "recission" of contracts---Distinction---Alteration may produce two consequences, firstly, where modified contract possesses an independent contractual force, or enables the parties to sue upon second contract alone as if the original contract does not exist, it is deemed that the original contract is rescinded---Secondly, where modified contract does not possess any independent contractual force or does not enable the parties to sue upon modified arrangement, then modifications are read into and become part of original contract---Original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications.

Morris v. Baron and Company [1908] AC 1; Century Spinning and Manufacturing Co. Ltd. Bombay v. Motilal Dhariwal son of Dulichand (Madhya Pradesh) AIR 1966 (M.P) 313; Chrisomar Corporation v. MJR Steels Private Limited 2017 (11) Scale 453; Juggilal Kamlapat v. N.V. Internationale Crediet-En-Handels Vereeninging 'Rotterdam' AIR 1955 (Calcutta) 65 and Makers Dev. Service Pvt. v. M. Visvesvaraya Industrial Research and Dev. (Bombay) 2008 (4) ALL MR 1 rel.

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

----Ss. 54 & 62---Civil Procedure Code (V of 1908), O.XXIII, R.1(3)---Suit for recovery of money---Reciprocal promises---Novation, recission and alteration---Performance of contact---Principle---Dispute was with regard to investment along with profit at market rate from date of maturity of Deposit Certificates---Trial Court decreed the suit in favour of respondent/plaintiff---Plea raised by appellant/Bank was that letter relied upon by respondent/plaintiff was not an offer rather it was a pre-contract and invitation to investment---Validity---When parties to a contract agreed to substitute a new contract in place of previous one, then performance of original contract was dispensed with---Where modified contract did not possess any independent contractual force then modified contract was read into the original contract except in so far the terms were inconsistence with the modifications---After compromise agreement, rules governing Profit and Loss Sharing Term Deposit were not applicable to the profit of 15% per annum on Deposit Certificates---No default of reciprocal obligations under the compromise agreement---Respondent/plaintiff was entitled for 15% profit regardless of terms given in Account Opening Form and certificates---Earlier suit filed by respondent/plaintiff was withdrawn without permission to file fresh suit, in that earlier suit, respondent/ plaintiff challenged various letters issued by appellant/Bank about revised rates, whereas subsequent suit was regarding recovery of profit amount, which was absolutely a different cause of action---Suit was not hit by O.XXIII, R.1(3), C.P.C.---Issues for which onus to prove was on appellant/Bank and no evidence was produced by appellant/Bank to support such issues, the same were lawfully decided by Trial Court against appellant/Bank---High Court declined to interfere in judgment and decree passed by Trial Court---Appeal was dismissed accordingly.

Executive Vice-President and others v. Brig. (Retd.) Mian Hameed-ud-Din 2010 CLD 823; Sheikh Inayat Ali v. National Bank of Pakistan and others 2007 CLD 99; Muhammad Javaid Anjum v. Industrial Development Bank of Pakistan 2004 CLD 520; Muhammad Afaz Shamsi and others v. National Accountability Bureau and others PLD 2001 Kar. 24; Mst. Waris Jan and others v. Liaqat Ali and others PLD 2019 Lah. 333; Messrs Digital Link and others v. Messrs Hangzhou Hikvision and others 2020 CLC 2108; Anson's Law of Contract; Treitel's the law of Contract; Cheshire and Fifoot's Law of Contract; Bank of India v. O.P. Swarnakar AIR 2003 (SC) 858; Ganeswar Biswal v. State of Orissa (Orissa) 2012 (109) AIC 893; Sri Gopal Chandra Jaiswal v. Messrs Birla Tyres, (Calcutta) 2017 (2) Cal. L.T. 303 and Carlill v. Carbolic Smoke Bali Company, (1893) 1 QB 256 ref.

Sui Southern Gas Company Limited v. Data Steel Pipe Industries (Pvt.) Limited and others 2021 CLC 892 rel.

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

----S.54---Reciprocal promises---Performance---Principle---When a contract consists of reciprocal promises such that one of them cannot be performed and the promisor of last mentioned fails to perform it, such promisor, not only cannot claim specific performance but must pay compensation for the resulting loss under the provision of S. 54 of Contract Act, 1872.

Syed Muhammad Saleem v. Ashfaq Ahmad Khan and others 1989 CLC 1883 and Pushkarnarayan.s.Masheswari v. Kubrabai Gulamamli (Bompany) 1969 (71) Bom. LR 769 rel.

Uzair Karamat Bhandari and Ms. Hoor-ul-Aien Asim for Appellant.

M. Irfan Khan Ghaznavi along with Umer Ishaque, Assistant Director (Legal) for Respondent.

2023 C L D 44

[Lahore]

Before Jawad Hassan, J

FAYSAL BANK LIMITED---Appellant

Versus

HARIS STEEL INDUSTRY (PVT.) LIMITED---Respondent

Ex. A. No. 50-B of 2016, decided on 14th November, 2022.

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

----O. XXI, R. 66---Public auction---Terms "Proclamation" and "auction schedule"---Scope---Term "auction schedule" only gives indication of schedule/timing/date of auction, rather than the terms and conditions mentioned therein---Term "proclamation" is a comprehensive term as approved proclamation includes both the schedule of auction sale, as well terms and conditions of auction.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 54, 65, 66 & 90---Execution of decree---Attachment proceedings---Sale of property---Public auction---Security, non-deposit of---Effect---Judgment debtor objected to auction proceedings---Contention of decree holder was that objections were not maintainable as no security was deposited by judgment debtor---Validity---As per second proviso to O. XXI, R. 90, C.P.C. until and unless judgment debtor deposited an amount equal to 20% of sum realized at sale or had furnished such security as the Court directed, objection was not maintainable even when there was material illegality and irregularity in auction proceedings---Requirement to deposit 20% of auction price or such other security as directed by Court along with application under O. XXI, R. 90, C.P.C. was mandatory---Any application that failed to fulfill such requirement could not be entertained and was liable to be dismissed by Court---Substantial compliance of provisions of O. XXI, R. 54(2), C.P.C. was enough for the purposes of sale proclamation and attracting prospective bidders---In absence of any specific complaint in such regard, entire auction proceedings could not be vitiated by Court---Necessary for objectors to raise in objection petitions not only irregularity or fraud in auction proceedings but they also had to prove before Court that they sustained substantial injury as a result of such irregularity or fraud---High Court declined to interfere in auction proceedings---Petition was dismissed, in circumstances.

Faysal Bank Limited v. Sajjad Aslam and others 2022 CLD 123; Zakaria Ghani v. Muhammad Ikhlaq Memon PLD 2016 SC 229; Muhammad Khalil v. Faisal M.B. Corporation 2019 SCMR 321; Ghulam Abbas v. Zohra Bibi and another PLD 1972 SC 337 and Muhammad Ashraf v. UBL 2019 SCMR 1004 rel.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 65, 66, 67, 84 & 85---Sale through public auction---Transparency---Signing of attendance and bidding sheets---Object, purpose and scope---Signing of attendance sheet and bidding sheet is for the purpose to establish that sale is conducted in fair and transparent manner at site in terms of proclamation of auction approved by Court; it further establishes that auction proceedings and auction report are not bogus or sham---Presence of attendance and bidding sheets on record shows number of parties present on auction date at site, and who were the persons who submitted their pay orders and participated in auction---Presence of greater number of persons on attendance and bidding sheet also proves that due publicity of auction sale of property was given and full opportunity was furnished to intending bidders to participate in auction proceedings---For the purposes of maintaining transparency in auction proceedings, it is duty of Court to check whether criteria for public auction of property as envisaged under O. XXI, C.P.C. has been complied with, and whether at the time of drawing up proclamation of sale, Court Auctioneer kept in his mind requirements under O XXI, Rr. 66, 67, 84 & 85, C.P.C.---Court was to apply its judicial mind before confirmation of auction sale in favour of purchaser, even in absence of objection petition---Failure of Court Auctioneers to adhere to such rules could vitiate auction proceedings on account of material irregularity resulting in lack of transparency and render proclamation of sale illegal.

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

----O. XXI, Rr. 89, 90 & 91---Auction purchaser---Vested right, accrual of---Principle---Vested/third party rights accrue in favour of a bidder when auction-sale becomes complete, i.e. when Court confirms auction sale--- Such vested rights again are defeatable and would not take away right of mortgagor/judgment debtor to redeem his property if he brings his case within parameters of O. XXI, Rr. 89, 90 or 91, C.P.C.---Position of auction purchaser is different when Court confirms auction sale in favour of auction purchaser.

Muhammad Attique v. Jami Limited PLD 2010 SC 993; Afzal Maqsood Butt v. Banking Court No. 2, Lahore PLD 2005 SC 470; Captain-PQ Chemical Industries (Pvt.) Ltd v. Messrs A.W. Brothers and others 2004 SCMR 1956; Muhammad Khalil v. Faisal M.B. Corporation 2019 SCMR 321; Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan Ltd. PLD 1987 SC 512 and Messrs Spinghar Textile Mills Ltd. and another v. United Bank Limited and another 2011 CLD 1683 rel.

Barrister Khalid Ishaq, Advocate Supreme Court, Qazi Misbah-ul-Hassan with Faizan Ahmad for the Applicants/Judgment debtors.

Muhammad Naeem Sehgal, Advocate Supreme Court and Waseem Ahmad for the Decree Holder.

Aamir Saeed Raan, Advocate Supreme Court, Barrister Mian Belal Ahmad, Advocate Supreme Court with Barrister Ali Fayyaz, Mirza Abdul Maalik Baig and Rai Usama Sultan for Auction Purchaser.

Ashiq Hussain Hanjra and Qaisar Mehmood, Advocates/court auctioneers.

Majid Ali Wajid, Advocate Supreme Court/Amicus Curiae.

2023 C L D 85

[Lahore]

Before Abid Aziz Sheikh and Asim Hafeez, JJ

AL-HADI RICE MILLS (PVT.) LTD. through Chief Executive and 4 others---Appellants

Versus

MCB BANK LIMITED and 6 others---Respondents

E.F.A. No. 19288 of 2022, heard on 27th September, 2022.

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

----S. 19--- Civil Procedure Code (V of 1908), O. XXI, Rr. 65, 66 & 90---Execution of decree---Sale of property---Public auction---Single bidder---Objection to sale---Non-deposit of 20% auction price---Value of other mortgaged properties as surety---Appellant/objector was aggrieved of dismissal of its objections by Executing Court against confirming auction in favour of single bidder of one property out of total three properties put to auction---Plea raised by auction purchaser was that objection petition was not maintainable as appellant/objector did not deposit 20% of auction price---Validity---Public auction referred in S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and O. XXI, Rr. 65 & 66, C.P.C. was one of the modes of sale under execution proceedings---Bid offered by single/sole bidder could not be classified as 'public auction'---Court was dealing with an invalid sale not qualified to be termed as a public auction wherein settlement of reserve price was based on five years old valuation report---Executing Court had discretion under second proviso to O. XXI, R. 90, C.P.C., to direct deposit of amount not exceeding 20% of the sum realized or to furnish such security, as the Court directed---Discretion rested with Executing Court opting for either direction to deposit in cash or a security was to be examined in the context of the facts of each case---Various properties [at serials 1, 2(i) & (ii) & 3] were put to auction sale, out of which property at serial 1 was allegedly auctioned and rest of the properties could not be auctioned---Auction purchaser offered a bid of Rs.29,525,000/-, 20% whereof had come to Rs.5,831,000/- and reserve price(s) of other properties was Rs.12,380,625, which was more than the limit of 20% of the amounts realized---Properties not auctioned could be treated as security for entertaining objections for ensuring compliance of second proviso of O. XXI, R. 90, C.P.C.---Executing Court, in the wake of gross illegalities, causing substantial injury could treat other properties as security and entertain objections against alleged auction---Sale under reference was a nullity, in the wake of the scale of lapses and illegalities in the conduct of auction and was inherently defective---High Court set aside order of Executing Court confirming auction sale and dismissal of objections---High Court declared that auction sale and confirmation thereof, including all steps taken in pursuance thereof were void and of no legal effect--- Appeal was allowed, in circumstances.

Muhammad Shoaib Arshad and another v. Federation of Pakistan through Secretary, Ministry of Law, Justice Human Rights and Parliamentary Affairs and 4 others 2020 CLD 638; Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. and others v. Allied Bank of Pakistan and another 2014 SCMR 1662; Messrs Habib And Company and others v. Muslim Commercial Bank Limited and others PLD 2020 SC 227; Agha Abbas Haider Khan v. Zarai Taraqiati Bank Limited through Branch Manager 2006 CLD 764; Mian Shahid Nadeem v. Bank Alfalah and others 2019 CLD 741 and Messrs Chaudhry Weaving Factory and 2 others through Partner v. National Bank of Pakistan through Vice-President/General Attorney and another 2005 CLD 1445 ref.

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

----O. XXI, R. 66---Public auction---Reserve price---Determination---Evaluation Report, five years old---Effect---Determination of the reserve price based on five years old report manifests conspicuous disregard for appreciation of real-estate prices during last five years---Determination of reserve price, based on latest valuation report arranged/conducted, ensures reasonableness, rationality, fairness, and otherwise promotes transparency, besides extending credibility to the judicial sales.

Iftikhar Ullah Malik for Appellants.

Majid Ali Wajid for Respondent No. 1.

Proceeded against ex-parte for Respondents Nos. 2 to 5

Ahsan Masood for Respondent No. 6.

Nadeem Irshad, Najia Noreen and Irfan Khalid Bhatti for Respondent No. 7.

2023 C L D 108

[Lahore]

Before Muhammad Ameer Bhatti, CJ

Messrs CRESCENT JUTE PRODUCTS LTD. through Chief Executive---Petitioner

Versus

BANK ALFALAH LTD. through Branch Manager and another---Respondents

Writ Petition No. 3115 of 2022, heard on 30th March, 2022.

Banker and Customer---

----Deposit of amount in High Court---Investment in profit bearing schemes---Income tax deduction certificate---Petitioner deposited amount with respondent Bank in compliance of orders passed by High Court---After decision of the case, petitioner sought income tax deduction certificate from Bank regarding deductions so made---Validity---Amount deposited was invested in profit-bearing schemes as a remedial mechanism against inflation etc., and had support by the parties---Such deposited amount along with profits invariably followed disbursement thereof either to the decree-holder or on the basis of final outcome of the legal proceedings of the suit, to any of the parties as per final adjudication or settlement, if any, arrived at between them---High Court system was silent with regard to mechanism to resolve such issue and no direction could be issued to respondent Bank who was under no obligation to issue certificates of tax-deduction concerning earned profit on petitioner's deposited amount inasmuch as the same could only be issued in the name of account holder with description of particulars of the depositor along with the amount of deducted/ deposited tax---High Court directed Additional Registrar (Judicial) of High Court to obtain necessary certificates in his name as account holder---High Court further directed that those original certificates would be placed on and retained in suit file of every case and certified copy thereof be issued to the party concerned for the purpose of its presentation before income tax department, as and when so required---Constitutional petition was disposed of accordingly.

Muhammad Imran Malik for Petitioner.

Faisal Hanif and Muhammad Riaz for Respondent No.1.

Muhammad Ramzan, Law Officer on behalf of Respondent No.2.

Qamar Fiaz, Branch Manager and Bilal Zamir, Branch Operational Manager for Bank Alfalah.

2023 C L D 111

[Lahore]

Before Jawad Hassan, J

ADDITIONAL REGISTRAR OF COMPANIES---Petitioner

Versus

Messrs B4USOFT (PRIVATE) LIMITED and others---Respondents

C.O. No. 56158 of 2021, decided on 19th April, 2022.

Companies Act (XIX of 2017)---

----Ss. 84, 301 & 304---Winding up of company---Prohibition on acceptance of deposits from public---Scope---Securities and Exchange Commission of Pakistan (SECP) filed a petition under S. 301 read with S. 304 of the Companies Act, 2017, on the grounds that the respondents in violation of Ss. 84 & 301(i)(g) of the Companies Act, 2017, was raising unauthorized deposits from the public at large in the garb of a ponzy scheme---Securities and Exchange Commission of Pakistan had received certain complaints through the Prime Minister's Performance Delivery Unit/Pakistan Citizen Portal that respondents were involved in securing deposits/advances from the public at large under a ponzy scheme, which act was beyond the objects of the company---Consistent absence of the respondents from scenario brought forth strong belief that they were available with nothing to defend allegations against them---Non-availability of defense on behalf of respondents and their disinterest left behind no other option except to believe the petitioner's stance---High Court observed that it was a fit case for an order of winding up under S. 301(h)(i) of the Companies Act, 2017---Petition was allowed and the respondent company was ordered to be wound up.

Additional Registrar Company v. Al-Qaim Textile Mills Limited 2021 CLD 931; Messrs Crescent Jute Products Limited v. Federation of Pakistan and others 2022 CLD 338 and Messrs Platinum Insurance Company Limited, Karachi through Managing Director v. Daewoo Corporation, Sheikhupura, through Director, Administration and Finance PLD 1999 SC 1 ref.

Ruman Bilal for Petitioner.

2023 C L D 121

[Lahore]

Before Shahid Karim, J

UNITED BANK LIMITED---Petitioner

Versus

Mian ASLAM JAVED and 6 others---Respondents

Writ Petition No. 39381 of 2016, decided on 1st October, 2020.

Constitution of Pakistan---

----Arts. 41 & 199---Constitutional petition---President of Pakistan, orders of---Implementation---Petitioner Bank was aggrieved of direction issued by State Bank of Pakistan---Directions were made on the basis of order issued by the President of Pakistan---Validity---Petitioner was pressured to grant a large scale rise in pension and to pay arrears to a considerable number of ex-employees which would necessarily mean a huge financial burden on petitioner---Without resting on any specific provision of law, which obliged petitioner to do so, State Bank of Pakistan had passed an order merely on the assumption that supreme executive authority of the country (The President of Pakistan) had directed to do so---Such was complete abdication of the powers by the official who was oblivious of statutory regime under which State Bank of Pakistan acted as a regulator and must act under the mandate of law to issue such directions---Any orders by the President of Pakistan in such matters was without lawful authority and could be accepted or implemented without demur by petitioner on the orders of State Bank of Pakistan---Source from which the issue emanated was a representation before the President which was in fact dismissed---Representation was filed by another Bank and petitioner was not party in those proceedings---Decision in that representation could not be made basis for passing general orders on the part of the President of Pakistan to Finance Division, who without dilating upon merits of directions proceeded to act as a post office to issue direction to State Bank of Pakistan---State Bank of Pakistan, in turn, too acted irrationally and without regard to its own statutory powers---High Court set aside order passed by State Bank of Pakistan as the same was ultra vires and of no legal effect---Petition was allowed, in circumstances.

Mubashar Aslam Zar for Petitioner.

Hamid Shabbir Azar for Respondents.

2023 C L D 135

[Lahore]

Before Shahid Bilal Hassan and Muhammad Raza Qureshi, JJ

PREMIER INSURANCE LIMITED through Authorized Officer---Appellant

Versus

Messrs IHSAN YOUSAF TEXTILE PRIVATE LIMITED through Director and 3 others---Respondents

R.F.A. No. 1064 of 2011, decided on 27th October, 2022.

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

----Ss. 75, 76, 121, 122 & 124---Insurance claim---Insurance Tribunal, constitution of---Word "shall"---Effect---Insurance company was aggrieved of acceptance of insurance claim of respondent company by Insurance Tribunal---Plea raised by Insurance company was that the Tribunal was not properly constituted---Validity---By using word "shall" Legislator made it mandatory and any deviation therefrom would make verdict of such Tribunal illegal and not sustainable in the eye of law--- Tribunal was consisting of only one Judge (Addl. District and Sessions Judge) and no member having experience of life insurance, non-life insurance, actuarial science, finance, economics, accountancy, administration or other discipline was included as provided under S. 121(2) of Insurance Ordinance, 2000---Judgment in question was rendered by Tribunal, not constituted as per mandate of law and the same was not sustainable in the eye of law---Tribunal without bifurcating, assessing and giving details of damages as to machinery, building, articles, etc., caused to respondent company proceeded to pass judgment giving an accumulative policy proceed/claim, which otherwise was to be referred to Arbitrator under the Policies---Condition in the Policies stipulated that matter as to quantum of alleged loss had to be referred to Arbitrator, which factum was ignored by Insurance Tribunal while accepting claim of respondent company---High Court set aside judgment passed by Insurance Tribunal and remanded the matter to lawfully constituted Insurance Tribunal for decision afresh---Appeal was allowed accordingly.

(b) Evidence---

----Admissibility---Objection, decision of--- Procedure--- Objection to admissibility of a document in evidence has to be decided then and there instead of deferring the same till the end of trial and even at the time of passing final judgment.

Hayatullah v. The State 2018 SCMR 2092 rel.

Syed Ali Zafar, Advocate Supreme Court, Talib Hussain, Jahanzeb Sukhera, Mehak Zafar and Ali Hur Jamal for Appellant.

Waqar A. Sheikh, Tassawar Sohail, Humaira Afzal, Faisal G. Meeran, Syed Ali Zakir, Mian Ijaz Latif and Ms. Hina Bandealy for Respondent No. 1.

Mushtaq Ahmad Khan, Advocate Supreme Court and Zahid Mehmood Arain for Respondent No. 3/HBL.

2023 C L D 154

[Lahore (Multan Bench))]

Before Shams Mehmood Mirza, J

BANK AL-HABIB LIMITED through Branch Manager---Plaintiff

Versus

Messrs RAFI COTTON INDUSTRIES (PVT.) LTD. through Chief Executive and others---Respondents

Ex. A. No. 7 of 2017, decided on 13th October, 2022.

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

----Ss. 15(6) & 21---Civil Procedure Code (V of 1908), O. XXI, Rr. 72(2) & 84(2)---Execution of decree---Purchase of attached property--- Decree holder, right of--- Set off, principle of---Applicability--- Decree holder Bank participated in auction proceedings---Highest and second highest bidders failed to deposit 25% of bid money resultantly decree holder Bank was declared successful bidder---Validity---Decree holder Bank filed application under provisions of O. XXI, R. 72, C.P.C.---Permission granted by High Court contained an implied dispensation from requirement of deposit under O. XXI, R. 84(2), C.P.C.---Auction proceedings were conducted by court auctioneer in accordance with law and there was no element of irregularity in conducting sale---Objection of judgment debtor had already been dismissed for want of deposit of 25% of amount realized at sale---High Court approved auction in favour of decree holder, subject to undertaking by decree holder committing itself to make payment of requisite amount to any other bank having charge on property in question---Bid money of decree holder was accordingly set off against decree in question---High Court directed the office to prepare necessary sales certificate, after receiving necessary amount of stamp duty from decree holder Bank---High Court directed bailiff of court to put decree holder in possession of mortgage property---Execution application was disposed of accordingly.

Kanhaiyalal v. Sansmal and another AIR 1956 Raj 18; Mathura Das Prabhu Dayal v. Brij Rani AIR 1929 Lah 492; Amar Singh v. Bishwanath Singh AIR 1972 All 59 and M Suryanarayana Rao v. Bommana Chinna Konda Reddi AIR 1958 AP 472 rel.

Syed Muhammad Ali Gillani for decree holder Bank along with Syed Qalb-e-Abbas Kazmi, HOD, Legal Affair Division and Muhammad Mubasher Law Officer for Bank Al-Habib.

Muhammad Saleem Iqbal for Habib Metropolitan Bank Limited (in C.M. No.452 of 2022).

Nemo for judgment debtor.

2023 C L D 165

[Lahore (Multan Bench)]

Before Ahmad Nadeem Arshad and Shakil Ahmad, JJ

ZARAI TARQIATI BANK LIMITED through Manager---Appellant

Versus

AFZAL SHAH---Respondent

R.F.A. No. 119 of 2017, heard on 7th September, 2022.

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

----Ss. 9 & 22---Limitation Act (IX of 1908), Ss. 19 & 20---Suit for recovery of Bank loan---Limitation---Debt, non-acknowledgement of---Fresh period of limitation---Principle---Suit filed by appellant/Bank was dismissed ex-parte by Trial Court---Validity---In order to invoke provision of S. 19 of Limitation Act, 1908, condition precedent was that such acknowledgement had to be made within the period of limitation prescribed for claims sought to be enforced and the same was to be fulfilled in first place---Any credit entry in account constituting an acknowledgment of payment, as per provisions of S. 20 of Limitation Act, 1908, had to be in handwriting or in writing signed by person making the payment so as to bring the case either within the purview of S. 19 or 20 of Limitation Act, 1908, whereby acknowledgment of payment was to be made in handwriting or in a writing signed by the person making the payment within the period of limitation---Fresh period of limitation was to only start when firstly payment/ acknowledgement was made before expiry of period of limitation and secondly, the same was in handwriting and signed by the party against whom and the right was claimed---Appellant/Bank failed to point out or refer any documents showing payment of amount in the handwriting or even signed by respondent/defendant and Trial Court rightly proceeded to non-suit appellant/Bank by holding that suit filed by appellant/Bank was barred by period of limitation---High Court declined to interfere in judgment and decree passed by Trial Court---Appeal was dismissed in circumstances.

Saddaruddin (since deceased) through LRs v. Sultan Khan (since deceased) through LRs and others 2021 SCMR 642 and Asad Ali and 9 others v. The Bank of Punjab and others PLD 2020 SC 736 ref.

Rao Riasat Ali Khan for Appellant.

Nemo for Respondent.

2023 C L D 175

[Lahore (Rawalpindi Bench)]

Before Mirza Viqas Rauf and Jawad Hassan, JJ

Raja HAFEEZ UR REHMAN---Appellant

Versus

Messrs GENERAL RICE TRADERS ASSOCIATIONS and others---Respondents

Execution First Appeal No. 15 of 2022, decided on 19th October, 2022.

(a) Administration of justice---

----Judicial proceedings--- Presumption of correctness--- Such presumption is attached to judicial proceedings, and strong and unimpeachable evidence is required to rebut such presumption.

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

----S. 19(7)---Civil Procedure Code (V of 1908), S. 47 & O. XXI, R. 89---Constitution of Pakistan, Art. 185(3)---Auction of mortgaged property---Objection by legal heirs of judgment debtor---Civil petition for leave to appeal filed before the Supreme Court---Mere filing of such petition cannot operate as a stay order against a decree or order (of the High Court or Banking Court)---In the present case issue relating to application under S. 47, C.P.C. though was sub-judice before the Supreme Court, but no stay order, had been issued in proceedings thereof, hence the argument of appellant that Banking Court had not taken into consideration the filing of Civil petition for leave to appeal before the Supreme Court did not carry weight---Appeal was dismissed.

Messrs British Biscuits Company (Pvt.) Limited v. Messrs Atlas Investment Bank Limited 2005 SCMR 671; Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241; H. M. Fazil Zaheer v. Kh. Abdul Hameed and others 1983 SCMR 906; Shah Wali v. Ghulam Din Alias Gaman and another PLD 1966 SC 983 and Ahmad Waqas and others v. Ishtiaq Ali and others PLD 2022 Lah. 313 ref.

Attiq ur Rehman Kiani for Appellant.

Syed Ghulam Mustafa Kamal for Respondents Nos.1 and 2c to 2f.

Habib Ahmed Bhatti for Respondent No. 2a.

Raja Zaheer ur Din Babar for Respondent No. 2b.

2023 C L D 189

[Lahore]

Before Shahid Karim, J

POSCO INTERNATIONAL CORPORATION through Authorised Officer---Plaintiff

Versus

RIKANS INTERNATIONAL through Managing Partner/Director and 4 others--- Defendants

C.O.S. No. 53422 of 2020, decided on 26th May, 2022.

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

----Arts. II & V(1)(a) of Schedule---Terms "incapacity" and "parties to the agreement" ---Connotation---Term "incapacity" used in Art.V(1)(a) of Schedule to Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, has a reference to capacity of parties to enter into a contract in the first place---Words "parties to the agreement" referred to in Article II of Schedule to Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, are closely tied in with the words "under some incapacity".

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

----Art. V (1)(b) of Schedule--- Term "public policy"--- Effect---Recognition and enforcement of an arbitral award may be refused if competent authority in the country finds that the award would be contrary to the public policy of that country---Term "public policy" has been subject of interpretation of Courts all around the world and still remains an extremely fluid term not capable of definite meaning---Concept of public policy gained wide-ranging and polycentric traction and scope of its application became broader---Same principles have been used interchangeably for both foreign and domestic awards losing sight of the purpose and intent in enacting law for enforcement of foreign awards to which different set of principles narrower in scope, must by applied---Such is necessary to maintain integrity of international commercial contracts and trust in Pakistani Courts to enforce foreign awards---Trust may be shaken irretrievably if Courts of Pakistan are to evince an anti-enforcement policy by seeking shelter in nebulous concept of "public policy".

Renusaghar Power Company Ltd. v. General Electric Company 1994 SCC Supl. (1) 644 and Associated Builders v. Delhi Development Authority 2014 (4) ARBLR 307 (SC) distinguished.

(c) Jurisprudence---

----Justice and morality---Scope---Justice or morality do not signify any concept of precision---Morality may fluctuate from one community to another and from one country to the other---Courts are not required to enforce moral standards but as Courts of law are merely concerned with enforcement of law enacted by Legislature.

(d) Arbitration---

----Agreement---Scope---Arbitration agreement not only imposes a "positive" obligation upon parties to proceed with a dispute but also creates negative undertaking for parties which obligates them not to bring any claims falling within the scope of arbitration agreement, in a forum other than arbitration.

AES [2013] 1 W.L.R. 1889 and West Tankers Inc. [2007] UKHL 4 ref.

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

----Ss. 3, 6 & Art. V (1)(a)(b) of Schedule---Foreign Arbitral Award---Recognition and enforcement---Challenge to award---Plea of "public policy"---Applicability---Civil suit, pendency of---Effect---Applicant company sought recognition and enforcement of foreign arbitral award---Respondent company raised plea of pendency of civil suit before Civil Court in Pakistan---Validity---There was a need to fence the power so that opinion of Courts exuded deference to Legislative intent---Arbitral award was contrary to public policy, if it had offended a Constitutional mandate or was forbidden by law or would defeat provisions of any law---Such were the only grounds on which a public policy challenge could succeed---Multiplicity of proceedings, conflicting decisions (between Arbitral Tribunal and Courts in Pakistan) and futility were not grounds covered by the doctrine of public policy---High Court recognized the Foreign Award in question as a binding and enforceable award---High Court granted judgment in the amount represented in the Foreign Award and the same would be executed as a decree of High Court---High Court in terms of O. XXI, R. 10, C.P.C. converted the application into execution proceedings---Application was allowed accordingly.

Orient Power Company (Private) Ltd. through Authorized Officer v. Sui Northern Gas Pipelines Ltd. through Managing Director 2021 SCMR 1728 and Words and Phrases, Permanent Edition, 35A (2006) ref.

Mian Sami ud Din, Ali Uzair Bhendari and Ms. Fatima A. Malik for Plaintiffs.

Muhammad Ali Raza and Ms. Habiba Alvi for Respondent No.1.

Sardar Taimoor Aslam Khan for Respondent No.5.

2023 C L D 235

[Lahore]

Before Abid Aziz Sheikh, J

MUSLIM COMMERCIAL BANK LIMITED---Plaintiff

Versus

CITY STEEL INDUSTRIES LAHORE through Partners and others---Defendants

Civil Original Suit No. 32 of 2015, heard on 23rd November, 2022.

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

----Ss. 9, 10 & 19---Suit for recovery of Bank loan---Leave to appear and defend the suit---Bank not returning pledged stock of borrows---Scope---Defendants/borrowers sought leave to appear and defend the suit on the plea that pledged stock was in the custody of plaintiff/Bank therefore, it could not seek recovery unless pledged stock was returned---Validity---Matter relating to shortfall in pledged stocks would be determined in execution proceedings when collateral securities were required to be sold---Such was not a ground of defence for grant of leave to defend the suit---Claim of plaintiff/Bank in the suit was substantiated by documents and statement of accounts---Defendants/borrowers were not able to raise any substantial question of law or fact requiring recording of evidence for its resolution---High Court declined to grant leave to appear and defend and decreed the suit in favour of plaintiff/Bank---High Court converted proceedings into execution proceedings under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was decreed accordingly.

National Bank of Pakistan v. Ali Akbar Spinning Mills Limited and others C.O.S. No.126 of 2011 rel.

Abdul Hameed Chohan and Chaudhry Sohail Khursheed for Plaintiff.

Muhammad Imran Malik and Akif Majeed Butt and Asim Farooqi for Defendants.

2023 C L D 261

[Lahore (Multan Bench)]

Before Shahid Jamil Khan, J

NEMAT ULLAH KHAN---Petitioner

Versus

PROVINCE OF THE PUNJAB and others---Respondents

Writ Petition No. 17916 of 2022, decided on 30th November, 2022.

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

----Ss. 7 (g), 11, 16(2), 17, 18, 19, 21 & 22---Constitution of Pakistan, Art.199---Brick klin owners---Imposition of penalty and proposed sealing of business for alleged violation of using old technology ('BTK') instead of approved zigzag technology---Legality---Under the provisions of Punjab Environmental Protection 1997 ('the Act'), if zigzag was not being used, the concerned Agency could pass an Environmental Protection Order by calling the responsible person, or visiting the premises, where violation was being committed, keeping in view the gravity of the violation; hearing could be provided at the premises and protection order should be passed immediately---In terms of S. 17 of the Act, if proceedings were not in accordance with law, the aggrieved person had remedy before the Environmental Tribunal under Ss. 21 & 22 of the Act---Plea that brick kilns were not contributing much in the smog, could not be taken up and decided in Constitutional jurisdiction being a purely technical issue---Determination of any anti-environmental activity primarily rests with the Authority under the Act, which can be assailed in accordance with law---High Court directed that petitioners be provided an opportunity of being head and an order, if required, under S. 16(1) of the Act, be passed---Constitutional petitions were disposed of with the said directions.

Chaudhary Muhammad Shahid Ansari, Peer Masood-ul-Hassan Chishti and M. Fayyaz Mansab Sukhera for Petitioner.

Rana Muhammad Arif Kamal Noon, Additional Advocate General, Punjab for Respondents.

Misbah-ul-Haq Lodhi, Deputy Director (Environment), Multan.

2023 C L D 290

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan and Sultan Tanvir Ahmad, JJ

ABDUL HAQ KHAN and another---Appellants

Versus

BANK OF PUNJAB and another---Respondents

R.F.A. No. 11 of 2022, heard on 17th May, 2022.

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

----Ss. 9 & 22---Suit for recovery of Bank loan---Signing and verification of plaint---Authority---Proof---Appellant/defendant assailed judgment and decree passed by Banking Court on the ground that suit was not instituted by a competent person having authority---Validity---Plaint was not accompanying any power of attorney and the same was not instituted by manager---Banking Court specifically framed an issue as to the authority for institution of plaint and its verification---Respondent/plaintiff/Bank produced one witness and brought on record as many as sixteen (16) documents including a letter in favour of witness to give evidence but failed to produce any document showing that the person who instituted the suit and verified the plaint, had any such authority or power as required under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside judgment and decree passed by Banking Court as institution of suit or verification of the plaint was not in accordance with S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed in circumstances.

Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684; Bashir Ahmad v. Plastic Bag Packaging Limited and others PLD 1991 Lah. 386; The Bank of Punjab v. Arif Ali Shah Bukhari 2016 CLD 1301; Ehsan-ul-Haq v. MCB Bank Limited through Manager 2016 CLD 1874; Zarai Tarakiyati Bank Limited through Authorized Officer v. Haji Audho through Attorney 2018 CLD 1327; Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550 and Bankers Equity Ltd. through Attorney and 5 others v. Sunflo Cit-Russ Ltd. (formerly known as Sunflo Juices Ltd.) through Managing Director PLD 1999 Lah. 450 ref.

Muhammad Basit Babar Chughtai, Advocate Supreme Court for Appellants.

Ch. Riaz Ahmed, Advocate Supreme Court for Respondent

No. 1-Bank.

2023 C L D 307

[Lahore]

Before Abid Aziz Sheikh and Sultan Tanvir Ahmad, JJ

Messrs MAKKAH TRADERS through Managing Partner and 3 others---Appellants

Versus

MCB BANK LIMITED---Respondent

F.A.O. No. 46550 of 2019, heard on 7th November, 2022.

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

----Ss. 9(5), 10(1), 12 & 22---Suit for recovery of Bank loan---Ex-parte decree, maintenance of---Absence from proceedings---Appellants/ defendants during pendency of their petition for leave to appear and defend the suit, absented themselves and were proceeded ex-parte---Banking Court declined to set aside ex-parte judgment and decree under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Decree could only be set aside under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001, if it was passed for failure to file petition for leave to appear and defend the suit---Such application could be filed within a period of 21 days of the date of decree or where summons were not duly served, when defendant had knowledge of decree---High Court declined to set aside ex-parte judgment and decree as application under S. 12 Financial Institutions (Recovery of Finances) Ordinance, 2001, was not maintainable---Appeal was dismissed in circumstances.

M. Haleem and others v. H. Muhammad Nasim and others PLD 1969 SC 270; Messrs Ammar Rice Dealers and 2 others v. National Bank of Pakistan and others 2004 CLD 857; Mst. Tahira Yasmeen and others v. Muslim Commercial Bank and others 2005 CLD 927; Messrs Agrocare and others v. Zarai Taraqiati Bank Limited 2011 CLD 990; Messrs Sahib Gas Ways through Partner and others v. The Bank of Punjab through Manager 2013 CLD 501 and Messrs Arbab Cotton Industries and Oil Mills through Managing Partner v. National Bank of Pakistan through Branch Manager 2017 CLD 1657 rel.

Malik Asif Iqbal and Haroon Farrukh for Appellants.

Ahsan Masood and Waqar Latif for Respondent.

2023 C L D 324

[Lahore (Bahawalpur Bench)]

Before Muzamil Akhtar Shabir and Sultan Tanvir Ahmad, JJ

MEEZAN BANK LIMITED and others---Appellants

Versus

Syed HASSAN MEHMOOD SHAH---Respondent

R.F.A. No. 176 of 2021, heard on 24th January, 2022.

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

----Ss. 9, 10 & 22---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Leave to defend the suit, non-decision of---Recovery of possession of leased vehicle---Appellant/Bank took over possession of vehicle leased to respondent/plaintiff---Banking Court without deciding application for leave to defend the suit passed decree in favour of respondent/plaintiff---Validity---Banking Court was obliged under S. 10(8)(9)(10) & (11) of Financial Institutions (Recovery of Finances) Ordinance, 2001 to consider application for leave to defend and to accept or reject the same keeping in view of any question of law and facts requiring evidence was raised therein as well as if conditions given in S. 10(3)(4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 were fulfilled---Banking Court was required by law to examine application for leave to defend before proceeding to decide the suit---High Court set aside judgment and decree and remanded the matter to Banking Court to decide application for leave to defend the suit afresh--- Appeal was allowed accordingly.

Abid Aziz Khan and 2 others v. Bank of Punjab through Branch Manager 2007 CLD 997; Shahid Saleem v. Bank Al-Falah Limited 2019 CLD 181; PASSCO v. Omer Bilal Traders (Pvt.) Limited 2007 CLD 492; Bank of Punjab through Attorney v. Manzoor Qadir and another 2021 CLD 1037 and The Bank of Punjab through General Attorney v. Malik Umer Farooq 2014 CLD 198 ref.

Muhammad Basit Babar Chughtai for Appellants.

Sh. Zaheer ud Din Babar for Respondent.

2023 C L D 333

[Lahore]

Before Ch. Muhammad Iqbal, J

MCB BANK LIMITED through Authorized Attorney---Petitioner

Versus

FEDERATION OF PAKISTAN through Director (Legal) President's Secretariat, Aiwan-e-Sadar, Islamabad and 2 others---Respondents

Writ Petition No. 77994 of 2021, heard on 10th January, 2023.

(a) Affidavit---

----Effect---In absence of any counter affidavit, contents of sworn affidavit is deemed to be admitted.

Abida Parveen v. District Education Officer, Schools Elementary (Female) Mirpur and 4 others 2014 PLC (C.S.) 999; Muhammad Nawaz v. Mohsin Saleem 2016 MLD 1553; Iyaz-ul-Haq Chaudhary v. NIB Bank Limited through Authorized Attorney and 4 others 2016 CLD 1741; Muhammad Bachal v. IXth Additional District Judge, Hyderabad and another 2019 CLC Note 51; President of Pakistan through Chairman, P.W.R., Lahore v. Sarfraz Khan 1980 CLC 541; Muhammad Farooq M. Memon Advocate v. Government of Sindh through its Chief Secretary, Karachi 1986 CLC 1408; Messrs Holy Family Hospital through Administrator v. Government of Sindh and another 2009 PLC (C.S.) 824 and Quaid-e-Azam Medical College, Bahawalpur through Principal v. Muhammad Aslam and another 2009 YLR 1508 rel.

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

----Ss. 82-A, 82-B, 82-D, 82-E & 82-F---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), S. 9---Mal-administration---Proof---Valuables missing from locker---Non-holding of departmental inquiry---Petitioner Bank was aggrieved of order passed by Appellate Authority directing to make good the loss---Validity---Relationship of Bank and its customer was based on trust on the basis of which respondent complainant had put her valuable articles i.e. gold ornaments in locker---When respondent complainant informed petitioner Bank about missing of her valuable articles from locker, petitioner Bank instead of making its best efforts to redress her grievance, not only declined her application but also went one step further and contested her case before authorities---High Court did not appreciate conduct of petitioner Bank---Public opt to put their valuable articles in Bank lockers for security purpose and if their articles are misplaced from there and banks do not redress their grievance in such case of loss, the very foundation of banking system would collapse---Banking Mohtasib did not consider all material facts while dismissing her complaint whereas Appellate Authority rightly allowed representation of respondent complainant and directed petitioner-bank to compensate her as per instruction of State Bank of Pakistan contained in Circular No.5 dated 05-06-2007---Petitioner Bank failed to point out any illegality or material irregularity in order passed by Appellate Authority nor there was any jurisdictional defect---Constitutional petition was dismissed in circumstances.

M. Zaheer Asghar Bhatti, Aamir Aziz Khan and Maaz Sajjad for Petitioner.

Ijaz Rehmat Basra, Assistant Attorney General for Respondent No. 1.

Ch. Muhammad Aslam for Respondent No. 3.

2023 C L D 345

[Lahore]

Before Abid Aziz Sheikh and Sultan Tanvir Ahmad, JJ

AKMAL AZIZ and 3 others---Appellants

Versus

HABIB BANK LIMITED and another---Respondents

E.F.A. No. 66967 of 2021, heard on 22nd November, 2022.

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

----S. 22---Civil Procedure Code (V of 1908), O. XXI, Rr. 89, 90 & 92---Suit for recovery of Bank loan---Execution of decree---Objection to auction---Right of legal heirs---Appellants were legal representatives of deceased judgment-debtor who after confirmation of sale filed objections under O. XXI, R. 89, C.P.C. which were dismissed by Banking Court---Plea raised by appellants was that after death of judgment-debtor sale could not have been confirmed without notice to legal heirs---Validity---Application under O. XXI, R. 90, C.P.C. was dismissed in the life time of deceased judgment-debtor, who failed to exercise his right under O. XXI, R. 89, C.P.C., within permissible time by depositing amount as stipulated in O. XXI, R. 89(1)(a) & (b), C.P.C. read with O. XXI, R. 92(2), C.P.C.---Deceased judgment-debtor was left with no interest that could be affected or which could have been passed on to legal representatives---High Court declined to interfere in order passed by Banking Court---Appeal was dismissed in circumstances.

Muhammad Khalil v. Messrs Faisal M.B. Corporation and others 2019 SCMR 321 and Minor Smt. Shanti Devi v. Khandubala Dasi and others AIR 1961 Cal 336 distinguished.

Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others 2016 CLD 480; Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500; Muhammad Hussain v. Industrial Development Bank of Pakistan, Hyderabad and another 2014 MLD 192; Janak Raj v. Gurdial Singh and another AIR 1967 (SC) 608 and R. Rajamma v. Avula Saraswathamma and others AIR 1973 (A.P.) 132 ref.

Muhammad Shahzad Shaukat, Advocate Supreme Court and Nadeem Irshad for Appellants.

Ashar Elahi, Advocate Supreme Court for Respondents.

2023 C L D 359

[Lahore (Bahawalpur Bench)]

Before Muzamil Akhtar Shabir and Sultan Tanvir Ahmad, JJ

Mst. ALIA SHAMEEM---Appellant

Versus

NATIONAL BANK OF PAKISTAN and others---Respondents

E.F.A. No. 5 of 2016/BWP, heard on 26th January, 2022.

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

----S. 22---Civil Procedure Code (V of 1908), O. XXI, R. 66---Suit for recovery of Bank loan---Execution of decree---Objections to auction---Limitation---Plea of fraud---Change of time, place and date of auction---Judgment debtor assailed auction on the plea of fraud committed by Court Auctioneer---Validity---Banking Court instead of settling down terms and conditions of auction in the language of Court or granting specific approval as required under O. XXI, R. 66(1), C.P.C., the same was left at discretion of Court Auctioneer leading to manifold and major mistakes---Proclamation was published in two newspapers without fixing any reserved price of suit property---Publication reflected date of auction as 19-6-1999 at 10:00 a.m. and stipulated venue of auction at the site---Report of auction showed that auction was adjourned to 26-6-1999 and site venue was abruptly changed to the office of the decree-holder without fresh publication or proper circulation of change of date and venue---When auction was challenged on the ground of fraud in publication and conduct of sale, time could only run against victim upon gaining clear and definite knowledge of facts which had constituted fraud---High Court set aside order passed by Banking Court confirming sale through auction---Appeal was allowed in circumstances.

Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. through Branch Manager and 3 others 2003 CLD 1693; Mst. Nadia Malik v. Messrs Makki Chemical Industries Pvt. Ltd. through Chief Executive and others 2011 CLD 1517; Siraj Ahmad through L.Rs v. Faysal Bank Limited and others 2018 CLD 233; National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd. and another PLD 2014 SC 283; Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others PLD 2016 SC 229; Mst. Manzoor Jahan Begum and others v. Haji Hussain Bakhsh PLD 1966 SC 375 and Nur Ahmed Chowdhury v. Ruhul Amin Chowdhury PLD 1961 Dacca 589 ref.

Muhammad Tayyab Zameer Khan for Appellant.

Syed Waseem Ahmad for Respondent No. 1/Bank.

Nadeem Iqbal Ch. for Respondents Nos. 8 to 11.

Respondents Nos. 3, 4 and 7 ex parte.

2023 C L D 372

[Lahore (Bahawalpur Bench)]

Before Jawad Hassan and Sultan Tanvir Ahmad, JJ

Messrs AL-BARKAT SEED CORPORATION and 3 others---Appellants

Versus

SILK BANK LIMITED and others---Respondents

R.F.A. No. 44 of 2020/BWP, heard on 13th June, 2022.

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

----Ss. 10(9)(10)(11)(12) & 22---Suit for recovery of Bank loan---Leave to defend the suit, dismissal of---Word 'forthwith'---Effect---Framing of issues and recording of evidence---Application for leave to defend the suit filed by appellant/defendant was dismissed and Banking Court did not passing judgment and decree, instead issues were framed, evidence was recorded and then suit was decreed---Validity---Upon rejection of leave application Banking Court was to forthwith pass judgment and decree under S. 10(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Word 'forthwith' was preceded by 'shall' that had not left any discretion with Banking Court but to pass judgment and decree on the material that was available on record---If sufficient material was available on record and suit of respondent/plaintiff/Bank was in accord with S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, then there was no need to proceed further for recording of evidence---If Banking Court on consideration of plaint, leave application and reply thereto was of the view that some substantial question of law and/or fact was raised and it required evidence, then procedure of law as envisaged in Ss. 10(9), (10) & (11) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be followed---High Court set aside judgment and decree and remanded the matter to Banking Court for decision afresh on application for leave to defend the suit filed by appellant / defendant--- Appeal was allowed accordingly.

Zakaria Ghani and 4 others v. Muhammad Ikhlaq Memon and 8 others PLD 2016 SC 229 and Faysal Bank Limited v. Sajjad Aslam and others 2022 CLD 123 ref.

Mrs. Jawahar Afzal v. Messrs United Bank Limited 2003 CLD 119; Messrs United Bank Limited through Authorized Attorney v. Banking Court No. II and 2 others 2012 CLD 1556; Khurram Farooq v. Bank Al-Falah Limited and another 2018 CLD 1417 and "Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 rel.

M. Basit Babar Chughtai for Appellants.

Ali Raza Kabeer for Respondent-Silk Bank.

Rana Rizwan Mehmood for Respondents Nos. 3 and 3(a).

2023 C L D 378

[Lahore]

Before Jawad Hassan, J

DEPUTY REGISTRAR OF COMPANIES---Applicant

Versus

MUKHTAR TEXTILES MILLS LIMITED and 8 others---Respondents

C.M. No. 2 of 2018 in C.O. No. 39619 of 2017, decided on 12th January, 2023.

Companies Act (XIX of 2017)---

----Ss. 313, 314, 337(e) & 414---Winding up proceedings stay of---Pre-conditions---Applicant/director/Chief Executive Officer of company under winding up sought stay of proceedings on the plea of formulation of revival plan and intention of induct further capital---Validity---Two conditions were required under S. 313 of Companies Act, 2017 to be satisfied for bringing an order of stay of winding up in existence (i) filing of an application either of the Official Liquidator or of any creditor or contributory or of the registrar or the Commission or a person authorized by it for stay of winding up proceedings; (ii) proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed---If such two conditions were satisfied, High Court had discretion to stay winding up proceedings, either altogether or for a limited time by imposing appropriate terms and conditions---Consequence of winding up order was that all assets of the company would come under the control of Court and management of company would vest with liquidator instead of Directors and Chief Executive of the company---Applicant/director did not have any locus standi to file such petition---Only official liquidator was empowered under S. 337(e) of Companies Act, 2017 to institute or defend any suit, prosecution or other legal proceedings in the name and on behalf of the Company under liquidation---High Court declined to interfere in the matter as the application was not filed as per requirement of S. 313 of Companies Act, 2017 rather the same was filed by director/Chief Executive and that too without any authorization---Winding up proceedings were still underway and staying of the proceedings at such stage would cause delay in liquidation process and prejudice to the rights of other creditors, if any, as protected under S. 314 of Companies Act, 2017---Application was dismissed, in circumstances.

Saudi Pak Industrial and Agricultural Investment Company Ltd. v. Chenab Limited 2020 CLD 339 and The Additional Registrar Company v. Al-Qaim Sugar Mills Limited 2021 CLD 931 rel.

M. Asad Buttar for Applicant.

2023 C L D 393

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Muhammad Raza Qureshi, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN and others---Appellants

Versus

SURRIYA ASGHAR---Respondent

Insurance Appeal (RFA) No. 47 of 2022, decided on 29th November, 2022.

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

----S. 122---Insurance claim---Burden of proof---Scope---Husband of respondent had purchased a policy from the appellants---Policy was duly revived and ultimately husband of the respondent passed away---On account of failure of the appellants to discharge their liability under the policy, the respondent filed a petition before the Insurance Tribunal, as a result of which impugned judgment and decree was passed---Burden of proof was lawfully discharged by the respondent, however, it was the appellants who were under obligation to dispel and dislodge the evidence led by the respondent---Appellants had failed to establish that the respondent was suffering from diabetes and was not entitled to recover the insurance amount secured by the policy---No legal or factual infirmity was found in the impugned judgment and decree with respect to declaring entitlement of the respondent to recover the amount---Appeal was dismissed.

(b) 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---Where Insurance Tribunal had decided the issue of liquidated damages without framing any issue and satisfying the test laid down by the provisions of Qanun-e-Shahadat, 1984, as well as Insurance Ordinance, 2000, High Court remanded the matter to the Insurance Tribunal with direction to frame specific issue with respect to the claim of liquidated damages and decide the matter after providing fair opportunities to the parties.

State Life Insurance Corporation of Pakistan through Zonal Head/Attorney and another v. Mst. Sawarna Bibi 2022 CLD 190 and Messrs Adamjee Insurance Company Ltd. through Authorized Representative v. Zia Ullah and another 2019 CLD 526 ref.

Malik Muhammad Tariq Rajwana for Appellants.

Muhammad Maalik Khan Langah for Respondent.

2023 C L D 397

[Lahore] Before Shams Mehmood Mirza and Rasaal Hasan Syed, JJ

AMJAD ALI---Appellant

Versus

AGRICULTURAL DEVELOPMENT BANK now ZTB and others---Respondents

E.F.A. No. 54 of 2016, decided on 24th February, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 99---Suit for recovery of finance decreed---Execution proceedings---Objection---Appellant intervened execution proceedings on the ground that auction purchaser intended to dispossess him of his land purchased by him through registered sale deed during execution proceedings---Validity---Judgment and decree passed by Court were binding upon parties to proceedings---Person who was not a party to proceedings was not bound by such decree or judgment nor it could be detrimental to their rights and interest in the property---Land mortgaged in favour of Bank was fully described in relevant documents of Bank and also in the plaint--- Such description was incorporated in the notice published for auction of property, in report of the court auctioneer as well as in sale certificate issued by Banking Court---Banking Court in execution of decree directed that possession of property be handed over to auction purchaser---High Court declined to interfere in execution proceedings--- Appeal was dismissed accordingly.

Mst. Amina Begum v. Chairman Karachi Development Authority and 5 others 1993 CLC 1307 rel.

Muhammad Shahid Siddique for Appellant.

Syed Ali Awas Tirmizi for Respondent No. 1.

Ms. Kashwar Naheed for Respondent No. 4.

Respondents Nos. 2, 3 and 5 to 8 ex parte.

2023 C L D 404

[Lahore]

Before Muzamil Akhtar Shabir, J

UZMA TAHRIM and others---Plaintiffs/Applicants

Versus

HABIB BANK LIMITED and others---Defendants/Respondents

C.O.S. No. 41078 of 2022, decided on 18th October, 2022.

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

----Ss. 9 & 11(1)---Suit for recovery of money---Interim decree---Phrase "while granting leave to defend"---Scope---Plaintiffs/customers sought passing of interim decree on the basis of facts admitted by defendant/bank---Contention of defendant/Bank was that before grant of leave to defend the suit, interim decree could not be passed---Validity---Words "while granting leave to defend" employed in S. 11(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not bar or imply that such decree could not be passed before leave to defend was granted, especially when admitted amount was payable by defendant/Bank to plaintiff/customer regardless of the fact whether leave to defend was granted or refused---High Court directed defendant/Bank to return admitted amounts to plaintiffs / customers and interim decree was passed---Application was allowed accordingly.

Bank of Punjab through SVP v. T&N Pakistan Pvt. Ltd. 2014 CLD 1341 rel.

Bilal Hassan Minto, Ahmad Manzur and Muhammad Usman Sheikh for Plaintiffs/Applicants.

Shahzada Mazhar, Jawad Khan Lodhi, Zahid Umar, Rizwan Rasool and Nouman Ahmad for Defendant No. 1/H.B.L.

Hashim Waqar Butt and Mian Kashif Abbas for Respondents Nos. 2 and 3.

2023 C L D 410

[Lahore]

Before Jawad Hassan, J

MCB BANK LIMITED---Petitioner

Versus

Messrs MAZCO INDUSTRIES PRIVATE LIMITED and others---Respondents

Execution Application No. 64900 of 2017, heard on 7th February, 2023.

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

----Ss. 2(b) & 19(7)---Execution of decree---Pecuniary jurisdiction---Determination---Respondent/Bank filed suit for recovery of Rs. 109.460 million and after passing of consent decree, amount claimed by decree-holder bank was reduced to Rs. 64.900 million---Applicant/judgment debtor sought transfer of Execution Proceedings to Banking Court on the plea of lack of pecuniary jurisdiction of High Court---Validity---Applicant/judgment debtor on one hand accepted concession of easy installments along with conditional waiving off the claims regarding amounts of costs of funds, charges, markups etc. while not objecting to original decree despite the same being less than Rs. 100 million and not even at subsequent stage of modified agreement while taking further concessions---Applicant/judgment debtor on the other hand took a totally different plea of lack of pecuniary jurisdiction at much belated stage---Such transfer application seemed to be an attempt to avoid scheduled and agreed upon payments/installments---If stance of applicant/judgment debtor was to be accepted as correct then as a necessary consequence initial consent decree was also liable to be set aside on the sole ground of being coram non judice and in that case applicant/judgment debtor was bound to pay Rs. 109.460 million claim of respondent/Bank---High Court declined to transfer execution proceedings to Banking Court on the ground of pecuniary jurisdiction---Application was dismissed, in circumstances.

Habib Bank Limited through Attorneys v. Messrs Rehmania Textiles Mills (Pvt.) Limited Jhang Road, Faisalabad 2003 CLD 689; Mashraq Bank v. Messrs Amtul Rehman Industries (Pvt.) Limited and others 2002 CLD 336 and MCB Bank Limited through Duly Authorized Attorney v. Eden Developers (Pvt.) Limited and others 2019 CLD 219 ref.

Muhammad Khalid alias Khalid Mehmood and others v. Muhammad Yousaf and others 2017 YLR 2347; Muhammad Yousaf v. Mrs. Muhammad Mohsin and 5 another 1986 MLD 342; Dr. Pir Muhammad Khan v. Khuda Bukhsh and others 2015 SCMR 1243 and Sardar Ali Khan v. State Bank of Pakistan and others 2022 SCMR 1454 rel.

Muhammad Shoaib Rashid, Advocate Supreme Court and Ms. Minahil Khan for the decree-holder Bank.

Muhammad Imran Malik, Advocate Supreme Court, Aqif Majeed, Fazal Mehmood, Bilal Mehmood and Rao Zahid for the Judgment-Debtor.

2023 C L D 491

[Lahore]

Before Jawad Hassan, J

MCB BANK LIMITED---Plaintiff

Versus

TANVEER SPINNING AND WEAVING MILLS and others---Defendants

Civil Original Suit No. 175411 of 2018, decided on 16th January, 2023.

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

----S. 9---Suit for recovery of finance facility---Maintainability---Locus standi to institute suit---Attorney holder---Suit was instituted by bank official who was attorney holder of the Bank---Defendant/customer raised objection that suit was not instituted by a competent person---Validity---Attorney holder was authorized through Special Power of Attorney executed in his favour by the President and Chief Executive of plaintiff Bank to institute the suit---Chairman of Board of Directors of plaintiff Bank appointed general power of attorney authorizing him to further delegate his powers authorizing him certain powers including the powers to take all requisite steps/actions in relation to legal proceedings of plaintiff Bank---Suit was instituted by competent person having requisite authority from President/CEO of plaintiff Bank under special power of attorney---Objection was rejected, in circumstances.

The Bank of Punjab v. Magic River Services and 4 others 2016 CLD 171 rel.

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

----Ss. 9 & 10---Suit for recovery of finance---Leave to defend the suit, refusal of---Evasive defense---Effect---Plaintiff/Bank filed suit for recovery of finance against which defendant/customer sought leave to defend the suit---Validity---Provisions of S. 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were mandatory in nature---Non-compliance of mandatory provisions entailed penal consequences, as provided under S. 10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Execution of documents filed with plaint was not denied by defendants/customers in Petition for Leave to Appear and were not entitled for leave to defend in the suit---Defendants/customers did not discharge their obligations as per the agreements, therefore, suit was rightly instituted by plaintiff/Bank---Where defendant had not complied with mandatory requirement of law, the plaintiff was entitled to have the suit decreed in his favour as mandated under S. 10(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defense set up in defendants' application for leave to defend the suit was evasive, improbable and no substantial questions of law or facts were raised in the leave application---Suit was decreed accordingly.

Paget's Law first published in 1904; National Bank of Pakistan v. Kohinoor Spinning Mills Limited and others 2021 CLD 1112; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi PLD 2002 SC 500; Muhammad Arshad and another v. Citibank N.A., Lahore 2006 SCMR 1347; The Bank of Punjab v. Messrs Magic River Services and 4 others 2016 CLD 171; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Syed Abbas Ali v. Bank of Punjab through Manager and others 2015 CLD 1409; NIB Bank Limited v Mirza Ghulam Mujtaba 2015 CLD 1547; National Bank of Pakistan v. Najma Sugar Mills Limited 2015 CLD 1990; Messrs Al-Madan Coal Company (Pvt.) Ltd. and others v. Regional Development Finance Corporation 2009 CLD 645 and Muslim Commercial Bank Limited v. City Steel Industries Lahore through Partners and others 2023 CLD 235 ref.

Adil Umar Bandial, Sajjad Ali, Kh. Fahad Ahmad, Asad Farzand and Muhammad Waqas for Platinff.

Muhammad Imran Malik, Advocate Supreme Court with Akif Majeed and Hassan Ismail for Defendants.

2023 C L D 525

[Lahore]

Before Muhammad Sajid Mehmood Sethi and Jawad Hassan, JJ

HUMAIRA MEHBOOB---Appellant

Versus

SUMMIT BANK LIMITED and others---Respondents

E.F.A. No. 20277 of 2023, decided on 27th March, 2023.

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

----O. XXI, R. 66(2)(e), proviso---Reserve price---Court, duty of---Scope---Fixing value of property is a matter of opinion and Court cannot give its opinion on such point---Object of proviso to O. XXI, R. 66(2)(e), C.P.C., is to relieve Court from the burden of affirming accuracy of value of property shown in proclamation of sale and to enable prospective purchaser to form his own opinion relying upon the estimates given by parties---Provision of O. XXI, R. 66(2)(e), C.P.C. stipulates that proclamation must contain every other thing which the Court considers material for a purchaser to know in order to judge nature and value of property.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 83---Execution of decree---Reserved price---Auction at low price---Limine control, doctrine of---Applicability---Appellant/judgment debtor assailed reserve price of mortgaged property on the plea of Executing court fixing the same on lesser side---Validity---Nothing stopped judgment debtor to locate and bring forward a buyer of her choice either in auction or before the Court prior to sale if property was to be sold for a price which in the estimation of judgment debtor was on the lower side---Sales under O. XXI, R. 83, C.P.C., could be postponed to enable a judgment debtor for raising money through private sale of the property---Judgment debtor could not be allowed to derail auction process by submitting evaluation report prepared at his instance instead of arranging a buyer for the properties to be auctioned---Condition of confirmation of sale by Court also operated as the biggest safeguard against the property which was sold at inadequate price irrespective of the fact whether any irregularity or fraud in conduct of sale was committed or not---Banking Court rightly dismissed application of appellant / judgment debtor as there was no illegality or perversity in orders which were passed in accordance with law---High Court applying doctrine of "Limine Control" declined to interfere in the order passed by Executing Court---Appeal was dismissed, in circumstances.

Dr. Muhammad Javaid Shafi v. Syed Rashid Arshad and others PLD 2015 SC 212; Al-Hadi Rice Mills (Pvt.) Ltd through Chief Executive and 4 others v. MCB Bank Limited and 6 others 2023 CLD 85 and Messrs Colony Textile Mills Limited and another v. First Punjab Modaraba 2021 CLD 1212 rel.

2023 C L D 534

[Lahore (Bahawalpur Bench)]

Before Sultan Tanvir Ahmad, J

Mian EJAZ AMIR----Petitioner

Versus

Haji MUHAMMAD IBRAHIM----Respondent

Civil Revision No. 170 of 2022/BWP, heard on 17th May, 2022.

Civil Procedure Code (V of 1908)---

----O. XXXVII, R. 3---Suit for recovery of money on the basis of negotiable instrument---Leave to defend the suit---Condition, imposition of---Principle---Denial of negotiable instrument---Petitioner/defendant was aggrieved of grant of conditional leave to defend the suit by Trial Court---Plea raised by petitioner/defendant was that when issuance of bank cheque was denied leave would have been granted unconditional---Validity---Imposition of condition or granting unconditional leave was within the discretion of Trial Court---When statute conferred such discretion, exercise of same should not be ordinarily interfered---Discretion was required to be exercised in careful manner and same should be based on logical and legally sustainable reasoning--- While granting leave to defend the suit, Trial Court imposed condition mainly on the basis of unilateral statement of respondent/plaintiff without even considering any dispute raised in leave application---Exercise of discretion by Trial Court, conferred under Civil Procedure Code, 1908 was based on some misunderstanding of principles governing exercise of such discretion---High Court set aside leave granting order and remanded the matter to Trial Court for decision afresh--- Revision was allowed accordingly.

Farzand Ali and another v. Khuda Bakhsh and others PLD 2015 SC 187 and Manzoor Hussain v. Haji Khushi Muhammad 2017 CLC 70 distinguished.

Ministry of IPC through Secretary and others v. Arbab Altaf Hussain and others 2014 SCMR 1573; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Mukhtar Ahmad Gondal v. Government of the Punjab through Secretary Health, Civil Secretariat, Lahore and 2 others 2000 YLR 4 and Dr. Muhammad Javaid Shafi v. Syed Rashid Arshad and others PLD 2015 SC 212 ref.

Zubair Ahmad and another v. Shahid Mirza and 2 others 2004 SCMR 1747; Province of Punjab through Special Secretary, Specialized Healthcare and Medical Education Department, Lahore and Others v. Khadim Hussain Abbasi 2021 SCMR 1419; Habib Bank Limited, Circle Office, Multan v. Al-Qaim Traders and another 1990 SCMR 686 and Santosh Kumar v. Bhai Mool Singh AIR 1958 SC 321 rel.

Rana Rizwan Ahmed for Petitioner.

A.R. Aurangzeb for Respondent.

2023 C L D 554

[Lahore (Multan Bench)]

Before Abid Aziz Sheikh and Muhammad Shan Gul, JJ

Rana MUHAMMAD AUSAF---Appellant

Versus

HOUSE BUILDING FINANCE COMPANY LIMITED---Respondent

R.F.A. No. 17 of 2021, decided on 22nd February, 2022.

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

----Ss. 3, 9, 17 & 22---Suit for recovery of finance facility---Date of default---Determination---Appellant/judgment debtor was aggrieved of imposing cost of funds by Trial Court from the date of institution of the suit---Validity---When finance facility was for specified period and not only the finance facility but also due date of payment had expired then "date of default" would be the date when the facility and due date of payment had expired---No mark-up could be allowed after expiry of finance period and at best only cost of funds could be allowed---When finance facility and due date of payment of installments was still in field, then "date of default" was the date when financial institution triggered incident of default and had filed suit under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, for customer "default" in fulfillment of financial obligations, provided the suit was decreed and not found to be premature---Last payment of installment in year 2016 against payment schedule valid till 2026 could not be treated as "date of default" for the purpose of cost of fund under S. 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Decree for cost of fund from institution of suit was not entirely adverse to appellant/judgment debtor---Finance facility was valid for period of 12 years and respondent/financial institution had the option to wait till expiry of said period and recover entire outstanding amount along with agreed mark-up---Respondent/financial institution filed suit earlier and had surrendered its claim of mark up from filing of suit till expiry of finance facility---Respondent/financial institution only claimed cost of funds as contemplated under S. 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which was much less than rate of mark up in the house finance facility agreement---Appeal was dismissed, in circumstances.

United Bank Limited v. Nothern Polyethylene Limited and others 2008 CLD 688; Crescent Commercial Bank now Samba Bank Ltd. v. Genertech Pakistan Ltd. 2011 CLD 37; Allied Bank of Pakistan Limited v. Nothern Polyethylene Limited and others 2006 CLC 565 and Industrial Development Bank of Pakistan v. Pakistan Belting (Pvt.) Limited and others 2006 CLD 808 rel.

Muhammad Aslam Saddiqui for Appellant.

Muhammad Masood Sabir for Respondent.

2023 C L D 599

[Lahore]

Before Sardar Muhammad Sarfraz Dogar, J

UZMA ADIL KHAN and others---Petitioners

Versus

FEDERAL INVESTIGATION AGENCY through Director General, Islamabad

and others---Respondents

Writ Petitions Nos. 72202, 70346, 73456, 73458 of 2021 and 9531 of 2022, decided on 29th December, 2022.

(a) Federal Investigating Agency Act, 1974 (VIII of 1975)---

----S. 5(5)---Restrictions imposed on property rights---Pre-conditions---Powers under S. 5(5) of Federal Investigating Agency Act, 1974 are based on four ingredients: (i) property has some nexus with investigation/alleged offence; (ii) there is likelihood that the property is to be removed, transferred or otherwise disposed of before an order passed by appropriate authority for its seizure is obtained; (iii) by issuing an order in writing directing the owner or any person who is for the time being in possession thereof not to remove, transfer or otherwise dispose of such property in any manner; and (iv) the order has to be subject to any order made by the Court having jurisdiction in the matter---Powers bestowed upon members of FIA under S. 5(5) of Federal Investigating Agency Act, 1974, are not unfettered, rather are subject to certain restrictions and limitations, required to be used sparingly and in cases of exceptional nature.

Najib Rahim v. Federation of Pakistan through Secretary, Ministry of Interior and 3 others PLD 2017 Sindh 53; Muhammad Sohail Shaikh v. The State and 2 others PLD 2021 Lah. 612 and Fazal Mahmood v. Sardar Khan PLD 1996 Kar. 475 rel.

(b) Anti-Money Laundering Act (VII of 2010)---

----Ss. 2 & 3---Money laundering---Pre-condition---Necessary element of offence of money laundering is commission of a predicate offence---Execution of predicate offence gives birth to proceeds of crime, the movement of which attracts criminal conduct of money laundering---Without commission of predicate offence there cannot be an offence of money laundering.

Justice Qazi Faez Isa v. The President of Pakistan PLD 2021 SC 1 rel.

(c) Federal Investigating Agency Act, 1974 (VIII of 1975)---

----S. 5(5)---Anti-Money Laundering Act (VII of 2010), Ss. 3 & 4---Constitution of Pakistan, Art. 199---Constitutional petition---Quashing of proceedings--- Restrictions imposed on Bank accounts and properties---Petitioners were aggrieved of initiation of inquiry by Federal Investigating Agency and imposing restrictions on their properties and bank accounts---Validity---There was no Suspicious Transaction Report (STR) against petitioners nor Federal Investigating Agency had any report in its possession to reasonably believe that property was involved in Money-Laundering---Investigating officer did not seek permission of Trial Court to attach Bank accounts nor had sent any notice to petitioners---Seizure of property was not made in accordance with the law rather the same was in contravention of the provision of law---Seizure of Bank accounts of the petitioners was nothing but a nullity in the eye of law---High Court set aside seizure letter issued by Federal Investigating Agency as the same suffered from perversity and clear transgression of authority and was nullity in the eye of law---Constitutional petition was allowed, in circumstances.

Maryam Nawaz Sharif v. Chairman, NAB and 2 others PLD 2020 Lah. 205 and Rafi Ullah v. State 2019 PCr.LJ 1608 ref.

(d) Oil and Gas Regulatory Authority Ordinance (XVII of 2002)---

----Ss. 2(xi), (xv), 23(3)(f), 23(4) & 23(6)---Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016, Rr. 34 & 35---License, issuance of---Pre-condition---Oil and Gas Regulatory Authority allows provisional licensee to undertake marketing of petroleum products/refined oil products, when it completes first storage facility and area of marketing is restricted to Province, where it develops that storage/depots and so on till it completes the entire work programme, which entitles the licensee to have a licence for a longer period i.e. maximum 30 years---New licensee does not have to first complete all its entire marketing infrastructure before having license for undertaking marketing of petroleum product, establish retail outlets and filling stations during initial license period, which are a part and parcel of the work programme---Provision of R. 35 of Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules, 2016, nowhere places any embargo that licensee cannot operate retail outlets or its storages during the initial license term of three years.

Barrister Momin Malik for the Petitioner (in W.P. No. 72202 of 2021).

Barrister Muhammad Umar Riaz, Saqib Haroon Chishti, Barrister Ch. Abubakar, Waqas Umar and Saba Shaheen for Petitioners (in W.P. No. 9531 of 2022).

Arshad Nazir Mirza, Barrister Maryam Salman, Barrister Ms. Amna Iqbal and Shan Saeed Ghumman for Petitioner (in W.P. No. 70346 of 2021).

Rai Sarfraz Ali Khan for Petitioners (in W.Ps. Nos. 73456 and 73458 of 2021).

Barrister Ahmed Pervaiz, Barrister Saffi-ul-Hassan and Barrister Ahtasham Mukhtar on behalf of OGRA.

Asad Ali Bajwa, Deputy Attorney General-I for Pakistan assisted by Mian Shahzad Khadim Manday, Assistant Attorney for Pakistan along with Muhammad Javed Sultan, Assistant Director, FIA for Respondents.

2023 C L D 641

[Lahore]

Before Asim Hafeez, J

Messrs UNIVERSAL INSURANCE CO. LTD. through Managing Director---Petitioner

Versus

RANA BASIT RICE MILLS (PVT.) LTD. through Chief Executive and 2 others---Respondents

W.P. No. 27393 and C.M. No. 2 of 2023, decided on 28th April, 2023.

Insurance Ordinance (XXXIX of 2000)---

----S. 115---Civil Procedure Code (V of 1908), S. 11---Insurance Tribunal---Jurisdiction---Res-judicata, principle of---Petitioner was an insurance company and aggrieved of assumption of jurisdiction by Insurance Tribunal---Plea raised by petitioner was that the Tribunal lacked jurisdiction and earlier another Tribunal had also dismissed the claim therefore, principle of res-judicata was applicable---Validity---Objection of res-judicata could be adjudicated only once issue of jurisdiction was settled---If Tribunal otherwise lacked jurisdiction it could not proceed to decide question of effect of principle of res-judicata---High Court declined to interfere in the matter---Constitutional petition was dismissed in circumstances.

Messrs Reliance Insurance Company Limited v. Messrs Ahsan Ikram Textile (Pvt.) Limited 2022 LHC 3939 rel.

Rana Muhammad Arshad Khan for Petitioner.

2023 C L D 655

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

MCB BANK LIMITED---Plaintiff

Versus

ADEEL SHAHBAZ STEEL MILLS and others---Defendants

Civil Original Suit No. 1 of 2022, decided on 7th June, 2023.

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

----S. 9---Civil Procedure Code (V of 1908), S. 20---Suit for recovery of finances---Territorial jurisdiction---Scope---Plaintiff filed a suit for recovery of finances---Defendants contended that the court lacked territorial jurisdiction for the reasons that finance facilities were extended to them at district 'H' and that the agreements pursuant thereto were also executed at 'ICT' and the district 'H', thus, the plaint was liable to be returned---Plaintiff contended that the registered office of the defendants fell within the territorial jurisdiction of the High Court---Validity---No doubt, the registered office of a defendant served as official address for legal and administrative purposes and determined the jurisdiction to which the firm was subject to but at the same time it is important to note that the registered office did not necessarily determine the sole basis for establishing jurisdiction, especially when the cause of action had arisen in a different city, such as the location of the contract execution---Finance facilities were extended to the defendants after execution of agreements at 'ICT' and district 'H', the defendants were residents of 'ICT' and district 'H', correspondence for applying and approving the finance facilities were made by the parties at 'ICT' and district 'H', mortgaged properties were situated at 'ICT' and district 'H', hence, the High Court had no territorial jurisdiction to pass any judgment and decree against the defendants---Plaint was returned to the defendants for presenting it before a Court of competent jurisdiction.

Bahoo Dying Industries (Private) Limited v. Sui Northern Gas Pipelines Limited and others PLD 2021 Lah. 186 rel.

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

----S. 2(a)--- Financial institution--- Scope--- Word "branches" mentioned in S. 2(a) means a branch from where the suit is to be filed before the Banking Court having jurisdiction to entertain it.

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

----Ss. 2(a), 5 & 9---Financial institution---Establishment of Banking Court---Procedure of Banking Courts---Scope---Section 9(1) stipulates the term 'Branch Manager', which, when read in conjunction with S. 2(a), implies that the suit is to be filed by the aforementioned Branch Manager in accordance with Ss. 9(2) & 9(3)---Suit should demonstrate the amount availed by the defendant, the amount paid by the defendant to the financial institution, and other finance-related amounts payable by the defendant---If the wording of S. 9 is read in conjunction with S. 5, it becomes clear that the Banking Court is established to exercise its jurisdiction under the Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----Ss. 9 & 10---Suit for recovery---Leave to defend---Scope---Wording of S. 10(1) states that in any case in which the summons has been served on the defendant under S. 9(5), the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court---While S. 10(3) gives a chance to the defendant to file leave to defend containing substantial questions of law as well as of fact.

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

----Ss. 2(a) & 9---Financial institution---Procedure of Banking Courts---Leave to defend---Scope---As S. 2(a) read with S. 9(5) mentions branch offices, the amount of finance availed, carrying on or transaction of business, therefore, the statement of account being sent to the defendant at his address would also be taken into consideration while deciding the leave to defend.

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

----Preamble---Scope---Financial Institutions (Recovery of Finances) Ordinance, 2001 was enacted by the Government to ensure speedier recovery of the finances advanced by the financial institutions and to make the banks recovery law more effective---Preamble to the Act provides that it was enacted to expedite the process of stuck-up loans from the unscrupulous customers/debtors of the banks.

(g) Interpretation of statutes---

----Preamble---Scope---Though the preamble to a statute is not an operational part of the enactment but it is a gateway, which discusses the purpose and intent of the legislature to necessitate the legislation on the subject and also sheds clear light on the goals that the legislator aims to secure through the introduction of such law---Preamble of a statute, therefore, holds a pivotal role for the purposes of interpretation in order to dissect the true purpose and intent of law.

Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447 and National Bank of Pakistan v. Messrs Kohinoor Spinning Mills and others 2021 CLD 1112 rel.

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

----Ss. 2(a), 2(b), 2(c), 2(d), 4, 5, 7 & 9---Financial institution---Banking Court---Customer---Finance---Ordinance to override other laws---Powers of Banking Court---Procedure of Banking Courts---Scope---Section 2(b) defines the Banking Court, in respect of a case; (i) in which the claim does not exceed hundred million rupees, and for the trial of offences under the Ordinance, in terms of S. 2(b)(i); (ii) means, a court established under section 5, and in respect of any other case, the High Court---While S. 5 enables the Federal Government to establish Banking Courts to exercise jurisdiction under the Ordinance---Being creature of the statute, the Banking Courts drive powers/jurisdiction under S. 7---Banking Courts, in exercise of its civil jurisdiction, shall have all powers otherwise available to a Civil Court under the Code of Civil Procedure, 1908---By virtue of the said provision, the Banking Court is bound to follow the procedure as provided in the Financial Institutions (Recovery of Finances) Ordinance, 2001, however where it is silent, the procedure provided in the C.P.C. shall apply---Pertinently, the Banking Courts are creatures of statute and they derive their powers/jurisdiction from S. 7(4) read with Ss. 9(1), 2(a), 2(c), 2(d), 2(e) & 4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and where the Ordinance does not prescribe a particular procedure with respect to a matter, the proceedings under the Ordinance are to be governed by the C.P.C.

Gulistan Textile Mills Ltd. and another v. Soneri Bank Ltd. and another PLD 2018 SC 322 rel.

Habib Bank Ltd. v. WRSM Trading Company, LLC and others PLD 2018 SC 795 ref.

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

----S. 20---Suit to be instituted where defendant resides or cause of action arises---Forum non conveniens---Scope---Section 20, C.P.C. contains a general rule regarding territorial jurisdiction which inter alia, enjoins that a suit must be instituted in a court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain, or where the cause of action wholly or in part arises---Explanation to said section prescribes that a corporation shall be deemed to carry on business at its sole or principal office, or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place---Since this provision primarily keeps the defendant in perspective, the corporation spoken of in the explanation, obviously refers to the defendant---Plain reading of the section arguably allows the plaintiff a multitude of choices in regard to where it may institute its lis, suit or action---Corporations and partnership firms, and even sole proprietorship concerns, could well be transacting business simultaneously in several cities---If subsections (a) and (b) of S. 20, C.P.C., are to be interpreted disjunctively from subsection (c), as the use of the word 'or' appears to permit the plaintiff to file the suit at any of the places where the cause of action may have arisen regardless of whether the defendant has even a subordinate office at that place---However, if the defendants' location is to form the fulcrum of jurisdiction, and it has an office also at the place where the cause of action has occurred, then the plaintiff is precluded from instituting the suit anywhere else---Obviously, this is also because every other place would constitute a forum non conveniens.

Barrister Sardar Umer Aslam, Advocate Supreme Court assisted by Hassan Matiullah for Plaintiff.

Umar Hanif Khichi for Defendants Nos. 1 and 2.

Agha Muhammad Ali Khan, Advocate Supreme Court/Amicus Curiae assisted by Waqar Khalid Khawaja for Defendants.

Rashid Mehmood, Research Officer, Lahore High Court, (Rawalpindi Bench).

2023 C L D 715

[Lahore]

Before Shahid Karim, J

SUMMIT BANK LIMITED through Authorized Attorney---Plaintiff

Versus

Messrs OTO PAKISTAN (PVT.) LTD. through Executive Officer/Director

and 8 others---Defendants

C.O.S. No. 64519 of 2020, decided on 15th June, 2022.

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

----Ss. 9 & 10---Suit for recovery of finances---Petition for leave to defend---Markup beyond the expiry period of agreement---Scope---Plaintiff filed a suit for recovery of certain amount outstanding in respect of finance facilities availed by the defendant company---Validity---Defendant company, its directors and guarantor had admitted availing of the finance facilities---Contention of defendants regarding claim of markup made in the plaint by the bank had considerable force---With regard to the Letter of Credit facility, markup had been claimed---On the contrary, no such claim was raised in the plaint---What was due to the plaintiff was an amount of commission, which was fixed as flat 0.20% per quarter (LC pending only)---There was no basis for claiming an amount of markup on the facility of letter of credit---With respect to other finance facilities, any amount charged beyond the date of expiry of agreement was unlawful---No other issue was raised by the defendants which entitled them to the grant of leave to appeal---Application for leave to defend was dismissed---Suit was decreed against the defendant company, its directors and guarantor jointly and severally for a certain amount with costs of funds in terms of S. 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Muhammad Ahmad Khan Niazi, Ali Rana and Asim Sarfraz Uppal for Plaintiff.

Muhammad Imran Malik and Hassan Ismail for Defendants Nos. 1 to 4.

Ch. Mushtaq for Defendant No. 6.

Ms. Maryam Salman for Defendant No. 8.

2023 C L D 819

[Lahore]

Before Jawad Hassan, J

Messrs TRADHOL INTERNATIONAL SA SOCIEDAD UNIPERSONAL-- Applicant

Versus

Messrs SHAKARGANJ LIMITED---Respondent

Civil Original Suit No. 80492 of 2017, decided on 28th April, 2023.

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

----S. 5---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. IV---Documents, reliance on---Scope---Court has to only examine documents filed, in order to enforce such award under the doctrine of pro-enforcement bias.

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

----S. 7---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. II, cl. 2 & Art. V (1) (a)---Invalidity of agreement---Electronic communication---Plea raised by objector to award was that agreement between the parties was invalid---Validity---Communications were exchanged between the parties and were sent through automated information system--- Such communication squarely came within the meaning of terms defined in Electronic Transactions Ordinance, 2002, as well as within the meaning of "agreement in writing" defined in Art. II, cl. 2 of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.

Louis Dreyfus Commodities Suisse S.A. v. Acro Textile Mills Ltd. PLD 2018 Lah. 597; Hitachi Limited v. Rupali Polyester" 1998 SCMR 1618; Enka Insaat Ve Sanayi AS v. Insurance Company Chubb [2020] UKSC 38 and Kabab-Ji SAL v. Kout Food Group [2021] UKSC 48 rel.

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

----S. 7---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. V(2)(b)---Final award---Unenforceability---Public policy, contrary to---Plea raised by objector to award was that the award was contrary to public policy in Pakistan---Validity---Recognition and enforcement of an arbitral award under S. 7 of Agreements and Foreign Arbitral Awards) Act, 2011 and New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, could be refused if competent authority in Pakistan would find that recognition or enforcement of the award was contrary to "public policy" of Pakistan---To avail benefit of Art. V(2)(b) of New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, the objector had to satisfy the High Court that the recognition or enforcement of award was contrary to "public policy" of Pakistan---Parties to an arbitration agreement were compelled under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 to take their claims to Tribunals agreed for resolution of disputes by parties and further required the Courts in Pakistan to refer the parties to arbitration---This was the public policy of Pakistan and had be adhered to---There was no violation of Pakistani law or public policy in circumstances.

Orient Power Company (Private) Limited through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2019 CLD 1069 and Scherk v. Alberto-Culver Co, 417 US 506 (1974) rel.

(d) Interpretation of statutes---

----Preamble---Object, purpose and scope---Preamble means an introductory statement in a Constitution, Statute or Act---It explains the basis and objective of such a document---Though Preamble to a statute is not an operational part of the enactment but it is a gateway, which discusses purpose and intent of Legislature to necessitate the legislation on the subject---Preamble sheds clear light on the goals that Legislator aims to secure through introduction of such law---Preamble of a statute holds a pivotal role for the purposes of interpretation in order to dissect true purpose and intent of law.

Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447; Orient Power Company v. Sui Northern Gas Pipelines PLD 2019 Lah. 607 and Dhanya Agro-Industrial (Pvt.) Limited through Attorney v. Quetta Textile Mills Ltd. through Chief Executive 2019 CLD 160 rel.

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

----Preamble & S. 2(e)---Foreign arbitral award---Court, jurisdiction of---Scope---Preamble of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 provided expeditious mechanism for recognition and enforcement of foreign arbitral agreements and foreign arbitral awards pursuant to New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958---Final Award was made by London Court of International Arbitration against the parties who belonged to consented countries and were bound by New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, therefore, it came within the meaning of S. 2(e) of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.

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

----S. 7---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. V(2)(b)---Recognition and enforcement of foreign arbitral award---Pro-enforcement bias---Object, purpose and scope---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, in Art. V advocates 'pro-enforcement bias' policy in dealing with applications of recognition and enforcement of international arbitral awards---General principle has been set forth that each contracting state has to recognize arbitral awards as binding and enforce them---As a result, foreign awards are entitled to a prima facie right to enforcement in the contracting states---Essentially it means pro-enforcement attitude of national courts enforcing foreign award---After ratifying New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 and Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, Courts in Pakistan have enforced the awards through pronouncements of judgments and such enforcement casts a duty upon the Courts to build the confidence of investors by protecting the sanctity of arbitration agreements.

Yukos Oil v. Dardana, [2001] EWCA Civ 1077 and M.C.R. (Pvt.) Ltd. Franchisee of Pizza Hut v. Multan Development Authority and others 2021 CLD 639 rel.

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

----Ss. 6 & 7---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. V(2)(b)---Civil Procedure Code (V of 1908), O. XXI, R. 10---Recognition and enforcement of foreign arbitral award---Pro-enforcement bias---Effect---Applicant filed application seeking recognition and enforcement of foreign arbitral award in Pakistan, issued by London Court of International Arbitration---Objector to the award raised plea of pro-enforcement bias---Validity---Pro-enforcement policy under New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, refers to a legal approach that favors recognition and enforcement of foreign arbitral awards---Such approach is based on the principle of comity, which requires countries to show respect and deference to legal systems and decisions of other countries and arbitral tribunals---Pro-enforcement policy under New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, is important because it promotes finality and enforceability of arbitration awards---When parties agree to resolve their disputes through arbitration, they expect that resulting award is final and binding---Pro-enforcement policy helps to ensure that parties can rely on arbitration process to resolve their disputes and that resulting awards are enforced in other countries---In practice, a pro-enforcement policy means that courts should apply a narrow standard of review when considering applications for recognition and enforcement of foreign arbitral awards---Such standard requires courts to limit their review to procedural matters and to refrain from re-examining substance of dispute---Such approach ensures that recognition and enforcement process is swift and efficient, which benefits both parties and promotes international trade and commerce---Pro-enforcement policy under New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, is essential to promote recognition and enforcement of foreign arbitral awards---Such approach reflects importance of promoting finality and enforceability in arbitration process, which in turn contributes to stability and predictability of international commerce---High Court is bound to implement it as such---Objector failed to defend its foreign arbitration award on the grounds raised under S. 7 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 read with Art. V(2)(b) of New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, by its conduct while appearing before London Court of International Arbitration Award, and by not filing proper documents under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 and even by its reply filed before High Court---Objector filed reply (four pages only) without any document/annexure by taking preliminary objections, whereas, applicant filed application under S. 6 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, read with Art. IV of New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, and had met with all requirements for enforcement of the "Final Award"---High Court recognized the "Final Award" as binding---High Court passed judgment in the amount represented in the "Final Award", which would be executed as decree of High Court---High Court in exercise of powers under O. XXI, R. 10, C.P.C. converted the application into execution proceedings--- Application was allowed accordingly.

Tariq Iqbal Malik v. Messrs Mltiplierz Group Pvt. Ltd. and 4 others 2022 CLD 468; Malik Mehboob v. Commissioner, Rawalpindi and others PLD 2023 Lah. 97; Abdullah v. Messrs CNAN Group SPA through Chief Executive/Managing Director and another PLD 2014 Sindh 349 and Louis Dreyfus Commodities Suisse S.A. v. ACRO Textile Mills Ltd. PLD 2018 Lah. 597 ref.

Barrister Iftikhar ud Din Riaz, Advocate Supreme Court with Ahmad Abdul Rehman, Smam Mir and Mehrunisa Virk for Applicant.

Deeba Tasneem Anwar, Mirza Nasar Ahmad, Advocate Supreme Court, Jam Waseem Haider, Haseeb Ahsan Javed, Ch. Nabeel Rafaqat and Jawad Jamil Malik for Respondent.

2023 C L D 879

[Lahore]

Before Muhammad Sajid Mehmood Sethi and Abid Hussain Chattha, JJ

FAYSAL BANK LIMITED---Appellant

Versus

NATIONAL ELECTRIC COMPANY PAKISTAN and others---Respondents

F.A.O. No. 191715 of 2018, heard on 7th June, 2021.

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

----Ss. 9, 10 & 22---Civil Procedure Code (V of 1908), O. IX---Suit for recovery of finance---Leave to defend the suit---Dismissal of suit for non-prosecution---During pendency of application for leave to defend the suit, Banking Court dismissed the suit for non-prosecution---Validity---When case was fixed for arguments on leave application, Banking Court could neither dismiss leave application for non-prosecution nor could it decide the suit unless leave application was decided---No limitation runs against void order---Question of limitation in respect of application seeking restoration of suit was not relevant as dismissal itself was not proper---High Court set aside order passed by Banking Court and suit was restored---Appeal was allowed accordingly.

Mst. Suraya Parveen v. Mst. Rukhsana Hanif and others 2012 SCMR 656; National Bank of Pakistan v. The Additional District Judge, Lahore and 2 others PLD 1985 Lah. 326; Muhammad Iftikhar through Special Attorney v. Zarai Taraqiati Bank Limited through Chairman and another 2005 CLD 1454; 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; Abid Aziz Khan and 2 others v. Bank of Punjab through Branch Manager 2007 CLD 997; Rab Nawaz Shahid and 3 others v. Bank of Khyber and 2 others 2007 CLD 1236 and Messrs Fateh Textile Mills Ltd. v. West Pakistan Industrial Development Corporation PLD 2008 Kar. 103 ref.

CITIBANK N.A. through Manager and duly authorized Attorney of the Bank v. Judge Banking Court-III, Lahore and another 2006 CLD 1543; Jamshed Iqbal Butt and another v. Mst. Bushra Tufail 2015 CLC 316 and Qazi Munir Ahmed v. Rawalpindi Medical College and Allied Hospital through Principal and others 2019 SCMR 648 rel.

Ashar Elahi for Appellant.

Syed Zille Hussnain Gillani for Respondents.

2023 C L D 885

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

Messrs MANDVIWALLA BUILDERS AND DEVELOPERS and another---Petitioners

Versus

M. AWAIS SHEIKH CEO MANGLA VIEW RESORT AND MANGLA GARRISON HOUSING (PVT.) LIMITED and others---Respondents

C.M. No.3 of 2023 and Civil Original No. 11 of 2022, heard on 1st June, 2023.

(a) Jurisdiction---

----Scope---Capacity of the Court to take account of any dispute submitted to it is called jurisdiction---Thus, without a specific jurisdiction, the Court will not possess the prowess to decide on a particular dispute.

Province of Punjab through Secretary to Government of Punjab, Communication and Works Department, Lahore and another v. Messrs Muhammad Tufail and Company through Muhammad Tufail (deceased) through Legal Heirs PLD 2017 SC 53; MCB Bank Limited v. Adeel Shahbaz Steel Mills and others 2023 CLD 655 and Bahoo Dying Industries (Private) Limited v. Sui Northern Gas Pipelines Limited and others PLD 2021 Lah. 186 ref.

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

----Ss. 5(1), 21 & 286---Civil Procedure Code (V of 1908), O. VII, R. 10---Petition for winding up of company---Return of plaint---Territorial jurisdiction of (Lahore) High Court---Scope---Registered office of a company---Section 5(1) of the Companies Act, 2017 ('the Act') unequivocally provides that the jurisdiction shall be determined on the basis of place of the "registered office" of the company situated in the territorial jurisdiction of the respective High Court---Thus, location of registered office of a company carries pivotal role and status while determining territorial jurisdiction of the Court dealing with company matters---Section 21 of the Act elucidates that the registered office will be the one where all communications and notices would be addressed to the company---All issues arising out of the "Act" are to be dealt with by the Company Judge of a Court having jurisdiction at the place where the registered office of the Company is situated, which in the present case was "Lahore High Court, Lahore (Principal Seat)", where admittedly the registered office of the petitioner-company is located---Since registered office of the petitioner-company is situated at Lahore, therefore, Rawalpindi Bench of the (Lahore) High Court lacks jurisdiction to entertain the present petition---Application was allowed and it was directed that the present petition be returned to the petitioners to be filed before the Company Judge at Principal Seat of the Lahore High Court, if so advised.

Iftikhar Hussain and others v. Dadex Enternit and others 2002 CLD 575; PHOENIX Security Service (Pvt.) Ltd. through Director Commercial v. Messrs Emerald Mining Company (Pvt.) Ltd. PLD 2000 Pesh. 78; Chief Executive Officer, Peshawar Electric and Power Company (PEPCO) and another v. Sajeeda Begum and others 2023 PLC (C.S) 90 = 2022 SCMR 2058; Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1006 SC 543; Zafar Iqbal v. Nasreen Ahmed 2014 CLD 1039; Iftikhar Hussain and others v. Dadex Enternit and others 2002 CLD 575 and Abdul Rauf and another v. Messrs Mifatah Uddin Flour Mills (Pvt.) Ltd. and others PLD 2000 Pesh. 83 ref.

(c) Jurisdiction---

----Question of jurisdiction---If a mandatory condition for the exercise of a jurisdiction before a Court, tribunal or authority is not fulfilled, then the entire following proceedings become illegal and suffer from want of jurisdiction---So, there rests no room for stepping ahead with a case without first attending to and adjudicating upon question of jurisdiction.

Zahid Zaman Khan and others v. Khan Afsar and others PLD 2016 SC 409; Government of Sindh through Secretary Education and Literacy Department and others v. Nizakat Ali and others 2011 SCMR 592; Pakistan Red Crescent Society, Punjab Provincial Branch v. Zia Ullah Khan Niazi 2011 PLC (C.S.) 1640 and Khyber Tractors (Pvt.) Ltd. through Manager v. Pakistan through Ministry of Finance, Revenue and Economic Affairs, Islamabad PLD 2005 SC 842 ref.

Mohsin Kamal, Nauman Iqbal and Waleed Khan for Petitioners.

Syed Ijaz Ali Akbar Sabzwari, Advocate Supreme Court, Muhammad Kamal Hassan and Mrs. Kalsoom Akhtar for the Respondents/Applicants Nos. 1 and 2 (in C.M. No.03 of 2023).

Muzaffar Ahmed Mirza, Chief Prosecutor, Executive Director, Legal Affairs, SECP with Syeda Muneeza Fatima, Special Public Prosecutor on behalf of Respondent No.4.

Rashid Mehmood, Research Officer, Lahore High Court, (Rawalpindi Bench).

2023 C L D 912

[Lahore (Multan Bench)]

Before Ch. Muhammad Masood Jahangir and Anwaar Hussain, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN (SLIC) through duly authorized Officer/Attorney---Appellant

Versus

Mst. Bibi REEMA---Respondent

Insurance Appeal No. 178 of 2021, decided on 27th September, 2021.

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

----Ss. 118 & 79---Qanun-e-Shahadat (10 of 1984), Arts. 129(g), 72, 78 & 117---Insurance claim---Non-disclosure or misrepresentation---Withholding best evidence---Proof of contents of documents---Post-mortem report, evidentiary value of---Scope---­­­Appellant impugned judgment and decree passed by the Insurance Tribunal whereby the suit of respondent for recovery of life insurance claim was allowed---Appellant in order to obtain benefit of S. 79 of the Insurance Ordinance, 2000 and to repudiate the contract placed reliance on a medical prescription issued by a specialist of mental disease and addiction treatment certificate along with inquiry report of the appellant's official---Validity---Neither inquiry officer of the appellant nor the doctor whose prescription had been presented was produced as witnesses---Prescription appended with the inquiry report was a photocopy and not the original---Probative value of the prescription evaporated in the thin air on the ground that it was a private document, hence, the genuineness of the same was required to be proved in terms of Art. 72 read with Arts. 78 & 117 of the Qanun-e-Shahadat, 1984---None of the relatives of the deceased had appeared in support of their statements made before the Inquiry Officer---No effort was made on the part of the appellant to get post mortem of the deceased conducted and in absence of the same, there was no reason to discard the death certificate, which was a public document and to which presumption of truth was attached---Mere fact that the death had occurred within short period of time after the purchase of the policy was not per se a suspicious circumstance to deny the relief to the beneficiary---Since the appellant had denied and lingered the claim of the respondent without any just cause, therefore, High Court awarded an additional cost to the appellant---Appeal was dismissed.

Muhammad Zakria and 3 others v. Bashir Ahmad 2001

CLC 595 rel.

Khan Muhammad Yusuf Khan Khattak v. S. M. Ayub and 2 others PLD 1973 SC 160; Muhammad Ashraf v. Shah Noor Khan and another 1996 MLD 1819; Muhammad Aslam and another v. Mst. Sardar Begum alias Noor Nishan 1989 SCMR 704; Board of Intermediate and Secondary Education, Lahore through Secretary v. Mst. Sobia Chand 1999 CLC 1166; Fateh Ullah v. Noor Ahmad 2012 CLC 246 and Life Insurance Corporation of India v. Smt. Parkash Kaur and others 1997 (1) MPLJ 203 ref.

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

----S. 79---Non-disclosure or misrepresentation---Scope---Insurance contracts belong to that limited category of contracts, which are regarded as ones falling under doctrine of uberrimae fidei i.e., of the utmost good faith and hence any concealment may lead to cancellation thereof.

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

----S. 79--- Non-disclosure or misrepresentation--- Scope--- Non-disclosure or wrong declaration of any material information can entitle an insurer to invoke S. 79 of the Insurance Ordinance, 2000, to repudiate the contract of insurance.

Life Insurance Corporation of India and others v. Asha Goel and others (2001) 2 SCC 160 rel.

(d) Insurance---

----Non-medical life insurance---Scope---Non-medical life insurance assumes a no medical test while issuing a policy, as opposed to a traditional policy where medical tests are required and are executed while relying upon the declaration, which the insured makes at the time of making of the contract of insurance.

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

----Art. 72 & 78---Proof of contents of documents---Proof of signature and handwriting of person alleged to have signed or written document produced---Scope---Production of documents and their admissibility as well as the proof and probative value carried by such documents are entirely two different things and should never be used or construed interchangeably---For proving veracity of a document, the person who authored it must depose before the court in support of the contents, otherwise such document can merely be taken into consideration for the purpose of showing that such a document was issued but whether the contents of the same are correct or not, such facts cannot go into the evidence unless the author of the document deposes before the court and faces cross-examination---Once a document is produced as a piece of evidence, it has to undergo the crucible of objective scrutiny in terms of Art. 78 of the Qanun-e-Shahadat, 1984---Mere production of a document neither lends any credence nor confers any probative value to it.

Pakistan Engineering Consultants through Managing Partner v. Pakistan International Airlines Corporation through Managing Director and another PLD 2006 Kar. 511 and Messrs United Ethanol Industries Limited v. Messrs JDW Sugar Mills Ltd. 2015 YLR 1429 ref.

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

----Art. 129(g)--- Withholding best evidence--- Scope--- An adverse presumption is to be drawn against the party which withholds the best evidence.

Dilshad Begum v. Nisar Akhtar 2012 SCMR 1106 ref.

Barrister Malik Sohail Ashiq Shujra for Appellant.

Sardar Muhammad Rashid Khan Baloch for Respondent.

2023 C L D 928

[Lahore (Multan Bench)]

Before Shahid Jamil Khan and Muhammad Sajid Mehmood Sethi, JJ

MUHAMMAD SHAHID KHAN---Appellant

Versus

FAYSAL BANK LTD. and others---Respondents

F.A.O. No. 173 of 2013, decided on 21st June, 2016.

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

----Ss. 22 & 27---Suit for recovery of finance---Finality of order---Principle of past and closed transaction---Applicability---Decretal amount, amendment of---After the judgment and decree was maintained by High Court, on the application of respondent Bank, the Banking Court enhanced decretal amount---Validity---Judgment and decree passed by Banking Court under the theory of merger was merged in judgment and decree passed by High Court in exercise of appellant jurisdiction, in the earlier round of litigation and had become past and closed transaction---Respondent Bank, at its own will and whims could not assail before Banking Court, the judgment which had merged into final judgment passed by High Court, by moving a miscellaneous application---Banking Court had allowed application of respondent bank in violation of the provisions of S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Only remedy available to respondent bank was to assail judgment and decree passed by High Court by filing appeal before Supreme Court---When in an appeal/revision/writ, judgment of lower forum was reversed, varied, modified or affirmed, after recording reasons on the consideration of issues of law and/or fact, the judgment/order of the subordinate Court/forum merged into the decision of appellate Court, irrespective of the fact that such judgment had reversed, varied or affirmed the decision of subordinate Court/forum---Decision of appellate Court would be operative and capable of enforcement in such case on the principle of merger---Application for modification of decretal amount could only be moved before High Court---High Court set aside the order of Banking Court on the doctrine of merger and the same was also violative of S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed, in circumstances.

Marhaba Textile Limited v. Industrial Development Bank of Pakistan 2003 CLD 1822; Askari Commercial Bank Limited through Authorized Signatory v. Messrs Bake Line Products through Partners and 5 others 2013 CLD 836; Anwar Mehmood v. Messrs Askari Bank Limited 2013 CLD 912; Messrs. Tharparkar Sugar Mills through Authorized Representatives and others v. Bankers Equity Limited through Official Liquidator 2014 CLD 1343 and Sahabzadi Maharunisa and another v. Mst. Ghulam Sughran and another PLD 2016 SC 358 rel.

Abdul Qadoos Khan Tareen for Appellant.

2023 C L D 984

[Lahore (Bahawalpur Bench)]

Before Muhammad Sajid Mehmood Sethi, J

The INDUS MOTOR COMPANY LIMITED---Appellant

Versus

ABDUL KHALID GILL and another---Respondents

F.A.O. No. 03 of 2018/BWP, decided on 8th February, 2021.

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

----S. 25---Defective part/item of sold product (car)---Warranty offered by the manufacturing company---Scope---Consumer Court directed the appellant to replace the defective engine of the vehicle with new one without any charges---Contention of the appellant/motor vehicle manufacturing company('company') was that the quality of engine had been compromised on account of improper periodic maintenance and use of non-branded/substandard lubricants/filters as maintenance of the vehicle was not carried out by its(company's) dealer---Held, that the documentary evidence produced by the respondent/claimant, inter alia, showed that engine oil and filters of a branded company were used after regular intervals---Contents of the Warranty Booklet did not impose any burden upon the respondent for carrying out maintenance from authorized dealer(s), rather free maintenance service was offered and the customer was advised to follow the instructions regarding maintenance contained in Owner's Manual for efficient working of the vehicle---Furthermore, "engine" fell within the items which were covered by the Warranty; and it was mentioned in the Warranty Booklet that the company would either repair or replace any part which would be revealed defective in material or workmanship under normal use within certain basic coverage period---Documents relied upon by the respondent for coverage of such period had not been disputed by the appellant/company---Vehicle-in-question was also within warranty period when the defect was communicated to the appellant/company---High Court maintained the order passed by the Consumer Court that the appellant/company was bound to replace the defective engine of the vehicle with new one without any charges---Appeal was dismissed, in circumstances.

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

----S. 25---Defective part/item of sold product (car)---Warranty offered by the manufacturing company---Expert opinion---Not necessary where malfunction admitted---Consumer Court directed the appellant/company to replace the defective engine with new one without any charges---Contention of the appellant/motor vehicle manufacturing company ('company') was that the Consumer Court was obliged to invite expert evidence to establish the condition of the engine---Held, that the appellant/company had not denied malfunctioning of the engine and its stance was that the defect occurred due to negligence of respondent/consumer---Consumer Court had rightly appreciated the facts and evidence while not calling for any expert evidence---High Court maintained the order passed by the Court below that appellant/company was bound to replace the defective engine of the vehicle with new one without any charges---Appeal was dismissed, in circumstances.

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

----Ss. 10 & 25---Defective part/item of sold product (car)---Warranty offered by the manufacturing company---Damages, award of---Scope---Consumer Court ordered the appellant/company to pay damages to the respondent/consumer while directing the appellant to replace the defective engine of the vehicle with new one without any charges---Held, that the respondent/consumer was under heavy duty to substantiate financial loss, mental torture/agony at the hands of appellant/company through independent and reliable evidence, which he (respondent/consumer) had failed to produce---Respondent had not suffered any damage from the vehicle, rather the defect was observed during a routine check-up---Restriction contained in the S. 10 of Punjab Consumer Protection Act, 2005 which stated that "where the consumer has not suffered any damage from the product except the loss of utility, the manufacturer shall not be liable for any damages except a return of the consideration or a part thereof and the costs"---Consumer Court had though rightly appreciated the facts and evidence while coming to the conclusion that the appellant/company was bound to replace the defective engine of the vehicle with new one without any charges, however, the Court below was not justified to award damages to the respondent/consumer--- Claim of the respondent/ consumer to the extent of damages was declined---Appeal was partly allowed.

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

----Ss. 25 & 28---Defective part/item of sold product (car)---Claim of the consumer in light of the warranty offered by the manufacturing company---Cause of action, accrual of---Limitation---Consumer Court directed the appellant to replace the defective engine of the vehicle with new one without any charges---Contention of the appellant/motor vehicle manufacturing company ('company') was that the claim of the respondent/consumer was time-barred as the cause of action accrued when the matter was reported for the first time by the complainant, whereas he filed complaint after about forty-six (46) days of said reporting---Validity---Record revealed that the prescribed notice in terms of S. 28(1) of the Punjab Consumer Protection Act, 2005 ('the Act 2005') was issued to the appellant about seventeen (17) days after the defect had been reported---Reply to the said notice, denying the claim of the respondent/consumer, was transmitted by the appellant after thirty (30) days of reporting but fifteen (15) days of sending of notice---Cause of action, in the present case, accrued on said date of denial of claim by the appellant/company, thus the complaint having been filed after about fourteen (14) days of said denial was well within time prescribed in S. 28(4) of the Act, 2005---High Court maintained the order passed by the Consumer Court that the appellant/ company was bound to replace the defective engine of the vehicle with new one without any charges--- Appeal was dismissed, in circumstances.

Messrs Deltex Courier Service v. Sajid Imran Gill and others 2019 CLC 1041 ref.

Sheikh Usman Ahmad and Shehryar Sindhu for Appellant.

Nadeem Iqbal Ch., Rana Rizwan Ahmad and Nusrat Jabeen for Respondents.

2023 C L D 995

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan and Anwaar Hussain, JJ

ZAFAR JAVED and others---Appellants

Versus

PUNJAB SMALL INDUSTRIES and others---Respondents

F.A.O. No. 77 of 2017, decided on 12th December, 2022.

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

----S. 15---Sale of mortgaged property---Mode and manner---Non-compliance of statutory requirements---Scope---Appellants assailed the rejection of their objection petition directed against the auction of mortgaged property---Validity---Report of the auction committee revealed that the advertisement was published only in one Urdu newspaper, although it was also required to be published in one reputable English newspaper as well---Additionally, the place of the auction was mentioned as the Office of Assistant Director, but as per S. 15(4), it must be a public auction---In the present case, the auction was conducted only three days after the issuance of publication---Three notices in terms of S. 15(2) were purportedly issued by the respondents in the name of appellants, but the record was absolutely mute about their effective service---Respondents were required to file the auction report before the Banking court within thirty days of the auction, as per S. 15(11), but it was filed after almost 13 months---Only the auction of the mortgaged property was alleged to have been conducted, and no further steps were taken---Thus, the impugned auction by no means had attained finality to be rendered as a past and closed transaction---Impugned order was set aside, allowing the matter to be open for the re-auction of mortgaged property---Appeal was allowed.

Mst. Shamim Akhtar v. Muhammad Riaz and another 2008 CLD 186; Rao Muhammad Sadaqat Ali and another v. Messrs Rana Jamal Akbar Ice Factory Rajan Pur and another 2013 CLD 546; Kamran and another v. Zonal Manager and another 2014 CLD 304; Irfan Nawab through Attorney v. Soneri Bank Limited 2012 CLD 1922; Izhar Alam Farooqi, Advocate and another v. Sheikh Abdul Sattar Lasi and others 2008 CLD 149; Muhammad Ismail v. Dubai Islamic Bank Pakistan Ltd. 2016 CLD 5 and Muhammad Moizuddin and another v. Mansoor Khalil and another 2017 SCMR 1787 rel.

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

----S. 15---Sale of mortgaged property---Scope---Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, reveals that the financial institution, before exercise of its powers under subsection (4), shall cause to be published a notice in one reputable English daily newspaper and one Urdu daily newspaper with wide circulation in the Province in which the mortgaged property is situated, specifying particulars of the mortgaged property, including name and address of the mortgagor, details of the mortgaged property amount of outstanding mortgage money, and indicating the intention of the financial institution to sell the mortgaged property; moreover, the financial institution shall also send such notices to all persons who, to the knowledge of the financial institution, have an interest in the mortgaged property as mortgagees.

Muhammad Safeer Mughal for Appellants.

Waqar ul Haq Sheikh for Respondents Nos. 1 and 2.

Wahab Mehdi Butt for Respondent No. 3.

Rashid Mehmood, Research Officer, Lahore High Court, Rawalpindi Bench.

2023 C L D 1021

[Lahore (Multan Bench)]

Before Muhammad Raza Qureshi and Shakil Ahmad, JJ

Messrs S.M. NISAR AND COMPANY through Managing Partner and others---Appellants

Versus

ASKARI BANK LIMITED, BRANCH HIGH STREET, SAHIWAL---Respondent

R.F.A. No. 73 of 2013, decided on 1st June, 2022.

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

----Ss. 9, 10 & 22---Suit for recovery of bank loan---Leave to appear and defend the suit---Availing of finance facility was admitted by the clients (appellants) of the bank---Court dismissed the appellants' application to leave to defend and decreed the suit of the bank/respondent---Appellants asserted that the amounts paid by them towards adjustment of finance facility had not been accounted for---Validity---Held, that such assertion had not been substantiated by the appellants in their application for leave to defend through tangible material/details of any amount adjusted and even no specific amount that could have been counted as disputed was mentioned in said application--- When the application for leave to defend did not fulfill the dictates of Ss. 10(3), 10(4) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 (' the Ordinance 2001'), then such application was liable to be rejected in terms of S. 10(6) of the Ordinance 2001 and in consequence, allegation of facts as contained in the plaint were deemed to have been admitted as per S. 10(1) of the Ordinance 2001---Appellants also failed to raise any substantial question of law and fact---No illegality or infirmity was noticed in the impugned judgment and decree passed by the Court below---Appeal was dismissed, in circumstances.

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

Syed Zeeshan Haider Zaidi for Appellants.

Malik Tariq Rajwana, Barrister Kashif Rajwana and Muhammad Ibtasam Ahmad for Respondent.

2023 C L D 1051

[Lahore]

Before Shams Mehmood Mirza, J

REINHART INDIA (PRIVATE) LIMITED through Special Attorney---Applicant

Versus

BASHIR COTTON MILLS LIMITED through Chief Executive Officer---Respondent

C.M. No. 13116 of 2017, decided on 10th April, 2023.

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

----Ss. 6 & 7---New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. V(1)(c)---Recognition and enforcement of award---Terms and conditions of contract, violation of---Non-filing of appeal against Award---Effect---Respondent company committed default in terms of contract and did not establish letter of credit in favour of applicant company within stipulated period---Applicant company sought enforcement and recognition of award announced by International Cotton Association (Association)---Respondent company raised objections against award---Validity---In relation to grant of interest/compound interest or alleged erroneous findings of arbitral tribunal about measurement standard, respondent company had remedy of appeal available to it under by-laws of the Association or by recourse to curial law---Respondent company chose not to avail remedies available to it with the result that Award had become final---Respondent company waived its right for raising such objections at enforcement stage---Grounds listed in New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, on the basis of which a Court could refuse to enforce an arbitral award were exhaustive---Standard of review on defense based on Art. V(1)(c) of New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, was fairly limited and such defenses did not include mistakes of fact or law by the arbitrators---Court before which a petition for enforcement of award was brought could not review merits or substance of award on the principle that the Court could not substitute its judgment for that of the arbitrators---High Court could not enter into reappraisal of merits of the award like an Appellate Court---Claim of parties arising from their contract and grant of interest and compound interest could not form any basis for refusing to endorse the award---Award in question was passed within the parameters of the dispute referred to the arbitral tribunal and did not exceed its authority or mandate---High Court recognized the award as respondent company failed to raise any valid defense in accordance with Art. V of New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958---High Court directed to enforce the award as a judgment of High Court---Application was allowed, in circumstances.

Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb [2020] UKSC 38; Arbitrators to Apply Contract Terms from the Perspective of the New York Convention; Management and Technical Consultants S.A. v. Parsons-Jurden Intl Corp. 820 F.2d at 1531; Aasma v. American Merican SS Owners Mutual Protection, 238 F. Supp. 2d 918 (N.D. Ohio 2003); Parsons and Whittemore Overseas Co. v. Societe Generale de L'Industrie du Papier (RAKTA) 508 F.2d 969 (2d Cir. 1974) and Rahat and Company v. Trading Corporation of Pakistan PLD 2020 SC 366 rel.

Wasif Majeed for Applicant.

2023 C L D 1086

[Lahore (Multan Bench)]

Before Shams Mehmood Mirza and Sultan Tanvir Ahmad, JJ

ASGHAR ALI---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager---Respondent

R.F.A. No. 172 of 2021 and C.M. No. 1327 of 2022, decided on 5th October, 2022.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Leave to defend---Scope---Bank filed a suit for recovery of certain amount against the appellant---Appellant filed the application for leave to defend stating that the amount shown to have been disbursed to him was incorrect and that he had repaid the due amount, which was not reflected in the statement of account---Banking Court did not consider the defense taken by the appellant to be bona fide and consequently passed decree against him---Validity---Judgment passed by the Banking Court had not dealt with the defense raised by the appellant in any meaningful way---Appellant in his application for leave to defend had substantially complied with the requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court, however, had mechanically stated in the order that the appellant had not fulfilled the requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed and the Banking Court was directed to expeditiously decide the application for leave to defend.

Hamayoun Syed Rasool for Appellant.

2023 C L D 1092

[Lahore (Multan Bench)]

Before Shahid Jamil Khan and Raheel Kamran, JJ

NATIONAL BANK OF PAKISTAN through Branch Manager---Appellant

Versus

ARSHAD MUNIR KHALID and 2 others---Respondents

R.F.A. No. 184 of 2022, decided on 23rd November, 2022.

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

----S. 9---Suit for recovery of bank loan---Scope---Appellant assailed the judgment passed by the Banking Court whereby it decided that the cost of funds was payable only if the date of default was determined by the court, with the observation that markup had already been charged---Validity---Settlement was arrived at between the parties during the pendency of the suit---Terms of settlement, eclipse the Financing Agreement and normally the suit is decreed in terms of the settlement---Cost of funds, mentioned in the settlement, was declined, by holding it against the law---Payment of a certain amount as costs of funds was part of the settlement and could not be lightly ignored by the Trial Court---Impugned judgment and decree were set aside and the Trial Court was directed to re-interpret the settlement agreement---Appeal was disposed of accordingly.

Mian Khurram Qureshi Hashmi for Appellant.

2023 C L D 1098

[Lahore]

Before Shahid Bilal Hassan and Muhammad Raza Qureshi, JJ

J. K. TWILLS AND DRILLS (PVT.) LTD. through Authorized Director and another---Appellants

Versus

PREMIER INSURANCE COMPANY OF PAKISTAN LIMITED and another---Respondents

R.F.A. No. 40462 of 2019, decided on 19th September, 2022.

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

----Ss. 122 & 123---Insurance Tribunal---Powers and procedure---Scope---For all intents and purposes, the Tribunal has powers of a Civil Court under C.P.C.---Trial before Insurance Tribunal is conducted in the same manner in which a suit before Civil Court proceeds---Tribunal has powers to enforce attendance of any person, examine him on oath, receive evidence on affidavits and issue permission for examination of witnesses or documents---All procedural as well as substantive provisions contained in C.P.C. and Qanun-e-Shahadat, 1984, are applicable for trials before Insurance Tribunal.

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

----O. VI, R. 1---Pleadings---Scope---Pleadings cannot be equated with evidence---No party to lis can be allowed to lead evidence beyond pleadings nor can it be read in evidence---Parties are required to lead evidence in consonance with their pleadings and no evidence can be led or looked into in support of a plea, which has not been taken in pleadings---Party is required to plead facts necessary to seek relief claimed and to prove it through evidence of unimpeachable character.

Saddaruddin (since deceased) through LRs. v. Sultan Khan (since deceased) through LRs. and others 2021 SCMR 642; Muhammad Rafique and another v. Syed Warand Ali Shah and others 2021 SCMR 1068 and Mst. Khanai and 4 others v. Ghulam Rasool and 9 others 2022 CLC 433 rel.

(c) Evidence---

----Marked document---Validity---Document placed as a marked document is worthless and inadmissible in evidence---Such document cannot be even read in evidence.

State Life Insurance Corporation v. Javaid Iqbal 2011 SCMR 1013; Federation of Pakistan through Secretary Ministry of Defence and another v. Jaffar Khan and others PLD 2010 SC 604 and Azhar Abbas and others v. Haji Tahir Abbas and another 2021 CLC 1351 rel.

(d) Interpretation of document---

----Construction of instrument---Principle---Question of construction of an instrument or document is a question of law---It is duty of Court to interpret a document in its proper legal perspective---While interpreting a document intention of parties must essentially be gathered from language adopted in document and viewed in law through surrounding circumstances---For proper comprehension and insight into an instrument same has to be read as a whole---Where language of document is simple, clearly understandable, and capable of no ambiguity, then intention of parties to such instrument has to be gathered from its contents alone without adverting to any other extraneous consideration.

Concentrate Manufacturing Company of Ireland and 3 others v. Seven-up Bottling Company (Private) Limited and 3 others 2002 CLD 77; Liaqat Ali Khan and others v. Falak Sher and others PLD 2014 SC 506 and Khushi Muhammad and others v. Muhammad Ashfaq and others PLD 2014 Lah. 26 rel.

(e) Interpretation of document---

----Deed of contract---Court, duty of---Principle---Court should lean towards any interpretation which effectuates an instrument rather than one which invalidates an instrument---Deed of contract has to be construed strictly and literally without deviating or anything which was not supported by the intention of parties and language of document---Nothing can be implied in a contract that was inconsistent with it.

Dr. Muhammad Javaid Shafi v. Syed Rashid Arshad and others PLD 2015 SC 212; Saudi-Pak Industrial and Agricultural Investment Company (Private) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another PLD 2003 SC 215; Haji Naimatullah v. Federation of Pakistan through Secretary Ministry of Defence and another PLD 2013 Sindh 406 and House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others 1992 SCMR 19 rel.

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

----Ss. 121 & 124---Insurance claim---Proof---Surveyor's report---Appellants/insurers sought recovery of damages claimed by them for theft of equipment and parts of machinery imported by them---Insurance Tribunal dismissed the claim against respondent/insurance company---Appellants/insurers contended that Surveyors' Reports were not credit-worthy---Validity---Appellants/insurers were beneficiaries of insurance claim and only produced their directors as witnesses and no independent witness was produced throughout to establish factum of burglary and consequent loss, which constituted a condition precedent for attracting indemnification clause contained in Insurance Policies---Evidence of witnesses of appellants/insurers denuded testimony of any credence---Appellants/insurers failed to discharge onus hence relevant issue was correctly decided against them---Reports of Surveyors were neither challenged in application nor before Commission under Securities and Exchange Commission (Insurance) Rules, 2002, therefore, it was too late in the day to throw a challenge in such regard---Where evidence of plaintiff was self-contradictory and not confidence inspiring then he must fail and where the case was doubtful, the decision must be given in favour of adversary rather than the claimant---Plaintiff must succeed on the strength of his own rather than weaknesses of other side---High Court declined to interfere in judgment and decree passed by Insurance Tribunal as the same was neither jurisdictionally flawed nor suffered from any misreading or non-reading of evidence--- Appeal was dismissed accordingly.

Khan Muhammad v. Muhammad Din through LRs 2010 SCMR 1351 and Nasir Ali v. Muhammad Asghar 2022 SCMR 1054 rel.

Ch. Irshad Ullah Chattha for Appellants.

Muhammad Hamza Sheikh for Respondents.

2023 C L D 1116

[Lahore (Bahawalpur Bench)]

Before Muhammad Sajid Mehmood Sethi and Tariq Iftikhar Ahmad, JJ

Messrs BAHAWALPUR COTTON COMPANY through Partners and others---Appellants

Versus

UNITED BANK LIMITED---Respondent

F.A.O. No. 59 of 2016/BWP, heard on 28th March, 2017.\

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

----Ss. 10, 22 & 27---Civil Procedure Code (V of 1908), S. 12(2) & O. IX, R. 9---Suit for recovery of bank loan---Leave to appear application, pendency of---Absence of defendant---Ex-parte judgment and decree, setting aside of---Jurisdiction of Banking Court---Appellants/defendants were aggrieved of ex-parte judgment and decree passed by Banking Court during pendency of application for leave to appear in suit due to non-prosecution---Validity---Once leave application was filed then Banking Court was under legal duty to consider the same regardless of non-appearance of appellants/defendants and their counsel---Banking Court under S. 10(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was required to read contents of plaint, application for leave to defend the suit, replication and then to determine whether any question of law and fact was raised, which needed recording of evidence---Powers were bestowed upon Banking Court under S. 10(9) of Financial Institutions (Recovery of Finances) Ordinance, 2001, to grant conditional or unconditional leave to appellants/defendants---Banking Court under S. 10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was empowered to reject leave application if it had not fulfilled conditions for grant of leave and thereafter could decreed the suit forthwith---Banking Court was required to consider and decide leave application on merits and there was no other choice left with Banking Court and could not dismiss leave application for non-prosecution---No such power was conferred upon Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001---Proceeding otherwise than the Financial Institutions (Recovery of Finances) Ordinance, 2001, would defeat the intent of legislature---Dismissal of leave application due to non-prosecution was without jurisdiction and patently illegal---Inherent jurisdiction of Banking Court was not ousted by S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---There was no specific provision available in Financial Institutions (Recovery of Finances) Ordinance, 2001, debarring application under O. IX, R. 9, C.P.C. or application under S. 12(2), C.P.C.---High Court set aside ex-parte judgment and decree passed against appellants/defendants and remanded the matter to Banking Court for decision on merits---Appeal was allowed accordingly.

Messrs Awan Electronics (Pvt.) Limited through Chief Executive and 2 others v. National Bank of Pakistan through Branch Manager and another 2005 CLD 1660; Nasim Nizami v. Habib Bank Limited 2006 CLD 1213; Abid Aziz Khan and 2 others v. Bank of Punjab through Branch Manager 2007 CLD 997; Pak American Commercial (Pvt.) Ltd. through Director v. Humayoun Latif and 7 others PLD 2008 Kar. 540; United Bank Limited v. Mehmood Ilyas Khan and another 2012 CLD 1372; Crescent Jute Products v. A.D.J., Faisalabad and 2 others PLJ 2015 Lahore 800; Tariq Mehmood v. Atlas Bank Ltd. through Authorized Agent 2015 CLD 959; Nisar Ahmed Afzal v. Muslim Commercial Bank 2014 CLD 390; P. Q. Chemicals v. A. W. Brothers 2005 CLD 169 and Khairpur Textile Mills Ltd. v. National Bank of Pakistan 2003 CLD 326 ref.

(b) Administration of justice---

----Void order---Effect---When basic order is void ab initio, the whole series of subsequent orders, together with the superstructure of rights and obligations built upon them must fall to the ground---Such orders have no foundation as they are based on void order.

(c) Administration of justice---

----Practice and procedure---Question of law---Scope---Pure question of law can be raised at any stage of proceedings.

Talib Hussain and others v. Member, Board of Revenue and others 2003 SCMR 549; Mustafa Lakhani v. Pakistan Defense Officers Housing Authority, Karachi 2007 SCMR 611; Almas Ahmad Fiaz v. Secretary Government of the Punjab Housing and Physical Planning Development, Lahore and another 2006 SCMR 783; Moulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others PLD 2008 SC 663; Abdul Hameed v. Deputy Commissioner/Administrator, Zila Council Mandi Bahauddin and 4 others 1997 CLC 540; Muhammad Siddiq v. Ashraf Ali and 3 others 2000 MLD 781; Faisal Jameel v. The State 2007 MLD 355; Secretary Communication and Works Department Government of Balochistan and others v. Dad Baksh and another 2013 CLC 343 and Muhammad Iqbal v. Muhammad Ahmed Ramzani and 2 others 2014 CLC 1392 rel.

Mian Muhammad Mujahid for Appellants.

Mahmood Ahmed Bhatti for Respondent.

2023 C L D 1131

[Lahore (Bahawalpur Bench)]

Before Muhammad Sajid Mehmood Sethi and Tariq Iftikhar Ahmad, JJ

NIB BANK LIMITED---Appellant

Versus

Messrs PASBAN AGRO CHEMICALS COMPANY and others---Respondents

R.F.A. No. 157 of 2015/BWP, heard on 27th March, 2017.\

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

----O. XVII, R. 3--- Word "forthwith"--- Applicability--- Word "forthwith" means without any further adjournment yet it cannot be equated with the words "at once pronounce the judgment".

Muhammad Aslam v. Nazir Ahmed 2008 SCMR 942 and Israr Ahmed Afzal v. Haji Muhammad Azram and another 2016 MLD 1490 rel.

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

----Ss. 9, 10 & 22---Civil Procedure Code (V of 1908), O. XVII, R. 3---Suit for recovery of finance---Leave to defend the suit---Dismissal of suit for non-production of evidence---Scope---Appellant/Bank was aggrieved of dismissal of suit for failure to produce evidence on date fixed---Validity---Time must be granted by Court at the request of defaulting party---If time was not granted by Banking Court for production of evidence at the instance of the party against whom order was required to be made, then penal provision of O. XVII, R. 3, C.P.C. would not be applied against such party though in default on next date---Banking Court could have adjourned the matter subject to deposit of cost before taking extreme measures of closing the right of evidence---Provision of law, regarding closing of right of evidence, required grater care on the part of the Court, as it would shut out one party to defend itself and virtually it would be at the mercy of other party to do justice between the parties---High Court set aside the order passed by Banking Court and restored the suit and provided one opportunity to appellant/Bank to produce its evidence--- Appeal was allowed accordingly.

Ghulam Qasim v. Ghulam Hussain PLD 1992 SC 577 rel.

Muhammad Basit Babar Chughtai for Appellant.

Gulzar Ahmad Khan Durrani for Respondents.

2023 C L D 1167

[Lahore (Rawalpindi Bench)]

Before Mirza Viqas Rauf and Asim Hafeez, JJ

HASSAN NAIMAT ULLAH KHAN and another---Appellants

Versus

MUMTAZ CITY through CEO and 5 others---Respondents

R.F.A. No. 31 of 2021, decided on 29th June, 2022.

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

----S. 441---Specific Relief Act (I of 1877), Ss. 12, 42 & 54---Civil Procedure Code (V of 1908), S. 9, O. VI, R. 5 & O. VII, Rr. 1, 2---Suit for specific performance of agreement, declaration and injunction---Rejecting of plaint---Civil Court, jurisdiction of---Better statement---Scope---Plaintiff was CEO of company which claimed to be owner of suit land and had sought specific performance of agreement, declaration and injunction regarding suit property---Trial Court rejected the plaint on the ground that plaintiff company had not been incorporated under S. 441 of Companies Act, 2017, with Securities and Exchange Commission of Pakistan--- Validity--- Some of the rights/claims pleaded were exclusive to plaintiff CEO having no proximity to plaintiff company---There was no determination regarding such aspect in the decision of Trial Court---Contents pleaded required deeper appreciation for the purpose of ascertaining nature of causes of action---Trial Court also failed to exercise jurisdiction to call for further/better statement, in exercise of powers under O. VI, R. 5, C.P.C., if at all some clarity was required---Any deficiency found was curable defect, which situation did not warrant exercise of jurisdiction under O. VII, R. 11 C.P.C.---Trial Court was eligible and empowered to reject plaint by referring to legal disability under S. 441 of Companies Act, 2017, when jurisdiction of Civil Court was barred with respect to the matters coming under Companies Act, 2017 and otherwise jurisdictional defects needed determination in context of provisions of Civil Procedure Code, 1908---Legal disability provided in terms of S. 441 of Companies Act, 2017, was attracted or could be invoked while exercising jurisdiction under S. 9, C.P.C., if it was established that plaintiff company was a foreign company---High Court set aside order passed against plaintiffs and remanded the matter to Trial Court for determination of questions upon framing of issues---Appeal was allowed accordingly.

Mol Pakistan Oil and Gas Company through Authorized Officers v. The Islamabad Capital Territory Administration through Chief Commissioner and others 2022 CLD 492; Gemalto Middle East FZ-LLC v. Federation of Pakistan through Secretary, Finance Division and others 2020 CLD 151; China Annang Construction Corporation through Project Manager v. K.A. Construction Co. through Attorney 2001 SCMR 1877; Hala Spinning Mills Ltd v. International Finance Corporation and another 2002 SCMR 450; Trek Technologies Limited v. Icondor Telecom (Private) Limited and another 2018 CLD 668 and Maulana Abdul Haque Baloch and others v. Government of Balochistan through Secretary Industries and Mineral Development and others PLD 2013 SC 641 ref.

(b) Jurisdiction---

----Existence and exercise---Principle---Existence of jurisdiction and exercise thereof are distinct concepts---Conferment of jurisdiction is legislative attribute and exercise thereof is embodied of or expression of exercise of jurisdiction conferred by law.

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

----S. 9---Civil Court, jurisdiction of---Scope---Civil Court is Court of plenary jurisdiction vested with authority/jurisdiction to determine jurisdictional fact concerning its own jurisdiction upon considering averments made in plaint---Party pleading ouster of jurisdiction has to establish such fact.

Syeda Nida Zahra for Appellants.

Atif Mumtaz Butt for Respondents Nos. 1, 2 and 3.

Kashif Ali Malik for Respondents Nos. 4 and 5.

Muhammad Furqan Shabbir for Respondent No. 6.

2023 C L D 1244

[Lahore (Rawalpindi Bench)]

Before Mirza Viqas Rauf and Sultan Tanvir Ahmad, JJ

Mst. SAIMA NAEEM---Appellant

Versus

HABIB BANK LIMITED through Manager/ Officer/Attorney and another-- Respondents

E.F.A. No. 18 of 2022, decided on 26th January, 2023.

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

----S. 9---Transfer of Property Act (IV of 1882), S. 58---Suit for recovery of finances---Mortgage by deposit of title-deeds---Creation of charge on mortgaged property---Scope---Bank filed a suit for recovery under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which was decreed---Decree stood converted into execution in terms of S. 19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and proceedings for its satisfaction through auction of mortgaged property were initiated by the Banking Court---Appellant filed objection petition in terms of S. 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 with the averments that one-third of the mortgaged property belonged to her as per undertaking given by her ex-husband (mortgagor), who had concealed the same from the Banking Court, thus, the proceedings of auction were nullity in the eyes of law---Said objection petition was contested by the bank---Banking Court dismissed the objection petition vide impugned order---Validity---Admittedly, the mortgage by way of deposit of title deed(s) was effected in favour of the Bank, whereas, the appellant had asserted her rights on the basis of the undertaking, which was purportedly executed by the mortgagor about nine months after the creation of mortgage, therefore, appellant could not claim any right in the property free of encumbrance created through the mortgage---Rights of the appellant, if any, in the mortgaged property on the strength of the undertaking, was minus the interest that had been created by way of the mortgage in favour of the mortgagee/Bank---Banking Court had rightly proceeded with the auction of the mortgaged property for satisfaction of the decree passed in terms of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was dismissed.

(b) Transfer of Property Act (IV of 1882)---

----S. 58---Mortgage---Mortgage by deposit of title-deeds---Scope---Mortgage is transfer of an interest in specific immovable property for the purposes of securing the payment of money advanced or to be advanced by way of loan or financing, an existing or future debt or the performance of an agreement which may give rise to a pecuniary liability---Once the mortgage is validly created against a specific immovable property, the interest of mortgagor in the property, to the specific extent, stands transferred to the mortgagee---Upon creation of mortgage, the charge travels with the property and not with the person---Thus, if a mortgagor manages to part with the property or confers further interest to third party then the buyer or the third party will step into the shoes of mortgagor and he cannot claim any better title or rights in the property or any interest free from the charge of mortgage.

Muhammad Sadiq and others v. Muhammad Mansha and others PLD 2018 SC 692 and Muslim Commercial Bank Limited v. Syed Ataullah Shah and 2 others 2003 CLD 888 rel.

Chief Land Commissioner and another v. Maula Dad and others 1978 SCMR 264; Dost Muhammad v. House Building Finance Corporation 2007 CLD 1369 and Kanti Ram and others v. Kutubuddin Mahomed and others (1895) 22 Cal 33 ref.

Qaiser Nawaz Khan Niazi for Appellant.

Barrister Khalique Zaman for Respondent No. 1-Bank.

Shoaib Shahid for Respondent No. 2.

2023 C L D 1332

[Lahore]

Before Mirza Viqas Rauf and Muhammad Raza Qureshi, JJ

Messrs G.A. TRADERS SOLE PROPRIETORSHIP through Haji Ghazanfar Ali (since deceased)---Appellant

Versus

ALLIED BANK LIMITED through Manager---Respondent

E.F.A. No 22133 of 2023, heard on 3rd May, 2022.

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

----Ss. 19 & 22---Execution of decree---Mark-up, recovery of---Appellant/judgment debtor was aggrieved of including mark-up in decree for beyond contractual period---Validity---At the time of passing decree in question Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance, 1997, was in force---Harshness of previous law permitted award of continuous mark-up beyond contracted mark-up---Executing Court could not extend benefit of new law by replacing mark-up awarded by Banking Court under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance, 1997, with the award of cost of funds permitted under Financial Institutions (Recovery of Finances) Ordinance, 2001---This would amount to empowering Executing Court to amend the decree---High Court declined to interfere in the order passed by Executing Court---Appeal was dismissed, in circumstances.

Khushi Muhammad and 2 others v. The Province of the Punjab through Secretary to Government of the Punjab and 2 others 1999 SCMR 1633 ref.

Habib Bank Ltd. v. Karachi Pipe Mills Ltd. 2006 CLD 842; Commissioner Inland Revenue v. Packages Limited 2022 SCMR 634; Muhammad Akbar v. Major Taj-ud-Din 2007 SCMR 140 and Capital Development Authority, CDA, through Chairman, CDA, Islamabad v. Ahmad Murtaza and another Civil Petition No.3709 of 2022 rel.

Syed Zeeshan Haider Zaidi for Appellant.

Moiz Tariq for Respondent.

2023 C L D 1342

[Lahore]

Before Muhammad Sajid Mehmood Sethi and Asim Hafeez, JJ

SILVER STAR INSURANCE COMPANY LIMITED, LAHORE through Chief Executive---Appellant

Versus

Messrs KAMAL PIPES INDUSTRIES, LAHORE and another---Respondents

R.F.A. No. 10241 of 2023, heard on 16th February, 2023.

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

----Ss. 122 & 124---Qanun-e-Shahadat (10 of 1984), Art. 114---Insurance appeal---Insurance claim, admitted by the Insurance Company---Scope and effect---Insurance Company admitted the claim of policy-holder and made partial payment ; and stated before the Insurance Tribunal that the outstanding amount would be paid on availability of the funds---Insurance petition was disposed of on the statement of the company partly decreeing the claim, however, company later preferred appeal against the judgment passed by the Tribunal---Record revealed that appellant/company freely and explicitly acknowledged the claim of the respondent/policy-holder---Payment of partial claim tantamount to admission of its liability regarding the decretal amount---Admission/statement/undertaking by a party during the judicial proceedings had to be given sanctity while applying the principle of legal estoppel and estoppel by conduct as well as to respect moral and ethical rules---At the subsequent stage a party cannot turn around to wriggle out from the consequence of such admission---If disclaimer therefrom is allowed as a matter of right, then it will definitely result into distrust of the public/litigants over the judicial proceedings---Article 114 of the Qanun-e-Shahadat, 1984, provids that when a person has by his declaration, act or omission intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative is allowed in any suit or proceedings between the parties to deny the truth of that thing---Said provision enacted a rule of evidence whereby a person was not allowed to plead contrary to a fact or a state of thing which he formerly asserted as existing and made the other party believe it as such and then the party acted on such belief---In fact, said principle was founded on equity and justness with straightforward objective to prevent fraud and ensure justice---Appellant in unequivocal terms agreed to pay back the remaining claim of respondent, which resulted into passing impugned judgment therefore, company was not allowed to challenge the same (decision) by filing an appeal---Appeal was dismissed, in circumstances.

Sardar Ali Khan v. State Bank of Pakistan and others 2022 SCMR 1454; Combined Investment (Pvt.) Ltd. v. Wali Bhai and others PLD 2016 SC 730; Mst. Ghazala Zakir v. Muhammad Khurshid and 7 others 1997 CLC 167; Muhammad Majid Iqbal through Special Attorney v. Judge Family Court, Dunya Pur and 2 others 2021 CLC 644; Pakistan through Secretary, Ministry of Defence, Islamabad and 2 others v. Wadero Lal Bux 2021 CLC 1609; Mushtaq Ahmad v. Mohsinn Iqbal 2022 CLC 1461; Haji Ghulam Rasool and others v. The Chief Administrator of Auqaf, West Pakistan PLD 1971 SC 376; Muhammad Sharif and 13 others v. Inayat Ullah and 24 others 1996 SCMR 145; Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd.) Syed Mukhtar Ali Shah and another 2007 SCMR 569 and Shahzada Aman-e-Room and others v. Sher Bahadar Khan and others 2022 YLR 2295 ref.

(b) Maxim---

----"Qui approbat non reprobat"---Said maxim quite literally translates to "the one who approbates, cannot reprobate" or "that which I approve, I cannot disapprove"---Doctrine of approbate and reprobate was established upon Scottish Laws and is now an essential principle of equity---To approve or reject anything is to approbate or reprobate---Person cannot approbate and reprobate something simultaneously, according to law---Doctrine of approbate and reprobate is also commonly known as the "doctrine of election" in English Law---Doctrine of election bases itself upon the maxim "allegans contraria non est audiendus" which means when people make comments that contradict one another, they will not be heard.

MBP v. LGK [2020] EWHC 90 (TCC) ref.

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

----Ss. 122 & 124---Qanun-e-Shahadat (10 of 1984), Art. 114---Insurance appeal---Claim admitted by the Insurance company---Scope and effect---Insurance Company admitted the claim of policy-holder and made partial payment and stated before the Insurance Tribunal that the outstanding amount would be paid on availability of the funds---Insurance petition was disposed of on the statement of the company partly decreeing the claim, however, company later preferred appeal against the judgment passed by the Tribunal---Contention of the appellant (Insurance Company) was that Insurance Tribunal was, before deciding the main (insurance) petition, obliged to dispose of certain applications especially one seeking impleading a party (a Insurance Company) with whom appellant asserted to have made arrangements for payment to the respondent---Validity---In view of admissions of appellant, applications moved by the appellant had no material bearing on the merits of the case---Even otherwise, the party (another Insurance Company), the appellant wanted to be impleaded, had no privy to the contract-in-question between the parties to the proceedings; and said contention of the appellant had no link with the respondent's claim and could not be the basis for impleading the said party---Miscellaneous application(s) ought not to be decided in all eventualities before the final determination of the controversy---If the matter is otherwise conclusively determined by the Court, the sole factum of indecision of some application(s) will not frustrate the proceedings/verdict of the Court---Appeal was dismissed, in circumstances.

Peer Bakhsh and others v. Nabi Bakhsh and others 2002 YLR 1630; Hashwani Hotels Limited through Senior Manager v. Sindh Insurance Tribunal, Karachi and 3 others 2016 CLD 1790 and Mst. Mairaj Bibi and 4 others v. Muhammad Shafique through L.Rs. and others PLD 2020 Lah. 888 ref.

Barrister Husnain Ali Ramzan for Appellant.

Muhammad Zain Qazi, Assistant Attorney General on Court's call.

2023 C L D 1354

[Lahore]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

RELIANCE INSURANCE COMPANY LIMITED through Manager---Appellant

Versus

AHSAN IKRAM TEXTILE (PVT.) LIMITED through Director---Respondent

R.F.A. No. 21810 of 2021, heard on 24th May, 2022.

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

----S. 115, proviso---Marine Insurance Policy---Law of Pakistan---Applicability---If in Marine Insurance Policy, it is specifically provided that payment can be received or suit can be filed in any other country, due to the proviso to S. 115 of Insurance Ordinance, 2000, S. 115 does not override such Marine Insurance Policy---Purpose of proviso to S. 115 of Insurance Ordinance, 2000, is to avoid any kind of interference with normal business of Marine Insurance---Marine Insurance contracts are international in scope and most of the time are for the benefit of the consignees abroad who have option of stipulating clause in Marine Insurance Policy mentioning place where such contracts are intended to be carried out between the parties.

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

----S. 122--- Marine Insurance Policy--- Insurance Tribunal---Jurisdiction---Marine Insurance Policy also falls within the scope of insurance policy and Insurance Tribunal has jurisdiction in respect of Marine Insurance Policy.

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

----S. 124 (2)---Appeal---New plea, raising of---Effect---Grounds never raised before Insurance Tribunal cannot be raised in appeal for the first time.

Muhammad Boota v. Basharat Ali 2014 CLD 63; Trading Corporation of Pakistan v. Devan Sugar Mills Limited and others PLD 2018 SC 828; Malik Muhammad Faisal and others v. State Life Insurance and others 2008 SCMR 456 and Muhammad Rafique v. Qamar Ali and others 2003 MLD 52 rel.

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

----Ss. 115 & 124 (2)---Marine Insurance Act (V of 2018), Ss. 3, 19, 20, 44, 45, 46 & 47---Marine Insurance Policy--- Knowledge of damage---Voyage, change/deviation of---Proof---Appellant/Insurance company was aggrieved of judgment and decree passed by Insurance Tribunal accepting claim of respondent company---Contention of appellant/insurance company was that damage to goods had occurred prior to issuance of Marine Insurance Policy in question---Validity---When appellant/insurance company itself issued Marine Insurance Policy on 31-05-2018 from warehouse to warehouse and also clearly mentioned that date of sailing was 20-05-2018, then subsequently it could not deny claim of insurance merely on the presumption that goods were damaged due to rain before the date of issuance of Marine Insurance Policy---Even if goods were damaged on 25/26-05-2018, there was nothing placed on record to show that respondent company was aware of such damage to the goods and had concealed such fact at the time of issuance of Insurance Policy on 31-05-2018---Nothing was placed on record by appellant/insurance company during evidence to show that respondent company had any knowledge about change of vessel or stoppage of vessel at any post---It cannot be said that there was mala fide on part of the respondent company or material facts were not disclosed at the time of Marine Insurance Policy on 31-05-2018---Division Bench of High Court declined to interfere in judgment and decree passed by Insurance Tribunal against appellant/insurance company---Appeal was dismissed, in circumstances.

Mst. Naseem Begum and others v. State Life Insurance and others 2014 SCMR 655; State Life Insurance and others v. Mst. Sardar Begum and others 2017 SCMR 999; The Universal Insurance Company v. Rana Basit Rice Mills and others 2021 CLD 1441; Pattoki Sugar Mills Limited v. Federation of Pakistan and others 2021 PTD 587; Messrs Radiant Overseas Pvt. Ltd v. Insurance Regulatory and Development Authority AIR 2012 CC 3041 and Multan Electric Power Company and others v. Muhammad Ashiq and others PLD 2006 SC 328 ref.

(e) Marine Insurance Act (V of 2018)---

----Ss. 44, 45, 46 & 47---Voyage---Change/deviation---Scope---Change of voyage under Ss. 44, 45, 46 & 47 of Marine Insurance Act, 2018, takes place when port of destination or port of departure is changed and there is deviation from voyage contemplated by insurance policy.

Amjad Pervaiz Ch. for Appellant.

Salman Ijaz and Miss Hira Jaleel for Respondent.

2023 C L D 1390

[Lahore (Rawalpindi Bench)]

Before Anwaar Hussain, J

FAYSAL BANK LIMITED and others---Petitioners

Versus

Ch. SHEHZAD MUNIR and others---Respondents

Civil Revisions Nos. 466, 467, 809 to 813 of 2022, heard on 22nd December, 2022.

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

----S. 9---Qanun-e-Shahadat (10 of 1984), Arts. 76 & 77---Secondary evidence---Non-issuance of notice---Principle---Petitioner/defendant/ Bank was aggrieved of order passed by Trial Court allowing respondents/plaintiffs to produce documents as secondary evidence---Plea raised by petitioner/Bank was that secondary evidence could not be adduced without issuing notice in such regard---Validity---Requirement of notice to be issued was relevant in a situation when a document was required to be produced from the possession of a person---Documents to be produced were no more in the possession of petitioner/Bank and had been submitted in another Court---No notice was required to be issued to Bank---Respondents/plaintiffs had a prima facie case and they deserved permission to lead secondary evidence---High Court declined to interfere in permission to produce secondary evidence--- Revision was dismissed , in circumstances.

Muhammad Sharif through Legal Heirs and 4 others v. Sultan Hamayun and others 2003 SCMR 1221 and Messrs Expeditor International Pakistan (Pvt.) Ltd. v. Messrs Sitara Textile Industries Ltd. and 2 others 2018 CLC 994 ref.

Ossama Shahid Khawajah for Petitioners.

Mahar Abdul Shakoor for Respondent No. 1.

Nemo for Respondent No. 2.

2023 C L D 1436

[Lahore]

Before Ch. Muhammad Iqbal, J

AL BARAKA BANK (PAKISTAN) LIMITED through Authorized Attorneys---Appellant

Versus

SUI NORTHERN GAS PIPELINES LIMITED through General Manager---Respondent

R.F.A. No. 70441 of 2022, heard on 16th January, 2023.

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

----Art. 72---Documentary evidence---Scope---Documentary evidence always takes preference over oral deposition as a man can tell a lie but a document cannot.

Abdul Ghani and others v. Mst. Yasmeen Khan and others 2011 SCMR 837 and Saleem Akhtar v. Nisar Ahmad PLD 2000 Lah. 385 rel.

(b) Gas (Theft Control and Recovery) Act (XI of 2016)---

----Ss. 6 & 13---Suit for recovery of outstanding gas charges---Bank guarantee, encashing of---Sui Northern Gas Pipelines Limited filed suit against appellant/Bank to encash bank guarantee provided in favour of consumer company to recovery outstanding gas charges of customer company---Suit was decreed in favour of plaintiff company---Validity---Bank guarantee claiming a categorical undertaking imposed absolute obligation on guarantor bank to pay guaranteed amount without being influenced by performance of the contract---High Court declined to interfere in judgment and decree passed by Trial Court as the same did not contain any illegality, material irregularity or misreading of evidence---Appeal was dismissed, in circumstances.

Mst. Nur Jehan Begum through LRs v. Syed Mujtaba Ali Naqvi 1991 SCMR 2300; Chief Engineer, Irrigation Department, N.W.F.P. Peshawar and 2 others v. Mazhar Hussain and 2 others PLD 2004 SC 682 and Mst. Rehmat and others v. Mst. Zubaida Begum and others 2021 SCMR 1534 ref.

Atif Mehmood Kiyani and another v. Messrs Sukh Chayn Private Limited, Royal Plaza, Blue Area, Islamabad and another 2021 SCMR 1446; Messrs National Construction Ltd. v. Aiwan-e-Iqbal Authority PLD 1994 SC 311; Standard Construction Company (Pvt.) Limited v. Pakistan through Secretary Ministry of Communications and others 2010 SCMR 524 and SEPCO-III Electric Power Constructions Co. Ltd. v. Federation of Pakistan through Secretary Ministry of Energy and 2 others 2022 CLD 1035 rel.

Abdul Hameed Chohan for Appellant.

Muhammad Hamza Amjad for Respondent.

2023 C L D 1448

[Lahore (Multan Bench)]

Before Sohail Nasir and Shakil Ahmad, JJ

Messrs MULTAN BRAIN CENTER through Partner and 3 others---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager---Respondent

E.F.A. No. 3 of 2022, decided on 24th February, 2022.

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

----Ss. 19, 15 & 22---Execution of decree of Banking Court---Auction of mortgaged property---Fair reserve price, determination of---Scope---Banking Court fixed new reserve price of mortgaged property on an application moved by decree-holder/Bank because earlier auction proceedings could not succeed as no bidder came forward---Application raising objection on determination of new reserve price moved by Judgment-debtors/appellants was dismissed by the Banking Court---Validity---Record revealed that earlier reserve was fixed pursuant to the evaluation having been submitted by the parties---Banking Court passed order on application for fresh determination of reserve price moved by the decree-holder/Bank, however, on that day/date no one was present on behalf of judgment-debtors/appellants---Banking Court on the very first date, accepted the said application (moved by decree-holder/Bank) in summary manner without issuing any notice or calling reply from the judgment-debtors/appellants---New reserve price determined by the Banking Court was quite low as compared to the earlier fixed reserve price---Determination of fair reserve price was always in interest of both sides because the same ensured the recovery for decree-holder and at the same time it guaranteed that judgment-debtor might not be deprived from his lawful entitlement---High Court set-aside new reserve price fixing order passed by the Banking Court while accepting application moved by the appellants, and the application under S. 151 of the Civil Procedure Code, 1908 moved by the decree-holder (Bank/respondent )for fresh determination of reserve price, would be deemed pending before the Banking Court---Execution First Appeal was allowed, in circumstances.

Muhammad Sulaman Bhatti for Appellants.

2023 C L D 1452

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

SALEEM AKHTAR KIYANI and others---Petitioner

Versus

PROVINCE OF PUNJAB and others---Respondents

Writ Petition No. 1106 of 2023, heard on 5th June, 2023.

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

----S. 12--- Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations 2022, R. 8---Environmental Impact Assessment, approval of---Scope---Section 12 of the Punjab Environmental Protection Act, 1997, explains that no proponent of a project shall commence construction or operation unless he has filed with the Federal Agency an Initial Environmental Examination or, where the projects is likely to cause an adverse environmental effect, an Environmental Impact Assessment, and approval from Federal Agency has to be obtained.

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

----S. 12--- Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations 2022, R. 8---Project of creation of a new site by the Capital Devolvement Authority for dumping garbage/solid waste---Environmental Impact Assessment---Scope---Contention of the petitioners was that site in question was a beautiful valley which would become terribly hazardous to the lives of residents---Validity---Record revealed that Capital Development Authority ('CDA'), being the proponent of the project, had filed an Environmental Impact Assessment ('EIA') under S. 12 of the Punjab Environmental Protection Act, 1997 ('the Act 1997') but, due to non-provision of certain documents by the respondent/CDA, the same was not completed by the Environmental Protection Agency ('EPA') under Regln. 8 of the Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2022 ('the Regulations 2022'), and procedure as per S. 12(2), (4) and (7) of the Act 1997 was still incomplete---Hence, Respondent/CDA was bound to fulfill all the mandatory requirements of law and fill up all lacunas on their part so that the EPA should decide the EIA before starting use of land-in-question for the purpose-in-hand---Once the EPA completes the EIA and communicates the same to CDA, the latter would complete the process in order to start work on its project---High Court directed the respondent/CDA for submitting all the required documents/record in the EIA before the EPA, who shall conduct scrutiny, then make publication in newspaper, place it in District Council Hall and complete the same in accordance with law, after providing proper hearing to all the concerned including the petitioners--- Constitutional petition was disposed of accordingly.

Naimatullah Khan Advocate and others v. Federation of Pakistan and others 2020 SCMR 1499; Muhammad Shahid v. Punjab Environmental Tribunal, Lahore and others 2018 CLD 506; Maple Leaf Cement Factory Ltd. v. Environmental Protection Agency and others 2018 CLD 153; Pakistan Mobile Communication Limited v. Abrar Ahmed and 4 others 2019 CLD 578 and Haji Sher Zaman Khan v. Government of Khyber Pakhtunkhwa through Chief Secretary and 8 others 2020 CLD 1232 ref.

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

----S. 7---Environmental Impact Assessment, approval of---Disclosure of information to the public---Scope---As per S. 7 of the Punjab Environmental Protection Act, 1997 ('the Act 1997'), the Environmental Protection Agency ('EPA') shall maintain registers for Initial Environmental Examination and Environmental Impact Assessment projects, which shall contain brief particulars of each project and a summary of decisions taken thereon, which shall be open to inspection by the public at all reasonable hours and the disclosure of the information in such register shall be subject to the restrictions specified in subsection (3) of the S. 7 of the Act 1997---Public has a right to receive the documents/information before the EPA and they can also file objection therein.

Muhammad Asif Chaudhry, Advocate Supreme Court for Petitioners (in W.Ps. Nos. 1106 and 1681 of 2023).

Ch. Umar Hayat for Petitioners (in W.P. No. 1148 of 2023).

Rizwan Akhtar Awan for Petitioners (in W.P. No. 1680 of 2023).

Syed Mudassar Nazir Naqvi, Assistant Advocate-General with Ajab Hussain, Law Officer, Commissioner, Rawalpindi.

Muhammad Sajid Khan Tanoli, Deputy Attorney General and Arshad Muhammad Malik, Assistant Attorney General.

Sardar M. Qadeer Hussain and Naeem-ul-Hassan, Advocates for Respondent No. 6/RWMC with Salman Aziz, Manager, Corporate Affairs RWMC.

Maqbool Hussian Qureshi, Inspector EPA, Rawalpindi.

Syed Zeeshan Haider Zaidi, Advocate for Respondent No.9/CDA with Malik Atta, Director Sanitation, CDA and Muhammad Anwar-ul-Haq, Member Environment, CDA.

Naseem-ur-Rehman Shah, Director (EIA) EPA, Punjab and Muhammad Rafique, Deputy Director (Environment), Rawalpindi.

Ossama Shahid Khawaja and Rashid Mehmood, Research Officer.

2023 C L D 1464

[Lahore (Multan Bench)]

Before Abid Hussain Chattha, J

HAMID MEHMOOD SHAH KHAGGA---Appellant

Versus

BANK AL-FALAH LIMITED through President and 2 others---Respondents

F.A.O. No. 11 of 2022, decided on 1st June, 2022.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for damages against the Bank---Civil Court, jurisdiction of---Relationship between the Bank and customer, question of---Suit for damages against the bank was filed before the Civil Court---Civil Court returned the plaint holding that the claim of the plaintiff fell within the jurisdiction of the Banking Court constituted under Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001')---Contention of the appellant/plaintiff was that suit filed by him did not fall within the jurisdiction of the Banking Court constituted under the Ordinance 2001, since no finance was extended by the respondent/bank and as such, the appellant/plaintiff did not fall in the definition of 'customer' as stipulated in the Ordinance, 2001---Validity---Admittedly, the Finance Facility requested to the respondent/Bank by the appellant/plaintiff did not culminate into contractual relationship through execution of Agreement of Financing and no amount was disbursed to the appellant/plaintiff by the respondent/Bank; and there was only an approval letter---Appellant/plaintiff had pleaded in the plaint that in compliance of the said approval letter, he had to take certain steps which resulted in financial loss to him---Contents of the plaint/prayer clause primarily focused on non-disbursement of the Financial facility, and on account of losses suffered by the appellant/plaintiff, he sought damages from the respondent/Bank---Suit was competently filed by the appellant before the Civil Court of ordinary jurisdiction as the relationship of 'customer' with the Bank with reference to 'finance' would have been/was established only when the Agreement of financing had been duly executed between the parties and the Finance Facility had been duly disbursed, whereas the said elements were lacking in the present case---Hence, the Civil Court fell in error to hold that it did not have jurisdiction to entertain and adjudicate upon the suit on its own merits---High Court set-aside impugned order of returning of plaint to the appellant and directed the parties to appear before the Civil Court---First Appeal against Order filed by the plaintiff was allowed, in circumstances.

Marahaba Pakistan International and others v. Habib Bank Limited and another 2017 CLD 995 and Ishfaq Ahmed and 5 others v. Habib Bank Limited and another 2017 CLD 1639 ref.

Zahid Mahmood Chaudhary for Appellant.

2023 C L D 1468

[Lahore (Multan Bench)]

Before Tariq Saleem Sheikh and Muzamil Akhtar Shabir, JJ

ATTA MUHAMMAD---Appellant

Versus

ZARAI TARAQIATI BANK LTD. through Manager---Respondent

E.F.A. No. 15 of 2022, heard on 9th May, 2023.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), S. 51 & O.XXI, R. 37---Suit for recovery of finance---Execution of decree---Arrest and detention---Principle---Appellant/judgment-debtor was aggrieved of order passed by Executing Court issuing warrants of arrest to recover decretal amount---Validity---Warrants of arrest of judgment-debtor could only be issued in cases where Court was satisfied that in order to obstruct or delay execution of decree, judgment-debtor was likely to abscond or leave limits of Court or had, after institution of suit in which decree was passed, dishonestly transferred, concealed or removed any part of his property, or committed any other act of bad faith in relation to his property, or judgment-debtor has, or had means to pay the amount of decree or some substantial part thereof and refuses or neglects or had refused or neglected to pay the same, or decree was for a sum for which judgment-debtor was bound in a fiduciary capacity to account for---Without satisfaction of such pre-conditions no mechanical order for detention in prison could be passed against appellant/judgment-debtor---Order whereby warrants of arrest of appellant/judgment-debtor were issued was not sustainable and serious attempt for sale of mortgaged property through open auction was required to be made so that outstanding decretal amount could be recovered from appellant/judgment-debtor without straightaway adopting process of issuance of warrants of arrest against him for execution of decree through arrest and detention---High Court set aside the order issuing warrants of arrest against appellant/judgment-debtor---High Court directed Executing Court to proceed further with execution proceedings by holding auction of mortgaged property, in accordance with law--- Appeal was allowed, in circumstances.

Muhammad Shahbaz Sharif v. Meezan Bank Limited and others 2019 CLD 729; Mirza Shahid Baig v. National Bank of Pakistan and 8 others 2002 CLD 623; Aftab Saleem Choudhary and another v. Soneri Bank Limited through Attorneys 2005 CLD 401; Aftab Saleem Choudhary and another v. Soneri Bank Limited through Attorneys 2007 YLR 107; Mansoor Ali v. Haji Liaquat Ali and another 2016 CLC Note 82; Messrs Azhar & Co and others v. National Bank of Pakistan 2018 CLD 830 and Muhammad Shafeeq v. United Bank Limited 2021 CLD 1002 rel.

Rana Muhammad Nazir Khan Saeed for Appellant.

Rao Riasat Ali Khan for Respondent.

2023 C L D 1481

[Lahore (Multan Bench)]

Before Sohail Nasir and Ahmad Nadeem Arshad, JJ

HABIB BANK LIMITED through Manager---Appellant

Versus

Messrs SAJID CLOTH HOUSE through Legal Heirs and another---Respondents

Regular First Appeal No. 19 of 2020, heard on 14th October, 2021.

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

----Ss. 8 & 9---Civil Procedure Code (V of 1908), O. VII, R. 11---Suit for recovery of written-off finances---Pre-condition---Limitation---Scope---Banking Court dismissed suit filed by the bank under O. VII, R. 11, Civil Procedure Code, 1908, on the ground that the same was filed without observing conditions prescribed in S. 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Contention of the appellant/bank was that suit was instituted after passing Resolution in the meeting of Board of Governors---Validity---Record (statement of accounts etc.) indicated that in the year 2014 a certain principal amount which was credited in the account of respondent/customer was written-off by the appellant/bank showing the remaining balance as zero, whereas not a single document was found (in the record) which could prove that after passing Resolution in the meeting the suit-in-question was instituted---Besides, suit-in-question was instituted after a belated stage---Section 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, stipulated that the Bank could institute the suit against the respondent/customer within the prescribed period of five years with only one pre-condition of prior approval from the Board of Governors---Thus, the impugned order passed by the Banking Court was not open to debate for the High Court, for being based on sound reasoning which did not call for interference for the High Court in exercise of appellate jurisdiction---No illegality or infirmity was noticed in the impugned order and judgment passed by the Banking Court dismissing the suit filed by the appellant/Bank under O. VII, R. 11, Civil Procedure Code, 1908---Appeal filed by the Bank was dismissed, in circumstances.

Mian Khurram Qureshi Hashmi for Appellants.

Respondent No. 1 proceeded ex parte.

2023 C L D 1486

[Lahore (Multan Bench)]

Before Muzamil Akhtar Shabir and Safdar Saleem Shahid, JJ

MUHAMMAD FAROOQ---Appellant

Versus

ZARAI TARAQIATI BANK LIMITED through Manager---Respondent

R.F.A. No. 299 of 2022, heard on 20th June, 2023.

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

----Ss. 9, 10 & 22---Qanun-e-Shahadat (10 of 1984), Arts. 48 & 72---Bankers' Books Evidence Act (XVIII of 1891), S. 4---Suit of recovery of finance---Leave to defend suit, grant of---Absence of original documents--- Duplicate file--- Scanned document---Scope---Appellant/ plaintiff was not granted leave to defend the suit and Banking Court passed decree in favour of respondent/Bank on the basis of duplicate file containing scanned document, which file was retained by respondent/Bank in its records---Validity---Whether duplicate file could be treated as good as its original file or not, or its' substitute and whether such documents could be treated as primary evidence or were required to be established through secondary evidence, were the questions which were required to have been determined---Safekeeping of documents was also question which could have bearing upon final judgment to be arrived at in the matter---Appellant/plaintiff had repaid previous loan in year 2019 in which original pass book/finance document were returned to him and remaining documents including NOC were promised to be issued by respondent/Bank including letter of redemption, etc.---No new loan was obtained by him in year 2019 and non-availability of original file with respondent/Bank, entitled appellant/plaintiff for grant of leave to defend as the same had raised substantial question of law and fact requiring recording of evidence for determination---Such aspect of the matter was not considered by Banking Court---High Court set aside judgment and decree passed against appellant/plaintiff who was granted leave to defend and matter was remanded to Banking Court for decision of the matter afresh on its own merits in accordance with law---Appeal was allowed accordingly.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 and The Bank of Punjab v. Fazal Abbas and another 2020 CLD 977 rel.

Muhammad Suleman Bhatti for Appellant.

Rao Riasat Ali Khan for Respondent.

2023 C L D 1536

[Lahore]

Before Sardar Muhammad Sarfraz Dogar, J

SHOUKAT ALI---Petitioner

Versus

STATION HOUSE OFFICER and 2 others---Respondents

Writ Petition No. 41044 of 2022, heard on 13th June, 2023.

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

----S. 3(2) & Preamble---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 20---Penal Code (XLV of 1860), S. 489-F---Criminal Procedure Code (V of 1898), Ss. 22-A & 22-B---Registration of FIR---Microfinance institutions---Object, purpose and scope--- Banking Court, jurisdiction of--- Petitioner/accused was aggrieved of order passed by Ex-officio Justice of Peace directing registration of FIR against him for issuing a cheque which was dishonored on presentation---Plea raised by petitioner/accused was that provision of S. 489-F, P.P.C. was not applicable---Validity---Purpose and aim of establishment of microfinance institution was to support persons with meagre means of subsistence---No criminal proceedings against such customer for whose alleviation such bank was established was intended by Microfinance Institutions Ordinance, 2001---If a person who was poor and socially not well placed committed a crime envisaged in S. 489-F, P.P.C., and was not punished for the reason that the provision was inapplicable, this would tantamount to giving a carte blanche to the poor to commit such crime---Microfinance institutions cannot be termed as financial institutions within the contemplation of Financial Institutions (Recovery of Finances) Ordinance, 2001, to say that its matters can only be tried by Banking Court---Provisions of Criminal Procedure Code, 1898 were fully applicable and application filed under Ss. 22-A & 22-B, Cr.P.C. on behalf of complainant/microfinance bank was fully competent---High Court declined to interfere in the order passed by Ex-officio Justice of Peace--- Constitutional petition was dismissed, in circumstances.

Mureed Hussain v. Additional Sessions Judge/Justice of Peace, Jampur 2014 PCr.LJ 1146; Syed Mushahid Shah and others v. FIA and others 2017 SCMR 1218; Muhammad Asif Nawaz v. ASJ and others 2014 PCr.LJ 1 = 2014 CLD 45 Lahore 606; Muhammad Tuseef and 4 others v. The State Bank of Pakistan and others 2018 CLD 1196; Syed Itrat Hussain Rizvi v. Messrs Tameer Microfinance Bank Limited and others 2018 CLD 116; Telenor Mirco Finance Bank Limited v. The State and others 2020 CLD 359; Mian Allah Ditta v. The State and others 2013 SCMR 51; Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218; Muhammad Mumtaz Akhtar v. Additional Sessions Judge and others PLJ 2021 Lahore 98 and Maj. (Retd.) Javed Inayat Khan Kiyani v. The State PLD 2006 Lah. 752 rel.

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

----S. 2(m)---State Bank of Pakistan Act (XXXIII of 1956), S. 37---Negotiable Instruments Act (XXVI of 1881), S. 3(j)---Microfinance Bank and scheduled Bank---Comparison---Both scheduled banks and microfinance banks provide services of acceptance of deposit by their customers and in turn are bound to remit such deposits back to the depositors or any other person, as per the directions of the depositor---Distinctive feature of a microfinance bank is that the value of its banking services is limited to the maximum limit defined by State Bank of Pakistan, whereas no such limit is defined for scheduled Banks---Both schedule banks and microfinance banks provide services in terms of S. 3(j) of Negotiable Instruments Act, 1881---Microfinance Banks are modelled in a beneficial manner to provide support for and uplift of persons with less financial resources and are bound to operate in a manner to ensure some advantage to such persons.

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

----S. 20---Penal Code (XLV of 1860), S. 489-F---Dishonored cheque---Distinction---Provision of S. 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001 deals with a cheque issued for securing repayment of finance to a Bank while S. 489-F, P.P.C. relates to a cheque albeit of a bank but issued between private parties.

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

----S. 3(2)--- Penal Code (XLV of 1860), S. 489-F---Dishonored cheque---Dominant object of S. 489-F, P.P.C. is not focused on repayment of finances or loans to a banking company or a financial institution---Thrust of S. 489-F, P.P.C. is aimed at securing interests of private party including even bank to whom cheques were issued dishonestly---Provision of S. 489-F, P.P.C. does not exclusively relate to financial institutions or banking companies so as to attract ouster contemplated by S. 3(2) of Microfinance Institutions Ordinance, 2001.

Tanveer Sadiq and Khalid Jamil for Petitioner.

Ms. Khalida Parveen, Additional Advocate-General Punjab for the State.

Usman Nasreen for Respondents.

2023 C L D 1551

[Lahore]

Before Shahid Karim and Raheel Kamran, JJ

ZAHIDA BIBI and others---Appellants

Versus

SUMMIT BANK LIMITED---Respondent

E.F.A. No. 35845 of 2020, decided on 27th April, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O. XXI, R. 67---Limitation Act (IX of 1908), Art. 166---Execution of decree---Sale, setting aside of---Limitation---Publicity of auction proceedings---Mandatory requirement---Appellants/judgment debtors assailed auction proceedings conducted by Court Auctioneer---Executing Court dismissed objection petition filed by appellants/judgment debtors---Validity---In execution proceedings involving Court Auctioneer, sale of immovable property became complete when bid was accepted by Court---For the purpose of Art. 166 of Limitation Act, 1908 time was to start to run from the date the highest offer was accepted by Court---Objection petition filed by appellants/judgment debtors was not barred by limitation as it was filed on 18-10-2016 i.e. 30th day of the auction held on 08-09-2016---Reserve price of property was fixed at Rs. 108,171,850/- and to ensure proper publicity, Executing Court had to have exercised authority vested in it under R. 67(2), C.P.C. to order proclamation to be published in at least one widely circulated daily newspaper---Such failure caused injustice to appellants/judgment debtors---Only respondent/decree holder participated in auction and it provided a convenient walkover to respondent/decree holder to purchase the property at reserve price---Division Bench of High Court set aside the sale and remanded the matter to Executing Court to proceed with execution of decree in accordance with law---Appeal was allowed, in circumstances.

Muhammad Attique v. Jami Limited and others PLD 2019 SC 993; Muhammad Jawed v. First Women Bank 2021 CLD 39; Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500 and Muhammad Attique v. Jami Limited and others 2015 SCMR 148 rel.

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

----O. XXI, R. 66---Execution of decree---Sale by auction---Reserve price, objection against---Principle---Objection regarding reserve price cannot be taken by judgment debtor after the auction is held---Duty to raise such objection at the initial stage is cast on judgment debtor.

Habib and Company v. Muslim Commercial Bank Limited 2019 SCMR 1453 rel.

Imran Malik for Appellants.

Iftikhar Ullah Malik for Respondent.

2023 C L D 1563

[Lahore]

Before Muhammad Sajid Mehmood Sethi and Asim Hafeez, JJ

FAYSAL BANK LIMITED through Authorized Person---Appellant

Versus

Messrs USMAN ENTERPRISES and another---Respondents

F.A.O. No. 75308 of 2019, heard on 11th September, 2023.

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

----Ss. 9 & 22---Contract Act (IX of 1872), S. 28---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery of finance---Return of plaint---Choice of forum by agreement---Exclusive and non-exclusive jurisdiction clause---Scope---Plaintiff Bank was aggrieved of order passed by Banking Court returning its plaint to be filed before proper forum on the basis of a clause in finance agreement pertaining to jurisdiction---Validity---Parties by their agreement or consent could not invest Court with a jurisdiction where it did not exist in law nor could the parties divest a Court of its jurisdiction by such methodology---Where more than one Courts had jurisdiction in the matter, the parties could make choice by their agreement or consent for conferment of jurisdiction upon one Court to the exclusion of other and agreement in such behalf in normal circumstances was binding upon parties thereto---Such choice of forum by agreement was not contrary to the mandate of S. 28 of Contract Act, 1872---Condition precedent to make a choice by parties through an agreement was that the Court or Tribunal so chosen had the jurisdiction under law---Nature of jurisdiction agreed to between parties was to be decided by Court on true interpretation of the contract on the facts and in circumstances of the case---Banking Court not only misconceived / ignored distinction between such categories of forum selection clauses but also straight away ordered return of plaint without deliberating upon the same and without making any effort to ascertain real intent of parties under non-exclusive jurisdiction clause in the agreement---High Court set aside the order returning plaint to plaintiff bank and matter was remanded to Banking Court to decide the suit in accordance with law---Appeal was allowed accordingly.

Tahir Tariq Textile Mills (Pvt.) Ltd. through Chief Executive and 2 others v. N.D.F.C. through Chairman 2001 YLR 846; High Noon Textile Ltd. through Authorized Attorney and 2 others v. Saudi Pak Industrial and Agricultural Investment Co. (Pvt.) Ltd. through Authorized Attorney and 4 others 2010 CLD 567; Multan Electric Power Company Ltd. through Chief Executive and another v. Muhammad Ashiq and others PLD 2006 SC 328; Muhammad Saddiq v. Askri Leasing Ltd. through Chairman and 2 others 2009 YLR 900; COMSET Services Limited v. Holger Hahn and another 2009 PLC (C.S.) 446; Pakistan KUWAIT Investment Company (Pvt.) Limited through Authorized Representative v. Messrs Active Apparels International and 6 others 2012 CLD 1036; Messrs Raziq International (Pvt.) Ltd. through Vice President v. Panalpina Management Ltd. PLD 2014 Sindh 175; Bepin Behary Law v. Mohit Kumar Pal and others AIR (29) 1942 Calcutta 496 and Radha Kishen v. Bombay Company Ltd. AIR (30) 1943 Lahore 295 rel.

Ashar Elahi for Appellant.

Muhammad Imran Malik for Respondents.

2023 C L D 222

[Peshawar]

Before Qaiser Rashid Khan, C.J. and S M Attique Shah, J

MUHAMMAD NIQAB---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Manager---Respondent

F.A.B. No. 26-P with C.M. No. 714-P of 2021, decided on 5th October, 2022.

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

----Ss. 3, 9 & 22---Suit for recovery of Bank loan---Cost of funds---Mark up beyond agreement period---Suit filed by respondent/Bank was decreed against appellant/defendant along with markup---Validity---Customer who defaulted in installment of obligations was liable to pay cost of funds for the period from date of default till its realization as certified by State Bank of Pakistan, besides other liabilities accrued under any contract agreement---Agreement executed by appellant/ defendant in favour of respondent/Bank did not exonerate him from payment of markup in the event of his default---Basic aim and theme behind such provision of law was to compensate financial institutions for finance blocked on account of breach of fulfillment of obligation by a customer---Banking Court duly attended the controversy involved in the matter and while disallowing application of appellant/defendant for grant of leave to defend, had rightly decreed suit of respondent/Bank through judgment and decree in question---High Court declined to interfere in the judgment and decree passed by Banking Court as the same did not suffer from any illegality, misreading or non-reading of record---Appeal was dismissed in circumstances.

Naqeeb Ahmad Takkar for Appellant.

Riaz-ud-Din Ahmad for Respondent.

2023 C L D 329

[Peshawar]

Before Qaiser Rashid Khan, CJ and Fazal Subhan, J

Messrs KAMRAN FILLING STATION through Sole Proprietor and another---Appellants

Versus

Messrs HABIB BANK LIMITED through President and 2 others---Respondents

F.A.B. No. 11-P with C.M. No. 354-P of 2022, decided on 8th September, 2022.

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

----Ss. 10 & 22---Suit for recovery of Bank loan---Leave to defend the suit, refusal of---Mandatory provisions, non-compliance of---Effect---Appellant/defendant was declined leave to defend the suit and suit was decreed in favour of respondent/plaintiff Bank---Validity---Borrower under S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was to show in all fairness as to what amount he had availed of from a financial institution, payments so made by him to the financial institution and amount which was accepted to be his liability, to be finally paid to the Bank---Provision of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, carried penal consequences as well, which was that in the event of failure of a borrower to meet requirements of S. 10(3)(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 his leave to defend application would be rejected---High Court declined to interfere in judgment and decree passed by Trial Court---Appeal was dismissed in circumstances.

Riaz-ud-Din Ahmad for Appellants.

Alamzaib Khan for Respondents.

2023 C L D 1072

[Peshawar (Abbottabad Bench)]

Before Wiqar Ahmad and Kamran Hayat Miankhel, JJ

SAMSON GROUP OF COMPANIES---Petitioner

Versus

PUBLIC PRIVATE PARTNERSHIP and others---Respondents

Writ Petition No. 803-A of 2021, decided on 28th September, 2022.

(a) Khyber Pakhtunkhwa Public Private Partnership Act (XLII of 2020)---

----Ss. 4, 11, 12 & 29---Khyber Pakhtunkhwa Galiyat Development Authority Act (XII of 2016), Ss. 3, 4, 6 & 14 [as amended by Khyber Pakhtunkhwa Galiyat Development Authority (Amendment) Act (XVII of 2020)]---Development of Galiyat---Award of contract---Legal regime applicable---Scope---Petitioner company was aggrieved of not following provisions of Khyber Pakhtunkhwa Public Private Partnership Act, 2020, in awarding of contract to respondent company---Validity---Having overwhelming powers for dealing with its own properties, the only way of harmonious interpretation of Khyber Pakhtunkhwa Galiyat Development Authority Act, 2016, with Khyber Pakhtunkhwa Public Private Partnership Act, 2020, was to hold that it was optional for fully autonomous bodies to have resort to Public Private Partnership or to enter into such contract under its own legal regime---It was up to Galiyat Development Authority as contracting authority to enter into mechanism provided under Khyber Pakhtunkhwa Public Private Partnership Act, 2020---If Galiyat Development Authority did not make recourse to Khyber Pakhtunkhwa Public Private Partnership Act, 2020, it had its own powers under Khyber Pakhtunkhwa Galiyat Development Authority Act, 2016 and Regulations framed thereunder to enter into Public Private Partnership for leasing out its property---Such act of Galiyat Development Authority, in not entering into Public Private Partnership, as provided in Khyber Pakhtunkhwa Public Private Partnership Act, 2020, did not suffer from illegality or want of lawful authority---It was optional for the contracting authority i.e. Galiyat Development Authority as well as Provincial Government to have opted for undertaking the project under the provisions of Khyber Pakhtunkhwa Public Private Partnership Act, 2020, but if neither of the two had opted thereof, and rather had undertaken the project under Khyber Pakhtunkhwa Galiyat Development Authority Act, 2016, read with Galiyat Development Authority Auction Regulations, 2019, their decisions were not invalid and unlawful or lacking lawful authority---High Court declined to interfere in the matter--- Constitutional petition was dismissed, in circumstances.

Oxford University Press v. Commissioner of Income-Tax 2001 PTD 2484; Shahzada Colonel Sharif-ud-Din and others v. The Settlement Officer District Upper and Lower Chitral and others 2021 CLC 1968; Market Committee, Khudian v. Town Committee, Khudian 1992 SCMR 1403; Lahore Development Authority v. Ms. Imrana Taiwana 2015 SCMR 1739; Messrs Pakland Cement Limited through Director v. Shamim Mushtaq Siddiqui 2002 CLD Kar. 1392; Travel Agents Association of Pakistan v. Pak Travel Agency (Pvt.) Ltd. 1999 CLC 1962; Rashidah Begum v. Deputy Settlement Commissioner, Circle II Lahore 1986 MLD 1941 and Inayatullah Hassan v. Bashirunnisa 1984 CLC 2463 ref.

(b) Khyber Pakhtunkhwa Wildlife and Biodiversity (Protection, Preservation, Conservation and Management) Act (I of 2015)---

----S. 29---Pakistan Environmental Protection Act (XXXIV of 1997), S. 12---Khyber Pakhtunkhwa Galiyat Development Authority Act (XII of 2016), Ss. 3, 4, 6 & 14 [as amended by Khyber Pakhtunkhwa Galiyat Development Authority (Amendment) Act (XVII of 2020)]---National Park---Accessibility to public---Recreation, education and research purposes---Scope---Petitioner was aggrieved of award of contract by authorities to respondent company---Validity---Provisions of Khyber Pakhtunkhwa Wildlife and Biodiversity (Protection, Preservation, Conservation and Management) Act, 2015, did not aim at obviating all such activities in a National Park---For the purposes of recreation, education and research, under S. 29 of Khyber Pakhtunkhwa Wildlife and Biodiversity (Protection, Preservation, Conservation and Management) Act, 2015, National Park was to be accessible to public subject to such restrictions as Government might impose--- Provision of access roads to and construction of rest houses, hostels and other buildings along with amenities for public under S. 29(3) of Khyber Pakhtunkhwa Wildlife and Biodiversity (Protection, Preservation, Conservation and Management) Act, 2015, were to be made in such a way, as not to impair the object of establishment of National Park---Facilities so provided were to be in conformity with the recommendations of environmental impact assessment or initial environmental examination within the meaning of Pakistan Environmental Protection Act, 1997---Construction of public amenities and necessary roads were not totally banned but were regulated---Regulating powers of concerned authority would apply to the subject project with full force---High Court did not declare contract in question as illegal in toto---High Court declared that all its provisions were to be read in accordance with and subject to all the prevalent laws of the land applicable in the area---Constitutional petition was disposed of accordingly.

Shin Satellite Public Co. Ltd. v. Jain Studios Limited AIR 2006 SC 963 ref.

Sardar Nasir Aslam Khan, Sardar Aman Khan and Khalid Mehmood for Petitioner.

Khurram Ghias Khan, Rasheed-ul-Haq Qazi, Barrister Syed Muddassar Ameer, Muhammad Tariq Afridi, Sardar Ali Raza, A.A.G. along with Syed Ali Raza, Director GDA and Junaid Alam, SDFO for Respondents.

2023 C L D 1209

[Peshawar (Mingora Bench)]

Before Muhammad Naeem Anwar, J

AKBAR ALI---Appellant

Versus

HIDAYAT ULLAH---Respondent

R.F.A. No. 66-M of 2022, decided on 23rd May, 2023.

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

----O. XXXVII, Rr. 1, 2 & 3---Qanun-e-Shahadat (10 of 1984), Art. 129(e)---Suit for recovery of money on the basis of cheque---Application for leave to defend---Conditional order, non-fulfillment of---Judicial proceedings---Presumption of truth---Scope---Leave to defend was granted by the Trial Court with condition to furnish security bond---Trial Court decreed forthwith the suit against the appellant/defendant on his failure to furnish security bond---Contention of the appellant/defendant was that he was unaware of the fact for furnishing security bond---Validity---Record revealed that a clear condition of furnishing security bond with specific reference of the date for its compliance was unambiguous and explicit therein but even then for about nine and half months the proceedings remained pending adjudication before the Trial Court and the appellant had never intended to fulfill such direction---Contention of the appellant regarding ignorance regarding conditional order could not be given preference because the presumption of truth is attached to the judicial proceedings---Plea of ignorance of law could not be construed or sustained as a bona fide excuse---Provision of the Art. 129(e) of Qanun-e-Shahadat, 1984 provided presumption of regularity to all acts performed in a judicial proceedings---No illegality or infirmity was found in the impugned judgment and decree passed by the Trial Court---Appeal was dismissed, in circumstances.

Muhammad Ameen and another v. Jawaid Ali and 5 others 2017 YLR Note 429; Zaman and 2 others v. Muhammad Khan 2017 YLR 353; Fayyaz Hussain v. Akbar Hussain and others 2004 SCMR 964 and Muhammad Ramzan v. Lahore Development Authority, Lahore 2002 SCMR 1336 ref.

(b) Maxim---

----Judicial proceedings are blessed with presumption of truth on the principle intended to be conveyed by the rule, Omnia praesumuntur rite et solemniter esse acta i.e., all acts are presumed to have been rightly and regularly done.

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

----O. XXXVII, Rr.1, 2 & 3---Suit for recovery of money on the basis of cheque---Application for leave to defend---Conditional order, non-fulfillment of---Scope and effect---Leave to defend was granted by the Trial Court with condition to furnish security bond---Trial Court decreed the suit forthwith against the appellant/defendant on his failure to furnish security bond without recording evidence---Contention of the appellant/defendant was that the suit should have been decided on merits after recording of evidence---Validity---Appellant/defendant was allowed to defend the suit but the relevant order was itself conditional for fulfillment of which a date was fixed by the Trial Court---Inbuilt directions given in the order for fulfillment of the condition in the shape of furnishing of a security bond on the next date, had bound down the appellant to pursue the suit and to defend it through his written-statement but in case when the condition had not been fulfilled, the consequence thereof would be borne by the party who failed to comply with the order of the Court or to fulfill his obligation---Order XXXVII of the Civil Procedure Code, 1908, provided a specific procedure for cases wherein the person against whom the lis was filed was required to get permission from the Court to defend the suit---It was not disputed that the validity and propriety of the order granting leave to defend had not been questioned by the appellant to the extent of condition of furnishing security bond and in such circumstances, the fulfillment of condition was prerequisite for further progress in the suit and his participation in proceedings in order to defend the suit against him---Provision of O. XXXVII, R. 3 of the C.P.C., 1908, with regard to filing of the application along with affidavit for grant of such leave was mandatory and failure thereof would result into a decree against the defendant even without recording of evidence in the matter---Order sheet revealed that the appellant despite availing several opportunities had not fulfilled his part of obligation in shape of furnishing a security bond as per directions of the Trial Court---No illegality or infirmity was found in the impugned judgment and decree passed by the Trial Court---Appeal was dismissed, in circumstances.

Murtaza Haseeb Textile Mills v. Sitara Chemical Industries 2004 SCMR 1882; Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim 1999 SCMR 2832; Makhdoomzada Abdul Karim v. Ajab Khan 2013 CLC 1471 and Muhammad Nawaz v. Muhammad Akram 2013 MLD 325 ref.

Sahibzada Azhar Saleem v. Muhammad Hanif 2002 MLD 696 and Muhammad Nasim v. Kashif Nasim and another 2018 CLC 1659 distinguished.

Muhammad Hayat Khan for Appellant.

Hidayat Ali for Respondent.

2023 C L D 1339

[Peshawar]

Before Lal Jan Khattak and Fazal Subhan, JJ

ZARAI TARAQIYATI BANK LIMITED through Incharge, Legal Litigation Unit, Peshawar---Petitioner

Versus

MUZAFFAR KHAN---Respondent

Writ Petition No. 2438-P of 2022 with IR, decided on 19th July, 2022.

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

----S. 10---Leave to defend the suit---Barred by time---Condonation of delay, non-seeking of---Petitioner/defendant was aggrieved of dismissal of his application for leave to defend the suit as the same was barred by 270 days---Validity---Despite filing application for leave to defend after much delay, no application for condonation of delay was filed and at the same time no plausible or sufficient cause/reason was forwarded for such delay---Order passed by Banking Court was silent about any verbal request made by petitioner/defendant at relevant time for condonation of delay---High Court declined to interfere in the order passed by Banking Court as application for leave to defend the suit was hit by limitation and was rightly dismissed---Constitutional petition was dismissed, in circumstances.

Najam Iqbal v. Mst. Naseem Akhtar 2014 YLR 1388 distinguished.

2004 CLD 732 rel.

2023 C L D 247

[Balochistan (Sibi Bench)]

Before Muhammad Hashim Khan Kakar and Gul Hassan Tareen, JJ

Messrs SABIR TRADERS SOLE PROPRIETORSHIP and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Manager---Respondent

High Court Appeal No. (s) 02 of 2021, decided on 31st October, 2022.

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

----S. 22(1), (2)---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Civil Procedure Code (V of 1908), O. XLIII, R. 3---Appeal---Statutory limitation---Condonation of delay---Advance notice, non-issuance of---Appellants/borrowers were aggrieved of judgment and decree passed by Trial Court---Appeal filed by appellants / borrowers was barred by 12 days and they did not issue advance notice to respondent/Bank---Validity---Appellants/borrowers did not furnish any sufficient cause for condonation of delay of 12 days in filing of appeal, which was barred by time and was liable to be dismissed---Reason mentioned by appellants/borrowers in application for condonation of delay was baseless and false, therefore, delay could not be condoned even in absence of counter affidavit by respondent/Bank---Special limitation prescribed by S. 22(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, itself was not subject to application of S. 5 of Limitation Act, 1908, due to bar contained in S. 29(2)(a) & (b) of Limitation Act, 1908---Reliance on S. 5 of Limitation Act, 1908 for condonation of delay in filing appeal was misplaced---Provision of general law, (Limitation Act, 1908) did not apply to special law [Financial Institutions (Recovery of Finances) Ordinance, 2001]---Appellants/borrowers did not comply with the provision of S. 22(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 before filing appeal, which provided for a notice of filing of appeal in accordance with the provisions under O. XLIII, R. 3, C.P.C. to respondent/Bank, so that it could appear to contest admission of appeal on the date fixed for hearing---Provisions of S. 22(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were mandatory and violation thereof did not cure that illegality committed at filing of appeal---Appeal was dismissed in circumstances.

Muhammad Khalid Naeem v. Habib Bank Limited 2018 CLD 1027 and Messrs Ashraf Agro v. H.B.L 2008 CLD 449 rel.

Muhammad Ali Kanrani, Hazrat Ali Kakar and Yasir Nizam Mengal for Appellants.

Ayaz Khan, Litigation Officer, National Bank of Pakistan for Respondent.

2023 C L D 1161

[Balochistan]

Before Gul Hassan Tareen, J

NOVATEX LIMITED AND ANOTHER: In the matter of

Judicial Miscellaneous Petition No. 1 of 2022, decided on 9th May, 2023.

Companies Act (XIX of 2017)---

----Ss. 280, 281, 282, 283 & 285---Scheme of arrangements, approval of---Commercial wisdom---Scope---Petitioners sought approval of Scheme of Arrangement---Validity---Where all requisite formalities are complied with including shareholders' and secured creditors' approval, High Court declines to question commercial wisdom behind the scheme and does not substitute its judgment against the intellect of all shareholders of the company---Shareholders approved the scheme in a meeting and unanimously approved the scheme---High Court allowed the scheme of arrangement as it was not duty of Court to substitute its own opinion against intellect of shareholders of petitioners who were the sole judge of their interests in the petitioners---Petition was allowed accordingly.

Gadoon Textile Mills Limited and 2 others' case 2015 CLD 2010; International Complex Projects Limited and another's case 2017 CLD 1468 and Dilsons (Private) Limited and others v. Securities and Exchange Commission of Pakistan and another 2021 CLD 1317 rel.

Aimal Khan Kasi and Mikael Azmat Rahim for Petitioners.

Abdul Rehman Khan Tareen, Deputy Registrar, Companies Securities and Exchange Commission of Pakistan for Respondent.

2023 C L D 1238

[Balochistan (Sibi Bench)]

Before Nazeer Ahmed Langove and Iqbal Ahmed Kasi, JJ

Messrs WELCOME PRINCE RICE MILL through Partners---Petitioner

Versus

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

Constitutional Petition No. (s) 81 of 2022, decided on 20th March, 2023.

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

----S. 19---Civil Procedure Code (V of 1908), S. 51(e), proviso, O. XXI, Rr. 37 & 66---Execution of decree---Arrest of judgment debtor---Statutory notice, non-issuance of---Effect---Petitioner was judgment debtor who was arrested during execution of decree for non-payment of decretal amount---Validity---Though vast powers were given to Executing Court but it was also legislative intention to protect citizen from personal humiliation in the capacity of a judgment debtor---Law provided mode of execution of decrees by way of issuing warrants of arrest but the same was subject to issuance of notice to judgment debtor---Executing Court without issuance of notice to petitioner to explain his position issued his warrants of arrest, which was against mandate of such provision of law---There was nothing on record to show that petitioner was ever served with such notice as contemplated in S. 51, C.P.C. read with O. XXI, R. 37, C.P.C. and had also failed to fulfill requirements of O. XXI, R. 66, C.P.C. for simple reason that no notice was issued to petitioner prior to issuance of his warrants of arrest---Executing Court committed serious illegality and material irregularity while passing order in question, which was not permissible under the law--- High Court directed Executing Court to proceed in accordance with the provision of S. 51, C.P.C. read with O. XXI, R. 37, C.P.C., and set aside order of arrest of petitioner passed by Executing Court---Constitutional petition was allowed accordingly.

Khursheed Anwar Khosa for Petitioner.

Muhammad Ali Khushnood for Respondents.

2023 C L D 1450

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

Messrs HAMZA FARHAD SECURITIES (PVT.) LTD.---Appellant

Versus

DIRECTOR/HOD ADJ-I---Respondent

Appeal No. 5 of 2022, decided on 25th August, 2023.

Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2018---

----Reglns. 15(3), 4(a), 18(c), 6(3)(a), 6(3)(c), 6(4) & 7(1)(b)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 40-A & 33---Anti-money laundering policies---Regulatory requirements, non-compliance of---Scope and effect---Appeal to the Appellate Bench of the Commission---Appellant, which was licensed with Pakistan Stock Exchange ('PSX') as a securities broker, was imposed penalty by the Commission for contravention of Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2018 ('the Regulations')---Contention of the appellant was that the Commission made changes to the Regulations and introduced new ones in the year 2019, which forced the Appellant to restart the entire policy process---Plea of the Respondent/Commission was that Anti-money laundering policies had been in existence since the year 2012 under the PSX Guidelines, which were not new to the Appellant---Held, that the Appellant had an obligation to adhere to the relevant requirements of the Regulations which should have been followed by the Appellant in true letter and spirit---Appellant had failed to comply with mandatory requirements, and had neglected to implement mandatory policies that had been in effect since the year 2012---Severity of money laundering, being a serious crime, could not be under-estimated---Regulated individuals were expected to be highly vigilant in adhering to Anti-money laundering laws and should not offer excuses to avoid compliance---Appellate Bench found no reason to interfere with the merits of the penalty imposing impugned order passed by the Commission, therefore, the same was maintained---Appeal was dismissed, in circumstances.

Khalid Irfan Mehmood Butt for Appellant.

Muhammad Faisal, Assistant Director, Adjudication-I, SECP.

Hammad Ahmed, Management Executive, Adjudication-I, SECP.

2023 C L D 1466

[Securities and Exchange Commission of Pakistan]

Before Abdul Rehman Warraich, Commissioner and Aamir Khan, Commissioner

KASB SECURITIES LIMITED---Appellant

Versus

HEAD OF DEPARTMENT (MSRD)---Respondent

Appeal No. 17 of 2014, decided on 27th July, 2023.

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

----S. 33---Appeal to the Appellate Bench of the Commission---Dismissal of appeal for non-appearance of the appellant (a Securities Limited Company)---Record revealed that appeal-in-hand was previously fixed for hearing on three dates, spanning about three and half years, and on all said dates the hearing was adjourned on the request of the appellant---Then the case was fixed on last date of hearing, however, once again the same was adjourned as no person appeared on the behalf of the appellant---In view of the said circumstances, it appeared that the appellant had no interest in pursuing the appeal-in-hand---Appeal preferred by the (Securities Limited) Company was dismissed for non-appearance and non-prosecution, in circumstances.

Nemo for Appellant.

Hammad Javed, Additional Director, Adjudication I, SECP.

2023 C L D 1480

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

REVIEW APPLICATION NO. 1 OF 2019: In the matter of

Appeal No. 5 of 2017, decided on 22nd June, 2023.

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

----R. 25--- Companies Ordinance (VI of 2016) [since repealed], S. 508---Review of the order passed by the Appellate Bench---Scope---Appellate Bench dismissed an appeal filed by the company (Steel Mill) against the order-in-original passed by the Commissioner---In said impugned order passed by the Appellate Bench, Applicant/Appellant sought review to remove the Bench's observation, (regarding appellant' request to take lenient view) for having been attributed to the Applicant/appellant---Contention of the Applicant/Appellant was that attributed observation/words in relevant para of the impugned order, be expunged as the same might affect it's (company's) integrity---Validity---Typographical error was actually observed in relevant para of the impugned order, wherein instead of the word "Respondent", inadvertently the word "Appellant" had been used, therefore, the Bench rectified the said error and word "Appellant" would be deemed and read as "Respondent"---Bench observed that the arguments by the parties were thoroughly heard and examined before the issuance of the impugned order, therefore, contention of the Applicant with regard to the observation of the Bench did not hold merit---Even otherwise, the parties could not deny the arguments put forth during the previous round of litigation---Application filed by the company/appellant to review impugned order passed by the Appellate Bench was dismissed, in circumstances.

Muhammad Jawwad Shekha for Petitioner.

2023 C L D 1484

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

REVIEW APPLICATION NO. 1 OF 2021: In the matter of

Appeal No. 30 of 2018, decided on 25th August, 2023.

Companies Act (XIX of 2017)---

----Ss. 42 & 43---License, revocation of---Renewal---Compassionate grounds---Review of the order passed by the Appellate Bench---Appellate Bench while dismissing an appeal filed by the company (Research Concern) against the order-in-original passed by the Commissioner, upheld/maintained the order of revocation of license of company---Applicant/company sought review of the impugned order passed by the Appellate Bench on compassionate grounds---Contention was that owing to similar facts the applicant might also be afforded the same relief as rendered by the Bench while passing order in another appeal against revocation of license wherein another appellant was allowed to meet the requirements within six months---Validity---Admittedly, the present review had been filed on the basis of compassionate grounds and no illegality or anomaly in the impugned order had been highlighted by the applicant---It was the case of the applicant that owing to similar facts it might also be afforded the same relief as rendered by the Bench in another appeal---Record revealed that the applicant, after revocation of license, had filed an application for renewal of the same, however, said fact was not agitated by the applicant at any stage in appeal proceedings---Therefore, in view of the peculiar circumstances of the matter-in-hand and while relying on the decision of the Bench in another appeal (asserted by the applicant), Appellate Bench, taking a lenient view, allowed the applicant an opportunity to rectify/fulfill/comply upon paying late fees applicable under the law as well as all outstanding statutory requirements, to the satisfaction of the concerned department(s) of the Commission within a period of three months---Concerned Department(s) would be restrained from proceedings against the applicant under S. 43 of the Companies Act, 2017, while considering the case of renewal of license of the applicant on merits---Such one-time opportunity granted to the applicant would not be extended without express permission of the Appellate Bench---Review application moved by the company was disposed of accordingly.

Faisal Hanif, Advocate Supreme Court for Applicant.

Muhammad Farooq Bhatti, Additional Director, Adjudication II, SECP.

Muhammad Javed, Assistant Director, Adjudication II, SECP.

2023 C L D 210

[Supreme Court of Pakistan]

Present: Sardar Tariq Masood, Amin-ud-Din Khan and Muhammad Ali Mazhar, JJ

SUMMIT BANK LIMITED, LAHORE---Petitioner

Versus

Messrs M. M. BROTHERS, PROPRIETORSHIP CONCERN through Proprietor and others---Respondents

Civil Petition No. 2056 of 2022, decided on 4th October, 2022.

(Against the judgment dated 27.04.2022 passed by the Lahore High Court, Lahore in E.F.A. No.35845 of 2020)

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

----O. XXI, Rr. 64, 65, 66, 67 & 90---Proclamation of sales by public auction---Mode of making proclamation---Guiding principle in the scheme of Order XXI, C.P.C. is to ensure appropriate publicity for Court auction sales so that a fair and reasonable price can be realized for the properties---Solitary underlying principle is that the properties must fetch the best possible price in the auction---Purpose and intention behind Rules 64 to 67 of Order XXI, C.P.C. stated.

While attempting the sale of property of a judgment debtor for execution and satisfaction of decree, wide publicity should be given to the proclamation of sale in order to fetch the highest and most handsome price for the property. Another purpose is to invite the maximum numbers of persons for participation in the auction proceedings through wide publications and the best course is the publication of auction notice in the vernacular newspapers to attract maximum participants. In today's advanced era of information technology and print and electronic media diversity and polarization, it seems to be totally illogical to avoid publication of proclamation in the newspapers and solely depend upon the beat of drum or other customary methods. Besides complying with other formalities, the publication of auction notice with the reserve price and other salient features must be published in the newspapers to attract the attention and participation of public at large, so that all interested persons may take part in the auction proceedings for submission of their bids before fall of the hammer which will maintain balance and will also protect the rights and liabilities of the parties. The fetching of fair market price through auction is not only in favour of decree holder to realize its debts but also in favour of judgment debtor for discharging his debts, so while conducting an auction efforts should be made by the Executing Court that the provisions contained for proclamation and its publication should not be disregarded or unheeded to render such provisions redundant which have been incorporated by the legislature with logical purpose. The guiding principle or course of action triggering in the scheme of Order XXI, C.P.C. is to ensure appropriate publicity for Court auction sales so that a fair and reasonable price can be realized for the properties. Solitary underlying principle is that the properties must fetch the best possible price in the auction and, in case of violation, the sale can be regarded as illegal under Rule 90 of Order XXI, C.P.C.

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

----O. XXI, Rr. 66 & 67(2)---Proclamation of sales by public auction---Competitive bidding---Pre-requisites---At least two bidders---Publication of proclamation---According to the established norms and standards, the presence of at least two potential bidders is indispensable to carry out an auction in which competitive bidding is a key factor for free and transparent public auction---Furthermore Executing Court ought to order the publication of proclamation in at least one widely circulated daily newspaper.

Auction is a form of sale of property to the highest bidder, usually as a result of competition between bidders who compete among themselves by offering competitive prices and the highest bid is normally approved, but according to the established norms and standards, the presence of at least two potential bidders is indispensable to carry out an auction in which competitive bidding is a key factor for free and transparent public auction. In the present case there was no competitive bidding conducted by the Court's auctioneers, nor any notice was published in the newspapers The sole bid was tendered by the decree holder bank which was accepted without considering whether the price offered matches the actual value of the property or not, nor anything was mentioned as to why publication of auction notice was not ordered to be published in the newspapers for information of general public or for inviting them to attend the auction on the given date. In the impugned judgment the High Court rightly found that in order to ensure proper publicity, the Executing Court ought to have exercised the authority vested in it under Rule 67(2) of Order XXI, C.P.C. to order the publication of proclamation in at least one widely circulated daily newspaper and failure to do so had caused injustice to the judgment debtors. Petition for leave to appeal was dismissed and leave was refused.

Iftikhar Ullah Malik, Advocate Supreme Court and Anis Muhammad Shahzad, Advocate-on-Record for Petitioner.

Nemo for Respondents.

2023 C L D 256

[Supreme Court of Pakistan]

Present: Ijaz ul Ahsan and Sayyed Mazahar Ali Akbar Naqvi, JJ

SDO, PESCO DAUDZAI SUB-DIVISION RING ROAD, PESHAWAR and others---Petitioners

Versus

WADAN SHER---Respondent

Civil Petition No. 820 of 2019, decided on 25th August, 2022.

(Against the judgment dated 25.01.2019 of the Peshawar High Court, Peshawar passed in Civil Revision No.592-P of 2018)

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

----O. XXIX, R. 1---Government owned public limited company [Peshawar Electric Supply Company (PESCO)]---Officials of the company (PESCO) sued in their personal capacity---Board resolution of company not required by officials for filing a civil revision before the High Court---Petitioner were sued in their personal capacity and were not representing PESCO---Plaint of the plaintiff nowhere mentioned that PESCO in its capacity as a public limited company was sued---Plaintiff consciously chose to nominate the petitioners as defendants in the suit, in their respective personal capacities---Written statement filed by the petitioners before the Trial Court showed that the same had been filed for themselves and not on behalf of the PESCO---Petitioners had nowhere taken any stance on behalf of PESCO or defended it, rather, the petitioners had defended themselves in their individual capacities---As such, they were not required to produce a Board Resolution when defending themselves in their personal capacity---Petition for leave to appeal was converted into appeal and allowed and impugned judgment of High Court was set aside.

Chief Executive, PESCO Department, Government of Khyber Pakhtunkhwa, Peshawar v. Afnan Khan 2021 SCMR 2100 ref.

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

----O. XXIX, R. 1---Suit by or against Corporations---Subscription and verification of pleadings---Board resolution, requirement of---Scope--- When a company is sued or is initiating legal proceedings, there must be proper authorization which is ordinarily provided in the Memorandum and Articles of Association or a Resolution of the Board of Directors of a company---To the contrary, if a member/shareholder/ director/official of a company is sued in his personal capacity, then, the need for a Board Resolution authorizing such person does not arise; this is because, the company is itself a separate legal entity whereas, its members/officials/shareholders/directors, in their personal capacity, have a separate legal status.

Uzma Construction Co. v. Navid H. Malik 2015 SCMR 642 ref.

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

----O. XXIX, R. 1---Suit by or against Corporations---Subscription and verification of pleadings---Board resolution, lack of---Curable defect---Even in the absence of a Board Resolution, pleadings can, either expressly or impliedly, be subsequently ratified---Court can, therefore, come to the conclusion that the Corporation had ratified the act of signing the pleadings by its Officer(s)---As such the absence of a Board Resolution is not an incurable defect which would ipso facto render a plaint/suit defective---Rather, it is a curable defect and, in certain instances, is not even necessary if subsequently, the plaint/suit is ratified by a person competent and empowered to do so.

Rahat and Company v. Trading Corporation of Pakistan Statutory Corporation 2020 CLD 872 ref.

Asad Jan, Advocate Supreme Court (through video link from Peshawar) for Petitioners.

Not represented (Ex parte) for Respondent.

2023 C L D 297

[Supreme Court of Pakistan]

Present: Sardar Tariq Masood, Amin-ud-Din Khan and Muhammad Ali Mazhar, JJ

SUMMIT BANK LIMITED, LAHORE---Petitioner

Versus

Messrs M. M. BROTHERS, PROPRIETORSHIP CONCERN through Proprietor and others---Respondents

Civil Petition No. 2056 of 2022, decided on 4th October, 2022.

(Against the judgment dated 27.04.2022 passed by the Lahore High Court, Lahore in E.F.A. No.35845 of 2020)

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

----O. XXI, Rr. 64, 65, 66, 67 & 90---Proclamation of sales by public auction---Mode of making proclamation---Guiding principle in the scheme of Order XXI, C.P.C is to ensure appropriate publicity for Court auction sales so that a fair and reasonable price can be realized for the properties---Solitary underlying principle is that the properties must fetch the best possible price in the auction---Purpose and intention behind Rules 64 to 67 of Order XXI, C.P.C. stated.

While attempting the sale of property of a judgment debtor for execution and satisfaction of decree, wide publicity should be given to the proclamation of sale in order to fetch the highest and most handsome price for the property. Another purpose is to invite the maximum numbers of persons for participation in the auction proceedings through wide publications and the best course is the publication of auction notice in the vernacular newspapers to attract maximum participants. In today's advanced era of information technology and print and electronic media diversity and polarization, it seems to be totally illogical to avoid publication of proclamation in the newspapers and solely depend upon the beat of drum or other customary methods. Besides complying with other formalities, the publication of auction notice with the reserve price and other salient features must be published in the newspapers to attract the attention and participation of public at large, so that all interested persons may take part in the auction proceedings for submission of their bids before fall of the hammer which will maintain balance and will also protect the rights and liabilities of the parties. The fetching of fair market price through auction is not only in favour of decree holder to realize its debts but also in favour of judgment debtor for discharging his debts, so while conducting an auction efforts should be made by the Executing Court that the provisions contained for proclamation and its publication should not be disregarded or unheeded to render such provisions redundant which have been incorporated by the legislature with logical purpose. The guiding principle or course of action triggering in the scheme of Order XXI, C.P.C is to ensure appropriate publicity for Court auction sales so that a fair and reasonable price can be realized for the properties. Solitary underlying principle is that the properties must fetch the best possible price in the auction and, in case of violation, the sale can be regarded as illegal under Rule 90 of Order XXI, C.P.C.

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

----O. XXI, Rr. 66 & 67(2)---Proclamation of sales by public auction---Competitive bidding---Pre-requisites---At least two bidders---Publication of proclamation---According to the established norms and standards, the presence of at least two potential bidders is indispensable to carry out an auction in which competitive bidding is a key factor for free and transparent public auction---Furthermore Executing Court ought to order the publication of proclamation in at least one widely circulated daily newspaper.

Auction is a form of sale of property to the highest bidder, usually as a result of competition between bidders who compete among themselves by offering competitive prices and the highest bid is normally approved, but according to the established norms and standards, the presence of at least two potential bidders is indispensable to carry out an auction in which competitive bidding is a key factor for free and transparent public auction. In the present case there was no competitive bidding conducted by the Court's auctioneers, nor any notice was published in the newspapers The sole bid was tendered by the decree holder bank which was accepted without considering whether the price offered matches the actual value of the property or not, nor anything was mentioned as to why publication of auction notice was not ordered to be published in the newspapers for information of general public or for inviting them to attend the auction on the given date. In the impugned judgment the High Court rightly found that in order to ensure proper publicity, the Executing Court ought to have exercised the authority vested in it under Rule 67(2) of Order XXI, C.P.C. to order the publication of proclamation in at least one widely circulated daily newspaper and failure to do so had caused injustice to the judgment debtors. Petition for leave to appeal was dismissed and leave was refused.

Iftikhar Ullah Malik, Advocate Supreme Court and Anis Muhammad Shahzad, Advocate-on-Record for Petitioner.

Nemo for Respondents.

2023 C L D 466

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah and Ayesha A. Malik, JJ

SAIF POWER LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Law, Civil Secretariat Islamabad and others---Respondents

Civil Petition No. 3263 of 2022, decided on 2nd November, 2022.

(Against judgment dated 06.06.2022 passed by the Islamabad High Court Islamabad in W.P. No. 2607 of 2012)

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

----Ss. 231, 263 & 265---Security and Exchange Commission of Pakistan (SECP)---Inspection of books of account by registrar, etc.---Investigation of affairs of company on application by members or report by registrar---Scope, nature and distinction between the SECP's power of inspection under Section 231 and the power of investigation under sections 263 and 265 of the Companies Ordinance, 1984 stated.

Section 231 of the Companies Ordinance, 1984 ('the Ordinance') empowers the Security and Exchange Commission of Pakistan (SECP), as a regulator, to inspect the books of account and related books and papers of a company. So, inspection is limited to books of account and related papers and books, and it does not include other record of the company which is unrelated to the accounts of the company. The exercise of this power is administrative in nature, essentially to ensure compliance with the regulatory requirements pertaining to the books of account. Books of account are the journals and ledgers which contain financial information related to the business and include books such as purchase books, cash books, sales books, debit ledger and credit ledger amongst others. There is also a corresponding obligation on the directors, officers and employees of the company to provide all books of account and papers and to give all assistance in connection with the inspection. An inspection under section 231 of the Ordinance is, therefore, restricted in its scope and requires every director, officer or employee of the company to produce the books of account and is not an open ended inspection. Further the officer who conducts the inspection must make a report to the SECP on the inspection. This goes to the scope of inspections which is to ensure regulatory compliances and to ensure that the books of account are duly maintained as required under the law. While, there exists an obligation to record reasons in writing for the exercise of power under section 231 of the Ordinance, there is no requirement under the Ordinance for the issuance of a show cause notice stating the reasons for the inspection, for which a reply is required before passing an order under Section 231 of the Ordinance. The obligation is to issue notice to inform the company of the reasons of the inspection simplictor. The difference being that the former contains allegations for which a reply and right of hearing is needed whereas the latter simply contains information of the inspection and the reasons for it.

On the other hand, sections 263 and 265 of the Ordinance deal with the exercise of power of investigation by the SECP. The powers under sections 263 and 265 are wider and also come with more procedural requirements. The SECP is empowered to initiate an investigation on an application by the members or on the basis of a report of the Registrar or it can initiate an investigation if there are circumstances suggesting that the business of the company is being conducted with intent to defraud the creditors, members or any other person, or if the business is being conducted for a fraudulent or unlawful purpose, or if the members concerned with the formation of the company are guilty of fraud, misfeasance, breach of trust or other misconduct. The spirit of sections 263 and 265 of the Ordinance is to ensure that the business is managed in accordance with sound business principles or prudential commercial practice and that the financial position of the company is not threatened. When carrying out an investigation, before passing an order, SECP is obligated to give an opportunity to the company to show cause against the investigation proposed to be taken. As per section 268 of the Ordinance, all officers, employees and agents of the company and all persons dealing with the company are to assist in connection with the investigation. The scope of who is to assist in investigations is wider than that of inspections. The inspector's report under section 269 of the Ordinance can form the basis of prosecution under section 270 of the Ordinance and an action under sections 271 and 272 of the Ordinance. The scope of the investigation is based on the allegations pertaining to the affairs of the company and requires a probe into the allegations to ascertain their veracity.

Thus, the provisions relating to inspection and investigation are distinct. An inspection is an administrative power exercised by the SECP to ensure compliance of regulatory requirements. This power is limited to the inspection of books of account of a company after recording of reasons for the inspection in this regard. Whereas, an investigation against a company is a serious matter, as it is capable of entailing consequences both financial and penal which will impact the goodwill of the company. Consequently, an investigation cannot be ordered except on statutory grounds which include allegations of fraud, illegalities into the affairs of the company, or misuse and misappropriation of funds of the company. It is then the duty of the SECP to consider and weigh multiple factors, such as the nature of the complaint and its source, ensure due process and follow the statutory process in good faith, without any bias, prejudice or ulterior motives. The Ordinance does not prescribe the same process for an inspection simply because its scope is limited as are its consequences.

Salman Aslam Butt, Senior Advocate Supreme Court and Muhammad Shoaib Rashid, Advocate Supreme Court for Petitioner.

Sultan Mazhar Sher Khan, Advocate Supreme Court, Ibrar Saeed and Syed Asif Ali, Public Prosecutors (SECP) for Respondents.

2023 C L D 517

[Supreme Court of Pakistan]

Present: Ijaz Ul Ahsan, Munib Akhtar and Shahid Waheed, JJ

STATE LIFE INSURANCE CORPORATION and another---Appellants/Applicants

Versus

Mst. RAZIA AMEER and another---Respondents

Civil Appeal No. 929 of 2017 and C.M.A. No. 1708 of 2019, decided on 6th March, 2023.

(On appeal against the judgment dated 22.05.2017 passed by the Lahore High Court, Lahore in Insurance Appeal No. 1288 of 2015)

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

----S. 118--- Payment of liquidated damages on late settlement of claims---Scope---On completion of all formalities, if the claim is not satisfied/cleared within ninety days without any fault of the claimant when it becomes due, then, under the implied term of every contract of insurance the liquidated damages must be granted.

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

----S. 118---Group insurance contract---Legal heirs of insured person---Payment of liquidated damages on late settlement of claims---Entitlement of legal heirs to claim liquidated damages under section 118 of the Insurance Ordinance, 2000---Scope---Group insurance is designed to provide monetary benefits to the family of the assured person; particularly, if the assured person has not defaulted in payment of premium amount---In the present case the insurer had failed to prove that its failure to pay the claim within the stipulated time of 90 days (mentioned under section 118 of the Insurance Ordinance, 2000) was due to circumstances beyond its control---Claim of the widow and legal heirs of deceased assured person for payment of liquidated damages was well founded, and thus, they were entitled to receive it---Appeal was dismissed.

Madan Gopal v. Maran Bepari PLD 1969 SC 617 ref.

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

----S. 2(xlv)--- Insurance policy---Effective date---Policy/contract becomes effective from the date it is signed by the executants.

Bhaiyat v. L. Chong Kha and others AIR 1934 Rangoon 342 ref.

Mushtaq Ahmad Mohal, Advocate Supreme Court (via video link from Lahore) for Appellants.

Liaqat Ali Butt, Advocate Supreme Court (via video link from Lahore) for Respondent No. 1.

Sanaullah Zahid, Additional A.G. and Shahid Fiaz, DEO (S.E), Narowal for Respondent No. 2.

2023 C L D 559

[Supreme Court of Pakistan]

Present: Qazi Faez Isa, Yahya Afridi and Muhammad Ali Mazhar, JJ

The COLLECTOR OF SALES TAX AND CENTRAL EXCISE, LAHORE---Petitioner

Versus

Messrs QADBROS ENGINEERING (PVT.) LTD., LAHORE---Respondent

Civil Petition No. 409-L of 2021, decided on 10th March, 2023.

(Against the judgment dated 12.11.2020 passed by the Lahore High Court, Lahore in S.T.A. No.13/2005)

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

----S. 2(68)---Companies Ordinance (XLVII of 1984), Ss. 2(38) & 3 [since repealed]---'Sister concern'---Meaning and definition---No definition of "sister concern" is provided either in the repealed Companies Ordinance, 1984 or the present Companies Act, 2017, but this turn of phrase basically delineates two or more distinct businesses or ventures owned by one and the same conglomerate but such undertakings/concerns do not have any link or nexus with the operations of each other's business with the exception of conjoint ownership but legally or financially are not related to each other despite its affiliation with another company with a separate identity and workforces.

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

----S. 2(68)---Companies Ordinance (XLVII of 1984), Ss. 2(38) & 3 [since repealed]--- 'Subsidiary' and 'wholly-owned subsidiary'---Definition provided.

Palmer's Company Law (2019 Edition), Volume 3, paragraph 9.303, page 9246; Halsbury's Laws of England (Fifth Edition), Volume 14 (pages 54-55) and C.R. Datta (Seventh Edition), Volume I, Chapter I (Page 1382-1383) ref.

(c) Sales Tax Act (VII of 1990)---

----S. 7---Input tax---Company securing input adjustment of sales tax on purchases made from its alleged subsidiary/sister concern---Subsidiary/sister concern relationship---Not proved---Tax department completely failed to establish that respondent-company was the sister concern or a subsidiary company of the supplier-company---No tangible evidence was produced including the record, if any, obtained from the Securities and Exchange Commission of Pakistan (SECP) in relation to the incorporation and substratum of both the companies together with the verification of holding company of the alleged subsidiary company---Tribunal had judiciously examined the pith and substance of the transaction and then rightly reached the conclusion that the respondent-company was not a subsidiary or holding company of the supplier-company---Furthermore if the supplier issued invoices erroneously or in violation of law then the Department should have initiated legal action for recovery against them rather than the buyer (respondent) which was not the sister concern or subsidiary company of the supplier---If some fault was committed by the supplier-company while issuing invoices then the respondent-company could not be penalized or disqualified from claiming input tax adjustment in accordance with the law---Petition for leave to appeal was dismissed, and leave was refused.

(d) Sales Tax Act (VII of 1990)---

----S. 7---Input tax ---Presumptive tax regime---Scope---Presumptive tax regime denotes that the tax so deducted or paid is treated as a final discharge of tax liability whereas the production capacity is reckoned by the Department according to the notified and applicable sales tax rates vis-à-vis the production as per comparative past and present physical production data including the machine ratings---Presumptive tax regime predominantly encompasses the usage of indirect means to determine tax liability, which diverges from the normal rules founded on the taxpayer's accounts to indicate a legal presumption that the tax liability is not less than the amount occasioning from the application of the indirect method.

(e) Sales Tax Act (VII of 1990)---

----S. 47---Reference to the High Court---Powers of High Court under section 47 of the Sales Tax Act, 1990---Scope---Jurisdiction of High Court under section 47 is strictly confined to answering questions of law---Source of question must be the order of the Tribunal---Elementary characteristic of such jurisdiction is that it has been conferred to deal only with questions of law and not questions of fact---Question of law connotes a tangible and substantial question of law on the rights and obligations of the parties founded on the decision of the Tribunal---Tribunal is therefore the final fact-finding body and its findings of facts are conclusive; the High Court cannot disturb them unless it is shown that there was no evidence on which the Appellate Tribunal could arrive at its conclusion and record such findings, or the same are perverse or based on surmises and conjectures.

Army Welfare Trust (Nizampur Cement Project), Rawalpindi and another v. Collector of Sales Tax (Now Commissioner Inland Revenue), Peshawar 2017 SCMR 9; Pakistan Match Industries (Pvt.) Ltd. and others v. Assistant Collector, Sales Tax and Central Excise Mardan and others 2019 SCMR 906 and Commissioner of Inland Revenue, Lahore v. Messrs Sargodha Spinning Mills (Pvt.) Ltd. Faisalabad and others 2022 SCMR 1082 ref.

Ch. Muhammad Zafar Iqbal, Advocate Supreme Court (through Video Link from Lahore) for Petitioner.

Nemo for Respondent.

2023 C L D 589

[Supreme Court of Pakistan]

Present: Ijaz ul Ahsan, Munib Akhtar and Sayyed Mazahar Ali Akbar Naqvi, JJ

KAUSER PARVEEN and another---Appellants

Versus

KASB BANK and others---Respondents

Civil Appeals Nos. 335 and 336 of 2010, decided on 22nd February, 2022.

(Against the order dated 25.05.2009 of Lahore High Court, Lahore passed in E.F.A. No. 91 of 2009)

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

----S. 19---Civil Procedure Code (V of 1908), S. 12(2) & O.XXI---Decree of Banking Court---Auction of mortgaged property by Bank--- Co-owners of mortgaged property claiming fraud and objecting to auction of suit property---Held, that perusal of section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 showed that once the decree of Banking Court was passed in favour of the bank, the decree by itself constituted and conferred sufficient power and authority on the bank to sell or cause to be sold any and all mortgaged properties of the judgment-debtors along with their marketable titles---Banking Court was not bound to follow the procedure laid down in Order XXI of the C.P.C.; it could adopt any procedure in order to satisfy and execute the decree passed in favour of the respondent-Bank---Even otherwise, the auction was advertised and the bid of the auction purchaser for the suit property being the highest was accepted vide the Banking Court's order---Since second co-owner never took the ground that the decree was obtained fraudulently or that the auction purchaser had obtained the suit property fraudulently, he could not travel beyond his pleas taken before the lower fora and rely on the arguments raised by first co-owner---Even otherwise, second co-owner could not agitate the questions at present stage for the first time since he was not a party in the execution proceedings before the Banking Court---First co-owner in her objection petition admitted the fact that the suit property was mortgaged to the respondent-Bank; she did not raise any plea before the lower fora that the sale certificate should not be issued to defeat her proprietary interest in the suit property as well as the ground that she was unaware that the suit property had been auctioned off and sold in favour of the auction purchaser---First co-owner therefore could not, at present stage, raise a ground which she had not taken before the Banking Court---It did not appeal to reason that the first co-owner was unaware of the fact that the suit property was mortgaged; that a suit for recovery was pending against the suit property, and that her own father, brothers and sisters were judgment-debtors in the said suit---Since the sale certificate had been issued by the Banking Court after the objection petition of first co-owner was dismissed, the sale certificate could not be set aside on the ground that both the co-owners' proprietary right in the suit property would be affected---Appeals filed by the co-owners were dismissed.

Mujahid Karim and others v. National Bank of Pakistan and others 2016 SCMR 66; Nice 'N' Easy Fashion (Ltd.) and others v. Allied Bank of Pakistan and another 2014 SCMR 1662 and Habib and Company and others v. Muslim Commercial Bank Ltd. and others 2019 SCMR 1453 ref.

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

----O. VI, R. 7---Pleadings, departure from---Party is not allowed to improve its case beyond what was originally setup in the pleadings.

Muhammad Yaqoob_v. Mst. Sardaran PLD 2020 SC 338 and Muhammad Iqbal v. Mehboob Alam 2015 SCMR 21 ref.

Muhammad Asad Manzoor Butt, Advocate Supreme Court for Appellants (in both cases).

Tariq Masood, Advocate Supreme Court, Raja Muqsit Nawaz Khan, Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Respondents.

2023 C L D 618

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah and Ayesha A. Malik, JJ

PUBLIC INTEREST LAW ASSOCIATION OF PAKISTAN registered under the Societies Act, 1860 through authorized person Chaudhry Awais Ahmed---Petitioner

Versus

PROVINCE OF PUNJAB through Chief Secretary, Civil Secretariat, Lower Mall, Lahore and others---Respondents

Civil Petition No. 55 of 2020, decided on 2nd February, 2023.

(Against order dated 18.11.2019, passed by the Lahore High Court, Lahore, in W.P. No. 56780 of 2019)

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

----S. 12---Punjab Mining Concession Rules, 2002, R. 95---Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2022, Reglns. 3, 4 & 5, Sched. I(D) & Sched. II(C)---Grant of small-scale license or lease for mining minor minerals like sand, gravel and sandstone--- Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) reports, significance of---Mining sector must adopt climate proof mining policy which must consider how climate change will impact mining areas so that the climate change risks are integrated into the environment assessment---Without an IEE or EIA, these matters are totally neglected---Not only do the IEE and EIA consider the environmental impact of the project but can also include standards and initiatives to improve sustainability of the sector---Mines and Minerals Department (MMD) is responsible for obtaining the IEE or EIA reports before initiating the process for bidding of the projects---Adverse impact on the environment due to exploration and mining of minor minerals stated.

The Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2022 (the Regulations) clearly specify the requirement of Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) reports, which is a fundamental and basic step before a project starts, so as to ensure that an adverse effect on the environment has been considered and addressed. This is because even the exploration and mining of minor minerals has an adverse impact on the environment, which includes deforestation, pollution, production of toxic waste water, loss of habitats and disruption of the ecosystem. In particular, with reference to sand mining; deforestation, loss of biodiversity, soil erosion and acid drainage are some of the serious environmental impacts, which have to be given due consideration. Surface mining creates health hazards for miners and local communities as well as gives rise to air pollution and produces toxic waste water, and causes droughts all of which must be catered for. In this context, climate change is one of the biggest global threats and the combination of surface mining and climate change becomes a serious threat for the ecological system. Hence, the mining sector must adopt climate proof mining policy which must consider how climate change will impact mining areas so that the climate change risks are integrated into the environment assessment. Therefore, without an IEE or EIA, these matters are totally neglected. Hence, special attention must be given to all environmental aspects even with reference to the mining of minor minerals.

Jason Phillips, Climate change and surface mining: A review of environment-human interactions and their spatial dynamics, 74, Applied Geography, 95-108 (2016); Lukas Ruttinger and Vigya Sharma (2016) Climate Change and Mining: A Foreign Policy Perspective, Germany, adelphi and Sustainability 2017 - Review on Environmental Impacts of Sand Exploitation ref.

The relevance of the IEE and EIA cannot be ignored. Not only do the IEE and EIA consider the environmental impact of the project but can also include standards and initiatives to improve sustainability of the sector. This can be vital in projects of mining under the Mines and Minerals Department (MMD). They also prescribe mitigation measures and put in place a monitoring method through an Environment Management Plan (EMP). The EMP provides the basic framework for implementing and managing mitigation and monitoring measures. It identifies the environment issues, the risks and recommends the required action to manage the impact. This is vital because not only does the miner know what its obligations are, it also gives the MMD and the EPA a framework to follow and to ensure its compliance. Hence, all factors considered the IEE and EIA ensure that the project is sustainable and all possible environmental consequences have been identified and addressed adequately.

There is no timeline provided in the Regulations within which the IEE and EIA approvals are to be obtained nor does it specify any process to bind the successful bidder of the project to the terms of any EMP or other measures provided for in the IEE or EIA. However, the Regulations do clarify that the proponent of the project has to obtain the IEE or the EIA and in this case, the proponent of the project will always be the MMD, hence the practice of requiring a successful bidder to obtain an IEE or EIA after bidding of the project totally negates the purpose and impact of these reports. The impact on the environment must be looked into before bidding commences by the MMD and at the time of bidding a bidder must know the terms set out in the IEE or EIA that they are bound by and are required to comply with especially the mitigation measures and the EMP. Hence, it is the MMD that is responsible for obtaining these reports before initiating the process for bidding of the said projects. In this regard, it would be useful for the MMD to provide guidelines and SOPs to facilitate this process and also provide penalizing provisions within the license or lease for any violation of the EMP so as to ensure compliance.

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

----S. 12--- Punjab Environmental Protection (Review of Initial Environmental Examination and Environmental Impact Assessment) Regulations, 2022, Reglns. 3, 4 & 5---Mining licences---Climate proof mining policy---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) reports, significance of---While mining is an essential part of the economy, it must be conducted in a responsible and sustainable manner to minimize its impact on the environment---By implementing best practices and adhering to strict guidelines and developing a climate proof mining policy, it can be ensured that mining continues to provide for the economy while also protecting the health of the planet and its inhabitants---Economic growth is important but it must be achieved in a way that is sustainable and respectful of the natural systems that support it.

Rafey Alam, Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Petitioner.

Qasim Ali Chohan, Additional A.G., Ashfaq Ahmed Kharal, Additional A.G., Noman Sarfraz, Deputy Director (Mines and Minerals) and Nawaz Majid, Deputy Director (L) Environment for Respondents.

2023 C L D 934

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah and Syed Hasan Azhar Rizvi, JJ

Messrs PAK SUZUKI MOTORS COMPANY LIMITED through Manager ---Appellant

Versus

FAISAL JAMEEL BUTT and another---Respondents

Civil Appeal No. 797 of 2017, decided on 23rd May, 2023.

(Against the judgment dated 20.02.2017, passed by the Lahore High Court, Lahore in F.A.O. No. 115 of 2014).

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

----Ss. 5, 6, 7 & 8---Defective motor vehicle---Claim filed against manufacturer of vehicle before the Consumer Court---Alleged defects not mentioned in the pleadings---Effect---Claim filed by respondent/ claimant did not make any specific mention of the alleged defects in the vehicle---Even the legal notices sent by respondent made no mention of any specific defects, and it was only in his affidavit, submitted as his examination-in-chief, that he mentioned the defects---Litigant was required to plead all material facts that were necessary to seek the relief claimed and then to prove the same through evidence---Parties were required to lead evidence in consonance with their pleadings and no evidence could be led or looked into in support of a fact or a plea that had not been taken in the pleadings---Notably, respondent also admitted in his cross-examination that he had not described the specific defects in the vehicle in his pleadings/claim---Therefore, the defects alleged in the affidavit of respondent were beyond the scope of the pleadings and, hence, could not have been considered---Appeal was allowed and claim filed by respondent was dismissed.

Muhammad Ghaffar v. Arif Muhammad 2023 SCMR 344; Saddaruddin v. Sultan 2021 SCMR 642; Moiz Abbas v. Latifa 2019 SCMR 74 and Muhammad Tariq v. Shamsa PLD 2011 SC 151 ref.

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

----S. 30(1)(c)--- Defective motor vehicle--- Claim filed against manufacturer of vehicle before the Consumer Court---Expert evidence---Where the defects alleged are of such a nature that required expert inspection or probe, the onus to provide such expert evidence falls on the consumer who is alleging that the product is defective or faulty---Where such defects are alleged by the consumer, a Consumer Court, before deciding that a certain product is defective or faulty, must satisfy itself that sufficient expert evidence is available and could be relied upon to ascertain the defects so alleged instead of merely placing reliance on the statement of a consumer who may not be from the related field of expertise and therefore, not competent to address the technicalities forming part of the alleged defects, especially where the claim of the consumer is denied by the manufacturer---To this effect, section 30(1)(c) of the Punjab Consumer Protection Act, 2005 allows the Consumer Court to invite expert evidence, if required, where the claim alleges that the products are defective and do not conform to the accepted industry standards.

In the present case despite alleging technical manufacturing defects in the vehicle, no expert evidence was led by respondent/claimant or invited by the Consumer Court under section 30(1)(c) of the Punjab Consumer Protection Act, 2005 ('the Act') to prove that the said defects alleged by respondent actually existed. Instead, the Court relied only on the evidence of respondent, who was not an expert in the automotive industry, and firstly deposed in his cross-examination that the alleged defects were based on his general observations regarding the vehicle and then stated that there were no manufacturing defects in the vehicle. It is apparent that at least two of the defects alleged by the claimant, i.e. with regards to the hatch box and the colour of the stereo, were of such nature that could not have been ascertained without expert inspection. Where the defects alleged are of such a nature that required expert inspection or probe, the onus to provide such expert evidence falls on the consumer who is alleging that the product is defective or faulty. Where such defects are alleged by the consumer, a Consumer Court, before deciding that a certain product is defective or faulty, must satisfy itself that sufficient expert evidence is available and could be relied upon to ascertain the defects so alleged instead of merely placing reliance on the statement of a consumer who may not be from the related field of expertise and therefore, not competent to address the technicalities forming part of the alleged defects, especially where the claim of the consumer is denied by the manufacturer. To this effect, Section 30(1)(c) of the Act allows the Consumer Court to invite expert evidence, if required, where the claim alleges that the products are defective and do not conform to the accepted industry standards. Additionally, section 30(1)(d) of the Act provides that where the dispute cannot be determined without proper analysis or test of the products, the Consumer Court shall obtain a sample of the products from the claimant and refer the same to a laboratory to make analysis or test with a view to find out if such products suffer from any defect, which may be paid for by the claimant, or if the test or analysis supports the version of the claimant, then to be paid by the defendant, as stipulated under Section 30(1)(e) of the Act. In the present case, the onus to prove the alleged defects was on respondent, which he failed to do. No expert evidence was produced by respondent or invited by the Consumer Court to ascertain whether the alleged defects existed in the vehicle. Therefore, respondent failed to prove that the vehicle was defective in construction or composition as required under section 5 or that it was otherwise defective for the purposes of any other provision of the Act. Appeal was allowed and claim filed by respondent was dismissed.

Plum Qingqi v. Muhammad Moeed 2015 CLC 1538; Muhammad Aslam v. General Manager Pioneer Pakistan Seed Limited 2014 CLD 257 and Dawlance v. Muhammad Jameel 2012 CLD 1461 ref.

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

----Art. 30---Admission---Admission of a co-defendant is not binding on the other defendant.

Farzand Ali v. Khuda Bakhsh PLD 2015 SC 187 and Shah Muhammad v. Dullah 2000 SCMR 1588 ref.

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

----S. 28(4)---Settlement of claims---Limitation period, commencement of---Defective motor vehicle---Claim filed against manufacturer of vehicle before the Consumer Court---Limitation period of 30 days provided under section 28(4) of the Punjab Consumer Protection Act, 2005 runs from date of knowledge of the defect or fault in the product or service---During this time, the consumer has to first send a written notice to the manufacturer or service provider under Section 28(1) of the Act and provide 15 days to respond to the same, as required under section 28(2) of the Act.

Even though no limitation period is provided for sending a written notice under section 28(1) of the Punjab Consumer Protection Act, 2005 ('the Act') it is apparent that section 28(4) of the Act in unequivocal terms stipulates and clarifies that a claim with regards to a defective or faulty product or service, or contravention of the provisions of the Act by the manufacturer or service provider, has to be filed within 30 days of the arising of the cause of action. The cause of action, in such circumstances where a product or service is faulty, therefore, arises the moment the consumer obtains knowledge that the product or service is defective or faulty.

The limitation period in consumer protection claims, involving defective products, becomes more significant especially because claimants should bring a claim as quickly as possible due to the potential depreciation of the product in question, the characteristics of which may differ according to the specific product. Delaying the filing of a claim can lead to challenges in establishing the product's condition at the time of purchase and linking any defects to the consumer's use or handling. As time passes, the product may deteriorate, be repaired or modified, or become unavailable, making it more difficult to prove the defects or assess its original condition. Bringing a claim promptly helps ensure that the product's condition and any defects can be accurately evaluated and documented. This can also contribute to a stronger case by providing evidence that directly supports the consumer's claim. Additionally, timely action demonstrates the consumer's diligence and commitment to addressing the issue.

When the consumer obtains knowledge of the defect or fault in the product or the service, the 30-day limitation period stipulated under section 28(4) of the Act commences. It is during this period that the consumer has to first put his grievance before the manufacturer or service provider, seeking rectification of the defect or fault in the product or service, or damages, and provide 15 days to the manufacturer or service provider to remedy the same, as required under section 28(2). It is only after the manufacturer or the service provider responds to the written notice, or where he fails to respond within the stipulated 15-day period, that the consumer can file a claim before the Consumer Court if the cause of action still subsists. The consumer can still file a claim before the Consumer Court by giving sufficient cause for filing the claim beyond 30 days which will be examined by the Consumer Court, as per the provisos to section 28(4) of the Act.

(e) Limitation---

----Limitation is not a mere technicality, and where the limitation period has expired, a right accrues in favour of the other side which cannot be lightly brushed aside.

Muhammad Anwar v. Essa PLD 2022 SC 716 and Asad Ali v. The Bank of Punjab PLD 2020 SC 736 ref.

Khalid Ishaq, Advocate Supreme Court for Appellant.

Muhammad Ayyub Aheer, Advocate along with Faisal Jameel Butt/claimant in person for Respondent No.1.

Respondent No. 2 in person (via video link from Lahore).

Assisted by Muhammad Hassan Ali, Law Clerk, Supreme Court.

2023 C L D 991

[Supreme Court of Pakistan]

Present: Sardar Tariq Masood, Amin-ud-Din Khan and Syed Hasan Azhar Rizvi, JJ

Messrs BENTONITE PAKISTAN LIMITED through Director/Chief Executive---Petitioner

Versus

BANKERS EQUITY LIMITED and others---Respondents

Civil Petition No. 1123 of 2020, decided on 15th February, 2023.

(Against the order dated 12.12.2019 of the High Court of Sindh, Karachi passed in J.C.M. No. 15 of 2000)

Companies Act (XIX of 2017)---

----S. 310---Limitation Act (IX of 1908), First Sched. & Art. 181---Applications filed under the Companies Act, 2017---Limitation---There is no specific provision in the Limitation Act, 1908 which deals with the applications or proceedings filed under the Companies Act, 2017, except Art. 112 thereof, which deals with "a call by a company registered under any Statute or Act" therefore, the general provision dealing with the applications would be applicable to the applications filed under the Companies Act, 2017---General provision, which deals with the applications, where no period of limitation is provided in the Limitation Act, 1908, etc., is Art. 181 thereof---Any application filed under the Companies Act, 2017 would be governed by Article 181 of the First Schedule to the Limitation Act, 1908 and there would be a period of limitation of three years for such applications.

Nadeem-ud-Din Malik, Advocate Supreme Court for Petitioner.

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

2023 C L D 1001

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah and Syed Hasan Azhar Rizvi, JJ

A. RAHIM FOODS (PVT.) LIMITED and another---Appellants

Versus

K&N'S FOODS (PVT.) LIMITED and others---Respondents

Civil Appeals Nos. 444 and 445 of 2017, decided on 10th May, 2023.

(Against the judgment of the Competition Appellate Tribunal, Islamabad, dated 25.01.2017, passed in Appeal No. 03 of 2016).

(a) Constitution of Pakistan---

----Art. 185---Appellate jurisdiction of the Supreme Court---Scope---Concurrent findings of facts by courts below---Interference with---In the exercise of its appellate jurisdiction in civil cases, the Supreme Court as a third or fourth forum, as the case may be, does not interfere with the concurrent findings of the courts below on the issues of facts unless it is shown that such findings are on the face of it against the evidence available on the record of the case and is so patently improbable or perverse that no prudent person could have reasonably arrived at it on the basis of that evidence---Mere possibility of forming a different view on the reappraisal of the evidence is not a sufficient ground to interfere with such findings.

Federation of Pakistan v. Ali Ihsan PLD 1967 SC 249; Abdur Rauf v. Babu Munir 1976 SCMR 436; Fateh Muhammad v. Muhammad Adil PLD 2007 SC 460; Khan Muhammad v. Muhammad Din 2010 SCMR 1351; Mohyuddin Hashmi v. Allama Iqbal Open University 2012 SCMR 1414 and Hussain Naqvi v. Zakara Chatha 2015 SCMR 1081 ref.

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

----Ss. 31, 37 & 38 & Preamble---Constitution of Pakistan, Art. 18---Freedom of trade and business---Scope---Free and fair competition in trade and business is an intrinsic part of the fundamental right to freedom of trade and business guaranteed by Article 18 of the Constitution.

The preamble to the Competition Act, 2010 (the Act') sets out the objective of the Act and provides for free competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anti-competitive forces. The Act aims to address the situations that tend to lessen, distort or eliminate competition, such as (i) actions constituting an abuse of market dominance, (ii) competition restricting agreements, and (iii) deceptive marketing practices. Free and fair competition is a fundamental concept in economics that involves providing a level playing field for all market participants. It is based on the principles of a free market where businesses compete on equal terms, and consumers make decisions based on price, quality, and preference. Free and fair competition is competition that is based on quality, price, and service rather than unfair practices. Predatory pricing, competitor bashing, and the abuse of monopoly-type powers, for example, are unfair practices. When competitors can compete freely on a 'level playing field,' economies are more likely to thrive. On the other hand, unfair competition is using illegal, deceptive, and fraudulent selling practices that harm consumers or other businesses to gain a competitive advantage in the market. However, free and fair competition is encouraged and enforced through legislation and regulation to promote economic efficiency, innovation, and consumer welfare. Violations of fair competition principles can lead to legal consequences, penalties, or other corrective measures. Competition is not only healthy for businesses, but pivotal for innovation. It sparks creativity and nurtures transformation and progress.

Article 18 of the Constitution provides that every citizen shall have the right to conduct any lawful trade or business and clause (b) of the proviso to the said Article states that nothing in this Article shall prevent the regulation of trade, commerce or industry in the interest of free competition. Therefore, regulation in the interest of free competition actualizes the fundamental freedom guaranteed under the Constitution to conduct lawful trade and business. As free and fair competition ensures freedom of trade, commerce and industry and therefore forms an intrinsic part of the fundamental right to freedom of trade and business guaranteed under Article 18 of the Constitution. The preambular objective of the Act is to ensure "free competition" in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from "anticompetitive behaviour". The "free competition" envisaged by the Constitution and aimed to be ensured by the Act, therefore, means a competition through fair means, not by any means. To ensure fair competition in trade and business, Section 10 of the Act has prohibited certain marketing practices by categorising them as deceptive marketing practices, and Sections 31, 37 and 38 of the Act have empowered the Commission to take appropriate actions to prevent those practices.

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

----S. 10(2)(d)---Deceptive marketing practices---Expression 'fraudulent use'in Section 10(2)(d) of the Competition Act, 2010---Meaning and scope stated.

The expression 'fraudulent use' in Section 10(2)(d) of the Competition Act, 2010 ('the Act')has made the intention of the defendant (user of another's trademark, firm name, or product labelling or packaging) relevant for holding him liable under the Act. However, as the Act has not defined the term 'fraudulent' and thus not given any particular meaning to it, the expression 'fraudulent use' in section 10(2)(d) is to be understood in its ordinary sense of 'intentional and dishonest use' in contrast to a mere 'mistaken or negligent' use. Needless to mention that 'intention', being a state of mind, can rarely be proved through direct evidence, and in most cases, it is to be inferred from the surrounding facts and circumstances of the case.

The word "use" in section 10(2)(d) of the Act includes the use of trademark, firm name, or product labelling or packaging which is confusingly similar (also referred to as deceptively similar) to that of another undertaking.

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

----S. 10(2)(d)--- Deceptive marketing practices--- Criterion for determining confusing similarity in the use of another's product labeling and packaging stated.

Criterion to determine the confusing similarity is well-established in our jurisdiction in passing-off and trademark-infringement actions, which also applies in deciding disputes under Sections 10(2)(d) of the Competition Act, 2010. It is whether an unwary ordinary purchaser is likely to be confused or deceived into purchasing the article of the defendant carrying the contentious mark, name or get-up as that of the plaintiff (complainant). The criterion is thus that of such an ordinary purchaser 'who knows more or less the peculiar characteristics of the article he wants; he has in his mind's eye a general idea of the appearance of the article and he looks at the article not closely, but sufficiently to take its general appearance'. It is not that of a careful purchaser neither is it of a 'moron in a hurry'. The purchaser is unwary in the sense that he does not when he buys the article 'look carefully to see what the particular mark or name upon it is' but not that he does not even know the peculiar characteristic of the article he wants to buy. An ordinary customer is not supposed to precisely remember every detail of the mark, name or get-up of the article he intends to buy. The standard is therefore also described as that of a purchaser of average intelligence and imperfect recollection. Further, to determine the confusing or deceptive similarity from the point of view of an unwary ordinary purchaser, the leading characteristics, not the minute details, of the two marks, names or get-ups (labelling or packaging) are to be considered. As the competing marks, names or get-ups when placed side by side, may exhibit many differences yet the overall impression left by their leading characteristics on the mind of an unwary purchaser may be the same. An unwary ordinary purchaser acquainted with the one and not having the two side by side for comparison, may well be confused or deceived by the overall impression of the second, into a belief that he is buying the article which bears the same mark, name or get-up as that with which he is acquainted.

Jamia Industries v. Caltex Oil PLD 1984 SC 8; Insaf Soap v. Lever Brothers PLD 1959 Lah. 381; Ram Kumar v. Wood & Co. AIR 1941 Lah. 262; Lever v. Goodwin (1887) 36 Ch.D. 1; Pasquali Cigarette v. Diaconicolas and Capsopolus 1905 T.S. 472; Morning Star v. Express Newspapers [1979] F.S.R. 113; Corn Products v. Shangrila Products AIR 1960 SC 142 and Amritdhara Pharmacy v. S. D. Gupta AIR 1963 SC 449 ref.

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

----S. 10(2)(d)---Deceptive marketing practices, action for---Pre-requisites---Registration of trademark (or for that matter, registration of firm name, or product labelling or packaging) is not necessary for the applicability of the provisions of section 10(2)(d) of the Competition Act, 2010---Neither the common law action of passing-off requires such registration nor does the language of section 10(2)(d) of the Act provide for any such requirement.

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

----S. 46---Trademark-infringement---Passing-off, tort of---Difference between the objectives of a passing-off action and a trademark-infringement action---Passing-off action essentially aims to protect 'property in goods' on account of its reputation (goodwill), not the trademark thereof, whereas the trademark-infringement action is meant to protect 'property of trademark' as a trademark itself is a property.

Tabaq Restaurant v. Tabaq Restaurant 1987 SCMR 1090 ref.

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

----S. 10(2)(d)---Deceptive marketing practices---Using a competitors product labelling and packaging in a deceptive marketing manner---In the present case, to determine the liability of appellant-company under section 10(2)(d) of the Competition Act, 2010 ('the Act'), the Competition Commission ('the Commission') specifically mentioned the criterion applied, that is, whether 'the striking similar packaging and labelling is misleading enough to cause confusion in the minds of the average consumer of a commodity, with the end result of an unjust advantage accruing to the copycat at the expense of and to the detriment of the complainant'---Commission further observed that it would examine the appearance of the product packaging and labelling 'as a whole which may collectively include visually confusing resemblances in elements of colour scheme, layout style, design, images, labels, font usages etc., instead of each individual similarity in isolation'---By applying this criterion the Commission recorded the findings of facts and held appellant-company liable for the contravention of section 10(2)(d) of the Act---Competition Appellate Tribunal ('the Tribunal'), affirmed the criterion applied and the findings of facts recorded by the Commission---Supreme Court observed that in determining the liability of appellant-company under section 10(2)(d) of the Act, the criterion applied by the Commission and affirmed by the Tribunal was legally correct, and the Commission and the Tribunal had correctly decided that the facts of the case fell within the prohibition of section 10(1) read with section 10(2)(d) of the Act---Appeals were dismissed.

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

----Ss. 10(2)(a) & 10(2)(d)---Deceptive marketing practices---Meaning of distribution of false or misleading information in section 10(2)(a) of the Competition Act, 2010 stated.

Section 10(2)(a) of the Competition Act, 2010 ('the Act') has codified the common law on injurious falsehood claims. In common law, 'misrepresentation' is a common ground in both the actions for passing-off and injurious falsehood, but it is understood and applied in a different sense in each action. The general difference between misrepresentation in a passing-off action and misrepresentation in an injurious falsehood action is that in the former action, the misrepresentation is made by the defendant concerning his own goods while in the latter it is made concerning the goods of the plaintiff. In a passing-off action, the defendant by misrepresentation primarily attempts to take the undue benefit of the reputation (goodwill) of the goods of the plaintiff though he thereby also causes damage to the business of the plaintiff indirectly; but in an injurious falsehood action, the direct and express purpose of the misrepresentation is to cause damage to the reputation (goodwill) of the goods of the plaintiff though it may also impliedly or indirectly benefit the business of the defendant.

Christopher Wadlow, The Law of Passing-Off (5th Ed. 2016) p 16.; White v. Mellin [1895] A.C. 154 HL; Kaye v. Robertson [1991] F.S.R. 62 CA and Schulke and Mayr v. Alkapharm [1999] F.S.R. 161 ref.

There is nothing in the language of section 10(2)(a) of the Act that suggests that the legislature has changed therein the meaning of 'misrepresentation' as understood in common law action for injurious falsehood. On the contrary, the use of the words 'false or misleading information' in section 10(2)(a) shows that the legislature has intended to retain the same meaning; for in common law both the terms 'false' and 'misleading' are used in injurious falsehood actions for a representation to be taken as 'misrepresentation'. Further, the use of the phrase 'harming the business interests of another undertaking' in section 10(2)(a) of the Act, and not in section 10(2)(d), denotes that the said phrase has been used in the sense of causing express and direct harm to the business interests of the complainant undertaking as it is understood in an injurious falsehood action. And the non-mentioning of this phrase in section 10(2)(d) of the Act shows that the damage caused to the business interests of the complainant undertaking is taken to be an implied and indirect effect of the fraudulent use of its trademark, etc., as it is understood in a passing-off action, which the legislature has considered unnecessary to be expressly mentioned.

Kaye v. Robertson [1991] F.S.R. 62 CA and White v. Mellin [1895] A.C. 154 HL ref.

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

----Ss. 12 & 43---Competition Commission of Pakistan ('the Commission')---Appeal filed by the Commission before the Supreme Court against an order passed by the Competition Appellate Tribunal ('the Tribunal')---Maintainability---Adjudicatory body (such as the Commission) deciding a matter in exercise of its quasi-judicial powers between two rival parties under a law cannot be treated as an aggrieved person if its decision is set aside or modified by a higher forum under that law or by a court of competent jurisdiction and such body thus does not have locus standi to challenge the decision of that higher forum or court.

Although the role of the Competition Commission ('the Commission') under the Competition Act, 2010 ('the Act') is primarily of a regulatory body, it is quasijudicial as well under some provisions of the Act. The provisions of clauses (a) and (d) of section 10(2) of the Act, envisage the quasi-judicial role of the Commission while deciding upon the divergent claims and allegations of two competing undertakings. And, an adjudicatory body deciding a matter in exercise of its quasi-judicial powers between two rival parties under a law cannot be treated as an aggrieved person if its decision is set aside or modified by a higher forum under that law or by a court of competent jurisdiction and such body thus does not have locus standi to challenge the decision of that higher forum or court. The appeal filed by the Commission in the present case against the decision of the Tribunal setting aside partially its quasi-judicial order is therefore not maintainable. Appeals were dismissed.

Wafaqi Mohtasib v. SNGPL PLD 2020 SC 586 ref.

Hasan Irfan Khan, Advocate Supreme Court assisted by Saqib Asghar, Advocate for Appellant (in C.A. 445 of 2017).

Azid Nafees, Advocate Supreme Court along with Syed Rifaqat Hussian Shah, Advocate-on-Record for Appellant (in C.A. 444 of 2017).

Barrister Haris Azmat, Advocate Supreme Court and Azid Nafees, Advocate Supreme Court for Respondents (in C.A. 445 of 2017).

Hasan Irfan Khan, Advocate Supreme Court and Azid Nafees, Advocate Supreme Court for Respondents (in C.A. 444 of 2017).

2023 C L D 1148

[Supreme Court of Pakistan]

Present: Muhammad Ali Mazhar and Syed Hasan Azhar Rizvi, JJ

TELENOR MICROFINANCE BANK LIMITED---Petitioner

Versus

SHAMIM BANO and others---Respondents

Civil Petitions Nos. 329-K to 391-K of 2022, decided on 28th April, 2023.

(On appeal from Order dated 03.12.2021 of the High Court of Sindh Circuit Court, Hyderabad in M.As. Nos. 3-12/2021 and 31-83/2021)

Microfinance Institutions Ordinance (LV of 2001)---

----S. 6(1)---Civil Procedure Code (V of 1908), O. XXXVII, Rr.1 & 2---Negotiable Instruments Act (XXVI of 1881), Ss. 4 & 13---Microfinance institution/bank---Default in payment of loan---Promissory note integral part of finance agreement---Summary suits filed by the Bank before Trial Court on basis of promissory notes---Maintainability---High Court directed the petitioner-Bank to file civil suits for recovery in the plenary jurisdiction of the civil court instead of summary suits under Order XXXVII, C.P.C.---Validity---Trial Court and the Appellate Court both ignored the fact that the promissory note was an integral part of the finance agreement and a specific condition was incorporated in the finance agreement which expounded that the borrowers of the loan, being the customers and guarantors, solemnly declared that their signatures and thumb impression shall be deemed as the whole agreement or acceptance for all documents including but not limited to the finance agreement, promissory note, hypothecated goods, letter of pledge, MODT, authority of encashment, marking of lien and all relevant affidavits with regard to loan and authorized the bank to use each of them as part of the agreement under their relationship---Petitioner-bank rightly invoked the jurisdiction of the Court under the summary chapter on the strength of the promissory note which was printed in the finance agreement in a separate head---Concurrent finding recorded by the Courts below that the suits for recovery should have been filed in the plenary jurisdiction of the civil court rather than summary jurisdiction was misconceived and erroneous---Courts below only relied upon the finance agreement without adverting to its terms and conditions and the integral documents appended thereto and returned the plaint in a slipshod and injudicious manner---All the prerequisites required to be followed were fulfilled at the time of issuing the promissory notes and the summary suits were rightly filed under the summary chapter---Petitions for leave to appeal were converted into appeals and allowed.

Jahanzeb Awan, Advocate Supreme Court assisted by Rasheed Mehar and Subhan Tasleem, Advocates and Muhammad Iqbal Chaudhry, Advocate-on-Record for Petitioner.

Nemo for Respondents.

2023 C L D 1184

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, Mazhar Alam Khan Miankhel and Jamal Khan Mandokhail, JJ

Qazi HUMAYUN---Petitioner

Versus

Mst. SABIHA QAYUM and others---Respondents

Civil Petition No. 4779 of 2019, decided on 26th October, 2021.

(On appeal from the judgment/order dated 04.09.2019 of the Peshawar High Court, Peshawar passed in FAB 28-P of 2010)

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

----O. XXI, R. 90---Execution of decree in favour of Bank---Auction proceedings---Objection petition regarding fraud in the passing of the decree and the sale carried out there-under---Judgment debtor in question was alive at the time of the compromise decree as well as the finalization of the sale of his share in the mortgaged property---Said judgment debtor did not challenge any of the actions taken in the proceedings leading to the decree and its realization in favour of the respondent decree holder Bank until his death on 08.10.2006---However, on 08.12.2007 his heirs i.e. respondents filed an application under Order XXI, Rule 90 of the C.P.C. alleging fraud in the passing of the decree and the sale carried out there-under---Held, that whereas the respondents disputed the compromise decree they brought no grievance against it before the Supreme Court---Moreover, the respondents' objections fail to disclose particulars of any fraud, illegality or irregularity alleged against the co-judgment-debtors one of whom was the petitioner before the Court---Present matter pertained to a decree passed in 1981 and satisfied in 2001 by sale of the shares of all nine co-owners of the mortgaged property accomplished through their compromise with the decree holder Bank---Predecessor of the respondents never challenged the decree nor the execution of the decree during his life time; he was aware of the proceedings because he was the Managing Director of the company that had committed default in repayment of loans to the respondent decree holder Bank---Decree was ultimately settled through contribution by all the judgment debtors, namely, the nine co-owners of the mortgaged property sold under the decree to settle the liability of the judgment debtor company---Respondents and their predecessor waited for six years to challenge in 2007 the sale of the mortgaged property effected in 2001---No explanation for the delay occasioned had been given by the respondents---Respondents belatedly approached the executing Court in 2007 to incompetently dispute the consent decree passed by the Supreme Court in the year 2000 before the wrong forum---In any event, the said objections failed to disclose any fraud committed by the other judgment debtors including the petitioner and decree holder Bank---Petition for leave to appeal was converted into appeal and allowed.

(b) Limitation---

----All objections regarding liability and its discharge come to a close after the lapse of the limitation period.

(c) Practice and procedure---

----Notice---Party residing outside Pakistan---Under the law service by publication is good service even in respect of parties living abroad.

Lilaram v. Ghulam Ali 1991 SCMR 932; Mir Wali Khan v. Manager, ADBP PLD 2003 SC 500 and Muhammad Attique v. Jami Limited PLD 2010 SC 993 ref.

Wasim Sajjad, Senior Advocate Supreme Court and Syed Rifaqat Hussain Shah, Advocate-on-Record for Petitioner.

M. Tariq Javed, Advocate Supreme Court for Respondents Nos. 1 - 3.

2023 C L D 1298

[Supreme Court of Pakistan]

Present: Umar Ata Bandial, CJ, Syed Mansoor Ali Shah and Ayesha A. Malik, JJ

COMPETITION COMMISSION OF PAKISTAN and others---Appellants

Versus

DALDA FOODS LIMITED, KARACHI---Respondent

Civil Appeal No. 1692 of 2021, decided on 29th March, 2022.

(Against the judgment dated 14.09.2021 of the Islamabad High Court, Islamabad, passed in Writ Petition No. 3454 of 2020)

Per Ayesha Malik, J; Umar Ata Bandial, CJ. agreeing; Syed Mansoor Ali Shah, J. also agreeing but with his separate note.

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

----Ss. 28(1)(b), 33, 36 & 37---Powers of the Commission in relation to a proceeding or enquiry---Power to call for information relating to undertaking---Scope of the Powers of the Competition Commission under sections 33, 36 & 37 of the Competition Act, 2010 stated.

Proceeding under section 33 means and only refers to proceedings under section 30 of the Competition Act, 2010 ('the Act'), and the power to call for information under section 36 of the Act or conduct of a study provided for under section 28(1)(b) cannot be treated as a proceeding within the meaning used in section 33 nor can the powers provided under section 33 be made available to Competition Commission of Pakistan ('CCP') in their exercise of jurisdiction under section 36 or 28(1)(b).

The CCP is a regulator which aims to prevent and address anti-competitive practices across markets for which it studies the market to understand market trends and practices. For this reason, CCP under section 36 of the Act is empowered to call for information relating to an undertaking. Through a general or special order, it may call upon an undertaking to furnish periodically or as and when required any information concerning the activities of the undertaking, including information relating to its organization, accounts, business, trade practices, management and connection with any other undertaking, which information is necessary for the CCP for the purposes of the Act. This is a regulatory power available to CCP aimed to collect and gather information about the undertaking and does not fall under the ambit of a proceeding under section 30. Hence, merely calling for information does not constitute a proceeding nor does it trigger any penal consequences.

Section 37 of the Act provides for enquiry and studies and subsection (1) thereof provides that the CCP may, on its own, conduct enquiries and studies into any matter relevant to the purposes of this Act or as per subsection (2) of section 37 of the Act, the CCP may conduct an enquiry and studies of an undertaking when it receives a complaint in writing of such facts that appear to constitute a contravention of the provisions of Chapter II of the Act unless it is of the opinion that the application is frivolous or vexatious or based on insufficient facts, or is not substantiated by any evidence to conduct an enquiry. Although enquiries and studies are referred together in section 37 of the Act, they serve distinct functions. Enquiry is a process available to the CCP to assess contravention of the Act before it initiates any proceedings under section 30 of the Act. Whereas, studies, as provided under section 28(1)(b) of the Act, are conducted to promote competition in all sectors of economic activity and in terms of section 37(3) of the Act, they are a function which may be outsourced by hiring consultants on contracts. Both enquiry and studies are used as independent tools by the CCP to collect and assess information on market trends and do not constitute an adverse action against the undertaking. Therefore, in terms of sections 36 and 37 the power to call for information or conducting an enquiry or study do not constitute a proceeding against an undertaking under section 30 of the Act.

It is important to draw a distinction between section 30 and section 37. Section 30 empowers the CCP to issue orders under section 31 when it is satisfied that there is a contravention of any provision in Chapter II of the Act. Before proceeding with the matter, the CCP must provide notice of its intent and the reasons behind it, giving the undertaking an opportunity to be heard and defend itself. On the other hand, section 37 defines a different scope for the CCP. Under this section, the CCP has the authority to conduct enquiries, either suo motu or based on references from the Federal Government, into matters related to the objectives of the Act. As mentioned above an enquiry under section 37 can also be initiated based on a complaint, unless the application is deemed frivolous, vexatious, lacks sufficient evidence, or is not supported by prima facie evidence. If, upon conducting this enquiry, the CCP is of the opinion that the findings necessitate taking action in the public interest, it shall initiate proceedings under section 30. In other words, the enquiry under section 37 serves as a preliminary step to gather information and evidence, and if it reveals a potential contravention of Chapter II of the Act, the CCP can then proceed. However, such enquiry is not always necessary to proceed against an undertaking, and if the CCP is satisfied on the information that it has available that a contravention of Chapter II of the Act is committed, it may proceed without it.

The CCP being a regulator must always act in a transparent manner, keeping the undertaking informed of its decisions. However, section 37 does not in itself result in penal consequences and the procedure is not a proceeding within the meaning of section 33. However, the CCP is required to provide the gist of its reasons as recorded in its internal deliberations which led to the decision of initiating such enquiry. This is a minimum requirement for the purposes of transparency and good governance and also facilitates the regulatory process by keeping the undertaking informed.

When perusing an order under section 37 of the Act, the CCP is not required to give a detailed reasoned explanation to the undertaking as to the enquiry, but should have deliberated on the issue so as to come to the conclusion that an enquiry is necessary, the gist of which reasoning should be communicated to the undertaking in writing. The internal working documents of the CCP need not be communicated in their entirety to the undertaking whilst at the same time its intent, along with gist of the reasoning, to conduct an enquiry must be communicated.

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

----S. 37---Powers of the Commission to call for information relating to undertaking---Scope---Competition Commission of Pakistan ('CCP'), as a regulator, is not only empowered to but also bears the responsibility to collect the market information in order to understand the market structure as well as to ensure effective enforcement of the Competition Act, 2010 ('the Act') being administered by it---In the absence of market information, that it may seek from different undertakings from time to time, CCP cannot carry out its functions as envisioned under the Act and the provision of this information by no stretch of the imagination amounts to an adverse action against an undertaking---Thus, it is an obligation upon the undertakings to fully comply with such orders of CCP for provision of information.

Per Syed Mansoor Ali Shah, J; agreeing with Ayesha Malik, J. with his separate note.

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

----Ss. 28(1)(a), 28(1)(b), 28(1)(c), 30, 33, 36 & 37---Distinction between the object and scope of "proceedings," "studies" and "enquiries" conducted by the Commission under Chapter IV of the Competition Act, 2010, and the duty of the Commission to act justly, fairly and reasonably and in a structured manner while exercising its discretionary power under section 37(1) of the Act to initiate on its own an enquiry against an undertaking stated.

Power of the Competition Commission of Pakistan ('the Commission') under section 36 of the Competition Act, 2010 ('the Act') to call upon an undertaking to furnish certain information is not a "proceeding'' within the meaning of this term as used in section 33 of the Act. Section 36 of the Act gives the Commission only one power, that is, to "call upon an undertaking to furnish periodically or as and when required any information concerning the activities of the undertaking". By treating this "power to call information" as a "proceeding" within the meaning of section 33, one would be conferring upon the Commission a long list of powers provided in section 33, which include summoning and enforcing the attendance of any person and requiring the production of any books, accounts or other documents in the custody of an undertaking, etc. And by so doing one would be adding further powers of the Commission in section 36 of the Act to interfere in the exercise of the fundamental right of the citizens to conduct any lawful trade or business which the Legislature has nor provided therein.

Although the word "proceeding'' used in section 33 has not been defined in the Act, the examination of the overall scheme of Chapter IV (sections 28 to 37) that describes the functions and powers of the Commission clearly indicates what it means. It has been used in section 33 in special meaning, not in general meaning; it means and refers to a "proceeding" initiated under section 30 of the Act. Therefore, the power of the Commission to call for information under section 36 and to conduct a study under section 28(1)(b), cannot be treated as a "proceeding" within the meaning of that word used in section 33 of the Act, nor can the powers mentioned in section 33 in relation to a "proceeding" be made available to the Commission for the purposes of calling information under section 36.

There is a also clear difference between the scope of "enquires" and ''studies" to be conducted by the Commission under the Act. They cannot be used by the Commission as two alternate modes to ascertain any contravention of the Act before it initiates any specific action against an undertaking. Enquiries are a process available to the Commission to assess any contravention of the Act before it initiates any specific action against an undertaking. However, this is not the object of "studies". Their object is mentioned in section 28(1)(b): the "studies" are to be conducted 'for promoting competition in all sectors of commercial economic activity', not to initiate any specific action against an undertaking. Under the Act, no regulatory action is triggered simply on the basis of the "studies". Therefore, the Commission may under section 37(3) outsource "studies" by hiring consultants on contract. It cannot be said that by doing so, the Commission out sources its statutory regulatory function to some consultants hired on contracts. Enquiries" and "studies" thus have no regulatory symbiotic relationship under the Act.

So far as the power of the Commission to initiate an enquiry against an undertaking either on its own under section 37(1) or on a complaint under section 37(2) of the Act is concerned, section 37(2) specifically requires that before initiating an enquiry under upon a complaint of such facts as appear to constitute a contravention of the provisions of Chapter II, the Commission is to examine the veracity of the complaint to ensure that it is neither frivolous or vexatious nor is it based on insufficient facts or unsubstantiated by prima facie evidence.

The Commission should, rather must, do so in order to exercise its discretionary power of initiating an enquiry on its own under section 37(1) of the Act in a just, fair and reasonable manner. And for this purpose, the Commission can advantageously follow the criterion prescribed by the legislature itself for initiating an enquiry on complaints under section 37(2). Further, it is also essential for the Commission to convey to the undertaking concerned the gist of the reasons and facts that prevail with the Commission in making the decision to initiate on its own an enquiry against that undertaking for a potential violation of any provisions of Chapter II of the Act.

(d) Administration of justice---

----Public institutions---Verbal orders---Institutions, and more so, public institutions don't function on the basis of verbal orders---Every opinion formed by the institution must be recorded and reduced in writing.

Faisal Siddiqui, Advocate Supreme Court for Appellants.

Syed M. Feisal Hussain Naqvi, Advocate Supreme Court for Respondent.

Ch. Aamir Rehman, Additional A.G. for Federation.