CLD 2025 Judgments

2025 C L D 193

[Competition Commission of Pakistan]

Before Saeed Ahmad Nawaz and Salman Amin, Members

IN THE MATTER OF: SHOW-CAUSE NOTICE ISSUED TO M/S 3N-LIFEMED PHARMACEUTICALS

On Complaint Filed By

M/S. RENACON PHARMA LTD. FOR DECEPTIVE MARKETING PRACTICES

File No. 345/RENACON/OFT/CCP/2021, decided on 8th November, 2024.

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

----S. 59---Drug Regulatory Authority of Pakistan Act (XXI of 2012), Preamble---Deceptive marketing practice---Competition Commission of Pakistan---Jurisdiction---Overriding effect---Provision of S. 59 of Competition Act, 2010 is non-obstante clause and no such provision exists in Drug Regulatory Authority of Pakistan Act, 2012---Commission could take cognizance of matters that include deceptive marketing practices, notwithstanding anything to the contrary contained in any other law on the subject-matter---DRAP does not have jurisdiction over the subject matter and Drug Regulatory Authority of Pakistan Act, 2012 does not impose any bar on exclusive mandate of Commission to prohibit and penalize deceptive marketing practices caused by false or misleading dissemination of information.

(b) Words and phrases---

----Inconsistency---Meaning.

Black's Law Dictionary (Sixth Edition) rel.

(c) Interpretation of statutes---

----General and special law---Lex specialis derogat legi generali, principle of---Applicability---Where two laws address analogous factual scenario, the statute addressing specific subject matter (lex specialis) takes precedence over the statute governing general matters on the same subject (lex generalis).

Syed Mushahid Shah v. Federation of Pakistan 2017 SCMR 1218 rel.

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

----Ss.10 & 37---Deceptive marketing practice---False or misleading advertisement---Anti-competitive behaviour---Scope---False or misleading advertising is a matter of protecting competitors and consumers from anti-competitive behaviour and has to be dealt with under Ss. 10 & 30 of Competition Act, 2010.

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

----S. 18---Content of complaint---Affidavit, absence of---Procedural lapse---Effect---Omission of affidavit in a complaint that otherwise meets all other formal requirements constitutes a minor procedural lapse---Such lapse neither undermines substantive issue nor does it prejudice the other party---Procedural formalities are the tools to advance cause of justice and cannot be used to cause miscarriage of justice---Such minor omission of a procedural requirement does not warrant dismissal of complaint.

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

----S.10---Deceptive marketing practice---Misleading information---Unauthorized use of Mark and Certification---Show cause notice was issued to respondent company for use of unauthorized and false "CE" (Confromitè Europèene) and "QMS" (Quality Management System) certification in total disregard to global standardization and certification---Validity---Respondent company's misuse of CE Mark and QMS Certification without prior substantiation amounted to a clear violation of S. 10(2) Competition Act, 2010, which had prohibited dissemination of false or misleading information that lacked a reasonable basis regarding character or quality of goods---Respondent company falsely represented its products as compliant with recognized EU standards and implied that they had been certified by an accredited body, SMIS-AGS, when they were not---Respondent company engaged in deceptive marketing practices and such actions had not only misled consumers but also distorted fair competition for the competitors who had actually adhered to required standards---Conduct of respondent company was direct infringement of statutory obligations under S.10(2)(b) of Competition Act, 2010, warranting legal accountability and corrective measures to ensure compliance with law and protection of consumer rights---Commission imposed cumulative penalty of Rs.20,000,000/- (Twenty Million) which was to be deposited in designated official account---Commission directed respondent company to immediately cease, if any, the use of unauthorized CE Mark and QMS Certification on its product packing and in its submissions to any procuring authority / office---Show cause notice succeeded in circumstances.

Black's Law Dictionary (Sixth Edition); Syed Mushahid Shah v. Federation of Pakistan 2017 SCMR 1218; S.D.O/A.M., Hasht Nagri Sub-Division, PESCO Peshawar v. Khawazan Zad 2023 PLD 174; In the matter of China Mobile Limited and Pak Telecom Mobile Limited 2010 CLD 1478; in the matter of Procter and Gamble Pakistan (Pvt.) Limited 2010 CLD 1685; Federal Trade Commission v. Wellness Support Network, Inc., 2014 and Bajaj Auto Ltd. v. TVS Motor Company Ltd. AIR 2009 SCW 6018 ref.

Shahid Rafique Sheikh for Complainant.

Faizan Saleem for Respondent.

2025 C L D 355

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman and Abdul Rashid Sheikh, Member

IN THE MATTER OF SHOW-CAUSE NOTICE ISSUED TO

M/S DAIRY AND CATTLE FARMERS ASSOCIATION KARACHI (DCFA) M/S DAIRY FARMERS ASSOCIATION KARACHI (DFAK) M/S KARACHI DAIRY FARMERS ASSOCIATION (KDFA)

File No.360/Milk-Karachi/C&TA/CCP/2021, decided on 19th December, 2204.

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

----Ss. 2(1) (q), 2(1)(b) & 4---Dairy and Cattle Farmers Associations---Association of 'undertakings'---Scope---Whether the number of Dairy and Cattle Farmers Associations based in different level/cities (Respondents/Associations) are 'undertakings'---Held, that as per the definition of 'undertaking' under S. 2(1)(q) of Competition Act, 2010, the 'undertaking' shall include an association of undertaking , and formal membership of an association of undertakings is not required for the application of the Competition Act, 2010---Agreement, understandings or acquiescence to decisions of association of undertakings that aim to restrict free market competition shall fall within ambit of S. 2(1)(b) read with S. 4 of the Act, 2010---Emphasis is placed on the substance of the arrangement and its effect on competition, rather than formal membership of an association of undertakings---Thus, an association of undertakings, howsoever, established and whether or not it has formal membership, will fall within the ambit of S. 2(1) (q) of the Act, 2010, even without being directly involved in economic activities.

In the matter of Show-Cause Notice issued to M/s Pakistan Flour Mills Association 2020 CLD 433 and In the matter of Show-Cause Notices Issued to Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) and its Member Undertakings 2016 CLD 289 ref.

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

----Ss. 2(1)(b), 2(1)(q), 4(1) & 4(2)(a)---Price of fresh milk (in Karachi), fixing of---Dairy and Cattle Farmers Associations as Association of 'undertakings', role of ---Anti-competitive practices---Whether the number of Dairy and Cattle Farmers Associations based on different level/cities (Respondents/Associations being Undertakings) were responsible for price hike of fresh milk in Karachi---Held, that despite absence of compelling evidence regarding the element of coercion upon wholesalers and retailers, statements/ findings recorded by the Enquiry Committee/Report reveal that both wholesalers and retailers are bound / restrained to follow the rates fixed by the Respondents / Associations , and both cannot afford to go against the rates set by the Respondents / Associations, as the Respondents / Associations will stop the milk supply to them and create an artificial shortage of milk by hoarding it in ice factories and then selling that milk in interior Sindh---Wholesalers and retailers, admitted during the hearing, that they primarily follow the presidents of the Respondents / Association directly or indirectly, at different stages---The legitimate role of any association is to serve as a link between the traders and the Government by representing their interest and assisting in favorable policy formulation and its implementation---It plays a pivotal role in standardization, supporting growth and development of particular sector and benefit to the public in the longer run---Thus, the Respondents/Associations have the ability to influence fresh milk prices in Karachi---Video evidence and testimonies support the claim that the Respondents/Associations exert substantial influence over bhandi rates, mandi rates, wholesale rate and in turn retail prices of the milk---The exercise of the said control as well as the evidence of coordination among the Respondents / Associations is glaringly obvious---Had other parties not adhered to the prices set by the Respondents, there would have been some price competition among the milk producers and retailers operating across various districts of Karachi, which suggests that the Respondents / Associations effectively suppressed natural equilibrium in the absence of Commissioner Karachi's price setting role and hindered the emergence of competition among dairy farmers---Thus, the Respondents / Associations have colluded on pricing mechanism of the sale of fresh milk which is contravention of Ss. 4(1) & 4(2)(a) of the Competition Act, 2010---Competition Commission of Pakistan imposed a lenient financial penalty on Respondents / Associations while directing them to submit a written commitment to the Commission that they will refrain from engaging in any form of market abuse, manipulation or any other anti-competitive practices prohibited under the Competition Act, 2010---Show-Cause Notice against the Dairy and Cattle Farmers Associations succeeded accordingly.

In the Matter of Show-Cause Notice issued to M/s. Pakistan Poultry Association 2011 CLD 42 ref.

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

----Ss. 4(1) & 4(2)(a)---Sindh Essential Commodities Price Control and Prevention of Profiteering and Hoarding Act, 2005 (IX of 2006), Preamble---Price of fresh milk (in Karachi), fixing of---Dairy and Cattle Farmers Associations as Association of 'undertakings', role of---Anti-Competitive Practices---Failure of the Commissioner Karachi regarding setting prices in dairy market---Argument of the Dairy and Cattle Farmers Associations (Respondents/Associations) was that their input costs increased significantly during the relevant period but the Commissioner Karachi failed to adjust inflationary pressures despite multiple appeals; consequently, they had no other option available but to raise prices---Validity---Despite failure of Commissioner Karachi to fix the prices in alignment with inflationary pressures under the Sindh Essential Commodities Price Control and Prevention of Profiteering and Hoarding Act, 2005, in normal market settings, each dairy farmer would have fixed its own prices taking into account demand and supply, costs incurred and economies of scale in case of bigger dairy farmers---Contrary to this the evidence /record, especially the video graphic evidence, indicates that Respondents/Associations colluded, coordinated, congregated a crowd of farmers before manipulating the milk price and key representatives of Associations announced prices of fresh milk which highlight their direct involvement in price setting mechanism, indicating manipulation of market dynamics to profit and to exploit consumers---No legal or regulatory framework should be manipulated to hinder competition or harm consumers---Any attempt to misuse regulations to conceal anti-competitive behavior to undermine market mechanism may constitute violation of the Competition Act, 2010---Representatives of the Respondents / Associations are engaged in anti-competitive activities by making decisions that set the prices of fresh milk in Karachi in violation of Ss. 4(1) & 4(2)(a) of the Competition Act, 2010---Competition Commission of Pakistan, however, in levying penalties, took a lenient view on account of failure of administrative role by the Commissioner Karachi as envisaged under the Sindh Essential Commodities Price Control and Prevention of Profiteering and Hoarding Act, 2005, and imposed a financial penalty on Respondents /Associations while directing them to submit a written commitment to the Commission that they will refrain from engaging in any form of market abuse, manipulation or any other anti-competitive practices prohibited under the Competition Act, 2010---Show Cause Notice against the Dairy and Cattle Farmers Associations succeeded accordingly. [p. 368] F, G & H

Present on behalf of the Respondents:

Ghazi Khan, Fawaz Khan, for DCFA.

Tayyab Malik for DFAK.

Sikandar Nagori for KDFA.

2025 C L D 651

[Competition Commission of Pakistan]

Before Saeed Ahmad Nawaz and Salman Amin, Mmebers

IN THE MATTER OF SHOW-CAUSE NOTICES ISSUED TO M/S. UNILEVER PAKISTAN LIMITED AND M/S FRIESLAND CAMPINA ENGRO PAKISTAN LIMITED

On a Complaint filed by

M/S PAKISTAN FRUIT JUICE COMPANY PRIVATE LIMITED REGARDING DECEPTIVE MARKETING PRACTICES

File No.427/Pakistan Fruit Juices/OFT/CCP/2022/454, decided on 18th December, 2024.

(a) Pakistan Standards and Quality Control Authority Act (VI of 1996)---

----Preamble---Punjab Food Authority Act (XVI of 2011), Preamble---Quality Control---Scope---Provisions of Pakistan Standards and Quality Control Authority Act, 1996, (PSQCA) and Punjab Food Authority Act, 2011 do not conflict with each other and each law has a distinct and separate scope---Punjab Food Authority Act, 2011 is a provincial law, which primarily addresses concerns regarding safety standard and hygiene of food, whereas PSQCA Act, 1996 pertains to standardization of wide range of products for advancement of national economy and promotion of industrial efficiency and development---Rules, Regulations and Standards of both the laws prescribe definition of various products to fulfil their distinct and distinguishable purposes.

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

----S. 10---Disclosures on packaging of products---Principle---Disclosures on extreme corner at bottom of wrapper do not meet requirements for printing of disclosures.

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

----S. 10---Violations---Limitation---Any violation under S. 10 of Competition Act, 2010 is not condonable because of any limitation of time.

M/s. Al-Hilal Industries (Pvt.) Limited's case 2012 CLD 1861 rel.

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

----S. 10---Deceptive marketing practice and dissemination of false and misleading information---"Ice-cream" and "frozen dessert"---Distinction---Third party advertisement---Advertisement on E-platforms---Complainant alleged that respondents / companies had been selling their frozen desserts under the garb of ice-cream and had been advertising the same on social media also---Respondent / company contented that it was not responsible for advertisements by third party seller on E-platforms---Validity---No action was taken by respondent / company to stop such advertisements on E-platforms and it also did not clarify the same to consumers at any stage---Financial and marketing benefits of alleged claims about the products on E-platforms were also reaped by respondent / company---If respondent / company had recognized that alleged claim was not crafted or created by them, then they would have stopped third party resellers---Despite being mindful of difference between two products i.e. "frozen dessert" and "ice-cream" respondents / companies knowingly initiated their marketing campaigns to sell their products, which were actually "frozen desserts", under the guise of "ice-cream"---Respondents / companies distributed false and misleading information to consumers viz-a-viz the character and properties of their products---Respondents / companies violated S.10(2)(b) of Competition Act, 2010 by disseminating false and misleading information to consumers---Conduct of respondents / companies was contra legem and amounted to deceptive marketing practices within the meaning of Ss. 10(1) & 10(2)(b) of Competition Act, 2010---Competition Commission of Pakistan imposed penalty upon respondents / companies for disseminating false and misleading comparison of goods in process of advertisement within the meaning of Ss. 10(1) & 10(2)(c) of Competition Act, 2010---Competition Commission of Pakistan directed respondents / companies to cease and desist from carrying out any false and misleading marketing practices concerning their "frozen dessert" products and restrain from making claims in a manner which could give consumers an impression of "frozen dessert" products as "ice-cream"---Commission further directed respondents / companies to modify all advertisements and promotional materials, whether through newspapers, TV campaigns, in electronic or digital media, social media posts or on their official websites and display only truthful claims regarding their products---Competition Commission also directed respondents / companies to ensure inclusion of disclaimer or disclosure as to the true nature of their products in explicit, express and bold terms, as per requirements of law and display the same prominently on the products packaging and in print / electronic / social media---Commission also directed respondents / companies to file compliance report otherwise additional penalty would be imposed---Complaint was allowed accordingly.

Reckitt Benckiser Pakistan Limited's case 2021 CLD 484, 1999 CLC 1443; PLD 2000 Lah. 1; https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=135&showFR=1; (356 F.3d 340, US Court of Appeal, First Circuit); https://www.fssai.gov.in/upload/uploadfiles/files /Compendium_Food_Additives_Regulations_30_06 2022.pdf, para 2.1.14; AIRONLINE 2018 BOM 1473; https://www.legislation.gov.au/F2015L00385/latest/text, recital 1.1.2-3; Askari Bank Ltd, United Bank Ltd, My Bank Ltd. and Habib Bank Ltd., 2008, Para 46; Paint Manufacturer's case 2012 CLD 808; Messrs China Mobile Pak Limited's case 2010 CLD 1478; Messrs Proctor and Gamble Pakistan (Pvt.) Limited for Deceptive Marketing Practices's case 2017 CLD 1609; Messrs AT-Tahur (Pvt.) Limited 2020 CLD 1148; Messrs Reckitt Benckiser Pakistan Limited 2020 CLD 995; Proctor and Gamble Pakistan (Pvt.) Limited's case (Head 7 Shoulder Shampoo) 2010 CLD 1695; M/s SC Johnson and Son Pakistan Limited's case 2012 CLD 783; Reckitt Benckiser Pakistan Limited's case 2016 CLD 40; A. Rahim Foods (Pvt.) Limited 2016 CLD 1128; Dar-e-Arqam School's case 2022 CLD 1343; Kennol Petroleum (Pvt.) Limited and another's case 2022 CLD 859; Messrs Al-Hilal Industries (Pvt.) Limited's case 2012 CLD 1861; Messrs Catkin Engineering Sale and Services (Pvt.) Limited against KPK Directorate of Agricultural Engineering's case 2020 CLD 497; Messrs Reckitt Benckiser Pakistan Limited's case 2015 CLD 1864 and Messrs Kitchen Stone Food's case 2018 CLD 778 rel.

Assisted By: Hafiz Naeem, Senior Legal Advisor and Hassan Raza, Legal Advisor.

Barrister Momin Ali Khan and Haider Rafay Butt for Complainant.

Khawaja Aizaz Ahsan for Respondent No.1.

2025 C L D 1065

[Competition Commission of Pakistan]

Before Saeed Ahmad Nawaz and Bushra Naz Malik, Members

IN THE MATTER OF SHOW-CAUSE NOTICE ISSUED TO

M/S BRITISH LYCEUM PRIVATE LIMITED FOR PRIMA FACIE VIOLATION OF SECTION 10 OF THE COMPETITION ACT, 2010

File No.385/British Lyceum/OFT/CCP/2020, decided on 19th May, 2025.

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

----Ss. 2(1)(q) & 10(2)(a) & (b)---Term, "undertaking"---Deceptive marketing practice---Misleading advertisement---Disclaimer---Effect---Show-cause notice was issued to respondent establishment for advertisement in newspaper offering attractive packages to teachers seeking to join an online educational program---Validity---Respondent-establishment was engaged in providing educational services and was registered with Securities and Exchange Commission of Pakistan under Companies Act, 2017, therefore, was qualified to be an undertaking as defined in S. 2(1)(q) of Competition Act, 2010---Once a false or misleading impression was created, subsequent clarifications, whether on a website or elsewhere could not remedy its deceptive effect---It was responsibility of respondent-establishment to ensure that material information was clearly and prominently disclosed within the advertisement itself---Disclaimers must serve to clarify not contradict primary message---Respondent-establishment violated S. 10(2)(b) of Competition Act, 2010 by disseminating misleading information regarding projected earnings, affiliations and qualifications of its Board of Directors---Such misrepresentations were capable of harming business interests of other undertakings thereby constituting violation of S. 10(2)(a) of Competition Act, 2010---Competition Commission directed to initiate criminal proceedings before Court of competent jurisdiction against respondent-establishment pursuant to S. 38 of Competition Act, 2010 and also imposed penalty upon respondent-establishment---Show-cause notice was disposed of accordingly.

In The Matter of China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478; Standard Oil of Clalif 84 F.T.C. 1401; The Matter of Proctor and Gamble Pakistan (Pvt.) Limited 2010 CLD 1695; Askari Bank Ltd. United Bank Ltd. My Bank Ltd. and Habib Bank Ltd. (2008) 2010 CLD 1454; American Home Products, 98 F.T.C. 136, 370 (1981); Syed Ahmed v. Syed Muzaffar Hussain 2008 CLC 175; A. Rahim Foods (Pvt.) Limited and another v. K N's Food (Pvt.) Limited and others 2023 CLD 1001; Hasnat Ahmed Khan v. Institution Officer 2010 SCMR 354; Reference No.1 of 2010 PLD 2013 SC 279; The Bombay Gas Co. Ltd. v. R.N. Kulkarni AIR 1965 Bombay 172, Municipal Corporation of Delhi v. Shashank Steel Industries (P.) Ltd and others AIR 2003 Delhi 110 and Janinabai wife of Hoondrai v. Jethamal and others AIR 1937 Sindh 316 rel.

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

----S. 10(2)(b)---Deceptive marketing practice---Determination---Net General Impression test---Scope---While evaluating "net general impression" or dominant message, Competition Commission examines express and implied claims contained in an advertisement or promotional campaign while holding the advertiser liable for both---Advertiser is liable for all such claims express or implied, if they are false, misleading or lack a reasonable basis for the same---Neither proof of intent to disseminate a deceptive claim nor evidence that consumers have actually been misled is required for an act or omission to constitute violations under S. 10 (2)(b) of Competition Act, 2010.

M/s Eden Builders (Private) Limited (File No. 191/OFT/Eden Life/CCP/2015 rel.

Barrister Ambreen Abbasi, Senior Legal Advisor.

Moqeem ul Hassan, Legal Advisor.

2025 C L D 1099

[Competition Commission of Pakistan]

Before Saeed Ahmad Nawaz and Abdul Rashid Sheikh, Members

IN THE MATTER OF SHOW-CAUSE NOTICE ISSUED TO M/S KINGDOM VALLEY (PRIVATE) LIMITED FOR PRIMA FACIE VIOLATIONS OF SECTION 10 OF THE COMPETITION ACT, 2010

File No.422/KINGDOM VALLEY/OFT/CCP/2022, decided on 27th May, 2025.

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

----Ss. 10(2)(a) & 10(2)(b)---Deceptive marketing practice---Determination---Net General Impression Test---Scope---While evaluating "net general impression" or dominant message, the Commission examines express and implied claims contained in an advertisement or promotional campaign and holds the advertiser liable for the both---Advertiser is liable for all such claims if the same are false and / or misleading or lack a reasonable basis.

M/s Eden Builders (Private) Limited (File No. 191/OFT/Eden Life/CCP/2015) rel.

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

----Ss. 10(2)(b) & 10(2)(b)---Deceptive marketing practice---False statement---Misleading claim---Show-cause notice was issued to respondent-establishment for making false claims about the housing scheme launched by it---Validity---Respondent-establishment's false claim of being associated with initiatives of Punjab and Federal Government for the provision of low cost housing in Islamabad was likely to attract investors and consumers to invest in the project of respondent-establishment when they might have otherwise considered other competing projects without such a misleading government endorsement---Rather than competing with other similar undertakings on merit, respondent-establishment adopted a strategy to influence consumers' choice by deception regarding government endorsement and geographical location of its project---Respondent-establishment had put itself forward by marketing its project as being sanctioned by government and giving the impression that the same was situated in Islamabad---This might have had the effect of distorting competition within Pakistan because other housing societies marketing similar projects would be at a serious disadvantage and might not able to compete with respondent-establishment as unsuspecting public would believe, understand or perceive respondent-establishments' project to be genuinely backed by government and located in Islamabad---Competition Commission imposed penalty upon respondent-establishment for violation of S. 10(2)(b) of Competition Act, 2010---Competition Commission directed respondent-establishment to inform public-at-large through appropriate clarifications published in two Urdu and two English newspapers giving correct situation regarding location and status of the housing scheme---Show cause notice was disposed of accordingly.

A. Rahim Foods (Pvt.) Limited and another v. K&N's Food (Pvt.) Limited and others 2023 CLD 1001; China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478; M/s Procter and Gamble Pakistan (Private) Limited's case 2010 CLD 1695; Pfizer, Inc.'s case 81 F.T.C 23 (1972); Hasnat Ahmad Khan v. Institution Officer 2010 SCMR 354; Reference No.1 of 2010 PLD 2013 SC 279; In the Matter of Show-Cause Notice issued to the British Lyceum Private Limited; http://appadminccp.cc.gov.pk/ccporders/feb23cf7430ab 17713f0edea53a03837.pdf and M/s Options International (SMC-Pvt.) Ltd. through its CEO Appellant v. The Competition Commission of Pakistan through its Registrar and another PLD 2024 SC 899 rel.

(c) Interpretation of statutes---

----Dictionary meaning---Applicability---One can rely on dictionary meaning where a statutory term is undefined---Ordinary and natural meaning of the term reflected in standard dictionaries may be relied upon.

(d) Words and phrases---

----"Capable of"---Meaning.

The Bombay Gas Co. Ltd. v. R.N. Kulkarni AIR 1965 Bombay 172; Municipal Corporation of Delhi v. Shashank Steel Industries (P.) Ltd and others AIR 2003 Delhi 110 and Jamnabai wife of Hoondrej v. Jethamal and others AIR 1937 Sindh 316 rel.

Syed Tassadaq Murtaza Naqvi for Messrs Kingdom Valley (Pvt.) Limited.

2025 C L D 1276

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman and Ms. Bushra Naz Malik, Member

IN THE MATTER OF SHOW-CAUSE NOTICE ISSUED TO M/S HYUNDAI NISHAT MOTOR PRIVATE LIMITED FOR VIOLATION OF SECTION 10 OF THE COMPETITION ACT, 2010

File No.382/HYUNDAI Tucson/OFT/CCP/2020, decided on 15th April, 2025.

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

----S. 10---Deceptive marketing practice---False statement---Industry-wide deceptive market practice---Scope---Individual responsibility of an undertaking under law is not exempted by industry-wide deceptive market practices.

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

----S. 10(2)(b)---Deceptive marketing practice---Determination---Net general impression---Disclaimer---Effect---Respondent establishment launched its new vehicle in market and in its media campaign introductory prices were prominently displayed in large font---Disclaimer stating "for limited time period only" was printed in a much smaller font, making it nearly illegible whereas period of such price was less than 24 hours---Validity---Deceptive marketing is evaluated based on net general impression of an advertisement---Even if a disclaimer exists, it must be clear, conspicuous and prominently placed to eliminate any misleading effect---Absence of key details in the advertisement of respondent, such as limited quantity of vehicles available at the time of introductory price and the abrupt withdrawal of the offer within 24 hours had raised serious concerns regarding accuracy and transparency of respondent's marketing campaign---Competition Commission imposed penalty upon respondent establishment who had acted in contravention of S. 10(2)(b) of Competition Act, 2010 by omitting to disclose material information related to their product characteristics to consumers---Show cause notice was disposed of accordingly.

In the matter of Show-Cause Notice Issued to Paint Manufacturers 2012 CLD 808; China Mobile Pak Limited and Pakistan Telecom Mobile Limited 2010 CLD 1478; Meezan Beverages (Pvt.) Limited v. Competition Commission of Pakistan and others 2024 CLD 1107; Proctor and Gamble Pakistan (Pvt.) Limited's case 2010 CLD 1685; Renault UK Ltd.'s case (Ref No. A23-1201059); Hyundai Motor UK Ltd.'s case (Ref No. A23-1201059) and In the Matter of Askari Bank Ltd., United Bank Ltd, My Bank Ltd. and Habib Bank Ltd. (2008) ref.

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

----S. 10(2)(b)---Deceptive marketing practice---Well-informed or experienced consumer---Scope---Even well-informed or experienced consumers are entitled to full disclosures of all material information, especially in transactions involving considerable financial commitments.

Rashid Sadiq, R&S Corporate Advisory for Hyundai Nishan Motor (Private) Limited.

2025 C L D 1314

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman

IN THE MATTER OF ACQUISITION OF % SHAREHOLDING OF WOOT TECH (PRIVATE) LIMITED BY WAKEB DATA COMPANY FOR TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY FROM MR. BILAL AHMED SIDDIQUI, MR. RAFEY AHMED AND MR. RAHEEL PASHA KHAN.

Case No. 1506/Merger-CCP/2024, decided on 2nd May, 2025.

Competition Act (XIX of 2010)---

2025 C L D 1336

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman

IN THE MATTER OF OF A JOINT VENTURE BETWEEN FLY JINNAH SERVICES (PRIVATE) LIMITED AND AIR ARABIA ACADEMY LLC.

Case No. 1520/Merger-CCP/2025, decided on 20th March, 2025.

Competition Act ( XIX of 2010)---

2025 C L D 1478

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman/Member and Salman Amin, Member

IN THE MATTER OF SHOW CAUSE NOTICE ISSUED TO MESSRS AL-GHAZI TRACTOR LIMITED REGARDING DECEPTIVE MARKETING PRACTICES

(File No.423/OFT/AL-GHAZI/CCP/2022/147), decided on 13th May, 2025.

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

----Ss. 30 & 37---Contravention---Inquiries and studies---Initiation of proceedings---Scope---Provision of S. 30 of Competition Act, 2010 is independent and not contingent on S. 37 of Competition Act, 2010---Inquiry is not a necessary prerequisite to issuance of show cause notice and initiation of proceedings under S. 30 of Competition Act, 2010---Provision of S. 37 of Competition Act, 2010 cannot be construed in any way to restrict scope and very purpose of Competition Act, 2010 or to pose constraints on the powers of the Commission by creating procedural hurdles.

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

----Ss. 10 & 30---Deceptive marketing practice---False statement---Show cause notice was issued to respondent-establishment for claiming its product as 30% more fuel efficient as compared to all such products available in the market---Respondent-establishment had made its claim on the basis of a report issued by Agriculture Mechanization and Research Institute (AMRI)---Validity---Report of AMRI did not support purported claim of respondent-establishment, as it had used the contents of that report in a deceptive manner---Claim of respondent-establishment was without any reasonable basis---In its correspondence with the Commission, AMRI denied granting certification or approval to respondent-undertaking and had categorically denied issuing any report, finding or information that could support the claim made by respondent-establishment---AMRI explicitly prohibited respondent-establishment from using it's name for publicity of its products and this was a substantial evidence of AMRI's view on actions and claims of respondent-establishment which could mislead the consumers---Report by AMRI compared products of respondent-establishment with that of one competitor only---Such claim of respondent-establishment was inherently defective and misleading and prohibited under S. 10 of Competition Act, 2010---Deceptive claim was carefully crafted with the intention of deceiving ordinary customer into believing that products of respondent-undertakings were superior in terms of fuel efficiency and would result in additional savings for the users---Respondent-establishment tried to create deceptive impression of performance of the product, enticing consumers by promising significant economic benefits that did not actually exist---By presenting such false and misleading information, respondent-undertaking aimed to gain an unfair advantage in the market, misguiding consumers and distorting their purchasing decisions---Such practice not only undermined consumer trust, but also disrupted fair competition within the industry---It was imperative for regulatory bodies to address such deceptive claims to protect consumers and ensure a fair and transparent marketplace---Respondent-undertaking had violated Ss. 10(1) & 10(2)(b) of Competition Act, 2010---Competition Commission directed respondent-establishment to cease and desist from carrying out deceptive marketing practices by suggesting that their products provide up to 30% additional fuel saving as compared to its competitors---Competition Commission further directed respondent-establishment to modify all advertisements and personal material and promotional material, whether through newspaper, TV campaign, in electronic or digital media, social media posts or on their official websites and to display only truthful claims regarding their product---Competition Commission also directed respondent-establishment to file compliance report with respect to implementation of the directions as well as deposit of penalty by not later than 30 days---Show cause notice was disposed of accordingly.

Competition Commission of Pakistan v. Dalda Foods Limited 2023 SCMR 1991; M/s Sadia Poultry (Private) Limited v. Federation of Pakistan and others PLD 2025 Lah. 57; In the matter of Show Cause Notice issued to Institute of Chartered Accountants of Pakistan (ICAP) Order dated 10/01/2013; In the matter of Show Cause Notice Issued to Pakistan Poultry Association (PPA) order dated 29-2-2016; In the matter of Show Cause Notice issued to All Pakistan Cement Manufacturers Association and its Member Undertakines 2010 CLD 1586; In the matter of Complaint filed by Reckitt Benckiser Pakistan Ltd. (mains, M/s S.C. Johnson and Son Pakistan Limited for Deceptive Marketing Practices 2012 CLD 783; Standard Oil of Calif 84 ETC 1401 and In the matter of Show Cause Notice issued to M/s. Catkin Engineering Sale and Services (Pvt.) Limited against KPK Directorate of Agricultural Engineering 2020 CLD 497 rel.

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

----S.10(2)(b)---Deceptive marketing practice---Determination---Lack of Reasonable Basis Test---Scope---Distribution of false and misleading information to consumer, under S. 10(2)(b) of Competition Act, 2010 must lack reasonable basis---Any information that has reasonable basis would not amount to "false" or "misleading" information.

In the matter of Show Cause Notice issued to M/s Proctor and Gamble Pakistan (Pvt.) Limited (Head And Shoulders Shampoo) 2010 CLD 1695 rel.

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

----S. 10(2)(b)---Deceptive marketing practice---Determination---Ordinary Consumer Test---Scope---Standard for evaluating consumer behavior and expectations must be based on the perspective of an "ordinary consumer"---Courts often consider what an ordinary person in general public would think or how they would act in a given situation.

In the matter of Messrs. China Mobile Pak Limited and Messrs Pakistan Telecom Mobile Limited 2010 CLD 1478; 2021 CLD 484; In the matter of Show Cause Notice issued to Eight (8) Campuses of Dar-e-Arqam Schools 2022 CLD 1343 (the Dar-e-Arqam Schools case) and In the matter of Show Cause Notice issued to Unilever Pakistan Limited on Complaint filed by Reckitt Benckiser Pakistan Ltd. 2024 CLD 1069 rel.

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

----S. 10 (2)(b)---Deceptive marketing practice---Determination---Net General Impression Test---Scope---While examining a deceptive claim, Commission usually considers "Net General Impression Test" as overall impression from deceptive advertisement, instead of isolated statements of words.

In the matter of Show Cause Notice issued to Unilever Pakistan Limited on Complaint filed by Reckitt Benckiser Pakistan Ltd. 2024 CLD 1069 and Standard Oil of Calif 84 F.T.C. 1401 rel.

Waqas Mir, Advocate Supreme Court for M/s. Al-Ghazi Tractors Limited.

2025 C L D 1514

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman

IN THE MATTER OF ACQUISITION OF % SHAREHOLDING OF MESSRS SHELL PAKISTAN LIMITED BY MESSRS WAFI ENERGY HOLDING LIMITED FROM MESSRS THE SHELL PETROLEUM COMPANY LIMITED

Case: 1448/Merger-CCP/2024, decided on 3rd July, 2024.

Competition Act (XIX of 2010)---

2025 C L D 1522

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman and Saeed Ahmad Nawaz Member

IN THE MATTER OF ACQUISITION OF % SHAREHOLDING OF M/S. GAS AND OIL PAKISTAN LTD BY M/S. ARAMCO ASIA SINGAPORE PTE. LTD FROM MR. KHALID RIAZ, MR. SHEHZAD MUBEEN AND MR. BILAL ANSARI.

Case: 1426/Merger-CCP/2024, decided on 17th April, 2024.

Competition Act (XIX of 2010)---

2025 C L D 1570

[Competition Commission of Pakistan]

Before Dr. Kabir Ahmed Sidhu, Chairman and Salman Amin, Member

IN THE MATTER OF SHOW CAUSE NOTICES ISSUED TO FERTILIZER MANUFACTURERS OF PAKISTAN ADVISORY COUNCIL (FMPAC) AND ITS MEMBER UNDERTAKINGS FOR VIOLATION OF SECTION 4 OF THE COMPETITION ACT, 2010

File No.463/UREA/C&TA/CCP/2022, decided on 2nd June, 2025.

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

----S. 2(1)(k)---Term, "relevant market"---Scope---Term "relevant market" comprises two components: the relevant product market and the relevant geographic market.

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

----S. 2(1)(k)---Term, "relevant market"---Scope---To determine "relevant product market" first step is to identify relevant products or services that are interchangeable or substitutable with those at issue---Products are considered interchangeable or substitutable in a relevant market based on their characteristics, prices and intended uses.

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

----S. 2(1)(q)---Term, "undertaking"---Scope---Respondent / Association raised an objection that it did not qualify as an "undertaking"---Validity---Respondent / Association qualified to be an "undertaking" under S. 2 (1)(q) of Competition Act, 2010, as it functioned as an association of undertakings---Respondent / Association represented and coordinated actions of fertilizers manufacturers, engaged in advocacy and communication within the industry and had participated in matters relating to supply and pricing urea---Activities of respondent / Association demonstrated economic engagement, irrespective of its registration status---Respondent / Association fell within the scope of S. 2(1)(q) of Competition Act, 2010, as it was applicable to both formal and informal associations based on their de facto conduct---Objection was repelled in circumstances.

In the Matter of Show Cause Notice issued to Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) and its Member Undertakings 2016 CLD 289 rel.

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

----S. 4---Fertilizer Policy, 2001---Cartelization---Fixing of price---State Action Doctrine---Applicability---Joint advertisement---Respondents / undertakings were alleged to have fixed price of "urea fertilizer" defeating healthy competition in market by entering into an agreement to such effect---Validity---There was no evidence direct or indirect of governmental compulsion that would justify respondents' / undertakings' conduct of joint price fixation under the State Action Doctrine---Respondents / undertakings failed to satisfy the legal threshold required to invoke such plea of State Action Doctrine---Respondents / undertakings acted on their own violated without any binding directive or legal mandate from the government in publishing advertisement announcing a uniform urea price---Such act of respondents / undertakings was violation of S. 4 of Competition Act, 2010 in circumstances---Respondents / undertakings conduct was not merely informational but constituted an impermissible attempt to orchestrate market wide pricing uniformly---Such act undermined the core objective of competition law i.e. to provide free competition, enhance economic activity and to protect consumers from anti-competition behaviour---One of the undertaking had higher production cost yet it agreed to follow Maximum Retail Price set by respondent / Association, apparently to its disadvantage---Such conduct led to the conclusion that consent of undertakings to go along with any price increase by competitor despite it being not commercially viable led to a restrictive competition---Respondents / undertakings acted in contravention of S. 4 of Competition Act, 2010 by entering into an agreement and / or engaging in a concerted practice to fix the price of urea fertilizer---Respondents / undertakings restricted competition in the relevant market, resulting in adverse effects on the economy, farmers and end consumers---Competition Commission imposed penalties upon respondents / undertakings, as they had violated the provisions of S. 4 of Competition Act, 2010---Competition Commission directed the respondents / undertakings to restore and ensure deregulated market dynamics in accordance with Fertilizer Policy, 2001 and desist from such concerted practices of uniform price fixation despite established different operational and financial dynamics, particularly the input costs---Show cause notice was disposed of accordingly.

Oil Companies Advisory Council (OCAC) 2019 CLD 1285; European Communities and French Republic v. Ladbroke Racking Ltd. ECLI:EU:C:1997:531; Polskie Gornictwo Noftoqwe I Gazownictwo S.A. v. European Commission ELCI:EU:C:1997:431; ECLI:EU:C:2022:44; O2 (Germany) GmbH & Co. OHG v. Commission of the European Communities ECLI:EU:C:2006:116; Competition Commission of Pakistan v. Dalda Foods Limited 2023 SCMR 1991; DG Khan Cement Companies Ltd. v. Monopoly Control Authority PLD 2007 Lah. 1; Fauji Fertilizer Company v. Competition Commission of Pakistan 2017 CLD 47; Pharma Bureau's case 2019 CLD 1152; A Ahlstrom Osakeyhtio v. Commission ECLI:EU:C:1988:447; National Feeds Limited v. Competition Commission of Pakistan 2016 CLD 1688; Pakistan Poultry Association's 2016 CLD 976; Whish, R., and Bailey D. (2012), Competition Law (7th edition), Oxford: Oxford University Press, pg.561; Black's Law Dictionary, 7th edition; In the Matter of Show Cause Notice issued to Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) and its Member Undertakings 2016 CLD 289 and In the Matter of Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange 2010 CLD 1410 rel.

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

----S. 4---Cartelization---Terms "price parallelism" and "conscious parallelism"---Scope---Terms "price parallelism" and "conscious parallelism" refer to a situation where competing firms adjust their prices in an identical or nearly identical manner and at the same or nearly the same time---Such conduct alone does not establish a violation of competition law; it may raise concerns where it is accompanied by additional factors, commonly known as "plus factor" which indicate coordination or a departure from independent business decision-making.

Assisted by:

Barrister Ambreen Abbasi, Senior Legal Advisor.

Hafiz Muhammad Naeem, Senior Legal Advisor.

Moqeem ul Hassan, Legal Advisor.

Yousaf Naeem, Legal Advisor.

Ahmed Reza Mirza for Fertilizer Manufactures of Pakistan Advisory Council.

Rashid Anwar, Advocate Supreme Court for Messrs Fatima Fertilizer Limited and Messrs Fatima Fertilizer Company Limited.

Saad Mumtaz Hashmi, Advocate Supreme Court for Messrs Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited.

Ali Almani and Akber Sohail for Engro Fertilizer Company Limited.

Sayed Sahab Qutub, Advocate Supreme Court, Muhammad Shafey Ali Khan and Tanveer Raza, Head of Sales and Marketing for Messrs Agritech Limited.

2025 C L D 1673

[Competition Commission of Pakistan]

Before Salman Amin and Ms. Bushra Naz Malik, Members

IN THE MATTER OF SHOW-CAUSE NOTICES ISSUED TO MESSRS UNITED DISTRIBUTORS PAKISTAN LIMITED MESSRS INTERNATIONAL BRANDS (PVT.) LIMITED FOR PRIMA FACIE VIOLATION OF SECTION 4 OF THE COMPETITION ACT, 2010

F. NO:503/IBL&UDPL/C&TA/CCP/2024, decided on 2nd July, 2025.

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

----Ss. 2(1)(b) & 4---Agreement---Scope---Term "agreement" under Ss.2(1)(b) and 4 of Competition Act, 2010 includes any type of contract, understanding or arrangements whether formal or informal that results in any form of cooperation or coordination between parties in a way that could hinder competition---This can include both horizontal (between competitors) and vertical (between different levels of supply chain) agreements.

Tobacco Manufacturers Case No. CA98/01/22_10/Case CE/2596-03; https://assets.pub1ishing.service.govakraedia/555de4b7e5274a7084900154/tobacco.d; Pakistan Jute Mills Association and its Member Mills https://appadminccp.cc.gov.pk / ccporders/2011a5a4-861d-4d8f-a9bb-2c6b55cd2f8_prima_order_3%20feb_2011.pdf; APCMA and Cement Manufacturers 2010 CLD 1586 rel.

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

----Ss. 4, 37 & 38---Competition (Exemption) Regulations, 2020---Unfair market practice---Non-compete agreement---Prior exemption, non-obtaining of---Effect---Authorities initiated proceedings against respondent companies for entering into non-compete agreement for distribution, marketing and sales of human pharmaceutical products---Validity---One respondent company recognized a large sum of amount in its financial statements and disclosure to Pakistan Stock Exchange without obtaining an exemption from the Commission which constituted a breach of legal requirements---Such recognition was also inconsistent with agreement in question which expressly envisaged that respondents shall seek an exemption prior to the enforcement---Respondents did not comply with Competition Act, 2010 and the agreement which had materially aggravated anti-competition conduct against their obligations---Arrangement between respondents both in its object and implementation constituted a violation of S.4(1) of Competition Act, 2010---Existence of anti-competitive object was sufficient to establish contravention, regardless of timing or completion of any consideration payment---By excluding potential competitor from market, the respondents engaged in conduct that had prevented and restricted competition, thereby breaching prohibitions set out under S. 4 of Competition Act, 2010---There were multiple aggravating factors including deliberate implementation of Non-solicitation of employees and Customers Covenants (NCC) without obtaining prior exemption, the receipt and recognition of heavy sum of amount as consideration and its disclosure to Pakistan Stock Exchange, all carried out without Competition Commission's approval of NCC---While the respondents eventually filed an exemption application which was done only after issuance of show-cause notice by the Commission---Competition Commission imposed penalty upon respondents for violating provision of Ss. 4(1), 4 (2)(b), 38 (1)(d) & 38 (2) of Competition Act, 2010---Show-cause notice was disposed of accordingly.

Case COMP/39125--Carglass rel.

Assisted by:

Ms. Ambreen Abbasi Senior Legal Advisor.

Present on behalf of: M/s. United Distributors Pakistan Limited and M/s. International Brands (Pvt.) Limited:

Mikael Azmat Rahim Partner Mohsin Tayebaly & Co.

Ms. Laraib Saba Turk Senior Associate Mohsin Tayebaly & Co.

Sohail Hasnain Ahmed, Chief Financial Officer United Distributors Pakistan Limited.

2025 C L D 296

[High Court (AJ&K)]

Before Syed Shahid Bahar, J

MANSOOR AHMED KHAN, DIRECTOR OF MANGLA

METALS (PVT.) LTD., ISLAMABAD---Petitioner

Versus

KOHSAR HYDRO LTD. through Chief Executive Officer (CEO), Mirpur and others---Respondents

Company Petitions Nos. 01, 02 of 2023 and 01 of 2024, decided on 26th November, 2024.

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

----Ss. 256, 257, 258 & 286---Investigation into affairs of company---Alternate and efficacious remedy---Disputed questions of facts---Both the parties were levelling allegations of fraud and embezzlement against each other---Validity---Petitioners invoked jurisdiction of High Court under S. 286 of Companies Act, 2017---Bulk of documents produced by both the parties required deep deliberation and investigation---Vast powers have been given to the Commission under Ss. 236, 257 & 258 of Companies Act, 2017 to investigate and inquire into such allegations of fraud---Matter should have been agitated first before relevant Commission by way of preferring an application under S. 256 of Companies Act, 2017, as the Commission was fully equipped with all powers regarding fixing criminal as well as civil liability and could investigate all disputed questions of facts by either way---Lower fora was to expose its wisdom upon the matter as efficacious modus operandi had been provided in Companies Act, 2017 for investigation of such like matter by the Commission---High Court declined to investigate and dig out the matter regarding resolution of fraud and malpractices as alternate remedy was also provided by statute for investigation of such matter, that too in absence of cogent proof---Where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by the statute must be availed---Although it was not a condition precedent to move the Commission prior to filing Company petitions before High Court yet an alternate fora was provided by law to get wisdom of the same upon disputed questions of facts requiring detailed investigation as per law---Petition was dismissed, in circumstances.

2011 CLD 1485; 2017 SCR 1231; 2015 CLD 970; 2005 CLD 463; Nadeem Kiani v. Messrs American Lycetuff (Pvt.) Limited and others 2021 CLD 7; 2022 CLD 468; PLD 1965 SC 221; JCM 03 of 2016; Imtiaz Ahmed v. Ghulam Ali PLD 1963 SC 382; Novile v. London Express Newspaper Ltd. (1919) AC 368; Woolverhampton New Water Works Co. v. Hawkesford (1859) 6 CB (NS) 336; Waqas Yaqub v. Adeel Yaqub 2024 CLD 990; M. Imran Qureshi v. Mohammad Asif 2020 CLC 1060; Malik Aziz ul Haq v. Messrs Crystal Line Chemical Industries 2016 CLD 970; M Ijaz v. Federation of Pakistan 2014 CLD 1683; Muhammad Fikree v. Fikree Development Corporation 1992 MLD 668 and Needle Industires v. NIN Ltd. AIR 1981 SC 1298 ref.

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

----S. 286---Affairs of company---Cognizance by High Court---Principle---High Court can take cognizance of the matter only when it is satisfied that affairs of company are being conducted or are likely to be conducted in an unlawful manner or for that matter fraudulent manner or a manner oppressive to any of the members.

Barrister Adnan Nawaz Khan for Petitioner - Mansoor Ahmed Khan.

Barrister Humayun Nawaz Khan for Respondents/Petitioner in Writ No.01/2024).

2025 C L D 29

[Insurance Tribunal Lahore]

Before Jusstice (Rtd.) Ali Akbar Qureshi, Chairman and Zafar Iqbal Tarar, Member Legal

Mst. JAMEELA RIAZ---Petitioner

Versus

IGI LIFE INSURANCE through Head of Business and Operation and another---Respondents

Insurance Application Petition No.310 of 2022, decided on 27th November, 2024.

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

----Ss. 122, 75 & 81---Insurance claim---Pre-insurance ailment of insured, concealment of---Utmost good faith---Scope---Plea of the petitioner (mother of deceased son/insured) was that her son got insurance policy, but unfortunately, before the payment of first premium he died---Stance of the respondent/company was that the insured was suffering from jaundice about 07 to 08 years prior to getting the policy, which was concealed by the policy-holder---Validity---Onus was on the petitioner to prove her stance---In her cross-examination she admitted that, at the time of admission of her son in the hospital, in the history of patient/deceased, it was mentioned that he suffered from Hepatitis-C, and at the time of childhood he was suffering from Hepatitis-A---Petitioner further admitted that she stated to the respondent/company that her son had Hepatitis since 06/07 years---Petitioner denied that her son concealed his disease from the respondent/company in his health declaration, however, perusal of the (duly exhibited) policy documents revealed that the deceased did not disclose any disease in the said form, which meant that he concealed his health condition at the time of getting the policy---Under S.75 of the Insurance Ordinance, 2000, the contract of insurance is based on utmost good faith, which requires both the parties to disclose all the relevant facts truly to each other regarding the terms and conditions of the insurance policy---Deceased concealed his disease of Hepatitis-A and C at the time of purchasing the policy, which he was bound to disclose, whereas the insured died the next month after purchasing the policy i.e. just after one month---It was active and glaring concealment of facts, therefore, the claim was rightly rejected by the respondent / company---However, in the given circumstances of the case, total rejection of the claim would be too harsh---Respondent / company received one premium from the deceased---Insurance Tribunal, under S. 81 of the Insurance Ordinance, 2000, directed the Respondent / Company to return the received (one) premium of Rs.50,000/- to the petitioner, and dismissed her prayer for payment of total death claim---Insurance application was partly decreed.

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

----Ss. 122, 75 & 118---Insurance petition---Claim not proved---Liquidated damages, entitlement to---Scope---Deceased concealed his disease of Hepatitis-A and C at the time of purchasing the policy, which he was bound to disclose, and insured died the next month after purchasing the policy---This was active and glaring concealment of facts, therefore, the claim was rightly rejected by the respondent /company---As the claim of the petitioner had been rejected, therefore, the applicant was not entitled to any liquidated damages---Insurance Tribunal, however, under S. 81 of the Insurance Ordinance, 2000, directed the Respondent / Company to return the received (one) premium of Rs.50,000/- to the petitioner, and dismissed her prayer for payment of total death claim---Insurance application was partly decreed.

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

----Ss. 122 & 162---Insurance petition, filing of---Permission of the Securities and Exchange Commission of Pakistan (SECP)---Scope---Contention of the respondent/ company was that petition was liable to be dismissed under S. 162 of the Insurance Ordinance, 2000, as the same had been filed without the permission of the Securities and Exchange Commission of Pakistan (SECP)---Validity---No such requirement had been stipulated under S.162 of the Insurance Ordinance 2000, for filing of insurance petition before the Insurance Tribunal, therefore, this issue was decided against the respondent/ company---Insurance Tribunal, under S. 81 of the insurance Ordinance, 2000, directed the Respondent / Company to return the received (one) premium of Rs.50,000/- to the petitioner, and dismissed her prayer for payment of total death claim---Insurance application was partly decreed.

Shahid Mehmood for Petitioner.

2025 C L D 53

[Insurance Tribunal Lahore]

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

MUHAMMAD TARIQ---Petitioner

Versus

JUBILEE LIFE INSURANCE---Respondent

Petition No.97 of 2023, decided on 7th October, 2024.

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

----Ss.97, 118 & 122(3)---Insurance Rules, 2017, Rr.41, 54, 56 & 57---Corporate Insurance Agents Regulations, 2020, Regln. 18(f)---Insurance policy---Claim of policy holder---Communication with policy holder---Call Back Confirmation (CBC)---Proof---Duty of insurer---Phrase "throughout the policy cycle"---Scope---Insurance agent, qualifications of---Petitioner / policy holder was aggrieved of failure of respondent / insurer to return, at the time of maturity of policy, the full amount of premium deposited by him along with profits---Plea raised by respondent / insurer was that petitioner / policy holder had been communicated regularly through Call Back Confirmation (CBC)---Validity---Respondent / insurer was bound by law and had no option but to communicate policy holder the status of policy, unit linked policy, statutory funds, creation of statutory fund and units, allocation of units to policy holder and details of investment of amount of premium including name of the company or government security as required by law---Phrase "throughout the policy cycle" and any "ancillary matters" were very significant and were purposely inserted by law maker to safeguard and protect rights and particularly pecuniary rights of policy holder who was the only stakeholder in insurance business---Steps or proceedings required to be communicated to policy holder were to be proved and established by insurer, through strong, reliable and cogent evidence---Respondent / insurer failed to prove CBC in accordance with terms of law---Conversation (CBC) recorded by respondent / insurer could not be termed as communication to petitioner / policy holder as CBC was totally silent about creation of funds, units and investment etc. and such type of evidence was not admissible in evidence---Insurance Tribunal decided relevant issues against respondent/insurer and in favour of petitioner / policy holder---Insurance Tribunal directed respondent / insurer to pay premium excluding the paid amount along with liquidated damages as laid down in S. 118 of Insurance Ordinance, 2000---Insurance Tribunal directed Insurance Companies to appoint qualified insurance agents who had qualified the courses; agent must explain each and every aspect of insurance policy, including special terminology in simple words and in the language of prospective policyholder; video should also be made wherein advice of insurer agent and queries raised by intended policyholder should be recorded; such record should be submitted along with all written replies of insurance companies; in the case of filing of insurance petition, the same video should be given on demand to policyholder---Insurance Tribunal further directed Insurance Companies to communicate to policyholder full information regarding policy and any ancillary matters relating thereto, nature of different funds, creation of statutory funds, location of units and investment of premium amount fund in sound equity, including its name, so that policyholder could know value of his / her / its units timely in an effective manner throughout the policy cycle, as provided in Insurance Rules, 2017 and Corporate Insurance Agents Regulations, 2020---Insurer and corporate insurance agent should provide detail of illustrations to prospective policyholder as per the formant provided by the Commission from time to time with profit on maturity or surrender and insurance agents should ensure that illustration plan given in the prospective policy order as to stand alone document and should also provide a reasonable time to understand the illustration before purchasing life insurance policy---Insurers should also ensure that a specified person must carry out insurance need analysis of the prospective policy holder strictly to accommodate with the terms given in Regln. 18(f) of Corporate Insurance Agents Regulations, 2020---Insurance Tribunal also directed that in case prospective policy holder was an illiterate or individual person or was a lady, whether educated or uneducated, the insurer or its agent should ensure presence of an independent educated advice, preferably of male member of her family, who should also be a witness of policy documents---Insurance Tribunal directed bilingual policy documents in Urdu and English in plain and simple language so that the policy holders, if not much qualified, could understand the nature of the plan sold---Insurer should strictly abide by the directions given in R. 56 of Insurance Rules, 2017---Insurance Tribunal also directed that in future all insurance companies dealing in business of life insurance should preferably invest amount of premium after creating the fund chosen by policyholder in a company having at least the rating of AA+ issued by Pakistan Credit Rating Agency to protect interest of policy holders and to save the insurer from unnecessary litigation---Pakistan Credit Rating Agency issues rating of different companies from time to time and AA+ company has the capacity of low expectation of credit risk and indicates strong capacity for timely payment of financial commitment and such capacity is not significantly vulnerable to foreseeable events---Insurance companies in any circumstance should comply with such important direction and violation of the same would entail serious consequences---Insurance Tribunal also directed that SECP and all insurance companies must have universal phone numbers and websites which should answer FAQ's and all other questions arising in the minds of policyholders---Insurance Tribunal further directed that insurers should also submit a complete record of compliance of mandatory provisions of law at time of filing of insurance petition before Insurance Tribunal---Insurance Tribunal further directed that the SECP as regulator of all insurance companies, should ensure that insurance companies are complying with such directions---Petition was allowed accordingly.

PLD 2019 SC 675; 2021 SCMR 522; 2016 PLC (C.S.) 1219 and 2023 PCr.LJ 1394 rel.

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

----S. 75---Act of "utmost good faith"---Scope---Act of utmost good faith of any party is to be assessed and gauged from the first day till maturity or termination of policy.

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

----S. 77---Language of policy documents---Principle---It is mandatory requirement of law to use plain language while drafting policy documentation, so that prospective policyholder can easily understand terms of policy, benefits and responsibilities of insurer during the currency of the policy---Failure to comply with mandatory requirement given in S. 77 of Insurance Ordinance, 2000 precludes insurer from refusing payment of claim on the ground of non-compliance or non-disclosure by policyholder of any fact mentioned in policy documents.

Mian Muhammad Aslam for Petitioner.

2025 C L D 15

[Islamabad]

Before Babar Sattar, J

Messrs STRAWBERRY SPORTS MANAGEMENT (PRIVATE) LIMITED, through Chief Executive Officer---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Finance and 7 others---Respondents

Writ Petition No.4526 of 2021, decided on 30th October, 2024.

Competition Act (XIX of 2010)---

----Ss. 30, 31 & 37---Constitution of Pakistan, Art. 199---Constitutional petition---Dominant position---Scope---Petitioner company was refused no objection certificate by Pakistan Hockey Federation to convene junior hockey league event---Petitioner company assailed report of Competition Commission declining to initiate proceedings for absence of dominant possession of Pakistan Hockey Federation---Validity---Requirements of fairness were satisfied as petitioner company was given ample opportunity to make out a case by inquiry committee that Pakistan Hockey Federation had abused its dominant position---Despite such opportunities, petitioner company failed to make out such case and the reasons for forming opinion documented in Inquiry Report---Competition Commission did not deal with petitioner company unfairly or that there existed, in terms of S. 37 of Competition Act, 2010 an independent right to adjudicatory hearing, before the Commission had decided to file the complaint---Pakistan Hockey Federation was not occupying dominant position in market for junior hockey league, nor could it be presumed that the Federation was abusing its position by refusing to issue no objection certificate to patronize petitioner company in convening junior hockey league as a commercial sporting event---High Court in its extra ordinary Constitutional jurisdiction declined to interfere in the matter as petitioner company failed to point out that opinion of Competition Commission suffered from illegality, irrationality or procedural impropriety---Competition Commission of Pakistan as a statutory regulator, had expertise to form opinions within the domain prescribed by the Legislature in terms of provisions of Competition Act, 2010 and exercise of such regulatory power, where it did not infringe on fundamental rights of the citizens, ought not be subjected to searching scrutiny by the Court---Constitutional petition was dismissed, High in circumstances.

Competition Commission of Pakistan v. Dalda Foods Limited, Karachi 2023 CLD 1298 and Justice Khurshid Anwar Bhinder v. Federation of Pakistan PLD 2010 SC 483 ref.

Federation of Pakistan v. Durrani Ceramics 2014 PTD 2016; Jamat-i-Islami Pakistan v. Federation of Pakistan PLD 2000 SC 111; Standard Printing Press v. Sindh Employees' Social Security Institution 1988 SCMR 91; Messrs Telenor Pakistan (Pvt.) Ltd. v. Federation of Pakistan 2022 PTD 1097; I.C.I. Pakistan Ltd. v. Salahuddin and others 1991 SCMR 15; Pakistan v. Abdul Hayee Khan PLD 1995 SC 418; Multan Electric Power Company Ltd. v. Muhammad Ashiq PLD 2006 SC 328 and State v. Obaid Khan (Deceased) PLD 2024 SC 810 rel.

Noman Amin Farooqi for Petitioner.

Ch. Ishtiaq Mehrban, Deputy Attorney General.

Adnan Haider for Respondents Nos.2 to 7.

M. Majid Bashir for Respondent No.8.

2025 C L D 34

[Islamabad]

Before Babar Sattar, J

SIDDIQ MOTI (deceased) through Legal Heirs---Appellant

Versus

APPELLATE BENCH REGISTRY, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD and 2 others---Respondents

SECP Appeal No.06 of 2015, decided on 19th November, 2024.

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

----Ss. 33 & 34---Securities and Exchange Ordinance (XVII of 1969), S.16---Central Depositories Act (XIX of 1997), S.4(3)---Civil Procedure Code (V of 1908), S. 100---Second appeal---Maintainability---Concurrent findings of facts by two forums below---Transfer of shares without authority---Extending credit to purchase any security---Central Depository System---Appellant / Stock Exchange broker was alleged to have illegally and without authority transferred shares of respondent / complainant as reflected in trading record maintained with Central Depository Company (C.D.C.)---Order passed by Director Securities Market Division of SECP (S.M.D.) was upheld by Appellate Bench of SECP---Validity---It was for appellant / broker to establish in terms of S. 100(1), C.P.C. that decision in question was contrary to law, or order assailed had failed to determine a material issue of law or suffered from substantial procedural defect affecting decision of the case in terms of Ss. 100(1) (a)(b) and (c), C.P.C., for High Court to interfere with concurrent factual findings rendered by SECP and Appellate Bench of SECP---Appellant / broker failed to make out case that factual findings as rendered by Director SMD and Appellate Bench SECP suffered from any such defects or infirmities---Provision of S. 16 of Securities and Exchange Ordinance, 1969 was applicable to the dispute and had barred, in terms of S. 16(a) of Securities and Exchange Ordinance, 1969 a member from extending credit to any person for purposes of purchasing any security---Provision of S.4(3) of Central Depositories Act, 1997 merely provided that a stock broker with written authorization of his client could enter securities beneficially owned by such client in his own account without establishing a sub-account in the name of such client---High Court declined to interfere in concurrent findings of two fora below which did not suffer from any infirmity---Second appeal was dismissed, in circumstances.

Mr. Saddiq Moti v. Appellate Bench to Securities and Exchange Commission of Pakistan (Civil Appeal No. 475/2006 in C.P No. 1388 of 2004); Honorary Capt. (Retd.) Noor Ahmed v. Aly Osman, Joint Director (Securities Market Division) SEC 2006 CLD 304 and Fayyaz Ahmed v. Muhammad Sarfraz Ghumman 2005 CLD 1229 ref.

Shezada Mazhar for Appellant.

Shahzad Ali Rana for Respondents/SECP.

Respondent No.3 in person.

2025 C L D 111

[Islamabad]

Before Arbab Muhammad Tahir, J

MOHSIN ABBAS---Appellant

Versus

SUZUKI MOTORS COMPANY LTD. through General Manager and another ---Respondents

Criminal Appeal No.280 of 2022, decided on 23rd February, 2024.

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

----Ss. 2(c)(i), 2(f), 5 & 9---Criminal Procedure Code (V of 1898), S.544-A---Consumer rights---Unfair trade practice---Appellant booked three pickup vehicles with respondents against payment of Rs. 29,97,000/----Respondents failed to provide the vehicles within stipulated period---Appellant filed a complaint, which was dismissed by the Consumer Court without recording evidence on the grounds that the booked vehicles constituted future goods within the meaning of Sale of Goods Act, 1930, thus civil suit was maintainable instead of a consumer complaint---Validity---Section 9(1) of Islamabad Consumer Protection Act, 1995 provided that where any right of consumer required to be protected under S. 5 of the Act of 1995 is in any way infringed, the person responsible for such infringement shall be punished with imprisonment which may extend to two years, or with fine which may extend to forty thousand rupees, or with both---Section 9(3) provided that the Authority (the Court of Session) may, where it deems appropriate, order for payment of compensation to the consumer to the extent the consumer has suffered any damage or loss through any unfair trade practice---Without prejudice to subsections (2) and (4), the function of the Authority is two-fold, (i) to determine criminal liability, and (ii) determination of the value of compensation---Both the determinations can be made together, but are not dependent upon one another---Unlike S.544-A, Cr.P.C., the award of compensation has not been made conditional to award of conviction by the Legislature---Section 544-A, Cr.P.C., opens with the words "whenever a person is convicted of an offence", contrary to subsection (3) of S. 9 of the Act of 1995 where the Authority is empowered to award compensation keeping in view the extent to which a consumer suffers damage or loss through any unfair trade practice---Court below had confused the scheme of two distinct provisions of different statutes and the manner in which a Court had to proceed while dealing with cases thereunder---For the purpose of determining the value of compensation under the Act of 1995, the Authority has to frame separate issue and accept evidence in support thereof, so as to achieve the purpose for which the Act of 1995 is enacted---Each provision of the Act of 1995 carries meaning and is enacted for the purpose of achieving its object---Unless a statute itself provides an exception, deviation from the provisions of a statute is unlawful---Therefore, all subsections of S. 9 of the Act of 1995 were independent of each other and not conditional to conviction of a respondent in the consumer complaint---Findings of the Consumer Court to such extent were, therefore, not justified in law and were contrary to the provisions of the Act of 1995---Divergent claims of the parties available on record contained substantial disputed questions of facts and law, which could have been resolved after recording evidence of the parties---Consumer Court should have refrained from knocking out the complainant on erroneous interpretations of the expressions contained in the Act of 1995---In the case in hand, prima facie, the appellant fell within the meaning of 'consumer of service' to the extent of delivery of vehicles---Therefore, the appeal was allowed by setting aside the impugned order and remanding the matter to the Consumer Court to decide the same afresh in accordance with the law after recording evidence of the parties.

Imperia Structures Ltd. v. Anil Patni and others AIR 2021 SC 70; Chandigarh Housing Board v. Avtar Singh and others AIR 2011 SC 130; Rohit Chaudhary and others v. Vipul Ltd. AIR 2023 SC 4229; K V Muthu v. Angamuthu Ammal AIR 1997 SC 628; National Insurance Company Limited v. Deepa Devi (2008) 1 SCC 414 and National Insurance Co. Ltd. v. Harsolia Motors 2023 SCC OnLine SC 409 rel.

Sajjad Haider Malik for Appellant.

Shahryar Tariq and Muhammad Taimoor Khan for Respondents.

2025 C L D 230

[Islamabad]

Before Miangul Hassan Aurangzeb, J

NATIONAL HIGHWAY AUTHORITY---Appellant

Versus

Messrs SARDAR MUHAMMAD ASHRAF D BALOCH (PRIVATE) LIMITED---Respondent

F.A.O. No. 69 of 2024, decided on 22nd January, 2025.

Arbitration Act (X of 1940)---

----Ss. 17 & 29---Arbitration---Arbitral award as rule of Court---Contractual liabilities---Determination---Interest on decretal amount---Appellant / National Highway Authority (NHA) assailed order passed by Executing Court directing respondent / decree holder to provide accurate calculation of outstanding decretal amount in line with terms of decree under execution---Validity---Mere furnishing of bank guarantee did not result in payment of amount in question to respondent / decree holder---It was only when principal amount was actually paid to respondent / decree holder that accrual of financing charges on amount in question would continue until such date---Appellant / NHA could have avoided paying substantial portion of financing charges if it had promptly complied with direction given by Arbitrator in the award or even when judgment and decree was passed---Appellant / NHA was well aware of terms of contract, including relevant clause thereof and adverse consequences which were to flow from non-compliance therewith, when it had decided to avoid its obligation under award and / or judgment and decree---Claim of respondent / decree holder was consistent with reports of two banks concerned as well as the judgment and decree read with award as a whole---Trial Court did not commit any illegality and had rightly directed respondent / decree holder to provide accurate calculation of outstanding decretal amount in line with terms of decree under execution---Appeal was dismissed, in circumstances.

Jajodia (Overseas) (Pvt.) Ltd. v. Industrial Development Corporation of Orissa Ltd. 1993 (2) SCC 106; Azad Government of the State of Jammu and Kashmir v. Muhammad Aslam Khan 1990 MLD 2333; Bhavan Vaja v. Solanki Hanuji Khodaji Mansang AIR 1972 SC 1371; Topanmal Chhotamal v. M/s. Kundomal Gangaram AIR 1960 SC 388 and Syed Waqar-ul-Hassan Shah Bukhari v. Small Business Finance Corporation 2024 CLD 1481 ref.

Barrister Muhammad Hassan Alam for Appellant.

Jawad-ur-Rahim Malik for Respondent.

2025 C L D 332

[Islamabad]

Before Aamer Farooq, CJ

Sheikh NAZIR AHMED---Appellant

Versus

MUHAMMAD AZEEM---Respondent

Civil Miscellaneous Appeal No.383 of 2024, decided on 22nd October, 2024.

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

----S. 19---Trade Marks Ordinance (XIX of 2001), S. 40---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Infringement of registered trade mark---Interim injunction, grant of---Appellant/ plaintiff claimed to be proprietor of registered trade mark "Kohinoor Fair Price Shop", who had exclusive rights to use the same---Respondent / defendant was running a shop under the name of "Kohinoor Fabrics"---Trial Court declined interim injunction in favour of appellant / plaintiff---Validity---Trial Court while deciding the question did not take into account the provisions of section 40 of Trade Marks Ordinance, 2001 to see whether any infringement of trade mark was made out in the facts and circumstances---Trial Court while dismissing the application filed by appellant / plaintiff had solely relied on the case of M/s Tabaq Restaurant reported as 1987 SCMR 1090 which pertained to the since repealed Trade Marks Act, 1940---Concept of infringement of trade mark was introduced though Trade Marks Ordinance, 2001 and Trial Court should have considered elements provided therein---High Court set aside the order declining interim injunction in favour of appellant / plaintiff and remanded the matter to Trial Court for decision afresh---Appeal was allowed accordingly.

Pioneer Cement Limited v. Fecto Cement Limited and 3 others 2013 CLD 201; Telephone Soap v. M/s. Lever Brothers 1994 CLC 2135; Al-Karam Textile Mills (Pvt.) Limited v. Mehtab Chawala and 3 others 2007 CLD 966; Soneri Travel and Tours Ltd. v. Soneri Bank Limited 2011 CLD 193; Malik Muhammad Rafiq Awan v. Javad Iqbal and others 2012 CLD 905; Novartis AG v. Nabiqasim Industries (Pvt.) Limited 2015 CLD 1162 and Rupali Polyester Limited v. Baba China Builders and Developers and 6 others 2014 CLD 1601 ref.

Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090 distinguished.

Muhammad Tariq Malik and Rifaqat Islam Awan for Appellants.

2025 C L D 420

[Islamabad]

Before Miangul Hassan Aurangzeb, J

The IMPERIAL ELECTRIC COMPANY (PVT.) LTD.---Appellant

Versus

M/s. ZHONGXING TELECOM PAK (PVT.) LTD.---Respondent

F.A.O. No.20 of 2024, decided on 20th December, 2024.

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

----Ss. 14(2) & 39---Limitation Act (IX of 1908), First Sched. Art.178---Award made rule of court---Filing of award in court by the Arbitrator upon application made by the appellant---Filing of application by the respondent for return of award due to lack of pecuniary jurisdiction of civil court to entertain and make award Rule of Court---Upon acceptance of application, the award was filed in the court of competent jurisdiction (District Court)---Limitation---Provisions of Art.178 of the Limitation Act, 1908, apply to application under S.14(2) of Arbitration Act, 1940, made by a party to Court---Appellant was prompted by the application of appellant to file the award in the Civil Court---Article 178 to First Schedule of the Limitation Act, 1908, applies only to cases where a party to the arbitration proceedings applies to the court for the filing of an award but it does not apply to an application filed by a party to the arbitrator for filing the award in the Court---Application to have the award filed in Court must be moved by any party within ninety days of the date on which he receives notice of the making of the award and no such application can be made after the expiry of this period---When the award is filed in the Court by the arbitrator, the limitation as may be applicable to a party is not applicable to him---No period of limitation is prescribed for the arbitrator to file the award in the Court and no limitation runs against a party to the arbitration proceedings requesting the arbitrator to file the award in the Court---Arbitrator is also not placed under an obligation to file the award in the Court within the limitation period of 90 days prescribed in Art.178---Limitation period under the said Article applies for the purpose of filing an application to the court for a direction to the Arbitrator to file the award in the Court---High Court converted the appeal into civil revision and accepted the same, in circumstances.

Oil and Gas Development Company Limited v. Muhammad Nazir Khan 2024 CLC 988; Muhammad Shafi v. Muhammad Sabir PLD 1960 (W.P.) Lah. 591; Sindh Industrial Trading Estates v. Sindh Employees Social Security Institution 1993 MLD 1258; Vaseem Construction Co. v. Province of Sindh 1991 CLC 1081; Telecom Foundation v. Asko Enterprises 2020 CLC 1605; Champalal v. Mst. Samrathbai AIR 1960 SC 629; Balwant Singh v. Partap Singh AIR 1968 Punjab and Haryana 265; Hoora v. Abdul Kareem AIR 1970 Rajhastan 22 and Babu Nazir Ahmad v. M/s. Premsukh Shyamsukh & Sons AIR 1987 Madhya Pradesh 240 rel.

Muhammad Mushtaq Saigal v. Muhammad Wasi Saigal 2001 SCJ 96; Rambilas v. Durga Bijai Prasad AIR 1965 Patna 239; Muhammad Hassan v. Muhammad Anwar AIR 1968 Patna 82 and District Cooperative Development Federation Limited v. Ram Samujh Tewari AIR 1973 All 477 distinguished.

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

----Ss.14(2) & 39---Civil Procedure Code (V of 1908), S.115---Appeal---Maintainability---Revisional jurisdiction of High Court---Scope---Conversion of appeal into revision---Legality---Order as to declaring the award filed in the court as time barred---Legality---Such order passed by the Court of the District Judge did not fall within any of the categories enumerated in S. 39 of the Arbitration Act, 1940 which explicitly provides that an appeal shall lie from the orders listed in the said Section "and from no others"---Appeal filed by the appellant against the order passed by the District Judge holding that the award was barred by law was not maintainable, however, by holding that the award was barred by the law, the District Judge had, in effect, refused to proceed further in the matter to exercise jurisdiction over the appellant's application to make the award a rule of Court---Such non-exercise of jurisdiction could be checked and corrected in the revisional jurisdiction of High Court under S. 115, C.P.C.---In case of satisfaction of court that the circumstances of the case justified conversion of an appeal into proceedings under S. 115, C.P.C., there was no legal bar to such a conversion---Decision by a subordinate court contrary to the law laid down in judgments of superior courts is a material irregularity or illegality within the meaning of S.115, C.P.C., which results in error of jurisdiction.

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

----S.39---Civil Procedure Code (V of 1908), S. 115---Conversion of proceedings in an appeal into proceedings under S. 115, C.P.C.---Scope---If a court is satisfied that the circumstances of the case justified conversion of an appeal into proceedings under S. 115, C.P.C., there was no legal bar to such a conversion.

Liaqat Ali v. Bashiran Bibi 2005 CLC 11; Tayab v. Muhammad Siddiq 2006 YLR 111; Capital Development Authority v. Khuda Bakhsh 1994 SCMR 771; Jane Margrete William v. Abdul Hamid Mian 1994 SCMR 1555; Muhammad Hanif v. Muhammad PLD 1990 SC 859; Muhammad Ramzan v. Fatima PLD 2004 Lah. 17; Karam Khan v. Allah Bakhsh PLD 1995 Lah. 462 and Oil and Gas Development Corporation v. Clough Engineering Limited 2003 YLR 353 rel.

Habiba Alvi and Sidharth Rashid Raza for Petitioner.

Raza Ullah Khan Niazi, Farhan Gul and Muhammad Amin for Respondent.

2025 C L D 598

[Islamabad]

Before Muhammad Azam Khan, J

NATIONAL HIGHWAY AUTHORITY through Director (Legal)---Appellant

Versus

Messrs HUSNAIN COTEX LIMITED through Chief Executive Officer and another---Respondents

Regular First Appeal No.70 of 2015, decided on 13th March 2025.

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

----Ss.16 & 30---Civil Procedure Code (V of 1908), S.151---Inherent powers of Court---Arbitration proceedings---Construction contract---Variation in contract terms---Instruction by Engineer for early completion deemed variation under the originally settled terms---Cost escalation and entitlement to compensation---Binding nature of directions issued under contract and their impact on performance and compensation---The National Highway Authority (NHA), the Appellant, awarded a contract to M/s Hussain Cotex Limited (Respondent No. 1) for the construction of a bridge over the River Chenab at Sher Shah, District Muzaffargarh---The contract, signed on 04.02.2005, was to commence on 25.02.2005 and be completed in 30 months (by 28.08.2007) with a total value of Rs. 845 million---Respondent No. 1 initially planned to perform piling in the riverbed during low flow seasons, however, on the direction of the Appellant's Engineer, the strategy was revised to complete one of the two bridges earlier (by 14.08.2006) to facilitate urgent traffic diversion---This instruction was considered a variation under Clause 51.1(f) of the Contract, as it imposed work during high-flow seasons, increasing costs---A dispute arose over additional compensation claimed by Respondent No. 1 due to this change---The engineer and resident engineer initially assessed the compensation rate at Rs. 77.83/m³ for the earth platform---Respondent No. 1 submitted a revised rate of Rs. 169.66/m³, which the Appellant rejected, leading the matter to arbitration---The sole arbitrator issued an award on 10.04.2010, accepting that the engineer's directive constituted a contractual variation under Cl. 51.1(f) and awarded compensation at Rs. 77.83/m³---Dissatisfied, the Appellant filed an application under S. 16 of the Arbitration Act, 1940 and S. 151, C.P.C. to set aside the award, which was dismissed by the Trial Court against which the appeal was filed---Appellant argued that the Arbitrator did not allow proper opportunity to lead evidence, amounting to misconduct---Held: The findings of sole arbitrator were based on documents placed on record and arguments of both parties---Since NHA raised no objection during the proceedings of the award, such objection could not be raised before the Trial Court or before the High Court, hence it was not a misconduct---The work undertaken in respect of the earthen platform and the comprehensive revision of the work methodology entailed by the Appellant's change instructions and requirements during the course of project, added considerably and enhanced the cost of Respondent No.1---It was fairly held by the arbitrator that appellant could not be allowed to wiggle out of his financial liabilities on the basis of a mere technicality---In the circumstances the appeal having no force was dismissed---Appeal dismissed.

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

----Ss.16 & 30---Scope and standard for setting aside an arbitration award stated---Award must contain error on face of record---No reappraisal of evidence permitted---Finality of arbitrator's decision on facts and law---High Court not a Court of Appeal in arbitration matters---Misconduct allegations must be clearly pleaded---Court cannot travel beyond the award---An error or infirmity in the award that renders it invalid must be apparent on the face of the award---The Arbitrator is the final authority on both law and facts, and it is not for a party to challenge the Arbitrator's decision if it is otherwise valid---If the Arbitrator has rendered a decision based on the submissions, no adverse inference can be drawn against him---The Court, under S. 30 of the Arbitration Act, 1940 is not meant to function as a Court of Appeal or re-evaluate the award---While examining the validity of an award, the Court does not act as a Court of Appeal, and a Court hearing objections to an award cannot undertake reappraisal of evidence recorded by the arbitrator and the findings of a sole arbitrator, which are otherwise legally sound and proper in all respects, cannot be disturbed---The Court, generally speaking, leans in favor of the award---It does not sit as a Court of Appeal, however, the award can be set aside if there is an error apparent on the face of award or the error is of a jurisdictional nature or some fraud has been practiced in obtaining such award---The Court cannot travel beyond the award and make inquiries and investigations in the proceedings and documents, which do not form part of the award---In order to construe misconduct on part of the arbitrator, it is essential that the grounds are raised with precision and allegations are pleaded clearly, rather than being evasive in nature---It is not for the Court to fish for latent errors in arbitration---These principles and law have been laid down in light of the object and purpose intended to be achieved by the Arbitration Act, 1940.

Shahin Shah v. Government of Khyber Pakhtunkhwa 2022 SCMR 1810; Gerry's International (Pvt.) Limited v. Aeroflot Russian International Airlines 2018 SCMR 662; A. Qutubuddin Khan v. Chec Millwala Dredgging Company (Pvt.) Limited 2014 SCMR 1268; Federation of Pakistan v. Joint Venture Knocks K.G/RIST,PLD 2011 SC 506; Mian Corporation v. M/s Lever Brothers of Pakistan Limited PLD 2006 SC 169; Pakistan Steel Mills Corporation v. M/s Mustafa Sons (Pvt.) Limited PLD 2003 SC 301 and M/s Joint Venture K.G/RIST v. Federation of Pakistan PLD 1996 SC 108 rel.

National Highway Authority v. Lilley International (Pvt.) Limited 2020 CLC 608 ref.

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

----Ss.16 & 30---Limitation Act (IX of 1908), First Sched., Art.158---Arbitration agreement---Limited cope of judicial interference---Duty to adhere to arbitration clause---Finality of arbitral awards and role of courts in enforcing contractual commitments, stated---Limitation for filing objections to award---Promotion of arbitration as a tool for economic development emphasized---In case where a contract includes an arbitration clause, the general approach should be to minimize the court interference, especially when the parties have voluntarily selected their preferred forum for resolving disputes---The courts can interfere to the extent as provided in the Arbitration Act, 1940---It is emphasized that expeditious and inexpensive Dispute Resolution should be considered vital for a vibrant economy and inevitable for economic growth and progress---The Courts have a crucial role to play in ensuring that the commitments made between parties are honored and implemented---It is the duty of courts to promote certainty by enforcing the binding commitments made by the parties---Therefore keeping in view the findings of superior Courts and after going through the award in detail, the High Court was of the considered view that the sole arbitrator rightly gave his findings on each and every issue discussed in the award---Even otherwise the objection filed by the appellant was time-barred under Art. 158 of the Limitation Act, 1908 which provides that the time limit for filing of objections to an award is thirty days from the date of notice of filing of an award in court---The appellant failed to point out any illegality or irregularity in the impugned order and decree and as such there was no force in the appeal, hence the same was dismissed---Appeal dismissed.

Shahin Shah v. Government of Khyber Pakhtunkhwa 2022 SCMR 1810 and Lahore Development Authority v. Khalid Javed Company 1983 SCMR 718 ref.

Airports Development Agency Limited v. M/s M.Y Corporation and others PLD 2001 Kar. 158 rel.

Muneeb Ahmed for Appellant.

Muhammad Masood Khan and Syed Faisal Hussain Shah for Respondent No.1.

2025 C L D 695

[Islamabad]

Before Miangul Hassan Aurangzeb, J

ZAVER PETROLEUM CORPORATION (PVT.) LIMITED---Applicant

Versus

SAIF ENERGY LIMITED---Respondent

C.S. No.01 of 2019, Enforcement Petitions Nos. 02, 06 of 2021 and 01 of 2022, decided on 24th October, 2024.

(a) Arbitration---

---Forum non conveniens, doctrine of---Applicability---Doctrine of forum non conveniens, has no place where contract between parties specifically provides for disputes to be settled through arbitration seated in a foreign country.

Global Quality Foods (Pvt.) Ltd. v. Hardee's Food Systems, Inc. PLD 2016 Sindh 169; CGM (Compagnie General Maritime) v. Hussain Akbar 2002 CLD 1528; Eckhartd & Company v. Muhammad Hanif PLD 1993 SC 42; Jes and Ben Groupo (Pvt.) Limited v. Hell Energy 2019 SCC Online Delhi 10225 and Bremem v. Zapata Off. Shore Co. (407 U.S. 1 (1972)) rel.

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

----Ss. 3 & 6---Contract Act (IX of 1872), S.28, Exception-1---Foreign seat of arbitration---Party autonomy, principle of---Scope---Domestic and foreign arbitration---Party autonomy is considered as cornerstone of arbitration---There is no prohibition on two Pakistani parties from opting for a foreign seat of arbitration---Foreign seated arbitration and award rendered in such arbitration attracts provisions of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 which is premised on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention")---Geneva Convention on execution of Foreign Arbitral Awards of 1927 ("the Geneva Convention") was expressly limited to agreements to arbitrate between parties that were nationals of different contracting States but this is not so under the New York Convention---All awards, under New York Convention, which may arise out of arbitrations seated in countries that are signatories to that Convention have to be treated as foreign awards---Once parties consciously agreed to a foreign seated arbitration and for arbitration agreement to be governed by English law, it was no longer open to any of them to contend that agreement was void or that award rendered in such arbitration was unenforceable under the provisions of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Provision of Exception-1 to S. 28 of Contract Act, 1872, does not distinguish between domestic and foreign arbitration---Right of parties to have recourse to legal action is not excluded by agreement---Parties are only required to have their disputes adjudicated by having the same referred to arbitration---Merely because agreement provides for a foreign seated arbitration cannot by itself be enough to nullify arbitration agreement when parties have with their eyes open willingly entered into the agreement---Exception to S. 28 of Contract Act, 1872 does not distinguish between domestic and foreign arbitration---Exception to S. 28 of Contract Act, 1872 expressly excepts arbitration from the clutches of S. 28 of Contract Act, 1872 which is an express approval to party autonomy which in turn is the very basis of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.

Atlas Export Industries v. Kotak & Company AIR 1999 SC 3286 = 1999 (7) SCC 61; PASL Wind Solutions Private Limited v. GE Power Conversion India (Private) Limited AIR 2021 SC 2517; Centrotrade Minerals and Metal Inc. v. Hindustan Copper Ltd. 2017 (2) SCC 228; Dholi Spintex (Private) Limited v. Louis Dreyfus Company India (Private) Limited 2020 SCC OnLine Del 1476; Sasan Power Limited v. North American Coal Corporation 2015 SCC OnLine MP 7417 and Sasan Power Limited v. North American Coal Corporation AIR 2016 SC 3974 = 2016 (10) SCC 813 rel.

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

----S. 3(2)---Foreign seated arbitration---Duty of Court---Defendant against whom a civil suit is filed with respect to a matter which is to be resolved with plaintiff through a foreign seated arbitration, such defendant has right to apply to the Court where such suit is pending for the proceedings to be stayed so that the disputes which are subject matter of the suit are resolved by the forum to which the parties had agreed---Where such application is filed, the Court is under an obligation to stay proceedings in the suit unless it finds that arbitration agreement is null and void, inoperative or incapable of being performed.

Ovex Technologies (Pvt.) Ltd. v. PCM PK (Pvt.) Ltd. PLD 2020 Isl. 52 rel.

(d) Arbitration---

----Jurisdiction of arbitrator---Principle---While a Court of law derives jurisdiction from statute, the arbitrator derives jurisdiction from the agreement---It is a private procedure established by an agreement between the parties---Parties to such an agreement can vary, amend or waive either expressly or impliedly/by conduct the procedure established by the agreement.

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

----S. 3(2)---Expression "an application to stay legal proceedings … may be filed in the Court, in which the legal proceedings are pending"---Scope---Where legal proceedings have been brought in High Court, it is the High Court where application under S. 3(2) of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 to stay legal proceedings can be filed---When legal proceedings have been brought in a Court other than the High Court, it is the Court in which the legal proceedings have been brought where the application to stay legal proceedings has to be filed, otherwise it would amount to attributing redundancy to the expression "an application to stay legal proceedings … may be filed in the Court, in which the legal proceedings are pending".

Muhammad Khan v. Obaidullah Jan Babat PLD 2016 SC 492; Abdul Majid v. Province of Sindh PLD 1974 Kar. 417; Bank of Bahawalpur Ltd. v. Chief Settlement and Rehabilitation Commissioner PLD 1977 SC 164; Pratap Singh and others v. B. Gulzari Lal and others AIR 1942 Allahabad 50 and Orient Power Company (Private) Limited v. Sui Northern Gas Pipelines Limited PLD 2019 Lah. 607 rel.

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

----S. 4---Arbitration Act (X of 1940), S. 34---Civil Procedure Code (V of 1908), O.VII, R.10---Foreign seated arbitration---Information to Court in Pakistan---Procedure---Form or manner in which a party is to inform the Court as to its intention to assert its right to arbitrate is immaterial---Whether an application is captioned as having been filed under S. 34 of Arbitration Act, 1940; or under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011; or even under O. VII, R. 10, C.P.C., is also immaterial---As long as Court seized of an action is made aware of arbitration agreement between parties and intention of party against whom jurisdiction of Court is invoked to insist on having disputes resolved in accordance with arbitration agreement, it is immaterial whether such party files an application captioned as having been filed under S. 34 of Arbitration Act, 1940; under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011; or even under O. VII, R. 10, C.P.C.

Tallahasee Resources Incorporated v. Director General Petroleum Concessions 2021 CLC 423 rel.

(g) Jurisdiction---

----Court lacking jurisdiction---Effect---Order passed by a Court lacking jurisdiction is coram non judice---If Court has no jurisdiction on the subject matter on which it assumes to act, it has no power to proceed at all---Proceedings of a Court without jurisdiction are a nullity and its order or judgment is without legal effect either on the person or property.

Sherin v. Fazal Muhammad 1995 SCMR 584 and Saleem Mehtab v. Refhan Best Food Company Limited 2010 MLD 1015 rel.

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

----Ss. 3(2), 4 & 11---Foreign seated arbitration---Execution of award---Applicant company sought execution of awards announced by London Court of International Arbitration (LCIA) against respondent company---Validity---Where international commercial contract contains agreement to resolve disputes by arbitration, at least three systems of national law are engaged when a dispute occurs---These are the laws governing substance of dispute; law governing the agreement to arbitrate; and law governing the arbitration process---Law governing substance of dispute is generally the law applicable to the contract from which the dispute has arisen---Law governing arbitration process (curial law) is generally law of the seat of arbitration, which is usually the place chosen for arbitration in the agreement---In the present case Letter Agreement provided for arbitration to be "at London" and by virtue of Art. 16.2 of London Court of International Arbitration Rules, 2020, the parties were deemed to have agreed for the seat of arbitration under Clause 4.3 of Farm out Agreement to be London---Curial law governing arbitration was English law and not Pakistani law---High Court recognized the awards and directed it to be executed in the same mode and manner as decrees---High Court directed respondent company to show compliance with the awards---Application was allowed accordingly.

Orient Power Company (Private) Limited v. Sui Northern Gas Pipelines Limited PLD 2019 Lah. 607; M.O. Ghani, Vice Chancellor University of Dacca v. Dr. A.N.M. Mahmood PLD 1966 SC 802; Namoos Zaheer v. Azfar Hasnain PLD 2023 Isl. 220 and M.A. Chowdhury v. Messrs Mitsui OSK Lines Ltd. PLD 1970 SC 373 ref.

Para 69 Article II (3) of the UNCITRAL Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards; Anna Dockeray v. Carnival Corporation 724 F. Supp. 2d 1216; Cornell Company v. Barber Ross 360 F.2d 512; Companhia Nacional de Cemento Portland . CNCP v. CP Cimentio e Participacoes S/A; Pakistan Refinery Limited v. Mst. Shahida Sultan 1988 MLD 1150; Messrs Tradhol International SA Sociedad Unipersonal v. Messrs Shakarganj Limited 2023 CLD 819; Messrs Tradhol International SA Sociedad Unipersonal v. Messrs Shakarganj Limited PLD 2023 Lah. 621; POSCO International Corporation v. Rikans International PLD 2023 Lah. 116; Messrs Hasan Ali Rice Export Co. v. Flame Maritime Ltd. 2004 CLD 334; Enka Insaat Ve Sanayi AS v. OOO Insurance Co. Chubb (2020) EWCA Civ 574; Enka v. Chubb (2020) UKSC 38 and Taisei Corporation v. A.M. Construction Company (Pvt.) Ltd. 2024 SCMR 640 rel.

Salman Aslam Butt, Taimur Tufail, Anique Salman Malik, Waleed Khalid, Zainab Janjua and Salaar Khan for Applicant.

Syed Ahmad Hassan Shah and Badar Iqbal Chaudhary for Respondent.

Barrister Hassan Ali Raza and Barrister M. Usama Rauf Amici Curiae.

2025 C L D 827

[Islamabad]

Before Muhammad Asif, J

Messrs JUBILEE LIFE INSURANCE COMPANY LIMITED through Authorized Officer---Petitioner

Versus

OFFICE OF THE PRESIDENT OF PAKISTAN (PUBLIC) through Director General Legal and another---Respondents

Writ Petition No.948 of 2024, decided on 22nd May, 2025.

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

----S.127(1)(b)---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), Ss.14 & 24---Surrendering of insurance policies and seeking a refund---Representation before the President---Scope of jurisdiction and powers of President stated---Federal Insurance Ombudsman, jurisdiction of---Small Dispute Resolution Committee (SDRC)---Scope of its mandate and nature discussed for the purpose of invoking jurisdiction of Federal Insurance Ombudsman---Brief facts of the case were that the petitioner company issued two insurance policies to respondent No.2 (Policy holder) and due to financial difficulties the respondent No.2 later sought to surrender the policies and requested a refund which the petitioner company refused, constraining the respondent No.2 to approach the Small Dispute Resolution Committee (SDRC), which disposed of the complaint on stating that the enhanced refund offer by the petitioner company was reasonable---Respondent No.2 being dissatisfied then filed complaint with the Federal Insurance Ombudsman (FIO), who dismissed the same citing lack of jurisdiction under S. 127(1)(b) of the Insurance Ordinance, 2000 ("Ordinance 2000"), due to prior resolution by SDRC---Subsequently, respondent No.2 filed a representation before the President of the Islamic Republic of Pakistan under S. 14 of the Federal Ombudsmen Institutional Reforms Act, 2013 ("Act 2013"), whereby, the President set aside the FIO's dismissal and directed the petitioner company to refund Rs.1,650,000 within 30 days, constraining the petitioner company to challenge that decision through the present Constitutional petition, thereby alleging lack of jurisdiction and legal error---The pivotal question for determination before the High Court was "whether the Respondent No.1 (The President) had the jurisdiction to entertain and decide the representation against the FIO's order declining jurisdiction under S. 127(1)(b) of the Insurance Ordinance, 2000"---Held: The representation was filed before the President/respondent No.1 under S. 14 of the Federal Ombudsmen Institutional Reforms Act, 2013 ("Act 2013")---The powers of the respondent No.1/President under S. 14 of the Act 2013 were expansive and allowed review of the "decision, order, findings or recommendations" of an Ombudsman---Any person or party aggrieved by such actions could file a representation to the President within 30 days---Section 24 of the Act 2013 also gave the said enactment primacy over competing provisions of the law---It could be safely concluded that the forum outlined, vide the Act 2013 for deciding representation against the FIO's order was the President/respondent No.1---Moreover, as regards the question viz Federal Insurance Ombudsman (FIO), dismissing the complaint citing lack of jurisdiction under S. 127(1)(b) of the Insurance Ordinance, 2000 due to the prior resolution by SDRC, from the plain reading of S. 127(1)(b) of the Ordinance 2000 it was clear that the bar applied only where the matter was sub judice or had been adjudicated by a court of competent jurisdiction---The FIO declined jurisdiction on the misconceived assumption that the SDRC's recommendation constituted a binding decision---Section 127(1)(b) of the Insurance Ordinance, 2000 imposed a specific bar on the jurisdiction of the Federal Insurance Ombudsman only where the subject matter of the complaint was sub judice before a court of competent jurisdiction, tribunal, or board---The Small Dispute Resolution Committee (SDRC), operating under the auspices of the Securities and Exchange Commission of Pakistan (SECP), was not a judicial forum, tribunal, or board vested with adjudicatory powers---Its mandate was limited to facilitating amicable settlements and offering non-binding recommendations---Its proceedings did not partake the character of a trial nor resulted in enforceable judgments unless voluntarily acted upon by the parties---The FIO, therefore, erred in treating the SDRC's recommendation as a binding adjudication and in declining to entertain the complaint due to a misapplication of S.127(1)(b) of the Ordinance 2000---This misunderstanding of the law constituted a jurisdictional defect, and the President acting under S. 14 of the Act ibid, rightly exercised supervisory jurisdiction to correct the matter---The respondent No.1 (President) acted well within the bounds of the law, and no case for High Court's interference was made out---Petition was dismissed, in circumstances.

(b) Jurisdiction---

----Question of jurisdiction should be decided at the outset---Jurisdiction must be lawfully conferred upon a forum---The question of jurisdiction is a pure question of law and is almost a fundamental issue that needs to be addressed first---There is no cavil with the proposition that no authority should exercise any jurisdiction in any manner brought before it until and unless such jurisdiction has been conferred upon it by the Constitution itself or under any law---Moreover, jurisdiction cannot be assumed or denied based on conjecture but must flow from express statutory authority.

S.M. Waseem Ashraf v. Federation of Pakistan through Secretary, Ministry of Housing and Works, Islamabad and others 2013 SCMR 338 rel.

Syed Hamid Ali Shah for Petitioners.

Ms. Shaista Tabbasum, A.A.G. along with Shajjar Abbas Hamdani for Respondent No.2.

2025 C L D 1141

[Islamabad]

Before Mohsin Akhtar Kayani and Saman Rafat Imtiaz, JJ

MURTAZA TALPUR---Appellant

Versus

LEOPARDS COURIER SERVICES---Respondent

Criminal Appeals Nos. 422 of 2022 and 16 of 2023, decided on 3rd June, 2024.

(a) Islamabad Consumer Protection Act (III of 1995)---

----Ss.8(1) & 9(3)---Punjab Consumer Protection Act (II of 2005), S.31---Extent of jurisdiction of Islamabad Consumer Court---Scope---Whether Consumer Court can award general/special damages---Consumer Court's jurisdiction to award broader damages examined---Consumer Court can entertain full spectrum of damage claims---Punjab Consumer Protection Act, 2005 permits broader remedies including legal costs---Phrase "any damage or loss"---Meaning and interpretation---Its interpretation includes emotional and financial harm---Senior citizen stranded abroad after flight cancellation---Rs. 500,000 claimed for distress and loss---The moot point which came up for determination before the High Court was as to "whether the Islamabad Consumer Court, under Section 9(3) of the Islamabad Consumer Protection Act, 1995, was legally empowered to award general and special damages, including compensation for mental agony, emotional distress, litigation expenses, and financial loss, arising from an unfair trade practice, or whether such remedies fell exclusively within the jurisdiction of civil courts?"---This moot point encapsulated the core legal controversy adjudicated in the case, i.e., the extent of the jurisdiction of the Islamabad Consumer Court and the interpretation of the phrase "any damage or loss" in light of legislative language, judicial precedents, and comparative statutory analysis (e.g., Punjab Consumer Protection Act, 2005)---The previously prevailing interpretation by the High Court was that under S. 9(3) of the Islamabad Consumer Protection Act, 1995, the Consumer Court could not award general or special damages, instead, only the actual damage or loss suffered could be compensated, and any broader claim for damages had to be pursued through a civil suit before a court of general jurisdiction---Due to this legal conflict, the matter was referred to the Division Bench for authoritative interpretation of the scope of S. 9(3) of the Islamabad Consumer Protection Act, 1995---Held: Requiring the consumer to seek special damages and general damages for the same cause of action from a different forum will only lead to multiplicity of proceedings---Since the plain language of S. 9(3) of the Islamabad Consumer Protection Act, 1995 authorized the learned Islamabad Consumer Court to award compensation for damage or loss without any restriction (except that it must be damage or loss suffered on account of any unfair trade practice) and the Islamabad Consumer Court may frame issues, record evidence, etc., there was no reason why only the consideration paid may be recovered under the Islamabad Consumer Protection Act, 1995 but not any other type of damage even if suffered on account of an unfair trade practice---The word 'any' used in S. 9(3) of the Islamabad Consumer Protection Act, 1995 before the words 'damage or loss' implied a wide scope of damages and loss and included all or every damage or loss suffered by the consumer on account of 'unfair trade practice' (as defined in the Islamabad Consumer Protection Act, 199)---In comparison to the Punjab Consumer Protection Act, 2005, the general and special damages including mental distress and agony were recoverable thereunder where facts and circumstances entitled the consumer to damages over and above the consideration paid---The appeals were allowed and the impugned judgments were set aside by remanding the matter to the Consumer Court to record evidence in respect of the claim of the appellants with regard to general damages allegedly suffered by them on account of mental torture, shock, agony and financial loss and expenses, etc.---Cases remanded.

TCS (Private) Limited v. Mst. Haseena Begum PLD 2022 Lah. 524 and Noor Bibi and 13 others v. Meer Muhammad alias Meer Jan and 4 others 2018 CLC 87 ref.

Ashfaq Ahmed Khan v. PTCL and others PLD 2016 Isl. 112; Messrs Multiline Associates v. Ardeshir Cowasjee PLD 1995 SC 423; Lucknow Development Authority v. M.K. Gupta AIR 1994 SC 787; Noman Ahmed and 14 others v. Capital Development Authority through Chairman and another PLD 2021 Isl. 75; Consumer Unity and Trust Society, Jaipur v. The Chairman and Managing Director, Bank of Baroda, Calcutta (1995) 2 SCC 150 and Abdul Haq Khan v. Haji Ameerzada and others PLD 2017 SC 105 rel.

(b) Islamabad Consumer Protection Act (III of 1995)---

----Ss.8(1) & 9(3)---Punjab Consumer Protection Act (II of 2005), S.31---Comparative analysis of Punjab and Islamabad consumer protection laws---Whether Consumer Court can award general/special damages---Consumer Court empowered to grant full compensation---Statutory language allowing recovery beyond price paid---The provisions of the Punjab Consumer Protection Act, 2005 serve as a useful comparison in this regard---Section 31 of the Punjab Consumer Protection Act, 2005 provides the actions the Punjab Consumer Court can order the defendant to take in the stipulated circumstances---Examination of S. 31 of the Punjab Consumer Protection Act, 2005 reveales that price or charges paid by the claimant; compensation for loss; damages; and actual costs including lawyer's fees incurred on the legal proceedings are treated as separate and distinct remedies that could be ordered by the Punjab Consumer Court---It was clear from Ss. 10 & 15 of the Punjab Consumer Protection Act, 2005 that the consideration paid and cost incurred is a component of damages which is treated as a separate remedy only because it is the consumer's sole remedy in the stipulated circumstances and in contradistinction thereto, the Islamabad Consumer Protection Act, 1995 does not expressly restrict the recovery of damages to return of the consideration amount or cost incurred in any given circumstances rather it empowers the Consumer Court to order compensation for any damage or loss suffered through any unfair trade practice as may be deemed appropriate---Since the plain language of S. 9(3) of the Islamabad Consumer Protection Act, 1995 authorizes the Islamabad Consumer Court to award compensation for damage or loss without any restriction (except that it must be damage or loss suffered on account of any unfair trade practice) and the Islamabad Consumer Court may frame issues, record evidence, etc., there was no reason why only the consideration paid may be recovered under the Islamabad Consumer Protection Act, 1995 but not any other type of damage even if suffered on account of an unfair trade practice---Consumer Court Islamabad was empowered to award compensation to a consumer for any damages or loss suffered through any 'unfair trade practice' including but not limited to consideration paid provided the consumer was able to prove such damages.

Noman Ahmed and 14 others v. Capital Development Authority through Chairman and another PLD 2021 Isl. 75 ref.

Abdul Haq Khan v. Haji Ameerzada and others P L D 2017 SC 105 rel.

(c) Islamabad Consumer Protection Act (III of 1995)---

----Ss.8(1) & 9(3)---Scope of 'compensation' in consumer protection law---Purpose of compensation explained---Restoration to pre-injury position'---The concept of compensation or damages is to make the injured person whole or in other words to restore him to the same position as he was in prior to the injury insofar as money can do so---Where a consumer has been a victim of an unfair trade practice he may not always be placed in the same position he occupied before he suffered the damage through the unfair trade practice merely by return of the consideration he had paid.

Noman Ahmed and 14 others v. Capital Development Authority through Chairman and another PLD 2021 Isl. 75 and Mehr Ashraf v. Station House Officer PLD 2022 Lah. 328 ref.

(d) Islamabad Consumer Protection Act (III of 1995)---

----Ss. 8(1) & 9(3)---Jurisdiction of the Consumer Court---Scope---Factors to be considered while adjudicating a complaint---Application of Qanun-e-Shahadat (10 of 1984)---While adjudicating upon a complaint under the Islamabad Consumer Protection Act, 1995 especially while awarding compensation in terms of S. 9(3) thereof, the court shall conduct an inquiry which includes: (i) Framing the points of determination/issues; (ii) Requiring oral evidence or evidence through affidavits; (iii) Allowing parties to cross-examine the witnesses; (iv) Producing documentary evidence; (v) Calling record from any authority, company, office; (vi) Summoning any expert witness to resolve the technical question of issue related to proposition in hand; (vii) Principles of Qanun-e-Shahadat, 1984, have to be applied.

(e) Islamabad Consumer Protection Act (III of 1995)---

----Ss.8(1) & 9(3)---Jurisdiction of the Consumer Court---Vested jurisdiction must be exercised---Failure to exercise jurisdiction defeats the very purpose of granting jurisdiction---Multiplicity of proceedings to be avoided---Same cause of action should not lead to parallel litigation---Consumer Courts are designed for consolidated and swift redress of claims, not partial or piecemeal remedies---Refusal to exercise vested jurisdiction not only tends to defeat the purpose of conferring jurisdiction but also exposes litigants to unnecessary hardship, expenditure and multiplicity of proceedings---Requiring the consumer to seek special and general damages for the same cause of action from a different forum will only lead to multiplicity of proceedings.

Noor Bibi and 13 others v. Meer Muhammad alias Meer Jan and 4 others 2018 CLC 87 ref.

(f) Islamabad Consumer Protection Act (III of 1995)---

----Ss.8(1) & 9(3)---Jurisdiction of the Consumer Court---Litigation costs, entitlement to---Scope---Costs awarded as reimbursement for expenses incurred by successful party---As far as the litigation costs claimed by the appellants was concerned such costs by their very nature were actual costs awarded to reimburse the successful party for the expenses incurred by it---The general rule is that costs follow the event---Costs is a pecuniary allowance made to the successful party for its expenses in prosecuting and defending an action---Therefore, in the present case the Islamabad Consumer Court was not justified in refusing to allow the appellants an opportunity to prove that they were entitled to compensation for damage or loss suffered by them allegedly on account of mental torture and agony, expenses, financial loss, and litigation cost---The appeals were allowed and the impugned judgments were set aside by remanding the matter to the Consumer Court to record evidence in respect of the claim of the appellants with regard to general damages allegedly suffered by them on account of mental torture, shock, agony and financial loss and expenses, etc.---Cases remanded.

Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28 rel.

Dileep Kumar Doshi for Appellant (in Crl. Appeal No. 422 of 2022).

Bebbr Sattar for Appellant (in Criminal Appeal No. 16 of 2023).

Sajjad Zafar for Respondent (in Criminal Appeal No. 422 of 2022).

M. Hafeez for Respondent (in Criminal Appeal No. 16 of 2023).

2025 C L D 1211

[Islamabad]

Before Saman Rafat Imtiaz, J

ENGRO CORPORATION LIMITED and 2 others :

In the matter of

Companies Original No.01 of 2025, decided on 19th May, 2025.

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

----Ss.279, 280, 281, 282, 283 & 285---Companies (Court) Rules, 1997, R. 29---Civil Procedure Code (V of 1908), O.I, R.10---Scheme of Arrangements---Impleading as party to proceedings---Pre-conditions---Applicant / Revenue authorities filed application under O. I, R. 10, C.P.C. to be impleaded in proceedings for Scheme of Arrangement filed by petitioners / companies---Validity---Application filed under the provisions of Civil Procedure Code, 1908 was not maintainable in a Company Original Petition instituted under Companies Act, 2017---Multiple prayers were not maintainable in an application for impleading as a party---Applicant could not seek to implead another person/official without being a party himself---Requirements of R. 29 of Companies (Court) Rules, 1997 were not fulfilled---Applicant failed to establish that it was a necessary and proper party for adjudication of the matter---Every person intending to appear at the hearing of a petition was required to send notice in Form No. 6 to Court and petitioners / companies or their advocates two days prior to the hearing pursuant to R. 29(1) and (2) of Companies (Court) Rules, 1997 and no such notice was sent by applicant to the Court or the petitioners / companies despite which no application for obtaining leave of the Court had been filed as per R. 29(3) of Companies (Court) Rules, 1997---High Court declined to implead revenue authorities / proposed interveners in the proceedings---Application was dismissed, in circumstances.

Associated Consulting Engineers Ace Limited's case 2023 CLD 885; Trek Technologies Limited v. Icondor Telecom (Private) Limited 2017 CLD 572; Rauf Baksh Kadri v. M/s National Technology Development Corporation Ltd. 2005 CLD 747 and Rauf B. Kadri v. State Bank of Pakistan 2002 CLD 1794 rel.

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

----Ss. 279, 280, 281, 282, 283 & 285---Scheme of Arrangements---Sanction of Court---Opinion of Court substituting that of shareholders---Principle---Petitioners / companies sought sanction of Court regarding proposed mergers, demergers and amalgamations---Validity---Not a single member of petitioners / companies objected to Scheme of Arrangement or any part thereof---Propriety and merits of compromise and arrangement had to be adjudged by parties who as sui juris with their open eyes and fully informed about pros and cons of the Scheme had arrived at their own reasoned judgment and agreed to be bound by such compromise or arrangement---It was not duty of Court to substitute its opinion in place of that of shareholders who were the sole judge of their interests in petitioners / companies---Court's task while sanctioning Scheme of Arrangement was limited to watching over regulatory and legal compliances being properly carried out for which Securities and Exchange Commission of Pakistan had taken lead in its assistance to the Court---Approach of Court was to ascertain (i) whether statutory requirements were complied with; (ii) to determine whether the Scheme as a whole was arrived at by the majority, in the interest of the whole body of shareholders, in whose interest the majority purported to act; and (iii) whether the Scheme was such that a fair and reasonable shareholder would consider it to be for the benefit of the company and for himself---Petitioners / companies completed all necessary legal formalities, including holding separate meetings of secured creditors, shareholders and board of directors, requisite publication, CCP approval and issuance of notices to Securities and Exchange Commission of Pakistan---High Court declined to take any exception to the Scheme of Arrangement as no objection whatsoever had come forward from any shareholder while all requisite formalities had been fulfilled---High Court sanctioned the Scheme of Arrangement as there was no impediment---Petition was allowed, in circumstances.

Dewan Salman Fibre Ltd. v. Dhan Fibres Ltd. PLD 2001 Lah. 230; Presson-Descon International (Private) Limited v. Joint Registrar of Companies PLD 2020 Lah. 869; Kohinoor Raiwind Mills Limited v. Kohinoor Gujar Khan Mills 2002 CLD 1314; Brooke Bond Pakistan Limited v. Aslam Bin Ibrahim 1997 CLC 1873; Commissioner Inland Revenue, Zone-II, LTU, Lahore v. Messrs Shezan International Ltd. 2024 PTD 758; Messrs Omer Iqbal Solvent (Pvt.) Ltd.'s case 2010 CLD 1802; Gadoon Textile Mills Limited's case 2015 CLD 2010 Dilsons (Private) Limited v. Securities and Exchange Commission of Pakistan 2021 CLD 1317; Novatex Limited 2023 CLD 1161 and Order dated 18-7-2024 passed in Dawood Hercules Corporation Limited, Companies Original No. 7 of 2024 rel.

Mikael Rahim and Asif Shafi for Petitioners Nos.1 and 2.

Barrister Jahanzaib Awan for Petitioner No.3.

Shahzad Ali Rana and Husnain Raza, Special Public Prosecutors, SECP for Respondents.

Saeed Ullah, Registrar, SECP for Respondent.

Waseem A. Khan, Director Merger and Restructuring Department, SECP for Respondent.

Touseef Ahmad Deputy Registrar, Merger and Restructuring Department, SECP for Respondent.

Hassan Ali Khan for Applicant (in C.M. No.718 of 2025).

2025 C L D 1323

[Islamabad]

Before Inaam Ameen Minhas, J

Hafiz MUHAMMAD AMIR HUSSAIN ---Petitioner

Versus

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

Writ Petition No. 2337 of 2025, decided on 30th June, 2025.

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

----Ss. 147, 158 & 159---Constitution of Pakistan, Art. 199---Election of directors of a public listed company, holding of---Term/tenure of directors, expiry of---Constitutional petition seeking direction against SECP to perform its statutory duty of conducting elections---Maintainability---Under the Constitutional jurisdiction the SECP can be directed to discharge its regulatory duties---Facts of the case, in brevity, were that the petitioner was a shareholder of the respondent company and he invoked the constitutional jurisdiction of the High Court under Art. 199 of the Constitution challenging the inaction of the Securities and Exchange Commission of Pakistan (SECP) in discharging its statutory duties under the Companies Act, 2017---It was contended that last election of directors was held on 14.01.2022, and as per Ss. 158 and 159 of the Companies Act, 2017 the next election was due by 15.01.2025,however, the respondent company failed to initiate the election process---Despite repeated approaches by the petitioner, SECP did not exercise its powers under Ss. 147 and 158 of the Companies Act, 2017 to ensure timely elections or to prevent retired directors from unlawfully continuing in office---Consequently, the petitioner sought High Court's intervention for enforcement of statutory obligations by SECP---The core issue for determination by the High Court was as to "whether the SECP was legally bound under the Companies Act, 2017 to ensure that elections of directors were conducted within the prescribed period, and whether its (SECP's) failure to take regulatory action against a respondent company for not holding timely elections amounted to a violation of its statutory duties, warranting the exercise of Constitutional jurisdiction by the High Court under Art. 199 of the Constitution?"---Held: The SECP despite having knowledge of the non-compliance of the respondent company failed to issue any direction or initiate action under Ss. 147, 158 and 159 of the Companies Act, 2017, thus, could not justify the failure to comply with the mandatory statutory requirement to hold elections within the prescribed statutory period after expiry of the terms of directions---The record and correspondence submitted by SECP reflected that SECP was well aware of the expiry of tenure of respondent company's directors, however, no action was initiated---The powers that flew out of S. 147 of the Companies Act 2017 were entirely different and it empowered SECP with not only the authority to direct the calling of meetings but also to call such meetings itself when there was a default in holding statutory, annual, or extraordinary general meetings which powers were independent of company articles and were legislated to ensure that a company could not paralyze its corporate governance compliance and infringe the rights of shareholders---Section 147 of the Act, 2017 provided an alternate solution to be applied only when the normal machinery of the company failed which was patently evident in the present case---The SECP being the regulator had not ensured compliance with the statutory provisions and the stance taken by the SECP that it was only empowered to direct the company to hold the meeting and not to call the meeting itself was misconceived---Securities and Exchange Commission of Pakistan was directed to invoke its powers under S. 147 and call EOGM of the respondent company to conduct elections in accordance with the relevant provisions of the Companies Act, 2017 and follow the procedure provided under S. 159 of the Companies Act, 2017---Constitutional petition was held to be maintainable since the petitioner merely sought enforcement of SECP's statutory duties and no relief was sought against the respondent company or the registrar concerned---Constitutional petition was disposed of, in circumstances.

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

----Ss.147 & 158(2)---Constitution of Pakistan, Art. 199---Election of directors of a public listed company, holding of---Securities and Exchange Commission of Pakistan's duty to conduct elections---Inaction---Effect---Interference by the High Court under its Constitutional jurisdiction---Scope---Where statutory period of ninety days provided under S. 158(2) of the Companies Act, 2017 for holding elections has lapsed and SECP failed to exercise its powers under S. 147 of the Companies Act, 2017, such inaction of SECP to ensure compliance from a public listed company creates regulatory vacuum affecting shareholder rights and public interest alike, hence, warrants Constitutional intervention of the High Court despite availability of certain statutory remedies before the SECP.

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

----Ss. 147 & 158---Constitution of Pakistan, Art. 199---Election of directors---Constitutional petition seeking direction to SECP to perform its statutory duty to conduct election---Maintainability---Territorial jurisdiction of the High Court---Registered office of the respondent company situated in another province---Effect---Where the registered office of respondent company and the concerned Registrar were situated in another province then question of compliance under S. 158 of the Companies Act, 2017 would ordinary fall within jurisdiction of the concerned High Court of that province---However, where the petitioner does not seek any relief against the company or the concerned Registrar and the mainstay of the petitioner lies against the inactions of SECP, a statutory body, to ensure compliance of statutory provisions of law, the Constitutional petition before the High Court of another province would be maintainable provided SECP is located within territorial jurisdiction of that High Court, territorial jurisdiction of which is invoked.

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

----Ss. 147 & 158---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 3 & 20---Elections of board of directors of public listed company, holding of---Roles and functions of SECP---Scope---Securities and Exchange Commission of Pakistan is established under S. 3 of the SECP Act, 1997 and the powers and functions of the SECP are mentioned under S. 20 of the Act 1997 including the powers of the Commission to be responsible for the performance of the Companies Act 2017---The Preamble of the Companies Act, 2017 states that the mission of SECP is to promote an efficient and transparent capital market, develop the corporate sector and protect the investor through responsive policy measures, effective regulation and enforcement of best governance practices---The Preamble clearly demonstrates to reform company law with the objective of facilitating corporatization and promoting development of corporate sector, regulating corporate entities for protecting interests of shareholders, creditors, other stakeholders and general public, inculcating principles of good governance and safeguarding minority interests in corporate entities---Where statutory period of ninety days under S. 158(2) of Companies Act, 2017 for holding elections has lapsed, as per the mandate of S. 147 of Companies Act, 2017 the SECP is mandated to exercise its powers.

Director General FIA and others v. Kamran Iqbal and others 2016 SCMR 447 and The Additional Registrar Company v. Al-Qaim Textile Mills Limited 2021 CLD 931 rel.

(e) Interpretation of statutes---

----Preamble to a statute---Object, purpose and scope---Though the Preamble to a statute is not an operational part of the enactment yet it defines the purpose and intent of the legislature, which necessitated the legislation on the subject and also sheds light on the goals which the legislature aimed to secure through the introduction of such law---The Preamble of a statute though not a substantive and enforceable part of the enactment, yet it provides primary guidelines about the object and scope of the legislation.

(f) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of the High Court, invoking of---Adequate remedy, availability of---Scope---Constitutional petition under Art. 199 of the Constitution is maintainable where no adequate or efficacious alternative remedy exists, or where a statutory body acts in derogation of its legal obligations or fails to act in circumstances warranting its intervention, despite availability of certain statutory remedies under the law---Where inaction or inefficiency of a statutory regulator results in a continuous breach of legal duty affecting public interest or fundamental rights, the High Court may intervene under Art. 199 of the Constitution and the public bodies cannot shield behind procedural barriers where public interest and rule of law are at stake---In such circumstances, Constitutional petition would be maintainable.

Brig. Muhammad Bashir v. Abdul Karim and others PLD 2004 SC 271 rel.

Barrister Haris Azmat, Barrister Faiza Asad, Husnain Ali Khan and Qasim Sheikh for Petitioner.

Shehzad Ali Rana, Hasnain Raza and Kehar Khan, SPP SECP for Respondents.

2025 C L D 1

[Sindh]

Before Yousuf Ali Sayeed and Arbab Ali Hakro, JJ

MUHAMMAD SIDDIQ MIRZA---Appellant

Versus

Messrs STANDARD CHARTERED BANK LIMITED and others---Respondents

I.A. No.187 of 2017, heard on 13th September, 2024.

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

----Ss.2(d) & 9---Suit for declaration etc. along with damages filed by customer against the Bank---Damages arising out of alleged tortious acts, claim of---Banking Court, jurisdiction of---Scope---Plea of the appellant (plaintiff /customer) was that the Bank had made an unlawful attempt to repossess the vehicle (auto finance facility) which was thrwarted but certain items, including jewellery, were removed from the vehicle causing him mental torture---Customer filed appeal as the Banking Court disposed of the case (returned the plaint), recording a finding that it lacked jurisdiction in the matter as the substance of the claim of damages did not fall within the parameters of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Claim for pecuniary compensation could either arise from a tortuous act i.e. not based on any contract or a breach of a contractual obligation not pertaining to an accommodation or facility of finance as defined under S.2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and for these two categories of claims obviously the Banking Court was not an appropriate forum ---However, a claim for pecuniary compensation could also arise in account of the failure of a Financial Institution to fulfill its obligation in relation to any financial accommodation or facility; it is this category of claim which certainly comes within the scope of S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, and a suit relating thereto is always maintainable before a Banking Court---Such claim being outside the ambit and preview of the Financial Institutions (Recovery of Finances) Ordinance, 2001, could have been struck out; then, the remaining claims could be proceeded for determination on merits---High Court, while setting aside impugned judgment, remanded the matter to the Banking Court for reconsideration and decision afresh---Appeal was allowed accordingly.

Citibank N.A v. Syed Shahanshah Hussain 2009 CLD 1564 and Messrs M.M.K Rice Mills v. Grays Leasing and others 2006 CLD 1147 ref.

Appellant in person.

Ghulam Rasool Korai for Respondent No.1.

2025 C L D 23

[Sindh]

Before Yousuf Ali Sayeed and Arbab Ali Hakro, JJ

Syed SAULAT HUSSAIN NAQVI---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

C.P. No.D-3201 of 2024, decided on 19th September, 2024.

Companies Act (XIX of 2017)---

----Ss.153 & 166(2)(e)---State-Owned Enterprises (Governance and Operations) Act (VII of 2023), S.29---Recruitment process for appointment of Chief Executive Officer (CEO)---Judicial review---Scope---Eligibility criteria and process for recruitment---Determination---Petitioner challenged the composition of recruitment board, increase in number of board members without calling Annual General Meeting, appointment of independent directors ignoring their inter se relationship being brothers and non-representation of female in the board---Validity---Section 166(2) of the Companies Act, 2017, does not serve to preclude two or more persons who are related inter se but as are otherwise unrelated to the sponsors/shareholders or directors representing otherwise their interests from being appointed as independent directors of a company---No requirement had been imposed by the Commission as to female representation in the board and the petitioner was also unable to point out any notification or directive in that regard---Section 29 of the State-Owned Enterprises (Governance and Operation) Act, 2023, empowers the Federal Government to exercise all the powers and rights of shareholders with the respondent being entirely owned by the Federal Government and its shareholding vesting solely in the President of Pakistan, which factual aspect remained unrefuted, thus, the argument that an Annual General Meeting ought to have been called for approving the increase in the size of its Board was fallacious and misconceived---Petitioner painted National Insurance Company Limited to be rife with malfeasance, with its incumbent CEO being at the epicentre thereof and to have so entrenched himself within the organisation so as to be able to orchestrate his own continuity in that role, which suggested that the Federal Government had conspired so as to expand the size of the Board and induct handpicked persons for the role of independent directors while excluding female representation for the ulterior motive of then tailoring the advertisement to fit the specification met by the incumbent so as to pave the way for his re-appointment, all of which was far-fetched to say the least---Disparate allegations had been conflated so as to cobble together a case against the recruitment process, which on examination, did not suffer from any contravention of law, rule, policy so as to warrant interference in exercise of the constitutional jurisdiction of High Court---Constitutional petition was dismissed, in circumstances.

Ahmed Masood for Petitioner.

Zahid F. Ebrahim for Respondent No.3.

Zehrah S. Vayani, Assistant Attorney General for Pakistan.

2025 C L D 50

[Sindh]

Before Zulfiqar Ahmad Khan, J

ABDUL WASIM---Appellant

Versus

Messrs NTN CORPORATION and another---Respondents

Miscellaneous Appeal No.42 along with Miscellaneous Appeal No.43 of 2007, decided on 6th February, 2024.

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

----Ss. 86 & 40---Well known trade mark, protection of---Infringement---Effect---Appellant (engaged in business of ball bearing and taper roller) challenged the decision of the Registrar of the Trade Marks whereby appellant's Trade Mark (NBN) was refused on the basis that Trade Mark (NTN) of the respondent was well-known---Validity---Record (impugned judgment and copies of the registration certificates of respondent) reflected that Trade Mark of the respondent (NTN) was not only registered in Pakistan but many other countries of the world---Hence, Trade Mark of the respondent (NTN) was protected under S.86 of the Trade Marks Ordinance, 2001, as a well-known Trade Mark---Letters NBN adopted by the appellant were clearly disentitled from protection because of resemblance with the Trade Mark NTN, which was Trade Mark of the respondent---Appellant was to be restrained from adopting or using the said NBN Trade Mark---Law of Trade Mark is founded on the fundamental principle of protection of consumers by restricting use of similar, identical or confusingly Trade Mark by rival entities---There was no doubt that the Trade Mark NBN was only adopted by the appellant after its proprietor considered the prior use and goodwill of the Respondent' Trade Mark NTN which was in existence for many years, not only in Pakistan but around the globe in relation to ball bearing and taper roller---No illegality or apparent error had been noticed in the impugned order passed by the Registrar of the Trade Marks---Appeal was dismissed, in circumstances.

CEC v. GEC; 1963 RPC-1; BEI v. BEL; 1982 PTC-377; ETC v. ATE; 1982 PTC 119; AEC v. GEC and AIR-1974 ref.

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

----Ss. 86 & 40---Trade mark---Infringement---Tests---Appellant (engaged in business of ball bearing and taper roller) challenged the decision of the Registrar of the Trade Marks whereby appellant's Trade Mark (NBN) was refused on the basis that Trade Mark (NTN) of the respondent was well-known---Validity------If a mark passes the "Moron in a Hurry", "Class Trinity" or "LAPP" tests, it escapes out of the legal protection umbrellaed by Trade Mark or common law, which was the case-at-hand, as NBN was not entitled to protection in the presence of NTN Trade Mark---No illegality or apparent error had been noticed in the impugned order passed by the Registrar of the Trade Marks---Appeal was dismissed , in circumstances.

Hamdard Laboratories (Waqf) Pakistan v. Muhammad Fahim 2016 CLD 2144 ref.

Ms. Naheed Akhtar holding brief for Muhammad Ali Zahid for Appellant.

Qamaruddin for Respondent No.1.

2025 C L D 73

[Sindh]

Before Yousuf Ali Sayeed and Arbab Ali Hakro, JJ

KARACHI CHAMBER OF COMMERCE AND INDUSTRY through Secretary General---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

C.P. No.D-4398 of 2024, heard on 20th September, 2024.

(a) Trade Organizations Rules, 2013---

----Rr. 2(b), 2(g), 11(7), 18(3) & 21(5)---Elections for Members of the Executive Committee of Chamber of Commerce and Industry, matter of---Authority, powers of---Petitioner (Chamber of Commerce and Industry) assailed three orders made ('impugned orders') by the Director General of Trade Organizations ('the DGTO') being regulator in the buildup to the election of 30 members of the Executive Committee ('the Committee') of the petitioner for the years 2024-26 ('the Election')---Directions to the petitioner by the DGTO through impugned orders included sharing the voters list for the years 2024-26 election according to their class of membership along with the details; reversion of security fee from Rs.100,000/- to Rs.15,000/- for contesting candidates ; mode of polling for the election ; submitting a report as to compliance of the earlier orders---Contention of the petitioner was that the impugned orders were illegal and had been made without jurisdiction or justification so as to create unnecessary hurdles in the process of the election, the schedule of which had already been announced by the three-member election commission and the matter had since proceeded to an advanced stage---Validity---Perusal of the Articles of Association of the petitioner reflected that it specifically contemplated that its membership will be of two classes, namely (i) Associate Members and (ii) Corporate Members, while an "Associate Member" being defined as "a Member of the Chamber which is not a body corporate or a multinational or a sales tax registered manufacturing concern or sales-tax-registered business concern having annual turn- over of not less than fifty million Rupees", and a "Corporate Member" being defined to mean "a member of the Chamber which is either a body corporate or a multinational corporation with its heads office or branch office in Pakistan or a sales-tax registered manufacturing concern or a sales-tax registered business concern having annual turn-over of not less than fifty million Rupees"---Requirement of such class distinction is also prevalent in terms of R. 11(7) of Trade Organizations Rules, 2013 ('the Rules, 2013'), stipulating that "there shall be two classes of memberships in a trade organization, except chamber of small traders and association of small traders"---Rule 21(5), to the extent relevant from the standpoint of the petitioner , envisages that "at least fifty per cent of members of the executive committee shall be from the corporate class" and that "the electoral college for each class of members of the executive committee shall be members of the general body from the respective class", with the definitions of the two classes for purpose of the Rules in terms of Rr.2(b) and (g) of the Rules, 2013 being in consonance with the definitions encapsulated in the Articles--- Admittedly, the enhancement of security deposit and provision for electronic voting had not been approved through the DGTO and/or incorporated in its Memorandum and Articles of Association of the petitioner---Constitutional petition, being merit-less, was dismissed, in circumstances.

(b) Trade Organizations Rules, 2013---

-----Rr. 2(b), 2(g), 11(7), 18(3) & 21(5)---Constitution of Pakistan, Art.199---Elections for Members of the Executive Committee of Chamber of Commerce and Industry, matter of---Constitutional petition---Maintainability---Petitioner (Chamber of Commerce and Industry)assailed three orders made ('impugned orders') by the Director General of Trade Organizations ('the DGTO') being regulator in the buildup to the election of 30 members of the Executive Committee ('the Committee') of the petitioner for the years 2024-26 ('the Election')---Validity---Constitutional jurisdiction under Art. 199 of the Constitution does not present a substitute for the appellate hierarchy established under Trade Organizations Act / Rules and while exercising such jurisdiction the High Court would at best examine the matter from an administrative rather than appellate lens---Thus, the impugned orders could not be said to be unreasonable, in terms of being either illegal, irrational or suffering from any procedural impropriety ; hence, no interference was warranted through the present proceeding---Constitutional petition was dismissed ,in circumstances.

Khalid Javed for Petitioner.

Maz Waheed and Usman Khan for Intervener.

Kafeel Ahmed Abbasi, Additional Advocate General, Sindh.

Kazi Abdul Hameed Siddiqui, D.A.G along with Ali Sufian Director, DGTO, Islamabad.

2025 C L D 86

[Sindh]

Before Muhammad Shafi Siddiqui, CJ and Omar Sial, J

UNITY FOODS LTD. through authorized representative---Petitioner

Versus

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

C.P. No.D-8554 of 2019, decided on 11th September, 2024.

Companies Act (XIX of 2017)---

----S. 221---Inspecting affairs of company---Securities and Exchange Commission of Pakistan (Commission), jurisdiction of---Petitioner company assailed order appointing inspectors to inspect books of accounts, books and papers of petitioner company in all respects and to furnish report---Plea raised by petitioner company was that exercise of powers under S. 221(1) of Companies Act, 2017, could not be extended---Validity---Commission issued show-cause notice followed by order under S. 221 of Companies Act, 2017, followed by letter of inspectors so appointed seeking certain information, after realizing its frame and under no stretch of imagination it could deemingly be extended to the provision of inspectors having different eventualities to initiate such actions---High Court limited applicability of order in question to the extent of frame provided under S. 221 of Companies Act, 2017---High Court did not curtail rights of SECP insofar as contemplated actions under other provisions of Companies Act, 2017, if the situation would demand---Constitutional petition was disposed of accordingly. [pp. 88, 89] A & B

Saif Power Limited v. Federation of Pakistan and others 2023 CLD 466 rel.

Abdul Ahad Nadeem for Petitioner.

Arshad Tayebally along with Raja Qasit Nawaz Khan for Respondents.

2025 C L D 270

[Sindh]

Before Yousuf Ali Sayeed and Arbab Ali Hakro, JJ

NATIONAL BANK OF PAKISTAN LIMITED through Authorized Attorney---Appellant

Versus

Messrs SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY (PVT.) LIMITED---Respondents

I.As. Nos. 16, 17 and 18 of 2022, decided on 29th October, 2024.

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

----Ss. 9 & 22---Contract Act (IX of 1872), S. 124---Suit for recovery of bank guarantee---Liability of surety---Appellant / bank issued bank guarantee to secure finance facility extended by respondent / finance company to borrower company---Suit filed against appellant / bank was decreed by Trial Court in favour of respondent / finance company---Validity---If principal debtor defaults or fails to repay his debt, the guarantor is equally liable to fulfill the obligation---Partial performance and acceptance of contractual duties necessitates full performance---Appellant / bank failed to discharge its contractual obligations---Right of respondent / finance company to seek enforcement of remaining guarantees through legal proceedings was justified---High Court declined to interfere in judgment and decree passed by Trial Court as there was no legal infirmity or jurisdictional defect---Appeal was dismissed, in circumstances.

PLD 1975 Kar. 672; 2003 CLD 1142; 2004 CLD 587; 2003 CLD 931; AIR 1983 Karnataka 73 and 2022 CLD 1478 ref.

Hyesons Sugar Mills (Pvt.) Ltd. v. Consolidated Sugar Mills Ltd. 2003 CLD 996 rel.

Ms. Naheed A. Shahid for Appellant.

Abdul Qayyum Abbasi along with Raja Safeer Ahmed, Muhammad Abdullah and Imran Rind for Respondent.

2025 C L D 319

[Sindh]

Before Muhammad Shafi Siddiqui, C.J. and Jawad Akbar Sarwana, J

B.R.R. GUARDIAN MODARABA and 8 others---Petitioners

Versus

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

C.P. No. D-3523 of 2020, decided on 23rd September, 2024.

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

----S. 20(4)(o)---Modarba Companies and Modarba Rules, 1981, R. 8(4)---Constitution of Pakistan, Art. 199---Constitutional petition---Inquiry, initiation of---Issuance of show cause notice---Petitioners were aggrieved of show cause notice issued by SECP in order to safeguard interests of Modarba Certificate holders---Validity---Securities and Exchange Commission of Pakistan, in terms of S. 20(4)(o) of Securities and Exchange Commission of Pakistan Act, 1997 is empowered to perform such functions and exercise such powers of the Authority, including any powers of Federal Government delegated to the Authority and under any other law for the time being in force under which any function or power has been conferred on the Authority including, but not limited to, the functions and powers set out in Securities and Exchange Commission of Pakistan Act, 1997---Securities and Exchange Commission of Pakistan after hearing petitioners and/or their representatives passed order in question---Payments to different individuals on different heads were made without codal formalities and/or providing legitimacy of such payments---There were some incidents of fire which resulted in loss to company in view of absence of insurance coverage/Takafal---Huge payments needed to be scrutinized, and if the Regulator would keep a blind eye on it, then entire scheme set out in relevant laws to maintain a system of check and balance on companies would become redundant---High Court declined to exercise jurisdiction under Art. 199 of the Constitution as the petitioners failed to point out the fundamental right which had been infringed, as High Court was not sitting in appeal over order in question---Petitioners raised controversies factual in nature and the same were not warranted while exercising jurisdiction under Art. 199 of the Constitution---It was primary duty of regulatory authorities to safeguard interests of certificate holders and order in question was an attempt to achieve such goal---Constitutional petition was dismissed, in circumstances.

Sameer Tayebally for Petitioner.

Khaleeq Ahmed, Deputy Attorney General for Respondent No.1.

Furqan Ali for Respondents Nos.2 and 3.

2025 C L D 446

[Sindh]

Before Muhammad Shafi Siddiqui, CJ and Jawad Akbar Sarwana, J

PAKISTAN STOCK BROKERS ASSOCIATION---Petitioner

Versus

PAKISTAN STOCK EXCHANGE LIMITED through Chief Executive Officer and another---Respondents

C.P. No.D-4449 of 2021, decided on 21st October, 2024.

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

----Ss.7 & 8---Pakistan Stock Exchange (PSX) Regulations---Futures Eligibility Criteria (FEC)---Scope---Futures Eligibility Criteria (FEC) is part and parcel of PSX Regulations and is regulated by statute under S.7 of Securities Act, 2015---Component of FEC does not fall outside the domain of S. 7 of Securities Act, 2015 and is part of PSX Regulations---Framework of Securities Act, 2015 provides that regulations framed by PSX are statutory in nature and must be framed within the contours of parent statute as stated therein.

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

----Ss. 7 & 8---Pakistan Stock Exchange (PSX) Regulations---Futures Eligibility Criteria (FEC)---Approval of regulations or amendments to regulations of Securities and Exchange Commission of the Pakistan (SECP)---Scope---Securities and Exchange Commission of Pakistan (SECP) when approving proposed regulations has two options under section 8 of Securities Act, 2015 i.e. either (i) to approve them, or (ii) to refuse to approve them---There is no third option available to SECP under S. 8 of Securities Act, 2015.

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

----Ss. 7, 8& 169 (4)---Constitution of Pakistan, Arts. 18 & 25---Pakistan Stock Exchange (PSX) Regulations---Futures Eligibility Criteria (FEC)---Approval of regulations or amendments to regulations of Securities and Exchange Commission of Pakistan (SECP)---Scope---Petitioner / Stock Exchange Brokers' Association assailed eligibility criteria for selection of securities eligible for trading in Deliverable Futures Contract and Cash Settled Futures Contract Markets referred to as Futures Eligibility Criteria (FEC), amending Pakistan Stock Exchange (PSX) Regulations for enhancement of Future Market---Held, that there was no publication of PSX Regulations, after SECP had introduced Criteria 4 (i) of FEC to PSX Regulations---Once SECP introduced a new provision, i.e. Criteria 4 (i) to FEC, SECP triggered precondition of public notice under S. 169(4) of Securities Act, 2015---Securities and Exchange Commission of Pakistan's contribution to PSX's proposed regulations of introducing criteria 4 (i) to FEC constituted making or amending a regulation under Securities Act, 2015 which mandated publication of such amendment by SECP---Securities and Exchange Commission of Pakistan failed to meet statutory condition set out in S.169(4) of Securities Act, 2015, i.e. eliciting public opinion on its draft version of PSX Regulations, which included Criteria 4 (i) of FEC---Criteria 4 (i) of FEC did not meet the test of introducing amendments to PSX Regulations under Securities Act, 2015---Criteria 4 (i) was illegal and unlawful made in contravention of Securities Act, 2015, thus, was of no legal effect---Eligibility notice dated 17-06-2021 issued by PSX at the material time suspended by High Court's interim order removing entities from approved list of eligibility securities on account of Criteria 4 (i) of FEC was not in accordance with law and the same was set aside---High Court declared that contents of Criteria 4 (i) of FEC to the extent of ousting securities of companies which obtained stay order from a Court against any inquiry / investigation initiated by Commission to be ineligible for trading in future market, was ultra vires of Arts. 9 & 25 of the Constitution---High Court stuck down Criteria 4 (i) of FEC to PSX Regulations as the same was un-Constitutional---Constitutional petition was allowed accordingly.

Zahid F. Ebrahim for Petitioner.

Jam Asif Mehmood for Respondent No.1.

Raja Qasit Nawaz for Respondent No.2.

2025 C L D 561

[Sindh]

Before Mohammad Abdur Rahman, J

LUCKY TEX (PVT.) LIMITED---Plaintiff

Versus

CRESOX (PVT.) LTD.---Defendant

Suit No.290 of 2018 and Judicial Miscellaneous Nos. 32, 33 of 2022, decided on 22nd February, 2025.

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

----S.23---Contract Act (IX of 1872), S. 23---Civil Procedure Code (V of 1908), O.VII, R.11---Specific Relief Act (I of 1877), S. 12---Suit for specific performance of agreement to sell---Rejection of plaint---Mortgaged property---Transfer of assets---Restrictions---Plaintiff company sought specific performance of agreement to sell regarding suit properties which were mortgaged with bank as security for a finance facility---Defendant company sought rejection of plaint on the plea that the suit was not maintainable---Validity---Provision of S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not operate retrospectively and transfers that occurred prior to promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 were not to be treated as void---General restraints as contained in Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 could only set aside those registered transfers that had violated provisions of each of those subsections---Properties that were not furnished as security were not impacted by S. 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 prior to any decree passed and were valid transfers---Agreement of sale instituted for sale of a mortgaged property would be void under S. 23 of Contract Act, 1872 as the object of agreement of sale would be to defeat the provision of law i.e., S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Right of redemption may be recognized in the context of transfers subject to S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Jurisdiction to determine performance of agreement to sell as entered into between parties, in terms of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 at all times vested with Banking Court and Civil Court did not have the requisite jurisdiction to entertain such suit---Plaint seeking specific performance of agreement to sell was barred under the provisions of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and was liable to be rejected under the provisions of O.VII, R. 11(d), C.P.C.---High Court rejected the plaint seeking specific performance of agreement to sell under O. VII, R. 11(d), C.P.C. as jurisdiction to consider the performance on the agreement of sale in respect of mortgaged property vested in Banking Court under Ss.23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaint was rejected in circumstances.

Mst. Nasira Khatoon and another v. Mst. Aisha Bai and 12 others 2003 SCMR 1050; University of Health Sciences and others v. Mumtaz Ahmad and another 2010 SCMR 767; Subedar Sardar Khan through Legal Heirs and others v. Muhammad Idress through General Attorney and another PLD 2008 SC 591; Rubina Amjad v. Javaid Shafique Siddiqui and others 2023 MLD 201; Muhammad Iqbal and others v. Nasrullah 2023 SCMR 273; Zamiruddin Ahmad v. Havas Khan PLD 1969 SC 57; Sheikh Jameel Ahmad v. Raja Khalid Hussain 2010 CLD 571; Habib Metropolitan Bank Limited v. Messrs Dagra Textiles (Pvt.) Limited and 3 others 2017 CLD 1256; Habib Bank Limited v. Daizy Knitwear (Pvt.) Limited through Chief Executive and 3 others 2006 CLD 206; National Bank of Pakistan v. Messrs Dharamdad and 2 others 2006 CLD 771; Rafiq Ahmed Sanauri through Attorney and 3 others v. Union Bank Limited through Bank Manager and 5 others 2007 CLD 1002; Citizens Investment Co. v. Askari Leasing Ltd. and others 2009 CLD 1392; Muhammad Hussain and another v. Judge Banking Court No. 1 Multan and 3 others 2013 CLD 1684; Askari Bank Ltd. v A.H. International (Pvt.) Ltd. and others 2016 CLD 1028; Muhammad Mansha v. Industrial Development Bank of Pakistan 2020 SCMR 1069; Azra Saeed v. Raees Khan through General Attorney and 5 others 2009 CLD 779; Muhammad Ashraf v. Muslim Commercial Bank Limited 2018 CLD 911; Azra Saeed v. Raees Khan 2009 CLD 779; Citizens Investment Co. v. Askari Leasing Ltd. and others 2009 CLD 1392; Saudi Pak Commercial Bank Ltd. v. A.H. International (Pvt.) Ltd. and others 2007 CLD 175; Soneri Bank Ltd. v. Messrs Punjab Engineering Services (Pvt.) Ltd. and 3 others 2016 CLD 440; Raja Riaz Ahmad Khan v. United Bank Limited and 7 others 2003 CLD 552; Muhammad Ejaz v. Allah Bakhsh 2017 CLC Note 28; Bank Al-Falah Ltd. v Bilal Spinning Mills Ltd. 2005 MLD 1358; Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166; Rao Abdul Rehman (Deceased) v. Muhammad Afzal (Deceased) 2023 SCMR 815; Javaid Iqbal v. Abdul Aziz PLD 2006 SC 66; Mst. Rasheda Begum v. Muhammad Yousaf 2002 SCMR 1089; Muhammad Bakhsh v. Zia Ullah 1983 SCMR 988; Zohair Zakaria v. National Bank of Pakistan 2009 CLD 915; See Muhammad Mansha v. Industrial Development Bank of Pakistan 2020 SCMR 1069; Al Haj Chaudhry Muhammad Bashir v. Citibank NA 2002 CLD 962; Sheikh Muhammad Khalid v. Malik Food Industries through Sole Proprietor 2009 CLD 1038; Muhammad Ejaz and another v. Allah Bakhsh and 7 others 2017 CLC N 28; Nasir Abbas Bhatti v. Abid Hussain 2024 CLC 268, Gujranwala Steel Industries through Partner v. Industrial Development Bank of Pakistan and 7 others 2024 CLD 343 and Muhammad Sadiq and others v. Muhammad Mansha and others PLD 2018 SC 692 ref.

Ali Mehdi for Plaintiff (in Suit No.290 of 2018).

Nemo for Defendant (in Suit No.290 of 2018).

Hanif Faisal Alam, Barrister-at-Law for Plaintiff (in J.M. No.32 of 2022).

Waqar Ahmed for Respondent No.1 (in J.M. No.32 of 2022).

Mrs. Heer Memon, Barrister-at-Law for Respondents Nos.2 and 4 (in J.M. No.32 of 2022).

Hanif Faisal Alam, Barrister-at-Law for Plaintiff (in J.M. No.33 of 2022).

Waqar Ahmed for Respondent No.1 (in J.M. No.33 of 2022).

Mrs. Heer Memon, Barrister-at-Law for Respondents Nos.2 and 4 (in J.M. No.33 of 2022).

2025 C L D 620

[Sindh]

Before Muhammad Shafi Siddiqui, C.J. and Jawad Akbar Sarwana, J

TRADE SMART SECURITIES (PRIVATE) LTD. through Chief Executive---Petitioner

Versus

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

Constitutional Petition No. D-5732 of 2024, decided on 13th December, 2024.

Constitution of Pakistan---

----Art. 199---Constitutional petition---Maintainability---Alternate efficacious remedy---Grievance of a securities broking company against Pakistan Stock Exchange---Arbitration proceedings---Petitioner assailed initiation of arbitral proceedings before arbitral tribunal by respondent/ Pakistan Stock Exchange---Validity---When alternative and equally efficacious remedy is open to a litigant, he should pursue that remedy---In presence of arbitration agreement between parties there was no other option left but for the aggrieved party to proceed with agreed alternative dispute resolution mechanism i.e. arbitration---There was no reason to invoke Constitutional jurisdiction of High Court for issuance of writ in an ongoing arbitration matter unless some exceptional ground could be made out for such intervention in the facts and circumstances of the case or in law---Respondent/Pakistan Stock Exchange was not a person performing functions in connection with the affairs of the Federation---Institutional arbitration was currently under process between parties---Petitioner could not renege from the same and even otherwise, arbitral forum had provided adequate remedy to petitioner, which had not been exhausted---High Court declined to interfere in the matter as an arbitration was underway---Constitutional petition was dismissed, in circumstances.

Attock Cement Pakistan Ltd. and others v. Federation of Pakistan and others C. P. No. D-1590 of 2023; Al-Jehad Trust v. Federation of Pakistan PLD 1997 SC 84, 192; Pakistan Stock Exchange Limited through Duly Authorized Officer v. Province of Sindh through Secretary, Ministry of Finance and 3 others 2024 CLD 580; Pakistan Stock Brokers Association v. Pakistan Stock Exchange Limited and another C.P. No.D-4449 of 2021 and Competition Commission of Pakistan's case 2023 CLD 475 ref.

Haider Waheed for Petitioner.

Nemo for Respondent No. 1.

Nemo for Respondent No. 2.

Nemo for Respondent No.3.

Nemo for Respondent No.4

Nemo for Respondent No.5.

Nemo for Respondent No.6.

Nemo for Respondent No.7.

2025 C L D 641

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

SALMAN CAPITAL INVESTMENTS (PVT.) LIMITED through duly authorized Representative---Appellant

Versus

MCB BANK LIMITED---Respondent

First Appeal No.114 of 2016, decided on 25th February, 2025.

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

----Ss. 22 & 24---Judgment passed by the Banking Court---Appeal, filing of---Limitation---Condonation of delay---Sufficient cause---Appellant (customer / Company), instead of filing within thirty days, filed appeal with a delay of atleast 08 months after passing of decree---Validity---Along with the application for condonation of delay, a photostat copy of a certificate, purportedly issued by a doctor had been filed by the deponent to support his statement / explanation ('certificate-in-question')---Certificate-in-question was issued on such date when at least seven months of impugned judgment has already elapsed---Certificate-in-question depicted that the deponent had remained under the treatment of said doctor for severe post trauma stress disorder ; however, it did not show that for how much period deponent remained under the treatment of the said doctor and from when---The doctor, in the certificate-in-question, had not clarified whether the deponent was not even able to communicate simple instructions to his lawyer to file an appeal within time, or that he was so incapacitated that his routine life had been compromised so much so that he had lost his ability to perform daily chores or run routine errands like a normal person---Therefore, certificate-in-question was of little help to the appellant for covering delay in filing the appeal---Consequently, the application for condonation of delay was also dismissed---Appeal, filed by customer / company was also dismissed, in circumstances.

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

----Ss. 22 & 24---Judgment passed by the Banking Court---Appeal, filing of---Limitation---Condonation of delay---Sufficient cause---Appellant (customer / Company), instead of filing within thirty days, filed appeal with a delay of at least 08 months after passing of decree---Validity---It was not explained in the application for condonation of delay that when the certified true copy of impugned judgment and decree (documents) was obtained---Even, as per endorsement date on both the documents, the appeal was filed after delay of two months thereafter, and not within 30 days thereafter---Delay of each and every day in filing the appeal had to be explained---Appellant had miserably failed to account for delay of each and every day in filing the appeal as required by law---The delay apparently caused by indolence and negligence of the appellant was shocking and unconscionable in that no cogent material had been brought on record to justify the same except a vague statement that authorized officer was suffering from some stress causing him mental disorder ; neither the gravity, nor the duration of which had been specifically revealed---Consequently, the application for condonation of delay was dismissed---Appeal, filed by customer / company was also dismissed, in circumstances.

(c) Limitation---

----Condonation of delay---Cause(s) / ground(s)---Indolence of party seeking condonation---Effect---A counsel's neglect to inform his client about fate of the case would not per se be a sufficient ground for condonation of delay---Ground of living in a far off village and lack of knowledge regarding dismissal of the case was a matter purely between client and his counsel, and it cannot be considered a sufficient ground for condonation of delay---Non-supply of cause list to counsel for a party would not constitute a valid ground for condonation of delay in absence of affidavit of the person concerned---Reasons to emphasize the law of limitation is that the same (limitation) has to be construed in strict sense because due to negligence and indolence of one party in pursuing the matter in the court, valuable rights are accrued in favour of the other party which cannot be done away with on flimsy and unsubstantiated grounds---Condoning the delay is not warranted without being satisfied about validity and sufficiency of the grounds raised for condonation of such delay.

Muhammad Immad Qamar for Appellant.

2025 C L D 852

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

Messrs OILBOY (PVT.) LTD.---Appellant

Versus

Messrs PAK QATAR INVESTMENT (PVT.) LTD.---Respondent

1st Appeal No. 09 of 2024, decided on 20th March, 2025.

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

----S. 28---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2---Summary suit for recovery on the basis of dishonored cheques filed by the respondent against the CEO of the appellant company---Application for leave to defend by the CEO was dismissed on account of admissions and as a result the appellant company filed the appeal before the High Court---Appellant company took a plea that suit was filed against CEO instead of the company---The central moot point for determination by the High Court was whether a company, as a separate legal entity, could be held liable for a dishonored cheque issued in its name when the suit was filed against the CEO rather than the company itself---Specifically, the issue was whether the CEO, acting as an agent for the company, could be personally liable in such a suit or whether the company must be made a party to the suit, considering that the company was a distinct legal entity, and the CEO's actions were carried out in his capacity as the company's representative---Whether the failure to name the appellant company as a party to the suit, and instead filing the suit against the CEO, renders the suit fatal or defective---The appellant company sought to separate itself from its CEO at the appellate stage, claiming the CEO's actions were not representative of the company, despite previously accepting his role as the company's representative---Validity---It is settled law that company is a separate juristic entity from its employees and its employees / directors cannot be held responsible for the contractual obligations incurred by a company (with certain exceptions of personal guarantee, fraud etc. which are irrelevant for the instant purposes), but each case must be viewed on its own merits and circumstances---The summary suit was filed in the name of CEO but a perusal of the title page in the summary suit showed that the appellant company being named as the address for the CEO---The normal format would be to name the company first, being served through its CEO, but in the present case the respondent / plaintiff appeared to have done the opposite---Further perusal of the contents of the plaint revealed that the CEO and the appellant company, in essence, appeared to be one and the same---The CEO also never denied the liability being claimed by the respondent and answered the allegations as if he was the appellant company---The CEO was also instrumental in all proceedings throughout, including signing the agreement between parties, signing cheques, as well as putting up defence on the appellant's side---Perusal of leave to defend filed by CEO on behalf of the appellant company unequivocally showed that he was acting on behalf of the appellant company---Prayer clause of leave to defend also showed that CEO accepted liability on behalf of the appellant company---Such actions of the CEO appeared to have been endorsed by the appellant company as throughout the memo of appeal before the High Court the appellant company referred to the leave to defend application (filed by the CEO) as the appellant company's own---It was an imperative aspect of the matter that given such acknowledgment and endorsement by the appellant company regarding the acts of the CEO i.e. filing leave to defend by CEO on behalf of the company, and owning the same as if the same was filed by the company itself, at a later stage when final order had also been passed, backtracked by attempting to create a juristic person separation between the appellant company and its CEO---Moreover, such plea was only taken by the appellant company in appeal and not before the Trial Court---Such belated argument being submitted by the appellant company in itself was self-defeating inasmuch as on one hand the appellant company was claiming relief based on the separation from its CEO and on the other hand it was claiming enforcement of the same leave to defend application filed by their CEO---The appellant company attempted to thwart judicial proceedings by raising an issue of 'legal entity v. company employee' at such a belated stage---The appellant company could not blow both hot and cold i.e. accept the CEO as the appellant's representative when it suited them and then deny his authority when it did not---High Court also made emphasis on s.28 of the Negotiable Instruments Act, 1881 which provided that an agent acting on behalf of another by signing a cheque could also be held liable---In the pleading of the instant case the CEO acted on behalf of the appellant company and same was never denied by the appellant company---In view of the above the High Court rejected such contention of the appellant company as being without merit---Appeal was dismissed.

Sh. Muhd Irfan v. Sitara Commission Shop and others 2005 SCMR 800 rel.

Habib Bank Ltd. v. T & N Pakistan (Pvt.) Ltd. 2016 CLD 1782 ref.

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

----O.XIV, R.1(6), O.XV, R.1, O.XII, R.12 & O.XXXVII, Rr. 1, 2---Qanun-e-Shahadat (10 of 1984), Art. 31---Judgment on admission---Admission in pleadings abolishing the need for further proof---Facts admitted need not be proved---Scope---Piercing the veil of incorporation---The appellant company and its CEO allegedly admitted owing the respondent Rs.57,000,000/- in their pleadings---Leave to defend application was dismissed on admission of liability---The Trial Court passed the impugned order based on the admission, raising the question of whether this admission was sufficient to support the decision---The Trial Court merely on the admission passed the impugned order---Validity---Where there is an admission in a pleading (such as written statement) there is no requirement for further proof---Leave to defend application could be dismissed where liability was admitted by CEO of the company---The appellant company at later stage could not disclaim its CEO from acting on its behalf considering the appellant company had repeatedly accepted / endorsed the CEO as its representative---The appellant company was estopped by its own conduct from claiming a juristic separative between itself and its CEO at such a belated stage---A piercing of the veil of incorporation would no doubt show the CEO and the appellant company to be one and the same i.e. CEO being the only person with whom the respondent had interacted---The signing of the agreement, cheques and all correspondence by the appellant company with the respondent were conducted through its CEO---The appellant company failed to show any illegality with the impugned order which was rendered entirely on admissions made by both the appellant company and its CEO through pleadings made under oath---The new plea of separating the CEO and the appellant company was also only taken at the appellate stage and was never raised earlier during trial proceedings---The CEO by purporting to substitute himself into the appellate proceedings had shown proximity with the appellant company---Appeal was dismissed, in circumstances.

President v. Justice Shaukat Ali PLD 1971 SC 585 rel.

Shaikh Javed Mir for Appellant.

Muhammad Khalid Hayat for Respondent.

2025 C L D 972

[Sindh]

Before Jawad Akbar Sarwana, J

A. QUTUBUDDIN KHAN through Duly Constituted attorney---Decree-Holder

Versus

CHEC MILLWALA DREDGING CO. (PVT.) LTD.---Judgment-Debtor

Execution Application No.47 of 2019 and Suit No.1461 of 1998, decided on 18th March, 2025.

Companies Act (XIX of 2017)---

----Ss. 398, 399 & 400---Companies Ordinance (XLVII of 1984), Ss.413, 414 & 415---Civil Procedure Code (V of 1908), Ss. 47(3), 151 & O. XXI, R. 50(1)(b)---Execution proceedings---Recovery of decretal amount---Impleading former directors of judgment debtor company---Decree holder sought impleading former directors of judgment debtor / company in execution proceedings on the plea that they were liable for making payment of decretal amount along with interest up to date---Validity---Former directors knew second arbitral award had been announced against them and decree holder's claim for damages against them had crystallized into a liability accrued against judgment debtor / company---Matter was pending before Supreme Court when ex directors decided to dissolve the company under Companies Easy Exit Scheme---Ex-directors and ex-shareholders could not benefit from their wrongdoings and they must be accountable as per undertaking, indemnity and provisions of law---Even if ex-directors/ex-shareholders were affected Court notice under O. XXI, R. 50, C.P.C. which provision ordinarily related to suits against firms and persons carrying on business in names other than their own, such, as partner(s) of a firm, nevertheless, two judgment debtors had stepped forwarded and defended and/or had been defending execution proceedings unconditionally and without claiming any prejudice since 2019 till then---Ex-directors could not approbate and reprobate now in oral arguments---Such liability was not limited to the two ex-directors/ex-shareholders, who were before High Court---Decree holder was at liberty to include remaining ex-directors/ex-shareholders in execution proceedings given the undertaking, indemnity and provisions of law which applied to all of the ex-directors, ex-shareholders, and ex-officers of judgment debtor company dissolved under Companies Easy Exit Scheme, read with S. 439 of Companies Ordinance, 1984---Application was allowed, in circumstances.

Nadeem Qutub for Decree-Holder.

Aitezaz Manzoor for Judgment-Debtor.

2025 C L D 1021

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

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

Versus

FIRST WOMEN BANK LIMITED through duly constituted attorneys---Respondent

Special H.C.A. No.91 of 2018, decided on 20th March, 2025.

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

----Ss. 9, 10 & 22---Suit for recovery of finance---Leave to appear and defend the suit, dismissal of---Substantial question of law, absence of--Suit filed by bank was decreed in its favour and against appellants / defendants---Validity---Application for leave to defend the suit was filed by appellants / defendants, reiterating the facts and disputing each and every assertion of bank, without raising any substantial question of law and facts with an aim to obfuscate claim of bank---Appellants / defendants attempted to make figures of amount outstanding against them as disputed, without presenting validly any evidence to rebut same---Such efforts of appellants / defendants were to make facts of the case unintelligent without offering any convincing alternate for a consideration---Appellants / defendants tried to dispute report of chartered accountant appointed with their consent by claiming unsuccessfully that the chartered accountant was biased in favor of bank, without pinpointing that his report was based on extraneous consideration or was an outcome of misunderstanding of facts---Division Bench of High Court declined to interfere in judgment and decree passed by Judge in Chambers of High Court as appellants / defendants failed to establish any material error in entries reflected in statement of accounts filed by bank nor could cite any excuse warranting their escape from fulfilling their obligation under agreements signed by them with the bank---Appeal was dismissed, in circumstances.

2014 SCMR 1048 and 2017 CLD 342 ref.

Muhammad Arif for Appellant.

2025 C L D 1029

[Sindh]

Before Jawad Akbar Sarwana, J

Messrs SADIQ & SUHARWARDY through Partner---Plaintiff

Versus

ISMAIL INDUSTRIES LIMITED through Chief Executive Officer---Defendant

Suit No.200 of 2020 (and Eight others connected Suits and one J. Misc. as per Annexure B), decided on 9th January, 2024.

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

----Ss.2(h), 16, 17, 18 & 39---Trade Marks Ordinance (XIX of 2001), Ss.6 & 117---Trade Marks (Amendment) Act (LVIII of 2023)---Trademark suits---Scope and adjudicating forum---Intellectual Property Tribunal---Jurisdiction---Pendency of cases at High Court filed before and after enactment of Intellectual Property Organization of Pakistan Act, 2012---Transfer of cases from High Court to Intellectual Property Tribunal---Exception---High Court's jurisdiction in revocation / rectification cases---The subject-matter of the present nine suits and one misc. application concerned the judicial determination of future proceedings of trademark matters, which had been filed between the years 2005 and 2020, pending hearing at various stages before the High Court---Intellectual Property Organization of Pakistan ("IPOP") Act, 2012 was enacted on 06.12.2012, S. 2(h) of which defined "Intellectual Property Laws" as the laws specified in the schedule to the Act which include (i) The Trade Marks Ordinance, 2001, (ii) The Copyright Ordinance, 1962; (iii) The Patents Ordinance, 2000, (iv) The Registered Designs Ordinance, 2000, (v) The Registered Layout-Designs of Integrated Circuits Ordinance, 2000 and Ss. 478, 479, 480, 481, 482, 483, 485, 486, 487, 488 and 489 of Pakistan Penal Code, 1860---Question for determination before the High Court was as to "Whether, after the Intellectual Property Organization of Pakistan Act, 2012 (the "Act, 2012") and the Trade Marks (Amendment) Act, 2023, the High Court could still hear trademark suits, including infringement, passing off, or cancellation cases filed before or after 29.12.2015, or if all such cases had to be sent to the Intellectual Property Tribunal"?---Held: According to S. 17(1) of the Act, 2012, matters pertaining to Intellectual Property Laws pending in any Court were to be transferred to the Intellectual Property Tribunal under S.16 of the Act, 2012---However, the IP Tribunal in Sindh was not established until 02.12.2014---Thereafter on 29.12.2015, S. 15 as well as subsections (2), (3), (8), (9), (10), (11) and (12) of S. 16 and Ss. 17, 18 & 19 of the said Act came into force with immediate effect---Moreover, where a suit included passing off along with trademark infringement, such action also fell within the scope of Act, 2012, and such suit was also to be instituted before the IP Tribunal---The Supreme Court in the case reported as 2022 SCMR 979 clarified that suits combining passing off with infringement were not beyond the IP Tribunal's jurisdiction---The old S. 117 of Trade Marks Ordinance, 2001 stood duly amended by the Trade Marks (Amendment) Act, 2023, and closed the door to any future filing of suits for infringement before the High Court---A suit for infringement and enforcement of all rights attached thereto was to be made before the IP Tribunal---However, there was an option in some instances to apply to the High Court where any suit or proceeding concerning the trademark was pending involving an application for revocation, an application for declaration of invalidity, an application for rectification, etc---In all such instances, an action in the High Court would be maintainable---The six (6) Category "A" suits were transferred to the Tribunal established under S. 16 of the Act, 2012---With regard to Category "B" Suits, the plaints were returned to the plaintiffs to enable them to avail the jurisdiction of the IP Tribunal---As regards Category "C", it was ordered that suit along with J.M 34 of 2020 was to proceed in the High Court of Sindh at Karachi in its normal course as these matters related to revocation/removal/cancellation of trademarks.

Muhammad Multazam Raza v. Muhammad Ayub Khan 2022 SCMR 979 rel.

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

----Ss.2(h), 16, 17, 18 & 39---Trade Marks Ordinance (XIX of 2001), S.6---Overriding effect of Intellectual Property Organization of Pakistan Act, 2012---Scope---It prevails over Trade Marks Ordinance, 2001---Section 6 of the Trade Marks Ordinance, 2001 states that the provisions of this Ordinance shall be in addition to and not in derogation of any other law for the time being in force---Further, S. 39 of Intellectual Property Organization of Pakistan Act, 2012 ('IPOP, 2012') states that the provisions of IPOP, 2012 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force---Thus the provisions of IPOP, 2012 will trump the provisions of Trade Marks Ordinance, 2001.

Muhammad Shaikh, Saifullah Sachwani, Amna Salman and Musharaf Asraf for Plaintiff (in Suit No.200 of 2020 and for Respondent in J.M. No.34 of 2020).

Hania Haroon, Alizeh Mehak and Hassan Zaman Khan for Applicant (in Suit No.200 of 2020 for Defendant and in J.M. No.34 of 2020)

Aitezaz Mansoor for Plaintiff (in Suit No.226 of 2004).

Mirza Mehmood Baig for Plaintiff (in Suit No.08 of 2005 and Defendant in J. Misc. No.34 of 2020).

Liaquat Hussain Khan for Plaintiff (in Suit No.2232 of 2016).

Saleem Khan holding brief for Nadeem Qureshi (in Suit No.584 of 2010).

Salman Ahmed Shaikh holding brief for Sultan Ahmed Shaikh for Plaintiff (in Suit No.226 of 2004 for Defendant and in Suit No.763 of 2010).

Jehangir holding brie for Abid H. Puri for Defendant (in Suit No.2679 of 2016).

Qamaruddin for Plaintiff (in Suit No.2679 of 2016).

Ms. Saira Shaikh.

2025 C L D 1130

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

PAKISTAN STATE OIL COMPANY LIMITED (PSO)---Appellant

Versus

Messrs GILLANI (PVT.) LIMITED and another---Respondents

H.C.A. No.211 of 2011, decided on 6th February, 2025.

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

----S. 34---Stay of legal proceedings---Principle---For arbitration an applicant must remain ready and willing to properly partake in arbitration proceedings.

(b) Maxim---

----Actus curiae neminem gravabit---Meaning---Act of Court should prejudice no man.

Abid Jan v. Ministry of Defence 2023 SCMR 1451 rel.

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

----Ss. 30 & 34---Intra Court Appeal---Suit for recovery of money---Arbitration proceedings---Objection to award---Appellant / plaintiff filed suit for recovery of money from respondent / defendant---During proceedings, respondent / defendant sought stay of proceedings and the matter was forwarded to arbitrator but on his failure to pay requisite fee to the arbitrator matter was delayed---Appellant / plaintiff sought the suit restored but Trial Court after recording of evidence dismissed the suit on ground that it could not have been restored---Validity---Award which had been made after issuance of a supersession order passed by Trial Court was liable to be set-aside---After order of restoring the suit was passed by Trial Court, award could not have been made by an arbitrator even if the matter had been referred back and decided in arbitration---Division Bench of High Court set aside the order passed by Judge in who Chambers of High Court who insisted on the matter only being decided through arbitration proceedings---Division Bench of High Court set aside judgment and decree passed against appellant / plaintiff and the matter was remanded to Trial Court for decision afresh---Intra Court Appeal was allowed, in circumstances.

AIR 1957 Patna 712; AIR 1956 Rajhastan 129; AIR 1966 Madhya Pradesh 177; AIR 1959 Bombay 549; AIR 1963 Andhra Pradesh 28; AIR 1958 Madras 420; AIR 1978 Madras 91; AIR 1938 Madras 205; Director Housing, A.G's Branch, Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988; Muhammad Hanif v. Eckhard and Co. Marine GMBH and 2 others PLD 1983 Kar. 613; 2002 CLD 671; 2009 MLD 1396; WAPDA v. Naeem Trading Co. 1982 CLC 353; Abbasia Cooperative Bank's PLD 1997 SC 3; Abid Jan v. Ministry of Defence 2023 SCMR 1451; PLD 2018 SC 40; PLD 2002 SC 1111; 1994 SCMR 1555 and 1982 SCMR 494 ref.

Ghulam Muhammad Dars for Appellant.

Aqib Hussain and Abdur Razzak for Respondent No.2.

2025 C L D 1158

[Sindh]

Before Muhammad Saleem Jessar and Jawad Akbar Sarwana, JJ

ALI RAZA MUGHERI---Appellant

Versus

GHULAM RASOOL and 2 others---Respondents

First Appeal No.D-01 of 2024, decided on 13th March, 2024.

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

----Ss.9, 10 & 22---Civil Procedure Code (V of 1908), O. VII, R. 11---Specific Relief Act (I of 1877), Ss. 42 & 56---Suit for declaration, settlement of accounts with permanent injunction---Filing of application for leave to appear and defend the suit by the respondent/bank---Suo motu exercise of power by the Banking Court for rejection of plaint under O. VII, R. 11, C.P.C.---Scope---Examination of cause of action by Banking Court with or without application for leave to appear and defend the suit---Scope---Claim of the appellant/customer was that Banking Court without first deciding the pending applications had resorted to rejecting the plaint under O. VII, R. 11, C.P.C.---Validity---Banking Court considered respondent-bank's oral submissions and filed documents, but did not assess the plaint to determine if a cause of action existed---Banking Court should have decided the application for leave to defend and the cause of action issue simultaneously and such holistic determination should have been made after examining the pleadings, noting the parties' averments and considering the counsel' oral submissions---Application for leave to defend should have been decided along with the legal points, which would have included a discussion on the cause of action---When the Banking Court found itself going beyond the examination of the plaint to determine if there was a "cause of action", it should have avoided an approach to pick and choose from the application for leave to defend and not to decide the application from which it had selected the facts relied upon to decide the issue of "cause of action"---Depending on the facts and circumstances of each case, the issue of cause of action may be one of the substantial questions of law or fact which has been raised in the pleading or taken up suo motu by the Banking Court in deciding the leave to defend application under the Financial Institutions (Recovery of Finances), Ordinance, 2001 (Ordinance)---Thus, when the Banking Court found itself overreaching, i.e., relying on material beyond the plaint, to decide the cause of action, it should have changed gears and proceeded to decide the issue of cause of action within the context of the leave to defend---Appeal was allowed in the circumstances and the matter was remanded to Banking Court for decision afresh after first deciding the application for leave to defend.

Gulistan Textile Mills Ltd. v. Askari Bank Ltd. and others 2013 CLC 2005 and Imran Hussain v. Banker's Equity Limited 2019 CLC 272 rel.

Atta Hussain Chandio for Appellant.

Nemo for Respondents Nos.1 and 2.

Ghulam Ali Abbasi for Respondent No.3.

Oshaq Ali Sangi, Assistant Advocate General for Pakistan.

2025 C L D 1171

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

SHABBIR AHMED through legal heirs and another---Appellants

Versus

Messrs JS GLOBAL CAPITAL LIMITED through CEO---Respondent

H.C.As. Nos.211 to 214 of 2024, decided on 20th March, 2025.

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

----S. 9---Civil Procedure Code (V of 1908), S. 20 & O. VII, R. 10---Suits for recovery of finances, filing of---Territorial jurisdiction, determination of---Scope---Suits to be instituted where defendants reside or cause of action arises---Determination---Applications for return of plaints filed by the appellants/defendants were dismissed by the Single Judge of High Court in terms of Clause "c" of S. 20, C.P.C.---Validity---Clauses "a", "b "and "c "of S. 20, C.P.C., are not mutually exclusive to one and other---It is not the scheme of S. 20, C.P.C. that in the cases where clause "a" is attracted, clause "b" and "c" would be excluded or in case clause "b" or "c" is attracted, clause "a" would be excluded and rendered irrelevant---Joint reading of clauses "a", "b" and "c" of S. 20, C.P.C., depicts that the plot thereunder is inclusively implying that if any of the provisions is attracted the plaintiff would have an option to take its benefit and file the suit accordingly---Three clauses are mutually beneficial to each other and provide to the plaintiff an opportunity to file the suit at either of the places transcribed thereunder---This could be a place where defendant (s) either resides, carries on business or personally works for gain, but in case, he resides at place "a", carries on business at place "b" and personally works for gain at place "c", then plaintiff will have liberty to file suit at either place, thus, the defendant cannot question maintainability of the suit on the ground that since he/she is living /residing at place "a", the plaintiff cannot file the suit at place "b", where he/she carries on business, because the proposition under S. 20, C.P.C. is not mutually exclusive or destructive, but inclusive, accommodative and beneficial---For deciding an application under O.VII, R. 10, C.P.C., the facts disclosed in the plaint are to be considered true on their face value for the purpose of deciding atleast territorial jurisdiction of the court to adjudicate the matter---All the facts narrated in the plaint prima facie show jurisdiction of the court at Karachi in the matter in terms of clause "c" of S. 20, C.P.C.---Appellants while making counter claim in the suit had admitted the territorial jurisdiction of the court at Karachi---When the appellants in their own written statement, while putting up counter claim, had accepted territorial jurisdiction of the court, their summersault in the shape of applications under O. VII, R. 10, C.P.C., at later stage could not be given much credence, not the least when in support of such applications nothing substantial had been brought before the court for excluding a consideration under clause "c" of S. 20, C.P.C., barring the fact that the respondents were residents of Lahore and particularly when by admitting the fact that certain activities benefiting the appellants had taken place at Karachi, the appellants had sealed the jurisdiction of the court at Karachi---High Court Appeals were dismissed, in circumstances.

Wasif Riaz for Appellants.

2025 C L D 1183

[Sindh]

Before Muhammad Shafi Siddiqui and Omar Sial, JJ

MAHMOODA TAPAL and another---Appellants

Versus

STANDARD CHARTERED BANK (PAKISTAN) LTD. and another---Respondents

High Court Appeal No. 202 of 2019, decided on 20th May, 2024.

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

----Ss. 151 & 152---Bank-locker contents---Bailment and bailee---Responsibility of loss---Appellants/plaintiffs alleged that valuables lying in their locker with respondent/bank were stolen and they had claimed recovery of their loss from the bank---Trial Court dismissed the suit---Validity---No responsibility would hinge on respondent/bank under the law of bailment if (i) bailment was proved and (ii) if respondent/bank had taken as much care of the goods bailed to them as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed---To make out a cause of action in bailment, appellants/plaintiffs had to prove (i) a transfer of possession of property and (ii) an obligation to do something with the property, such as to store it, use it for a specified purpose, or hold it subject to satisfaction of security, whether or not for payment---For a contract of bailment, a transfer of possession (delivery) of bailed goods must occur---Division Bench of High Court in exercise of appellate jurisdiction had to decide the matter within specific parameters, to see if laws and the evidence could allow claim of appellants/plaintiffs but they failed to establish their claim---Appeal was dismissed, in circumstances.

Mahmooda Tapal and another v. Standard Chartered Bank PLD 2021 Sindh 28; New India Insurance Company Limited and another v. The Delhi Development Authority and others AIR 1991 Delhi 298; Bank of Chitur Limited v. P Narasimhulu Nidu and others AIR 1996 A.P. 163; Morvi Mercantile Bank Limited v. Union of India AIR 1965 SC 1954; Cooperative Hindustan Bank Limited v. Surindranath Dey and others AIR 1932 Calcutta 524; Sikandar Hayat v. Sughra Bibi 2020 SCMR 214; Hafiz Tassaduq Hussain v. Lal Khatoon PLD 2011 SC 296; Noor Jehan Begum v. Mujtaba Ali Naqvi 1991 SCMR 2300; Malik Tariq Mehmood v. Province of Punjab 2023 SCMR 102; Farzand Ali v. Khuda Buksh PLD 2015 SC 187; Muhammad Rafique v. Abdul Aziz 2021 SCMR 1805; Mahmood Khan v. Sara Akhter 2024 SCMR 178 and Jahangir v. Mst. Shams Sultana 2022 SCMR 309 ref.

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

----Arts. 38 & 39---Extra judicial confession---Principle---Extra judicial confession made by any accused is inadmissible in evidence according to Arts. 38 & 39 of Qanun-e-Shahadat, 1984, specially before registration of FIR

Zahid F. Ebrahim for Appellants.

Hassan Arif for Respondents.

2025 C L D 1269

[Sindh]

Before Muhammad Jaffer Raza, J

Messrs JS BANK LIMITED through Authorized Attorney---Plaintiff

Versus

Messrs GULSHAN SPINNING MILLS LIMITED through Chief Executive / Director---Defendant

Suit No.B-64 of 2012, decided on 30th April, 2025.

Companies Act (XIX of 2017)---

----Ss. 6(14), 279 & 283---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001),Ss. 9 & 19---Reference by Official Assignee---Release of sale proceeds---Scheme of Arrangement---Objection, non-filing of---Official Assignee sought permission to release sale proceeds of pledged goods to the agent, in accordance with the Scheme of Arrangement---Bank objected to release of sale consideration under Scheme of Arrangement earlier approved by High Court on the plea that it had filed suit for recovery of finance---Validity---While hearing Reference filed by Official Assignee, High Court could not delve into the Scheme of Arrangement as the same was sanctioned by High Court in its company jurisdiction under Companies Act, 2017---Leave to defend application was neither heard nor decided---Bank, subject to decree passed in its favour, could file for execution under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Neither the decree nor entire exercise would be in vain---It was open for bank to have assailed the Scheme under S. 6(14) of Companies Act, 2017---Omission of bank to assail Scheme of Arrangement in such regard was fatal---High Court directed the Official Assignee to release the amount lying with him to the "Agent" after deduction and adjustment of the amount referred by Official Assignee---Reference was allowed accordingly.

Paramount Spinning Mills Limited and others' case 2020 CLD 1443; Messrs Pakland Cement Limited's case 2002 CLD 1392 and Gulshan Weaving Mills Limited v. Al Baraka Bank Limited 2018 CLD 737 rel.

Khawaja Shamsul Islam for Plaintiff.

Muhammad Ali Akbar and Hameed Bukhsh for Defendant No.1.

Ms. Heer Memon for UBL Bank.

Hashmatullah Aleem for Bank Al-Falah.

Baqar Raza for Intervener.

Order

Muhammad Jaffer Raza, J.---1-13. Adjourned.

1. Deferred.

14-15. Through the instant order Official Assignee's References Nos. 13/2020 and 14/2025 shall be adjudicated and necessary orders shall be passed thereon.

Brief facts pertaining to the said reference are noted hereinafter. Vide order dated 07.04.2015 the learned Official Assignee was directed to sell the pledged goods. Subsequently, an offer was received and the same was accepted which is reflected in the order dated 28.08.2015. The total consideration for the said sale was agreed, amount of which is reflected in Official Assignee Reference No.13/2020. Thereafter, the matter came up for further orders. It is also reflected in the said reference that vide letter dated 09.07.2020, the scheme of arrangement in petition bearing J.C.M. No.14/2019 under Sections 279 and 283 of the Companies Act, 2017 ("Act, 2017") was placed before the Official Assignee. The said scheme was allowed by this Court in the above-mentioned petition vide order dated 06.02.2020. It was requested that the amount as reflected in the Reference No. 13/2020 be released in accordance with the scheme of arrangement.

Learned counsel M/s. Muhammad Ali Akbar, Hameed Bukhsh, Heer Memon, Hashmatullah and Baqar Raza, advocates have jointly argued that the scheme of arrangement was approved by this Court in the above-mentioned petition and the said scheme was not impugned by the Plaintiff bank. They have further stated that considering the said scheme was not impugned before any competent forum, therefore, it is not open to creditors who are alien to the scheme of arrangement, to dispute the same at this stage and forum. Learned counsel has relied upon the following judgments: -

l Paramount Spinning Mills Limited and others

l Messrs Pakland Cement Limited

Conversely, learned counsel on behalf of the Plaintiff bank has stated that the banking suit has been preferred under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("FIO, 2001") and leave to defend application is pending adjudication. He has further stated that if the sale consideration as reflected in the above-mentioned reference of the Official Assignee is released to the "Agent", pursuant to the scheme of arrangement, the suit which is pending adjudication will be frustrated. He further argued that the Plaintiff bank has not participated in the above scheme and therefore, entire sale consideration which is lying with the learned Official Assignee may be released to the Plaintiff bank. He has further argued that there are orders in the instant banking suit and the same cannot override the orders of an order of another learned Single Judge of this Court. Learned counsel has thereafter invited my attention to salient features of the scheme of arrangement which reflects that the Plaintiff bank in the instant suit is also a creditor. He has specifically referred to schedule "F" of the scheme of arrangement which refers to the pendency of the instant suit. He further referred to schedule "C" and in this regard states that the liability of the Plaintiff bank in the instant suit is clearly laid down and recognized in the said scheme. He has, thereafter, relied upon Sections 3 and 4 of the FIO, 2001 and stated that the same will override other laws as the same is special law which determines all the disputes between the financial institution and the customer. He has averred that he will be running from "pillar to post" for satisfaction of his potential decree in the instant suit if the amount lying with the Official Assignee is released to the "Agent" and the Plaintiff Bank will be left with a "paper decree" without any possibility of its realization. He has further contended that the said scheme of arrangement is contrary to the provisions of Sections 279, 280, 283 and 285 of the Act, 2017. He has lastly referred to order dated 01.07.2015 in which it was ordered that the sale proceeds may not be released to the Plaintiff bank without permission of this Court but shall be considered at the time of release/distribution of the sale proceeds.

I have heard all learned counsels and perused the record. I have specifically examined the references which are being adjudicated vide the instant order. It is clear that the scheme of arrangement was sanctioned by this Court in petition bearing J.C.M. No. 9/2020 and the same was sanctioned vide order dated 24.11.2021. At this juncture, I have examined the scheme of arrangement which defines UBL as the Agent in clause 1.1. The scheme coined under the Act, 2017 is peculiar and envisions that once a scheme of arrangement has been approved and sanctioned by the competent Court it is not open to any other creditor and/or alien to the proceedings to raise objections on the same. My discretion in respect of the reference filed by the Official Assignee is restricted only to adjudicate as to whether the amount which is lying with the Official Assignee can be released to the Agent mentioned in the scheme of arrangement. It is not open for me to examine the validity and legality of the said scheme. The arguments advanced by the learned counsel for the Plaintiff bank in this reference merit no consideration. A similar issue came up in the case of Paramount Spinning Mills Ltd. (supra). The contention of the learned counsel in the cited judgment (only reproduced to exhibit the similarity in the argument) and findings of the Court are reproduced below: -

"4…….He has also referred to the provisions of F.I.O. and has contended that this being a special law, must override any other provisions of Companies Act and in terms of the F.I.O., no such Scheme can be approved, whereas, it is only the Banking Court(s) having jurisdiction, who can decide the cases in accordance with F.I.O. Insofar as the judgment of the learned Division Bench in the case of Gulshan Weaving Mills Limited (Supra) as relied upon by the learned Counsel for the Petitioner No.1 is concerned, he has argued that on facts the same is not squarely applicable, whereas, even the said judgment supports the case of the objectors. He has prayed for dismissal of the Petition."

20. In view of hereinabove facts and circumstances of this case I am of the view that the objections of Bank of Punjab cannot be sustained as the law is already settled in our jurisdiction through the case of Gulshan Weaving Mills Limited (Supra), which is a Division Bench judgment of this very Court, whereas, even in the English and Indian Jurisdiction the same principle applies that if once a Scheme of arrangement or a compromise is agreed upon by a class of creditors and a resolution to that effect is passed by them, then the said Scheme is binding on all including the non-consenting creditors. Since all requisite formalities as prescribed in law have been completed and complied with by the petitioners in accordance with the Companies Act, 2017 read with the Companies (Court) Rules, 1997, and I am satisfied that the petitioners have made out a case, therefore, the petition is allowed as prayed. The Petitioners to act further pursuant to the grant of this petition in accordance with the approved Scheme in question."

It is apparent from the reading of the above quoted judgment that learned Single Judge of this Court after examining various judgments from multiple jurisdictions, has held that once a scheme of arrangement is agreed upon by a class of creditors, the said scheme is binding on all non-consenting creditors. The learned Single Judge in this regard placed reliance on the case of Gulshan Weaving Mills Limited v. Al Baraka Bank Limited where the learned Division Bench was pleased to overrule identical objections and the scheme was allowed by the learned Division Bench of this Court. The arguments of the learned counsel for the Plaintiff bank are similar to the arguments raised by the learned counsel in the judgment of Pakland Cement Limited (supra). The said arguments are reflected in paragraph number 5 and are reproduced below:-

"5(b)under section 27 of the Financial institutions (Recovery of Finances) Ordinance. 2001 (hereafter referred to as "the 2001 Ordinance"), any proceedings. judgment or decree passed by the Banking Court cannot be revised, reviewed or recalled by any other Court- except in appeal under section 22 of the 2001 Ordinance. Through the present petition the petitioner seeks modification and alteration of the orders/judgments/decrees/ proceedings finalized by the Banking Court. As such any assumption of jurisdiction under section 284 of the 1984 Ordinance would violate the finality clause contained in the 2001 Ordinance. Further reliance is placed upon section 7(4) of the 2001 Ordinance which provides that no Court other than the Banking Court shall have jurisdiction in relation to the matters falling within the scope of the Banking Court including execution of decrees. It is contended that as the matter concerns execution of the decrees, the Company Judge has no jurisdiction. Reliance is also placed upon section 4 of the 2001, Ordinance which gives the said Ordinance an overriding effect on all or any other law inconsistent therewith. In particular reference is invited to the following judgments, wherein it has been contended that a special law overrides general law and since in the present case the 2001 Ordinance is a special law it overrides the 1984 Ordinance which is a general law."

After recording the contention of the learned counsel, the learned single judge held as under: -

8. The second objection of Mr. Mandviwala that any assumption of jurisdiction in the present case would violate sections 27, 7(4) and 4 of 2001 Ordinance also seems out of order. Through the present scheme of Arrangement recoveries of outstanding debts is being facilitated with the collateral attempt to keep the petitioner alive. There is nothing in the Banking Laws or the Civil Procedure Code which mandates that no attempt should be made to keep a Company alive. In the present scheme of Arrangement there is also no attempt to reduce the decretal amounts or the amounts owed by the petitioner to Banks/DFIs and Financial Institutions. As such the present proceedings can by no means be construed as being in conflict with the decrees/orders or judgments passed by the Banking Court or any appeals thereto. As such sections 27, 7(4) and 4 of the 2001 Ordinance neither stand violated nor there is any conflict thereof with section 284 of the 1984 Ordinance. This is not the first time when the Legislature in its own wisdom has provided for banking laws to co-exist with the provisions in the companies jurisdiction for rehabilitation and restructuring. Under the Companies Act, 1913 sections 153 and 153-A had provided for facilitation of arrangements and compromise in a manner similar to section 284 of the 1984 Ordinance. While the Companies Act, 1913 occupied the field sections 3, 6(4) and 11 of the Banking Companies (Recovery of Loans) Ordinance, 1979 co-existed which provided for overriding of the Banking Laws, ouster of jurisdiction of other Courts in matters to which the Special Court (i.e. Banking Court) had jurisdiction and finality attached to the orders/judgments/decrees of the Special Court i.e. Banking Court, respectively, in a manner similar to the arrangement envisaged under the 2001 Ordinance. Upon the advent of the 1984 Ordinance, the Banking Tribunals Ordinance, 1984 was also brought in the field which also provided for overriding effect of the banking laws (section 3), ouster of jurisdiction of other Courts (section 5(3)) and finality attached to orders of the Banking Tribunal including execution proceedings (sections 10 and 11). However, the law-makers in their own wisdom enacted section 284 of the 1984 Ordinance and the two schemes co-existed. Even under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 section 3 contained the overriding clause, section 7(4) provided the ouster clause and section 27 provided the finality clause. The law-makers legislated the Banking Law regime without any amendment in the scheme of section 284 of the 1984 Ordinance. Even in India, under the Indian Companies Act, 1956 sections 391, 392, 393 and 394 provide for enforcing a scheme of arrangement for the purposes of reconstruction and rehabilitation of companies. In the Province of East Pakistan v. Siraj-ul-Haq Patwari PLD 1966 SC 854 the Honourable Supreme Court has been pleased to observe that laws should be interpreted in a manner so as to be saved rather than destroyed. Unless and until there is a clear cut conflict which is irreconcilable, the Courts should lean in favour of a harmonious interpretation so as to avoid any conflict and keep the laws operating in their occupied fields in order to avoid any provision becoming redundant or surplus (see PLD 1963 SC 663). The interpretation offered by the learned counsel for the objectors would leave section 284 of the 1984 Ordinance and the entire scheme for any restructuring and rehabilitation redundant. There is no conflict between the banking laws and the scheme of section 284 of the 1984 Ordinance. The two co-exist as they have co-existed before. As such the objection regarding jurisdiction is hereby repelled.

I have already observed above that whilst hearing the abovementioned reference I cannot delve into the scheme of arrangement as the same was sanctioned by this Court in its company jurisdiction under the Act, 2017. In regards to the objection of the learned counsel for the Plaintiff bank in respect of the instant suit pending adjudication, it is noted that that leave to defend application is yet to be heard and decided. The Plaintiff bank, subject to instant suit being decreed in their favor, can file for execution under Section 19 of the FIO, 2001 and, therefore, I disagree with respect to the learned counsel for the Plaintiff bank that the decree and the entire exercise will be in vain. Further, it was open for the Plaintiff Bank to impugn the said scheme under Section 6 (14) of the Act, 2017. The same is reproduced below: -

2025 C L D 1300

[Sindh (Hyderabad Bench)]

Before Muhammad Faisal Kamal Alam and Khadim Hussain Soomro, JJ

MAZHARUDDIN---Appellant

Versus

The MANAGER SME LEASING LTD.---Respondent

1st Appeal No.12 of 2018, decided on 6th November, 2024.

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

----Ss.2(c), 2(d) & 9---Civil Procedure Code (V of 1908), O.VII, R.10---Suit for declaration and recovery of damages against the bank---Purchase of CNG station in auction proceeding---Cancellation of sale deed and delay in return of bid money---Non-existence of relationship of bank and customer---Civil Court, jurisdiction of---Banking Court instead of returning the plaint dismissed the same on the ground of limitation while observing that appellant did not fall within the definition of 'Customer' as defined in S.2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Transaction of auction purchase and the relationship between the appellant and respondent-bank was neither of 'Finance' nor 'Customer', which was also observed in the order, yet, the Banking Court dismissed the suit on merits, although it did not have jurisdiction to decide the lis in terms of the Banking Law, thus, the order was also self-contradictory---Proper course was to return the plaint, as was done in the earlier suit of similar nature---Order of Banking Court being illegal and without jurisdiction could not be sustained; consequently, the same was set aside and the plaint was directed to be returned and to be filed in the court of competent jurisdiction, which after ceasing of the matter could decide the maintainability issue and all other issues on merits---First Appeal was allowed, in circumstances.

Al-Baraka Bank [Pakistan] Limited v. Raja Ashfaq Hussain 2013 CLD 511 rel.

Aamir Ali Memon for Appellant.

2025 C L D 1344

[Sindh]

Before Zafar Ahmed Rajput and Arshad Hussain Khan, JJ

Mrs. SHAMIM BANO and another ---Appellants

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED ---Respondent

1st Appeal No. 191 of 2017, decided on 26th April, 2025.

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

----S. 9(2)---Bankers' Books Evidence Act (XVIII of 1891), Ss. 2(8) & 4---Plaint---Statement of Account to be "supported by"---Requirement---Scope---Verification/attestation of Statement of Account---Procedure---Customers filed appeal as the Banking Court, after dismissing their application to leave to defend, decreed suit against them, relying on submitted documents---Validity---Pertinently, S. 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001') provides that the plaint shall be "supported" by a "Statement of Account" which shall be duly certified under S. 2(8) of Bankers' Books Evidence Act 1891 ('the Act 1891')---The "Statement of Account" is a continuous daily posted record showing in detail all debits , credits and balance as on the close of the period , giving dates and description, permitting customer to verify the Bank's record with his own---Therefore, the "statement of account" is a basic document that is filed by a financial institution before the Court in discharge of its mandatory duty under S. 9(2) of Ordinance, 2001---If such "statement of account" is not filed along with the plaint, a customer will obviously remain totally unaware of the record---In the present case, the Statement of Account filed by the Respondent-Bank with plaint in the suit, being incomplete and unsubscribed by the principal accountant or manager, did not fulfill the mandatory requirement of the provisions of S. 9(2) of the Ordinance 2001 and Ss. 2(8) & 4 of Bankers' Books Evidence Act 1891 ('the Act 1891'), therefore, the same did not qualify as a "Statement of Account" duly certified under the Act 1891, as it did not contain the details of entire transactions between the respondent /Bank and appellants/customers during finance limit period---Besides, Statement of Account was undated and had been subscribed allegedly by an attorney of the Respondent-Bank instead of being subscribed by its principal accountant or the manager, as required under S. 2(8) of the Act 1891---It was only the principal accountant or the manager of the financial institution who alone could certify the statement---Hence, a Statement of Account signed/subscribed by the Attorney of the bank cannot be treated as a duly certified copy within the meaning of S. 2(8) of the Act 1891---It appeared that the Trial/Banking Court had ignored the mandatory provisions of S. 9(2) of the Ordinance, 2001 and Ss. 2(8) and 4 of the Act, 1891 while decreeing the suit of the Respondent and had wrongly treated the Break-up of Account as Statement of Account which did not contain the requisite information and detail as required under proper statement of account; hence, the impugned judgment/decree passed by the Trial Court was not sustainable in law---Appellate / High Court set-aside the judgment and decree as well as dismissal order of application for leave to defend the suit and remanded the case to the Banking Court to decide the application of the appellants for leave to defend as well as the suit afresh, while the respondent-Bank would be at liberty to file proper Statement of Account in terms of S. 9(2) of the Ordinance, 2001 and Ss. 2(8) & 4 of the Act 1891, and in such case, the appellants may raise/file such objections thereon as they may deem fit---Appeal, filed by customer, was allowed accordingly.

Elbow Room and another v. MCB Bank Limited 2014 CLD 985; United Bank Limited v. Messrs Ilyas Enterprises through Proprietor Ilyas Malik and 2 others 2004 CLD 1338 and C.M. Textile Mills (Pvt.) Limited through Chairman v. Investment Corporation of Pakistan 2004 CLD 587 ref.

Saalim Salam Ansari for Appellants.

Khalid Mahmood Siddiqui and Ghulam Rasool Korai for Respondent.

2025 C L D 1355

[Sindh]

Before Aqeel Ahmed Abbasi and Kausar Sultana Hussain, JJ

Messrs PANGRIO SUGAR MILLS LTD through duly Appointed Officer ---Appellant

Versus

BANKERS EQUITY LIMITED (in liquidation) through Official Assignee and 5 others ---Respondents

Special High Court Appeal No. 199 of 2017, decided on 22nd December, 2022.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, R. 92---Execution of decree---Confirmation of sale---Consideration less than reserve price---Appellant / Judgment Debtor was aggrieved of confirmation of sale through auction due to inadequacy of sale price---Plea raised by appellant / judgment debtor was that sale price was neither supported by any independent evaluation or any offer of any prospective buyer, whereas inspite of repeated attempts none come forward to offer any bid whatsoever for subject mill---Validity---Court sale is a forced sale and contains certain elements of risk with a chance of litigation and for such reasons properties auctioned by Court do not usually fetch reasonable price as per market value, which it otherwise could fetch between two private persons---In respect of sale by Court there is no straight jacket formula for determination of sale price---Relevant laws of execution of decree provide maximum opportunities to mortgagor to redeem property and discourage any clog against equity of redemption but do not provide undue favour to prolong execution or auction proceedings on flimsy grounds to a chronic defaulter who fails to make payment of admitted liability pursuant to compromise decree inspite of long period of time provided by Court---Once auction is conducted successfully the auctioneer's report must be taken up in Court for orders at the earliest, if not on the next day accepting or rejecting the sale---In the present case sale was confirmed after adopting all required legal formalities as provided under O. XXI C.P.C. and relevant rules---High Court declined to interfere in auction proceedings as there was no illegality, infirmity, misreading or non-reading of facts by Executing Court---Appeal was dismissed in circumstances.

Zakaria Ghani v. Muhammad Ikhlaq Memon 2016 CLD 480 and 2011 CLD 486 ref.

Agha Zafar and Jazib Ali Shaikh for Appellant.

M. Umar Lakhani and Khalid Mehmood Siddiqui for Respondent No. 2.

Dr. Faiz H. Shah for Respondent No. 6.

Khair Muhammad, representative of Official Assignee.

2025 C L D 1381

[Sindh]

Before Muhammad Shafi Siddiqui, CJ and Jawad Akbar Sarwana, J

MAHLE ENGINE COMPONENT JAPAN CORPORATION through Authorized Attorney and others---Appellants

Versus

AZAM AUTOS through Proprietor and others---Respondents

High Courts Appeals Nos.264 of 2021 and 01 and 02 of 2022, decided on 17th January, 2025.

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

----Ss.16 & 39---Trade Marks Ordinance (XIX of 2001), Ss.2(li), 6, 67 (3), 68, 90, 116 & 117---Law Reforms Ordinance (XII of 1972), S. 3---Intra Court Appeal---Intellectual Property and Trade Marks---Infringement of rights---Jurisdiction---Which forum to decide dispute pertaining to intellectual property and trade mark rights---Held: Provisions of Trade Marks Ordinance, 2001 are in addition to and not in derogation of any other law for the time being in force---Provisions of Intellectual Property Organization of Pakistan Act, 2012 have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force---Provisions of Intellectual Property Organization of Pakistan Act, 2012, trump provision of Trade Marks Ordinance, 2001---At the same time, Trade Marks (Amendment) Act, 2023 has also modified definition of "Tribunal" under S. 2(li) of Trade Marks Ordinance, 2001---In the amended definition of S. 2(li) of Trade Marks Ordinance, 2001 "Tribunal" means the Registrar, as the case may be, the High Court or Intellectual Property Tribunal before which proceedings concerned are pending---Consequence/significance of retaining reference to "the High Court" in S. 2(li) of Trade Marks Ordinance, 2001 even after creation of "Intellectual Property Tribunal" under Intellectual Property Organization of Pakistan Act, 2012 on Trade Marks Ordinance, 2001, and in particularly S. 116 of Trade Marks Ordinance, 2001 remains subject to a judicial determination as and when it is triggered---After Trade Marks (Amendment) Act, 2023: (i) suits for infringement of a trade mark under S. 117 of Trade Marks Ordinance, 2001 (the word "infringement" under the trademarks regime has a definite meaning), as well as (ii)those matters which fall within the framework of the phrase in S. 117 of Trade Marks Ordinance, 2001, described as suit(s) "otherwise relating to any right in a trade mark", which may relate to enforcement of such rights as those specified under S. 67(3) of Trade Marks Ordinance, 2001 [unfair competition], S. 68 of Trade Marks Ordinance, 2001 [misleading and comparative advertising], S. 90 of Trade Marks Ordinance, 2001 [acts of agent or representatives], etc. - all such matters - both (i) and (ii) above - from 16-08-2023 onwards were to be instituted / filed before Intellectual Property Tribunal---After removing the word "District Court" in S.117 of Trade Marks Ordinance, 2001 by way of Trade Marks (Amendment) Act, 2023, no suit for infringement and enforcement of all such rights was to be instituted in any Court except an Intellectual Property Tribunal---High Court directed to transfer file of the suit to Intellectual Property Tribunal---Intra Court Appeal was disposed of accordingly.

Muhammad Multazam Raza v. Muhammad Ayub Khan 2022 SCMR 979 rel.

Ms. Hanya Haroon and Syed Hassan Zaman Shah for Appellant (in High Court Appeal No.264 of 2021).

Zark Ahmed Khan Ghory for Respondents (in High Court Appeal No.264 of 2021).

Salman Ahmed Shaikh for Appellant (in High Court Appeal No.01 of 2022).

Zark Ahmed Khan Ghory and Khalid Daudpota for Respondents (in High Court Appeal No.01 of 2022).

Salman Ahmed Shaikh for Appellant (in High Court Appeal No.02 of 2022).

Khalid Daudpota for Respondents (in High Court Appeal No.02 of 2022).

Date of hearing: 10th December, 2024.

COMMON JUDGMENT

JAWAD AKBAR SARWANA, J.---These three (3) appeals arise out of impugned orders passed in two separate suits, namely, Suit No.2578/2014 (Muhammad Ali Barry v. Kaybee Snacks and others) and Suit No.2058/2019 (MECJC v. Azam Autos and another), instituted in the first instance jurisdiction (original side) of the High Court of Sindh at Karachi, and concern the judicial determination of two (2) trademark-related cases which were pending hearing in the High Court since the years 2014 and 2019, respectively, and were retained as per his lordship, Mr Justice Munib Akhtar, who as a Judge of the High Court of Sindh at Karachi (currently a sitting Judge of the Supreme Court of Pakistan) authored a Note/Opinion regarding the contours of transfer of such cases from the High Court of Sindh at Karachi to the Intellectual Property Tribunal established under Section 16 of the Intellectual Property Organization of Pakistan ("IPOP") Act, 2012. Following the issuance of the Note/Opinion, the defendants in the respective two suits (respondent(s) in HCA No.264/2021 and HCA No.02/2022) challenged the maintainability of the two lis instituted in the High Court under the Trade Marks Ordinance ("TM Ordinance"), 2001, i.e. whether the suit ought to be transferred and/or its plaint is to be either returned or rejected, leading to the judicial determination of each lis. These three (3) appeals also involve impugned orders passed in the two suits by the same learned Single Judge on different hearing dates: Order dated 01.11.2021 in Suit No.2058/2019 and Order dated 14.12.2021 in Suit No.2578/2014. The learned Single Judge ordered the return of the plaint(s) in each of the two suits. Both impugned orders, although passed in two separate suits, are similar and are based on the interchangeably the same reason. Hence, this Common Judgment decides all three appeals.

1. Turning to the first action, Mahle Engine Components Japan Corporation ("MECJC") filed Suit No.2058/2019 against Azam Autos and another for declaration, permanent injunction, damages, rendition of account against the infringement of plaintiff's registered trademark "IZUMI" and or its logo: i+O "i surrounded with circle" and/or from using the infringing mark "CJIZUMI" by the Defendant(s) and/or from unfair competition under the TM Ordinance, 2001 read with all enabling provisions of law. On 01.11.2021, the learned Single Judge passed orders returning the plaint to the Intellectual Property Tribunal ("IP Tribunal"). Aggrieved by the said order dated 01.11.2021 in Suit No.2058/2019, MECJC has preferred an appeal, i.e. HCA No.264/2021.

2. Plaintiff, Muhammad Ali Barry son of Zafar Ahmed Kalia ("MAB") filed Suit No.2578/2014 against Kaybee Snacks and seven (7) others for groundless threats, declaration, injunction and damages under Section 52 of the TM Ordinance, 2001. On 14.12.2021, the learned Single Judge passed an impugned order returning the plaint. Aggrieved by the Order dated 14.12.2021, MAB preferred an appeal to the said Order, viz. HCA No.02/2022.

3. Additionally, MAB, has also filed HCA No.01/2022 against MECJ and impleaded the defendants in his Suit No.2578/2014 as respondents in the said HCA alleging that he is aggrieved by the learned Single Judge order dated 01.11.2021 passed in Suit No.2058/2019 deciding that the High Court of Sindh does not have jurisdiction to institute and decide suits and other civil proceedings under "Intellectual Property Laws" as the said order effects the jurisdiction of several hundred cases pending in the Hon'ble High Court including MAB's Suit No.2578/2014.

4. At the outset, Counsel consented that this bench may proceed with the matter, in spite of one of us having conflict, namely, the undersigned, one of the signatories, so long as the appeals are decided in terms of the Judgment dated 10.01.2024, again passed by one of us, namely, the undersigned, one of the signatories, while sitting in the first instance jurisdiction (original side) of the High Court of Sindh at Karachi in Suit No.200 of 2020, M/s. Sadiq and Suharwardy v. Ismail Industries Ltd. and eight (8) other connected suits and one J. Misc. as per annexure "B" of the said Judgment.

5. We have heard the learned Counsel and perused the record.

6. By way of background, it may be noted that the President of Pakistan gave his assent to the IPOP Act on 03.12.2012, and Parliament enacted the said Act, on 06.12.2012 which was also published in the Gazette of Pakistan on the same date.

7. Section 1(3) of the IPOP Act, 2012 determines the date of the commencement of that statute and clarifies that:

". . .(3) It shall come into force with effect from 28th August, 2012, except the provisions of sections 15, 16, 17, 18 and 19 which shall come into force on such date as the Federal Government may, by notification in the official Gazette, appoint."

1. Section 16 of the IPOP Act, 2012 provides for the creation of IP Tribunals and determines how "Intellectual Property Tribunals" are to be established, clarifying that:

"16. Establishment of Intellectual Property Tribunals: (1) The Federal Government may, by notification in the official Gazette, establish as many Tribunals as it considers necessary to exercise jurisdiction under this Act, appoint a Presiding Officer for each of such Tribunal and where it establishes more Tribunals than one, it shall specify in the notification the territorial limits within which each of the Tribunal shall exercise its jurisdiction."

1. According to Section 17(1) of IPOP Act, 2012, matters pertaining to "Intellectual Property Laws" (hereinafter referred to as "IP Laws") pending in any Court shall stand transferred to the Intellectual Property Tribunal under Section 16 of the IPOP Act, 2012, and Sections 17 and 18 of the Act determine the powers and jurisdiction of such Tribunals as follows:

"17. Powers of the Tribunals. (1) Subject to the provisions of the Act, the Tribunal shall, (a) in the exercise of its civil jurisdiction, have all the powers vested in a civil court under the Code of Civil Procedure, 1908 (Act V of 1908);

(b) in the exercise of its criminal jurisdiction, try offences made punishable under this Act and shall, for this purpose have the same powers as are vested in a Court of Sessions under the Code of Criminal Procedure, 1898 (Act V of 1898);

(2) The Tribunal shall in all matters with respect to which the procedure has not been provided for in this Act, follow the procedure laid down in the Code.

(3) All proceedings before the Tribunal shall be deemed to be judicial proceedings within the meaning or sections 193 and 228 of the Pakistan Penal Code (Act XLV of 1860).

(4) Subject to subsection (5), no court other than a Tribunal shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of the Tribunal extends under this Act.

(5) Nothing in subsection (4) shall be deemed to affect any proceedings pending before such court immediately before the coming into force of this Act.

(6) All suits and proceedings pending in any court instituted under intellectual property laws shall stand transferred to, and be heard and disposed of by, the Tribunal having jurisdiction under this Act. On transfer of proceedings under this subsection, the parties shall appear before the Tribunal concerned on the date previously fixed.

(7) In respect of proceedings transferred to the Tribunal under subsection (6), the Court shall proceed from the stage which the proceedings had reached immediately prior to the transfer and shall not be bound to recall and re-hear any witness and may act on the evidence already recorded or produced before a court from which the proceedings were transferred (underling added)."

"18. Jurisdiction of the Tribunals. (1) All suits and other civil proceedings regarding infringement of intellectual property laws shall be instituted and tried in the Tribunal.

(2) Notwithstanding anything contained in any other law for the time being in force, the Tribunal shall have exclusive jurisdiction to try any offence under intellectual property laws."

(underlining added)

1. It may be noted that Section 2(h) of the IPOP Act, 2012 defines "Intellectual Property Laws" / "IP Laws", as the laws specified in the Schedule to the Act, which include the following:

(1) The Trade Marks Ordinance, 2001 (XIX of 2001)

(2) The Copyright Ordinance, 1962 (XXXIV of 1962)

(3) The Patents Ordinance, 2000 (LXI of 2000)

(4) The Registered Designs Ordinance, 2000 (XLV of 2000)

(5) The Registered Layout-Designs of Integrated Circuits Ordinance, 2000 (XLIX of 2000).

(6) Sections 478, 479, 480, 481, 482, 483, 485, 486, 487, 488 and 489 of Pakistan Penal Code (XLV of 1860).

1. Inspite of coming into force of IPOP Act, 2012, the IP Tribunal in Sindh was not established until the Government of Pakistan, Law Justice and Human Rights Division published Notification No.P.15(1)/2013-A-IV dated 02.12.2014 when Section 16 was brought into force and by which notification the IP Tribunals were established, and in particular a Tribunal was constituted inter alia having territorial jurisdiction for matters pertaining to the infringement of intellectual property rights within the city of Karachi. Thereafter vide the Government of Pakistan, Law Justice and Human Rights Division published Notification No.S.R.O 1330(I)/2015 dated 29.12.2015, the Federal Government was pleased to direct that Section 15 as well as sub-sections (2), (3), (8), (9), (10), (11) and (12) of Section 16 and Sections 17, 18 and 19 of the said Act shall come into force with immediate effect.

2. Following the above developments, pursuant to an Order dated 14.12.2017 in Suit No.2578/2014 (Muhammad Ali Barry v. Kaybee Snacks and others), Mr. Justice Munib Akhtar, rendered an opinion/note pursuant to the directions of the Chief Justice of the High Court of Sindh relating to the transfer of cases to the IP Office Report put up by the Asst. Registrar (D-II)(O.S.) on 28.12.2017 to regulate IP matters filed in the High Court. A selection of relevant paragraphs is reproduced from Justice Munib Akhtar's Note/Opinion as follows:

"2. One point appears clear. Since the Tribunal is intended to be a first instance (i.e. trial) forum, the appellate jurisdiction of the High Court is not involved. Thus (obviously) HCAs and MAs (Misc. Appeals) under or in respect of or arising out of the IP Laws are not affected and were not be transferred.

3. The first jurisdiction, generally speaking, under the IP Laws is conferred on the "court" which is usually defined as being the District Court or Judge. The Sindh High Court, being or having the jurisdiction of the principal Court of Civil Jurisdiction in Karachi Division by virtue of the (Provincial) Act of 1926 exercises this jurisdiction accordingly, essentially in forms of suits filed on the Original Side. Some of the provisions of the IP Laws, however, directly confer first instance jurisdiction on the High Court. These include Petitions regarding revocation of Patents and cancellation of designs and/or the Patents Ordinance, 2000 and Registered Design Ordinance, 2000, respectively.

4. As noted above, in my view the crucial provision is Section 18(1) and what is required in particular is the proper interpretation of the word "infringement" of intellectual property laws appearing therein. The reason is that it is only suit and civil proceedings "regarding" such "infringement" that fall within the (exclusive) jurisdiction of the Tribunal and need therefore be transferred. Quite obviously, suits for infringement of intellectual property rights such as registered trademarks, patents, designs, etc. would fall within the scope of the foregoing words. The fact that such suits above have been instituted in the High Court would not be relevant since as noted the High Court is exercising jurisdiction in such matters because it is the principle court of civil jurisdiction for Karachi Division. The statute confer jurisdiction in relation to such infringement not on the High Court but rather on the District Court or Judge or Court in relation to infringement of the right concerned. Thus Section 117 of the Trademark Ordinance, 2001 ("TM Ordinance"). . . speak of the District Court/Judge. . .Now, by far, the majority of the suits pending on the original side would appear to be those involving infringement in terms of the foregoing provisions. Thus, subject to what is stated below, the general rule would appear to be that suits pending on the Original Side arising out of the IP Laws would have to be transferred to the Tribunal.

5. . . .

6. Section 46(3) of the TM Ordinance provides as follows: "Nothing in his Ordinance shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or services as services provided by another person, or the remedies in' respect thereof". Thus, the action of passing off lies, as before, in the realm of forts and is not an infringement of the TM Ordinance. A suit for passing off pending on the Original Side ought not therefore to be transferred to the Tribunal, since its jurisdiction in terms of Section 18(1) is specifically limited to "infringement of intellectual property laws". The difficulty however is that invariably the action for passing off is not a "standalone" suit, in which the relief (for injunction, etc.) is sought only on this basis. It is invariably combined with an action for trademark infringement. Thus, it could be that relief is sought on the basis of trademark infringement with an additional or alternative basis on the ground of, passing off. In my view such a "combined" suit would not lie within the competence of the Tribunal and ought not therefore to be transferred.

7. The TM Ordinance also poses certain other difficulties in the present context. They are rather intricate in nature and may well not arise in any of the pending proceedings. I have not therefore discussed these difficulties in any detail. I merely mention this in case there is such a situation. which would have to be dealt with on a case to case basis. . . ."

1. Mr. Justice Munib Akhtar summarized his opinion in paragraph 9 of the said Note/Opinion as follows, which is reproduced to the extent of trademark matters only:

"a) Pending appeals need not be transferred.

b) Pending petitions (J.Ms). . . (a patent). . .(a design). . .

c) Pending suits for infringements. . . (a patent). . . (a design). . .

d) Suits being an action of passing off or in which relief sought on this basis along with an action for infringement of a registered trademark (whether in addition or in alternative) also ought not to be transferred.

e) Subject to the above, suit pending on the Original Side regarding the IP Laws ought to be transferred.

f) In case in any suit being transferred any party claims it ought not to be transferred (or even vice versa), the party should be asked to file appropriate application in the suit or seek other appropriate judicial remedy, in the High Court. The matter should then be dealt with on the basis of the judicial determination.

1. Following Justice Munib Akhtar's Note/Opinion, the High Court accepted all kinds of suits in respect of IP Laws filed in the High Court. None were rejected until parties, as in the present case, the defendants/respondents, raised a judicial challenge by way of an application for the transfer of the trademark-related suit from the High Court to the IP Tribunal.

2. As Justice Munib Akhtar's Note/Opinion (reproduced above) mentioned, IPOP Act, 2012 covered "IP Laws" only. Therefore, any matter that would fall outside the scope of "IP Laws" was deemed not covered by the IPOP Act, 2012. Thus, suits that referred to "Passing Off" in the prayer clause and other multiple reliefs, such as the declaration, permanent injunction, rectification, rendition of accounts, damages, etc., were not to be transferred as per Justice Munib Akhtar's Note/Opinion. It may be noted that Justice Munib Akhtar's Note/Opinion was neither a judicial order nor a judgment. It was a simplicter office Note/Opinion. There was no judicial determination on whether the subject of "Passing Off" was beyond the ambit of "IP Laws" under the IPOP Act, 2012 until the Judgement of the Supreme Court of Pakistan in the case of Muhammad Multazam Raza v. Muhammad Ayub Khan, 2022 SCMR 979 ("the MM Raza case") in paragraph 12 of the judgment, wherein the apex Court observed as follows:

"It may also be relevant to note that what is described as a passing off action may either be a passing off action simplicitor or an action of infringement of trade mark coupled with passing off. Where the case of passing off action is based on infringement of trade mark, such suit shall necessarily require determination of the question whether there had been any infringement of the trade mark and where infringement of trade mark is alleged the suit must, in view of sections 17, 18 and 39 of the IPO Act, 2012, be instituted before the tribunal notwithstanding that the allegations in the suit were coupled with the allegation of passing off."

1. Thus, the Supreme Court has clarified that "IP Laws" under the IPOP Act, 2012, includes cases involving "Passing Off" action, too.

2. It is pertinent to note that in the impugned Orders, the date of filing (institution) of the two suits, i.e., in the case of the suit filed in 2014, i.e. Suit No.2578/2014, and in the case of the suit filed in 2019, i.e. Suit No.2058/2019, the dates of the institution of the cases were not taken into consideration viz. deciding between whether Court ought to have transferred the cases and/or the plaint should have been returned. As is apparent while under Section 18(1) of IPOP Act, 2012, the jurisdiction of the "Intellectual Property Tribunal" is in respect of "all suits and other civil proceedings regarding infringement of intellectual property laws", as per Section 17(6) of IPOP Act, 2012, cases that were to be transferred to "Intellectual Property Tribunals" were not all pending suits and other civil proceedings regarding the infringement of intellectual property laws but were limited to those matters that were "instituted under IP Laws." The legislature distinguished between the nature of proceedings to be instituted before the IP Tribunals, once constituted, and the pending proceedings before any other forum, which are to be transferred to IP Tribunals. Inasmuch after 29.12.2015, being the date of the notification by which jurisdiction was conferred on the IP Tribunals, only matters that had been instituted under the provisions of any "IP Laws", as defined in Section 2(h) read with the Schedule of the IPOP Act, 2012, and which were related to the infringement of an IP Laws stood transferred to the IP Tribunals.

3. According to Section 17(6) of IPOP Act, 2012, which pertains to the transfer of proceedings from the High Court to the IP Tribunal, the said section came into force on 29.12.2015. Therefore, concerning trademark-related suits and proceedings instituted/filed in the High Court before 29.12.2015, all such matters appear to be liable to be transferred from the High Court to the IP Tribunal. Based on the above understanding, in our view, as a starting point in trademark-related cases pending in the first instance jurisdiction (original side) of the High Court of Sindh at Karachi, the institutional date of the case is the first port of call for the High Court when deciding the issue of how to deal with such lis, i.e. to transfer the case or return/reject the plaint. We propose to describe these Pre 28.12.2015 instituted trademark-related suits filed in the High Court as Category "A" cases. Thus, trademark-related suits instituted/filed on or before 28.12.2015 should be transferred to the IP Tribunal. Further, from 29.12.2015, once Section 17(6) came into force, the High Court continued to entertain and hear trademark matters, whereas such actions ought not to have been filed in the High Court. In such cases, the plaint filed in the trademark suit ought to have been returned by the High Court for filing in the IP Tribunal, as the High Court did not have jurisdiction. To this end, we have classified Trademark cases instituted/filed on or after 29.12.2015 as Category "B" cases. In such cases, the plaint should be returned for filing before the proper forum, i.e. the IP Tribunal. Suffice it to say that suits for infringement of a trade mark currently pending in the High Court and filed prior to 29.12.2015 may be transferred to the IP Tribunal subject to judicial determination as proposed by Justice Munib Akhtar in his Opinion/Note (Category "A"), whereas trademarks suits filed after 29.12.2015, currently pending in the High Court, the plaint in such suits must be returned (Category "B") based on judicial determination, too.

4. It may be noted that MAB's Suit No.2578/2014 involved a suit for groundless threats, etc. The "IP Laws" for remedies against groundless threats of infringement proceedings are covered by Section 52 of the TM Ordinance, 2001, which MAB has invoked in his suit. In these proceedings, essentially, the plaintiff is threatened by the defendant, the holder of the IP right, on the basis of an alleged infringement of the latter's right(s), which the plaintiff denies. The remedies include suitable declarations, injunctions and even damages. As discussed in paragraph 5 of Justice Munib Akhtar's Note/opinion, while it could be argued that the nature of such groundless threats should not be considered to be "infringement of intellectual. property laws", the crucial words of Section 18(1) of the IPOP Act, 2012, require consideration particularly in light of the observation made by the Supreme Court of Pakistan in the MM Raza case (supra) expanding the definition of "IP Laws" under the IPOP Act, 2012. Indeed, even if it could be argued that such situations are quite the opposite, here, the plaintiff is averring that he has not infringed the relevant "IP Laws" but has nonetheless been issued a (groundless) threat in this regard. However, based on a holistic approach, the better view seems to be that such suits would also be covered by Section 18(1) as being "regarding infringement" and, hence, in our opinion, a suit of such kind would lie within the jurisdiction of the IP Tribunal. This is all the more so given that it is quite probable that the IP right holder would countersue for infringement of his right, which would undoubtedly lie within the jurisdiction of the IP Tribunal. There would then be a danger of multiple proceedings before different forums. Therefore, because of the above reasons,1 we find that the subject matter of MAB's Suit No.2578/2014, instituted under the TM Ordinance, 2001, falls within the definition of "IP Laws",2 and as such, the said suit is liable to transfer to the IP Tribunal on this score too. This is apart from the fact that Suit No.2578/2014 involved an "IP Laws" matter, was instituted under the TM Ordinance, 2001 and was filed in the year 2014, and falls under Category "A"; hence, it was always subject to transfer from the High Court to the IP Tribunal under the IPOP Act, 2012. Accordingly, when this lis is liable to be transferred to the IP Tribunal under the IPOP Act, 2012, no question of returning or rejecting the plaint arises in the trademark-related suit.

5. Apart from the above-mentioned criterion of the date of filing (institution) of the trademark-related suit, the High Court must also deal with several moving parts of the IPOP Act, 2012, concerning "IP Laws" and civil proceedings "regarding infringement of IP Laws", when examining "a suit for infringement of a trade mark" and/or "a suit for otherwise relating to any right in a trade mark" under Section 117 of the TM Ordinance, 2001. Each particular case must be examined in light of the law and its facts. Thus, another aspect that also comes into play when the High Court is considering the issue of either transferring the trademark-related suit or returning the plaint filed in such suit or continuing the hearing of the case in the first instance jurisdiction (original side) of the High Court has to do with Category "C" cases.

6. It is pertinent to mention that in addition to trademark-related matters concerning suits for infringement of a trade mark, which fall under Category "A" and Category "B", there is a third species of trademark matters under the TM Ordinance, 2001, which do not fit into either of the two categories, i.e. neither Category "A" nor Category "B". Instances/situations may occur when the High Court has to deal with a trademark-related suit pending in the first instance of the High Court for adjudication to decide further proceedings in the lis as per IPOP Act, 2012 and, at the same time, there is also an application pending in the High Court that was filed directly in the High Court when the suit or proceeding concerning the trademark was pending in the High Court that also simultaneously requires to be adjudicated. Section 116 of the TM Ordinance, 2001, provides the procedure in certain cases, an option for an interested person or otherwise, to apply directly to the High Court where any suit or proceeding concerning the trademark is pending. These cases under the TM Ordinance, 2001, include, but are not limited to:

(i) Revocation of registration:3 An application for revocation under Section 73(4) of the TM Ordinance, 2001, may be made by an interested party to the Registrar of Trademarks, except that --

(a) if proceedings concerning the trade mark in question are pending in the High Court or a District Court, the application shall be made to the High Court or as the case may be, the District Court; and

(b) in case the application is made to the Registrar, he may at any stage of the proceedings refer the application to the High Court or a District Court.

(Section 73(4)(a)&(b) of TM Ordinance, 2001)

(ii) Grounds for invalidity of registration:4 An application for declaration of invalidity under Section 80(4) of the TM Ordinance, 2001, may be made by an interested party to the Registrar of Trademarks, or to the High Court or a District Court, except that --

(a) if proceedings concerning the trade mark in question are pending in the High Court or a District Court, the application shall be made to the High Court or a District Court, and

(b) in any other case, if the application has been made to the Registrar, he may at any stage of the proceedings refer the application to the High Court or a District Court.

(5) In the case of bad faith in the registration of a trade mark, the Registrar may apply to the High Court or a District Court for a declaration of the invalidity of the registration.

(Section 80(4)(a)&(b) and (5) of TM Ordinance, 2001)

(iii) Rectification or correction of Register:5 An application for rectification may be made to the Registrar except that -

(a) if proceedings concerning the trade mark in question are pending in the High Court or a District Court, the application shall be made to the High Court or a District Court; and, (b) in case the application is made to the Registrar, he may at any stage of the proceedings refer the application to the High Court or a District Court.

(3) Except where the Registrar or the High Court or a District Court directs otherwise, the effect of rectification of the Registrar shall be that the error or omission in question shall be deemed never to have been made.

(Section 96(2)(a)&(b) and (3) of TM Ordinance, 2001)

1. Based on a judicial determination, the above instances/scenarios give rise to a third category, which we have classified herein as Category "C" cases. Category "C" cases may not be subject to transfer from the High Court to the IP Tribunal and/or the return/rejection of the plaint, and the High Court may retain jurisdiction and proceed with the matter in the normal course. However, such issues remain subject to a judicial determination, which must be dealt with on a case-to-case basis.

2. In HCA No.264/2021 and HCA No.01/2022, the matter concerns an "IP Laws" dispute between MECJC, Azam Autos and ABS International Corporation. The two appeals arise from Suit No.2058/2019, which, as mentioned earlier, is/was a suit for infringement of trademarks filed by MECJC against "Azam Autos" and "ABS International Corporation". Counsel submitted that in addition to this trademark-related suit, the sole proprietor of "Azam Autos", namely, one, Sheikh Irshad Ahmed son of Dost Muhammad and, another Gulnaz Begum w/o Sheikh Irshad doing business as "ASB International Corporation", had also filed a Judicial Miscellaneous (J. Misc.) Application No.23/2020 against MECJC and the Registrar of Trade Marks under Section 80 of the TM Ordinance, 2001, for declaration of invalidity of trademark "IZUMI" under No.2586063 in Class 7 filed on 13.11.2019 and registered on 18.04.2019 in respect of Piston (parts of machines and engines), pistons for cylinders, etc. which is still pending hearing in the High Court. It may be noted that in the case of an application under Section 80(4) of the TM Ordinance, an interested party can file such application directly in the High Court. Accordingly, we called up and perused the Order sheets of Suit No.2058/2019 and observed a note on 06.10.2020 to put up the suit along with J. Misc. No.23/2020. Similarly, in J. Misc. No.23/2020, we have seen an order dated 21.08.2020 directing the Office to fix Suit No.2058 of 2019 along with this J. Misc. on the next hearing date. A perusal of the online case profile of Suit No.2058/2019 and J. Misc. No.23/2021 on the High Court of Sindh website also confirmed this position, i.e. the two matters were connected. However, on the perusal of the impugned Order dated 01.11.2021 passed in Suit No.2058/2019, we did not find any mention of J. Misc. No.23/2020. This omission is/was material to the future hearing of the lis being contested between the parties in the High Court of Sindh. The facts mandated consideration. The J. Misc. application invoked Section 80 of the TM Ordinance, 2001, and the said section directly conferred jurisdiction on the High Court, once the applicant elected to institute such proceedings in the High Court during the pendency of Suit No.2058/2019. As a first impression, if one considers the trademark-related suit only in isolation without considering the consequence of the J. Misc. Application, it would appear that as the plaint was filed in Suit No.2058/2019 after the threshold date of 29.12.2015, and the lis falls in Category "B" it was liable to be returned to the IP Tribunal. The impugned Order dated 01.11.2021 could be said to have rightly returned the plaint. Yet the fact is that the parties in the two lis, i.e. in Suit No.2058/2019 and J. Misc. No.23/2020, are the same and are/were hotly contesting the matter with the other. Moreover, the application under Section 80(4) of the TM Ordinance filed directly in the High Court is to be decided statutorily by the High Court. Further, parties' rights under the "IP Laws", including the issue of alleged infringement of trademark, cannot be decided in isolation under two separate lis. Therefore, in the facts and circumstances, it would be expedient, in the fitness of things, and to avoid conflicting judgments based on the same points of law and facts relied upon by the parties to determine and decide their respective "IP Laws" rights, notwithstanding multiplicity of proceedings should also be avoided, that both the lis, i.e. Suit No.2058/2019 and J. Misc. No.23/2020 are heard and decided in the High Court of Sindh at Karachi. Therefore, the plaint in Suit No.2058/2019 was not liable to be returned.

3. Given the above, the impugned Order dated 14.12.2021 passed in Suit No.2578/2014 (Muhammad Ali Barry v. Kaybee Snacks and others), is set aside, and the said suit is hereby transferred to and will be heard and disposed of by the IP Tribunal established under Section 16 of the Intellectual Property Organization of Pakistan ("IPOP") Act, 2012 along with C.M.A. No.17419/2014 which also stands restored for hearing by the Intellectual Property ("IP") Tribunal. C.M.A. No.12291/2017 (Order VII, Rule 10, C.P.C.) stands dismissed. The parties will appear before the learned Tribunal on 17.02.2025, which will then proceed with the matter in accordance with law. HCA No.02/2022 stands allowed in these terms.

2025 C L D 1438

[Sindh]

Before Adnan Iqbal Chaudhry, J

IN THE MATTER OF THE COMPANIES ACT, 2017

AND

BEACH LUXURY HOLDINGS (PRIVATE) LIMITED, SPENCER AND COMPANY (PRIVATE) LIMITED AND PHYSONS (PRIVATE) LIMITED

J.C.M. Petition No.35 of 2024, decided on 24th April, 2025.

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

----Ss.279, 280, 281 & 282---Companies (Court) Rules 1997, R.19---Scheme of amalgamation, sanctioning of---Demerger and merger, benefits of---Scope---Petitioners companies sought sanctioning of a scheme of amalgamation under Ss. 282, 279 to 281 of the Companies Act, 2017---The petitioner No.1 (a large-sized hotel business), petitioner No.2 (a formerly operational pharmaceutical company now non-functional), and petitioner No.3 (a newly incorporated company), for the purpose of amalgamation, proposed the scheme---Pursuant to the court's order, meetings of shareholders and secured creditors were held where unanimous or overwhelming approval was granted for the scheme---Special resolutions were passed by the shareholders of all petitioners and secured creditors of petitioners Nos.1 and 2 voted in favor of the scheme---No secured creditors existed for petitioner No.3---Held: As per the scheme of amalgamation, the benefits of the demerger and merger were that the petitioners Nos.1 and 2 would be classified as 'group' companies and entitled to group tax benefits and that the shareholders demerging from petitioner No.2 would be removed from undertaking risks associated with the operation of the retained undertaking by the petitioner No.2---Therefore, the scheme was for viable reasons---The swap ratio of shares worked out by the chartered accountant appeared to be reasonable---99.7% of shareholders of petitioner No.2 and 100% shareholders of petitioner No.1 and 3 had voted in favor of the scheme---All secured creditors of the petitioner Nos.1 and 2 had also voted in favor of the scheme---The petition was advertised pursuant to Rule 19 of the Companies (Court) Rules, 1997 but no one came forth to oppose the sanction of the scheme---Therefore, scheme of amalgamation was sanctioned and petition was allowed, in circumstances.

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

----S.282---Scheme of amalgamation---Interference by Courts---Scope---Where a scheme of amalgamation approved by the requisite majority appears to be fair, just, reasonable and prima facie fulfills statutory requirements then the Court does not sit in appeal over the commercial wisdom of the scheme.

Paramount Spinning Mill's case 2020 CLD 1443; IGI Insurance Ltd's case 2018 CLD 572 and Gadoon Textile Mills Ltd.'s case 2015 CLD 2010 ref.

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

----S.282---Competition Act (XIX of 2010), S.11---Competition (Merger Control) Regulations 2016, Regln. 5(1)(ii)---Scheme of amalgamation---Pre-merger clearance by the Competition Commission---Exemption---The scheme of amalgamation is a transaction exempted by Regln. 5(1)(ii) of the Competition (Merger Control) Regulations 2016 and therefore the pre-merger clearance of the Competition Commission under S. 11 of the Competition Act, 2010 is not required.

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

----Ss.281 & 282(2)---Scheme of amalgamation---Meeting of shareholders and secured creditors, calling of---Requirement---In a scheme of amalgamation, the requirements of Ss. 281 & 282(2) of the Companies Act, 2017 must be fulfilled by convening meetings of the shareholders and secured creditors of the companies involved, to enable them to vote on the proposed scheme.

Mikael Azmat Rahim for Petitioners.

Syed Ebad-ur-Rehman on Court notice.

2025 C L D 1457

[Sindh]

Before Jawad Akbar Sarwana, J

CYNERGYICO PK LIMITED through duly authorized representative---Plaintiff

Versus

TRAFIGURA PTE LIMITED through duly authorized attorney---Defendant

Suit No.466 of 2023, decided on 18th December, 2023.

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

----S. 7---Specific Relief Act (I of 1877), Ss. 42 & 54---Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, The New York Convention), Art. V(2)---Suit for declaration and injunction---Foreign award, enforcement of---Violation of public policy---Effect---Plaintiff company was award-debtor, and resisted enforcement of foreign award on the plea that it was in violation of public policy issued by State Bank of Pakistan---Validity---If plaintiff company (award-debtor) had any objections to recognition and enforcement of the award, it could raise the same in Enforcement Suit and suit of plaintiff company (award-debtor) seeking declaration and permanent injunctions of the award was not maintainable in light of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 and New York Convention---Question relating to maintainability of "Suit for Declaration and Permanent Injunction" was a question of law and had to be dealt with first before delineating questions of merits of the case---Legal challenge to the award raised by plaintiff company, including in terms of Art. V (2) of New York Convention, had to be in separate proceedings, and not under award-creditor's suit---Plaintiff company, did not submit on factual plane and avoided touching upon merits of the case and taking steps that could later prejudice his defence in other suit---Plaintiff company strategically saved his attack on the award under Art. V of New York Convention to plead in defendant's (award-creditor's) suit---Defendant (award-creditor) also did not commit himself and face its consequences in other suit seeking the recognition and enforcement of award---Parties did not draw themselves into any discussion about whether the award was contrary to public policy, or what constituted "public policy" under Art. V of New York Convention---Division Bench of High Court declined to interfere in the Award as there was no violation of the grounds enshrined under Article V (2) of New York Convention---Suit filed by plaintiff company was not maintainable under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Suit was dismissed, in circumstances.

Abdullah v. Messrs CNAN Group SPA through Chief Executive/Managing Director and another PLD 2014 Sindh 349 rel.

Auteurs Acteurs Associes v. Hemdale Film Corporation (XVI YCA 543 (1991); Lanifico Mario Zegna SpA v. Emernegildo Zegna Corporation and another (XXXI YCA 798 (2006)); Mary D. Slaney v. International Amateur Athletic Federation (244 F.3D 580 (2001), XXVI YCA 1091 (2001); Agricultural Workers Union v. The Registrar of Trade Unions 1997 SCMR 66, 81; Vikrant Tyres Ltd. and another v. Techno Export Foreign Trade Company Ltd., ILR 2005 Kar 4738; Jindal Drugs Ltd. v. Noy Vallesina Engineering SpA and others, 2002 (3) BOMCR 554; 2008 SCC Online Bom 1694 ; Goldcrest Exports v. Swissgen N.V. and another, 2005 (4) BOMCR 225; Bulk Trading SA v. Dalmia Cement (Bharat Ltd), 2006 (1) ARBLR 38 Delhi ; Hindustan Petroleum Cor. Ltd. v. M/s Videocon Ltd. and others, 2012 (3) ARBLR194 (Delhi)(MANU/DE/3196/2012) and Shriram EPC Limited v. Rioglass Solar SA, Civil Appeal No.9515 of 2018 (arising out of SLP (Civil) No.13913 of 2018) ref.

Abdul Ahad, Ammar Suria and Ms. Hareem Godil for Plaintiff.

Jahanzeb Awan and Rashid Khan Mehar for Defendant.

2025 C L D 1504

[Sindh]

Before Muhammad Iqbal Kalhoro and Muhammad Osman Ali Hadi, JJ

MUHAMMAD ANIS---Appellant

Versus

Messrs PAK GULF LEASING COMPANY LTD. and others---Respondents

1st Appeal No.103 of 2018, decided on 26th February, 2025.

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

----Ss. 7(4) & 9---Civil Procedure Code (V of 1908), S. 151 & O. XLI, R.33---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration, cancellation, damages and permanent injunction---Right of party---Remedy not granted by the Court---Act(s) of the Subordinate Court(s) not granting relief / right to party---Inherent/ex delicto justitiae powers of High/Appellate Court---Scope---Owner of residential property, through original papers, furnished surety in a criminal case on behalf of two accused persons pursuant to their bail order, however, later he did not receive any final outcome on his application for release of surety, i.e. return of his original property papers---Then, owner received a notice from a non-banking finance leasing company ('Leasing Company') stating that the property was mortgaged to them and they intended to auction the same---Then the owner filed a civil suit for a declaration, etc., before the High Court in its Original Civil Jurisdiction, inter alia, seeking to restraint Leasing Company from auction / sale of the property but the Single Judge returned the plaint, with an observation to approach the court of proper jurisdiction---Then the owner approached the Banking Court and filed suit seeking redressal of his grievance, however, when the matter proceeded to the final arguments the Judge-Banking Court, while holding that the Banking Court did not have jurisdiction to adjudicate the matter, returned the plaint with the direction to file the same before the (civil) court of competent jurisdiction---Owner/Appellant approached Appellate/High Court---Validity---Banking Court, undoudtdly, has authority to decide its own jurisdiction as provided in S. 7(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001') being a special law; the jurisdiction of which (Banking Court) is only invoked when there is dispute between a financial institution and a customer, as defined under the Ordinance 2001---In the present case , it is an accepted position that the appellant does not fall into either category, which forms the basis of the impugned judgment and return of the plaint---Both the Courts (Civil and Banking) , at separate times, have returned the plaint to the appellant, in essence leaving the appellant non-suited ; which is contrary to the provisions of law and natural justice, i.e. ubi jus ibiremedium, meaning where there is a right, there is a remedy---Similarly , "actus curiae neminemgravabit" means an act of court should prejudice no man, both the said principles would be called into effect to the aid of the appellant to support him in present matter---Mere technicalities cannot forgo justice, nor can technicalities be allowed to operate as tyrant masters so as to frustrate genuine claims as it remains incumbent upon a court to remedy any wrong suffered by a litigant---Additionally, the High /Appellate Court holds inherent jurisdiction and power, the Court remains duty-bound to ensure that complete justice is done and technicalities are avoided---Such power has been granted vide statute, i.e. under S. 151 as well as O. XLI, R. 33, Code of Civil Procedure, 1908---Additionally, the Appellate Court can also act ex delicto justiciae and supply for an omission in any procedure---The Appellate Court exercises powers to make such orders to cover ostensibly impossible situations for complete dispensation of justice---The appellant has been in pursuit of his property, which has eluded him for nearly 20 years, and the matter to-date remains in limbo---The Appellant is no better off today than he was 20 years ago, despite pursuing his matter before the courts of law---It would by any standard be unjust, if the appellant was not aided to conclude his claim---Thus, to serve a more reasonable and justiciable purpose, High/Appellate Court, while invoking inherent powers, transferred the suit filed by Appellant from the Banking Court to the relevant Civil Court holding pecuniary and territorial jurisdiction over the Property; the matter would commence at the stage of Final Arguments on the basis of evidence already adduced by both the parties---Appeal was disposed of accordingly.

2016 CLD 461; 2003 CLD 1026; 2003 CLD 1843; 2007 CLD 1532; 2004 CLD 689; 2023 SCMR 1451; 2024 CLD 1099; Dr. Asma Noreen Syed v. Government of the Punjab and others 2022 SCMR 1546; 2010 CLC 22; Abdul Qudoos v. Commandant Frontier Constabulary KPK, Peshawar and another 2023 SCMR 334; Messrs Grain Systems v. Agricultural Development Bank 1993 SCMR 1996; 2004 SCMR 108; 2010 CLD 981; 2009 CLD 172 and 2022 SCMR 870 ref.

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

----S. 9---Constitution of Pakistan, Arts. 4, 8, 10-A, 23, 24 & 25 ---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit fora declaration, etc. cancellation, damages and permanent injunction---Right of party---Remedy not granted by the Court---Act(s) of the Subordinate Court(s) not granting relief / right to party---Fundamental rights of litigant---Scope---Owner provided his residential property ,through original papers, as a surety in a criminal case on behalf of two accused persons pursuant to their bail order , however, later he did not receive any final outcome on his application for release of surety, i.e. return of his original property papers---Then, owner received a notice from a non-banking finance leasing company ('Leasing Company') stating that the Property was mortgaged to them, and they intended to auction the same---Then the owner filed a Civil Suit for a declaration, etc. before the High Court in its Original Civil Jurisdiction, inter alia, seeking to restraint Leasing Company from auction / sale of the Property but the Single Judge returned the Plaint, with an observation to approach the court of proper jurisdiction---Then the owner approached the Banking Court and filed Suit seeking redressal of his grievance, however, when the matter proceeded to the final arguments the Judge-Banking Court ,while holding that it( Banking Court) did not have jurisdiction to adjudicate the matter , returned the Plaint with the direction to file the same before the (civil) court of competent jurisdiction---Owner/Appellant approached Appellate/High Court---Validity---It is abundantly clear that distress has been caused to the Appellant, due to the various courts below sending him from pillar to post in an attempt to safeguard his own Property---Said actions also appear violative to Appellants' rights having been guaranteed under Arts. 4, 8, 10-A, 23, 24 & 25 of the Constitution of Pakistan---Appellant has now been left in a situation whereby his Property appears to be lost in an abyss, not through any fault of his own, but due to actions of the courts below in returning his plaint---Mere technicalities cannot forgo justice, nor can technicalities be allowed to operate as tyrant masters so as to frustrate genuine claims---Thus, to serve a more reasonable and justiciable purpose High/Appellate Court, while invoking inherent powers, the Suit filed by Appellant from the Banking Court to the relevant Civil Court holding pecuniary and territorial jurisdiction over the Property; the matter would commence at the stage of Final Arguments on the basis of evidence already adduced by both the parties---Appeal was disposed of accordingly.

2010 CLC 22 ref.

Abdul Shakoor and Fahad Ali for Appellant.

Nemo. for Respondents.

2025 C L D 1539

[Sindh (Hyderabad Bench)]

Before Mahmood A. Khan and Muhammad Hasan (Akber), JJ

Messrs SUNNY PETROLEUM SERVICE through Proprietor (since deceased) through Legal Representatives---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

1st Appeal No.D-14 of 2022, decided on 18th March, 2025.

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

----S. 9---Suit for recovery filed by Bank---Assertion of defendant---Proof, absence of---Effect---Plea of the appellant ( customer/defendant) was that the respondent (plaintiff /Bank) obtained signatures of defendant on blank printed form of relevant documents---Validity---Appellant (customer/defendant) utterly failed to discharge its burden, since neither any complaint was lodged by them, nor any evidence was produced to prove that signatures of the customer were obtained on blank printed documents---The presence of relevant documents (a registered mortgage deed, a fire insurance policy) and the admitted insurance claim by the appellant further negated such a bald plea---Appeal, filed by customer, was dismissed, in circumstances.

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

----S. 9---Suit for recovery filed by Bank---Assertion of defendant---Documentary proof---Effect---In view of production of chain of documents executed by the appellant (customer/defendant) including the registered mortgaged documents) and Statement of Accounts by the respondent (plaintiff/Bank) and admission of loan but failure to produce any receipt against repayment of loan by appellant's attorney, the Banking Court was justified in deciding that the appellant / defendant had not committed any default in payment of facility/loan amount and markup/riba---Appeal, filed by customer, being meritless, was dismissed, in circumstances.

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

----S. 9---Insurance policy availed by customer through Bank---Loss of stock due to fire set by mob---Bank / plaintiff, responsibility of---Scope---Plea raised by appellant (customer / defendant) was that insurance policy also covered loss in the event of loss/damage by fire/strike by burglary ; thus, they claimed, while relying on an FIR (FIR-in-question) that on 27-12-2007 due to death of Shaheed Mohtarma Benazir Bhutto, a mob attacked his shop and godown and burnt, damaged and looted the insured property---Validity---There seemed no dispute between the parties on the insurance of the stock with Excel Insurance Company Limited in the sum of Rs.36,00,000/- under fire policy No.1923 dated 01-02-2007---However, upon perusal of the FIR-in-question it appeared that the same was lodged by cashier of the appellant---Surprisingly, the said complainant/ cashier was not even produced in evidence as a witness, especially when he was not a party to the suit and the attorney of the defendant/appellant was not his attorney---Additionally, during his cross- examination, the sole witness/ attorney for the appellants stated that an official of the concerned Deputy Commissioner (DC) had given a report in respect of the damage in the said incident, however, no such report was produced in evidence---It was also admitted during his cross-examination that no documents to establish the alleged loss of Rs.4 million or as allegedly assessed by the DC were produced in evidence---The same could not be established in evidence since no document or witness was produced by the appellant to establish its claim, except a mere oral assertion by the appellant---Statements of facts contained in a First Information Report under S. 154, Cr.P.C., were not gospel truth but the same are mere statement of facts; hence, for placing reliance on a First Information Report in civil proceedings, the statements of facts contained therein are required to be established, corroborated and proved through positive evidence by the party relying on the same---On the contrary, neither the complainant appeared as a witness, nor any other employee of the appellant (Petrol Pump) on the said incident was produced, nor any proof of loss of Rs.4 million was established, nor the purported report by the DC was produced---Appeal, filed by customer / defendants, being meritless, was dismissed, in circumstances.

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

----S. 9---Insurance policy availed by customer through Bank---Loss of stock due to fire set by mob---Bank / plaintiff, responsibility of---Scope---Plea of the appellant was that it was the responsibility of the Bank to file a suit against the insurance company with respect to the claim lodged by the appellant and since the Bank had failed to file such a suit, the Bank was responsible to pay Rs.3.6 million---Validity---One of the witnesses of respondent / Bank, in his cross-examination, stated that the Petrol Stock was insured with Insurance Company in the sum of Rs.36,00,000/- and the letter by the customer /appellant was received and the same was also forwarded to the manager of the Insurance Company and in said regard an officer of the insurance company also visited the place of alleged incidents at the petrol pump of the customer, however the Insurance Company refused to allow the claim, since the claim was not covered under the policy---Filing a suit against the insurance company by the Bank had been rightly denied by the respondent/Bank on the grounds that it was not the responsibility of the Bank to lodge suit against the insurance company---Appeal, filed by customer, was dismissed, in circumstances.

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

----S. 9---Insurance policy availed by customer through Bank---Loss of stock due to fire set by mob---Bank / plaintiff, responsibility of---Scope---Whether or not, in view of the incident of the alleged fire and the existence of Insurance policy, the Bank was entitled to claim the outstanding liability/ default amount from the customer under the Ordnance 2001?; and whether the Bank was under an obligation to seek reimbursement of the same against the insurance company instead?---Held: In the absence of any clause in the insurance policy, which could possibly put Bank under obligation to file a claim with the insurance company of any outstanding liability of customer/ defendants, the Bank was not responsible to file such claim on behalf of the customer---Suit filed by Bank against its customers was only concerned with the determination of liability against the customers / defendants---Even the claim under an insurance clause was an independent and separate agreement, which could not be made the basis to restrict the Bank to recover the amount only through the said process---Appeal, filed by customer / defendants, being meritless, was dismissed, in circumstances.

Messrs Jan Sher Khan Petroleum Service through Proprietor and another v. Messrs Allied Bank Limited 2013 CLD 526; Riaz Ahmad (Rana Riaz Anjum) and another v. The Bank of Punjab 2016 CLD 596 and Bhatti and others v. United Bank Limited and 2 others 2005 CLD 643 ref.

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

----S. 9---Insurance policy availed by customer through Bank---Loss of stock due to fire set by mob---Bank / plaintiff, responsibility of---Scope---Contention of the appellant (customer/defendants) was that incident of fire burning the stock was an Act of God, thus the principal borrower was exonerated from the liability---Validity---The right of the Bank to recover the claim against its customer was unimpaired by the insurance policy---Stance of the customer for making recovery from the insurance company in the case of the alleged fire incident in the factory of appellants was rejected---Appeal, filed by customer / defendants, being meritless, was dismissed, in circumstances.

Imran Enterprises through Proprietor and another v. Muslim Commercial Bank through Manager and another 2007 CLD 555 and Messrs Nawaz Enterprises through Sole Proprietor and another v. Habib Bank Limited and 5 others 2007 CLD 952 ref.

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

----Ss. 2(c) & 9---Claim against Insurance Company---Jurisdiction of Banking Court---Scope---Insurance policy availed by customer through Bank---Loss of stock due to fire set by mob---Bank / plaintiff, responsibility of---Scope---An insurance company is not a customer under S.2(c) of the Ordinance, 2001 and the Banking Court has no jurisdiction to entertain or adjudicate upon claim against insurance company under a finance agreement---In the present case, the appraisal of documents produced in evidence by the respondent (Bank / plaintiff) clearly reflected that appellants (customers / defendants) had availed the facility-in-question---It further established that the insurance policy was duly signed by the appellant nor did the appellant point out towards any clause in such policy which could possibly put the respondent /Bank under obligation to file a claim with the insurance company of any outstanding liability of the appellant in case of default---Even if such a clause did exist, the right of the Bank to claim the outstanding liability against its customer was duly protected under the Ordinance, 2001---The insurance policy was obtained in the name of the company of the appellant No.1 and the entire insurance policy documents were singed and the premium was also paid by the appellants---As per clause of insurance in the sanction advice it was the condition precedent that all the assets of the company and/or personal properties of the partners/directors be charged with the Bank as security for the payment/obligations of company until the facility was fully settled and the assets shall be insured with an insurance company acceptable to the Bank---However, such insurance was meant to cover the risks of fire---Notably, such insurance policy had been assigned in favour of respondent / Bank but nothing had been mentioned in the finance facility about the extinguishment of the liability of the appellants towards Bank on account of any loss, whether it was insured or not---Appellants had also failed to point out any such condition, either in the sanction or in the terms and conditions of the insurance policy which absolved them from discharging their liability of payment of outstanding amount to the respondent / Bank---In the circumstances it appeared that the condition of insurance of hypothecated stock goods was imposed only to doubly secure the liabilities of the Bank in addition to the execution of other security documents including the mortgage deed of the properties against the finance facility provided by the respondent / Bank---Appeal filed by customer / defendants, being merit less, was dismissed, in circumstances.

Adieu (Pvt.) Limited through Directors/ Chief Executives v. Platinum Commercial Bank Limited through President and 3 others 2005 CLD 1781; Pakistan General Insurance Company Limited through Executive Vice-President v. Messrs Muslim Commercial Bank Ltd. and 4 others 2015 CLD 600; 'Messrs United Bank Limited v. Messrs Adamjee Insurance Company Ltd. and 2 others 1988 CLC 1660; EFU General Insurance Ltd. through Executive Vice-President v. Chairman, Banking Tribunal No.1, Lahore, and 3 other PLD 2001 Lah. 313; Messrs Evergreen Press and 3 others v. Bank of Punjab 2004 CLD 239; Messrs Grace Textile Mills (Pvt.) Ltd. and another v. Habib Bank Limited and 5 others 2003 CLD 1685; National Bank of Pakistan (N.B.P.) and 5 others v. Punjab Road Transport Board through Managing Director and 3 others 2003 CLD 653 and P.M. Packages and others v. Silk Bank Limited 2019 CLD 713 ref.

Sunder Das for Appellant.

Imran Ali Borano for Respondent.

2025 C L D 1625

[Sindh]

Before Muhammad Jaffer Raza, J

Messrs JS BANK LIMITED through Authorized Attorney---Plaintiff

Versus

Messrs GULISTAN TEXTILE MILLS LIMITED through Chief Executive/Director---Defendant

Suit No.B-63 of 2012, decided on 30th April, 2025.

Companies Act (XIX of 2017)---

----Ss. 6 (14), 279 & 283---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 9 & 19---Reference by Official Assignee---Release of sale proceeds---Scheme of Arrangement---Objection, non-filing of---Official Assignee sought permission to release sale proceeds of pledged goods to the agent, in accordance with the Scheme of Arrangement---Bank objected to release of sale consideration under Scheme of Arrangement earlier approved by High Court on the plea that it had filed suit for recovery of finance---Validity---While hearing Reference filed by Official Assignee, High Court could not delve into the Scheme of Arrangement as the same was sanctioned by High Court in its company jurisdiction under Companies Act, 2017---Leave to defend application was neither heard nor decided---Bank, subject to decree passed in its favor, could file for execution under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Neither the decree nor entire exercise would be in vain---It was open for bank to have assailed the Scheme under S. 6(14) of Companies Act, 2017---Omission of bank to assail Scheme of Arrangement in such regard was fatal---High Court directed the Official Assignee to release the amount lying with him to the "Agent" after deduction and adjustment of the amount referred by Official Assignee---Reference was allowed accordingly.

Paramount Spinning Mills Limited and others's case 2020 CLD 1443; Messrs Pakland Cement Limited's case 2002 CLD 1392 and Gulshan Weaving Mills Limited v. Al Baraka Bank Limited 2018 CLD 737 rel.

Khawaja Shamsul Islam for Plaintiff.

Muhammad Ali Akbar and Hameed Bukhsh for Defendant No.1.

Ms. Heer Memon for the UBL Bank.

Hashmatullah Aleem for the Bank Al Falah.

2025 C L D 1653

[Sindh]

Before Adnan Iqbal Chaudhry, J

PAK BRUNEI INVESTMENT COMPANY LIMITED---Petitioner

Versus

ATLAS CABLES (PRIVATE) LIMITED and others---Respondents

Suit No.B-32 of 2021, decided on 20th August, 2025.

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

----S. 10---Limitation Act (IX of 1908), Ss. 5 & 18---Civil Procedure Code (V of 1908), O. XXIX, R.1---Application for leave to defend the suit, filing of---Condonation of delay---Knowledge of company---Scope---Defendant / company sought condonation of delay in filing of application for leave to defend the suit on the plea of acquiring knowledge of pendency of suit---Validity---Knowledge of defendant / company was knowledge of its officers---Leave application for defendant / company in view of O. XXIX, R.1, C.P.C. could have been filed by company Secretary or by any Director or other principal officer of the company---Officers who eventually filed leave application for defendant / company had already filed leave application for themselves within the prescribed time---Defendant / company could not say that it did not have knowledge that it was also sued and had to file a leave application within 30 days---Fraud alleged by defendant / company was committed by another defendant and not by plaintiff / financial institution---Plaintiff / financial institution did not prevent defendant / company or its directors from filing leave application within time and could not be faulted for infighting between directors of the company---To extend limitation for leave application by defendant / company, provision of S. 18 of Limitation Act, 1908 could not be invoked---High Court declined to condone delay and leave was not granted---Application for leave to defend the suit was dismissed, in circumstances.

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

----Ss. 9(2) & 10---Bankers' Books Evidence Act (XVIII of 1891), Ss. 2 (8) & 4---Electronic Transactions Ordinance (LI of 2002), Ss. 3 & 12---Suit for recovery of finance---Leave to defend the suit---Statement of accounts---Print out of electronic document---Bar to attestation---Principle---Plaintiff / financial institution instead of appending complete statement of accounts appended only statement of balances and certificate of outstanding amount---Validity---Statement of account envisaged in S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 is a document reflecting debits and credits and dates thereof from the time of disbursement---Any statement only of balances or a certificate of outstanding amount is not such a statement of account---Statement appended to plaint was not certified as required by S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 as it did not bear the certificate prescribed by S. 2(8) of Bankers' Books Evidence Act, 1891 and could not be taken as prima facie evidence of existence of entries it had reflected---This recognition was otherwise provided to a certified copy by virtue of S. 4 of Bankers' Books Evidence Act, 1891---Print-out of such electronic document for the purposes of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was required to be certified under Bankers' Books Evidence Act, 1891---Omission of statement of account with plaint was a defect that was rectified to avoid rejection of plaint but the same had deprived defendants of a defense on accounts, thereby raising a substantial question of fact for granting leave to defend---Defendants who were directors and officials of defendant company, were entitled to leave to contest, plaintiffs / financial institution's accounts in as much as those were produced for the first time with the replication---Application was allowed.

Apollo Textile Mills Ltd. v. Soneri Bank Ltd. PLD 2012 SC 268 distinguished.

Ali Khan and Company v. Allied Bank of Pakistan Ltd. PLD 1995 SC 362; C.M. Textiles (Pvt.) Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; Emirates Global Islamic Bank Ltd. v. Muhammad Abdul Salam Khan 2013 CLD 1291; Ali Waqar Azeem v. Standard Chartered Bank Ltd. 2024 CLD 397; Elbow Room v. MCB Bank Ltd. 2014 CLD 985; Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. 2011 CLD 408; Imran Hussain v. Bankers Equity Ltd. 2019 CLD 272; Al Raheem Rice Mills v. Bank Alfalah Ltd. 2018 CLD 1351; Habib Metropolitan Bank Ltd. v. Abdul Jabbar Gihllin 2013 CLD 88; Habib Metropolitan Bank Ltd. v. Faizan Ali & Company (Pvt.) Ltd. 2017 CLD 1583; Tasleem Fatima v. Bank of Punjab 2017 CLD 552; Askari Bank Ltd. v. DCD Services Ltd. 2018 CLD 799; 2015 CLD 56; Bankers Equity Ltd. v. Bentonite Pakistan Ltd. 2003 CLD 931; 2010 CLD 651; Decent Builders and Developers v. Standard Chartered Bank (Pakistan) Ltd. 2021 CLD 130; Jamal Tube (Pvt.) Ltd. v. First Punjab Modaraba 2021 CLD 1372; National Bank of Pakistan v. Amna Export (Pvt.) Ltd. 2020 CLD 1243; National Bank of Pakistan v. Pakistan Textile City Ltd. 2021 CLD 194; Soneri Bank Ltd. v. Compass Trading Corporation 2012 CLD 1302; Pak Kuwait Investment Company (Pvt.) Ltd. v. Active Apparels International 2012 CLD 1036; Pakistan Kuwait Investment Company (Pvt.) Ltd. v. Three Star Hosiery Mills 2017 CLD 546; NIB Bank Ltd. v. Venus Chemicals (Pvt.) Ltd. 2020 CLD 1227 and National Bank of Pakistan v. Tuwairqi Steel Mills Ltd. 2019 CLD 1140 ref.

(c) Electronic Transactions Ordinance (LI of 2002)---

----Ss. 2 (m), 3 & 12---Electronic transaction---Print out of electronic document---Certified copy, exemption of---Principle---Production of a "certified copy" under S. 3 of Electronic Transactions Ordinance, 2002 is not exempted rather it exempts "attestation by witness" relating to a document that is "in electronic form"---Provision of S. 2(m) of Electronic Transactions Ordinance, 2002 defines an "electronic document" as a document that is "in electronic form"---Any document on paper is not in electronic form and cannot be termed an electronic document---Print-out of an electronic document should not be confused with electronic document itself, this distinction has been brought out in S. 12 of Electronic Transactions Ordinance, 2002.

Syed Shayan Ahmed, Ghulam Murtaza and Ahmed Magsi for Plaintiff.

Waqar Ahmed and Abdullah Azzam Naqvi for Defendant No.1.

Hassan Khurshid Hashmi for Defendant No.2.

Talha Javed, Heer Memon and Ammar Suria for Defendant Nos.3, 4, 5 and 7.

Zeeshan Abdullah and M. Adnan Abdullah for Defendant No.6.

2025 C L D 1665

[Sindh]

Before Sana Akram Minhas, J

MENA ENERGY DMCC---Decree-Holder

Versus

HASCOL PETROLEUM LIMITED---Judgment-Debtor

Foreign Execution Application No.51 of 2019 and C.M.As. Nos. 2363, 2939 and 2940 of 2022, decided on 27th February, 2025.

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

----Ss. 44A, 47 & O. XXI, Rr. 11, 58---Foreign decree---Execution proceedings---Passing of order of attachment of assets of judgment-debtor for satisfaction of foreign decree subject to any charge or encumbrance already existing on such assets---Secured objectors/banks filed their separate objections against the order of attachment---One of the secured creditor/bank took the plea that instead of attachment of assets of judgment-debtor let it be operational in view of its precarious financial position for clearing the debts---Validity---Attachment order explicitly stated action being taken was conditional upon and subordinate to any existing legal claims, charges or mortgages on them---If there were prior claims by other parties, such claims would take precedence---Such condition was a legal safeguard ensuring that the order of attachment of assets did not interfere with pre-existing rights of other parties and that the High Court acknowledged and respected any legal claims or financial burdens that were already in place before issuing the attachment order---Enforcement of a judgment is a legal process aimed at protecting creditor's right and if the judgment debtor's financial situation was as precarious as claimed, it was unclear how continued operations would safeguard public interest better---Precarious financial position of a debtor (judgment-debtor) alone was not a ground to deny a creditor (decree-holder) its right to enforce a judgment---If such a plea was to be accepted, that would set a dangerous precedent where financially distressed entitles could indefinitely delay enforcement by merely citing their poor financial health---Secured creditors might have mutually agreed to accord a "standstill" to the judgment debtor, but such an arrangement cannot be imposed on the decree-holder, which was not a part to such an informal agreement---Objections applications were dismissed, in circumstances.

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

----S. 44A---Foreign judgment/decree---Execution---Legal entitlement of decree-holder to recover legitimate debt and impact on other creditors---Scope---Enforcement of a judgment is based on the legal right of a creditor to recover outstanding amounts---Financial impact on other creditors or depositors does not override the legal entitlement of the decree-holder to seek enforcement---Judgment debtor's financial distress cannot serve as a justification to deny the legitimate enforcement of the debt.

Ijaz Ahmed for Decree Holder.

Abdul Ahad and Khurram Ashfaq for Judgment Debtor.

Abdallah Azzaam Naqvi for Objector/Applicant (in C.M.A. No.2940 of 2022).

Rashid Anwar and Muhammad Adil Saeed for Objector/ Applicant (in C.M.A. No.2939 of 2022).

Afaq Ahmed for Objector/Applicant (in C.M.A. No.2363 of 2022).

2025 C L D 1708

[Sindh]

Before Adnan Iqbal Chaudhry, J

NEW JUBILEE INSURANCE COMPANY LTD.---Petitioner

Versus

THREE STARS HOSIERY MILLS (PVT.) LTD.---Respondent

J.C.M. No.17 of 2011, decided on 24th April, 2025.

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

----Ss.305 & 306---Petition for winding up of a company by a creditor, filing of---Company unable to pay its debts---Outstanding insurance premium, non-payment of---Notice of demand for deeming a company unable to pay its debts, requirement of---Scope---Non-issuance of notice of demand fatal for the case of creditor seeking winding up---Creditor seeking winding up of a company to prove that a company is unable to pay its debts---The entire case of the petitioner was that the respondent company should be deemed unable to pay its debts under clause (a) of S. 306(1) of the erstwhile Companies Ordinance, 1984 (the Ordinance) as it neglected to pay the outstanding insurance premium---Respondent company had pleaded that no such notice of demand was served on it---Held: Since the respondent company had pleaded that no such notice was served on it, to rebut that, the petitioner did not file any postal or courier receipt or any acknowledgment of the respondent company to show that notice was sent to or served upon it---The notice of demand contemplated under clause (a) of S. 306(1) of the Ordinance was required to be served on the respondent company, by causing the same to be delivered by registered post or otherwise, at its registered office---Since the said provision imposed a penal obligation upon the debtor company, it was to be construed strictly---Though the notice relied upon by the petitioner listed outstanding premium payable by four associated companies including the respondent, it was addressed only to the director of the respondent company, i.e. to an associated company and that too at Multan---It was neither addressed to the Respondent nor to the registered office of the respondent which was at Karachi---Even if the associated company was dealing with the petitioner on behalf of the respondent company, to seek winding-up of the respondent company under clause (a) of S. 306(1) of the Ordinance, the notice of demand had to be sent to the respondent company which was a separate legal entity from its associated company---It was apparent that the petitioner did not send any notice of demand to the respondent company as required by clause (a) of S. 306(1) of the Ordinance---Resultantly, the petitioner could not rely on Cl. (a) of S. 306(1) to raise the presumption that the respondent company was unable to pay its debts---Petition was dismissed, in circumstances.

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

---Ss.305 & 306---Petition for winding up of a company by a creditor---Maintainability---Remedy for the creditor where company is commercially solvent but unable to pay its debts, availability of---Scope---If a debtor company is merely unwilling to pay its debts but otherwise is commercially solvent, then the normal remedy available to a creditor is a suit for the recovery of the amount and not a petition for winding up---The object of Ss. 305 & 306 of the Companies Ordinance, 1984 is not to coerce a debtor company to make payment to an unpaid creditor, but to secure discontinuation of functioning of such company which has ceased to be commercially solvent.

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

----S.306---Petition for winding up by the creditor of a company---Company unable to pay its debts---Deeming a company unable to pay its debts---Scope---To deem that a company is unable to pay its debts, a creditor can rely on clause (c) of S.306(1) of the Companies Ordinance, 1984, independent of clause (a) and otherwise 'prove' that the company is unable to pay its debts.

Khurram Rashid for Petitioner.

Zahrah Sehr Vayani and Rameez Lalani for Respondent.

2025 C L D 1714

[Sindh]

Before Muhammad Osman Ali Hadi, J

Messrs PORSCHE MIDDLE EAST AND AFRICA FZE---Applicant/Plaintiff

Versus

Messrs PERFORMANCE AUTOMOTIVE (PVT.) LTD. (UNDER LIQUIDATION) through Official Liquidator---Respondent/Defendant

J.M. No.15 of 2025 and Suit No.1091 of 2022, decided on 19th May, 2025.

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

----S.6, Article V, 'Sched.'---Civil Procedure Code (V of 1908), O.XXI, R.10---Foreign arbitral award---Enforcement---No objections were filed by respondents---Award was made rule of court---The applicant filed an application under section 6 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 (the Act 2011) seeking enforcement of the foreign arbitral award---The dispute arose from a commercial relationship whereby the respondent purchased Porsche vehicles from the applicant for distribution in Pakistan---Due to commercial differences, the respondent initiated arbitration in a foreign country---Both parties appeared and submitted cross-claims---The arbitrator dismissed all claims except for the applicant's claim for outstanding sums---Despite notice, the respondent failed to file objections or appear---Held: None of the grounds for refusal for enforcement of a foreign award as provided under Article Vof the Schedule provided under the Act 2011 could be claimed by the respondent---First and foremost, it was the respondent itself who initiated the arbitration proceedings---Secondly, the respondent appeared and contested the arbitration---Finally, the respondent did not file any objections to the award, despite a lapse of over two years---There remained no impediment under the prescribed law to enforce the award---The award was recognized as binding and enforceable and as such the same was made a Rule of the Court---The applicant was granted the amount represented in the award which was to be executed as a decree of the High Court---In terms of O. XXI, R. 10, C.P.C., the present application was converted into execution proceedings---There was four Porsche vehicles belonging to the respondent lying at the Karachi port regarding which Nazir of the High Court was appointed to ascertain the status of the same for attachment of said vehicles in order to satisfy the award---Matter was adjourned for submission of report of Nazir regarding status of the mentioned vehicles--- Present application was accepted and award was made rule of court.

2024 SCMR 640 and Messrs Tradhol International Sa Sociedad Unipersonal v. Messrs Shakarganj Limited PLD 2023 Lah. 621 rel.

Omair Nisar for Applicant/Plaintiff.

Khalid Mehmood Siddiqui holds brief for Khawaja Hassan Anwar for Respondent.

2025 C L D 6

[Lahore]

Before Sultan Tanvir Ahmad, J

Messrs POPULAR SUGAR MILLS LIMITED---Petitioner

Versus

DISTRICT COLLECTOR, SARGODHA and 2 others---Respondents

Writ Petition No.40356 of 2019, decided on 5th December, 2023.

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

----Ss.39 & 40(1)---Companies Act (XIX of 2017), S.13(3)---Punjab Land Revenue Act (XVII of 1967), S.42---Record of Rights---Change of name of 'person'---Effect---Petitioner company was aggrieved of order passed by revenue authorities refusing to incorporate change of its name and had treated the same as sale in favour of petitioner---Validity---Provision of S. 42 of Punjab Land Revenue Act, 1967 reflects that the same is applicable on acquiring of any right as land owner or a tenant---Words "a person" in S. 42 of Punjab Land Revenue Act, 1967 further clarifies that the Legislature has envisaged acquisition of any right or interest as land-owner or a tenant from one person to another---Dispute had arisen when request was made to revenue authorities to incorporate the change in name of the company from "National Sugar Industries Limited" to "Popular Sugar Mills Limited", which change had already been permitted by Registrar of the Companies, under Ss. 39 & 40 of Companies Ordinance, 1984---Mere change of name did not change legal status of petitioner company or its distinct personality and such change entailed no difference to rights or obligations---High Court set aside order passed by revenue authorities as application or request to incorporate change of name was not a sale---Constitutional petition was allowed accordingly.

Asghar Ali v. P.K. Shahani and 2 others 1992 CLC 2282; Habib Safe Deposit Vault (Pvt.) Ltd. v. Province of Sindh through Secretary, Ministry of Revenue and 2 others 2015 PTD 1863; Bhoruka Engineering Inds. Ltd. v. The Deputy Commissioner of Income Tax (ITA No. 120 of 2011); Reckitt Benckiser (India) Private Limited v. State of H.P. and others (C.W.P. No. 1293 of 2019); Inox Air Products (Pvt.) Ltd. v. State of H.P. and others (C.W.P. No. 3166 of 2016); Bacha F. Guzdar v. Commissioner of Income Tax, Bombay (Civil Appeal No.104 of 1953); Cyrus Cowasjee and 2 others v. Karachi Metropolitan Corporation through Administrator, Karachi PLD 2022 Sindh 106; Aron Salomon (Pauper) v. A. Salomon and Company Limited 1897 AC 22, HL; Lee v. Lee's Air Farming Ltd. 1960 3 All E.R = 1961 AC 12, PC; State of West Bengal and others v. Gopi Vallabh Solutions Private Limited and others (CAN 6652 of 2018 in MAT 869 of 2018); Hira Textile Mills Ltd. through Director v. Executive District Officer (Revenue), Kasur and 4 others 2009 CLD 839; Salfi Textile Mills Limited and another v. City District Government of Karachi through D.C.O. and another 2013 CLD 2120; Administrator, Thal Development through EACO Bhakkar and others v. Ali Muhammad 2012 SCMR 730; Ghulam Sarwar v. National Bank of Pakistan and others 2007 CLD 530; Collector of Customs, Lahore and others v. Universal Gateway Trading Corporation and another 2005 SCMR 37; Dr. Abdul Nabi, Professor, Department of Chemistry, University of Balochistan, Sariab Road, Quetta v. Executive Officer, Cantonment Board, Quetta 2023 SCMR 1267 and Haji Noorwar Jan v. Senior Member, Board of Revenue, N.W.F.P. Peshawar and 4 others PLD 1991 SC 531 ref.

Dr. Muhammad Farogh Naseem, Senior Advocate Supreme Court and Haq Nawaz Chattha, Advocate Supreme Court for Petitioner.

Ms. Samia Khalid Additional Advocate General, Salman Asif Warraich, Assistant Advocate General with Ch. Rab Nawaz, Assistant Commissioner and Ijaz Ahmad, Tehsildar / Sub-Registrar Kot Momin for Respondents.

2025 C L D 44

[Lahore]

Before Abid Aziz Sheikh, J

ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Petitioner

Versus

KOH-I-NOOR EDIBLE OILS LIMITED through Chief Executive---Respondent

C.O. No.30 of 2004, C.M. Nos.376 of 2016, 02 and 04 of 2022, decided on 16th May, 2022.

Companies Act (XIX of 2017)---

----S. 310---Companies Ordinance (XLVII of 1984) [since repealed], S.316---Winding up order of company during pendency of execution proceedings---Stay in execution proceedings---Application for leave to proceed in execution proceedings was filed by the applicant/ZTBL on the ground that besides the company since execution petitions were also against guarantors and mortgagors, thus, leave to proceed with execution petitions could be granted---Validity---Person claiming to be a secured creditor cannot be compelled to prove his debt in liquidation; such person could stand outside the winding up proceedings and rely upon his security---When such creditor asks for leave to sue, such prayer should ordinarily be granted unless there are special grounds to support the contrary course---In a judgment and decree, in which the judgment debtors also included the individuals besides the company, the execution would ordinarily be allowed to proceed against individuals because winding up proceedings were against the company and not against the individual judgment debtors who were jointly and severally responsible---Decrees in favour of the applicant were not only against the company under liquidation but same were also against some other judgment debtors including guarantors and mortgagors---For recovery of claim of the applicant, High Court in winding up petition could auction the assets of the company and distribute the amount realized but it could not proceed against the properties of individual mortgagors and guarantors of applicant, who were also judgment debtors in the above execution petitions---In cases where the company is necessary party to the action but there are other defendants as well, the Court generally grants leave---Considering that mortgagors and guarantors of applicant could not be proceeded against in the winding up petition, the same principle should also be applicable to the execution to the extent of guarantors and mortgagors---High Court was not bound to grant permission as prayed for rather High Court while granting permission could impose conditions in leave granting order as it might deem fit and appropriate---Application was partially allowed and applicant was granted permission to proceed with the execution petitions only to the extent of judgment debtors, who were impleaded as guarantors and mortgagors, however, execution petitions would not proceed against company.

Messrs Kashmir Theatres Limited Lahore (In Liquidation) Messrs Nizami Pictures Lahore v. Sh. Abdul Rehman, Managing Director PLD 1964 (West Pakistan) Lah. 326; matter of SECP v. Innovative Investment Bank Limited) C.O. No.46 of 2010 vide order dated 26.04.2018; Shafi Woolen Industries Limited, Lahore and 5 others case PLD 1993 Lah. 691 and Capt. Muhammad Aqeel Siddiqi and 2 others case PLD 1988 Kar. 72 rel.

Muhammad Khalil Rana for Applicant-ZTBL (in C.M. No.376 of 2016).

Irshad Ullah Chatha and Muhammad Jamil Rahi for Applicant (in C.M. No.02 of 2022).

Mohsin Ashfaq for Applicant (in C.M. No.04 of 2022).

2025 C L D 78

[Lahore]

Before Muhammad Sajid Mehmood Sethi, J

QATAR LUBRICANTS COMPANY W.L.L. ("QALCO") and another---Applicants

Versus

ATIF NAEEM RANA and others---Respondents

C.M. No.3 of 2023 in C.O. No.48681 of 2023, heard on 24th June, 2024.

Arbitration Act (X of 1940)---

----Ss. 34, 126 & 278---Power to stay legal proceedings, where there is an arbitration agreement---Scope---Parties to the dispute in the main petition not parties to the agreement or in the arbitration clause---Effect---Exclusive jurisdiction of High Court while functioning as a Company Bench over certain company-related matters---Scope---Third party interest---Factual controversies---Applicants sought stay in the main petition and for referring the dispute regarding rectification of register to the arbitration---Validity---Where all parties to the main petition were not parties to the arbitration clause, which constituted a separate agreement, bifurcation of judicial action could not be allowed, which would not only cause inevitable delay in the resolution of the dispute but could also lead to conflicting decisions, increased litigation costs, and harassment of the parties---Right to arbitrate could not be enforced by anyone who is not a party to the agreement containing the arbitration clause, thus, proceedings in the main petition could not be stayed under S. 34 of the Arbitration Act, 1940 (Act)---Non-signatory could not compel arbitration except under exceptional circumstances---In the absence of any contract, an agent could not personally enforce contracts entered into by them on behalf of their principal, nor were they personally bound by them---Court may refuse to stay the proceedings if it is satisfied that there is no sufficient reason to refer the matter to arbitration and that a substantial miscarriage of justice or inconvenience to the parties would occur---Staying proceedings under S.34 of the Act is discretionary and not mandatory---There is no fixed rule for determining when a stay should be refused, however, each case has different facts, and the decision to grant or refuse a stay depends on the specific facts and circumstances of each case---Court can make an objective assessment and decide whether the stay of legal proceedings should be granted or refused---Section 34 of the Act, implies that the Court should first examine whether the arbitration clause applies to the dispute and if it does, the Court must determine whether the nature of the dispute is such that the ends of justice would be better served by a decision of the Court or by the private forum chosen and agreed upon by the parties---Matters involving third-party rights and factual controversies related to companies should be resolved by the courts established under Company Law, which have the authority to frame issues and admit both oral and documentary evidence for adjudication of the dispute---Application for staying the proceedings and for referring the matter to arbitration was dismissed, in circumstances.

Case law referred.

Iftikhar-ud-Din Riaz, M. Haroon Mumtaz, Ahmad Abdul Rehman, Asfand Mir for Applicant (C.M. No.3 of 2023) / Respondents Nos.1 to 3 (in main petition):

Hafiz Talha for Respondent 4 (in main petition).

Zaki Rehman for Respondent No.5 (in main petition).

Arshad Tayebaly, Arshad Nazir Mirza, Talha Javed, Saad Amir, Amna Iqbal, Shakoh Zulqarnain and Nadia Iffat for Petitioners (in C.M. No.3 of 2023).

2025 C L D 90

[Lahore (Rawalpindi Bench]

Before Jawad Hassan, J

Messrs SADIQ POULTRY (PRIVATE) LIMITED---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petitions Nos.498 of 2022 and 1633 of 2024, heard on 9th September, 2024.

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

----Ss. 30 & 37---Punjab Environmental Protection Act (XXXIV of 1997), S. 16---Issuance of Show Cause Notice---Competition Commission of Pakistan---Powers and functions---Petitioners (engaged in running businesses) invoked constitutional jurisdiction of the High Court assailing Show Cause Notices ("impugned notices") issued by the Competition Commission of Pakistan (CCP) to protect the regime of antitrust law---Section 30 (1) and (2) of Competition Act, 2010 ('the Act 2010'), is peri metria to S.16 of the Punjab Environmental Protection Act, 1997 wherein the Authority, Commission or Agency has to be satisfied of contravention of provision of the Punjab Environmental Protection Act, 1997, before making any proceedings in the case but such satisfaction cannot be done unless section 30(2) of the Act 2010 is invoked and thus it has to be read first as the Competition Commission of Pakistan (CCP) has to give notice of intention to make order and to give the undertaking an opportunity to be heard in detail---Section 30(2) of the Act 2010 then comes into play with the notice issued by the CCP with its intention to make orders stating reasons to the undertaking of contravention with some material which the CCP based it on; it then has to sit with the respondents and clarify whether there is any contravention of the provision of the Act 2010 and such notice issued under this section has to be read with S. 37(4) of the Act 2010 as per enquiry initiated under S. 37 of the Act 2010, which had already been done by the CCP in the present case---Language of S. 30(2) of the Act 2010 is very clear which states that the CCP first shall serve notice of its intention stating reasons to the undertaking and by giving an opportunity of being heard with supportive material whereas as per proviso to S. 30(2), the CCP can decide the case ex-parte in case the undertaking does not avail the opportunity of being heard---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

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

----Ss. 28, 30 & 37---Competition Commission of Pakistan initiating enquiries on its own---Power of---Section 28 of the Competition Act, 2010 ('the Act 2010') while delineating the functions and powers to the Competition Commission of Pakistan ('CCP'), empowers it (CCP) to initiate 'proceedings' in accordance with the procedures of the Act 2010---Section 28 of the Act 2010 explicitly states that the CCP may conduct enquiries into the affairs of any undertaking as may be necessary for the purposes of the Act 2010---Said broad mandate underscores the CCP's role as a proactive regulator, capable of initiating investigations to promote competition and prevent anticompetitive behavior---Section 30(1) of the Act 2010 empowers the CCP to make orders in cases of contravention of the provisions of Chapter II; it mandates that the CCP must adopt due process by providing notice of its intention to make such an order, thereby ensuring that the undertaking has an opportunity to be heard---This procedural safeguard is essential for maintaining fairness and transparency in the regulatory process---However, it is crucial to note that the initiation of an enquiry under S. 37 of the Act 2010 does not equate to a formal proceeding under S. 30 of the Act 2010, as the latter involves potential penal consequences---Section 37 of the Act 2010 is particularly pertinent to the CCP's authority to conduct enquiries---Subsection (1) of S. 37 of the Act 2010 empowers the CCP to initiate enquiries on its own or upon a reference from the Federal Government; this provision is significant as it allows the CCP to act independently, without waiting for a complaint or external prompting---Under S. 37 of the Act 2010, enquiries and studies are independent tools employed by the CCP to collect and assess information on market trends---Importantly, such enquiries do not constitute an adverse action or a formal proceeding under S. 30 of the Act 2010---Competition Commission of Pakistan (CCP) can initiate inquiries on its own accord under S. 37(1) of the Act, 2010, which allows it to address potential violations proactively---Competition Commission of Pakistan (CCP) has authority to initiate enquiries based on its own assessment of market conditions, thereby enhancing its regulatory effectiveness---Thus, the Act 2010 does not pose any embargo upon CCP rather it empowers the commission to initiate enquiries on its own against any undertaking to serve the purposes of the Act, 2010---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

Dalda Foods Limited v. Competition Commission of Pakistan 2023 SCMR 1991 and A. Rahim Foods (Pvt.) Limited and another v. K&N'S Foods (Pvt.) Limited and others PLD 2023 SC 516 ref.

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

----S. 30---Constitution of Pakistan, Art. 199---Constitutional petition---Issuance of Show Cause Notice, assailing of---Jurisdiction of Competition Commission of Pakistan, non-challenging of---Effect----Jurisdiction of Competition Commission of Pakistan (CCP) to issue the "impugned notices" had not been agitated by the petitioners---Petitioners has not controverted or challenged the authority of the CCP to issue 'notice' so no question of issuance of show cause notice without valid jurisdiction arises in any manner for maintainability of instant petition---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

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

----Ss. 28, 30 & 37---Constitution of Pakistan, Art. 199---Issuance of Show Cause Notice by Competition Commission of Pakistan, assailing of---Constitutional petition---Maintainability---Whether extraordinary jurisdiction of the High Court can be determinatively applied where the 'injury' is not actual rather perceived in the form of mere issuance of show cause notice---Held, that contents of impugned notices issued by the Competition Commission of Pakistan (CCP) revealed that the petitioners (businessmen) had only been called upon to show cause in writing and to appear and place before the CCP, facts and material in support of their contentions and to avail the opportunity of hearing---Show Cause Notice is delivered to a person by an authority in order to get the reply back with a reasonable cause as to why a particular action should not be taken against him with regard to the defaulting act---By and large, it is a well-defined and well-structured process to provide the alleged defaulter with a fair chance to respond to the allegation and explain his position within reasonable timeframe"---Therefore, a show cause notice is not a testament of an adverse proceeding against a party rather it is an intimation of initiation of a process, which requires certain answers and clarifications from the party addressed---As such a show cause notice is not and ought not to be a culmination of unfavorable determination against the party but it is, and it must be adopted as a mode of opportunity to enable the party to provide explanation of certain facts or missing information as required by the relevant law in a case where shortcomings or omissions thereof surface or are noted either through the enquiry, tentative or otherwise, or by information received by the department in any other manner---Petitioners should have responded to the show-cause notice before seeking intervention, as this practice undermines the department's ability to proceed with cases effectively---Thus, mere issuance of a show cause notice is not an adverse order---Since through the "impugned notices" a chance was given to the "petitioners" to appear and produce evidence/material in response to the allegations levelled in the "enquiry report" therefore, the petitioners' grievance was not actual rather it was perceived---Present constitutional petition was filed against the "impugned notices" by the petitioners, which was not an adverse order and they had agitated an injury which was neither actual nor immediate rather was perceived and suppositious---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were

Commissioner Inland Revenue and others v. Jahangir Khan Tareen and others 2022 SCMR 92; Deputy Commissioner of Income Tax/Wealth Tax, Faisalabad and others v. Messrs Punjab Beverage Company (Pvt.) Ltd. 2008 SCMR 308 and Abdul Razzaq v. Lahore Development Authority through Director General and another 2017 PLC (C.S.) Note 2 ref.

(e) Words and phrases---

----'Show cause' notice---Definition.

(f) Words and phrases---

----Show cause notice---Meaning and scope---Term Show Cause Notice is a formal communication that informs the recipient of alleged legal violations and provides them an opportunity to respond, embodying the principles of natural justice and due process, which ensures a fair hearing and protection of rights before any adverse action is taken.

Commissioner Inland Revenue, Lahore v. Messrs Millat Tractors Limited, Lahore and others 2024 SCMR 700 ref.

(g) Constitution of Pakistan---

----Art. 199---Issuance of a Show Cause Notice, assailing of---Constitutional petition---Maintainability---Mere issuance of a show cause notice does not amount to an adverse action; and a constitutional petition against a show-cause notice is not maintainable unless such a notice has been issued without lawful authority, is wholly without jurisdiction, coram non judice or is based on mala fides.

Saeed Ahmad and others v. Chairman O.G.D.C.L. and others 2020 PLC 27 ref.

(h) Constitution of Pakistan---

----Art. 199---Issuance of show cause notice, assailing of---Constitutional petition---Maintainability---Principles regarding maintainability of constitutional petition against mere issuance of show cause notice are: (i) Show Cause Notice is not an adverse order unless it could be clearly shown to the satisfaction of the Court that it has been issued by an authority not vested with jurisdiction or it was issued for mala fide reasons; (ii) The exception relating to want of jurisdiction does not include every jurisdictional error; a wrong exercise of jurisdiction or interpretation of the law cannot be treated as want of jurisdiction;(iii) Constitutional jurisdiction is exercised if the Court is satisfied that the person is an 'aggrieved party' within the context of Art. 199 of the Constitution and no adequate remedy is provided by law; if adequate statutory remedies are provided under the relevant statute, it is to be taken into consideration while exercising discretion under Art. 199 of the Constitution; (iv) By passing or circumventing statutory forums is to be discouraged; (v) The approach should be to advance the object and purpose of a statute and every effort should be made to uphold the sanctity of the legislative intent rather defeating it.

Strategic Plans Division and another v. Punjab Revenue Authority and others PLD 2024 Lah. 545 ref.

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

----Ss. 30 & 37---Constitution of Pakistan, Art.199--- Issuance of Show Cause Notice by Competition Commission of Pakistan, assailing of---Constitutional petition---Maintainability---Doctrine of ripeness---Petitioners (engaged in running businesses) invoked constitutional jurisdiction of the High Court assailing Show Cause Notices ("impugned notices") issued by the Competition Commission of Pakistan (CCP) to protect the regime of antitrust law---Validity---Approach of the petitioners was contradictory to the doctrine of ripeness; this doctrine is also a determinative parameter for maintainability and merit adjudication of a constitutional petition within the bound of Art. 199 of the Constitution---Term 'ripeness' has been defined in Blacks' Law Dictionary, 11th Edition, as 'The state of a dispute that has reached, but has not passed the point when the facts have developed sufficiently to permit an intelligent and useful decision to be made'---Principle of ripeness is grounded in the notion that judicial resources must be preserved, ensuring that Courts engage only with disputes that are actual and immediate; it reflects the view that Courts should concern themselves with tangible, present, or imminent issues, avoiding the exhaustion of their efforts on abstract or perceived questions layered in probabilities and apprehensions; as such, judicial intervention is discouraged in matters that, at least for the time being, do not bear a direct or substantial impact on the parties involved---Therefore, present constitutional petitions, in the instant point of time, are contradictory to the doctrine of ripeness and prematurity---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

(j) Jurisdiction---

----Doctrine of ripeness---Applicability and significance---Doctrine of ripeness ensures that Courts avoid premature adjudication by requiring disputes to be concrete and focused, preventing abstract disagreements over policies---This principle protects agencies from judicial interference until their decisions are formalized and felt by the challenging parties, allowing Courts to benefit from agency expertise and a developed record.

(k) Interpretation of statutes---

----Preamble---Preamble to a statute is though not an operational part of the enactment but it is a gateway, which opens before the Court the purpose and intent of the legislature, which necessitated the legislation on the subject and also sheds clear light on the goals which the legislator aimed 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 the law.

Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447; Dilsons (Private) Limited and others v. Security and Exchange Commission of Pakistan and another 2021 CLD 1317; A. Rahim Foods (Pvt.) Limited and another v. K&N'S Foods (Pvt.) Limited and others 2023 CLD 1001; Competition Commission of Pakistan and others v. Dalda Foods Limited, Karachi 2023 SCMR 1991 and LPG Association of Pakistan through Chairman v. Federation of Pakistan through Secretary, Ministry of Petroleum and Natural Resources, Islamabad and others 2021 CLD 214 ref.

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

----Ss. 28, 30 & 37---Constitution of Pakistan, Art. 199---Issuance of Show Cause Notice by Competition Commission of Pakistan, assailing of---Constitutional petition---Maintainability---Issuance of the "impugned notices" is an initial yet primary step of the process to ensure fair opportunity, which is also akin to probability of mediation---Therefore, the constitutional petitions, in the instant point of time, were contradictory to the doctrine of probability of mediation---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

Commissioner Inland Revenue v. Messrs RYK Mills 2023 SCMR 1856 ref.

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

----Ss. 30, 37, 41, 42 & 44---Constitution of Pakistan, Art. 199---Issuance of Show Cause Notice by Competition Commission of Pakistan, assailing of---Constitutional petition---Maintainability---Alternate and efficacious remedy not availed---It was an opportunity for the petitioners to explain their position and if they did so, the impugned notices were and ought to be deemed satisfied without any further adverse action---As the matter had not ripened under Chapter IV of the Competition Act, 2010, under which certain powers had been given to the Regulator to decide the matter and once it was decided by the CCP, the petitioners had the remedies under S. 41 of the Act 2010 by way of an appeal before the Appellant Bench of the Commission and an appeal to the Competition Appellate Tribunal under S. 42 of the Act 2010, and further appeal to the Supreme Court under S. 44 of the Act 2010, and such remedies had not been exhausted by the petitioners---If a Regulator is barred from exercising any of such functions, the purpose of law will not only be compromised but the intent behind making of such law will also be jeopardized---Moreover, if the Court starts interfering at initial steps of the Regulator for not initiating inquiry, then it will create hurdle for the Regulator to proceed in the matter to protect the very purpose and object of law---In presence of availability of an alternate efficacious remedy, jurisdiction of the High Court under Art. 199 of the Constitution cannot be invoked---High Court directed the petitioners to file their replies by agitating all points raised in these petitions before the CCP who shall proceed ahead with an objective approach to the matter strictly as per law---Constitutional petitions were disposed of accordingly.

Chenab Flour and General Mills v. Federation of Pakistan and others PLD 2021 Lah. 343 ref.

(n) Constitution of Pakistan---

----Art. 199---Constitutional petition---Maintainability---Alternate and efficacious remedy---High Court, before granting relief to a Petitioner by exercising its extraordinary jurisdiction under Art. 199 of the "Constitution", must satisfy itself regarding the non-availability of any alternate remedy, or in case Court is inclined to grant relief even in presence of alternate remedy, Court should be satisfied that circumstances of the case make the other remedy inadequate---In presence of availability of an alternate efficacious remedy, jurisdiction of the High Court under Art. 199 of the Constitution cannot be invoked.

Indus Trading and Contracting Company v. Collector of Customs (Preventive) Karachi and others 2016 SCMR 842; Dr. Sher Afgan Khan Niazi v. Ali S. Habib and others 2011 SCMR 1813 and Muhammad Abbasi v. Station House Officer Bhara Kahu and 7 others PLD 2010 SC 969 ref.

Sardar Taimoor Aslam Khan, Advocate Supreme Court with Uzair Shafie, Barrister Jahanzeb Awan and Arshad Mahmood, Muhammad Imran Malik, Advocate Supreme Court with Aakif Majeed Butt, Hassan Ismail and Asim Tufail Farooqi for the Petitioner (in connected W.P. No. 1633 of 2024).

Sajid Ilyas Bhatti, Additional Attorney General with Arshad Mahmood Malik, Assistant Attorney General, Barrister Asadullah Chattha and Barrister Ambreen Abbasi for Respondents/ Competition Commission of Pakistan with Hafiz Nasim, Senior Legal Advisor along with Musa Hayat Tarar, Adeel Peter and Hassan Raza, Legal Advisor for Competition Commission of Pakistan.

2025 C L D 122

[Lahore]

Before Ahmad Nadeem Arshad, J

Mst. RAZIA BEGUM---Petitioner

Versus

PUBLIC AT LARGE and others---Respondents

Civil Revision No. 44347 of 2023, decided on 1st October, 2024.

(a) Words and phrases---

----Nominee---Meaning and scope---A "nominee" is typically defined as a person or entity designated to act on behalf of another, particularly in legal or financial matters---Nominee may hold assets for the benefit of the actual owner, indicating a fiduciary relationship---Nominee is "a party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others"; "nominee" is "a person who has been formally suggested for a job, a prize etc.

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

----S.72---Life Insurance Policy---Nominee, status of---Nomination merely confers a right to collect the money or to "receive the money"; it does not operate either as a gift or as a will and, therefore, cannot deprive the other heirs of the nominator who may be entitled thereto under the law of succession applicable to the deceased---Thus, the nominee collects as a trustee for the benefit of all persons entitled to inherit from the deceased employee---Nomination merely confers a right to collect the money or to receive the money and it does not operate as a gift or as a will and, therefore, cannot deprive the legal heirs of the nominator who may be entitled thereto under the law of succession applicable to the deceased propositus---Thus, the nominee collects as a trustee for the benefit of all persons entitled to inherit from the deceased propositus.

Mst. Amtal Habib and others v. Mst. Musarat Parveen and others PLD 1974 SC 185; Malik Safdar Ali Khan and another v. Public At Large and others 2004 SCMR 1219; Mst. Ameeran Khatoon v. Mst. Shamim Akhtar and others 2005 SCMR 512 and Postal Life Insurance (PLI) and others v. Muhammad Ishaque Butt 2022 CLD 309 ref.

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

----S. 72---Life Insurance Policy, proceeds of---Tarka---Scope---Nominee assigned by the deceased---Scope and effect---Deceased in his lifetime purchased an insurance policy wherein he nominated his wife as his nominee---Mother of the deceased filed an application for issuance of succession certificate, which was concurrently declined---Claim of the petitioner (being mother of the deceased) was that she was entitled to inherit 1/6th share of the insurance policy amount, whereas, respondent (wife/widow) denied her right on the ground that being nominee she was solely entitled to receive the whole insurance policy amount---Deceased left behind mother (petitioner), widow (respondent/ nominee), a daughter and two sons (respondents)---Courts below non-suited the petitioner on the ground that the amount of the Insurance Policy did not fall within the ambit of "Tarka", which was not liable to be inherited by the legal heirs and only the nominee was entitled to receive the amount of said Life Insurance Policy---Whether the amount of Life Insurance Policy falls within the ambit of "Tarka" and is liable to be distributed amongst the legal heirs of the deceased propositus or not?---Held, that the status of the amount of Life Insurance Policy was not described in the insurance documents---However, S. 72 of the Insurance Ordinance, 2000, provides that the policy holder, when effecting the policy or at any time before the policy matures for payment, may nominate a person or persons as nominee to whom the money secured by the policy shall be paid in the event of the death of the insured person---Section 72 of the Ordinance, 2000, authorizes and empowers the policy holder to nominate a person or persons to whom the money secured by the policy shall be paid in the event of his death, but this provision of law does not exclude the legal heirs to inherit the assets, including the policy proceeds of the deceased according to the principle of Muhammadan Law, because there is a Constitutional guarantee enunciated in the Constitution of Pakistan that no law can be made which is contrary to the Injunctions of Quran and Sunnah---It is a Quranic injunction that the legal heirs of a Muslim deceased will inherit their assets according to the principle of Muhammadan Law, therefore, the nominee is only supposed to collect the policy proceeds and to disburse the same among the legal heirs, and further the nominee in any case shall not exclude or deprive the legal heirs of the fruits of the policy---Thus, the Insurance Policy proceeds fall within the definition of "Tarka" of the policy holder after his death---Both the Courts below had erred in law while dismissing the succession petition of the petitioner and had failed to properly appreciate the question involved in the lis as the present case related to Life Insurance Policy and the nominee was appointed by the nominator just to fulfill the legal requirement of S. 72 of the Insurance Ordinance, 2000---High Court set-aside the impugned judgments of the Courts below, and the petitioner, being mother of the deceased, was held entitled to receive her due share out of the policy proceeds---Revision petition, filed by mother of deceased was allowed accordingly.

Muhammad Umar v. IGI and others 2023 CLD 420 ref.

Mst. Rabia Qavi and others v. Mst. Hina Qavi Khan and others PLD 2020 Sindh 263; Mirza Muhammad Ameen and others v. Government of Pakistan PLD 1982 FSC 143 and Wafaqi Hakoomat-e-Pakistan v. Awamunnas PLD 1991 SC 731 distinguished.

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

----S. 72---Life Insurance Policy, proceeds of---Tarka---Nominee assigned by the deceased---Scope and effect---Deceased in his lifetime purchased an insurance policy wherein he nominated his wife as his nominee---Mother of the deceased filed an application for issuance of succession certificate, which was concurrently declined---Claim of the petitioner (being mother of the deceased) was that she was entitled to inherit 1/6th share of the insurance policy amount, whereas, respondent (wife/widow) denied her right on the ground that being nominee she was solely entitled to receive the whole insurance policy amount---Deceased left behind mother (petitioner), widow (respondent/ nominee), a daughter and two sons (respondents)---Courts below non-suited the petitioner on the ground that the amount of the Insurance Policy did not fall within the ambit of "Tarka", and was not liable to be inherited by the legal heirs and only the nominee is entitled to receive the amount of said Life Insurance Policy---Legality---Admittedly, when a person secures Insurance Policy he makes certain payments from time to time as per the schedule from his pocket and on the maturity of Policy in his lifetime, he is entitled to receive the same---Moreover, as per subsection (2) of S. 72 of Insurance Ordinance, 2000, the Policy holder can change the nominee or cancel the nomination at any time before maturity of the policy---It is further provided in the subsection (5) of S. 72 of the Ordinance 2000 that in the event of death of the nominee or the nominees before the policy matures the amounts secured by the policy shall be payable to the legal heirs of the deceased policy holder or legal representatives, or the holder of a succession certificate, as the case may be---It is nowhere mentioned that after the death of nominee the amount would be disbursed amongst the legal heirs or legal representatives of the nominee---Hence, it clarifies that the nomination shall not operate as a gift or will because had the nomination been a gift or will, then after the death of the nominee the amount would devolve on the heirs of nominee rather than the heirs of policy holder---Both the Courts below had erred in law while dismissing the succession petition of the petitioner and had failed to properly appreciate the question involved in the lis as the present case related to Life Insurance Policy and the nominee was appointed by the nominator just to fulfill the legal requirement of S. 72 of the Insurance Ordinance, 2000---High Court set-aside the impugned judgments of the Courts below, and the petitioner, being mother of the deceased, was held entitled to receive her due share out of the policy proceeds---Revision petition, filed by mother of deceased was allowed accordingly.

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

----S. 72---Life Insurance Policy, proceeds of---Tarka---Nominee assigned by the deceased---Scope and effect---Deceased in his lifetime purchased an insurance policy wherein he nominated his wife as his nominee---Mother of the deceased filed an application for issuance of succession certificate, which was concurrently declined---Claim of the petitioner (being mother of the deceased) was that she was entitled to inherit 1/6th share of the insurance policy amount, whereas, respondent (wife/widow) denied her right on the ground that being nominee she was solely entitled to receive the whole insurance policy amount---Deceased left behind mother (petitioner), widow (respondent/ nominee), a daughter and two sons (respondents)---Courts below non-suited the petitioner on the ground that the amount of the Insurance Policy did not fall within the ambit of "Tarka", and was not liable to be inherited by the legal heirs and only the nominee was entitled to receive the amount of said Life Insurance Policy---Legality---Concept of nominee is alien to Muslim Law, according to which the legal heirs are the only persons entitled to receive the property left by their predecessor and no Muslim heir can exclude the other heir on the ground that he is a nominee---A nominee, if appointed, does not become the sole owner of the assets left by the deceased but he/she is only authorized to collect the amount or to hold the property of the deceased as an administrator and then to distribute the same amongst all the legal heirs---The nomination does not make the nominee as donee nor the nomination amounts to a gift, in the absence of delivery of possession of the property gifted---The nominee cannot claim as exclusive owner the amount of the insurance policy---In the light of Muslim Law of Inheritance, all the legal heirs of the deceased are entitled to receive the property ("Tarka") left by the deceased, according to their shares---Both the Courts below had erred in law while dismissing the succession petition of the petitioner and had failed to properly appreciate the question involved in the lis as the present case relates to Life Insurance Policy and the nominee was appointed by the nominator just to fulfill the legal requirement of S. 72 of the Insurance Ordinance, 2000---High Court set-aside the impugned judgments of the Courts below, and the petitioner, being mother of the deceased, was held entitled to receive her due share out of the policy proceeds---Revision petition, filed by mother of deceased was allowed accordingly.

Muhammad Alamgir Khan for Petitioner.

Akhtar Saeed Bhatti for Respondents Nos. 2-5.

Barrister Humayun Faiz for Respondent No.6.

2025 C L D 138

[Lahore]

Before Ahmad Nadeem Arshad, J

Messrs STACO-SHAHID BUILDERS JOINT VENTURE (JV)---Appellant

Versus

LAHORE CANTONMENT BOARD---Respondent

F.A.O. No.24690 of 2024, decided on 3rd September, 2024.

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

----S.20(4)---Cantonments Act (II of 1924), S.84---Appointment of arbitrator---Dispute arose between the parties with regard to initial work order and subsequent changes/enhancement in the costs for the project---Appointment of arbitrator was to be made in such manner as may be agreed upon between the parties in terms of the contract---Contention of the appellant was that an independent arbitrator ought to have been appointed instead of appointment of the arbitrator in terms of the contract owing to his biasness and partiality being part of the respondent-department as its appellate authority---Validity---Whole object underlying the Arbitration Act, 1940 (Act) is to enforce the arbitration agreement whereby the parties bind themselves down to have their disputes, arising out of transaction to which such an agreement is applicable, adjudicated upon and decided by the domestic tribunal---Under clause (4) of S.20 of the Act, power of the Court to order reference to an arbitrator appointed by itself did not confer the authority on the Court to substitute the original agreement of the parties by an entirely new agreement of its own choice---If the parties out of their free-will and consent appointed a third person knowing fully well his relation with any one of the parties to dispute, such arbitration agreement shall not be invalided on the principle of bias and the arbitrator cannot be removed on this ground---Known interest of an arbitrator did not in any way invalidate his appointment, and it was only in a case where such an interest was concealed or came into existence after the appointment, that the appointment was rendered invalid or was liable to be revoked---Appellant was well aware of the authority and department of the arbitrator from the very first date and the Arbitrator was not the official of the respondent-department rather he was an Appellate Authority under S.84 of the Cantonments Act, 1924, who was appointed by the Government as defined under Pakistan Cantonment Service Rules, 1952---Arbitrator was not a participant in the meetings of Cantonment Board, therefore, any kind of allegation of biasness or partiality on his part was purely hypothetical and presumptuous, without any kind of evidence at all---Parties had already appointed the arbitrator for adjudication of the disputes arising out of the agreement and the appellant could not wriggle out from his commitment, and was precluded from approaching the court for appointing an arbitrator other than the arbitrator named in the agreement---Appellant could approach the already appointed arbitrator for redressal of his grievance and thereafter if there appeared any instance of biasness he could approach the Court for redressal of his grievance under relevant provisions of law---Appeal was dismissed, in circumstances.

Messrs Commodities Trading International Corporation v. Trading Corporation of Pakistan Ltd. and another 1987 CLC 2063; Messrs Allied Engineering Consultants (Pvt.) Ltd., Lahore v. Messrs Sui Gas Transmission Company Ltd. 1989 CLC 1143; Director Housing, A.G'S Branch, Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988; Engr. Inam Ahmad Osmani v. Federation of Pakistan and others 2013 MLD 1132 and University of Engineering and Technology, Lahore and another v. Messrs Upright Engineers (Pvt.) Ltd. 2021 CLC 596 distinguished.

Messrs Hafiz Abdul Aziz Cotton Jinning Factory v. "Messrs Haji Ali Muhammad Abdullah & Co. and another PLD 1966 (W.P) Kar. 197; Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Limited, Islamabad v. M/s Allied Bank of Pakistan and another PLD 2003 SC 215; Lahore Stock Exchange Limited v. Fredrick J. Whyte Group, Pakistan Ltd. and others PLD 1990 SC 48; M.A. Ghani Sufi & Sons v. Federation of Pakistan PLD 1957 (W.P) Lahore 363 and Pakistan Medical Commission (PMC) through Secretary (Successor of Registrar, PMDC), Islamabad Capital Territory v. Construction Experts (Pvt.) Limited through Chief Executive/Director, Islamabad and another PLD 2023 Isl. 01 rel.

(b) Interpretation of document---

----Documents or statutes are to be interpreted in their entire context following a full consideration of all provisions of the documents or statute, as the case may be---Every attempt must be made to save the document and for this purpose a difference between general statements and particular statements of the document should be differentiated properly to save the document rather to nullify it---No provision of the document should be read in isolation or in bits or pieces, but the entire document is to be read as a whole to gather the intention of the parties---Court for this purpose can resort to the correspondence exchange between the parties---Court should lean towards an interpretation, which effectuates rather than one which invalidates an instrument.

Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Limited, Islamabad v. M/s Allied Bank of Pakistan and another" PLD 2003 SC 215 rel.

Zahid Saleem for Appellant.

Shahzada Muzaffar Ali with Sidra Azmat and Hanan Masood on behalf of LCB / Respondent.

2025 C L D 160

[Lahore]

Before Ch. Muhammad Iqbal, Muzamil Akhtar Shabir and Asim Hafeez, JJ

AL-MAKKAH PRESS (PVT.) LTD. through Chief Executive and 2 others---Appellants

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED---Respondent

E.F.A. No.248622 of 2018, decided on 18th October, 2024.

Per Ch. Muhammad Iqbal, J.;Muzamil Akhtar Shabir and Asim Hafeez, JJ agreeing.

(a) High Court (Lahore) Rules and Orders---

----Vol. I, Ch. 3---Value of suit---Determination---Value of suit for the purpose of court fee and jurisdiction, under Chapt. 3 of Vol. I of High Court (Lahore) Rules and Orders, is the value mentioned in plaint by plaintiff---No specific valuation of suit is mentioned in Suits Valuation Act, 1887, thus, fixing appropriate value of suit for the purpose of Court fee and jurisdiction is left at the discretion of plaintiff---Ordinarily on the basis of value mentioned in plaint, pecuniary jurisdiction of Court is presumed to be the same, however, if Court modifies value of suit then the changed value is considered as value of the suit for the purpose of pecuniary jurisdiction of a Court.

Zahid Zaman Khan and others v. Khan Afsar and others PLD 2016 SC 409; Mst. Parveen (deceased) through LRs. v. Muhammad Pervaiz and others 2022 SCMR 64; Messrs Mardan Ways Sui Northern Gas Pipelines Limited Station v. General Manager SNGPL and others 2022 SCMR 584 and Mumtaz Hussain v. Haji Muhammad Bashir and others PLD 2016 Lah. 97 rel.

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

----Ss. 9(a) & 19---Suit for recovery of finance---Execution proceedings---Valuation of suit---Pecuniary jurisdiction of Banking Court---Determination---Change in valuation---Effect---Dispute had arisen due to two different views taken by Judges in Chambers of High Court when one execution proceeding was kept pending before High Court despite the fact that amount decreed was less than Rs.100 million, whereas in another case reliance was placed on case titled Zarai Taraqiati Bank Limited v. Faran Maiz Industries (Pvt.) Ltd. (EFA No.1059/2016) and execution proceeding was sent to Banking Court---Held, that plaintiff is competent to fix value of suit for recovery under Financial Institutions (Recovery of Finances) Ordinance, 2001---If Banking Court disagrees with the value fixed by plaintiff, it determines and fixes the value of suit as per provisions of Suits Valuation Act, 1887 after holding appropriate inquiry and collecting material---After such determination of value, the matter is liable to be adjudicated by Court of competent jurisdiction---Pecuniary jurisdiction should be ascertained from the value assessed by plaintiff in the plaint and if Court alters the value in appeal etc., in that eventuality pecuniary jurisdiction remains the same as mentioned in plaint---High Court, as a Banking Court, has jurisdiction to execute judgment and decree passed by it, irrespective of the quantum of amount so decreed---Full Bench of High Court set aside the order passed by Judge in Chambers of High Court in which execution was sent to Banking Court for further proceedings---Furthermore, the judgment passed by Division Bench of High Court in E.F.A No.1059/2016 titled as Zarai Taraqiati Bank Limited v. Faran Maiz Industries (Pvt.) Limited [relied upon by one of the Judge in Chambers of High Court, while sending execution to Banking Court for proceedings], was declared to be passed in violation of S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, as well as settled principle of law and was a judgment per incuriam---Decrees passed by High Court under Banking jurisdiction were liable to be exclusively executed by High Court itself---Question was answered accordingly.

Zarai Taraqiati Bank Limited v. Faran Maiz Industries (Pvt.) Limited (E.F.A No.1059/2016) Overruled.

Shafaqat Iqbal and others v. Ghulam Rasool and another PLD 2001 Lah. 139; Muhammad Saleem and 3 others v. Pak Brunei Investment Company Ltd. through Chief Manager/President 2022 CLD 84; Dr. Pir Muhammad Khan v. Khuda Bukhsh and others 2015 SCMR 1243; MCB Bank Limited through Duly Authorized Attorney v. Eden Developers (Pvt.) Limited and others 2019 CLD 219; Mashraq Bank v. Messrs Amtul Rehman Industries (Pvt.) Limited and others 2002 CLD 336; MCB Bank Limited v. Messrs Mazco Industries Private Limited and others 2023 CLD 410; Muhammad Jawad Hamid v. Mian Muhammad Nawaz Sharif and others PLD 2018 Lah. 836 and Qaiser and another v. The State 2022 SCMR 1641 rel.

Per Asim Hafeez, J.:

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

----Ss. 9(a) & 19---Suit for recovery of finance---Execution proceedings---Valuation of suit---Pecuniary jurisdiction of Banking Court---Determination---Change in valuation---Effect---Dispute had arisen due to two different views taken by Judges in Chambers of High Court when one execution proceeding was kept pending before High Court despite the fact that amount decreed was less than Rs.100 million, whereas in another case reliance was placed on case titled Zarai Taraqiati Bank Limited v. Faran Maiz Industries (Pvt.) Ltd. (EFA No.1059/2016) and execution proceedings were sent to Banking Court---Held, that suit proceedings, under Financial Institutions (Recovery of Finances) Ordinance, 2001 stand converted into execution by operation of law, upon pronouncement of judgment and decree---Court which pronounces the judgment is obligated to act and exercise jurisdiction to execute the decree, without the necessity of re-visiting or re-determining its own pecuniary jurisdiction in the context of quantum of an adjudicated claim / decreed amount---Legislature, in its wisdom, has rightly absolved the Court executing decree to re-visit or re-determine its pecuniary jurisdiction while giving effect to decree under Financial Institutions (Recovery of Finances) Ordinance, 2001---Full Bench of High Court affirmed the order in which execution proceeding was retained in High Court and the order in which execution was sent to Banking Court for proceedings was set aside---Full Bench of High Court declared judgment passed in case of Faran Maiz Industries (Pvt.) Ltd. (E.F.A. 1059 / 2016) contrary to law, hence, per-incuriam---Reference was decided accordingly.

Zarai Taraqiati Bank Limited v. Faran Maiz Industries (Pvt.) Limited (E.F.A No.1059/2016) Overruled.

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

MCB Bank Limited through duly authorized attorney v. EDEN Developers (Pvt.) Limited and others 2019 CLD 219; Messrs United Bank Ltd. v. Mst. Rehana Raza PLD 1983 Kar. 467 and National Bank of Pakistan v. Bawany Industries Ltd. PLD 1983 Kar. 300 rel.

Muhammad Riaz for Appellants.

Ashar Elahi for Appellant (in E.F.A. No.43805 of 2021).

Nemo for Respondents.

2025 C L D 184

[Lahore]

Before Shahid Karim, J

NOORUDDIN FEERASTA and others---Petitioners

Versus

LAHORE DEVELOPMENT AUTHORITY (LDA) and others---Respondents

Writ Petition No.17085 of 2022, decided on 29th February, 2024.

(a) Lahore Development Authority Building and Zoning Regulations, 2019---

----Regln. 2.5---Right of way---Connotation---Right of way means width of street between two opposite property lines---It does not mean merely the road on which vehicles are intended to ply---It also includes footpaths for passengers and also green areas which are required to be maintained outside buildings by owners.

(b) Lahore Development Authority Building and Zoning Regulations, 2019---

----Regln. 10.3.3 (g)---Pakistan Environmental Protection Act (XXXIV of 1997), S. 12---Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA)---No Objection Certificate from Environmental Protection Agency---Petitioners were aggrieved of construction of a multi-storeyed Apartment Building by the respondent which required no objection certificate from Environmental Protection Agency---Validity---Decision to require EIA or IEE was for LDA to make and Regln. 10.3.3 of Lahore Development Authority Building and Zoning Regulations, 2019, did in fact require an EIA, but for this condition ('Condition')---Policy regarding Apartment Buildings could not be viewed in insolation and in the setting of one particular building only---Canvas had to be widened and entire array of building which were under construction and their impact on environment had to be at the heart of the policy---Such condition was a serious clog on such effort which had to be struck down---High Court directed Lahore Development Authority to issue revised edition of Lahore Development Authority Building and Zoning Regulations, 2019 by deleting such condition---High Court further directed that henceforth any construction of Apartment Building would require EIA and NOC from EPA---Constitutional petition was dismissed, in circumstances.

Standard Chartered Bank Limited through Constituted Attorney v. Karachi Municipal Corporation through Administrator and 9 others 2015 YLR 1303 rel.

Syed Ali Zafar, Jahanzeb Sukhaira, Talib Hussain, Asfand Waheed, Muhammad Adeel Chaudhry and Abdul Latif for Petitioners.

Muhammad Iftikhar ud Din Riaz, Ahmad Abdul Rehman and Muhammad Umer Rafiq for Respondent No.3.

Sahibzada Muzaffar Ali for Respondent-LDA.

Hassan Ijaz Cheema, A.A.G.

2025 C L D 217

[Lahore]

Before Abid Aziz Sheikh, Ch. Muhammad Iqbal and Anwaar Hussain, JJ

JAMIL TARIQ---Appellant

Versus

NEW JUBILEE INSURANCE COMPANY LIMITED through Competent Authority and another---Respondents

Insurance Appeal No.195930 of 2018, (with other connected Appeals) heard on 11th October, 2024.

Insurance Ordinance (XXXIX of 2000)---

----S. 121(2)---Insurance Tribunals, constitution of---Objection was raised on constituting Insurance Tribunals under Insurance Ordinance, 2000, on the basis of judgment passed by Division Bench of High Court in the case of Premier Insurance Limited reported as 2023 CLD 135---Held, that Federal Government has power under S. 121(2) of Insurance Ordinance, 2000 to appoint a serving or a retired Judge of High Court as Chairman, Insurance Tribunal with not less than two members who are persons of ability with integrity who have such knowledge or experience of life insurance, non-life insurance, actuarial science, finance, insurance economics, law, accountancy, administration or other discipline---Federal Government with consultation of Chief Justice of High Court issued notifications under proviso of S. 121(1) of Insurance Ordinance, 2000 and constituted Insurance Tribunal which were accordingly functioning before 03-10-2022---Government had rightly issued notification and validly constituted Insurance Tribunals, as such to that extent, any adverse findings rendered by Division Bench of High Court in case of Premier Insurance Limited reported as 2023 CLD 135 were declared as not sustainable as the same had no binding force of law---Full Bench of High Court directed the office to fix insurance appeals before appropriate Benches of High Court for decisions on merits---Question was decided accordingly.

Premier Insurance Limited through Authorized Officer v Messrs Ihsan Yousaf Textile Private Limited through Director and 3 others 2023 CLD 135 Overruled.

Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan through Chairman 2007 CLD 490; State Life Insurance Corporation v. Razi-ur-Rehman 2011 CLD 746; Premier Insurance Limited through Authorized Officer v. Messrs Ihsan Yousaf Textile Private Limited through Director and 3 others 2023 CLD 135; Jalil Ahmed v. Additional District and Sessions Judge-I and others (Writ Petition No.7364/2017); Multiline Associates v. Ardeshir Cowasjee and 2 others PLD 1995 SC 423; Qaiser and another v. The State 2022 SCMR 1641; Muhammad Jawad Hamid v. Mian Muhammad Nawaz Sharif and others PLD 2018 Lah. 836; Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan through Chairman 2007 CLD 490 and State Life Insurance Corporation of Pakistan through Chairman and another v. Mst. Naseem Begum 2009 CLD 1413 rel.

Barrister Tariq Saeed Rana and Rao Usama for Appellants (in RFAs Nos.239730/18 and 245865/2018).

Ibrar Ahmed for Appellant (in R.F.A. No.10482/2022).

Ahsan Nasrullah for Appellant (in R.F.A. No.245865/2018).

Imtiaz Rashid Siddiqui, Barrister Shehryar Kasuri, assisted by Raza Imtiaz Siddiqui and Ali Umrao for Appellant (in R.F.A. No.231965/2018).

Mian Khasham Ataullah, Mian Zargham Ataullah, Rana Zeeshan and Ch. Ali Usman for Appellants (in R.F.A. No.12395/2022).

Liaquat Ali Butt for Appellant (in R.F.A. No.29341/2022.

Ms. Asma Hamid, Mustafa Khalid and Ms. Laiba Tariq for Appellant (in Insurance Appeal No.22680 of 2021).

Ahmed Farooq for Appellant (in R.F.A. No.12395/2022).

Ms. Shehzeen Abdullah, Addl. Advocate General, Punjab (in Insurance Appeal No.195930/2018).

Hammad Hussain and Ali Hussain Gilani for Respondents (in R.F.A. No.195930/2018).

Barrister Tariq Saeed Rana and Rao Usama for Respondent No.1 (in R.F.A. No.195930/2018).

Ahsan Nasrullah for Respondent No.1 (in R.F.As. Nos.239729, 23973 and 241566 of 2018).

Liaquat Ali Butt for Respondents (in R.F.A. No.46567/2022).

Nasir Mahmood Chaudhry for Respondents (in R.F.A. No.12395/2022).

Ms. Madiha Amin for Respondent (in R.F.As. Nos.245865 and 239730 of 2018).

Ali Ibrahim, Barrister Hussan Akhtar and Barrister Aneeq Sanotra for Respondent (in R.F.A. Nos.239729, 239730 and 245865 of 2018).

Muhammad Haroon Mumtaz and Ali Khichi for Respondent (in R.F.A. No.231965/2018).

Rana Abu Harahrah for Respondents.

Shahzad Shaukat and Taha Shaukat for Respondents.

Waqas Ahmad Mir assisted by Hamza Hayat, Amicus Curiae.

2025 C L D 241

[Lahore]

Before Shahid Karim, J

SPACECOM INTERNATIONAL, LLC through Special Attorney---Applicant

Versus

WATEEN TELECOM LIMITED---Respondent

Civil Original No.25854 of 2023, decided on 4th December, 2024.

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

----Ss. 3 & 6---Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 ("the New York Convention"), Arts. V(1)(d) & (2)(b)---Foreign arbitral award---Recognition and enforcement---Foreign seat of arbitration---Autonomy of parties, principle of---Scope---Applicant company sought execution of foreign arbitral award---Respondent company resisted execution of award on the plea that composition of arbitral authority for arbitral proceedings was not in accordance with the agreement of parties, as seat of arbitration was Dubai, UAE which was distinguished from Dubai International Financial Centre-London Court of International Arbitration (DIFC-LCIA)---Validity---High Court was not precluded in any sense whatsoever from conducting de novo review of respondent's evidence and submissions with reference to Art. V(I)(d) of the New York Convention---Enforcement Court was "indeed bound" to revisit issues relating to Art. V of the New York Convention---High Court was required by Art. V of New York Convention to conduct a fresh review of parties' evidence to assess whether grounds enumerated in Art. V of New York Convention were met or not---Arbitration must have a seat which signifies a geographical location to prescribe procedural law of arbitration---There is an autonomy and freedom which inheres in the parties to choose a seat (specifically procedural law of the arbitration) and which may be different from proper law of contract and proper law of arbitration agreement---Parties' choice of seat is extremely important simply because law of a particular seat may contain provisions which have important consequences for the conduct of proceedings---Seat is legal rather than physical place of arbitration proceedings and it does not matter whether hearings are held physically at the seat chosen by the parties or some other jurisdiction---This does not detract from the fact that seat of arbitration chosen by parties is curial law of arbitration---Respondent furnished proof that composition of arbitral authority and arbitral procedure was not in accordance with the agreement of the parties in terms of Art. V (1)(d) of the New York Convention and had undermined legitimacy of awards---High Court refused recognition and enforcement of awards in question---Application was dismissed, in circumstances.

Christopher Brown Ltd. v Genossenschaft Osterrreichischer [1954] 1 QB 8; Bremen v. Zapata Off-Shore Co. 407 U.S. 1; Scherk v. Alberto Culver Co. 417 U.S. 506-519; Louis Dreyfus Commodities Suisse S.A. v. Acro Textile Mills Limited PLD 2018 Lah. 597; Zaver Petroleum Cop. Ltd. v. Saif Energy Ltd. (C.S No.1 of 2019); Encyclopaedia Universalis SA v. Encyclopaedia Britannica Inc. 2nd Cir. 2005; Polimaster Ltd. v. RAE Systems, Inc., 623 F.3d 832; Dallah v. Pakistan [2008] EWHC 1901; Dallah v. Pakistan [2010] UKSC 46; ST Group Co. Ltd. and 2 others v. Sanum Investments Ltd. [2019] SGCA 65; Enka v. Chubb [2020] UKSC 38 and Gaetan Inc. v. Geneva Investment Groups LLC [2015] ARB 010 rel.

(b) Arbitration---

----Laws---Applicability---Law of arbitration agreement usually follows proper law of main contract---Arbitration agreement is separable from main contract between parties---Arbitration agreement may have a different law from that of the proper law.

Russel on Arbitration (21st Edition) rel.

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

----Ss. 3 & 6---Forum of choice---Scope---Choice of forum is crucial in context of seat of arbitration---Rule of dual control would suffer a serious setback if agreed procedure is not followed.

New York Convention, edited by Dr. Reinmar Wolff (second edition 2019) rel.

Sameer Khosa, Momal Malik and Hammad Hussain for Applicant.

Salman Akram Raja, Muhammad Umer Akram Chaudhry, Muhammad Ali Talib and Muhammad Hammad Amin and Waheed Ahmad for Respondents.

2025 C L D 277

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

Messrs SADIQ POULTRY FARMS (PVT.) LIMITED through Authorized Director

and 2 others---Plaintiffs

Versus

FIRST HABIB MODARABA, A SUBSIDIARY OF HABIB METRO BANK through Authorized Representative---Defendant

Civil Original Suit No. 6 of 2023, decided on 30th September, 2024.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908) ,O. VII, R. 10 & O. XIII R. 1---Suit for recovery, filing of---Territorial jurisdiction, determination of---Scope---Documents admitted/acknowledged by parties---Effect---Suit filed at Rawalpindi ('R')---Held, that in the present case, the admitted documents/agreements (Diminishing Musharakah Financing Agreement etc.) clearly depicted that the parties had mutually agreed to resolve their issues at Courts of Karachi ('K') having exclusive jurisdiction for the determination of their disputes---Based on the agreements between the parties, which had been acknowledged by the parties and the documents filed and relied by the plaintiffs under S. 9 of Financial Institution (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001') along with list of documents under O. XIII, R. 1 of the "C.P.C." and under S. 10 of the Ordinance 2001 by the defendant, High Court lacked jurisdiction to entertain the matter due to specific and exclusive jurisdiction clauses in all the agreements---High Court lacked territorial jurisdiction to pass any judgment and decree against the defendant; therefore, the plaint was returned under O. VII, R. 10 of the Civil Procedure Code, 1908, for presenting it before a Court of competent jurisdiction---Suit was disposed of accordingly.

Faysal Bank Limited v. Messrs Usman Enterprises and another 2023 CLD 1563; Eden Builders (Pvt.) Limited, Lahore v. Muhammad Aslam and others 2022 SCMR 2044; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393 and Messrs Kadir Motors (Regd). Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174 ref.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery, filing of---Territorial jurisdiction, determination of---Scope---Exclusive jurisdiction incorporated in agreement regarding a place other than where the suit was filed---Effect---Suit was filed at Rawalpindi ('R')---Held, that in the present case, documents/ agreements (Diminishing Musharakah Financing Agreement etc.) clearly depicted that the parties had mutually agreed to include/incorporate jurisdiction clauses in a clear and unambiguously manner, which showed that the parties had given exclusive jurisdiction to the Courts at Karachi ('K')---Thus, the parties were bound by their terms and conditions for resolution of their disputes---All the agreements were executed on different dates at the registered office of the defendant at Karachi and were not disputed by the parties---Lahore High Court lacked territorial jurisdiction to pass any judgment and decree against the defendant; the plaint was returned under O. VII, R. 10 of the Civil Procedure Code, 1908, for presenting it before a Court of competent jurisdiction---Suit was disposed of accordingly.

Eden Builders (Pvt.) Limited, Lahore v. Muhammad Aslam and others 2022 SCMR 2044; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; Messrs Kadir Motors (Regd). Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174; Saleem Mehtab v. Messrs Refhan Best Food Ltd, Compnay through Chief Executive and 9 others 2010 MLD 1015; Chaudhry Mehtab Ahmad and another v. Mir. Shakeel-ur-Rehman and 4 others 2004 MLD 662; Tahir Tariq Textile Mills (Pvt.) Ltd. through Chief Executive and 2 others v. N.D.F. C. through Chairman 2001 YLR 846; Tradesmen International (Pvt.) Ltd. v. Federation of Pakistan through Secretary, Ministry of Food, Agriculture and Livestock and another 2008 CLD 1217; Bankers Equity Ltd. v. Iqas Weaving Mills (Pvt.) Ltd. 2001 CLD 169 and MCB Bank Limited v. Adeel Shahbaz Steel Mills and others 2023 CLD 655 ref.

(c) Jurisdiction---

----Principle---When parties were at controversy regarding point of jurisdiction of Court, it was incumbent upon the Court either to decide question of jurisdiction after giving an opportunity of hearing to parties and then to proceed with the other issues regarding merits of case.

American Express Travel Related Services Company Inc. and others v. Muhammad Nasrullah Beg, Advocate 2000 MLD 1155 ref.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery, filing of---Territorial jurisdiction, determination of---Scope---'Boilerplate clauses'---Scope---All commercial and banking contracts/ agreements contain a number of "boilerplate clauses", which are often seen as standard add-ons to the main terms and conditions of the contract---One such "boilerplate clause" relates to jurisdiction and choice of law, and although these can be relatively straightforward when both parties are based in the same jurisdiction, they deserve proper consideration, particularly when the parties to the contract are based in different jurisdictions---In drafting dispute resolution clauses in commercial contracts and banking agreements, parties contemplate, inter alia, the most convenient and affordable forums to resolve their disputes through the "boilerplate clauses"---In the present case, all the agreements were executed on different dates at the registered office of the defendant at Karachi and this was not disputed by the parties---Lahore High Court lacked territorial jurisdiction to pass any judgment and decree against the defendant; the plaint was returned under O. VII, R.10 of the Civil Procedure Code, 1908 for presenting it before a Court of Competent Jurisdiction---Suit was disposed of accordingly.

State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393 and Messrs Kadir Motors (Regd). Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174 ref.

(e) Contract---

----'Boilerplate clause'---Scope---A boilerplate clause is a legal English term that is used in conjunction with contract law---When forming contracts, parties to the contract often use templates or forms with boilerplate clauses (boilerplate language, used as standard language)---Such clauses refer to the standardized clauses in contracts, and they are to be found towards the end of the agreement---Including boilerplate clauses is the process by which parties to the contract may better define their relationship and the will to provide certainty if terms in the contract are ever disputed---Boilerplate clauses are standard contractual terms that are routinely included in many contracts---In the present case, all the agreements were executed on different dates at the registered office of the defendant at Karachi and this was not disputed by the parties---Lahore High Court lacks territorial jurisdiction to pass any judgment and decree against the defendant; the plaint was returned under O. VII, R. 10 of the Civil Procedure Code, 1908, for presenting it before a Court of competent jurisdiction---Suit was disposed of accordingly.

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 10---Suit for recovery, filing of---Territorial jurisdiction, determination of---Scope---Exclusive jurisdiction clause---'Boilerplate clause'---Scope---Boilerplate clauses---Validity---Question that parties to a contract are faced with is the extent of autonomy they can exercise in choosing an appropriate forum in a "boilerplate clauses"---Henceforth, to avoid the hassle of litigating in a forum, which is inconvenient or time-consuming, parties often mutually agree to litigate their disputes before a specific Court---Such clauses are drafted taking into account the common economic and geographic convenience of the parties---Exclusive jurisdiction clauses enunciate a choice by parties to limit the place of institution of the suit to one forum---Jurisdiction clauses, therefore, relate as to which Courts would hear a dispute---Nevertheless, an exclusive jurisdiction specifies that only the Courts of a particular jurisdiction, such as those of 'K' (Karachi), in the present case, should deal with any disputes arising out of a contract between the parties---In the present case, all the agreements were executed on different dates at the registered office of the defendant at Karachi and this was not disputed by the parties---Lahore High Court lacked territorial jurisdiction to pass any judgment and decree against the defendant; the plaint was returned under O. VII, R. 10 of the Civil Procedure Code, 1908 for presenting it before a Court of competent jurisdiction---Suit was disposed of accordingly.

Muhammad Imran Malik, Advocate Supreme Court, Aakif Majeed and Asim Tufail Farooqi for Plaintiffs.

Ms. Samia Faiz Durrani, Advocate Supreme Court, Faiz Durani, Advocate Supreme Court with Salman Khan Baryalay and Arshad Mehmood for Defendant.

2025 C L D 313

[Lahore]

Before Abid Aziz Sheikh, J

MUHAMMAD QASIM---Appellant

Versus

REGISTRAR OF TRADE MARKS and others---Respondents

F.A.O No.433 and R.F.As. Nos.1073, 1074, 1077 of 2014 heard on 30th October, 2024.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 73, 80 & 96---Intellectual Property Organization of Pakistan Act (XXII of 2012), Ss. 16, 17 & 18---Specific Relief Act (I of 1877), S. 54---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for injunction and recovery of damages---Rejecting of plaint---Infringement of trade mark during pendency of suit---Appellant / plaintiff filed suit before District Court and during pendency of the suit, Registrar Trade Marks revoked trade mark in question---Validity---Suit concerning Trade Mark was already pending before District Court, therefore revocation/ invalidation/rectification application under Ss. 73, 80 & 96 of Trade Marks Ordinance, 2001 was required to be filed before District Court or when the same was filed before Registrar, the Registrar was required to refer the same to District Court where the suit was already pending---High Court set aside orders passed by Registrar as well as by the District Court---High Court remanded the matters to Intellectual Property Tribunal and District Court for decisions afresh on application of respondent and suit of appellant / plaintiff, respectively---Appeal was allowed accordingly.

The State through Advocate General, N.W.F.P., Peshawar v. Naeemullah Khan (2001 SCMR 1461; Italfarmaco S.P.A. v. Himont Pharmaceuticals (Pvt.) Ltd. and another 2017 CLD 1382; Royal PVC (Pvt.) Ltd. through Authorized Officer v. Registrar of Trade Marks and another 2011 CLD 833; Messrs H&B, General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 1028; Messrs H&B General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 318; Messrs H&B General Trading Company through Director v. Messrs International Marketing Company through Proprietor and 2 others 2009 CLD 354; Muhammad Multazam Raza v. Muhammad Ayub Khan and others 2022 SCMR 979 and Messrs Shaheen Chemist through Proprietors and 3 others v. Zahid Mehmood Chaudhry and another 2023 CLD 1 rel.

Raheel Ahmad Sheikh and Tahir Maqsood Butt for Appellant.

Barrister Syed Sajjad Haider Rizvi, A.A.G.-Pk, for Registrar of Trade Marks Respondent No.1.

Respondent No.2. (in F.A.O. No.433 of 201) and Respondent (in R.A.Fs. Nos.1073 and 1074 of 2014) already proceed against ex parte on 19-11-2020 and (in R.F.A. No.1077 of 2014) on 22-11-2023.

2025 C L D 324

[Lahore (Bahawalpur Bench)]

Before Ahmad Nadeem Arshad, J

Mst. HALEEMA and others---Petitioners

Versus

EXECUTIVE DIRECTOR, C&C DEPARTMENT SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and others---Respondents

Writ Petition No.8594 of 2016/BWP, decided on 28th February, 2024.

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

----Ss. 265(a) & 265(b)---Investigation of Company's affairs---Appointing of Inspector---Scope---Securities and Exchange Commission of Pakistan---Powers and discretion---Scope---Provisions under S.265(a) of the Ordinance, 1984 stipulates that the Securities and Exchange Commission of Pakistan ('Commission'), under S. 265(a) of the Ordinance, 1984, can appoint Inspector subject to fulfillment of pre-conditions mentioned therein but such pre-conditions are not applicable to its suo motu powers, under S. 265 (b) of the Ordinance 1984, to appoint an Inspector---Commission has only to satisfy itself, prima facie, on the basis of the material placed before it, that case for investigation through an Inspector is called for---The matter, in fact, vests in the discretion of the Commission, to be decided after following the summary procedure---In proceedings under S. 265 of the Ordinance 1984, full-fledged inquiry in the form of a trial is not required to be held nor any formal evidence is to be recorded before passing the order under S. 265 of the Ordinance, 1984---Authority has to only satisfy itself prima facie, of course, on the basis of the material placed before it that a case for investigation through an Inspector is called for and it is for the Inspector to ascertain and determine the truth or otherwise of the allegation during the investigation to be conducted by him whereafter he has to submit report to the concerned Authority.

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

----S. 265---Investigation of company's affairs---Appointing of Inspector---Scope---Securities and Exchange Commission of Pakistan, powers of---While a Civil (Original) Suit, regarding dispute of company left by predecessor of parties ('Company'), was being adjudicated upon by the High Court, one of the parties filed a petition, with certain submission/prayer for the decision of the dispute between the parties ; High Court directed /ordered to transmit the matter to the Securities and Exchange Commission of Pakistan (' Commission') for decision of the same---Commission while exercising the power under S.265 of the Companies Ordinance, 1984 ('the Ordinance, 1984'), appointed a Chartered Accountant as Inspector for carrying out investigation into the affairs of the Company ('impugned order')---A few share-holders of Company (petitioner) filed constitutional petition assailing the vires of impugned order passed by the Commission/respondent---Grievance of the petitioners was that the impugned order was violative of the direction given by the High Court as no direction was given to pass any order in terms of S. 265 of the Ordinance, 1984---Validity---Provisions under S. 265 (a) of the Ordinance, 1984 stipulate that the Commission, under S. 265 (a) of the Ordinance, 1984 , could appoint Inspector subject to fulfillment of pre-conditions mentioned therein---Commission has only to satisfy itself, prima facie, on the basis of the material placed before it, that case for investigation through an Inspector is called for---The matter, in fact, vests in the discretion of the Commission, to be decided after following the summary procedure---In proceedings under S. 265 of the Ordinance, 1984, full-fledged inquiry in the form of a trial is not required to be held nor any formal evidence is to be recorded before passing the order under S. 265 of the Ordinance, 1984---The Authority has to only satisfy itself prima facie, of course, on the basis of the material placed before it that a case for investigation through an Inspector is called for and it is for the Inspector to ascertain and determine the truth or otherwise of the allegation during the investigation to be conducted by him whereafter he has to submit report to the concerned authority---In the present case, the Commission (Respondent), before passing the impugned order, issued Show-Cause Notices to the Chief Executive and Directors of the Company, and after going through the facts of the case, evidences produced as well as arguments advanced by the parties, and while observing that the affairs of the Company warranted deeper probe through appointment of a competent Inspector(s), appointed a Chartered Accountants as Inspector for carrying out investigation into the affairs of the Company as per annexed Terms Of Reference (TORs)---Therefore , respondent /SECP had rightly passed the impugned order by appointing the Chartered Accountant as an Inspector in terms of S. 265 of the Ordinance, 1984---No illegality, irregularity or jurisdictional defect on the part of respondent (Securities and Exchange Commission of Pakistan) had been noticed while passing the impugned order---Constitutional petition, being merit-less, was dismissed , in circumstances.

(c) Companies Ordinance (XLVII of 1984) [Since repealed]---

----S. 265---Investigation of Company's affairs---Appointing of Inspector---Scope---Securities and Exchange Commission of Pakistan, powers of---While a Civil (Original) Suit, regarding dispute of company left by predecessor of parties ('Company'), was being adjudicated upon by the High Court, one of the parties filed a petition ,with certain submission/prayer for the decision of the dispute between the parties ; High Court directed/ordered to transmit the matter to the Securities and Exchange Commission of Pakistan ('Commission') for decision of the same---Commission while exercising the power under S.265 of the Companies Ordinance, 1984 ('the Ordinance 1984'), appointed a Chartered Accountant as Inspector for carrying out investigation into the affairs of the Company ('impugned order')---A few share-holders of Company (Petitioners) filed constitutional petition assailing the vires of impugned order passed by the Commission / Respondent---Grievance of the petitioners was that the impugned order was violative of the direction given by the High Court as no direction was given to pass any order in terms of S.265 of the Ordinance, 1984---Validity---Record reflected that said constitutional petition was disposed of by the High Court on very submission of said private respondent/share-holder (then petitioner ) that he would be satisfied if the matter be referred to the SECP to investigate the allegations levelled by him in terms of S. 265 of the Companies Ordinance, 1984 and thereafter decide the case in accordance with law---Thus, then High Court directed the SECP to decide the same in accordance with law i.e. in terms of S. 265 of the Ordinance, 1984---No illegality, irregularity or jurisdictional defect on the part of respondent (Securities and Exchange Commission of Pakistan was noticed while passing the impugned order---Constitutional petition, being merit-less, was dismissed, in circumstances.

(d) Administration of justice---

----Petition---Expression "disposed of accordingly"---Meaning---Said expression significantly means that the petition was disposed of in terms of the submission made by the counsel for the petitioner---So, an order stating that counsel for the petitioner wishes to withdraw this petition after arguments…. "disposed of accordingly"… means that subject petition is terminated, settled, ended, concluded or closed as desired by the counsel for the petitioner after arguments and consideration of the merits of the case.

Muhammad Saqlain v. The State and others 2024 YLR 2568 ref.

Aejaz Ahmad Ansari for Petitioners.

M. Yaseen Kamran and Ch. Muhammad Jameel, Assistant Attorney General for Pakistan for Respondents.

2025 C L D 343

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

FAUJI FERTILIZER COMPANY LIMITED AND FAUJI FERTILIZER BIN QASIM, LIMITED---Petitioner

Versus

SECURITIES YAND EXCHANGE COMMISSION OF PAKISTAN and another---Respondent

Civil Original No.04 of 2024, decided on 18th November, 2024.

Companies Act (XIX of 2017)---

----Ss. 6(11),11, 134(3), 279, 280, 281, 282, 283 & 285---Companies (Court) Rules, 1997, R.19---Competition (Merger Control) Regulations, 2016, Regln.5---Constitution of Pakistan, Art.37(d)---Scheme of arrangement and merger, approval of---Duty of Court---Interference of Court in business decision of merger---Scope---Substitution of collective wisdom of the shareholders through court's decision---Pre-merger clearance---Fulfillment of legal formalities---Sanction of Scheme of Arrangement meant for amalgamation of companies was sought---Securities and Exchange Commission of Pakistan pressed pre-merger clearance---Held, that Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited filed a petition for merger, in which Court approved the merger, noting that it had been established like mid-day-sun that all legal/statutory requirements qua holding of meetings by the Chairmen, requisite publication, issuance of notices to the Securities and Exchange Commission of Pakistan "SECP" and Competition Commission of Pakistan "CCP", filing of NOCs of all secured creditors, interest of whole body of shareholders and approval of the "Scheme" by majority of shareholders was obtained---It ultimately will prove to be beneficial for the shareholders and the companies and there remained no impediment to grant sanction of the Scheme of Arrangement of the petitioners---All legal requirements were met, including obtaining NOCs from secured creditors, pre-merger notification from the CCP, and approval from the SECP---Shareholders unanimously approved the Scheme---Court emphasized the importance of timely decisions in commercial matters and cited precedents supporting judicial non-interference in business decisions when legal formalities were fulfilled and the Scheme was fair and reasonable---Merger was held to be beneficial for stakeholders---Once the requirements of a Scheme for getting sanction of the court were found to have been met, the Court would have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons, who with their open eyes had given their approval of the Scheme---Petition was allowed and the Scheme was sanctioned and approved in terms thereof, in circumstances.

Fauji Cement Company and Askari Cement Company v. Securities and Exchange Commission of Pakistan and others 2022 CLD 604; M.C.R. (Pvt.) Ltd., Franchisee of Pizza Hut v. Multan Development Authority and others 2021 CLD 639; Waqas Ayub v. Adeel Yaqub and others 2024 CLD 990; Taisei Corporation and another v. A.M. Construction Company (Pvt.) Ltd. and another 2024 SCMR 640; Lt. General (Retd.) Mahmud Ahmad Akhtar and another v. M/s Allied Developers (Private) Limited and others 2022 CLD 718; Shaheen Merchant v. Federation of Pakistan/National Tariff Commission and others 2021 PTD 2126; Dewan Salman Fiber v. Dhan Fibers Limited PLD 2001 Lah. 230; International Complex Projects Limited and another 2017 CLD 1468; Gadoon Textile Mills and others' case 2015 CLD 2010; Roomi Foods (Pvt.) Ltd. v. Joint Registrar of Companies 2020 CLD 900; MS Fazal Cloth Mills Ltd. v. MS Fazal Weaving Mills Ltd. 2021 CLD 182; Presson Descon International (Pvt.) Limited and others v. Joint Registrar of Companies 2020 CLD 1128 = PLD 2020 Lah. 869; Dilsons (Private) Limited and others v. Securities and Exchange Commission of Pakistan and another 2021 CLD 1317; Nadeem Power Generation (Pvt.) Ltd. and another 2023 CLD 652; Chancellor Masters and Scholars of the University of Oxford and Oxford University Press Pakistan (SMC-Private) Limited 2023 CLD 1111 and SPI Insurance Company Limited and the United Insurance Company of Pakistan Limited 2023 CLD 1088 rel.

Barrister Raja Jibran Tariq, Asim Shafi, ASC with Mikael Azmat Rahim, ASC and Furqan Khan for Petitioners.

Shahzad Ali Rana, Special Public Prosecutor on behalf of the SECP with Fatima Shabbir and Hassnain Raza for Petitioners.

Gulfraz Arshad, Law Officer on behalf of the CCP.

Muhammad Ahmad for United Bank Limited.

Shah Jahan, Law Officer for Meezan Bank Limited.

Rahil Sikandar Khawaja for Faysal Bank Limited with Raja Faisal Ghanni for Petitioner.

Raja Arshad Mahmood for Bank of Punjab with Sardar Haseeb Arshad, Abdul Waheed and Muhammad Nasrullah Rehman for Petitioner.

Muhammad Asif, Law Officer on behalf of Askari Bank Limited.

Muhammad Tauseef Akhlaq, Law Officer for Bank Al-Habib Limited with Abid Jan, Bank Representative.

Shahzada Moteen Hasan, Manager Legal Affairs on behalf of MCB Bank Limited with Nouman Israr, Bank Representative.

Faheem Farooq, Manager/Representative on behalf of Soneri Bank Limited.

2025 C L D 369

[Lahore]

Before Shams Mehmood Mirza, J

FAYSAL BANK LIMITED---Plaintiff

Versus

Messrs DYNASEL LIMITED and others---Defendants

C.O.S. No. 28 of 2014, decided on 13th May, 2024.

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

----S.9---Suit for recovery of finance---Entries of statement of account---Proof---Parties prove facts stated in pleadings---Statement of account is simply the ledger maintained by bank reflecting outstanding amount of a finance facility but its entries are required to be proved by underlying documents by evidence led by the plaintiff.

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

----S. 9---Suit for recovery of finance against surety---Maintainability---Pre-condition---Existence of a debt is a sine qua non for an action against surety even if it is separately and independently brought against it---Foundation or basis of claim even in suit against surety is liability of principal debtor.

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

----S. 45---Execution proceedings---Several co-defendants---Principle---Plaintiff who has obtained judgment against several co-defendants who are jointly and severally liable, can take execution proceedings against any one of the co-defendants, or any combination of them or all of them.

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

----S. 9---Suit for recovery of finance---Debtor and guarantor, joining of---Principle---Even if contract of guarantee by its terms makes guarantor not jointly liable and cause can be said to be separate, the creditor can bring an action by joining principal debtor and surety as defendants.

Bank of Bihar Ltd. v. Damodar Prasad and another [1969] 1 SCR 620 rel.

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

----S. 9---Civil Procedure Code (V of 1908), O.II, R.2---Contract Act (IX of 1872), S. 128---Suit for recovery of finance---Liability of surety---Joint cause of action---Plaintiff/bank filed suit against principal borrowers and surety for failure to repay finance facilities---Validity---Plaintiff/bank by provisions of O. II, R. 2, C.P.C. was precluded from splitting claim which had its foundation in joint cause of action against all defendants---Provision of Explanation to O. II, R. 2, C.P.C. supported case of plaintiff/bank in treating cause of action against all defendants as unified and joint---Plaintiff/bank proved its case against defendants for recovery of amounts under finance facilities in question and mark-up under Running Finance facility in addition to preliminary decree that was passed earlier---High Court decreed the suit in favour of plaintiff/bank and against defendants, jointly and severally---Suit was decreed accordingly.

Saudi Pak Industrial and Agricultural Investment Limited v. B.A Rajput Steel and Re-rolling Mills (Pvt.) Limited and others 2016 CLD 465; Sri Sri Raja Lakshmi Narayan Jew and others v. The Province of East Pakistan 1969 SCMR 898; Mst. Bakht Bibi v. Muhammad Aslam Khan and others 2016 MLD 1411; Loo Chay Sit v. Estate of Loo Chay Loo (2010) 1 SLR 286; Muhammad Luqman v. The State PLD 1969 Lah. 257; High Noon Textile Limited and others v. Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Limited and 4 others 2010 CLD 567; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; Messrs Kadir Motors (Regd). Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174; National Construction Limited v. Standard Insurance Co. Limited 1984 CLC 286 and Kamila Aamir and another v. Additional District and Sessions Judge and others PLD 2023 Lah. 601 ref.

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

----S. 128---Word "coextensive"---Scope---Word "coextensive" in S. 128 of Contract Act, 1872 refers to the extent to which surety is liable towards creditor---Surety is not liable for more than what is due from principal debtor---Surety, under S. 128 Contract Act, 1872 may impose limits on restricting its liability by entering into a special contract.

Ashar Elahi and Syed Majid Ali Bukhari for Plaintiff.

Haq Nawaz Chattha for Defendants Nos.1 to 8.

Zaki ur Rehman for Defendant No.9.

2025 C L D 408

[Lahore]

Before Sultan Tanvir Ahmad, J

SHAHID MAHMOOD & COMPANY (PVT.) LIMITED and 2 others---Petitioners

Versus

ZAHID MAHMOOD and 5 others---Respondents

C.O. No.62104 of 2023, heard on 4th June, 2024.

Companies Act (XIX of 2017)---

----Ss.55, 136, proviso, 160 & 197 (3)---General Meeting and election of directors---Proof---Limitation to assail such meeting---Petitioners assailed extra ordinary general meeting (EOGM) and change of directors made pursuant to such meeting---Respondents contended that period to assail such meeting was thirty days---Validity---Respondents should have first persuaded or at least demonstrated with some certainty the EOGM had actually taken place and then to seek shelter of period provided by law to make their challenge---Respondents failed to file return or forms for such a long time period, and even return in terms of S. 197(3) of Companies Act, 2017 for change claimed in pursuance to so-called EOGM in question did not exist and this position was confirmed by SECP---Respondents instead of explaining reasons for non-compliance of several provisions of Companies Act, 2017 were simply seeking to escape on the basis of period to make challenge---Respondents could not even produce copy of notice, the mode adopted under S. 55 of Companies Act, 2017 or any affidavit to show date of issuance of notice of EGOM inviting all entitled to notice, attend and vote in EOGM---High Court directed the parties to hold EOGM afresh as proceedings in question were invalid---Petition was allowed in said terms, in circumstances.

Khalid Mehmood and 4 others v. Messrs Multi Plus Corporation Private Limited and 2 others 2017 CLD 1737; Nizam Hashwani v. Hashwani Hotels Limited and 14 others 1999 CLC 1989; In the matter of the Karnal Distillery Company Ltd., Karanaland of the application of Mr. L.P. Jaiswal PLD 1956 Lah. 731 and Tariq Aziz and others v. Makhdum Ahmed Mahmud and others 2022 CLD 1279 ref.

Bilal Kashmiri for Petitioners.

Faisal Islam for Respondents Nos.1 to 5.

Ruman Bilal for Respondent No.6.

2025 C L D 474

[Lahore]

Before Asim Hafeez, J

A.M. CONSTRUCTION COMPANY (PRIVATE) LIMITED---Petitioner

Versus

TAISEI CORPORATION and others---Respondents

Civil Revision No.23509 of 2020, decided on 6th May, 2022.

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

----S. 4---Arbitration Act (X of 1940), S.14---Arbitration---Stay of proceedings---Subcontract---Scope---Petitioner / plaintiff was a subcontractor, whereas main contract was between respondent / foreign company and respondent / National Highway Authority (NHA)---Petitioner / plaintiff filed civil suit under S. 14 of Arbitration Act, 1940 against respondent / foreign company---Trial Court on application filed by respondent / foreign company stayed proceedings of suit under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, as Foreign Arbitral Award had already been issued in its favour---Validity---Mere exchange of few letters or act of registering some complaints, in absence of privity of contract between petitioner / plaintiff and respondent / NHA, did not give any cause of action to petitioner / plaintiff to sue respondent / NHA---Subcontract was independent and any representation made therein, or scope of obligations undertaken in the context thereof did not bind respondent / NHA- the employer, which could not be held liable for any vicarious liability in the guise of subcontract---Arbitration agreement, under reference, was not null and void, inoperative or incapable of being performed---High Court declined to interfere in the order passed by Trial Court and directed that legal proceedings would remain stayed till the circumstances so warranted and could be resurrected if conditions so arise---Revision was dismissed, in circumstances.

Taisei Corporation v. A.M. Construction Company (Pvt.) Ltd. PLD 2012 Lah. 455; Taisei Corporation v. A.M. Construction Company (Pvt.) Ltd. 2018 MLD 2058; Muhammad Aslam and another v. Munshi Muhammad Behram and another 1991 SCMR 1971; Mubarik Cotton Factory v. Messrs General Agencies, Multan PLD 1980 Baghdadul Jadid 1; Orient Power Company (Pvt.) Limited v. Sui Northern Gas Pipelines Limited PLD 2019 Lah. 607; Orient Power Company (Private) Limited through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2021 CLD 1069; Bharti Televentures Ltd. v. Dss Enterprises Private Ltd. [2005 (2) ARBLR 561 Delhi]; Mian Iftikhar-ud-Din v. Muhammad Sarfraz Administrator, Progressive Papers Ltd. PLD 1961 SC 585; Sir Dinshaw Manekji Petit v. G.B. Badkas and others AIR 1969 Bombay 151; Devkumarsinghji Kasturechandji v. State of Madhya Pradesh and others AIR 1967 Madhya Pradesh 268; Ch. Tanvir Khan v. President, Cantt. Board, Rawalpindi and 2 others 1999 MLD 721; Thyssen Stahlunion GMBH v. Steel Authority of India Ltd. AIR 1999 SC 3923; Hungerford Investment Trust… v. Haridas Mundhra and others 1972 SCR (3) 690; Abbott v. The Minister for Lands 1895 AC 425; Ovex Technologies (Private) Limited v. PCM PK (Private) Limited and others PLD 2020 Isl. 52; Port Qasim Authority, Karachi v. Al-Ghurair Group of Companies and 3 others PLD 1997 Kar. 636; Lahore Stock Exchange Limited v. Fredrick J. Whyte Group (Pakistan) Ltd. and others PLD 1990 SC 48; Mst. Surriya Rehman v. Siemens Pakistan Engineering Company Ltd. 2011 PLD Kar. 571; Cummins Sales and Services (Pakistan) Limited through authorized signatory v. Cummins Middle East FZE through Chief Executive and 3 others 2013 CLD 291; FAR Eastern Impex Limited, Karachi v. Quest International Nederland BV and 6 others 2009 YLR 334; Messrs Travel Automation (Pvt.) Ltd. through Managing Director v. Abacus International (Pvt.) Ltd. through President and Chief Executive and 2 others 2006 CLD 497; Abid Associated Agencies International (Pvt.) Ltd. and others v. Areva and others 2015 MLD 1646; Messrs Haji Muhammad Ibrahim & Sons and others v. Karachi Municipal Corporation and others PLD 1960 (W.P.) Kar. 916; Lithuanian Airlines v. Bhoja Airlines (Pvt.) Ltd. and others 2004 CLC 544; Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109; Brothers Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and M.A. Chowdhury v. Messrs Mitsui O.S.K. Lines Ltd. and 3 others PLD 1970 SC 373 ref.

Hitachi Limited and another v. Rupali Polyester and others 1998 SCMR 1618; Rao Shiv Bahadur Singh and others v. The State of Vindhya Pradesh AIR 1953 SC 394; Muhammad Ghafoor and another v. The State 1998 PCr.LJ 1876; Maj. Mehtab Khan v. The Rehabilitation Authority and another PLD 1973 SC 451; House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others 1992 SCMR 19; Investors Compensation Scheme Limited v. West Bromwich Building Society and others [1998] 1 All ER 98; Spencer v. Secretary of State [2012] 2 All ER (Comm) 480]; Wood (Respondent) v. Capita Insurance Services Limited (Appellant) [(2017) 4 All ER 615]; Muhammad Shahnawaz and 44 others v. Karachi Electric Supply Company through Company Secretary and 2 others 2011 PLC (C.S.) 1579; Burma Oil Mills Limited v. Trustees of the Port of Karachi through Chairman 2011 CLC 1538; Mst. Baswar Sultan v. Mst. Adeeba Alvi 2002 SCMR 326; Bolan Beverages (Pvt.) Limited v. PEPSI Co. Inc. and 4 others PLD 2004 SC 860; Uzin Export Import Foreign Trade Co. v. Macdonald Layton & Co. Ltd. Karachi and another 1996 SCMR 690; Home Building and Loan Association v. Blaisedell 290 U.S. 398 78 L Ed 413; James Miller and Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd., [1970] 1 ALL ER 796; Armar Shipping Co. Ltd. v. Caisse Algerienne D' Assurance et de Reassurance [1981] 1 ALL ER 498; Sh. Muhammad Sadiq v. Lala Krishan Lal Malhotra and others PLD 1966 SC 439; Zila Council Jehlum through District Coordination Officer v. Messrs Pakistan Tobacco Company Ltd. and others PLD 2016 SC 398; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; Nabi Ahmed and another v. Home Secretary, Government of West Pakistan, Lahore and 4 others PLD 1969 SC 599; Shahida Bibi and others v. Habib Bank Limited and others PLD 2016 SC 995 and Messrs Eckhardt & Co, marine GmbH v. Muhammad Hanif PLD 1993 SC 42 distinguished.

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

----S. 4---Arbitration Act (X of 1940), S. 34---Foreign Arbitral Award---Stay of arbitration proceedings under Arbitration Act, 1940---Scope---It was an absurdity to infer or assume that mere non-mentioning of exclusion of the provisions of Arbitration Act, 1940 in Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 would conversely imply applicability of Arbitration Act, 1940---Provision of S. 34 of Arbitration Act, 1940 would not apply, as various provisions of Arbitration Act, 1940 are inconsistent with the provisions of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011---Such inconsistency renders Arbitration Act, 1940 inapplicable---Provisions of Ss. 46 & 47 of Arbitration Act, 1940, exclude applicability of S. 34 of Arbitration Act, 1940 in the wake of inconsistency apparent with S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.

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

----S. 4---Courts in Pakistan---Jurisdiction---Provisions of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, do not envisage "ouster of jurisdiction of the Courts of Pakistan" having jurisdiction to entertain and try civil suit(s), irrespective of availability of arbitration agreement / arbitration clause, but extends option / remedy to the party, to such arbitration agreement / arbitration clause, for seeking stay of legal proceedings, provided conditions prescribed under S. 4 of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 are available and met.

Uzair Karamat Bhandari, M. Suhail Tipu, Ali Uzair Bhandari and Mian Muhammad Kashif for Petitioners.

Zaki Rehman, Zaheer A. Cheema and Ali Hur Jamal for Respondent No.1.

Barrister Aun Ali Raza, Ahmad Nisar Khan, Syed Ali Asim Raza Shamsi and M. Nouman Shams Qazi for Respondents Nos.2 (2.1, 2.2).

Ch. Muhammad Shabbir for Respondent No.3.

2025 C L D 517

[Lahore (Multan Bench)]

Before Asim Hafeez and Anwaar Hussain, JJ

Messrs RAFI COTTON INDUSTRIES (PVT.) LTD. and others---Appellants

Versus

BANK AL-HABIB and others---Respondents

E.F.A. No.30 of 2022, heard on 22nd October, 2024.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908),O. XXI, Rr.69 & 84---Execution proceedings---Auction---Aborted sale---Appellant / judgment debtor assailed auction proceedings on the plea that the highest bidder defaulted and property was sold to respondent---Validity---Practice of continuing further with an aborted sale, is not permitted under O. XXI, R. 84, C.P.C., if default has been committed by successful purchaser---By offering the option to purchase to the lower and then to the lowest bidder tantamount to hedging the success of auction and this is not required under O. XXI, R. 84, C.P.C.---High Court declared auction in favour of respondent as nullity and set aside order confirming auction sale---Appeal was allowed, in circumstances.

Mst. Nadia Malik v. Messrs Makki Chemical Industries (Pvt.) Ltd. through Chief Executive and others 2011 SCMR 1675; Afzal Maqsood Butt v. Banking Court No.2, Lahore and 8 others PLD 2005 SC 470; Muhammad Ashraf and others v. U.B.L and others 2019 SCMR 1004; Muhammad Ali Asghar Sabir Raja v. Mst. Sajida Bashir and others 2006 SCMR 801; Mst. Samrana Nawaz and others v. M.C.B. Bank Ltd and others PLD 2021 SC 581; Messrs Habib and Company and others v. Muslim Commercial Bank Limited and others PLD 2020 SC 227 and Mst. Samrana Nawaz and others v. MCB Bank Ltd and others PLD 2024 SC 873 ref.

Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 distinguished.

(b) Auction---

----Single bidder---Scope---Presence of single bidder or availability of single bid is contrary to the spirit of public auction.

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; Al-Hadi Rice Mills (Pvt.) Ltd. through Chief Executive and 4 others v. MCB Bank Limited and 6 others 2023 CLD 85; Summit Bank Limited, Lahore v. Messrs M.M. Brothers Proprietorship Concern through Proprietor and others 2023 CLD 297 rel.

Muhammad Sulaman Bhatti, Peer Muhammad Masood Chishti, Qaisar Abbas and Naveed Qadir Khan for Appellants.

Syed Muhammad Ali Gillani and Anwar Kamal for Respondent No.1.

2025 C L D 537

[Lahore (Rawalpindi Bench]

Before Mirza Viqas Rauf, J

Messrs 7SKY DIGITAL MARKETING (PVT.) LIMITED through authorized representative---Petitioner

Versus

Messrs ASR BUILDERS through L.Rs. and others---Respondents

Civil Revision No.326 of 2024, decided on 12th September, 2024.

Arbitration Act (X of 1940)---

----Ss. 5, 11, 14, 17, 33 & 41(a)---Civil Procedure Code (V of 1908), S.115, O.II, R.6-A & O.XVI, R.5---Consolidation of petitions and issues by the Arbitrator---Application of provisions of Civil Procedure Code in arbitration proceedings---Petitioner filed a petition under S.14 read with S.17 of the Arbitration Act, 1940 (Act), which was resisted by way of filing a counter petition under Ss.5 & 11 of the Act---Issue involved in both the petitions emanated out of the same cause, so order of consolidation of petitions was passed and consolidated issues were framed---Contentions of the petitioner were that provisions of C.P.C. were not stricto sensu applicable to the Act and in terms of S. 33 of the Act the civil court was obliged to decide the dispute on the basis of affidavit---Validity---Proviso to S.33 of the Act ordains that where the court deems it just and expedient, it may set down the application for hearing and other evidence also, and it may pass such order for discovery and particulars as it may do in a suit---Section 41 of the Act provides procedure and powers of the court and in terms of S.41(a) of the Act, the provisions of "C.P.C." are applicable to all the proceedings before the court under the Act---Applicability of the provisions of "C.P.C." are not meant to hamper the arbitration proceedings but for ensuring the advancement of ends of justice---In view of joint reading of above two provisions the contention of the petitioner that under the Act, framing of issues was not permissible was highly ill-founded and misconceived---Petitioner itself moved an application under O. XIV, R. 5 of "C.P.C." for framing of additional issue as such it was estopped by words and its conduct---Since there was no specific impediment in the way of the court proceeding under the Act, so consolidation of the petitions and framing of consolidated issues, did not warrant invoking revisional jurisdiction---Constitutional petition was dismissed, in circumstances.

Qausain Faisal Mufti and Muhammad Saifullah Khan for Petitioner.

Muhammad Habib-ullah Khan and Faisal Shakrani for Respondent No.1.

Sardar Muhammad Obaid Khan for Respondent No.2.

2025 C L D 543

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Raheel Kamran, JJ

Messrs AL-HARMAIN & CO. through Sole Proprietor and 2 others---Appellants

Versus

M.C.B. BANK LIMITED through Manager / Attorney---Respondent

E.F.A. No.26 of 2023, heard on 16th April, 2024.

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

----Ss.19 & 22---National Database and Registration Authority Ordinance (VIII of 2000), S. 18---Execution proceedings---Computerized National Identity Card (CNIC), blocking of---Appellants / judgment debtors were aggrieved of direction issued by Executing Court to block their CNICs during execution proceedings---Validity---CNIC is essential for enjoyment of a number of fundamental rights, therefore, no person can be deprived of it without due process---Agricultural land of appellants / judgment debtors had already been redeemed and another agricultural land was under mortgage---Executing Court could have passed an order regarding property under mortgage which was permissible under law---High Court set aside direction issued by Executing Court, as there was no justification of such order and the same was illegal, unlawful and was passed without observing prerequisites---Appeal was allowed, in circumstances.

Messrs Azhar & Co. and others v. National Bank of Pakistan 2018 CLD 830; Muhammad Asif v. Standard Chartered Bank (Pakistan) Limited through Manager 2022 CLD 1021; Muhammad Umar v. Federation of Pakistan, through Secretary, Ministry of Interior, Islamabad and 2 others PLD 2017 Sindh 585; Hafiz Awais Zafar v Judge Family Court, Lahore and 2 others PLD 2022 Lah. 756 and Urooj Tabani v. Federation of Pakistan through Secretary Ministry of Interior, Islamabad and 2 others PLD 2021 Isl. 105 ref.

Habib Ahmad v. Haji Munir Ahmad 2004 YLR 1540; Messrs 3-A Trade Impex through Partner and 2 others v. Askari Commercial Bank Ltd, through Branch Manager 2005 CLD 1379; Abdul Basit Zahid v. Modaraba Al-Tijarah through Chief Executive and 2 others PLD 2000 Kar. 322 and Muhammad Kaleem v. Arslan Aslam and others 2023 CLC 796 rel.

(b) Constitution of Pakistan---

----Arts. 9 & 14---Right to identity---Scope---Right to identity is also associated to right to life (Article 9) and would also be read into Art. 14 of the Constitution, which guarantees dignity of man.

Muhammad Suleman Bhatti for Appellants.

Respondent fEx parte.

2025 C L D 587

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan and Malik Javid Iqbal Wains, JJ

JADEED FEEDS INDUSTRIES (PRIVATE) LIMITED through authorized Representative---Appellant

Versus

BOARD OF REVENUE, PUNJAB through Chief Inspector of Stamps and others---Respondents

I.C.A. No.99 of 2024, decided on 25th March, 2025.

Companies Act (XIX of 2017)---

----Ss.4, 5, 282(5) & Preamble---Stamp Act (II of 1899), S.27-A & Schedule I---Constitution of Pakistan, Art. 143---Intra Court Appeal---Inconsistency in Federal and Provincial laws---Merger of companies---Transfer of assets---Stamp duty, charging of---Appellant / company was aggrieved of charging of stamp duty on transfer of assets as a result of merger of two companies under the order of High Court---Validity---Objective to enact Companies Act, 2017 was to protect interests of shareholders, creditors, stakeholders and general public by inculcating principles of good governance and safeguarding minority interests in corporate entities and providing alternate mechanism for expeditious resolution of corporate disputes as well as matters connected thereto, as was mentioned in its preamble, read with the provisions of Ss. 4 & 5 of Companies Act, 2017---Hinderance by way of imposing stamp duty and other taxes would take away companies law jurisdiction from High Court to other Provinces---Conflict of law is created only when the two, i.e. the Federation and the Province, simultaneously have authority and in such circumstances, Federal Law would prevail---Provisions of Ss. 4 & 282(5) of Companies Act, 2017 were part of Federal Law, therefore, it prevailed over the provision of Provincial Law, i.e. S. 27-A of Stamp Act, 1899---High Court directed Chief Secretary of Province of the Punjab to file a detailed report on or before the next date, explaining progress made in the meeting to resolve the matter---High Court further directed that if matter would not be resolved despite efforts of the Chief Secretary of Province of the Punjab, then the same would be decided on its own merits, after discussing legal anthropology of relevant provisions of law, i.e. the Companies Act, 2017 and Stamp Act, 1899---High Court granted interim injunction in favour of appellant / company, since vires of the judgment passed by Judge in Chambers of High Court, in case titled Jadeed Feeds Industries (Pvt.) Limited v. Board of Revenue, Punjab through Chief Inspector of Stamps and others, reported as 2024 CLD 1570 was under challenge and balance of convenience for grant of interim relief also tilted in favour of appellant / company---Interim injunction was allowed accordingly.

Total Parco Pakistan Ltd. and Total Oil Pakistan (Pvt.) Ltd. 2023 CLD 241; Fauji Cement Company and another v. Securities and Exchange Commission of Pakistan and others 2022 CLD 604; Fatima Sugar Mills Limited through Company Secretary and others PLD 2015 Lah. 632; Jadeed Feeds Industries (Pvt.) Limited v. Board of Revenue, Punjab through Chief Inspector of Stamps and others 2024 CLD 1570; Faqeer Muhammad v. Messrs Natover Lease and Refinance Ltd. through DMO, Peshawar and another 2024 PTD 758; Roomi Foods (Pvt.) Ltd. v. Joint Registrar of Companies 2020 CLD 900; Ms Fazal Cloth Mills Ltd. v. Ms. Fazal Weaving Mills Ltd. 2021 CLD 182; Presson Descon International (Pvt.) Limited and others v. Joint Registrar of Companies 2020 CLD 1128 = PLD 2020 Lah. 869; Dilsons (Private) Limited and others v. Security and Exchange Commission of Pakistan and another 2021 CLD 1317; Nadeem Power Generation (Pvt.) Ltd. and another 2023 CLD 652; Fauji Fertilizer Company Limited and Fauji Fertilizer Bin Qasim Limited v. Security and Exchange Commission of Pakistan and another 2024 LHC 5533 and Kausar Rana Resources (Private) Limited and others v. Qatar Lubricants Company W.L.L (QALCO) and others 2025 SCMR 517 ref.

Benazir Bhutto v. President of Pakistan PLD 1998 SC 388; Mian Muhammad Asif v. Superintendent of Police PLD 2020 Lah. 137; Sharaf Faridi v. The Federation of Islamic Republic of Pakistan through Prime Minister of Pakistan PLD 1989 Kar. 404; Al-Jehad Trust v. Federation of Pakistan and others 1990 SCMR 1379; Province of Sindh and others v. M.Q.M. through Deputy Convener and others PLD 2014 SC 531; Walid Iqbal v. Federation of Pakistan and others PLD 2018 Lah. 1; PIA Officers Cooperative Housing Society Ltd. through President v. Province of Punjab through Secretary to the Government of Punjab, Cooperatives Department, Lahore and 4 others 2024 CLC 947 Muhammad Banaras v. Government of the Punjab and others PLJ 2024 Lah. 242; Adnan Arif v. Province of Punjab and others 2025 CLC 550; Messrs Mustafa Impex, Karachi and others v. The Government of Pakistan through Secretary Finance, Islamabad and others PLD 2016 SC 808 and Abdul Latif Chaudhary v. Province of Punjab and others (Writ Petition No.1596 of 2024) ref.

Barrister Talha Ilyas Sheikh, for Appellant.

Barrister Raja Hashim Javed, Assistant Advocate General along with Zahid Akhtar Zaman, Chief Secretary, Government of the Punjab; Engr. Aamir Khattak, Commissioner, Rawalpindi, Muhammad Junaid, Chief Inspector of Stamps and Suhail, Inspector of Stamps, Board of Revenue, Punjab.

Arshad Mahmood Malik, Assistant Attorney General.

2025 C L D 615

[Lahore (Rawalpindi Bench)]

Before Mirza Viqas Rauf and Asim Hafeez, JJ

BASHIR AHMAD BHATTI and another---Appellants

Versus

ALBARAKA BANK PAKISTAN LTD. and 4 others---Respondents

F.A.O. No.109 of 2013, decided on 12th March, 2025.

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

----S. 15 [as amended through Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016)]---Auction proceedings---Objection raised, rejection of---Sale of mortgaged property, confirmation of---Doctrine of prospective overruling---Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question')---Submission of the appellant was that auction sale in question was carried out in terms of originally framed S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance, 2001') before said section was re-enacted pursuant to the decision of Supreme Court in the case of National Bank of Pakistan v. SAF Textile Mills Ltd. and another reported as PLD 2014 Supreme Court 283 ('the SAF Textile Mills Case'), which provision of law was held ultra vires in the Constitution; that auction sale the present case was not immune from the effect of the 'SAF Textile Mills' Case'---Validity---Auction sale in question was carried out under the originally framed S. 15 of the Ordinance, 2001, which was declared ultra vires vide decision of 'SAF Textile Mills Ltd.' case, in which, evidently, Supreme Court had neither invoked nor applied the doctrine of prospective overruling - protecting past and closed transactions [auctions conducted in terms of S. 15 of the Ordinance, 2001] while declaring the law unconstitutional---Even otherwise, auction conducted did not become a past and closed transaction in wake of pendency of present appeal (pending since 2013 ) , against the order of dismissal of objections and confirmation of sale---High Court set-aside the order of confirmation of auction sale in question (dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale---Appeal was allowed accordingly.

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

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

----S. 15 [as amended through Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016]---Auction proceedings---Objection raised, rejection of---Sale of mortgaged property, confirmation of---Single bid---Effect---Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question')---Validity---Acceptance of single bid in an auction sale, without any competitive bid, is antithesis to the claim and concept of public auction(s)---High / Appellate Court set-aside the order of confirmation of auction sale in question ( dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale---Appeal was allowed accordingly.

Al-Hadi Rice Mills (Pvt.) Ltd. v. MCB Bank Limited 2023 CLD 85 ref.

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

----S. 15 [as amended through Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016]---Financial Institutions (Recovery of Finances) Rules, 2018, R. 3(c) (iv)---Auction proceedings---Objection raised, rejection of---Sale of mortgaged property, confirmation of---Re-enactment of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question)---Whether the auction sale in question could claim protection in terms of S. 15 of the Ordinance, 2001---Held, that S. 15 of the Ordinance, 2001 was amended through Financial Institutions (Recovery of Finances) Amendment Act, 2016, which also promulgated Financial Institutions (Recovery of Finances) Rules, 2018 ('the Rules, 2018')---Rule 3(c) (iv) of the Rules, 2018, permits considering single bids, subject to certain conditions---However, R.3(c) (iv) of the Rules, 2018 extends no protection to auction sale in question, as R. 3(c)(iv) of the Rules, 2018 was declared ultra vires in terms of the majority decision in the case of Muhammad Shoaib Arshad and another v. Federation of Pakistan through Secretary and 4 others reported as 2020 CLD 638---High / Appellate Court set-aside the order of confirmation of auction sale in question (dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale---Appeal was allowed accordingly.

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 ref.

Abdul Hameed Baloch for Appellant.

Nemo. for Respondent No.1.

Ibrahim Khan, vice counsel for Respondent No.2.

2025 C L D 635

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi and Raheel Kamran, JJ

UNITED BANK LTD. through authorized attorneys---Appellant

Versus

MUHAMMAD AMJAD HAYAT KHAN---Respondent

E.F.A. No. 41 of 2023, heard on 18th April, 2024.

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

----Ss.3 (2), 19 & 22---Civil Procedure Code (V of 1908), S.47---Execution proceedings---Correction of decree---Awarding of cost of funds---Executing Court, jurisdiction of---Suit for recovery was filed by respondent/plaintiff against appellant/bank on the ground that his amount was lying with appellant/bank and as the bank itself received mark-up of more than 13.50% therefore, he was also entitled to receive profit on that amount which was lying with the bank---Trial Court passed decree in favour of respondent/plaintiff to recover the amount along with cost of funds---Appellant/bank filed application for revisiting judgment and decree to the extent of awarding cost of funds, which application was dismissed by Trial Court---Validity---Cost of funds is basically the cost that a financial institution is entitled to recover from borrower on account of funds which as per terms of finance or the law ought to have been in the custody of a financial institution but happened to be in the custody of customer after default---Rationale of the same is that financial institution has been deprived from placing the funds somewhere else for its financial benefits which is the core business of financial institution---Questions relating to executability of an order or decree can be raised even in execution proceedings and it is open to the party against whom it is sought to be executed to show that it is null and void or had been made without jurisdiction or that it is incapable of execution---It is not for Executing Court to decide whether decree passed is legal or illegal or whether it is erroneous or not, but it is open to Executing Court to consider whether decree sought to be executed is void or not---Any decree passed by any Court or forum is void if the Court or the fourm which passed it has no jurisdiction over the subject matter---Division Bench of High Court set aside the order passed by Executing Court, as the decree was not executable to the extent of award of cost of funds---Appeal was allowed accordingly.

Ahmad Abbas v. Additional District Judge and others 2022 CLC 1296; Deputy Director Finance and Administration Fata through Additional Chief Secretary FATA, Peshawar and others v. Dr. Lal Marjan and others 2022 SCMR 566; Reference No.01 of 2012 PLD 2013 SC 279; Nadeem Ahmed Advocate v. Federation of Pakistan 2013 SCMR 1062; Abdul Haq Khan and others v. Haji Ameerzada and others PLD 2017 SC 105; The Collector of Sales Tax, Gujranwala and others v. Messrs Super Asia Mohammad Din and Sons and others 2017 SCMR 1427; Messrs Long Term Venture Capital Modaraba v. Messrs State Life Insurance Corporation of Pakistan 2005 CLD 122; Bank of Punjab through Attorney v. Manzoor Qadir and another 2021 CLD 1037; Islamic Republic of Pakistan v. Muhammad Saeed PLD 1961 SC 192; Fakir Abdullah and others v. Government of Sindh through Secretary to Government of Sindh, Revenue Department, Sindh Secretariat, Karachi and others PLD 2001 SC 131 and V. Chinna Lakshmaiah v. Samurla Ramaiah and others AIR 1991 AP 177 rel.

Ch. Saleem Akhtar Warraich for Appellant.

Syed Tariq-ur-Rehman Hashmi for Respondent.

2025 C L D 689

[Lahore]

Before Shahid Karim, J

Messrs MUMTAZ GHANI TEXTILE (PVT.) LTD. through Chief Financial Officer and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Finance

and 2 others---Respondents

Writ Petition No. 79375 of 2023 (and other connected petitions), heard on 21st January, 2025.

(a) Foreign Exchange Regulation Act (VII of 1947)---

----Ss. 3, 12(1), 12(3), 23B & 23J---Constitution of Pakistan, Arts. 9, 10A, 14 & 18---Adjudicating Proceedings and Appeal Rules, 1988---State Bank Notification No.F.E.I/2002 dated 05.01.2022---Foreign Exchange Circular No.1 dated 13.02.2023---Foreign Exchange Circular No.2 dated 31.03.2023---Payment of exported goods---Delayed realization of export proceeds---Issuance of show cause notice by State Bank of Pakistan (SBP)---Lien on export proceeds---Adjudication process---Due process of law, violation of---Assumption of role of Adjudicating Officer by the SBP---Legality---Claim of the petitioner was that Circular No.2 of 2023 issued by SBP amending Foreign Exchange Manual by adding paragraph 33A was ultra vires and impinged on their rights to deal with their funds---Plea of the SBP was that as per Ss. 3, 12(3) & 20(3) of the Foreign Exchange Regulation Act, 1947 (Act) powers were vested with SBP to issue the circular---Validity---Section 20(3) of the Act merely grants power to SBP to give directions qua making of payment and doing of other acts, inter alia, by authorized dealers in the course of their business and these directions may be given as appears to SBP to be necessary or expedient for the purpose of securing compliance with the provisions of the Act---State Bank of Pakistan was not at all empowered to add anything or impose stricter conditions to the conditions already prescribed by Adjudication Proceedings and Appeal Rules, 1988 (Rules), and power to do so vested in the Adjudicating Officer upon a complaint being filed to him and that too at the conclusion of the hearing after following due process of law---State Bank of Pakistan had arrogated to itself the power vested in the Adjudicating Officer by virtue of S. 23J of Act regarding the recovery of sums due to the Government in execution of the orders passed by him---Circular No.2 condemned the authorized dealer unheard and was a pre-emptive order issued by use of SBP's dominant position as a regulator---Such act of SBP not only offended the provisions of the Act but also the constitutional rights enshrined in Arts. 9, 10A, 14 & 18 of the Constitution---SBP could have issued a notification for the purpose of securing compliance with the provisions of S. 23B of the Act but could not have imposed conditions in the form of paragraph 33A of Circular No.2 to usurp the powers of Adjudicating Officers under S. 23B of the Act---Intent of the legislature in enacting S. 23B of the Act read with Rules, 1988, could not be nullified or circumvented by an administrative order to mark a lien on export proceeds realized by the exporters, which would tantamount to adjudication by SBP prior to an adjudication process for which the law empowers specific officers of SBP to undertake the enquiry---Constitutional petitions were allowed, in circumstances and show cause notices based on Circular No.2 were struck down with a direction to SBP to proceed with the matter in accordance with law by referring the matter to the Adjudicating Officer.

(b) Constitution of Pakistan---

----Art. 10-A---Fair trial---Due process of law---Determination of civil rights---Scope---Constitutional right recognized by Art. 10A of the Constitution is a fundamental right inhering in a person to fair trial and due process for the determination of his civil rights.

Petitioner by:

Barrister Muhammad Umer Riaz, Saqib Haroon Chishti, Abdul Waheed, Muhammad Amin, Rana Rehan, Haseeb Tariq, Barrister Hassan Safdar Khan, Rashid Khan, Rana Muhammad Afzal Razzaq Khan, Sajid Asghar Langhra, Awais Toseef Rana, Faisal Anwar Minhas, Hafeez Ullah Maan, Asif Amin Goraya, Nazakat Abbas Bhatti and Muhammad Sohail Anjum.

Respondents by:

Ahmed Pervaiz for SBP.

Azmat H. Lodhi for FBL.

Zahid Mahmood Arain for UBL.

Muhammad Riaz for Bank Al-Falah.

Kashif Hussain for Meezan Bank.

Zameer ud Din Ibad for Sindh Bank.

Mirza Abdul Basit for Soneri Bank.

Asad Ali Bajwa, D.A.G with Muhammad Waqar Khalique, Law Officer, SBP.

2025 C L D 813

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

Messrs 5H INSAAT VE TICARET ANONIM SIRKETI---Petitioner

Versus

SECRETARY and others---Respondents

Writ Petition No.1712 of 2025, decided on 29th May, 2025.

(a) Punjab Alternate Dispute Resolution Act (XVII of 2019)---

----S.2(b)---Alternate Dispute Resolution ("ADR")---Mediation---Object, purpose and scope---Significance of mediation stated---Distinction from arbitration---Cancellation of a contract by the authorities---Accruing of vested right of the contractor after submitting Rs.2.2 billion as performance security---Matter referred to mediation after setting aside the cancellation notice---Facts in brevity where that the petitioner was awarded a contract of a project titled "Developing Resilient Environment and Advancing Municipal Services" and thereafter it fulfilled all legal formalities, submitted performance securities worth over Rs. 2.2 billion, and requested mobilization advances and work commencement orders, however, after four months, termination notices were issued to the petitioner---The petitioner challenged these notices through the present Constitutional petition---Held: Admittedly the contract was awarded to the petitioner and since it had invested a huge amount of more than Rs.2.2. billion in the project, therefore, vested rights had been created in its favour and if the contract was terminated, the petitioner would suffer a huge financial loss---Contract executed between the parties provided amicable settlement by mentioning that both the parties would attempt to settle the dispute amicably before the commencement of arbitration---Then, under clause 21.6 of the contract, any dispute in respect of which the decision of the DAAB had not become final and binding were agreed to be finally settled by international arbitration under the Rules of Arbitration of International Chamber of Commerce---In order to avoid such arbitration, while seeking guidance from the jurisprudence developed on mediation from time to time, High Court deemed it appropriate to refer the matter for mandatory mediation, before the arbitration started---The reasons which make mediation a compelling choice to resolve disputes efficiently and effectively, inter alia, include: (i) Cost-effectiveness; (ii) Time efficiency; (iii) Flexibility; (iv) Confidentiality; (v) Preservation of relationships; (vi) Control over the outcome; (vii) Expertise; (viii) Reduced hostility---An ounce of mediation is worth a pound of arbitration and a ton of litigation---Supreme Court of Pakistan has put more emphasis on resolving disputes through mediation as the benefits of mediation are manifold---It reduces the costs associated with protracted legal battles, alleviates the burden on courts, and ensures quicker resolution of disputes---The confidential nature of mediation protects the privacy of the parties, and its informal setting encourages honest communication and problem-solving---Moreover, the flexibility of the process allows parties to explore creative, interest-based solutions that a court of law may not be empowered to grant---The earlier a dispute is channeled through mediation, the greater the potential for cost and time savings, reduced emotional strain, and restored relationships---Therefore, in view of the above background and the facts of the present case, specifically when consensus had also been reached between the parties for amicable settlement of the dispute, the impugned notices of termination of contractwere set-aside and the respondent No.1/Secretary, Local Government and Community Development Department, Government of the Punjab who had already dealt with the matter, and who had passed the detailed order by confirming rights of the Petitioner, and he having awareness of the matter, could play an important role to mediate all the differences/disputes between the parties---Respondent No.2 was appointed as the neutral facilitator/mediator with a view to resolve the dispute in amicable and expeditious manner because the project related to welfare of the public at large---Constitutional petition was disposed of accordingly.

Waqas Yaqub v. Adeel Yaqub and another 2024 CLD 990; Faisal Zafar and another v. Siraj-ud-Din and 4 others 2024 CLD 1; Netherlands Financierings Maatschappij Voor Ontwikkelingslanden N.V. (F.M.O.) v. Morgah Valley Limited and SECP PLD 2024 Lah. 315 = 2024 CLD 685; Strategic Plans Division and another v. Punjab Revenue Authority and others PLD 2024 Lah. 545; Sohail Nisar v. Nadeem Nisar and others 2025 MLD 105 and Messrs National Logistics Cell v. Assistant/Deputy Commissioner and others 2025 PTD 614 ref.

Messrs Mughals Pakistan (Pvt.) Limited v. Employees Old Age Benefits Institution through Director Law, Lahore and others PLD 2025 SC 1; Province of Punjab through Secretary C&W, Lahore and others v. Messrs Haroon Company, Government Contractor and others 2024 SCMR 947; Taisei Corporation and another v. A.M. Construction Company (Pvt.) Ltd. and another 2024 SCMR 640; Commissioner Inland Revenue v. Messrs RYK Mills 2023 SCMR 1856; Orient Power Company (Private) Limited through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2021 SCMR 1728 and Federation of Pakistan and others v. Attock Petroleum Ltd. Islamabad 2007 SCMR 1095 rel.

(b) Punjab Procurement Rules, 2014---

----Rr.2(1)(f), 2(1)(g), 2(1)(n), 2(1)(s), 2(1)(w), 3, 31, 32, 63(a) & 63(b)---Procurement process through competitive bidding---Role and rights of a bidder stated---Awarding a contract to a party---Process and scope---A bidder is an individual or organization that submits a proposal to undertake a specific project or provide goods/services at a specified price and in the context of public interest projects or government contracts, the bidders play an important role in competing for projects/contracts---The basic role of a bidder is to (i) submit proposals or bids for a project or contract; (ii) provide goods or services as specified in the said project or contract and (iii) comply with the terms and conditions of the project/contract awarded to him---Whereas the rights of a bidder include the right of fair evaluation of his bid; right to be notified of bid evaluation results; and most importantly right to protest or dispute the awarding of the contract if necessary---As regards, the scope of awarding a bidding contract, it involves several key aspects which are (i) Notification; (ii) Publication; (iii) Contract execution; (iv) Conditions precedents; (v) Timeline---The process of awarding a contract or project involves bid evaluation, recommendation of the contracting authority regarding the winning bidder, approval by the relevant authority and then signing of the contract between the contracting authority and the winning bidder.

(c) Arbitration---

----Significance of arbitration---Types of arbitration---Arbitration is a dispute resolution process where the parties agree to submit their disputes to a neutral third-party called the arbitrator, who, after listening to the stance of the parties, makes a binding decision---There are two types of arbitration; the first is "voluntary arbitration" in which the parties agree to arbitration voluntarily, through a contract or agreement and second type is known as "mandatory arbitration" which is required by law or contract, and the parties must participate in the process---The first and the basic benefit of arbitration is the faster resolution of a dispute because it contains a process which is faster than traditional litigation, reducing the time and cost associated with resolving disputes---Arbitration can be more cost-effective than approaching the court as it eradicates many of the formalities and procedures associated with the litigation---It is commonly used to resolve commercial disputes, labour disputes, such as grievances and collective bargaining agreements but the arbitrator can also play pivotal role in resolving international disputes, such as disputes between countries or multinational corporations.

(d) Constitution of Pakistan---

----Art.18---Freedom of trade, business and commerce---Project for public welfare---Encouraging promotion and protection of public welfare project involving foreign investment---Foreign investment and the role of foreign investors in Pakistan---Scope---One of the basic purpose behind provision of Article 18 of the Constitution is certainly to advance culture of socio-economic progress and to protect and promote business and trade activities and, at the same time, to encourage simplification of the process of establishing and carrying out new business ventures throughout the country---It is the duty of the courts in Pakistan to see the rights of the parties and to protect their interest in order to build confidence of investors in Pakistan but at the same time the interest of government functionaries also has to be examined regarding financial interest of the government---If such like projects are delayed then it will negatively impact the quality of life of the individuals, who are to be benefited from it, particularly when the project is intended to provide essential services or infrastructure---Especially, when the foreign investment is involved then delay in completion of such kind of projects will jeopardize tendency of entering new technologies, management practices and marketing techniques in the country.

M.C.R. (Pvt.) Ltd., Franchisee of Pizza Hut v. Multan Development Authority and others 2021 CLD 639 ref.

(e) Punjab Government Rules of Business, 2011---

----Rr.3(3) & 10---Responsibilities and functions of the heads of government departments---Scope---Under R. 3(3) of the Punjab Government Rules of Business, 2011, business of the Government has been distributed amongst several departments in the manner indicated in the Second Schedule and functions of the Secretary are described under R. 10 of the Punjab Government Rules of Business, 2011---The Secretary, being official head of the department, having constitutional powers, is responsible for its efficient administration and discipline; for the conduct of business assigned to the department, and for the observance of laws and rules.

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

PIA Officers Cooperative Housing Society Ltd. through President v. Province of Punjab through Secretary to the Government of Punjab, Cooperatives Department, Lahore and 4 others 2024 CLC 947; Muhammad Banaras v. Government of the Punjab and others PLJ 2024 Lah. 242 and Adnan Arif v. Province of Punjab and others 2025 CLC 550 ref.

Akhtar Javaid, Advocate Supreme Court for Petitioner.

Barrister Raja Hashim Javed, Assistant Advocate General along with Tayyab Farid, Special Secretary, Housing, Urban Development, Public Health Engineering Department, Lahore, Hamza Salick, Program Director, Project Coordination Unit, Lahore and Muhammad Saleem Ashraf, Managing Director, WASA, Rawalpindi.

Shahzain K. Mandokhel, M. Talib Shahzad and Shokat Ali Joyia for the Respondent No.5.

2025 C L D 834

[Lahore (Rawalpindi Bench)]

Before Asim Hafeez, J

UNITED BANK LIMITED---Petitioner

Versus

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

Writ Petition No.983 of 2025 (with other connected Petitions), decided on 2nd May, 2025.

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

----Ss. 82-B & 82-E---Federal Ombudsmen Institutional Reforms Act (XIV of 2013), S. 14---Banking Mohtasib (Ombudsman), jurisdiction of---Scope---Law entitles and empowers Mohtasib to adjudicate upon subject-matter complaints, wherein complainants alleged incidences of banking malpractices, violations of banking laws, rules, regulations and guidelines, instances of maladministration, fraud in relation to transfer of funds and complain against fraudulent or unauthorized withdrawals or debit entries in the accounts.

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

----S. 14---Payment Systems and Electronic Fund Transfers Act (IV of 2007), S. 41---Constitution of Pakistan, Art. 199---Constitutional petition---Banking Mohtasib---Jurisdiction---Electronic Fund Transfers---Contributory negligence and comparative negligence, principles of---Scope---Petitioners / banking companies were aggrieved of orders passed by Banking Mohtasib pertaining to unauthorized Electronic Fund Transfer (EFTs)---Customers asserted that they were deceptively and fraudulently induced by callers impersonating as bank or government officials, resulting into sharing of personal information, identity, access codes, one-time-pass codes (OTPs) on the assumption that information was required for the purposes of periodical checks---Banking Mohtasib directed petitioners / banking companies to reimburse / compensate the victims, i.e. the customers---Validity---Jurisdiction conferred on the Mohtasib is in the nature of quasi-judicial jurisdiction, where Mohtasib is entitled to receive evidence on affidavits, without necessity of strictly following evidentiary principles---One must not overlook, evidently the significant role of Mohtasib, which is to act as mediator for the purposes of resolving disputes amicably, which makes application and adoption of evidentiary principles inapplicable for such mediation proceedings---Provisions of Qanun-e-Shahadat, 1984 are not applicable to arbitration proceedings, which leads to an inference that meditators are not bound by the rigours of Qanun-e-Shahadat, 1984 - and so is the Mohtasib---Statute per se supports adjudication of questions of fact, to an extent and the extent is determinable by Mohtasib---Mohtasib ignored and overlooked to consider the effect and consequence of 'contributory negligence' and 'comparative negligence'---Absolute responsibility was shifted by Mohtasib on banks by placing reliance on S. 41 of Payment Systems and Electronic Fund Transfers Act, 2007---High Court set aside decisions made by Banking Mohtasib and orders of dismissal of representations of petitioners / banking companies by the President---High Court remanded the complaints of customers to Banking Mohtasib, for decisions afresh after affording opportunity to the parties to produce documents, affidavits and evidence, in support of their respective claims---Constitutional petition was allowed accordingly.

Philipp v. Barclays Bank UK PLC [2023 UKSC 25]; Ghulam Mustafa v. Presiding Officer Special Court (Offences against Banks) Rawalpindi and others 2003 MLD 841; Hamza Raza v. The State and others 2014 CLD 1943; Naeema A. Sattar v. Federation of Pakistan and others PLD 2016 Sindh 311; Syed Mushahid Shah and others v. Federal Investment Agency and others 2017 SCMR 1218; Mushtaq Ahmed v. Judge Banking Offences Court No.02, Lahore and others 2019 CLD 318; Hamda Raza v. The State and others 2014 CLD 1493; United Bank Limited v. Federation of Pakistan and others 2018 CLD 587; Habib Bank Limited v. Federation of Pakistan and others 2022 CLD 769; Habib Bank Limited v. Muhammad Ayub Mengal and others 2022 CLD 1448; MCB Bank Limited through Authorized Attorney v. Federation of Pakistan through Director (Legal) President's Secretariat Aiwan-e-Sadar, Islamabad and 2 others 2023 CLD 333; Habib Bank Limited through Litigation Officer v. Federation of Pakistan through President Secretariat Islamabad and 2 others 2018 CLD 1152; Soneri Bank Limited through Constituted Attorneys/Authorized Officers and another 2013 CLD 1756 and Messrs Muslim Commercial Bank Ltd. through Lawful Attorney v. Federation of Pakistan through Director, (Legal-II), President's Secretariat and 2 others 2020 CLD 829 rel.

M. Wisal Khan, Ahmad Hassan and Tanzeela Nazar for Petitioner (in this and connected Petitions Nos.3875, 3876, 910, 911 and 983 of 2024).

Syed Hasnain Ibrahim and Saleem Iqbal for Petitioners (in connected Petitions Nos.2358/2021, 685/2022, 686/2022, 1484/2022, 1485/2022, 1802/2020 and 1803/2020).

Barrister M. Shayan Homayon for HBL.

Barrister Babar Shahzad Imran for Petitioners Allied Bank Limited (in connected petitions).

Sagheer Ahmed for Petitioner (in connected W.P. No.1478/2022).

Barkat Hussain for Petitioner (in connected W.P. No.518/2025).

Haseeb Shakoor Paracha, Additional Attorney General.

Ms. Hifza Bukhari, Deputy Attorney General.

Qasim Abbas, Assistant Attorney General.

Barrister Zain Mansoor, Assistant Attorney General.

Syed Zain-ul-Abideen for Respondent No.5 (in connected W.P. No.911/2025).

Barrister Raja Ammad Jillani, Muhammad Adeel Arshad, Abdul Hameed Qureshi and Raja Abid Mehmood for Respondent (in W.P. No.1485/2022).

Ch. Attique-ur-Rasool for Respondent No.1 (in W.P. No.1018 and 1019 of 2025).

Hafiz Muhammad Kalim Ullah for Respondent No.3 (in connected W.P. No.910/2025).

Ziafat Kayani for Respondent (in W.P. No.1438/2019), in person.

Changraiz Khan in person.

Sheikh Iftikhar Ali in person (in W.P. No.938/2025).

2025 C L D 863

[Lahore (Bahawalpur Bench)]

Before Muhammad Sajid Mehmood Sethi and Muzamil Akhtar Shabir, JJ

Messrs WAZIR COTTON GINNERS AND OIL MILLS and others---Appellants

Versus

BANK OF PUNJAB---Respondent

F.A.O. No.41 of 2024/BWP, decided on 10th October, 2024.

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

----Ss.12 & 22---Civil Procedure Code (V of 1908), O.IX, Rr.3 & 13---Application seeking to set aside ex-parte decree---Appeal under S. 22 of Financial Institutions (Recovery of Finances) Ordinance---Co-existent remedies against ex-parte decree by Banking Court---Doctrine of election of remedies not attracted---Appeal withdrawn in order to pursue the remedy under O. IX, R. 13, C.P.C.---Application under O.IX, R. 13, C.P.C. dismissed for non-prosecution and restoration of same also dismissed---Dismissal for non-prosecution is not fatal if ignorance bona fide---Technical defaults must not override substantive justice---The appellants had challenged the ex-parte decree passed by the Banking Court by seeking two remedies side by side i.e. one by filing an application under O. IX, R. 13, C.P.C. for setting aside ex-parte proceedings and judgment and decree before the Banking Court and another by filing an appeal before the High Court which was later withdrawn by the appellants with permission to pursue the remedy before the Banking Court under O. IX, R.13 of C.P.C.---When the appellant approached Banking Court to pursue their said remedy it was found out that their application under O. IX, R.13, C.P.C. was dismissed for non-prosecution---Consequently, the appellants then filed application for restoration of their application which was pending under O. IX, R.13, C.P.C. which was also dismissed by the Banking Court vide order dated which was impugned before the High Court in the instant appeal---High Court considered that "Whether an application for restoration of an earlier application seeking to set aside an ex-parte decree under O. IX, R.13, C.P.C, which was dismissed for non-prosecution by the Banking Court, remains maintainable in law when the applicant, unaware of such dismissal, withdraws a pending appeal against the same ex-parte decree before the High Court to pursue the said remedy before the Banking Court, and whether dismissal of the restoration plea on purely technical grounds, without adjudication on merits, amounts to denial of fair adjudication in terms of the Financial Institutions (Recovery of Finances) Ordinance, 2001? Held: The impugned order of Banking Court dismissing the application for restoration of earlier application filed by the appellants for setting aside ex-parte decree did not show that proper consideration had been given to the facts of the case while dismissing application on technical grounds solely for the reasons that the appellants had sought to pursue remedy by filing application for setting-aside ex-parte decree before the Banking Court, which application already stood dismissed for non-prosecution on 07.02.2019 and subsequent application filed on 15.07.2021 for its restoration was held to be not maintainable, which reason was not sustainable for the reason that the appellants had filed the second application for restoration of the first application, which was dismissed through the impugned order without discussing its merits---High Court set-aside the impugned order dated 10.05.2024 passed by Judge Banking Court, with the result that the order of dismissal of application for restoration application was set aside and the said application was allowed with observation that the application for setting-aside ex-parte decree shall be deemed to be pending before the Banking Court, which shall be decided on its own merits in accordance with law---Appeal was allowed, in circumstances.

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

----Ss.12 & 22---Civil Procedure Code (V of 1908), O.IX, R.13---Appeal against interlocutory order---Scope---Dismissal of an application which ends proceedings is final order for the purpose of maintaining appeal---Where a restoration application for the application seeking setting aside an ex-parte decree was dismissed, it concluded the proceedings and constituted a final order---Such dismissal cannot be treated as interlocutory---Held: As regards the objection regarding the maintainability of the instant appeal on the ground that same was against an interlocutory order and hence not maintainable it was ruled that the appeal in terms of S. 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, was available against all final orders and if it be a decree in the shape of Regular First Appeal before the High Court and against all final orders in shape of an Appeal against Order, therefore, objection of the learned counsel for the respondent was not sustainable as no other remedy against the said order except through filing of appeal against said order was available to the appellants---The application for restoration of earlier application for setting aside ex-parte decree was dismissed by the Banking court on technical grounds, which had finally disposed of the matter agitated through the said application, therefore, finality was attached to the said order and the same could not be treated as interlocutory order---High Court set-aside the impugned order dated 10.05.2024 passed by Judge Banking Court, with the result that the order of dismissal of application for restoration application was set aside and the said application was allowed with observation that the application for setting-aside ex-parte decree shall be deemed to be pending before the Banking Court, which shall be decided on its own merits in accordance with law---Appeal was allowed, in circumstances.

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

----O.IX, Rr.3 & 13---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.12 & 22---Parallel/co-existent remedies---Scope---Doctrine of election does not bar simultaneous legal actions where permissible---Withdrawal of appeal to pursue co-existent remedy---Act of court should prejudice no one---The question for determination before the High Court was whether the application for restoration of earlier application, which was dismissed for non-prosecution on 17.02.2019 was maintainable or not---The appellant had challenged the decree dated 03.10.2017 by availing two remedies; first by filing Regular First Appeal against the said decree on 08.12.2017 before the High Court and another by filing an application for setting-aside ex-parte decree before the Banking Court on 13.12.2017---Although generally it is settled principle of law that when an aggrieved person intends to commence any legal action to enforce any right and/or invoke a remedy to set right a wrong or to vindicate an injury, he has to elect and/or choose from amongst the actions or remedies available under the law---Choice to initiate and pursue one out of the available concurrent or coexistent actions or remedy from a forum of competent jurisdiction vests with the aggrieved person---Once the choice is exercised and the election is made then the aggrieved person is prohibited from launching another proceeding to seek relief or remedy contrary to what could be claimed and/or achieved by adopting other proceeding/action and/or remedy, which in legal parlance is recognized as 'doctrine of election' yet there was no bar under the law for availing the said two remedies simultaneously, however, the conclusion of one remedy would have resulted in the other remedy as having become infructuous---In the instant case the remedy of filing application for setting aside ex-parte decree initiated on 13.12.2017 resulted in dismissal for non-prosecution, whereas, the co-existent remedy against the ex-parte decree in the form of appeal before High Court was withdrawn by appellant for pursuing the former remedy---Hence, withdrawal of appeal with permission to pursue the former remedy could not be treated to have rendered the remedy of pursuing the application for setting-aside ex-parte decree as infructuous, however, it appeared that on the said date none of the parties was aware of dismissal of the application before the Banking Court and when the appellants approached the said Court for availing the said remedy in terms of permission sought from the High Court, it transpired that the said application had been dismissed---Had it been pointed out by the counsel for the respondent or was within the knowledge of the appellants that the said application had already been dismissed, they might have asked the High Court to decide the appeal on its own merits instead of permitting them to pursue the remedy before the Banking Court for the reason that withdrawal of appeal from the High Court had also deprived them of seeking further remedy against the order passed in that appeal before any higher forum and in such a situation, such an order might cause prejudice to the rights of the appellants to seek remedy available to them under the law----An act of court cannot be allowed to stand in the way of remedy available to a person for the reason that act of court should prejudice no one---In this view of the matter, when both parties were ignorant of fact of dismissal of application for non-prosecution, the conduct of the appellants seeking withdrawal of appeal to seek remedy though application for setting aside ex-parte decree could not be treated as contumacious to disentitle the appellants from pursuing the remedy for its restoration---High Court set-aside the impugned order dated 10.05.2024 passed by Judge Banking Court, with the result that the order of dismissal of application for restoration application was set aside and the said application was allowed with observation that the application for setting-aside ex-parte decree shall be deemed to be pending before the Banking Court, which shall be decided on its own merits in accordance with law---Appeal was allowed, in circumstances.

Chief Executive Officer NPGCL, GENCO-III, TPS Muzafargarrah v. Khalid Umar Tariq Imran 2024 SCMR 518; Trading Corporation of Pakistan v. Devan Sugar Mills Limited and others PLD 2018 SC 828 and Abdul Quddous v. Commandant Frontier Constabulary, Khyber Pakhtun Khawa, Peshawar and another 2023 SCMR 334 rel.

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

----O. IX, Rr. 3, 8, & 13---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.12---Restoration of application dismissed for non-prosecution---Restoration of proceedings favoured when dismissal occurs in absence of both parties---Generally, when both the parties had not appeared in the court when a petition/application is dismissed for non- prosecution, the courts liberally allow application for restoration.

Khalid Iqbal and others v. Mst. Yaseen and others 2023 CLC 963; Saeed Ahmad v. Mst. Ghulam Fatima PLD 2019 Lah. 723; Sardar Tabarik Ali and another v. Administrator Municipal Corporation, Muzaffarabad and 6 others 2020 CLC 1318; Jan v. Abdul Razzaq 2012 MLD 812 and Messrs Fateh Textile Mills Ltd. v. West Pakistan Industrial Development Corporation PLD 2008 Kar. 103 ref.

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

----First Sched., Art.181---Civil Procedure Code (V of 1908), O.IX, Rr.3, 8, & 13---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.12---Restoration of an application dismissed for non-prosecution---Limitation---Limitation for filing an application for restoration of an earlier application i.e. application for setting aside ex-parte decree by the Banking Court, which was dismissed for non-prosecution, was governed by Art. 181 of the Limitation Act, 1908, providing 3-years limitation period.

Muhammad Naveed Farhan for Appellants.

2025 C L D 884

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

IMRAN AHMED MALIK and 2 others---Petitioners

Versus

SOHAWA FLOUR AND GENERAL MILLS (PVT.) LIMITED and 3 others---Respondents

Civil Original No.06 of 2021, decided on 30th April, 2025.

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

----S. 126---Rectification of Register---Terms "member" and "shareholder"---Distinction---Terms "member" and "shareholder" are often used synonymously yet both are different---For a person to become a shareholder, allotment or purchase of shares from another shareholder is enough---No person can be treated as a member of a company until his name is entered in the Register of Members of the company---If a shareholder (whose name is entered as a member) sells his shares to another person, such seller has to be treated as member until his name is replaced with the name of purchaser in the Register---In case a person subscribes to shares of a company, he may not be treated as a shareholder until the shares are actually allotted to him---After allotment, such person is not a member until his name is entered in the Register of Members.

Abdullah Khan Usmani v. Security and Exchange Commission of Pakistan and others 2022 CLD 821 rel.

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

----S. 126---Rectification of Register---Remedies---If a person, outside the scope of member, debenture-holders or shareholders, believes that default or unnecessary delay has happened in registering members, shares, or debenture-holders affecting his claimed rights, such person has certain options depending on his status which may include lodging of a complaint with Securities and Exchange Commission of Pakistan (which can conduct an inspection, investigation or can even issue orders to a company to correct the defaults, if necessary) and may avail remedy in Civil Court due to breach of a contract.

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

----S. 126---Rectification of Register of Shares---High Court, jurisdiction of---Pre-conditions---Expression "aggrieved person"---Scope---Petitioners invoked original jurisdiction of High Court seeking rectification of Register of Shares of respondent / company on the basis of sale agreement executed by respondents / shareholders in their favour and sought entering their names in the Register---Validity---Requirement of transfer of shares as envisaged under S. 126(1)(b) of Companies Act, 2017 is that the person has to be an "aggrieved person"---Expression "aggrieved person" includes a transferor of shares who handed over transfer documents to transferee who lodged them with the company and the same were rejected by the company as bad delivery---So long as grievance of a member or an aggrieved person or company if there has been default or unnecessary delay in entering in the Register the fact of any person having become or ceased to be a member, an application under S. 126 of Companies Act, 2017 can be made---Cause of action to invoke provisions of S. 126 of Companies Act, 2017 arises only when the fact of any member having ceased to be a member is brought before the company or its board and there is default or delay in taking decision---Petitioners failed to furnish any evidence that they approached Board of Directors of respondent / company seeking removal---Petitioners sought directions against respondent / shareholders and Securities and Exchange Commission of Pakistan to record transfer of shareholding of petitioners in the "Company" regardless of becoming members, debenture holders or shareholders of the "Company" and without fulfilling requirement of S. 126(1)(a) of Companies Act, 2017---Petitioners could not be termed as members, debenture-holders or shareholders of respondent / Company---High Court declined to interfere in the matter as the petitioners failed to prove themselves to be members, debenture holders or shareholders of respondent / Company, who without fulfilling requirements of S. 126(1)(a) of Companies Act, 2017 could not invoke S.126(1)(b) of Companies Act, 2017---Petition was dismissed in circumstances.

Kausar Rana Resources (Private) Limited and others v. QATAR Lubricants Company W.L.L. (QALCO) and others 2025 SCMR 517; Mian Javed Amir and others v. United Foam Industries (Pvt.) Ltd., Lahore and others 2016 CLD 393 ; Ch. Shaukat Ali Noon and another v. Tehzeb Bakers (Pvt.) Limited and others 2024 CLD 113; Alliance Textile Mills Limited and 8 others v. Mrs. Naheed Kayani and 9 others 2015 CLD 1532; Khurshid Ahmed Khan v. Pak Cycle Manufacturing Company Limited PLD 1987 Lah. 1; Haji Abdur Rehman v. Umar Farooq Miankhel and others (I.C.A. No.3 of 2005); Fawwad Butt v. Messrs Mary (Pvt.) Limited and 5 others 2015 CLD 1309; Zakir Latif Ansari and another v. Pakistan Industrial Promoters Ltd. and 2 others 1988 CLC 1541; Mrs. Yasmeen Lari v. Mums Lahore Investment Ltd. and 2 others PLD 1981 Lah. 90 and Amhed Kuli Khan Khattak v. Creek Marina (Singapore) (Pvt.) Ltd. through Chief Executive Officer and 5 others 2012 CLD 879 rel.

Sultan Mazhar Sher, Advocate Supreme Court with Syed Asad Haider for Petitioners.

Barrister Usama Rauf with Malik Saqib Muhammad Khalid for Respondent No.1.

Jamal Mehmood Butt, with Hafiz Muhammad Tanveer Nasir and Ms. Javeria Rehman Faisal for Respondent No.2.

Tariq Mahmood on behalf of Respondent No.3.

Barrister Omar Azad Malik, Advocate Supreme Court, Husnain Raza and Fatima Shabbir, for Respondent No.4/SECP.

Barrister Raja Hashim Javed, Assistant Advocate General on behalf of Deputy Commissioner, Rawalpindi.

Dates of hearing: 20th November, 2024, 28th January and 30th March, 2025.

Prima facie, companies' shares are freely transferable; as we have seen, it is this feature which constitutes one of the great advantages of an incorporated company. Unless the company's regulations provide otherwise, the shareholder is entitled to transfer to whom he will.

But, as we have also seen, the company's regulations may place restrictions on the right to transfer and at present must do so if the company is a private one. These restrictions may take any form, but in practice they normally either give the existing members a right of pre-emption or first refusal, or confer a discretion on the directors to refuse to pass transfers.

2025 C L D 913

[Lahore (Bahawalpur Bench)]

Before Syed Ahsan Raza Kazmi, J

Malik MUHAMMAD SARFRAZ NAZAM AWAN---Petitioner

Versus

FEDERAL GOVERNMENT, MINISTRY OF COMMERCE through Secretary, Islamabad and 3 others---Respondents

Writ Petition No.8683 of 2024, decided on 18th March, 2025.

(a) Trade Organizations Act (II of 2013)---

----Ss.3(2)(b), 14(3)(g), 21, 21(2) & 21(4)---Constitution of Pakistan, Art.199---Companies Act (XIX of 2017), S.190---Trade Organizations Rules, 2013---Constitutional jurisdiction of the High Court, invoking of---Maintainability of a Constitutional petition while alternate remedy is provided by relevant law---'No confidence motion' against President of a trade organization---Applicability of the Companies Act, 2017 to trade organizations in governing their affairs---Facts in brevity were that the petitioner filed a Constitutional petition under Art. 199 of the Constitution challenging letters for convening an executive meeting concerning a "No Confidence Motion" against the President of Bahawalpur Chamber of Commerce and Industry (the "BCCI")---It was alleged that such actions had no legal basis in the governing documents of the trade organization---High Court considered as to "whether the Constitutional petition was maintainable under Art. 199 of the Constitution to challenge directions issued for convening a no confidence motion in a trade organization, despite the availability of an alternative remedy under S. 21 of the Trade Organizations Act, 2013 and in light of the applicability of the Companies Act, 2017 to such organizations"---Held: A bare reading of S. 21 of the Trade Organizations Act, 2013 established that the same provided a specific channel for addressing grievances and the aggrieved person must have exhausted this avenue before seeking further recourse---The petitioner's case fell within the purview of S. 21(2) Trade Organizations Act 2013 as the regulator/respondent No.2 had directed the secretary general of the trade organization/respondent No.3 to convene a meeting of the executive members to table the "No Confidence Motion" against the president of BCCI---The petitioner failed to provide a valid reason for not utilizing the available alternate remedy, which was a statutory, time-bound, and legislatively prescribed solution---Moreover, the Companies Act, 2017 was applicable to trade organizations in governing their affairs and BCCI licensed under S. 3(2)(b) of the of the Trade Organizations Act, 2013 and registered under S. 42 of the Companies Act, 2017 was required to comply with the provisions of the Companies Act, 2017---Therefore, any breach of the Companies Act, 2017 would violate the Trade Organization Rules, 2013 and the terms of the license---The regulator directed the BCCI to convene an executive committee meeting to discuss a "No Confidence Motion" and his directions were at par with S. 190 of the Companies Act 2017, thus, respondent No.2 (the "regulator") was well within its authority to issue the impugned direction---The instant petition was not maintainable due to availability of an alternate efficacious remedy under S. 21(2) of the Trade Organizations Act, 2013 and the directions issued by Respondent No.2 were lawful and in conformity with the Trade Organizations Act, 2013---Consequently, the Constitutional petition was dismissed, in circumstances.

Ms. Saba Gul v. Government of Pakistan through Secretary Commerce and 3 others 2020 CLD 251 ref.

(b) Trade Organizations Act (II of 2013)---

----Ss.3(2)(b), 14(3)(g), 21, 21(2) & 21(4)---Constitution of Pakistan, Art.199---Companies Act (XIX of 2017), S.190---Trade Organizations Rules, 2013---Constitutional jurisdiction of the High Court, invoking of---Availability of alternate remedy by the relevant law---No confidence motion against President of a trade organization---Applicability of the Companies Act, 2017 to trade organizations in governing their affairs---Scope---Trade organizations must follow provisions of the Companies Act, 2017---A "Registered Trade Organization" is by definition, an entity incorporated under the Companies Act, 2017---To obtain a license, a trade organization must be registered as a company with limited liability under the Companies Act, 2017---Additionally, license holders are required to apply for incorporation within 30 days and secure incorporation within 90 days---It is established that the Companies Act, 2017 would be applicable to trade organizations in governing their affairs---In the present case Bahawalpur Chamber of Commerce and Industries (BCCI) licensed under S. 3(2)(b) of the Trade Organizations Act, 2013 and registered under S. 42 of the Companies Act, 2017 must comply with the Companies Act, 2017, which governs corporate formation, operation, and management, ensuring standards of conduct, accountability, and transparency---Specifically, S. 190 of the Companies Act, 2017, outlines the process for removing a chief executive by requiring a majority vote from the board of directors---Additionally, Clause 14(1) of BCCI's license requires compliance with the Companies Act, 2017---Therefore, any breach of the Companies Act would constitute a breach of the Trade Organizations Rules, 2013 and the terms of the license---Section 14(3)(g) of the Trade Organizations Act, 2013 empowers the Regulator to direct trade organizations to comply with the Companies Act, 2017---In the instant case, the Regulator directed BCCI to convene an executive committee meeting to discuss a "no confidence motion" and his directions were at par with S. 190 of the Companies Act, 2017--Thus, respondent No.2 (the regulator) was well within its authority to issue the impugned direction---The instant petition was not maintainable due to availability of an alternate efficacious remedy under S. 21(2) of the Trade Organizations Act, 2013 and the directions issued by respondent No.2 were lawful and in conformity with the Trade Organizations Act, 2013---Consequently, the Constitutional petition was dismissed, in circumstances.

Pakistan Poultry Association through Secretary General v. Regulator of Trade Organizations and another 2024 CLD 1266 ref.

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

----O.XXIX, R.1---Suits by or against corporations---Board resolution, requirement of---Scope---A company has a separate legal identity and to sue or initiate legal action on its behalf, authorization through board resolution is required, however, if a company official is sued personally, no board resolution is needed, as individuals and the company are legally distinct entities.

SDO, PESCO Daudzai Sub-Disvison Ring Road, Peshawar and others v. Wadan Sher 2023 SCMR 236 rel.

(d) Constitution of Pakistan---

----Art.199---Constitutional jurisdiction of the High Court, invoking of---Availability of alternate remedy---Scope---Constitutional jurisdiction cannot be invoked as a routine matter of right---Instead, it has specific limitations that must be considered by the High Court when exercising its discretionary powers---Article 199 of the Constitution outlines these limitations, including the requirement that alternate remedies must have been exhausted.

Ms. Saba Gul v. Government of Pakistan through Secretary Commerce and 3 others 2020 CLD 251 ref.

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

----S.190---Removal of chief executive of a company---Process---The board of directors by a majority vote can remove a chief executive of a company and the whole process for conducting such an exercise has been provided under S.190 of the Companies Act, 2017.

Muhammad Nawazish Ali Pirzada and A.R. Aurangzeb for Petitioner.

Tahir Mehmood Mufti, Deputy Attorney General for Respondent No.1.

Malik Ghulam Sabir for Respondent No.4.

Muhammad Tahir Saeed Ramay for Respondent No.3.

Sardar Abdul Basit Khan for Respondent No.4.

Rai Mazhar Hussain Kharal, A.A.G. on Court's call.

2025 C L D 954

[Lahore]

Before Anwaar Hussain, J

Messrs TAIGA APPAREL (PVT.) LTD.---Petitioner

Versus

Messrs INTERNATIONAL FABRICATION COMPANY---Respondent

Civil Revision No.60145 of 2024, decided on 25th February, 2025.

(a) Arbitration---

----Procedure---Object, purpose and scope---Arbitration is fundamentally a contractual arrangement and the parties must be held to their bargain---Parties cannot be allowed to circumvent procedure for arbitration provided in arbitration clause---Procedure for appointment of arbitrator, as provided in arbitration agreement, must be given effect.

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

----S. 8(1) & (2)---Arbitrator, appointment of---Procedure---Provision of S. 8(1) of Arbitration Act, 1940 empowers a party to serve a notice on other party to concur in appointment of arbitrator etc., where arbitration agreement provides reference to one or more arbitrators appointed by consent of parties and parties do not, after differences have arisen, concur in appointment or appointments---If appointment is not made within fifteen clear days after service of such notice, then under S. 8(2) of Arbitration Act, 1940 Court may, on application of the party which had given notice and after giving the other parties an opportunity of being heard, appoint arbitrator or arbitrators or umpire, as the case may be.

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

----Ss. 8, 9 & 20---Arbitration---Procedure to be followed---Two arbitration agreements---Respondent invoked arbitration clause before Trial Court and sought appointment of arbitrator; the application was dismissed for parties to first proceed as per agreement---Lower Appellate Court set aside order of Trial Court and directed appointment of arbitrator---Validity---Both the agreements between parties required two arbitrators, followed by an umpire if needed---Correct legal provision to invoke was S. 9 and not S. 8 of Arbitration Act, 1940---Lower Appellate Court directed Trial Court to appoint arbitrator without first determining whether two steps procedures envisaged under arbitration clauses agreed between parties had been exhausted and it also failed to address issue of whether application under Ss. 8 and 20 of Arbitration Act 1940 was maintainable for two separate agreements, which was erroneous, making its decision legally unsustainable---Application of respondent under Ss. 8 and 20 of Arbitration Act, 1940 was not maintainable as it covered two separate agreements, and arbitration mechanism in both the agreements was not exhausted by respondent, rendering the application premature---High Court set aside judgment passed by Lower Appellate Court as disputes between the parties fell under S. 9, rather than S. 8 of Arbitration Act, 1940 and the parties were at liberty to invoke arbitration clauses in letter and spirit---Revision was allowed accordingly.

Messrs Ganapati Technology Services (Pvt.) Ltd v. The State Fisheries Development AIRONLINE 2021 CAL 120; Orient Power Company (Private) Limited through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2021 SCMR 1728; Sezai Turkes Feyzi Akkaya Construction Company, Lahore through Project Director v. M/s. Crescent, Services, Lahore and another 1997 SCMR 1928; M/s. Duro Felguera, S.A v. M/s. Gangavaram Port Limited AIR 2017 SC 5070; Libra Automotives Private Limited v. BMW India Private Limited and another 2019 (176) DRJ 976; Olympus Superstructures (Pvt.) Ltd. v. Meena Vijay Khetan and others AIR 1999 SC 2102; DLF Home Developers Limited v. Rajapura Homes Private Limited and another AIRONLINE 2021 SC 759; Subal Chandra Bhur v. MD. Ibrahim and another AIR 1943 Cal. 484 and Better Engineered Solutions (Pvt.) Ltd. v. Balochistan Development Authority, Quetta through Chairman and another PLD 2023 Isl. 105 rel.

Abid Minhas for Petitioner.

Proceeded against ex-parte vide order, dated 16-12-2024.

Syed Shahab Qutab, Amicus Curiae.

2025 C L D 996

[Lahore]

Before Shahid Karim, J

EFU GENERAL INSURANCE LIMITED through Authorized Officer and another---Petitioners

Versus

PROVINCE OF THE PUNJAB through Chief Secretary and 3 others---Respondents

Writ Petition No. 7002 of 2020 (and other connected Petitions), decided on 24th March, 2025.

(a) Stamp Act (II of 1899)---

----Ss. 2(22A), 33, 35 & Schedule-I, Art. 47 (as amended by Punjab Finance Act, 2018)---West Pakistan Stamp Inspection and Audit Rules, 1949, R.3---Constitution of Pakistan, Arts. 138 & 199---Constitutional petition---Public office---Collection of stamp duty---Insurance policies---Petitioners/insurance companies were aggrieved of notices for audit of accounts issued by Chief Inspector of Stamps, Board of Revenue Punjab---Dispute was with regard to deposit of stamp duty on instruments of insurance executed by petitioners/insurance companies---Held: If public functions under Art. 138 of the Constitution belong to Provincial Government then such functions can only be delegated to public officers who are departmental officials---Provisions of Stamp Act, 1899 concern themselves with collection and impounding of duties of stamp which, in essence, are public functions meant to be performed by public officers---Private bodies and persons included in definition of public office in Stamp Act, 1899 may carry out functions which can be described as public but as commercial organizations they cannot be said to possess powers solely in order that they may use them for the public good---Private bodies do not have the same duty that a public body, which is not a commercial undertaking, has---Private body is entitled to look to the interest of its shareholders---This also means that private bodies and persons may become subject to judicial review since their source of power is a statute---Offices to which a reference has been made in Appendix II of Stamp Act, 1899 do not include the bodies in dispute and not at all the offices of petitioners/insurance companies---Petitioners/insurance companies are not comprised in the list of Courts and offices and other accounts which are subject to stamp audit by a stamp auditor under West Pakistan Stamp Inspection and Audit Rules, 1949---Notices issued to petitioners/insurance companies were ultra vires as West Pakistan Stamp Inspection and Audit Rules, 1949 did not empower stamp auditor to inspect books and records of petitioners/ insurance companies for audit---Notices for audit were without lawful authority and Chief Inspector of Stamps was denuded of powers to serve such notices on petitioners/insurance companies to compel them to undertake stamp audit by stamp auditor nominated by Collector---High Court declared that definition of public office contained in S. 2(22A) of Stamp Act, 1899, to the extent of bodies in dispute was unconstitutional and without lawful authority and were struck out from the definition---High Court gave directions to modify definition of public officer in S. 2(22B) of Stamp Act, 1899---Constitutional petition was allowed accordingly.

Sui Southern Gas Company Ltd. and others v. Federation of Pakistan and others 2018 SCMR 802; R (King) v. Secretary of State for Justice [2015] UKSC 54 and YL v. Birmingham City Council [2007] UK HL 27 ref.

(b) Stamp Act (II of 1899)---

----Ss. 33 & 35---Words "by any public officer" and "acted upon, registered or authenticated…. by any public officer"---Scope---Words "by any public officer" in section 35 of Stamp Act, 1899 are tied in with the forgoing words "acted upon, registered or authenticated…. by any public officer"---These are all public functions conferred by Provincial Government and there is no power in any private person to act upon, register or authenticate an instrument---Such power is inconceivable to vest in a private person nor can he be conferred such a power, for that would be unconstitutional and against the holding of Supreme Court in Mustafa Impex case reported as PLD 2016 SC 808---Functions contemplated by sections 33 and 35 of Stamp Act, 1899 are in essence public functions of a Constitutional nature and the wide scope of definition of 'public office' introduced by Stamp (Punjab Amendment) Act, 1973 would be in contradiction to such functions---Two potentially conflicting strands of the same term are hard to reconcile in the statutory setting of Stamp Act, 1899.

Mustafa Impex v. Government of Pakistan PLD 2016 SC 808 rel.

Imtiaz Rashid Siddiqui, Shahzad Ata Elahi, Gohar Mustafa Qureshi, Shahryar Kasuri, Khawaja Omer Ghias, Syed Kamal Ali Haider, Raza Imtiaz Siddiqui, Ali Umrao, Haider Aziz Sheikh, Muhammad Mohsin Malik, Asad Abbas Butt, Muhammad Asif, Ms. Ayesha Qazi, Awais Ahmed, Malik Muhammad Zarif, Ali Ahmad Toor and Syed Ali Ahmad Gillani for Petitioners.

Abdul Muqtadir Khan for Respondent No.4-FBR.

Mirza Nasar Ahmad, Addl. Attorney General, Asad Ali Bajwa, D.A.G., Jahanzeb Inam, Addl. Advocate General and Hassan Ijaz Cheema, A.A.G. for Respondents.

2025 C L D 1095

[Lahore]

Before Raheel Kamran, J

Ahsan Idrees and another---Appellants

Versus

Judge Banking Court No.V, Lahore and others---Respondents

Writ Petition No. 4285 of 2024, heard on 24th March, 2025.

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

---S.20---Criminal Procedure Code (V of 1898), Ss. 344, 249-A & 265-K---Constitution of Pakistan, Art. 199---Filing of private criminal complaint by the Bank against accused / customer, challenging of---Constitutional petition---Maintainability---Summoning of accused not being challenged by the customer/ accused---Effect---Alternate remedy, availability of---Petitioners (customers) challenged filing of criminal private complaint by filing constitutional petition on the ground that civil litigation was already pending before the Banking Court on the same subject, thus, proceedings should be stayed till final decision of the civil litigation---Validity---Record (including appended copies of complaint along with order sheet) reflected that the Banking Court had passed order under S.204 of the Criminal Procedure Code, 1898 ('Cr.P.C') while taking cognizance of the matter and summoning the accused (petitioners) to face trial---But no supplication to challenge said summoning order had been made by the petitioners /accused; whereas such order, being judicial in nature, was assailable, however, none of the petitioners ever challenged the same---Non-assailing of the order whereby cognizance was taken by the Judge Banking Court, would imply that the petitioners had submitted to jurisdiction of the Banking Court in the complaint against them---After failure of the petitioners to challenge the summoning order, if they wanted stay of criminal proceedings pending civil litigation, they could move an application under S.344 of the Cr.P.C. before the Trial Court with prayer to postpone the commencement of trial or adjourn the trial, if already commenced, pending decision in the respective civil proceedings---Provision under S.344 of the Cr.P.C. denotes that a court may postpone the initiation of any inquiry or trial or may adjourn any inquiry or trial which is already in progress---Postponement of the commencement or adjournment of trial can be made due to the absence of a witness or for any other reasonable cause ---Petitioners could even have approached the Trial Court by moving application under S.265-K of Cr.P.C. seeking their acquittal at any stage---Section 265-K of Cr.P.C. provides jurisdiction to Trial Court to discharge/acquit an accused if it considers that there is no probability of the accused being convicted of the offence---In the present case, the petitioners instead of exhausting any of such adequate efficacious remedies available to them, had opted to approach the High Court directly by invoking the provisions of Article 199 of the Constitution ---A constitutional petition under Article 199 of the Constitution is not maintainable when a person has an adequate, efficacious alternate remedy--- In light of the availability of an alternate remedy to the petitioners under S.344 or 265-K of the Cr.P.C. and in the absence of any compelling reasons with the petitioners to invoke the constitutional jurisdiction of the High Court the present petition could not be entertained---Constitutional petition, being non-maintainable, was dismissed, in circumstances.

Muhammad Farooq v. Ahmed Nawaz Jagirani PLD 2016 SC 55 and Province of Punjab through Secretary Communication and Works Department, Lahore v. Yasir Majeed Sheikh 2021 SCMR 624 ref.

Messrs Long Grain Rice Mills (Pvt.) Ltd. through Chief Executive v. Habib Bank Limited through Senior Manager (CAD) and Senior Manager (Remedial) and another 2016 CLD 551 distinguished.

Syed Zeeshan Haider Zaidi for Petitioners.

Muhammad Nadeem for Respondent No. 2.

Date of hearing: 24th March, 2025.

Judgment

Raheel Kamran, J.---The petitioners have filed this petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (hereinafter to be referred as the ('Constitution') to challenge the filing of private complaint under section 20 of the Financial Institutions (Recovery of Finances) Ordinance 2001 (hereinafter to be referred as 'FIO 2001') by the respondent No.2-Bank against the petitioners and proforma respondent No.3 during pendency of civil litigation before the Banking Court on the same subject.

1. The petitioners as well as pro forma respondent No.3 have been arrayed as accused in the private complaint filed by respondent-Bank on the allegation that they removed the hypothecated stocks, etc. It is asserted in the petition that civil suit instituted by the respondent-bank against the petitioners and pro forma respondent No. 3 is pending and during pendency of such civil suit, criminal complaint has been filed. Prayer of the petitioners is that filing of the criminal complaint be declared illegal and proceedings thereof be ordered to be stayed till final decision of the civil litigation.

2. Learned counsel for the respondent-Bank has raised preliminary objection on the maintainability of this petition by contending that adequate alternate remedies are available to the petitioners either to approach the trial court by filing application to seek postponement of the proceedings till determination of the civil liability under section 344 of Code of Criminal Procedure, 1898 (hereinafter to be referred as 'Cr.P.C.') or to seek acquittal under section 265K of Cr.P.C. Learned counsel while making reference to the case of Sheikh Muhammad Anwar and 4 others v. Judge Banking Court and another (2024 CLD 724) submits that the trial court is empowered to postpone proceedings if it comes to the conclusion that criminal liability is intimately connected with the outcome of civil proceedings. Learned counsel emphasizes that even otherwise, the suit instituted by the respondent-Bank against the petitioners has already been decreed. He finally contends that after filing of the complaint, the order passed by the Banking Court taking cognizance of the matter, which is assailable, was not assailed by the petitioners through appropriate proceedings, as such they are precluded from agitating such grievance by invoking constitutional jurisdiction of this Court.

3. In rebuttal, learned counsel for the petitioners while placing reliance on the dicta laid down in the case of Messrs Long Grain Rice Mills (Pvt.) Ltd. through Chief Executive v. Habib Bank Limited through Senior Manager (CAD) and Senior Manager (Remedial) and another (2016 CLD 551) contends that the petition is maintainable.

4. In view of the objection raised by the learned counsel for the respondent, this Court deems it necessary to first address and resolve the issue of maintainability as a preliminary matter before proceeding to examine the substantive aspects of the petition, so as to ensure that the proceedings are properly before it.

5. The petitioners have challenged the filing of complaint before the Judge Banking Court as is evident from perusal of the prayer clause. No supplication to challenge the summoning order has been made despite the fact that copies of complaint along with order sheet are appended with the petition, perusal whereof reflects that the Banking Court has passed order under section 204 of Cr.P.C. while taking cognizance of the matter and summoning the accused (petitioners) to face trial. Such order being judicial in nature, is assailable, however, none of the petitioners ever challenged the same. Non-assailing of the order whereby cognizance was taken by the Judge Banking Court, would imply that the petitioners have submitted to jurisdiction of the Banking Court in the complaint against them. After failure of the petitioners to challenge the summoning order, if they wanted stay of criminal proceedings pending civil litigation, they could move an application under section 344 of the Cr.P.C. before the trial court with prayer to postpone the commencement of trial or adjourn the trial if already commenced pending decision in the respective civil proceedings. Subsection (1) of section 344 of Cr.P.C. reads: -

"344. Power to postpone or adjourn proceedings. (1) If, from the absence of a witness, or any other reasonable cause, it becomes necessary or advisable to postpone the commencement of, or adjourn any inquiry or trial, the Court may, if it thinks fit, by order in writing, stating the reasons therefor, from time to time, postpone or adjourn the same on such terms as it thinks fit, for such time as it considers reasonable, and may by a warrant remand the accused if in custody:"

Plain reading of the text of this section denotes that a court may postpone the initiation of any inquiry or trial or may adjourn any inquiry or trial which is already in progress. Postponement of the commencement or adjournment of trial can be made due to the absence of a witness or for any other reasonable cause.

1. The petitioners could even have approached the trial court by moving application under section 265-K of Cr.P.C. seeking their acquittal at any stage. Section 265K of Cr.P.C. is reproduced hereunder for the ready reference.

"265K. Power of Court to acquit accused at any stage. Nothing in this Chapter shall be deemed to prevent a Court from acquitting an accused at any stage of the case, if, after hearing the prosecutor and the accused and for reasons to be recorded, it considers that there is no probability of the accused being convicted of any offence."

2025 C L D 1127

[Lahore]

Before Shams Mehmood Mirza, J

SWITCH SECURITIES (PVT.) LIMITED---Appellant

Versus

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

Commercial Appeal No.4350 of 2021, decided on 20th February, 2025.

Securities Act (III of 2015)---

----Ss. 64 (2) & 65 (2)---Securities Brokers (Licensing and Operations) Regulations, 2016, Cl. 60(2)(k)---Brokerage House---Terms of license, violations of---Brokerage House accepting deposits from its customers on pre-determined rate of return---Legality---Appellant (Brokerage House) assailed order passed by the Appellate Bench of Securities and Exchange Commission of Pakistan---Submission of the appellant was that the transactions entered into by it pre-date the promulgation of Securities Brokers (Licensing and Operations) Regulations, 2016 ('the Regulations 2016') and as such it could not be penalized for violation thereof---Validity---The fact that the appellant sought deposits from its customers on pre-determined rate of return was not in dispute---It was also an admitted fact that the licence of brokerage granted to the appellant did not allow it to indulge in receiving such deposits from its customers---The activities which the appellant could lawfully pursue were mentioned in the certificate of registration as broker---Section 64(2) of the Securities Act, 2015, clearly stipulates that the licence shall specify the regulated activities that a broker is committed to undertake---It was not in dispute that the appellant accepted deposits from its customers on pre-determined rate of return which activity was not mentioned in the brokerage certificate issued to it---Thus, the appellant violated the terms of its brokerage certificate and was in violation of Ss. 64(2) & 65(2) of Securities Act, 2015---The fact that the Regulations, 2016 were introduced subsequently and had no retrospective application to the activities the appellant indulged in was beside the point---Appellant , admittedly, was in violation of the terms of its brokerage license and Ss. 64(2) & 65(2) of the Securities Act, 2015 thus, the impugned order was lawfully passed against it---No interference by the High Court in the order passed by the Appellate Bench of Securities and Exchange Commission of Pakistan was made out---Appeal, filed by Brokerage House, being merit-less was dismissed.

Usman Nasir Awan for Appellant.

2025 C L D 1154

[Lahore]

Before Shahid Karim, J

BLITZ ADVERTISING (PVT.) LTD. through duly authorized officer---Petitioner

Versus

CIVIL JUDGE LAHORE and another---Respondents

Writ Petition No.23999 of 2024, decided on 11th February, 2025.

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

----S.2(e)---Arbitration Act (X of 1940), Ss. 14 & 17---Foreign arbitral award---Scope---Application to make the award rule of court---Civil Court in Pakistan, jurisdiction of---Constitutional petition was filed to challenge the order passed by Civil Court dismissing an application filed by the petitioner by which dismissal of the main application (filed by respondent to make the award rule of court) was sought---Contention of the petitioner was that the Civil Court lacked jurisdiction as it was a foreign arbitral award within the meaning of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 ('the Act 2011'), and was to be conducted under the London Court of International Arbitration (LCIA) Arbitration Rules, 2014 ('the Rules 2014')---Validity---Record revealed that an arbitration took place between the petitioner and respondent by an Arbitration Tribunal set up through a letter dated 06.08.2020---The award was announced on 16.12.2021 by sole arbitrator appointed by the parties---The sole arbitrator was appointed by London Court of International Arbitration (LCIA) through an email dated 06.08.2020---Apart from that it was clearly mentioned in that email that the seat of arbitration shall be Lahore, Pakistan; the language of arbitration proceedings shall be English, and the law of arbitration and the arbitration agreement shall law of Pakistan---Further, there was no contention that the award so rendered was at Lahore which fact was mentioned on the first page of the copy of award which had been attached with present petition---The term 'foreign arbitral award' as defined in the Act, 2011 connotes that a foreign arbitral award shall mean a foreign arbitral award made in a Contracting State and such other State notified by the Federal Government in the Official Gazette---In the present case, the arbitral award was made at Lahore and so could not be considered as a foreign arbitral award made in a Contracting State---Otherwise, the term 'foreign arbitral award' would clearly mean taken literally that the arbitral award had been made in a foreign country though that country was a Contracting State---It did not matter whether the Rules, 2014 were applicable and in terms of which the sole arbitrator was appointed---What was of crucial significance was the fact that the award should be made in a Contracting State which would mean a State which was signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the New York Convention)---Since the award had been made at Lahore and the entire proceedings were also conducted at Lahore, there was no warrant for this/High Court to hold that the award in question was a foreign arbitral award which could only be enforced under the provisions of the Act 2011---Additionally, both the parties were Pakistani entities and there was no warrant to hold that they intended the ensuing award to be treated as foreign arbitral award within the meaning of the Act 2011---No illegality in the impugned orders have been noticed---Constitutional petition was dismissed.

SpaceCom International, LLC v. Wateen Telecom Limited C.O No.25854 of 2023 and Civil App. No.722 of 2012 ref.

Messrs Tradhol International SA Sociedad Unipersonal v. Messrs Shakarganj Limited PLD 2023 Lah. 621 distinguished.

Muhammad Ahmad Qayyum and Shamail Arif for Petitioner.

2025 C L D 1165

[Lahore (Multan Bench)]

Before Muhammad Sajid Mehmood Sethi, J

Sheikh KAMRAN SHAFI and others---Petitioners

Versus

SADAQAT SHAFI and others---Respondents

C.O. No.06 of 2014 and C.M. No.314-C of 2015, heard on 23rd April, 2024.

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

----Ss. 265, 290, 291 & 292---Civil Procedure Code (V of 1908), O.VII, R. 11---Oppression and mismanagement---Rejecting of proceedings---Wrong provision of law---Converting of petition---Petitioners alleged that respondents acted with mala fide and had deprived them of their shareholding and directorship in an illegal manner---Respondent sought rejection of petition on the plea that it was not maintainable---Validity---Mentioning of wrong provision of law in petition does not prevent Court from exercising its proper authority and appropriate jurisdiction vested under law, keeping in view circumstances of a case---High Court declared that petition under Ss. 290, 291 & 292 of Companies Ordinance, 1984 was not maintainable and the same was converted into a petition under S. 265 of Companies Ordinance, 1984---High Court directed Securities and Exchange Commission of Pakistan to proceed into the matter and appoint inspectors to investigate into the affairs of the company after issuing show cause notice as per law---Petition was disposed of accordingly.

Miss Mahenau Agha v. United Liner Agencies of Pakistan Limited and 12 others PLD 1990 Kar. 198; Messrs Shaheen Foundation v. Messrs Capital F.M. (Pvt.) Limited and others 2002 CLD 188; Shaukat Ali v. Amin Fabrics Ltd. and 3 others 2008 CLD 837; Hassan Al-Adawi and another v. Messrs HAMA International (Pvt.) Ltd. and 3 others 2009 CLD 1043; Shaukat Ali v. Messrs Bawany Sugar Mills Ltd. 4 others 2009 CLD 497; Mrs. Naila Naeem Younus and others v. Messrs Indus Services Limited through Chief Executive and others 2022 SCMR 1171; Abdul Kareem Khan v. Messrs Haroon-ur-Rasheed Textile Mills (Pvt.) Ltd. through Chief Executive and 13 others 2015 CLD 719; Bhai Azizur Rehman and 5 others v. Messrs Ghafur Textile Mills Ltd., Karachi and 19 others 1987 CLC 577; Mian Khalid Siraj and others v. Khalid Siraj Industries (Pvt.) and others 1997 CLC 1220; Brothers Steel Limited's case PLD 1995 SC 320 and Sardar Khan Niazi v. Barex Lahore Ltd. 2005 CLD 1670 ref.

(b) Constitution of Pakistan---

----Arts. 23 & 24---Property rights---Scope---Valuable property rights must not be allowed to be negated, unless law clearly and expressly stipulates that such rights would expire with efflux of time---No person can be compulsorily deprived of his property rights save in accordance with law---Right to hold and dispose of property envisaged in Art. 23 of the Constitution would be vitiated if a person's right to property is declared in such manner that another who is not entitled thereto become its owner.

Mst. Safia Bibi v. Mst. Aisha Bibi 1982 SCMR 494 and Multan Electric Power Company Ltd. through Chief Executive and another v. Muhammad Ashiq and others PLD 2006 SC 328 rel.

Shafqat Mehmood Chohan and Muhammad Suleman Bhatti for Petitioners.

Malik Muhammad Rafiq Rajwana and Muhammad Sohail Iqbal Bhatti for Respondents (Applicants of C.M. No.314-C of 2015).

2025 C L D 1176

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

ASKARI BANK LIMITED---Petitioner

Versus

Messrs KHAWAJA FLAT GLASS INDUSTRIES (PRIVATE) LIMITED and others---Respondents

Execution Petition No.01 of 2024, decided on 18th December, 2024.

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

----Ss.9 & 19---Commercial / Banking disputes---Legal heuristic approach---Scope---Long-standing recovery of debt liability and complex legal problems, resolving of---Revival/restructuring of the judgment-debtor (Company/Customer)---Exercise to resolve the issues of long-standing recovery of debt liability and complex legal problems to achieve purposive justice in execution petition(s) may be accomplished through a legal heuristic approach, which provides three general perspectives in law i.e. purposiveness, justice and legal certainty under the prevailing laws---In said approach, the Court acts as loco parentis taking on a protective and supervisory role to ensure the proper resolution of the commercial and banking debt disputes, while safeguarding the rights and interests of all the parties involved---The heuristic approach is a legal framework for solving legal problems that has been developed with the judicial anthology of the "Five R's" methodology i.e. (1) Recovery; (2) Restructure; (3) Renewal/Revival; (4) Resurrection; and (5) Resolution through mediation---In developing countries like Pakistan, the judicial forums should provide opportunities to the sick industries to revive and to restart their business at full pace and to pay off and settle their debts and other liabilities, especially when the banks are also willing to do so and have no objection to do so in this regard.

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

----S. 19---Financial Institutions (Recovery of Finances) Rules, 2018, Rr. 3 & 4---Civil Procedure Code (V of 1908), O. XXI, R. 1---Execution proceedings---Commercial/Banking disputes---Long-standing recovery of debt liability and complex legal problems, resolving of---Revival/restructuring of the judgment-debtor (Company)---Legal heuristic approach, adopting of---Scope---The heuristic approach is a legal framework for solving legal problems that has been developed with the judicial anthology of the "Five R's" methodology i.e. (1) Recovery; (2) Restructure; (3) Renewal/Revival; (4) Resurrection; and (5) Resolution through mediation---Said methodology is based on practical experience, knowledge, and quick fixes to resolve debt recovery issues in a timely manner---Where the debt is substantially disputed, then to continue with the winding up proceedings would be an abuse of process of the court---Thus, in the present case, the approach of revival/restructuring of the Company was being adopted---Since the situation had been changed after the decree of the suit, the decree-holder/banks had shown their willingness to restructure the debts of the Company---In view of the scheme of arrangement, restructuring plan, joint statement and other documents submitted by the parties and the interest of the creditors, contributors and public, there appeared to be no other option but to revive/restructure the Company---High Court directed all parties to work together (by convening a meeting etc.) to discuss and finalize a mutually agreeable restructuring plan and they (parties) shall work towards finalizing the restructuring plan and scheme of arrangement in line with the intentions expressed before the High Court---High Court had adopted a heuristic legal approach to facilitate the restructuring of the judgment-debtor/ company, however, in the event of failure to achieve a resolution, the Court shall proceed with the auction of the mortgaged properties to ensure expeditious recovery of the outstanding liabilities, without any further delay---Order accordingly.

First Dawood Investment Bank Ltd. v. Bank of Punjab through President, Lahore PLD 2022 SC 769; Messrs. Khalid Siraj Textile Mills Limited Lahore and others v. Additional Registrar of Companies, Securities and Exchange Commission of Pakistan and another 2022 CLD 1557; Investment Corporation of Pakistan and others v. Sunshine Jute Mills Limited 2005 CLD 713 and Saudi Pak Industrial and Agricultural Investment Company Ltd. v. Chenab Limited 2020 CLD 339 ref.

Syed Ishtiaq Haider, Advocate Supreme Court, Saleem Raza and Syed Afraz Naqvi, Advocates for decree-holder with Ali Mohammad Khan, Group Head, Askari Bank Ltd. Liaqat Mehmood Balt and Omer Ali Mehmood, Regional Head.

Ms. Shahina Akbar, Advocate for the decree holder in Ex.P. No.02 of 2010 with Parveen Zareen, Manager, First Women Bank, Al-Amin Plaza, Rawalpindi.

Barrister Zulfiqar Ali Shah and Luqman Ali Sipra for the judgment debtor(s) with Khawaja Ahmad Kamal, CEO, Khawaja Flat Glass Industries (Pvt.) Ltd.

Sh. Ahsan-ud-Din, Advocate Supreme Court, Court-Auctioneer.

Ahmad Nawaz Khan, Court Auctioneer.

Muhammad Osman Khan, Assistant Advocate-General on Court's call.

2025 C L D 1200

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

MUHAMMAD ARSAL---Petitioner

Versus

Messrs SADIQ FEEDS (PVT.) LTD. and others---Respondents

C.O. No.01 of 2024, heard on 3rd June, 2025.

(a) Mediation---

----Corporate dispute---Rule of law---Very foundation of a just society, safeguarded by rule of law, rests upon enduring bedrock of public trust and confidence in its Courts and judiciary---Individuals, including families involved in complex corporate disputes, approach Courts as their ultimate recourse to seek fair and impartial adjudication and resolution---Willingness of individuals to do so, and to comply with judgments, depends on the degree of confidence they place in judicial processes.

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

----Ss. 286, 287 & 288---Company affairs---Prevention of oppression and mismanagement---Corporate and family business disputes---Mediation---Annual General Meeting (AGM) of shareholders---Petitioner sought prevention of oppression and mismanagement in respondent company---On directions of High Court AGM was held to resolve dispute amongst the parties---Held: Process of resolution adopted was rooted in corporate harmony, family goodwill and statutory framework under Companies Act, 2017 which had proven to be both timely and effective---High Court appreciated gracious conduct and conciliatory approach adopted by counsel for the parties, who played a vital role in facilitating such amicable settlement---High Court also appreciated dignified role of petitioner and respondent, who, as mother and son, chose cooperation over conflict in the larger interest of respondent / Company, its stakeholders and over 3000 workers who were dependent on its continuity---Registrar SECP played pivotal role during mediation process, providing much-needed guidance akin to that of an elder in a family, as recognized in the minutes of the AGM---High Court reaffirmed its unwavering commitment to the principles laid down by Supreme Court in its landmark judgments, wherein mediation was emphasized as an essential and rights-based component of access to justice---Mediation was not merely an alternative but a necessary and effective means for ensuring party autonomy, reducing judicial backlog and fostering lasting, interest-based solutions---High Court underscored importance of "Mediation through AGM" as a model mechanism for resolving corporate and family business disputes, preserving corporate democracy and strengthening institutional integrity through resolution by consensus, as envisioned under Companies Act, 2017 and the Constitutional and jurisprudential mandates of High Court---High Court maintained the successful outcome of mediation conducted among the parties through the AGM---Petition was disposed of accordingly.

Sohail Nisar v. Nadeem Nisar and others 2025 MLD 105; Mian Muhammad Ilyas Mehraj and 17 others v. Appellate Bench No.III, Securities and Exchange Commission of Pakistan, Islamabad and 6 others 2009 CLD 883; Faisal Zafar and another v. Siraj-ud-Din and 4 others 2024 CLD 1; Netherlands Financierings Maatschappij Voor Ontwikkelingslanden N.V. (F.M.O.) v. Morgah Valley Limited and SECP PLD 2024 Lah. 315 = 2024 CLD 685; Strategic Plans Division and another v. Punjab Revenue Authority and others PLD 2024 Lah. 545; Messrs National Logistics Cell v. Assistant/Deputy Commissioner and others 2025 PTD 614; Messrs Mughals Pakistan (Pvt.) Limited v. Employees Old Age Benefits Institution through Director Law, Lahore and others PLD 2025 SC 1; Province of Punjab through Secretary C&W, Lahore and others v. Messrs Haroon Company, Government Contractor and others 2024 SCMR 947; Taisei Corporation and another v. A.M. Construction Company (Pvt.) Ltd. and another 2024 SCMR 640; Commissioner Inland Revenue v. Messrs RYK Mills 2023 SCMR 1856; Orient Power Company (Private) Limited through Authorized Officer v. Sui Northern Gas Pipelines Limited through Managing Director 2021 SCMR 1728; Federation of Pakistan and others v. Attock Petroleum Ltd. Islamabad 2007 SCMR 1095; Muhammad Naseer Butt v. Additional District Judge, Lahore and others (C.P.L.A. No.3519 of 2021) and Additional Registrar Companies v. Al-Qaim Textile Mills Ltd. 2021 CLD 931 rel.

Barrister Sameer Khosa, Advocate Supreme Court and Sardar Haseeb Iftikhar Ahmad for Petitioner.

Muhammad Imran Malik, Akif Majeed Butt, Asim Tufail Farooqi, Fayyaz Ahmad Khan and Bilal Mehmood Khokhar for Respondents.

Muhammad Waseem Ashraf Rana, Omar Azad Malik and Shehzad Ali Rana, Advocates / Special Prosecutors for SECP.

Ahmad Nawaz Khan, Advocate Supreme Court and Barrister Talha Ilyas Sheikh, Advocate.

Barrister Zain Mansoor and Ms. Nabila Rubab, Assistant Attorney Generals and Barrister Raja Hashim Javed, Assistant Advocate-General.

2025 C L D 1226

[Lahore (Multan Bench)]

Before Ahmad Nadeem Arshad, J

Mst. KHADIJA BIBI and others---Petitioners

Versus

JUDGE BANKING COURT and others---Respondents

C.M. No.7334 of 2018 in Writ Petition No.3876 of 2006, decided on 5th May, 2025.

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

----S. 22---Civil Procedure Code (V of 1908), S. 12(2)---Constitution of Pakistan, Art. 199---Order passed by the Banking Court, assailing of---Constitutional petition---Maintainability---Nature of order passed by Banking Court---Application moved by auction-purchaser before the Banking Court for delivery of possession of the property purchased by him, dismissal of---Whether interlocutory order or not---Remedy---Scope---Application under S. 12(2) C.P.C---Ingredients of fraud / mis-representation, missing of---Legal heirs of judgment-debtor (mortgagee /customer of bank) filed an application under S. 12(2), C.P.C (Applicants) before the High Court against the auction-purchaser (respondent) challenging the order passed, in constitutional petition, which was filed by respondent against dismissal of his application for delivery of possession of the property purchased by him(order under challenge)---Plea of the applicants was that the order under challenge was appealable under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 but the respondent (auction purchaser) challenged the same by invoking constitutional jurisdiction of the High Court, hence, the constitutional petition was not maintainable---Validity---Record revealed that respondent (auction purchaser) moved an application before the Banking Court for delivery of possession of the property purchased by him through auction but the same was dismissed on account of late filing of statement of accounts---Said dismissal order was assailed in the constitutional petition being interlocutory order as under S. 22 of the Ordinance, 2001, no appeal lies against an interlocutory order--- Thus , the plea of applicants was beyond the scope of S. 12(2), C.P.C.---Provisions of S.12(2) C.P.C. can only be pressed into service when fraud has been practiced upon the Court during the proceedings of case, and order, judgment and decree is obtained on the basis of such fraud and misrepresentation or want of jurisdiction---Applicants (legal heirs of customer /judgment-debtor) failed to substantiate any allegation of fraud, misrepresentation as per mandate of S. 12(2), C.P.C., to upset or overturn the order/judgment of the High Court having been passed in its constitutional jurisdiction---Application under S. 12(2) C.P.C, being meritless and not maintainable , was dismissed.

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

----S. 12(2)---Allegation of fraud, misrepresentation or want of jurisdiction---Scope of provisions under S. 12(2) of Civil Procedure Code, 1908 (C.P.C.) is restricted and the applicants are obliged to prove that fraud or misrepresentation is committed by the adversary in connection with the proceedings of the Court and have to prove the following aspects:--

(i) The fraud and mis-presentation was practised during the proceedings in the Court; (ii) Alleged fraud included untrue statements by respondents who did not believe them to be true and had committed active concealment of facts; (iii) Judgment was obtained on the basis of forged documents; (iv) The order, judgment/decree was collusively obtained and (v) The order/judgment/decree suffered from want of jurisdiction.

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

----S. 15---Auction proceedings, challenging of ---Past and closed transaction---Scope and effect---Application moved by auction-purchaser before the Banking Court for delivery of possession of the property purchased by him was dismissed, however, his prayer (for delivery of possession) was allowed by the High Court by accepting his constitutional petition---Legal heirs of judgment-debtor (mortgagee /customer of bank) filed an application under S. 12(2), C.P.C (applicants) before the High Court against acceptance of constitutional petition filed by the auction-purchaser (respondent )---Plea of the applicants was that that in view of the law laid down in case reported as National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd and another PLD 2014 SC 283 confirming judgment of the High Court in case reported as Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 (judgments-in-question), S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001') had been declared ultra vires; that since possession to the respondent (auction-purchaser) had not been delivered prior to the passing of judgments-in-question, hence, the sale be set-aside as per ratio of the judgments-in-question---Validity---Though under the judgments-in-question S. 15 of the Ordinance 2001 was declared ultra vires but for totally independent reasons and the findings of this/High Court to the extent of past and closed transactions were neither considered nor any observation was made---Supreme Court of Pakistan in case reported Muhammad Moizuddin and others v. Mansoor Khalil and another (2017 SCMR 1787), while keeping in view the effect of Art. 10-A of the Constitution, set-aside the sale on account of non-delivery of possession before the cutoff date---Supreme Court of Pakistan while elaborating upon the past and closed transaction allowed the petition with the observations that cases where sale itself had not been challenged, or such challenge had remained unsuccessful, and the sale proceeds stood adjusted towards outstanding liability of the principal debtor, and sale deed in favour of the auction purchaser stood registered under the provisions declared ultra vires the Constitution, would be saved from the effect of such declaration being past and closed transactions---In the present case, the respondent purchased the mortgaged property of customer / judgment-debtor (predecessor of the applicants) for a consideration of Rs.885,000/-.---After deposit of whole auction amount respondent /Bank issued relevant certificate and mutation was also sanctioned in his favour by the Revenue Officer---Said judgment-debtor (predecessor of the applicants) never challenged the auction proceedings during his lifetime, rather he filed an application in the Bank by contending that after auction of his property some amount was lying in his account which may be returned to him while (further contending that) he had no objection to the auction proceedings ; he received the remaining sale proceeds (amounting to Rs.79,405/-) through Credit Cash Voucher by putting his signatures and thumb impressions---In such way, the applicants were estopped from initiating any further proceedings to challenge the auction or subsequent events---Application under S.12(2) C.P.C, filed by legal heirs of customer / judgment-debtor, being meritless and not maintainable, was dismissed.

Muhammad Moizuddin and others v. Mansoor Khalil and another 2017 SCMR 1787 ref.

National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd. and another PLD 2014 SC 283 and Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 distinguished.

Malik Ghulam Qasim Rajwana for Applicants.

Rao Riasat Ali Khan for Respondent No.1.

2025 C L D 1244

[Lahore (Multan Bench)]

Before Abid Hussain Chattha, J

The BANK OF PUNJAB---Plaintiff

Versus

Messrs AGRI INTERNATIONAL and 5 others---Defendants

C.O.S. No.07 of 2014 and P.L.A. No.8 of 2014, decided on 18th March, 2025.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O. VI, R. 17---Suit for recovery---Application for leave to defend filed---Application seeking amendments in the application for leave to defend---Maintainability---One of the defendants (applicant) filed an application under R. 17 of O. VI of the Code of Civil Procedure, 1908, seeking amendments in the application for leave to defend (PLA)---Plea of the applicant was that he had been wrongly impleaded as a defendant (customer of the plaintiff /Bank ) whereas he was no more a partner; neither he was mortgagor nor an alleged guarantor for enforcement of liability of other defendants arrayed by the plaintiff /Bank, as such, the guarantees appended with the plaint contained fake and fictitious signatures of the applicant---Plaintiff / Bank raised objection on the maintainability of application seeking amendment on the ground that the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance, 2001') was a special law and as such, no miscellaneous application could be filed and entertained before the decision of PLA---Held, that where amendments sought for were supplementary and not destructive, the same could be allowed to be raised and even the limitation would not come in its way---The only consideration should be that plea(s) should not be inconsistent or divergent to the pleas raised earlier and there was no bar to move such an application---Principle of amendment in pleadings enshrined in O.VI, R.17 of the C.P.C. could be pressed with respect to amendment in the PLA---In the present case, the applicant in his original joint PLA with other defendants already raised the plea(s) he had raised in his application seeking amendment in PLA---Applicant while placing reliance upon two previous letters ('letters-in-question'), had taken an additional plea that the waiver of special condition had been contained in the last Facility Offer Letter---Plaintiff / Bank (in its reply to application seeking amendment) had not disowned the letters-in-question, though it took / stated a different version---Applicant primarily pleaded that the said letters be placed on record and their effect be considered while deciding the PLA---High Court directed that let the letters-in-question be made part of record and the same would be considered while deciding the PLA in the light of respective stances of the applicant and the plaintiff / Bank---Application under O. VI, R. 17 of Civil Procedure Code, 1908, filed by defendants, was allowed accordingly.

Messrs Habib Bank Ltd. v. Messrs Bela Automotives Ltd. and 7 others 2010 CLD 1243 and Messrs Maroof Knitwear (Pvt.) Limited through Chief Executive and 8 others v. Allied Bank of Pakistan Limited 2003 CLD 1610 ref.

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

----S. 9---Suit for recovery filed by Bank---Pledged stock, expiry of---Customer, responsibility of---Scope---Stance of the defendants was that plaintiff /Bank was responsible for expired pledged stock---It was evident from the contents of the application for leave to defend (PLA) that the defendants had accepted and admitted the sanctioning and availing of the facilities from the plaintiff / Bank ; as such, the grant and utilization of Finance Facilities in terms of financing documents appended with the plaint was fully established---Thus, stance of the defendants (that plaintiff / Bank was responsible for expired pledged stock) was not tenable for the reason that the defendants in their PLA had not identified any particular clause in the Letter of Pledge which was breached by the plaintiff / Bank---In a pledge transaction, a financial institution only maintains constructive possession over the pledged stock through the Muqadam but practically, the customer maintains its physical custody and operates it in concert with the creditor in accordance with the terms and conditions of the Letter of Pledge---For all intents and purposes, the customer was responsible to undertake its business and the plaintiff / Bank had no concern with the running of the business of the customer---In said context, the plaintiff / Bank rightly maintained in its replication that the defendants defrauded the plaintiff /Bank by not replacing the expired stock of the pledged goods after default, thereby, eroding and diminishing its value despite insistance of the plaintiff / Bank to replace the same which compelled the plaintiff /Bank to initiate criminal proceedings against the defendants---Plaintiff / Bank was not obliged to renew the Facilities of defendant / Partnership as the latter had defaulted in the repayment of the Facilities---Hence, the plaintiff / Bank could not be held responsible for engineering default of defendant---Hence, in the wake of admission qua availing of the Facilities by the defendants and their failure to raise any substantial question of law and fact which required recording of evidence, the High Court rejected the PLA of the defendants---Nevertheless, minute perusal of the statement of accounts appended with the plaint revealed that the plaintiff /Bank had claimed mark-up beyond the period of expiry of the Facilities which could not be granted to the plaintiff / Bank---As such, the plaintiff / Bank was only entitled to recover the amounts excluding said amount---Suit filed by the Bank was decreed accordingly.

Messrs World Trans Logistics and others v. Silk Bank Limited and others 2016 SCMR 800 and Habib Metropolitan Bank Limited v. Nazir Rice Mills (Pvt.) Limited through Chief Executive Officer and others 2020 CLD 796 ref.

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

----Ss. 9(3), 10(4)(5) & 10(4)(7)---Suit for recovery filed by Bank---Default, incidence of---Scope---The incidence of default was fully narrated in the plaint in compliance with the requirements of S. 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001')---Rather notably, the defendants did not fulfill the mandatory requirements of S. 10(4)(5) and (7) of the Ordinance, 2001 and as such, the PLA merited to be dismissed on this single score alone---Defendants failed to raise any substantial question of law and fact which required recording of evidence---High Court rejected the PLA of the defendants---Nevertheless, minute perusal of the statement of accounts appended with the plaint revealed that the plaintiff / Bank had claimed mark-up beyond the period of expiry of the Facilities which could not be granted to the plaintiff / Bank ; as such, the plaintiff / Bank is only entitled to recover the amounts excluding said amount---Suit filed by the Bank was decreed accordingly.

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

----S. 9---Suit for recovery filed by Bank---Status of guarantor denied by defendant(s)---Plea of two Defendants (Nos. 4 and No.5) from a total of six defendants, including Partnership-entity/customer (defendants-in-question) was that they (defendants-in-question) had not executed their guarantees and as such, they were unnecessarily impleaded as parties to the suit---Validity---Record reveals that by virtue of relevant Partnership Deed dated 27.09.2004, Defendants Nos. 2 & 4 were its partners---On 20.11.2004, the number of partners soared to four but the same were reduced to two i.e. defendants Nos. 2 and 3 through Partnership Deed dated 25.03.2006---As such, defendants-in-question did not remain the partners of defendant No. 1 /entity thereafter, however, as third party they provided personal continuing guarantees having stakes in Group entities---Record depicted that defendants-in-question executed their continuing personal guarantees dated 15.05.2006 which were appended with the plaint with respect to each Facility obtained by entity / defendant No. 1---Similarly, continuing personal guarantees dated 01.03.2007 were also on record---Defendants Nos. 2 to 4 also executed their fresh personal guarantees dated 02.08.2010 along with defendant No. 6 which executed its corporate guarantee in favor of the plaintiff / Bank---Defendants-in-question in their original PLA claimed that their personal guarantees were fake and forged---Later through an amendment, it was stressed that guarantees were invalid as the special condition of Facility Offer Letter dated 25.10.2025 mandating them to tender their personal guarantees was waived by the plaintiff / Bank---The argument was self-defeating in as much as by resorting to subsequent plea, it was unequivocally accepted that prior to the claimed waiver, personal guarantees on record had indeed been furnished as maintained by the plaintiff /Bank---Letter dated 02.02.2011 relied upon in said behalf simply stated that the competent authority of the plaintiff /Bank had approved to waive off the special condition pursuant to request dated 28.12.2010 as contained in Facility Offer Letter dated 25.10.2010---However, there was no evidence on record that the said approval was acted upon by discharging the personal guarantees of defendants-in-question on record, which in their terms, were continuing in nature, unequivocally guaranteeing the repayment of the Facilities of defendant No. 1 /entity in the event of default---This was particularly so when the plaintiff /Bank maintained that the letter dated 02.02.2011 was never acted upon on account of failure of defendant No. 1/entity to replace expired pledged stock and subsequent default, whereafter, the Facilities were not renewed---As such, defendants-in-question had failed to demonstrate that they were unnecessarily arrayed as defendants since they had executed guarantees to secure the facilities extended to defendant No. 1/entity---Hence, the defendants failed to raise any substantial question of law and fact which required recording of evidence---High Court rejected the PLA of the defendants---Nevertheless, minute perusal of the statement of accounts appended with the plaint revealed that the plaintiff /Bank had claimed mark-up beyond the period of expiry of the Facilities which could not be granted to the plaintiff / Bank---As such, the plaintiff / Bank was only entitled to recover the amounts excluding said amount---Suit filed by the Bank was decreed accordingly.

Industrial Development Bank of Pakistan v. Hyderabad Beverage Company (Private) Limited and others 2016 SCMR 451 and Mian Aftab A. Sheikh and 2 others v. Messrs Trust Leasing Corporation Limited and another 2003 CLD 702 ref.

Syed Muhammad Kaswar Gardezi for Plaintiff.

Mughees Aslam Malik, Sohail Iqbal Bhatti and Malik Muhammad Husnain Rajwana for Defendants.

2025 C L D 1260

[Lahore]

Before Shahid Karim and Raheel Kamran, JJ

SUI NORTHERN GAS PIPELINES LTD. through authorized representative---Appellant

Versus

WASEEM MAJID MALIK and others---Respondents

I.C.A. No.34877 of 2020, heard on 22nd April, 2025.

(a) Constitution of Pakistan---

----Art.199---Companies Act (XIX of 2017), Ss. 5, 159(3) & 160---Federal government participating in the election of directors of Sui Northern Gas Pipelines Limited (SNGPL), challenge to---Constitutional petition, maintainability of---Adequate and efficacious remedy---Federal Government being a member of a company does not mean that it will be subject to the Constitutional jurisdiction of the High Court---Declaring the elections of directors invalid--- Under S. 160 of Companies Act, 2017---Effect---The matter arose from an election notice dated 02.05.2020 issued by Sui Northern Gas Pipelines Ltd. (SNGPL) for electing its Board of Directors---The respondent filed a Constitutional petition challenging the participation of the Federal Government in these elections---The Single Judge in Chambers held that the petition was competently filed under Article 199 of the Constitution because the Federal Government, being an instrumentality of the State, was amenable to the High Court's constitutional jurisdiction---Sui Northern Gas Pipelines Limited (SNGPL) filed the present appeal (ICA) challenging this finding on the point of jurisdiction---Pivotal question for determination in the present appeal was as to "Whether the High Court, in the exercise of its constitutional jurisdiction was competent to entertain a challenge to the participation of the Federal Government as a shareholder in the election of directors of SNGPL or whether such matters fell exclusively within the domain of the remedies provided under the Companies Act, 2017"---Held: The act in question was of the Federal Government in seeking to contest an election of the Board of Directors of SNGPL---That function was quintessentially a private function being undertaken as an ordinary member of a company incorporated under the Companies Act, 2017---By the mere fact that Federal government held a major shareholding in SNGPL did not mean that it became amenable to the jurisdiction of the High Court under Art. 199 of the Constitution while performing its functions as a member of SNGPL---As a shareholder of SNGPL the Federal government had the same set of rights as other shareholders conferred by the provisions of the Companies Act, 2017---The mere fact that the Federal government had ventured into corporate enterprises and purchased shares of a company did not mean that in such capacity too the Federal government was subject to the jurisdiction of a High Court---The challenge was to the set of exercise of rights, as a member, to contest an election to the office of a director of company---That right emanated from the provision of the Companies Act, 2017---Simply because the Federal government was a member of a company would not clothe it with the right to maintain a Constitutional petition---The second reason as to why the impugned judgment was not sustainable was that as per section 5 of the Companies Act, 2017 it was evident that the jurisdiction had been conferred on a High Court in respect of all matters arising under the Companies Act, 2017---The remedy had been provided by section 160 of the Companies Act, 2017 conferring power on the court to declare elections of directors invalid---That power could not be usurped under Art. 199 of the Constitution as efficacious and adequate remedy had been provided by law and this aspect should have been taken consideration while holding that the Constitutional petition was competently filed---If a challenge of this nature were allowed to succeed then it would mean that in any case where a Federal government was a shareholder, a Constitutional challenge would be maintainable yet no such challenge would be competent in respect of an ordinary member of a company who was neither a Federal government, Provincial government or a local authority---The impugned judgment to the extent that it held that the subject matter of the Constitutional petition was amenable to the jurisdiction of the High Court, was set aside---Consequently, the challenge to the act of Federal government to contest elections of board of directors could not be brought before the High Court in its Constitutional jurisdiction---The power to do so lay in the High Court exercising jurisdiction under the Companies Act, 2017 only---Appeal was allowed, in circumstances.

Pakistan International Airlines and others v. Tanveer ur Rehman and others PLD 2010 SC 676 rel.

Aown Abbas Bhatti v. Forman Christian College and 2 others PLD 2018 Lah. 435 ref.

(b) Constitution of Pakistan---

----Art.199(1)(a)(i)---Constitutional jurisdiction of the High Court---Scope---Functions in connections with the affairs of the Federation, Province or a local authority---The first condition stipulated in Art.199(1)(a)(i) of the Constitution to engage the jurisdiction of a High Court is that the act must not only be performed by a person within the territorial jurisdiction of that High Court but also must relate to functions in connection with the affairs of the Federation, a Province or a local authority---Only then can the jurisdiction of a High Court be engaged to make an order directing that person to refrain from doing anything he is not permitted by law to do or to do anything he is required by law to do---Thus, the conditions contained therein must be established to exist before any order can be passed under Art. 199(1)(a)(i) of the Constitution---It follows indubitably that if a person is not performing functions in connection with the affairs of Federation, a Province or a local authority, that person cannot be subjected to an order by a High Court---The distinction brought forth in Art. 199(1)(a)(i) is a distinction between public and private acts of a person though he may otherwise be performing functions in connection with the affairs of Federation, a Province or a local authority---If that person is performing public functions then a High Court has the jurisdiction to make an order under Art. 199---On the contrary, if that person is merely performing acts of a private nature and are private functions, then the authority of the High Court to make an order is seriously in doubt---The primary purpose of the engagement of Art. 199 of the Constitution is to confer powers on a High Court in respect of functions of the State involving some exercise of sovereign or public power and not otherwise---The words "functions in connection with the affairs of the Federation" have to be read with "to refrain from doing anything he is not permitted by law to do" to ascertain the competence of a constitutional petition---Unless the function under challenge is in connection with the affairs of the Federation, no relief can be granted and the High Court's hands are constricted and restrained---Judicial review is concerned with causes of action against public authorities in the performance of their public duties---The meaning of the phrase 'performing function in connection with the affairs of the Federation' has reference to governmental or State functions involving, in one form or another, an element of exercise of public power.

(c) Constitution of Pakistan---

----Art.199---Constitutional jurisdiction of the High Court---Adequate and efficacious remedy---Scope---In case where there is an adequate and efficacious remedy provided by law, High Court will not exercise its Constitutional jurisdiction and collateral challenges are not allowed to sustain.

(d) Constitution of Pakistan---

----Art.199---Constitutional jurisdiction of the High Court, invoking of---Federal government being a major shareholder / member of a company---Constitutional petition, maintainability of---The mere fact that the Federal Government has ventured into corporate enterprises and purchased shares of a company does not mean that in such capacity too the Federal Government is subject to the Constitutional jurisdiction of a High Court---Mere fact that Federal government holds a major shareholding in a company does not mean that it becomes amenable to Constitutional jurisdiction of the High Court under Art. 199 of the Constitution.

Pakistan International Airlines and others v. Tanveer ur Rehman and others PLD 2010 SC 676 rel.

Aown Abbas Bhatti v. Forman Christian College and 2 others PLD 2018 Lah. 435 ref.

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

----S.160---Declaring the election of directors invalid---Scope and criteria---The challenge on the basis of section 160 to declare election of directors invalid may be brought on the application of members holding 10% of the voting power in the company.

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

----S.5---Jurisdiction of the Company Bench of the High Court---Matters arising under the Companies Act, 2017---Jurisdiction of all other courts barred---Scope---The court having jurisdiction under the Companies Act, 2017 shall be the High Court having jurisdiction in the place at which the registered office of the company is situated---Notwithstanding anything contained in any other law no civil court as provided in the Civil Procedure Code, 1908 or any other court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the court is empowered to determine by or under the Companies Act, 2017.

Adil Umar Bandial, Zohaib Hashmi and Tamoor Sultan, with Ahmad Arslan, G.M Law and Ahmad Sohail and Imran Javed, Dy. Chief Officers Law, SNGPL for Appellant.

Anas Hanif, Asst. Attorney General for Pakistan.

Saad Amir, Kumail Ali and Wasi ul Haq for Respondent No.1.

Ruman Bilal for SECP.

Shahryar Kasuri for Respondent No.14.

2025 C L D 1303

[Lahore (Multan Bench)]

Before Malik Javid Iqbal Wains, J

ASHFAQ AHMED ---Appellant

Versus

DISTRICT AND SESSIONS JUDGE/ PRESIDING OFFICER DISTRICT CONSUMER COURT, MULTAN and another ---Respondents

F.A.O. No. 12 of 2025, decided on 21st February, 2025.

(a) Punjab Consumer Protection Act (II of 2005)---

----S. 33---Judgment passed by the Consumer Court---Appeal, filing of---Limitation---Sufficient cause---Scope---Appellant (air-conditioner seller) filed appeal against the order passed by the Consumer Court with a delay of 41 days---Appellant filed application seeking condonation of delay---Contention of the applicant/appellant, while attaching a travel history (proof of tickets), was that he was out of country at the time of passing of adverse orders in the matter and was not even available in Pakistan at the time of announcement of the impugned order---Validity---Contents of the application seeking condonation of delay drew an inference that the reason assigned was inexplicit, general and not true, which was neither permissible nor satisfactory to convince the Court to condone the delay in filing the appeal---Appellant had placed on the record contrary documents, which could not strengthen his cause---Appellant opted the stance that the impugned order was passed in his absence, when he was abroad, however, his travel history revealed that, he came back to Pakistan after four days of passing of the impugned order, meaning thereby, that prima facie he had knowledge of passing of the impugned order---In terms of S. 33 of the Punjab Consumer Protection Act, 2005 ('the Act 2005'), any person aggrieved may file an appeal within 30 days against final order of the Consumer Court passing such an order---The rationale behind said provision is to ensure that judgments become conclusive within a reasonable timeframe to prevent indefinite litigation and fair opportunity for appeal---Aggrieved party is granted adequate time to challenge an order while maintaining procedural discipline that statutory limitation periods are not mere technicalities but substantive provisions that serve to promote finality in litigation and judicial efficiency---Even, from perusal of travel history of the appellant, it was manifestly clear that he was available in Pakistan, during the last /cut-off date(s) of limitation for challenging the impugned order, thus, stance of the appellant appeared to be intangible---The appellant's failure to challenge the impugned order within the prescribed time despite being available in the country during the relevant period reflected a lack of diligence in pursuing his legal remedy---The explanation offered for the delay, in light of the appellant's presence in Pakistan, did not appear to be convincing or sufficient to justify the delay in filing the appeal---Law is well settled that mere filing of an application for condonation of delay is not sufficient to persuade the Court to condone the delay in preferring an appeal---The object of law of limitation is to help the vigilant and not the indolent---Law of limitation is required to be construed strictly and the delay of each day has to be explained---Appellant had to satisfy as to why he took about 41 days to prefer present appeal against the impugned order of the Consumer Court---The reasons provided in the application for condonation of delay did not constitute a sufficient cause within the meaning of law---Thus, in the absence of sufficient cause, a time-barred appeal must be dismissed---Application for condonation of delay being merit-less, was dismissed along with the appeal.

Ghulam Sarwar through L.Rs. v. Province of Punjab through District Collector, Lodhran PLD 2025 SC 60 ref.

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

----S. 5---Condonation of delay----Circumstances---Scope---Law mandates strict adherence to limitation period---Courts possess discretion to condone delay in exceptional circumstances---Said discretion, however, must be exercised sparingly and cautiously---A party seeking condonation must prove that the delay resulted from circumstances beyond its control, such as, force majeure events (e.g., natural disasters, unforeseen emergencies); court closures due to extraordinary circumstances; legal impediments preventing timely filing---A casual approach or mere administrative lapses do not constitute sufficient cause for condonation of delay---If the delay is found to be intentional, avoidable or due to negligence, the appeal must be dismissed---The doctrine of limitation is based on the principle that "condonation of delay is an exception, not the rule"---Impediments of limitation cannot be traversed under pretense of hardships or imaginary inherent discretionary jurisdiction of the Court---Negligence, mistake or hardship do not save from limitation nor does poverty of the parties.

Khushi Muhammad through L.Rs. and others v. Mst. Fazal Bibi and others PLD 2016 SC 872 ref.

(c) Punjab Consumer Protection Act (II of 2005)---

----Ss. 33 & 34---Judgment passed by the Consumer Court---Filing of appeal beyond period of limitation---Finality of order---Effect---Appellant (air-conditioner seller ) filed appeal against the order passed by the Consumer Court with a delay of 41 days---Validity---Section 34 of the Punjab Consumer Protection Act, 2005 ('the Act 2005'), deals with the finality of order---Said provision in consumer law is acknowledged as finality clause which stipulates that once the statutory appeal period, typically 30 days, expires, the judicial order issued by the Consumer Court attains finality and becomes legally enforceable---Said provision is crucial for upholding judicial discipline, preventing the misuse of appellate mechanisms and ensuring that justice is not indefinitely delayed---Without such a clause, Courts would be susceptible to an influx of untimely or repetitive appeals, which could obstruct the prompt enforcement of consumer remedies and exacerbate judicial backlog---Through imposition of a fixed limitation period for appeals, the legal framework provides certainty and closure to both parties, ensuring that judicial orders rest on a firm legal foundation---Said requirement compels aggrieved parties to act within the prescribed timeframe, discouraging dilatory tactics designed to evade legal obligations---The strict enforcement of appeal deadlines except in exceptional circumstances is vital for preserving the efficiency of judicial proceedings and safeguarding consumer rights---Ultimately, the finality clause functions as a legal safeguard that solidifies the binding nature of judicial orders once the appeal period lapses, thereby promoting the expeditious resolution of consumer disputes and reinforcing stability as well as predictability of legal proceedings---Appellant had badly failed to substantiate his claim for condonation of delay in filing the appeal---Application for condonation of delay being merit-less was dismissed along with the appeal.

2025 C L D 1317

[Lahore]

Before Anwaar Hussain, J

SYMPL ENERGY PVT LTD. ---Petitioner

Versus

PRESIDING OFFICER and others ---Respondents

W.P. No. 28913 of 2025, decided on 14th May, 2025.

(a) Punjab Consumer Protection Act (II of 2005)---

----Ss. 28(4) & 35---Consumer complaints, limitation of---Filing of claims beyond period of thirty days---Scope---Discretion of Consumer Court to allow or extend limitation period beyond thirty days where there is sufficient cause for not filing the claim within time---Plea of dismissal of claim being frivolous and vexatious---Claim being time barred does not mean same is frivolous and vexatious---Facts in brevity where that the petitioner/service provider (respondent before the Consumer Court) challenged an order of the Consumer Court refusing to summarily dismiss a complaint filed against it by respondent No. 2---Petitioner argued that the complaint was time-barred, as the limitation period under S. 28(4) of the Punjab Consumer Protection Act, 2005 (the "Act 2005") was thirty days from the accrual of cause of action, referring to case reported as PLD 2023 SC 482 titled Pak Suzuki Motors Co. Ltd. v. Faisal Jameel Butt) and also sought dismissal of the complaint under S. 35 of the Act 2005 on grounds that the claim was frivolous or vexatious---Held: The limitation period provided under S. 28(4) of the Act 2005, for filing a claim, was thirty days from the date of accrual of cause of action, however, the said period of limitation was not so absolute as to leave no room for filing claim beyond the stipulated period of thirty days as evident from the first proviso to S. 28(4) of the Act 2005, which vested discretion within the court to allow a claim to be filed within such time as the court might allow, if it was satisfied that there was sufficient cause for not filing the complaint within the specified period---Similarly, the second proviso provided an upper ceiling of sixty days from the expiry of warranty or guarantee and if no period was specified one year from the date of purchase of the product or providing of services---Thus, the legislature in its wisdom had conferred discretion for extending the limitation for filing of a claim beyond the stipulated period of thirty days---The case of 'Pak Suzuki Motors' relied upon by the petitioner was hardly of any help as it was enunciated therein that the limitation period of thirty days was to run from the date of accrual of case of action, however, the said case by no means denuded the Trial Court from its discretionary power of extension of limitation period vested under the law---In the present case, the respondent also filed an application for condonation of delay, asserting that negotiations were ongoing between the parties regarding compensation---These facts rendered the limitation as a mixed question of law and fact, which could not be adjudicated in summary manner, without recording of evidence, hence, case of 'Pak Suzuki Motors' was not applicable, on account of distinguishable facts---As far as the plea for dismissal of complaint being frivolous and vexatious was concerned it sufficed that such terms did not encompass matters where there existed a genuine legal issue, even if that issue pertained to limitation---A complaint that was barred by time may ultimately fail on legal grounds, but it does not, on that count becomes frivolous or vexatious when relationship of customer-service provider is admitted and the claims that were hit by limitation must be addressed under the scheme provided in S. 28 of the Act 2005---A complaint that might have been time barred would not per se be frivolous---The conjunctive reading of Ss. 28 and 35 of the Act, 2005 showed that claims which are frivolous and vexatious were to be dismissed and did not encompass within its purview such cases where the court below was vested with the discretion to extend limitation provided by the law---Thus, the Trial Court was justified in holding that the plea of limitation could not be resolved without examining the application for condonation of delay---Trial Court was directed to consider whether the explanation furnished in the application for condonation of delay met the standard under S. 28 of the Act, 2005 and to render a reasoned finding on the applicability of the limitation periods contemplated thereunder and its extension; and determine, whether the complaint of the respondent was within time---Petition was dismissed in limine, in circumstances.

Pak Suzuki Motors Company Limited through Manager v. Faisal Jameel Butt and another PLD 2023 SC 482 rel.

Muhammad Ashraf v. Sheikh Muhammad Akram and others 2022 CLD 638 ref.

(b) Punjab Consumer Protection Act (II of 2005)---

----S. 35---Consumer complaints---Frivolous or vexatious claims, dismissal of---Terms "frivolous and "vexatious"---Definitions---Where a claim is found to be frivolous or vexatious, the Consumer Court shall dismiss the claim and impose fine on the claimant up to an amount not exceeding ten thousand rupees for having willfully instituted a false claim and shall award appropriate compensation to the defendant from the amount of fine so realized---This provision is aimed at curbing baseless or malicious complaints---The terms "frivolous" and "vexatious", as used in S. 35 of the Punjab Consumer Protection Act, 2005 carry distinct legal connotations---According to Black's Law Dictionary (Tenth Edition by Bryan A. Garnder) a "frivolous" action is one that lacks any legal basis or merit and is often brought to harass or embarrass the opposing party, and a "vexatious" proceeding, similarly, refers to one instituted without probable cause, primarily intended to cause inconvenience or expense to the defendant.

2025 C L D 1349

[Lahore (Rawalpindi Bench)]

Before Jawad Hassan, J

ADDITIONAL REGISTRAR OF COMPANIES ---Petitioner

Versus

Messrs AYAT ENTERPRISES (SMC-PRIVATE) LIMITED ---Respondent

C.O. No. 09 of 2022, decided on 26th May, 2025.

Companies Act (XIX of 2017)---

----Ss. 301, 304 & 509---Companies Ordinance (XLVII of 1984), S. 282C---Winding up of company---Principle---Non-Banking Finance Company---Prohibited business, performing of---Violating Memorandum / Articles of Association---Petitioner / Registrar of Companies sought winding up of respondent company on the plea that it was performing prohibited business---Validity---Company could be wound up under section 301 (g)(ii) of Companies Act, 2017 if it had been carrying on a business prohibited or restricted by law, rules or regulations---Court was empowered under S. 301(g)(v) of Companies Act, 2017 to order winding up where the company was managed by persons who refused to act in accordance with the Memorandum or Articles of Association---Provision of S. 282C of Companies Ordinance, 1984 was protected under S. 509 of Companies Act, 2017 which had provided that no Non-Banking Finance Company (NBFC) could be incorporated or allowed to operate without obtaining prior license---Engagement of respondent company in car financing and property leasing without such license was a violations of such provisions---High Court directed respondent company to be wound up---High Court directed Securities and Exchange Commission of Pakistan to appoint Provisional Manager in compliance of S. 315 of Companies Act, 2017---Petition was allowed, in circumstances.

Messrs Platinum Insurance Company Limited, Karachi through Managing Director v. DAEWOO Corporation, Sheikhupura, through Director, Administration and Finance PLD 1999 SC 1 and Ali Hussain Manzoor v. Federation of Pakistan and others 2022 MLD 361 = PLJ 2022 Lahore 226 ref.

Omar Azad Malik, Advocate Supreme Court for Petitioner.

2025 C L D 1366

[Lahore]

Before Muhammad Sajid Mehmood Sethi, J

FAYSAL BANK LIMITED---Plaintiff

Versus

Messrs TAHIR OMER INDUSTRIES LIMITED and others---Defendants

C.O.S. No.825 of 2022, heard on 26th March, 2025.

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

----S. 9(1)---Suit for recovery filed by Bank---Competency of institutor, objection against---As per S. 9(1) of Financial Institutions (Recovery of Finances) Ordinance ('the Ordinance 2001'), when a customer or financial institution defaults on any finance obligation, the aggrieved party may institute a suit in the Banking Court by presenting a plaint verified on oath; in the case of a financial institution, this verification may be executed by the Branch Manager or another officer duly authorized by power of attorney---Record demonstrates that the plaintiff-Bank had nominated and appointed its two officers (designation of whom are duly described) as Attorneys to conduct, carry on and represent the bank in all forms of litigation---Present suit was instituted through the said persons, with the Power of Attorney available in the file, confirming that present suit had been properly instituted through a competent person---The defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

First Dawood Investment Bank Ltd. v. Bank Islami Pakistan Ltd. 2019 SCMR 1925; The Bank of Punjab through Branch / Chief Manager v. Messrs Khan Unique Developers (Pvt.) Ltd. through Chief Executive Officer and 9 others 2016 CLD 29; Ehsan-Ul-Haq v. MCB Bank Limited through Manager 2016 CLD 1874; Allied Bank Limited through Principal Officers v. Messrs S.G. Polypropylene (Pvt.) Limited through Directors/Chief Executive and 5 others 2018 CLD 199; Mian Ashiq Hussain and others v. Faysal Bank and others 2019 CLD 152; Messrs Bahawalpur Cotton Company v. United Bank Limited 2021 CLD 434; The Bank of Khyber through Branch Manager v. Messrs Kashmir Sugar Mills Limited through Chief Executive and others 2021 CLD 1220 ref.

(b) Bankers' Books Evidence Act (XVIII of 1891)---

----S. 2(8)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9(1)---Suit for recovery filed by Bank---Statement of Account, attached with the plaint, not duly verified---Objection that the Statement of Account, attached with the plaint, is not duly verified as required under the provisions of the Bankers Books Evidence Act, 1981---Validity---Statement of Account provided by the Bank, which bears the proper stamps and initials of the authorized bank official, besides carrying a certain note regarding being "Certified and verified on Oath", satisfies the legal requirements stipulated under S. 2(8) of the Bankers' Books Evidence Act, 1891---The Statement of Account submitted by the plaintiff-Bank in this suit carries such an endorsement/certification; therefore, the Statement of Account is duly certified in terms of afore-referred provisions of law---On the other hand, the defendants have not attached any counterstatement to controvert said Statement of Account---Consequently, their mere unsubstantiated allegations, unsupported by legal authority or documentary evidence, have no legal merit or foundation---Thus ,the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

Muhammad Saleem Khan v. MCB Bank Limited 2020 SCMR 984; Habib Bank Limited through Authorized Attorney v. Haidri Homes through Partners and 3 others 2012 CLD 2016; Messrs Habib Metropolitan Bank Limited v. Messrs Faizan Ali and Company (Pvt.) Ltd. through Chief Executive Officer and others 2017 CLD 1583; First Dawood Investment Bank Limited v. New Allied Electronics (Pvt.) Limited and another 2018 CLD 250; Trust Investment Bank Limited v. The Bank of Punjab 2021 CLD 1430 and MCB Bank Limited through Authorized Officer v. Messrs City Steel UAE Mills (Pvt.) Ltd. through Chief Executive and others 2024 CLD 387 ref.

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

----S. 9(1)---Suit for recovery filed by Bank---Defendant filing to produce favourable supporting documents---Effect---Stance taken by the defendants / customers is that they have not availed the alleged Finance Against Trust Receipt (FATR ) and Working Capital Loan (WCL) finance facilities, besides disbursement of Rs.41 Million under FATR facility---Validity--- In their leave application, the defendants disputed the availing of FATR and WCL finance facilities, except disbursement of Rs.41 Million under FATR facility, however, said stance lacks supporting documentary evidence---Defendants have also contested the demanded mark-up under the said facilities but have failed to identify even a single entry demonstrating how the mark-up was inconsistent with the Statement of Account---Where a defendant challenges the disbursement claim made by the plaintiff bank, he must rely on his account statement to highlight the inaccuracies and fallacies of the claim, rather than putting up just a simpliciter denial---Defendant-Company, in its financial statement for the year 2019, submitted with SECP, showed an amount of Rs.400 Million as outstanding against the defendant-Company---A defendant cannot contest an amount that has been duly acknowledged in the financial statement and audited accounts---Audited financial statement of the defendant-Company is very strong corroborative evidence against it---Thus ,the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

National Bank of Pakistan v. Chenab Limited and others 2017 CLD 1539; Messrs Colony Textile Mills Limited and another v. First Punjab Modaraba 2021 CLD 1212 and Habib Bank Limited v. Orient Rice Mills Ltd. and others 2004 CLD 1289 ref.

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

----S. 9(1)---Suit for recovery filed by Bank---Mark-up, payment of---Calculation---Scope---Objection taken by the defendant-Company was that entries of the Statement of Account were not corroborating the alleged claim of mark-up in respect of availed finance facilities---Validity---The documents annexed with the plaint negate said contention of the defendant-Company---The Statement of Account and the Financing Statement duly reflect the details of due mark-up as well as adjusted mark-up---Mark-up is to be paid by the customer on the availed finances as per the agreement executed between the parties---Thus, the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

First Women Bank Limited through Attorneys v. Messrs Bita Textile Mills (Pvt.) Ltd. through Directors and 6 others 2018 CLD 913 and Messrs U.I.G (Pvt.) Ltd. through Director and 6 others v. Bank Al-Falah Ltd. 2015 CLD 452 ref.

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

----Arts. 102 & 103---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.9(1)---Suit for recovery filed by Bank---Conflict between oral evidence and documentary evidence---Defendant failing to produce favourable supporting documents---Effect---Objection of the defendant/Company that the claim of Finance Against Trust Facility (FATF) is not supported by necessary documents particularly 'Trust Receipts"---Validity---Said contention of the defendant-Company was belied by the relevant Trust Receipt (dated 10.04.2019), which unequivocally established that FATR facility was availed by the defendant-Company---Indubitably, in terms of Arts. 102 & 103 of Qanun-e-Shahadat, 1984, if, there is a conflict between oral evidence and documentary evidence, the documentary evidence available on record is to prevail over the oral evidence---Thus, the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

Tassaduq Hussain Shah and others v. Allah Ditta Shah and others 2023 SCMR 1635; Muhammad Akbar and others v. Province of Punjab through DOR, Lodhran and others 2022 SCMR 1532; Azeem Khan and another v. Mujahid Khan and others 2016 SCMR 274 and Sher Muhammad v. Muhammad Khalid 2004 SCMR 826 ref.

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

----S. 9(1)---Suit for recovery filed by Bank---Defendant failing to produce favourable supporting documents---Effect---Objection taken by the defendant (Company / Customer) that the Letters of Credit (LCs) mentioned in the plaint were different and not the ones which the plaintiff-Bank allegedly claimed to have retired---Validity---No supporting material was submitted by the counsel for the defendant-Company to substantiate this claim---It is axiomatic that the Court cannot grant relief based merely on unsubstantiated assertions---It is a fundamental principle of evidence that parties seeking judicial remedy must provide adequate documentation or testimony to validate their contentions---In the absence of any supporting material, the Court has no alternative but to reject such unfounded assertions as being devoid of merit---Thus, the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

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

----S. 9(1)---Suit for recovery filed by Bank---Defendant failing to produce favourable supporting documents---Effect---Stance taken by the defendants (Company / Customer) was that they were not liable to make payment of the suit amount as the alleged documents showing liability of the defendants had been engineered by the plaintiff-Bank---Validity---The defendants Nos. 2 to 4, being Directors of the defendant-Company, furnished personal guarantees in favor of the plaintiff-Bank---Said defendants have failed to produce any documentation demonstrating that the personal guarantees were fake, fabricated, or bore forged signatures; consequently, their mere vague denials were insufficient to absolve them of their liability---Even when a contract becomes unenforceable against the principal debtor, the guarantor remains bound by the surety he had executed, unless there exists a specific covenant to the contrary and a surety/guarantor cannot be permitted to repudiate the original finance facility---Furthermore, jurisprudence has consistently recognized that a bank guarantee constitutes an autonomous contract that imposes an absolute obligation to fulfill its terms---Payment under such a guarantee becomes due upon the occurrence of the specified contingency that renders the guarantee enforceable---Unsubstantiated allegations by the defendant-Company regarding the non-execution of financial documents lack documentary evidence---The defendants have not specifically denied executing the mortgage deeds, Memorandum of Deposit of Title Deeds, or other security documents---Furthermore, the Defendants have not explicitly denied that the amount claimed by the plaintiff-Bank was credited to the principal debtor's account---The defendants have also failed to challenge these documents before any legal forum---Therefore, the evasive denial of defendants of executing the financial documents does not entitle them to leave to defend the suit---Conversely, the plaintiff-Bank's claim is supported by numerous documents present on the record, as discussed above, which cannot be discarded without compelling documentary evidence in rebuttal---Thus ,the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others 2002 SCMR 1419; Sahara Trading International (Pvt.) Ltd. and others v. Bank Alfalah Ltd. PLD 2004 SC 925; Messrs State Engineering Corporation Ltd. v. National Development Finance Corporation and others 2006 SCMR 619; Bolan Bank Limited through Attorneys v. Baig Textile Mills (Pvt.) Ltd. through Chief Executive and 6 others 2002 CLD 557; Standard Chartered Bank (Pakistan) Ltd. through Authorized Attorney v. Needle Point (Pvt.) Ltd. through Chief Executive and others 2016 CLD 2066; Adamjee Polycraft Limited and 3 others v. National Investment Trust Limited 2017 CLD 380 and Mian Furqan Idrees and others v. JS Bank Limited and others 2022 CLD 1395 ref.

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

----S. 9(1)---Suit for recovery filed by Bank---Mark-up or interest---Scope---Objection of the Defendants (Company) was that the amounts mentioned under the head of interest could not be a part of the claim of plaintiff-Bank as this term was alien to the alleged finance agreements and so-called finance facilities---Validity---In the Statement of Account, certain outstanding amounts have been claimed under the title of interest, however , the plaintiff-Bank (during arguments) clarified that this was merely a technical error and the amounts should be construed as mark-up---Court found said clarification sufficient and did not consider it a valid ground for dismissal of the plaintiff-Bank's claim---Thus , the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit , filed by Bank, was decreed.

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

----Ss. 10(1), 10(4), 10(5), 10(6) & 10(11)---Suit for recovery filed by Bank---Application for leave to defend, acceptance / rejection of---Defence to be taken by customer---Requirements---Scope --- Under the provisions of Ss.10(4) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, ('the Ordinance 2001') the defendants were obligated to provide a clear and specific response to the Bank's Statement of Account, in their application for leave to defend, besides providing details of their own accounts along with the specific amounts they dispute---However, the necessary documents, as mandated under S. 10(5) of the Ordinance, 2001, were not annexed with the leave application---Said failure to plead the requisite details attracts the consequences prescribed under Ss. 10(1) & 10(6) of the Ordinance, 2001, warranting the rejection of the application for leave to defend and the passing of judgment and decree in favour of the plaintiff-Bank under Ss. 10(1) & 10(11) of the Ordinance, 2001---The defendants have failed to comply with the requirements of Ss. 10(4) & 10(5) of the Ordinance, 2001---Thus , the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit, filed by Bank, was decreed.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268; Habib Metropolitan Bank Limited through Attorney v. Century 21 Textile and Sportswear (Pvt.) Limited and 3 others 2014 CLD 729; Silkbank Limited through Authorized Persons v. Messrs AZM Chemical Company through Proprietor and 5 others 2014 CLD 1526 and Al-Madina Aluminium Work and others v. Habib Metropolitan Bank 2020 CLD 892 ref.

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

----S. 9(1)---Suit for recovery filed by Bank---Application for leave to defend, rejection of---Ancillary / miscellaneous application (s) filed by defendant prior to the grant of leave---Maintainability---Defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed--- Since, application for leave to defend filed by defendants was dismissed, therefore, all the (four) miscellaneous applications filed by defendants, were also dismissed being not maintainable---Prior to the grant of leave to defend, a defendant cannot seek adjudication of any rights of defence as the law expressly prohibits consideration of a defendant's defence before leave is granted and prescribes a specific procedure under which any defence-whether raising legal or factual controversy-may only be entertained after leave to defend has been granted---Therefore, any ancillary application filed prior to the grant of such leave is legally untenable---A defendant could not file any ancillary or interlocutory application unless such defendant was allowed by the Court to defend the suit---Thus , the defendants failed to raise any factual defence that would necessitate the recording of evidence---Accordingly, the defendants' application for leave to appear and defend the suit was dismissed---Suit , filed by Bank, was decreed.

Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245 and Sheikh Muhammad Usman v. Judge Banking Court No.1, Lahore 2015 CLD 257 ref.

Rizwan Rasool for Plaintiff.

Muhammad Imran Malik for Defendants.

2025 C L D 1398

[Lahore]

Before Abid Hussain Chattha, J

Syed ALI JAVAID HAMDANI---Petitioner

Versus

The FEDERATION OF PAKISTAN through Cabinet Secretary and 5 others---Respondents

Writ Petition No.12660 of 2023, decided on 26th June, 2023.

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

----Ss. 186 & 187---Chief Executive Officer (CEO) of a company---Role---CEO of a company is the most important person in the sense that law confers responsibility of administration and management of company to CEO---This is full time role and responsibility as executive head of a company.

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

----Ss. 186, 187 & 190---State-Owned Enterprises (Governance and Operations) Act (VII of 2023), Ss.18 & 22---Public Sector Companies (Corporate Governance) Rules, 2013, R. 5 (2)---Constitution of Pakistan, Art. 199---Constitutional petition---Appointment of Chief Executive Officer (CEO) of State owned company---Curtailing of powers---Acting CEO, appointment of---Petitioner was appointed as CEO of respondent / Sui Northern Gas Pipelines Company Limited, (SNGPL) by Federal Government for a period of three years---Petitioner / CEO was aggrieved of withdrawal of power of attorney issued in his favour by the Company and also appointment of an Acting CEO---Petitioner / CEO contended that he was not appointed by Board of directors, instead was nominated by Federal Government---Validity---Power of nomination of CEO vested with Federal Government under S.187(4) of Companies Act, 2017---Federal Government did not exercise power of nomination regarding petitioner / CEO of SNGPL and followed the process of appointment of CEO prescribed under S.187(1) of Companies Act, 2017 read with Public Sector Companies Guidelines and Public Sector Companies (Corporate Governance) Rules, 2013---Board of SNGPL followed an advertised competitive process through which petitioner / CEO was shortlisted and his name was included in a panel of three shortlisted candidates recommended by the Board to Federal Government seeking its concurrence to one of the three candidates---Federal Government concurred with the name of petitioner whose name was second in priority, whereafter, notification was issued by Federal Government---Board, thereafter, issued letter of appointment to petitioner / CEO and upon its acceptance, the service contract was duly executed between SNGPL and petitioner / CEO---Procedure adopted by the Board in appointment of petitioner / CEO was in conformity with S. 18(1) of State Owned Enterprises (Governance and Operations) Act, 2023 which dealt with appointment of petitioner / CEO and ordained that the Board, in the case of a company would appoint the CEO of the state-owned enterprise under a performance contract for a specified period---High Court repelled contention of petitioner / CEO that he was not appointed by the Board but nominated by Federal Government---Process of appointment and removal of petitioner / CEO was regulated by specific mandatory legal provisions which preempted general role of oversight, supervision and control of the Board over petitioner / CEO---Notwithstanding that power of nomination of CEO vested with Federal Government under S. 187(4) of Companies Act, 2017 the Federal Government did not exercise the power of nomination regarding petitioner as CEO of SNGPL and followed the process of appointment prescribed under S. 187(1) of Companies Act, 2017 read with Public Sector Companies Guidelines and Public Sector Companies (Corporate Governance) Rules, 2013---Petitioner / CEO was also a Director of SNGPL and as a member of the Board had the same powers, functions and responsibilities as any other member of the Board---Processes of appointment and removal of the CEO were separate and distinct and did not have any co-relation with each other---There was no role of Federal Government in removal of petitioner / CEO of SNGPL as Federal Government did not hold more than 75% shares in SNGPL as ordained by S. 190(2) of Companies Act, 2017---Petitioner / CEO of SNGPL could only be removed in accordance with mandatory provisions of section 190 of Companies Act, 2017 requiring three fourth of total membership of the Board and it was not inconsistent with S. 22 of State Owned Enterprises (Governance and Operations) Act, 2023---Board was obligated to delegate such powers to petitioner / CEO as were necessary to enable him to perform statutory duty of administration and management of the Company---Such powers could be withdrawn and petitioner / CEO could be removed even without inquiry under S. 190 of Companies Act, 2017---If Board deemed appropriate, it could initiate an inquiry against petitioner / CEO before removing him from office but without seizure of his powers---If immediate measures were required to be taken against petitioner / CEO, the only course available was to follow procedure of removal of CEO under S. 190 of Companies Act, 2017---There was no provision in law for appointment of Acting CEO in the presence of existing CEO---High Court declared that acts of Board of SNGPL of suspending petitioner / CEO and / or withdrawing his powers, and appointing Acting CEO and conferring him powers of CEO were unlawful, illegal and void-ab-initio as the same were in violation of S.190 of Companies Act, 2017---High Court further declared that manner and conduct of emergent meeting of Board of SNGPL with less than one day notice under a vague and generalized agenda infringed various principles of good governance under the applicable law and as such the same was unlawful and not held in accordance with law---Constitutional petition was allowed accordingly.

Qazi Tehmid Ahmed v. Secretary Ministry of Petroleum and 3 others 2015 PLC (C.S.) 449; Muhammad Naeem Akhtar v. Federation of Pakistan through Secretary, Cabinet Division and others (Writ Petition No. 3879 / 2022); Syed Nazir Gillani v. Pakistan Red Crescent Society and another 2014 SCMR 982; Abdul Wahab and others v. HBL and others 2013 SCMR 1383; Habib Bank Ltd. v. The State 2013 SCMR 840; Sui Southern Gas Company Limited and others v. Saeed Ahmed Khoso and another 2022 SCMR 1256; Pakistan Telecommunication Company Ltd. v. Muhammad Samiullah 2021 SCMR 998; Pakistan Airline Pilots Association and others v. Pakistan International Airline and another 2019 SCMR 278; Habib Bank Limited and others v. Syed Zia-ul-Hassan Kazmi 1998 SCMR 60; Abdul Malik v. Government of Punjab and others 2019 PLC (C.S.) 764; Naweed Akhtar Cheema v. Chairperson, TEVTA and others 2011 PLC (C.S.) 803; Ms. Serwat Azim v. Sindh Bank Limited through President / CEO and 7 others 2019 PLC (C.S.) 975; Commissioner of Income Tax and others v. Messrs Media Network and others 2006 PTD 2502; Mughal-e-Azam Banquet Complex through Managing Partner v. Federation of Pakistan through Secretary and 4 others 2011 PTD 2260; Reliance Commodities (Private) Ltd. v. Federation of Pakistan and others PLD 2020 Lah. 632; Muhammad Hammad ur Rehman Zafar v. Director, Federal Investigation Agency, Lahore and another PLD 2022 Lah. 177; Aman Ullah Khan and others v. The Federal Government of Pakistan through Secretary, Ministry of Finance, Islamabad and others PLD 1990 SC 1092; Syed Husnain Aamer v. Tehsil Municipal Officer, Narowal 2007 PLC (C.S.) 348; The Federation of Pakistan through the Secretary, Establishment Division, Government of Pakistan Rawalpindi v. Saeed Ahmad Khan and others PLD 1974 SC 151; Dr. Akhtar Hassan Khan and others v. Federation of Pakistan and others 2012 SCMR 455; Tabassum Shahzad v. I.S.I. and others 2011 SCMR 1886; Baz Muhammad Kakar and others v. Federation of Pakistan through Ministry of Law and Justice and others PLD 2012 SC 923; Waseem Majid Malik v. Federation of Pakistan through Cabinet Secretary and 23 others 2020 CLD 1207; Engr. Ghazanfar Ali Khan and others v. F.O.P. and others PLD 2014 Lah. 375; Babar Sattar v. Federation of Pakistan through Secretary Ministry of Water and Power and 4 others 2016 CLD 134; Nadeem Mumtaz Qureshi v. Pakistan Petroleum Limited and others 2019 CLD 1374; Muhammad Suleman Kanjiani and 3 others v. Dadex Eternit Ltd. through Chief Executive and 4 others 2009 CLD 1687; Bentley-Stevens v. Jones and others 1974 2 All ER 653; Muhammad Yousuf Ahmed and 5 others v. Artistic Denim Mills Limited 2021 CLD 134 and Syed Hasan Masroor Zaidi and others v. Syed Ghayoor Zaidi and others 1988 CLC 1347 ref.

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

----Ss. 2(14), 183, 188 & 192---Offices of a Company---Status---Offices of Chief Executive Officer (CEO), Chairman and member of Board are separate and independent in terms of appointment, removal, role, powers and functions which are regulated by mandatory provisions of law and the same cannot be circumvented or made redundant by exercise of discretionary and general powers vested in any of such offices.

Shah Khawar, Barrister Ahmed Qayyum, Barrister Syed Ali Nouman Shah and Barrister Hassan Safdar Khan for Petitioners.

Ali Jaffar Khan, Assistant Attorney General for Pakistan for Respondents Nos.1 to 3.

Uzair Karamat Bhandari, Mian Sami ud Din, Imran Iqbal, Awaiz Asif Ali along with Ahmed Arslan, Incharge Law SNGPL, Amjad Ikram, Chief Officer, Media Affairs SNGPL and Imran Javed and Ahmed Sohail, Deputy Chief Officers Law SNGPL for Respondents Nos.4 to 6.

2025 C L D 1445

[Lahore]

Before Abid Hussain Chattha, J

EQUITY MASTER SECURITIES (PVT.) LIMITED and 3 others---Petitioners

Versus

PAKISTAN STOCK EXCHANGE LIMITED and 937 others---Respondents

C.O. No.14225 of 2023, decided on 3rd June, 2024.

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

----Ss. 2(xix), 138, 139, 148 & 174---Companies Act (XIX of 2017), Ss. 301, 305 & 308---Petition to wind up a broker company---Maintainability---Company moving the Court in concert with its contributories---Scope and effect---Objection qua maintainability of the petition was raised as winding up petition was instituted, in concert with contributories, by a company licensed under S. 148 of the Securities Act, 2015, ('the Act 2015') issued by the Security and Exchange Commission of Pakistan /SECP (Petitioners / Company)---Validity---Admittedly, the Company is not an ordinary Company but a licensed Company which is engaged in the further regulated business of selling, buying and dealing in securities on Pakistan Stock Exchange (PSE) under the license issued by SECP---As such, the operations of the Company are subject to regulatory regime of PSE as a frontline regulator and SECP as an apex regulator which regulates the PSE as well as the Company---Section 148 of the Act 2015, for regulation of the securities industries as well as the protection of investors, requires a licensed person not filing a petition for winding up unless it satisfies the SECP in the manner prescribed that it has settled all outstanding investors claims as per default regulations and has obtained prior approval of the SECP---Section 2(xix) of the Act 2015 defines 'Default Regulations' while Ss. 138 to 139 of the Act 2015 confer powers upon the SECP to inspect and investigate the affairs of a licensed person---In short, a comprehensive regulatory scheme is available to scrutinize the affairs of a licensed person for the protection of rights and interests of stakeholders and investors---Under S. 174 of the Act 2015, it is abundantly clear that provisions of the Securities Act, 2015, being a special law applicable to the Company, will pre-empt and take precedence to the provisions of winding up stipulated in the Companies Act, 2017 ('the Act 2017')---Record shows that SECP has invoked its investigative powers vested under S. 139 of the Act 2015 against the Company / petitioners and an investigation team has been constituted for said purpose and that the Company as a securities broker has defaulted against a host of its account holders and the victims are the public-at-large having as many as 197 unsettled claims against the Company and that the process of investigation is being delayed due to pendency of the present petition---Therefore, it is safely concluded that the Company has defaulted with respect to its liabilities towards the account holders and others---Default Regulations and investigation processes by PSE and SECP as regulators have already been triggered against the Company---Both the regulators have unequivocally opined that in the given circumstances, the winding up of the Company is not in public interest---Rather, the right to institute the winding up petition in terms of S. 148 of the Act 2015 under the given circumstances now vests with the SECP---As such, the institution of the present petition is clearly an attempt on the part of the petitioner to bypass the mandatory and special regulatory framework and evade their responsibilities and liabilities under the law---Hence, it is not just, equitable or in the public interest to wind up the Company particularly when other remedies are available to the petitioners and they are acting unreasonably in seeking winding up of the Company instead of availing and pursuing the other remedy as ordained in S. 308(2) of the Act, 2017---Therefore, the present petition instituted by the Company and its contributories is not maintainable, however, SECP as the apex regulator may file the winding up petition as and when in its opinion, it would be just and equitable to do so in terms of S. 148 of the Act, 2015 read with Ss. 304 & 305 of the Act, 2017---Winding up petition, being non-maintainable, was dismissed.

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

----Ss.304(a) & 304(e)---Securities Act (III of 2015), Ss. 2(xix) & 148---Petition to wind up a broker company---Maintainability---Company moving the Court in concert with its contributories---Scope and effect---Objection qua maintainability of the petition was raised as the winding up petition was instituted, in concert with contributories, by a company licensed under S. 148 of the Securities Act, 2015, ('the Act 2015') issued by the Security and Exchange Commission of Pakistan / SECP (Petitioners / Company)---Validity---Petition has been incompetently instituted by the Company and its contributories without complying with the prerequisites embodied in S. 304 of the Companies Act, 2017, ('the Act, 2017') for the reason that the number of members of the Company are not reduced below two which is one of the threshold prescribed under S. 304(a) of the Act, 2017 for the contributories to maintain the petition for winding up---Petition is also not maintainable in terms of S. 304(e) of the Act, 2017 on behalf of the Company since it did not furnish, in the prescribed manner, the particulars of its assets, liabilities, business operations and the suits or proceedings pending against it---A mere hand written one page was appended with the petition which lists assets twice than the liabilities of the Company which is in complete contrast to the averments in the petition that the substratum of the Company has been lost and it is not a going concern---The information is not only deficient but is also not substantiated on the basis of reliable documents such as audited accounts of the Company---The information is also in deep contrast to the information provided by the regulators which demonstrates that pertinent facts and particulars as required to be disclosed under S.304(e) of the Act, 2017 were concealed in the petition with mala fide intention---Petition is also not maintainable on behalf of the Company---Winding up petition, being non-maintainable, was dismissed.

Muhammad Nawazish Ali Pirzada for Petitioners.

Shezal Khan Burki for Respondent No.1.

Ruman Bilal for Respondent No.2.

Muhammad Ali Malik for Respondent No.5.

Dilnawaz A. Cheema for Respondent No.647.

2025 C L D 1517

[Lahore]

Before Malik Waqar Haider Awan, J

HABIB METROPOLITAN BANK PAKISTAN LIMITED through authorized signatory---Appellant

Versus

PRESIDING OFFICER DISTRICT CONSUMER COURT SIALKOT and others---Respondents

F.A.O. No.7458 of 2024, decided on 26th May, 2025.

Punjab Consumer Protection Act (II of 2005)---

----S.31(g)---Powers of Consumer Court to award lawyers' fee incurred in pre-remand proceedings before the superior courts---Scope---Granting of lawyer's fee by the Consumer Court incurred in pre-remand proceedings before the superior court would amount to exceeding its jurisdiction and mandate of S. 31(g) of the Punjab Consumer Protection Act, 2005---Facts in brevity were that respondent No.2 (consumer) filed a complaint before the Consumer Court against the appellant bank (service provider), alleging defective and sub-standard services regarding an ATM machine and a debit card issued by the bank---The Consumer Court initially returned the complaint for want of jurisdiction, however, the Supreme Court of Pakistan subsequently confirmed the Consumer Court's jurisdiction and directed it to decide the case---Upon remand, the Consumer Court partially accepted the complaint and awarded (i) Rs. 1,500 for the cost of the debit card; (ii) Rs. 50,000 as compensation for non-utilization of the ATM Card; (iii) Rs. 15,000 as litigation charges; (iv) Rs. 100,000 and Rs. 500,000 as lawyers' fees for proceedings before the High Court and the Supreme Court of Pakistan, respectively---The bank filed the present appeal choosing not to press the challenge to the amounts awarded under the first three heads and solely contested the award of lawyers' fees related to the proceedings before the High Court and the Supreme Court---Pivotal question for determination before the High Court was as to "whether the Consumer Court, under S. 31(g) of the Punjab Consumer Protection Act, 2005 (the "Act 2005"), had jurisdiction to award lawyers' fees incurred by a litigant in pre-remand proceedings before superior courts, in addition to costs related to proceedings before the Consumer Court itself"---Held: Awarding lawyers' fee by the Consumer Court to respondent No.2 (consumer) incurred by him to plead his case before the High Court as well as the Supreme Court of Pakistan amounted to exceeding its jurisdiction and stepping into the jurisdiction of superior courts as it was an admitted fact that the Supreme Court of Pakistan had not allowed civil petition filed by respondent No.2 with costs---Awarding fee of lawyers who pleaded the case of respondent No.2 before the High Court as well as the Supreme Court of Pakistan amounted to altering and modifying the judgment of the Supreme Court of Pakistan which was not covered under S. 31(g) of the Act, 2005---Consumer Court could exercise jurisdiction only to its own extent qua complaints filed before it---Consumer Court, being a subordinate court, could only determine the actual costs of litigation incurred by a litigant in relation to the proceedings pending before it and not the costs incurred during the proceedings before another court, such as the High Court or the Supreme Court of Pakistan---Impugned judgment was set aside to the extent of grant of lawyers' fee to respondent No.2 (consumer) incurred by him before the High Court as well as the Supreme Court of Pakistan---Appeal was partly allowed, in circumstances.

M. Wisal Khan for Appellant.

Respondent No.2 proceeded against ex parte vide order dated 25.03.2024.

2025 C L D 1632

[Lahore]

Before Ch. Muhammad Iqbal and Malik Waqar Haider Awan, JJ

ADAMJEE INSURANCE COMPANY LIMITED through authorized attorney---Appellant

Versus

MUHAMMAD RAMZAN and another---Respondents

Insurance Appeal No.29992 of 2022, decided on 29th April, 2025.

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

----Ss.118 & 124(2)---Insurance policy---Claim of policy holder---Recovery of insurance claim for loss of crops and livestock due to calamity/natural disaster---Respondent No.1 obtained a loan from a bank by mortgaging his agricultural land and the loan was compulsorily insured by the appellant company as per State Bank of Pakistan's directives---In September 2014, a severe flood devastated the area destroying crops, livestock, and house of respondent No.1---The area was officially declared a calamity-hit zone by the Government of Punjab---Respondent No.1 filed a claim for insurance compensation for loss of crops and livestock under the insurance policy---Insurance Tribunal granted respondent No.1 Rs. 131,000 for loss of Kharif 2014 crop; liquidated damages at 5% per annum from October 2014; and, directed the bank to adjust the said insurance claim amount in the account of borrower / respondent No.1---Being dissatisfied with the Tribunal's decision appellant (insurance company) instituted the present appeal---The controversy involved in the present matterwas centered upon the issue as to "whether the respondent No.1/policy holder was entitled to recover claim of loss of crops and livestock/sheep loan under insurance policy amounting to Rs.2,62,000/- along with liquidated damages on the basis of insurance policy"---Held: As per the agreement, in case of large scale catastrophe / calamity, appellant company would indemnify the insured up to 300% of the premium collected for Rabi and Kharif separately, based on 100% premium---The area where land of the respondent No.1 (policy holder) was located, was declared as calamity affected area, as such, the claim of the respondent No.1 (policy holder) was fully covered in the policy---Respondent No.1 (policy holder) availed loan facility from respondent No.2/bank by mortgaging his land---The loan was compulsorily insured with the appellant company---The area where the land of the respondent No.1 (policy holder) was situated, was badly affected by flood upon which it was declared calamity hit area---The meager amount of insurance claim of Rs.1,31,000/- of the insured / respondent No.1 (policy holder) was pending against the appellant company and it was legal right of the respondent No.1 (policy holder) to recover the same---No illegality or material irregularity, misreading and non-reading of evidence in the impugned judgment passed by the insurance tribunal was pointed out---Appeal being devoid of any merits was dismissed, in circumstance.

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

----Art. 72---Insurance Ordinance (XXXIX of 2000), Ss.118 & 124(2)---Document---Proof---Producing document in the statement of counsel---Principle---Exceptions---Insurance claim---Recovery of claim of loss of crops and livestock---Objection raised by counsel for the appellant (insurance company) that the documents were produced by counsel of the respondent No.1 (policy holder) as such those documents could not be considered---Validity---The documents under question pertained to the record of the appellant company as well as that of respondent No.2 (bank) which had not been controverted by the appellant company through convincing evidence---Further, the other documents pertained to public record which were prepared, maintained and issued by the government and same had presumption of correctness, which official documents were per se admissible in evidence and even validity or veracity of said instruments were not under question in the present lis as such it did not have any effect on the case of the respondent No.1 (policy holder) and even the High Court had jurisdiction to take judicial notice of such public documents---Thus, the argument of counsel for the appellant being devoid of any force was repelled---No illegality or material irregularity, misreading and non-reading of evidence in the impugned judgment passed by the insurance tribunal was pointed out---Appeal being devoid of any merits was dismissed, in circumstance.

(c) Appeal---

----Departments---Departments should not file appeals/ revisions as a matter of routine resulting into wastage of public time and money.

Pakistan through Chairman FBR and others v. Hazrat Hussain and others 2018 SCMR 939 rel.

Ahmad Farooq for Appellant.

Munir Ahmed Khan Sadhana for Respondent No.1.

Saifullah Maan for Respondent No.2.

2025 C L D 1646

[Lahore]

Before Sultan Tanvir Ahmad and Hassan Nawaz Makhdoom, JJ

KHADIM HUSSAIN SANDHU---Petitioner

Versus

MUSLIM COMMERCIAL BANK LIMITED and 2 others---Respondents

Writ Petition No.14083 of 2025, decided on 1st July, 2025.

(a) Interpretation of document---

----Nature, determination of---Principle---Merely captioning an application or a document is not always material rather it is the instrument, application or document which determines its nature.

Asif Raza Mir v. Muhammad Khurshid Khan 2011 SCMR 1917 rel.

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

-----Ss.19 & 22---Limitation Act (IX of 1908), S. 5---Civil Procedure Code (V of 1908), O.XXI, Rr. 89 & 90---Constitution of Pakistan, Art. 199---Constitutional petition---Execution of decree---Auction, setting aside of---Objections---Converting Constitutional petition into appeal---Principle of approbate and reprobate---Scope---Petitioner objected to sale of mortgaged property through auction for recovery of decretal amount---Validity---Petitioner repeatedly changed his stance, firstly, he objected to conduct of auction and secondly, he made request to treat his application as under O. XXI, R. 89, C.P.C.---Petitioner once again resiled from the same and raised challenge to terms of auction---Such frequent shifts and developments were hit by principle of approbate and reprobate---Petitioner could not be permitted to adopt one stance and to resile from the same before fora below and then to file Constitutional petition before High Court permitting him once again to take a somersault---Petitioner did not make any request for permission to deposit any amount under O. XXI, R. 89, C.P.C. and even time period provided by law had elapsed---Constitutional petition was filed much after the period for filing an appeal under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Limitation period was prescribed by Financial Institutions (Recovery of Finances) Ordinance, 2001, which was a special law to which provisions of S. 5 of Limitation Act, 1908 were not applicable---Petitioner did not make any request nor application to condone the delay was made---No question had arisen to convert Constitutional petition into appeal---High Court declined to interfere in the orders passed by Banking Court which were in consonance with law---Constitutional petition was dismissed, in circumstances.

House Building Finance Corporation through Branch Manager v. Abdul Sattar Anjum 2022 CLD 1555; Chaudhary Ghulam Hussain and another v. Messrs Saudi Pak Commercial Bank Limited, Lahore and another 2025 SCMR 298; Ghulam Rasool Bhatti v. Judge Banking Court-II, Lahore and 4 others 2007 CLD 1578; Mst. Anwar Sultana through L.Rs. v. Bank Al-Falah Ltd. and others 2014 SCMR 1222 and Messrs Nice 'N' Easy Fashion (Pvt.) Ltd. and others v. Allied Bank of Pakistan and another 2014 SCMR 1662 ref.

Mst. Samrana Nawaz and others v. MCB Bank Ltd. and others PLD 2024 SC 873; Faqir Muhammad v. Fazal Rahman and 13 others 1970 SCMR 662; Federation of Pakistan v. Amir Hamza 2001 SCMR 1959 and Overseas Pakistanis Foundation and others v. Sqn. Ldr. (Retd) Syed Mukhtar Ali Shah and another 2007 SCMR 569 rel.

Ch. Ghulam Murtaza and Mudassar Nazar for Petitioner.

Ashar Elahi for Respondent No.1.

Ms. Manahil Khan for Respondent No.2.

2025 C L D 1702

[Lahore]

Before Ch. Muhammad Iqbal and Malik Waqar Haider Awan, JJ

Messrs BBJ STEEL LIMITED---Appellant

Versus

Messrs CARGILL INTERNATIONAL TRADING PTE. LTD. through authorized representative---Respondent

I.C.A. No.6601 of 2024, decided on 3rd June, 2025.

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

----Ss.6, 7& 8---Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, ("the New York Convention") Article-V---Recognition and enforcement of foreign arbitral awards---Limited grounds for refusal---Scope and limitations explained---Overriding effect of New York Convention stated in case of inconsistency between the Act, 2011 and New York Convention---The issue for determination before the High Court in the present intra-court appeal was as to "whether a foreign arbitral award rendered by the Singapore International Arbitration Centre (SIAC) could be recognized and enforced in Pakistan under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011?"---The appellant challenged the enforcement of arbitral award on grounds that the underlying contract between the parties was signed by unauthorized person on its behalf and that the arbitral award suffered from legal and factual errors---Held: Plea of the appellant company that contract was signed by unauthorized person was misconceived because the contract was signed by agent of the appellant company who acted upon appellant company's behalf with its permission and consent and no action against him was stated to have been taken by the appellant company; moreover, the address of the appellant company and that of the agent/signatory was also the same which further supported that the agent was acting on behalf of the appellant company---With respect to the alleged legal factual errors averred by the appellant company High Court emphasized upon and took note of the fact that the appellant company had replied to a legal notice but not opted to appear and join the arbitration proceedings which showed that the appellant company intentionally avoided the proceedings of arbitration---Refusing to accept the arbitrator's authority and not taking part in the arbitration proceedings did not release the appellant from the duties and responsibilities under the sales contract---Even if there were any mistakes or illegalities in the decision of arbitrator, same did not fall under Article-V of the New York Convention---Under S. 7 of the Act, 2011, only the reasons listed in Article-V of the New York Convention could be used to refuse enforcement of a foreign award---Section 6 of the Act, 2011 also confirmed that only those reasons mentioned in S. 7 of the Act, 2011, which was Article-V of the New York Convention, were valid grounds for refusal for recognition and enforcement of a foreign arbitral award---This showed that the law allowed very limited scope for rejecting a foreign arbitration award---The argument of the appellant company that the arbitrator while giving its award made legal or factual errors was not a valid reason under Article-V of the New York Convention, so this defense was not available to the appellant---Recognition and enforcement of a foreign arbitral award could only be refused by a Pakistani Court if the award seriously violated the basic notions of morality and justice prevailing in Pakistan which was not the case of the appellant---Pakistan had been a signatory to the New York Convention and the country had promulgated the Act, 2011 to implement it---Section 8 of the Act, 2011 provided that in the event of any inconsistency between this Act and the convention (New York Convention), the convention was to prevail to the extent of the inconsistency---Appellant-company failed to point out any jurisdictional error in the judgment of the Single Judge in Chamber or in the award in the light of the Act, 2011 and New York Convention---For the foregoing reasons, no ground was made out for interference in the judgment impugned---Therefore, the present intra-court appeal being without substance was dismissed, in circumstances.

Taisei Corporation and another v. A.M. Construction Company (Pvt.) Ltd. and another 2024 SCMR 640 rel.

Shah Zaib Masood and Jawad Jameel Malik for Appellant.

Shah Bakhat Pirzada, Ahmed Nisar Khan and Mahaar Mustafa Kazmi for Respondent.

2025 C L D 1722

[Lahore (Multan Bench)]

Before Anwaar Hussain, J

SULTAN MEHMOOD RANA---Petitioner

Versus

NAEEM AHMAD and 5 others---Respondents

Civil Revision No. 931-D of 2018, decided on 19th February, 2024.

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

----Ss. 14, 17 & 42---Limitation Act (IX of 1908), First Sched., Art. 178---Application to make the Award of Arbitrator as Rule of Court, filing of---Limitation, commencing date of---Scope---Appellate Court held that the award cannot be made Rule of the Court as it was not filed by the petitioner within 90-day time period stipulated under Art. 178 of the Limitation Act, 1908, ('the Act 1908')---Whether the limitation period commences from the date of issuance of formal notice in writing by the Arbitrator(s) to the parties or the general knowledge of the parties about making and signing of the award is sufficient to non-suit a litigant on question of limitation?---Held: Article 178 of the Act 1908 clearly depicts that the limitation starts from "the date of service of the notice of the making of the award"---Section 14(1) of the Act 1940 makes it clear that the Arbitrators after making and signing of the award have to give a notice, in writing, of the making and signing of the award to the parties---The requirement of a notice in writing is important as the service of notice is the point from which the limitation for making an application to the Court for filing the award commences per Art. 178 of Act 1908---Section 14(1) of the Act 1940 is to be also read with S. 42 of the Act 1940, which (S. 42) provides that any notice that is required to be served by an Arbitrator shall be served in the manner provided in the arbitration agreement or if there is no such provision then by delivering it to the person on whom it is to be served or by sending it by post at the usual address of such person---Provisions under S. 42 of the Act 1940 make it clear that the Act 1940 provides a clear and specific manner in which the notice is to be served by the Arbitrator(s)---There is no room of implied notice under the law in respect of making and signing of the award---Provisions of S. 42 of the Act, 1940 have technical meanings and can only be construed as requiring issuance of a separate notice in writing by the Arbitrator(s) notwithstanding the fact that a party has knowledge of the passing of the award through receipt of any instrument (cheque in the present case) handed over to him for satisfaction of amount awarded by the Arbitrator(s)---Law of limitation contemplates general principle of administration of justice, which has the effect of preventing a party from having recourse to redressal of rights through judicial process even where such rights subsist and therefore, any law whereby the recourse to the Court(s) is restricted, must be construed strictly---The proceedings should only be held to be barred by time if the chicaneries of law of limitation are made applicable in strictest sense---High Court set-aside the impugned judgment rendered by the Appellate Court and directed that the appeal of the respondent shall be deemed to be pending, which shall be decided on its merits after extending an opportunity of hearing to the parties---Revision was allowed accordingly.

Muhammad Shafi and others v. Muhammad Sabir and others PLD 1960 Lah. 591 ref.

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

----First Sched., Arts. 178 & 181---Arbitration Act (X of 1940), S. 14---Application to make the Award of Arbitrator as Rule of Court, filing of---Limitation, commencing date of---Scope---Appellate Court held that the award cannot be made Rule of the Court as it was not filed by the petitioner within 90-day time period stipulated under Art. 178 of the Limitation Act, 1908, ('the Act 1908')---Question as to how the limitation is to be governed, if no notice is given by the Arbitrator(s) to the party---Held, that in such eventuality it is Art. 181 of the Limitation Act, 1908, which is residuary clause that will be applicable and the same contemplates a period of three years--- High Court set-aside the impugned judgment rendered by the Appellate Court and directed that, the appeal of the respondent shall be deemed to be pending, which shall be decided on its merits after extending an opportunity of hearing to the parties---Revision was allowed accordingly.

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

----Ss. 14, 17 & 42---Limitation Act (IX of 1908), First Sched., Arts. 178 & 181---Application to make the Award of Arbitrator as Rule of Court, filing of---Limitation, commencing date of---Scope---Whether the limitation period commences from the date of issuance of formal notice in writing by the Arbitrator(s) to the parties or the general knowledge of the parties about making and signing of the award is sufficient to non-suit a litigant on question of limitation?---Held: The Arbitration Act, 1940,('the Act 1940') makes it clear that after an award is rendered, any party thereto or any person claiming thereunder may request the Arbitrator(s) or the Umpire to cause the award or its signed copy thereof, together with any disposition or the document, which may have been taken and/or proved, to be filed in the Court---Pertinently, no limitation has been provided under the Act 1908 whereby the party is required to make a request to the Arbitrators or the Umpire to cause the award to be filed in the Court and again residuary Art. 181 of the Act 1908 is applicable and a party to arbitration proceedings can make such a request to the Arbitrators within three years' time period from the date of making and signing of the award---Imperatively, the object of giving notice to the parties is to enable them to file an application for setting aside the award---Pertinently, when the respondent filed an application for cancellation of the award, he also categorically acknowledged that the Arbitrators had not issued any formal notice, in writing, to the parties regarding making of the award---High Court set-aside the impugned judgment rendered by the Appellate Court and directed that the appeal of the respondent shall be deemed to be pending, which shall be decided on its merits after extending an opportunity of hearing to the parties---Revision was allowed accordingly.

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

----Ss. 14, 17 & 42---Limitation Act (IX of 1908), First Sched., Arts. 158 & 178---Application to make the Award of Arbitrator as Rule of Court, filing of---Limitation, commencing date of---Scope---Appellate Court held that the award cannot be made Rule of the Court as it was not filed by the petitioner within 90-day time period stipulated under Art. 178 of the Limitation Act, 1908, ('the Act 1908')---Whether a Court can dismiss the objections to the award but at the same time refuse to make the award a Rule of the Court on the ground that the application of a party for filing/making the award a Rule of the Court was not within limitation---Held: Pertinently, once an award is before the Court, either through the Arbitrator(s) or any party (for example the respondent), then in terms of S. 17 of the Arbitration Act, 1940, ('the Act 1940'), it is the duty of Court to examine the same and see whether it suffers from any patent illegality or if there is any cause to remit the award to the Arbitrator(s) irrespective of the fact that opposite party (the petitioner in present case) has not approached the Court within time---Provision of S. 17 of the Act 1940 is couched in mandatory terms as the same is signified by use of the word "shall" and cast a duty upon the Court to pass a decree if it sees no cause to remit or set-aside the award---The proceedings under S. 17 commence once an award has been filed in the Court---The very fact that the respondent filed an application seeking cancellation/setting aside of the award means that it was admitted that the award had been made and that the proceedings under S. 17 of the Act 1940 shall commence---Once an award comes before the Court then the Court has got jurisdiction to take further proceedings in accordance with the law and pass a decree thereon---Thus, once the award is before the Court, it is the duty of the Court to scrutinize the award, which is independent of the fact whether any side has objected to the same or not or the application of one of the parties to arbitration proceedings is time barred---In present case, the Trial Court discharged that duty and passed the decree on the basis of the award in favour of the petitioner whereas the Appellate Court has upended the said findings without touching the merits of the case by merely holding that the application of the petitioner to make the award a Rule of Court was time barred which in-fact was not as examined hereinabove, and hence, the finding of the Appellate Court below is erroneous and not sustainable---High Court set-aside the impugned judgment rendered by the Appellate Court and directed that the appeal of the respondent shall be deemed to be pending, which shall be decided on its merits after extending an opportunity of hearing to the parties---Revision was allowed accordingly.

Noor Muhammad v. A.D.J. Nankana Sahib and others 1996 CLC 268; Messrs Awan Industries Ltd. v. The Executive Engineer, Lined Channel Division and another 1992 SCMR 65 and A. Qutbuddin Khan v. Chec Milliwala Dredging Co. (Pvt.) Ltd. 2014 SCMR 1268 ref.

Syed Kabeer Ahmad Mehmood for Petitioner.

Abdul Salam Alvi for Respondent No.1.

2025 C L D 133

[Peshawar]

Before Syed Arshad Ali, J

The GOVERNMENT OF KHYBER PAKHTUNKHWA through Chief Secretary, Peshawar and others---Appellants

Versus

Messrs HMA PUMPS (PVT.) LTD. PESHAWAR CANTT. and another---Respondents

R.F.A. No.186 of 2023 with C.M. No.299 of 2023 with C.M. No.541 of 2023, decided on 20th May, 2024.

Arbitration Act (X of 1940)---

----Ss. 14, 16 & 20---Award passed by arbitrators unanimously---Scope---Remitting (re-referring) matter to Arbitrators or umpire---Reconsideration---Scope---Provincial Government filed appeal against the order passed by the Civil Court whereby the award made by the umpire was made rule of court---Argument of the Appellant (Provincial Government) was that as earlier, during the proceedings before the Court, Arbitrators had passed award unanimously, the Court had wrongly accepted application of respondents/Company for remitting/re-referring the matter to the umpire---Contention of the respondents/ company was that it was provided under S. 16 of the Arbitration Act 1940 ('the Act 1940') that the award could be remitted to the arbitrators or the umpire for reconsideration, therefore, the Trial Court had rightly remitted the award to the umpire, instead of arbitrators---Question as to whether in a case when an unanimous award has been passed, the matter may be re-referred/remitted to the arbitrators who passed the award or it could be referred to an umpire---Held, that S. 16 of the Act 1940 and Rr. 2, 4 & 5 of the First Schedule of the Act 1940 clearly demonstrate that the umpire can only take cognizance in the matter if there are the circumstances provided under R. 4, which, inter alia, include that both arbitrators could not agree on a particular issue---Therefore, an umpire cannot be called upon to act under R. 5 if the circumstances as provided under R. 4 do not arise---Thus, the contention of the respondents/company went counter to the scheme of S. 16 of the Act 1940, which clearly envisaged that where award had left undetermined any of the matters referred to arbitration, or where it determined any matter not referred to arbitration and such matter could not be separated without affecting the determination of the matter referred to, the Court was competent to remit the award or any matter referred to arbitration of the arbitrators or umpire for reconsideration---This clearly implies that if the ambiguity, as stated in S. 16 of the Act 1940, arises out of the award passed by the arbitrators, then the matter shall be referred to the arbitrators and in case the same is arising out of the award passed by the umpire, then obviously the same has to be referred for reconsideration to the umpire---Indeed, the word "reconsideration" is a determining fact implying the intention of legislation because the award passed by the arbitrator cannot be reconsidered by the umpire as the role of umpire comes into play only when there is disagreement between the arbitrators---Thus, the impugned order of the Trial Court remitting the award to the umpire was patently illegal and the entire edifice built upon the said order had to crumble to the ground being coram non judice and against the letter and spirit of S. 16 of the Act 1940 read with the First Schedule of the Act 1940---High Court set-aside the impugned order of the Trial/Civil Court to the extent of remitting the award to the umpire, the award passed by the umpire; and the impugned judgment/order of the Trial Court making the disputed award passed by the umpire as rule of the Court were also set aside and the matter was sent back to the Trial Court to redecide the application of the respondents/company, which it had filed under S. 16 of the Act, 1940---Appeal, filed by the Provincial Government, was allowed accordingly.

Muhammad Farooq Shah v. Shakirullah 2006 SCMR 1657 ref.

Yasir Khalid, A.A.G. for Appellants.

Barrister Muhammad Yaseen Raza Khan and Barrister Muhammad Ibrahim Khan Afridi, Amici Curiae for Respondents.

2025 C L D 181

[Peshawar]

Before S M Attique Shah, J

AJMAL---Appellant

Versus

S.D.O, PESCO SUB-DIVISION, NOWSHERA CANTT-01 and 3 others---Respondents

F.A.O. No.51-P of 2023, decided on 8th November, 2023.

Khyber Pakhtunkhwa Consumers Protection Act (VI of 1997)---

----Ss.13(2), 11B & 17(2)---Consumer---Filing of complaint regarding exaggerated amount in electricity bill---Limitation---Application for rejection of complaint being time barred filed by the respondent (Electricity Supply Company) was accepted by the Consumer Court---Validity---Khyber Pakhtunkhwa Consumers Protection Act, 1997 (Act) was promulgated to provide for healthy growth of fair commercial practices, the promotion and protection of legitimate interest of consumers and speedy redressal of their complaints and matters arising out of or connected therewith, which purpose and object clearly envisages that the enactment is consumer beneficial and as such, it requires to be treated in the same manner in order to provide and extend the consumers a fair chance qua protection of their legitimate rights---Section 13(2) of the Act provides that a complaint shall be submitted before the Consumer Court within 10 days of the sale, delivery or rendering of the service---Appellant had filed the complaint against the respondent-PESCO before the Consumer Court on 03.08.2022, while the disputed electricity bill was payable till 05.08.2022, thus, in the attending circumstances of the case, the question of limitation would at best be seen at the time of final determination of the matter by the Consumer Court; particularly, in the circumstances, when the first proviso to S.13(2) has conferred discretion upon the court to entertain a complaint filed beyond ten days within such time as it may allow if it is satisfied that there is sufficient cause for not filing the same within the specified time subject to the provision of second proviso---Consumer Court was held to have committed gross illegality and jurisdictional error in rejecting the complaint of the appellant---Appeal was accepted, in circumstances.

Muhammad Umar Saeed for Appellant.

2025 C L D 527

[Peshawar]

Before Ishtaiq Ibrahim and Wiqar Ahmad, JJ

EAST WEST INSURANCE CO. LTD. and others---Appellants

Versus

AURANGZEB and others---Respondents

R.F.A. No.168-P of 2015, decided on 4th October, 2024.

(a) Penal Code (XLV of 1860)---

----S.425---Mischief---Scope---In mischievous acts, no gain is normally found accrued to wrong doer and only damage to someone else's property is caused.

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

----S.121---Insurance claim---Proof---Non-filing of FIR---Appellant / insurance company was aggrieved of judgment and decree passed by Insurance Tribunal directing to pay to respondent depreciated value of his vehicle which was allegedly stolen---Validity---Appellant / insurance company rightly declined claim of respondent---Insurance Tribunal wrongly allowed claim of respondent to the extent of depreciated value of truck on the basis of Naqal Mad entered at Police Station Dargai, Malakand---Neither any FIR was registered in the light of Daily Diary in question nor nominated accused in Daily Diary had been detained/arrested---Truck in question was not recovered and there had been no inquiry or investigation report on the part of police---Respondent was not entitled to submit claim before Insurance Tribunal---Whole insurance amount or depreciated value of the vehicle could not be paid to respondent---High Court set aside judgment and decree passed by Insurance Tribunal and suit of respondent was dismissed resultantly---Appeal was allowed accordingly.

Arshad Jamal Qureshi for Appellants.

Shumail Ahmad Butt for Respondents.

2025 C L D 549

[Peshawar]

Before Ijaz Anwar and Muhammad Ijaz Khan, JJ

JUBILEE LIFE INSURANCE COMPANY LTD---Petitioner

Versus

FEDERAL INVESTIGATION AGENCY (FIA) through Director General, Islamabad and 3 others---Respondents

Writ Petition No. 3419-P of 2023 with IR, decided on 22nd August, 2024.

(a) Federal Investigation Agency (Inquiries and Investigations) Rules, 2002---

----R. 5---Inquiry and Investigation---Jurisdiction of Federal Investigating Agency ('FIA')---Scope---Powers of FIA regarding investigation are duly structured in Federal Investigation Agency (Inquiries and Investigations) Rules, 2002---Federal Investigation Agency can only inquire and investigate certain offences either committed in connection with matters concerning Federal Government or for matters connected therewith.

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

----Ss. 121, 122, 124 & 156---Federal Investigation Agency (Inquiries and Investigations) Rules, 2002, R. 5---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 20---Dispute between insurance company and insured persons---Inquiry and Investigation---Whether Federal Investigation Agency had jurisdiction in the matter---Petitioner/Insurance company assailed initiation of inquiry proceedings by Federal Investigation Agency ('FIA') on the complaints of respondents/insured persons, pertaining to dispute over insurance amount---Validity---Besides having numerous other functions, Securities and Exchange Commission of Pakistan is also a regulator of business of insurance companies---Securities and Exchange Commission of Pakistan had taken up the case of respondents/insured persons with petitioner/company and proceedings for settlement between the parties were in progress while respondents/insured persons were not agreeing to amount which were released to them---If there was any genuine dispute between parties it could be resolved before forums provided under Insurance Ordinance, 2000---Such dispute could not be made a base for proceedings under penal criminal laws---Provisions of Insurance Ordinance, 2000 are special law which has to prevail over general law---Special mechanism has been provided for dealing with offences for contravention of Insurance Ordinance, 2000---High Court quashed inquiry proceedings initiated by FIA as the same was uncalled for and without lawful authority---Constitutional petition was allowed, in circumstances.

The Murree Brewery Co. Ltd v. Pakistan through the Secretary to Government of Pakistan, Works Division and 2 others PLD 1972 SC 279; Director General, FIA and others v. Kamran Iqbal and others 2016 SCMR 447; Mian Hamza Shahbaz Sharif v. Federation of Pakistan and others 1999 PCr.LJ 1584; Pakistan Engineering Company Ltd through Managing Director and 2 others v. Director General, FIA Islamabad, and 3 others 2011 YLR 337; Muhammad Hammad ur Rehman Zafar v. Director, FIA Lahore and another PLD 2022 Lah. 177 and Oxford University Press, Peshawar v. Inayat-ur-Rehman and others 2021 SCMR 321 ref.

Ziaullah Khan and 5 others v. Government of Pakistan through Secretary Interior and others PLD 2022 Pesh. 122; State Life Insurance Corporation of Pakistan v. Commissioner Insurance, SECP and another 2017 CLD 1515 and Saeed Muhammad Shah v. Federal Investigation Agency and others 2017 SCMR 1218 rel.

Syed Hamid Ali Shah for Petitioner.

Barrister Rahat Ali Khan Nahaqi, Assistant Attorney General, along with Ms. Laila Manan, Sub-Inspector, FIA/ACC, Peshawar.

Younas Ali Shah for Respondents Nos. 3-4.

2025 C L D 1193

[Peshawar (Abbottabad Bench)]

Before Muhammad Ijaz Khan and Sadiq Ali, JJ

Sardar FARAZ HUSSAIN and 2 others---Petitioners

Versus

The STATE and another---Respondents

Writ Petition (Q) No.31-A of 2024, decided on 12th February, 2025.

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

----Ss.476, 477 & 497---Criminal Procedure Code (V of 1898), Ss. 154 & 561-A---Constitution of Pakistan, Art. 199---Penal Code (XLV of 1860), Ss. 419, 420, 468, 471, 408 & 409---Quashing of FIR---Constitutional jurisdiction of High Court---Scope---Petitioners/accused sought quashing of FIR by invoking constitutional jurisdiction of the High Court---Held: Allegations against the petitioners were that they being coordinator and servant of a registered company while being hand in glove with each other prepared fake and fictitious rent deed and wrongfully obtained possession of the company's outlets along with wrongful dispossession of the servants of the company, thus cheated the company---When the company was a registered one and completely came within the four corners of Companies Act, 2017 ('the Act') the best course for the company was to move a complaint as required under S. 477 of the Act and not to move an application before the SHO for registration of a criminal case against the petitioners---When the law provides a mechanism for doing a thing in a particular manner, then it must be done in that way and not otherwise---Section 476 of Companies Act, 2017, provides cognizance to be taken in the case of registered companies while S. 477 provided the way of making a complaint for such offences whereas S. 497 provides the penalty /punishment for the offences committed---Section 476 of the Companies Act, being non obstante clause which excludes other provisions of the general law and full mechanism has been provided while taking the cognizance as provided under S. 497 of the Act, which is also a scheduled offence, provided in Eighth Schedule of the Act---Thus, the contents of FIR fully constituted an offence under S. 497 of the Companies Act, hence, lodging of the FIR by the local police was without any competence and was patently illegal on the face of record---Constitutional petition was allowed, accordingly.

Syed Mushahid Shah and others v. Federal Investigating Agency and others 2017 SCMR 1218; 2013 SCMR 85 and FIA through Director General FIA and others v. Syed Hamid Ali Shah and others PLD 2023 SC 265 rel.

(b) Interpretation of statutes---

----General and special law---Applicability---Wherever there is a special and general law applicable to a certain matter, the special law will prevail.

Muhammad Iqbal others v. Nasrullah 2023 SCMR 273 and Safi-ud-Din Kazi v. Pranab Chandra Roy Choudhary PLD 1950 Dacca 37 rel.

Waheed Jan Muhammad for Petitioner.

Shoaib Ali, Assistant Advocate General for the State.

Malik Asif Ali for Respondent No.2.

2025 C L D 1528

[Peshawar (Abbottabad Bench)]

Before Syed Mudasser Ameer, J

MUHAMMAD IRSHAD & CO.---Petitioner

Versus

SECRETARY GOVERNMENT KHYBER PAKHTUNKHWA, COMMUNICATION AND WORKS DEPARTMENT, PESHAWAR and 4 others---Respondents

Writ Petition No.1382-A of 2021, decided on 16th April, 2025.

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

----Ss. 15, 16 & 17---Powers of Court---Making award Rule of Court---Scope---While making award Rule of the Court, the Court is not supposed to act in a mechanical manner, like a post office and put its seal on it---Court has to look into the award and if it finds patent illegality on the face of the award, it can remit the award or any of the matters to arbitrator for reconsideration or set aside the same.

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

----S. 17---Constitution of Pakistan, Art. 199---Constitutional petition---Arbitration---Rule of Court, assailing of---Extraneous remarks by Arbitrators in Award---Petitioner was aggrieved of not including in Rule of the Court, the escalation amount calculated by Arbitrators---Validity---Erroneous interpretation of law and/or clauses of contract made by Arbitrators could be set aside by Referee Court---Referee Court had rightly concluded that escalation was part of contract and provisions of Pakistan Engineering Council guidelines had been wrongly applied to the contract, therefore Arbitrators' interpretation in such regard was validly set aside---Regardless of correct interpretation of relevant clause of contract and legal position in that regard orders passed by Referee Court had never been challenged and was duly implemented---Such orders attained finality and were binding on Arbitrators who were bound to follow the same---Arbitrators went way beyond the terms of reference as well as their powers and jurisdiction by sitting as a Court of Appeal on Referee Court's orders and any such remarks given by them were extraneous to the Terms of Reference and should have been discarded by Referee Court---Calculations finally made by Arbitrators had to have been made Rule of the Court---Order of Referee Court as well as Lower Appellate Court to the extent of issue pertaining to escalation cost were not sustainable in the eye of law and the same were set aside to that extent---High Court discarded remarks made by Arbitrators regarding non-admissibility of escalation---High Court made calculations with respect to escalation cost as Rule of the Court---Constitutional petition was allowed accordingly.

Sh. Muhammad Saleem v. Saadat Enterprises 2009 CLD 390; Messrs Jaffar Bros. Ltd. v. Islamic Republic of Pakistan and others PLD 1978 Kar. 585; Pakistan v. Ms. Rajastan Alloy and Steel (Pvt.) Ltd. 2002 CLD 61; Syed Tariq Farooq v. Nasruddin and another PLD 1980 Quetta 1; Gerry's International (Pvt.) Ltd. v. Aerofloat Russian International Airlines 2018 SCMR 662; Karachi Dock Labour Board v. Ms. Quality Builders Ltd. PLD 2016 SC 121; Pakistan v. Ms. QMR Expert Consultants PLD 1980 SC 800; State Bank of Pakistan v. Khyber Zaman and others 2004 SCMR 1426; Societe Generale De Surveillance S.A. v. Pakistan through Secretary, Ministry of Finance Revenue Division, Islamabad 2002 SCMR 1694 and Director Housing, A.G's Branch, Rawalpindi v. M/s. Makhdum Consultants Engineers and Architects 1997 SCMR 988 ref.

Zahid Idrees Mufti for Petitioner.

Wajahat Hussain Shah, Assistant Advocate General for Respondents.

2025 C L D 441

[Balochistan]

Before Muhammad Ejaz Swati and Nazeer Ahmed Langove, JJ

Syed MATIULLAH AGHA---Appellant

Versus

Haji MUHAMMAD HUSSAIN alias Haji MUHAMMAD HASSAN---Respondent

R.F.A. No. 3 of 2022, decided on 24th October, 2023.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 5, 6, 30, 72, 73 & 84---Civil Procedure Code (V of 1908), O. XXXVII---Suit for recovery on the basis of negotiable instruments (nine cheques)---Pre-requisites---Presentment of cheque before the bank---Seven out of nine claimed cheques (cheques-in-question) not having been presented before the bank, were produced by the respondent/plaintiff in his statement recorded before the Trial Court---Trial Court decreed recovery of whole amount regarding nine cheques---Validity---Record reveals that appellant/defendant in his written statement denied the factum of outstanding amount, and that the respondent/plaintiff through a representative of concerned branch of the Bank, being one of his (plaintiff's) witnesses, only succeeded to produce(get exhibited) two cheques (amounting to Rs. 5 lac each) issued by the appellant/respondent which were dishonored; the remaining seven cheques (cheques-in-question) were produced by the respondent/plaintiff in his statement recorded before the Trial Court---Admittedly, there was no evidence on record produced by the plaintiff for presentment of the cheques-in-question to the concerned branch of the Bank---Section 5 of the Negotiable Instruments Act, 1881, ('the Act 1881') defines "bill of exchange" and S. 6 of the Act 1881 defines "cheque" as a bill of exchange drawn on specified banker and not expressed to be payable otherwise than on demand---It appears that dishonor by non-acceptance or non-payment gives rise to an immediate right to recourse against the drawer of the bill of exchange---Section 68 of the Act 1881 deals with all negotiable instruments including cheques while S. 73 of the Act 1881 deals with the cheque and provides the time of presentment and its consequence; this section further provides that a cheque must be presented for payment within reasonable time after its delivery to the holder---It is the mandate of the Act 1881 that all negotiable instrument should be presented for payment within a reasonable time---According to S. 72 of the Act 1881, the drawer of the cheque is the principle debtor and he cannot avoid his liability towards the holder except in case of non-presentment of a cheque within a reasonable time---Sections 72 & 84 of the Act 1881 stipulate that unless a cheque is presented for payment within a reasonable time of its issue no right to recover the amount would accrue---Presentment of a cheque, being a bill of exchange, is a condition precedent in order for a payee to charge the drawer/maker of a cheque; thus, for filing suit under O. XXXVII, C.P.C. based on a cheque, it is necessary to present the said cheque to the bank, as presentment under the provisions of the Act 1881 is the cause of action, in a suit based upon such an instrument---In the present case, admittedly there was no evidence of presentment of the seven cheques (in-question) having been exhibited/produced by the plaintiff in his statement before the Trial Court to the concerned branch of the Bank, therefore, to the said extent suit of the respondent/plaintiff under O. XXXVII, C.P.C., was not maintainable, however to the extent of two cheques duly exhibited [total amount of Rs.10,00,000/- (ten lac only)], the impugned judgment was maintained---High Court set-aside impugned judgment/ decree to the extent of said seven cheques and suit to that extent filed by the respondent/plaintiff was dismissed---However, impugned judgment/ decree to the extent of two duly exhibited cheques was maintained---Appeal filed by the defendant, was partly allowed.

National Bank of Pakistan v. Shahyar Textile Mills Ltd. 2003 CLD 1370; Al-Hamd Edible Oil Industries (Pvt.) Limited through Chief Executive v. Syed Waseem Hyder 2008 CLC 1578 and Khalifa Azhar Mumtaz v. Ghulam Akbar 2014 CLC 1448 ref.

Rehmatullah Barech for Appellant.

Mian Badar Munir for Respondent.

2025 C L D 1340

[Balochistan (Sibi Bench)]

Before Zaheer-ud-Din Kakar and Shaukat Ali Rakhshani, JJ

Messrs NOOR RICE MILLS through Proprietor ---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Manager ---Respondent

High Court Appeal No.(s) 12 of 2023, decided on 2nd October, 2023.

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

----Ss. 19 & 22---Execution of decree---Auction of mortgaged property---Term 'satisfaction of decree'---Object, purpose and scope---Decree was passed on 16-10-2020 but appellant / judgment debtor failed to deposit any sum of decretal amount---Executing Court repeatedly directed appellant / judgment debtor to deposit decretal amount in installments but it was all in vain---Executing Court ordered auction of mortgaged property of appellant / judgment debtor---Validity---Decree of Court is mere declaration of right unless through the process of execution such determination is transformed into actual realization---Without execution, a decree is an expression of recognition of right of relief---When decree gets executed through the process of law, it then culminates into attainment of dispensation of justice in actual and palpable terms---When decree is executed successfully, it is called satisfaction of decree---High Court declined to interfere in execution proceedings---Appeal was dismissed, in circumstances.

Muhammad Attique v. Jamil Limited and others 2015 SCMR 148 and Mst. Nadia Malik v. Messrs Makki Chemical Industries Pvt. Ltd. through Chief Executive and others 2011 CLD 1517 rel.

Mujahid Hussain Qaiserani for Appellant.

Muhammad Ali for Respondent.

2025 C L D 1428

[Balochistan]

Before Gul Hassan Tareen, J

Mrs. RAZIA AMIR SULTANA and others---Applicants

Versus

AL AMIR PAPER MILLS (PVT.) LIMITED and others---Respondents

Company Petition No.01 of 2021, decided on 29th May, 2025.

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

----Ss.5(1), 5(2), 126, 127, 287-A & 497---Limitation Act (IX of 1908), First Sched., Art.112---Petition for rectification of shareholding register---Limitation---Jurisdiction of the Company Bench---The petitioners invoked the jurisdiction of the High Court under its companies jurisdiction for correction of the members' register of the company---The company was incorporated in 1993 and the petitioners and respondent No. 2, were legal heirs of the member, who originally held a collective shareholding of 491,000 shares---However, after the petitioners migrated abroad between 1999-2000, respondent No. 2 fraudulently removed their names from the register, assumed full ownership, and later unlawfully transferred shares to respondent No. 4, including those of the deceased---Applicants filed present petition in 2021 seeking rectification of shareholding register---Main questions for determination before the High Court was as to "Whether the petitioner, who had been the shareholders of the company, were entitled to rectification of the company's register on account of alleged fraudulent removal of their names and unauthorized transfer of shares by respondent No. 2, and whether such petition was maintainable and within limitation period"---Held:---Respondent No.2 was the beneficiary of the shares, therefore, the burden to proof was on him to plead and prove the particulars of such purchase---Respondent No.2 did not plead description and particulars of purchase, such as price, sale, agreement, mode of payment of the price---While transferring shareholding of the applicants the respondent No.2 had not observed and complied with the Articles of Association---Respondent No.2, at the relevant time, in compliance with the erstwhile S. 76 of the Companies Ordinance, 1984 did not bring on record instrument of transfer duly stamped and executed by the applicants and their late father---Respondent No.2 could not place on record any instrument showing that he had paid price of the shares to the applicant---Respondent No.2 was the beneficiary of the shareholding, thus, burden to proof was on him to substantiate that he had purchased the shareholding of the applicants but he failed to do so---Section 126(3) of the Companies Act, 2017 (and S. 152 of the erstwhile Companies Ordinance, 1984) conferred exclusive jurisdiction upon the High Court to try an application made under S. 126 for rectification of the register---Thus, the High Court had exclusive territorial and subject matter jurisdiction to try the application at hand under S. 5 subsection (1) and S. 126 of the Companies Act, 2017---Subsection (2) of S. 5, ousted the jurisdiction of any other court to entertain any proceedings in respect of any matter which the High Court was empowered to determine by or under the Companies Act, 2017---With regards to the question of limitation for filing application for rectification of register, the High Court while relying on the case reported as "2022 SCMR 1171" observed that no limitation was provided for filing application for rectification of register and held the petition to be within time---Moreover, applicants and respondent No.2 were legal heirs of the late member and there was no limitation for a co-sharer and against other co-sharer for claiming shares in the joint immovable, or movable, property including shares in a company---High Court ordered for rectification of the shareholding register of members---Petition was allowed, in circumstances.

Naila Naeem Younus v. Indus Services Limited 2022 SCMR 1171 rel.

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

----S.126---Limitation Act (IX of 1908), First Sched., Art.112---Petition for rectification of shareholding register---Limitation---Scope---Section 126 of the Companies Act, 2017 or any other provision thereof and the Limitation Act, 1908 do not prescribe any particular time limitation for making an application for rectification in the register of members---Term 'Company' has been mentioned in the explanation to S. 3 of the Limitation Act, 1908 which means 'a company which is being wound up by the Court'---The only article mentioning term 'Company' in Schedule-I of the Limitation Act 1908 is Art. 112, which states 'For a call by a company registered under any Statute or Act.'---Hence, both Acts i.e. Companies Act, 2017 and Limitation Act, 1908 do not place impediment of limitation on an application made for the rectification of entries in the register of members---High Court while relying upon the case reported as '2022 SCMR 1171' observed that there was no limitation period prescribed for an application for rectification of register.

Naila Naeem Younus v. Indus Services Limited 2022 SCMR 1171 rel.

Sultan Khalid for Petitioners.

Ex-parte vide order dated 23rd May, 2025 for Respondents Nos.1 to 4, 5 and 7.

Murtaza Butt for Respondent No.6.

2025 C L D 1551

[Balochistan]

Before Gul Hasan Tareen, J

Messrs NATIONAL BANK OF PAKISTAN Attorney/Officer/Manager---Plaintiffs

Versus

Messrs BISMILLAH MARITIME BREAKERS through Partners and others---Defendants

Civil Suits Nos.01 and 02 of 2009, decided on 13th June, 2025.

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

----Ss. 3(2) & 9---Contract Act (IX of 1872), Ss.127 & 128---Suit for recovery of finance---Guarantor, liability of---Cost of funds, recovery of---Plaintiff / bank filed suit against defendants / debtors as well as guarantors---Validity---Defendants / guarantors executed guarantee for the benefit of defendant / principal debtor and had also executed memorandums for deposit of title deeds for the benefit of defendant / principal debtor---This was a sufficient consideration to defendants / guarantors for giving the guarantees---Liability under S. 128 of Contract Act, 1872 of defendants / guarantors was co-extensive with that of principal debtor---Defendant / debtor had defaulted in discharge of principal amount---Such default not only incurred cost of funds under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, rather was actionable under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, rather was actionable under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Finance agreement expired on 31-03-2008, which was date of default---Plaintiff / bank was entitled for cost of funds from pleaded date of default---Defendant / debtor breached terms of sanctioned advices, finance agreement and guarantees---Suit was decreed accordingly.

Messrs Sittara Rice Trading v. United Bank Limited 2011 CLD 254; Khurshid Anwar v. United Bank Limited 2002 CLD 1252; State Engineering Corpn. Ltd. v. National Development Finance Corpn. 2006 SCMR 619; Trading Corpn. of Pakistan (Pvt.) Ltd. v. Murshad Enterprises PLD 2004 Kar. 407 and S.L. Ramaswamy v. M.S.A.P.L. Palaniappa AIR 1930 Madras 364 ref.

(b) Damages---

----Special damages---Proof---Where plaintiff claims special damages, he must plead particulars of damages he has suffered.

(c) Administration of justice---

----Mere acquittal in a criminal case does not absolve a defaulter from civil liability.

Muhammad Akram Shah for Plaintiff (in Suit No.01 of 2009).

Mujeeb Ahmed Hashmi for Defendants Nos.1 (i to iii) and 3 (in Suit No.01 of 2009).

Ex parte for Defendants Nos.2, 4 and 5 (in Suit No.01 of 2009).

Mujeeb Ahmed Hashmi for Plaintiff (in Suit No.02 of 2009).

Muhammad Akram Shah for Defendants (in Suit No.02 of 2009).

2025 C L D 288

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

UNITED INSURANCE COMPANY OF PAKISTAN LIMITED---Appellant

Versus

The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECP, ISLAMABAD---Respondent

Appeal No.19 of 2022, decided on 1st January, 2025.

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

----S. 156---SRO No. 1545(I)/2019 dated December 6, 2019---Takaful Rules, 2012, Rr. 10(1)(k) & 20(1)---Different persons/entities of Securities Exchange Commission of Pakistan (Commission)---Delegation of powers---Objection raised by the appellant (Insurance Company, being authorized to undertake non-life insurance business and to carry on Window Takaful Operations /WTO), was that the Show-Cause Notice was controversial because powers under S. 156 of the Insurance Ordinance, 2000, had been delegated to different persons (Commissioner Insurance, HOD, Adjudication and Wing Head Adjudication-I) which tantamount to sub-delegation of powers of the Securities and Exchange Commission of Pakistan (Commission)---Validity---Under the SRO No. 1545(I)/2019 dated December 6, 2019 ('the SRO-in-question'), powers had been delegated to the different administered legislations (persons) of the Commission (the Commissioners, Heads of Departments and Wing Heads)---Thus, the appellant's objection was misconceived as S. 156 of the Insurance Ordinance, 2000, was a penal clause that was delegated to different persons to adjudicate the matters involving violations of the substantive provisions of the Insurance Ordinance, 2000---Appellate Bench found no reason to interfere in the merits of the impugned order----Appeal was dismissed.

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

----S. 24-A---Takaful Rules, 2012, Rr. 10(1)(k) & 20(1)---Non-speaking order ---Scope---Argument of the appellant (Insurance Company), being authorized to undertake life insurance business and to carry on Window Takaful Operations /WTO) was that the Impugned Order was a non-speaking order---Validity---Rules 10(1)(k) and 20(1) of Takaful Rules were explicit and violations of said Rules were adequately explained by the Respondent / Commission---Thus, plea of the appellant was without any substance---Appellate Bench found no reason to interfere in the merits of the impugned order----Appeal was dismissed.

(c) Takaful Rules, 2012---

----R.12---Insurance Ordinance (XXXIX of 2000), Ss. 156 & 167---Provisions of Takaful (Insurance), violation of---Penalty, imposition of---Appellant (Insurance Company, being authorized to undertake non-life insurance business and to carry on Window Takaful Operations /WTO), was penalized by Securities Exchange Commission of Pakistan (Commission)---Argument of the appellant was that for any violation of the Takaful Rules, 2012, a penalty could only be imposed under R. 12 of Takaful Rules, therefore, imposition of penalty by the respondent / Commission under S. 156 of the Insurance Ordinance, 2000, was without jurisdiction---Validity---Secondary legislations are made to achieve the purpose of primary legislation, therefore, Takaful Rules being a secondary legislation serve the same purpose under the primary legislation i.e. the Insurance Ordinance, 2000---Rule 12 of Takaful Rules, 2012 was not a penal provision rather it merely dealt with the revocation of the authorization, therefore, to deal with the violation of the Takaful Rules, 2012, a penal provision provided under the Insurance Ordinance, 2012, was to be applied---Notably, the authorization to carry out WTO was a permission granted by the Commission, therefore, in case of any violation, the Commission being an authorization granting authority was empowered to revoke such authorization---Takaful Rules, 2012, were made under S. 167 of the Insurance Ordinance, 2000, therefore, any Rule or Regulation made under the Insurance Ordinance, 2000, was an integral part of the Insurance Ordinance 2000, and in the absence of penal provision under the secondary legislation, penal provision provided under the primary law was to be applied--- Furthermore, the revocation of authorization could not be termed as a "penalty", therefore, the appellant's interpretation that R. 12 of Takaful Rules was a penal provision was not tenable---Appellate Bench found no reason to interfere in the merits of the impugned order----Appeal was dismissed.

2005 SCMR 728 distinguished.

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

----Ss. 156 & 167---Takaful Rules, 2012, Rr.10(1)(k), & 20(1)---Provisions of Takaful (insurance), violation of---"Wakala fee"---Scope---Appellant (Insurance Company, being authorized to undertake non-life insurance business and to carry on Window Takaful Operations /WTO), was penalized by the Commission---Argument of the Appellant was that "wakala fee" was not a liability rather it was a "management fee " payable by the participants of PTF to the Appellant---Held, that every payable was a liability and it had to be treated as per legal requirements---In addition, the appellant, as the operator, had to give PTF money in the form of a Qarz-e-Hasna (interest-free loan) in order to satisfy its solvency requirements---However, rather than giving PTF actual money, a set-off transaction was carried out in which the appellant neither provided funds to PTF nor received the "wakala fee" from PTF---By carrying out the transaction in the manner-in-question, the appellant had disregarded the requirements of law---Appellant's interpretation regarding the explanation of R. 10(1)(k) of the Takaful Rules, 2012 was not correct because Qarz-e-Hasna was not a receivable of PTF in the ordinary course of business, rather it was the obligation of the operator to provide such funds on as and when required basis to enable PTF to meet the solvency requirements---Adjustment of the "wakala fee" could not be treated as a grant of real funds required under R. 20(1) of the Takaful Rules, 2012, therefore, the Appellant had undermined the sanctity of the applicable legal framework---Both the legal provisions i.e. Rr. 10(1)(k) & 20(1) of Takaful Rules, 2012 were explicit and there was no ambiguity in this regard---Appellate Bench found no reason to interfere in the merits of the impugned order----Appeal was dismissed.

Commissioner of Income Tax/Wealth Tax v. Messrs Papers and Board Mills 2006 PTD 386 distinguished.

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

----Ss. 156 & 167---Takaful Rules, 2012, Rr.10(1)(k), 12 & 20(1)---Provisions of Takaful (insurance), violation of---Penalty---Plea of leniency---Appellate Bench of Securities and Exchange Commission of Pakistan (Commission)---Appellant (Insurance Company, being authorized to undertake non-life insurance business and to carry on Window Takaful Operations /WTO), was penalized by the Commission---Argument of the appellant, relying on case titled Takaful Pakistan Limited reported as 2016 CLD 840, was that the Commission may take a lenient view and set aside the penalty imposed for contravention of the Takaful Rules, 2012---Validity---Appellate Bench had perused the case law relied upon by the appellant i.e. Takaful Pakistan Limited [2016 CLD 840), however, said case law was not binding on the Appellate Bench because it had been passed by a Commissioner in the course of the Commission's original jurisdiction---Appellate Bench was an appellate forum of the Commission, therefore, orders passed by a subordinate or lower authority were not binding for the Bench--- Appellate Bench found no reason to interfere in the merits of the impugned order----Appeal was dismissed.

Takaful Pakistan Limited's case 2016 CLD 840 distinguished.

Ali Ibrahim for Appellant.

Shafiq-ur-Rehman, Additional Joint Director, Adjudication-I, SECP for Respondent.

2025 C L D 393

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdur Rehman Warraich, Commissioner

UBL FUND MANAGEMENT LIMITED---Appellant

Versus

Ms. MOMY KAMAL and another---Respondents

Appeal No.21 of 2020, decided on 4th July, 2024.

(a) Non-Banking Finance Companies and Notified Entities Regulations, 2008---

----Reglns. 66A(c)(i), 66A(c)(iv), 66A(d) & 66A(f)---Investing in Equity/Mutual Funds---Mis-selling / concealed investment risks, allegation of---Risk categorization of investor---Appellant (Fund Management Company) was penalized by the Securities and Exchange Commission of Pakistan (Commission) on complaint of lady investor (a housewife who had invested an inherited amount) who redeemed the availed plan owing to loss of principal investment allegedly due to contraventions on the part of the Appellant---Validity---To influence the investment decision of investors, it is a practice of the sales agents to highlight the returns without adequately explaining the associated risks and potential downside of equity investment through mutual funds---At the time of making investment respondent (lady complainant), received a welcome call informing her of the risks and exposure involved---Despite that, respondent (complainant) had proceeded with her investment---If respondent (complainant) had been deceived by the appellant's relationship manager / sales staff, she should have made a wise choice after receiving the welcome call and information about the risks associated with investing in equity, as required by the "Caveat Emptor" (buyer beware) doctrine, which holds the respondent (complainant), responsible for her investment decision---Respondent (complainant) also failed to proceed vigilantly---The recorded call log between the representative of appellant and respondent (complainant) mitigates the assertion made by respondent (complainant) regarding mis-selling or concealed investment risks, however, this fact does not completely absolve the appellant---Respondent / complainant is a housewife, therefore, she cannot be considered well-informed and vigilant Investor who can understand the risk-bearing factors of equity funds ; thus, the appellant had not acted in her best interest and failed to ensure reasonable care regarding the suitability of the investment product offered to her---However, appellant has apprised the Appellate Bench that without admitting the guilt and on compassionate grounds, a compromised deed has been executed between the parties with the amount of loss suffered by respondent having been paid to her---Appellate Bench, while appreciating said compassionate act of compensation, converted the penalty into a warning---Appeal was disposed of accordingly.

(b) Non-Banking Finance Companies and Notified Entities Regulations, 2008---

----Reglns. 66A(c)(i), 66A(c)(iv), 66A(d) & 66A(f)---Investing in Equity/Mutual Funds---Mis-selling / concealed investment risks, allegation of---Risk categorization of investor---Appellant (Fund Management Company) was penalized by the Securities and Exchange Commission of Pakistan (Commission) on complaint of lady investor (a housewife who had invested an inherited amount) who redeemed the availed plan owing to loss of principal investment allegedly due to contraventions on the part of the appellant---Validity---Purpose of the need assessment section of the Account Opening Form (AOF) was to determine the suitability of a person for certain investments, however, the appellant failed to proceed in the required manner and in result thereof, a major part of investment of respondent (complainant) was allocated to the high-risk equity fund (average investment in equity funds during the plan duration remained 66.11%)---Respondent (complainant) was a housewife and the invested her inherited amount, therefore, for all practical purposes her risk appetite tolerance level may not be considered as 'moderate', rather the risk tolerance level should have been recorded as 'low'---Notwithstanding, as per the risk assessment section of the AOF, respondent (complainant), who had been assigned a moderate risk tolerance level, should have been admitted to a capital protection fund and other balanced funds, however, her major investment was made in an equity fund---Importantly, in the AOF, the equity investment solution has been provided for a high tolerance level client---Instead of offering a capital protection hand, she had been admitted to an equity fund---Respondent / complainant is a housewife, therefore, she cannot be considered well-informed and vigilant Investor who can understand the risk-bearing factors of equity funds ; thus, the appellant had not acted in her best interest and failed to ensure reasonable care regarding the suitability of the investment product offered to her---However, appellant apprised the Appellate Bench that without admitting the guilt and on compassionate grounds, a compromised deed had been executed between the parties with the amount of loss suffered by respondent having been paid to her---Appellate Bench, while appreciating said compassionate act of compensation, converted the penalty into a warning---Appeal, was dispose of accordingly.

(c) Non-Banking Finance Companies and Notified Entities Regulations, 2008---

----Reglns. 66A(c)(i), 66A(c) (iv), 66A(d) & 66A (f)---Investing in Equity/Mutual Funds---Mis-selling / concealed investment risks, allegation of---Risk categorization of Investor---Account Opening Form (AOF)---Object and purpose---Appellant (Fund Management Company) was penalized by the Securities and Exchange Commission of Pakistan (Commission) on complaint of lady investor (a housewife who had invested an inherited amount) who redeemed the availed plan owing to loss of principal investment allegedly due to contraventions on the part of the appellant---Stance of the appellant was that at the time when respondent / complainant made the Investment there was no specific law requiring it to consider specific risk categorization and the same were later introduced vide Circular No. 2 of 2020---Validity---Though appellate Bench endorsed said stance, however, this was not the case against the Appellant that it failed to follow any specific risk categorization---The case against the appellant was that it failed to accurately categorize the risk tolerance level of respondent / complainant as per the given data and information---Appellant had failed to understand the object of Account Opening Form (AOF) and admitted the major part of respondent's investment was in equity fund---Account Opening Form (AOF) was not a mere formality rather it was a key document to determine the investment tolerance level of respondent, however, the appellant's relationship manager/sales staff committed serious irregularities in said regard---The sanctity of the AOF cannot be undermined and the appellant also has no mechanism to check and verify the accuracy and suitability of data provided by the relationship manager/sales staff to avoid incidents of incorrect risk categorizations---Respondent / complainant is a housewife, therefore, she cannot be considered well-informed and vigilant investor who can understand the risk-bearing factors of equity funds ; thus, the appellant had not acted in her best interest and failed to ensure reasonable care regarding the suitability of the investment product offered to complainant---However, appellant had apprised the Appellate Bench that without admitting the guilt and on compassionate grounds, a compromised deed had been executed between the parties with the amount of loss suffered by respondent having been paid to her---Appellate Bench, while appreciating said compassionate act of compensation, converted the penalty into a warning---Appeal, was dispose of accordingly.

(d) Non-Banking Finance Companies and Notified Entities Regulations, 2008---

----Reglns. 66A(c)(i), 66A(c)(iv), 66A(d) & 66A(f)---Investing in equity/Mutual Funds---Investment risks---Scope---Securities and Exchange Commission of Pakistan---Powers and responsibilities---Appellant (Fund Management Company) was penalized by the Securities and Exchange Commission of Pakistan (Commission) on complaint of lady investor (a housewife who had invested an inherited amount) who redeemed the availed plan owing to loss of principal investment allegedly due to contraventions on the part of the appellant---Plea of the appellant was that any adverse decision (in this appeal ) may undermine the growth of the mutual funds industry in Pakistan---Validity---Appellate Bench, while rejecting the appellant's plea, was of the view that while protecting the growth of mutual funds or other regulated activities, the Securities Exchange Commission of Pakistan (the Commission) cannot overlook the violations committed by the regulatees and especially when cases of investor exploitation by the regulatees are evident---As per the requirements of the Securities and Exchange Commission of Pakistan Act, 1997, the Commission has the responsibility to protect both: whether it is a regulated entity or an investor---However, appellant had apprised the appellate bench that without admitting the guilt and on compassionate grounds, a compromised deed had been executed between the parties with the amount of loss suffered by Respondent having been paid to her---Appellate Bench, while appreciating said compassionate act of compensation, converted the penalty into a warning---Appeal, was dispose of accordingly.

For the Appellant.

Sahar Iqbal (Counsel), Yasir Qadri (CEO) and Hadi Hassan Mukhi (Head of Risk and Compliance).

For the Respondents.

Mahboob Ahmed, Additional Director, Adjudication-I, Securities and Exchange Commission of Pakistan and Ms. Asima Wajid, Additional Joint Director (Adjudication-I), Securities and Exchange Commission of Pakistan.

2025 C L D 435

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

HAJRA TEXTILE MILLS LIMITED---Petitioner

Versus

DIRECTOR, CORPORATE SUPERVISION DEPARTMENT, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.81 of 2017, decided on 4th July, 2024.

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

----S. 33(1)(a)---Companies Ordinance (XLVII of 1984) [since repealed], S. 231---Administrative (Inspection) order passed by Securities and Exchange Commission of Pakistan (SECP)---Appeal before the Appellate Bench of SECP---Maintainability---Appellant (Textile Mills) assailed inspection order passed by the Director-Corporate Supervision Department (CSD), SECP, (Respondent) under S. 231 of the Companies Ordinance, 1984 ('the Ordinance, 1984')---Validity---Impugned order was an order to inspect the books and records of the Appellant which had been passed in accordance with law---Section 33(1)(a) of Securities and Exchange Commission of Pakistan Act, 1997 states that no appeal shall lie against "an administrative direction given by a Commissioner or an officer of the Commission"---Exercise of powers under S. 231 of the Ordinance, 1984 was administrative in nature and limited to conducting inspection and preliminary inquiries into the affairs and books of accounts and papers of a company---If the orders passed by the Commission in terms of S.231 of the Ordinance, 1984 were subject to challenge that would paralyze functions of the Commission which would not be expected to perform its regulatory functions---It is the prime responsibility of the Commission as a regulator to collect information for effective enforcement of the laws being administered by it, and in the absence of such information, the Commission cannot be expected to make fair and impartial decisions---Therefore, it is extremely important for the regulatees /concerned persons to fully cooperate for providing such information---There was no reason to interfere in impugned inspection order---Appeal, being non-maintainable, was dismissed, in circumstances.

Ofspace (Private) Limited v. Federation of the Islamic Republic of Pakistan and 3 others 2012 CLD 923 and Saif Power Limited v. Federation of the Islamic Republic of Pakistan 2022 CLD 1382 ref.

Sardar Qasim Hassan Khan for Appellant.

Muhammad Tanver Alam, Additional Director, Supervision Division, SECP for Respondent.

Kashif Ali, Joint Director, Supervision Division, SECP for Respondents.

2025 C L D 872

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

The UNITED INSURANCE COMPANY OF PAKISTAN LIMITED---Appellant

Versus

The HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD---Respondent

Appeal No.53 of 2022, decided on 1st January, 2025.

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

----Ss. 156 & 166---SRO No. 1545(I)/2019 dated December 6, 2019---Insurance of public property, matter of---Violations---Penalty, imposition of---Powers---Sub-delegation---HOD-Adjudication---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company) on a complaint lodged by National Insurance Company Limited (NICL/Complainant) for underwriting insurance policies of vehicles of a public sector entity (PASSCO)---Appellant raised objections regarding SRO No. 1545(I)/2019 dated December 6, 2019 ('the SRO') including that the delegation of powers under S. 156 of the Insurance Ordinance, 2000 ('the Ordinance, 2000') to Commissioner Insurance, HOD-Adjudication-I and Wing Head Adjudication-1 tantamount to sub-delegation of the Commission's powers---Validity---Filing of a complaint to seek clarification regarding the SRO had no bearing on the merits of the case and it appeared that while relying on such ground, the Appellant was trying to evade the due process of law---Through the SRO, powers under the different administered legislations of the Commission had been delegated to the Commissioners, Heads of Department and Wing Heads---Section 156 of the Ordinance, 2000 was a penal clause that was delegated to different persons to adjudicate the matters involving violations of the substantive provisions of the Insurance Ordinance, 2000---Sub-delegation was the process whereby a delegate further delegated powers delegated to him, to any third person, but in the present case, the Commission had directly delegated its powers to different persons including the Respondent---Preamble of the SRO was self-explanatory that the Commission had delegated its powers through the SRO to different officers, so the question of sub-delegation did not arise---Thus, the Appellant's objections were mis-conceived---Appeal, filed by Insurance Company, being merit-less was dismissed, in circumstances.

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

----S. 24-A---Insurance Ordinance (XXXIX of 2000), Ss. 156 & 166---Insurance of public property, matter of---Violations---Penalty, imposition of---Non-speaking order, plea of---Scope and effect---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company ) on a complaint lodged by National Insurance Company Limited (NICL/Complainant) for underwriting insurance policies of vehicles of a public sector entity (PASSCO) ---Argument of the Appellant was that the Impugned Order was a non-speaking order---Validity---Commission / Respondent adequately explained in the Impugned Order how the law was violated and provided reasons to implicate the Appellant---Thus, the Appellant's objection was mis-conceived---Appeal, filed by Insurance Company, being merit-less was dismissed, in circumstances.

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

----Ss. 156 & 166---Insurance of public property, matter of---Violations---Complaint, filing of---Limitation---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company) on a complaint lodged by National Insurance Company Limited (NICL/Complainant ) for underwriting insurance policies of vehicles of a public sector entity (PASSCO)---Argument of the Appellant was that there was delay in filing of the complaint by NICL---Validity---Appellant had failed to corroborate said argument with the any relevant legal provision that stated that NICL's case was barred by the statute of limitations---Insurance Ordinance, 2000 ('the Ordinance') and secondary legislation made under the Ordinance did not prescribe a limitation period for filing a complaint, therefore, Appellant's assertion (that the complaint filed by NICL was time-barred) was misconceived---Furthermore, principles envisaged under the legal framework of the criminal justice system were not applicable in the present case---This was not a case of a delayed complaint rather, it was about the fact that as to when, how and by whom the law had been violated---Respondent had not taken action against the Appellant to undo the effect of the transaction whereby insurance policies were issued by the Appellant for PASSCO vehicles, but to proceed against the violation of S. 166 of the Insurance Ordinance, 2000---Filing a delayed complaint did not bar the Commission from taking action against the violation that came on record through a complainant---Thus, the violation committed by the Appellant had been duly dealt with by the Respondent---Furthermore, the case laws referred by the Appellant were not binding on the Bench, because the said orders were passed by the subordinate adjudicating authorities--- Moreover, every case had its own merits and circumstances, therefore, the decision in one case was not ipso facto applicable in other cases---Appeal, filed by Insurance Company , being merit-less was dismissed, in circumstances.

PLD 2019 SC 64 distinguished.

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

----Ss. 156 & 166---Insurance of public property, matter of---Violations by Insurance Company---Penalty, imposition of---Mens Rea---Scope---Ignorance of law---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company ) on a complaint lodged by National Insurance Company Limited (NICL/Complainant ) for underwriting insurance policies of vehicles of a public sector entity (PASSCO) ---Assertion of the Appellant was that the Respondent/Commission was required to establish mens rea (guilty mind) before proceeding against the Appellant under S. 156(6) of the Insurance Ordinance 2000 because the Appellant being a regulatee under the Insurance Ordinance 2000 was required to have complete knowledge and information regarding the ambit of operations and restrictions imposed under the law---Legal principle of law, "ignorantia juris non excusar" (ignorance of the law excuses not), or "ignorantia legis neminem excusat" (ignorance of law excuses no one), is explicit and holds that a person who is unaware of a law may not escape liability for violating that law merely by being unaware of its content---Furthermore, ignorance of the law may be considered as a valid argument inparticular cases where violations are committed by a third person, having no direct or indirect concern with the relevant law, however, a regulatee or any other stakeholder under the relevant law cannot take a defense that they were not aware of such law---Appeal, filed by Insurance Company, being merit-less was dismissed, in circumstances.

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

----Ss. 156 & 166---Insurance of public property, matter of---Violations---Penalty, imposition of---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company ) on a complaint lodged by National Insurance Company Limited (NICL/Complainant ) for underwriting insurance policies of vehicles of a public sector entity (PASSCO) ---Validity---Appellant could not absolve itself on the grounds that tender to procure insurance policies was issued by the public sector entity (PASSCO), which had complete knowledge of the transaction, and that the Appellant was not liable under the law---Two wrongs did not so make one right, therefore, if PASSCO, while inviting insurance policies for its vehicles, had not proceeded as per the requirements of S. 166 of the Insurance Ordinance, 2000, then this illegality did not make it permissible for the Appellant to either participate or secure such a tender---PASSCO also failed to obtain an NOC from NICL while initiating the procurement process under the PPRA Rules---Law had been violated by both parties i.e. the Appellant as well as PASSCO, therefore, legal proceedings should have been initiated against both parties---Matter-at-hand was against the Appellant, however, the record was silent on whether any proceedings against PASSCO were ever instituted or not---In the event that no proceedings were ever initiated against PASSCO, Appellate Bench, SECP directed the relevant department of the Commission to proceed against PASSCO as per law for evading the requirements of S. 166 of the Insurance Ordinance, 2000---Appeal , filed by Insurance Company, being merit-less was dismissed, in circumstances.

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

----Ss. 156 & 166---Insurance of public property, matter of---Violations---Penalty, imposition of---Principle of estoppel by acquiescence---Scope---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (Insurance Company) on a complaint lodged by National Insurance Company Limited (NICL/Complainant) for under writing insurance policies of vehicles of a public sector entity (PASSCO)---Validity---Estoppel was a legal principle that prevented someone from arguing something or asserting a right that contradicted what they previously agreed to or said, therefore, this principle was not applicable in the present case because the Appellant had failed to establish acquiescence of NICL with respect to the transaction-in-question---Principle of estoppel by acquiescence was a legal concept that applied when one party acted on an assumption that the other party acquiesced in, therefore, non-issuance of NOC by NICL was sufficient to establish that neither the NICL agreed with the tender bid process initiated by PASSCO nor it had knowledge that PASSCO had issued a tender /bid---Furthermore, failure on the part of public or government functionaries to proceed as per the requirements of law did not allow the Appellant to ignore its responsibility under the Insurance Ordinance, 2000---Appellant being a regulatee under the Insurance Ordinance, 2000, was required to ensure that the requirements of S. 166 were duly met, however, it failed to proceed diligently as per law---Appeal, filed by Insurance Company, being merit-less was dismissed, in circumstances.

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

----Ss. 156 & 166---Insurance of public property, matter of---Violations---Penalty, imposition of---Provisions under S. 166 of the Insurance Ordinance, 2000---Exceptions, benefit of---Securities and Exchange Commission of Pakistan ('Commission') penalized Appellant (insurance Company) on a complaint lodged by National Insurance Company Limited (NICL/Complainant) for underwriting insurance policies of vehicles of a public sector entity (PASSCO)---Contention of the Appellant was that there was some ambiguity in S. 166 of the Insurance Ordinance 2000---Held, that Appellant was not entitled to secure the tender bid issued by PASSCO for insurance of its vehicles except as otherwise provided under subsections (4), (5) and (6) of S.166 of the Insurance Ordinance, 2000---Appellant failed to demonstrate that it was entitled to get the benefit of the exceptions provided in said subsections of S. 166 of the Insurance Ordinance, 2000---Appeal, filed by Insurance Company, being merit-less was dismissed, in circumstances.

Ali Ibrahim for Appellant.

Shafiq-ur-Rehman, Additional Joint Director, Adjudication-I, SECP for Respondent.

2025 C L D 903

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

UNITED INSURANCE COMPANY LIMITED---Appellant

Versus

The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD---Respondent

Appeal No.44 of 2022, decided on 18th November, 2024.

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

----S. 156---SRO No. 1545(I)/2019 dated 06-12-2019---Penalty for contravention of provisions relating to Insurance Ordinance, 2000---Legislation---Delegation of powers ---Sub-delegation---Scope---Appellant (Insurance Company) was penalized by the Director /HOD of Adjudication Department of Securities and Exchange Commission of Pakistan (Respondent)---Argument of the appellant was that delegation of powers under S. 156 of the Insurance Ordinance, 2000, to respondent amounted to sub-delegation---Validity---Section 156 of the Insurance Ordinance, 2000, was is a penal clause that was delegated in different persons to adjudicate the matters involving violations of the substantive provisions of the Insurance Ordinance, 2000---Furthermore, the Securities and Exchange Commission of Pakistan ('Commission') had delegated its powers through SRO No. 1545(I)/2019 ('the SRO') to various persons, therefore, it was not sub-delegation, rather it was a direct delegation of powers---Sub-delegation was the process whereby a delegatee further delegates powers delegated tohim to any third person, however, in the present case, the Commission directly delegated its powers to different persons including the Respondent (Director /HOD of Adjudication Department of Commission), therefore, it could not be considered as sub-delegation---Even the preamble of the SRO was self-explanatory, that the Commission had delegated its powers through the SRO to different officers, therefore, the question of sub-delegation did not arise---Even otherwise, S. 156 of the Insurance Ordinance, 2000, was not relevant to the present case because neither the Show Cause Notice was issued under the said section nor the impugned order had relied upon the said provision---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the Appellant for calculation of solvency had been duly established by the Respondent which included "related party" receivables while calculating solvency---Appeal, filed by Insurance Company, was dismissed.

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

----Ss.32(2)(g) & 32(7)---Admissible assets---"Related parties"---Receivables from such entities---Calculation of solvency, non-admissibility of---Misreporting of financial facts---Effect---Appellant (Insurance Company) was penalized by the Securities and Exchange Commission of Pakistan ('Commission') for misreporting regarding admissible assets---Validity---Section 32(2)(g) of the Insurance Ordinance, 2000, stipulates that receivables from "related parties" cannot be admitted as admissible assets while calculating the solvency, and criteria to establish the 'related parties" status has been provided in S. 32(7) of the Insurance Ordinance, 2000---Keeping in view the said both provisions, the Respondent / Commission had adequately and reasonably adjudged in the impugned order that the inclusion of receivables from "related parties "as an admissible asset for solvency calculation was a violation of S. 32(2)(g) of the Insurance Ordinance, 2000---Notably, in the impugned order, the Respondent had established that the Appellant and concerned banking company were "related parties" in terms of S. 32(7) of the Insurance Ordinance because in both companies, shareholding of the Appellant exceeded 49%---Thus, the Respondent had adequately explained that two companies-in-questions had an effective shareholding of 87.79% and 67.75% in the Appellant and Banking Company, therefore, both companies were "related parties " in terms of S. 32(7) of the Insurance Ordinance, 2000---On the same premise, the Respondent had established the "related party" status of the Appellant with two companies/entities-in-question, therefore, receivables from such entities were also not admissible for calculation of solvency---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the Appellant for calculation of solvency had been duly established by the Respondent which included "related party" receivables while calculating solvency---Appeal, filed by Insurance Company, was dismissed.

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

----S. 24-A---Insurance Ordinance (XXXIX of 2000), Ss. 32(2)(g) & 32(7)---Admissible assets---"related parties", matter of---Passing of non-speaking order, allegation of---Appellant (Insurance Company) was penalized by the Securities and Exchange Commission of Pakistan (Respondent /Commission) for misreporting of financial facts---Argument of the Appellant was that the impugned order was a non-speaking order---Validity---Impugned Order was well-reasoned as perusal of relevant paragraph of the same (impugned order) revealed that the Respondent had explained that concerned (banking) Company and the Appellant were related parties due to relevant direct and indirect shareholdings, therefore, it could not be assumed that the case was based on premise of direct shareholding alone, therefore, the Appellant's assertion of a "non-speaking order" was without any substance---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the Appellant for calculation of solvency had fairly been established by the Respondent which included "related party" receivables while calculating solvency---Appeal, filed by Insurance Company , was dismissed.

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

----Ss. 32(2)(g) & 32(7)---Admissible assets---Balances / amounts etc. due from "related parties"---"Direct" and "indirect" ownership---Securities and Exchange Commission of Pakistan ('Commission') assuming the role of the legislature, allegation of---Appellant (Insurance Company) was penalized by the Securities and Exchange Commission of Pakistan ('Commission') for misreporting regarding admissible assets---Assertion of the Appellant was that related party status could only be determined through direct shareholdings and by including indirect shareholdings while calculating "ownership" stake of "related parties", the Respondent / Commission, violated the principle of casus omissus, had assumed the role of legislature---Validity---The term "ownership" used in S. 32(7) of the Insurance Ordinance, 2000, does not provide that "ownership" means only "direct ownership"---The term "ownership" includes direct as well as indirect ownership interest---If the Appellant's assertion (that related party status could only be determined through direct shareholdings was held to be correct then one may defeat the purpose of the law by acquiring more than 49% ownership interest through indirect ownership interest---Such a flawed interpretation would defeat the purpose of S. 32(2)(g) of the Insurance Ordinance, 2000, which states that "related party", receivables are not admissible for the calculation of solvency---Thus, by considering "direct" and "indirect" ownership while establishing related party status under S. 32(7) of the Insurance Ordinance 2000, the Respondent had not assumed the role of the legislature---Additionally, there was no legislative deficit or fault in the relevant statute, thus the appellant's argument that the law was being applied was beyond what the legislature intended was baseless---Provision was explicit and it referred to "ownership" which included "direct" as well as "indirect" ownership---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the Appellant for calculation of solvency had been duly established by the Respondent which included "related party" receivables while calculating solvency---Appeal, filed by Insurance Company, was dismissed.

2019 PTD 2209; PLD 1961 SC 468 and 2006 PTD 386 distinguished.

Ali Ibrahim for Appellant.

Shafiq-ur-Rehman, Additional Joint Director, Adjudication-I, SECP for Respondent.

2025 C L D 1236

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Mujtaba Ahmad Lodhi, Commissioner

Messrs AGRITECH LIMITED and others---Appellants

Versus

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

Appeals Nos.65 of 2020 and Appeal No. 31 of 2021, decided on 14th November, 2023.

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

----Ss. 132, 147, 223 & 237---Provisions /requirements under S. 237 of the Companies Act, 2017---Scope---Default by company---Effect---Extension under S. 147 of the Companies Act, 2017---Scope---Company was penalized for contravention of S. 237 of the Companies Act, 2017---Plea of the Appellant / Company was that extension was given to it on its application under S. 147 of the Companies Act, 2017---Validity---Provision under S. 237 of the Companies Act, 2017, reveals that a listed company is under an obligation, inter alia, to electronically transmit to the Commission its quarterly financial statements within the time frame provided in subsection (1) of the S. 237 of the Act---In view of S. 147 of the Companies Act, 2017, the legislative intent is to bring a company, which has committed default by not holding AGM, within the compliance of regulatory ambit---However, entertaining application of appellant / company (under S. 147 of the Companies Act, 2017) does not in any manner suggest that the appellant / company was given extension in time in terms of Ss. 223 & 132 of the Companies Act, 2017, to lay the financial statement and hold AGM respectively, rather it was a direction given through the impugned order to lay the statements and hold the overdue AGM for the relevant period---Similarly, S. 237 of the Companies Act, 2017, provides the stipulations for transmitting quarterly financial statements while also providing room for extension in filing in case of accounts of the first quarter if the company is allowed extension in terms of S. 223 of the Companies Act, 2017---Thus, timeline provided in the S. 223 of the Companies Act, 2017, is understandably aligned with S. 132 of the Companies Act, 2017, to create harmony amongst both the provisions as financial statements are to be laid before the company AGM---This fortifies the legislative intent behind S. 237 of the Companies Act, 2017, as extension in period for transmitting accounts of first quarter may only be granted where extension under S. 223 of the Companies Act, 2017, has already been allowed and clearly has no nexus with S. 147 of the Companies Act, 2017, which being a stand-alone provision aims to ensure compliance of inter alia holding AGM of the company , once the default is established---Non-compliance on the part of appellant / company was apparent , requiring no interference with the impugned order by the Appellate Bench---Appeal was dismissed, in circumstances.

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

----Ss. 132, 147, 223 & 237---Provisions /requirements under S. 237 of the Companies Act, 2017---Scope---Default by company---Effect---Extension under S. 147 of the Companies Act, 2017---Scope---Company was penalized for contravention of S. 237 of the Companies Act, 2017---Plea of the appellant / company was that extension was given to it on its application under S. 147 of the Companies Act, 2017---Validity---Section 237 the Companies Act, 2017, empowers the Commission to grant, upon an application by a company, extension in period of filing in case of accounts of first quarter for a period not exceeding thirty days provided company is allowed extension in terms of S. 223 of the Companies Act, 2017---In the present case, the Commission did grant an extension for filing accounts of first quarter, however, the same was not complied with within the stipulated time---Non-compliance on the part of appellant / company was apparent, requiring no interference with the impugned order by the Appellate Bench---Appeal was dismissed, in circumstances.

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

----Ss. 132, 147, 223 & 237(1)(b), second proviso---Circular 10 of 2020 dated April 01, 2020---Provisions / requirements under S. 237 of the Companies Act, 2017---Scope---Default by company---Effect---Extension under S. 147 of the Companies Act, 2017---Scope---Company was penalized for contravention of S.237 of the Companies Act, 2017---Plea of the appellant / company was that the impugned order was in contravention of Circular 10 of 2020 dated April 01, 2020 (Circular )---Validity---Said circular explicitly states that the law does not provide for any relaxation in timeline for filing of quarterly financial statements except first quarter financial statements i.e. second proviso to S. 237(1)(b) of the Companies Act, 2017---Directions under S. 147 of the Companies Act, 2017, to hold AGM can in no manner be treated as an automatic extension for filing the quarterly financial statements as the same is being dealt with under S. 237 of the Companies Act, 2017, which is an independent provision of law---Non-compliance on the part of appellant / company was apparent, requiring no interference with the impugned order by the Appellate Bench---Appeal was dismissed, in circumstances.

Ms. Rabia Hassan for Appellant (in Appeal No.65 of 2020).

Ms. Asma Irfan -- Company Secretary for Appellant (in Appeals Nos.65 of 2020 and 31 of 2021).

Rashid Sadiq for Appellant (in Appeal No.31 of 2021).

M. Azeem Rashid for Appellant (in Appeal No.31 of 2021).

Asif Iqbal, Director, PRDD, SECP for Respondent (in Appeal No.65 of 2020).

Ms. Sumaira Siddiqui, Additional Director, PRDD, SECP for Respondent (in Appeal No.65 of 2020).

Mahboob Ahmad, Additional Director, Adjudication-I, SECP for Respondent (in Appeal No.31 of 2021).

Muhammad Anwar Hashmi, Additional Joint Director, Adjudication-I, SECP for Respondent (in Appeal No.31 of 2021).

Raja Farukh Ahmad, Additional Joint Director, Adjudication-I, SECP for Respondent (in Appeal No.31 of 2021).

2025 C L D 1256

[Securities and Exchange Commission of Pakistan]

Before Abdul Rehman Warraich and Mujtaba Ahmad Lodhi, Commissioners

FIRST NATIONAL EQUITIES LIMITED---Appellant

Versus

COMMISSIONER (SMD)---Respondent

Appeal No.66 of 2019, decided on 31st January, 2025.

Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2018---

----Reglns. 6(3), 6(4), 11(2) & 13---Joint Inspection Regulations, 2015, Cl. 19(e)---Anti-money laundering provisions, requirements of---Non-compliance of said requirements---Effect---Thematic review, conducting of---A thematic review (Review) was initiated under Cl.19(e) of Securities and Exchange Commission of Pakistan Joint Inspection Regulations, 2015 ('the Regulations, 2015') against a Trading Rights Entitlement Certificate holder of the Pakistan Stock Exchange Limited (the Appellant) with the scope to review and check compliance with respect to the Securities and Exchange Commission of Pakistan (Anti-Money Laundering and Countering Financing of Terrorism) Regulations, 2018, ('the AML Regulations, 2018')---Appellant was penalized by Securities and Exchange Commission of Pakistan ('the Commission') for its failure to maintain proper mechanism and for discrepancies in Know Your Customer/Customer Due Diligence (KYC/CDD)---Validity---Appellant was obligated to fully comply with AML Regulations, 2018, however, it failed to do so---Notably, at the time of Review, the appellant had no ongoing monitoring mechanism to ensure compliance with the AML Regulations, 2018, therefore, such non-compliance had compromised the requirements contained under the AML Regulations, 2018---Appellant, by ignoring the Know Your Customer/Customer Due Diligence (KYC/CDD) requirements, had also undermined the sanctity of the AML 7Regulations, 2018---Thus, the appellant's failure to ensure adequate ongoing monitoring mechanism and adherence to KYC/CDD requirements had serious consequences, therefore, there was no reason to interfere with the merits of the impugned order---Appeal was dismissed in circumstances.

Arslan Tahir for Appellant.

Mehboob Ahmad (Additional Director, Adjudication-I, SECP) for Respondent.

Muhammad Faisal (Assistant Director Adjudication-I, SECP) for Respondent.

Zenia Rahat (Management Trainee Adjudication-I, SECP) for Respondent.

2025 C L D 1309

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Mujtaba Ahmad Lodhi Commissioner

TAKAFUL PAKISTAN LIMITED and others ---Appellants

Versus

The DIRECTOR (INSURANCE) INSURANCE DIVISION, SECP ---Respondent

Appeal No. 108 of 2017, decided on 3rd June, 2024.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1), 28 & 156---Securities and Exchange Commission (Insurance) Rules, 2002, R. 9---SRO 828(I)/2015 dated 18-08-2015---Requirement to meet the minimum paid-up-capital---Failure---Margin of good faith or benefit of "clean hands"---Appellants (Takkaful /Insurance Company and its directors) were penalized by the Director Insurance, Securities and Exchange Commission of Pakistan, for failing to meet the requirement to raise its paid-up capital for the relevant periods---Validity---Appellants had not denied in the pleadings that the Company was required to meet the requirement of the minimum paid-up capital of Rs. 500 million on December 31, 2017---Appellants admitted that the said requirement was subsequently met on June 30, 2018---Record revealed that the Company attempted to issue the right shares through two transactions to enhance its paid-up capital, however, such efforts could not succeed and materialize in time---Thus, the Company was aware of its responsibility to enhance its paid-up capital and in said regard its efforts were on record, therefore, the margin of good faith or benefit of "clean hands" should have been given to the appellants---Furthermore, most of the directors who were penalized via the impugned order were no longer on the Company's board, therefore, maintaining the penalty order against such directors would not serve the purpose as the Company subsequently complied with the requirement of minimum paid-up capital---Appellate Bench while maintaining the merits of the impugned order converted the penalty into a warning---Appeal was disposed of accordingly.

Muhammad Hassan Abbas (Mohsin Tayebaly & Co.) for Appellants.

Shafiq-ur-Rehman, Additional Joint Director, Adjudication-I, SECP and Raja Farukh Ahmad, Additional Joint Director, Adjudication-I, SECP for Respondent.

2025 C L D 1453

[Securities and Exchange Commission of Pakistan]

Before Aamir Khan and Abdul Rehman Warraich, Commissioners

HASEEB WAQAS SUGAR MILLS LIMITED---Appellant

Versus

HEAD OF DEPARTMENT/ED-CSD, CLD, SECP and another---Respondents

Appeal No.12(13)/Misc/ABR/2022 (Objection Case), decided on 3rd November, 2023.

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

----S.257---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Investigating order passed under S.257 of the Companies Act, 2017, challenging of---Appeal before the Securities and Exchange Commission of Pakistan (SECP)---Maintainability---An investigation order under S.257 of the Companies Act, 2017 was passed by the HOD, Corporate Supervision Department-Securities and Exchange Commission of Pakistan, against the Company---Appellant, after invoking constitutional jurisdiction of the High Court twice, approached the Appellate Bench, however, was confronted with question of maintainability vide a letter sent by the Registrar-SECP---Contention of the Appellant was that the question of maintainability of the appeal (before the SECP) had already been determined by the High Court---Validity---Record revealed that in said order passed by the High Court in its constitutional jurisdiction, letter of Registrar-SECP was challenged by the Appellant, wherein order was passed that the matter (of maintainability) be placed before the appellate Bench for decision in accordance with law---Thus, the contention of the Appellant was not tenable---Appeal filed by the Company, being not maintainable, was dismissed.

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

----S. 33(1), proviso---Companies Act (XIX of 2017), S.257---Investigating order passed under S.257 of the Companies Act, 2017, challenging of---Appeal before the Securities and Exchange Commission of Pakistan(SECP)---Maintainability---An investigation order under S.257 of the Companies Act, 2017, was passed by the HOD, Corporate Supervision Department-SECP against the Company---Appellant/Company, in order to assail investigating order, approached the Appellate Bench, however, was confronted with question of maintainability vide a letter sent by the Registrar-SECP---An investigation is a fact-finding exercise conducted with the aim of ascertaining the accurate state of affairs pertaining to companies, hence, the same is not appealable in view of an express bar contained in S.33 of the Securities and Exchange Commission of Pakistan Act, 1997---Furthermore, an order passed under S.257 of the Companies Act, 2017, is an administrative order as the same does not result in determination of rights and liabilities and is also not penal in nature per se, therefore, the same is not appealable and falls within the proviso to subsection (1) of the S.33 of the SECP Act---Appeal filed by the Company, being non-maintainable, was dismissed.

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

----S.257---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33(1), proviso---Investigating order passed under S.257 of the Companies Act, 2017, challenging of---Appeal before the Securities and Exchange Commission of Pakistan(SECP)---Maintainability---An investigation order under S.257 of the Companies Act, 2017, was passed by the HOD, Corporate Supervision Department-SECP against the Company---Appellant /Company, in order to assail investigating order, approached the Appellate Bench, however, was confronted with question of maintainability vide a letter sent by the Registrar-SECP---Contention of the Appellant /Company was that the two judicial precedents [i.e. 'Depilex Smile again Foundation v. SBCP and others' (2019 CLD 861) and Attock Refinery Limited v. Executive Director, Enforcement and Monitoring Division, SECP (2010 CLD 774 SC) relied upon in the letter of the Registrar-SECP were distinguishable---Validity---Both the said judicial precedents highlighted a pivotal point that inter alia an investigation order was an exploratory measure and not an end by itself---Thus, applicability of both the case laws(judicial precedents) in the matter could be disregarded---Appeal filed by the Company, being non-maintainable, was dismissed.

Depilex Smile again Foundation v. SBCP and others' (2019 CLD 861) ref.

Attock Refinery Limited vs. Executive Director, Enforcement and Monitoring Division, SECP 2010 CLD 774 ref.

Hasham Ahmad Khan for Appellant.

2025 C L D 1524

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Abdul Rehman Warraich, Commissioner

MEEZAN BANK LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR (ADJUDICATION DEPARTMENT-I) SECP, ISLAMABAD---Respondent

Appeal No.08 of 2021, decided on 2nd May, 2024.

Debt Securities Trustee Regulations, 2017---

----Reglns. 10(3), 10(4) & 10(5)---Securities Act (III of 2015), Ss. 64 & 159(5)---Requirements for a debt securities trustee, compliance of---Renewal application, submission of---Appellant (Bank registered as a debt securities trustee) was penalized by the Securities and Exchange Commission of Pakistan ('the Commission) for contravention of Debt Securities Trustee Regulations, 2017 ('the DST Regulations')---Argument of the appellant was that default was not willful and it was in the process of preparation of documents for submission of a renewal application before receiving the reminder letter from the Commission---Validity---Though the appellant had an obligation to adhere to the relevant requirements of the DST Regulations which should have been timely followed by the appellant in true letter and spirit, however admittedly, a renewal application was subsequently filed---Under the licensing regime a license holder is under strict legal obligation to comply with the relevant applicable requirements, therefore, question of willfulness and its absence is irrelevant---In the present case, the appellant had successfully proved that it was in process to file renewal application when a reminder letter of the Commission was received, which (application ) was filed though with delay of one month---Thus, exorbitant amount of penalty had been imposed without any quantification of penalty---Appellate Bench converted the penalty into a stern warning and directed the appellant to be vigilant and compliant in future with respect to its legal, regulatory and licensing obligations---Appeal was disposed of accordingly.

Sajjad Ali (Legal Counsel) for Appellant.

Rehan Waheed (Meezan Bank Representative) for Appellant.

Zains Shafqat for Appellant.

Mohammad Akram, Assistant Director, Adjudication-I, SECP for Respondents.

Raja Farukh Ahmad, Additional Joint Director, Adjudication-I, SECP for Respondent.

2025 C L D 1537

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Chairman/Commissioner and Mujtaba Ahmad Lodhi, Commissioner

NASIR ALI---Appellant

Versus

COMMISSIONER INSURANCE---Respondent

Appeal No.100 of 2017, decided on 20th March, 2024.

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

----S. 33---Appeal before the Securities and Exchange Commission of Pakistan ('the Commission')---Non-appearance of the appellant---Effect---Appellant assailed an order passed by the Commissioner Insurance , which was fixed for hearing, however, neither any person appeared on behalf of the appellant nor any application for adjournment had been received---In view of the said circumstances, it appeared that the Appellant had no interest in pursuing the present appeal, therefore, the same was dismissed for non-appearance and non-prosecution---Appeal was dismissed accordingly.

Nemo for Appellant.

Shafiq ur Rehman, Additional Joint Director, Adjudication Department-I and Raja Ahmad, Additional Joint Director, Adjudication Department-I for Respondents.

2025 C L D 1621

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed Chairman/Commissioner and Mujtaba Ahmad Lodhi, Commissioner

Messrs EFU GENERAL INSURANCE LIMITED---Applicant

Versus

EXECUTIVE DIRECTOR, INSURANCE-SECP---Respondent

Review Application No.02 of 2017 and Appeal No.53 of 2012, decided on 4th October, 2023.

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

----S. 33---Insurance Ordinance (XXXIX of 2000), S. 45---Review of the order passed by the Appellate Bench Securities and Exchange Commission in appeal---Scope---Applicant (Insurance Company) sought review of an order passed by the Appellate Bench whereby penalty was imposed on account of non-compliance of S. 45 of the Insurance Ordinance, 2000---Argument of the applicant was that S. 45 of the Insurance Ordinance, 2000 allowed maintaining books and records in electronic form which were available for inspection, however, the inspection team insisted on providing the 116 missing claim files in physical form, which (files) were not available due to the reason that they were lost during shifting of offices of the applicant despite taking reasonable measures---Validity---Record revealed that the said argument / contention of the applicant had already been considered by the Appellate Bench while passing the impugned order and determination on questions of facts and law had already been made thereunder---Applicant failed to highlight legal or factual error discernable on the surface of the impugned order---Review application was dismissed.

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

----S. 33---Insurance Ordinance (XXXIX of 2000), S. 45---Review of order passed by the Appellate Bench Securities and Exchange Commission in appeal---Scope---Applicant (Insurance Company) sought review of the order passed by the Appellate Bench whereby penalty was imposed on account of non-compliance of S. 45 of the Insurance Ordinance, 2000---Applicant contended that the Bench had erred in imposing penalty on the applicant vide impugned order for the reason that survey reports were not available---Validity---Record revealed that matter regarding non-availability of the survey reports pertaining to the inspected claims had already been determined vide impugned order, thus contention of the applicant was not tenable---Applicant failed to highlight any legal or factual error discernable on the surface of the impugned order---Review Application was dismissed.

(c) Securities and Exchange Commission (Insurance) Rules, 2002---

----Rr. 24(1) & 24(2)---Motor insurance claims---Survey conducting of---Scope---Argument of the applicant was that, in terms of R. 24(2) of the Securities and Exchange Commission (Insurance) Rules, 2002 ('the Rules, 2002'), survey of motor insurance claims was not required where the claimed amount was below twenty-five thousand rupees---Validity---Sub-rule (2) of the R. 24 of the Rules, 2002, pertains to power of the Commission to issue direction to an insurer to conduct an independent insurance survey in the event of situations mentioned in sub-rule (1) of R. 24 of the Rules, 2002, subject to the threshold provided in sub-rule (2) thereof---Thus, argument of the applicant was mis-construed :firstly, for the reason that the applicant in its pleadings had admitted that as a policy, small losses below Rs. 25,000 were not uploaded to the internet system and the applicant started the practice of uploading all losses in their internet system from 2011; secondly , the said Rule provided the threshold in connection with the independent insurance survey to be conducted on the direction of the Commission and not the survey that was conducted as a consequence of filing of a claim by the policy-holder---Applicant failed to highlight legal or factual error discernable on the surface of the impugned Order---Review application was dismissed.

Rashid Sadiq and Azeem Rashid for Applicant.

Raja Farruk Ahmad, Additional Joint Director, Adjudication-I, SECP for Respondent.

Shafique Ur Rehman, Additional Joint Director, Adjudication-I, SECP for Respondent.

Obaid ur Rehman, Additional Director, Onsite Department, SECP (Member Inspection Team).

2025 C L D 150

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah, Ayesha A. Malik and Aqeel Ahmed Abbasi, JJ

Messrs MUGHALS PAKISTAN (PVT.) LIMITED---Appellant

Versus

EMPLOYEES OLD AGE BENEFITS INSTITUTION through Director Law, Lahore and others---Respondents

Civil Appeals Nos. 256 and 257 of 2024 and C.M.As. Nos. 3039 and 3042 of 2024, decided on 6th November, 2024.

(On appeal against the judgment dated 06.01.2024 passed by the Lahore High Court, Lahore in R.F.As. Nos. 43092 and 37623 of 2022).

(a) Alternate Dispute Resolution Act (XX of 2017)---

----S. 2(i)---Punjab Alternate Dispute Resolution Act (XVII of 2019), S. 2(b)---Balochistan Alternate Dispute Resolution Act (XXXI of 2022), S. 2(i)---Khyber Pakhtunkhwa Alternate Dispute Resolution Act (XLVIII of 2020), S. 2(a)---Civil Procedure Code (V of 1908) [as amended by the Code of Civil Procedure (Sindh Amendment) Act, 2018], S. 89-A(1)---Alternative Dispute Resolution ("ADR")---Mediation---Mediation is not merely an alternative to litigation but a complementary and necessary component of the justice system---Significance of mediation stated.

Mediation is evolving as a powerful mechanism for conflict resolution, bridging divides with creativity and fostering harmonious solutions. It is a testament to the potential of dialogue over confrontation. Mediation (and other mechanisms of Alternative Dispute Resolution (ADR)) can be philosophically framed as essential tools to ensure access to justice in a country where millions of cases are pending. This approach aligns with a broader understanding of justice as being not only about achieving outcomes but also about the process itself being fair, efficient, and accessible. Traditional court system is adversarial and often resource-intensive, leading to delays and alienation of marginalized groups. Mediation embodies a collaborative model of justice that prioritizes dialogue and empowerment, ensuring parties are active participants in resolving their disputes. The sheer volume of pending cases often renders justice delayed, and as the saying goes, "Justice delayed is justice denied." Mediation offers a timely and context-sensitive resolution that addresses the substance of disputes without being bogged down by procedural complexities. Philosophically, mediation reflects the relational nature of human beings. It prioritizes restoring relationships, preserving dignity, and finding mutually beneficial solutions over the zero-sum outcomes of litigation. Mediation accommodates the cultural, social, and economic diversity of disputing parties. It aligns with justice as capability enhancing, allowing parties to exercise their agency and reach solutions that reflect their lived realities. Mediation bridges modern legal systems with indigenous practices, thereby strengthening communal harmony while maintaining legal validity.

Mediation must be increasingly seen as a right of the parties within the litigation process. Access to justice includes the right to have disputes resolved in a timely and efficient manner. Mediation, as a faster and cost-effective alternative, satisfies this fundamental aspect of justice. Mediation respects the autonomy of the parties by giving them control over the process and outcome, unlike litigation, where outcomes are imposed by judges. Litigants have the right to avoid the adversarial consequences of litigation, such as financial strain, emotional distress, and reputational harm. Mediation provides a non-confrontational environment that mitigates these risks. Procedural justice emphasizes the fairness of the process, and mediation upholds this by ensuring participation, neutrality, and respect - core elements of a fair process. In contexts where economic inequalities limit access to legal representation, mediation ensures that the justice system remains accessible to the underprivileged. Many societies have strong traditions of community-led dispute resolution. Mediation builds on these traditions, ensuring justice remains culturally relevant. Mediation is at the heart of access to justice. Courts must embrace it as an essential tool for efficient and humane dispute resolution. In conclusion, mediation is not merely an alternative to litigation but a complementary and necessary component of the justice system.

Chief Justice Sundaresh Menon's speech titled "International Mediation and the Role of Courts" at the Supreme Court of Indonesia, November 2023 ref.

The reasons which make mediation a compelling choice for an appropriate avenue to resolve disputes efficiently and effectively, inter alia, include: (i) Cost-effectiveness; mediation incurs lower legal fees and expenses due to shorter and less formal processes; (ii) Time efficiency; resolutions can often be reached much faster through mediation than through court proceedings, which can take years to conclude, (iii) Flexibility; the procedures in mediation are flexible, allowing parties to tailor the specific processes to their specific needs, including choosing their mediator and deciding the rules for the proceedings, (iv) Confidentiality; unlike trials in courts which are generally public, mediation processes are private. This confidentiality can be crucial for preserving personal relationships, protecting trade secrets or avoiding negative publicity, (v) Preservation of relationships; mediation encourages cooperation and communication, which can help maintain or even improve relationships between parties, a key consideration in business context or family disputes, (vi) Control over the outcome; parties have more control over the resolution as they are directly involved in negotiating the settlement, (vii) Expertise; parties can choose an expert in the field relevant to their dispute to act as the mediator, which can lead to more informed decisions and (viii) Reduced hostility; mediation tends to be less adversarial than court litigation, which can reduce tensions and hostility between parties.

The courts should not only encourage mediating more and litigating less but also exhibit a promediation bias which connotes a pre-disposition within the legal system for resolution of disputes through mediation rather than through litigation or other forms of dispute resolution. Such bias does not favor one party over another but rather prioritizes mediation as the preferred method of dispute resolution. It is grounded in the belief that settlements are generally more efficient and satisfactory for all parties involved compared to outcomes determined by a court. Mediation offers the best chance of a solution where both parties leave with dignity and satisfaction, as opposed to the all-or-nothing results of litigation.

Taisei Corporation v. A.M. Construction 2024 SCMR 640; Commissioner Inland Revenue v. RYK Mills 2023 SCMR 1856; National Highway Authority v. Sambu Construction 2023 SCMR 1103; Orient Power Company v. Sui Northern Gas 2021 SCMR 1728; Federation of Pakistan v. Attock Petroleum 2007 SCMR 1095; Waqas Yaqub v. Adeel Yaqub 2024 CLD 990; Faisal Zafar v. Siraj-ud-Din, 2024 CLD 1; Fiaz Hussain Minhas v. SECP, C.O. No. 75025/2022 (unreported); Netherlands Financierings v. Morgah Valley 2024 CLD 685; Strategic Plans v. Punjab Revenue Authority PLD 2024 Lah. 545; Sohail Nisar v. Nadeem Nisar 2024 LHC 1435; Messrs Alstom Power v. Pakistan Water PLD 2007 Lah. 581; Shehzad Arshad v. Pervez Arshad 2024 CLD 1121; Focus Entertainment v. Television Media 2021 CLD 885; Asif S. Sajan v. Rehan Associates PLD 2012 Sindh 388; Messrs U.I.G v. Muhammad Imran Qureshi 2011 CLC 758; Miss Memoona Zainab Kazmi v. Additional District Judge 2023 CLC 207; Imperial Electric Company v. Zhongzing Telecom Pakistan 2019 CLD 609; Cowl v. Plymouth City Council [2001] EWCA Civ 1935 (per Lord Woolf LCJ) and Province of Punjab v. Haroon Construction Company 2024 SCMR 947 ref.

Encouraging mediation aligns with the broader goals of justice systems worldwide: to resolve disputes in a manner that is fair, efficient, and conducive to the longterm well-being of all parties involved. [p. 158] E

From a global perspective, the value of mediation as a method of amicably resolving disputes has been recognized in various international legal instruments including the United Nations Convention on International Settlement Agreements Resulting from Mediation, known as, the "Singapore Convention on Mediation", ("Singapore Convention"). The Convention provides a uniform and efficient framework for the recognition and enforcement of mediated settlement agreements that resolve international, commercial disputes - akin to the framework that the 1958 New York Convention provides for arbitral awards. To date, the Convention has 57 signatories, while only 12 states have ratified the same. To promote efficiency and align with the principle that 'in the future, it is likely that the traditional trial will be the exception rather than the rule' it is recommended that Pakistan becomes a signatory to the Convention. This will not only reduce the alarming backlog statistics through enhancing faster access to justice but will also serve as a turning point towards a comprehensive and profound transformation of the legal and judicial system.

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

----Ss. 17 & 20---Construction project---Disputes over extension of time and the encashment of Mobilization Advance Guarantees---Alternative Dispute Resolution ("ADR")---Mediation---In the present case the arbitral award passed by a two-member arbitral tribunal was made the Rule of Court by the Civil Court---Appeal was filed against the said judgment by the respondents before the High Court, which was allowed and the unanimous arbitral award was rendered a nullity---Respondents after initially expressing their unease with out of court settlement or "ADR" finally agreed to resolve their dispute through mediation in both the appeals---Respondents, however, reserved their right to expand the scope of their dispute before the mediator, provided both the parties mutually agreed to such a change---Supreme Court disposed of present appeals as being sent out for mediation, and observed that in case mediation or any other mode of ADR was unsuccessful, the parties may approach the Supreme Court and apply for the refixation of present appeals---Appeals were, therefore consigned to the record.

Ahmer Bilal Soofi, Advocate Supreme Court, Syed Ali Imran, Advocate Supreme Court and Sh. Mehmood Ahmed, Advocate-on-Record for Appellants.

Salman Mansoor, Advocate Supreme Court, Mian Shafqat Jan, Advocate Supreme Court, Barrister Khurram Raza, Advocate Supreme Court, Syed Rifaqat Hussain Shah, Advocate-on-Record, Sukhan Ilyas Malik, Dy. Dir. Law (EOBI) and Imran Shanwari, CEO PRIMACO for Respondents.

Assisted by Umer A. Ranjha, Judicial Law Clerk.

2025 C L D 402

[Supreme Court of Pakistan]

Present: Irfan Saadat Khan and Aqeel Ahmed Abbasi, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN, KARACHI ---Petitioner

Versus

NINA INDUSTRIES LIMITED, KARACHI and others---Respondents

Civil Petition No. 1721-K of 2021, decided on 19th December, 2024.

(Against the order dated 25.10.2021 passed by the High Court of Sindh, Karachi, in J.C.M. No. 49 of 2016).

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

----Ss. 284 & 285---Companies Court Rules, 1997, R. 55---Scheme of Arrangement---Secured and unsecured creditors---Rights---Petitioners were minor share-holders of respondent company, who were aggrieved of sanctioning of Scheme of Arrangement by High Court---Plea raised by petitioners was that Scheme of Arrangement catered only for interest of secured creditors while ignoring interest of minority creditors and share-holders---Validity---All codal formalities were complied with---Objectors before High Court were minor share-holders and unsecured creditors, who could not point out any illegality or violation of the provisions of Companies Ordinance, 1984, in the 'Scheme of Arrangement' between respondent company and its creditors, nor could refer to any legal defect or procedural irregularity in order passed by High Court while sanctioning the 'Scheme of Arrangement'---Pursuant to the order of High Court, meeting of all stakeholders including creditors and members was held, wherein, 100% share-holders of respondent company and 95.09% in value of secured creditors pursuant to vote at the meeting, consented to and also passed a resolution approving 'Scheme of Arrangement', which fact alone was sufficient to reflect upon the will of majority creditors/share-holders while considering Scheme of Arrangement as in the best interest of respondent company and its share-holders---Secured creditors, who were majority share-holders, did not suffer from any legal infirmity or procedural defect---Supreme Court declined to interfere in judgment passed by High Court as petitioners failed to raise any substantial question of law---Petition for leave to appeal was dismissed and leave to appeal was refused.

Khalid Mehmood Siddiqui, Advocate Supreme Court for Petitioner.

Ch. Atif Rafiq, Advocate Supreme Court for Respondent No.1.

2025 C L D 507

[Supreme Court of Pakistan]

Present: Syed Mansoor Ali Shah, Irfan Saadat Khan and Aqeel Ahmed Abbasi, JJ

KAUSAR RANA RESOURCES (PRIVATE) LIMITED and others ---Petitioners

Versus

QATAR LUBRICANTS COMPANY W.L.L. (QALCO) and others ---Respondents

C.P.L.A. No. 4468 of 2024, decided on 2nd December, 2024.

(Against the judgment of the Lahore High Court, Lahore, dated 24.06.2024, passed in C.M. No. 3 of 2023 in C.O. No. 48681 of 2023).

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

----Ss. 126, 127 & 278---Arbitration Act (X of 1940), Ss. 18 & 34---Pro-arbitration approach of Courts---Arbitration---Filing of award---Dispute pertaining to transfer of shares was initiated before High Court where proceedings were neither stayed under Arbitration Act, 1940 nor the matter was referred to Arbitrator---Validity---In addition to Supreme Court adopting a pro-arbitration approach, stance of referring for arbitration was also bolstered by the framework of Companies Act, 2017, which, through its Preamble, affirmatively advocated for alternative mechanisms to ensure expeditious resolution of corporate disputes---Companies were explicitly encouraged under section 278 of Companies Act, 2017 to refer any existing or future disputes, whether between companies or involving any other persons, to arbitration---Supreme Court with pro-arbitration approach and with the consensus of parties referred the matter to Arbitrator---Supreme Court set aside order passed by High Court and accepted application under section 34 of Arbitration Act, 1940---Supreme Court stayed proceedings under sections 126 and 127 of Companies Act, 2017 concerning alleged fraudulent transfer of shares and rectification of register of members (shareholders)---Supreme Court directed that award made by Arbitrator would be filed in High Court in accordance with the proceedings under Arbitration Act, 1940, as the matter fell exclusively within the jurisdiction of Court established under the Companies Act, 2017---Appeal was allowed.

Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd. [1993] AC 334; Brother Steel Mills v. Ilyas Miraj PLD 1996 SC 543 and Nilmoni Singh v. Taranath ILR 9 Cal 295 rel.

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

----S. 2(c)---Companies Act (XIX of 2017), S. 5(4)---Term "Civil Court"---Civil Courts of special jurisdiction---Scope---Courts exercising civil jurisdiction in relation to specific matters, such as the Court established under Companies Act, 2017 cannot be read into the exception clause of section 2(c) of Arbitration Act, 1940---Term "Civil Court" mentioned in section 2(c) of Arbitration Act, 1940 does not refer exclusively to Civil Courts of general jurisdiction but also encompasses Civil Courts of special jurisdiction.

(c) Arbitration---

----Economic benefits---Scope---Significant economic benefits of arbitration are cost-effective, efficient and confidential means of resolving disputes---Arbitration alleviates burden on national Courts, enhances business productivity and provides faster resolution process, thereby minimizing disruptions to businesses---Ability to enforce international arbitration awards strengthens trade and commerce, while arbitration's stable and predictable dispute resolution mechanism promotes investor confidence, making the country an attractive destination for foreign investment---Such factors collectively foster a favourable business environment, drive economic growth and enhance country's competitiveness on the global stage.

Barrister Iftikhar-ud-Din Riaz, Advocate Supreme Court and Muhammad Haroon Mumtaz, Advocate Supreme Court for Petitioners.

Arshad Mohsin Tayebaly, Advocate Supreme Court and Tariq Aziz, Advocate-on-Record for Respondents.

2025 C L D 540

[Supreme Court of Pakistan]

Present: Sardar Tariq Masood and Mazhar Alam Khan Miankhel, JJ

Raja SHAHZAD AHMAD---Petitioner

Versus

INCHARGE BAGGAGE ROUTING PAKISTAN INTERNATIONAL AIRLINE, LAHORE and others---Respondents

C.P.L.A. No.944-L of 2014, decided on 18 November, 2024.

(Against the judgment dated 02.06.2014 passed by Lahore High Court, Lahore in F.A.O. No. 305 of 2014).

Punjab Consumer Protection Act (II of 2005)---

----S.28---Limitation Act (IX of 1908), S. 5---Consumer Court proceedings---Limitation---Condonation of delay---Complaint filed by petitioner/consumer was barred by 90 days---Plea raised by petitioner/consumer was that delay could have been condoned under section 5 of Limitation Act, 1908---Validity---Provision of section 5 of Limitation Act, 1908 was not applicable to the proceedings before Consumer Court---Supreme Court declined to condone the delay in filing of complaint---Petition for leave to appeal was dismissed and leave to appeal was refused.

Muhammad Rafique Shah, Advocate Supreme Court (through Video Link from Lahore) for Petitioner.

Nemo for Respondents.

2025 C L D 610

[Supreme Court of Pakistan]

Present: Munib Akhtar and Athar Minallah, JJ

ADAMJEE INSURANCE COMPANY LIMITED --Petitioner

Versus

TECHNO INTERNATIONAL and others ---Respondents

Civil Petitions Nos. 202-L and 203-L of 2022, decided on 15th November, 2024.

(Against judgment dated 09.12.2021 the Lahore High Court, Lahore passed in Civil Revisions Nos.77081 and 77089 of 2021).

Civil Procedure Code (V of 1908)---

----O.XXXVII, Rr. 1 & 2---Suit for recovery of money on the basis of bank cheque---Leave to appear and defend the suit, grant of---Condition of furnishing surety---Petitioner/Insurance company instituted suit for recovery against respondents/defendants---Trial Court granted conditional leave subject to deposit of surety---Validity---Respondents/defendants denied issuance of cheques and had also denied having authorized petitioner/insurance company to encash the cheques---Question regarding maintainability of two suit was also raised---Trial Court exercised its discretion in accordance with law and principles settled in such regard---Supreme Court declined to interfere in judgments passed by Trial Court and maintained by High Court---Petition for leave to appeal was dismissed and leave to appeal was refused.

Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Fine Textile Mills Ltd. Karachi v. Haji Umar PLD 1963 SC 163; Kodak v. Alpha Film Corporation (1930) 2 K B 340 and Abdul Karim Jaffarani v. United Bank Ltd. and others 1984 SCMR 568 rel.

Farooq Amjad Meer, Advocate Supreme Court for Petitioner.

Nemo for Respondents.

2025 C L D 647

[Supreme Court of Pakistan]

Present: Naeem Akhter Afghan and Shahid Bilal Hassan, JJ

MUHAMMAD ADNAN ---Petitioner

Versus

SALAH-UD-DIN ---Respondent

C.P.L.A. No. 1618 of 2024, decided on 17th February, 2025.

(Against the judgment dated 06.03.2024 passed by Peshawar High Court, D.I.Khan Bench in R.F.A.No. 53-D of 2020 with C.M. No. 31-D of 2020).

Negotiable Instruments Act (XXVI of 1881)---

----S. 4---Qanun-e-Shahadat (10 of 1984), Art. 17(2)(a)---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2---Suit for recovery of money---Promissory note, non-attestation of---Evasive denial---Concurrent findings of facts by two Courts below---Suit filed by respondent/plaintiff was decreed by both the Courts below in his favour and against the petitioner/defendant---Validity---Promissory note, under section 4 of Negotiable Instruments Act, 1881 is required to contain four essential ingredients: (i) an unconditional undertaking to pay; (ii) the sum should be the sum of money and certain; (iii) the payment should be to or to the order of a person who is certain, or to the bearer of the instrument; and (iv) the maker should sign it---If an instrument fulfills such four conditions, it is called a promissory note---Requirement of attestation of a document provided under Article 17(2)(a) of Qanun-e-Shahadat, 1984 does not apply to promissory note---Petitioner/defendant took a vague stance and evasively denied allegations so made by the respondent/plaintiff as to his claim against petitioner/defendant---Such denial without any substantive proof could not be considered and approved---Trial Court and High Court minutely appreciated and evaluated pleadings of parties and had assessed evidence on the principle of preponderance---Both the Court below reached to a just conclusion that petitioner/defendant failed to successfully overturn the stand taken by respondent/plaintiff against him---Supreme Court declined to interfere in judgments and decrees passed by two Courts below in favor of respondent/plaintiff---Petition for leave to appeal was dismissed and leave was refused.

Sheikh Muhammad Shakeel v. Sheikh Hafiz Muhammad Aslam 2014 SCMR 1562 and Muhammad Ashraf v. Abdul Ghafoor and 4 others 1999 SCMR 2633 rel.

Aftab Alam Yasir, Advocate Supreme Court and Sheikh Mehmood Ahmed, Advocate-on-Record for Petitioner.

Burhan Latif Khaisori, Advocate Supreme Court for legal heirs of Respondent.

2025 C L D 680

[Supreme Court of Pakistan]

Present: Naeem Akhter Afghan and Shahid Bilal Hassan, JJ

SECRETARY TO GOVERNMENT OF KHYBER PAKHTUNKHWA COMMUNICATION AND WORKS DEPARTMENT, PESHAWAR and others---Petitioners

Versus

Messrs PARCON ASSOCIATE GOVERNMENT CONTRACTORS through Muhammad Haroon and others---Respondents

C.P.L.A. No.694-P of 2024, decided on 17th February, 2025.

(Against the judgment dated 19.07.2024 passed by Peshawar High Court, Peshawar in C.R.No.365-P of 2024)

Arbitration Act (X of 1940)---

----Ss. 14 & 17---West Pakistan Civil Courts Ordinance (II of 1962), S.18---Limitation Act (IX of 1908), Ss. 5 & 14---Condonation of delay---Wrong appellate forum---Petitioner/authorities were aggrieved of award being made rule of the Court, and preferred appeal before High Court but the same was dismissed for lack of pecuniary jurisdiction---Lower Appellate Court and High Court declined to condone the delay caused due to filing of appeal before High Court---Validity---Delay of time in filing of appeal, application or suit may be condoned but subject to plausible and reasonable explanation---One who seeks condonation of delay has to explain each and every day's delay---Petitioner/authorities could not put-forward reasonable and plausible justification/explanation for filing appeal after about two years of passing of judgment and decree by Trial Court---Earlier appeal filed before High Court was not a reasonable justification---Petitioner/ authorities could not claim to be treated in any manner differently from an ordinary litigant---Time consumed in pursuing appeal in wrong forum could not be condoned under section 5 of Limitation Act, 1908---Time spent in pursuing proceedings before wrong appellate forum could not be excluded for the purposes of filing of an appeal---If appeal was barred by time, provisions of section 5 of Limitation Act, 1908, could only be invoked, that too, by showing sufficient cause---Forum of appeal was regulated by jurisdictional value in plaint---In presence of section 18 of West Pakistan Civil Courts Ordinance, 1962 there could be no doubt or complication to determine forum of appeal---Provisions of sections 5 and 14 of Limitation Act, 1908 would come into play only if delay appeared to be condonable because of the petitioners/authorities prosecuting their case with due diligence---Supreme Court declined to interfere in the judgment passed by High asCourt---Petition for leave to appeal was dismissed and leave to appeal was refused.

Messrs SKB-SNK Joint Venture Contractors through Regional Director v. Water and Power Development Authority and others 2022 SCMR 1615; East Pakistan v. Abdul Hamid Darfi and others 1970 SCMR 558; Commissioner of Income Tax v. Rais Pir Ahmad Khan 1981 SCMR 37; Federation of Pakistan v. Niaz Ahmad 1997 SCMR 959; Mst. Khadija Begum and 2 others v. Mst. Yasmeen and 4 others PLD 2001 SC 355; Dr. Syed Sibtain Raza Naqvi v. Hydrocarbon Development and others 2012 SCMR 377; Ghulam Ali v. Akbar alias Akoor and another PLD 1991 SC 957; Abdul Ghani v. Mst. Mussarat Rehana 1985 CLC 2529; Government of Pakistan v. Rafi Associates Limited 1985 CLC 2234; Abdul Ghani v. Ghulam Sarwar PLD 1977 SC 102; Syed Haji Abdul Wahid and another v. Syed Sirajuddin 1998 SCMR 2296; Raja Karamatullah and 3 others v. Sardar Muhammad Aslam Sukhera 1999 SCMR 1892; Akhtar Nasir Ahmed v. Province of Punjab through District Collector Gujrat and others PLD 2024 SC 1268; Khushi Muhammad through L.Rs. and others v. Mst. Fazal Bibi and others PLD 2016 SC 872; Chief Executive Officer NPGCL, Genco-III, TPS, Muzaffargarrah v. Khalid Umar Tariq Imran and others 2024 SCMR 518; Regional Police Officer, Dera Ghazi Khan Region and others v. Riaz Hussain Bukhari 2024 SCMR 1021; Kiramat Khan v. IG, Frontier Corp and others 2023 SCMR 866 and Imtiaz Ali v. Atta Muhammad and another PLD 2008 SC 462 rel.

Shah Faisal Ilyas, A.A.G. Khyber Pakhtunkhwa for Petitioners.

Nemo for Respondents.

2025 C L D 921

[Supreme Court of Pakistan]

Present: Yahya Afridi, CJ, Amin-ud-Din Khan and Ayesha A. Malik, JJ

SHER ASFANDYAR KHAN and 3 others---Appellants

Versus

NEELOFAR SHAH and others---Respondents

Civil Appeals Nos. 1843 to 1846 of 2019 and Civil Miscellaneous Application No. 1138 of 2020, decided on 8th May, 2025.

(Against the judgment dated 16.09.2019 of the High Court of Sindh, Karachi passed in High Court Appeals Nos. 107 of 2012, 114 of 2012 and 109 of 2012).

Per Yahya Afridi, CJ; Amin-ud-Din Khan, J. agreeing; Ayesha A. Malik, J. dissenting.

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

----Art. 76---Secondary evidence---Scope---Failure to ensure compliance with Article 76 of Qanun-e-Shahadat, 1984 vitiates evidentiary basis upon which findings of Courts below were rendered, necessitating intervention by Supreme Court.

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

----Ss. 7, 9, 148, 290 & 291---Qanun-e-Shahadat (10 of 1984), Art. 76---Corporate affairs---Oppression and mismanagement---Proof---Summary proceedings---Secondary evidence---Non-seeking of permission---Effect---Proceedings under sections 290 and 291 of Companies Ordinance, 1984 were initiated against respondents for inquiry into mismanagement and oppression in corporate affairs---Company Judge allowed the petition and Division Bench of High Court dismissed the appeal---Objection was raised by appellant on admissibility of secondary evidence---Validity---Company Judge erred in proceeding summarily in a dispute that required a full evidentiary examination---Nature of the controversy, involving serious allegations of forgery and fabrication, necessitated framing of issues and recording of evidence; procedural safeguards that were improperly bypassed---Statutory prohibition under section 148 of Companies Ordinance, 1984 (section 121 of Companies Act, 2017) precluded recognition of a trust over shares in the company's register, reinforcing the principle that the company was not bound to take notice of any alleged trust arrangement---Claim of trust, as asserted by respondents, was legally untenable---Improper admission of secondary evidence in violation of Article 76 of Qanun-e-Shahadat, 1984 undermined validity of proceedings---Failure to establish preconditions for admissibility of secondary evidence rendered reliance on disputed documents unsustainable---Discretion of Company Judge in treating the Shareholders' Agreements as genuine was exercised in disregard of established legal principles, given the absence of a proper evidentiary inquiry---Division Bench, in upholding such finding, failed to recognize procedural and substantive irregularities in the adjudication of the case---Parties could pursue their respective claims in pending civil suits, wherein all matters in controversy, including validity of Shareholders' Agreements and legitimacy of meeting in question of Board of Directors were to be adjudicated---Supreme Court set aside judgments passed by Company Judge as well as by Division Bench of High Court---Appeal was allowed. [Majority view]

Platinum Insurance Company Limited, Karachi v. Daewoo Corporation, Sheikhupura PLD 1999 SC 1; Mian Javed Amir v. United Foam Industries (Pvt.) Ltd. 2016 SCMR 213; Enviroco Ltd. v. Farstad Supply A/S [2011] UKSC 16; Bland and another v. Keegan [2024] EWCA Civ 934; Perkins and others v. Mexican Santa Barbra Mining Co. (1890) 24 QBD 613 and Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik PLD 2021 SC 715 ref.

Per Ayesha A. Malik, J. dissenting (Minority view)

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

----S. 7---Original civil jurisdiction---Corporate affairs---Jurisdiction specifically vested with Company Judge under Section 7 of Companies Ordinance, 1984 cannot be ousted merely on the pretext of a factual dispute---Provision of Section 7 of Companies Ordinance, 1984 specifically provides that Company Judge has jurisdiction---Statute has authorized Company Judge to exercise jurisdiction under Companies Ordinance, 1984---Jurisdiction vested with the Court by way of statute cannot be ousted merely because the parties contend that dispute involves complicated facts, the law does not provide so.

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

----Ss. 7 & 9---Qanun-e-Shahadat (10 of 1984), Arts. 72, 74, 75 & 76---Corporate affairs---Standard of proof---Principle---Standard of proof required in company matters is that of balance of probabilities rather than proof beyond reasonable doubt---In civil matters, this standard requires Court to assess whether, on the evidence as a whole, a fact is more likely than not to be true---It is neither necessary nor appropriate to frame formal issues or conduct a full trial to determine veracity of documents such as Shareholders Agreements---Court must evaluate totality of material, including primary and secondary evidence, where particularly in the context of secondary evidence the documents are reasonably credible, without strict insistence on original proof and reach a conclusion accordingly.

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

----Ss. 7, 9, 148, 290 & 291---Qanun-e-Shahadat (10 of 1984), Art. 76---Corporate affairs---Oppression and mismanagement---Proof---Summary proceedings---Secondary evidence---Non-seeking of permission---Effect---Proceedings under Sections 290 and 291 of Companies Ordinance, 1984 were initiated against respondents for inquiry into mismanagement and oppression in corporate affairs---Company Judge allowed the petition and Division Bench of High Court dismissed the appeal---Objection was raised by appellant on admissibility of secondary evidence---Validity---Issues arising in the present case had brought into sharp focus the fundamental role of corporate governance in ensuring that companies act with transparency, fairness, and accountability---Protection of shareholder rights, obligation of disclosure, and adherence to ethical governance practices were not optional aspirations; they were indispensable pillars upon which trust in corporate structures was built---It was by steadfast commitment to such principles that corporations earn legitimacy, foster sustainable growth, and contribute to economic and social well-being of wider community---Corporate governance was, in its essence, a framework designed not merely to direct corporate conduct but to safeguard interests of all stakeholders through structured, principled oversight---Supreme Court accordingly reaffirmed that transparency, good faith disclosure, and protection of shareholders must remain at the heart of all corporate endeavors, for it was only through such adherence that confidence in corporate sector and by extension, in rule of law itself, could be maintained and strengthened---Supreme Court declined to interfere in concurrent findings of facts by two Courts below---Appeal was dismissed.

Brother Steel Mills Ltd. v. Ilyas Miraj PLD 1996 SC 543; Platinum Insurance Co. Ltd. v. Daewoo Corp. PLD 1999 SC 1; Javed Amir v. United Foam Industries (Pvt) Ltd. 2016 SCMR 213; Omar Masood v. Amir Hussain Naqvi 2019 CLD 931; Messrs Ammonia Supplies Corporation (Pvt.) Ltd. v. Messrs Modern Plastic Containers (Pvt.) Ltd. AIR 1998 SC 3153; Shri Gulabrai Kalidas Naik v. Laxmidas Lallubhai Patel of Baroda (1978) 48 Comp Cas 438 (Guj) and E.V. Swaminathan v. K.M.M.A. Industries and Roadways Private Ltd. (1993) 76 Comp Cas 1 (Mad) ref.

Haider Waheed, Advocate Supreme Court and Anis Muhammad Shahzad, Advocate-on-Record for Appellants (in C.As.Nos. 1843 and 1846 of 2019).

Salman Akram Raja, Advocate Supreme Court and Syed Rifaqat Hussain Shah, Advocate-on-Record for Appellants (in C.As. Nos. 1844 and 1845 of 2019).

Wasim Sajjad, Senior Advocate Supreme Court, Shah Khawar, Advocate Supreme Court, Muhammad Masood Khan, Advocate Supreme Court and Mehmood A. Sheikh, Advocate-on-Record for Respondents Nos. 1 and 2.

Barrister Umer Aslam Khan, Advocate Supreme Court for Respondents Nos. 4 to 6.

Omer Azad Malik, Advocate Supreme Court for Respondent No. 7 (SECP).

Farooq H. Naek, Senior Advocate Supreme Court for Applicants (in C.M.A. No. 1138 of 2020).

2025 C L D 1639

[Supreme Court of Pakistan]

Present: Yahya Afridi, C.J., Muhammad Shafi Siddiqui and Miangul Hassan Aurangzeb, JJ

PAKISTAN RAILWAYS through Chief Controller of Purchase, Pakistan Railways, Lahore---Petitioner

Versus

CRRC ZIYANG CO. LIMITED, LAHORE---Respondents

C.P.L.A. No.813-L of 2024, decided on 29th April, 2025.

(Against judgment dated 04.03.2024 of the Lahore High Court, Lahore passed in C.R. No.79723 of 2022).

Arbitration Act (X of 1940)---

----Ss. 14, 17, 30, 33 & 39---Contract Act (IX of 1872), S. 74---Arbitration---Award made rule of Court---Objections against award---Trial Court inviting evidence without deciding the objections ---Dispute between the parties arose and was related to a contract executed on 01.11.2017 and was referred to arbitration by a two-member arbitral tribunal, which rendered the award on 02.07.2021---On 07.07.2021, the arbitrators filed the award before the Civil Court---On 01.09.2021, the petitioner filed objections for setting aside the said award---On 23.11.2022, Civil Court framed the issues and required the parties to submit the list of witnesses for the production of evidence---Said orders were assailed before the High Court by filing a revision petition, which was allowed by setting aside the orders dated 23.11.2022 passed by the Civil Court and case was remanded to the Civil Court for decision afresh on the basis of available record---Validity---Arbitrators were entitled to regulate their own procedure and were not governed by the strict procedure prescribed by the C.P.C. and the rules regarding evidence contained in the Qanun-e-Shahadat, 1984---Arbitrators decided the disputes based on evidence presented during arbitration proceedings---Arbitrators were under no obligation to frame issues as provided in the C.P.C.---Court recorded fresh evidence, disregarding the procedural safeguards in arbitration, such as the arbitrator's exclusive jurisdiction to assess evidence and apply the law---Said fact might lead to inconsistent outcomes and procedural unfairness---If the Court frames issues and records evidence after objections to an award were filed, parties might use this as an opportunity to re-litigate the entire dispute, leading to multiple proceedings on the same issues besides undermining both the legislative intent and the integrity of the arbitral process---Said multiplicity undermined the arbitrator's role in providing a one-time binding decision---Possibility of a trial after the award has been filed in Court creates uncertainty about the finality and enforceability of awards, that discourages the parties from opting for arbitration, defeating the legislative intent to promote arbitration as a preferred mode of dispute resolution---Framing of issues, recording of evidence and hearing arguments post the filing of the award in the Court is bound to increase litigation costs for parties and add to the already heavy workload of Courts---Said fact again defeats the purpose of arbitration as an economical and efficient alternative dispute resolution mechanism---Recording of evidence and conducting a trial effectively converts the Court into an appellate or fact-finding forum, which would be contrary to the statutory scheme envisaged by the Act, 1940---In the case in hand, the sole reason given by the Civil Court for framing the issues was that the contentions raised through the objections formed a factual controversy, which could not be determined without the recording of evidence---Perusal of the issues framed by the Civil Court showed that they were generalized in nature, they lacked specificity and the necessity for framing such issues could not be discovered in the impugned order---Therefore, the High Court did not commit any illegality by setting aside the order dated 23.11.2022 and remanding the matter to the Civil Court with the direction to decide the petitioner's objections to the award dated 02.07.2021 on the basis of the available record---Leave to appeal was declined and the petition was consequently dismissed.

Messrs Joint Ventures Kocks K.G./RIST v. Federation of Pakistan PLD 1996 SC 108; Pakistan Steel Mills Corporation v. Mustafa Sons (Pvt.) Ltd. PLD 2003 SC 301; Mian Corporation v. Lever Brothers of Pakistan Ltd. PLD 2006 SC 169; Federation of Pakistan v. Joint Ventures Kocks K.G./RIST PLD 2011 SC 506; Gerry's International v. Aeroflot Russian Airlines 2018 SCMR 662 and Chairman, WAPDA v. Messrs Syed Bhais Private Limited 2011 CLC 841 rel.

Jawad Mahmood Pasha, Advocate Supreme Court along with Amin Gondal and Asim Tasneem, DCPs (all via video link (Lahore)) for Petitioner.

Syed Tassadaq Mustafa Naqvi, Advocate High Court for Respondent.

2025 C L D 750

[Supreme Court of UK]\

Present: Lord Lloyd-Jones, Lord Kitchin, Lord Leggatt, Lord Stephens and Lord Richards LIFESTYLE EQUITIES CV and another---Appellants

Versus

AHMED and another---Respondents

Decided on 15th May, 2024.

(On appeal from: [2021] EWCA Civ. 675).

Trade Marks---

----Infringement by use of deceptively similar sign---Likelihood of confusion---Unfair advantage/detriment to distinctive character or reputation---Joint liability of company directors as accessories---Strict liability tort---Knowledge requirement---Remedies---Account of profits---Apportionment ---Directors' personal liability---A person is not liable as an accessory for a strict liability tort, such as trade mark infringement, unless they have knowledge of the essential facts that make the act wrongful---Liability of accessories is not strict and requires a mental element; mere involvement in the company's activities is insufficient---An account of profits is an equitable remedy aimed at preventing unjust enrichment---It is not punitive and should not be ordered against a person who did not personally benefit from the infringement.

The appellants, Lifestyle Equities CV and another, owned UK-registered trade marks for "BEVERLY HILLS POLO CLUB" and associated logos. They brought proceedings against Hornby Street Ltd and its directors, Mr Kashif Ahmed and Ms Bushra Ahmed, alleging that the company's use of "SANTA MONICA POLO CLUB" signs infringed their trade marks under sections 10(2) and 10(3) of the Trade Marks Act 1994. At first instance, the High Court found that Hornby Street Ltd had infringed the trade marks and that the Ahmeds were jointly liable as accessories, despite no findings that they knew or ought to have known of the infringement. The Ahmeds were ordered to account for profits, including a portion of their salaries and a director's loan. The Court of Appeal upheld the finding of liability but set aside the order regarding the director's loan.

On appeal to the Supreme Court, the issues were: (1) whether a company director can be held liable as an accessory for the company's strict liability tort of trade mark infringement without knowledge of the essential facts constituting the tort; and (2) whether such a director can be ordered to account for profits not personally received.

Accessory liability requires knowledge:

A person will only be liable in tort as an accessory if they have knowledge of the essential facts that make the act in question tortious. This applies even where the underlying tort is one of strict liability, such as trade mark infringement under the Trade Marks Act 1994. Accessory liability arises under common law doctrines, principally procuring or authorising the tort, or participation in a common design, each of which requires a fault element. Strict liability applicable to the primary in fringer does not extend to accessories. For a director or third party to be held jointly liable, they must know or wilfully turn a blind eye to facts such as the likelihood of confusion or the unlawful character of the conduct. This requirement ensures that personal fault underlies secondary liability.

Rainham Chemical Works Ltd. v. Belvedere Fish Guano Co Ltd [1921] 2 AC 465, 488; Performing Right Society Ltd. v. Ciryl Theatrical Syndicate Ltd. [1924] 1 KB 1, 14-15; C Evans & Sons Ltd. v. Spritebrand Ltd. [1985] 1 WLR 317, Vestergaard Frandsen A/S v. Bestnet Europe Ltd. [2013] UKSC 31; [2013] 1 WLR 1556; Twinsectra Ltd. v. Yardley [2002] UKHL 12; [2002] 2 AC 164 and OBG Ltd. v Allan [2007] UKHL 21; [2008] AC 1 ref.

There is a general principle of the common law that a person who knowingly procures another person to commit an actionable wrong will be jointly liable with that other person for the wrong committed. The liability of the procurer is an accessory liability. Where the primary wrong is a breach of contract, this accessory liability takes the form of a distinct tort. Where the primary wrong is a tort, however, there is no need to posit a separate tort of procuring another person to commit a tort. Where the general principle applies, the procurer is made jointly liable for the tort committed by the primary wrongdoer.

There is a further, distinct principle of accessory liability by which a person who assists another to commit a tort is made jointly liable for the tort committed by that person if the assistance is more than trivial and is given pursuant to a common design between the parties. On the facts of a particular case both principles may be engaged. But on the present state of the law assistance which falls short of procuring the primary wrongdoer to commit the tort cannot lead to liability unless it is given pursuant to a common design.

Although procuring a tort and assisting another to commit a tort pursuant to a common design are distinct bases for imposing accessory liability, they must operate consistently with each other and such that the law of accessory liability in tort is coherent. Considerations of principle, authority and analogy with principles of accessory liability in other areas of private law all support the conclusion that knowledge of the essential features of the tort is necessary to justify imposing joint liability on someone who has not actually committed the tort. This is so even where, as in the case of infringement of intellectual property rights, the tort does not itself require such knowledge.

In the present case, the appellants, Mr and Ms Ahmed, were directors of two companies found liable for infringing the respondents' trade marks. The companies accepted liability for marketing clothing under "Santa Monica Polo Club" branding. The claimants argued that the directors were jointly liable by reason of their role in authorising the acts of infringement. However, the case advanced at trial was based solely on the directors' involvement and control, without proving that they knew of any likelihood of confusion or that the branding was legally infringing. No findings were made that the directors had knowledge or blind-eye knowledge of the relevant facts. Therefore, the legal test for accessory liability had not been satisfied, and the imposition of personal liability was ill-founded.

Account of Profits limited to personal gains:

The equitable remedy of an account of profits is directed at preventing unjust enrichment. It may be awarded against a defendant who has made gains from the wrongful use of another's property or rights, including trade marks. However, such an account is limited to the profits actually made by the defendant personally. It does not extend to profits earned by others, including companies, unless those profits were received or retained by the individual defendant.

Colbeam Palmer Ltd. v. Stock Affiliates Pty Ltd (1968) 122 CLR 25 ref.

An account of profits is not punitive in nature; it is compensatory and restorative. Accordingly, where no profit was made by the individual, regardless of their level of involvement in the tort, the remedy will be unavailable. This principle also safeguards against the improper use of the account as a means of indirectly punishing or extending liability to non-beneficiaries. Even if a director is found liable for participating in a tort, the account of profits can only be ordered in respect of benefits directly acquired by the individual, and the remedy remains discretionary.

In the present case the respondents (Lifestyle) sought to recover both the profits made by the infringing companies and the personal profits of Mr. and Ms Ahmed. Court of Appeal was correct in concluding that the directors could not be liable for company profits in the absence of evidence that those profits were transferred to or retained by them.

As there was no finding of personal benefiteven if liability had been established, no account of profits could be granted. A defendant cannot be required to account for someone else's profits. Since no personal gain from infringing acts was proven, and the account was based only on strict liability, no order for an account of profits could be sustained.

Salaries and loans not subject to account:

A salary paid to a director or employee is not, without more, considered a profit arising from infringing acts. Likewise, the repayment of a legitimate loan advanced by the director to the company is not a benefit derived from infringement. Only where it is shown that such payments were inflated, excessive, or causally connected to infringing profits can they be brought within the scope of an account. General remuneration for services or repayment of legitimate loans will not be considered "profits" derived from wrongful conduct for the purposes of an account. Court of Appeal was right in holding that it was wrong in principle to treat the loan as a profit. A person does not make a profit just by borrowing a sum of money. If the loan is interest-free or at a rate of interest lower than a commercial rate, this difference might generate a profit for the borrower. But Lifestyle had not attempted such a calculation or put its case in this way. Equally, had it been shown that the loan was not really a loan at all but a disguised dividend, the position would be different. But there was no evidence or finding to that effect.

Lifestyle had argued that the loan became a profit when Hornby Street was dissolved. This was not an argument which Lifestyle could have made at the trial, as the company was then still in existence and in the hands of administrators. But in the Court of Appeal Lifestyle argued that, even if the judge were wrong to characterise the loan as a profit, his decision should be upheld because the subsequent dissolution of the company meant that what had been a loan had become a profit. Alternatively, Lifestyle argued that, even at the time of the trial, it was apparent that the administrators were not going to pursue Mr. Ahmed for repayment of the loan. The Court of Appeal rightly regarded these matters as irrelevant. If, as a result of supervening events, a loan is forgiven or otherwise ceases to be repayable, that does not alter its character as a loan.

Where the Court of Appeal erred was in upholding the judge's decision that part of the salaries paid to the Ahmeds could properly be treated as profits. Again, payments made ostensibly as remuneration may in reality be a way of extracting profits from a company. But there was no allegation, evidence or finding that the salaries paid to the Ahmeds were anything but ordinary remuneration for their services. Whereas an employer may of course profit from the labour of an employee in that the work done by the employee may earn more income for the employer than it costs to employ that person, an employee who receives in return for their services a sum no greater than the fair market value of those services does not make a profit. It was not suggested that the Ahmeds were paid more for their services to Hornby Street than their services were worth. Supreme Court dismissed the appeal filed by Lifestyle and allowed the one filed by Ahmeds.

Peter Knox KC, Timothy Sampson and Adam Riley (Instructed by Ronald Fletcher Baker LLP (West End)) for Appellants (in Appeal 2021/0147).

Thomas St. Quintin, Rory Brown (Instructed by Brandsmith (London)) for Respondents (in Appeal No.2021/0147) and for Appellant (in Appeal No.2021/0150).

Peter Knox KC, Laurent Sykes KC and Timothy Sampson (Instructed by Ronald Fletcher Baker LLP (West End) for Respondents (in Appeal No.2021/0150).