National Bank of Pakistan and others Vs M/s Premier Sugar Mills and Distillery Company, Mardan

Judgnnent Sheet

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HIGTI

WDICAL DEPARTMENT.

JUDGMENT

FAO No.133-PnA22 with CM 152-PnA24. Date of hearing 08.03"202,[ National Bank of Pakistan and others. Versus M/s Premier Sugar Mills and Distillery Cornpany Mardan.

Appellant (s) by: Mr. Kashif Zaman Advocate alongwith Mehmooda Gul, Litigation Ollicer.

Respondent(s) by: M/s Issac Ali Qazi, MaqsoodAli and Khushnurna ,ddvocates.

WIOAR AHMAD. J Through instant appeal, appellant has challenged the impugned order dated 07.12.2021, passed by learned Executing Court (Civil Judge-I, Feshawar), whereby objection petition filed by appellant was dismissed.

As per contents of instant appeal, respondent company filed execution petition for satisfaction of judgment and decree dated 29.1t.?A19, before leamed Executing Court Feshawar. During

pendency of same, appellant filed an Objection Petition against judgment and deeree dated 29.11.2019, by raising various legatr and factual objections regarding maintainability of said decree. Respondent filed reply to objection petition. After hearing the parties, learned Executing Court dismissed objection petition of appellant vide impugned order dated 07.12.2021. Aggrieved frorn same, appellant has filed instant appeal.

3 Arguments heard and available record perused"

4 Ferusal of record reveals that while filing objection petition, appellant had raised a question relating to lack of jurisdiction of civil Court before the Executing Court, which was dismissed tbr two reasons vizthat such question could not be re-agitated before an Executing Court and secondly that appellant had not deposited the decretal amount in Court before filing of ?AO ,lo,I33.PRA22

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objection petition, as required under Order 2tr Rule 23-A CPC.

3 While raising objection as to jurisdiction of the Court, learned counsel for appellant contended that the matter was falling in the jurisdiction of Banking Court therefore civil Court lacked jurisdiction to entertain the suit. He also placed reliance on the judgment dated 10.rc.2023 of this Court passed in Writ Petition No.139tr-P/2014 and contended that Executing Court can refuse execution of a decree if same is nullity in the eyes of law or passed without jurisdiction.

6 In response, leamed counsel representing the respondent submitted that respondent, who was plaintiff before the Court below, was neither falling in the definition of Financial Institution nor a borrower and therefore, he could not have approached the Banking Court.

7 This Court would first address arguments of leamed counsel for the appellant that the decree had been passed by EAA No. t33-PnOtP

learned civil Court without having jurisdiction and was therefore a nullity in the eyes of law. Appellant has filed CM No.152-P/2024 alongwith which a number of documents have been annexed. Same is allowed and the documents annexed therewith shall be deemed to be part of record of this case. Perusal of written statement annexed therewith (filed ln original proceedings) reveals that ob.jection as to jurisdiction had been raised in clause 'C' of preliminary objection of written statement and therefore an issue had also been framed in the case. Said issue had been decided against appellant by leamed civil Court. The appeal filed before this Court trad partially been allowed vide order dated 22.09.2011 and the case again had been remanded to leamed civil Court for decision afresh. Ttrereafter decree was passed and same had also attained finality. The question of jurisdiction had remained expressly decided against appellant in the original ?AO !lo, t33.Pl2CA2

proceedings. Appellant was not ontry precluded from raising said objection again before leamed Executing Court but his objection was also not tenable.

I Perusal of plaint in the original proceedings reveals that original transaction was not that of lending and borrowing but was relating to investment earlier made by respondent in PLS term deposit, basic detail of which is reproduced from Para 4 of the original plaint;

"4. That the plaintiff allowed Mehran Bank Limited to collect an amount of Rs. 5 million frorn the accoants of the plaintiff from Ws Maslim Commercial Bank Limited, lVlardan and invest the same for a period of 6 rnonths as PLS Term Deposit. Accordingly M/s Mehran Bank Limited, Feshawar collected tke amount af Rs 5 million from Mwslim Commercial Bunk Limited, Mardan from the accownts af tke plaintiff and deposited the some in its Term Deposit on 25.09.1993 for a period of 6 months maturing on 25.03.1904 at proftt af 12.50% per annum, however, withholdiwg tax payable to the Income ta Department was to be deducted from the proftt at the rate of, 10% upon maturity af the Term Depostt."

lAa No. t}3.PhUUt

The decree had also been accordingly granted to the following effect;

"25. Though the plaintif,f is sacceeded in proving the alleged facts, narrated in the body of the plaint yet the qwestion of retief has to be addressed properly. Because the Court is empowered to grant all such relief as the justice of case ,noy demsnd. Similarty where the plaintiff claimed relief larger than tkut to which he is found to be entitled, the Court ought to grant the relief to which he is sofoand entitled (F 1976 SC 78s).

26.It is in the heading af the plaint that payment of Rs. Five million with prolit of 12.50% per annam with effect fronn 25/09/1993 till date af Jinal payment msy be made. Such other relief appropriale is olso asked in alternative. Plaintiff failed to adduce any type of evidence wherefrom it cdn he determined that why 12"50% interest be paid to him. Similarly ratio of markup ckanges tirne to time. Further that the TDR. af the plainffi was based on proftt and loss saving (PLS) accaunt and Mehran Bank Ltmited was collapsed. lVleaning thereby that there was no proftt at all and pluintiff is supposed to be skare holder in loss as well, This ts wky his date of maturity af TDR is ertended to 1999 for the leason that the National Bank of Pakistan was assigned tke duty of pflyment of of creditors tke Mehran Bank Ltmited in 1999 PAA N.. t3'.PAUUt

after getting free financial assistance from State Eank of Pakistan. Reswltantly, the date of maturity of tke TDR af tke plaintiff which is 1994 be considered 1999 as the account of the plaintiff is based on PLS and fall down of Mehran Bank Limited was obviously loss rather profrt. This is worth mentioning that the atnoant of TDR was lying with the National Bank of Pakistan since tkat lixcd date of, maturity (fmed by Court) i.e, 1999 so far without fault of plainttff, Therefore this is in the titness of things as well fls demand of justice ofthe case to pay that very amount of TDR on agreed term to the plaintiff on the basis of prevailing market rate of the gold To be more certain, the amount of TDR on agreed term wkick was to be paid on prevailing market rate of the gold. To be more certain, the amount of TDR on agreed term which was due to be paid in 1999 is ordered to be paid on prevailing market rate of the gold as to compensate the platntiff and to redress his objectton of devaluation of PKR.s (cuweney) and intlation.'

I The decree had only been modified subsequently to the extent of giving profit in terms of increase in gold price while rest of decree had attained finality. The modification was made by appellate Court vide order dated 29.11.2019 FAo No. t33.Pl2O22

by granting a decree in terms of prayer 'oA" of the plaint and respondent was directed to recover Rupees five Millions with profit at the rate of L2.50% per annum from National Bank of Pakistan, for the period given in the judgrnent. The original transaction was though prior to promulgation of Financial Institutions (Recovery of Finances) Ordinance 200l(hereinafter referred to as Ordinance 2001) but the ordinance had been promulgated during pendency of suit and Section 29 of the Ordinance 2001 repealed the Banking Companies(Recovery of Loans, ,Advances, Credits and Finances) Act 1997 therefore, the Ordinance being procedural law would be deemed applicable to proceedings therein to the extent of regulating of procedure as well as jurisdiction of the Banking Court. Sub- section 1 of Section 9 of the Ordinance was providing that where a customer or a financial institution committed a default in fulfillrnent of any obligation with regard to FAA No, 133-PnO2a

any finance, the financial institution or, as the case might be, the customer, may institute a suit in the Banking Court by presenting a plaint which would be verified on oath, in the case of financial institution by the Branch Manager or such other officer of the financial institution as might be duly authorized in this behalf by power of attomey or otherwise, The word "customer" has been defined in clause "C" of Section 2 of the Ordinance 2001 as follows;

(c)"castomer' means a persnn to whom ftnance hss been extended by a tinancial institution and includes a persan on whose bekalf a guarantee or letler of credit has been issued by a financial inslitution as well as a surefit or an indemnffier."

As per abovementioned definition customer would mealu

(a)a person to whom finance has been exlended by aftnancial institution

(b)includes e persan on whase behalf a guarantee or letter of credit has been issued by a financial institution as well as a surety or an indennnifier."

FAA No,I39.PR@O

10.Respondent (plaintiff) being investor in the Bank by way of purchase of Term Deposit Certificates, cannot be termed person to whorn finance had been extended by the financial institution. He was also not a person on whose behalf the Bank had issued any guaxantee or letter of credit. He was not falling in the definition of customer and therefore he could not have knocked at the door of Banking Court. Hon'ble Lahore High Court (Multan Bench) while giving its judgment dated 24.02.2022, in FAO No.49 of 2008 has also concluded, on the basis of existing case law, on the subject, that;

"15. A cwstomer operating a lacker witk a banker does not obtain a finance ( as deJined in F inanc ial I nstit ut io ns (Re cov e ry of Finances) Ordinance 2001) while the jurisdiction of a Banking Court is limited to a dispute arising out of a finance facility between a customer and a Bwnk, hence, a banking Court cqnnot adjudicate the dispute of a bank's liability regarding theft from its lockers wnder the jurisdiction confewed by Finoncial Institwttons (Recovery of Finances) Ordinance 2001."

?AA No.t3g-Pnot e

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Similarly this Court while giving its judgment in FAB No.l-D of 2021, has also held;

"11. Admittedly, the appellant has neither availed any ftnance facility from the Bank nor ke is castomer af the bank within the contemplotion of section 2 (c) of the Recovery Ordinance, therefore, he cunnot rnake recuurse to the provisions of Sectton 9 of the said Ordinance for the redressal of his grtevance. In-fact the appellant is an account holder of the Bank and, according to him, kis smount has been misappropriated from his accoanl, and this allegation is encompussed in the scheduled offences as enanteiltted in the 'the Olfences in Respect of Banks (Special Coarts) Ordinance, 1984' and he can seek remedy for the redress of his grievance within the framework of the Ordinance of tr984.'

Frorn the above discussion, it is clear that the original decree was neither nullity in the eyes of law nor it was passed without having jurisdiction therefore, same could not be challenged in the execution proceedings on the ground on which the objection petition had been filed. The Executing Court in the F.to No.7!3-PlzoiB

given circumstances could not go beyond the decree and reliance in this respect may also be made on the judgment of Hon,ble Supreme Court of Pakistan rendered in case of '6frshad Mashi Vs Ernmanuel Masih,, reported as2Al,4 SCMR 1481.

11.The objection petition was therefore totally ill-conceived, which was also not entertainable for the additional reason that requisite deposit of decretal arnount had not been made. Although a surety bond had subsequently been submitted in pursuance to order dated 20.02.2023 in the instant appeal but at the time of passing the impugned order neither the amount had been deposited nor the surety bond executed and on said score also objection petition was not maintainable.

Learned counsel for appellant was heard at length but he failed to make out a case of any illegality or material irregularity in the impugned order of learned Executing Court Instant appeal was therefore found lacking lAa No. lAs-Pngrv,

substanoe and same is accordingly dismissed.

J GE

Due of heafing & mnouncement ofiudemerrt,., .,.,........,...,....08.03.2024.

Date of Veparution al signing ofiudgment .... 13.03.2024.

'%Qar"d N" (sB) Uon'bb lt . t.ila mroAtiad.

FAa No, ,33.P/*22