ALLIED BANK LTD. through Authorized person vs INAM ULLAH KHAN and another

' JUSTICE MAMOON RASHID SHEIKH (MEMBER).--- This appeal under section 14(5A) of the Representation of the People Act, 1976, has been filed by Allied Bank Ltd., against one Inam Ullah Khan Niazi (respondent No,1) who has been declared as a validly nominated candidate to contest the election to the Constituency NA-71, Mianwali-I, through order dated 4-4-2013 passed by the learned Returning Officer, NA-71 (respondent No,2).

2. Briefly stated the facts giving rise to this appeal are to the effect that the appellant filed a suit for the recovery of Rs,77,304,000/ against Messrs Hura (Pvt.) Ltd. (the company) and 5 others before the Lahore High Court, Lahore, in its Banking jurisdiction. Respondent No,1 was arrayed as defendant No,2 in the suit in his capacity as a guarantor and customer within the meaning of the Financial Institutions (Recovery of Finances), Ordinance, 2001. The said suit was decreed in the sum of Rs,71.641 million through judgment and decree dated 24-7-2006. Respondent No,1 and the other defendants filed R.F.A. No,202 of 2008 against the decree. The R.F.A. Was, however, dismissed being barred by time. As a consequence, respondent No,1 and the other defendants filed C.P. No,1167-L of 2011 and C.M.As No,281-L and 397-L of 2012 before the Hon'ble Supreme Court. However, through order dated 20-3-2013 C.P.No,1167-L of 2011 was dismissed and leave to appeal was refused. In the meantime, the election schedule for the 2013 General Elections was announced and respondent No,1 as per the schedule filed his nomination paper which was accepted through the order dated 4-4-2013. The appellant on the basis of the decree in its favour has filed the instant appeal to have the nomination paper of respondent No,1 rejected, inter alia, on the ground that the appellant is an adjudged defaulter and thus disqualified in terms of Article 62 of the Constitution of the Islamic Republic of Pakistan, 1973, to be elected or chosen as a member of the Majlis-e-Shoora (Parliament).

3. The learned counsel for the appellant has argued mainly in the terms of the facts given hereinabove. He contends that there is a decree against respondent No,1 passed by a Court of competent jurisdiction. The said decree is joint and several and remains unsatisfied. Respondent No,1 is, therefore, a defaulter. Respondent No,1 has concealed this factum whilst filing his nomination paper. Respondent No,1 is, therefore, not only a defaulter but he is also guilty of concealment. He is, therefore, not qualified to be chosen or elected as a member of the Majils-e- Shoora (Parliament). Relies on the judgments reported as "Rao Tariq Mehmood v. Election Tribunal, Punjab and another" (PLD 2003 Lahore 169) and "Dr. Shaukat Ilahi v. Ch. Mubashar Hussain and another" (2008 CLC 341) in support of his contentions.

4. The learned counsel for respondent No,1 at the outset has presented certified copies from the SECP to contend that respondent No,1 has neither been a shareholder nor a director of the company nor its chief executive at any point in time. Further submits that the appellant has deliberately tried to create the impression that respondent No,1 is the chief executive of the company. This information is false to the knowledge of the appellant.

5. The learned counsel for respondent No,1 further submits that the instant appeal is mala fide. The appellant never raised these objections before the learned Returning Officer at the time of scrutiny.

This appeal is, therefore, not maintainable. Further submits that even otherwise no case is made out against respondent No,1 as firstly he is neither a shareholder nor a director of the company who is purported to have availed of the finance facility from the appellant. Respondent No,1 only stood as a guarantor and is not a beneficiary of the finance facility. In order to be adjudged a defaulter a candidate should hold shares of a company individually or along with his spouse and children or dependents equivalent to 51% or more of the company's shareholding. In the instant case the appellant does not even hold a single share in the company. He is only a guarantor and thus cannot be held liable for the default of the company, if any. Contends that section 12 read with sections 68 and 99 of the Act, ibid, clearly lay down that a guarantor is not included in the persons mentioned in section 12 of the Act, ibid, for the reasons that the words, "...In his own name or in the name of his spouse or dependent, or any business concern mainly owned..." by a candidate rule out the inclusion of any other person who is to be designated as a person who has taken a loan and is in default thereof Relies on the judgments reported as "Sardar Talib Hussain Nakai v.

Returning Officer and another" (1993 MLD 2485), "Haji Ghulam Sabir Ansari v. Returning Officer"

(1993 MLD 2508), "Ch. Muhammad Aslam Kaira v. Returning Officer, PP-96, Gujra-6" (1994 MLD 424), "Ghulam Mustafa Jatoi v. Additional District and Sessions Judge/Returning Officer, NA.158, Naushero Feroze and others (1994 SCMR 1299).

6. Further contends that none of the provisions of Articles 62 and 63 of the Constitution is an impediment to the candidature of respondent No,

1. The primary liability is that of the company, its directors and shareholders and not of respondent No,1.

7. In response to the objection raised by the learned counsel for respondent No,1 that the appellant has mala fide tried to create the impression that respondent No,1 is the chief executive of the company, the learned counsel for the appellant submits that the said ground has been raised in the Memo of Appeal on the basis of a mistaken impression. Expresses his regret for the error and readily admits that the appellant was neither a shareholder nor a director of the company at the relevant time, respondent No,1, however, stood as a guarantor to the finance facility availed of by the company.

8. The learned counsel for the appellant further submits that the appeal has been filed under section 14(5A) of the Act, ibid, whereby the appellant has placed information before this Tribunal which information was concealed by respondent No,1 at the time of filing of his nomination paper.

There is a decree against respondent No,

1. He is a guarantor for repayment of the finance facility in question and his liability is coextensive with that of the principal debtor. Relies on section 128 of the Contract Act, 1872.

9. Arguments heard. Record perused.

10. Admittedly, respondent No,1 is a guarantor to the finance facility having been availed of by the company. Admittedly, a decree in the sum of Rs,71.641 million, has been passed against the company and respondent No,

1. We find that .The decree is joint and several and is, therefore, executable against respondent No,1 also. The decree, however, remains unsatisfied to date even though it was passed on 24-7-2006 and was affirmed by the Hon'ble Supreme Court of Pakistan through its decision dated 20-3-2013.

11. The learned counsel for respondent No,1 has contended on the basis of Ghulam Mustafa Jatoi's case (supra) that since respondent No,1 is neither a shareholder nor a director of the company, which fact is admitted by the appellant, in order, therefore, for respondent No,1 to be adjudged a defaulter he should have a controlling share of the company with 51% shares or more either independently or along with his family or his dependents. On the basis of the same it has been contended that sections 12, 68 and 99 of the Act, ibid, as also Articles 62 and 63 of the Constitution are not attracted in the case of respondent No,

1. This argument does not come to the aid of the learned counsel for respondent No,I inasmuch as the judgments relied upon by. The learned counsel relate to cases where a decree has not been passed. The said judgments are, therefore, not attracted to the facts and circumstances of the case. In the instant case a decree has been passed against respondent No,1 and has been upheld by the Hon'ble Supreme Court. The decree as said above remains unsatisfied. Under the law the liability of a guarantor is co-extensive with that of the principal debtor. Reference is made to section 128 of the Contract Act, 1872, and the judgments reported as "Daewoo Corporation v. Messrs Platinum Insurance Company Limited" (1997 CLC 1272), "Rafique Hazquel Masih v. Bank Alfalah Ltd. And others" (2005 SCMR 72) and "Ch. Mubashar Husssa in v. Returning Officer, Kharian, District Gujrat and 3 others" (PLD 2008 Lahore 134).

Respondent No,1 is, therefore, liable to pay the decretal amount.

12. Respondent No,1 has admittedly not disclosed the fact of the passing of the decree against him in his nomination paper. Even if it were to be assumed that respondent No,1 is not liable to repay the finance facility availed of by the company still the factum of passing of the decree against him and it remaining unsatisfied to date should have been disclosed by respondent No,1 in his nomination paper. Respondent No,1 is, therefore, not only an adjudged defaulter in terms of section 14(5A) of the Act, ibid, but is also guilty of concealment of facts. The contentions of the learned counsel for respondent No,1 are, therefore, repelled.

13. The candidature of respondent No,1 is, therefore, hit by the provisions Of Articles 62 and 63 of the Constitution read with section 14(5A) of the Act, ibid. Respondent No,1 's nomination papers are accordingly directed to be rejected and his name be deleted from the list of validly nominated candidates of NA-71.

14. Copies of this order be sent to the learned District Returning Office and the Returning Officer concerned for information and necessary action.