TRUSTEES OF PORT OF KARACHIs vs MANZOOR SONS CORPORATION and others
This matter arises from three petitions directed against interim orders passed by the High Court of Sindh at Karachi, which declined to stay the operation of orders allowing the release of goods on the furnishing of insurance guarantees rather than bank guarantees. Respondent-1 had filed suits before the Senior Civil Judge seeking the release of goods on furnishing insurance guarantees, to which the petitioners insisted on bank guarantees for demurrage and storage charges. The Senior Civil Judge allowed insurance guarantees, and a subsequent civil revision was dismissed by the District Judge. The High Court also refused interim relief. The core legal question concerns the propriety of interfering in constitutional jurisdiction with discretionary interim orders passed by courts below regarding the nature of guarantees for the release of goods. The Supreme Court dismissed the petitions, holding that the impugned orders were discretionary and within jurisdiction, and no interference was warranted in constitutional jurisdiction. The Court laid down that if a specific insurance company is deemed insolvent or has failed to meet obligations, the petitioners may object and have the controversy determined by the Nazir of the Court.
- Whether the Supreme Court will interfere in constitutional jurisdiction with discretionary interim orders passed by subordinate courts regarding the acceptance of insurance guarantees?
- Can a petitioner object to a specific insurance company furnishing a guarantee if it is considered not solvent or has failed to meet prior obligations?
- How is a controversy regarding the solvency and sufficiency of funds of an insurance company offering a guarantee to be determined?
ORDER
' NAIMUDDIN, J.---All the above three petitions are directed against three separate, but similar, orders all dated 3-6-1991, passed on three interim applications separately filed in Constitution Petitions Nos.D-414, D-415 and D-416 all of 1990 filed by the petitioners in the High Court of Sindh at Karachi.
2. The brief facts are that respondent-1 filed three suits in the Court of III Senior Civil Judge, Karachi (West). They prayed to the Court that they might be allowed to get the goods released from the petitioners on furnishing insurance guarantees. The petitioners, it appears have had no objection to the release of the goods on their furnishing bank guarantees for the dues on account of demurrage/storage charges claimed by the petitioners against the goods. The Senior Civil Judge, however, allowed the release of goods on furnishing guarantee by insurance company.
3. Aggrieved by the order, the petitioners filed a Civil Revision Application in the Court of District Judge, Karachi (West). The Court dismissed the application holding that the impugned order did not suffer from any illegality or material irregularity.
4. Still aggrieved, the petitioners challenged the orders in three separate Constitution petitions filed by them, as stated before, as also applied for interim relief for a direction that the goods may be allowed to be released on furnishing bank guarantees instead of insurance guarantees.
5. While rejecting the prayer, the High Court observed as follows:-- "In the last para. Of the order, whereby the petition was admitted it was observed that the learned Senior Civil Judge had followed the practice of this Court in allowing a party to furnish insurance guarantee instead of a bank guarantee. In view of this position it is not proper at this stage to stay the operation of the Impugned Order of the learned Senior Civil Judge and the District Judge...
6. We heard Mr. Qamar Abbas, learned counsel for the petitioners. Mr. S.M. Abbas, A.O.R. Is present for Caveator/respondent-1.
7. It is submitted by Mr. Qamar Abbas that a large number of insurance companies have been black listed by the K.P.T. Because they did not meet their obligations under the guarantees furnished by them in other cases.
8. Firstly, no such point was raised in any of the Courts below or in the High Court. Secondly, the orders are discretionary and within jurisdiction. Therefore, it is not possible to interfere with such orders in Constitutional jurisdiction. (See Sheikh Gulzar & and Company Limited and others v.
Special Judge, Special Court of Banking and another (1991 SCM R 590).
9. Further, the Court has not ordered the acceptance of guarantee of any particular insurance company. Therefore, if any insurance company is not solvent in the opinion of the petitioners, the petitioners can object to its furnishing guarantee and show that it has failed to meet its obligations under an earlier guarantee given by it. Further, in the affidavit of justification the insurance company which offers guarantee has to state that it has sufficient funds to meet its obligations under the guarantee and its assets exceeds its liabilities. If any controversy in this regard arises, it will be determined by the Nazir of the Court in accordance with the rules. Therefore, the petitioners should have no apprehension on that count.
10. Subject to the above observations, all the three petitions are dismissed.