ASAD SHAFIQUE Versus DISTRICT AND SESSIONS JUDGE, LAHORE And Other

Writ Petition No. 334 of 1992, decided on 12th December, 1994.

MIAN ALLAH NAWAZ, J.- The validity of order dated 18.2.1992, passed by the learned District Judge, Lahore, is called in question in this petition.

2.The facts, in brief, are: that M/s Fancy Manufacturers (Pvt) Limited, secured a loan of Rs. 12,14,000/- as foreign currency loan from the Industrial Development Bank of Pakistan/herein respondent No.3, in year 1985. The Company through its Managing Director Mr. Asad Shafique/herein petitioner, executed a loan agreement and mortgaged/hypothecated his properties as security for the repayment of the loan. The Company, covenanted to repay the loan within a period of l2 years with eighteen half yearly instalments. As company/borrower was not able to make repayment, in accordance with the schedule, so the respondent No. 2,. Served a legal notice Upon it on 12.5.1990. The Company thereafter made payment of Rs. 15,000/- which was not received by the respondent No. 2, as the cheque was dishonoured. Respondent No.2 again served a notice upon the Company/borrower on 19.10.1990. As the borrower did not pay any attention to notice, respondent No. 2 moved a petition under Section 39 of the Industrial Development Bank of Pakistan Ordinance (XXXl of 1961) to the learned District Judge Lahore and following prayer:-

".... That this Hon'ble Court may be pleased to make an order:

(a)for absolute attachment of the property mentioned in Schedules I & II to this application or such other property of the respondents disclosed or indisclosed as is likely in the estimation of this Hon'ble Court to fetch, on being sold amount equivalent to the outstanding, liability of the respondents to the bank together with costs of these proceedings. The liability of respondents is Rs. 26,14,286 /39 as on 31.12.1991.

(b)For the sale of the property detailed in Schedules I & II mortgaged by the respondents with the petitioner bank as security for the loan, out of the sale proceeds a sum of RS. .26,14,286/39 as on 31.12.1991 together with interest from lst of January, 1992 till todate at the agreed rate, interest pendentelite and future interest/penal interest and other charges accrued or to be accrued at stipulated rates as per loan agreement dated 8.6.1985, cost of the legal proceedings and other charges which the respondents are liable to pay in terms of the aforesaid agreement may kindly be directed to be paid to the petitioner bank.

(c)It is further prayed that since there is strong apprehension that mortgaged property with machinery and equipment as per schedules I & II may'be sold or removed from the premises by the respondents an ad-interim attachment order may be passed as envisaged by subsection (3) of Section 30 of the Industrial Development Bank of Pakistan Ordinance, 1961.I

(d)It is further prayed that an injunction restraining the respondents from transferring or removing their disclosed or undisclosed properties during the pendency of the present application may be granted in favour of the petitioner/bank."

3.The respondent No.2 also moved an application for interim attachment of the properties of the Company which stood hypothecafed/mortgaged in favour of respondent No.2. A notice was issued to the petitioner & respondent No. 1. It was only the petitioner who appeared before the Court on 18.3.92 and the remaining respondents did not enter appearance. On the same date the impugned orders were passed subject to notice. In the aforesaid background, this constitution petition has been moved.

4.The learned counsel for the petitioner relied upon Section 6 of {he Banking (Recovery of Loans) Ordinance (XXIII of 1978), to contend that the learned District Judge had no jurisdiction whatsoever, to entertain the petition filed by the respondent No.2; that the impugned orders as well as proceedings pending before the learned District Judge were coram non-judice. The learned counsel for the respondent No.2, on the other hand, supported the impugned order by relying upon proviso (a) to subsection (4) of Section 6 of the Banking Companies (Recovery of Loans) Ordinance to contend that the petitioner had a remedy under Section 39 of the Ordinance and so neither the impugned order was without jurisdiction nor the proceedings pending before the learned District Judge were not maintainable.

5.As regards respondents No.3 to 6, no one enters appearance on their behalf. They are, therefore, proceeded against ex-parte.

6.I have heard the learned counsel for the petitioner as well as respondent No.2 at considerable length and bestowed careful consideration to the rival contentions of the parties. The challenge to jurisdiction of the learned District Judge is clearly repelled by the plain language of Section 6 of Banking Companies (Recovery of Loan ) Ordinance, 1961 which reads as follows:-

" 6-Powers of Special Court (1) A Special Court shall

(a)(b)&(c)...................

(2)................

(Q)(b)&(c)..................

(3).................

(4)No Court other than a Special Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Special Court extepds under this Ordinance, including a decision as to the existence or otherwise of a loan and the execution of a decree passed by a Special Court; and all proceedings, including proceedings following the filing of an arbitration award and proceedings for theexecution of a decree within the jurisdiction of a Special Court, by whatever Court passed, which may be pending in any Court immediately before the commencing day shall stand transferred to the Special Court;

Provided that nothing in this sub-section shall be deemed to affect:

(a)the right of a banking company to seek any remedy before any Court that may be available under the law by which the banking company may have been established or under that law as amended from time to time;

(b)..

(5)..............................

7. The Banking Companies (Recovery of Loans- (Amendment) Ordinance (II of 1983) was promulgated on 30.1.1983. It amended Section 6 by, way of adding Proviso to it. The bare reading of Proviso (a), supra, makes it clear that the right of banking Company, to seek any remedy before any Court, which may be available to a Company under the law by which the Company is established, is saved. Resultantly it can be safely said that this proviso has come to protect the right of the company to avail the remedy under Section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961. It is a settled constructionr of law that an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the proceeding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within and such a proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and properly construed without attributing to it that effect. (See Page 218 .Construction of Provisos in Caries on Statute Law: 7th Edn, by S.G.G. Edgar").

8. Applying this principle to the effects and circumstances of this case I have no hesitation in coming to conclusion that the Company had a right to move a petition under Section 39 of the Industrial Development Bank Ordinance 1961, before the District Judge. The challenge raised on behalf of the petitioner to the competency of the District Judge, is wholly misconceived and is based upon totally untenable grounds:

For the reasons stated above, this petition is found to be wholly devoid of merit and is accordingly dismissed in limine. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.

Judges on this bench

Mian Allah Nawaz397 judgments