EFU GENERAL INSURANCE LTD. Through Executive Vice-President vs CHAIRMAN, BANKING TRIBUNAL NO.1, LAHORE and 3 others

The facts leading to the filing of the present petition are that respondent No,2 which is a Banking Company had brought a suit for recovery of Rs,28,46,207.90 against respondents No,3 and 4.

During the pendency of that suit an application was filed by the respondents Nos.3 and 4 for impleading the petitioner as a party. This application was resisted but was allowed by the Banking Court on 3-1-1995. The petitioner contested the suit by filing reply to the show-cause notice and raising various objections through another application under Order VII, Rule 11 of Code of Civil Procedure. The trial Court instead of deciding that application decreed the suit against respondents Nos.2 and 3 as also the petitioner on 10-1-1996. That decree has been challenged by the petitioner in the present proceedings.

2. Learned counsel for the petitioner has contended that the petitioner which is an insurance company had only insured the goods against theft and robbery and has nothing to do with the transaction between the Bank and its customers. Learned counsel has further pointed out that the petitioner does not fall within the definition of "Customer" as given in section 2(c) of the Banking Tribunals Ordinance, 1984 which reads that a customer shall mean a person who has obtained finance from a Banking Company or is the real beneficiary of such finance and includes a surety and an indemnifier. Consequently, the only question which arises for determination in the present case is as to whether the petitioner can be said to be an indemnifier. The answer to this question has to be in negative, inasmuch as the petitioner did not indemnify .Against non-payment of the suit amount and liability of the petitioner could only be created if the goods had been lost on account of theft or robbery. Learned counsel for the petitioner has relied upon a Division Bench judgment of Karachi High Court reported as M/s. United Bank Limited v. M/s. Adamjee Insurance Company Ltd. 1988 CLC 1660 which is almost on all fours with the present case. It has been ruled that "it is true that the insurance company is an indemnifier but it is not indemnifier in the sense of which it has been used in the definition of the word "borrower" in above-quoted clause. (b). The insurance Company is an indemnifier for any losses, the insured may sustain through the agency of sea risks insured against i,e, any loss occurring by means of any of the perils insured against and not in relation to th loan contract". These observations are conclusive of the controversy.

3. No one has appeared for the respondents. They are proceeded against ex parte. In view of the above, this petition is allowed and the impugned judgment and decree so far as the petitioner is concerned is declared to be without lawful authority and of no legal effect. No order as to costs.