Plaintiffs filed a suit for. recovery of Rs, 159.972722 Millions by way of compensation for damages allegedly sustained by them, with the averments that the Defendant No, 1 on 4.4.1983 filed a suit in the Court of Special Judge Banking Court Lahore for recovery of Rs, 6,68,649/- with interest against them, Defendant No, 2 and one Ch. Aman Ullah Tarar. The Plaintiffs Nos, 1 to 3 were sued being guarantors, having furnished their personal guarantees, whereas Defendant No, 2 and his brother Ch. Aman Ullah were sued in the capacity of mortgagors/guarantors for the finance facility availed by Plaintiff No,
4. The learned Banking Judge cognizant of the suit while dismissing the application for leave to appear and defend the suit, passed a preliminary decree in favour of Defendant No, 1 on 24.11.1984 allowing three months time for payment of the suit amount. Defendant No,. 1 filed an application before the Banking Court complaining nonpayment of the decretal amount and prayed for final decree whicli was passed on 17.3.1985, directing the sale of mortgage property i,e, House No, 141-E Gulberg-III, Lahore, claimed to be jointly owned by Defendant No, 2 and his brother Aman Ullah Tarar. The plaintiffs pleaded that the Defendant No, 1 inspite of praying attachment/sale of mortgaged property, moved an application on 24.6.1985 for execution of the decree .by attachment/sale of the properties of all the judgment-debtors, including that of the Plaintiffs Nos, 1 to 3 and one Pervaiz Khatak brother of Plaintiff No, 1 (now deceased) who was not even a party to the suit. It was also averred that in "Fard Taliqa" submitted by Defendant No, 1, contained all the assets, movable/immovable of the plaintiffs and that of Pervaiz Khatak, which were illegally included, therein. According to the plaintiffs inclusion of above referred properties in the ''Fard Taliqa" was done maliciously out of conspiracy hatched with Defendant No, 2 who was opposed to the plaintiffs and this activity, was aimed at to humiliate them and to render them physical, proprietary rights loss and to damage their reputation. The plaintiffs also asserted that malicious joint move the defendants, led to issuance of warrants of attachment of properties mentioned in the "Fard Taliqa" by the Banking Court vide order dated 5.9.1985 consequent to which the assets of Plaintiff No, 4 were attached by the Bailiff on 14.9.1985. Defendant No, 2 also claimed to have acted with malice in filing application on 5.10.1985 whereby warrant of attachment of property of Parvaiz Khatak, a non-party to the suit, was prayed.
2. The plaintiffs on gaining knowledge of execution proceedings, filed an objection petition under Order XXI, Rule 58 read with Section 151 CPC on 4.3.1986, asserting that any other judgment-debtor could not have been solicited unless the mortgaged properties had first been sold and that too, if the sale proceeds fell short of the decretal amount. They also averted in their application-dated 4.3.1986 that the entire activity of attachment of their properties was out of conspiracy hatched maliciously to humiliate them and to cause them financial loss. The learned Banking Judge after hearing the parties accepted the application of the plaintiffs on 21.2.1989 and recalled the order of attachment with regard to their properties. Thereafter, Banking Court issued process for sale of the mortgaged property only.
3. The plaintiffs on account of alleged malicious prosecution launched by the defendants estimated their loss/damage at Rs: 1,59.972722 Millions, with the following details:-- "(a) On account of interest accrued upon the loan payable to the Industrial Development Bank of Pakistan for 5 years 7 months and 1 day i,e, from 20.7.1983 to 21.2.1989 ............Rs, 44,72,722.00
(b) On account of interest accrued upon the loan payable to Defendant No, 1 and other creditors for the said period from 20.7.1983 to 21.2.1989. ..........Rs, 5,00,000.00
(c) On account of loss of business for the said period i,e, 20.7.1983 to 21.2.1989. ........Rs, 80.00 million
(d) On account of mental torture and agony caused to Plaintiffs Nos, 1 to 3 ........Rs, 15.00 million
(e) On account of sufferings, prejudice and humiliation in the eyes of public-at-large and trading circles in particular. .........Rs, 30.00 million
(f) On account of damage to the machinery and business of Plaintiff No, 4. .........Rs, 30.00 million Grand Total;........Rs, 159.972722"
4. The defendants were granted leave to appear and defend the suit vide order dated 26.6.1991 and were permitted to file their written statements. Defendant No, 1 in its written statement raised certain preliminary objections regarding maintainability of the suit, lack of cause of action, besides claiming indemnity under the provisions of Section '14 of the Ordinance XIX of 1979 and denied the averments in the plaint. Defendant No, 2 also filed a similar written statement. Controversial pleadings of the parties necessitated framing of issues which were reduced on 7.7.1992 as follows:- -
1. Whether the suit is not maintainable? OPD.
2. Whether this Court has no jurisdiction to try this suit? OPD.
3. Whether the plaintiff is entitled to recover damages, if so, to what extent and from which defendant? OPP.
4. Relief'.
5. The plaintiff examined PW.1 Muhammad Amin son of Khuda Bakhsh, PW.2 Javed Ahmad, Ahlmad to Special Judge, Banking Court Lahore, PW.3 Haji Abdur Rehman son of Jamal Shah Nawaz Khan and tendered in evidence Ex. P.W. 1/1 a certificate alongwith summary of Account No, 2746-D-3 of Hafiz Abad Sitra Board Mills, Ex. W.1/2. Statement of Account No, 2746-D-3, Ex. P.W.1/3, valuation certificate issued by M.A Javed Engineer, Ex. P.W.4/11, certified copy of the plaint in the suit titled MCB Versus Hafiz Satra Board Mills Limited and 6 others, Ex. P.W. 4/12, copy of the interim order sheet of the Special Banking Court.
6. In rebuttal Defendant No, 1 examined DW. 1 Bashir Ahmad, Manager Muslim Commercial Bank, Circle . Office Lahore, and for corroboration statement of Defendant No, 2 was got recorded.
7. The learned counsel for the plaintiffs submitted that the property of the Defendant. No, 2 was mortgaged as security for repayment of finance facility availed by Plaintiff No, 4 and in presence of this mortgage, move of the defendants for sale of the properties of the guarantors was not only illegal, unwarranted and unauthorized but was an out come of conspiracy hatched by the defendants against the plaintiffs to maliciously cause them humiliation, physical, property/reputation losses. He further submitted that mala fide intention of the defendants is apparent from the fact that besides the properties of the plaintiffs those of Mr. Parvaiz Khatak were also included in the. "Fard 'Taliqa" alongwith the mortgaged property, inspite of the fact that Parvaiz Khatak was neither a party to the suit nor was a judgment debtor or guarantor of the defendants.
The learned counsel for the plaintiffs relied on the judgments in the cases of PLD 1954 SC 38, and Muhammad Akram Versus Mst. Farman Bi (PLD 1990 SC 28), to contend that all the prerequisites, for grant of decree for unauthorized damage caused by the defendants, are fulfilled in the case in hand and thus the suit of the plaintiffs deserved to be decreed. Reference to the judgment in the case of Ch. Muhammad Aslam Versus Aman Ullah and others (PLD 1990 Lahore 330), Messrs Marine Management Company through Proprietor Versus Government of Pakistan through Secretary, Ministry of Defence, Rawalpindi and 2 others IPLD 2000 Karachi 214), PLD 1966 SC 737, and Pervez Ahmad Khan Burki and 3 others Versus Assistant Commissioner, Lahore Cantt and 2 others (PLD 1999 Lahore 31), as was also made in support of the claim in the suit.
8. Both the learned counsel appearing on behalf of the Defendants Nos, 1 and 2 refuted the arguments of the plaintiffs and argued that grievance of the plaintiffs, if any, stood redressed by acceptance of their application/objections filed by them under Order XXI, Rule 58 CPC vide order dated 21.2.1999 passed by the Banking Court concerned thus, the suit for damages by them is not maintainable at law. It was also submitted that at the time of filing of suit Ordinance XIX of 1979 was in force and under its Section 6, the suit for damages could only be filed by a borrower and the plaintiffs being not the borrowers of Defendant No, 1, the suit was not maintainable at law. It was also urged on behalf of the defendants that for maintaining a suit for damages there should be some obligation in existence, violation of which may result in to create a liability of damages but no such obligation was in existence between the parties hence, the suit can not be decreed. Reference to Section 9 of the Recovery and Finance Ordinance 2001 was made, relying on the judgment in the cases of Haji Nabi Ullah and another Versus Messrs Habib. Bank Ltd. through President Bank, Head Office, Karachi and 2 others (PLD 1990 Peshawar 17), Messrs Grain Systems (Pvt.) Ltd. and 10 others Versus Agricultural Development Bank (1993 SCMR 1996), 1998 PLC 1718, Atlantic Carpets through Partner Versus Messrs Emirates Bank International and other (2000 MLD 1850) and PLD 2004 Lahore
101. It was also contended that essentials/pre-requisites for maintaining a suit for damages have neither been averred in the plaint nor those have been proved through evidence. According to him the alleged loss sustained by the plaintiffs -is not proved on the file and mere verbal assertions do not entitle them to the decree prayed. Immunity of acts done during the judicial proceedings, from claim of damages was also relied. Reference was made to the judgment in the case of M. Moosa Versus Mahomed and others (PLD 1959 Karachi 378). Non-appearance of all the plaintiffs in the witness Box was emphasized to be fatal to the suit for damages as without their individual statements neither the quantum of damages nor their real sufferance could be determined. In this behalf judgments in the case of Dr. Syed Haider Bokhary Versus North West Frontier Province and 5 others (1984 CLC 1280) and Adeeb Javedani, Printer and Publisher, Moon Digest, Lahore Versus Yahya Bakhtiar (1995 CLC 1246) were relied. It was also contended on behalf of the defendants that money decree passed against the plaintiffs had to be executed and they being judgment debtors cannot make any exception to the execution proceedings by filing a fake suit for damages. In the last, it was argued that this Court lacks jurisdiction to grant the decree prayed and the plaintiffs, if are really serious they must file a suit before the Civil Court of general jurisdiction. Judgment of the Honourable Supreme Court in the case, of Siddiqui Woolen Mills and others vs. Allied Bank of Pakistan (2003 SCMR 1156) was relied for this argument.
9. I have minutely considered the arguments of the learned counsel for the parties and have perused the record. My issue-wise findings are as below:-- Issue No, 1.
10. This issue, regarding maintainability of suit was framed on the basis of Preliminary Objections Nos, 1 to 3 of the written statement filed by Defendant No,
1. These objections were that since the matter did not arise out of "loan" and was only outcome of the alleged attachment, hence, the suit for damages was not maintainable before this Court, to whom the jurisdiction under the Banking Companies (Recovery of Loans) Ordinance 1979, was conferred under Ordinance-II of 1983 and that the grievance of the petitioner, if any stood redressed by the de-attachment of the properties of the plaintiffs by the Court who, attached those and that the Defendant No, 1 was immune from the prosecution, having bona fidely attempted to execute the decree in its favour in terms of Section 14 of the Ordinance XXIX of 1979. The dispute between the parties is regarding attachment of properties of the plaintiffs who though were not mortgagors of Defendant No, 1 at the time of availing finance facility by Plaintiff No, 4 against mortgage by Defendant No, 2, who mortgaged his property for availing of this facility being the chief executive but the defendants out of connivance with each other, without first proceeding against the mortgaged property, got the properties of the other judgment-debtors attached who were simply guarantors. Undeniably the Plaintiffs Nos, 1 to 3 were not customers of Defendant No, 1 who inspite of it, filed, suit before this Court for trial under the jurisdiction vested in it, under the Banking Companies (Recovery of Loans) Ordinance, 1979. The relevant provision of this Ordinance for filing the suit before this Court was Section 6 of the.
Ordinance (ibid) where-under a special Court in exercise of its civil jurisdiction, was conferred jurisdiction to try the suit filed by a Banking Company against a borrower or by a borrower against the Banking Company,. in respective or arising out of a loan. It is manifest from a bare perusal of the clause (a) of sub-section (1) of Section 6 of Ordinance XIX of 1979, that the Plaintiffs Nos, 1 to 3 being not the borrowers of the Bank (Defendant No, 1) could not maintain the suit in hand, before this Court thus. As regards Plaintiff No, 4 i,e, Hafizabad Straw Boards Mills (Pvt.) Ltd. the borrower, it had no grievance like the one voiced by the other plaintiffs and at the same time it cannot hold brief of its co-plaintiffs. In a suit for damages, each plaintiff has to show his own loss or sufferance hence inspite of impleadment of Plaintiff No, 4, suit as a whole `remained incompetent. Above all, the dispute canvassed by the plaintiffs did not relate to loan, in terms of the provisions of law, above discussed.
11.The properties of the plaintiffs were attached by the executing Court under a decree passed against the plaintiffs under the Banking Companies (Recovery of Loans) Ordinance, 1979, and its Section 8(3) provides that the Special Court shall on application of the decree holder forthwith order execution of the decree as arrear of the land revenue or in such other manner, as it may think fit. Meaning thereby that execution of the decree was processed under the provisions of said Ordinance whose Section 14 reads as under:-- "4. Indemnity. No suit, prosecution or other legal proceedings shall lie against the Federal Government or a Special Court or a Banking Company or any other person for anything which is in good faith done or intended to be done under this Ordinance or any Rule made there under."
12.It is clear from the above-reproduced provision of law that no suit, prosecution or other legal proceedings could have been filed against the Banking Company for anything done in good faith.
Since all the plaintiffs were judgment-debtors in the decree dated 17.3.1985, Defendant No, 1' with a bona-fide intention of executing the decree, and for recovery of the decretal amount, bona-fidely included their properties in the "Fard Taliqa" filed by and there is no evidence on the file regarding the claimed conspiracy between the defendants allegedly hatched to harm the plaintiffs thus, the Defendant No, 1 was not liable to pay damages as claimed by the plaintiffs being indemnified/immuned under the above referred provision of law. Thus the suit in hand was not maintainable. Besides it, suit of the plaintiff does not fall within the four corners of the Financial Institutions (Recovery on Finance) Ordinance, 2001 as the same has become for decision under this Ordinance, by successive legislations like Banking Tribunal Ordinance 1984 the Banking Company (Recovery of Loans, Advances, Credits and Finances Act, 1979, hence the same remains un- maintainable.
Issue No, 2 13.This issue was framed on an objection of the defendants that the asserted cause of action, to file the suit by the plaintiffs. did not arise out any dispute between a Banking Company and, the borrower, and this Court had no jurisdiction to entertain, adjudication or decide the suit. In support this objection besides reliance on Section 6 of the Ordinance-XIX of 1977 Reference to the judgment of the Honourable Supreme Court in the case Siddiqui Woolen Mills and others vs. Allied Bank of Pakistan (2003 SCMR 1156) was made, A close scrutiny of all the relevant provisions, already discussed while giving finding under Issue No, 1, revealed that a borrower/customer or a Banking Company could only file a suit, arising out of default in fulfilling any obligation with regard to any, loan/finance. The first requirement was that the parties should either be borrower/customer or Banking Company, as defined by Section 2 of the Ordinance (ibid) which defines a borrower as a person who has obtained a loan under a system based on interest from an indemnifier, whereas the customer is defined, as a person who has obtained finance under a system which is not based on interest from a Banking Company or is the real beneficiary of such finance, including a surety of the idemnifier. The plaintiff's suit, undeniably did not arise out of any dispute with the Banking Company in . fulfilling any obligation with regard to any loan or finance availed by them, thus, this Court had no jurisdiction to entertain, process or decide the suit filed by the plaintiffs hence, the suit in hand, at the cost of repetition, from the above resume, no financial facility having been advanced by the Defendant No, 1 (Banking Company) to be Plaintiffs Nos, 1 to 3, it did not fall within the purview of Section 6 of the Ordinance XIX of 1979, to confer jurisdiction on this Court to try it.
Issue No, 3.
14. This issue relates to entitlement of the plaintiffs to recover the claimed damages on account of attachment of their properties deserting mortgaged property of Defendant No,
2. Attachment of the properties of the plaintiffs was ordered by the Banking Court vide order dated 5.9.1985 in terms of "Fard Taliqa" filed by defendant and according to the plaintiffs, actual attachment at the spot was done by the Bailiff on 14.9.1985 regarding assets of Plaintiff No, 4 only. The plaintiffs also averred in the plaint in order to show malice on the part of the defendants that on the application of the Defendant No, 2 dated 5.10.1985 which was exceeded by the learned counsel for the Defendant No, 1 that the properties of one Parvaiz Khatak be also attached who was neither a party nor a judgment-debtor. This assertion was denied by the defendants claiming that besides the defendants' execution, application was moved under. Order XXI Rule 10 CPC, giving details of the property of all the new Directors of Plaintiff No, 4 who had offered that the property mortgaged be redeemed and that of the deceased Riaz Ullah Khatak and his brother, be mortgaged, to secure liability of the Company, Plaintiff No, 4 and consequently details of their properties were provided to decree holder.. Precisely their case was that the Plaintiffs Nos, 1 to 3 Directors/guarantors of the liability of Plaintiff No, 4 and the other person Parvaiz Khatak being its Director were proceeded against in the execution proceedings for recovery of decretal amount, remaining outstanding against their company. It is not denied by the parties that the Defendant No, 2 had mortgaged the property at the time of sanctioning of loan and without its sale, an effort to attachment of the properties of the guarantors was made by Defendant No,
1. It is clear that properties of Plaintiffs Nos, 1 to 3 though were included in the "Farad Taliqa" and were ordered to be attacked but, as a matter of fact, were not attached at the spot and the order of attachment was subsequently recalled by the executing Court. We will have to first see, what the attachment is? Ordinary meanings of attachment is "legal seizure", "to hold" or "to keep under holding/seizing of property so that it may remain intact till recovery of the decretal amount". Property subject of attachment continues to be owned/vested in the owner and he is only restrained from alienating any interest, therein, contrary to the order of attachment. The Honourable Supreme Court in the case of Mohiuddin Molla vs. The Province of East Pakistan and 2 others (PLD 1962 S.C. 119) graciously held that attachment is only a protective measure taken by a Court in order to keep the property intact and to enable the decree holder to satisfy the decree, therefrom. Besides the fact that attachment orders of the properties of Plaintiffs Nos, 1 to 3 were not actually executed at the spot, it was not such an act on basis of which plaintiffs could claim sufferance of such a huge loss, especially when they were not aliens to the cause. The other point which hinges for determination is whether the complained action of the defendants, amounts to malicious prosecution entitling the plaintiffs to award of damages prayed in the suit. The Honourable Supreme Courtin the case of Muhammad Akram Versus Mst. Farman Bi (PLD 1990 SC 28) laid down the ingredients/elements to test whether, some malicious prosecution really occasioned and those elements were graciously detailed as follow:--
(i) That the plaintiff was prosecuted by the defendant;
(ii) That the prosecution ended in plaintiff's favour;
(iii) That the defendant acted without reasonable and probable cause;
(iv) That the defendant was actuated by malice;
(v) That the proceedings had inferred with plaintiff's liberty and had also affected her reputation; and finally.
(vi) That the plaintiff had suffered damages.
15. Malicious prosecution according to dictionary meaning is prosecution intended to harm the person against whom it is initiated with malice. A judgment-debtor against whom a decree had attained finality, could not claim the prosecution as malicious only for the reason that the decree holder attempted to recover the decretal amount from his person or property. The plaintiff in order to prove the malice of the defendants examined PW.1 Muhammad Amin son of Khuda Bukhsh who produced certified copies of the statement of Account, a certificate of inspection report of Plaintiff No,
4. PW.2 Javed Ahmad, Ahmad to Judge Special, Banking Court Lahore was produced alongwith file of the Execution Petition filed by Defendant No,
1. PW. 3 is Abdur Rehman Jamali, Plaintiff No, 3 who stated that Hafizabad Straw Boards Mills Limited took a loan of Rs, 5,00,000/-from the Muslims Commercial Bank Limited, Defendant No, 1 and Mr. Ihsan Ullah Tarar was the Director at that time who mortgaged his personal property by executing document. He further deposed that the defendant Bank in the year 1983 filed a suit for recovery of loan arraying all the Director as defendants in the recovery suit. According to him, in the year 1985 warrants of attachment . were issued for attachment of personal properties of the Director on Which the Banking Counsel was approached and their properties were released. He further stated that he also moved an application before the learned Banking Judge which was opposed by the defendants and remained pending for 3 years on account of which heavy loses were suffered by them as the company was closed. He further stated that Defendant No, 2 in a surreptitiously manner tried to take out his property from attachment. He expressed that according to his thinking, in 'attachment process both the defendants corroborated each other and succeeded for attachment of the property of Parvaiz Khatak who was not even a Director of the Company. PW.3 admitted that he cannot qualify the exact amount of loan suffered due to attachment. This is the entire evidence produced by the plaintiffs to prove their claim of malicious prosecution and that of, decree for an amount of Rs, 159.972722 Million. This statement of PW.3 neither fulfilled the elements of test for malicious prosecution, laid down by the Honourable Supreme Court in the case of Muhammad Akram (supra) nor the details of the quantum of sufferance of damage by the plaintiffs, as detailed in para 8 of the plaint, are also not made out. In such like cases all the plaintiffs were required to appear in the witness box to support their claim of personal damage but except Plaintiff No, 3 none has appeared in the witness box which negatively reflected on their claim. They could not prove unreasonable or improbable cause for the attachment of their properties which either, already noted, was a bona fide effort on the part of the decree holder to recover the decretal amount.
Conspiracy inter defendants as asserted in the plaint, could not be proved by the plaintiffs and thus, it was not shown that the act of Defendant No, 1 of including the properties of the Director/guarantors in the "Fard Taliqa" was tainted with malice and at the same time, it could not be proved that what damage was sustainable by them, due to simple orders of attachment. PW3 admitted that the Plaintiff No, 4 availed the finance facility and if, it remained closed for some time, the act of Defendant No, 1 could not be said to be unauthorized. Though there is no difference for malicious prosecution through criminal or civil proceedings yet the pre-requisite above noted had to be proved, as those get their foundation from the judgments of Naveed Shaha Versus Sham ud Din (PLD 1964 Dacca 111), and Muhammad Mumtaz ud Din versus Shamas ur Rehman (PLD 1964 Dacca 618).
16. Defendant No, 2 in order to rebut the stance of the plaintiff, appeared in the witness box and stated that he was owner of 1/2 share of Plaintiff No, 4 and was Chairman of the Company. Riaz Khatak, Riaz Jamali and Parvez Khatak Members of the Board of Directors with whom he asserted that he had no relation but on account of their attempt to transfer his share, relations between them became constrained. He referred to civil litigation between them which was said to be pending before the High Court. He also stated that in account of this dispute, his son was murdered and he is facing litigation in different Courts. He also deposed that his dispute with the Bank is still going on, as the Bank tried to auction his residential house. He stated that he has discharged the entire liabilities in terms of incentive scheme announced by the State Bank of Pakistan. He further deposed that Parvaiz Khatak offered to mortgage his property as security with a view to substitute him and the company also passed a resolution to this effect and the matter was conveyed to the Bank but no action was taken. He denied in his examination in chief that any loss was suffered by the plaintiffs on account of his any action. The plaintiffs cross-examined him, during which he admitted that an amount of Rs, 5,00,000/- was obtained as loan from the Muslim Commercial Bank and his property was mortgaged as security. Neither this witness was cross-examined on the point of the alleged conspiracy between the defendants nor any suggestion put to him, to the effect that he connived with the Bank for attachment of their properties out of malice. This witness was also not cross-examined about his statement in the examination in chief that no, loss was sustained by the plaintiffs for any lapse on his part.
17.Above scan of evidence clearly shows that neither malicious prosecution was proved by the plaintiffs nor sustaining of any loss by them or quantum thereof could be established. The plaintiff miserably failed to prove their entitlement to the suit amount, hence this issue is answered in negative.
Relief 18.For the findings given on Issues Nos, 1 to 3 the suit of the plaintiffs, fails and is accordingly dismissed with costs.