Learned counsel for the petitioner is disputing the valuation of his securities provided for the outstanding amount to the creditor Bank, respondent No.2. This valuation has been made by professional PBA approved valuators engaged by respondent No.2 Bank. Their valuation has been affirmed on 9-3-2004 in the decision of the SBP Committee formed under paragraph 17 of Circular 29 of 2002 to resolve disputes with financial institutions. Under Circular 8 of 2003 the decision of the SBP Committee is binding on the parties.
The written comments by the SBP state that the petitioner provided its own valuation of the securities that was prepared by a property dealer; the Committee however, preferred to accept the valuation made by PBA approved valuators. It is plain that in doing so the Committee acted strictly in accordance with Circular 29 and there is nothing on record to dislodge the view taken by it.
2. The learned counsel for the petitioner also took up a new ground not contained in the petition to the effect that the terms of Circular 29 of 2002 set out in its paragraph 10 are unreasonable and arbitrary. In a case as the present, where the forced sale value (FSV) of the security is less than the outstanding amount, then to effect settlement a sum equal to the FSV is to be recovered from the customer in cash. If FSV is higher than the outstanding amount then the customer has to pay 75% or more of the outstanding amount to reach settlement. Learned counsel for the petitioner claimed that this classification operated to the petitioner's prejudice, because its FSV was marginally less than the outstanding amount which disentitled the petitioner to pay 75% of the outstanding amount in settlement. consequently the classification is alleged to be arbitrary and illegal. As pointed out above, this contention came as a surprise because it is not set out in the petition.
Nevertheless, the argument is facile because even in cases where the FSV is higher than the outstanding amount, the SBP Committee has discretion to order settlement at higher than 75% of the outstanding amount. In fact the floor percentage would come into active consideration where the disparity of FSV over the outstanding amount is substantial, rather than marginal, as is the present case. In all cases of classification it is common that difficulty is experienced by cases on the borderline between separate classes, but that does not mean that the classification made is illegal. So long as rational criteria distinguish the classes that are formed with nexus to the object of the law, the classification so made is valid. So too is the classification done by Circular 29.
3. Learned counsel for the petitioner finally questioned the value ascribed to pledged goods. These are described as scrap by the valuators and the value, determined, in the amount of Rs.4,00,000 is said to be excessive. This point seeks as adjustment rather than revision of value. However, it raises a question of fact, which cannot be examined by this Court in Constitutional jurisdiction. The respondent No.2 Bank and the petitioner are, however, directed to revisit the matter and settle it by mutual consent keeping in view the hardship encountered by the petitioner for being a borderline case due to FSV amount.
4. The present dispute has been lingering for more than one year after the SBP Committee decision whereas the object of Circular 29 is to conclude settlements rather than drag matters. Therefore the petitioner is directed to pay the amount of the FSV less the disputed valuation amount of pledged stock to the respondent No.2 Bank within two weeks. The dispute about valuation of the scrap shall be resolved by mutual consent cF the parties acting reasonably and fairly, within one month. Failing settlement for the petitioner's default, respondent No.2 Bank shall be entitled to also recover he disputed amount from the petitioner in accordance with law.
5. This petition is disposed of in the above terms.