1. ZIA PERWEZ, J.-- By this application under Order IX, Rule 13 read with Section 15(ii) and Section 27 of the Financial Institution (Recovery of Finances) Ordinance, 2001, applicant/defendant No. 2 seeks modification of order dated 17.9.2003 whereby the suit was disposed of to enable the parties to proceed in pursuance of the terms of the State Bank of Pakistan BDP Circular No. 29, dated 15th October, 2002.
2. Contention of Mr. Rizwan Ahmed Siddiqui, learned counsel for applicant/defendant No. 2, is that the directions issued on 17.9.2003 for settlement of the matter in pursuance of BPD Circular No. 29 are not attracted to the cases being dealt by CIRC. His contention is that the constituted by virtue of the Corporate and Industrial Restructuring Corporation Ordinance, 2000 as stipulated in Section 19 of the Ordinance. Learned counsel forcefully argued that as the CIRC is not a Banking Company, the question of it being governed by State Bank Circulars does not arise. He has also placed on record photocopy of a Circular No. BPD/PU-34/CIRC/11815/2004-6021, dated May ' 14, 2004 whereby plaintiffs were directed to approach CIRC directly for settlement of their case. He further contended that as defendant No. 2 is a statutory corporation entitled to adopt its procedure for settlement. In fact the policy was framed by CIRC entitled as "CIRC Settlement Scheme". It was duly notified through National Press and the time for availing benefit under that scheme has already been expired. Learned counsel further contended that the case of the plaintiff can be taken-up for consideration under the said CIRC Settlement Scheme and all the terms attracted shall be applicable after valuation of the units of the plaintiff by a value. In this regard he has stated that some of the valuers, as envisaged in the State Bank Circular No. 29 under Clause 7 and clause 9(iii) listed on the penal of valuers maintained by the Pakistan Bankers Association (PBA), are also on the penal of CIRC. The valuation already carried out is also disputed on the ground that valuers were not appointed by the Bank but acted on instructions of the plaintiffs.
3. Mr. Faisal Arab, learned counsel for the plaintiff, while opposing the application states that the BPD Circular No. 29' is attracted to the present case which provides for valuation by any valuer on the approved list of the Pakistan Banks Association (PBA). The plaintiffs approached the Court in the year 2001 and have acted promptly in pursuance to the circular.
4. Before proceeding further the relevant section of the CIRC may be reproduced which reads as follows:- "19. Corporation not to be a banking company.--Without prejudice to the provisions of Section 32, the Corporation shall be deemed not to be engaged in the business of banking for purposes of the Banking Companies Ordinance, 1962 (LVII of 1962) or, as the case may be, the State Bank of Pakistan Act, 1956 (Act XXXII of 1956)."
5. Reference may also be made to the provisions of Section 10(1) of the CIRC Ordinance which provides for:- "10. Verification Committees.-- (1) For the purposes this Ordinance and before taking any action thereunder, the Corporation shall, having regard to the facts and circumstances of the case, refer a question of bona fide dispute relating to liability of the obligatory in respect of the non-performing assets or cases relating thereto, including the cases of fraud, misrepresentation, and breach of any provision of law, rule, regulation and circulars of the State Bank, regarding the calculation, existence and repayment of a financial obligation or outstanding loan, mark-up or interest claimed against an obligator, to the Governor State Bank for verification and correct determination and calculation by the Verification Committee as hereafter provided: Provided that the Corporation may in appropriate cases and having regard to the facts and circumstances of the case require the Governor State Bank to include one or more suitable persons including an expert or consultant to be member of the Verification Committees."
6. A plain reading of the above sections reveal that while CIRC has been incorporated as a Corporation not to engage in banking as its business for the purposes of Banking Companies Ordinance, 1962. At the same time the provisions of law, rule, regulation and circulars of the State Bank, regarding the calculation; existence and repayment of a financial obligation or outstanding loan, mark-up or interest claimed against an obligator, to the Governor State Bank for verification and correct determination and calculation by the Verification Committee as provided under the law continue to apply.
7. The non-performing assets including the claim pertaining to this suit are alleged to have been transferred from defendant No. 1 to defendant No. 2 under terms of an agreement; in the absence of any statutory condition, such an agreement would not have the effect of altering or affecting the relationship between the plaintiff and defendant No. 1. The conditions applicable to the transaction between the plaintiff and the defendant would not be altered merely by assigning or passing of assets from defendant No. 1 to defendant No. 2 under the agreement to which the plaintiff is not even a party.
8. The contention of Mr. Rizwan Ahmed Siddiqui that the State Bank Circulars are not applicable to the defendant, in view of the provisions of Section 19 of the CIRC Ordinance: has no merit as the same have been specifically made applicable by virtue of Section 10(1) and other provisions of the Ordinance. The law is to be interpreted harmoniously. Section 19 is not an isolated section it is incorporated in the CIRC Ordinance which is to be read in conjunction with the other sections in a manner that the other provision s are not rendered redundant or ineffective. The conclusion is. That while the CIRC may not act as a Banking Company for carrying on its business, the provisions applicable to the borrowers from the respective banks continue to remain in force. The language of the statute being plain and unambiguous and dealing with the assets in the specified manner has to be interpreted in a manner so as to give effect to Section 19 as well as other sections of the statute including Section 10(1) of the Ordinance as held in the cases of Muhammad Haroon v. The Crown (PLD 1951 FC 118) and Inspector General of Police v. Mushtaq Ahmed Warraich (PLD 1985 SC 159). the law has already been settled on the point that the State Bank Circular have the powers of law as held by the Hon'ble Supreme Court in Hashwani Hotels Limited v. Federation of Pakistan and others (PLJ 1997 SC 315). However, the same is to be examined in the light of Section 19 of the Ordinance in the instant case. This controversy can be further narrowed down if a reference is made to the CIRC Settlement Scheme notified in the press. The second paragraph of the said scheme reads as follows:- "CIRC has decided to introduce a scheme for amicable settlement of non-performing assets (hereinafter called "CIRC Settlement Scheme") in line with SBP, BPD Circular No. 29, dated 15th October, 2002 with immediate effect."
9. Considering the above paragraph of the scheme it is manifestly clear that the CIRC has invited for settlement against the non--performing assets in the line with State Bank of Pakistan Circular No. 29, dated 15.10.2002. Once the policy is announced and this fact is advertised through public notice all subsequent matters have to be dealt in line with the circular. The question of pick and choose does not arise with regard to the respective clauses of the circular is to be applied in its entirety. Mr. Rizwan Ahmed Siddiqui on being pointed out candidly conceded to this position. To pointed out that the only controversy that now remains to be thrashed out is the entitlement of plaintiff to avail the benefit under the scheme of CIRC and the reference to valuer. This brings the matter to the second point as to the appointment of the valuer. In view of the above discussion this matter does not call for any further examination. It has also been admitted that there are valuers on the penal of CIRC who are also listed on the penal of valuers maintained by. Pakistan Banks' Association (PBA). BPD Circular No. 29 specifically provides for the manner of selection of valuers. According for the aforesaid reasons order dated 17.9.2003 is modified to this extent.
10. The time for approaching and availing benefit under the "CIRC Settlement Scheme" has already expired, however, such controversy is not attracted in the present matter as the plaintiff has taken the steps necessary to avail the benefit under Circular No. 29 within time prior to expiry of the date for availing such facility. The plaintiff has shown his bona fide intention by placing sufficient material on record and by depositing 10% amount with the Nazir of this Court. The scheme framed by the CIRC specifically refers to action in line with the said Circular No. 29. This being the position' the case of the delay is not attributable -to the plaintiff who is to be dealt within similar manner and in accordance with the same guidelines whether the application is made to the Bank or CIRC both parties to the present suit. For these reasons the plaintiff cannot be deprived of the benefit under the Scheme framed by CIRC.
11. To avoid further dispute between the parties the appointment of the valuer may be made by the State Bank of Pakistan in pursuance to Section 10(1) of the CIRC Ordinance within one month in lien with the terms and conditions of Circular No. 29, dated 15.10.2002. Consequently, earlier valuation report is set aside.
12. The CIRC may withdraw the amount deposited by the plaintiff with the Nazir of this Court and the balance amount of 10%, if any required, may be deposited by the plaintiff with the CIRC within 30 days of the finalisation of valuation or earlier, if an agreement for settlement under the provisions of Scheme is arrived at and executed between the parties.
13. CMA 6693/2003 stands disposed of in above terms.
(2) In view of the fact that the order dated 17.9.2003 has been modified, this application is dismissed.