ALI NAWAZ CHOWHAN, J. This order will dispose of Writ Petition No. 683/2005 as well as C.O. No. 9/1999.
2. M/s. Gadoon Synthetic Mills Ltd. Is the petitioner in Writ Petition No. 683/2005 and has a grouse against CIRC (Corporate & Industrial Restructuring Corporation) to the effect that they were not following the dictates of the State Bank of Pakistan who while acting under the CIRC's laws has determined a question with respect to payment of the non-performing assets. That the State Bank of Pakistan had appointed a Committee of Experts for going through the loan under reference and had brought it within the purview of Circular No. 29 issued by the State Bank of Pakistan. Reference is made to a letter of the State Bank of Pakistan, dated 13th July, 2004 addressed to the petitioner, whereby the liability was determined against the loan under reference with respect to the HBL and a modus operandi for payment was also determined in the subsequent paragraph of the said letter which is placed at page 13 of the file.
3. According to the learned counsel for the petitioner, the petitioner is ready with a cheque to start discharging its liability under the said letter of the State Bank of Pakistan but the opposition is coming from the respondent-CIRC, who are not accepting the cheque nor letting the HBL accept the same on grounds which were frivolous in law.
4. The learned counsel appearing on behalf of the CIRC has taken exception to what has been stated by the learned counsel for the petitioner. According to him, there was a rationale behind the creation of the CIRC Ordinance, 2000 and it was because of this Ordinance that the loans pertaining to non-performing assets were activated through a scheme which the law envisaged.
According to Section 19 of the Ordinance itself, the CIRC was not a Banking Company and this has been stated in the statute. Consequently, the said corporation was not under the control of bankers' bank which is the State Bank of Pakistan.
5. According to the learned counsel for the petitioner, it has been held through legal realism and the case-law that for all intents and purposes and as the CIRC was dealing with the banking matters, therefore, it was bound by the dictates of the banker's bank.
6. In this connection, it was said that the very purpose of CIRC was to ensure the return of the loans taken against on-performing assets. That once the matter was determined and a party to the said loan was willing to pay the same, it should accept the same, It is said that invariably the CIRC was creating such hurdles and the Courts have issued directions asking them to allow the payments to be made so that the loans were discharged and the real purpose for which the CIRC was created is given a boost rather than it be allowed to work against the very purpose for which it is not created.
7. Whether CIRC is bound by the dictates of the State Bank of Pakistan? A reference is made to the case of Tanya Knitwear (Pvt.) Ltd. Vs. United Bank Ltd. And others, 2005 CLR (Kar) 77 and the relevant except from the same is reproduced below:-- "The contention of Mr. Rizwan Ahmad 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 provisions are not rendered redundant or ineffective. The conclusion is that while the 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 Ahmad 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 honourable Supreme Court in Hashwani Hotels Limited v. Federation of Pakistan and others (PLD J997 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 which SBP Circular No. 29, dated 15th October, 2002 with immediate effect."
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 be dealt in line with the circular."
8. In furtherance of what has been argued by the learned counsel for the petitioner, reference was made to the case of Industrial Development Bank of Pakistan Vs. Friends Spinning Mills (Pvt.) Ltd.
Through Chief Executive and 10 others (2005 CLD 833), as well as to the case of National Bank of Pakistan Vs. Messrs Paksaco Limited (2005 CLD 422).
9. When this Court asked the learned counsel for the CIRC whether the amount of the loan has been settled by a Committee which was constituted under the provisions of Section 10 of the CIRC Ordinance, 2000 and it has duly verified by the Verification Committee so constituted under the aegis of Governor State Bank of Pakistan, then what objection he has to the payment being submitted.
10. Reference was also made to Section 19(12) of the same Ordinance which reads as follows:-- "The recommendations and finding of the Governor State Bank made on the basis of finding, report and recommendations of the Verification Committee in regard to calculation of liability of obligor shall be final and have presumption of truth unless found to contain manifest error or contrary to law, but the same shall be subject to orders of the High Court."
His reply was that coming into being of the CIRC Ordinance and reference made to it, the HBL ceased to have the locus standi with respect to this loan and, therefore, for all the affairs of the loan the CIRC was to deal with the person who has obtained the loan. It was also his case that the Committee about which reference has been made by the learned counsel through the letter of the State Bank of Pakistan, was not that Committee which is envisaged under Section 10 of the Ordinance.
11. Whereas, the learned counsel for the petitioner further states that it is the same Committee and there cannot be any other committee and the matter was referred to the State Bank of Pakistan for final resolution and it passed through the jurisdiction of the experts committee which is the Verification Committee S envisaged by Section 10. That the Committee about which the reference is made in the letter of State Bank of Pakistan, was thus no other committee.
12. Now here is a case where the petitioner, as he so states, is ready to pay in accordance to the letter of the- State Bank of Pakistan. The HBL is refusing this payment on the ground of interference by CIRC. Then what should be done? Answering this question, the learned counsel for CIRC stated that he may make the payment to the CIRC and leave it for the CIRC to fulfil its obligation towards HBL whatever these be.
13. The pragmatic thing would, therefore, be for the petitioner under the circumstances when the HBL is refusing to accept its cheque, to send this cheque to CIRC with a note that it was meant discharging of the liability of the HBL.
14. What has been stated above, appears to be also the wishes of the CIRC because that is the path which the petitioner has to adopt for discharging its liability and the CIRC being there as entity for purposes of receiving the money under the law for non-performing assets.
15. There is also a necessity for approaching the CIRC and which has been expressed by the learned counsel. That there were certain charges from which the petitioner has to be discharged and certain document to be completed by the CIRC in this connection after receiving the payment.
16. When this Court asked the learned counsel for CIRC whether will it will amount to re-opening the quantum of liability which has been already determined in letter of State Bank. The answer was in the negative.
17. The learned counsel was again asked this question for the second time. His reply was that of course the liability which has been determined by the State Bank of Pakistan will be respected by the CIRC to the extent of fore sale value.
18. Learned counsel for the petitioner states that the same is already determined. The matter now ends and the petitioner is directed to follow the method so suggested.
19. After having heard both sides, this Court feels that it will be proper if the entire amount is recovered within 5 months so that the liability is discharged completely by the 30th of June, 2006.
But the first instalment of this amount in accordance with law and policy of the State Bank of Pakistan is to be paid by the 15th of February, 2006. Time starts from today.