' MUNIB AKHTAR, J.---By means of a short order dated 26-5-2011, I had dismissed C.M.A. No, 5399 of 2010. The following are my reasons for having done so.
2. The aforesaid C.M.A. Is an application moved under section 16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("2001 Ordinance"), read with Order XXXVIII, rules 5 and 6 and Order XXXIX, rules 1 and 2, C.P.C. As presently relevant, the facts of the case are that the suit has been filed by the plaintiff bank against the defendants under the 2001 Ordinance for recovery of certain finance facilities made available to the defendant No,1 by the plaintiff bank. The other defendants, and in particular, the A defendant No,3, have been sued therein as guarantors of the loan facilities that were made available. The present application is concerned with the defendant No,3, and arises in respect of certain property that, at the time of the institution of the suit, belonged to the said defendant, being Plot No,136, 30th Street, Phase-VIII, DHA, Karachi ("the subject property"). By means of the CMA under consideration the plaintiff bank sought to have the subject property attached in terms of the provisions of the 2001 Ordinance and the C.P.C., as noted above.
3. The first point that requires consideration is that, admittedly, the defendant No,3 is only a guarantor of the facilities provided to the defendant No,l. He has been sued only in this capacity and none other. More specifically, the subject property has not been charged or mortgaged by the defendant No, 3 with the plaintiff bank in respect of the finance facilities provided to the defendant No,
1. An immediate question that therefore arose was as to how the subject property could be attached in terms of section 16(1) of the 2001 Ordinance. When confronted with this situation, learned counsel for plaintiff bank fairly (and in my view quite correctly) conceded that section 16(1) had no application in the facts and circumstances of the present case, and he, therefore, abandoned any prayer for attachment of the subject property in terms of that provision. However; learned counsel drew attention to subsection (4) of section 16, which expressly provides that nothing in, inter alia, subsection (1) shall affect the powers of the Banking Court under Order )
(XXVIII, rules 5 and 6, C.P.C., and submitted that the Plaintiff Bank was entitled to an attachment before judgment of the subject property in terms of the latter provision. To substantiate his claim in terms of Order XXXVIII, learned counsel submitted that the defendant No,3 had sought to sell off the subject property after the institution of the suit and after, apparently, having been served the matter. He submitted that the plaintiff bank became aware of the 'sale only when the matter was advertised in the newspapers on or about 14-4-2010. In these circumstances, according to learned counsel, all the ingredients of rules 5 and 6 of Order )(XXVIII were attracted and the property was liable to be attached.
4. It appears that, in fact, the defendant No,3 has sold off the subject property to one Mr. Ashar Sameer ("the Intervener"), who has filed C.M.A. No,11592 of 2010 under Order I, rule 10, C.P.C. In order to be impleaded as a defendant in the present suit. Learned counsel for the Intervener opposed the C.M.A. Presently under consideration. His case was that the sale transaction whereby the defendant No,3 had sold off the subject property to the Intervener was perfectly regular and lawful, and all the formalities in respect thereof had been completed by the parties concerned. He submitted that no ground whatsoever had been shown by the plaintiff bank for attachment before judgment and no such case had been made out and he accordingly prayed that the application be dismissed.
5. After having heard learned counsel as above, I ultimately came to the conclusion that the C.M.A.
Under consideration ought to be dismissed. As noted above, learned counsel for the plaintiff bank abandoned his claim in terms of section 16(1) of the 2001 Ordinance and focused exclusively on Order XXXVIII, rules 5 and 6, C.P.C. Also as noted above, the defendant No,3 has been sued only as a guarantor in the suit on the basis of the personal guarantee that has been given by him to the plaintiff bank in respect of the finance facilities made available to the defendant No,
1. It is, of course, settled law that simply because a person has given a personal guarantee in respect of an outstanding loan, that does not mean that he therefore stands precluded from dealing with his properties and assets in accordance with law B and in such manner as he deems appropriate.
Simply because a suit has been filed against a guarantor does not in and of itself entitle the creditor to come forward and in effect, restrain the guarantor from dealing with his properties. The creditor must show something specific and additional as required in terms of Rule 5 of Order XXXVIII, i.e., that the concerned defendant is disposing off, or is about to dispose off his property with intent to defeat or delay any decree that may be made in the suit. A mere bald assertion in this regard is not enough. In the facts and circumstances of the present case, it appears that the only reason why the plaintiff bank seeks relief by way of attachment before judgment is on account of the advertisement that appeared with regard to the subject property and the sale transaction in respect thereof. In my view, this is insufficient to entitle the plaintiff bank to obtain attachment before judgment. If at all the plaintiff bank succeeds against the defendant No,3, it would be entitled to a personal decree against him in respect of the amount decreed against him.
In such an eventuality (and of course, it is to be noted that this is something that remains yet to be decided), if the defendant No, 3 fails to make payment of the decretal amount, the plaintiff bank would be required to pursue execution proceedings against the said defendant in the manner required by law. In my view, simply on the basis of a bald assertion, and without anything more, the plaintiff Bank cannot be allowed to bypass the process of the law and, in effect, obtain something against the defendant No,3 to which it is not directly entitled, i.e., an immediate judicial order in respect of his property. Of course, had the subject property been mortgaged or otherwise charged with the plaintiff bank, the situation would have been entirely different. However, since that is admittedly not the case, the matter falls to be decided simply in terms of Rules 5 and 6 of Order XXXVIII, C.P.C. And I am not at all satisfied that the plaintiff bank was able to make out any case in terms thereof. Accordingly, in my view, the application was without merit, and was dismissed by me by means of the short order noted above.