MUHAMMAD ALI MAZHAR, J. - This common order will dispose of CMA No. 4322 of 2009 filed by the plaintiff under Order 39, Rules 1 and CPC and CMA No. 6377 of 2009 filed by the defendant under Section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001.
2. The plaintiff has filed this Suit under Section 9 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 for recovery of amount paid in excess, mark-up on- late redemption, declaration, injunction, direction, possession, redemption of mortgaged properties and recovery of liquidated damages and general damages, The case of the plaintiff is that in order to build low cost houses and sell the same to the general public, the plaintiff obtained financial facility of Rs. 20 million from the defendant. At that time when loan was obtained changes in the banking matters took place for elimination of the interest based transaction, but the defendant fixed the rate of interest @ 17% per annum, which was against the Islamic Banking System and BCD Circular No. 13, dated 20.6.1984 issued by State Bank of Pakistan. The plaintiff also referred to the judgments of Hon'ble Federal Shariat Court as well as Hon'ale Shariat Appellate Bench of the Supreme Court of Pakistan. Due to some differences and or non-payment of loan amount the defendant filed Banking Suit No. 2134/1995 against the plaintiff in the Banking Court. The Banking Court passed the judgment and decree against the plaintiff. Against the judgment and decree, the plaintiff preferred Appeal No. 75 of 1998 in this Court which was also dismissed thereafter, the plaintiff preferred Civil Petition No. K- 516/1999 in the hon'ble Supreme Court of Pakistan, in which both the parties have filed a settlement and the hon'ble Supreme Court was pleased to dispose of the matter in terms of settlement as under:-
(1) That the petitioner (Appellant) to pay Rs. 5.5 Million to the House Building Finance Corporation within 15 days' time from today (31.8.1999) and undertake to pay rest of the amount as per terms of deed of assignment. After this payment mortgaged property worth Rs. 4 Million will, remain with House Building Finance Corporation, While other property will be redeemed.
(2) That rest of the claim based on interest/profit is referred to the official assignee who will calculate the same with the assistance of representatives of the parties in accordance with the terms of Deed of Assignment within one month time from today.
(3) That calculation of the Official Assignee will be final and any amount found due will be paid by the petitioner within two months from the date of final calculation of official assignee after this balance payment withheld property will be released.
(4) In case the amount of Rs. 5.5 Million is not paid within time or calculation of official assignee are not honored by payment, the House Building Finance Corporation will recover the amount per decree of Court.
(5) The fee of Official Assignee is Rs. 10,000/- payable by the petitioner.
According to the plaintiff the Official Assignee instead of making calculation in terms of amended law i.e. H.B.F.C. Act, 1952 submitted his report dated 13.11.1999 charging interest @ 17% per annum which was gross violation of Islamic Banking System, In view'of the grossly inflated figure of interest calculated by the Official Assignee the plaintiff again approached hon'ble Supreme Court by filing the review application which was also dismissed vide order dated '14.12.2000. The plaintiff has also referred to other proceedings including the filing of execution application by the defendant against the plaintiff in the Banking Court and also a criminal complaint lodged by the defendant against the same plaintiff.
3. It was further contended that the plaintiff has already paid Rs. 32,594,613/- to the defendant which they were not entitled. The plaintiff has shown the following break up in paragraph 34 of the pliant.
Principal Loan Amount Rs.
20,000,000/- Amount Paid by M/s. Brecast, compounded by HBFC increasing the principal LoanRs.
24,135,651/- Excess amount received by HBFC as principalRs, 4,135,651/- Mark-up @ 17% from 14.12.1999 to 26.03.2005Rs. 3,717,018/- Total amount receivable form HBFC Rs.
7,852,669/- The plaintiff in paragraph 37 of the plaint has also stated that they are entitled to recover mark- up/profit from the defendant as well as liquidated damages with the following break up:- Overpaym ent of Principal to HBFC Mark-up of Overpaym ent to HBFC 4,315,651 Mark-up 14.12.99 to 26.03.2005 6,310,541 Mark-up 27.03.05 to 31.12.2005 1,453,823 Mark-up for the year 2006 2,257,929 Mark-up for the year 2007 2,686,352 Mark-up for the year 2008 3,196,064 Mark-up till 23.04.2009 1,194,843 17,099,552 Mark-up on delayed redemption 6,964,314 Losses incurred due to late redemption of units in the shape of 60% escalation on 96 unit @ 141,000/- 13,536,000 Losses incurred due to forced sale Plots without Construction, 96 residential and 2 commercial plots at 50% of market value 10,170,000 Loss of market value of above sale of 2 commercial plots.
15,500,000/- Total:-67,405,5177/- The plaintiff has also shown the claim of general and special damages in paragraph 38 of the plaint.
4. After incorporating various details and calculation of the alleged excess amount paid and the claim of special as well as general damages the plaintiff has inter atia prayed for declaration that the charging of 17% interest as well as compound interest is illegal. Further declaration has been sought that in view of the withdrawal of Execution Application No. 202/1998 and the dictum laid down by the Federal Shariat Court in PLD 1992 FSC 501 and the judgment of hon'ble Shariat Appellate Bench reported in PLD 2000 S.C. 716, the defendant has no right and authority to claim a sum of Rs. 14,472,181/- or auction/sell the mortgaged properties bearing units/bungalows Nos. R- 238 to R-241 and bungalow Nos. R-274 to R-281 (total 12 bungalows) constructed on plot No. A-3, Sector 42-A Gulshan-e-Omair, KDA Scheme No. 3 Gulzar-e-Hijri Karachi. The plaintiff has also sought direction against the defendant for the redemption of the aforesaid bungalows and the mandatory and permanent injunction against the defendant not to auction or dispose of bungalows without due process of law.
5. Through CMA No. 4322 of 2009 moved under Order 39 Rule 1 and 2 CPO, the plaintiff has prayed that the auction proceedings notified by the defendant in the newspaper be suspended with further prayer that the defendant be restrained from disposing of bungalow Nos. R- 238 to R-241, till disposal of the suit.
6. The defendant has filed leave to defend application bearing CMA No. 6377 of 2009 under Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in which preliminary legal objections have been raised that the suit is not maintainable and barred under the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001. It is further stated that the suit is otherwise not maintainable in view of the order of hon'ble Supreme Court dated 14.12.2000. It was further contended that the plaintiff has already sold out the assigned property and delivered possession thereof to M/s. Rufi Builders without completion of construction of subject houses. The plaintiff has committed breach of the terms and conditions of compromise made before the hon'ble Supreme Court. Besides taking other legal pleas, it was further stated in the application that as per clause 2 of the deed of assignment the bulk investment was made by the defendant in the plaintiff's housing project was exclusively on profit basis, which was assessed in accordance with prevailing market value and investment policy. The corporation by following the principles of Islamization in banking system had granted bulk investment of Rs. 20 million for short duration of 5 years to the plaintiff and not to any individual borrowers/property holders. The rate of profit at 17% per annum was assessed and fixed after negotiation/settlement with the plaintiff. The diminishing partnership system of gradually reducing the outstanding liability and the concept of joint ownership was applied. The defendant has raised various contentions and vehemently denied the allegation made,in the plaint and prayed unconditional leave to defend.
7. Since both the learned counsel advanced their common arguments on both the pending applications, so first I would like to take up leave to defend application. Learned counsel for the defendant argued that the suit was filed in the month of April, 2009 for the recovery of alleged excess mark-up paid by the plaintiff and the liquidated and general damages. Learned counsel referred to the order dated 9.3.2011 and argued that the instant suit has been filed by plaintiff for the recovery of excess amount paid to HBFC, but the above order shows that the plaintiff is willing to pay the defendant Rs. 75 lacs in full and final settlement. He further referred to paragraph 17 of the plaint and the letter wherein the plaintiff offered Rs. 6 million to the defendant for full and final settlement and similar request was made in the letter dated 19.8.2005 available at page 185 of the Court file. It .Was further.Contended that the deed of assignment dated 15.2.1990 was executed for construction of housing project. The plaintiff obtained financial facility of Rs. 20 cotillion for five years but before completion of the said housing project the plaintiff sold out the entire assigned property fraudulently to Rufi Builders without the permission of the defendant. Learned counsel further argued that the defendant filed a Suit No. 2134 of 1995 against the plaintiff in the Banking Court, which was decreed. The plaintiff filed first appeal, which was also dismissed thereafter, the plaintiff filed civil petition in the hon'ble Supreme Court, which was disposed of in view of settlement reached between the parties. The plaintiff failed to make any payment as per compromise decree and the Official Assignee found that the plaintiff is liable to make payment of Rs. 5,485,193/- to the defendant. The learned counsel further argued that Criminal Complaint No. 19 of 2002 was filed by the defendant against the Director of the plaintiff and he referred to page 171 of the plaint to show that the plaintiff filed criminal misc. Application No. 27 of 2006 under Section 561-A, Cr.P.C, in this Court for the suspension' of criminal proceedings in which it was stated that all questions involved were finally disposed of by hon'ble Supreme Court in C.P.No, 516-K of 1999, which attained finality.
Oh this statement the criminal misc. Application was admitted and the proceedings arising from above criminal complaint were suspended till next date. Learned counsel referred to order of this Court passed in First Appeal No. 42 of .2006. Though the learned division bench of this Court allowed appeal but the impugned order passed in execution proceedings was set aside without prejudice to the tights of the respondent/defendant to claim & recover the amount in accordance with law as calculated by the Official Assignee per order of the hon'ble Supreme Court dated 31.8.1999 followed by order on CMA No. 29 of 2000 in civil appeal No. 1321 of 1999, dated 14.12.2000.
8. Learned counsel further argued that even in J.M. No. 44 of 2001, the learned counsel for the plaintiff admitted that respondent/plaintiff is willing to settle the amount of HBFC in terms of the order of hon'ble Supreme Court without prejudice to his legal rights, which fact is reflecting from the order of this Court dated 8.2.2008. Learned counsel argued that the order passed by the hon'ble Supreme Court on the basis of compromise has attained finality and plaintiff failed to make payment and on the contrary filed the suit which is also hit by doctrine of res judicata. Learned counsel argued that keeping in view the circumstances and various questions of law and fact raised in the leave to defend application the defendant is entitled to an unconditional leave to defend.
9. So far as the injunction application is concerned, learned counsel argued that no injunction can be granted unless the entire outstanding dues are deposited or surety is furnished equivalent to the subject amount. He further argued that the injunction application has been filed with mala fide intention. The plaintiff has failed to make out prima facie case, balance of convenience' is also not in favour of the plaintiff and there is no question of any irreparable injury. The assignment deed makes it clear that the arrangement of investment was made on profit sharing for bringing transaction within the Islamic system as Musharka/diminishing partnership. Learned counsel further argued that no case of any interim injunction is made out and the application is liable to be dismissed, In support of his arguments, learned counsel for the defendant relied upon following case-law:-
(1) 2012 SCM R 280 (State Bank of Pakistan through Governor and another v. Imtiaz All Khan and others). It is well -settled law that party once approaching the Court for seeking relief shall seek all the relief to which it thinks entitled to and if such relief, even if available but not asked for, cannot be claimed by filing a subsequent legal proceedings as it would fall within the mischief of constructive res judicata.
(2) 2003 CLD 326 (Khairpur Textile Mills Ltd. And 7 others v. National Bank of Pakistan and another). By virtue of the provisions contained in Article'189 of the Constitution of Islamic Republic of Pakistan any decision of the Supreme Court to the extent that it decides a question of law or is based upon or enunciates a principles of law, shall be binding on all other Courts in Pakistan. Thus the law declared by Supreme Court becomes the law of land and is binding on all Courts and all other forums. It is the duty of every- authority whether judicial or otherwise to give effect to the law laid down by Supreme Court.
(3) 2009 CLD 1215 (M/s. Nishat Impex (Pvt.)Ltd. v. M/s. Habib Bank Ltd.). To constitute res judicata, within the contemplation of Section 11, CPC subject-matter of two suits is required, under law to be directly and substantially in issue to warrant application of Section 11, CPC.
10. Conversely, the learned counsel for the plaintiff argued that the hon'ble Federal Shariat Court has already held that the House Building Finance Corporation after enactment of . House Building Finance Corporation (Amendment) Ordinance, 1979 functions on partnership basis, the system of loaning by the corporation which was previously based on interest has now been substituted by system of joint ownership (Musharka). If was further held in the same judgment that Section 21 in its present form is repugnant to the injunction of Islam. The borrowing power mentioned in the Section must be based on interest free transaction. He further argued that the judgment rendered by the Federal Shariat Court was affirmed by the hon'ble Shariat Appellate Bench of Supreme Court.
11. Learned counsel further argued that while imposing the interest and compound interest the defendant grossly violated the law. The learned counsel referred to page 333(a) of the Court file, which is an order dated 7.4.2006 passed by learned Banking Court-II, Karachi in Execution Application No. 202 of 1998 filed in Suit No. 2134/1995. This execution application was withdrawn by the defendant on the ground that the decree-holder/defendant wish to sell the assigned property under sub-section (3) of Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. Learned counsel argued that only permission for withdrawal of execution application was accorded to by the Banking Court but no permission was given to the decree-holder to sell out the property under Section 19 of the above Ordinance, 2001. Learned counsel further argued that the plaintiff has already paid entire amount in terms of settlement between the plaintiff and defendant which is available at page-155(a) of the Court file. He further argued that the plaintiff has already paid Rs. 5.5 million. It was further averred that the plaintiff showed, his bona fide and without prejudice to their legal right agreed to deposit Rs. 60 lacs for the redemption of bungalows but the defendant refused the same with mala fide intention.
12. Learned counsel also referred to an order dated 18.6.2007 passed by the learned Company Judge of this Court in J.M.No 44 of 2001 in which the Official Liquidator submitted a reference showing outstanding amount of Rs. 1,24,65,104.50 against the respondent/J.Ds. Which amount was calculated in accordance with calculation provided by the HBFC, which contained the mark-up @ 17%, The learned Single Judge observed in his order that possession of houses/properties against which finances were advanced, were taken over by the HBFC on 10.8.1999, therefore, there entitlement to charge mark-up is dubious. On this observation learned counsel for HBFC sought time to ascertain the factum of possession and to address the Court on the next date. It was further contended that vide order dated 7.10.2008 the plaintiff company was revived and parties were directed to pursue their remedy in accordance with law. Learned counsel argued that the defendant illegally issued public notice on 3.4.2009 for selling plaintiffs properties therefore, the plaintiff has immediately filed the suit. It was further averred that the plaintiff has paid the entire amount and for this reason the defendant issued the deed of redemption in favour of plaintiff.
Learned counsel also pointed out an application which was moved by the defendant in the Banking Court in execution application in which it was mentioned that on the application of decree- holder the Banking Court ordered delivery of possession of the house No. R-238, R-239, R- 240 & R-241 and on the basis of this admission the learned Single Judge of this Court in J.M. No. 44 of 2001 passed the order on 18.6.2007 that the entitlement to charge mark-up after taking over the possession of bungalow is dubious. The learned counsel made much emphasis that the Official Assignee instead of making calculation in terms of amended law i.e. HBFC Act, 1952, calculated 17% interest as well as compound interest which is gross violation of Islamic Banking System therefore, the plaintiff has claimed the refund of excess amount paid and also claimed liquidated damages.
He further argued that leave to defendant application does not fulfill the requirements of Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
13. So far as the injunction application is concerned learned counsel reiterated that instead of issuing redemption deed in respect of four bungalows in favour of the plaintiff, the defendant made an attempt to grab the property and issued notice for public auction in the newspaper after withdrawing the execution application from Banking Court. Learned counsel argued that if interim orders are not confirmed, the plaintiff shall suffer irreparable loss and injury. Finally, learned counsel concedes that the plaintiff is ready to deposit the amount of Rs. 80 lacs with the Nazir of this Court as security/surety in lieu of confirmation of stay as already noted by this Court in its order dated 9.3.2011. In support of his contention he relied upon following case-law:-
(1) PLD 1992 Federal Shariat Court 501 (Muhammad Iqbal Chaudhry, Advocate v. Federation of Pakistan and others). Section 21 [(as amended by House Building Finance Corporation (Amendment) Ordinance (XL of 1979)] Constitution of Pakistan (1973), Article 203-DD. Repugnancy to Injunction of Islam. Borrowing power mentioned in Section 21 has to be based on interest free transaction. Section 21 in its present form is, therefore, repugnant to Injunction of Islam and is to be amended. Obviously the repayment of principal and payment of interest due in case of funds raised under clause (b) of sub-section (1) of Section 21 are objectionable. This sub-section in fact relates to the borrowing power under sub-section 21(1) for purpose of raising of its capital and taking loans from working capita! Relating to the loans, etc. It is not linked with investment as defined in sub-section (ee) of Section 2 of the Act as amended nor with the agreement of partnership as defined in sub-section (eee) of Section 2 of the Act and as such it is not in accordance with the Islamic Injunction.
(2) PLD 2000 SC 760 (HBFC v. Muhammad Sharif). The learned Federal Shariat Court held that provision of interest in clause (2) of Section 21 of the Act of 1952 is un-lslamic. No exception can be taken to this finding of the Federal Shariat Court. Raising funds through interest bearing loans is against the injunctions of Islam as detailed in our main judgment about Riba in the case of Muhammad Aslam Khaki v. Federation of Pakistan and others (Shariat Appeal No. 1/92 etc.). It is a well-established rule of Shariah that a partner cannot guarantee the principal invested by his other partner, because it means that in the case of a loss, the whole loss will be borne by the guaranteeing partner and the other partner will remain immune from any loss. This is a clear violation of the basic principle of Islamic partnership, where losses must be shared pro rata by all the partners.
(3) 2011 CLD 790 (M/s. Shaz Packages & 03 others v. M/s. Bank Al-Falah Ltd.) This judgment ' was authored by me (Muhammad Ali Mazhar, J.) in which while deciding leave to defend application, it was held that responsibility rested upon Banking Court to appreciate riot only the contents of plaint but also leave to defend application and replication, if any filed, In order to pass a speaking order with sound reasoning, it was necessary to look into facts of the case and also consider documents attached with plaint, leave to defend application and replication. After going through entire pleadings of parties, it was obligatory upon Banking Court to decide question of law raised in leave to defend application and not to dismiss or reject it in perfunctory and cursory manner. In banking suit it was a sole opportunity for defendants to apply for leave to defend and their entire future rested upon its decision, therefore, in all fairness defendants had legitimate right to be heard and all questions of law and facts raised in leave to defend application should be answered by Banking Court for the reason that on rejection of leave to defend, defendants were to go out of arena without any further opportunity to defend.
(4) 2011 CLD 408 (Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. Authored by me (Muhammad AIi Mazhar, J.). Sections 9(2) and 10(3)(4). Application for leave to defend. Suit. Non-fulfilment of requirements of Section 10(3) and (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 by defendant. Validity. Defendant's such failure would be considered after plaintiff first fulfilled requirements of Section 9(2) of the Ordinance.
14. Heard the arguments. It is an admitted position that the defendant filed the suit against the plaintiff, which was decreed by the Court, thereafter, the plaintiff filed appeal in this Court, which was also dismissed and the plaintiff filed civil petition in the hon'ble Supreme Court, which was disposed of in view of the settlement reached between the parties. The settlement was filed in the hon'ble Supreme Court through the advocates of the parties in which it was agreed that plaintiff/petitioner will pay Rs. 5.5. Million to the defendant within 15 days with further undertaking to pay rest of the amount in terms of deed of assignment. After this payment mortgaged properties worth Rs. 4 million will remain with HBFC while other properties will be redeemed. It was further agreed that rest of the claim based on interest/profit will be referred to the Official Assignee who will calculate the same with the assistance of the representative of the parties in accordance with terms of deed of assignment. It was further agreed that the calculation of the Official Assignee will be final and any amount found due will be paid by the plaintiff/petitioner within two months from the date of final calculation and after this balance payment withheld property will be released. It was further agreed in the settlement that in case of amount of Rs. 5.5 million is not paid within time or the calculation of Official Assignee are not honoured by payment, the HBFC will recover the amount per decree of the Court.
15. The Official Assignee on 13.11.1999 submitted the report to the hon'ble Supreme Court in which he has shown the calculation of amount found to be due in terms of clause 2 of deed of assignment between the parties and in last paragraph he has shown liability in the sum of Rs. 54,85,193/- outstanding as on 30.9.1999. It is also a matter of record that the plaintiff filed civil misc. Application in the hon'ble Supreme Court for remanding the matter to Official Assignee for recalculation of the amount and sought the direction that the respondent/defendant be directed to charge the simple interest only. The contention of the plaintiff in the hon'ble Supreme Court was that the plaintiff is not liable to pay interest while counsel for the defendant argued that it was interest bearing loan and case was to be decided on the basis of compromise entered into between the parties. The hon'ble Supreme Court dismissed the civil misc. Application. Before the Official Assignee counsel for the plaintiff referred to clause 22 of deed of assignment while the counsel for the defendant relied upon clauses 2 and 5 of the deed of assignment. Clause 2 of deed of assignment provides that investment of Rs. 20 million will carry a profit of 17% per annum to be calculated on quarterly rest basis and shall be paid by the assignee at the time of each quarter. While clause 5 provides that the profit @ 17% per annum shall be payable for the interim period from the date of release of first installment. It is also a fact that deed of assignment was entered into for the bulk investment for the construction of 192 houses each measuring 160 sq. Yards, which was described in the schedule.
16. The main thrust of the arguments of the learned counsel for the plaintiff that the Federal Shariat Court in the case of Muhammad Iqbal, Advocate (supra) rendered the judgment on 14.11.1991 whereby Section 21 of HBFC Act, 1952 was held to be repugnant "to the injunctions of Islam and required to be amended, accordingly. The hon'ble Federal Shariat Court held that obviously the repayment of principal and payment of interest due in case of funds raised under clause (b) of sub-section (1) of Section 21 are objectionable. This sub-section in fact relates to the borrowing power which is not linked with investment as defined in sub-section (ee) of Section 2 of the Act as amended nor with the agreement of partnership as defined in sub-section (eee) of Section 2 of the Act and as such it is not in accordance with the Islamic Injunction. The judgment of Federal Shariat Court was impugned before the hon'ble Shariat Appellate Bench of Supreme Court in the case of HBFC v. Mohammad Sharif (supra) whereby the judgment of hon'ble Federal Shariat Court was affirmed and the hon'ble Supreme Court held that raising funds through interest bearing loan is against the injunctions of Islam as detailed in the case of Muhammad Aslam Khaki v. Federation of Pakistan. It was further held by the hon'ble Supreme Court that it is a well-settled rule of Shariah that a partner cannot guarantee the principal invested by his other partner, because it means that in the case of a loss, the whole loss will be borne by the guaranteeing partner and the other partner will remain immune from any loss. This is a clear violation of the basic principle of lslamic partnership,.Where losses must be shared pro rata by all the partners.
17. There is no cavil to the proposition that the hon,'ble Federal Shariat Court as well as hon'ble Shariat Appellate Bench of Supreme Court declared the aforesaid provisions against the injunctions of Islam but it Is also a fact that the judgment of Federal Shariat Court was announced 14.11.1991 and various appeals were filed before hon'ble Shariat Appellate Bench of Supreme Court and the Shariat Appellate Bench affirmed the order of Federal Shariat Court in their judgment dated 23.12.1999 while the compromise before the Supreme Court between the parties in this case was recorded on 31.8.1999 before the judgment of Shariat Appellate Bench affirming the decision of Federal Shariat Court. Even in the settlement brought on record the matter was agreed to be referred to Official Assignee for the calculation of claim based on interest/profit and the calculation was to be made with the assistance of the representatives of the parties. It is not out of place to mention that hon'ble Federal Shariat Court directed the implementation of its judgment till 30.6.1992 while Shariat Appellate Bench ceased of the matter and while affirming the judgment of Federal Shariat Court, directed the implementation of the judgment by 30.6.2000, so according to the letter of the law as envisaged under Articles 203-D and 203-F of the Constitution of Pakistan, the decision was effective from 30.6.2000.
18. In my humble view at this stage I cannot . Reopen the matter which was decided by the Court,Appellate Court and finally by the hon'ble Supreme Court where the civil petition was disposed of on mutually agreed terms which is a sticking point, nonetheless, there must not be dead silence but to,grasp the effect of judgment passed by the hon'ble Shariat Appellate Bench came into effect from 30.6.2000 and its binding effect on the present case Another important aspect cannot be ignored which are the ways and means under which the Official Assignee has calculated the figure of liability and its endpoint. Various documents .Already on record to show that the matter was finally exposed of by hon'ble Supreme Court. Even orefehdated $V2.2008 passed in J.M.Nq. 44 of 2001 available If Page 239 shows that the plaintiffs counsel gave his clear statement in the Court that the plaintiff is willing to settle the amount of HBFC in terrr\s of the order of hon'ble Supreme Court without prejudice to his legal rights. Even in the order dated 23.2.2006 the same learned counsel on behalf of plaintiff appeared in criminal misc. Application No. 27 of 2006 and argued that all questions involved were finally disposed of by the hon'ble Supreme Court in C.P.No. 516-K/99 which had attained . Finality therefore, subsequent criminal proceedings are against the settled compromise. At the same time an important aspect cannot be ignored which is emerging from the order dated 18.6.2007 passed by the Company Judge in which the Official Assignee's Reference No. I of 2007 was referred to with the wording that learned Official Assignee/Liquidator has shown outstanding amount of Rs. 1,24,65,104.50 payable by the respondent/plaintiff which was calculated in accordance with the calculation provided by the HBFC. The order further speaks that the possessions of the houses/properties against which finance was advanced were taken by HBFC on 10.8.1999, therefore, entitlement to charge mark-up is dubious, In paragraph 3 of the reference it is stated that the HBFC filed the claim of Rs.
1,24,65,104.50 as on 1.12.2006 before the Official Assignee/Official Liquidator, which claim is including the mark-up @ 17% per annum from the institution of the suit. On one hand this Court observed in its order that possession was taken over by HBFC on 10.8.1999, but on the other hand the last reference of the Official Assignee shows the calculation of dues as on 1,12.2006. The defendant in their leave to defend application admitted that necessary amendments have already been made jn HBFC Act that all provisions declared repugnant to the injunctions of Islam were removed, In para 4 of the leave to defend application it is stated that the defendant is following the principle of islamization in banking/finance business had granted the investment of Rs. 20 million for short term duration. It was further stated that rate of 17% per annum was agreed after negotiation. The diminishing partnership provides a system of gradually reducing outstanding liability. The concept of joint ownership has been applied to delete/refuse interest bearing for Islamization of finance of the defendant to share rental benefits to assigned properties as partner by deleting the provision of HBFC Act repugnant to Islamic ideology in pursuance of decision of Federal Shariat Court and Shariat. Appellate Bench by incorporating and applying the direction of State Bank of Pakistan which provides system of profit and loss sharing as well as joint ownership Of the assigned property by the corporation and borrowers.
19. Though the plaintiff went upto the hon'ble Supreme Court and settled and agreed the terms and conditions of compromise but in the present suit they are heavily relying upon the judgments of Federal Shariat Court as well as hon'ble Shariat Appellate Bench. While the defendant in their own leave to defend application also referred to the judgments of Federal Shariat Court and Shariat Appellate Bench and also referred to the circular of State Bank of Pakistan, which provides the system of profit and loss sharing as well as joint ownership of the assigned property. It is also a fact that besides, disputing mark- up/interest the plaintiff also claimed the recovery of excess amount paid to the HBFC and also claimed liquidated damages and general damages which cannot be adjudicated through a snap decision. At the same time it is also necessary to see whether the learned Official Assignee rightly calculated the outstanding liability in terms of settlement reached before the Honorable Supreme Court. It is also necessary to be adjudicated whether the plaintiff is liable to pay mark-up /profit upto the date of taking over the possession by HBFC or it is continuing right to claim the mark-up/profit on the last calculation made by Official Assignee upto 1.12.2006 and even the defendant in the leave to defend shown the calculation upto 30.4.2009 in the sum of Rs. 14,796,327/- payable by. Plaintiff which is on and on. In order to resolve this controversy including the claim of damages and excess amount an opportunity needs to be provided to the parties for leading evidence so that bone of contention may be decided, in all conscience, the defendant in its leave to defend application has raised substantial question of law and fact hence, they deserve unconditional leave to defend.
20. Learned counsel for the defendant relied upon the case of State Bank of Pakistan and Nishat Impex Pvt. Ltd. (supra), in both cases the principle of res judicata and constructive res judicata was discussed that a party wants to approach Court of law for relief shall seek all reliefs to which it thinks entitled to and if such relief available but not ask for cannot be claimed by filing subsequent legal proceedings as it would fall within the mischief of constructive res judicata. There is no cavil to the proposition expounded but in the suit in hand the plaintiff has approached for the recovery of excess amount and claim of damages and liquidated damages, which requires evidence hence, at this stage it cannot be said that the suit is hit by res judicata unless parties are allowed to lead evidence. Learned counsel also relied upon the case of Khairpur Textile Mills Ltd. In which Article 189 of the Constitution of Pakistan was under discussion that any decision of the Supreme Court to the extent that it decides a question of law or is based upon or enunciates a principle of law, shall be binding on all other Courts in Pakistan, In the present case the hon'ble Supreme Court did not decide the issue on merits but the case was disposed of by way of compromise. There is no doubt that under Article 189 of the Constitution the dictum laid down by the hon'ble Supreme Court is binding upon all Courts in Pakistan if a question of law is decided, In fact the plaintiff is taking the same plea that the judgment rendered by Federal Shariat Court and affirmed by the hon'ble Shariat Appellate Bench of Supreme Court is binding on the defendant, A careful examination of the plaint does show that the plaintiff has approached this Court for recovery of damages and excess amount and not to modify the terms of compromise which Is otherwise not possible In the present proceedings. So far as the case-law cited by the learned counsel for the plaintiff is concerned the Judgments of hon'ble Federal Shariat Court as well as hon'ble Shariat Appellate Bench of Supreme Court have already been discussed in detail, In my own judgments rendered in M/s. Shaz Packages and Soneri Bank Ltd. {supra). I have discussed in detail the circumstances which makes entitled the defendant for awarding leave to defend, In the Soneri Bank case I have also discussed that right of fair trial and due process has become fundamental right under Article 10-A of the Constitution of Pakistan. The plaintiff's counsel argued that the defendant has failed to comply with the requirements of Section 10 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, In this regard I would like to observe that the defendant has clearly mentioned in paragraph 37 that the plaintiff is liable to pay Rs. 14,796,327/- as per calculation upto 30.4.2009 while the plaintiff has claimed the recovery of excess amount as well as liquidated damages and general damages and since the defendant is itself a Financial Institution and claimed the amount in view of the Official Assignee reference while the plaintiff has also lodged various claims against the defendant. The claims of both the parties cannot be decided without evidence, therefore, in my view the strict compliance of Section 10 is not required to be made out in the facts and circumstances of the present case, where the controversy is altogether different from a normal/routine banking suit.
21. Now I would like to take up injunction application. The contentions of both the learned counsel have already been discussed in detail along with case-law cited at bar, so I do not need to touch it again. On 28.4.2009 the learned Single Judge of this Court as an interim measure restrained the defendant from finalizing the auction proceedings by accepting bid. The plaintiff has impugned the auction proceedings initiated through public notice published in the newspapers daily Jang and Dawn for selling bungalow Nos. R-238, R-239, R-240 and R-241 and it is also the matter of record that a learned counsel for the plaintiff on 9.3.2011 without prejudice offered to pay Rs. 75 lacs to HBFC for full and final settlement of the claim or in lieu of confirmation of stay order he was ready to furnish solvent surety in the sum of Rs. 80 lacs with the Nazir of this Court, in order to safeguard and protect the interest of the defendant as well, I feel it expedient that the plaintiff in lieu of confirmation of stay should furnish solvent surety/security with the Nazir of this Court, so the claim of parties vice versa may be adjudicated upon after recording evidence and reconciling the report of Official Assignee whether he has calculated the dues in terms of settlement reached before the hon'ble Supreme Court. The defendant in its leave to defend application stated that Rs.
14,796,327/- is due upto 30.4.2009 and according them die figure of this liability has substantially increased, while the plaintiff's claim is diet the four bungalows involved in the present suit was taken over by the defendant on 10.8.1999, so in my view in order to decide the controversy regarding the cut-off date, the plaintiff has made out an arguable case and if without resolving die present controversy, the interim orders are vacated or the defendant is allowed to continue the auction proceedings, the claim of redemption shall become infructuous. On the contrary, no injury will be caused to the defendant when their right if any has been secured through solvent surety/security.
22. The bottom line of die above discussion is that the defendant is allowed unconditional leave and die leave to defend application is converted into written statement. The interim orders granted Cartier are confirmed subject , to furnishing cash security or bank guarantee by the plaintiff in the sum of Rs. 1,50,00,000/- within 15 days with the Nazir of this Court, In case cash security is furnished it will be invested by the Nazir in some Government profit bearing scheme till final outcome of the suit. Both the applications are disposed of accordingly.
23. Since under Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, it is clearly provided that if the application for leave to defend is accepted, the same will be treated as written statement and the Court while granting leave shall also frame issues relating to substantial questions of law and fact. After examining the plaint and the contents of. Written statement, following issues are framed:-
(1) Whether the suit is maintainable and not hit by the principle of constructive res judicata?
(2) Whether the judgment of hon'ble Supreme Court (Shariat Appellate Bench) reported in PLD 2000 SC 716, which was made effective from 30.6.2000 will have any effect on the settlement dated 31.8.1999?
(3) Whether the plaintiff is defaulter in payment of dues to the defendant?
(4) Whether the Official Assignee has calculated the dues in accordance with settlements reached between the parties.
(5) Whether the plaintiff is liable to pay any interest/profit to the defendent if yes, then upto which period?
(6) Whether the plaintiff is entitled to the liquidated damages and general damages as claimed in the suit?
(7) Whether the plaintiff is entitled for tie redemption of bungalows in question?
(8) What should the decree be?
List of witnesses within seven days. Documents and commission if any, within 30 days.
4. The learned Official Assignee is also directed to submit the latest report In Court with upto date calculation of dues if any within 30 days.