1. AAMER FAROOQ, J.---This judgment shall decide, the instant appeal as well as Regular First Appeal No, 6 of 2011 as well as E.F.A. No, 3 of 2011, as common questions of law and facts are involved..
2. The facts, in brief, are that the appellants i,e, Sheikh Ghulam Farooq and Sheikh Yaseen Farooq, obtained finance facility from Muslim Commercial Bank (MCB) in the sum of Rs,30,00,000/- against the security of pledge of shares in the year 1994-1995. Appellants defaulted in the repayment of the finance, therefore, MCB filed a suit for recovery of Rs,36,13,510.97/-. Leave to appear and defend the suit filed by the appellants was dismissed and the suit filed by MCB was decreed. Muslim Commercial Bank sold shares of the appellants pledged with it for a sum of Rs,5,69,772/-. The appellants filed appeal against the above mentioned judgment and decree which was dismissed vide judgment and decree dated 25.06.2003. Appellants on 12.07.2003 filed an application for appropriate orders with respect to the return of shares pledged with MCB bank, which were of the value in sum of Rs,66,00,000/-. On 06.08.2003, MCB bank filed an execution application in which proceedings the earlier application of the appellants filed on 12.07.2003 was treated as an objection petition. The parties led their evidence in the objection proceedings and vide order dated 30.09.2010, the objection petition filed by the appellants was allowed. Meanwhile, appellants also filed a suit for recovery of Rs, 13,42,866/- along with the markup against MCB in the Civil Court. The plaint was returned in 2004 and suit was filed under the banking jurisdiction before the Banking Court i,e, Suit No,59/2004. On 30.09.2010 the suit filed by appellants was dismissed. The instant appeal has arisen out of dismissal of the suit, filed by the appellants vide judgment and decree dated 30.09.2010. Muslim Commercial Bank also assailed judgment and decree dated 30.09.2010 on account of certain observations made by the learned Trial Court against the bank which has been assailed in R.F.A. No,06 of 2011. MCB also assailed order dated 30.09.2010, whereby the shares were ordered to be returned to the appellants by the learned Trial Court through E.F.A. No,03/2011.
3. Learned counsel for the appellants, inter alia, contended that the suit filed by the appellants has been dismissed on the grounds of jurisdiction as well as merits. It was contended that as per admission of MCB the relationship of customer and financial institution exists between the appellants and MCB bank, hence, the Banking Court had jurisdiction in the matter. It was contended that findings of the learned Trial Court on issues Nos,02 and 03 in this behalf are not tenable. It was further contended that on merits the appellants led cogent evidence, whereby, it was proved that the shares were pledged with MCB Bank in the sum of Rs.13,42,866/- which is borne out from Ex-PW-1/1, which is against the statement of accounts duly issued by the respondents bank. It was further contended that there was one account of the appellants maintained with MCB, Stock Exchange Branch; that question of pledge of shares is different from the return of shares pledged with the Bank. It was further submitted that in addition to pledge of shares which were in the value of Rs.66,00,000/- the appellants used to keep shares on trust with MCB, which were in the sum of Rs.13,42,866/- and on 14.05.1997, the respondent bank failed to return the same.
2. 4.Learned counsel for the respondent bank, inter alia, contended that the appellants were allowed the finance facility against the pledge of shares; in this behalf letter of pledge as well as letter of lien was obtained, however, during the subsistence of the finance it was a practice that the customer could rotate the pledge inasmuch as shares pledged could be replaced according to their value. It was contended that no separate account other than the finance account was operated by the appellants; that the shares pledged with the bank used to be replaced by the appellants from time to time. In support of his contention, learned counsel placed reliance on cases reported as "Muhammad Wali Khan v. Gul Sarwar Khan" (PLD 2010 SC 965), "Habib Bank Limited v. Messrs Ajma Corporation and others" (2000 CLC 1425), "Allah Ditta v. Ahmed Ali Shah and others (2003 SCM R 1202) and "Bank Alfalah Limited v. Mukhtar Hussain Chishti" (2016 CLD 1586).
3. 5.The arguments advanced by the learned counsel for the, parties have been heard and the documents on record have been examined with their able assistance.
4. 6.The instant appeal is against the dismissal of the suit filed by the appellants which was for recovery of Rs.13,42,866/-. The learned Trial Court out of divergent pleadings of the parties framed six (06) issues:- i."Whether suit is barred by time? O.P.D. ii.Whether plaintiff has no cause of action? O.P.D. iii.Whether suit is not maintainable in view of preliminary objection No.4? O.P.D. iv.Whether this Court has no jurisdiction? O.P.D. v.Whether the plaintiff is entitled to recover Rs.13,42,866/- along with markup etc. on the grounds mentioned in the plaint? O.P.P. vi.Relief. "
5. 7.Issues Nos.3 and 4 pertain to the jurisdiction of the Trial Court and it was held that the relationship between the appellants and MCB is not one of customer and financial institutions, hence, the suit is not maintainable. Admittedly, the appellants had only one account with the respondent bank i.e. 00046-6. Though, the assertion of the appellants is that they used to deposit shares in the said account and withdraw the same on trust, however, the said concept is alien to the banking transactions and no such facility exists. As observed above, there is only one account of the appellants which was with respect to the finance allowed to them. In the said account the finance amount was disbursed to the appellants. It is the assertion of appellants that the shares pledged were separate from the shares tendered on trust. Since the very basis of claim filed in the suit for recovery of Rs.13,42,866 is that the shares were deposited on trust to the respondent bank, therefore, the appellants do not fall within the definition of customer as provided in section 2 of Financial Institutions (Recovery of Finances) Ordinance, 2001. Furthermore, the suit for recovery also does not arise out of the relationship as customer and Financial Institution and does not pertain to finance, therefore, Banking Court had no jurisdiction in the matter as provided in section 9 of 2001 Ordinance. In view of the above, the findings of the learned Trial Court on issues Nos.3 and 4 do not suffer from any infirmity calling for interference by this Court. Even otherwise, the appellants had onus to prove that they used to deposit the shares on trust with the respondent bank, which they failed to do so. In this behalf, the appellants tendered in evidence (statement of account), as Ex- PW-1/1 as well as Ex-PW-1/3, however, the bare perusal of the referred statements including the handwritten notes tendered, as Ex-P1, Ex-P2, Ex-P3 and Ex-P4 do not divulge that the same were tendered on trust. The appellants also did not prove in evidence the terms of the account or the transaction on the basis of which the shares were deposited and got released on trust. In fact the transaction alleged by the appellants is not known to the banking concept. The appellants, therefore, failed to prove their case i.e. entitlement to receive sum of Rs.13,42,866/-.
6. 8.The judgment and decree dated 30.09.2010, whereby the suit filed by the appellants was dismissed does not suffer from any factual or legal infirmity, therefore, the instant appeal is dismissed.
7. 9.The appeal filed by the MCB (R.F.A. No. 06/2011) pertains to the conclusion reached by the learned Trial Court that sum of Rs.13,42,866/- is with respect to the shares deposited on trust by the appellants. The referred findings ar without any basis or justification inasmuch as, as observed above the appellants failed to prove that there was any account or document on the basis of which there was relationship between the appellants and the MCB by virtue of which they used to deposit shares on trust and got them released. The sole basis of the referred transaction was the pledge of shares which were initially pledged in 1994-1995, however, MCB allowed substitution of the same on regular basis in order to meet the short fall of security or on the request in case they wanted to replace the same. The findings of the learned Trial Court on issue No.5 are therefore reversed and the appeal filed by the MCB is allowed to that extent. The suit filed by the appellants stands dismissed on merits, as observed hereinabove.
8. 10.The learned Judge Banking Court vide order dated 30.09.2010 ordered the adjustment of the shares valuing Rs.77,32,296/- against the outstanding decretal amount in terms of the judgment and decree passed in favour of the respondent bank. The referred conclusion has been reached by the learned Judge Banking Court on the basis, that the appellants pledged shares in the value of Rs.66,00,000/- and the same was proved with their various handwritten account statements which were tendered in evidence as OW-1/1 to OW-1/21. The bare perusal of the referred statements shows that there is no stamp from the bank that these shares were received as security for the finance. The witness appearing as DW-1 i.e. Manager Officer Advance department, Muhammad Akmal Kamran, categorically submitted during cross-examination that the shares were deposited as security but used to be released for trading, which was though not in accordance with the terms of the pledge but was a common practice. It was also stated by the said witness that the appellants had only one current account i.e. 46-6 and the entire record of. the shares deposited and withdrawn is mentioned in the register evidencing transactions from 1993 to 1999; the said register was subsequently computerized. The said statement of the witness is supported by initial handwritten letter and computerized statement of account, which was tendered in evidence as Ex- PW-1/1. In the suit filed by the appellants from the evidence it is evident that there was only one account of the appellants. The shares were tendered as security, however, the bank allowed the appellants to replace or substitute the shares on regular basis. The shares which were pledged with the respondent bank were sold for partial satisfaction of the decree. It is also evident from the record that currently there are no shares lying with the bank. Appellants failed to prove that there were two separate transactions i.e. the shares tendered on trust and the ones pledged with the Bank.
9. 11.In view of the above, the findings of the learned trial Court on the objection petition filed by the appellants are not tenable, hence, E.F.A No.03 of 2011 is allowed and order dated 30.09.2010 is set aside.
10. 12 In view of the above findings, the instant appeal is dismissed and R.F.A No.06/2011 is allowed to the extent of findings on issue No.5. Consequently, the suit filed by the appellants for recovery of Rs.13,42,866/- stands dismissed. As noted above, E.F.A. No. 03/2011 is allowed and order dated 30.09.2010 is set aside, consequently the application filed by the appellants also stands dismissed.