' ZAFFAR HUSSAIN MIRZA, J.--This appeal by leave of this Court arises out of the order passed by a Division Bench of the Sind High Court, dated 21st October, 1985, in First Appeal No,65/1981, whereby the Division Bench directed the appellant to furnish security in the sum of Rs,1,50,00,000 and further directed that the amount should be deposited within two months.
2. Briefly the facts, so far as relevant for the present purpose are that Dubai Bank Limited, the respondent herein filed a suit against the appellant-company and two of its directors in the Court of Special Judge, at Karachi, under the Banking Companies (Recovery of Loans) Ordinance, 1979, inter alia, for the recovery of Rs,1,09,57,899.30 by the sale of mortgaged property. The appellant appeared in response to the summons and filed an application for leave to defend the suit but the prayer of the appellant was refused and the suit was decreed by judgment dated 12th November, 1981.
3. Being aggrieved the appellant filed an appeal in the High Court of Sind at Karachi, which was admitted to regular hearing by a Division Bench but by an order dated 15th February, 1982, another Division Bench of the Court rejected the application of the appellant for interim stay of execution and while doing so raised the question of maintainability of the appeal on the ground that the decretal amount was not deposited as required by law. Subsequently the Division Bench disposed of the preliminary question by order dated 21st April, 1982, taking the view that since the mortgaged property in suit was valuable property the same may be treated as security for the purpose of section 12(5) of the said Ordinance.
4. Both parties then came up before this Court in separate petitions in which leave was granted (Civil Appeal No,67-K/1982 and Civil Appeal No,68- K/1982). These appeals were disposed of by judgment dated 25th September, 1984. The result of this judgment was that the impugned orders of the High Court were set aside and with the consent of parties the case was remanded to the High Court "for determining the adequacy of the mortgage security to be treated as security for the purpose of section 12(5) of the Ordinance" and it was directed that in case of a shortfall it will be open to the High Court to order cash deposit to meet the shortfall or in its discretion to order security equal in value to the same.
5. When the case was taken up by the High Court on remand the appellant contended that the plot which was the subject-matter of mortgage and which was to be treated as security was commercialised. The appellant was given time to produce evidence in support of this assertion.
However, on 21st October, 1985, when the case came up for hearing again, the Court referred to its earlier order dated 15th April, 1985, which was passed on the report of the Naazar to the effect that the property was of the value of Rs,1.6 crore. This value was disputed by the respondent on the ground that the plot had not yet been commercialised. Therefore, the Naazar's report was rejected and it was held that the security was insufficient. Accordingly by order dated 21st October, 1985, the Court came to the conclusion that there was no proof showing that the plot had been converted to commercial purpose and therefore, it was directed that the appellant should furnish security in the sum of Rs,1-1/2 crore.
6. Leave was granted to the appellant against the aforesaid order in order to consider the contention that the learned Judges of the Division Bench had held the security as insufficient without properly considering the evidence produced by the appellant to establish that the plot was a commercial one and in any case no attempt was made by the learned Judges to determine the shortfall if any in the value of the security. When this appeal came up for hearing on 29th January, 1986, learned counsel for the appellant contended that necessary permission from the Karachi Development Authority for the conversion of the plot in question for commercial purpose had been obtained on payment of fees to the tune of Rs,10,77,900 and also an amount of Rs,71,860 was paid to the same authority as scrutiny fee. An objection seems to have been raised that the competent authority for conversion of land vests in the Karachi Municipal Corporation and not the Karachi Development Authority. However, it was contended on behalf of the appellant that after the promulgation of the Sind Buildings Control Ordinance, 1979, the competent authority constituted for the purpose is the Karachi Development Authority and not the Karachi Municipal Corporation. In view of these arguments notice was ordered by this Court to the Advocate-General, Sind, and Karachi Municipal Corporation for 30th January, 1986.
7. We have heard the learned counsel for the parties and Mr.Muslim Naqvi learned counsel appearing for the Karachi Municipal Corporation stated that the appellant had applied to the Karachi Municipal Corporation for conversion and a sum of Rs,69,16,400 was worked out as commercialization charges by the Karachi Municipal Corporation. However, we feel that the decision of this question involves the question of law as to whether the Karachi Development Authority or the Karachi Municipal Corporation is the competent authority for the purpose of conversion of a plot from residential to commercial purposes, which has not been decided by the High Court. We would not, therefore, like to go into that question and leave it open for the decision of the High Court, in view of the order that we propose to make. It appears to us that in any case the directions given by this Court were not kept in view by the learned Judges of the Division Bench who passed the impugned order, in so far as, they have ordered a fresh security without determining the actual value of the plot which was already mortgaged by the appellant in favour of the respondent to secure the liability or to determine the shortfall if any. Therefore, the impugned order is not sustainable and has to be set aside.
8. In the result this appeal is allowed and the order of the High Court is set aside and the case is remanded to the High Court for determining the shortfall in the value of the security as originally directed. The question whether the plot has been commercialised is left open and may be determined by the High Court. As this case has been pending adjudication for some time and its progress has been interrupted on account of proceedings brought to this Court by one or the other party, we would request the High Court, if possible, to dispose of the appeal expeditiously.