' Habib Bank Limited, Mirpur Branch brought a suit against M/s. Qureshi Vegetable Ghee Mills Limited, Mangla-Mirpur, for the recovery of Rs,92,003.48, in the Court of District Judge, Mirpur, on November 16, 1989. It was averred that the defendants requested the plaintiff-Bank on May 7, 1983, for the facilities of cash credit of Rs,10,000 million, against pledge of various goods mentioned therein. They also made a request for the pledge of shares of the Company valuing Rs,9.600 million as security, for the alleged credit. The second charge was also requested on the assets of the Company valuing Rs,30,000 million. The request was granted and a limit of credit in the sum of Rs,10,000 million was sanctioned on June 27, 1983 against pledge described above. The credit was availed w.e.f. October 4, 1993. The deed of charge was executed on April 16, 1984, for Rs,10,000 million. Various documents were also executed by the defendant-petitioners, in favour of the plaintiff-respondentBank. The defendants deposited the arrears outstanding against them, from time to time. On December 1, 1987, the outstanding amount against the defendants was Rs,14,92,739.19. On expiry of previous limit on December 17, 1986, it was renewed on April 15, 1987 upto December 31, 1987. On failure of the defendants to account for the arrears, it was felt constrained to bring an action against them. An application was also moved for interim injunction, to the effect that in the light of the agreement, the defendant-petitioners may be ordered to refrain from converting the raw material into finished goods and to remove the same from the factory site. On November 16, 1989, the interim relief was granted, in the manner that the defendant-petitioners shall refrain from moving or shifting the raw material or finished goods from the site of the factory.
An application was moved by the defendant-petitioners for vacation of the interim injunction. The application was partly allowed and the order of interim relief was modified on December 9, 1989, in the manner that the applicant shall furnish security bond of the value of Rs,92,03,000.48 with the condition that in case the suit is decreed, they will be responsible to pay the decretal amount to the plaintiff-Bank. The surety bond was accordingly furnished on December 11, 1989. On June 21, 1990, an application was moved by the plaintiff-Bank that proper security can be the Bank Guarantee, as such the guarantee can only meet the eventualities. Objections were filed to the application on August 7, 1990. It was disclosed in the objections that the shares of the Company were with the Bank, as such, there was no need of Bank Guarantee as desired in the application. The learned District Judge vide an order passed on July 27, 1992, directed that the security bond already furnished and accepted by the Court, was invalid, as the security bond of third party alone would fulfil the objective. This order has been assailed through the petition before this Court.
2. Mr. M.S. Tariq, the learned counsel for the petitioners contended that the security bond already submitted and accepted by the Court, was valid under the provisions of Articles 15 and 57 of the Stamp Act read with Article 6, Schedule II of the Court Fees Act, as in force in Azad Jammu and Kashmir. It was further argued that the security bond envisaged by the impugned order was contrary to the provisions of Orders 38, 25 and 41, C.P.C. Raja Muhammad Siddique Khan, the learned counsel for the opposite side supported the impugned order.
3. At the conclusion of arguments, the Bank Officer present in the Court, conceded that the shares of the defendant-petitioners-Company, of the value of Rs,9.600 million were in the custody of the Bank, in lieu of an agreement whereby credit facilities were granted to the defendant- petitionersCompany.
4. It is a suit for recovery of amount as loan advanced in the shape of credit facilities to the defendant-petitioners. The credit facilities, according to the pleadings of the plaintiff, were granted on the basis of pledge made by the defendant-petitioners. Among the pledged property, the shares of the value of Rs,9.600 million are admittedly in possession of the plaintiff-Bank. These shares belonged to defendant-petitioners as conceded by the Officer of the Bank.
5. In order to avail the provisional remedy of temporary injunction under Order 39, C.P.C. It is enjoined upon the plaintiff to prove to the satisfaction of the Court (i) prima facie case in his favour, (ii) balance of convenience, and (iii) irreparable loss. On the satisfaction of these conditions, it is permissible to grant interim injunction. In absence of either of the conditions, the Court has no option except to refuse the interim injunction, in the light of the facts of the case.
6. In the present case, it is noticed that the defendant-petitioners were directed to furnish the security bond of the value of Rs,92,03,000.48, with the condition that in case of passing of decree against them, they shall be responsible to pay the decretal amount to the plaintiff-Bank. The 'condition of furnishing security bond, prima facie, is frivolous as, ordinarily, when a decree is passed against a party, the judgment-debtor has to satisfy the decree in the light of its terms and conditions irrespective of the executing the security bond preceding such decree. The Court has to satisfy the conditions listed under Rules 1 and 2 of Order 39; C.P.C. Under these provisions, it was enjoined to issue interim injunction when it was proved by an affidavit or otherwise, (i) that any property, the subject of dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit or wrongfully sold in execution of a decree, or (ii) that the defendant threatened or intended to remove or dispose of his property with a view to defraud his creditors. In presence of either of the conditions, it was permissible to issue interim injunction preventing the wastage, damage, loss, alienation, sale, removal or disposition of the property as the Court may think fit. The provisions of Order 39, Rules 1 and 2 excluded the scope of security bond to be furnished by the defendant, to meet the liability ultimately settled in the shape of decree.
7. Under Rule 10, however, it was postulated that where the subject-matter of a suit was money or some other thing capable of delivery, and any party 'thereto admitted that he held such money or other thing, as trustee for another party, or that it belonged to or was due to another party, in such case, the Court was empowered to order that the same may be deposited in the Court or delivered to such party as named by the Court, with or without security subject to further direction of the Court. These provisions, obviously, were not applicable to the proposition under consideration as the conditions laid therein were not fulfilled in this case.
8. Under Order 38, Rule 1, C.P.C., a defendant could be asked to furnish security for his appearance in the Court. Rule 5 of the Order pertained to attachment before the judgment. These provisions were not attracted in the present case as the proposition under consideration, in fact, confined to issuance of interim injunction as prayed by the plaintiff-Bank.
9. On perusal of record, it has appeared that the learned District Judge passed 3 orders on different occasions. By first order passed on November 16, 1989, interim injunction was issued by directing the defendant-petitioners to refrain from shifting the raw material and finished goods from the site of the factory. This order was modified on December 9, 1989 when direction was issued to furnish security bond of the value of the amount in dispute and the interim injunction was accordingly modified. Vide the impugned order, the security bond already furnished and accepted by the Court was declared as invalid as the same was not furnished by a third party and on account of its execution on insufficient stamp-papers.
10. In the present case, the claim of the plaintiff-respondent confined to payment of amount in dispute. In case of passing of decree, the defendants were liable to satisfy the decree for money, from their assets and property. It is on record that the defendants resided and carried on their business within the local limits of jurisdiction of the trial Court. The value of the factory site, building and machinery, besides the finishedgoods and raw material, was several times more than the amount in dispute. It was also admitted by the attorney of the plaintiff-Bank that the shares belonging to the defendants, of the value of Rs,9.600 million were already in possession of the plaintiff-Bank. In these circumstances, neither the interim injunction issued on November 16 nor the order asking for furnishing the security bond, passed on December 9, 1989, were warranted. Thus, the impugned order which emerged from the aforesaid orders, was equally unsustainable. These orders are, therefore, modified in the manner that the defendant-petitioners shall refrain from transferring, alienating the site of the factory, the building and the machinery, till the decision of the suit. Such order, in the considered view of this Court, is deemed adequate and expedient, to meet the ends of justice. The petitioner is disposed of accordingly.