JUDGMENTMUHAMMAD ASLAM NAGI, CHAIRMAN BANKINGTRIBUNAL-IV.- The present suit has been filed by the plaintiffs. Banking Companies, against the defendants for the recovery of Rs. 245.985
(M) as on 31,3.1995 with compensatory charges and liquidated damages.
2. It is submitted by the plaintiffs Companies that the defendant No. 1 is a public company limited by shares incorporated in Pakistan under the Companies Ordinance, 1984 vide its Certificate of Incorporation bearing No. L-02607 dated 4.8.1990 by the Joint Registrar, Joint Stock Companies Lahore. The Company was established to set up, 'operate industrial undertaking for the production of sugar and its by-products, by defendants No. 2 to 6 as Sponsoring Directors of the Company.
Defendants No. 2 to 6 are alleged to be the Directors/Guarantors/Mortgagors of the defendant company who are jointly and severally liable to the plaintiffs for their collective and individual omissions and commissions and financial obligations.
It is submitted that the defendants approached the plaintiffs for the grant of financial facility by way of short term from Financial Certificates (ST-TFCs). The plaintiffs further state that on the representation made by the defendants the plaintiffs agreed to accommodate the defendants company for the aforesaid facility vide letter of sanction dated 19.12.1991. It is submitted that on21.12.1991 the defendants company through its duly authorised Directors, executed a Short Term Investment Agreement, against(TECs) pending the public issue of shares (hereinafter referred to Short "Term Agreement) with the plaintiffs companies by the defendants whereby the plaintiffs paid to the defendants company Rs. 81.0, 000/- as the principal amount of Short Term Finance Certificate Investment in consideration of the defendant company having agreed to repay to the plaintiffs Rs. 114,624,749/- as its purchase price in 24 equal monthly installments on or before30.6.1994. The plaintiffs have appended with the plaint photo copies of the Resolution of the Board of Directors dated 12.12.1991, letter of sanction dated 19.12.1991 and Short Term Investment Agreement dated 21.12.1991 an Annex. D to D/2 respectively.
3. It is further submitted that as security the defendant company executed the following security documents in favour of the plaintiffs acknowledging its liability:-(i) Letter of Hypothecation dated 22.12.1991.(ii) Deed of Floating Charge dated 22. 12.1991.(i.e) 3 DP Notes for (i) Rs. 58,019,934/- dated 22.12 1991 (ii) Rs. 42,453,611/- dated 22.12.1991 (i.e) Rs. 14,151,204/- dated 22.12.1991.(iv) Memorandum of deposit of-title deeds dated 22.12.1991 of all the properties and assets of the Company.(v) Trust Deed dated 22. 12.1991.
Copies of these documents have been attached to the plaint as Annex. E to E/6, respectively, thereafter in the plaint detailed description of title deeds and properties equitably mortgaged, creating pari passu charge in favour of the plaintiffs has been given. These are mentioned in Para-1
(i) (ii), Para 2 (a) & (b), II. Building and III. Plaint & Machinery (a) & (b) etc. The charge so created mentioned above was duly got registered with the Registrar Joint Stock Companies Lahore in favour, of the plaintiffs as is evident from the Certificate of Registration of Charge issued by the said Registrar on 22.12.1991. Copy of the Certificate of Registration of charge has been appended as Annex. F to the plaint.
It is further submitted by the plaintiff that defendants No. 2 to 6 in consideration of the plaintiffs entering into the above referred Short Term Agreement dated 21.12.1991 executed Sponsors/Directors undertaking in favour of the plaintiffs. It - is further added that the said defendants executed a Letter of Guarantee dated 22.12.1991 by way of security for the above- mentioned facility. Copies of these documents have been appended as Annex. G to G/l with the plaint. It is further submitted that the defendants also approached the plaintiffs to have a financial facility by way of locally manufactured machinery (LMM) Financing Scheme as a result whereof, plaintiff No. 1 through its letter of sanction dated 6.4.1991 agreed to accommodate the defendant company. A Financial Agreement dated 11.4.1991 was executed between the parties under the terms of which the Plaintiff No. 1 extended financial assistance to the defendant company in the sum of Rs. 85.000 million is consideration of the defendant company having agreed to pay to the Plaintiff No, 1 a sum of Rs. 124,061,502/- by way of 16 half yearly installments commencing 31.12.1993 with final payment being payable by or on 30.6.2001. Copies of the Board Resolution dated 8.4.1991, Plaintiff No. 1's letter of sanction dated 6.4.1991 and Financial Agreement dated 11.4.1991 have been appended as Annex. II to H/2. Respectively.
4. The defendant Company further secured the above- mentioned LMM Financial facility by executing the following securities/documents in favour of Plaintiff No. 1:-
(i) Memorandum of Deposit of title Deeds dated 13.11.1991 of all the properties and assets of the Company.
(ii) Letters of Hypothecation dated 13.4.1991.(i.e) Deed of Floating Charge dated 11.4.1991.(iv) D.P. Note for Rs. 85,000 (M) together with Profit/Mark- up and fine, if any.
Copies of the above documents have been appended with the plaint as Annex. I to!/3, respectively.Detailed description of title deeds and property mortgaged with the plaintiffs is given in Para 5 of the plaint. The charge was created as mentioned above and was duly submitted by the defendant company and got registered with the Registrar Joint Stock Companies Lahore in favour of the plaintiff as is evident from the Certificate of Registration of Charge issued by the said Registrar on 14.4.1991. Copy whereof has been appended as Annex. J to the plaint.
5. It is further submitted that the defendants No. 2 to 8 is consideration of the plaintiffs entered into the above referred financial agreement dated 11.4.1991, executed Sponsors/Directors undertaking in favour of the plaintiffs and in addition thereto the said defendants executed a letter of guarantee in favour of the plaintiffs by way of security for the above-mentione facility. Copies of the Sponsors' undertaking and letter of guarantee have been appended with the plaint as Annex. K to K/l.
6. It is submitted that the defendants No. 1 to 6 in flagrant disregard of their contractual obligations toward it the plaintiffs paid only Rs. 107,775,350/- under the ST-TFCs till the expiry of the said limit.
Similarly it is submitted that uptill 31.12.1994 the said defendants paid only Rs. 83,16,124/- bv way of Mark-Up under the LMM Facility.
It is pointed out that the defendant company through Letter No. NA/RSML/392/93 dated 27.9.1992 reminded for expediting decision on its request seeking rescheduling of the over due in this regard.
Copy of the letter has been appended an Annex. L to the plaint.
It is submitted by the plaintiffs that the proposal for rescheduling made by the defendants could not be accepted due to failure of the defendant company to adjust the over the Mark-Up and its inability to make up the alarming shortfall in its equity. It is further submitted that due to continuous losses and scales thereof the Sponsors' equity stood entirely eroded and no account of the existing capacity utilization and operation and operational margin of the defendant company there was no likelihood of a turn round. It is submitted that the defendant company was not in a position to repay its accumulated dues either lump sum or even after rescheduling as a direct consequence whereof any rescheduling package based on the probability of servicing present and future debt obligations through internal cash generation was no longer a solution.
7. The plaintiffs have claimed the following amounts due from the defendants as on 31.3.1995:-ST- TFC.Principal + Mark-Up Rs. 123,875.082.40LMMPrincipal + Mark-Up ' Rs. 36,672.818.50Not yet due Rs.
85,437,128.00Certified statements of accounts have been appended as Annex. M to M/3. With the plaint.
8. It is submitted that the defendants were called upon to repay and liquidate their liabilities according to their contractual obligations but to no result. The outstanding amount claimed by the plaintiffs, thus, comes to Rs. 245,985,028.90 alongwith fee, charges etc. Under the said agreement as on 31.3.1995.
9. A notice in terms of S. 6(2) of the Banking Tribunals Ordinance, 1984 was ordered to be issued by my learned predecessor on 4.6.1995. Registered notices were sent to the defendants on25.6.1995 which have not been received back undelivered. Notices were sent through process server of the Court on 18.6.1995. Notices were received by the Manger of Defendant No. 1 vide report of Amin Amjad process server of the Tribunal on 3.7.1995, by Mian Abbas Sharif on 3.7.1995, by Mian Zahid Shafi through the Manager on 3.7.1996, by Mian Tariq Shafi through the Manager on 3.7.1996.
Regarding Mian Yahya Siraj the bailiff has reported that he went to the address given again and again but he could not find this defendant and a copy was pasted at the address given. Similar is the report with regard to Mian Farrukh Siraj, Mian Mehraj Din and Mrs. Kausar Yousaf.
Notice was published in the Daily Musawaat dated 27.6.1996 and in Daily Pakistan Times dated 26.6.1996.
10. Replies to the notices were filed by Mr. Sajid Mehmood, Advocate learned counsel for defendants No. 2, 5 and 7'and Major Akhtar Shah, Advocate learned counsel for defendants No. 1.3,4 and 6 whereas Mrs. Kauser Yousaf defendant No. 8 was proceeded ex parte by my learned predecessor vide order dated 25.7.1995.
11. Rejoinder was filed by the plaintiffs on 15.8.1995. Defendants No. 2,5 and 7 denied in their reply to have executed documents of financing and their signatures thereon. Defendants No.2,5 and 7 were summoned to appear in person. It was submitted that defendant No. 2 was a bed-ridden person and a prayer was made for his examination through a local commission. Mr. Zahid Malik, Advocate was appointed as local commission to examine defendant No. 2 Mian Mehraj Din imder Order 10 Rule 2 C.P.C, An appiication was made under Section 6(6) of the Banking Tribunals. Ordinance, 1984 by the plaintiffs seeking for an order to the defendant No. 1 to furnish a Bank Guarantee. Copy was given to the defendants. On 10.10.1995 the suit was sent to this Tribunal after distribution of work by the Federal Government of Pakistan. On 11.10.1995 I proceeded ex parate against defendant No. 8.
Report of the local commission regarding examination of Mian Mehraj Din defendant No. 2 was considered wherein the defendant No. 2 had denied execution of documents mentioned in report in Para 3, A.B and C. His specimen signatures were placed on the record. I observed that the defendants No.. 2,5 and 7 had made a statement before my predecessor Tribunal that defendants No. 2,5 and 7 also denied in their reply to the show cause notice execution of documents of finance and their signatures therein. Recording of their statement under Order 10 Rule 6 C.P.C, was ordered and they were summoned. I ordered the Bank to produce the original documents before the Court so that the statements of defendants No. 5 and 7 are recorded with regard to those documents and to confront these defendants with the original documents. I fixed the application under Order 11 Rules 1 and 2 read with Sections 141 and 151 C.P.C, to serve interrogatories on the attorney of the Bank. Reply was filed and the application was fixed for order.
Another application of the plaintiffs bank u/S. 6(6) of the Banking Tribunals Ordinance, 1984 was on the record and its reply had been filed. This application was also fixed for arguments.Another application under Order 7 Rule 11 C.P.C, which was filed on 10.10.1995 by the learned counsel for the defendants No. 1.3.4 and 6 was on the file. I ordered filing of reply to this application on the next date of, hearing and fixed the case for arguments on this application for 16.10.1995. On 16.10.1995 original documents were produced before me. I asked the plaintiff bank the name of the Manager*or officer of the bank in whose presence the signatures of defendants No. 5 and 7 are alleged to have been signed. Time was sought by the Bank and the case was adjourned to 20.10.1995. Since defendants No. 1, 3, 4 and 6 23343 not represented, they were also summoned.
On 22.10.1995 specimen signatures of defendants No. 5 and 7 were obtained by Mrs. Pervez Aslam Handwriting Expert Officer of Forensic Science Laboratory Lahore. Passports of defendants No. 5 and 7 were taken into possession and original documents were ordered to be produced by the plaintiff on the next date of hearing. 1 directed the learned counsel for defendants No. 1,3, 4 and 6 to be present in the Tribunal on the next date of hearing as well so that their statements with regard to these documents be also recorded. It was further ordered that in case the defendant did not want to appear and make any statement they might do so through their learned counsel. The case was adjourned to 25.10.1995. On 25.10.1995 Mr. Zahid Malik Local Commissioner, appointed to examine Mian Mehraj Din defendant No. 2, appeared and filed specimen signatures as already observed in the report filed in the Tribunal. These signatures were not verified. Signatures of defendants No. 2, 5 and 7 which were available with the Tribunal were handed over to Mrs. Pervez Aslam Handwriting Expert. The specimen signatures of defendant No. 2 were attested by Mr. Zahid Malik Advcoate/local commission before the Tribunal. These signatures were also handed over to the handwriting expert. The plaintiffs were ordered to hand over the original documents required to be verified on 29.10.1995 for being escorted by Guard of the plaintiffs for being sent to the Officer of the Handwriting Expert. It was further directed that an officer of the plaintiff bank shall be appointed by the plaintiffs who shall remain in attendance till such time the Handwriting Expert completed her process of enlargement of the signatures from the original documents and to enable her to prepare her report. It was also ordered that after this process the original documents shall be handed over to the officer of the plaintiff bank against a receipt to be obtained by the Handwriting Expert and thereafter the plaintiffs bank shall keep these documents in safe custody till such time the Tribunal requires them to be produced. The application filed by the plaintiffs u/S, 151 C.P.C, allowing them to keep the original documents with them was disposed of with these observations.
It was further ordered that on 29.10.1995 the learned counsel for the other defendants shall make a statement with regard to their signatures on the original documents.
On 29.10.1995 Mr. Muhammad Shakeel learned counsel for defendants No. 1, 3. 4 and 6 filed an application for production of original documents. The original documents were available in the Tribunal at that time but the learned counsel submitted that he would like the defendants represented by him (defendants No. 1. 3, 4 and 6 to appear in the Tribunal for the inspection of the documents on the next date of hearing on which I adjourned the case to 2,11.1995. On 2.11.1995 Mrs. Kauser Yousaf defendant No. 8 filed an application for setting aside ex parte proceedings. I allowed this application as the case was at preliminary stage and set aside the ex partite proceedings against her to promote ends of justice. National Identity Card of Mian Mehraj Din defendant No. 2 was filed which was given to the Handwriting Expert and the case was adjourned. Mr. Ashtar Ausaf Ali, Advocate learned counsel for the defendants prayed that his clients wanted to inspect the original documents before making any statement which prayer was allowed. Defendants No. 1. 4. 5, 7 and 8 alongwith Mr. Ashtar Ausaf Ali, Advocate or any other counsel were ordered to visit the office of the plaintiffs bank on6.11.1996 at 11.00 a.m. For inspection of the documents and a direction was given to the Bank to give all the facilities to these defendants and their counsel to inspect, the documents in the presence of a responsible officer of the plaintiffs bank. It was agreed amongst the parties that after the inspection of the documents both the counsel for the parties shall attend the Tribunal for further proceedings.
12. Reply to show cause notice was filed on behalf of defendant No. 8 Mrs. Kauser Yousaf on 1.11.1995 which was placed on the record and the case was adjourned to 6.11.1995 for further proceedings.
On 6.11.1995 Mr. Muhammad Shakeel. Advocate for defendants No. 1, 3. 4 and 6 prayed for making a statement which was recorded. The statement is as follows: "Statement of Mr. Muhammad Shakeel Advcoate/learned counsel for defendants No. 1, 3, 4,and 6 without oath; Defendants No. 1. 3. 4 and 6 admit their signatures on the documents executed with the plaintiffs banks. Hence inspection in respect of the original documents for the present is not necessary."R.O. & A.C. Chairman." Thereafter Mr. Iqbal Mehmood Awan, Advocate for defendant No. 8 submitted that his statement be recorded which was also recorded. The statement is as follows:"Statement of Mr. Iqbal Mehmood Awan. Advocate counsel for defendant No. 8 Mrs. Kauser Yousaf without oath:- Since the signatures on the documents for Mrs. Kauser Yousaf are visibly in the name of Muhammad Riaz there is no need for getting her signatures verified by the Handwriting Expert.R.O. & A.C. Chairman." I adjourned the case to 8.11.1995 and summoned the original documents. On 8.11.1995 the original documents were produced by the plaintiffs which were handed over to the Handwriting Expert for her report and the case was adjourned to 19.11.1995. Thereafter the case was adjourned to various dates for waiting for the report of the Handwriting Expert. Thereafter the original documents were returned to the Bank on their application on 7.12.1995 and the certified copies of the documents were obtained and placed on the record of this file. Report of the Handwriting Expert was received. The case.Was fixed for arguments on the application of thb defendants under Order 7 Rule 11 C.P.C and on the application of the plaintiffs Bank u/S. 6(b) of the Banking Tribunals Ordinance, 1984 and was adjourned to7.1.1996. On 7.1.1996 prayer was made by the defendants No. 1.3. 4 and 6 for the latest statement of account as allegedly certain amounts had been paid to the Bank by them. On 18.1.1996 I released the report of the Handwriting Expert.
Copies were given to the. Parties and they were asked to file their objections to the report, if so advised, and the case was adjourned to 24.1.1996 for arguments on the reply to the show cause notice filed by the defendants and for arguments on the report of the handwriting expert. On 24.1.1996 Mr. Iftikhar Ali Sheikh, Advocate appeared for defendants No. 1. 3. 4 and 6 and filed an application for second opinion of the Handwriting 1. Xpert. I adjourned the case for filing objections to the report and for arguments to 29.1,1996. On 29.1.1996 the learned counsel for defendants No. 1. 3, 4 and 6 filed objections to the report of handwriting expert. Mr. Iqbal Mehmood Awan, Advocate for defendant No. 8 also filed three documents in respect reply to show cause notice filed by defendant No. 8. Objections to the report of the handwriting expert were also filed by the plaintiffs bank and I fixed the case for arguments on the application u/S. 6(6) of the Banking Tribunals Ordinance, 1984 and the case was adjourned to 12.2.1996. Arguments were heard and the case was fixed for orders on 18.2.1996. On 14.2.1996 an application was moved under Order 1 Rule 10 C.P.C, for striking of name of defendant No. 2 in the titled suit. Notice of this application was given and the case was fixed for reply and arguments on this application to 38.2.1996. On 18.2.1996 replies were filed to the application under Order 1 Rule 10 C.P.C, and the learned counsel for defendants No. 1. 3. 4 and 6 sought adjournment to file reply and the case was adjourned to 28.2.1996. On 28.2.1996 replies were filed Arguments were heard and the case was adjourned to 6.3.1996. On 6.3.1996 I was on tour to Okara. Order was announced on 25.3.1996.
In my order dated 25.3.1996 I disposed of the application under Order l Rule 10 C.P.C- filed by Mrs. Kauser Yousaf defendant No. 8 and Mian Mehraj Din defendant No. 2. I with a detailed order passed on the said date held that signatures of Mian Mehraj Din on disputed documents Annex: G/l and K/l were forged and further held that these documents did not create any liability against Mian Mehraj Din defendant No. 2 Accordingly by accepting his application I ordered his name to be struck out of list of defendants.
Similarly I held that against the name of Mrs. Kauser Yousaf defendant No. 8 one Muhammad Riaz and signed. There was no need for comparison in this case. I also ordered striking of name of Mrs.Kauser Yousaf from the array of the defendants as her signatures were found to be forged. The application for second opinion of another handwriting expert was not pressed by the learned counsel for defendants No. 1. 3. 4 and 6.
I also accepted the application of-the plaintiffs bank under S. 6(6) of the Banking Tribunals Ordinance, 1984 and held that defendants No. 1. 3, 4 and 6 had through a statement made before this Tribunal through their counsel dated 6.11.1995 admitted their signatures on the documents executed with the plaintiffs bank. Accordingly. I ordered defendants No. 1. 3, 4 and 6 to furnish a Bank Guarantee for the suit amount of Rs. 245.985 Million to the satisfaction of this Tribunal as prayed for by the plaintiffs within 15 days of this order (order dated 25.3.1996),
13. I framed the following Issues in this case for determining the liability of Mian Yahya Si raj and Mian Farrukh Siraj defendants No. 5 and 7:-
(1) Whether the signatures of Mian Yahya Siraj defendant No. 5 and Mian Farrukh Siraj defendant No. 7 on the Letters of Guarantee are forged, if so. What is its effect? OPD 5 & 7.(2) Whether Mian Yahya Siraj defendant No. 5 and Mian Farrukh Siraj defendant No. 7 are estopped by their conduct to challenge their signatures on the documents at this stage? OPD 1, 3, 4. 6.(3) Whether the plaint is liable to be dismissed under Order 7 Rule 11 C.P.C.? OPD 1. 3, 4 and 6.The case was fixed for evidence.
Thereafter an application was made for amendment of Issue No.1 on behalf of defendants No. 5 and 7. The application was accepted and the Issue was recast as follows:Issue No. 1. Whether the signatures of Mian Yahya Siraj defendant No. 5 and Mian Farrukh Siraj defendant No. 7 on the Letters of Guarantee and other documents. Are forged. If so. What is its effect? OPD 5-7.
Thereafter the parties were asked to produce evidence. The defendants No. 5 and 7 produced AW- 1,Mrs. Pervez Aslam. Inspector./Handwriting Expert, Finger Print Bureau/Forensic Science Laboratory Lahore, defendant No. 5 Mian Yahya Siraj appeared as AW-2 whereas Mian Farrukh Siraj defendant No. Tappeared as AW.
3. A W-L stated that she was appointed Handwriting Expert in this case by the order of this Tribunal. She compared Exh. R-l Guarantee Letter dated 13.4.1991 consisting of 3 pages. Exh. R-2 letter of guarantee dated 22.11.1991 consisting of3 pages. Sponsors/'Direetors undertaking Exh. R-3 consisting of 3 pages and Sponsors undertaking Exh. R-4 dated 13.4.1991 consisting of 3 pages with Exh. R-5 signatures of Mian Yahya Siraj obtained as specimen signatures before this Tribunal consisting of 2 pages and signatures of'Mian Farrukh Siraj defendant No. 7 Exh.
R-6 obtained as specimen signatures before this Tribunal, Passport No. AA518203 Exh. R-7 of Mian Yahya Siraj and Passport No. AA400160 of Mian Farrukh Siraj Exh. R-8. She further submitted that she compared the admitted and questioned, signatures of both Mian Farrukh Siraj and Mian Yahya Siraj on the questioned with the admitted signatures: She stated that she found that the questioned English signatures of Mian Farrukh Siraj and Mian Yahya Siraj did not bear identical characteristic with the admitted and the specimen English signatures of these persons on the Passports and the specimen sheets taken before this Tribunal. She produced her report as Exh. R-9 before this Tribunal and submitted that the report bore her signatures and the signatures oLJncharge Director of her Department. She also submitted that she was in possession of the photocopies of the enlargement made by her for the comparison and produced photographs and enlargement of these signatures and her reasons in respect of Mian Yahya Siraj placed in file as Exh. R-10 and enlargement and photographs and her reasoning regarding report of Mian Farrukh Siraj is Exh, R.II. The learned counsel for the plaintiffs bank has raised objections to the Exhibits of these documents on the ground that the Handwriting Expert was neither authorised nor the witnesses to these documents. These objections were overruled by me on the ground that the witrfesk was directed by this Tribunal to compare the disputed signatures^With theadmitted signatures of Mian Yahya Siraj and Mian Farukh Siraj and she having compared these signatures was to give her opinion and was. Therefore, entitled to depose about these documents and the documents can be accepted in evidence.
14. Lengthy cross-examination was conducted on her by both the learned counsels for the plaintiffs and Mr. Ashtar Ausaf Ali learned counsel for defendants No. 1. 3. 4 and 6. Nothing damaging to the evidence of this witness was elicited by both the counsels. The statements made by Mian Yahya Siraj and Mian Farrukh Siraj stand corroborated by the evidence of the Handwriting Expert. I have also minutely compared the disputed signatures with the admitted signatures of Mian Yahya Siraj and Mian Farrukh Siraj and have firmed that the opinion given by AW-1 Handwriting Expert as sound and has plausible reasoning behind it. I.
Therefore, rely on the evidence of Mian Yahya Siraj. Mian Farrukh Siraj and the ^ Handwriting Expert.
The defendants No. 1. 3. 4 and 6 were allowed opportunity to lead their evidence. Both Mr. Muhammad Aftab Alam Rana learned counsel for the plaintiffs and Mr. Ashtar Ausaf Ali learned counsel for defendants No. 1. 3, 4 and 6 have made their statements that their clients i.e., plaintiffs as well as defendants No. 1. 3, 4 and 6 did not want to lead any evidence. Therefore, there is no rebuttal on behalf of plaintiffs and defendants No. 1. 3, 4 and 6.
15. I. Therefore, hold that the signatures of Mian Yahya Siraj and Mian Farrukh Siraj on documents of Letter of Guarantee dated 13.4.1991 Exh. R-l. Letter of Guarantee dated 22.11.1991 Exh. R-2.
Sponsors/Directors undertaking Exh. R-3 and Sponsors/Directors undertaking dated 13.4.1991 are forged. These documents do not create any liability against Mian Yahya Siraj and Mian Farrukh Siraj defendants No. 5 and 7. Their names are. Therefore, ordered to be stuck out of the array of the defendants and no decree can be passed against them. The suit as against defendants No. 5 and 7 is dismissed.
16. Issues No. 1 and 2 are decided in favour of defendants No.5 and 7. The execution of documents as narrated above has been admitted by the defendants No. 1. 3. 4 and 6 as per statement dated 6.11.1995 of their learned counsel the cause of action is disclosed in the case and the suit is liable to he tried. Issue No. 3 is. Therefore, decided against the defendants No. 1. 3. 4 and 6.
17. Now the only defendants in the field.Are defendants No 13. 4 and 6 (in amended plaint defendants No. 1. 2. 3 and 5. As 1 have already observed above the learned counsel for these defendants Mr Ashlar Ausaf Ali and Mr. Muhammad Shakeel made a statement before this Tribunal admitting the signatures of defendants No. 1. 3. 4 and 6 on all the documents executed by these defendants with the plaintiffs bank. So. Therefore, authenticity of these documents to their extent is unquestionable.I8. I had in my order dated 25.3.1996 ordered the defendants No i. 3. 4 and 6 to furnish a Bank Guarantee tor the suit amount m terms of S. 6(6) of the Banking Tribunals Ordinance. 1984 amounting to Rs. 245.985 Million to the satisfaction of this Tribunal as prayed for by the plaintiffs within 15 days of the passing of the order This order was assailed by these defendants by way of Writ Petition No. 18420/95 in the Lahore High Court. That wait petition was dismissed by His Lordship Mr. Justice Munir A. Shaikh vide his Lordship order dated 26. 12 1995.
It is submitted before me to day that this order passed by the learned Single Bench in the High Court was appealed against in I.C.A. No. 504/95 and a stay order was passed, restraining passing of final order.1 myself am not inclined to take a penal action in terms of S 6(6) of the Banking Tribunals Ordinance. 1984 at this stage a much of water has flowed under the bridge. The jurisdiction of these Banking Tribunals was challenged in a number of writ petitions in the llon'ble High Court. Those 602 writ petitions were finally decided by a l ull Bench of the Lahore High Court on 21.7.1996. According to the said order S. 4 of the Banking Tribunals Ordinance. 1984 alongwith other sections was held to be ultra vires of the Constitution. As a result the Banking Tribunals were also held to be unconstitutional. Since all the writ petitions have been disposed of by the Hon'ble High Court on the subject all the interim orders in the tiled have merged in the final order and nothing is left to be disposed of by the High Court. The only point to be seen is as to whether the cases pending can be disposed of by the Banking Tribunals after the suspension of the order passed by the Supreme Court of Pakistan in C.M. No. 832-L/96 in Appeal No. 1633-L/96.
Civil Petition No. 832 in Leave to Appeal No. 1633-L/96 was filed by the Federal Government of Pakistan in the Supreme Court of Pakistan titled Federal Government of Pakistan v. Imran Ahmad Chaudhry, etc. The august Supreme Court of Pakistan suspended operation of the impugned judgment of the Lahore High Court vide order dated 24.7.1996 with the result that these Tribunals have become operative for the time being till further orders by the Supreme Court of Pakistan. An application has been filed on behalf of defendants No. 1, 4, 5. 7 and 8 for the transfer of this case to the Lahore High Court. Another application has been moved u/S. 151 CPC for staying of proceedings before this Tribunal on behalf of defendants No. 1, 3, 4 and 6. There is a third application on the record u/S. 5 of the Banking Tribunals Ordinance. 1984 read with .
114 and Order 47 CPC for review of order dated 15.2.1996. Before passing final order in this case I would like to dispose of these applications one by one.
"Application u/S. 5 of the Banking Tribunals Ordinance.1984 etc. And the order dated 15.2.1996." 19.
This application was moved by defendants No 1, 3. 4 and 6 against the order dated 25.3.1996 passed u/S. 6(6) of the Banking Tribunals Ordinance, 1984 whereby the detendants were ordered to furnish Bank Guarantee within 15 days for a sum of Rs. 245.985 Million in the Court which is suit amount. It has been submitted that W.P. No. 1081/96 challenging the vires of the Banking Tribunals stood admitted to regular hearing in the High Court and the same was sub-judice. It was further submitted that alongwith the writ petition. C.M. No. 2/96 was filed for stay of proceedings in the suit The Hon-hie High Court.Vide Order dated 21.1.1996 granted interim relief lo the defendants/applicaqts according to which the proceedings were ordered to be continued before the Tribunal and it was further ordered that writ petition would be heard alongwith other writ petitions. It has been submitted that in view of the order dated 21.1.1996 the order dated 25.3.1996 requiring the defendants to furnish Bank Guarantee was not legal.
As has been observed above 602 writ petitions were finally decided by' the Full Bench of the Lahore High Court on 21.7.1996. Including the present writ petition. The interim order, thus, merged into the final order and no order is required to be passed on this application. Accordingly this application becomes infructuous and calls for no order and the same is. Therefore, dismissed.After the passing of final order by the Hon'ble High Court with regard to the vires of the Banking Tribunals Ordinance, 1984 and legality of the Constitution of the Banking Tribunals u/S. 4 of the Banking Tribunals Ordinance, 1984, the Banking Tribunals became inoperative i.e.f. 21.7.1996. However, the Hon'ble Supreme Court of Pakistan in C.M. No. 832-L/96 in Leave to Appeal No. 1633- L/96 titled Federation of Pakistan, etc. v. Chenab Cement Products (Pvt.) Ltd., etc. Has passed an order on 24.7.1996 which is as follows:- "I have heard the learned counsel for the petitioners at considerable length. Contentions raised by them involve the interpretation of Constitutional provisions relating to the independence of Judiciary and its separation from the Executive with particular reference to the relevant provisions of the Banking Tribunals Ordinance. 1984 impugned in and declared invalid by the High Court.
Operation of the impugned judgment of the High Court is. Therefore, suspended pending the hearing of the petition for leave to appeal which may be fixed before the appropriate Bench as soon as it is available at Lahore. "the net result of the said order would be that the order of the Hon'Hle Lahore High Court has become inoperative for the time being 'till final decision by the august Supreme Court of Pakistan, as such, the Banking Tribunals have become functional. The pending cases can, therefore, be heard and disposed of by the Banking Tribunals till further orders by the Hon'ble Supreme Court of Pakistan.
20. Now two applications one u/S. 151 CPC for staying of proceeding on behalf of defendants No. 1, 3.
4 and 6 and the other application for transfer of case on behalf of defendants No. 1. 3. 4 and 6 have been filed. Replies to these applications have also been filed.
Application u/S. 151. CPC for stay of proceedings on behalf of defendants No. 1,3,4 and 6.It is submitted that the Hon'ble Lahore High Court vide judgment dated 21.7.1996 has set aside the Notification of appointment of learned Chairmen.Of Banking Tribunals and declared Ss. 4. 6(6) and First Proviso of S. 9 unconstitutional. It is further submitted that against this judgment of the High Court Federation of Pakistan has filed C.A. No. 1633-L/96 before the Hon'ble Supreme Court of Pakistan and obtained interlocutory relief on 24.7.1996 through C.M. No. 832-L/96. According to this order the operation of the impugned judgment of the Lahore High Court has been suspended pending hearing of the petition for Leave to Appeal.
The learned counsel for the petitioners/defendants submits that the aforesaid order of the Supreme Court of Pakistan is of interim nature and operation of the judgment of the High Court has been suspended for the time being. His conclusion is that in view of this interim order continuation of the proceedings in the Banking Tribunal tend to frustrate and defeat the proceedings which are pending before the superior Courts and any decision may effect right of the parties who are before Supreme Court of Pakistan. He submits that unless the judgment of the High Court is reversed by the Appellate Court proceedings in this Court are improper.
21. I have heard the learned counsel for the plaintiff as well as the petitioner/defendants No. 1. 3, 4 and 6. The learned counsel for the defendants No. 1. 3. 4 and 6 has relied upon Art. 201 of the Constitution of Pakistan which for the sake of convenience is reproduced below: "201. Decision of High Court binding on subordinate Courts- Subject to Article 189, any decision of a High Court shall, to the extent that it decides a question of law or is based upon or enunciates a principle of law. Be binding on all Courts subordinate to it." The contention of the learned counsel for the petitioners/defendants is that the order passed by the Supreme Court of Pakistan is not a final order and is only an interim order, therefore, the order passed by the High Court shall continue to operate with the result that this Tribunal has no jurisdiction to pass any order in the present case.
1 am afraid.
I cannot subscribe to the view held out by the learned counsel for the defendants No. 1. 3. 4 and 6.
No doubt any order passed by the Supreme Court of Pakistan on a question of law is binding on ail Courts and Tribunals in Pakistan. From this it cannot be concluded that pending final decision of any question by the Supreme Court of Pakistan the interim orders passed by the august Supreme Court of Pakistan are liable to be ignored. If this interpretation of the learned counsel for the petitioners is accepted no interim order staying- proceedings of any subordinate Court shall be of any significance. The Supreme Court of Pakistan has suspended the order passed by the High Court and the natural consequences of this order is that the order of the High Court is not in the field. Accordingly 1 hold that this Tribunal has jurisdiction to decide the list pending before it. This application is, therefore, dismissed with costs.
22. Application for transfer of the case to the High Court on behalf of defendants No. I, 3. 4 and 6.The present application has been filed by the petitioners/defendants No. 1. 3. 4 and 6 for the transfer of this case to the High Court in view of the judgment announced in W.P. No. 1081/96, dated 21.7.1996. It is submitted that W.P. No. 1081/96 was disposed of by the Hon'ble Full Bench of the Lahore High Court on 21.7.1996 and no appeal has been filed against the said order by the defendants therein. It is submitted that decision of the High Court being bindirijl tri view of Art. 201 of the Constitution of Islamic Republic of Pakistan. 1973 this Tribunal is bound to follow the said order. So far as the binding nature of any order passed by the High Court is concerned there is no cavil about this preposition of law. The order referred to was passed jointly in 602 writ petitions by the Hon'ble High Court in which jurisdiction, appointment and vires of the Banking Tribunals Ordinance, 1984 was challenged. Those wait petitions stand disposed of and no matter is pending on this subject in the High Court. The Supreme Court of Pakistan having suspended the operation of the judgment of the Hon'ble Lahore High Court in CP No. 832/96 in Leave to Appeal No. 833/96. There is no order in the field required to be implemented by this Tribunal. Accordingly this application is also dismissed with costs.
23. Now I revert to the merit of the case as regards defendants No. 1.3,4 and 6.I have gone through the reply to the show-cause notice filed by defendants No. 1, 3, 4 and 6. The documents on the record and heard the learned counsel for the parties at length.1 have discussed the documents executed by these defendants with the plaintiffs bank is Paras 1 to 11 in the judgment. I have dismissed the suit to the extent of Mrs. Kauser Yousaf, defendant No. 8. Mian Mehraj Din defendant No. 2, Mian Yahya Siraj defendant No. 5 and Mian Farrukh Siraj defendant No. 7.The learned counsel for the plaintiffs banks at the very out set has raised the objection that the execution of the documents has been admitted by the learned counsel for the defendants No. 1.3. 4 and 6 vide his statement dated 6.11.1995. As such, the suit is liable to be decreed as prayed for by the plaintiffs.
During the course of proceedings in this case the learned counsel for the defendants No. 1. 3.4 and 6 raised an objection that the Memorandum and Articles of Association of the defendants were not on the record and. As such, the submissions regarding the competence of the suit shall be made by these defendants as and when these documents are placed on the reaord. Ait application was made by the learned counsel for these defendants on 29.10.1995 for production of the original documents. The original documents were allowed to be examined hv this Tribunal which were produced on 16.10.1995 before the Tribunal. I allowed defendants No. 1, 4, 5. 7 and 8 alongwith Mr. Ashtar Ausaf Ali. Advocate or any other counsel to visit the plaintiffs bank on 6.11.1995 at 11.00 a.m.
And ordered the plaintiffs bank to provide all the possible facilities to these defendants or their learned counsel to inspect the total record in original. It was also ordered that after the inspection the parties shall appear before this Tribunal of further orders. On 6.11.1995 Mr, Muhammad Shakeel, Advocate learned counsel for these defendants made a statement before the Tribunal whereby he submitted that defendants No. 1.3. 4 and 6 admitted their signatures on the documents executed with the plaintiffs bank, hence, inspection in respect of the original documents for the present was not necessary.Mr. Iqbal Mehmood Awan, Advocate made a statement on behalf of Mrs. Kauser defendant No. 8 submitting that signatures over the name of Mrs. Kauser Yousaf were visibly in the name of Muhammad Riaz (not Mrs. Kauser Yousaf) and there was no need to have her signatures verified by the Handwriting Expert.
In view of these statements this objection of these defendants died of its on death. On the other hand the main objection relating to authenticity of the documents fell to the ground and the authenticity of the documents stood proved.
24. It has been further objected to by the learned counsel for these defendants that the machinery for the recovery of alleged debts had been put into motion mala fidely to utilize it as a lever of oppression which cannot be done under the law, the recovery suit was filed for reasons tarnished with malice. According to these defendants the purpose is not for recovering the money involved as alleged in the plaint but the purpose was to punish the Ittefaq family which was headed by Mian Muhammad Sharif father of Mian Muhammad Nawaz Sharif, the former Prime Minister of Pakistan and now the Leader of the Opposition in the Centre and Mian Shahbaz Sharif Leader of Opposition in the Punjab. It was alleged that the defendants No. 2. 5, 7 and 8 who were recently included in the Ittefaq Family and took pride in that statute, have fallen prey inadvisably to the overtures made by the present PPP Government headed by its Chairperson Mohterma Benazir Bhutto the Prime Minister of Pakistan. Thereafter allegations have been levelled inter se the Ittefaq Group and these defendants. Between the two groups of the family some memorandum of understanding has been referred to. It has further been alleged that the present Prime Minister of Pakistan is personally monitoring the efforts of the dissident the members of ittefaq Family to ruin their business and projects and the present suit has been filed for that purpose. An allegation has been levelled against the Banks on the ground that the plaintiffs banks are nationalised commercial banks and are directly being run by the Federal Government and the present suit is out-come of the efforts of the Government to ruin the family. Similar allegations have been levelled relating to the period of 1988 when PPP Government was in power in the Federation. The main purpose of these allegations made in the reply to the show-cause notice is to malign the present Government with a view to establishing that the suit has been filed to cause financial loss to the Ittefaq family, by Mohterma Benazir Bhutto Prime Minister of Pakistan.
It is further submitted that there is no cause of action in favour of the plaintiffs and that no default has been committed bv these defendants.
On merits it has been admitted that the answering defendants are the Directors of the Company and are Share-holders and members of the defendants company. Para 2 of the plaint has been admitted with the result that these defendants admitted that they have established the present company and these defendants are the Directors of the Company. In para 5 of the reply it has been submitted that the documents mentioned in this paragraph were standard documents and prepared by the Banks and Management of the defendants company was required to sign such documents as were presented to them. It is further submitted that contents, terms and conditions of these docui^L-nts/agreements were not deliberated upon or negotiated by the parties by a conscious application of mind. It was also submitted that the parties did not enjoy equal bargaining position. Thus, it is submitted that whatever documents were prepared and required by the Banks the answering defendants, in good faith executed and signed them.
25. I have gone through the record carefully and the submissions made by the parties. I am astonished at the reply given in Para 5 to the show-cause notice submitted above. Mian Muhammad Nawaz Sharif was Prime Minister of Pakistan at the time of execution of the documents. The Ittefaq family, thus, was a ruling family of the country with an edge over other financial institutions and enjoying full sway over Government Departments. It is strange that these defendants have claimed that they were made to sign such documents as were prepared by the Banks and that they were required to sign such documents as were presented to them without deliberating upon the terms and conditions of these documents. On the top of it the assertion that parties did not enjoy an equal bargaining position is all the more stunning. How could a Prime Minister of Pakistan and his family members be expected just to sign in routine documents already filled in and without reading and understanding the contents of the documents because of the alleged unequal bargaining position.
Execution of documents has been admitted by Ramzan Sugar Mills defendant No. 1, Mian Tariq Shafi defendant No. 3, Mian Abbas Sharif defendant No. 4 real brother of the then Prime Minister Mian Muhammad Nawaz Sharif and Mian Zahid Shafi defendant No. 6. They were masters of all that they surveyed. They were in dictating position. They have no mouth to open against the present Government who was out of power at the time of execution of these documents. They cannot wriggle out of the implications of, these documents. Receipt of finance by these defendants is not denied. Money was received and utilised to the benefit of these defendants and the Ittefaq Group.
Magnanimity demanded fullfilment of commitment and payment of finance to the plaintiff banks by setting up a good example to be followed by others to solidify the financial position of the country instead of trying to blame the present Government for their on wrong doings. No Bank could have ventured to fill in any document against the interest of the family of Mian Muhammad Nawaz Sharif the then Prime Minister of Pakistan. Rather the presumption would be that the documents were filled in and completed according to their wishes and-dictates.
Another feature of the transaction between the plaintiff and these defendants is that their on kith and kin have resiled from the execution of these documents. Defendant No. 8 Mrs. Kauser Yousaf is real sister of Mian Muhammad Nawaz Sharif the then Prime Minister of Pakistan. She categorically stated that her signatures were forged. Similar is the case of Mian Mehraj Din defendant No. 2 real uncle of Mian Muhammad Nawaz Sharif and defendants No. 5 and 7 M/s. Yahya Siraj and Farrukh Siraj his real cousins. No sister would level such an allegation against her real brother and family members at this juncture when mala fide is being alleged by the Ittefaq Family against the Prime Minister of Pakistan Mohterma Benazir Bhutto. It will be noticed that Mr. Iqbal Mehmood Awan.
Advocate in his statement made before this Tribunal on 6.11.1995 submitted as under:- "Since the signatures on the documents for Mrs. Kauser Yousaf are visibly in the name of Muhammad Riaz there is no need for getting her signatures verified by the Handwriting Expert."it shows that signatures of Mrs. Kauser Yousaf were not obtained in her hand. Rather some Muhammad Riaz was asked to sign on behalf of Mrs. Kauser Yousaf and that Muhammad Riaz involuntarily signed as Muhammad Riaz instead of Mrs. Kauser Yousaf. Nobody cared to notice this while handing over the documents to the plaintiffs bank.
The then Manager or the officer concerned of the plaintiffs bank is also highly responsible for dereliction of his duty who accepted the documents with signatures of Muhammad Riaz instead of Mrs. Kauser Yousaf and placed them on the record. I am not interested in causing aspertions on any body. A stern action is required by the authorities against the then Managers or the Bank Officers concerned who have connived at the commission of this forgery.
The allegations of mala fides against Mohterma Benazir Bhutto the Prime Minister of Pakistan in the reply to the show-cause notice filed by these defendants are not borne out by the record. Rather it is a clear attempt to malign her to save themselves from the liability to the plaintiffs Banks. The execution of documents is admitted by the defendants No. 1, 3, 4 and 6 for the finance received by them from the plaintiffs and has been utilized by them. On the commission of default in liquidating the liability by these defendants the present suit was filed by the plaintiffs.
26. Accordingly, I reject the reply to the show-cause notice filed by defendants No. 1, 3, 4 and 6 and decreed the suit for the recovery of Rs. 245,985 Million in favour of the plaintiffs and against the defendants No. 1, 3, 4 and 6 in old plaint (in amended plaint defendants No. 1. 2, 3, and 5), jointly and severally with costs. The decretal amount shall be recovered by sale or mortgaged properties, stocks pledged/hypothecated by these defendants with the plaintiffs and other properties of these defendants.File be consigned to record after completion. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.