1. ' In both the suits filed by the plaintiff-bank for declaration and permanent injunction, the plaintiffs have prayed for a temporary injunction seeking to restrain defendant No,1 or any one acting on their behalf from transferring or alienating three plots of land described in the application as well as para. 18 of the plaint.
2. ' Briefly stated, it is the case of the plaintiff-bank that on privatization of defendant No,1, defendant No,2 submitted a bid to the Privatization Commission for acquiring the shares of the said defendant. In connection with the said bid, at the instance of defendant No,3, the plaintiff-bank gave a guarantee in favour of Privatization Commission dated 14-1-1992 guaranteeing payment of Rs,90,266,886 to the Privatization Commission being balance 60% of the price of the shares in.
3. Terms of the agreement for sale between the said Commission and National Motors Limited. It was agreed that the said guarantee shall be secured, inter alia, by a registered charge over the fixed assets of defendant No,l. In Suit No,212 of 1994, it has been averred that in addition the plaintiffs gave an undertaking-cum-counter-guarantee in favour of Muslim Commercial Bank Limited in the sum of Rs,129,766,885 as security. The said counter-guarantee also guaranteed the fulfilment of all obligations relating to creation of charge on the assets of defendant No, I. It is further stated that the bid of defendant No,2 was accepted by the Privatization Commission and 51% shares of M/s. National Motors Limited were transferred in favour of defendant No,2, whose nominees were also inducted in the Board of Directors. The nominees of defendant No,2 enjoy majority on the Board and their nominee, Lt.-Gen. (Retd.) M. Habibullah Khan Khattak, was appointed as its Chief Executive. It is pertinent to note that earlier defendant No,2 had entered into a joint venture agreement with defendant No,3 for acquiring the shares and management of National Motors Limited jointly and pursuant to the said agreement, defendant No,2, in turn transferred/sold 25% of the shares in favour of defendant No,3 after acquisition of the shares and management of National Motors Limited by defendant No,2. The plaintiffs repeatedly requested the management of defendant No,1 to create registered charge on their fixed assets as agreed and approved by the Board of Directors in its meeting held on 24-2-1992. Though the said defendant created a charge on the stocks it failed and neglected to create charge on its fixed assets in spite of repeated requests. In November, 1992, the plaintiffs came to know that defendant No,1 was contemplating to sell two plots bearing, Nos.D-179 and D-179-B situated in Site belonging to them with an intention to dilute the security. The plaintiffs vide their letter dated 30-11-1992 in Suit No,212 of 1994 intimated Muslim Commercial Bank Limited of the intended sale with a request to forbid defendant No,1 from selling the plots it would dilute the security. On their part, the plaintiffs in Suit No,211 of 1994, by letter dated 1-12-1992, protested against the proposed sale and asked defendant No,2. To complete all formalities to create the first charge on all fixed assets of National Motors Limited without further delay, who sent an evasive reply dated 24-1-1993 and avoided to create the agreed charge. Sale of the said plots was also opposed by defendant No,3 a joint venture partner of defendant No,2, and legal proceedings were commenced by way of Suit No,779 of 1992 in the High Court of Sindh wherein a restraint order had been passed against the sale of the said plots. On 18-34994, defendant No,1 published notice of the meeting of the Board of Directors proposed to be held on 10- 4-1994 showing that they intended to sell three other plots belonging to the company, in respect of which the present suits have been filed seeking the following reliefs:---
(a) Declaration that the defendant No,1 is not entitled to sell and transfer Plot No,B-67, S.I.T.E., Hub Chowki Road, Karachi measuring 4.6 acres and Plot No,B-41, S.I.T.E., Hub Chowki Road, Karachi measuring 2.50 acres and Plot at Bandukwalla Building, I.I. Chundrigar Road, Karachi measuring 3120 sq. Yds.
(b) Permanent injunction restraining the defendant No,1 from selling, the transferring, alienating and/or encumbering the plots mentioned in prayer (a) above.
4. ' Defendant No,1 contested the prayer of the plaintiffs and filed a counter-affidavit of the Secretary and General Manager (Finance), controverting the contents of the plaint as well as the affidavit filed in support of the C.M.A. It has been contended that the plaintiffs have neither any cause against defendant No,1 nor any relief in the suit can be granted by the Court of law. It was clarified that a joint venture agreement dated 30-12-1991 was executed between defendant No,2 on the one hand and Prudential Capital Management Limited, Fur Assets Management (Pvt.) Limited and Third Prudential Modaraba on the other hand and that the agreement was not between defendants Nos.2 and 3. As regards the bank guarantee, it was stated that it was given by the plaintiffs at the request of Prudential Capital Management Limited for which Prudential executed a counter- guarantee dated 14-1-1992 in favour of Muslim Commercial Bank Limited and not at the request of National Motors Limited. It was pointed out that Prudential Capital Management Limited, being a necessary party and liable to pay under the counter-guarantee, the plaintiff-bank ought to have claimed the suit amount against it instead of defendant No,1. Payment of Rs,34 million by defendant No,2 to Privatization Commission within a period of three years was guaranteed and the bank guarantee valid upon 14-1-1992 has now been substituted by a fresh guarantee dated 22-1- 1994 for a reduced amount of Rs,90,95,000. It is the case of this defendant that by Resolution No,4 of the Board of Directors the Company agreed for the creation of floating charge on the fixed assets of the Company in favour of Muslim Commercial Bank Limited in respect of stuck-up loan of Rs,34,000,000 payable to Government of Pakistan and to PACO in respect of its dues of Rs,5,500,000 as mentioned in letter dated 1-12-1992. Creation of charge for Rs,90,266,886 as alleged by the plaintiff was disputed. In reply to the letter dated 1-12-1992 addressed to defendant No,2, defendant No,1 Nide its letter, dated 24-1-1993 informed the Muslim Commercial Bank Limited that out of Rs,39,500,000, the first instalment with mark-up was already paid on 15-7-1992 and the second instalment with mark-up was paid on 15-1-1993, thus reducing the outstanding loan to Rs,19,750,000. Besides, plaintiff M.C.B. Was informed that National Motors Limited had already created charge on its stock to the extent of Rs,39,500,000 and was prepared, if so desired by the plaintiff, to create charge to the extent remaining amount of Rs,19,750,000 on its main plant valued at Rs,180,000,000 but no response was received. Subsequently, third instalment of Rs,8,500,000 had also been paid alongwith mark-up of Rs,1,190,000 on 14-7-1993. For the reduced outstanding amount of Rs,9,095,000 the plaintiff M.C.B. Had issued a fresh guarantee dated 22-1-1994 valid up to 31-1-1995 in favour of Privatization Commission, Government of Pakistan. It was contended' that the plaintiffs' . Guarantee was only an assurance that in the event, instalments were not paid by defendant No,2, the same would be payable by the plaintiffs. With the payment of instalments in time and the amount of guarantee reduced to the extent of Rs,9,095,000 the plaintiffs had not incurred a penny towards the guarantee, therefore, the allegations against defendant No,1 and apprehensions shown were unfounded. With regard to Suit No,779 of 1992, it was urged that the sale of plots was not opposed by defendant No,3 nor was the suit filed by it. Defendant No,1 further urged that their company had suffered huge losses as a result of the abovementioned suit. It was pointed out that the plaintiff M.C.B. Was holding 3,343,218 shares of National Motors Limited of the face value of Rs,10 each and the stock market value on the date of filing the suit was Rs,38 per share, indicating thereby, the plaintiffs were holding shares of the value of Rs, 127,042,284. Thus, filing of the suit was mala fide and likely to put National Motors Limited in jeopardy and causing huge financial losses.
5. ' It may be observed that in Suit No,212 of 1994 defendant No,I apart from contesting the application for temporary injunction have filed. C.M.A. 2304 of 1994 under Order VII, Rule 11, C.P.C. Seeking rejection of the plaint on the ground that was barred by clauses (a) and (c) of the aforesaid provision of law.
6. ' I have heard the learned counsel appearing for the parties and gone through the material placed on record. It would appear from a narrative of this judgment that the plaintiffs have sought the declaration and permanent injunction in relation to alienation of valuable plots owned and possessed by defendant No,!, without claiming any legal right or title to the said plots or claiming any legal character in respect thereto. Assertion to the effect that defendant No,1 had agreed to create a charge on their fixed assets or that in spite of repeated requests, they had failed and, neglected to create a charge thereon or that they were attempting to sell away part of their assets, in my view, would not furnish a good cause to the plaintiff to seek discretionary relief of injunction of the nature asked for. It would appear that the right to acquire, hold and dispose of property in favour of defendant No,1 is guaranteed by Article 23 of the Constitution subject to any reasonable restrictions imposed by law in the public interest, which cannot be lightly taken away by this Court thereby creating restrictions to the free use and enjoyment of the property held' by National Motors Limited. This right is further caused and guaranteed by section 7 of the Transfer of Property Act, which provides that every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally to the extent and in the manner allowed and prescribed by any law for the time being in force. It has been rightly pointed out that in case the suit is decreed in terms, of the prayer, defendant No,1 would be deprived of dealing with his property for all times to come and he would have filed another suit to obtain release from the decree for a permanent injunction. It would thus appear that the plaintiffs have miserably failed to make out a strong prima facie case for the grant of equitable relief of injunction. In the peculiar circumstances of this case, in my view, remedy of the plaintiffs, if any, for breach of promise or commitment on the part of defendant No,1, may lie in a suit for damages and not in a suit for declaration and permanent injunction as prayed for. On merits, it would appear that defendant No,1 has been paying periodical instalments to the Privatization Commission of Pakistan as agreed and there is no imminent threat or danger to the guarantee furnished by the plaintiff-bank with regard to the obligation of defendant No,1 towards defendants Nos. 2 and 3 as well as Privatization Commission. Needless to observe, in the given circumstances, balance of convenience would lie in favour of defendant No,1 rather than the plaintiffs, who are not likely to suffer any irreparable injury in the event of temporary injunction being refused.
7. ' Learned counsel for the plaintiffs contended that the plaintiffs were entitled to seek performance of the agreement against defendant No,1 under section 3 of the Specific Relief Act. I am least impressed by this argument as section 3 of the Specific Relief Act is the interpretation clause which interprets and defines "obligation", "trust", "trustee' and "settlement" and does not confer any right to seek specific performance. Besides, in the present case, the plaintiffs are not seeking the enforcement of any agreement or contract but seeking a restraint order depriving defendant No,1 of their right to freely enjoy their property. The learned counsel also referred to the case of Satnarain Gurwala v. Hanuman Parshad and another, AIR (33) 1946 Lah. 85, in which the view taken was that a suit for declaration that rejection of plaintiff's nomination paper was illegal and that defendant had not been elected as member, was maintainable.
8. ' Learned counsel for defendant No,1 referred to the case of Alvi Sons Limited v. Government for East Pakistan and others PLD 1968 Kar. 222, in which the view taken was that suit for injunction that defendant-bank be restrained and prohibited from paying over guarantee amount to person entitled to guarantee arranged for by plaintiff was not maintainable. Surety bank was entitled under section 145 of the Contract Act, 1872, to indemnify itself only if guarantee was rightfully paid.
9. Reference was also made to the dictum laid down by the Supreme Court in the case of M.A. Naseer v. Chairman, Pakistan Eastern Railways and others PLD 1965 SC 83, in which it was held that under the provisions of section 42 of the Specific Relief Act; 1877, a person entitled to any "legal character" or to "any right to property" can institute a suit for a declaration relief of respect of his title to such legal character or right to property. This judgment was followed in the Karachi case referred earlier.
10. Reference was also made to the case of Abdur Rehman Mubeshir and 3 others v. Syed Amir Ali Shah Bukhari and others PLD 1978 Lah. 113, in which it was held that negative declaration in declaratory suit can be granted on principle that what can be done directly can also be justified if done indirectly. Such declaration must, however, also be one affecting some threatened injury or infringement of plaintiffs' right.
11. ' For all these reasons, both the C.M.As. For temporary injunction are dismissed.
12. ' Adverting to the application for rejection of plaint, it would appear that according to the plaintiffs, cause of action arose when the plaintiff-bank issued the counter-guarantee and when the defendant No,1 was asked to create charge on the fixed assets of the Company and the said defendant failed to do so and attempted to sell two plots belonging to the Company and on 18-3- 1994 when the notice of the meeting of the Board was published. It would be seen that the plaintiffs did not disclose as to in whose favour charge was agreed to be created by defendant No,1. At any rate, it has not been pleaded that guarantee was furnished at the instance of defendant No,1.
13. Besides, it is not the case of the plaintiffs that Muslim Commercial Bank Limited has paid any of the instalments on account of default of defendant No,1 nor have the plaintiffs been asked to pay any amount of instalments by Muslim Commercial Bank Limited. It would be seen that no obligation of defendant No,1 would arise in respect of any counter-guarantee furnished by the plaintiff-bank to the Muslim Commercial Bank Limited. It would thus seem that the plaintiff does not disclose a cause of action against defendant No,1, whereas no relief has been sought against defendants Nos.2 and 3 to have been joined as proper parties to the suit. Learned counsel for the plaintiffs relied upon para. 5 of the plaint in which it was stated that the guarantee shall be secured by a registered charge over the fixed assets of defendant No,1 in favour of Muslim Commercial Bank Limited. Besides, the plaintiff bank gave an undertaking-cum-counter-guarantee in favour of Muslim Commercial Bank Limited, which also guaranteed the fulfilment of all obligations relating to creation of charge on the assets of defendant No,l. The plaint does not recite that the counter- guarantee was furnished at the instance of defendant No,1 or that they had undertaken to create a charge over their fixed assets and, more particularly, the plots of land involved in the suit. It could, therefore, be legitimately said that the plaint does not disclose a cause of action 1 within the meaning of the term.
14. ' It would further appear that the suit is barred by the provisions contained in section 7 of the Transfer of Property Act as well as Article 23 of the Constitution, which, guarantee the right of a citizen to acquire, hold and dispose of his property subject to reasonable restrictions. In case this right is guaranteed by the Constitution and the law of land, it cannot be taken away by the plaintiffs' by way of this suit on the averments made in the plaint. No doubt, the right has been secured subject to law for the time being in force, but in the peculiar circumstances of the case, there is no law warranting a restraint or restriction on the power of defendant No,1 to free use and enjoyment of their right to deal with the property in any manner desired by them. The plaintiffs having failed to disclose a legal right or title to the property involved in the suit, the suit would also be barred by the provisions contained in sections 42 and 56 of the Specific Relief Act. In any event, no permanent injunction restraining defendant No,1 from transferring or alienating their property can be granted against them, which, otherwise is not warranted by law.
15. ' No submission to the contrary has been urged on behalf of the plaintiffs which would show that the suit is barred by law and not maintainable in the present form.
16. ' For these reason, I would grant C.M.A. 2304 of 1994 and direct the rejection of the plaint.