AJMAL MIAN, J.---This is an appeal with the leave of this Court against the judgment dated 29-5- 1986 passed by a Division Bench of the High Court of Sindh in Constitution Petition No,1035 of 1982, filed by the appellants inter alia for declaration to the effect that the fixed investments made by the appellants in their hotels are in law "fixed industrial investments" and are fully qualified to be treated as such from the day on which fixed industrial investments were first admitted by the State Bank of Pakistan respondent No,2 to a reduced rate of interest, dismissing the same. Leave to appeal was granted to consider the following questions:--- "(i) Whether under the State Bank Circulars dated 5-9-1977 and 3-7-1978 the petitioners were entitled to the reduced rate of interest on the loans obtained for financing the construction of two 4 star standard hotels? .
(ii) Whether the learned High Court was justified in denying the petitioners the benefits of the aforesaid two Circulars on account of the clarification issued by the Government on the 15th February, 1981, on the ground that in the meanwhile the aforesaid two Circulars had not been acted upon?
(iii) Whether the petitioners could be denied the benefits of the aforesaid two Circulars for the reason that the consortium banks had failed to act upon the same, notwithstanding the fact that the petitioners had been continuously pressing their claim for reduced rate of interest against the Banks?
(iv) Whether the High Court was in error in holding that for the purpose of availing the benefit of reduced rate of interest, the relevant date is not the date of the loan agreement but the date on which actual disbursements were made?
(v) Whether the petitioners had failed to establish that the loans were obtained by them for fixed industrial investment and were not meant for financial additional industrial capacity as stated in the Government of Pakistan Finance Division letter dated 28-11-1977 and what is the legal effect of the latter?
(vi) Whether the writ was pot maintainable on account of the failure of the petitioners to implead as parties to the writ petition all the banks constituting consortium from whom they had obtained loan, though the leader of consortium I.C.P. Was made a party?"
2. The facts to be noted are that the appellants are a public company established and registered under the Companies Act, 1913, for the prime purpose of constructing hotels and carrying on business of hoteliers. On 23-11-1974 the appellants were granted by the Government of Pakistan, Ministry of Industries, Department of Investment, Promotion and Supplies, permission for establishment of two new 4 Star Hotels, having 200 rooms at Karachi and 150 rooms at Islamabad.
It is the case of the appellants that the above permission was granted under Serial No,61 Group I of the Industrial Investment Schedule for the Fourth Five Year Plan period 1970-75 which envisaged additional industrial capacity for 17 hotels for which a total sum of rupees 210 million was allotted for the new additional capacity. It seems that for the purpose of construction of the above two hotels, the appellants availed of loan facilities provided by consortium comprising of seven banks/financing institutions, namely, M/s. National Bank of Pakistan, M/s United Bank Limited, M/s. Habib Bank Limited, M/s. Muslim Commercial Bank Limited, M/s. Allied Bank of Pakistan Limited, Investment Corporation of Pakistan, and National Investment Trust, headed by the Investment Corporation of Pakistan respondent No,4 at the agreed rate of interest of 14 per cent. Per annum.
The details of the disbursements of the amount of loans by the above seven banks/financing institutions are given in the statement at pages 77 to 80 of the Paper Book.
3. It appears that respondent No,2 by a Circular No,22 dated 5-9-077 addressed to all the banks informed them that the rate of interest which would be charged by them on loans and advances provided to finance fixed investments should not exceed 12-1/2 per cent. Per annum. The above Circular was followed by another Circular of respondent No,2 dated 3-7-1978 bearing No,15 addressed to all the banks advising them that the rate of interest which would be charged on loans and advances provided to finance fixed industrial investments shall not exceed 11 per cent. It may be advantageous to reproduce the above Circulars, which read as follows:--- "STATE BANK OF PAKISTAN BANKING CONTROL DEPARTMENT CENTRAL DIRECTORATE, KARACHI.
PCD Circular No,22 5th September, 1977 All Banks.
Dear Sirs, Interest Rates Please refer to BCD Circular No,13 dated the 7th June, 1977, on the above subject. In order to encourage industrial investment, it has been decided that the rate of interest which may be charged by the banks on loans and advances provided to finance fixed investment should not exceed 12 per annum. Accordingly, in exercise of the powers vested in the State Bank of Pakistan under the Banking Companies Ordinance, 1962, the State Bank is pleased to direct that with immediate effect the following may be added as sub-para. (iv) to BCD Circular No,13 of 7th June, 1977.
"(iv) Banks shall not charge interest at a rate higher than 12% per annum on accommodation provided for financing fixed industrial investment."
3. Please acknowledge receipt. Your faithfully (Sd.)
(S.S. Hamid), Director"
"STATE BANK OF PAKISTAN BANKING CONTROL DEPARTMENT CENTRAL DIRECTORATE, KARACHI.
PCD Circular No,15 3rd July, 1978 All Banks. Dear Sirs, Interest Rates Please refer to BCD Circular No,22 dated the 5th September, 1977, on the above subject. It has been decided that the rate of interest which may be charged by the banks on loans and advances provided to finance fixed industrial and agricultural investments shall not exceed 11% per annum.
The sub-para. (iv) of BCD Circular No,13 of 7th June, 1977, may please be substituted by the following:--- "(iv) Banks shall not charge interest at a rate higher than 11% per annum on accommodation provided or financing fixed industrial/agricultural investment."
2.The reduced rate of interest shall apply to loans/advances given for the above purposes on or after 1st July, 1978.
3.Please acknowledge receipt. Your faithfully (Sd.)
(S.S. Hamid), Director."
4.It seems that after the issuance of the above first and second Circulars, the appellants had taken up the question of reduction of the rate of interest with the respondents and the other six bank/financing institutions, which were parties to the consortium and which advanced the loans to them, without any success. While the appellants were agitating the above question through correspondence addressed to the respondents, respondent No,2 issued BCD Circular No,6 dated 15-2-1981 with reference to above BCD Circular No,15 dated 3-7-1978 addressed to all the banks informing them that it has been decided that the fixed investment in hotel industry should with immediate effect be treated as fixed industrial investment and accordingly banks would not charge interest at a rate higher than 11 per cent. On accommodation provided for financing fixed investment in hotel industry. It may be pertinent to reduce the above Circular, which reads as follows:--- "STATE BANK OF PAKISTAN BANKING CONTROL DEPARTMENT CENTRAL DIRECTORATE, KARACHI.
PCD Circular No,6 15th February, 1981.
All Banks.
Dear Sirs, CONCESSIONAL RATE OF INTEREST DEFINITION OF FIXED INVESTMENT Please refer to BCD Circular No,15 dated the 3rd July, 1978, regarding rate of interest on loans and advances provided to finance fixed industrial and agricultural investments.
2. It has been decided that fixed investment in hotel industry should with immediate effect be treated as fixed industrial investment. Accordingly, banks will not charge interest at a rate higher than 11% on accommodation provided for financing fixed investment in hotel industry.
3. Please acknowledge receipt. Your faithfully (Sd.)
(Mian Muhammad Din)
Director."
5. That upon issuance of the above Circular, the appellants made further representations to the respondents and the other six banks for requesting to charge interest as per aforesaid two earlier Circulars but since they did not get any redress, they filed aforesaid Constitution petition on the basis of averment that the fixed investments made in hotels qualify as fixed industrial investments and that the investments of the appellants in hotels are entitled to be treated as fixed industrial investments and by virtue of the statutory decisions given by the State Bank of Pakistan, were liable to be charged interest at rates notified. In the above petition, the appellants arrayed one of the above seven banks/financing institutions, namely, Investment Corporation of Pakistan as respondentrNo,4 instead of impleading all the above seven banks and financing institutions, though they also arrayed Federation of Pakistan, State Bank of Pakistan and the Banking Council of Pakistan as respondents Nos.1 to 3.
6. The above petition was resisted by the respondents inasmuch as respondent No,2 filed a counter-affidavit in which inter alia it was averred that the Ministry of Finance clarified that hotels did not fall within the purview of the definition of the fixed investments by Notification No,F.2(1)- CCl/77-366 dated 26th February, 1978. A copy of the above notification was enclosed as Annexure 'Cto the counter-affidavit. It may be advantageous to reproduce the above-notification, which reads as follows:--- "No,F.2(1)-CCI/77-366 GOVERNMENT OF PAKISTAN FINANCE DIVISION (INVESTMENT AND CAPITAL ISSUES WING)
Islamabad, the 26th February, 1978.
To
1. The Managing Director, I.C.P., Karachi.
2. The Chairman, N.D.F.C., Karachi.
3. The Managing Director, I.D.B.P., Karachi.
4. The Managing Director, P.I.C.I.C., Karachi.
5. The Chairman, N.I.T., Karachi.
Subject: INTEREST RATES TO FINANCE FIXED INVESTMENT.
Dear Sir, In continuation of this Division's Letter No,F.2(1)-CCI/77 dated 28th November, 1977 on the above subject it is clarified that hotels do not fall within the purview of the definition of the fixed investment as mentioned in the letter referred to above.
Your faithfully (Sd.)
(Ahadullah Akmal), Joint Secretary (Inv.)."
7.It was also averred in the above counter-affidavit that concessionary rate of interest for hotels was factually and legally effective from the date of the BCD Circular No,6 i,e, from 15-2-1981 and not retrospectively and this could be only to the new cases of loans and advances extended to hotel industry for fixed investments in hotels given on or after the date of said Circular were to be eligible for concession in rate of interest.
Respondent No,4 also filed a counter-affidavit adopting the counter-affidavit of respondent No,2 though probably by mistake, respondent No,1 has been mentioned.
8.The learned Judges of the Division Bench, after hearing the parties, inter alia concluded on the question, of application of the above Circulars to the case of the appellants as follows:--- "Now, the term 'Industryas ordinarily understood, would include different kinds of Industry which may also include hotel industry. Consequently, when circulars, dated 5th September, 1977 and 3rd, August, 1978 failed to categorise any particular industry, presumption was that they applied to hotel industry as well. The position, however, changed after issuance of circular, dated 15th February, 1981. Although there can be no doubt, that the respondent No,2 as a subordinate legislative authority can interpret its own circulars or determine the area of their operation, but in the instant case, the same appears to have been done more than three years after the issuance of the first circular, dated 5th September 1977 and more than two years after the issuance of the second circular, dated 3rd July, 1978. The question therefore arises, could the respondent No,2, after lapse of such a period, issue a clarification through its Circular, dated 15th February 1981, restricting the scope of operation of the earlier circulars. In our view, it could not have done so if the petitioner or any of the members of the consortium from which the petitioner took loans, had acted on such circulars and taken steps which they might have found difficult. To retrace. No doubt, according to its averments in the petition the petitioner did represent to the respondent No,4 to reduce the rate of interest in accordance with the circulars of the respondent No,2, but admittedly, no action was taken by the said respondent. In the meanwhile, the respondent No,2 issued circular dated 15th February, 1981 which changed the position completely. Therefore, in our opinion, clarification issued by the respondent No,2 through its circular dated 15th February, 1981, cannot be treated as redundant and the respondent No,2 could issue such clarification."
9.While repelling the contention of the learned counsel for the respondents on the question of application of the above Circulars, the learned Judges further observed as under:--- "The learned counsel has argued that the said circulars issued by the respondent No,2, being in the nature of subordinate legislation, cannot operate retrospectively. That is, because, the petitioner is seeking reduction in the rate of interest in respect of loans which were obtained by it much before the issuance of the circulars dated 5th September, 1977, and 3rd July, 1978, respectively. A simple answer to this argument is that the said circulars were intended to take effect from the respective dates of their issue. The circular dated 3rd July, 1978, in fact, provides that the said circular would be effective from Ist July, 1978. In that case the question of their retrospective operation could hardly arise. The intention of the respondent No,2 clearly seems to be to direct the banks not to charge interest at rates higher than what had been shown in the circulars. The circulars, no doubt, applied in future, as is clear from their language, but no such intention can be gathered therefrom that the same were meant to be applicable only to new loans. The position could, however, have been different if the reduced rates of interest had related back to dates when loans had been granted to the petitioner. In any case, the argument advanced by Mr. Mansoor Ahmad Khan is repelled."
10.Similarly, the learned Judges of the Division Bench repelled the contention of the learned counsel for the respondents that the Circulars could not be construed in a manner so as to deprive the banks of their vested right to charge interest at the rate fixed under the loan agreement by holding that "respondent No,2 appears to be possessing unabridged power under section 25 of the Banking Companies Ordinance, 1962".
However, the appellants were non-suited by the learned Judges of the Division Bench on the ground that the appellants failed to establish that the loans obtained by them were meant for financing "fixed industrial investments" as interpreted and defined by the Government of Pakistan, Finance Division's Letter dated 28-11-1977 and, therefore, the appellants were not entitled to claim benefit of the reduced rate of interest under Circulars dated 5-11-1977 and 23-7-1978, respectively.
The other reason found favour with the learned Judges for non-suiting the appellants was that the two agreements dated 19-5-1977 were entered into between the appellants with a consortium of five companies, whereas another loan agreement dated 17-2-1982 was entered into between the appellants and a consortium of seven companies but the appellants impleaded only Investment Corporation of Pakistan (respondent No,4). The petition, therefore, was dismissed. Thereupon, the appellants filed a petition for leave to appeal, which was granted to consider the above questions.
11.In support of the above appeal, Mr. Fakhruddin G. Ebrahim, learned Senior Advocate Supreme Court appearing for the appellants, has urged as follows:---
(i) That the learned Judges of the Division Bench after having held that the above earlier two Circulars were applicable, could not have denied the benefit of the same on the ground that the appellants failed to establish that the loans obtained by them were meant for financing "fixed industrial investments" or for the reason that only one of the banks/financial institutions was impleaded in the petition and not all;
(ii) that since the Circulars issued by the State Bank of Pakistan respondent No,2 are binding on the banks/financial institutions in view of section 25 of the Banking Companies Ordinance LVII of 1962, hereinafter referred to as the Ordinance, the banks/financial institutions which were the members of the consortium, could not have denied the benefit of the Circulars to the appellants;
(iii) that though under the loans agreement the rate of interest agreed to be paid by the appellants is 14% or 4% above the bank rates, but the same is to be subject to the provisions of section 25 of the Ordinance.
On the other hand, Mr. Mansoor Ahmad Khan, learned counsel appearing for the respondents, has urged as follows:---
(i) that the basic principle of interpretation of a notification or an executive order is that it is not to operate retrospectively and that even the statutes are to operate prospectively in the absence of any express provision or by necessary intendment and, therefore, the above Circulars could not have been pressed into service by the appellants in respect of the loans agreements which were concluded prior to their issuance;
(ii) that the State Bank of Pakistan (respondent No,2) being the authority which issued the above Circulars under section 25 of the Ordinance, has itself clarified inter alia through its letter dated 19- 3-1981 that the instructions contained in BCD Circular No,6 dated 15-2-1981 would apply only to new cases of loans and advances extended to hotel industry after 15-2-1981 and this stand has been reiterated by it in its counter-affidavit and, therefore, this Court while interpreting the Circulars will give due weight to the interpretation place by the issuing authority;
(iii) that jurisdiction of the Court under Article 199 of the Constitution is very limited and that the same cannot be pressed into service to give retrospective effect to the Circulars as to infringe the vested right of the banks to recover interest from the appellants at the agreed rate under the loans agreement;
(iv) that, in any case, if there is any default in compliance of the direction issued by the State Bank of Pakistan on the parts of the banks/financial institutions concerned, the action should have been taken by the State Bank in terms of subsection (3) of section 25 of the Ordinance.
12.Adverting to the above first submission of Mr. Fakhruddin G. Ebrahim that the learned Judges of the Division Bench after having held that the above earlier two Circulars were applicable, could not have denied the benefit of the same on the ground that the appellants failed to establish that the loans obtained by them were meant for financing "fixed industrial investments" or for the reason that only one of the banks/financial institutions was impleaded in the petition and not all, it may be observed that there seems to be inconsistency in the observations of the learned Judges of the High Court quoted hereinabove, inasmuch as after having held that the Circulars were applicable to the appellants, they further held that the Circulars were not applicable as the appellants failed to establish that the loans obtained by them were meant for financing "fixed industrial investments". Similarly the appellants could not have been non-suited on the ground that they had impleaded only one of the seven banks/financial institutions, namely, Investment Corporation of Pakistan (respondent No,4) instead of impleading all the seven; as in any case, relief could have been granted against respondent No,4 alone if not against all the banks. We have referred to hereinabove four Circulars. It may be observed that two of the above Circulars directly deal with the investment in hotels. The first Circular on the point in issue is dated 26-2-1978 quoted hereinabove in para.. 6, in which the Government of Pakistan, Finance Division (Investment and Capital Issues Wing), in continuation of its letter dated 28-11-1977 clarified that the hotels did not fall within the purview of the definition of the "fixed investment" as mentioned in the letter referred to above. It may be pointed out that the above notification escaped notice from the learned Judges.
Since by virtue of the above notification, the hotels did not fall within the purview of the definition of the "fixed investments", the above two Circulars dated 5-9-1977 and 3-7-1978 were not applicable to the hotels. However, this position was changed when the State Bank of Pakistan issued aforesaid Circular, namely, BCD Circular No,6 dated 15-2-1981 quoted hereinabove in para. 4, addressed to all the banks informing them that it had been decided that fixed investments in hotel industry should with immediate effect be treated as fixed industrial investments and that accordingly banks would not charge interest at a rate higher than 11 per cent. On accommodation provided for financing fixed investments in hotel industry. In view of the above Circular, the benefit of the reduced rate of interest granted under aforesaid BCD Circular No,15 dated 3-7-1978 became available to the hotel industry for financing fixed industrial investments.
13.The question which requires consideration is, as to whether the above benefit would be available to the hoteliers who were to enter into loan agreements after the above Circular of 15-2-1981 or could the above concession be claimed by the hoteliers who had already entered into loan agreements with the banks/financial institutions and agreed to pay interest at the agreed rate. In this regard, it may be pertinent to reproduce section 25 of the Ordinance, which reads as follows:-- - "25.Power of State Bank to control advance by banking companies.--
(1) Whenever the State Bank is satisfied that it is necessary or expedient in the public interest so to do, it may determine the policy in relation to advances to be followed by banking companies generally or by any banking company in particular, and, when the policy has been so determined, all banking companies or the banking company concerned, as the case may be, shall be bound to follow the policy as determined.
(2)Without prejudice to the generality of the power conferred by subsection (1), the State Bank may give directions to banking companies either generally or to any banking company or group of banking companies in particular-- (a)as to the credit ceilings to be maintained, credit targets to be achieved for different purposes, sectors and regions, the purposes for which advances may or may not be made, the margins to be maintained in respect of advances, the rates of interest, charges or mark-up to be applied on advances and the maximum or minimum profit sharing ratios; and (b)prohibiting the giving of loans, advances and credit to any borrower or group of borrowers on the basis of interest, either for a specific purpose or for any purpose whatsoever; and each banking company shall be bound to comply with any direction so given.
(3)If any default is made by a banking company in complying with the policy determined under subsection (1) or direction given under subsection (2), every director and other officer of the banking company and any other person who is knowingly a party to such default shall, by order of the State Bank, be liable to a penalty of an amount which may extend to two thousand rupees and, where the default is a continuing one, of a further amount which may extend to five hundred rupees for every day after the first during which the default continues.
(4)Without prejudice to the provisions of subsection (3), the State Bank may, for the purposes of securing implementation of any special credit schemes or monetary policy or observance of credit ceiling by a banking company; by order in writing require companies generally, or any banking company in particular, to make special deposits with it for such amount and on such terms and conditions as may be laid down by the State Bank in this behalf.
(5)The amount deposited with the State Bank under subsection (4) or any part thereof may, at the discretion of the State Bank, be released by it to the banking company which deposited it as and when the State Bank deems fit either unconditionally or on such terms and subject to such conditions as the State Bank may, by order in writing, determine from time to time.
(6)Any penalty imposed under subsection (3) shall be payable on demand made by the State Bank and, in the event of refusal or failure by the director, officer or other person concerned to pay on such demand, shall be recoverable as arrears of land revenue."
14.It may be pertinent to observe that subsection (1) of the above section was substituted by Ordinance No, VII of 1971, whereas subsections (2) and (4) were substituted by Ordinance No, LVIII of 1980 and by Act No, XXX of 1972, respectively. It may be noticed that under subsection (1) of the above section, the State Bank has been empowered if it is satisfied that it is necessary or expedient in public interest so to so, it may determine the policy in relation to advances to be followed by banking companies generally or by any banking company in particular. The policy so framed is binding on all banking companies or the banking company concerned. It may further be noticed that under subsection (2), it has been provided without prejudice to the generality of the power conferred by subsection (1), the State Bank may give direction to the banking companies either generally or to any banking company or group of banking companies in particular matters referred to in sub-clauses (a) and (b) of the above subsection, which include the power to give direction as to the rates of interest, charges or mark-up to be applied on advances and the maximum or minimum profit sharing ratios.
It may also be observed that subsection (3) of the above section provides the penalty for defaulting banking companies by providing that if any default is made by a banking company in complying with the policy determined under subsection (1) or direction given under subsection (2), every director and other officer of the banking company and any other person who is knowingly a party to such default shall, by order of the State Bank, be liable to a penalty of an amount which may extend to two thousand rupees and, where the default is a continuing one, of a further amount which may extend to five hundred rupees for every day after the first during which the default continues. It may further be observed that under subsection (4), the State Bank has been empowered to direct the banking companies generally or any banking company in particular, to make special deposits with it for such amount and on such terms and conditions as may be laid down by the State Bank in this behalf, whereas subsection (5) thereof provides that the amount so deposited with the State Bank under above subsection (4) or any part thereof may at the discretion of the State Bank be released by it to the banking company which deposited it as and when the State Bank deems fit either unconditionally or on such terms and subject to such conditions as the State Bank may by order in writing determine from time to time. It may also be pointed out that under subsection (6) of the above section 25, the State Bank has been empowered to recover the amount of penalty imposed under subsection (3) thereof as arrears of land revenue in case of default of payment.
15.From the above section 25, it is evident that the State Bank has the requisite power to issue direction to the banks as to the rate of interest which should be charged by them and such a direction is binding on them.
16. Reverting to the question, whether such a direction can affect the loan agreements which were already concluded prior to such direction, it may be observed that it is a well-settled principle of interpretation of a notification and/or an executive order that the same can operate prospectively and not retrospectively. This principle is equally applicable to a statute in the absence of any express or implied intendment contrary to it. It may be observed that Mr. Mansoor Ahmed Khan, in support of the above proposition, has referred to the following cases:---
(i) Condicalo Hypolito Constancio Moronha v. Damji Devji and others PLD 1954 PC 22;
(ii) Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187;
(iii) The Income-Tax Officer (Investigation), Circle 1, Dacca and another v. Sulaiman Bhai and another PLD 1970 SC 80;
(iv) Mian Rafi-ud-Din and 6 others v. The Chief Settlement and Rehabilitation Commissioner and 2 others PLD 1971 SC 252;
(v) Mahmood Shah etc. v. Additional Settlement Commissioner Revenue etc. PLD 1979 Lah.
709.
Mr. Fakhruddin G. Ebrahim, learned counsel for the appellants, has not disputed the correctness of the above proposition, but his submission was that the appellants were not seeking the enforcement of the above Circular dated 15-2-1981 retrospectively but wish to press into service prospectively in respect of the amounts disbursed by the banks under the loan agreements to the appellants after the issuance of the above Circular.
16. Before dilating upon the above submission, it may be pointed out that besides the above legal position that a notification or an executive order can only operate prospectively, from the contents of the relevant notifications, it is evident that they were intended to be enforced prospectively. In this regard, it may be pointed out that the above first BCD Circular No,22 dated 5-9-1977 quoted hereinabove in para. 3 states that "in order to encourage industrial investments it has been decided that the rate of interest which may be charged by the banks on loans and advances provided to finance fixed investments should not exceed 12 per cent. Per annum". The above expression clearly indicates that by reducing the rate of interest, the new industrial investment was to be encouraged and not the investments which were already made. Similarly, para. 2 of BCD Circular No,15 dated 13-7-1978 clearly provides that "the reduced rate of interest shall apply to loans/advances given for the above purpose on or after 1-7-1978". The same is the position in respect of BCD Circular No,6 dated 15-2-1981 applicable to the hoteliers in which in para. 2, it has been stated that "it has been decided that fixed investments in hotel industry should with 'immediate effect be treated as fixed industrial investments".
17. Reverting to the above submission of Mr. Fakhruddin G. Ebrahim that the benefit of the above Circular of 15-2-1981 is applicable to the amounts disbursed to the appellants by the banks concerned after the date of above Circular, it may be stated that factually there were the loan agreements executed between the appellants and the banks concerned. The above loan agreements provided the schedule for disbursement of the loans amounts on various dates by the banks concerned to the appellants. One view can be that each amount of disbursement will constitute an accommodation or loan agreement, the other view can be that the disbursements of the various amounts made by the banks were in performance of the above three loan agreements already executed. If we were to prefer the above first view, it will affect the vested right of the banks to recover interest at the rate of 14% under the loans agreement and, therefore, the construction which does not affect the vested right of a party is to be preferred. It may be observed that from the statement containing the details of disbursements at pages 77 to 80 of the Paper Book, it appears that the banks have disbursed the various amounts on 65 different dates and, therefore, it would not be reasonable to hold that factually they were 65 loan agreements or accommodations.
10. Mr. Mansoor Ahmad Khan has referred to the meaning of the word "accommodation" in the following; two Dictionaries, which read as follows:--- Law Dictionary of Words and Phrases Judicially By A.R. Biswas"Accommodation.--(1) 'Accommodationmeans something supplied for convenience or to satisfy a need, as lodging, food and services or seat, berth or other space occupied together with services available. (2) The word 'accommodationis regularly used in connection with markets in the sense of space or room. Bracken borough v. Spalding Urban District Council (1942) AC 310 HL. (3) In psychology it is used in two technical senses:
(a) changes in the curvature and therefore focal length of the eye effected by the ciliary muscles, with the object of focussing for different distances; and
(b) effect produced on sense organs by continuous and unvarying stimulation so that ultimately no sensation is experienced."
Mitra's Legal and Commercial Dictionary Fifth Edition by A.N.Saha, Advocate"Accommodation".--Something supplied for convenience or to satisfy a need, as lodging, food and services or seat, berth or other space. Occupied together with service available. Webster's Seventh New Collegiate Dictionary. The word 'accommodationis regularly used in connection with markets in the sense of space or room. Brackenborough v. Spalding Urban District Council (1942)
AC 310 HL."
The above quoted definitions indicate that the word "accommodation" inter alia connotes the meaning as something supplied for convenience or to satisfy a need, lodging, food, and services or seat, berth or other space, occupied together with the services available. The above meaning in fact strictly speaking does not fit in, in the context of the present case. In this behalf, reference may be made to the definition of the above term given in the Concise Oxford Dictionary, Seventh Edition, which reads as follows:--- "Accommodation" n.1. Adjustment (e.g. Of lens of eye to focus for various distances); adaptation of anything or oneself to a purpose or meaning different from the original,
2. Settlement, compromise.
3. Serviceable thing, convenience; loan of money; (in sing. Or pl.) lodgings, living premises; (in pl.) seat in vehicle, etc.
4. Address (used on letters to person unable or unwilling to give permanent address); accommodation Bill; ladder (up side of ship from small boat); road (for access to place not on public road). F, or f. L accommodation is (as Accommodate; see ATION.)"
A perusal of the above quoted definition indicates that it includes loan of money and, therefore, it can be held that the word "accommodation" used in the above Circular of 15-2-1981 refers to loan agreement. We may also observe that the appellants have not produced the copies of the relevant loan agreements before us and in the absence of the same, even otherwise it would not be proper to hold that factually the above three loan agreements were in fact 65 loan agreements/acconunodations.
19. We may advert to Mr. Mansoor Ahmed Khan's second submission, namely, that the State Bank of Pakistan being the authority which issued the above Circulars under section 25 of the Ordinance, has itself clarified inter alia through its letter dated 19-3-1981 that the instructions contained in BCD Circular No,6 dated 15-2-1981 would apply only to new cases of loans and advances extended to hotel industry after 15-2-1981 and this stand has been reiterated by it in its counter-affidavit and, therefore, this Court while interpreting the Circulars will give due weight to the interpretation placed by the issuing authority, it may be observed that in support of his above submission, he has relied upon para. 209 of Treatise On Statutory Construction, 1945 Edition, by Crawford, and the case of Nazir Ahmad v. Pakistan and 11 others PLD 1970 SC 453.
20. In the above-cited case, this Court in a service matter has observed as to the value of the practice and departmental construction of the relevant rules,as follows:- "The departmental practice has followed the right course in the implementation of the relevant rule but whether right or wrong, it will be extremely unfair to make a departure from it now after a lapse of so many years and to disturb rights that have been settled by a long and consistent course by this practice. In the case of the appellant, seniority initially accorded to him has held the ground continuously for ten long years until it was disturbed by the impugned order. This, to say the least, is bound to weaken the faith of the employees in the attitude and behaviour of the department. A passage from Crawford's Statutory Construction (1940 Edition at page 399) may be usefully reproduced to point out the effect of "departmental construction", that is to say, the construction which is placed in practice on the provisions of a statute or rules by the administrative authorities who are charged with the execution of the statute or the rules. The learned author observes: 'Where the executive construction has been followed for a long time an element of estoppel seems to be involved. Naturally many rights will grow in reliance upon the interpretation placed upon a statute by those, whose duty it is to execute it. Often grave injustices would result should the Courts reject the construction adopted by the executive authorities."
In the present case, the question of practice is not involved but the question of interpretation is very much present. The State Bank of Pakistan has in unequivocal terms had informed the appellants even prior to the filing of the writ petition by them through its letter dated 19-3-1981 that the instructions contained in BCD Circular No,6 dated 15-10-1981 would apply to only new cases of loans and advances extended to hotel industry for fixed investment purpose on or after the date of the said Circular dated 15-2-1981. The above letter is at page 74 of the paper book and which reads as follows:--- "STATE BANK OF PAKISTAN CENTRAL DIRECTORATE POST BOX NO.4456, KARACHI Banking Control Department No, BCD(D) 99/697.30-81 19th March, 1981.
The Managing Director, Hashwani Hotels Limited, 66, Cotton Exchange Building, LI Chundrigar Road, Karachi.
Dear Sir, RATE OF INTEREST FOR LOANS AND ADVANCES MADE TO FINANCE FIXED INVESTMENTS.
Please refer to your letter dated the 5th March, 1981, on the above subject. We have duly considered your request but we regret that we are unable to accede to the same. The instructions contained in BCD Circular No,6 dated the 15th February, 1981, would apply only to new cases of loans and advances extended to hotel industry for fixed investment purposes on or after the date of the said Circular i,e, 15th February, 1981.
Yours faithfully, (Sd.)
(Z.U.K. Fani) for Director."
21. It may also be observed that the authority i,e, the State Bank of Pakistan which had issued the above Circulars including of 15-2-1981, has taken the stand that the same were not intended to cover the loan agreements which were entered into prior to the date of the above Circular. In presence of the above written clarification by the authority which has the power under section 25 of the Ordinance to issue direction as to the rate of interest and to vary or to withdraw the same, it would not be legal for a Court to hold that the above Circular of 15-2-1981 would be applicable to the loan agreements already concluded and wholly or partly acted upon prior to the date of the above Circular by the parties on the ground that certain amounts pursuant thereof were disbursed by the banks to the party concerned subsequent to the date of the Circular. It must, therefore, follow that no writ could be issued against respondent No,4 and/or the remaining banks/financial institutions directing them to charge interest at the reduced rate of interest in breach of the terms of the loan agreements.
22. Mr. Mansoor Ahmad Khan has also referred to the AIR Manual, Vol.2, pages 81 and 82, which contains the Banking Regulations Act, 1949, relating to Reserve Bank of India. In the bottom of page 81, a note is given containing a judgment of a Division Bench of the Messore High Court on the interpretation of Regulation 21, under which the Reserve Bank of India had more or less similar power as contained in section 25 of the Ordinance. It may be advantageous to reproduce the above note, which reads as follows:--- "(1) The directions, if any, issued by the Reserve Bank of India under section 21(2) must operate prospectively and it will not affect the existing contracts or advances made by the Banking Companies with their customers. The direction issued by the Executive Director of the Reserve Bank to operate retrospectively will be clearly in excess of the authority given to the Reserve Bank by section 21(2). (1967) 10 Law Rep 767 (772) (Mys.) (DB)."
The above-quoted note indicates that the Division Bench of the Mysore High Court has taken the view, which we are inclined to take in the present case. .
23. Since we are of the view that the appellantsabove Constitution petition was not maintainable for the reasons referred to hereinabove, it is not necessary to examine the .Other submissions of Mr. Mansoor Ahmed Khan referred to hereinabove.
24. The upshot of the above-discussion is that the appeal is dismissed. However, there will be no order as to costs.
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