1. On 26.9.1997, respondent Bank instituted a suit under Section 9 of Banking Companies (Recovery of Loans; Advances, credits and Finances) Act, XV of 1997) (shortly stated the Act of 1997) for the recovery of 5,98,900/- rupees against appellant/borrower. The appellant moved an application under Section 10 of the Act for grant of leave to defend the suit. The said application was rejected on 15.3.1998 with a result that suit of respondent stood decreed. Against this judgment and decree, the appellant has preferred first appeal under Section 21 of the Act, 1997 alongwith an application/C.M. No. 1-C/98 for stay of the execution of the impugned decree. Although the appeal was admitted to regular hearing, yet notice was issued in C.M. No. 1-c/98. This is the brief background in which this application has been heard by us.
2. The sole contention, urged by appellant, is that an application for leave to defend moved by appellant raised serious and bona fide dispute within the terms of section 10 of the Act ad so the Court was bound to grant unconditional leave to defend. Help was sought from Pakistan v. Ismail Jee & Sons (1976 Lah. 1427), General Investments Ltd. V. Dubai Bank Ltd. (1984 SCMR 634), Haji Banaris Khan v. Central Government (1986 SCMR 105), Baghpatee (Pvt.) Ltd. V. Pak Libya Holding Company (Pvt.) Ltd. (1991 SCMR 33), Usman Hussain v. Habib Bank Ltd. (PLD 1988 Karachi 628), General Investment Ltd. V. Dubai Bank Ltd. (1992 CLC 1964) Gul Hassan v. Allied Bank of Pakistan (1996 SCMR 237), Sh. Muhammad Rafique v. United Bank Ltd. (1997 SCMR 1149) and Kohinoor Textile Mills v. Kohinoor Sugar Mills Ltd. (NLR 1993 A.C. (civil).
3. On the other hand, the learned counsel for respondent referred to proviso to Section 21 of the Act to maintain that impugned decree was money decree and so it should not be stayed, lt was next argued that if the operation of the decree was to be stayed, the applicant be directed to deposit the decretal amount in some profit bearing scheme of National Bank so that no harm is done to decree-holder whole will be entitled to reap the benefit of decree at the relevant time. Continuing, the learned counsel represented that under the impact of global economy, the currency of our country was subject to phenomena of devaluation and so the course suggested by him was in line with the sociol-economic dynamics of the country.
4. We have heard the learned counsel for parties at some length and attended to. Their competing contentions. Before we proceed further to weigh their submissions, we find it convenient to reiterate certain well-known propositions of law having bearing on this case.
2. Firstly:- While exercising in civil jurisdiction, the banking Court has to follow the procedure laid down in respect of suit in the Civil Procedure Code subject to the extent that any contrarieties embodied in Act of 199 Reading of Section 3 and Section 141 of CPC clearly indicate the above legislative intendment, lt is settled that where the provisions of Act are repugnant to provision of Civil Procedure Code, the former will prevail as provision of special law over corresponding provisions of CPC. See Hudaybia Textile Mills Ltd. V. Allied Bank of Pakistan (PLD 1987 S.C. 512) and M/s. Con force Ltd. V. Rafique Industries (PLD 1989 S.C. 136). lt needs to be remembered that the applicable provisions of Banking Companies (Recovery of loans) Ordinance, 1979 (XIX of 1979), on which aforesaid opinions were rendered, are completely similar to the provision of Act of 1997. The principles enunciated therein are, therefore, applicable to Banking Courts constituted under Act of 1997.
3. Secondly: The appeal is in continuation of the original proceedings taken before superior Tribunal and that it reopens the whole dispute unless something contrary is expressed by the Statute under which, the right of appeal is granted. See Wajid Ali v. S. Sajid Ali (1985 SCMR 401), Muzaffar Ali v.
4. Muhammad Shafi (1981 S.C. 94) and Altaf Din v. Perveen Akhtar (PLD 1970 S.C. 75).
5. Thirdly: Mere presentation/filing of appeal does not operate as stay of the execution of the decree.
6. This jurisdiction is to be exercised within the circumference of Section 21 of the Act of 1997 read with Order XLV, rule 5 of CPC. The underlying objectives of above provisions is that it is unfair to deprive of decree-holders of fruit of his decree only because the judgment-debtor has filed appeal.
7. Simultaneously the Court is to that execution of decree may not occasion irreparable injury and substantial loss to judgment-debtor. Furthermore, it is established practice of this Court that ordinarily the execution of money decree is not stayed and this Court while exercising its jurisdiction asks the decree- holder to furnish adequate security for the restriction of decretal amount to be received. See Mian Mushtaq Ahmad v. Ch. Bashir Ahmad (1970 SCMR 183), Ch. Altaf Hussain v. Mirza Azam Bag (1983 SCMR, 643) and M/s. Allied Bank of Pakistan v. Super Electric Industries Ltd. (1991 SCMR 2319). The authority (1983 SC 643) presents a classic enunciation of application of the above principle, in this case, on 16 July, 1971, Mirza Azam Bag/respondent had sued for recovery of Rs. 299986/- This suit was dismissed by the first Court but was decreed by High Court as appellate From on 19.1.1976. Against this decision the judgment-debtor filed two petitions for leave to appeal which were granted in following terms:- "The respondent has obtained a money decree against the petitioners, for recovery of Rs. 29,986/- passed by the High Court. The petitioners have pressed for the stay of the execution of the decree pending the disposal of this appeal. We are of the opinion that the petitioners are not likely to suffer any irreparable loss or injury in case he is made to pay the decretal amount to the decree-holder, their interest can be fully safeguarded by obtaining a suitable guarantee ultimately turned out to be successful in this appeal in Dhunjibhoy Cowasji Umrigar v. Lisoba, it was held that a party appealing against a decree, which direct him to pay money, may obtain stay of execution of the decree, so for as it directs payment, on his lodging * the amount in Court, unless the other party gives security for the repayment of the money in the event of the decree being reversed. If such security be given by the successful party, then stay of execution should not be granted. We have, therefore, declined to order the stay of the execution proceedings against the petitioners. However, at the same time we direct that the decretal amount, if realised, will be paid to the respondent only after he has furnished security to the satisfaction of the execution Court for the restitution of the amount to the petitioners in the event of their success in this appeal."
8. Fourthly: that rule enunciated above is not inflexible and the appellate Court has powers to stay execution of money decree in highly special circumstances within the four corners of sub-rule (3) of Rule 5 of Order 41 of CPC and section 21 of the Act of 1997. The stay, however, is to be granted subject to conditions that appellant/applicant deposits in cash with this court an amount equivalent to the amount due. or. furnishes security equal in value to such amount. Reference be made on Pakistan v. A. Ismail Jee;& sons Ltd., (PLD 1976 Lah. 1427), Usman Hussain v. H.B. Ltd. (PLD 1988 Karachi 628), General Investment Ltd. V. Dubai Bank Ltd. (1989 SCMR 724), Bhagpattee Ltd. V.
9. M/s. Pak. Lybia Holding Company (1991 SCMR 33), Gul Hussain & Co., v. Allied Bank of Pakistan (1996 SCMR 237) and Sh. M. Rafique (PLD 1988 Karachi 628). 1989 725, 1991 SCMR 333 and 1996 SCMR 237 deal with question as to whether the appellant/applicant can file the security furnished by him in First Curt, in appellate forum. This question was referred to Full Bench of Karachi High Court in Usman Hussain's case (PLD 1988 Karachi 628). lt was held therein that the Court has discretionary power to accept the security furnished to bank for the repayment of loan as security for the purpose of admitting the appeal in terms of Section 12(5) of Banking Companies (Recoveries of Loan) Ordinance 1979. Speaking for the Bench his lordship Mr. Justice Mian Amal (as he then was said:- "10. The upshot of the above discussion is that our answer to the above-quoted question is that the Court has discretion even to accept the security furnished to the Bank for repayment of loan as a security for the purpose of admitting the appeal in terms of section 1295) of the Ordinance, provided it covers the amount of the judgment debt and there is no legal impediment in respect thereof."
10. The rule enunciated in above precedent was approved by the Supreme Court in 1989 SCMR 724 and was reiterated in 1991 SCMR 33."
11. The question, which finally arises for consideration, is whether this Court/appellate Court under power under section 21 of the Act 1997 to direct the application/appellant to deposit decretal amount in same profit bearing scheme of National Bank of Pakistan/National Savings Centre as a security instead of securities furnished by him in Bank or before the Court of first instance. This question hinges upon the meaning and scope of expression of "security" as employed in Order XL1 rule 5(3) of CPC and Section 21 of the Act 1997. Interestingly, this phrase has neither been defined in Act of 1997 nor in Code of Civil Procedure. As a rule, we will have fall upon its dictionary meaning.
12. "The relevant meaning, of expression "security" as culled from Black's Law Dictionary Fifth Edition, are: Protection, assurance; indemnification. The term is usually applied to an obligation, pledge, mortgage, deposition, lien, etc., given by a debtor in order to assure the payment or performance of his debt, by furnishing the creditor with a performance of his debt, by furnishing the creditor with a resource to be used in that indicates evidence of indebtedness. The name is also sometimes given to one who becomes surety or guarantor for another.
13. The term "security" means any note, stock, treasury stock, bond, debenture, certificate of interest participation in any profit sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate preorganization certificate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit, for a security, or in general, any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited. Securities Ex-change Act.
14. The term "security" means any bond, debenture, note or certificate or other evidence of indebtedness, issued by a corporation or a government or political sub-division thereof, with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate, or warrant or right to subscribe to or purchase, any of the foregoing: negotiable instrument; or money."
15. This expression was construed by learned Single Judge Sindh High Court in Chetumal Balchand v.
16. Noorbhoy Jafferi (AIR 1928 Sindh 89) in following terms:- "There can be no doubt that in the power the expression "securities of any description whatsoever" has been used in its widest possible meaning, and is not confined only to charges on moveable or immovable property, but includes, 'personal securities for money, in Stround's Judicial Dictionary it is said that speaking generally a security is anything that makes the money more assured in its payment or more readily recoverable as distinguished from, e.g., a mere "I.Q.U. which is only evidence of a debt."
17. Meaning of "(1) A "security," speaking generally, is anything Expression that makes the money more assured in the "Security" payment or more readily recoverable; as in Stroud's distinguished from e.g. a mere I.Q.U. which is only Judicial evidence of a debt. See Securities. See further, Dictionary, per Stirling L.J. British Oil Mills Co. V. Inland Revenue Commissioners (1903)1 K.B. 697.
(2) Thus, bank notes, bills of exchange, promissory notes, and cheques, are "securities" (Byles (129th ed). See further Brown v. Inland Revenue Commissioners (1895) 2 Q.B. 598, cited Marketable security; security for money; but see security for debt.
(3) And writing is not necessary; for a parol deposit of deeds to secure a debt creates an mortgage (Fisher and Lightwood; Coote(9th ed), and is obviously a "security."
(4) Probably the more general meaning of "security" is, money secured on property (per Farewell, J.); but that has been termed "its narrow, archaic, meaning" (per Williams, L.J.), yet still it is its prima facie meaning, though a flexible one" (Per Romer L.J.), and, semble, it will, somewhat easily, yield to a context; therefore, where a testate (being a man of large means and taking many kind (investment) directed that liable be invested under this will may be invested in such securities as trustees, in their absolute discretion, shall think fit and I authorise my trustees to continue or leave any moneys invested at my death in or upon the same securities, it was held - that "securities" was used in the sense of investments, and that the trustees were authorised to invest in the purchase of the ordinary stock of the Midland Railway and of the London & North Western Railway (Reyner (1904) 1 Ch. 176; this case was applied i Re Gent and Eason (1905) 1 Ch. 386; see further Re Tapp and London & India Docks Co. 74 L.J. Ch. 523, cited Invest. CP. Re Hutchinson 88 L.. Ch. 352).
18. The ratio emerging from the above definitions is that the security is not only of immovable or personal security, lt may embrace a cash deposits, any bond, debenture, shares of stock, any certificates of interest, certificate of any investment, deposit it in some profit bearing scheme of lending Institution/having sanctions from Central Government/Provincial Government. The Philosophy, behind security, is assurance that decree-holder will reap the benefit of decree at the time of its execution, lt, therefore, follows that the decree-holder in clearly entitled to reap the benefits of decree. With the march of time the currency of our country and so many other countries is undergoing rapid depreciation on of global pushes and pulls, lt is a stark fact that since 1971 our currency has undergoing rapid depreciation on number of occasions. Taking into consideration this economy reality, we are inclined to hold scheme of National Savings Centre will be adequate Scheme of National Savings Centre will be adequate security. The deposit/investment so made by the decree-holder will earn profit during the pendency of appeal and the same will enure to the party successful in this appeal. This shall safeguard the both parties from Corrasion of decretal amount which is being caused by the devaluation of our currency. This, in our considered opinion, will be adequate security within the meaning of Section 21 of the Act of 1997 and Order XL1, rule 1 of CPC.
19. For the reasons stated above, we allow this application. The execution/operation of the impugned decree shall remain stayed subject to condition that the applicant/appellant shall invest the decretal amount in some profit baring scheme of National Savings Centre with a period of one month, in case of default the respondent/decree-holder shall be well within his right to get the decree executed through process of law. _______________ CH. IJAZ AHMAD, J.- I have had the privilege and the benefit of going through the draft judgment prepared by my learned brother Mian Allah Nawaz, J. Since important legal issues arose in this case, I had decided to write a separate note and I hereby record the same herewith, lt is admitted fact that the suits for recovery by Banks had been filed before the Civil Courts but the recoveries were not effected as the cases were not decided for years. On account of above situation the Legislature decided to legislate different laws in the national interest so that the cases may be decided in a shortest possible time for the benefit of the Banks-institutions and also make amendments in the relevant provisions of the Companies in the relevant provisions of the Companies Ordinance, 1984 that the petitions filed by the Banks for liquidation of the Companies may be decided within 90 days. The list of Banking Laws for the immediate recovery of the loans from the creditors framed are as follows:-
(i) The Banking Companies (recovery of loans) Ordinance, 1979.
(ii) Banking Tribunals Ordinance, 1984.
20. The provisions of the aforesaid Ordinances were challenged before this Court on the touch stone of violation of Constitution and fundamental rights (Arts. 8 and 25) read with Articles 2-A and 4 and Article 175 of the Constitution. The full Bench of this Court in M/s. Chanab Cement Products v.
21. Banking Tribunals Lahore (PLD 1996 Lahore 672) declared certain provisions of the aforesaid Ordinance ultra vires and writ petitions were accepted by Hon'ble Full Bench of this Court.
22. Resultantly, Banking Companies (recovery of loans, advances, creditors and finances) Act (XV of 1997) was promulgated and proviso of Section 21 in some what exactly similar to Order 41, Rule 5, CPC which are reproduce hereunder for ready reference: Section 21 of the Banking Act: Appeal-(1) subject to sub-section (ii), Any person aggrieved by a decree or an ing to set aside a decree, or an order protecting or preventing the sale of property, or a sentence passed by a Banking Court established under Section 4, may, within 30 days of such order, decree or sentence, prefer an appeal to the High Court. Provided that the admission of the appeal shall not per se operate as a stay, nor shall any stay be granted therein unless the appellant deposits in cash with the High Court an amount equivalent to the amount due, or, at discretion of the High Court, furnishes security, equal in valued to such amount; and in the event of a stay being granted for a part of the decretal amount only the requirement for a deposit in cash or furnishing of security shall stand reduced accordingly: Provided further that where the claim of the decree-holder is based on the default of the defendant in payment of agreed instalments, the deposit shall be made or, as the case may be, the security furnished to the extent of the amount of instalments in default.
(ii) The High Court shall, at the stage of admitting an appeal, or at any time thereafter either suo motu, or on the application of the decree-holder, decided by means of a reasoned order whether appeal is to be admitted in part or in whole depending on the fact and circumstances of the case.
23. Order 41, Rule 5, CPC.
5. Stay by Appellate Court (I) An appeal shall not operate as a stay of proceedings under a decree or order appeared from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient case order stay of execution such decree.
24. Stay by Court which passed the decree.--(2) Where an application is made for stay of execution of an appealable decree before the expiration of the time allowed for appealing therefrom, the Court which passed the decree may on sufficient case being shown order the execution to be stayed.
(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied-
(a) that substantial loss may result to the party applying for stay of execution unless the order is made:
(b) that the application has been made without unreasonable delay; and
(c) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him.
(4) Notwithstanding anything contained in sub- rule (3), the Court may make an ex parte order for stay of execution pending the hearing of the application.
25. The aforesaid legislative history in the amendments of the Banking recovery of loans indicates that it is in the interest of the Banks/institution to recover its loan from the creditors. The Legislature has fixed the time limit to decide the suit/appeals coupied with the fact that it is the discretion of the Court to grant the stay to the appellant against whom the Banking Court has already passed money decrees but legislature has imposed the aforesaid conditions to exercise the discretion keeping in view prevailing conditions of the sociol-economic conditions of the country. The creditors did not return the loan in accordance with their commitment at the time of executing agreement between the creditors and the Banks/institutions and the Banks and the Institutions were constrained to file suits, lt is the established right of the decree-holders in case of the money decrees that security must be obtained from the creditors so that the decree may be satisfied immediately thereafter as and when the appeal has been finally decided between the parties on account of the general conduct of the creditors Banks/institutions have become bankrupt and the foreign loan giving agencies i.e. IMF and World Bank pressurize the Institutions including the Government of the day to impose taxes and almost take over the role of a ruler to Government may not be declared defaulter and their vested rights be protected. Even otherwise the-people of Pakistan have to face difficulties day by day on account of the increase in the prices of the utility of eatables meaning thereby on account of the conduct of the creditors by not discharging their liabilities in accordance with the terms of the agreement. The Government of the day as well as the people of Pakistan have become sufferer and the freedom of the country and independence is at stake and the Government is under compulsion on account of the pressure of the World Bank and IMF devaluate the currency due to these reasons my learned brother has taken lot of pain to apart from the previous practice to suspend the money decrees on the basis of the mortgage properties and hypathocations etc. depositing the same in some profit earning scheme of National Savings Center will be adequate security, lt is common phenomena that at the time of sanctioning of loan on account of either the political pressure or negligence or other reasons the value of the property mortgage were assessed at a very high rate for the purpose of obtaining loan by the creditors from the Banks through the actual values of mortgaged properties were much less at that time, in view of these circumstances it is the right time to departure from the previous practice to suspend the decrees without cash deposit and my learned brother has given in the circumstances good formula not detriment to any of the parties to deposit the decretal amount by depositing the same in the any financial scheme so that at the time of the decision of the appeal none of the parties will be deprived from the fruit of the decretal amount in letter and spirit, lt is pertinent to mention here that Banks/National Institutions have sanctioned loans from the public exchequer. lt is fraud with the people of Pakistan who are the real sovereign and tax paid only few influenced persons obtained the loans from the Institutions and wasted the same and did not fulfil' their commitments which is their duty and obligation by virtue of the terms and conditions of the contract as well as by virtue of their promise and they are bound to fulfil their promise by virtue of the injunctions of Islam and the Courts are bound to take into consideration Injunctions of Islam after the addition of Article 2-A in the Constitution. Even on this account the appellants are not entitled any relief without depositing the decretal amount in the profit financial schemes. lt is also settled principle of law that national interest is supreme qua the individuals to safe the nation from the privilege clause and also able to live as independent nation so that the Government may be able to discharge their liabilities according to their promise and agreements with the foreign loan agencies i. e. World Bank and IMF in fact it is the duty and obligation of each and every citizen to sacrifice each and every citizen to sacrifice each and every thing for their freedom to discharge the liabilities qua foreign loan agencies for the sake of national independence and to avoid the interference of the foreign loan agencies to change the tariff of the electricity, sui-gas and telephone etc. facilities.
26. The meaning of the word security and devaluation are defined Encyclopedia of Banking and Finance 10th Edition in the following terms:- Securities: That class of investments represented by engraved, printed, or written documents evidencing ownership or creditorship in a corporation or other forms of business organization, or a creditorship relation to public bodies. The term therefore includes bounds, stocks, mortgages, notes, scrip, warrants, rights, options, etc., of every kind. As defined by the Securities Act of 1933, the term "security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest of participation in any profit-sharing agreements, collateral-trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of interest in property, tangible or commonly known as a security, or any certificate or interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing." lt is pertinent to mention here that security means participation in any profit sharing agreements Devaluation: The process of reduction in the monetary metal content of the standard money unit of a country, which thereby lowers its par (ratio of monetary metal content relative to that to money units of other countries). Such reduction is effected by appropriate amendment of the monetary statute of the country that defines the stander money unit. in view what has been discussed above concur with the reasons enumerated by my learned brother to suspend the execution/operation of the impugned decree subject to the condition that the applicant/appellant shall invest the decretal amount in some profit bearing schemes.