1. ' NAZIM HUSSAIN SIDDIQUI, C.J.---This appeal under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, is directed against the order, dated 10th May, 1999, passed by learned Single Judge, whereby the appellant's application filed under Order 39, Rules 1 and 2 read with section 151, C.P.C. Was dismissed.
2. ' Appellant Saleem Adamjee on 22-3-1999 filed the Civil Suit No,367 of 1999 against the respondent No,1, Al Faysal Investment Bank Limited, for declaration, rendition of accounts, permanent injunction and damages. The appellant availed finance facility from respondent No,1 under the mode of Islamic banking called 'Murabaha' and signed and executed necessary documents at Karachi, in a sum of Rs,29,691,913 (29.69 Millions) with repurchase price of Rs,33,459,288 calculated to include the purchase price plus a profit agreed to be Rs,3,759,288 @ 22%. The loan facility was secured by pledge of shares of M/s. Adamjee Insurance Company Limited owned by various individuals and companies and documents of valuable property located at Plot No,241. Beach Avenue, Phase-VIII, D.H.A., Karachi, measuring 2000 sq. Yards of Mr. Abdul Ghaffar Adamjee. In said suit, the appellant prayed for the following reliefs:-
(a) To declare that the plaintiff is not liable to pay the liquidated damages/surcharge and custody charges on account of the fact that the same is not authorised in view of the B.C.D. Circulars of the State Bank of Pakistan, law and the Constitution as well as the Qur'an and Sunnah;
(b) to declare that the plaintiff is entitled to reasonable time up to third week of July, 1999, for the liquidation of finance facility;
(c) to declare that the sale of 25,000 shares by the defendant Bank much below the market price and/or in unfavourable market condition is illegal, mala fide, harsh, unreasonable, against the established banking practice;
(d) to direct the defendant not to sell share in an unfavourable market conditions and/or at price lower than the market rates;
(e) to direct the defendant Bank to render true and correct account;
(f) to award damages for a sum of Rs,10 Millions;
(g) to grant permanent injunction and pending disposal of the suit restrain the defendant Bank, their agents, officers, employees, persons, subordinates or any person working under them to act on the notices dated 5-3-1999, 15-3-1999 and 16-3-1999 or any other notice prior or subsequent for recovery in any manner whatsoever tentatively amounting to Rs,32,128,815 or any other amount and/or further restrain them from selling the shares or any other security already pledged/secured with the defendant as securities against loan and/or to pass order for the suspension of the operation of the aforesaid impugned notices pending disposal of this case and/or;
(h) to grant such other/further/additional relief as this Hon'ble Court may deem fit and necessary under the facts and circumstances of the case;
(i) to grant costs of the suit.
3. ' Alongwith the aforesaid suit, the appellant had filed Miscellaneous Application No,2308 of 1999 which was dismissed by the order impugned in this appeal.
4. ' On 26-5-1999, the operation of impugned order was stayed subject to the appellant depositing debt amount with respondent Bank by 15th June, 1999.
5. ' It is the case of respondent No,1 that the appellant did not deposit the amount up to 15-6-1999 and the respondent No,1 had absolute right to sell the pledged shares submitted by the appellant. The appellant on 14-6-1999 at 13-27 had sent a fax message to the respondent No,1 in which, inter alia, it was stated that the respondent No,1 had already converted and got registered 446, 765 pledged shares of M/s. Adamjee Insurance, hence the appellant was entitled to claim adjustment to the maximum price on the date the respondent No,1 had moved for conversion.
6. ' It is contended on behalf of the appellant that after vacation of stay order, the respondent No,1 had started transferring and converting shares in their own name without disclosing the rate or showing any adjustment and in this way the appellant was deprived not only of bonus shares and dividend which he would have been entitled, had the shares remained in his name till 12th June, 1999 and also the benefit of further rise in prices of shares. Further, it is urged that the respondent No,1 had already sold the shares at much below market price and by doing so committed fraud and caused loss to the appellant.
7. ' It is an admitted fact that the appellant is indebted to the respondent and had pledged shares to secure the repayment of debts. It appears from the circumstances that, before the order dated 26- 5-1999 the respondent No,1 had sold certain pledged shares through Stock Exchange, which shares were transferred by respondent No,2 M/s. Adamjee Insurance Company Limited, in the name of ' transferee'. Section 176 of the Contract Act is applicable to this case. It is as under: "If the pawner makes default in payment of the debt, or performance, at the stipulated time of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawner upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged on giving the pawnor reasonable notice of the sale.
8. ' If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawner is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawner."
9. According to this section, the pawnee' has a right either to file a suit in case the pawner makes default in payment of debt or sell the things pledged on giving reasonable notice of the sale. It is an admitted position that the respondent No,1 had sent notice to the appellant for the sale of pledged shares as back as September 1998. The respondent No,1 thereafter, could sell the pledged shares on any date to reimburse themselves by the sale of the pledged shares. The object of the notice is that the pawner, being the owner of the property shall have priority to get back his property by clearing the dues outstanding against him. It is based upon equitable principles. On one hand, it provides fair opportunity to the pawner to get back his property and on the other, it also safeguards the interest of the pawnee. The right of respondent No,1 to sell the pledged shares was absolute and could not be bracketed with the possible rise in price of shares.
10. ' It is significant to note that in the impugned order, it has been clearly stated that in case the respondent No,1 do not act prudently and sell the shares at a price lower than the prevailing market rates, the appellant would have a cause of action against the respondent No,1. Learned counsel for respondent No,1 submits that issues to this effect have already been settled in this matter. Under the circumstances, there is no merit in this appeal.
11. ' On 17-6-1999, after hearing learned counsel of the parties, we had dismissed this appeal in limine with costs and these are reasons for the same.