1. ' ZAHID KURBAN ALAVI, J.---Briefly the facts of the case are that the petitioner is a well-established company of repute registered under the Insurance Companies Law, having its Head Office at Karachi and various Branches in the Country. The petitioner is engaged in Insurance business and has affiliation through reinsurance arrangements with Pakistan Insurance Corporation and other Foreign Re-Insurers.
2. ' The Gujranwala Office of the Union Insurance Company of Pakistan Limited, issued a cover note No,95324 dated 1-9-1996 in favour of the respondent Bank's City Branch, Gujranwala as mortgages A/C Messrs Saleem Plywood Industries (Pvt.) Limited, Gujranwala as mortgagors for a sum of Rs,22 million insuring the building, machinery and stocks etc. Of the said Saleem Plywood Industries situated at 24.25 Kms. G.T. Road, Gujranwala for the period 1-9-1996 to 31-8-1997 against the risk of fire, atmospheric disturbance and riot stick damages subject to the Bank Mortgage and A.D.
3. Clauses. The Messrs Union Insurance Company of Pakistan Limited, Gujranwala collected full premium amounting to Rs,86,330 from the respondent as per their Policy No,GRW/FP/01/00251/96, dated 26-11-1996 in lieu of the said cover Note. A fire incident took place in the Factory Premises of Messrs Saleem Plywood Industries on 28-5-1997 followed by windstorm damage on 6-6-1997. The loss estimated by the Insured was to the tune of Rs,13,862,525. The Messrs Union Insurance Company of Pakistan Limited by their letter dated 31-5-1997 informed the respondents that they had received the full payment and it was their responsibility to pay the claim. For the first time the Union Insurance Company informed the petitioner to depute their surveyors and that the petitioner deputed Mr. Islam Naseer, Insurance Surveyor, to investigate and survey and assess the alleged loss and submit the report. The petitioner also by letter dated 31-5-1997 called upon the Union Insurance Company to provide them copies of coinsurance Policy and Cover Note alongwith insurance clause as the same were not available on their record. This was done. Later on the co- insurance premium receipt and pay order photo-copies were supplied by the Gujranwala Zonal Office of the respondent-Bank. On scrutiny it was found that on the coinsurance clause the names of the petitioner company, Standard Insurance Co. Limited and Platinum Insurance Co. Limited were written. Not only the petitioner but also the other two said companies denied the signatures on the said coinsurance clause, for reason of the same not being of any of their Authorized Officers/Representatives and stated that all the said documents were fake, false fictitious and fabricated and that the premium had never been received by them. On the basis of those documents the respondents by their letter dated 4-11-1997 called upon the petitioner to settle the claim by 30-11-1997 else they would be constrained to issue directive to the field offices to stop further business with the petitioner and they shall report the matter to the Controller of Insurance and delist the petitioner in case of their failure to settle the claim amicably. The petitioner denounced and disowned as it had repeatedly, done earlier the said co-insurance clause and coinsurance Premium receipt as fake and the pay order as spurious and frivolous. Therefore, the petitioner was not liable for the claim. The respondent had also lodged an F.I.R. No,100 of 1998 at Gujranwala on 29-1-1998 against one Muhammad Arif Butt of Union Insurance Company under sections 403, 406, 419, 420, 468 and 471, P.P.C. At Police Station Civil Lines Notices were issued to all the parties including the petitioner Company, Standard Insurance Company and Platinum Insurance Company by the S.H.O. Civil Lines Police Station, Gujranwala. A detailed inquiry was conducted and as per S.H.O's. Report-- "The Manager of Union Insurance Company Muhammad Arif Butt joined other Insurance companies namely Crescent Star, Platinum and Standard in this instance and had deposited the co-insurance documents in the Bank and in this connection National Bank issued a Pay Order of Rs,86,330 to the leading company i,e, Union Insurance and Muhammad Arif Butt had deposited the whole amount in Union Insurance Company and issued pay orders to other three companies according to their share and he himself took two men with him went to the Manager of National Bank Corporation and took him in confidence and obtained cash on counter, although the amounts were required to be deposited into the account of three companies. But Muhammad Arif Butt by making forged documents of all other three companies had deposited the same (in the bank) and to hide his crime, he obtained cash on counter and he showed his own two men accompanying him as the representatives and helped the amount to be handed over to them. In this way he showed them Sheikh Ashique Hussain and Muhammad Arif Dugal; as the representatives, whereas the pay order bears the signature of Muhammad Rafique Muhammad Arif Butt is found guilty in this case while Sheikh Ashique Hussain and Muhammad Arif Dugal are innocent. And there is no part of Crescent Star, Platinum and Standard Insurance Company in this criminal case, they are innocent."
4. ' On the basis of the said report a charge-sheet was sent to the trial Court by the police against Muhammad Arif Butt only. The respondent had also filed a Suit No,4131 of 1997 before the Banking Court, Gujranwala against Messrs Saleem Plywood Industries and others including Union Insurance Company for recovery of Rs,26,004,623,67 the suit was decreed in favour of the respondent on 22- 3-1999. In the said suit the petitioner and other two insurance companies were not made parties, the responding to the complaint lodged with the Controller of Insurance by the respondent urging him to cancel the registration of the Insurance Companies namely Union Insurance Company of Pakistan Limited, Crescent Star Insurance Company Limited, Standard Insurance Company Limited and Platinum Insurance Co., Limited due to nonpayment of the claim the Controller of Insurance in his letter dated 26-6-1999 addressed to the President of the respondent-Bank has stated:-- "I have, therefore every reason to believe that the three companies namely Crescent Star, Standard Insurance and Platinum Insurance could not be held liable as Co-Insurer for payment of the claim lodged by you. The only company that could have been held liable for the claim appears to be Union Insurance. This is corroborated by the Letter No,MIS/28/97, dated 31-5-1997 addressed by the Gujranwala Manager of Union Insurance to the Manager of your Bank' City Branch, Gujranwala confirming that since Union Insurance had received the full 100% premium of the insured risk of Saleem Plywood Factory Premises they and they alone were responsible for payment of the claim that had arisen.
5. ' The Insurance Surveyor, Islam Naseer also confirmed in his survey report dated 9-3-1998 after having conducted detailed enquiry and investigation into the facts and circumstances of the case, that the petitioner is not at all on risk as co-insurer and consequently non liable for the loss in question whatsoever. The petitioner had been on the approved list of the respondent for the last 40 years or so and had paid millions of rupees to the respondent on account of various claims. There had never been any dispute over any claim settlement between the petitioner and the respondent and there had been no outstanding claim of the respondents against the petitioner in the past remaining unsettled. The petitioner has been maintaining Premium Collection Accounts as also Imparts Accounts for over decades and is maintaining the same even to date at its various Branches all over the country exclusively with the respondent-Bank over and above the substantial amounts being kept in "Term Deposit Accounts". The order of delisting has seriously affected the business and reputation of the petitioner and in spite of repeated assertions by the petitioner that it was not a party to the co-insurance clause and the co-insurance premium receipt nor had it received premium from the Union Insurance Company and that the co-insurance clause and the other related documents were fake, fabricated, unconnected, spurious and frivolous the respondent did not deal with the case of the petitioner in accordance with the law applicable and became a judge in their own cause violating the provisions of Articles 4 and 25 of the Constitution and thereby causing serious miscarriage of justice, equity and fairly."
6. We have gone through the petition as well as the documents on record and it is clear to us that the claim of the respondent was not settled by the Insurance Company as they did not hold themselves liable under the policy. They justified the reasons and from the reading the report of the S.H.O. It is clear that the petitioners have been exonerated from the alleged charge. Thereafter, we have been asked to take a note of a suit which was filed against Union Insurance Company by Saleem Plywood Company in Gujranwala which has been decreed. In that suit the petitioner was not a party. The Controller of Insurance who is the guiding factor for all Insurance Companies and who is empowered to ensure that strict compliance of the rules is made has also exonerated the petitioner from the allegations levied by the Insured. With all these factors in favour of the petitioner and against the insured we find the behaviour of the Bank very strange and partisan. There was no justification whatsoever for the Bank to resort to such a harsh stand. The Bank should realize that by delisting and blacklisting Companies in an arbitrary and capricious manner they are holding themselves vulnerable to action for damages. Indeed the delisting may take place but it should only be after due consideration and keeping in mind all the facts of the case. It should be considered as a last measure and, therefore, it should be very sparingly used. In the instant case we do not feel that the Bank acted at all with prudence.
7. ' At the time of arguments the petitioner has relied upon the case of New Jubilee Insurance Company v. National Bank of Pakistan PLD 1999 SC 1126. In this case also a blacklisting and delisting was done and the appeal was allowed and the delisting of the appellant was quashed and the name of the appellant was directed to be incorporated in the approved list of the Insurance Companies and the listing the Bank. Identical issue is involved in this case and the Bank is same. It is also apparent that the facts as stated above do not justify any action by the Bank, leaving aside such a harsh action which is totally unwarranted and unjustified.
8. ' We are bound by the decision of the Hon'ble Supreme Court of Pakistan. The petition was allowed by a short order and the above are the reasons.