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Petitioner: Messrs BANK OF OMAN LTD.- (B) Islamic Jurisprudence-- --- Interpretation Of Qur'an--A Verse, Though Revealed In A Particular Situation, Remains General In Its Effect And Applicability. (C) Islamic Jurisprudence-- --- Mortgage-----Mortgage Is Valid Both While One Is On Journey As Well As During His Stay At Place Of Residence--Mortgage With Possession Of Mortgaged Property Being A Condition As To Its It Is Not Valid Unless Mortgage Is Completed With Possession Qualification. (D) Pakistan VS Respondent: Messrs EAST TRADING C0. LTD. And Other
Court Name: Sindh High Court Judge(s): Tanzil-ur-Rehman Title:Messrs BANK OF OMAN LTD.- (B) Islamic Jurisprudence-- --- Interpretation
Of Qur'an--A Verse, Though Revealed In A Particular Situation, Remains General In Its Effect And Applicability. (C) Islamic Jurisprudence-- --- Mortgage-----Mortgage Is Valid Both While One Is On Journey As Well As During His Stay At Place Of Residence--Mortgage With Possession Of Mortgaged Property Being A Condition As To Its It Is Not Valid Unless Mortgage Is Completed With Possession Qualification. (D) Pakistan vs Messrs EAST TRADING C0. LTD. And Other Case No.: Miscellaneous Application No.5170 of 1984 Suit No. 519 of 1984 Date of Judgment:1987-04-16 Reported As: PLD 1987 Karachi 404 Result: suit is granted Judgment ORDER This is an application under Order XXXVII, Rule 3, C.P.C. Filed by the attorney of defendant No.4 for leave to defend the suit. The facts arising out of the above suit have been fully stated by me in my order dated 18th February, 1986 while disposing of C.M.A. Nos.4398 and 4397 of 1984 filed by the defendants Nos.3 and 5 respectively (1987 CLC 288). Now, suffice it to say that defendant No.4 is the wife of defendant No.5 and mother of defendant No.3 and is a share-holder and director of defendant No.1 company. She has been sued by the plaintiff as mortgagor. 2. Mr. Muhammad Ali Sayeed, learned counsel for defendants submits that defendant No.4 is a Pardahnashin lady who had given her house as security by way of mortgage by signing a memorandum of the title-deeds, which, according to him, is not valid, as it being a complete document of mortgage ought to have been registered. He further submits that as the said memorandum has been witnessed, it did not remain mortgage but turned into a bond which, being unstamped, is invalid. He further submits that the said memorandum purports to secure a liability of defendant No.l and not of herself, whereas an equitable mortgage can be valid only to secure one's own debts, as it amounts to assigning personal liability for the loan obtained by
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defendant No.l. At the very outset, I must say that the abovementioned pleas were taken by Mr. Muhammad Ali Sayeed, learned counsel for the defendants, to say the least, half-heartedly. The total impression that I could gather was that the said pleas, except one, are for the sake of pleas only, because the learned counsel failed to develop the point or cite any law in support thereof. Therefore, the only plea that requires consideration is: whether the memorandum of deposit of title-deed is a complete document of mortgage and so it ought to have been registered. For this plea, the learned counsel placed his reliance on the case reported as Messrs Eagle Star Insurance Co. Ltd. v. Messrs Usman Sons Ltd. And others PLD 1969 Kar. 123. 3. To appreciate the submission of the learned counsel it seems convenient to reproduce the contents of memorandum in question, which read as under:---- "Messrs Bank of Oman Limited, Variave Building, I.I. Chundrigar Road, Karachi. MEMORANDUM OF DEPOSIT OF TITLE DEED I, Mrs. Mubaraka Piracha wife of Mr. A. Sami Piracha, residing at B-16/C North Nazimabad, Karachi, hereby confirm that as agreed upon in person I have deposited on 14-6-1980 the Title Deed of my property situated at Plot No.F-51/A-Block 'F' Scheme 2, North Nazimabad, Karachi measuring about 1,000 Sq. Yds. To secure the payment to you on demand any amount outstanding that may have been or may be lent along with interest as agreed between you and Messrs East Asia Trading Company Limited, Karachi. Yours faithfully, (Sd.) (Mrs. MUBARAKA PIRACHA) w/o Mr. A. Sami Piracha Witnesses & address (1)Mr. Zafarullah Paracha, IV-C-1/6, Nazimabad, Karachi.(Sd.) (2)Mr. Anwar Beg, H. No.572, LAC No.l, Mehmoodabad, Karachi.(Sd.) DETAILS OF TITLE DEED Indenture of Lease between K.D.A. And Mrs. Mubaraka Piracha in respect of Plot No.F-54/A, Block 'F' Improvement Scheme No.2, Karachi. Dated 14th June, 1980." 4.In the cited case the operative part of writing referred to in the judgment, reads as under:- "(1)That the documents are sent herewith to the Eagle Star Insurance Company Limited by way of equitable mortgage of the value of the properties described below as additional securities, in consideration of the said Eagle Star Insurance Company Limited having granted loan of Rs.6,25,000 (Rupees six lacs twenty-five thousand) only to Messrs Usman Sons Limited of 22, SR, 3 Serai Road, Karachi by agreement of loan, dated 16th March, 1964. (2)That Nisar Ahmad, Muhammad Umar, Muhammad Suleman, Muhammad Bashir, Muhammad Salim, Fazal Rahman sons of late Haji Muhammad Usman and Zubeda Begum widow of late Haji Muhammad Usman have interests valued at Rs.5,93,000 (Rs. Five lacs ninety-three thousand) in the said properties in their own rights by way of inheritance and have right to mortgage such interests as owners thereof, which they hereby mortgage as equitable mortgage with Eagle Star Insurance Company Limited." (3)That Nisar Ahmad is duly constituted attorney of Muhammad Suleman (by virtue of Power-of- Attorney dated 22-2-1964) and of Muhammad Salim and Muhammad Bashir (by virtue of Power-
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of---Attorney dated 24-2-1964) and has full authority to mortgage their shares in the properties and in exercise of the power, their shares are hereby mortgaged by him. (4)That Muhammad Umar is duly constituted attorney of Mst. Zubeda Begum (by virtue of Power- of-Attorney dated 27-6-1963) and has full authority to mortgage her share in the properties and in exercise of such authority, he hereby mortgages her share. (5)That the properties in question are free from any kind of encumbrance and shall not be encumbered or alienated by the mortgagors before repayment of the aforesaid loan by Messrs Usman Sons Limited to the Eagle Star Insurance Company Limited. (6) That the terms hereof shall be binding on the heirs and legal representatives of the mortgagors." In the case cited, the writings, as quoted above, contained the undertakings that the properties with regard to which documents of title were deposited shall not be alienated or encumbered until the loan advanced by the plaintiffs had been repaid, and, further, the plaintiffs were empowered to recover their loan from those properties. It was thus, held that:--- "These writings operate in praesenti to create the relationship of mortgagor and mortgagee between the parties. The writings make the properties in dispute answerable for the claims of the plaintiffs, who are also empowered to recover their dues from the said properties, and further, the writings contain the undertakings that the properties shall not be alienated or encumbered in any manner until the plaintiffs' loans are repaid. In my view, these documents are in effect contracts of mortgage and purport to create in praesenti an interest in the properties in the plaintiff's favour. It being so, the documents were compulsorily registrable under the Registration Act, 1908, and not having been registered, it has to be held that not only these documents are inadmissible in evidence, but also that these documents do not create any mortgage in the plaintiff's favour. Since the deposits of the documents of title are not independent of memorandums, the deposits also would not create any right or interest in the plaintiffs in the disputed properties." 5.If the contents of the writing by which document of title were said to have been deposited with the plaintiffs in the cited case are compared with the contents of the memorandum executed in the instant case it would appear that there is a world of difference between the two. The writing in the instant case is a mere confirmation of deposit of title deeds and not a contract of mortgage. In this respect, I may rely on the case of United Bank of India Ltd. v. Azirannessa Bewa alias Azizanessa Bewa PLD 1965 SC 274. The relevant observation of f A.R. Cornelius, C.J. Who delivered the judgment, is of great advantage and is reproduced below:--------- "The mention of the deposit is in the past tense, i.e. 'I deposited'. There are no words used to show that in praesenti the security was being created, but it is said 'I deposited ...The documents .... With intent to create an equitable mortgage' and in the light of the observations in the judgment of the Privy Council last cited, the possession of such an intent at the time of deposit, being in the past, is capable of being proved by production of the document in evidence. It is indeed probably that the language employed in these 'letters of deposit' is derived from the declaration of law by the Judicial Committee in the case of Sundarachariar, which (we say so with respect) is entirely correct." 6.The rule of test between the two situations in the Eagle Star's case and the instant case seems to be that if the writing purports to be creating a right of mortgage in praesenti, it is compulsorily registrable under section 17 of the- Registration Act, and if the writing is merely A recital of the event i.e. The fact of having already deposited the document of title, with intent to create an equitable mortgage, it is not compulsorily, registrable. Looking to the contents of the memorandum of deposit of title deeds in the instant case it cannot be said that a contract of mortgage is being created in praesenti by the said memorandum. The contention is therefore, devoid of any merit.
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7. During the submissions of Mr. Muhammad Ali Sayeed, learned counsel for the defendant, a question also arose as to the un-Islamic character of the said memorandum. Learned counsel submitted that the concept of equitable mortgage is purely an English concept which is foreign to Islam. The said memorandum is not a mortgage according to Islamic Law and it should, therefore, be declared as null and void. In order to know if there is any decision on Transfer of Property Act, 1882, by the Federal Shariat Court, a request in this behalf on my direction was made by the Registrar of this Court to the Registrar of the Federal Shariat Court, who by his letter dated 27-10- 1986 forwarded to the Registrar of this Court a copy of the order dated 5-10-1982 passed by the Federal Shari'at Court in the matter of Transfer of Property Act, 1882. A perusal thereof will show that the whole Transfer of Property Act, 1882, in which the provision relating to equitable mortgage is also contained in its section 58(f) came up for consideration before the Federal Shari'at Court comprising of Aftab Hussain, C.J., Ali Hussain Qazilbash, Ch. Muhammad Siddiq, Maulana Malik Ghulam Ali and Pir Muhammad Karam Shah, JJ and a unanimous decision was made in respect thereof. The order, delivered by the learned Chief Justice, being short, is reproduced in full which reads as under:------ "On the 15th of July 1982, a public notice was issued to invite views of the members of the public inter alia in regard to the question as to whether the Transfer of Property Act, 1882 or any of its provisions, is repugnant to the Holy Qur'an or the Sunnah of the Holy Prophet (p.b.u.b.) and if so, to what extent. No one either from the Ulema, or members of the Bar or members of the public except Mr. Abdul Karim Langah, Civil Judge, Islamabad responded to the notice. Mr. Langah is of the view that no provision of the Act is repugnant to the Shari'ah except the provision as regards interest. 2.It was found unnecessary to consider two Chapters of the Act i.e. Chapter II (sections 5 to 53-A) and Chapter VII (sections 122 to 129) since it is clarified in section 2 that nothing in Chapter II and in section 129 that nothing in Chapter VII of the Act, shall be deemed to effect any rule of Muslim Law. It is, therefore, clear that the rule of Muslim Law on matters dealt with in various sections of these two Chapters override the provisions of those sections in case of conflict with the provisions of Muslim Law. 3. We have already gone carefully through the other provisions of the Act but except for the provisions allowing interest no other provision is repugnant to the Holy Qur'an and the Sunnah. The provisions regarding interest are in sections 55, 56, 57, 58, 62, 63, 65--69, 69-A, 72, 76, 77, 108 and 114. It appears that while drafting the Act the provisions of Muslim Law with the exception of interest, have been kept in view. 4.We have already held that interest is a fiscal matter and it is not within our jurisdiction to order necessary amendments in regard to provisions in any Statute concerning it. However, we recommend that the President may kindly consider the advisability of elimination of interest from all Statutes in the dealings between private natural persons, since such restricted elimination does not appear to pose any problem to the Government, the Banks, the Insurance Companies, and other Statutory Bodies. 5. The other provisions of the Transfer of Property Act, 1882 are not repugnant to the Holy Qur'an and the Sunnah." (Sd.)(Sd.) Judge-IChief Justice. (Sd.)(Sd.) Judge-III.Judge-IV (Sd.) Judge-V. 8. It will be of interest to mention here that the Transfer of Property Act also came up for consideration by the Council of Islamic Ideology under Article 230(1)(c) of the Constitution, 1973. The observations of the Council in respect of the said Act have been published in its 14th Report
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concerning Islamization of Laws, in May, 1984. Its recommendations relating to the said Act are contained at pages 131 to 155 of the said Report which are annexed by me as Appendix-I to this order, but it seems proper to reproduce hereinbelow the observations of the Council relating to mortgage from pages 149-50 of the said Report, which read as under:------ 9. In relation to mortgage, I may, further, refer to the Qur'anic provisions, the traditions of the Holy Prophet (p.b.u.h.) and the works of Fiqh. In verse 283 of Surah A1-Baqarah, the Qur'an says: "If ye are on a journey, and cannot find a scribe, a pledge with possession (may serve the purpose)." It may be mentioned that although the Qur'an mentions about 'the mortgage with possession' when one is on a journey, the provision cannot be said to be limited to' that particular situation only, as it is one of the rules of interpretation of the Holy Qur'an that a verse, though revealed in a particular situation, remains general in its effect IC and applicability. (i)Imam Abu Bakr Ahmad bin Ali Al-Jassas (d.370 A.H.) in hisAhkam al-Qur'an, one of the most reputed and authentic commentaries on the Holy Qur'an, Egypt, 1347 A.H. Vol. I, p.622 has stated that reference to journey is for the reason that the facilities of writing and of witnesses are not found generally in a journey. However, it has been narrated of Mujahid that he used to disapprove mortgage except when one is on journey, but 'Ata did not see any thing wrong if there is a mortgage while one is at his residence. In fact, Mujahid leaned towards the literal meaning of this provision of mortgage as it is in the Qur'an. There is, however, no controversy among the jurists of the time and generality of the people in the past that mortgage is valid while one is at his place of residence. It has been narrated by Hadrat 'Aishah that Prophet (p.b.u.h) purchased food from a Jew on deferred payment and pledged his armour in lieu thereof. It is also narrated by Hadrat Anas that the Prophet (p.b.u.h.) of Allah (p.b.u.h) pledged his armour with a Jew at Madina and borrowed barley from him. This proves the validity of mortgage in the state of residence by the act of the Holy Prophet, and Allah the Almighty has commanded "Obey him" and has also said. "Indeed there is for you in the Messenger of Allah the excellent example (to follow)." This shows that a mortgage is valid both while one is on a journey as well as during his stay at the place of residence. About possession of the property mortgaged to be with the mortgagee, Jassas referring to the Qur'anic provision says that it proves that the mortgage is not valid unless it is with possession. He assigns two reasons for that view: firstly it is a conjunction on the preceding. The required number and qualifications of witnesses are incumbent for the witnesses. In the same way, the qualification of mortgage to be with possession is a condition. As the evidence of the witnesses is not valid unless it is coupled with the qualification stated above, that is 'the number of witnesses and that there should be two male witnesses from amongst the Muslims and if there are no two male witnesses available then one male and two women who agree to become witnesses' are essential as a rule. In the same way, possession of the mortgaged property being a condition as to its qualification it is not valid unless mortgage is coupled with possession and secondly the mandate of mortgage has been derived from the verse and the verse permits it with the qualification of possession, meaning thereby that it is invalid without possession. So, according to him it stands proved that the mortgage is not valid unless it is with possession. The relevant discussion at p. 622 is quoted as under:------ (ii) In Madarik-al-Tanzil, known as Tafseer-al-Nasfi, by Abdullah bin Ahmad bin Mahmud al-Nasfi, (d.710 A.H), Egypt, Vol. 1, 142 it is stated that the word proves the condition of possession. Imam Malik, however, is of the view that mortgage is valid by proposal and acceptance, without possession, as is evident from the following;---- (iii) I may also refer to Anwar al-Tanzil wa Asrar al-Tawil, a well-known commentary on the Holy Qur'an, generally known as Tafsir Baidawi and taught in the traditional Madrasahs of the Indo-Pak sub-continent, by Abdullah bin 'Umar Baidawi (d. 791 A.H.) Egypt, 1358 A.H./1939 A.D., page 126. The
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learned commentator after saying about the validity of a mortgage at the place of habitation, says that G majority is unanimous on the question that possession of the mortgaged property should be with the mortgagee, without being its owner. To quote his own words:---- (iv) Another noted commentary of the Holy Qur'an relating to injunctions of the Qur'an, known as Tafseerat Ahmadiyyah by Shaikh Ahmad (d. 1075 A.H.), generally known as Mullah Jiwan of Jonepur (India), published in Dewband page 128, after stating the same thing as already referred to having been stated by Baidawai and Nasafi and also referring to Marghiani, the author of A1-Hidayah interprets the words that is to pledge is with possession and that is the mandate, as under:- 10. The above Qur'anic provision of law relating to mortgage has also been dealt with by Imam Bukhari (d.256 A.H./810 A.D.) in his Sahih published in Karachi, Vol. I, Chapter 1577 under the 'Book on Mortgage' (CA116d1:5). He has stated a number of traditions, two of which have already been referred to by me while quoting Imam Jassas above. 11. As regards the discussion on the subject by noted Jurists, I may quote below from several text- books of renowned Jurists, as under: (i) Imam Abu Bakar bin Mas'ud al-Kasani (4. 587 A. H;) in his well-known book Bada'i al Sanai fi Tartibal Shara'iEgypt, 1328 A. H. /1910, Vo1.6, page 135 in its 'Book on Mortgage' writes, inter alia, that the mortgaged property to be in possession of the mortgagee is a condition of its validity. He, however, states that there is a difference of opinion, whether possession is a condition or it is a constituent part (cue) of the contract' of mortgage itself like acceptance, as under:----- (ii) Allama Burhanuddin A1 Marghiani, the author of A1-Hidayah, a very well-known book taught in the traditional schools of the sub-continent writes in Vol.II, p.516 that a contract of mortgage is constituted by proposal and acceptance and is completed by possession. A1-Marghinan further writes that according to some Jurists the contract of mortgage is complete immediately upon declaration, for, it is an act purely voluntary. Nevertheless, according to him possession of the property mortgaged is absolutely requisite to the obligation. Imam Malik has, however, said that a contract of mortgage is valid and binding immediately upon the consent of the parties, because it is relatable to the property of both and consequently is similar to sale. On the other hand, the argument of Hanafi doctors of Fiqh is that the text of the Qur'an as to the fact of possession is evident and further that the act of mortgaging being voluntary, it must be effectually concluded which K can only be done by taking over possession. It is further stated that upon a person receiving a mortgage, the acceptance being then ascertained, the contract is complete and consequently binding. In fact on the mortgaged property having been delivered to the mortgagee, and his taking possession of the same, he is entitled to detain it until he receives the payment of debt. He also becomes answerable in case of its being destroyed in his hand. The original text reads as under:- (iii) A1 Nasafi in Kanz al-Daqa'iq, a text-book on Fiqh which is also taught in this Sub-continent, by Abdullah bin Muhammad al-Nasafi (d .710-A . H .) , whose commentary on Qur'an has already been quoted above, published at Delhi, page 437, writes almost the same 1 thing about possession as had already stated by Marghaani in al Hidayah. In his words:- (iv) Allama ibn Nujaim (d.970 A.H) in his famous book N1-Bahr al Raiq, which is a commentary of Kanz al Daqa'iq, Egypt, 1334 A.H. Vol. 8, page 231, while explaining what has already been quoted from Kanz al Daqa'iq says that the contract does not become incumbent without possession: (v) And, lastly, I may refer to Majalla al-Ahkam al-'Adliyah, generally known as Al-Majalla, a codified compendium of several Islamic civil laws compiled by a committee of jurists during the reign of Sultan Abdul Hameed, the second, in 1869-1976 A.D. Book V of the same relates to mortgage. The provisions of the law have been stated in sections 701-761. Some of the provisions relevant to the point, are referred to from A1-Majalla as under:-
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12. Following is the translation of the above sections by C.R.Tyser and two other officials of the District Court of Kyrenia, in the Book "The Mejeille", published by All Pakistan Legal Decisions, Lahore, 1967, pp.106-110:- 701.Rehn is to make a property a security in respect of a right of cue, the payment in full of which from that property is permitted. The property is called "Merhoun" and also "Rehn" (n.k. Hereafter called "pledge"). 706.The pledge becomes a concluded contract by the offer and acceptance of the pledgor and pledgee. But, until it is received, it is not complete and irrevocable. Therefore, the pledgor, before delivery can go back from the pledging. 719. The giving of a pledge by the principal debtor to his surety is lawful. 722.The pledgee keeps the thing pledged in person, or he causes it to be kept by someone whom he trusts, such as his family or his partner or his servant. 724. If the thing pledged is an animal the cost of forage, and the wage of the herdsman, falls on the pledgor. And if it is immovable property, expenses incurred for improving its use and for its preservation, like repairing it, and watering it, and grafting, and weeding it, and the cleaning of the water channels, falls on the pledgor. 729. A consequence of making a pledge is that the pledgee has a right to keep possession until redemption of the pledge, and ifthe pledgor has died, he has a better right than the other creditors, and can make full payment of the debt from the pledge. 13. A further question arises whether this Court has got jurisdiction to strike down as un-Islamic the provision of section 58(f) of the Transfer of Property Act, 1882, which relates to "mortgage by deposit of title deeds". As it involved the interpretation of the Constitution, a notice was issued to the learned Attorney-General to address the Court on the question of jurisdiction. Mr. Khalid M. Ishaque, Advocate was also requested to appear and address as amicus curiae on the point of jurisdiction. 14. As regards the question of jurisdiction Mr. Khalid M. Ishaque, referring to the several provisions of the Constitution, submitted that notwithstanding the provisions contained in Chapter 3-A of the Constitution, this Court, being a Court of general jurisdiction, is empowered to enforce an existing law and construe the same with all such adaptations as are necessary to bring the same in accord with the provisions of the Constitution, as laid down in sub-Articles (1) and (6) of Article 268 read with Article 2-A of the Constitution, as inserted by President Order No.14 of 1985 (Revival of the Constitution Order, 1985), making the principles and provisions set out in the Objectives Resolution, reproduced in the Annex, as part of the Constitution. The only exception, he submitted, is the decision of the Federal Shari'at Court, in the exercise of its jurisdiction under the said Chapter,…
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