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Petitioner: Messrs PAKLAND CEMENT LIMITED VS Respondent: Messrs AMERICAN EXPRESS BANK N.A.Honorable Justice MUSHIR ALAMSaalim Salam Ansari and Mukhtiar Ahmed Kober,Syed Salimuddin Nasir
2006 C L D 494
2006 C L D 494
[Karachi]
Before Mushir Alam and Syed Zawwar Hussain Jaffery, JJ
Messrs PAKLAND CEMENT LIMITED---Appellant
Versus
Messrs AMERICAN EXPRESS BANK N.A. and another ---Respondents
First Appeal No.75 of 2004, heard on 20th September, 2005.
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---
----Ss. 9, 10 & 22---Civil Procedure Code (V of 1908), O.I.R.1---Suit for recovery of amount relating to corporate charge card by Bank---Joining of proper parties---Contention of the plaintiff Bank was that "Corporate Charge Card" was issued on the guarantee of the company, to its corporate Director whosoever it might be and the company was bound to honour such liability incurred---Material placed on record showed that "Corporate Charge Card" in fact. was issued to be used by Corporate Director of the Company, who was Finance Manager of the Company and who utilized the card as Was apparent from the statement of accounts and even the legal notice had been issued by name to the said person calling upon him to reimburse the liability followed by the suit---Pleadings nowhere showed that the company was made party to the suit nor even such case appeared to have been made out in the plaint, as was being urged by the Bank (at appellate stage) that "Corporate Charge Card" was issued to tine company for the use of its Director Finance---Pleadings, thus lacked in material particulars and even proper parties were not added or joined---Effect---Held, under O.I.R.1, C.P.C., all persons may be joined in one suit against whom any right or relief in respect of or arising out of the same act or transaction or series of acts or transactions was alleged to exist---Company, a separate legal entity having not been joined as party to the proceedings, there appeared to be misrepresentation as to the liability of the party by the Bank-High Court allowed the appeal of the company and granted its application under S.12(2), C.P.C.---Bank was directed to add the Director Finance by name who had availed "Corporate Charge Card" and the company as necessary party in the plaint. before the Banking Court within specified time---Bark undertook to waive notice before the Banking Court and filed leave to defend application within specified period under the Financial Institutions (Recovery of Finances) Ordinance, 2001 before the Banking Court, which application would be decided by the Banking Court according to law.
Saalim Salam Ansari and Mukhtiar Ahmed Kober for Appellant.
Syed Salimuddin Nasir for Respondent No. 1.
Nemo for Respondent. No.2.
Date of hearing: 20th September, 2005.
ORDER
MUSHIR ALAM, J.--The order, dated 8-4-2004 on application under section 12(2), C.P.C. has been impugned by the appellant Pakland Cement Ltd. It appears that the respondent No. 1 filed a suit against Director, Finance, Pakland Company Ltd. It appears that the suit was decreed vide judgment, dated 15-10.-1998. Execution was filed bearing No.43 of 1999 that led the appellant to approach the Court for setting aside of the judgment and decree obtained behind their back.
It was contended by Mr. Saalim Salam Ansari learned counsel for the appellant that appellant is a public limited company, owns its independent legal entity as opposed to its A distinctive share-holder and Directors. It was concealed that even the defendant was sued without naming any person and blanket judgment and decree was obtained which clearly amounts to misrepresentation and fraud not only upon the Court but also to the appellant, who was never a party before the Court. When Mr. Salimuddin Nasir was confronted to the above position it was contended that Corporate Charge. Card was issued on the guarantee of the Pakland Cement Ltd. to its Corporate Director whosoever, it may be and the Company is bound to honour such liability incurred. From the record that has been placed on record it appears that "Corporate Charge Card" in fact was issued to be used by Corporate Director one Yazdi, J. Mehta who was Finance Manager, who utilized it as apparent from the statement of accounts and even the legal notice has been issued to Mr. Yazdi J. Mehta on 21-7-1998 calling upon him to reimburse the liability followed by this suit. Nowhere from the pleading it appears that the appellant was made party to the suit nor even such case appears to have been made out in the plaint, as is being urged now that a corporate card was issued to the appellant for the use of its Director Finance. It seems that pleadings in suit lack in material particulars and even proper parties were not added or joined. It is settled preposition of law under Order I, rule 1, C.P.C. that all persons may be joined in one suit against. whom any right or A, relief in respect of or arising out of the same act or transaction or series of acts or transactions is alleged to exist. It was contended by the learned counsel for the respondent No.1 that, appellant cannot be absolved of its liability, but the facts remain that, the appellant a separate corporate legal entity was not joined as party to the proceeding. Therefore, in our opinion there appears to be misrepresentation as to the liability of the party by the respondent No. 1. The appeal is accordingly allowed; application under section 12(2), C.P.C. is granted; judgment and decree, dated 8-4-2004 in Suit No.565 of 1998 is set aside. Respondent No.2 is directed to add the Director Finance by name who had availed Corporate Charge Card and the appellant, Pakland Ltd., as necessary party in the plaint, before the Banking Court within the two weeks from today. Mr. Salimuddin Nasir undertakes to waive notice before the Banking Court on 1-10-2005 and file leave to defend application within time stipulated under the Financial Institutions (Recovery of Finances) Ordinance, 2001 before the Banking Court. The Banking Court shall decide leave to defend application in accordance with law. The impugned order is set aside.
M.B.A./P-49/K??????????????????????????????????????????????????????????????????????????????????? Appeal allowed.