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Petitioner: MUSLIM COMMERCIAL BANK LTD. VS Respondent: M/S. ADAMJEE PAPER & BOARD MILLS JUDGMENT
Court Name: Peshawar High Court Judge(s): Khalida Rachid, Shakirullah Jan Title:MUSLIM COMMERCIAL BANK LTD. vs M/S. ADAMJEE PAPER & BOARD MILLS
JUDGMENT
Reported As: 1997 CLC 1046 Result: Appeal dismissed Judgment JUDGMENT MIAN SHAKIRULLAH JAN, J.---This appeal is directed against the judgment and order of the Special Court established under the Banking Companies (Recovery of Loans) Ordinance, 1979 hereinafter referred to as the Ordinance whereby, during the execution proceedings, the application submitted by the appellant under Order XXI, Rule 58, C.P.C. Was turned down. 2. M/s. Adamjee Paper and Board Mills Ltd., respondent No. 1 hereinafter referred to as respondent No.1 a company, obtained loan and availed banking facilities from the Pakistan Industrial Credit and Investment Corporation Ltd. Respondent No. 2 and on account of failure of respondent No. 1 to pay the amount alongwith interest and other charges to respondent No.2, the latter filed a suit for the recovery of an amount of Rs.2,38,87,876 before the Special Court Banking Companies and in which respect a preliminary decree was passed on 13-10-1993, and final decree was, stated to have been passed on 30-3-1994. The respondent No.2 in pursuance of the decree obtained, initiated execution proceedings during which proceedings, the factory/property of respondent No.1 was attached. The appellant, the Muslim Commercial Bank Ltd., during the execution proceedings, submitted an application under Order XXI, Rule, 58, C.P.C., making a prayer for the vacation of the order of attachment/sale of stocks, goods, assets which are lying at the factory premises of the judgment-----debtor, respondent No. 1. In the application, the appellant has stated that it is also a Banking Company and the judgment-debtor has requested the appellant for credit and banking facilities against,, hypothecation of stock and fixed assets in the sum of Rs,6,05,00,000 and agreed to create a second charge and which facility was availed by respondent No. 1. It has also been stated therein that in view of the continued failure and default on the part of the appellant in
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making payment of the outstanding dues, the appellant served respondent No. 1 with a notice dated 18-2-1993 calling upon it (respondent No. 1) to make payment of the amount then outstanding, due and payable and after which the winding up proceedings were also initiated before the High Court of Sindh and Karachi vide J. Misc. No.50/94. The appellant stated that it had got the knowledge of the execution proceedings on 15-4-1995 when a public notice was published in the Daily Mashriq, Peshawar to the effect that all the assets of respondent No. 1 would be sold in the execution of a decree obtained by the decree-holder (respondent No.2) and that the sealed bids for the same were invited. Thus the application in question was submitted before the Executing Court hereinafter called as the Court on 24-4-1995 vide C.M. No.2/1995. The order-sheet of the Court dated 24-4-.1995 reveals that an auction was held in the Court whereby after giving full details of the auction proceedings, it was also observed:--- "The learned counsel for the decree-holder and the Deputy Managing Director PICIC after consented to accept the offer of Mr. Moazzam A.I Khan of Abid International.-------- They submitted written consent for the acceptance of the improved bid of M/s. Adil International and also specified the schedule of payment which is accepted to the bidder. " This bid was for Rs.22,00,00,000 out of which rupees seven crore was promised to be deposited on the acceptance of the bid and the remaining amount would be paid in annual instalments of rupees three crore per annum for the first three years and the balance of rupees six crore would be paid in the 4th year. This order-sheet, whereby the auction proceedings, as stated above, were ordered, also contains at the end with regard to the submission of application in question by the appellant and after calling for reply for the said application and also the application for staying of the execution proceedings, 27-4-1995 was fixed for arguments on which date the impugned order was passed. 3. The learned Special Court after examining the merits of the case and relevant provisions of law, arrived at the conclusion that the application had been designed to unnecessarily delay the execution proceedings. The appellant was in perfect knowledge of the fact that the Mills and the assets thereof were already mortgaged/hypothecated with the decree-holder and a reference was made to para.5 of the affidavit annexed with the application whereby the appellant had expressed its consent to create a second charge over the assets of the company/respondent No. 1 against the hypothecation of stock etc., for providing of facility of Rs.6,05,00,000. The other factor which weighed with the learned Special Court was the conduct of the applicant by holding that the application had been designed to prolong the execution matter. It has been further observed in the impugned order that the record also shows that the property of the judgment-debtor both movable and immovable was attached on 30-3-1994 and the advertisements were ordered to be published for the sale of the property in the newspaper on 25-9-1994 after which another publication was also issued in various leading newspapers of the country with a similar exercise for the third time and the application was submitted on 24-4-1995, that is, after a period of more than a year of the order of attachment. The application was held by the Court to be time-barred, as the same was neither filed within a reasonable time or within one year of the date of attachment in execution and no explanation was offered for this unnecessary delay in submission of the application. 4. The winding up proceedings, as stated earlier, had already been initiated by the appellant before the High Court of Sindh, Karachi and during which proceedings the Hon'ble Judge has ordered that the respondent-company was to be wound up vide his order dated 14-9-1995. As the instant appeal was pending in this Court so the appellant approached the Sindh High Court by submitting an application under section 316 of the Companies Ordinance, 1984 seeking permission to proceed with the instant appeal which application was accepted and the permission was granted, vide order dated 17-10-1995.
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5.The learned counsel for the respondent No.3 i.e., Adil International has raised two objections with regard to the maintainability of appeal: (i)Limitation, i.e., that the appeal is time-barred qua respondent No.3; and (ii)Incompetency of the appeal on two-fold ground: (a)Non-service of notice under Order XLIII, Rule 3, C.P.C. (b)In view of the provisions of section 12 of the Ordinance. 6. While stating Ithe first objection regarding the limitation the learned counsel has contended that respondent No.3 is a necessary party being an auction-purchaser who has purchased the industry through auction and a part of payment in this respect has also been made and it has been impleaded after the expiry of the period of limitation. 7. The first part of the second objection is regarding the incompetency of appeal, it has been submitted that though an interlocutory order has been challenged through an appeal under the provisions of C.P.C., as the caption of the appeal indicates by mentioning Order XLIII, Rule I (ii) read with section 15 of the Ordinance, 1980 Code of Civil Procedure Amendment Ordinance, 1980 and no notice as contemplated under Order XLIII, Rule 3, C.P.C., has been given to the respondent and it has rendered the appeal as incompetent. 8. The other part of the second objection relates to the maintainability of appeal, as stated above, in view of the provisions of section 12 of the Ordinance. The learned counsel for the respondent has submitted that the appeal is not maintainable as the order of the Special Court is under the Ordinance which has been challenged and the only provisions of the law for filing of the appeal is provided therein in the Ordinance which is section 12 and if the appeal is not, and cannot be filed under the provisions of section 12 of the Ordinance then an appeal under any other provision of law is not competent. 9The learned counsel for the appellant was asked to meet the preliminary objections of the respondent but instead of giving reply firstly, specifically, to the objections, he dilated upon the merits of the case by stating that the same can betterly be answered after elaborating the facts of the case and raising his contentions on that aspect of the case. His this lengthy argument mainly on the facts of the case obliged this Court to record the rival contentions of both the parties before giving finding on the preliminary objections. 10 The learned counsel for the appellant, in addition to his other contentions to the effect:-- (i)that the amount of Rs.22,00,00,000 for which the company has been auctioned is a lesser one and it could have been auctioned for Rs.50,00,00,000 if proper care and caution had been taken, and (ii)that no detail of the company assets had been given in the auction notice and in the absence of which no proper offer could have been made, has laid much emphasis on the point that no investigation in the claim was held by the Court as envisaged in Order XXI, Rule 58, C.P.C., and without carrying out any investigation the application was summarily dismissed which, according to' him, required an investigation and thus an illegality was committed by the Court. With regard to his contention (i) that the factory and its assets could fetch much more higher price, than the one for which it was auctioned, amounting to Rs.50,00,00,000, the learned counsel for the auction-purchaser expressed their readiness to transfer the company and to assets purchased by them through auction for the said amount to the appellant but their this offer was not responded positively on behalf of the appellant. In reply to the second contention it has been submitted on behalf of the respondent that during the execution proceedings it was not for one time that the publication was made for the auction of the company but it was several times and mainly on the ground that the offer used to be a lesser one and' not acceptable to the decree-holder. The contention with regard to the details of . The assets in the auction notice, it has been submitted that, it is also not maintainable as if a look is made at the
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notice then in addition to the brief resume given therein it had also been mentioned that the full detail could be ascertained from the Additional Registrar of this Court. It has been further contended that these are objections pertaining to post attachment proceedings and not pre- attachment proceedings whereby the requirement of law is that it would be shown that the property was not liable to attachment on the basis of bona fide claim and invoking of provisions of Order 21, rule 58, C.P.C., were not for curing the defects in post auction proceedings. 11. With regard to the main point of the appellant that is, the non-holding of the investigation by the Court, it has been argued by respondents' counsel that it would be proper that a reference be made to the relevant provisions of law. According to Order 21, rule 58, C.P.C., the jurisdiction of the Court is invoked by a person who is having a claim or interest in the attached property and his assertion is that the property is not liable to such attachment by reason of his claim or interest. According to Order 21, Rule 60, C.P.C., in case the claimant succeeds then the property so attached is released wholly or partly on the ground that it is not liable to attachment on the basis of the title, right or interest of the claimant. Normally such like situations happen when a person has laid a claim over the attached property by contending that it is his property and not of the judgment- debtor or that he is having a claim over the same on the basis of certain transactions or undertaking prior to the establishment of the claim of the decree-holder. It has been further argued that herein this case it is not the case of the appellant that the property is not belonging to the judgment-debtor or that the decree-holder is not 'having a claim over the said property but rather appellant's plea is that because of the creation of the second charge over the movable assets of the company the attachment of the whole of the property is not proper. The question is that the person who is having a claim on the basis of a second charge without any denial to the first charge of the decree-holder or that the property is not belonging to the judgment-debtor asserts that the property is not liable to attachment on the ground of a second charge. It has been submitted that the answer to the question would be in the negative because when the claim of the decree-holder is admitted and the title of the judgment-debtor is also admitted then the natural consequence of such admitted facts, in case of a decree, would be the attachment of the property and no one would be allowed to have an objection to the attachment of the property. The conclusion derived by the learned counsel for respondent is, if one looks at the matter from this angle then it can definitely be said, that the property is liable to attachment and if anybody is having any claim at the most he could ask the Court that any amount in excess of the decree should not be given or disbursed to the judgment-debtor but he kept or be given to him, or the decretal amount be distributed proportionately subject to agreement, if any, in case he proves his right to the said amount etc. 12. The learned Court dismissed the petition mainly on the ground that it had been designedly or unnecessarily delayed and that the appellant had not filed the application within reasonable time or with a period of one year of attachment. It has been contended on behalf of respondents that it was not only once that the advertisements were made in the newspaper but, as stated earlier, the advertisements to this effect were made several times and not in one newspaper but in several newspapers having a wide circulation like "Dawn Karachi", "Muslim Islamabad", Mashriq Peshawar", "Nawa-e-Waqt" and "fang Rawalpindi". It is the case of the appellant that it got knowledge through a publication published in the Mashriq Newspaper dated 15-4-1994 and still waited till a date when the auction was made on 24-4-1995 on which date the application was submitted in the Court and the sequence of the order reveals that it was submitted subsequent to the auction and sale proceedings in the Court. Lastly it has been contended that when it is the case of the appellant that it got the knowledge through a publication in the newspaper then what the reasons were that through the previous publication in the various newspapers for various times spreading over months the same were not noticed by it.
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13. We refrain to give our findings on the abovementioned contentions of both the parties lest it may prejudice the parties in one way or the other as the appeal has been decided on the ground of preliminary objection i.e., maintainability of appeal in view of provisions of section 12 of the Ordinance on the reason to be discussed hereinafter in paras. 24 and onward. 14. The objection with regard to the limitation is taken first. The impugned order -was passed on 27- 4-1995 and the appeal was filed on 3-5-1995. The case was fixed for preliminary hearing at 8-5- 1995 on which date a pre-admission notice was given. The appeal was again fixed for hearing on 30-5-1995 on which date it was admitted to full hearing. The appellant submitted an application for impleadment of Aadil International in the appeal as respondent on 30-5-1995 and an order to that effect was passed by this Court on 15-6-1995 for the impleadment of Aadil International, the auction-purchaser. An application bearing C.M. No.99/1995 was also submitted on 14-6-1995 for the maintenance of status quo and restraining the respondents and on which application the order was passed on the said date, i.e., 15-6-1995 to the following effect:-- "Notice. Meanwhile the respondents are directed that no sale certificate shall be issued in favour of Aadil International. " M/s. Adamjee Paper and Board Mills was also impleaded in the appeal vide order dated 23-10-1995 of this Court. 15. The period prescribed for filing an appeal under section 12 of the ordinance is 30 days while the period for filing an appeal under the Code of A Civil Procedure is three months under Article 156 of the Limitation Act. According to the learned counsel for the respondent as the order of the Special Court Banking is under challenge, the appeal would be considered under section 12, if otherwise competent, and has submitted that the application for impleadment of Aadil International was filed on 30-5-1995 and the order was passed on 15-6-1995 for its impleadment and both are beyond the period of limitation of 30 days. Now it will be seen that a party which ought to have been made as such was not made inadvertently or by omission in due time, i.e., the period prescribed for filing of the appeal, then the delay is condonable and if it is, then under what provision of law. In this respect reference may be made to section 3 of the Ordinance and for the sake of convenience the same is reproduced as under:-- "S.3. Ordinance not to derogate from other laws ---The provisions of this Ordinance shall be in addition to and, save as hereinafter expressly provided, not in derogation of any other law for the time being in force." This section has clearly made applicable all the relevant laws of a particular e aspect of subject of the case provided that has not been expressly excluded. 16. The learned counsel for the respondents, supporting their this contention, referred to sections 3, 22 and 29 of the Limitation Act. According to section 3, when an appeal or suit has been instituted or preferred after the period of limitation, shall be dismissed. According to section 29, if any special or local law prescribed for any suit or appeal, a period of limitation different from the C period prescribed by the Limitation Act, the provisions of section 3 shall apply. Section 22 alongwith other sections has been made applicable to cases under special law. According to section 22, if a party is added to the suit which has already been instituted, then as regards the newly-added party the suit shall be deemed to haze been instituted when it was so made a party. Here in this case, it is not the suit but the appeal to which respondent No:3 was added at the instance of the appellant after the period of limitation and section 22 is not applicable to the appeals. In this respect a reference may be made to a judgment of a Division Bench of the Lahore High Court reported as Syed Rahat Hussain Zaidi v. Settlement Commissioner 1988 MLD 113 and while dealing with the question that section 22 is applicable to the appeals or not it was observed as follows:-- "Now from the language used herein the counting of time limit is there but it is applicable only to the suits and there. Is no parallel provision as to appeals within the Limitation Act or to say that a plaintiff and a defendant shall include an appellant and respondent respectively, so the Appellate
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Court has the discretion to substitute or add an appellant or respondent after the period of limitation prescribed for an appeal." . Reliance was also placed in above-referred case on a judgment of the Court of Wards on behalf of the Raja of Kanti v. Gaya Parsad and others ILR Allahabad Series Vo1.II 1879 wherein it was held:-- "The first question arising in this appeal is whether or not the appeal so far as it affects Ram Manorath is barred by limitation. By some carelessness he was not at first made a respondent and the period prescribed for appeal had expired before he was brought on the record as respondent. By 22nd section of the Limitation Act it is provided that when after the institution of a suit a new plaintiff or defendant is substituted or added, the suit shall as regards him will be taken to have been instituted when he was so made a party. There is no analogous provision with respect to appeals, and therefore, it is competent to the Court to exercise its discretion in allowing a party to be added to the record after the period prescribed for the admission of an appeal has elapsed ...." 17. Furthermore Order 41, rule 20 of the Civil Procedure Code empowers an Appellate Court to direct that a person who is ought to be a party in appeal to I be made a respondent. In a judgment reported in Said Muhammad and others v. M. Sardar and others PLD 1989 SC 532, while dealing with the question with l regard to the impleadment of a person during the pendency of appeal under Order 41, rule 20 while interpreting the words "interested party" which finds its mention in the abovementioned rule, it was held that if a person is not a party to the appeal, then holding him that it is not an interested party is not inviolable E rule and while making reference to certain judgments of the Privy Council it was observed: "It did not foreclose the exercise of discretion to be exercised in the circumstances of the case and that this carried with it the power to condone the delay. " While making reference to another judgment, it was observed:--- "The language of Rule 20 of Order XLI does not show that it is exclusive or exhaustive so as to deprive a Court of any inherent power which it may possess and can exercise in special circumstances, and which has been saved by section 151, C.P.C." 18. While again referring to another judgment of the Indian jurisdiction Jalal Din v. Karim Bakhsh AIR 1930 Lahore 295, it was held as under:-- "If by omission the name of a party is left out due to oversight, the proper course for the Appellate Court is to exercise itrk powers under Order XLI, rule 20 and implead the party so omitted in appeal. " 19 Order I, rule 10 of the C.P.C., which empowers a Court to add any person as a party who ought to have been joined or whose presence before the Court is necessary in order to enable the Court to adjudicate effectually and F completely upon all the questions involved in the suit. According to section 107, C.P.C., the Appellate Court shall have the same powers and to perform the same duties as are conferred and imposed by the C.P.C., on Courts of original jurisdiction in respect of suits. By reading these provisions together, then the Appellate Court can add- a party to appeal if necessary. In the, case referred to above as 1988 MLD 113, it was held that this rule when read with section 107, 10 C.P.C. Is applicable also to an appeal. It was observed:--- "In the present case it is true that the right of the co-appellants to appeal there from the judgment, has become time-barred by 65 days when they were added as co-appellants to this appeal but this will not have its impact upon their position when so added as to say that the appeal regarding them will be treated to have been filed when they are added as parties as in the suits. " 20. The Court even otherwise, has got sufficient powers under section 151, C.P.C. To add any party to the appeal and in this respect a reference can be made H to a judgment reported as Shanti Lal and others v. Firm Hira Lal Sheo Narain AIR 1941 Lahore 402 wherein it has been held:--- "Apart from Order 41, Rule 20 the Court has ample power under section 151, Civil P.C., to add a party to the appeal even after the expiry of the period of limitation prescribed for appeals, if in the
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circumstances of the particular case before it, it thinks fit to do so." 21. The result of the above discussion would be that though respondent No.3; Aadil International has been impleaded when the period of limitation has 1 run out for filing the appeal but that would be of no consequence in view of its subsequent impleadment in the appeal. 22. The non-compliance of Order XLIII, rule 3 of the C.P.C., by not giving a notice for filing of appeal to the respondent, in the instant case, would J be of no consequence. Both the parties have relied upon the judgment reported as Mrs. Dina Manekji Chirioy v. Muhammad Matin PLD 1983 SC 693 wherein it was held that under Order XLIII, rule 3, C.P.C., is a mandatory one and no appeal can oe tntertained without issuance of the requisite notice and this part of the judgment as relied upon by respondent No.3. In this judgment it was also held that when all the objects for which the abovementioned provision inserted were satisfied in substance then it should not stand in the way of .The appellant to make his appeal liable to dismissal by observing that a party could not be allowed to be defeated for failure to comply…
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