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Petitioner: SHEHRYAR WAQAS MALIK and another VS Respondent: MUHAMMAD ZAFAR ALI KHAN and JUDGMENT
Court Name: Sindh High Court Judge(s): Aqeel Ahmed Abbasi, Aziz-ur-Rehman Title:SHEHRYAR WAQAS MALIK and another vs MUHAMMAD ZAFAR ALI KHAN and
JUDGMENT
Reported As: 2018 CLD 1040 Result: ?Appeal dismissed Judgment JUDGMENT AZIZ-UR-REHMAN, J.---By means of this Spl. High Court Appeal filed by the appellants on 31.01.2017 under section 15 of Civil Procedure [Amendment) Ordinance, 1980 [Shehryar Waqas and Waqas Malik v. Muhammad Zafar Ali Khan and HBL], have challenged the impugned order dated 13.01.2017, passed in Execution No,75 of 2016 whereby, the learned Single Judge of this Court while, issuing notice on the Application under section 94, C.P.C. read with section 151, C.P.C. bearing C.M.A. No,26 of 2017, filed by Respondent No,1 herein [J.D.] for 03.01.2017 to the intervener [appellant No,1 herein] Decree-Holder [HBL] and Deputy Director Complaint FIA viz. Mr. Safiullah Jokhio, suspended the operation of Notice dated 03.01.2017 till then. The prayers sought in the instant Spl. High Court Appeal read as follows:- "M. Set aside the Impugned Order dated 13.1.2017 suspending the operation of Notice bearing No,FIA/KZ/Misc/Comp01/2017/B-73-74 dated 3.1.2017 issued on behalf of FIA to an officer of the HBL in Execution No,75 of 2015; [ii]. grant any other relief as this Court may deem fit and appropriate. [iii]. grant costs of the Appeal. 2. The brief facts giving arise to the filing of the above Spl. High Court Appeal, are that Respondent No,2[HBL], as being a Decree-Holder, filed an Execution Application No,75 of 2016, arising out of a compromise judgment and decree dated 27.09.2016, passed by this Court in a Mortgaged Banking Recovery Suit No,B-35 of 2012 [Habib Bank Limited v. Mr. Muhammad Zafar Khan], wherein, inter alia Habib Bank Limited, had sought recovery of-Rs,188,123,906 and sale of the three [3] mortgaged immovable properties belonging to the J.D./Respondent No,1 herein.
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3. In Para 12 of the compromise decree inter alia it was provided as follows:- "12. In case of either delay in payment of 2nd tranche of Rs,10.000 million or delay in payment of 3rd tranche of Rs,15.000 million or default in payment of any two consecutive installments by the Defendant or if the Defendant within (90) days from the date of grant of this Application by the Honourable Court has not deleted/removed the name of the Plaintiff Bank from the Banking Suit No, 97 of 2011, or on occurrence of any one or more of the events described above, the settlement amount (Rs,150.000 million) mentioned above shall stand cancelled and the total outstanding liability of Rs,210.218 million as of 15.10.2015 and the cost of funds shall become payable from the date of default (of such occurrence(s)) described herein until payment is actually received by the Plaintiff Bank. The Plaintiff shall be entitled to recover the total outstanding liability of Rs,210.218 million as of 15.10.2015 less any payment already received under the cancelled payment schedule plus cost of funds by filing an execution application against the Defendant for recovery of the outstanding finance and sale of the mortgaged properties. [Underlining is ours] 4. Respondent No,1 herein [J.D.], it appears, had failed and/or avoided otherwise, to comply with the 'terms' and 'conditions' of the 'compromise decree' passed on 28.09.2016 by the Court. Consequently, Respondent No,2 herein [D.H.], filed an Execution Application No,75 of 2016, for enforcement of the compromise decree in terms thereof. 5. In the aforesaid Execution Application, the Decree-Holder Bank filed an application under Order XLI 41, Rule 1, C.P.C. read with Order XXXIX, Rules 1 and 2, C.P.C. sections 91 and 151, C.P.C. read with sections 17(2) and 19 of the Financial Institutions [Recovery of Finances] Ordinance, 2001 [C.M.A. No,436 of 2016], with a prayer for appointment of the Official Assignee of Karachi, as 'Receiver' inter alia to takeover the control of judgment-debtor's mortgaged factory built on Industrial Plot No,F/92, SITE, Karachi, together with all building, shades, structures, machinery, etc. etc. and also to attach and sale the same. 6. The said application bearing C.M.A. No,436 of 2016 when came-up before the Court, then after hearing the same, it was disposed of vide order dated 13.12.2016. The relevant part of order dated 13.12.2016 reads as follows:- "From the circumstances at hand it appears that at least to the extent of the hypothecated movables there is a prospect of grave loss being occasioned to the parties that are subject decree, as is being apprehended by them, and it appears just and convenient that an Order be passed in respect of the hypothecated goods, merchandise products, stocks, stock-in-trade, raw materials, work-in-progress, finished and unfinished goods, plant, machinery, spares, equipment, tools and receivables and pledged goods, stocks of steel, billets, bars and scrap belonging to the Judgment Debtor and lying, stored or located at the aforementioned factory premises so as to preserve such movables properties from being dissipated or otherwise laid waste. No immediate Order appears necessitated in respect of the immovable property in as much as the same is subject to mortgage and, as per learned counsel the title documents are consequently in custody of the Decree Holder. Accordingly, it is hereby Ordered that the Official Assignee is appointed as interim receiver to enter upon the factory premises bearing industrial Plots Nos,F-92, S.I. T.E. and take a full inventory of the movables present and take custody/control thereof so as to preserve the same. Photographs of the premises may also be taken. Such exercise is to be expeditiously carried out with prior notice to the Decree Holder and Judgment Debtor, whose representatives may accompany the Official Assignee and/or his functionaries for the purpose of rendering all due assistance in identifying the property, and a report regarding this exercise is to be filed by the Official Assignee within a period of ten years." [Underlining is ours.] 7. Upon passing of the aforesaid order, it appears that Appellant No,1 viz. Shehryar Waqas Malik feeling apprehension of his dispossession from the factory premises by the learned Official Assignee Karachi, pursuant to order dated 13.12.2016, filed an application under section 12(2), C.P.C.
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read with section 151, C.P.C. [C.M.A. No,503 of 2016] in the aforesaid Execution Application No,75 of 2016 whereby, order dated 13.12.2016 was challenged on the pleas of fraud and collusion between Decree-Holder Bank and Judgment-Debtor. On 19.12.2016 when the said C.M.A. No,503/2016, came- up before the Court, then the appellant No,1 viz. Shehryar Waqas Malik son of Waqas Malik given an undertaking regarding not removing of any assets from the factory premises while, order dated 13.12.2016 is in field. In view of the undertaking so given on 19.12.2016 the matter was adjourned to 23.12.2016. The relevant part of the consent order dated 19.12.2016 reads as follows:- "Accordingly, with the consent of counsel present, it is hereby clarified that the purpose of appointment of the Official Assignee is to take an inventory and safeguard movable assets by taking control of the same, and not to dispossess the Applicant together. As such, it is hereby further clarified that whilst the Official Assignee may take the inventory and depute/post watchmen at the premises for the purpose of preservation of assets, the Applicant is not precluded from entering the premises, and he do so subject to the undertakings given, as recorded herein above. Official Assignee is directed to submit a detailed report by the next date. [Underling is ours] " 8. The Court on 23.12.2016 while, taking the report of Official Assignee dated 22.12.2016 on record, subject to all just exceptions also recorded the submissions of the Official Assignee to the extent and effect that no any business activity is carried out on the subject premises, as was noted, at the time of inspection. The factory premises, it appears, was/is under the watch of security guards having been posted by the Official Assignee. Per order dated 23.12.2016, the appellant No,1 viz. Shehryar Waqas Malik, was directed to withdraw his security personnel, as may be present on site, as henceforth the 'Factory Premises' is to remain in the custody and possession of the Official Assignee. 9. Keeping in view the gravity of situation arisen, on 24.12.2016 besides, passing an order for 'sealing of the factory' and 'office premises', the same, was given in sole control of the Official Assignee. Relevant portion of order dated 24.12.2016 runs as under:- "Accordingly Official Assignee is directed to seal the Factory and office premises and preserve all assets, equipment and records and keep the same in his sole Control. Mr. Salahuddin Ahmed, learned Counsel for the Applicant raises an apprehension that the handover of complete possession and control would undermine the Applicant's case. Accordingly it is clarified that the appointment of the Official Assignee and the subsequent Orders passed in respect of the premises in question will not prejudice the arguments/claims of any of the contesting parties as to their rights/interest in the Factory Premises or the assets thereon. [Underling is ours] Let this Order be communicated to the Official Assignee today for compliance. Office is directed to tag the file of Suit No,B-35/2012 and Special H.C.A. No,348/201 5 along with this Ex. application. To come up on 10.01.2017." 10.Despite, the above consent orders that have been passed in presence of the learned counsel for the appellants, by the executing Court and in consequence whereof, the possession and custody of factory and office premises of the subject immovable property, situated at F-92, SITE, Karachi, was given to/taken over by Official Assignee, Karachi, the Appellants, opted to file a Complaint No,01 of 2017 on 03.01.2017 against Mr. Nasir Ali DGM Remedial Assets HBL and others officials alleging therein connivance with Zafar Ali Khan and Mr. Sahabzada Jehanzeb Khan who as alleged, had committed fraud/cheating against Mr. Shehryar Waqas and Mr. Waqas Malik with F.I.A. The said complaint, thereafter, was forwarded to President of HBL/Decree-Holder Bank by Deputy Director [Complaint] vide Letter No,FIA/K2/ Misc./Complaint-1/2017/B-73-47 for 'verification' of the contents thereof, and comments thereon by HBL. 11. In response to the above, HBL submitted its' comments/detailed report dated 11.1.2017, addressed to Mr. Safiullah Jokhio, Deputy Director Complaint FIA wherein, each and every adverse allegations
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levelled by the complainant/appellants, was specifically and vehemently denied. Being relevant Paras 'A' to 'D' from the 'comments' of HBL-[Decree-Holder] are reproduced herein:- A. At the outset the Bank denies each and every averment/allegation raised in the Complaint. It is denied that the bank or any officer of the bank has committed any fraud/cheating or any offence specified in the Schedule. It is also denied that the Complainant is a victim of fraud or coercive financial loss. It is further denied that there has been any concealment of facts. No damage to the reputation of the Bank has been caused by any officer of the Bank. The Complainants have sought specific performance of negotiations and contracts alleged to have been made by the Bank and customer which is a civil matter and beyond the jurisdiction of FIA. B. The Complainants have already agitated the allegations which are sub-judice before the Hon'ble High Court in HBL's Execution Application No, 75/2016. Neither inquiry nor investigation by the FIA is necessitated in the facts and circumstances of the case. Copies of Court's Orders showing the Complainant(s) participating in the proceedings since September 2015 till present are attached herewith and highlighted in yellow. C. The Bank and its officials have the highest regard for the laws of the land and work in strict compliance with the State Bank of Pakistan's rules, regulations, circulars and notifications issued by the Central Bank from time to time. The Bank adheres to and complies with the highest ethical standards of banking business. D. With great respect it is submitted that the FIA has no jurisdiction in this matter The case involves or civil dispute between the Complainants and a customer of the bank whose property is mortgaged with the bank. No offence specified in the Schedule is made out." [Underlining is ours] 12. The aforesaid letter/so-called Notice dated 3.1.2017, issued by Mr. Safiullah Jokhio, Director PIA, to the President Habib Bank Ltd, Karachi, was later on suspended vide impugned order dated 13.1.2017. For ready reference Notice dated 3.1.2017 [Annexure 'P' to the MoA at page 867], issued by Mr. Safiullah Jokhio, Deputy Director [Complaints], is reproduced herein below: OFFICE OF THE DIRECTOR FEDERAL INVESTIGATION AGENCY (SINDH) KARACHI 26-A, LALAZAR ST. # I, M.T.KHAN ROAD NEAR BECH LUXURY HOTEL, KARACHI PHONE # 99203078 NO.FIA/KZ/Misc/Comp-01/2017/B-73-74 Dated 03-01-2017 To The President Habib Bank Limited Karachi SUB: COMPLAINT OF SHERYAR WAMALIK (M/S SHARRY SHIP BREAKERS Enclosed please find herewith complaint mentioned above along with its enclosures on the subject noted above for proper verification of the contents of the complainant and provide the Specific Report/Comments to this directorate immediately to proceed further into the matter. Sd/- (SAFIULLAH JOKHIO) DY. DIRECTOR (COMPLAINT) FOR DIRECTOR End: (a. a) Original complaint and enclosures as mentioned in complaints. Copy for information to Mr. Sheryar Waqas Address: M/s. Sharry Ship Breakers, 16-C, 2nd Floor Tauheed Commercial Area, Phase-V, DHA, Karachi
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(SAFIULLAH JOKHIO) DY. DIRECTOR (COMPLAINT) FOR DIRECTOR 13.The Respondent No,1 herein [J. Debtor], feeling 'aggrieved' by the above notice of FIA dated 03.01.2017 filed an APPLICATION under section 94, C.P.C. read with section 151, C.P.C., in the Execution Application. On 13.1.2017, when the aforesaid application bearing C.M.A. No,26 of 2017, came-up before the Court then, the executing Court while, issuing notice to the Applicant/Intervener [Appellant No,1 herein], Decree-holder [HBL] and Deputy Director [Complaint] FIA, namely, Mr. Safiullah Jokhio for 1.2.2017, till then, the operation of notice dated 3.1.2017, was suspended. The operative part of order dated 13.1.2017 runs as follows: "Let notice be issued to the Applicant/Intervenor Decree Holder and Deputy Director [Complaint] FIA Mr. Safiullah Jokhio for 01.02.2017. Till the next date of hearing, the operation of impugned Notice dated 03.01.2017 issued by Mr. Safiullah Jokhio Deputy Director [Complaint] FIA shall remain suspended. Sd/- JUDGE" 14.The appellants herein, feeling 'aggrieved' and 'dis-satisfied' by order, dated 13.01.2017, opted to file the instant Spl. High Court Appeal No,112 of 2017 on 31.01.2017 with prayers as reproduced hereinabove. It is needless to say, that 'not only the Appellants' Application under Order I, Rule 10, C.P.C. filed in Banking Suit No,B-35 of 2012 was dismissed on 18.11.2015 but the Special High Court No,348 of 2015, preferred against Order dated 18.11.2015, was also dismissed on 28.09.2016. On 07.02.2017 when, the instant Spl. High. Court appeal, came-up before the Court then the following order was passed:- "1. Granted. 2. Granted subject to all just exceptions. 3 & 4. Mr. Khawaja Shams-ul-Islam, advocate has effected appearance on behalf of respondent No,1 by filing his vakalatnama and waives notice of the appeal. Mr. Salahuddin Ahmed undertakes to supply copy of the memo of appeal along with the annexures during the course of the day. Since very short point is involved in this matter, therefore, we fix it for hearing on 17-2-2017." 15.Lastly, on 15.01.2017, when the above Spl. High Court Appeal came-up before us then, we heard Mr. Salahuddin Ahmed, learned counsel for the appellants, Mr. Khawaja Shams-ul-Islam along with Mr. Imran Taj, learned counsel for the 'Respondent No,1 [J.D.] and Mr. Jawad A. Sarwana, learned counsel for the Respondent No,2 [HBL -Decree-Holder] and also gone through available record before us. 16.Mr. Salahuddin Ahmed, learned counsel for the appellants submitted that the suspension of notice dated 03.01.2017, issued by Mr. Safiullah Jokhio, Deputy Director [Complaints], FIA through the impugned 'ad-interim order' dated 13.01.2017, passed by this Court, in a Banking Execution No,75 of 2016, is erroneous and illegal, as such, the same is liable to be set aside, otherwise, both the appellants shall be seriously prejudiced. While, continuing arguments Mr. Salahuddin Ahmed further argued that the impugned order of 13.01.2017 has been passed in violation of the settled principles of law. Per Mr. Salahuddin Ahmed, the learned Single Judge, hearing the Execution Application No,75 of 2016, which pertains to and arising out of a banking suit, has failed to appreciate that FIA's notice dated 3.1.2017, as issued and collateral proceedings as initiated, are under a separate and specific statute. According to Mr. Salahuddin Ahmed, the Single Judge exercising Banking jurisdiction while, passing the 'impugned order' dated 13.01.2017, has gone beyond the scope of compromise decree dated 27.09.2016. 17.Mr. Salahuddin Ahmed, next contended that the learned Single Judge, hearing the Execution Application which pertains to and arising out a banking suit, does not enjoy any jurisdiction over the criminal matters regarding criminal conduct of bankers or employees of banks. Per learned counsel, such jurisdiction exclusively falls within the purview and scope of Special Court and/or
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High Court. According to Mr. Salahuddin Ahmed, criminal proceedings are to proceed independently. Mr. Salahuddin Ahmed, learned counsel for the Appellants next urged that the proceedings initiated by FIA, the jurisdiction, in that regard, vests in the Special Court under the relevant criminal statute and or Hon'ble Court under the exercise of writ jurisdiction. But in no event, the Executing Court/Banking Court, can exercise such jurisdiction under the Financial Institutions (Recovery of Finances) Ordinance, 2001. 18.Mr. Salahuddin Ahmed while, continuing his arguments next contended that the Executing Court, has failed to appreciate that under section 56(e) of the Specific Relief Act, there is a express bar on the grant/issuance of an injunction for to stay criminal proceedings. Moreover, as urged, by Mr. Salahuddin Ahmed, the affected party of FIA's notice dated 31.01.2017, is HBL [Decree Holder Bank]. But HBL did not raise any grievance/complaint against the notice of FIA, as such, the Impugned Order dated 13.01.2013, passed on the Respondent No, l's [Judgment-debtor's] Application, is of no legal effect, as Respondent No,1, has no concern with Notice of FIA dated 3.01.2017. Per Mr. Salahuddin Ahmed, this position not only confirms but also shows collusion of HBL with Respondent No,1 vis-a-vis, the so-called Fraud and collusion, allegedly played on this Hon'ble High Court. 19.Regarding his contentions vis-a-vis no bar of a civil and criminal proceedings side by side. Mr. Salahuddin Ahmed placed reliance on the case laws i,e, [i]. 2006 SCMR 1192 [ii]. 2006 SCMR 483 [iii]. 2016 CLD 906 [iv]. 2004 MLD 113 [v]. PLD 2003 Lahore 01 and [vi]. PLD 1968 SC 281. As far as, the stoppage of criminal proceedings is concerned, in this regard reliance was placed on the case laws i,e, [a]. PLD 2014 Karachi 264 [b]. 2010 YLR 1819 [c]. 2004 MLD 1113 [d]. PLD 2001 Karachi 256 [e]. PLD 2003 Lahore 01 [f]. 1989 CLC 1975. 20.Conversely, Mr. Khawaja Shamsul Islam, learned counsel for the Respondent No,1 [Judgment- debtor], contended that instant Spl High Court Appeal filed under Section 15 of Civil Procedure [Amendment] Ordinance, 1980 [Ordinance X of 1980], against an Ad Interim Order dated 13.01.2017 passed by Executing Court, exercising Banking Jurisdiction, besides misconceived, mis-leading is not maintainable under the law. 21.Per Mr. Khawaja Shamsul Islam, learned counsel for Respondent No,1 [Judgment-debtor], the Appellants being not parties to Execution Application, in no event, can claim to be aggrieved persons. Besides, the Appellants have no locus standi to question the ad-interim order dated 13.01.2017, whereby, merely notice was issued to the Appellants [Interveners], Respondent No,2 [Decree-holder] and one Safiullah Jokhio, Deputy Director [Complaints], PIA for 01.02.2017 on C.M.A. No,26 of 2017, filed by Respondent No,1 under section 94 read with section 151, C.P.C. 22.Mr. Jawad A. Sarwana, learned counsel for the Respondent No,2 [HBL-Decree-holder], on the other hand while, controverting/ disputing the contentions of Mr. Salahuddin Ahmed, forcefully submitted that Decree-holder Bank-HBL/Respondent No,2, has not only questioned the jurisdiction of FIA's authorities but also have specifically denied the contents/assertions of the Appellants- complainant. The contentions of Mr. Jawad A. Sarwana seems correct if, the same is seen in juxtaposition of HBL's Report/comments, sent to FIA's authorities, as was requested/asked through FIA's Notice dated 03.01.2017. 23.Per HBL's stand Mr. Zafar Ali Khan, who is a Sole Proprietor of M/s. Sarhad Re-Rolling Mills as being a customer of Habib Bank Ltd availed various finance facilities from HBL from time to time but failed and/or avoided to repay the same. To secure the finance facilities granted to and availed by the customer the latter mortgaged, various properties including the factory situated on the land bearing Industrial Plot No,F/92, SITE Survey No,27, Survey Sheet No,35-P/1, 351/13, measuring 1.42 Acre located at SITE, Karachi together with the building, sheds, structures, plants, machinery, air-conditioning plaints, spare parts, appliances fittings and fixtures and appurtenance, affixed installed or attached thereto with HBL.
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24.On account of default, in the year, 2012, the Bank filed a mortgage recovery Suit No,B-35/2012 under section 9 of F.I.O., 2001 against the customer viz. Zafar Ali Khan for recovery of its' outstanding liabilities then due and payable i,e, Rs,188,123,906. The Hon'ble High Court, finally on 17.05.2016, decreed the said Suit in terms of the compromise application filed by the parties. Prior to the passing of Judgment and Decree in Suit No,B-35/2012, the customer approached Habib Bank Ltd. and informed the Bank's management about his intention of his business deal with Sharry Ship Breakers for and with a view to settle the outstanding liabilities. On the assurance of the customer of his efforts to be made genuinely for to find out a way for payment of the outstanding mounts, the Bank with such aim entered into negotiations with the customer for to settle the outstanding liabilities out of Court. 25.Habib Bank Limited, later on received a draft Agreement of Sale wherein, it was proposed that a new entity is willing to pay the debt of Zafar Ali Khan to the Bank. The Bank, however, was neither a party to nor otherwise prepared the proposed Agreement of Sale. On 6 May 2015 HBL, issued a Settlement of liabilities letter to Mr. Zafar Ali Khan whereby he was asked to make down payment of Rs,45 million to the Bank within 30 days w,e,f, 6th May, 2015. The proposed final settlement of the outstanding liabilities of Zafar Ali Khan including the buyout plan of the project assets [mortgaged factory] as proposed having shareholding of Sharry Ship Breakers], was, however subject to payment of initial down payment of Rs,45 million from Zafar Ali Khan and upon completion of other requisite documentation. Zafar Ali Khan, customer, however, miserably failed under and/or avoided to fulfill the conditions. No down payment of Rs,45 million was made within 30 days. Besides, documentation as mentioned in the offer letter never materialized. This position has been acknowledged and confirmed in paragraph 11 of the Complaint of Appellants to the FIA. 26.The customer viz. Zafar Ali Khan when, failed to fulfill the terms and conditions of Bank's 'offer, as per letter dated 12 August 2015, HBL thus constrained to withdraw the Settlement of Liabilities' letter, which stood withdrawn consequently. The Bank, sometime in August, 2015, received information about sheer violation of the terms and conditions of the facilities granted to the customer regarding his drill to part with the possession of the mortgaged factory. The Bank, thereafter, through its' letter dated 12 August, 2015, directed Zafar Ali Khan to immediately remove the un-authorized persons from the mortgaged factory otherwise, the Bank would move an Application for appointment of the Official Assignee of the High Court to take over possession of the mortgaged factory. On the 6th October 2015, the Appellants/Complainants filed an Application for becoming party…
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