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Petitioner: ABDUL RAHIM and 2 others VS Respondent: Messrs UNITED BANK LTD. OF PAKISTAN
Court Name: Sindh High Court Judge(s): Ghous Muhammad, Ghulam Haider Lakho Title: ABDUL RAHIM and 2 others vs Messrs UNITED BANK LTD. OF PAKISTAN Case No.: First Appeals Nos. 26, 27, 29 to 61 of 1995 Date of Judgment:1996-07-02 Reported As: PLD 1997 Karachi 62 Result: Order accordingly
JUDGMENT
JUDGMENT ' DR. GHOUS MUHAMMAD, J.---In the present set of first appeals as mentioned in the title since common questions of law and fact have been raised we propose to dispose of the same through a consolidated judgment. 2. The present set of first appeals have been instituted by the appellants under section 9 of the Banking Tribunals Ordinance. 1984 (hereinafter "the 1984 Ordinance"), being aggrieved by the judgments and decrees, all dated 3-8-1995, passed by the Presiding Officer (Mr. Khadim Hussain Junejo), Banking Tribunal, Hyderabad in Suits Nos. 356, 357, 398, 402, 353, 339, 373, 380, 394, 368, 377, 369, 401, 363, 340, 344, 348, 391, 351, 378, 337, 381, 396, 370, 327, 328, 364, 349, 329, 355, 384, 352, 395, 376 and 367 of 1994, while decreeing the suits of the respondent bank. 3. It has been alleged by the learned counsel for the appellants that in response to the suits instituted by the respondents in the Banking Tribunal under the 1984 Ordinance, the appellants had filed written statements with a view to defend the same. The learned Presiding Officer of the Banking Tribunal, Hyderabad while decreeing the suits had observed that "neither of the parties appeared to be interested in recording evidence". We have further seen from the record that the learned Presiding Officer had decreed the suits without framing any issues, recording any evidence and meeting any of the objections raised by the appellants. 4. We have heard the learned counsel for both sides and perused the pleadings before us as well as before the Banking Tribunal. From the said pleadings as well as from the arguments advanced by the respective sides we feel that in the present set of appeals the following points would warrant adjudication and finding on our part:-- (i) Whether it was essential to deposit the decretal amount before filing the appeals in question?
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(ii) Whether the Banking Tribunal could decree a suit for customer's failure to furnish a bank guarantee or deposit an amount under section 6(6) and second proviso thereto of the 1984 Ordinance? (iii) Whether the Banking Tribunal was under an obligation to frame issues and record evidence. In other words what ought to have been the procedure followed by the Banking Tribunal while deciding the suits before it? (iv) Whether the respondent-bank in this case was claiming any amount which constituted interest and whether the said amount relatable to interest/Riba was recoverable under the 1984 Ordinance? (v) Whether the documents relied upon by the respondent were in order and if the same were disputed whether the same had been executed in consonance with the provisions of law? (vi) Whether the Banking Tribunal was at all under an obligation to decree the amount as desired by the respondent-bank or whether it had to determine the correct amount after necessary adjustments while taking into account set offs and counter-claims of the appellants, if any? (vii) Whether the suits in question were filed in a premature manner as there had been talks of rescheduling of the payments and compromise? (viii) Whether under the agreements of finance the provisions of the 1984 Ordinance ought not to have been invoked since the arrangements of finance were nothing but mere contracts of services in .View whereof the suits ought to have been filed by the respondent-bank under normal law and not under the special law as envisaged in the 1984 Ordinance? (ix) Whether the person filing the suits had to do so under an express authority backed by a resolution from the bank? 5. We intend to deal with and dispose of these issues in turn. 6. The first issue can be disposed of by scrutinizing the question as to whether the first proviso to section 9(1) of the 1984 Ordinance is mandatory or directory in nature. In case the pre-condition of depositing the decretal or other amount, as specified in the said first proviso to section 9(1), is found to be a mandatory requirement, default thereof would result in dismissal of the appeals. However, in case we come to the conclusion that the said pre-condition of deposit of the decretal amount is only directory in nature, the first appeals under section 9 would still be maintainable despite failure of deposit of the same. As the matter revolves round the import of section 9 of the 1984 Ordinance we feel that it shall be both pertinent and convenient to reproduce the same:-- "9. Appeal.---(1) Any person aggrieved by an order of the Banking Tribunal passed under subsection (4) or subsection (5) of section 6 or a decree or sentence passed under this Ordinance may, within thirty days of such order, decree or sentence, prefer an appeal to the High Court: ' Provided that no appeal filed by the defendant against a decree shall be entertained unless the defendant has deposited with the Banking Tribunal the amount claimed in the suit under subsection (6) of section 6 or the decretal amount: ' Provided further that, where the claim of the banking company is based on the default of the defendant in payment of agreed instalments the deposit shall be to the extent of the amount of instalments in default. (2) An appeal under subsection (1) shall be heard by a Bench of not less than two Judges." 7. The first proviso to the said section 9 stipulates that no appeal filed by the appellants against a decree shall be entertained unless the appellants first deposit the decretal amount or the amount under section 6(6) of the 1984 Ordinance with the Banking Tribunal. 8. While interpreting the first proviso to section 9(1) of the 1984 Ordinance we would first highlight that an analogous matter in respect of the Sales Tax Act, 1990 came before a Single Bench of the Lahore High Court in M/s. Maple Leaf. Cement Factory v. The Collector of Central Excise and Sales Tax (Appeals), Lahore and 2 others, (1993 MLD 1645). Under the Sales Tax Act, 1990, section 45
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provides for filing of appeals while section 45(3) thereof requires the appellants to deposit both the tax demanded and the penalty levied, if any, before filing the appeal. The actual words of the said section 45(3) are as follows:-- "S. 45(3).--Any person desirous of appealing under subsection (1) against any decision or order relating to any tax demanded or any penalty levied under the Act, shall; before filing the appeal, deposit the tax demanded or the penalty levied or both tax and penalty." ' Malik Muhammad Qayyum, J., while writing for the Court in Maple Leaf, and relying upon a number of references including case-law and books on interpretation of statutes, from both the Pakistani, and foreign jurisdictions, in a well-reasoned judgment came to the conclusion that the provisions of section 45(3) were not mandatory in nature because the said provisions were silent in respect of the consequences flowing out of non-compliance thereof. The learned Judge in his judgment at. Para. 17 has, however, compared the said section 45(3) of the Sales Tax Act, 1990 with the comparable provisions of the Banking Companies (Recovery of Loans) Ordinance, 1979 and the 1984 Ordinance and expressed the view that since in the latter the consequences for default or non-compliance of deposit have been categorically stated, the said analogous provisions in the Banking Companies (Recovery of Loans) Ordinance, 1979 and the 1984 Ordinance, were mandatory in nature. In this respect it would be pertinent to reproduce the relevant findings:-- "17, As already observed, the consequences of non-deposit have not been provided by section 45(3) of the Sales Tax Act, 1990 by the Legislature itself. This omission is not without significance especially when this provision is compared with similar provision existing in many other statutes, like the Banking Companies (Recovery of Loans) Ordinance, 1979 and the Banking Tribunals Ordinance, 1984, which emphatically provided that no appeal shall be entertained or admitted to hearing unless the amount found due has been deposited. (See 1994 MLD 1654)." 9. With due respect we are unable to subscribe to the obiter expressed in Maple-Leaf (as above) in relation to the comparable provisions of the Banking Companies (Recovery of Loans) Ordinance, 1979 and the 1984 Ordinance. We do not think that just because the first proviso to section 9(1) of the 1984 Ordinance expresses a consequence that an appeal shall not be entertained unless the defendant first deposits the decretal or other amount would not make the said first proviso mandatory in nature. It is now well-settled that mere use of the word "shall" will not make a particular provision mandatory in nature. In fact the two words "shall" and "may" have been judicially recognized to be interchangeable. If there is any authority needed for the proposition it is the case of Muhammad Saleh v. The Chief Settlement Commissioner, Lahore, (PLD 1.972 SC 326), wherein the Supreme Court has been pleased to observe as follows:-- "It is now well-settled that the words may and shall' in legal phraseology are interchangeable depending on the context in which they are used, and are not to be interpreted with the rigidity which is attributed to them in ordinary prudence." ' No doubt the general rule is that where a provision in a statute is couched in negative language, while providing for consequences in case of default of conditions and pre-conditions specified therein, the provision is to be taken to be mandatory in nature. However, this is only a general rule which is not without exceptions. In fact our Supreme Court has conclusively settled the matter in Jamshed Ahmed Khan and 2 others v. The S.D.M./Assistant Commissioner, Garden Sub-Division, Karachi and others (PLD 1987 SC 213) and Dr. Sher Afgan v. Aamar Hayat Khan (1987 SCMR 1987), that no universal rule can be laid down to determine as to whether a provision is directory or mandatory in nature. The Supreme Court, in the two cases referred, has categorically held that every enactment has to be construed on its own merit in light of the general object intended to be secured, the subject-matter and the importance of the provisions which are to be interpreted. Such also appears to be the settled law in the English and Indian jurisdictions as is borne out from Liverpool Borough Bank v. Turner (1861) 30 U Ch. 379 (at page 380) and H.N. Rishbud v. State of Delhi
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AIR 1955 SC 196. We feel that the correct approach while construing any provision of an enactment is to evaluate the entire scheme of the enactment, the nature of the provision in question and to ascertain the true intention of the Parliament before coming to the conclusion as to whether a particular provision is directory or mandatory in nature. 10. Section 9 of the 1984 Ordinance provides for an appeal. The primary objective of the Legislature in legislating such a provision is to provide a right of appeal to the persons aggrieved so as to allow them forum of remedy. Dismissal of appeals on mere ground of failure to deposit any amounts specified has been deprecated by the Supreme Court as far back as M/s. Eastern Rice Syndicate v. C.B.R. (PLD 1959 SC (Pak.) 364). Subsequently the case of Maudood ur Rehman v. C.B.R. (PLD 1975 Karachi 51) lends further support to this proposition. Also in case we hold that the condition of depositing the decretal amount under the first proviso to section 9 of the 1984 Ordinance is Constitutional challenge on grounds that a provision providing for a right of mandatory in nature, the said provision would be open to a prospective appeal is a basic natural right in an Islamic polity while any attempt to take the same away or make it restrictive, nugatory or illusory would be void and the Courts shall be empowered to strike down the offending part of that provision (See CIT v. M/s. Siemen PLD 1991 SC 368, Pakistan v. The General Public, PLD 1989 SC 6 and Maple-Leaf (supra), paras. 19 and 20). In this respect we have also been able to lay our hands on Sindh High Court Bar Association, Karachi v. Islamic Republic of Pakistan (PLD 1991 Karachi 178) and Dr. Mehmoodur Rehman Faisal v. Secretary, Ministry of Justice and Parliamentary Affairs (PLD 1992 FSC 195), wherein it has been categorically decided that in an Islamic polity there is no concept of a court-fee while in the earlier case i,e, Sindh High Court Bar Association a Division Bench of this Court interpreting the Constitutional mandate contained in Articles 2-A and 227 of the 1973 Constitution has been pleased to strike down an increase in the court-fee. While reversing these two judgments it is quite apparent that any court-fee is viewed as a hindrance in and negation of a person's right of appeal which is his basic right in an Islamic polity. If court-fee can be seen as a burden to and negation of a person's right of appeal there can be no cavil with the proposition that a mandatory condition to deposit a decretal or other amount before filing an appeal would also be a clear negation of a person's right of appeal. As we have already observed aforesaid that such a view would leave room for a Constitutional challenge and justify striking down that part of the first proviso to the said section 9(1) of the 1984 Ordinance which provides for such a precondition of deposit. It is the duty of the Court to afford an interpretation which would save the law rather than destroy the same. In this respect we would cite the decision of Multiline Associates v. Ardeshir Cowasjee (PLD 1995 SC 423), wherein Sajjad Ali Shah, CJ, while sitting in a Full Bench has been pleased to observe:-- "35. Cardinal principle of interpretation of statutes is that a law should be interpreted in such a manner that it should be saved rather than destroyed. The Courts should lean in favour of upholding constitutionality of legislation and it is, therefore, incumbent upon the Court to be extremely reluctant to strike down laws as unconstitutional. This power should be exercised only when absolutely necessary, for injudicious exercise of this power might result in grave and serious consequences. In support of the proposition reference can be made to the case of Province of East Pakistan v. Sirajul Haq Patwari (PLD 1966 SC 854)." In order to save the first proviso to section 9(1) of the 1984 Ordinance from being a subject-matter of Constitutional challenge and striking down the same we ought to give an interpretation that the same is directory and not mandatory in nature. In this manner we would save rather than destroy the law. 11. In case we were to hold that the pre-condition of depositing the decretal or other amount as contained in section 9 of the 1984 Ordinance was mandatory in nature, it would additionally open the path for litigants to challenge decrees of the Banking Tribunal in Constitutional petitions as
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there are authorities for the proposition that in case filing of an appeal is subject to the condition of depositing an amount, the appeal is not an efficacious adequate remedy in view whereof a direct Constitutional petition under Article 199 would lie. (See Eastern Rice Syndicate v. C.B.R. PLD 1959 SC (Pak.) 364, and M/s. Usmania Glass Sheet Factory v. Assistant Collector of Customs, PLD 1968 Dacca 276 and Nagina Silk Mills v. Income Tax Officer PLD 1963 SC 322 (at 327(D)). In the context of the 1984 Ordinance, we have been able to lay our hands on M/s. Majeed Enterprises v. U.B.L. 1994 CLC 2292) where it has been clarified that due to the condition of deposit stated in the 1984 Ordinance, the right of appeal is illusory and not in the nature of an adequate remedy in view whereof the appellants could file a Constitutional petition. However, in two other recent decisions the Courts have taken the view that notwithstanding the precondition of deposit a Constitutional petition shall not be maintainable to impugn an order/decree of the Banking Tribunal. These decisions are M/s. Tank Steel and Re-Rolling Mills (Pvt) Ltd. v. Federation of Pakistan (PLD 1996 SC 77) and Khurshid Alam v. U.B.L. (PLD 1995 Karachi 409). These two decisions are clearly in dissonance with the settled proposition of law that where the filing of an appeal is subject to the condition of deposit, an aggrieved person may invoke the Constitutional jurisdiction since the appeal in such an event could not be viewed to be an efficacious or adequate remedy. Assuming for the sake of argument we were to hold that the pre-condition to deposit the decretal amount under section 9 of the 1984 Ordinance was a mandatory requirement before an appeal thereunder could be entertained the position would be that the first appeal under section 9-A would not be entertained in case Of default of the condition of deposit while a Constitutional petition would also not be maintainable in view of the decisions in M/s. Tank Steel and Re-Rolling Mills Pvt. Ltd. And Khurshid Alam (cited above). In other words, if a person who is unable to arrange each to meet the deposit while admittedly the decree passed by the Banking Tribunal is fundamentally perverse (as is in this case), the aggrieved person would be left without a remedy. Such cannot be the intention of the legislature while such a predicament would be opposed to all cannons of law, justice and equity. The Courts are under an obligation to place such construction on statutes which will be beneficial to the widest extent and which would make the legislation operate fairly, justly, equitably and not unreasonably while, the Legislature presumes an enactment to operate in a manner which would be just, reasonable, equitable and fair (see Mst. Zainab v. Kamal Khan PLD 1990 SC 1051 and Kamran Industries v. Collector of Customs (PLD 1996 Karachi 68 at page 101). An interpretation that the first proviso to section 9 (1) of the 1984 Ordinance making the requirement to first deposit the decretal amount before instituting appeal is only directory in nature would allow the aggrieved person a chance to avail an appellate remedy in case he is unable to deposit the decretal amount. Such an interpretation would also restrain us from respectfully disagreeing with M/s. Tank Steel and Re-Rolling Mills (Pvt.) Ltd. And Khursheed Alam cited above (enunciating the proposition that despite the pre-condition of deposit a writ would not lie) and indulging ourselves to scrutinize as to whether the said two decisions are per incuriam. Our proposed interpretation would also avoid a flood-gate on the Constitutional jurisdiction impugning the decrees passed by the Banking Tribunal on the score that the aggrieved persons can well avail the appellate remedy without meeting the mandatory requirement of depositing the decretal or other amount. In this context we would like to underscore that in M/s. Majeed Enterprises (cited above) it was additionally observed that the first proviso to section 9 (1) of the 1984 Ordinance was mandatory in nature and failure to deposit the decretal amount would merit dismissal of the appeals. However, this was subject to the reservation (as already detailed above) that the appellants would be able to impugn the judgment/decree in a Constitutional petition since the right of appeal subject to the pre-condition of deposit would be illusory. Accordingly, where the view as per M/s. Tank Steel Re-Rolling Mills Pvt. Ltd. And Khursheed Alam is adhered to i,e, that notwithstanding the precondition of depositing the decretal amount a Constitutional petition is not maintainable, the view in M/s. Majeed Enterprises
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that the condition of such deposit is mandatory in nature would also not hold the field. In matters pertaining to rights of appeal subject to the condition of deposit the Court can have two options, firstly to hold that in view of such condition the appellants should resort to the Constitutional jurisdiction and secondly to hold that the condition of deposit is directory in nature. In M/s. Majeed Enterprises the learned Judges opted for the first option whereas in M/s. Tank Steels and Re- Rolling Mills Ltd. And Khursheed Alam that first option was closed to the petitioners/appellants without availing of the second option. In Majeed Enterprises had the learned Judges been aware of such closure of the first option they would not have entered into the verdict of interpreting the first proviso to section 9 as mandatory in nature. In Majeed Enterprises the observation that section 9 was mandatory was subject to availability of a writ petition as a substitute remedy. In view of this we do not think that M/s. Majeed Enterprises poses any hindrance before us to hold that the pre- condition of deposit under section 9 is a directory condition. This is moreso because of the fact that in the case of M/s. Tank Steel and Re-Rolling Mills Pvt. Ltd. The Supreme Court has approved an Appellate Court's power and jurisdiction to resolve factual, legal as well as Constitutional controversies. The consequence of our proposed interpretation that the condition of deposit is not mandatory in nature would essentially have the same result in case the appellants were to file a Constitutional petition as per the directions in M/s. Majeed Enterprises. In this manner the spirit of the statement of law and observations by the learned Judges in Majeed Enterprises remains intact. We may also point out that in Sirajuddin etc. v. Habib Bank Ltd. (PLD 1994 Pesh. 233) the Peshawar High Court has taken the view that the use of the word, "shall" in the proviso to section 9(1) of the 1984 Ordinance suggests its operation to be mandatory. There is no further discussion in the said judgment in this context. We have already cited the decision of M. Saleh (PLD 1972 SC 326) for the point that mere use of the word, "shall" does not make an enactment mandatory, while further the Supreme Court in Jamsheed Ahmed Khan and Dr. Sher Afgan cited above has clarified that there can be no universal rule for interpreting an enactment to be mandatory in nature. With utmost respect these aspects of the decisions of the Supreme Court have not been considered in Sirajuddin, in view whereof the same loses its binding or persuasive force on the plane of stare decisis. 12. Before parting with this particular issue we would also like to underscore another very significant aspect and which touches upon the limits of judicial power i,e, whether the Courts ought to follow the law stricto senso no matter how unjust and inequitable consequences may ensue or whether the Court afford an interpretation by reading in and reading down provisions in a avoid inequity. It is essential to view this controversy in the light of facts be k,i c.s as, on one hand it has been argued that this Court can only apply the provisions of first proviso to section 9(1) of the 1984 Ordinance in the strictest literal sense by not entertaining the first appeals if the decretal amount is not deposited, while on the other hand it has been contended that the Courts as guardians of the Constitution have the power to supply construction to provisions which if taken in the strictest sense are patently unjust. The controversy is far from simple and is in no way confined to our jurisdiction alone. As far back as in the 19th century such a question came before the Courts in the United States wherein it was thought that the Courts ought to strictly follow the law irrespective of the consequences. In this respect the prime authority is Obserne v. Bank of United States, 9 Wheaton 738 (1824), 866 where it was observed:-- "Judicial power, as contradistinctions from the power of the laws, has no existence. Courts are mere instruments of the law, and can will nothing. When they are said to exercise a discretion, it is a mere legal discretion, a discretion to be exercised in discerning the course prescribed by law; and when that is discerned, it is the duty of the Court to follow it. Judicial power is never exercised for the purpose of giving effect to the will of the Judge, always for the purpose of giving effect to the will of the Legislature; or, in other words, to the will of the law."
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' In striking contrast Hamilton, J., had been noted not only to call upon the Judges to declare statutes unconstitutional whenever they contravened the Constitution but also ordained them to "mitigate the severity" and "confine the operation" of "unjust and partial (though not unconstitutional) laws". According to the learned Judge, judicial "firmness" in turning back the "spirit of injustice" is "calculated to have more influence upon the character of our Government, than but few may be aware of". And "whatever will tend to fortify that temper in the Courts" should be prized by…
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