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Official Citation: 2024 IHC 187974
Court / Jurisdiction: Islamabad High Court
Parties: M/s Live Securities Private Limited vs Muhammad Salim Khan etc.
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2024 IHC 187974. In this matter between M/s Live Securities Private Limited and Muhammad Salim Khan etc., the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Miangul Hassan Aurangzeb) AUTHOR JUDGE: Honourable Mr. Justice Miangul Hassan Aurangzeb DECISION DATE: 24-OCT-2024 CASE NO: Civil Revision-173-2017 CITATION: 2024 IHC 187974 PARTIES: M/s Live Securities Private Limited VS Muhammad Salim Khan etc. LAW / SECTION: - SUBJECT: Against Judgement & Decree, REMARKS: Civil Revision Petition Against dismissal of appeal by additional district judge wherein judgement and decree regarding accepting of suit by civil judge was assailed. ============================================================ JUDGMENT SHEET IN THE ISLAMABAD HIGH COURT, ISLAMABAD JUDICIAL DEPARTMENT
C.R.No.173 of 2017
W.P. No.3364 of 2013 Live Securities Limited Versus Muhammad Salim Khan
Akhtar Hussain Shah Versus Oil and Gas Development Company Limited and another Date of Hearing: 18.09.2024 Petitioner by: Khawaja Hasan Riaz, Advocate. Respondent by: Mr. Irshad-ul-Haq, Advocate. _____________________________________________________________________ MIANGUL HASSAN AURANGZEB, J :- Through the instant petition th e petitioner, Live Securities Limited, impugns the judgment dated 12.01.2017 passed by the Court of the learned Additional District Judge, Islamabad whereby its appeal against the judgment and decree dated 06.12.2012 passed by the Court of the learned Civi l Judge, Islamabad , was dismissed. Vide the said judgment and decree dated 06.12.2012, the learned Civil Court decreed the respondent’s suit for declar ation and permanent injunction. 2. The facts essential for the disposal of the instant petition are that petitioner / defendant is engaged in the business of brokerage of shares. In August 2008, the respondent / plaintiff had opened an investor account No.129001 with the petitioner . The dispute between the petitioner and the respondent arose when the latter received letter dated 16.10.2008 from the petitioner whereby a demand of Rs.63,73,531.99 was raised against the respondent. 3. On 15.12.2008, the respondent filed a suit for de claration and permanent injunction against the petitioner before the Court of the learned Civil Judge, Islamabad. The respondent had sought a declaration that all transactions for the sale and purchase of shares in account No.129001 without the respondent’s instructions were “illegal, deceptive, fraudulent, null and void.” In the sai d suit, it was pleaded inter alia that other than the 2 C.R. No.173/2017
instructions for the purchase of shares in M/s AHSL, on 31.07.2008, the respondent had given no other instructions to the petitioner to sell or purchase any of his shares. It was also pleaded that at th e time of the opening of the account with the petitioner, the respondent had an account with M/s BMA Capital Management Ltd. in which he had 25,000 shares in PTCL, 52,000 in FCCL, 1,04,000 in MLCF and 2,000 in OGDCL. These shares according to the responden t were transferred in the account he had opened with the petitioner , but were sold off without his consent and his account showed Rs.63,73,531.99 to be payable by him. 4. The petitioner contested the suit by filing a written statement. In the said written statement, it is pleaded inter alia that although the petitioner had opened an investor / trading account with the petitioner in August 2008, the respondent had transferred a certain amount of shares owned by him in M/s BMA Capital Management Ltd. to his account with the petitioner. This transfer was in lieu of the initial security / margin deposit in accordance with the cond itions set out in the account opening form. It is also pleaded that the respondent st arted buying and selling shares on his own accor d through his individual account. More importantly , it is pleaded that the petitioner had been kept abreast verbally, telephonically and also through courier services regarding the transactions in his account , the ledger and wealth statements. The responde nt’s averment that he did not place any purchase order after 31.07.2008 was denied by the petitioner. Since the r espondent’s ledger balance showed an amount of Rs.63,73,531.99 which amount had been deposited by the petitioner with the clearing house of the Karachi Stock Exchange against the shares purchased by the respondent, he was liable to pay the said amount. 5. From the divergent pleadings of the contesting parties, the learned Trial Court framed the following issues:- 3 C.R. No.173/2017
“1. Whether the plaintiff placed any order for the purchase or sale of shares with the defendant after 31.07.2008? OPD 2. Whether, basing upon the findings on issue No.1 , plaintiff is entitled to a decree, as prayed for? OPP 3. Whether in view of preliminary objections No.1 to 4 this suit is liable to be dismissed? OPD 4. Relief.”
6. After the recording of evidence, the learned Civil Court decreed the suit on 06.12.2012 and the petitioner’s appeal against the said decree was dismissed by the learned Appellate Court vide judgment and decr ee dated 12.0 1.2017. The said concurrent judgments and decrees have been assailed by the petitioner in the instant civil revision petition. 7. Learned counsel for the petitioner, after narrating the facts leading to the filing of the instant petition, subm itted that the respondent’s suit for declaration with regard to pecuniary liability was not maintainable; that under Section 42 of the Specific Relief Act, 1877 a declaration cannot be granted where its effect is only on the pecuniary relationship between parties to a contract; that an equitable relief cannot be granted on the basis of the allegation of fraud where specific details of the same are not pleaded and the intention to deceive has not been proved; that in the instant case , the respondent only ma de vague allegation s of fraud; that observations and conclusions of the learned Court below about inadmissibility of power of attorney in favour of DW -1 under Article 95 of the Qanun-e-Shahadat Order, 1984 was misplaced; that the said original power of attorney was part of the record of the learned trial Court and its photocopy was produc ed by the petitioner’s witness DW -1; that the learned Courts below did not appreciate the statement of the petitioner ’s witness DW-1 about placing the orders directly to Karachi Automated Trading System (“KATS”) in times of bullish market; that through postal and courier receipts , the petitioner proved sending of periodical account statements to the respondent; that the said statements provided that the same will be deemed to have been conclusively accepted if any error or discrepancy is not notified within three 4 C.R. No.173/2017
days of the issue date; that mere non -production of order register with regard to sale and purchase of the shares after 31.07.2008 could not have lead the learned Co urts below to non -suit the petitioner; that the suit of the respondent was not maintainable in the presence of dispute resolution mechanism provided by the Securities and Exchange Commission of Pakistan Act, 1997; that the account opening form signed by th e parties also provided for the dispute resolution through arbitration under the Arbitration Act, 1940 under which the arbitrator was to be selected by the Managing Director of the Karachi Stock Exchange; and that the learned Courts below did not give decisions on the facts and law points raised before them. Learned counsel for the petitioner prayed for the instant revision petition to be allowed in terms of the relief sought therein. 8. On the other hand , learned counsel for the respondent in support of t he impugned concurrent judgment and decree s submitted that he came to know about the sale and purchase of shares from his account through letter dated 16.10.2008 which was captioned as Margin Call and was sent through registered post; that the petitioner fa iled to prove the mode and manner for issuance of share purchase and sale order by the respondent; that the petitioner produced accounts statements which were generated much after the time when they were claimed to have been sent to the respondent; that Ru le 4 (1) of the Securities and Exchange Commission Rules, 1971 provides that all orders to buy or sell securities shall be entered in the chronological order in a register which shows the name and address of person who placed such an order; that the petiti oner’s witness admitted that during a bullish market time all orders are not recorded in register instead are sent directly to KATS; that the statements produced in evidence show that the same were addresses of one Abdul Basit Khan; that the petitioner exe cuted an agreement with the said person to act as f acilitator entitled to receive 30% of brokerage commission; that the respondent placed on record 5 C.R. No.173/2017
copy of the said agreement on record and on the respondent’s application, the learned trial Court directed t he petitioner to produce original agreement but the petitioner did not comply with the direction; that the said Abdul Basit Khan and the petitioner ’s employees / agents were operating the respondent’s account without his permission and knowledge; and that the petitioner liquidated the respondent’s account except for Arif Habib Securities Limited shares despite the fact that an interim injunction prohibiting from operating the respondent’s account was restored by the learned appellate Court. Learned counsel for the respondent prayed for the revision petition to be dismissed. 9. I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance. 10. Primarily, the respondent’s claim , in his su it, was that after 31.07.2008, he had not placed an order for the sale or purchase of any share from his account maintained at the petitioner’s company. On the basis of this claim , he alleged that through Margin Call letter dated 16.10.2008 which was accom panied with a statement showing equity position, he came to know that a number of shares of different companies were purchased and sold from his account. He alleged that on visit to the petitioner’s office, he came to know that the petitioner’s servants an d agents had been operating his account through deception, fraud and were buying and selling shares in his name without his consent. 11. This allegation was denied by the petitioner and it was pleaded in the written statement that the respondent after account opening started buying and selling shares totally on the basis of his choice through his individual account and that the petitioner kept him informed verbally / telephonically and through courier service, regarding his transaction details, ledger and net worth statement. It was the petitioner’s stance that statements sent to the respondent read that any discrepancy in the same shall be raised within three days of issuance date and since the 6 C.R. No.173/2017
respondent did not raise any objection to the said statements , he was aware and acquiesced to the transactions mentioned therein. 12. As mentioned above , the learned trial Court framed an issue on this subject as follows:- “Whether the plaintiff placed any order for the purchase or sale of shares with the defendant after 31.07.2008? OPD”
13. This was the core issue . Onus to prove this issue was placed on the petitioner to which it did not raise an objection. The petitioner’s witness Raja Izhar Ahmed , who was designated as Manager-Islamabad in the authority letter (Mark-D) deposed that the respondent used to place orders for the sale and purchase of shares telephonically and after execution / clearing of said orders, statements were sent to him through courier. The said witness further deposed that he did not receive a ll orders from the respondent and some of orders w ere received by other employees. He stated that he could not say to distinguish which of the orders from the respondent he received. He placed on record the courier receipts and copies of the statements whi ch were sent to the respondent. 14. Now all such persons who received orders for sale or purchase of shares from the respondent should have been brought as witnesses before the learned trial Court but this the petitioner did not do. In his cross -examination, DW-1 even could not identify as to which of the respondent’s orders were those that he received. DW -1 did not connect a courier receipt with specific account statement which was communicated to the respondent through the s aid receipt . There is no explan ation in the petitioner’s evidence as to why the respondent’s statement of account carry the name of one Abdul Basit Khan who according to DW-1 was merely another client of the petitioner. 15. The petitioner produced statements claimed to have been sent to the respondent but the said transaction detail statements were generated from the petitioner’s automated database on 7 C.R. No.173/2017
23.10.2008, i.e. after the issuance of Margin Call letter dated 16.10.2008. Now it was this letter dated 16.10.2008 which gave rise to the respondent’s cause of action. The said statements portrayed several transactions which were done on August 12, 13 and 15 and September 1, 3, 4, 5, 8 to 12 of the year 2008 . The petitioner did not produce evidence either oral or mechanical as to when and by whom these transactions were entered i n the software database. The petitioner’s witness admitted that all orders were not entered in the register during bullish market rather the orders were directly placed on KATS. Even no electronic evidence such as automatically generated orde r routing history was produced in evidence. 16. The petitioner did not produce a witness from the courier office who issued the receipts which were produced during evidence. It also did not produce a witness from its own office who may have stated that he placed the statements in the envelope and handed over the same to courier office for transmission to the respondent. This was important because mere receipt of courier even if admitted would only be proof of dispatch and not of its contents. 17. The petitioner is registered with Karachi Stock Exchange Company and the respondent, in his evidence, produced a notice issued by the Karachi Stock Exchange (Mark-C ) whereby Karachi Stock Exchange directed for the telephonic orders to b e tape recorded and such recordings to be maintained for a minimum period of six months. The petitioner did not produce any such tape recording for orders placed by the respondent in the month s of August and September, 2008 while the respondent instituted the suit in the month of December, 2008. 18. The above material shortcomings in the petitioner’s evidence lead me to agree with the concurrent findings of the learned Courts below that the petitioner failed to exhaust the burden of proof to show that the respondent did place the orders 8 C.R. No.173/2017
for transactions after 31.07.2008 as shown in his account statement. 19. The petitioner’s objections on the maintainability of the respondent’s suit , due to availability of exclusive alternative dispute settlement mechanism , are also without substance because it did not file an application to stay the suit under Section 34 of the Arbitration Act, 1940 instead filed a written statement and joined the proceedings in the suit before the learned trial Court. The petitioner took every possible step in aid of the progress of the suit and towards submitting to the jurisdiction of the Court. In fact the petitioner by its conduct chose to waive the benefit of arbitration and preferred to proceed with the suit for a decision by the Court on merits of its dispute with the respondent. 20. The petitioner also raised the objection that jurisdiction of the learned Civil Court was barred under Securities and Exchange Commission of Pakistan Act, 1997 as for disputes related to sale and purchase of shares are settled under the said legal framework. Now under Section 9 of the Code of Civil Procedure, 1908, a Civil Court has jurisdiction to try all suits of a civil nature excepting suits for which the Civil Court’s cognizance is either expressly or impliedly barred . The petitioner has been unable to mention any specific provision of law whereunder dispute of the nature in volved in the instant case was excluded from the jurisdiction of Civil Court either expressly or impliedly. 21. The petitioner for the first time before this Court in its revisional jurisdiction raised the objection as to maintainability of suit for declaration about pecuniary relationship of parties to a contract and where no consequential relief about cancellation was claimed. T his objection was neither taken in written statement nor in the memo of the petitioner’s appeal. The respondent, in his suit , prayed for a decree of declaration and permanent injunction against the petitioner for deceptive and fraudulent transactions from his account to be declared null and void. As mentioned above , after the factual inquiry during which 9 C.R. No.173/2017
the petitioner was given opportunity to produce evidence, it was unable to prove that after 31.07.2008 an order for sa le or purchase of shares was made by the respondent. This , in my view, was sufficient for the issuance of declaration as sought for. 22. Additionally this Court has gone through findings in order only to ascertain as to whether an illegality or non-reading / misreading of evidence was done. I t is because in exercise of its revisional jurisdiction under Section 115 CPC, this Court is not called upon to re-appraise and re-evaluate the merits of evidence of the parties in the absence of any illegality or non -reading / misreading of evidence. I n r evisional jurisdiction, re-examining the entire evidence to find support for another possible view , albeit different from the conclusion of learned Courts below is not permissible. Reference in this regard may be made to case of Hazara Vs. Muhammad Yar (2011 SCMR 758). 23. Furthermore i n the case of Sardar Muhammad Kamal -Ud- Din Khan Vs. Syed Munir Syed (2022 SCMR 806 ), the Hon’ble Supreme Court held that “the exercise of revisional power is circumscribed by section 115 of the Code. Clauses (a) and (b) are attracted when jurisdiction, which is vested in a court, is not exercised or when jurisdiction is not vested in a court yet the court assumes jurisdiction. And, clause (c) is with regard to a court exercising jurisdiction illegally or with material irregul arity. Conversely, when the order of a subordinate court is within its jurisdiction and such court has not exercised jurisdiction illegally or with material irregularity revisional jurisdiction cannot be exercised. The power of revision cannot be used by a higher court to substitute its own discretion or authority…” 24. In view of the above, the petitioner has been unable to show as to how in passing the impugned judgment dated 12.01.2017, the learned appellate Court or in passing order dated 06.12.2012, the learned Civil Court have committed an illegality or non- reading / misreading of evidence or an error of jurisdiction or had exercised jurisdiction illegally or with material irregularity. 10 C.R. No.173/2017
Consequently, the instant civil revision petition is dismissed with costs.
(MIANGUL HASSAN AURANGZEB) JUDGE
ANNOUNCED IN AN OPEN COURT ON 24.10.2024.
(JUDGE)
Sultan(U)*