ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

HCA No.68 of 2007

(ePlanet Ventures Limited & another v. Gateway (Pvt) Ltd.)

Date	Order with signature of Judge

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

Hearing of Case.

For hearing of Main Case.

04.11.2026.

Mr. Nabeel Ahmed Khan, advocate for the appellants.

Mr. Basil Nabi Malik, advocate for the respondent.

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This High Court Appeal is directed against the order dated 28.03.2007 passed by the learned Single Judge, exercising original civil jurisdiction, in Suit No.15 of 2007, whereby an application filed under Section 41 of the Arbitration Act, 1940, was allowed, however, subject to deposit with the Nazir of this Court of the promissory note executed by the defendant in connection with the handing over of a pay order equivalent to US$2,000,000.

Briefly, the facts giving rise to the present appeal are that Appellant No.1 and the Respondent entered into a Partnership Agreement dated 06.04.2005 and a Joint Venture Agreement dated 19.04.2005 for acquisition of 10 acres of land from the Defence Housing Authority (DHA), Karachi, and development of a high-rise residential complex thereon. Under the agreements, the Respondent was required to provide financing in the form of an interest-free shareholder loan, repayable from booking/public funds. Disputes arose when the Respondent allegedly failed to fulfil its financial obligations in accordance with the agreed investment schedule, resulting in termination of the DHA Agreement, Addendum and Lease Deed through letters dated 21.09.2006 and 22.09.2006. Consequently, Appellant No.1 terminated the agreements through letter dated 22.12.2006 and demanded return of the share certificates and resignations of the Respondent's nominee directors. Meanwhile, DHA returned Pay Order No.MNPO 1416492 dated 15.09.2006, amounting to Rs.120,000,000, which became the subject matter of the proceedings under Section 41 of the Arbitration Act, 1940.

During the pendency of this appeal, this Court, vide order dated 21.09.2007, while disposing of the Respondent’s application (CMA No.1929 of 2007), permitted return of the pay order to the Respondent, subject to deposit of 4,900 original share certificates of Appellant No.2-company, duly signed original transfer deeds, resignation letters of two nominee directors and a promissory note. For the sake of ready reference the relevant portion of the order is reproduced hereunder:-

"However, in our view, these documents have initially to be deposited with the Nazir of this Court and then the Appellant may make appropriate application for the return of the same, which is to be decided on its own merit as return of the documents directly to the Appellants at this stage may cause prejudice to the two cases pending before the Arbitrator and this Court.

Mr. Farooq H. Naek has also given an undertaking that in case the pay order is returned to the respondent and, at any subsequent stage of the proceedings in the two suits he is required to redeposit/pay this amount to the DHA, he will abide by the order of this Court/ Arbitrator.

We have examined the case and we are of the view that the respondent is entitled to the return of the pay order for Rs. 120,000,000 returned by DHA. We will, therefore, direct the Nazir of this Court to return pay order No. MNPO 141692 dated 15.9.2006 to the respondent after proper verification and identification and subject to completion of all the corporate formalities. The return of the above pay order will, however, be subject to the following conditions:

1. The respondent shall deposit 4900 original share certificates of Appellant No.2 company with the Nazir of this Court alongwith signed original transfer deeds.

2. The two nominee directors of the respondent, namely, Rafiq H. Usman and Nazir Haji Usman, on the Board of Directors of Appellant company, shall submit their resignations in favour of two persons named by the Appellants. These resignations shall become effective only from the date on which the same are handed over by the Nazir to the Appellants.

The Nazir is also directed to return the promissory note in the sum of US $$2.5 million, issued by the Appellants to the respondent, to the Appellants subject to their furnishing promissory note equivalent to US$$ 500,000/-."

Subsequently, vide order dated 17.01.2008, this Court, while disposing of the Appellants’ application (CMA No.2046 of 2007), directed the Nazir to return the resignation letters of the two nominee directors to the Respondent. Relevant portion of the said order is as under:-

"There is no cavil that the proceedings are pending between the parties and Defence Housing Authority, question of the investment of the huge amount in the project as well as Defence Housing Authority is in dispute which shall be resolved in the arbitration proceedings as well as in the suit pending between the parties. Tentatively, an order for return of share shall cause prejudice to the case of both the parties. In all fairness for the purpose of completing all corporate formalities of the appellant No.2's company, Nazir is hereby directed to return resignation letters of the two nominee, Directors of the Respondent's company deposited by the Respondent to meet the exigency."

Aforesaid order was challenged before the Honourable Supreme Court of Pakistan in Civil Appeals Nos.394 and 395 of 2008, which were disposed of vide order dated 26.02.2019 by observing in paragraph 4 as follows:

"4. The above order has brought the parties before this Court. There is no cavil that Appellant is holding 49% shares and Respondents are holding 51% shares in the joint venture company/Respondent No.2. Both the parties concede that the order dated 21.09.2007 may continue to operate and the impugned order as reproduced above dated 17.01.2008 may be recalled. Order accordingly."

The Honourable Supreme Court further directed the parties to pursue their respective statutory remedies before the learned Company Judge in J.M. No.36 of 2006 concerning corporate governance and before the learned Arbitrator in relation to monetary and contractual claims arising out of the Joint Venture Agreement.

Today, learned counsel for the parties, present in Court, jointly submit that, in view of the aforesaid order of the Honourable Supreme Court, nothing further survives for adjudication in the present appeal. They accordingly consent to its disposal in terms of paragraph-4 of the order dated 26.02.2019, with the understanding that the order dated 21.09.2007 shall continue to operate, whereas the subsequent order dated 17.01.2008 already stands recalled by the Honourable Supreme Court.

In view of the binding order dated 26.02.2019 passed by the Honourable Supreme Court, coupled with the consensus expressed by learned counsel for the parties, no further adjudication is called for in the present appeal.

Accordingly, by consent of learned counsel for the parties, this High Court Appeal is disposed of in terms of paragraph 4 of the order dated 26.02.2019 passed by the Honourable Supreme Court of Pakistan in Civil Appeals Nos.394 and 395 of 2008. The order dated 21.09.2007 passed by this Court shall continue to operate, whereas the subsequent order dated 17.01.2008 stands recalled pursuant to the aforesaid order of the Honourable Supreme Court.

JUDGE