IN THE HIGH COURT OF SINDH, KARACHI.

 

HCA No.10 of 2012

 

 

                                    Present:          Mr. Justice Syed Hasan Azhar Rizvi,

                                                            Mr. Justice Muhammad Junaid Ghaffar.

 

 

M/s. Pangrio Sugar Mills Ltd.                     ………..                         Appellants

 

 

V e r s u s

 

 

Bankers  Equity Ltd. & 5 others                ………..                     Respondents

 

 

 

Date of hearings:                            10.02.2014, 28.02.2014 & 18.03.2014

 

Date of judgment:                           04.09.2014

 

Appellant:                                         Through Mr. Asim Mansoor Khan,

                                                            Advocate.

 

Respondents:                                   Respondent No. 1 through Mr. Muhammad Ali Hakro, Advocate

Respondent No.2 through Mr. Hamid Idrees, Advocate.

Respondent No.4 through Mr. Khalid Mahmood Siddiqui, Advocate

 

                                                J U D G M E N T

 

 

Muhammad Junaid Ghaffar, J:   Through instant appeal, the appellant has impugned order dated 22.11.2011 passed by a learned Single Judge of this Court whereby application bearing CMA No.679 of 2008 seeking review of the order dated 20.08.2008 has been dismissed.

 

2.         Briefly the facts as narrated in the memo of appeal are that respondent No.1 “Bankers Equity Ltd” (“BEL”) had provided an aggregate amount of finance of Rs.225.253 Million in 1984 – 1987 to the appellant along with other Syndicate members, namely M/s Habib Bank Ltd., M/s Allied Bank Ltd., M/s Muslim Commercial Bank Ltd., M/s Untied Bank Ltd and National Bank Ltd (“formerly National Development Finance Corporation NDFC”) who are Performa respondents No.2 to 6 in the instant appeal. The appellant thereafter defaulted in repayments of the finance facility, whereafter the respondents filed a Suit bearing No.B-68 of 2000 for recovery of Rs.475.108 million against the appellant which was contested by the appellant by filing objections and written statement. In the meanwhile State Bank of Pakistan introduced Circular No.29 of 2002 dated 15.10.2002 for resolution of disputes in respect of stuck up finances/loans. The case of the appellant was considered by the Committee of resolution established by the State Bank of Pakistan in its meeting held on 01.10.2004, and the case of the appellant was considered and decided in terms that the respondents should allow settlement of outstanding liabilities on payment of Rs.215.277 million and fulfillment of certain conditions. Thereafter the Official Assignee who was acting as Official Liquidator for respondent No.1 (BEL) placed reference No.269 of 2005 before this Court in J.M. No.15 of 2000 and subsequently the Suit filed by the Respondents was decreed by consent on 26.01.2006 in the following terms:-

As jointly requested and in view of the order passed on Reference No.269/2005, the suit is decreed in the following terms:-

 

(i)            That the outstanding liabilities of M/s. Pangrio Sugar Mills Ltd would be settled at the Forced Sale Value of Rs.215m770,000/- on the basis of the decision taken in the 85the meeting held on October 1, 2004 by the State Bank Committed for Resolution of Disputes Annexure ‘C’.  Bankers Equity’s share in the Forced Sale Vale in Rs.114,099,176/- (against total outstanding liability of Rs.199,336,373/- as on 31.12.2004).

 

(ii)           That the payment by the company would be made as per the Statement of Prorata Distribution which has been verified/signed by all secured creditors Annexure ‘D’ inthe following manner:

 

(a)   10% down payment of settlement amount of Rs.215,770,000/- which comes to Rs.21,577,000/- in which Bankers Equity’s share is Rs.11,409,918/-.

 

(b)   Balance of Rs.194,000,000/- in 12 quarterly installments in three years.  Bankers Equity’s share in 12 quarterly installments is Rs.102, 689,258/-.

(iii)          That the company will be eligible for any write off/waiver under State Bank Circular No.29 after payment of entire settlement amount of Rs.215,770,000/- in which Bankers Equity’s share is Rs.114,099,176/- according to the repayment schedule.

(iv)          In case of any single default in payment of settlement installment, the above arrangements would be cancelled and Bank would be entitled to recover entire outstanding liabilities as per their record/decree issued by the Hon’ble Court.

(v)              That the settlement of liabilities shall be implemented through a consent decree in recovery Suit No.B-68/2000 pending before the Hon’ble High Court of Sindh, Karachi”.

           

3.         It is further stated by the appellant that after passing of the decree, respondent No.1 as well as respondents No.2 to 6 were required to execute agreements as contemplated under the settlement terms and conditions and such condition was adhered to from time to time by all the respondents by executing separate agreements in this regard, except respondent No.1 and due to such delay on the part of respondent No.1, the appellant could not continue with the Re-payments in terms of the settlement agreement, whereafter the Respondent Banks filed Execution Application bearing No.23 of 2008 before this Court for recovery of Rs.1,195,206,588/-.  Subsequently the Respondent No.2 to 6, from time to time, entered into agreements with the appellant to settle their liabilities and filed applications for deletion of their names from the list of Decree Holders in the aforesaid Execution application.  However, since the respondent No.1 did not enter into any such agreement, as such it remained as a Decree Holder in the Execution proceedings. It further reflects from the record that on 20.08.2008 Execution No.23 of 2008 was fixed for hearing and on that date a further week’s time was sought by the Counsel for the appellant for filing objections to the Execution Application which was declined by this Court as it was vehemently opposed by the Counsel for the decree holders as the Execution was in respect of a consent decree. Accordingly the appellant was directed to deposit the decretal amount within one month and thereafter the appellant filed a review application against the order dated 20.08.2008 bearing CMA No.679/2008 which has been dismissed through  the impugned order.

 

4.         Mr. Asim Mansoor Khan learned Counsel appearing on behalf of the appellant contended that the review application was heard on 22.11.2011 by a learned Single Judge of this Court and after conclusion of the hearing the matter was adjourned to 23.11.2011 to assist the Court on a new issue raised on behalf of the Decree Holder. Per learned Counsel, thereafter appellants Counsel had filed written synopsis on 23.11.2011 along with case law on the subject, whereas per learned Counsel no order was announced nor any date was fixed for announcement of judgment. Learned Counsel further contended that no order was passed by the learned Single Judge on that day or thereafter, and it only come to the knowledge of the appellant on 14.01.2012, when the Official Assignee informed the Counsel for the appellant that on the basis of the impugned order dated 22.11.2011, the Mill of the appellant is going to be auctioned. It is further contended by the learned Counsel that thereafter the appellant approached the office and submitted application for issuance of certified copy of the order dated 22.11.2011 which was provided by the office on the same date, hence the time consumed from 22.11.2011 to 14.01.2012 may be condoned and the instant appeal may be treated as being within time as no order was passed

 

on 22.11.2011. Learned Counsel further contended that from the perusal of the diary sheet of the reader of the Court in Execution Application No.23 of 2008, it could be seen that the file was sent by the Reader of the Court on 13.01.2012 with noting as “direction to the Official Assignee to auction the Mill”. Per learned Counsel there is no diary sheet available for the period between 22.11.2011 to 13.01.2012 and on such basis it was contended by the learned Counsel that presumption would be that no order was passed on 22.11.2011 and it was only done on 13.01.2012, on which date the file was sent to the office for further proceedings. Learned Counsel further contended that otherwise, if any order would have been in field before 13.01.2012, the Official Assignee would have acted upon the said order for auctioning the Mill of the appellant, therefore the application filed under Section 5 of the Limitation Act 1908 is liable to be allowed by treating the appeal in time. On merits of the case learned Counsel contended that in so far as the claim of the respondent No.1 is concerned, the same was to the extent of Rs.114,099,176/- out of which 10% amounting to Rs.11,409,918/- has been paid by the appellant, and an amount of Rs.102,689,258/- was payable by the appellant. Learned Counsel further contended that as per the settlement agreement after which the consent decree was passed, the outstanding amount would remain as Rs.102,689,258/- and not the original amount claimed in the Suit filed by the respondent No.1 as in Clause-4 of the settlement agreement on the basis of which the consent decree was passed, the respondent No.1 would only be entitled to recover the outstanding liability as per their record/decree passed by this Court. Per learned Counsel the words used in Clause-4 are very clear and the Executing Court cannot go beyond the decretal amount.  Learned Counsel further contended that the words “as per the said record” means the outstanding amount at the time of default, if any, after payment of the installments as per the Settlement Agreement and under such circumstances the original amount as claimed in the recovery Suit could not be enforced against the appellant. Per learned Counsel even in case of any default for any of the reason whatsoever, after passing of the consent decree the amount as agreed upon between the parties on the basis of the consent decree could not be altered. Learned Counsel further submitted that in view of such position the impugned order is liable to be set aside whereby the auction proceedings have been ordered to be carried out. In support of his contention he relied upon the cases reported in 2009 SCMR 684, (Sheikh Atiq-ur-Rehman Sarwar Vs. Sajjad Hussain), PLD 2009 SC 760 (Tauqeer Ahmad Qureshi Vs. Addl. District Judge, Lahore & Ors), 2007 SCMR 818 SC, (Muhammad Tariq Khan Vs. Kh. Muhammad Jawad Asami & Ors), 1994 SCMR 22 SC (Mst. Naseem Akhtar & Ors Vs. Shalimar General Insurance Co. Ltd. & Ors.), 2009 CLD 922 Lah, (MCB Ltd. Vs. M/s. Hirra Farooq Ltd. & Ors), 2006 CLD 842 Kar (HBL Vs. Karachi Pipe Mills Ltd), 2005 CLD 1539 Lah, (Zarai Taraqiati Bank Ltd., Vs. S. Nusrat Ali Shah & Ors), 2009 CLD 36 Lah, (Zarai Taraqiati Bank Ltd. Vs. Hassan Aftab Fatiana), 2009 CLD 312 Kar (HBL Vs. Tauqeer Ahmed Siddiqui & Ors), 2005 CLD 1676 Lah, (M/s. Green Oil Mills & Ors. Vs. NBP & Anr),  2006 CLD 1393 Lah (NBP Vs. M/s. Overseas Trading Services (Pvt) Ltd. & Ors) and 2006 CLD 804 Lah (HBL Vs. National Engineering Co. (Pvt) Ltd. & Ors.

 

5.         Conversely, Mr. Muhammad Ali Hakro learned Counsel appearing for respondent No.1 contended that the instant appeal is hopelessly time barred, as the order was passed on 22.11.2011 and not on 13.01.2012, therefore, the application under Section 5 of the Limitation Act filed on behalf of the appellant is liable to be dismissed. Per learned Counsel the learned Single Judge after hearing of the application on 22.11.2011, had categorically said that the order would be passed during the course of the day, hence there was no question of adjournment of the matter to 23.11.2011 as alleged by the learned Counsel for the appellant. Learned Counsel also referred to the written synopsis filed on behalf of the appellant in the Execution Application and contended that the same were filed somewhere in September 2011, which is much prior to the date of hearing of the case which per learned Counsel also does not support the appellants case. Learned Counsel further contended that the conduct of the appellant was not appropriate during the proceedings of the Execution Application as the appellant had sought time on several occasions but had failed to file any objections in the Execution Application therefore, the learned Single Judge was left with no other option but to pass the order on 20.8.2008, directing the appellant to deposit the decretal amount as it was a matter of a consent decree. Per learned Counsel the appellant is trying to enlarge the time for payment of the decretal amount by filing frivolous applications and even otherwise in the instant appeal, the appellant is enjoying the benefit of an Ex-parte injunction order and such conduct of the appellant does not warrant any interference by this Court. Learned Counsel further contended that since the learned Single Judge had announced after hearing of the application in open Court, that the order would be passed during the course of the day, therefore the date of passing of the order would be 22.11.2011 and not on which the copy of the order was made available or obtained by the appellant. Per learned Counsel the Counsel for the appellant should have been vigilant by himself and was required to file an application for obtaining the certified copy on the same day i.e. 22.10.2011, irrespective of the fact that whether or not the order was available. Learned Counsel further contended that even otherwise the instant appeal is not maintainable as the appellant was required to obtain permission under section 316 of the Companies Ordinance 1984 prior to the filing of the instant appeal as the respondent No.1 is in liquidation, hence the instant appeal has been incompetently filed. On merits of the case learned Counsel contended that the impugned order is correct in law as on the failure of the appellant to make payments as agreed upon in the Suit and the consent decree, the liability to pay would be determined on the basis of record of the Respondent No.1 and not in terms of the consent decree as admittedly the appellant had defaulted to comply with the conditions of the consent decree.

 

6.         We have heard both the learned Counsel and pursued the record with their assistance. On 04.09.2013 the Counsel for both the parties had agreed for the final disposal of instant appeal at Katcha Peshi stage.

 

7.         Since the Counsel for the Respondent No.1 has raised a preliminary objection with regard to delay in filing of the instant Appeal, we at the very first instance would like to address the question of limitation and the delay, if any, in the filing of the instant appeal. From perusal of the record it reflects that review application bearing CMA No 679 of 2008 was fixed for hearing on 22.11.2011 at 08.30 AM before a learned Single Judge of this Court. According to the learned Counsel for the appellant, after hearing of the application, the parties were directed to file their written arguments/case law, if they so desire, and matter was adjourned to 23.11.2011, whereas according to the learned Counsel for the respondent the learned Single Judge had announced in open Court that order will be passed during the course of the day. The record of the Execution proceedings as well as the order sheet does not reflect that after hearing of the matter on 22.11.2011 the matter was adjourned to 23.11.2011, as vehemently argued by the learned Counsel for the appellant. In such an eventuality we would be justified to hold that the matter was not reserved for announcement of judgment at any other date nor was any other date fixed for the release of the order or judgment as the date of passing or announcement of the order was made in open Court, and for all legal and practical purposes the date of the order would be 22.11.2011. The order would be deemed to have been passed during the course of the day insofar as limitation for filing of the appeal, if any, is concerned. We have also taken note of the fact that even the written synopsis filed by the learned Counsel for the appellant does not reflect the date i.e.23.11.2011 as suggested by the learned Counsel for the appellant, on the contrary it shows that the same were filed somewhere in September 2011. In our view this also does not support the argument of the appellant that the matter was adjourned to 23.11.2011 for any further hearing or arguments. Moreover the appellant was not required to be intimated any further regarding the date of passing or announcement of the order or judgment as it was within the knowledge of the learned Counsel for the appellant that the judgment had not been reserved and it was incumbent upon the appellant to file an application for issuance of certified copy at the earliest, as an abundant precaution, to avoid issue of any limitation. Further, the record before us does not support any other conclusion except that the order was passed during the course of the day after completion of hearing on 22.11.2011. Mere sending of files by the reader of the Court at a later date would not suggest that no order was passed on 22.11.2011. The argument of the leaned Counsel for the appellant that as the fate of its application was not known, that as to whether the same was allowed or dismissed, the application for obtaining certified copy could not be made, with respect, is misconceived and not tenable under the law. The limitation period starts from the date of the announcement of the order, whether the copy of the order is ready or not and further, it is not dependent on the fate of the order that as to whether the same is in favor of the applicant or not. The period consumed in preparation of the certified copy could only be condoned in favor of a party, provided the application for issuance of certified copy is made in time. In the instant matter, it is not relevant that whether the order was ready on 22.11.2011 or thereafter on 13.01.2012, as alleged by the learned Counsel for the appellant, when the file was sent by the reader of the Court to the office, however, what is relevant is, that the appellant chose not to file any application for issuance of certified copy and such fact is not denied, rather admitted by the learned Counsel for the appellant. It has been further admitted and stated that for the first time it came to the knowledge of the appellant on 14.01.2012 when the Official Assignee informed the learned Counsel for the appellant regarding the auction of the Mill being conducted by him on the basis of the order passed by this Court on 22.11.2011. This coming into knowledge of the order is not relevant or crucial for the purposes of limitation and its condonation, as limitation is to be taken or counted from the date of the order i.e. 22.11.2011, and not from the knowledge of the order, as after this date the Counsel for the appellant did not made any appreciable efforts to obtain the copy of the order.  The counsel for the appellant was aware that the order will be passed during the course of the day; therefore, the argument that no order was passed during the course of the day and was in fact passed thereafter is not relevant in the instant matter.

 

8.         The instant appeal arises out of an order passed by a Banking Judge of this Court and the limitation for filing an appeal Under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance 2001, is thirty days from the date of the order and in the instant matter the date of order would be 22.11.2011 and the period of thirty days expired on 22.12.2011, whereas the instant appeal has been filed on 20.01.2012, which is hopelessly barred by time and for which no plausible  reason has been put forth except that it only came to the knowledge of the learned Counsel for the appellant through the Official Assignee on 14.01.2012 that some order has been passed  by the Court. Though the question that whether the provision of section 5 of the Limitation Act 1908 is applicable in respect of cases under the Financial Institutions (Recovery of Finances) Ordinance 2001 or not in view of the provisions of section 29(2) of the Limitation Act 1908, has not been raised or argued by the learned Counsel for the respondent, however, as a matter of indulgence and to meet the ends of substantial justice, even otherwise, it must be kept in mind that the powers vested in the Court to condone the period of limitation in terms of Section 5 of the Limitation Act, 1908 are discretionary in nature and for exercise of such discretion in favor of any party, the Court must be satisfied that the delay in filing of appeal was beyond the control of such party and was not contumacious, whereas in the instant case, we are not convinced that the appellant has made out any prima facie case to exercise any such discretion in its favor to condone the delay in filing of instant appeal. Needless to state that once the time begins to run, it does not stop and delay of each and every day has to be explained, which the appellant in the instant matter has failed to explain, as such the appeal is to abate as a whole. It is not the case that whether or not the appellant had shown due diligence and good faith through its conduct so as to seek any condonation of such delay in filing the instant appeal, rather it is a case wherein the appellant was required to show “sufficient cause” whereby discretion could be exercised by this Court in condoning such delay. In the instant matter the appellant has not been able to show any sufficient cause, whereby this Court could be convinced to condone the delay in filing of the instant appeal.

 

9.       In view of hereinabove facts and circumstances of the case the application filed under section 5 of the Limitation Act 1908 bearing CMA No. 89/2012 is hereby dismissed, consequently the instant appeal along with all pending applications is also dismissed as barred by time.

 

Dated: 04.09.2014                                                                           J U D G E

 

                                                            J U D G E