1992 PLP 2490 (CLC)

SALEEM AKHTAR, J.‑‑‑In a suit filed by Ghulam Muhammad respondent No.2 order dated 1‑4‑1990 was passed whereby the Official Assignee was appointed as Commissioner. He was directed to hand over two equal portions of the shop after getting it partitioned to Ghulam Rasool and Ghulam Muhammad, the appellant, for purpose of business upon furnishing security by each of them in the sum of Rs.5.00.000. In pursuance of this order respondent No.2 furnished a bank guarantee which the appellant challenged on the ground that the attorney of the bank had no specific power to furnish bank guarantee on behalf of the bank. The Na7sr made a reference to the learned Single Judge who by his order dated 31‑5‑1989 held that the power of attorney properly authorises the officer to execute the bank guarantee. This order has been challenged by the appellant. The learned counsel for the appellant has repeated the same contention which was raised before the learned Single Judge. In this regard reference has been made to the power of attorney produced by the Bank Officer, in which, according to the learned counsel for the appellant, no specific power to furnish bank guarantee has been given. It is true that the word guarantee does not find place anywhere in the power of attorney. However respondent No.2 had pointed out paragraphs 1, 2, 11, 17 and 19 to show that the authority to furnish guarantee has been vested by virtue of this power of attorney. Para. 11 reads as follows:‑‑ "The said attorney by virtue of these presents, shall have the power to sign, make, execute and do on behalf and in the name of the Bank in favour of or with, any individual or firm or authority or officer or Government or Corporation or association or persons all cheques, contracts, agreements, engagements, commitments, bonds, deeds, transfers; assignments and other things whatsoever, and he shall also have the power to renew, vary and discharge all such contracts and agreements and do all things requisite for obtaining a renewal, variation and discharge thereof." A perusal of this para. will show that the officer has been vested inter alia to sign and execute agreement, engagements, commitments, bonds, deeds, transfers, assignments and other things whatsoever and has the power to renew, vary and discharge all such contracts and agreements. Contract of guarantee is a contract. As defined by section 126 of the Contract Act it means a contract to perform the promise or discharge the liability of a third person in case of his default. The word guarantee is a technical term which in essence is contract made on behalf of a person to compensate the third party for the default of the principal debtor. Considering the various clauses in the power of attorney. and the nature and meaning of the word guarantee as understood in law, we are of the view that the provisions in the power of attorney specifically provide for furnishing a bank guarantee. The learned counsel has referred to PLD 1989 Kar. 123 and contended that there should be specific power to the Bank Officer for acts intended to be done and conferred upon him. The absence of the words "bank guarantee" does not change the situation because in law execution of a contract, bond, deed or undertaking to discharge the burden of a third party on his default will amount to furnishing guarantee. The ( A appeal is dismissed in limine. A.A./G‑306/K???????????????????????????????????????????????????????????????????????????????????? Appeal dismissed .