2005 PLP 1845 (CLD)
IMTIAZ BEGUM and 5 others — Appellants Versus FIRST ELITE CAPITAL MODARBA and another — Respondents
| Citation | 2005 PLP 1845 (CLD) |
| Forum / Court | Lahore |
| Bench Members | N/A |
| Parties | IMTIAZ BEGUM and 5 others — Appellants Versus FIRST ELITE CAPITAL MODARBA and another — Respondents |
| Primary Law | Modaraba Companies and Modarabas (Flotation and Control) Ordinance (XXXI of 1980) |
Q1: What are the key laws and sections cited in 2005 PLP 1845 (CLD)?
This judgment primarily cites: Modaraba Companies and Modarabas (Flotation and Control) Ordinance (XXXI of 1980) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2005 PLP 1845 (CLD)?
The case was heard and decided by the Lahore bench comprising: N/A.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2005 PLP 1845 (CLD) (IMTIAZ BEGUM and 5 others — Appellants Versus FIRST ELITE CAPITAL MODARBA and another — Respondents). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Muhammad Riaz Malik for Respondents.
Headnotes / Summary
S.30
Director of Company was also arrayed as defendant not as mortgagor or guarantor, but as real beneficiary
Plea of Director not to be liable for facility provided to Company
Defendant-Company was a legal. entity and juristic person, to whom facility was granted
Liability of Director could, in no way, be created in such transaction
Suit against Director was dismissed in circumstances.
Judgment & Decree
MIAN SAQIB NISAR, J.
Through an agreement, respondent No.1 awarded a modarba finance facility to respondent No.2/Ravi Enterprises (Pvt.) Ltd. Subsequently, for non-discharge of liability by the borrower, the said respondent brought a suit for recovery of Rs.6,076,103 under the Provisions of Modaraba Companies and Modarabas (Floatation and Control) Ordinance, 1980 before the Chairman Modaraba Tribunal, Punjab, Lahore, in which, the present appellants have been arrayed as defendants, but not as the guarantors nor the mortgagors of the said loan, rather, as the real beneficiaries. The appellants, inter alia, applied for the grant of leave to appear and defend the suit on the ground that they are not liable, which application has been rejected through the impugned judgment. Hence this appeal.
2. Learned counsel for the appellants contends that respondent No.2 is a Private Limited Company and is a juristic person and a legal entity. Resultantly, for any liability incurred by the Company, the appellants as the Directors of the Company are not liable to discharge the same. It is further submitted that in the Banking Tribunal Ordinance, 1984 and the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, though the liability of a real beneficiary, has been created by virtue of the relevant definition of the term `Customer/borrower' but this is conspicuously missing in the Modaraba Companies and Modarabas (Floatation and Control) Ordinance, 1980, therefore, being the Director of the Company, the appellants cannot be held responsible for the facility provided to the Company.
3. Confronted with the above, learned counsel for the respondent No.1 by relying upon Ladli Prasad Jaiswal v. The Karnal Distillery Co. PLD 1965 SC 221 argued that, in fact, Ravi Enterprises is a Private Limited Company and, therefore, by lifting the veil, it is clear that the appellants, are the real beneficiary of a Company, thus are liable, on this account.
4. We have heard the learned counsel for the parties and find no force in the plea, raised by the learned counsel for the respondents. Ravi Enterprises is a legal entity and is a juristic person to whom the facility was granted. On the principle of Ladli Prasad Case, which is applicable in the matter relating to liquidation of such Company, the liability of the appellants being the Director of the Company can in no way be created. Resultantly, this appeal is accepted; impugned judgment of learned trial Court is set aside and suit of the respondent against the appellants is dismissed. No order as to costs. S.A.K. /I-46/L Appeal accepted.