P L D 1985 Karachi 1 (PLP)

ABDUL HAYEE KURESHI, C. J. The present petition has been filed by Muhammad Farooq Textile Mills Limited impleading Special Court of Sind (Banking) and Pakistan Industrial Credit and Investment Corporation Limited and the Federation of Pakistan as the respondents. For the purposes of convenience we will refer to the petitioner as "borrower", the Special Court as- "Court", Pakistan Industrial Credit and Investment Corporation as the "creditor" and the Federation of Pakistan as "alleged guarantor", The brief facts are that the "borrower" obtained a loan in foreign currency from the "Creditor". A loan agreement was drawn up on 21-4-1969. The terms of repayment as well as payment of interest etc. are detailed in paragraphs 5 and 6 of Article I of the loan agreement. The main controversy raised by the borrower is based on the terms of paragraph 5(b) in Article I of the loan agreement and the said paragraph reads as follows : "The Borrower shall, in addition to interest, pay to the Government of Pakistan through PICIC a commission at the rate of half per cent (# %) per annum to cover the exchange risk. This commission shall be payable in the same manner as interest provided in 5(a) above. It seems a suit was filed by the "Creditor" against the "Borrower" in the Special Court constituted under the Banking Companies (Recovery of Loans, Ordinance, 1979. This Court was then presided over by a District Judge and the suit was registered as Suit No. 141 of 1979. An application was made in the suit praying that the "alleged guarantor" may be joined as a party in the suit. It seems. an argument had been raised, as has been raised even before us, that by the terms of paragraph 5(b) of Article I of the loan agreement (reproduced above) the Government had guaranteed that no extra burden of any fluctuations in the exchange rate will fall on the "borrower" and that the Government had agreed to indemnify the "borrower" against any extra burden resulting from fluctuations in the rate of foreign exchange. On such premises the prayer before the Special Court was that the alleged guarautor may be joined as a party in the suit. The Judge of the Special Court rejected that prayer on the ground that under clause (b) of section 2 of the Ordinance "borrower" means a person who has obtained a loan from the banking company and includes a surety or indemnifier. The learned Judge also referred to the provisions of section 6(1) (a) to repel the argument on the ground that the Special Court shall have jurisdiction only in respect of the claim filed by a banking company against the "borrower" or by a "borrower" against the banking company. The Court took the view that the Government of Pakistan was neither a banking company nor a "borrower" and therefore the dispute between the parties could not be adjudicated in that suit. However, in the same order the Special Judge stated that if the "borrower" had suffered any loss due to any act of the Government of Pakistan he could seek relief against the Government in a competent Court of law. This order was passed on 4-4-1981 and it is being challenged before us. The relief that the petitioner seeks in this petition is to the following effect (i) to declare that the impugned order of Respondent No. 1, dated 4-4-1981 in Suit No. 141/79 (now Suit No. 674/83) in this Hon'ble Court is without lawful authority and reverse the same ; (ii) direct that the Respondent No. 3, be added as defendant in the Suit No. 674/83 pending in this Hon'ble Court." At this stage we would like to record the statement which Mr. Khalid M. Ishaque made before us. We asked him the meaning of the words "exchange risk" as appearing in patagraph 5(b) of Article I of the loan agreement and the learned Advocate stated that these words meant any risk following the fluctuations in the foreign exchange value. It would appear that Mr. Khalid M. Ishaque means to state that by payment of 1/4th per cent to the "alleged guarantor" all fluctuations in foreign exchange and the burden flowing therefrom bas to be satisfied by the Government of Pakistan. Much as we would like to refrain we are compelled to state 7 that this interpretation completely loses sight of Article 3 of the President's Order No. 3 of 1982 viz. Foreign Currency Loans (Rate of Exchange) Order, 1982. Article 3 reads as follows : "Rate of exchange applicable to foreign currency loans.-For the removal of doubts, it is hereby declared that, notwithstanding anything contained in any other law for the time being in force, the judgment, of any Court or any agreement, contract or other instrument, the rate of exchange, for the purpose of conversion into Pakistan currency for repayment in respect of an outstanding foreign currency loan or any part thereof or interest in respect is thereof payable to a financial institution on the day of commencement of this Order shall be, and shall be deemed at all material times to have been, the rate of exchange in force under section 23 of the State Bank of Pakistan Act, 1956 (XXXIII of 1956), on the day on which the loan. part or interest is actually repaid or paid to the financial institution ; and all parties by whom the loan, part or interest is repayable or payable shall make the repayment or payment accordingly." style='margin-right:-9.0pt;text-align:justify'>We would point out that even if the argument of Mr. Kbalid M. Ishaque is assimilated on his own interpretation still the agreement in which clause 5(b) appears will have to be overlooked for the purposes of repayment of loan for Article (3) also excludes the effect of any agreement, contract or instrument between the parties. In other words even if an agreement provided for the Government of Pakistan indemnifying the "borrower" the effect of President's Order is to deprive the "borrower" of that protection. We would not like to go deeper into the question for the suits are pending trial. The present position however is that the petitioner has also filed a suit bearing No. 747/79 both against the creditor as well as "alleged guarantor". He has claimed reliefs mainly based on the clause that has been pressed by Mr. Khalid M. Ishaque before us. He also states that in fact all the amounts payable by the borrower to the creditor have been paid and therefore there is no liability. This suit is pending on the Original Side of this Court. The suit filed by the "creditor" against the "borrower" before the Special Court of Banking has by reason of an amendment been transferred for trial on the original side of this Court. Both these suits are now fixed (as stated by Mr. Aziz Munshi) on 30-9-1984. Mr. Aziz Munshi has stated that the averment based on clause 5(b) of the loan agreement has also to be tried as an issue before the Judge on the original side who is trying these suits, and the controversy that has been raised by Mr. Khalid M. Ishaque is to be decided in Suit No. 747/79. Mr. Khalid M. Ishaque states that even in the suit filed by the "creditor" against the "borrower" protection of clause 5(b) has been claimed in the written statement that has been filed. This would clearly show that what is being urged by Mr. Khalid M. Ishaque before us is awaiting adjudication by the( learned Single Judge sitting on the original side of this Court. We are, therefore of the view that this petition is for such reason immature ands what is more that adequate alternate relief is available. Suffice to say that no decree has yet been passed so that the petitioner is not exposed to any forfeiture or perils of execution. We may also state that as against the decrees that may be passed in any one of these two suits an appeal can be filed before this High Court either under the Law Reforms Ordinance) or under section 12 of the Banking Companies Ordinance. There could be no better case of alternate relief being available. There is a further reason which persuades us not to entertain this petition. The suit was filed in 1979 and application for refusing to join the Government of Pakistan as a party was rejected in 1981. The present petition has been filed in 1984 viz. after 3 years. Such delay is sought to be accounted on the ground that a revision application had been filed by the present petitioner. Such revision application was patently barred and the Supreme Court in their judgment reported in P L D 1981 S C 351, have so decided. This petition therefore appears to be suffering from laches also. This petition is dismissed in limine. M. Z. M. Petition dismissed.