1998 PLP 1091 (CLC)

AMIR‑UL‑MULK MENGAL, C.J.‑‑‑This Constitutional petition arises out of the following facts:

1. The petitioner is a private limited company registered with Registrar of Firms, Quetta. It runs Trade business under the name and style or Mehran Industries (Pvt.) Limited, Quetta. The firm has installed a Ghee Mills at Quetta Industrial and Trading Estate at Eastern Bye Pass, Quetta. Petitioner firm applied for a loan for installation of Mills from PICK. Initially its capacity of production was 60 tons a day. According to the petitioner firm it invested rupees 30 millions from its personal resources. However, for remaining investment N.D.F.C. was approached for providing working capital. The N.D.F.C. agreed to advance Rs.12 million as working capital and subsequently another amount of Rs.6 million was demanded in order to keep pace with marked demand. This amount of Rs.6 million was also accorded by N.D.F.C.

2. According to petitioner it has been regularly paying the quarterly mark up. The last payment was made on 30‑9‑1996 whereas the next payment was due on 31‑12‑1996. The petitioner firm also used to pay Muqadam charges and advance deduction of Central Excise Duty. It has paid an amount of Rs.90 lacs to N.D.F.C. According to agreement, dated 22‑10‑1995 the period of one year was renewable for another year.

3. The case of the petitioner is that despite regular payment of mark‑up and making payment of a reasonable amount of 88.90,00,000 the respondent unnecessarily started harassment of petitioner firm. In this regard several notices were issued and the last notice was issued on 5‑11‑1996. In compliance with the notices the petitioner honestly tried its best to coop with the situation. The case of the petitioner is that the respondent approached Deputy Commissioner, Quetta without any rhyme and reason for sealing the mill. The Deputy Commissioner deputed Assistant Commissioner who sealed the godowns, took into possession the entire stock and posted levies as a result whereof the factory has been closed and its production stopped. This action was high‑lighted in the press as a result of which the purchasers/agents have stopped payment, thus, an amount of Rs.60,00,000 (six millions) advanced as credit in the market was freezed. The stock of oil, tins, plastics worth Rs.2,26,50,947 was lying in the stores and on account of sealing the factory entire stock would be wasted.

4. It is this action of the respondent that led the petitioner to file this petition having no other expeditious remedy.

5. We have heard Mr. Tahir Muhammad Khan, learned counsel for petitioner and Mr. Basharatullah, Advocate for respondents Nos. l and 2.

6. Mr. Tahir Muhammad Khan, learned counsel for petitioner raised the following contentions: (i) There was no pledge in favour of N.D.F.C. within the meaning of section 166 of Contract Act, as such respondents had no authority to take possession of the entire factory alongwith the goods. (2) Even if there was pledge the same was not complete as the possession of the so‑called goods was not handed over to the pledgee and in absence of transfer no pledge was created. (3) In view of section 166 of the Contract Act, a reasonable action was required i.e., reasonable time should have been given to the petitioner before taking of the factory. The closing of the factory was harsh and unwarranted. (4) The pledge‑agreement is without consideration. (5) The pledge agreement lacks mutuality. (6) The conduct of respondent No. l is based on personal bias and mala fides. Application for renewal of the payment schedule was never placed before the Board of Directors of the Corporation and without sanction of the Board action could not have been initiated by respondent No. 1. (7) Respondent No. l through a fax message asked Deputy Commissioner who was his personal friend to take oppressive measures and on the said message Deputy Commissioner took possession of the entire building illegally and without any lawful authority causing collapse of the entire unit.

7. Mr. Basharatullah, Advocate for respondents Nos. l and 2 while opposing the petition stated that the questions raised by the petitioner regarding enforcement of contractual obligations or performance of contract cannot be urged in the Constitutional jurisdiction as alternate remedy is available to the petitioner, and also defended the action of the Deputy Commissioner. Learned counsel further stated that since the goods were pledged with the bank, the bank had right to dispose of the same to recover the loan amount; as such the action of the Deputy Commissioner in taking over the premises was justified.

8. We have given our anxious thought to the arguments of the learned counsel for the parties and have also perused the record. As far as the contentions from serial No. l to serial N01.15 raised by learned counsel for petitioner are concerned, the same are in respect of contractual obligations, and cannot be subject‑matter of examination in Constitutional jurisdiction of High Court. The matters regarding enforcement of contractual obligations involve factual enquiries and require evidence; therefore, alternate remedy is provided for the same.

9. In our considered view all the questions agitated before us by the counsel for the parties require detailed examination and recording of evidence which is perhaps not the domain in exercise of Constitutional jurisdiction. The points raised could be duly settled by a Court of competent civil jurisdiction. As such we refrain from adjudicating upon such questions because we feel that it is outside the Constitutional jurisdiction of the High Court under Article 199 of the Constitution of Islamic Republic of Pakistan. Besides these are contractual obligations involving factual controversy and the best forum according to our calculated view is Court of original civil jurisdiction.

10. However, what is important to us is the manner in which the respondent bank and the Deputy Commissioner took action. In fact the petitioner is aggrieved of the action and the manner in which the same has been taken. As mentioned hereinabove the respondent bank instead of placing the case of recovery of loan before the Board of Directors of the bank or taking action in a competent Court of law perhaps resorted to a short‑cut method by approaching the Deputy Commissioner to take its force and to occupy the factory premises on the pretext not to allow removal of pledged goods. It is not controverted that the Deputy Commissioner passed such orders directing the Assistant Commissioner to take levies force and to occupy the premises of the factory by sealing the same. There is also no controversy that in consequence of the said order the factory of petitioner which was in running condition by producing ghee/oil was raided by levies and the entire factory was sealed. We feel that such action has been taken in connivance with the Deputy Commissioner on a fax massage by the respondent bank without prior approval of the Board of Directors or taking action before a competent Court of civil jurisdiction. In other words it is very difficult for us to endorse such action of the Deputy Commissioner which has been initiated at the instance of the Manager of Quetta Branch through a letter addressed to Deputy Commissioner as under:‑‑‑ "Mr. Fawad Hassan Fawad, Deputy Commissioner, Quetta. FAX MESSAGE. SUB LEGAL ACTION AGAINST M/S. MEHRAN INDUSTRIES (PVT.) LTD. QUETTA. Sir Please refer to my telephonic request today towards the matter cited as subject. The Working Capital Finance Facility extended to aforementioned company was matured for repayment on 18‑1‑1996. Sufficient time was allowed to the sponsors to repay the outstanding dues. Consequent upon the failure of the sponsors to repay the outstanding dues, we have no option left but to start Recovery proceedings starting from the sale of Goods/Stock under our pledge at Factory Site. Since we foresee the sponsors efforts to carry away the Goods/Stock under our pledge from the Factory Site, we request you to kindly provide us legal protection to seal the factory site. We also request you to kindly arrange for armed security on 24 hours basis at Factory Site till the sale of Goods/Stock under our pledge. Furthermore, it is hereby confirmed that expenses/charges in connection with security arrangement shall be borne by the Corporation. Yours sincerely Imran Ahmed Hijazi Manager Quetta Branch Camp Office, Karachi". Thus, the only question for determination before us was whether the action taken by the Deputy Commissioner on the fax message of the respondent bank was justified or warranted by law or it was in excess of lawful authority. 11, Perusal of agreement does not disclose any clause providing for sealing the entire factory in default of payment of installments by the petitioner. It has come on record to prima facie establish that not only the pledge goods but many other items which had no nexus in the transaction have also been sealed by the Assistant Commissioner and levies authorities. Furthermore, we can safely observe that although notices have been issued to petitioner firm for repayment of entire debt amount and he has also made serious efforts to repay the loan amount in installments but still any lapse and defect on his part would not vest the Deputy Commissioner with authority of sealing the entire factory. Of course, respondent bank had all the legal authority to realize the loan by taking into possession the pledge goods but all such actions have to be done in accordance with law by a prescribed procedure and not by adopting sheer force at the hands of Deputy Commissioner.

12. Mr. Basharatullah, however, took exception to this argument contending that if at all the action of the Deputy Commissioner was illegal and in excess of lawful authority, the same has already been undone by the Deputy Commissioner and the force of levies deployed by him has already been removed. So much so the order passed by the Deputy Commissioner has also been withdrawn. In such circumstances, it was argued that no action can be taken in exercise of Constitutional jurisdiction for an act which has already been nullified by the Deputy Commissioner. He proposed that if the petitioner has any grievance, the only remedy left for him would be a suit for damages.

13. Prima facie this argument was impressive but on thorough scrutiny we feel that by this action of Deputy Commissioner the petitioner factory has been sealed and possession taken by the Deputy Commissioner still continues. The petitioners have been ousted from their own factory by such action. The only remedy for the petitioner firm was that the possession be restored to him with direction to respondent bank to initiate proceedings for recovery of loan in a Court of competent civil jurisdiction. It is now well‑settled that if as a result of an illegal action some results or consequences have arisen the same must be removed and the original position restored, if the High Court comes to the conclusion that the action was unwarranted and taken in excess of lawful authority. As such we are not persuaded with the contention raised by Mr. Basharatullah that Deputy Commissioner has already recalled his orders, therefore, his illegal actions are fortified and cannot be interfered with in exercise of Constitutional jurisdiction. Of course, the suit of damages for the loss done to the petitioner is competent but the main question before us is restoration of possession which has been taken by the Deputy Commissioner by use of sheer force. As such we are inclined to hold that cause of petitioner still subsists and requires consideration by this Court.

14. We have already mentioned in preceding paras. that there was no clause at all in agreement that for pledge goods the Deputy Commissioner shall take action by using his force. In fact the Deputy Commissioner does not figure any where and it appears that he has taken action on the instructions of local authorities of bank with mala fide intention to occupy the premises which was otherwise actively functioning and was in process of production successfully and after the said action has now come to a standstill. This shows mala fides on the part of the local authorities of the bank and the Deputy Commissioner. We have no alternative but to declare such action as having been taken without lawful authority and thus, the same has no legal effect. All the consequential actions are, thus, void. Resultantly a declaration is issued that the factory be handed over the petitioner without any further delay. However, this will not debar the respondent bank for their genuine claim of recovery of loan in accordance with law. Nevertheless, such recovery could be made in accordance with law and not by resorting to brute force on the part of executive authority. Resultantly we allow this petition with specific observations that the factory shall be handed over to the petitioner forthwith and any civil liabilities between the parties shall be determined by competent Court of civil jurisdiction in accordance with law. We also award costs to the petitioner throughout. A.A./674/Q Petition accepted.