1990 PLP 524 (SCMR)

NAIMUDDIN, J.‑‑This is an application under Order 33 Rule 6 of the Rules of this Court seeking clarification of the order dated 4‑3‑1989 and/or direction for the implementation thereof.

2. The relevant facts briefly st‑ited, are that on an application (C.M.P.No.49‑R of 1989) under Order 2:0 Rule 1 of the Rules of this Court praying for suspending the operation of tae impugned judgment passed by the Lahore High Court in R.FA. No.54 of 1987, this Court passed the following order:‑ "Limitation is condoned subject to all just exceptions. Let the applicants deposit the amount awarded in Court. If the deposit is so made execution shall be stayed. The amount deposited in Court may be taken by the land‑owner, on furnishing security to the satisfaction of executing Court to the extent of one‑half the amount withdrawn, and for the rest bank guarantee. If the amount is not withdrawn in this manner within three months from :he deposit of it, or the balance remains, it should be invested in Khas Deposit Certificates for the benefit of succeeding party."

3. Pursuant to the above order, the applicants/appellants deposited a sum of Rs.1,50,79,790.23 (Rupees one crore fifty lacs seventy‑nine thousand seven hundred ninety and Paisa twenty‑three) in the Treasury. The respondent (applicant herein) thereafter applied to the Senior Civil Judge, Sheikhupura for the withdrawal of the above amount whereupon the following order was passed on 9‑4‑1989:‑ "....The decree holder/respondent, who is the sole land owner of the property acqui:ed, according to the record produced before me, therefore, he is directed to furnish Bank Guarantee from any Scheduled Bank of Pakistan, to the tune of Rs.75,39,895.12 (Seventy‑five lacs thirty nine thousand eight hundred ninety‑five and twelve paisa), for the rest of the amount, the land‑owner would furnish a personal bond by depositing his documents of ownership as collateral for the said amount with one surety. The land‑owner Muhammad Akhtar Iqbal has stated today that he is unable to produce the title deeds of his property. So, in the alternative, he is directed to furnish a Bank Guarantee for this amount as well." Subsequently, however, on an application under section 151, C.P.C. filed by the respondent, the learned Senior Civil Judge, Sheikhupura, modified his earlier order on 22‑4‑1989 as follows:‑ "After having considered the order of Honourable Supreme Court, dated 4‑3‑1989, 1 respectfully feel that the order with respect to furnishing the Bank Guarantee in the alternative to the security would perhaps not be according. to the orders of Honourable Supreme Court. I am fully conscious that this Court is not competent at all, to vary or amend any of the terms fixed by the Honourable Supreme Court, so, I review my order to this extent and require the petitioner to furnish the security as ordered before to the extent of half of amount deposited." 5.Accordingly the respondent submitted bank guarantee No.791/10‑1309 dated 2‑5‑1989 for Rs.75,39,895.12, issued by Deutsche Bank, Mall View Plaza, Roberts Road, Bank Square, Lahore and a surety bond purported to have been executed by one Haji Muhammad Rafique son of Haji Sher Muhammad, resident of 130‑A/1, Township, Lahore, as surety for the half amount. But the learned Senior Civil Judge, by order dated 18‑5‑1989, observed that both the instruments were not in accordance with his order dated 9‑4‑1989 and with reference to the two instruments he observed as follows:‑ .I required the petitioner to furnish a personal bond with one surety. Moreover, he should furnish Bank Guarantee from Scheduled Bank of Pakistan. The reasons for my asking the Bank guarantee of the Scheduled Bank of Pakistan, have been assigned in my order dated 29‑4‑1989. The petitioner has not produced his personal bond and the surety bond produced by him also shows, according to the petitioner's own calculation made, that the sure' owns the property only to the tune of Rs.52,75,

000. This amount is mt.ch less than the amount to be disbursed the petitioner on his filing security. The Bank guarantee produced by the petitioner, as I have mentioned earlier, is not of a Scheduled Bank of Pakistan. Apart from that, it has been declared valid only upta 3‑10‑1989. Thus, is not in 'accordance with orders of the Supreme Court. With these observations. I find that the petitioner has not been able to file satisfactory Bank Guarantee as well as the security. Both are, therefore, not accepted."

6. From the perusal of the above order it will be seen that the bank guarantee has been rejected on two grounds; namely, (i) that the guarantee is not by a scheduled bank, and (ii) that the guarantee is valid upto 3‑10‑1989.

7. The order of this Court dated 4‑3‑1989 shows that it did not anywhere mention that the guarantee should be by a scheduled bank. The object of taking guarantee, however, was that in case of success of the appeal fully or partly, the appellants should be able to get back their money‑ wholly or partly in accordance with the order which may be passed by this Court. It is, therefore, the duty of the Court to see that the bank by which the guarantee is being furnished, has resources to meet the liability thereunder if called upon to do so by the Court and this could be done by examining its paid‑up capital, reserved funds and assets and liabilities as reflected by its last year's or current year's interim balance sheet or the latest balance sheet, if any.

8. The other objection was that the guarantee was valid upto 3‑10‑1989. It is, however, pointed out by the learned counsel for the petitioner that a perusal of the guarantee would show that it, no doubt, provides validity upto 3‑10‑1989 or till the decision of this Court, whichever is earlier but it further provides "that the validity of this guarantee can be extended for a further period of six months or till the decision of the Supreme Court of Pakistan". However, in our view also the above terms of the guarantee do not meet the objection raised by the learned Senior Civil Judge and the object for which it was to be provided namely, the re payment of the money withdrawn from the Court by the respondent in case of success of the appeal. Therefore, it was necessary to provide a guarantee for the period the appeal remains pending in this Court.

9. We would, therefore, by way of clarification, direct as follows:‑ The guarantee of Deutsche Bank will be accepted if it is proved that the Bank will be able to meet its liability under the guarantee by taking into consideration its paid‑up capital, reserved funds or liabilities or, in other words, its assets and liabilities for which the examination of latest annual balance‑sheet will be necessary. It will also be necessary for the Senior Civil Judge to be satisfied that the guarantee is duly and validly executed on behalf of the Bank in accordance with its Memorandum and the Articles of Association.

10. We may also add that no grievance was made before us as regards the rejection of the security for half of the amount as it has to be sufficient and free from any encumbrances and satisfy the Court objectively. In this regard we may also observe that the security should be such as is easily disposable and the amount secured under it conveniently realizable. M‑A.K/L‑36/S Order accordingly.