2001 CLC917 (PLP)

Dr. A: Basit for Petitioner. Siraj‑ul‑Islam for Respondent. Muhammad Jehangir Wahla, A.A.‑G. (on Court's call). In order to contest elections to the seat of Nazim in Union Council 65. (Gujranwala City) the petitioner and his co‑candidate filed nomination papers. These papers came up for scrutiny by the learned Returning Officer and as none objected and papers were found to be in order, they were accepted. The said Rana Sarfraz then filed an appeal which was entertained by respondent learned District Returning Officer. During the hearing of the said appeal, however, he received information that the petitioner owes some money to the Allied Bank of Pakistan Ltd. (A.B.L.). Although it was observed that appeal filed by Rana Sarfraz is not competent, learned District Returning Officer took the cognizance of the said information and impugned order narrates that he had given a chance to the petitioner to clear the loan. According to the learned D.R.O. the loan was not cleared and he proceeded to reject the papers.

2. This case came up before me yesterday when in order to understand the nature of the default, I summoned the Manager of the said Bank. The Manager is present with records and I have examined the same. I find that two Private Limited Companies had been provided financial assistance in terms of working capital to the tune of Rs.30 millions and despite the fact that facility has lapsed, the payment has not been made. It also appears from the documents produced by the said Manager that some correspondence had been going on between the said companies and the Bank regarding the adjustment of the said amount, however, all present report so far an adjustment has not been reached. The Manayger also informs me that a notice of demand had been issued to the said borrowers and the Competent Authority of the Bank has authorised institution of a suit for recovery. According to the said Manager Rana Faisal Rauf is Director holding share in both the companies.

3. Learned counsel for the petitioner contends that the proceedings wherein the nomination papers have been rejected were not competent rather were coram non judice. Further contends, that A.B.L. is not a financial institution with the meaning of section 140) of the Punjab Local Government Elections Ordinance,‑ 2000; A.B.L. stands excluded from the definition of financial institution as defined in section ' 2(15)(a) of the Companies Ordinance, 1984 and that there is no adjudication that the petitioner is defaulter within the meaning of said Ordinance, 2000. Relies on the case of Kh. Muhammad Azhar Khan v. Returning Officer 1999 AC 464 to contend that‑unless a shareholder in a company or firm is owner of 51 per cent. share therein he cannot be held to be a defaulter for a default of the company or the firm.

4. The said Manager of the A.B.L. relies on his record and states that the petitioner in fact is owner of 50 per cent. shares in one company and less than 50 per cent. in the other company. Relies on Regulations issued by 'the State Bank of Pakistan (B.R.D. Circular No.14, dated 30‑11‑1993) which defines default for a period exceeding 365 days to be wilful default and defines major shareholding in the content of Corporate Body to be in excess of 10 per cent. Learned counsel for Rana Zafar Sarfraz, contesting candidate, argues that the Bank is by all means financial institution and admittedly default of the petitioner stands established upon a perusal of the record produced by A.B. L.

5. So far the said first contention of the learned counsel as to the status of A.B.L. is concerned the term financial institution as used in section 140) of the said Ordinance, 2000, would not be relatable to any institution owned by the Government. This would be evident from the word "or" occurring between the terms Federal or Provincial or Local Governments and Financial Institution. To my mind prima facie said word "or" is disjunctive and term financial institution cannot be read to mean an institution of the Federal or Provincial or Local Governments. This would thus, also dispose of the objection of the learned counsel that majority of shares of A.B.L. stand privatised. So far as the said case of Kh. Muhammad Azhar Khan is concerned the perusal of the judgment would show that it was brought to the notice of their Lordships that a provision had been added by amending section 12 of the Representation of the People Act, 1976, providing the condition that a person would be disqualified if he, his spouse and dependants own the main share of the firm/company i.e. 51 per cent. of the total value of the shares. No such limitation is spelt out m the said dispensation governing the forthcoming Local Government Elections. There is, of course, force in the arguments of the leaned counsel that as per plain reading of the terms of Rule 18(4) of Rules frame under the said Ordinance the proceedings before the learned D.R.O. may not be stated to be competent as the said provision does give impression that decisions to be appealed are those mentioned in sub‑Rule (3) of Rule 18 of the said Rules of 2000. However, since record has been examined in the presence of all present and the details of the amount being claimed by the bank under an arrangement not specifically denied by the petitioner are there, I was not inclined .to interfere in exercise of Constitutional jurisdiction. Learned counsel for the petitioner, however, came up with a proposal which I find to be fair. He proposes that without prejudice to the right of his client with regard to his defence in any suit or proceedings that may be filed by the A.B.L. against him in person or against the company as also his personal right to recover back the said amount either from the bank or .the said company upon establishing that amount being paid is not due. In order to show his good faith, he is prepared to pay a sum of Rs.2 millions to the A.B.L. Out of this amount Rs.l million shall be adjusted against principal amount arid the remaining 1 million against the mark‑up etc. This entire exercise will be subject to the decision of a Court of competent jurisdiction in proceedings either filed by him or the Bank. In view of the said undertaking made by the learned counsel and also for the reasons that prima facie adjudication regarding the determination of the entire liability of the petitioner is yet to be made, this writ petition is allowed. The impugned order of the learned District Returning Officer is set aside. This will be subject to payment by the petitioner to Allied Bank of Pakistan, Bank Square Branch, Gujranwala, of the said sum of Rs.2 millions. The petitioner then to approach the learned Returning Officer with receipt/certificate of the batik as to the deposit of the said amount and the learned Returning Officer upon verification shall immediately issue symbol to the petitioner and to facilitate him in contesting election in accordance with law. No order as to costs. Copy Dasti. H.B.T./F‑38/F Petition allow/Order accordingly.