2021 PLP 1422 (CLD)

MUHAMMAD SAJID MEHMOOD SETHI, J.

Through instant appeal, filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance ("F1O"), 2001, appellant has challenged judgment and decree dated 01.02.2016, passed by learned Single Bench of this Court, whereby suit filed by respondent-bank for recovery of an amount of Rs.171,785,675.75 was decreed with cost of funds and costs of the suit.

2. Brief facts of the case are that respondent-bank filed a suit for recovery of Rs. 171,785,675.75 contending therein that respondent-bank earlier filed suit for recovery of Rs.286,675,696.77, which was disposed of on account of compromise between the parties, however, appellants committed default in the repayment of settled amount and consequently, respondent-bank, after notice, sold the shares of various companies pledged with it by appellant No.1 and realized an amount of Rs.113,810,711.40 and the suit for balance settlement amount. Suit was contested by appellants by filing petition for leave to defend the suit. Learned Single Bench, after hearing the arguments of learned counsel for the parties, dismissed said application and decreed the suit entitling respondent-bank to recovery of Rs. 171,785,675.75 with costs of suit and cost of funds, judgment and decree dated 01.02.2016. Hence, instant appeal.

3. Learned counsel for appellants submits that shares have been sold by respondent-bank without any notice and formal permission, which is violation of terms of the compromise effected between the parties. He adds that substantial questions of law and facts were raised in the leave application but the same were not properly adjudicated upon by learned Single Judge. He further submits that statement of account is silent about the record of sale of shares.

4. Conversely, learned counsel for respondent-bank defends the impugned judgment and decree.

5. Arguments heard. Available record perused.

6. Record shows that appellants entered into compromise with respondent No.1 vide compromise deed dated 24.03.2011, according to which earlier suit i.e. C.O.S. No. 148 of 2009 stood withdrawn with permission to file a fresh suit in case of default by appellant-company and suit was disposed of accordingly by learned Single Bench. In the compromise deed, appellants had acknowledged each and every amount claimed by respondent-bank. through the suit. However, appellants defaulted in the repayment schedule attached with compromise deed, which compelled respondent-bank to sell the` pledged shares, as it was explicitly mentioned in Clause 11 of the compromise deed that in case of default the bank would have unconditional right to liquidate the pledged shares. Record shows that respondent-bank issued notices to appellants for repayment, however, same remained un-responded and aforesaid Clause 11 was also mentioned therein, showing bank's implied intention to sell pledged shares due to persistent default of appellant No.1 . Even, after sale of shares, letter dated 04.03.2013 was issued to appellants disclosing the shares of companies that were liquidated. The sale proceeds of said sold shares were also credited in the statement of accounts. Even otherwise, if the pledgee elects to exercise power of sale under section 176 of the Contract Act, the sale must be made after giving reasonable notice to the pledger. It appears to us that no hard and fast rule can be laid down in this respect and it will depend on the facts of each case whether the notice given to the pledger was a reasonable notice within the meaning of the said provision of the Contract Act. However, it is not at all necessary that such notice must contain the actual date of sale and the time. It only requires that the pledger should be given a reasonable time to redeem the property pledged with the pledgee and the pledgee must inform him that if by such and such a time, he will not pay the amount due from him, the property pledged with him will be sold for the recovery of the amount due. Moreover, it is not necessary that at the time of actual sale, the pledgee should also serve with a notice on the pledger. Reliance is placed upon Usrnan Malik v. The Bank of Behawalpur Ltd. (PLD 1959 (W.P.) Karachi 725), A. Habib Ahmad v. The Hong Kong Shanghai Banking Corporation and 2 others (1987 CLC 1919) and Habib Ahmad v. Meezan Bank Limited and 5 others (2016 CLD 527). It was observed by learned Single Bench that dispute relating to security of pledged stocks could not be raised in a suit before a banking court either as a defence in leave application or by way of an independent suit. The said observation of the learned Single Judge is fortified by various decisions of superior Courts including cases reported as Messrs Muhammad Siddique Muhammad Umar v. The Australasia Bank Limited (PLD 1966 SC 684) and Siddique Wollen Mills and others v. Allied Bank of Pakistan (2003 CLD 1033).

7. Learned counsel for appellants has failed to point out any illegality or legal infirmity in the impugned judgment and decree, thus, no interference in the exercise of appellate jurisdiction is warranted.

8. In view of the above, instant appeal, ,being devoid of any merit, is hereby dismissed. No order as to costs. KMZ/F-9/L Appeal dismissed.