1999 PLP 3 (CLC)

In case reported as Messrs Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC

582. It was observed that the taxation provisions of the Constitution should not be construed in isolation; the same are to be construed in the context in which they are legislated. It was further observed that the approach for interpreting a constitutional provision should be dynamic, progressive and be oriented with the desire to meet the situation which has arisen; it should not be interpreted narrowly.

5. We have given due consideration to the arguments raised at the Bar. For elucidating the matter, it is necessary to reproduce below the relevant provisions of sections 28, 29 and 30 of the Act. Section 28:‑‑‑ "28(1) When a borrower or a partner or the surety of either of them makes default, in payment or otherwise fails to comply with the terms of the agreement or letter of guarantee with the Corporation the Corporation may sell or realise any property pledged, mortgaged, hypothecated or assigned by the borrower or the partner or the surety of either of them to the Corporation by way of security. (2) Any transfer of property made by the Corporation in exercise of its powers under subsection (1) shall vest in the transferee all rights in or to the property transferred as if the property had been sold to the transferee by the owner. (3) All sums due to the Corporation from a borrower or a partner or the surety of either of them shall be recoverable as arrears of land revenue. " Section 29:‑

"

29. Power to call for payment before agreed period.‑‑‑ In case it is found that‑‑ (a) a loan or investment was obtained by providing false or misleading information in any material particular; or (b) a breach of the terms of agreement with the Corporation has been committed; or (c)

(d)

(e)

(f)

(g) the property pledged, mortgaged, hypothecated or assigned to the corporation has in any way been disposed of or charged without the prior consent of the Corporation; or on the opinion of the Board it is necessary to do so in order to protect the interest of the Corporation for any other reason, the Corporation, may notwithstanding any agreement to the contrary, by notice require the borrower, the partner or the surety of either of them, as the case may be, to repay the loan or the amount invested by the Corporation in Section 30:‑‑‑ "

30. Special provisions for enforcement of claim by the Corporation.‑‑‑ (1) Where by reason of the breach of any agreement by the borrower or the uartner the Corporation becomes entitled to require the immediate navment of the amount due by the borrower or the partner to the Corporation, any officer of the Corporation authorised generally or specially by the Board in this behalf may apply to the District Judge within the local limits of whose jurisdiction the borrower's or the partner's house is situated for any one or more of the following reliefs, namely:,‑‑. (a)

(b)

(c)

(2)

A comparative study of the abovementioned provisions would show that the provisions contained In sections 28, 29 and 30 of the Act have been intended by the Legislature to apply to different situations:‑ Section 28 applies to a case in which default in payment is made in respect of amount which has already become due for payment according to the agreement, while sections 29 and 30, which are interrelated would apply when the amount becomes payable before the agreed period by happening any' of the eventualities envisaged under section 29; including the eventuality of the breach of the agreement, which entitles the Corporation to demand the payment of whole of the loan before the agreed period. If the premature payment of loan cannot be claimed in view of the terms of the agreement or if any such premature payment can be claimed but is not claimed, section 30 would have no application. It is crystal clear even from the title of section 29 that it is applicable only if the payment of the loan is demanded before the agreed period and not otherwise; similarly, the expression 'the Corporation becomes entitled to require immediate payment of the amount due by the borrower to the Corporation' employed in subsection (1) of section 30 and the words ' in full' used in section 29(g) further lend support to the view that section 30 of the Act would be attracted only in case of demand for payment before agreed period; if the amount is already due according to the terms of the agreement, section 30 would have no application in such a case: The provisions contained in section 28(1), reproduced above, clearly show that the Corporation has been empowered to sell the property in case of a breach of terms of agreement without having any recourse to the District Judge. Therefore, the view taken by the High Court that the Corporation was not competent to sell the pledged house without having recourse to the District Judge under section 30 of the Act or it is the District Judge only who can order the sale of the property is not correct; as has been already stated, sections 28 and 30 of the Act are applicable to different situations and the former case cannot be subordinated to A the 'latter. Therefore, the High Court was not correct in holding that the impugned notice for auctioning the house belonging to the respondent was illegal, because this could only be done by the District Judge. It is clearly laid down under section 28(l) that in case of breach of agreement, the Corporation is competent to sell the property pledged and, thus, the view that this could not be done without intervention of the District Judge is tantamount to read in the statutory provision the words which are not there, such an approach would be violative of the settled principles which govern the interpretation of a statute.

6. As has been already stated above, notice, dated 7‑8‑1996 which is Annexure "A/2" to the memorandum of appeal was given ten months prior to the notice which was impugned before the High Court. It has not been pleaded by the respondent in the writ petition that in pursuance of the said notice any amount was prematurely demanded by the appellants before the agreed period of payment. It appears that the respondent tried to build up altogether a new case in this Court after realising the fact that section 30 of the Act would have no application to the case in hand, if the amount of which the payment was demanded, is not shown to be demanded prematurely, before the agreed period. In the light of what has been stated above, we accept the appeal with costs and set aside the impugned order of the High Court with the observations that the Corporation was fully competent to issue notice, dated 10‑6‑1997 for auction of the house which was pledged by the respondent with it. H.B.T./288/SC(AJ&K) Appeal accepted