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AL-MEEZAN INVESTMENT MANAGEMENT COMPANY LTD. versus WAPDA FIRST SUKUK COMPANY LTD LAHORE.

ection Sections 88 and 0XXXV, R 1 - Interplayer Suit - Retention and pre-requisite corporations and several banks) filed conflicting claims with the Securities Certificate - the respondent company and the legal authority disputed a dispute under Section 88, CPC They filed a lawsuit in which they said there was no title to the certificate and they were ready to pay the rent, eventually paying the original amount, whatever the court had determined to be the true owner - even the case of Interpulder. Was maintained under conditions up to 5 88, CPC - to be eligible, first, to be a competitor to an Intellectual Suit It is necessary. Secondly, the same loan, amount of money or other property, must be claimed by two or more claimants, and third, the person to whom such loan, amount of money, etc. is being claimed. Must not claim interest ut Legal authority and respondent company faced numerous competing contenders - Controversial SKO certificates, which were claimed by corporations and banks, represented the same loan, money or other property - legal authority and The defendant company did not claim interest in the controversial SKO certificate, and the cash value of the controversial SKO certificate With the payment of the rent lease was submitted to the court ??? Three terms of an intelipader case satisfied in the present case ut The loss / loss received by the corporation by the legal authority was not the result of some fraudulent arrangements or some secret negotiations. Schneid, and was not synonymous with pleas pleader was in the main position accordingly.

P L D 2017 Supreme Court 1

Present: Mian Saqib Nisar, Manzoor Ahmad Malik and Ijaz ul Ahsan, JJ

AL-MEEZAN INVESTMENT MANAGEMENT-COMPANY LTD. and 2 others—Appellants

versus

WAPDA FIRST SUKUK COMPANY LIMITED,

LAHORE and others—Respondents

 

Civil Appeals Nos. 104-L, 106-L and 107-L of 2015, decided on 10th October, 2016.

(Against the judgment dated 17-2-2015 of the Lahore High Court, Lahore passed in R.F.A. No.779 of 2010).

(a) Civil Procedure Code (V of 1908)—

—S. 88—Interpleader suit—Origins, scope and description of the law of interpleaders stated. [p. 10] A

(b) Civil Procedure Code (V of 1908)—

—S, 88 & O. XXXV, R. 1—Interpleader suit—Pre-requisites—Certain conditions must be satisfied before an interpleader suit could be competently filed; firstly, there must be rival claimants; secondly, the same debt, sum of money or other property, moveable or immoveable, must be claimed by two or more claimants, and thirdly the person from whom such debt, sum of money etc. was being claimed must claim no interest in the same. fp. 12] B

(c) Civil Procedure Code (V of 1908)—

—S. 88 & 0. XXXV, R. 1—Interpleader suit—Maintainability and pre-requisites—Sukuk certificates—Dispute oyer ownership of sukuk certificates—Sukuk certificates were issued by respondent-company, which was wholly owned by a statutory authority (WAPDA)—Claimants (a corporation and several banks) made conflicting claims to the sukuk certificates—Respondent-company and statutory authority filed an interpleader suit under S.88, CPC before the civil court stating that they claimed no title in the certificates and were ready to pay the rental profits, and ultimately the principal amount, to whoever was determined to be the true owner by the court—Whether interpleader suit was maintainable in terms of proviso to 5. 88, CPC—For an interpleader suit to be competent, firstly, there must be rival claimants; secondly, the same debt, sum of money or other property, must be claimed by two or more claimants, and thirdly, the person from whom such debt, sum of money etc. was being claimed must claim no interest in the same—Statutory authority and respondent-company were faced with several rival claimants—Disputed sukuk certificates which were claimed by the corporation and banks, represented the same debt, sum of money or other property—Statutory authority and respondent-company did not claim an interest in the disputed sukuk certificates, and had deposited the rental ijara payments along with the encashment value of the disputed sukuk certificates with the court—Three conditions precedent for an interpleader suit thus stood satisfied in the present case—Indemnity /undertaking obtained from the corporation by the statutory authority was not the outcome of some deceitful arrangement or some secret negotiations, and did not tantamount to collusion—Interpleader suit was held to be maintainable accordingly.

Statutory authority (WAPDA) wanted to raise funds for its various projects and to this end it incorporated a company (Wapda First Sukuk Company), which is a public limited company wholly owned by the statutory authority. Respondent company issued sukuk certificates to a corporation. Due to an admitted fraud in the corporation the sukuk certificates were sold to another entity, which in turn sold it to claimants/Banks. Dispute arose between the corporation and the claimant Banks over ownership of the sukuk certificates. Respondent-company and statutory authority filed an interpleader suit under Section 88, CPC before the civil court stating that they claimed no title in the certificates and were ready to pay the rental profits, and ultimately the principal amount, to whoever was determined to be the true owner by the court. Question was whether the interpleader suit was maintainable in terms of Order XXXV and proviso to section 88, CPC.

Certain conditions precedent must be satisfied before an interpleader suit could be competently filed; firstly, there must be rival claimants; secondly, the same debt, sum of money or other property, moveable or immoveable must be claimed by two or more claimants, and thirdly, the person from whom such debt, sum of money etc. was being claimed must claim no interest in the same. [p. 12] B

Statutory authority and respondent-company were faced with several rival claimants. Corporation and Banks were calling on statutory authority and respondent-company to make good for various amounts in respect of rental ijara payments as well as laying claim to differing sums of money on account of the encashment value of the disputed sukuk certificates on the basis of their holding of the said certificates. Therefore, the first condition precedent stood satisfied in the present circumstances, [p. 13] C

Disputed sukuk certificates which were claimed by the corporation and Banks, represented the same debt, sum of money or other property. Disputed sukuk certificates were originally purchased by the corporation. At the time of the fraudulent “sale” of the disputed sukuk certificates, apparently 72 forged physical sukuk certificates were surrendered to the (WAPDA) Bonds Cell and instead of the surrendered certificates the Cell issued/substituted 6 physical sukuk certificates. Substitution of the 72 physical sukuk certificates by the 6 physical sukuk certificates did not give rise to a new debt. Banks and those who claim to derive title from it, including the corporation, were rival claimants for the same debt/sum of money, [p. 13] D

Statutory authority and respondent-company did not claim an interest in the disputed sukuk certificates, as they had categorically stated before the court that they had divested themselves of the entire amount to be paid on account of the disputed sukuk certificates and had deposited the rental ijara payments along with the encashment value of the disputed sukuk certificates with the court. All three conditions precedents for an interpleader suit thus stood fulfilled in the present case. [p. 13] F

Indemnity/undertaking obtained from the corporation by the statutory authority was not the outcome of some deceitful arrangement or some secret negotiations. Such undertaking did not tantamount to either collusion with a party to the interpleader suit or an interest in the suit property i.e. the disputed sukuk certificates. Appeal was dismissed accordingly and interpleader suit was held to be maintainable. (PP. 14, 15] J & K

(d) Fraud—

'"Fraud vitiated the most solemn of proceedings and a superstructure Wt on a foundation of fraud must fall. [p. 13] E

(e) Words and phrases

—“Indemnity”—Meaning—Indemnity was a collateral contract or assurance, by which one person engaged to secure another against an anticipated loss or to prevent him from being damnified by the legal consequences of an act or forbearance on the part of one of the parties or of some third person. [p. 14] G

(f) Civil Procedure Code (V of 1908)—

—S. 88 & 0. XXXV, R. 1(c)—Interpleader suit, bar against—Scope— “Indemnity agreement” between the plaintiff and one or more of the defendants—When interpreting the requirement under S. 88, CPC that the plaintiff “claims no interest” in the debt/sum of money etc in dispute and requirement under 0. XXXV, R.l(c), C.P.C. that, “that there is no collusion between the plaintiff and any of the defendants” in an interpleader suit, one must first look to the text of the statute, its history, traditions, precedent, purpose and consequences — Purposive interpretation of the said provisions led to the conclusion that what was to operate as a bar to an interpleader suit was collusion; collusion between the plaintiff and one or more of the defendants that would destroy the neutrality of the plaintiff in an interpleader suit— Indemnity per se was not barred under the relevant provisions, [p.14] H

(g) Words and phrases —

—“Collusion”—Meaning—Collusion was a deceitful agreement or compact between two or more persons, for the one party to bring an action against the other for some evil purpose, as to defraud a third party of his right: a secret arrangement between two or more persons, whose interests were apparently conflicting, to make use of the fÓrm;s and proceedings of law in order to defraud a third person, or to obtain that which justice would not give them, by deceiving a court or its officers. Ip. 14] I

(h) Civil Procedure Code (V of 1908)—

—0. XXXV, R. 5—Interpleader suit, bar against—Principal-agent relationship—Question as to why an agent was precluded from interpleading his principal in a suit—Agent had a fiduciary duty to his principal, having been entrusted with the care of the principal's property or funds—Agent could not absolve himself of his responsibility to be held accountable to his principal by suing him and compelling him to interplead with another party (other than a person who claimed through the principal)—Said rule was based upon the sound legal

principle that an agent could not be allowed to dispute the authority of his principal, [p.15] L

(i) Civil Procedure Code (V of 1908)—

-—O. VII, R. 11(d)—Rejection of plaint—Suit dismissed as being not maintainable—Distinct concepts—Question whether a suit was maintainable or not was moot with respect to whether or not a plaint was to be rejected as being barred by law—Both were a different species altogether and it may well be that a plaint was not rejected in terms of O.VII, R.ll, C.P.C. but the suit was dismissed eventually as not maintainable for a possible host of reasons, [p. 17] M

Uzair Karamat Bhandari, Advocate Supreme Court, Mrs. Tasneem Amin, Advocate-on-Record for Appellants (in C.A.NO.104-L of 2015).

Shehryar Kasuri, Advocate Supreme Court for Appellant (in C.A.No.l06-Lof 2015)

Asad Javed, Advocate Supreme Court and Mahmudul Islam, Advocate-on-Record for Appellant (in C.A.No.l07-L of 2015)

Ms. Ayesha Hamid, Advocate Supreme Court and Syed Fayyaz A. Sherazi, Advocate-on-Record (for Respondents Nos.l and 2 (in all appeals).

Asad Javed, Advocate Supreme Court and Mahmudul Islam, Advocate on Record (for Respondent No.3 in C.As. 104-L and 106-L of 2015).

Uzair Karamat Bhandari Advocate Supreme Court and Mrs. Tasneem Amin, Advocate-on-Record (for Respondent No.4 in C.A. No.106-L of 2015 and for Respondent No.3 in C.A. 107-L of 2015).

Fayyaz A. Sherazi, Advocate on Record (for Respondent No.6 in C.As. 106-L and 107-L of 2015)

Shehryar Kasuri, Advocate Supreme Court (for Respondent No.5 in C.As. 104-L and 107-L of 2015).

Date of hearing: 10th October, 2016 

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