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Civil Petition for Special Leave to Appeal No. 58 of 1982, decided on 18th April, 1982.

(On appeal from judgment and order of the Lahore High Court, Lahore, dated 1‑12‑1981 passed in ‑F. A. O. No. 36 of 1981).

‑‑ O. I, r. 10 and Constitution of Pakistan (1.973), Art. 185(3)‑‑Con tention that policy of insurance having been assigned to petitioner Bank, petitioner necessary or proper party to proceedings and peti tioner by virtue of assignment of policy being vested with all rights of respondent debtor arising out of contract of insurance hence amount could not be paid to respondent‑Held : Questions sought to be raised pending adjudication before competent Courts and adequate safeguards provided in impugned order in terms of Bank guarantee to be furnished by respondent debtor before amount disbursed to him and petitioner also not deserving to be impleaded as a party to appeal arising out from arbitration proceedings to which petitioner never formed a party specially when not availing of any right to action based on policy at inception of dispute and handing over policy for preferring claim by respondent debtor, no fault could be found with impugned order.

Hamid Yusuf, Bar‑at‑Law, Advocate, Supreme Court with S. Wajid Hussain, Advocate‑on‑Record for Petitioner.

Bashir Zafar, Advocate Supreme Court with Tanvir Ahmad, Advocate‑on -Record for Respondent No. 3.

Nemo for Respondents Nos. 1 and 2.

Date of hearing : 18th April, 1982.

‑The National Bank of Pakistan, petitioner herein, in the year 1970, granted Messrs Capital Flour Mills Ltd. respon dent No. 3 herein, a cash‑credit facility to the extent of Rs. 12,50,000. The Advance was secured, inter alia, by assignment of insurance Policy No. 6131 for Rs. 4,00,000 in favour of the petitioner and I. D. B. P. In the events that happened, as on 31‑3‑1980, a sum of Rs. 9,00,574'04, was due and payable by the respondent Mills in the aforesaid account. On the night between 24th and 25th July, 1974, a fire had broken out which gutted the Mills. The claim lodged by the respondent Mills with the insurer under the Policy, was eventually referred to arbitration, through the intervention of the Court, in pursuance of the arbitration clause of the Policy, by the sole arbitrator, who passed an award, dated 10‑7‑1978 in the sum of Rs. 4,00,000, alongwith interest, the total amount being Rs. 10,30,204. This award, after being filed in Court, was made the rule of the Court by the Civil Judge vide order, dated 18‑10‑1981. The insurance Company, being aggrieved by the order has filed appeal, which is pending in the Lahore High Court.

2. The controversy that has given rise to the dispute in the present petition, arises out of an order passed by the learned Civil Judge, during the pendency of proceedings before him, in pursuance whereof the Insurance Company deposited the sum of Rs. 4,00,000 in the form of a fixed deposit receipt for the said sum, in the petitioners Branch at the Lahore Cantonment. The petitioner claims that the respondent Mills, all along assured the petitioner Bank, that the amount of claim, as soon as realised, would be paid to them in virtue of their right of assignment of the Policy, but failed to inform the petitioner about the deposit of the amount in the manner aforestated.

3. In these circumstances, the petitioner submitted C. M. No. 2792‑C of 1981 under Order I, rule 1.0, C. P. C. read with section 151, C. P. C., praying that petitioner be joined as a respondent in the appeal pending before the High Court. By another application C. M. No. 2793‑C of 1981, a further prayer was made by the petitioner, in the same proceedings, for stay of disbursement of 4,00,000, during the pendency of the petition first mentioned above. But a learned Single Judge of the High Court, by order dated 1‑12‑1981, disposed of the two applications, by modifying the earlier orders making the disbursement of the amount subject to the decision of appeal, by directing that the amount shall be released to respondent No. 3 against a bank guarantee, "assuring that ‑ the same shall be deposited in the Court if the instant appeal succeeds or the applicant bank is found entitled to it by the learned trial Court, where the parties are litigating".

4. Aggrieved by this order, the petitioner seeks special leave to appeal. It is contended on behalf of the petitioner, that in view of the admitted position that the policy was assigned to petitioner Bank, they were necessary or proper party to the proceedings and this request was wrongly refused by the learned Single Judge. It is further contended that by virtue of the assignment of Policy, the petitioners are vested with all the rights of respon dent No. 3 arising out of the contract of insurance and hence the amount cannot be paid to the respondent.

5. We, however, find to force in either of the contentions advanced. It is admitted that disputes have arisen between the petitioner and respondent No. 3 over the payment of dues, under the loans secured by assignment of the Policy, which are the object‑matter of civil suits filed by them against each other before the Civil Courts and it is in this connection that the learned Judge observed that "it is yet to be seen who would be found entitled to the decretal amount, which now forms the subject‑matter of the appeal". The questions sought to be raised by the petitioner are, therefore, properly before the competent Courts for adjudication, for which adequate safeguards have been provided in the impugned order, in the terms of the Bank guarantee to be furnished by respondent No. 3 before the amount is disbursed to him. Besides the learned counsel was unable to adequately meet the point arising out of the impugned order as to how the petitioner could be impleaded as a party to the appeal arising from arbitration proceedings to which they were not a party, especially when admittedly the petitioner did not avail of any right to action based on the Policy at the inception of the dispute and handed over the Policy for preferring a claim thereunder by the respondent No. 3.

6. In the circumstances, no fault‑can be found with the impugned order, which does not call for interference. The petition has no merit and is accor dingly dismissed.

Petition dismissed.

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