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Civil Miscellaneous Petition No. 3118‑R of 1985 in Civil Appeal No. 199 of 1985, decided on 30th October, 1985.
(In the matter of Stay Application).
‑‑‑Art. 185(2)‑‑Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), S. 8(3)‑‑Bank suit on mortgage‑‑Bank guarantee furnished by appellant‑‑Order remanding case to Special Court (Banking) for deciding afresh‑‑Such order challenged iii appeal before Supreme Court‑‑During pendency of appeal in Supreme Court, appellant seeking interim relief by way of restraining respondent from encashing Bank guarantee pending disposal of main petition‑‑‑Prayer allowed to extent that status quo be maintained in respect of guarantee furnished by appellant and respondent not to encash it during pendency of appeal‑ liberty at liberty to move Special Court (Banking), in this behalf who may dispose of matter on merits iii accordance with law.
Raja Muhammad Akram, Advocate Supreme Court and M.A. Siddiqi, Advocate‑on‑Record (absent) for Petitioner/ Appellant.
Bashir Ahmad Ansari, Senior Advocate Supreme Court and Ch. Akhtar Ali, Advocate‑on‑Record for Respondents.
Date of hearing: 30th October, 1985.
‑‑The petitioner, a co‑defendant alongwith respondents No's. 1 and 2 in the proceedings initiated by 'respondent No. 3 for recovery of Rs.8,53,355 under the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter referred to as Ordinance) seeks interim relief in the following terms in a pending appeal filed in this Court as a matter of right under Article 185 of the Constitution:‑
"It is, therefore, humbly prayed that this Hon'ble Court may be pleased to suspend the operation/implementation of the judgment and decree, dated 16‑10‑1985 of the learned Lahore High Court in R.F.A. No. 30 of 1984, and respondents be restrained from encashing the Bank guarantee pending disposal of the main petition".
The Bank's suit was filed on the basis of a mortgage deed, dated 13‑3‑1983. A preliminary decree was passed under order XXXIV of C.P.C. on 11‑4‑1984. The Special Court (Banking) simultaneously attached the sum (Rs.7,10,895‑25) lying in the account of respondent No. 1 in Grindlays Bank. On 9‑8‑1984, the decree was made final and the Special Court proceeded to execute it under subsection (3) of section 8 of the Ordinance. The appellant/petitioner made up the balance (Rs.1,44,000). The Special Court (Banking) disposed of the entire matter accordingly.
The respondents Nos. 1 and 2 appealed to the High Court under section 12 of the Ordinance challenging the final decree, dated 9‑8‑1984. During the pendency of the above appeal in the High Court, the appellant was required by it vide order, dated 20‑10‑1984 in variance of the earlier interim order, dated 21‑8‑1984 to furnish "unconditional bank guarantee" to the satisfaction of the learned Special Judge (Banking) in the sum of Rs.7,10,000 which shall be encashable at the call of the Court depending upon the result of the appeal. The requisite Bank guarantee was thereupon duly furnished by the petitioner appellant.
Ultimately, the High Court allowed the appeal by its impugned order and remanded the case to the Special Court (Banking) "with a direction to decide the case afresh in accordance with the law". This order has been challenged by this appeal and there are substantial questions of law involved iii the case, inter alia, the effect of the failure of either party to appeal against the preliminary decree, the scope of power possessed by Special Court (Banking) under subsection (3) of section 8 of the Ordinance to execute the decree "in such other manner as it may deem fit", which will be attended to in due course.
Meanwhile, we consider that the prayer for interim relief be allowed to the extent that status quo be maintained in respect of the Bank guarantee furnished by the petitioner/appellant. In other words, the respondents will not be able to encash the Bank guarantee during the pendency of this appeal. However, the respondents, may, if so advised, move the Special Court for reversal of the debit entry of their account with Grindlays Bank and it shall be open to that Court to pass orders thereon on its own merits, in accordance with law fill other respects, the application is rejected.
M. I. Application rejected.
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