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COS No.191 of 2010.

15.03.2011.

Barrister Usman G. Rashid, Advocate.

Defendant proeeded exparte vide order dated


20.01.2011.

IJAZ UL AHSAN, J:- The plaintiff is a banking


company incorporated and organized under the laws of
Pakistan. It is a financial institution as defined by Section
2(a) of the Financials Institutions (Recovery of Finances)
Ordinance, 2001 (FIO). It has its registered office at 4th
Floor, Habib Bank Tower, Jinnah Avenue, Islamabad and
a Branch office known as Bur Dubai Branch, Khalid Bin
Waleed Road, P.O. Box No.2759 Dubai, United Arab
Emirates. This suit has been instituted and filed through
Mr.Loung Rathore and Mr. Tariq Masood Ansari, who are
the Principal Officers of the Bank and have been duly
authorized through Powers of Attorney dated 14.12.1981
and 30.06.1980 respectively to institute, sign, verify, file
and prosecute this suit and depose about the facts and
circumstances of the case.
2.

It is alleged in the plaint that the defendant

alongwith Parameswaran Mohan Parameswaran applied

COS No.191 of 2010.

for grant of a loan for a company under the name and style
of Maham Impex LLC FZE (The Company) incorporated
under the laws of UAE and conducting its business in the
said country. The record indicates that the matter was duly
processed and a loan facility was sanctioned. A sanction
advice dated 14.07.1999 was accordingly issued by Bur
Dubai Branch of the plaintiff bank sanctioning a credit
facility in the aggregate sum of Arab Emirates Dirhams
(AED) 3.4 million. The loan facility was divided into the
following categories:-

i.

Letters of Credit.

ii.

PAD (Sub-limit of L/C).

iii.

Finance against Trust Receipt.

iv.

Facility of overdraft.

v.

Local Bills Discounting etc.

The aforesaid facilities were secured, inter alia, by


the

personal

guarantees

of

Parameswaran

Mohan

Parameswaran and the defendant.


3.

The aforesaid facility was subsequently renewed

vide facility renewal letter dated 02.08.2000. Through the


said letter, the earlier loan facility of AED 3.4 million was
reduced to AED 2.9 million. The loan amount was

COS No.191 of 2010.

disbursed and duly utilized by the company from time to


time for the purposes of its business. However, the
company defaulted in its repayment obligations. This led
to a suit being filed by the plaintiff bank in the court of
first instance at Dubai. Maham Impex LLC FZE,
Parameswaran Mohan Parameswaran and the defendant
were arrayed as defendants in the said suit. The record
indicates that only Azam Majeed, the defendant herein
contested the suit. A trial was conducted, in which the
defendant filed his written statement and was duly
represented at all stages. Vide judgment and decree dated
26.11.2002, the suit filed by the plaintiff bank was
decreed in the sum of AED 2,774,292.30 alongwith
annual interest @ 12% from the date of filing of the suit
till recovery. A certified copy of the original judgment and
decree alongwith a certified copy of translation duly
attested by the Consulate General of Pakistan has been
placed on record.
4.

The aforesaid judgment and decree were challenged

in appeal by the defendant before the Court of Cassation,


the appellate forum, under the laws of UAE. The appeal
did not succeed and was dismissed vide order dated
28.11.2004. On the basis of the aforesaid judgments and
decrees, the present suit has been filed with the prayer that

COS No.191 of 2010.

a decree be passed in favour of the plaintiff and against


the defendant for an amount of AED (Arab Emirates
Dirhams)

5,562,456.30/-

equivalent

to

Pak

Rs.129,972,910.15/-. The said amount has been calculated


by converting the aforesaid AED amount into Pak Rupees
@ Rs.23.3661 for AED 1.00 as on 13.08.2010. Further,
interest @ 12% per annum from the date of filing the suit
i.e. 31.03.2002 to 15.08.2010 has been calculated and
included in the claim, regarding which an account
statement has also been placed on record.
5.

I have heard the learned counsel for the plaintiff

and gone through the entire record with his assistance.


6.

The first question that arises for determination in

this suit is that in a situation where loan facilities have


been granted by a Pakistani Bank having overseas
branches, a foreign court has decreed a suit filed by the
bank and a defendant is residing within the jurisdiction of
this Court, whether this Court would have jurisdiction in
the matter. The said question has been examined by this
Court in various cases and has been answered in the
affirmative. In Emirates Bank International Ltd. Vs.
Messrs Oosman Brothers and 9 others (1990 MLD
1779), it was held:-

COS No.191 of 2010.

In view of the fact that the defendants, after


having been served with the summons by
Bailiff, Registered Post and publication, have
chosen; (1), not to appear on the date
mentioned in the publication, i.e. 30.10.1989,
and the summons by Bailiff and the summons
by registered post A/D, have become ex
parte, and (2) by not having filed an
application for leave to defend within 10
days of the above service have become liable
to a decree under Order XXXVII Rule 2
C.P.C. However, since the office objection
had been raised, it will not be out of place to
mention that upon obtaining a foreign
judgment three courses are open to the
Decree-Holder i.e. (1) that he can obtain
execution of the foreign judgment by
proceeding under section 44-A of C.P.C., if
the country from which the decree has been
obtained

is

United

Kingdom

or

any

reciprocating territory and in that case he


can outright obtain execution of that decree
from the District Court of concerned District
of Pakistan, and that he need not file a suit
even and need not go through the procedure
prescribed for the trial of the suit; (2) that he
can file a suit in Pakistan on the basis of the
foreign judgment treating it as the cause of
action. In that case, if the conditions
prescribed in section 13 C.P.C. are fulfilled,
the judgment is conclusive between the
parties and otherwise it is res judicata
between them and as such Courts in Pakistan

COS No.191 of 2010.

are bound by its findings. Such suit, however,


is to be filed within the period of six years
from the date of that judgment as provided
under Article 117 of the Limitation Act, or
(3) that he can file a suit on the original
cause of action as it does not come to an end
after passing a foreign judgment, but
remains intact until and unless that foreign
judgment is satisfied. However, if the
conditions mentioned in section 13 are not
satisfied, then the decree will be open to
collateral attack in Pakistan. In view of
Section 1(3) read with section 2(a) of
Banking Companies (Recovery of Loans)
Ordinance, 1979 the provisions of the said
Ordinance are applicable to the plaintiff
Bank. There is nothing in section 13 CPC
which has the effect of excluding the
provisions of the above Ordinance to a suit
on foreign judgment.

Likewise, in the matter of Habib Bank Ltd. Vs.


Messrs Virk House TradingCompany Ltd. (2009 CLD
451), this Court examined the question of jurisdiction of
this Court and held as follows:-

The suit of the plaintiff is based on foreign


judgments. Section 2(6) of C.P.C. pertains to
a foreign judgment and it refers to decree or
order of a foreign Court. Three courses are
open to a decree holder in whose favour

COS No.191 of 2010.

foreign judgment has been passed. The


decree holder can seek execution of the
foreign judgment under sections 44 or 44-A
of

CPC,

where

these

provisions

are

applicable. Second available course is filing


of the suit on the basis of foreign judgment,
treating it to be the cause of action, subject
to limitation under Article 117 of the
Limitation act. Thirdly, a suit can be filed in
the Court of competent jurisdiction in
Pakistan on the basis of original cause.
Foreign judgments can be enforced in
Pakistan by filing a suit, in which the cause
of action is the foreign judgment. The
reference in this regard can be made to the
cases of Mian Nazir Ahmad v. Abdur
Rashid Qureshi 1986 CLC 1309, Ganguli
Engineering Ltd. v. Smt. Sushila Bala Dasi
and another AIR 1957 Cal. 103 and Popat
Virji v. Damodar Jairam AIR 1934 Bombay
390. The Banking Court can entertain a suit
in a similar manner as has been held in the
case of Emirates Bank Intl. Ltd. v. Messers
Osman Brothers and 9 others 1990 MLD
1779.

In United Bank Limited Vs. Naeem Ullah Malik


and 2 others (2009 CLD 1459), this Court again
examined the law on the question of jurisdiction of

COS No.191 of 2010.

Banking Courts in Pakistan and came to the following


conclusion:-

Foreign judgment of the Dubai Court of


First Instance, has been perused. Its perusal
reflects that the defendants were summoned
and re-summoned but they did not attend the
Court According to Article 53 of the Civil
Procedure Law (Law of Dubai). Such
judgment is considered as judgment passed
in presence of the parties. Defendant No.4
(defendant No.1 herein) appeared before the
foreign court. So was the case of Hajvairy
Textile Mills Ltd. They contested the suit.
Learned Court considered the memorandum,
containing their pleadings and the request
for dismissal of the suit to their extent.
Learned Court after considering whole
evidence and after its due appraisal, passed
the decree. The Court absolved Hajvairy
Textile Mills Ltd and Mr. Mouiz Sultan, of
the liability again which the bank went into
appeal. Dubai Court of Appeal accepted the
appeal vide judgment dated 25.05.1998 and
bound the Hajvairy Textile Mills Ltd. and
Mouis Sultan for value of unpaid cheques
and confirmed rest of the judgment of Dubai
Court of First Instance. These judgments are
by Court of competent jurisdiction, given on
merits of the case and founded on correct
view of law applicable. The judgments do not

COS No.191 of 2010.

breach any law in force in Pakistan and do


not offend the principle of natural justice.
The judgments are conclusive and binding.
Defendant No.1, on his return from
abroad is residing within the jurisdiction of
this Court, which fact is evident from the
perusal of the address, which the said
defendant has himself provided in the title of
his appeal. The other defendants are also
residing, working for gain and carrying the
business within the jurisdiction of this Court.
The plaintiff has its regional office at Davis
Road, Lahore and relevant record of the
instant controversy, gone through the record
and have no hesitation to hold that this Court
has the jurisdiction over subject-matter, over
parties and the territorial jurisdiction. The
suit was competently filed in this Court and it
does not suffer from any jurisdictional flaw.

7.

Further, it is settled law that where there is a direct

connection between the bank established and registered in


Pakistan having a branch office in a foreign country, the
defendant is within the jurisdiction of this Court and three
ingredients prescribed in the Financial Institutions
(Recovery of Finances) Ordinance, 2001 to confer
jurisdiction, namely existence of relationship of Banker
and Customer between the plaintiff and the defendant,
availing of financial facility by or on behalf of the

COS No.191 of 2010.

10

defendant and the bank falling within the definition of


financial institution under the FIO are available, this Court
would have jurisdiction in the matter.
8.

From a perusal of the record, it is apparent that the

plaintiff is a duly registered bank under the laws of


Pakistan and falls within the definition of a financial
institution under the provisions of the Ordinance. It has a
branch office in Dubai which granted the loan. Further,
the defendant had issued his personal guarantee in favour
of the bank. A guarantor falls within the definition of
customer as defined in Section 2(c) of the FIO.
Consequently, the relationship of customer and banker
exists between the parties. Finally, the facilities were
availed by/on behalf of the defendant, repayment of which
were guaranteed by way of issuance of personal guarantee
by the defendant. The defendant statedly resides within
the jurisdiction of this Court. A foreign court of competent
jurisdiction has issued a decree against him after a trial on
the merits of the case. Consequently, all three ingredients
that confer jurisdiction on this Court are present. It is,
therefore, held that this Court has the jurisdiction to
entertain and adjudicate upon this matter.
9.

The next question that needs to be considered by

this Court is, whether a court of competent jurisdiction in

COS No.191 of 2010.

11

Dubai had issued a judgment and decree against the


defendant and whether the suit was decided on merits. The
record indicates that the defendant was duly served, he
contested the suit on merits and he was granted an
opportunity to defend himself through counsel. In Virk
House Trading Company (2009 CLD 451), it was held:-

The aim of rules of natural justice is to


secure justice. The rule was originally based
on two principles namely, (1) No one should
be condemned unheard (Nemo debet esse
judix propria causa) and (2) no decision
shall be given against a party without
affording him a reasonable hearing (audi
alteram partem). Then a third principle/rule
emerged that judicial or quasi-judicial
forum, must hold enquires in good faith,
unbiased

and

not

arbitrarily

or

unreasonably.

Reference in this regard may also be made to


Chairman Board of Mining Examination and
Chairman Inspector of Mines Vs Ramjee (AIR 1977
SC 965) where it was observed:-

Natural justice is no unruly horse, no


lurking land mine, nor a judicial cure all. If
fairness is shown by the decision maker to
the man proceeded against, the form,

COS No.191 of 2010.

12

features and the fundamentals of such


essential

pro-cessual

propriety

being

conditioned by the facts and circumstances of


each situation, no breach of natural justice
can be complained of, unnatural expansion
of natural justice, without reference to the
administrative realities and other factors of a
given case, can be exasperating. We can
neither be finical nor fanatical but should be
flexible yet firm in this jurisdiction. No man
shall be hit below the belt that is the
conscience of the matter

10.

The record indicates that a Bench consisting of

three Honourable Judges of the Court of First Instance at


Dubai, chaired by Judge Ramadan Hasanain and two other
Judges namely Dr. Mohammad Ahmed Al Shirbini and
Mr. Saeed Hilal Humaid Al Zaabi conducted the trial.
They heard the defendant, examined the documents, went
through the pleadings and other relevant record brought
before them and after a proper trial, found the defendant
liable for payment of the suit amount. The learned Court
considered inter alia the following documents:-

i)

claim/pleadings/documents
plaintiff bank;

filed

by

the

COS No.191 of 2010.

ii)

13

copy of application form for opening


current account in the name of the
company;

iii)

copy of the facility letter issued by the


plaintiff bank;

iv)

copy of the letter of guarantee issued


by

the

defendants

including

the

defendant herein;
v)

copy of the bank statement indicating


the principal amount as well as
interest;

vi)

the reply filed on behalf of the


defendants herein raising legal and
procedural objections; and

vii)

An application filed on behalf of the


defendants seeking rejection of the
pleadings in terms of Article 1092 of
the Civil Transactions Federal Law of
Dubai.

11.

After examining the aforesaid documents and other

evidence produced by the plaintiff and the defendant, the


learned court came to the conclusion that the plaintiff had
succeeded in establishing its case and decreed the suit in
the amount of AED 2.774.292.30 (Two Million and Seven
Hundred and Seventy Four and Two Hundred and Ninety

COS No.191 of 2010.

14

Two Dirham and Thirty Fills) and annual interest @12%


from the date of claim, till payment.
12.

The Court of Cassation Dubai (Appellate Court)

consisting of six Honourable Judges heard the appeal filed


by the defendant. After hearing the defendant, the
appellate court dismissed the appeal on 28.11.2004. No
further appeal was filed. The judgment and decree against
the defendant has, therefore, attained finality. A certified
copy of the judgment and decree of the appellate court
with its translation is available on the record. In the
absence of any material to the contrary, the aforesaid
judgments are presumed to be pronounced by the courts of
competent jurisdiction within the contemplation of
Section 14 of the CPC. There is nothing on record to show
that the foreign judgments, upon which the plaintiff has
based its suit fall within any of the exceptions enumerated
in Section 13 of the CPC. The aforesaid judgments and
decrees are, therefore, conclusive and binding on the
defendant. These can furnish cause of action and basis to
maintain this suit.
13.

Coming to the question of limitation, it may be

noted that the original judgment and decree was passed


by the court of first instance on 26.11.2002. An appeal

COS No.191 of 2010.

15

was filed against the aforesaid judgment and decree. The


appellate court dismissed the appeal on 28.11.2004.
14.

Article 117 of the Limitation Act prescribes a

period of six years from the date of judgment for filing of


suit upon a foreign judgment as defined in the Code of
Civil Procedure. An appeal is a continuation of the suit.
Even otherwise, a suit for execution of a foreign decree,
which had not attained finality and was under challenge
before an appellate forum, could not have been filed in
Pakistan. It, therefore, follows that the period of limitation
would start from the date that the appeal filed by the
defendant was dismissed by the appellate forum on
28.11.2004 when the judgment and decree attained
finality. Reckoned from the said date, the plaintiff had six
years to file the present suit. The present suit was filed on
25.11.2010. the same was therefore within time. I am
fortified in my view by the law laid down in Messrs
Farm and Foods International through Attorney Vs
Hamid Mahmood (2006 CLC 492), where it was held
that the suit for enforcing a foreign judgment can be filed
within six years from the date of such judgment. The
starting point of limitation for the purpose of enforcement
of such judgment would be from the date of the appellate
decree. It is settled law that the original decree merges in

COS No.191 of 2010.

16

the appellate decree and it is only logical that limitation


should start from the date when the decree attains finality.
In this regard, reference may also usefully be made to
Maulvi Abdul Qayyum Vs. Syed Ali Asghar Shah and
5 others (1992 SCMR 241) and Baijnath Karnani Vs
Vallabhdas Damani (AIR 1933 Madras 511).
15.

The present suit was filed on 25.11.2010. It came

up for hearing on 30.11.2010 before this Court. On the


said date, the suit was registered and summons were
directed to be issued in Form-IV in Appendix-B to the
Code of Civil Procedure, 1908. It was directed that the
defendant shall be served through ordinary mode,
registered post acknowledgement due and by courier
service. It was further directed that the notices shall also
be published in The News and Nawa-i-Waqt for
20.01.2011. It appears that the defendant was not served
in person. However, service was effected through
publication of citations in the newspapers, which appeared
on 13.12.2010. In terms of Section 9(5) of the FIO,
service duly effected in any one of the aforesaid modes
shall be deemed to be valid service. Despite service, no
one entered appearance to represent the defendant.
Therefore, vide order dated 20.01.2011, the defendant was
proceeded against ex-parte.

COS No.191 of 2010.

16.

17

I have also gone through the plaint and the

documents attached with the plaint. The plaint is


supported by two sanction advice letters dated 14.07.1999
and 02.08.2000. Further, certified copies of the judgment
and decree passed by Dubai Court of First Instances and
its duly attested translation as well as judgment and decree
of the Court of Cassation, Dubai (the Appellate Court) and
its duly attested translation have been placed on record.
17.

I have also gone through and scrutinized the

accounts statement, which has been duly attested in


accordance with the Bankers Book Evidence Act. There is
a presumption of truth attached to it. The accounts
statement indicates that as of 26.02.2002, the following
amounts were due and payable by the defendant to the
plaintiff bank:-

Facility
Trust
Receipt
PAD
Local Bill
Discounting
Total

18.

Principal
Interest
Total
Amount
494,455.32
99,273.44
593,728.76
1,793,429.00
33,740.00

348,693.43 2,142,122.43
4,701.11
38,441.11

2,321,624.32

452,667.98 2,774,292.30

It is noticed that the learned court of First Instance

at Dubai as well as the first appellate court had granted


interest to the plaintiff bank @ 12% per annum from the

COS No.191 of 2010.

18

date of filing of the suit i.e. 31.03.2002 until repayment of


the entire amount. The plaintiff bank has calculated
interest in the aggregate amount of AED 5,562,456.30/on the decretal amount, which is due and payable as of
15.08.2010. The accounts statement supports the said
figure.
19.

Finally, it is to be determined whether or not the

plaintiff is entitled to claim interest on the decretal amount


under the laws of Pakistan. Under the Islamic modes of
finance, recovery of interest on finance is prohibited.
However, in this regard, reference may be made to State
Bank of Pakistan, Banking Control Department, Central
Directorate

Karachi,

BCD

Circular

No.13

dated

30.06.1984. The said circular creates an exception in the


case of foreign loans on which recovery of interest has
been made permissible. The decretal amount arises out of
a foreign loan that was granted by the plaintiff to a foreign
entity in Dubai under the laws of Dubai and the defendant
had guaranteed repayment of the loan amount. Further, the
judgments and decrees passed by the Court of First
Instance at Dubai as well as the Appellate Court of the
said country awarded interest to the plaintiff at the rate of
12% per annum on the basis of the loan agreement
executed between the parties. It was the said amounts that

COS No.191 of 2010.

19

the defendant had guaranteed to repay. As such, it is held


that the plaintiff is entitled to recover interest at the rate of
12% per annum on the decretal amount from the date of
filing of the suit till recovery of the decretal amount.
20.

Despite service of notice, the defendant did not

enter appearance or file application for leave to appear


and defend the suit. Consequently, in terms of provisions
of the Financials Institutions (Recovery of Finances)
Ordinance, 2001 and relying on the case of M/s. Ahmad
Autos and another Vs A.B.L. (PLD 1990 SC 497), the
allegations of fact in the plaint are deemed to be admitted.
Further, I have satisfied myself by carefully going through
the judgments and decrees rendered by the Courts in
Dubai as well as documents attached with the plaint and
the accounts statement, which carries presumption of truth
with it that the suit filed by the plaintiff is within time, this
Court has jurisdiction, the claim of the plaintiff is valid
and has earlier been proved before courts of competent
jurisdiction after following due process of law. The
learned courts at Dubai passed valid and legally
enforceable judgments and decrees in favour of the
plaintiff and against the defendant on the merits of the
case which have attained finality.

COS No.191 of 2010.

21.

20

For the reasons recorded above, a decree for a sum

of Rs.129,972,910.15 alongwith interest calculated on the


principal amount at the rate of 12% per annum from the
date of filing of this suit till the date of realization of the
decretal amount is passed in favour of the plaintiff against
the defendant. Costs of the suit are also allowed to the
plaintiff/decree holder. Failure on the part of the
defendants to satisfy the decree within a period of one
month from today will result in execution of the decree
forthwith without the need of a formal application for
execution of the decree.
22.

Order accordingly.
(IJAZ UL AHSAN)
JUDGE

A.Rehman.