THE HIGH COURT OF SINDH, AT KARACHI

High Court Appeal No. 119 of 2012

Present:

MR. JUSTICE AQEEL AHMED ABBASI

JUSTICE RASHIDA ASAD

Date of hearing: 20.10.2020

Date of decision: 20.10.2020

Appellants: Ahmed Kuli Khan Khattak and another through Mr. Khawaja Shamsul Islam Advocate

Respondents No.1 to 5: Creek Marina (Singapore) Pvt. Ltd and others through Mr. Arshad M. Tayebaly advocate

Respondent No.6&7: Nemo

J U D G M E N T

RASHIDA ASAD ,J.– The captioned High Court Appeal has been filed against the short order dated 30.03.2012, followed by reasons dated 03.04.2012, whereby the learned single Judge in Suit No. 911 of 2011 had dismissed the Civil Miscellaneous Application. No. 2778 of 2012, seeking extension of time given for furnishing the Bank guarantee, in an injunctive order dated 24.02.2012.

2. Shortly put, the facts are that the Appellant No.1 filed the aforementioned suit, seeking declaration, specific performance and permanent injunction in respect of a share purchase contract dated 22.02.2011, entered into between appellants and respondent No.7 as buyers, and the respondent No.1 and 2 as sellers. Such Agreement was for purchase of entire shareholding of respondent No 3 (Creek Marina Pvt. Limited), comprising of 885,020 shares for a total sale consideration of USD 13.5 Million. The said appellant’s case further was that, respondents with malafide intention had illegally issued a termination letter dated 24.05.2011, however, the appellant at all material times was ready and willing to perform obligations under the Contract. Along with the suit, the appellant No.1 also filed CMA No.7630/2011 under Order XXXIX Rules 1 and 2 CPC, which was allowed by the learned Single Judge vide order dated 24.02.2012, in the following terms:

“Accordingly, I hereby allow the application as prayed, but subject to the condition that the plaintiff shall furnish a bank guarantee to the satisfaction of the Nazir of the Court in the sum of USD 5.25 million or its equivalent in Pakistani rupees. The injunction shall be operative immediately, but shall automatically stand vacated and recalled if the plaintiff fails to furnish the bank guarantee within a period of 30 days from today. If the guarantee is not in place within the stipulated period, the Nazir shall issue a certificate to this effect to any defendant who makes an application to him in this regard.”

3. The appellant No.1, a day before expiry of submission of Bank guarantee i.e. on 22.03.2012, filed an application under section 148 CPC, seeking extension of the time given for furnishing the bank guarantee and in this regard a further period of one month was sought, which request was declined by the learned Single Judge. Hence this appeal.

4. We have heard Mr. Khawaja Shamsul Islam advocate for the appellants and Mr. Arshad M. Tayebaly advocate for respondents No.1 to 5.

5. The main contention of the learned counsel for the appellants before us was that the required bank guarantee could not be furnished due to fluctuation in the foreign currency rates, as the appellant No.1 had to deposit a substantial amount of USD 5.2 Million. However, he has shown his readiness and willingness to deposit the same, if reasonable time be granted. Learned counsel for the appellants further argued that section 148 CPC grants discretion to the Court to enlarge time when any period is fixed or granted by the Court for doing of any act prescribed or allowed by the Code itself and such time can be granted even if the originally fixed period has expired; that the exercise of discretion as provided under section 148 CPC can only be refused if the conduct of the party was contumacious in any manner, whereas, in the present case, the appellants were always acted in accordance with law whereas, the conduct of the respondents was questionable.

6. The contentions of the learned counsel for the appellants were strongly opposed by learned counsel for the contesting respondents, while submitting that powers under section 148 CPC are discretionary in nature and cannot be claimed as right, which discretion was rightly exercised by the learned Single Judge by dismissing the application under Section 148 CPC; that during the time granted by the learned Single Judge, by order dated 24.02.2012, there was no fluctuation in the foreign currency rates and the conversion rates between rupee and dollar were stagnant over that period; that any objection on the condition of submission of bank guarantee for an amount of USD 5.2 Million at this stage is afterthought emanating from the malafide, prevailing with the appellant No.1 since day first; disentitling the appellants from seeking further relief on the basis of SPA.

7. We have examined the case in light of the arguments of the learned counsel and have carefully gone through the record. In a suit for specific performance it is always of paramount consideration that the plaintiff seeking equitable remedy of specific performance must be always willing and ready to perform his part of contract, presuming that he is having money in his pocket and sitting outside the Court awaiting directions of the Court. On perusal of the impugned order, it reveals that the learned Single Judge has rightly observed that nothing has been shown as to indicate that the time frame given vide order dated 24.02.2012 should be modified in any manner at all, although option was also given to the appellant to arrange for the guarantee either in terms of US dollars or the Pak Rupee equivalent in order to balance the competing rights of the parties. Thus, the plea taken by the appellant as to non-compliance with the directions contained in the aforementioned order that the amount of bank guarantee was substantial and was in Dollars and the appellant had to take into account the fluctuation between two currencies is not tenable in view of the above circumstances. Failure to comply with the condition imposed by the learned Court, seized with suit, at the time of granting injunction, exposes the bonafide of appellant’s claim as asserted in the plaint showing his readiness and willingness to perform his part of obligations under the Agreement. Admittedly, the suit is pending since 2011, which reflects the conduct of the appellants that they are protracting the litigation on one or the other ground and have been successful so far on untenable grounds. Since the appellant No.1 did not furnish the bank guarantee in compliance with the order passed by learned Single Judge within the stipulated period of time and only one day before its expiry applied for extension of one month’s time for furnishing the same, thus, we would be legitimately justified in presuming that the appellant was not serious in prosecution of his remedy but rather he appears to be unwilling to comply with the conditional stay order passed by learned Single Judge and if he had any grievance as regards to the condition imposed by the learned Single Judge, he could have challenged such order but he waited for 29 days and thereafter applied for extension and after dismissal of his application preferred instant High Court Appeal, which is pending since 2012. Learned counsel for the appellant could not point out any reasonable ground for not complying with the order within the stipulated period of time which could justify filing of the application for extension of time in depositing the bank guarantee as ordered by the learned Single Judge.

8. We are therefore of the considered opinion that the order of the learned Single Judge is unexceptionable and therefore does not require any interference by this Court.

9. In consequences thereof this High Court appeal being without merits is dismissed. These are the reasons for the short order announced on 20.10.2020.

JUDGE