IN THE HIGH COURT OF SINDH AT KARACHI

Spl. H.C.A. No.431 OF 2022

[Dewan Cement Limited v. MCB Financial Service Limited]

PRESENT:

Mr. Justice Arshad Hussain Khan

Mr. Justice Amjad Ali Sahito

Appellant : Through Mr. Ayan Mustafa Memon, Advocate.

Respondent : Through Waqar Ahmed, Advocate.

Date of hearing : 22.10.2026

Date of Judgment : 22.10.2026

JUDGMENT

Arshad Hussain Khan J; Through the instant Special High Court Appeal, preferred under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as the “Ordinance”), the Appellant has assailed the order dated 05.12.2022, passed by the learned Single Judge in Execution Application No.77 of 2018, arising out of Suit No.B-1 of 2017, whereby the immovable properties of the Appellant/Judgment Debtor were ordered to be attached, with a direction to the Nazir of this Court to supervise the attachment proceedings and submit a report accordingly.

2. Brief facts leading to the institution of the instant appeal are that Suit No.B-1 of 2017 was decreed vide order and decree dated 28.02.2017, under Order XXIII Rule 3 CPC, on the basis of a compromise embodied in a Standstill Agreement. Subsequently, the Respondent instituted Execution Application No.77 of 2018 seeking enforcement of the said decree, whereas the Appellant filed Suit No.1102 of 2017 and other connected suits challenging the validity of the Standstill Agreement. Vide order dated 24.11.2020, passed in Suit No.1102 of 2017, the learned Court reserved its order on the injunction applications and expressly directed the Office to de-tag the execution applications and fix them only after pronouncement of the order on the injunction applications. Thereafter, during proceedings in Execution Application No.77 of 2018, learned counsel for the Judgment Debtor, on 31.10.2022, informed the learned Executing Court about the institution of a subsequent suit concerning the consent decree. The learned Executing Court accordingly directed the Judgment Debtor to place on record the relevant documents of the subsequent suit, along with any restraining order, under a statement, failing which the execution proceedings would continue. On the next date of hearing, i.e., 05.12.2022, when learned counsel for the Appellant was on general adjournment and his brief was being held by another advocate, the learned Executing Court passed the impugned attachment order on account of non-compliance with the earlier directions.

3. Learned counsel for the Appellant, while assailing the impugned order, contended that the same was passed in disregard of the directions contained in the earlier order dated 24.11.2020, passed in Suit No.1102 of 2017, and in violation of the principles of natural justice and the right to fair trial guaranteed under Article 10-A of the Constitution, particularly when learned counsel was on general adjournment on 05.12.2022 and his brief was being held by another advocate. In support of his contention, learned counsel placed on record a statement dated 21.10.2026, along with copies of various Court orders, reflecting that connected Judicial Miscellaneous matters had consistently been adjourned sine die in terms of the order dated 24.11.2020. He further submitted that non-compliance with the directions contained in the order dated 31.10.2022 was neither willful nor deliberate, but occurred due to his general adjournment on the scheduled date of hearing. Learned counsel, without pressing the merits of the underlying controversy, submitted that the Appellant would be satisfied if the impugned order dated 05.12.2022 were set aside and the matter remanded to the learned Executing Court, with an opportunity to the Appellant to furnish the requisite statement and documents in compliance with the order dated 31.10.2022, and a direction to decide the pending applications in accordance with law within a stipulated period.

4. Conversely, learned counsel for the Respondent, while raising a preliminary objection as to the maintainability of the instant appeal, vehemently opposed the same and submitted that the execution proceedings have remained pending since 2018 without any substantial progress on account of repeated delays attributable to the Appellant/Judgment Debtor. He contended that the decree dated 28.02.2017 remains valid, binding and executable, and that the learned Single Judge was fully justified in directing attachment of the Appellant's immovable properties through the impugned order dated 05.12.2022, particularly in view of the Appellant's failure to comply with the express directions contained in the earlier order dated 31.10.2022. Learned counsel, therefore, prayed for dismissal of the instant appeal.

5. We have heard learned counsel for the parties and examined the available record. At the outset, it may be observed that the controversy presently before us concerns the maintainability of the instant appeal against an order directing attachment of immovable properties during execution proceedings. The validity of the compromise decree dated 28.02.2017, the enforceability of the Standstill Agreement and the merits of the pending proceedings are not matters requiring determination at this stage. The preliminary objection raised by learned counsel for the Respondent must, therefore, be addressed before examining the merits of the impugned order.

6. Section 22(1) of the Ordinance provides an appellate remedy against a judgment, decree, sentence or final order passed by a Banking Court, whereas subsection (6) restricts appeals against interlocutory orders which do not dispose of the entire case, subject to the exceptions expressly provided therein, including orders passed under Section 19(7) of the Ordinance. The latter provision contemplates investigation and determination of claims and objections relating to attachment or sale of property during execution proceedings. Thus, the mere fact that an order has been passed in execution proceedings, or that it affects the property of a Judgment Debtor, does not necessarily render it appealable. Its appealability must be determined with reference to its nature, substance and legal effect, rather than its form or the consequences apprehended by the aggrieved party.

7. Examining the impugned order dated 05.12.2022 in the light of the aforesaid statutory provisions, we find that the learned Executing Court, upon noticing non-compliance with its earlier order dated 31.10.2022, merely directed, in the first instance, attachment of the immovable properties mentioned in the execution application and required the Nazir to supervise the proceedings and submit a report. The impugned order neither determines any claim or objection under Section 19(7) of the Ordinance nor finally adjudicates any substantive right of the parties in the execution proceedings. It is, therefore, interlocutory in character and does not fall within the exceptions contemplated under Section 22(6) of the Ordinance. Consequently, the instant appeal is not maintainable.

8. Insofar as the Appellant's grievance regarding the earlier order dated 24.11.2020, passed in Suit No.1102 of 2017, is concerned, the record reflects that the learned Court had directed the Office to de-tag the execution applications and fix them only after pronouncement of the order on the injunction applications. Learned counsel for the Appellant has also placed on record certain orders relating to connected proceedings in support of his contention that the said directions continued to govern the fixation of execution matters. However, the existence of such procedural directions, or the allegation that the impugned order was passed during the general adjournment of counsel, does not, by itself, confer appellate jurisdiction upon this Court where the statutory remedy is expressly restricted. Nevertheless, the effect of the order dated 24.11.2020, including whether it remained operative at the relevant time, is a matter which may appropriately be brought before the learned Executing Court for consideration in accordance with law.

9. We are also mindful that the execution proceedings have remained pending since 2018 and that a decree-holder is ordinarily entitled to seek enforcement of a decree unless its operation has been stayed or otherwise restricted by a competent Court. The mere institution or pendency of separate proceedings challenging the underlying transaction does not, by itself, operate as a stay of execution. At the same time, the Judgment Debtor cannot be deprived of such remedies or objections as may otherwise be available under the law. These considerations, however, must be addressed before the competent forum and cannot override the statutory limitations governing the appellate jurisdiction of this Court.

10. In view of the foregoing, while declining to interfere with the impugned order for want of appellate jurisdiction, we clarify that the Appellant shall be at liberty to approach the learned Executing Court through an appropriate application, supported by the requisite statement and documents in terms of the order dated 31.10.2022, raising such objections as may be available to it under the law. If such application is filed, the learned Executing Court shall consider and decide the same independently, strictly in accordance with law and after affording an opportunity of hearing to both parties, preferably within thirty (30) days from the date of its filing. It is clarified that dismissal of the instant appeal shall not be construed as an affirmation of the impugned order on merits, nor shall any observation made herein prejudice the respective rights and contentions of the parties. The learned Executing Court shall remain at liberty to pass appropriate orders in accordance with law, without being influenced by any observation made herein.

11. Consequently, the instant Special High Court Appeal is dismissed as not maintainable, along with all pending applications, with no order as to costs.

JUDGE

Naveed PA