Law:

Section:

Banking Tribunals Ordinance (LVIII of 1984)-------S. 7---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.9---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2(c)(d), 7 & 22---Civil Procedure Code (V of 1908), O.VII, R.10---Suit for specific performance of underwritten agreement and sponsor agreement---Fresh issuance of shares by making public offer thereof for increasing in share capital of defendant-company---Bank agreeing with company through underwritten agreement to subscribe and take up specified number of shares in event of public offer thereof being under-subscribed---Sponsor agreement between Bank and other defendants, whereby they agreed to take up shares in terms stated therein---Failure of other defendants to take up shares, which Bank had taken under underwritten agreement in event of public offer thereof being under-subscribed--- Return of plaint by Banking Court for want of jurisdiction--- Bank's plea that shares were property, and subscription of underwritten shares by Bank was a purchase of property falling with definition of "finance"---Validity---Shares were property of movable type and share certificates were goods as per Sale of Goods Act, 1930---Shares once issued to a subscriber, he would become shareholder of company and holder of property at such time--- Act of issuance of fresh share capital by company would not be a sale of property--- Underwriting obligation was owed by Bank not on behalf of company---Sponsor agreement was not owed by company, but by its directors and/or sponsors, who were legally separate and distinct persons---Obligation undertaken by Bank in respect of an underwritten agreement/ transaction could not be regarded as "finance" within meaning of S.2(d) of Financial Institutions (Recovery of Finances) Act, 2001---Principles---High Court dismissed appeal. National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689; Bank Alfalah Ltd. v. Iftikhar A. Malik 2003 CLD 363; Naini Gopal and others v. State of Uttar Pradesh (1965) 35 Comp. Cas. 30; Mughul and Sons v. NIB Bank Ltd. and another 2012 CLD 1915; Procter and Gamble Pakistan (Pvt.) Ltd.…

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