Law: Civil Procedure Code (V of 1908)

Section: 44A, 47. O. XXI, Rr. 11, 58

P L D 2025 Sindh 395 Before Sana Akram Minhas, J MENA ENERGY DMCC---Decree-Holder Versus HASCOL PETROLEUM LIMITED---Judgment-Debtor

Foreign Execution Application No.51 of 2019 and C.M.As. Nos. 2363, 2939 and 2940 of 2022, decided on 27th February, 2025.

(a) Civil Procedure Code (V of 1908)---

----Ss. 44A, 47 & O. XXI, Rr. 11, 58---Foreign decree---Execution proceedings--Passing of order of attachment of assets of judgment-debtor for satisfaction of foreign decree subject to any charge or encumbrance already existing on such assets---Secured objectors/banks filed their separate objections against the order of attachment---One of the secured creditor/bank took the plea that instead of attachment of assets of judgment-debtor let it be operational in view of its precarious financial position for clearing the debts---Validity---Attachment order explicitly stated action being taken was conditional upon and subordinate to any existing legal claims, charges or mortgages on them---If there were prior claims by other parties, such claims would take precedence---Such condition was a legal safeguard ensuring that the order of attachment of assets did not interfere with preexisting rights of other parties and that the High Court acknowledged and respected any legal claims or financial burdens that were already in place before issuing the attachment order---Enforcement of a judgment is a legal process aimed at protecting creditor's right and if the judgment debtor's financial situation was as precarious as claimed, it was unclear how continued operations would safeguard public interest better---Precarious financial position of a debtor (judgment-debtor) alone was not a ground to deny a creditor (decree-holder) its right to enforce a judgment---If such a plea was to be accepted, that would set a dangerous precedent where financially distressed entitles could indefinitely delay enforcement by merely citing their poor financial health---Secured creditors might have mutually agreed to accord a "standstill" to the judgment debtor, but such an arrangement cannot be imposed on the decree-holder, which was not a part to such an informal agreement--Objections applications were dismissed, in circumstances.

(b) Civil Procedure Code (V of 1908)---

----S. 44A---Foreign judgment/decree---Execution---Legal entitlement of decreeholder to recover legitimate debt and impact on other creditors---Scope--Enforcement of a judgment is based on the legal right of a creditor to recover outstanding amounts---Financial impact on other creditors or depositors does not override the legal entitlement of the decree-holder to seek enforcement---Judgment debtor's financial distress cannot serve as a justification to deny the legitimate enforcement of the debt.