| Case ID |
1aa3a508-afdb-4b14-b044-362b143a834b |
| Body |
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| Case Number |
Suit No. 464 of 1976 |
| Decision Date |
Dec 23, 1981 |
| Hearing Date |
Oct 19, 1978 |
| Decision |
The Sindh High Court ruled in favor of the plaintiff, Habib Bank Ltd., asserting that the Social Security Institution could not claim priority over the bank's secured mortgage. The court emphasized that priority for contributions under the West Pakistan Employees' Social Security Ordinance, 1965, is only granted in insolvency or winding-up proceedings. The decision highlighted that mere accrual of dues does not provide automatic priority without an attachment process being initiated. The court concluded that the claim of the Social Security Institution, which accrued prior to the mortgage, does not hold priority against the bank's established rights as a secured creditor. |
| Summary |
In the landmark case of Suit No. 464 of 1976, the Sindh High Court addressed the conflict between a secured creditor, Habib Bank Ltd., and the Sind Employees Social Security Institution regarding priority claims on assets. The core issue revolved around whether the Social Security Institution could assert priority over the bank's mortgage, given that the dues had accrued prior to the mortgage's establishment. The court interpreted the West Pakistan Employees' Social Security Ordinance, 1965, specifically sections 55 and 68, to clarify that priority is only applicable in insolvency or winding-up scenarios. The ruling underscored that the bank's rights as a secured creditor were intact, as no attachment process was initiated prior to the mortgage. This case sets a significant precedent in the interpretation of creditor rights and the hierarchy of claims against secured assets, particularly in the context of social security contributions. Keywords: secured creditor, priority claims, social security contributions, Sindh High Court, insolvency proceedings. |
| Court |
Sindh High Court
|
| Entities Involved |
Sind Employees Social Security Institution,
Habib Bank Ltd.
|
| Judges |
SALEEM AKHTAR
|
| Lawyers |
J. H. Rahimtoola,
S. A. Sarwana,
M. Jalaluddin
|
| Petitioners |
HABIB BANK LTD. KARACHI
|
| Respondents |
2 OTHERS,
SIND EMPLOYEES SOCIAL SECURITY INSTITUTION (EAST DIRECTORATE)
|
| Citations |
1982 SLD 1480,
1982 PLC 316
|
| Other Citations |
Federation of Pakistan v. Pioneer Bank Ltd. P L D 1958 Dacca 535,
Casbered v. The Attorney-General 146 All E R 850,
I L R 7 Mad. 434,
I L R 28 Mad. 420,
I L R 45 Cal: 653,
A I R 1935 Mad. 882,
I L R 34 All. 223 (P C),
A I R 1935 Sind 232,
Kunwar Ragho Prasad v. Lala Mewa Lal 159 I C 177 (P. C.),
Murli v. Asoomal & Co. A I R 1955 Cal. 423
|
| Laws Involved |
West Pakistan Employees' Social Security Ordinance, 1965
|
| Sections |
55,
68
|