| Case ID |
3930c970-c8ac-44ef-bf15-df47eaaaec99 |
| Body |
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| Case Number |
Civil Appeals Nos. 185 and 186 of 2002 |
| Decision Date |
Nov 27, 2002 |
| Hearing Date |
|
| Decision |
The Supreme Court dismissed both Civil Appeals Nos. 185 and 186 of 2002, affirming the Lahore High Court's ruling that the responsibility of the bank, Allied Bank of Pakistan, was limited to the terms of the bank guarantee. It was determined that the plaintiff, Saudipak Industrial and Agricultural Investment Company (PVT.) LTD., failed to provide adequate evidence of damages suffered due to default. The court emphasized that liquidated damages require positive evidence of actual loss. The court also clarified the interpretation of the bank guarantee, stating that the validity period was one year, and the plaintiff was entitled to enforce the guarantee within that timeframe, which was confirmed by the correspondence exchanged between the parties. |
| Summary |
In the case of Saudipak Industrial and Agricultural Investment Company (PVT.) LTD. vs. Messrs Allied Bank of Pakistan, the Supreme Court of Pakistan addressed critical issues related to bank guarantees as outlined in the Contract Act of 1872. This case revolved around the interpretation of a bank guarantee issued by Allied Bank to Saudipak for a loan amounting to Rs. 40,000,000. The bank's liability was strictly interpreted based on the guarantee's terms. The court highlighted that the plaintiff was required to provide evidence of actual damages to claim liquidated damages, which they failed to do. The decision reinforces the principle that guarantees must be enforced according to their explicit terms, and the courts will not extend liability beyond those terms without sufficient proof of losses. The ruling is significant for financial institutions and legal practitioners, emphasizing the importance of clear documentation and the necessity of demonstrating actual loss in claims for damages. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Allied Bank of Pakistan,
Saudipak Industrial and Agricultural Investment Company (PVT.) LTD.,
Saudi Pak Kalabagh Livestock Company Ltd.
|
| Judges |
Nazim Hussain Siddiqui,
Hamid Ali Mirza,
Tanvir Ahmed Khan
|
| Lawyers |
Dr. Parvaiz Hasan,
Umar Ata Bandial,
Zakaullah,
M.S. Khattak,
Raja Muhammad Akram,
Ejaz Muhammad Khan
|
| Petitioners |
Saudipak Industrial and Agricultural Investment Company (PVT.) LTD.
|
| Respondents |
Messrs Allied Bank of Pakistan,
Saudi Pak Kalabagh Livestock Company Ltd.
|
| Citations |
2003 SLD 3432,
2003 PLD 215
|
| Other Citations |
Allah Bakhsh and another v. Muhammad Ishaque and another PLD 1984 SC 47,
Societe Generale De Surveillance S.A. v. Pakistan 2002 SCMR 1694,
Messrs Pakistan State Oil Company Limited v. Muhammad Tapir Khan and others PLD 2001 SC 980,
Sandoz Limited and another v Federation of Pakistan and others 1995 SCMR 1431,
House Building Finance Corporation v. Shahinshah Hamayun Corporative House Building Society and others 1992 SCMR 19,
Ghazanfar Hussain v. Rahmat Bibi 1981 CLC 310,
Habib Bank Limited v. Malik Atta Muhammad and 4 others 2000 CLC 451,
Haji Adam Ali Agaria v. Asif Hussain and 2 others 1996 MLD 322,
Mst. Iqbal Begum v. Abdul Ghaffar and others 1995 CLC 105,
Saeed Mahmood v. Halima Bai 1990 MLD 1789,
Najmul Hassan Farooqui v. Messrs United Carpets Limited 1990 ALD 412
|
| Laws Involved |
Contract Act (IX of 1872)
|
| Sections |
126
|