| Case ID |
d69a28b7-a97d-4099-ab2e-23e09c5a1117 |
| Body |
View case body. Login to View |
| Case Number |
Special High Court Appeal No.238 of 2005 |
| Decision Date |
Sep 09, 2007 |
| Hearing Date |
|
| Decision |
The appeal was dismissed in limine. The court found that the bank guarantees executed by the appellants were unconditional and valid, rejecting the argument that they were subject to conditions set forth in a letter from the borrower company. The court held that the guarantees were executed with sufficient consideration, as the appellants had acquired the project along with its liabilities. The court emphasized that the conditions proposed by the borrower company were not accepted by the bank and thus did not form part of the guarantees. Moreover, the court determined that the appellants, being directors of the borrower company, were liable for the loan amount due to the bank, leading to the decree against them. |
| Summary |
In the case of Special High Court Appeal No.238 of 2005, the Sindh High Court addressed the validity of bank guarantees executed by the appellants in favor of Zarai Taraqiati Bank Ltd. The dispute arose from a loan agreement under the Financial Institutions (Recovery of Finances) Ordinance, 2001, and the Contract Act, 1872. The appellants contested their liability, claiming that the guarantees were conditional based on a letter from the borrower company. However, the court ruled that the guarantees were unconditional and enforceable, as no conditions had been properly incorporated into the guarantees at the time of their execution. The court's decision reaffirmed that clear and unambiguous written contracts stand firm against claims of conditionality unless explicitly stated within the contractual documents. This case highlights the importance of understanding the implications of personal guarantees in corporate financing and the necessity of clarity in contract terms to avoid disputes in financial obligations. |
| Court |
Sindh High Court
|
| Entities Involved |
Mas Dairies Limited,
ZARAI TARAQIATI BANK LTD.
|
| Judges |
ANWAR ZAHEER JAMALI,
MUHAMMAD ATHAR SAEED
|
| Lawyers |
A.H. Lakho,
Muhammad Riaz Malik holding brief for Altaf Hussain
|
| Petitioners |
others,
Mian ABSAR AKHTAR
|
| Respondents |
others,
ZARAI TARAQIATI BANK LTD.
|
| Citations |
2007 SLD 2896,
2007 CLD 1620
|
| Other Citations |
Custodian of Enemy Property, Islamabad v. Hoshang M. Dastur and 6 others PLD 1977 Kar. 377,
Saudi-Pak Industrial and Agricultural Investment Company (Pvt:) Ltd. v: Messrs Allied Bank of Pakistan and another PLD 2003 SC 215,
Sadar Din v. Mst. Khatoon and others 2004 SCMR 1102
|
| Laws Involved |
Financial Institutions (Recovery of Finances) Ordinance, 2001,
Contract Act, 1872
|
| Sections |
9,
128,
127
|