| Case ID |
e015df49-66a1-4bcf-a0a1-0ec5f9f62f37 |
| Body |
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| Case Number |
Civil Appeal No. 196-P of 2014 |
| Decision Date |
May 30, 2023 |
| Hearing Date |
May 30, 2023 |
| Decision |
The Supreme Court of Pakistan, in its judgment, ruled in favor of the Appellant, Allied Bank Limited, challenging the previous decision of the Peshawar High Court. The Court held that the guarantees issued by the Appellant could not be encashed by the Respondents because they had expired. The Court emphasized that the obligation to pay under the guarantees was not subject to the Customs Act and that the guarantees were standalone contracts. The judgment of the Peshawar High Court was set aside, and the Appellant's petition was allowed. The ruling underscored the principles governing bank guarantees, particularly their independence from underlying debts and the necessity of adhering to specified terms and expiry dates. |
| Summary |
The case revolves around the interpretation of bank guarantees within the framework of the Customs Act and the Constitution of Pakistan. The Supreme Court addressed the issue of whether the Appellant, Allied Bank Limited, could be compelled to honor a guarantee that had expired. The Court found that the guarantees constituted separate contracts not governed by the Customs Act, leading to a ruling that reinforced the autonomy of such financial instruments. This case is significant for legal practitioners as it clarifies the conditions under which guarantees can be enforced, emphasizing the importance of compliance with contractual terms. The decision has implications for banks, businesses, and legal counsel dealing with financial guarantees and customs regulations in Pakistan. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Federation of Pakistan,
Allied Bank Limited,
Collectorate of Customs, Peshawar
|
| Judges |
IJAZ UL AHSAN,
MUNIB AKHTAR,
JAMAL KHAN MANDOKHAIL
|
| Lawyers |
Muhammad Ajmal Khan, Advocate-on-Record/Advocate Supreme Court,
Abdul Rauf Rohaila, Advocate Supreme Court,
Raja Muhammad Shafqat Abbasi, DAG on Court’s Notice
|
| Petitioners |
ALLIED BANK LIMITED
|
| Respondents |
FEDERATION OF PAKISTAN THROUGH COLLECTORATE OF CUSTOMS, PESHAWAR AND OTHERS
|
| Citations |
2023 SLD 1885,
2023 PTD 1280,
(2024) 129 TAX 16
|
| Other Citations |
Bara Ghee Mills (Pvt.) Ltd. vs. Assistant Collector Customs (PLD 2017 SC 738),
Universal Insurance Co. Ltd. v. Collector Customs, Central Excise and Sales Tax, Peshawar (2005 PTD 2355),
Atif Mehmood Kiyani vs. Messrs Sukh Chayn Private Limited, Royal Plaza, Blue Area, Islamabad (2021 SCMR 1446),
EFU General Insurance Ltd. vs. Zhongxhing Telecom Pakistan (Private) Limited (2022 SCMR 1994),
Commercial Bank of Ceylon PLC vs. Ace Containers (Pvt) Ltd. ([2015] 1 S.L.R. 223),
U.P. State Sugar Corporation vs. Sumac International Ltd. [1997] 1 SCC 568
|
| Laws Involved |
Constitution of Pakistan, 1973,
Customs Act, 1969
|
| Sections |
199,
203,
202
|