KARACHI:- A division bench of High Court of Sindh (SHC) disposed of a constitution petition filed by National Bank of Pakistan (NBP) challenging auction of mortgaged goods by Pakistan Customs and held that “right of first charge” is of Pakistan Customs.
The petitioner bank citing Secretary Finance, Member Customs, FBR, Collector Model Customs Collectorate (MCC) Hyderabad and M.H Dadabhoy Energy Supply Company Limited as respondents maintained that in the year 1994, respondent Dadabhoy Company approached them for a loan facility for importing four power generators each of 3.8 Mega watt totaling v15.2 MW. The generators were to be purchased from Stork Wartsila Diesel, Netherlands. NBP and Dadabhoy entered into a Term Finance Facility of rupees 488,440,494. The petitioner maintains that later some problems developed and parties went into litigation up-to Supreme Court of Pakistan (SCP) and later SCP passed a decree in favour of NBP. The petitioner maintained that as per decree, they hold the first exclusive mortgages over the land and building of respondent four and first floating charge over entire plant and machinery of Respondent 4. The petitioner stated that Dadabhoy company owes rupees 185,142,000 to NBP besides a markup of rupees 260,862,000.
The petitioner stated that they were shocked to see a public auction notice in newspapers regarding auction of assets of the respondent 4 by Custom Authorities. As per our knowledge Customs authorities have a claim of rupees 30 million towards Sales Tax and Advance income tax for which Custom officials are auctioning assets worth rupees 670 million, the petitioner stated in their petition praying to the court to stop custom officials from auction and to declare that petitioner has the first charge.
The petition was today heard by a division bench of High Court of Sindh (SHC) comprising Justice Sajjad Ali Shah and Justice Junaid Ghaffar who after hearing the counsel for the petitioner as well as respondents including Syed Mohsin Imam advocate, counsel for Collector Customs Hyderabad ordered that Custom authorities being government functionaries have the right of first charge. After deducting the amount payable to the national exchequer, the liabilities of the bank can be cleared out of money obtained from public auction.