Special Report

July 30, 2010

Dealer arrested in bounced cheque case

A local Motorcycle Dealer Muhammad Shahid was arrested under Section 489-F and sentenced to Landhi Jail on July 20, 2010 by Preedy Police Karachi in the case of dishonestly issuing various cheques of about 26 Million Rupees. The case was registered on a complaint made by Pervez Ismail on behalf of M/s. N.J. Autos Industries (Pvt) Ltd. Karachi.

The complainant had already filed a suit against Muhammad Shahid in the Sindh High Court Karachi for recovery of Rs36,387,383/- on 11th May 2010. He had prayed to decree the suit in the favor of plaintiff against the defendant, directing him to pay Rs36,387,383/- plus Rs20,000,000/- (as damages) total Rs56,387,383/- with the mark up/profit at a rate of 20% per annum w.e.f. November 2008 (the day of stop the payment) till the realization of the suit amount (if decreed).

Pervez Ismail requested the Court to attach the following properties of Muhammad Shahid U/o 5 Rule 38 R/w. Section 151 C.P.C till the realization of the suit amount:

 (1) Plots Nos.CI-1, 2, 3, 17, 18, 19, Sector 5-E, Nagun Chowrangi, North Karachi, (720 Sq.Yds each).

(2) CI-7, 8, 9, 10, 11, 12, 13, Sector 5-E, Nagun Chowrangi, North Karachi, (800 Sq. Yds).

(3) CI-4, 5, 6, 14, 15, 16, Sector 5-E, Nagun Chowrangi, North Karachi, (720 Sq.Yds).

(4) Flat No.C/01, TownPlaza, Phase I, Sector 11-E, North Karachi.

(5) Plot No.B-62, Sector l-A/4, North Karachi, (measuring 400 Sq.Yds).

(6) Plot No.B-5, Block 14-A, North Karachi, (measuring 403 Sq.Yds).

(7) Shahid Auto Exchange, Show Room No.L-895, Sector 11-E, U.P. Society, North Karachi.

(8) Shop No.5, Najmani Estate, SB-47, Sector 11-H, Auto Exchange Market, U.P. More, North Karachi.

It was also requested to restrain the defendant, his father, agents, workers, salesman and all other persons from creating any third party interest with the properties mentioned in prayer of the instant suit till final disposal of the Suit. Cost of the suit including lawyer fees, Stamp Papers and all other miscellaneous expenses and any other better relief which Honorable Court deem fit according to the circumstances of the case.

According to details of the case Pervez Ismail S/o Ismail Abdul Karim on behalf of M/s. N.J. Autos Industries (Pvt) Ltd. filed a Suit No.736/2010 in the High Court of Sindh at Karachi against Muhammad Shahid S/o Muhammad Haji, the Sole Proprietor of Shahid Auto Exchange having its Office/ Show Room at L-895, Sector 11-E, U.P Society, North Karachi for recovery of Rs36,387,383/-.

He said the Plaintiff is a Limited Company, which deals in manufacturing, selling the Motorcycles & Rickshaws of various Horse Powers, and spare parts, by possessing tremendous and spotless reputation in the business community. The Defendant was a Dealer of the Plaintiff, who runs his business in the name & style of Apna Auto Exchange (Shahid Auto Exchange), U.P. More, Karachi, from about last 20 years.

The plaintiff had supplied the Motorcycles & spare parts to the defendant at worth of rupees in Billions, his payment record always found irregular, and never paid the payments of the Motorcycles & spare parts in time, the Cheques issued by him were severally bounced from the concerned Banks and returned unpaid, however due to good terms because of plaintiffs positive behavior as well as in order to save its outstanding sale consideration, the Company tolerated all the irregularities, in payments of outstanding sale consideration.

The Plaintiff alleged that during the business terms between both the parties, they dealt in billions, subsequently the defendant diverted his attention towards usurping and devilish practice, there was an amount outstanding against the defendant Rs36,387,383/- (Rupees Three Crore Sixty Three Lacs Eighty Seven Thousand Three Hundred Eighty Three), wherein Spare Parts sold of amount Rs17,903/-, and Cheque bounced penalty Rs15,000/- were also included. Out of said amount the defendant issued Cheques No.75065223 to 75065250 (total 31 Cheques), drawn on NIB Bank Ltd. and Cheques No.5485620 to 5485640 (total 21 Cheques) drawn on Bank AI-Habib Ltd., Karachi, at a worth of Rs26,000,000/- (Two Crore Sixty Lacs) and rest of the amount Rs10,387,383/- (Rupees One Crore Three Lac Eighty Seven Thousand Three Hundred Eighty Three) were also in balance.

The plaintiff deposited the Cheques issued by the defendant vide their No.75065223 & 75065224 at a worth of Rs1,000,000/(Rupees Ten Lacs) drawn at the Bank AI-Habib, but on presentation the Cheques had become bounced, and returned unpaid, whereupon, in pursuance of the company policy a Notice was dispatched to the defendant advised therein by the plaintiff that pay the remaining amount of Cheques as well as the amount of other than Cheques.

On the contrary the defendant instituted a Civil Suit No.374/2010 against the Plaintiff and concocted a fictitious story towards the payment of remaining consideration in a period of long term, whereas he had already sold out the purchased items from the plaintiff, and he was legally bound to payoff the settled amount interalia.

In the said suit the learned Judge had passed the Order that no coercive action shall be taken, simultaneously the defendant approached the constitutional forum of the Honorable High Court of Sindh and preferred a Petition vide its No.787/2010 having the identical prayer to the suit mentioned above.

The said petition was dismissed by Mr. Justice Amir Hani Muslim and Mr. Justice Muhammad Zakir, and prayer of the petition was categorically rejected to accept, whereas in the suit No.374/2010 the defendant undertook that he will furnish the Bank guarantee at worth of Rs20,000,000/- and shall deposit Rs500,000/- per month, wherein he had also been failed miserably to comply the Order passed by the Honorable High Court within the time.

The plaintiff preferred a Summary Suit vide its No.554/2010 before the High Court of Sindh at Karachi at a worth of Rs26,000,000/-, which has been tagged in lieu of Order passed by Justice Mr. Muhammad Ali Mazhar in Suit No.374/2010.

The remaining sale consideration was other than the Cheque amount, therefore, the plaintiff decided to avail the remedy from the original civil jurisdiction of the High Court of Sindh at Karachi.

Pervez Ismail stated that the defendant had sold out the purchased items/ Motorcycles, Rickshaw and Spare Parts, and instead of payment to the plaintiff, he invested the amount in purchasing the immovable properties in order to generate more and more fund because of inner avaricious desires.

The defendant is duty bound to pay the entire outstanding sale consideration amount mentioned above to the plaintiff without any delay. The defendant by opting the malicious and greedy usurping conspiracy in connivance of rivals of other manufacturers of the plaintiff, chalked out the plan to destroy its business, hence he is attempting to delay or usurp the outstanding amount of the plaintiff, Pervez Ismail added.

The delay in payment of suit amount the plaintiff suffered heavy monitorial losses, since because of delay in payment whereof, the company could not invest the amount for more generation the business and fund. His money has been blocked with the defendant because of his malafide intention; the wages of the labor/workers/employees and payments for the raw material being purchased is also in crucial financial position.

Simultaneously heavy losses of the time, mental agony, tension, Court proceedings and series of the questions in the market (i.e. the plaintiff is involved in the litigation by the defendant); the other dealers were also avoiding to contract in the further business.

New dealers and customers were also afraid because of expected business transactions with the plaintiff and apart from all the above-said grievances, the plaintiff has suffered irreparable loss, which can not be estimated in the shape of money, but shall not less than of rupees at least Rs20,000,000/-, so the defendant has to pay this amount as damages to the plaintiff other than the other payable amount/sale consideration.

According to Plaintiff the cause of action for filing the suit firstly occurred on 08-03-2010 when the Cheques at a worth of Rs2,000,000/- were bounced from the Bank and then on receiving the Notice by the plaintiff, the defendant instituted bogus and baseless suit and constitution petition in the High Court of Sindh at Karachi and thereafter each and every day before the filing of the suit.

He said that both parties are residing at Karachi with their business office, therefore, this Honorable Court is competent to entertain the territorial and pecuniary jurisdiction and cause of action also occurred at Karachi.

The Plaintiff therefore prayed to decree the suit in the favor of plaintiff against the defendant, directing him to pay Rs36,387,383/- plus Rs20,000,000/- (as damages) total Rs56,387,383/- with the mark up/profit at a rate of 20% per annum w.e.f. November 2008 (the day of stop the payment) till the realization of the suit amount (if decreed).

-Published on pages# 10 & 11 in July-2010 issue of MOBILE WORLD Magazine

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