IN THE SUPREME COURT OF PAKISTAN 
(APPELLATE JURISDICTION) 
 
 
PRESENT: MR. JUSTICE MIAN SAQIB NISAR 
 
 
MR. JUSTICE MANZOOR AHMAD MALIK 
 
 
MR. JUSTICE IJAZ UL AHSAN 
 
 
CIVIL APPEALS NO.104-L, 106-L AND 107-L OF 2015 
(Against the judgment dated 17.2.2015 of the Lahore High Court, 
Lahore passed in R.F.A. No.779/2010) 
 
 
1. 
Al-Meezan 
Investment 
Management 
Company Ltd. 
 
…in C.A.104-L/2015 
 
 
2. 
Soneri Bank Limited 
…in C.A.106-L/2015 
 
 
3. 
National Fertilizer Corporation of 
Pakistan (Pvt.) Ltd. through its 
Chairman 
 
…in C.A.107-L/2015 
 
…Appellant(s) 
VERSUS 
WAPDA First Sukuk Company Limited, Lahore etc. 
 
…Respondent(s) 
(in all appeals) 
 
For the appellant(s): 
Mr. Uzair Karamat Bhandari, ASC 
Mrs. Tasneem Amin, AOR 
(in C.A.104-L/2015) 
Mr. Shehryar Kasuri, ASC 
 (in C.A.106-L/2015) 
Mr. Asad Javed, ASC 
Mr. Mahmudul Islam, AOR 
(in C.A.107-L/2015) 
 
 
For the respondent(s): 
Ms. Ayesha Hamid, ASC 
Syed Fayyaz A. Sherazi, AOR 
(for respondents No.1 & 2 in all appeals) 
Mr. Asad Javed, ASC 
Mr. Mahmudul Islam, AOR 
(for respondent No.3 in C.As.104-L & 106-L/2015) 
Mr. Uzair Karamat Bhandari, ASC 
Ms. Tasneem Amin, AOR 
(for respondent No.4 in C.A.106-L/2015 and 
 for respondent No.3 in C.A.107-L/2015) 
Mr. Fayyaz A. Sherazi, AOR 
(for respondent No.6 in C.As.106-L & 107-L/2015) 
Mr. Shehryar Kasuri, ASC 
(for respondent No.5 in C.As.104-L & 107-L/2015) 
 
 
Date of hearing: 
10.10.2016 
… 
 
Civil Appeal No.104-L/2015 etc. 
 
- 2- 
 
JUDGMENT 
 
 
MIAN SAQIB NISAR, J.- Through this order we will 
decide three civil appeals bearing Nos.104-L, 106-L and 107-L of 
2015 which arise out of the common judgment dated 17.2.2015 
passed by the Lahore High Court whereby it set aside the order dated 
21.5.2010 of the Trial Court rejecting the plaint of the Respondent 
Nos. 1 and 2. For the purposes of this common judgment we will 
treat Civil Appeal No.104-L of 2015 as the main appeal. The appellant 
therein, Al-Meezan Investment Management Company Limited will be 
referred to as the appellant. The factual background of these appeals 
is that WAPDA/respondent No. 2 wanted to raise funds for its various 
projects 
and 
to 
this 
end 
the 
Wapda 
First 
Sukuk 
Company/respondent No.1 was incorporated, which is a public 
limited company wholly owned by respondent No.2, which is a 
statutory authority constituted under the Pakistan Water and Power 
Development Authority Act, 1958. In terms of the Declaration of 
Trust dated 15.11.2005 the respondent No.1 issued sukuk 
certificates having a value of Rs.8,000,000,000/- (rupees eight billion) (388 
physical certificates worth Rs.3,374,500,000/- and the remaining with Central Depository 
System governed by Central Depository Act 1997) due and payable in 2012. In 
terms of the Purchase Agreement dated 15.11.2005 respondent No.1 
purchased and respondent No.2 sold 10 turbines at the Mangla Hydel 
Power Station which became the trust assets owned by respondent 
No.1. 
Through 
the 
Purchase 
Undertaking 
dated 
15.11.2005 
respondent No.2 undertook to buy back the 10 turbines at the time of 
the dissolution/maturity of the sukuk certificates in 2012. As per 
Ijara Agreement dated 15.11.2005 between respondent Nos.1 and 2 
and MCB Bank Limited as the delegate of the Trustee viz respondent 
Civil Appeal No.104-L/2015 etc. 
 
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No.1, the rental payments in respect of these sukuk certificates were 
to be made on the 22nd of April and the 22nd October of each year 
upto and including 22nd October 2012 [the maturity date]. Through 
Agency Agreement dated 15.11.2005 executed by respondent No.1, 
Citibank NA, Lahore Branch was the Paying Agent, Jahangir Siddique 
& Company Limited was the Reference Agent and the WAPDA Bonds 
Cell of respondent No.2 was the Registrar, Transfer Agent and 
Replacement Agent. 
2. 
 
The National Fertilizer Corporation [hereinafter the “NFC”] 
[the appellant in Civil Appeal No.107-L of 2015] purchased 300 physical 
certificates of the value of Rs.750,000,000 (rupees seven hundred and fifty 
million). On receipt of a letter dated 12.2.2009 purportedly issued by 
the Deputy General Manager Accounts of NFC to the effect that NFC 
had sold certificates of the value of Rs.180,000,000 (rupees one hundred 
and eighty million) out of its holding of Rs.750 million to Swift 
Engineering Solutions and surrender of 72 physical certificates of 
aforesaid value of Rs.180 million for transfer to said Swift 
Engineering Solutions, the Wapda Bonds Cell of the respondent No. 2 
issued/substituted 6 physical certificates of the value of Rs.180 
million to Swift Engineering Solutions. The appellant purchased the 
said 6 certificates from the Swift Engineering Solutions on 6.3.2009. 
Thereafter request was received by respondent Nos. 1 and 2 from the 
appellant to transfer the 6 physical sukuk certificates to the Central 
Depository System which was done by respondent No.2’s Bond Cell 
on 17.3.2009. 
3. 
 
During the course of April 2009, when NFC received 
profit for only Rs.57 million sukuk certificates from Citibank (the Paying 
Agent) against its holding of Rs.750 million, it raised this issue with 
Civil Appeal No.104-L/2015 etc. 
 
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respondent Nos. 1 and 2. NFC informed respondent Nos. 1 and 2 that 
it had not sold its sukuk certificates to Swift Engineering Solutions 
and in time the apparent fraud was revealed. NFC informed 
respondent Nos. 1 and 2 that the purported letter dated 12.2.2009 
was fake and had not been signed by Deputy General Manager 
(Accounts) of NFC and that any transaction made by respondent Nos. 
1 and 2 on basis of said letter was illegal and fraudulent. Respondent 
No.2 informed the Central Depository Company (hereinafter the “CDC”) 
(respondent No.6) that further transfer/transaction of subject sukuk 
certificates be stopped till further instructions. Despite aforesaid 
instructions sukuk certificates were further sold by the appellant and 
CDC gave effect to the said sales. Presently the subject sukuk 
certificates are variously owned by BankIslami (respondent No.4) and 
Soneri Bank (appellant in Civil Appeal No.106-L of 2015) and Meezan Bank (in 
respect of whom an application under Order 1 Rule 10 CPC was pending before the Trial 
Court when the plaint was rejected vice order dated 21.5.2010). 
4. 
 
At this stage inquiry No.76/2009 dated 12.5.2009 was 
registered with FIA Crimes Circle, Lahore by respondent No.2. FIA 
inquired into the matter and on basis of their inquiry FIR 
No.28/2009 dated 5.8.2009 was lodged and separate criminal 
proceedings on the basis thereof are at varying stages before the 
competent courts of law, the fate whereof does not concern us in 
these civil proceedings; it is sufficient that fraud was prima facie 
established in respect of the “sale” of sukuk certificates of the value 
of Rs.180 million from NFC to Swift Engineering Solutions. 
5. 
 
Upon becoming aware of the doubtful transaction of the 
sale of the sukuk certificates to the appellant, respondent Nos. 1 and 
2 sought a refund of the rental ijara payment made to the appellant 
Civil Appeal No.104-L/2015 etc. 
 
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in April 2009. On 22.10.2009 the appellant filed Suit No. 1497 of 
2009 titled “Al-Meezan Investment Management Company Ltd and 
Central Depository Company Vs. Wapda First Sukuk Company Ltd 
and 3 others” before the Sindh High Court at Karachi [hereinafter “Suit 
No.1497/2009”] claiming, inter alia, that it was the rightful owner of the 
sukuk certificates valuing Rs.180 million at all material times and 
seeking a declaration that it was entitled to the rental profit of 
Rs.13,640,900/- paid in April 2009. In addition NFC claimed the 
rental on the sukuk certificates valuing Rs.180 million from the 
respondent Nos.1 and 2 and insists that it is the rightful/lawful 
owner thereof and claimed further rentals/profits on said certificates. 
Similar claims to be the rightful/lawful owners of the sukuk 
certificates valuing Rs.180 million were put forward by BankIslami, 
Soneri Bank and Meezan Bank, alongwith claims to rental ijara 
payments on the basis of their holding in respect of said certificates. 
6. 
 
In view of the conflicting claims to the sukuk certificates 
valuing Rs.180 million, on 12.12.2009 respondent Nos.1 and 2 filed 
an interpleader suit under Section 88 CPC before the Civil Court at 
Lahore [hereinafter the “Interpleader suit”] stating that they claim no title in 
the certificates valuing Rs.180 million and are ready to pay the rental 
profits, and ultimately in October 2012 the principal amount, to 
whoever is determined to be the true owner by the learned court. It is 
pertinent to mention that initially pursuant to order passed by the 
learned Civil Court at Lahore in the Interpleader suit and later in 
compliance with orders dated 19.7.2010 and 10.10.2012 passed by 
the learned High Court in RFA No.779/2010 allowing the 
respondents’ applications to that effect, the respondent Nos.1 and 2 
deposited the rental ijara payments for the sukuk certificates valuing 
Civil Appeal No.104-L/2015 etc. 
 
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Rs.180 million and finally the encashment value of Rs.180 million at 
the time of maturity into an account maintained by the Civil Court 
for said purpose. 
7. 
 
NFC filed a written statement in the Interpleader suit 
wherein it raised certain preliminary objections on the basis whereof 
the learned Civil Court rejected the plaint vide order dated 21.5.2010 
holding that the Interpleader suit was not maintainable in terms of 
Order 35 Rule 5 CPC and in terms of the proviso to Section 88 CPC 
and lastly on the basis of the ratio of G. Hari Karmarkar Vs. J. A. 
Robin and others (AIR 1927 Rangoon 91). Respondent Nos.1 and 2 
challenged the said order through RFA No.779/2010 which was 
accepted vide the order dated 17.2.2015 passed by the Lahore High 
Court, impugned in these appeals. 
8. 
 
Mr. Uzair Bhandari, learned counsel for the appellant 
apprised us of the detailed facts set out hereinabove. He stated that 
the appellant is a bona fide purchaser without notice and its title to 
the sukuk certificates valuing Rs.180 million is duly recorded in the 
Central Depository Register and is not liable to be rectified by virtue 
of Section 11 of the Central Depositories Act, 1997. He stated that 
the various claimants to the sukuk certificates valuing Rs.180 million 
are not claiming the same debt but two different and distinct debts 
and respondent Nos.1 and 2 are liable to satisfy both claims viz those 
of the NFC and of the appellant and those who claim title on the 
basis of the appellant’s title. He sought to persuade us that the 
relationship of the appellant and respondent No.1 is that of principal 
and agent. Respondent No.1 acts as the agent of the appellant in 
respect of the trust assets and conducts transactions on behalf of the 
appellant with respect thereto in its capacity as agent; this 
Civil Appeal No.104-L/2015 etc. 
 
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relationship precludes respondent No.1 from filing an Interpleader 
suit because Order 35 Rule 5 CPC specifically bars the agent from 
bringing an interpleader suit against his principal. He also relied on 
the proviso to Section 88 CPC to argue that as Suit No.1497/2009 
was filed prior in time and the pith and substance of the controversy 
can be adjudicated therein, therefore the Interpleader suit is not 
maintainable. He submitted that the Interpleader suit was not filed 
through an authorized person as the documents establishing his 
authority were not placed on the record of the Civil Court. He 
submitted that respondent Nos.1 and 2 had not approached the 
court with clean hands and that the Interpleader suit was simply a 
device to transfer the loss caused by the fraud onto the appellant and 
those parties who claim title from it. He in support of his contention 
has cited judgments from the foreign jurisdiction such as:- Conley et 
al. Vs. Alabama Gold Life Insurance Company [(1880) 67 Ala. 
472], National Life Ins. Co. Vs. Pingrey and others [(1880) 141 
Mass. 411], Sablicich Vs. Russell [(1866) 2 EC 441], Ann Dalton 
Vs. The Midland Railway Company [(1852) 138 ER 985], Farmers 
Irrigating Ditch Reservoir Company Vs. Nick Kane, et al. [(1988) 
845 F.2d 229], Atoka Coal & Min. Co. Vs. Hodges et al. [(1894) 59 
FR 836], Finn Vs. Missouri State Life Ins. Co. [(1931) 222 Ala. 
413] and Great American Insurance Company, a Corporation Vs. 
Bank of Bellevue and American Home Assurance Company 
[(1966) 366 F.2d 289]. 
9. 
 
Learned counsel for appellant in Civil Appeal No.106-L of 
2015 concurred with the grounds urged by Mr. Uzair Bhandari and 
submitted that respondent Nos.1 and 2 had accepted indemnity from 
the NFC and the same constituted a violation of the provisions of 
Civil Appeal No.104-L/2015 etc. 
 
- 8- 
 
Order 35 Rule 1(c) CPC and therefore the Interpleader suit was not 
maintainable. Learned counsel for the NFC urged the same grounds 
before us. 
10. 
 
Ms. Ayesha Hamid, learned counsel for respondent Nos. 
1 and 2 submitted that respondent Nos.1 and 2, faced with the 
adverse claims of the NFC, the appellant, BankIslami, Soneri Bank 
and Meezan bank were entitled to file an Interpleader suit in order for 
the Civil Court to determine the lawful ownership of the sukuk 
certificates valuing Rs.180 million. Respondent Nos.1 and 2 claimed 
no interest in the disputed sukuk certificates and this was proved by 
the fact that all rental ijara payments and the final encashment value 
of the disputed certificates had been deposited with the Civil Court 
since institution of the interpleader suit and it was for the said Court 
to release the amount to the rightful owner. She stated that the 
respondent No.1 was a trustee in respect of the trust assets and the 
certificate holders were the beneficiaries; there was no relationship of 
agent and principal betwixt them as respondent No.1 could not bind 
NFC to third parties and nor was it bound to render accounts to the 
certificate holders. Reliance in this regard was placed on the case 
cited as Bolan Beverages Pvt Ltd Vs. Pepsico Inc. (PLD 2004 SC 
860), which lays down the tests for establishing the relationship of 
agent and principal. Ms. Ayesha Hamid stated that the Interpleader 
suit is not hit by the proviso of Section 88 CPC for the reason that all 
the claimants to the disputed sukuk certificates are not party to the 
Suit No.1497/2009 before the Sindh High Court, notably Soneri 
Bank, BankIslami and Meezan Bank are missing from the array of 
defendants and the prayer in the said suit is not for the Court to 
determine the ownership of the disputed sukuk certificates but 
Civil Appeal No.104-L/2015 etc. 
 
- 9- 
 
rather to declare that at all material times the appellant was the 
rightful owner thereof and is entitled to retain the rental payment 
received in April 2009. Therefore, the rights of all parties could not 
properly be decided in Suit No.1497/2009. She provided us with a 
list of cases relating to the disputed sukuk certificates pending before 
the Sindh High Court in addition to Suit No. 1497/2009; Suit No. 
726/2012 filed by Meezan Bank, Suit No. 1269/2010 filed by Soneri 
Bank and Suit No.1086/2013 filed by the appellant. In addition NFC 
has also filed Suit No.40163/2015 before the Civil Court at Lahore 
[hereinafter collectively referred to as the “other suits”]. She relied on the case 
cited as Abdul Karim Vs. Florida Builders (Pvt) Ltd (PLD 2012 SC 
247) to argue that the objections as to the Interpleader suit not being 
filed by duly authorized person, or as to the motivations or purpose 
for filing the Interpleader suit do not fall within the parameters laid 
down by this Court for rejection of plaint and hence the Interpleader 
suit was maintainable. 
11. 
 
Heard. The instant appeals have raised rather interesting 
and intriguing questions of law before us as there is no precedent in 
our jurisprudence with respect to Interpleader suits. In this context 
we feel it would be useful to examine the origins of this law. The law 
of Interpleader comes from the laws of England. Halsbury’s Laws of 
England1 explains the same in the following terms:- 
 
“Where a person, for example an enforcement officer who 
has levied a writ of execution, is in possession of property 
or its proceeds of sale and he is, or expects to be, sued in 
respect thereof by two or more persons making adverse 
                                                
1 Halsbury’s Laws of England/Civil Procedure (Volume 12(2009) 5th Edition, Paras 
1109-1836, para 1586.  
Civil Appeal No.104-L/2015 etc. 
 
- 10- 
 
claims thereto, he may apply to the court for an order 
requiring the claimants to litigate their differences and to 
abide by the court’s final order in respect thereof. He is 
thereafter safeguarded by being able to act in respect of the 
property or its proceeds of sale consistently with, or as may 
be directed by, the court’s final order. In these 
circumstances he is said to apply to the court for relief by 
way of interpleader.” 
 
Further elucidation for the scope and the description of interpleader 
suit is found in Black’s Law Dictionary, which reads as under:- 
 
“1. A suit to determine a right to property held by a usu. 
disinterested third party (called a stakeholder) who is in 
doubt about ownership and who therefore deposits the 
property with the court to permit interested parties to 
litigate ownership. Typically, a stakeholder initiates an 
interpleader both to determine who should receive the 
property and to avoid multiple liability…2. Loosely, a party 
who interpleads. – Also termed (in civil law) concursus. 
 
“Interpleader is a form of joinder open to one who 
does not know to which of several claimants he or 
she is liable, if liable at all. It permits him or her to 
bring the claimants into a single action, and to 
require them to litigate among themselves to 
determine which, if any, has a valid claim. Although 
the earliest records of a procedure similar to 
interpleader were at common law, it soon became 
an equitable rather than a legal procedure.” 
Charles Alan Wright, The Law of Federal Courts § 
74, at 531 (5th ed. 1994).” 
 
The law relating to interpleader was originally codified in the sub-
continent in the Code of Civil Procedure, 1882 at Sections 470 to 
Civil Appeal No.104-L/2015 etc. 
 
- 11- 
 
476. It is now contained in Section 88 and Order 35 of our Code of 
Civil Procedure, 1908. The law of Interpleader may have its origins in 
equity but since it is now codified in our statute, equity must yield to 
law. Section 88 and Order 35 Rules 1, 3 and 5 CPC are reproduced 
below for ease of reference. 
 
“88. Where interpleader suit may be instituted.-- Where 
two or more persons claim adversely to one another the 
same debt, sum of money or other property, movable or 
immovable, from another person, who claims no interest 
therein other than for charges or costs and who is ready to 
pay or deliver it to the rightful claimant, such other person 
may institute a suit of interpleader against all the claimants 
for the purpose of obtaining a decision as to the person to 
whom the payment or delivery shall be made and of 
obtaining indemnity for himself: 
Provided that where any suit is pending in which the rights 
of all parties can properly be decided, no such suit of 
interpleader shall be instituted. 
 
Order XXXV 
 
1.Plaint 
in 
interpleader 
suits.---In 
every 
suit 
of 
interpleader the plaint shall, in addition to other statements 
necessary for plaints, state— 
(a) that the plaintiff claims no interest in the subject-matter 
in dispute other than for charges or costs; 
(b) the claims made by the defendants severally; and  
(c) that there is no collusion between the plaintiff and any 
of the defendants. 
 
3. Procedure where defendant is suing plaintiff.- Where 
any of the defendants in an inter-pleader suit is actually 
suing the plaintiff in respect of the subject-matter of such 
suit, the Court in which the suit against the plaintiff is 
Civil Appeal No.104-L/2015 etc. 
 
- 12- 
 
pending shall, on being informed by the Court in which  the 
inter-pleader suit has been instituted, stay the proceedings 
as against him; and his costs in the suit so stayed may be 
provided for in such suit; but if and in so far as, they are 
not provided for in that suit, they may be added to his costs 
incurred in the inter-pleader suit. 
 
5. Agent and tenants may not institute interpleader suit.- 
Nothing in this Order shall be deemed to enable agents to 
sue their principals, or tenants to sue their landlords, for 
the purpose of compelling them to interplead with any 
persons other than persons making claim through such 
principals or the landlords. 
 
Illustrations 
(a) 
A deposits a box of jewels with B as his agent. C 
alleges that the jewels were wrongfully obtained 
from him by A, and claims them from B. B cannot 
institute an interpleader suit against A and C. 
(b) 
A deposits a box of jewels with B as his agent. He 
then writes to C for the purpose of making the 
jewels a security for a debt due from himself to C. A 
afterwards alleges that C’s debt is satisfied, and C 
alleges the contrary. Both claim the jewels from B. 
B may institute an interpleader suit against A and 
C.” 
 
12. 
 
There are certain conditions precedent which are 
required to be satisfied before an Interpleader suit can be 
competently filed. Firstly, there must be rival claimants. Secondly, 
the same debt, sum of money or other property, moveable or 
immoveable must be claimed by two or more claimants. Thirdly, the 
person from whom such debt, sum of money etc. is being claimed 
Civil Appeal No.104-L/2015 etc. 
 
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must claim no interest in the same. These conditions are set out in 
Section 88 CPC and reinforced by Order 35 Rule 1 CPC.  
13. 
 
There is no quibbling with the fact that respondent Nos.1 
and 2 are faced with several rival claimants. The appellant, NFC, 
Soneri Bank, BankIslami and Meezan Bank are calling on respondent 
Nos.1 and 2 to make good for various amounts in respect of rental 
ijara payments as well as laying claim to differing sums of money on 
account of the encashment value of the disputed sukuk certificates 
on the basis of their holding of the said certificates. Therefore, the 
first 
condition 
precedent 
stands 
satisfied 
in 
the 
present 
circumstances. 
14. 
 
Do the disputed sukuk certificates of the value of Rs.180 
million which are claimed by NFC on the one hand and by the 
appellant and those who claim to derive title from them, represent 
the same debt, sum of money or other property? It is an admitted fact 
that the disputed sukuk certificates were originally purchased by the 
NFC. It is an admitted fact by all parties to the present appeals that 
the onward “sale” of the sukuk certificates of the value of Rs.180 
million from NFC to Swift Engineering Solutions was effected through 
apparent fraud. At whose door such apparent fraud is to be laid is 
the subject of separate criminal proceedings and does not concern us 
for the moment. At the time of the fraudulent “sale” of the disputed 
sukuk certificates, apparently 72 forged physical sukuk certificates 
were surrendered to the Wapda Bonds Cell and instead of the 
surrendered certificates the Wapda Bonds Cell issued/substituted 6 
physical sukuk certificates. Because the substituted 6 physical 
sukuk 
certificates 
were 
not 
forged 
or 
fake, 
the 
appellant 
disingenuously claims that it is a bona fide purchaser without notice 
Civil Appeal No.104-L/2015 etc. 
 
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and that the 6 new physical sukuk certificates represent a different 
debt/sum of money being claimed from the respondent Nos. 1 and 2. 
We are not convinced that this is so: the substitution of the 72 
physical sukuk certificates by the 6 physical sukuk certificates does 
not give rise to a new debt. The appellant and those who claim to 
derive title from it and NFC on the other hand are rivals claimants for 
the same debt/sum of money. Section 11 of the Central Depositories 
Act, 1997 cannot override fraud if it is once established as it is 
settled law that fraud vitiates the most solemn of proceedings and a 
superstructure built on a foundation of fraud must fall like a house 
of cards. 
15. 
 
Do respondent Nos.1 and 2 claim an interest in the 
disputed sukuk certificates? Ms. Ayesha Hamid, learned counsel for 
the respondent Nos.1 and 2 stated categorically that respondent 
Nos.1 and 2 have divested themselves of the entire amount to be paid 
on account of the disputed sukuk certificates and have deposited the 
rental ijara payments alongwith the encashment value of the 
disputed sukuk certificates with the learned civil court. This 
establishes the bona fides of the respondent Nos.1 and 2. At the time 
the rental ijara payment was made to NFC in October 2009 
respondent Nos.1 and 2 sought and obtained an indemnity from NFC 
to the effect that “It is hereby undertaken that NFC will remit back to WAPDA 
Rs.13,640,900/- if it is found that NFC had actually transferred certificates worth 
Rs.180 million to the Swift Engineering Solution. NFC will also extend full 
cooperation to the investigation Agency for further probe into the matter.” This 
undertaking is altogether different from the ‘indemnity’ referred to in 
G. Hari Karmarkar’s case [relied on by the learned Civil Court in its order dated 
21.5.2010 rejecting the plaint] in terms of which the plaintiff filing an 
Civil Appeal No.104-L/2015 etc. 
 
- 15- 
 
interpleader suit had entered into an agreement with one of the 
parties whereby he would have to pay very much less to said party if 
it succeeded. On those facts it was held that it could not be said that 
the plaintiff in the suit had no interest in the result of the 
proceedings initiated by him. An Indemnity is a collateral contract or 
assurance, by which one person engages to secure another against 
an anticipated loss or to prevent him from being damnified by the 
legal consequences of an act or forbearance on the part of one of the 
parties or of some third person2. In the present circumstances does 
this undertaking indemnify the respondent Nos. 1 and 2 against 
anticipated claims by the appellant or those who claim to derive title 
from the appellant? Patently not. The aforesaid “indemnity” is no 
more than an assurance by NFC to return a particular ijara rental 
payment to the respondent Nos.1 and 2 in case it is found disentitled 
to the same. When interpreting Section 88 CPC’s requirement that 
the plaintiff “claims no interest” in the debt/sum of money etc in 
dispute and Order 35 Rule 1(c) CPC’s requirement that, “that there is no 
collusion between the plaintiff and any of the defendants” in an interpleader 
suit, we must first look to the text of the statute, its history, 
traditions, precedent, purpose and consequences. The purposive 
interpretation of the provisions ibid lead us to conclude that what is 
to operate as a bar to an interpleader suit is collusion; collusion 
between the plaintiff and one or more of the defendants that would 
destroy the neutrality of the plaintiff in an interpleader suit. An 
indemnity per se is not barred under the relevant provisions. 
Collusion is a deceitful agreement or compact between two or more 
persons, for the one party to bring an action against the other for 
                                                
2 Black’s Law Dictionary 
Civil Appeal No.104-L/2015 etc. 
 
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some evil purpose, as to defraud a third party of his right: a 
secret arrangement between two or more persons, whose interests are 
apparently conflicting, to make use of the forms and proceedings of 
law in order to defraud a third person, or to obtain that which justice 
would not give them, by deceiving a court or its officers.3 It was not 
argued before us by any of the appellants that the “indemnity” 
obtained from NFC by the respondent Nos.1 and 2 was the outcome 
of some deceitful arrangement or some secret negotiations. If the 
respondent Nos.1 and 2, on account of the so-called indemnity were 
more interested in the appellant succeeding or NFC for that matter 
there may be some remote possibility that their neutrality was 
compromised in some manner. But if NFC were to be declared the 
rightful owner they would retain the rental ijara payment made to 
them under the aegis of the so-called indemnity, respondent Nos.1 
and 2 would not be entitled to the said payment. If, suppose, the 
appellant or some party deriving title from the appellant were to be 
declared the rightful owner, respondent Nos.1 and 2 would, on the 
basis of the so-called indemnity, be entitled to the return of the rental 
ijara payment, only for the same to be paid onwards to the declared 
rightful owner. In neither of these two scenarios is it the case that 
respondent Nos.1 and 2 are more interested, financially, if one party 
succeeds over another. In the circumstances of the present appeals 
we do not find that the undertaking obtained by respondent Nos.1 
and 2 from the NFC is tantamount to either collusion with a party to 
the Interpleader suit or an interest in the suit property i.e. the 
disputed sukuk certificates. 
                                                
3 Black’s Law Dictionary. 
Civil Appeal No.104-L/2015 etc. 
 
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16. 
 
Let us now address the question of the purported bar of 
Order 35 Rule 5 CPC; all the learned counsels for the three different 
appellants variously argued that the relationship inter se respondent 
Nos.1 and 2 and the certificate holders was that of agent and 
principals respectively and on account thereof respondent No.1 in 
particular was barred from filing an Interpleader suit. Why is an 
agent precluded from interpleading his principal? Again, a purposive 
construction of the statute is our best guide. An agent owes a duty of 
care to his principal. An agent is accountable to his principal. Indeed, 
he has a fiduciary duty to his principal, having been entrusted with 
the care of the principal’s property or funds. In these circumstances 
the agent cannot absolve himself of his responsibility to be held 
accountable to his principal by suing him and compelling him to 
interplead with another party (other than a person who claims through the 
principal). This rule is based upon the sound legal principle that an 
agent cannot be allowed to dispute the authority of his principal. 
Similarly, the tenant is barred from filing a suit of interpleader 
against his landlord as he is not to dispute the title of his landlord 
during the subsistence of tenancy (other than a persons who claims through the 
landlord). The Declaration of Trust dated 15.11.2005 clearly defines the 
role of respondent No.1 as Trustee with respect to certificate-holders, 
as defined in the Trust Act 1882. In any event, in the Bolan 
Beverages case (supra) this Court has clearly set out the parameters of 
the relationship of agent and principal. It was held at paragraph 15 
that:- 
 
“We hold in the light of the above discussion as well as the 
law, that an agent is a hyphen that joins and a buckle that 
Civil Appeal No.104-L/2015 etc. 
 
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binds the relation between the principal and the third party. 
Where an agent is not a link between the principal and a 
third party, the institution of agency is not created. Where a 
person is not liable to the principal for the submission of 
accounts such person cannot be dubbed as agent.” 
 
Describing the essentials for the relationship of agency in the 
judgment of the Lahore High Court reported as Concentrate 
Manufacturing Company of Ireland and 3 others versus Seven-Up 
Bottling Company (Private) Limited and 3 others (2002 CLD 77) it 
has been held:- 
 
“From the above, it is clear that in effect an agent is the 
connecting link between the principal and third person---a 
sort of conduit pipe or an intermediary. This intermediary 
has the powers to create legal relationship between the 
principal and third party. He has competence to make the 
principal responsible to the third person. He is an 
imperative bridge by crossing which, the third person can 
reach the principal to enforce his legal right or vice versa. 
The principal is liable to the third person for all the act and 
deeds performed, within the authority of agency, by his 
agent, as if those were personally performed by him. The 
agent 
necessarily 
and 
the 
principal 
in 
certain 
circumstances are liable to each other for accounts. If a 
so-called agent is not liable to the so-called principal for 
the submission of accounts, such as the profit and loss, he 
cannot be termed as agent.” 
 
The provisions of Order 35 Rule 5 are not attracted to the facts of the 
Interpleader suit. In any event it cannot be assumed that the 
agent/principal relationship existed between respondent No.1 and 
Civil Appeal No.104-L/2015 etc. 
 
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certificate holders, including the appellants, without framing an issue 
thereon and recording evidence. 
17. 
 
Now let us address the question of the proviso to Section 
88 CPC; does the pendency and prior filing of Suit No.1497/2009 of 
the appellant bar the Interpleader suit? It is admitted by the 
appellant at ground VIII of its memorandum of appeal that 
subsequent purchasers of the disputed sukuk certificates are not 
impleaded in its Suit No. 1497/2009 pending before the Sindh High 
Court, Karachi. In juxtaposition the Interpleader suit brings all 
claimants to the disputed sukuk certificates before the civil court at 
Lahore and respondent Nos.1 and 2 had filed an appropriate 
application under Order 1 Rule 10 CPC before the Civil Court at 
Lahore in the Interpleader suit with respect to Meezan Bank Ltd to 
implead it as respondent No.6 when the suit was rejected vide order 
dated 21.5.2010. Still further, as is evident from a bare perusal of the 
plaint filed by the appellant in its Suit No.1497/2009 for declaration, 
injunction and damages, the matters in issue in the two suits are not 
the same, and it is only in respondent Nos.1 and 2’s Interpleader suit 
that it can be definitively decided as to who is the true and original 
owner of the disputed sukuk certificates of the value of Rs.180 
million. We are not convinced that the respondent Nos.1 and 2 could 
be non-suited on the basis of the proviso to Section 88 CPC. 
18. 
 
Whether or not the person filing the Interpleader suit on 
behalf of respondent Nos.1 and 2 was duly authorized to do so is an 
issue that can only be proved through evidence if and when the trial 
court deems it appropriate to frame an issue in respect thereof. Other 
objections raised by the learned counsels for the appellant, such as 
the motivation(s) of the respondent Nos.1 and 2 in filing the 
Civil Appeal No.104-L/2015 etc. 
 
- 20- 
 
Interpleader suit are not germane to the question of rejection of a 
plaint on the touchstone of Order 7 Rule 11 CPC.  This Court in the 
case cited as Haji Abdul Karim and others Vs. Messrs Florida 
Builders (Pvt.) Ltd (PLD 2012 SC 247) has comprehensively 
discussed the scope and parameters of Order 7 Rule 11 CPC and has 
set out the following guidelines for interpretation thereof:- 
 
“Firstly, there can be little doubt that primacy, (but not 
necessarily exclusivity) is to be given to the contents of the 
plaint …………. 
Secondly, it is also equally clear, by necessary inference, 
that the contents of the written statement are not to be 
examined and put in juxtaposition with the plaint in order 
to determine whether the averments of the plaint are 
correct or incorrect…….. 
Thirdly, and it is important to stress this point, in carrying 
out an analysis of the averments contained in the plaint the 
court is not denuded to its normal judicial power………” 
 
The said judgment also defines the scope of Order 7 Rule 11(d) CPC: 
suffice it to say that the question of whether a suit is maintainable or 
not is moot with respect to whether or not a plaint is to be rejected as 
being barred by law. Both are a different species altogether and it 
may well be that a plaint is not rejected in terms of Order 7 Rule 11 
CPC but the suit is dismissed eventually as not maintainable for a 
possible host of reasons. 
19. 
 
For the aforesaid reasons we uphold the impugned order 
dated 17.2.2015 and dismiss the appeals. Before parting we would 
like to note with appreciation the able assistance rendered by Mr. 
Uzair Bhandari and Ms. Ayesha Hamid. We also note with concern 
that the Interpleader suit is pending before the Civil Court at Lahore 
Civil Appeal No.104-L/2015 etc. 
 
- 21- 
 
since 2009 and is still at a preliminary stage: given that the entire 
eventual decretal amount is already deposited with the learned Civil 
Court, the learned Civil Court at Lahore is directed to proceed with 
the Interpleader suit on day to day basis and decide the same as soon 
as possible but no later than 3 months from receipt of this order. No 
order as to costs. 
 
 
JUDGE 
 
 
 
JUDGE 
 
 
 
JUDGE 
Bench-I 
Lahore, the 
10th October, 2016 
Approved For Reporting 
Waqas Naseer/* 
