' RAJA FAYYAZ AHMED, J.---In this Constitutional petition the following reliefs have been claimed;--
(a) That the order dated 23-5-1998 passed by District Judge Ad hoc Quetta has not been passed in accordance with the law as such the same is liable to be set aside.
(b) That the District Judge Ad hoc Quetta has got jurisdiction to proceed under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961.
(c) To grant any other relief as is deemed fit and proper in the circumstances of the case in the interest of justice."
2. The brief facts of the case as set up in the petition are that the petitioner is a Banking Company constituted under the Industrial Development Bank of Pakistan Ordinance, 1961 with its Head Office at Karachi and Regional Office at Sharah-e-Hali at Quetta Cantt. Which is a recognized Banking Company under the Banks Nationalization Act, 1974. The petitioners extended foreign currency loan facility equal to Pak-Rupees 6,66,000 to Messrs Ali Woollen Mills (Pvt.) Ltd. Registered under the Erstwhile Companies Act, 1913 having its Head Office at Sirki Road, Quetta (now wound up) on terms and conditions of the loan duly incorporated in a credit agreement executed on 22-8-1970 and also the petitioner advanced a loan of Rs.3,91,000 in the year 1973 to the aforesaid company and the terms and conditions of such advanced loan are contained in a credit agreement dated 15-6- 1973 executed between the wound-up company and the petitioner. In addition to such agreements, the parties also executed various other legal documents in respect of the above said loan but the said wound-up company failed to meet with its repayment obligations as against the outstanding loans, consequently; the petitioner-Bank and the other creditors had filed winding-up petition in this Court (J.M. No,5 of 1988) wherein, order dated 3-8-1889 for winding-up of the company was passed. Pursuant to such order, the official liquidator and the petitioner made all out efforts to sell the project property for a maximum price through bidding/negotiation and finally official liquidator sold the property for Rs.5.540 Million, but the sale proceed was short even to liquidate the petitioner's claim who statedly was the only secured creditor, as such; the above mentioned amount was paid to the petitioner on 28-9-1991.
' The petitioner's claim as it stood at the time of the filing of the claim i.e. 30-9-1988 was 7.270 Million which increased to 8.592 Million as on 31-3-1991 therefore, after adjustment of the sale proceeds as above mentioned, an amount equivalent to Rs.50,96,054.30 (Rupees five Million ninety four thousand fifty-four paisas thirty only) was still due as the liability against the respondents Nos.1 to 11 who for the loan liability furnished surety and executed letters of guarantee on 22-8-1970 and 15-6-1973 binding themselves jointly and severally in personal capacity, undertaking and guaranteeing for the due payment of the credits/loans advanced to the wound-up company along with interest, charges, commission, cost and expenses thereon, which are binding on the heirs executors, administrators and legal representatives of the respondents Nos.1 to 11 but they statedly avoided to discharge their liability and have refused to adjust/repay the same despite repeated requests and legal notice dated 12-4-1996. The petitioner has also given the details of the landed property owned by the aforesaid respondents.
3. On the above mentioned averments the petitioner filed suit under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961 against the respondents Nos.1 to 11 in the Court of learned District Judge, Quetta on 25-9-1996 and thereafter on or about 1-4-1997 on administrative side the same was transferred to the file of Additional District Judge-I, Quetta and thereafter, the case file was sent back by the learned transferee Court to the learned District Judge, Quetta and transferred to learned Additional. District Judge-IV. Quetta some time in the month of June,, 1997 and ultimately the same was transferred to the file of District Judge (Ad hoc) Quetta. It is pertinent to note that during the pendency of the matter in the Court of Additional District Judge-I, Quetta, as contemplated under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961 vide interim order dated 2-4-1997 the landed property of the private respondents was attached and they were called upon by means of notice, directed to be issued to them to show-cause as to why the ad interim order of attachment of property may not be confirmed, and; ultimately the learned District judge (Ad hoc), Quetta vide order dated 23-5-1998 impugned herein directed that the suit be returned to. The petitioner for presentation to the competent Court of law for want of jurisdiction and simultaneously the interim order passed on 2-4-1997 by the learned Additional District Judge- I, Quetta was also vacated. It may be noted that after having heard the arguments of the parties learned counsel, when the matter was reserved for judgment; Civil Miscellaneous Application No,506 of 1999 was submitted by the appellant's learned counsel wherein, it was prayed that by virtue of Banking Companies (Recovery of Loans) (Amendment) Ordinance, 1983, proviso to section 6(4) has been added and therefore, the judgment reported in 1981 SCMR 143 and 1994 SCMR 1007, cited by the respondents learned counsel will have no application in the matter. Accordingly; notice of the application was given to the respondent counsel who were re-heard in the matter in respect of the above noted aspect.
4. The learned counsel for the appellant contended that:--
(a) The learned District Judge (Ad hoc) failed to exercise jurisdiction vesting in it under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961 read with Proviso to subsection (4) of section 6 of the Banking Companies (Recovery of Loans) Ordinance, 1979 arbitrarily by holding that the amount sought to be recovered since does not exceed rupees Ten Million will be governed by the provisions of above said Ordinance, except the Agricultural Development Bank of Pakistan to which it does not apply.
(b) The remedy provided by section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961 is more effective and speedy than the one available under the provisions of Ordinance XIX of 1979 and since the right of the Banking Company (appellant) to seek any remedy before the Court that may be available under law by which the petitioner's company has been established, and; as the instant cause has been saved by the added Proviso to subsection (4) of the Banking Companies (Recovery of Loans) Ordinance, 1979 therefore, the impugned order is liable to be reversed and the rights of the parties need be decided not withstanding the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 but according to the law existing when action began.
(c) For the above reasons, the application filed by the appellant is triable by the District Judge (Ad hoc), Quetta and not by a Special Court.
5. Syed Ayaz Zahoor, the learned counsel for the private respondent contends that-
(a) That the pending proceedings including all the suits instituted after the Amending Ordinance No,II, 1997 would have to be tried by the Special Court constituted under Banking Companies (Recovery of Loans) Ordinance, 1979 not withstanding the proviso added to subsection (4) of section 6 of the aforesaid Ordinance and therefore, the impugned order is not open to any interference. He placed reliance on the reported judgments i.e. 1981 SCMR 143 and 1994 SCMR 1007 and the change of forum of the trial of suits was only a matter of procedure in absence of any vested right of a party to the proceeding.
(b) The application instituted by the appellant for recovery of the claimed amount is triable only by Special Court constituted under the Banking Companies (Recovery of Loans) Ordinance, 1979 alone i.e. According to the existing law when application was filed by the Banking Company (appellant).
6. We have considered the contentions put forth by the learned counsel for the parties in the light of the record of the case and law. The petitioner Banking Company on 25-9-1996 filed application against private respondents under section 39 of Industrial Development Bank of Pakistan Ordinance, 1961 (hereinafter called as the first Ordinance) for recovery of Rs.50,94,054.30 with interest and other charges etc. In the Court of District. Judge, Quetta and ultimately the same was transferred to the file of District Judge (Ad hoc) Quetta and the learned Court vide order impugned herein directed that the application so instituted by the petitioner be returned for presentation to the competent Court of law for want of jurisdiction on the ground that amount sought to be recovered since does not exceed Rupees Ten Million therefore, the cause will be governed by the provisions of Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter called as the second Ordinance).
7. Undoubtedly the petitioner-Company has been established by the first Ordinance i.e. Industrial Development Bank of Pakistan Ordinance, 1961 (Ordinance )00U of 1961) and by virtue of section 39 of this Ordinance, special provisions for the enforcement of the claim by the Bank have been enacted whereby such a bank, if becomes entitled to require immediate payment: of any loan by reasons of breath of any condition of an agreement between the bank and Industrial concern to which the loan has been granted or any person liable for repayment of that loan, fails to repay the loan or where any Industrial concern to which any loan has been granted or any person liable for repayment of that payment fails to pay the loan in terms thereof or in compliance with the notice under section 38, the bank may apply to the District Judge within the local limits of whose jurisdiction the Industrial concern carries on the whole or a part of its business, or the office or branch of the bank from which the loan was disbursed is situated, for one or more of the reliefs mentioned in Clauses (a), (b) and (c) of section 39 of the said Ordinance.
8. It may be seen that the Banking Companies (Recovery of Loans) Ordinance, 1978 was repealed and with certain modifications the Banking Companies (Recovery of Loans) Ordinance, 1978 was re-enacted vide Ordinance No,XIX of 1979 and subsection (3) of section 1 of the second Ordinance provides that it applies to all the Banking Companies except the Agricultural Development Bank of Pakistan to which only such provisions shall apply, and from such date as the Federal Government, may, by notification in the official Gazette specify and therefore, without any ambiguity it has been laid down that the second Ordinance applies to all the Banking Companies except the Agricultural Development Bank of Pakistan; and; the State Bank of Pakistan has been specifically excluded from the definition of the "Banking Company" as defined in clause (a) of section 2 of the Ordinance. By virtue of subsection (4) of section 6 of the Ordinance provides that no Court other than a Special Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of such Court extends under the second Ordinance, including a decision as to the existence or otherwise of a loan and the execution of a decree passed by Special Court; and all the proceedings, including proceedings following the filing of arbitration award and proceedings for execution of a decree within the jurisdiction of a Special Court, by whatever Court have been passed or may be pending in any Court before the commencing day shall stands transferred to the Special Court, constituted under Ordinance No, XIX of 1979. The provisions of subsection (4) of section 6 of the second Ordinance makes it clear that the jurisdiction of all other Courts have been excluded in respect of the proceedings pending in any Court and to be instituted including that of execution of a decree and proceedings following the filing an arbitration award to which the jurisdiction of the Special Court extends under the Ordinance.
9. Syed Ayaz Zahoor, the learned counsel for the private respondents in view of the above quoted provisions of the second Ordinance argued that only a Special Court constituted under the Ordinance has the exclusive jurisdiction to adjudicate upon the matter and the section 39 of the first Ordinance has no application of the matter. To supplement his contention he placed reliance on the reported judgments i.e. 1981 SCMR 143 and 1994 SCMR 1007.
10. In the case of Industrial Development Bank of Pakistan v. Messrs Nadeem Flour Mills and others reported in 1981 SCMR 143 the facts in brief are that the petitioner advanced a loan to Messrs Nadeem Flour Mills etc. Which was secured by a Promissory Note, by a pledge and by hypothecation and mortgage of their factory and in the chain of events a sum of Rs.603,302.97 was due from the said borrower, as they did not repay the same despite notice therefore, the said Banking Company filed application in the original side of the High Court of Sindh under section 39 of the first Ordinance, 1961 for attachment and sale of the mills of the borrower at Quetta i.e. At the time when the Banking Companies (Recovery of Loans) Ordinance, 1979 was in force therefore, Honourable Chief Justice of Sindh High Court held that the application was not maintainable because the petitioner was a Banking Company within the meaning of the second Ordinance and vide order dated 5-11-1975 impugned before Honourable Supreme Court directed "let the plaint be returned for presentation before the proper forum". The creditor i.e. Industrial Development Bank of Pakistan feeling aggrieved of the transfer of its case to the Special Court constituted under the second Ordinance, assailed the same before the Honourable Supreme Court. The Honourable Court having dilating upon the various provisions of the second Ordinance held that the matter pending before High Court under section 39 of the Industrial Development Bank of Pakistan Ordinance (X0U of 1961) was rightly ordered for transfer to proper forum under Ordinance XIX of 1979, having powers to call for repayment of loans before expiry of agreed period, which are wider than the powers conferred on the Court under section 38 of Industrial Development Bank of Pakistan Ordinance XXXI of 1961, but the remedy for recovery of loan as contemplated under section 39 of the first Ordinance is more effective than that contained in section 7 of the second Ordinance. It has further been held that the second Ordinance does not apply to the Agricultural Development Bank of Pakistan to which exemption specifically has been extended by the provisions of subsection (a) of section 1 of the Ordinance and thus the claim of the creditor can only be adjudicated upon by Special Court constituted under the second Ordinance.
11. In the case of Yousaf All Khan Barrister-at-Law Lahore v. Messrs Hong Kong Shanghai Banking Corporation Karachi and others reported in 1994 SCMR 1007, the contention before Honourable Supreme Court was that under the Banking Companies (Recovery of Loans) Ordinance XIX as amended, there is no provision for transfer of pending cases and the reliance on the precedents quoted in the impugned order are not quite apt. The Honourable Supreme Court while seized of the matter on having dilated upon the various provisions of the second Ordinance including the earlier Ordinance No,XXIII of 1978 and as amended vide Banking Companies (Recovery of Loans)
(Amendment) Ordinance (Ordinance No,II of 1983 and the Banking Companies (Recovery of Loans)
Amendment Act (XVII of 1992) held that all pending suits involving claim by or against a Bank in which the amount of Bank was below Ten Millions became exclusively triable by Special Court mentioned in section (2)(f)(i) of Ordinance XIX of 1979 and all suits pending in the High Court stood transferred to the Special Court constituted under the above mentioned Ordinance and the change of forum of the trial of suit was a mere matter of procedure which applied to all pending cases in the absence of any prejudice to the parties and therefore, on transfer of the pending case no vested right of any party was affected by applying the rule laid down in the case of Mst.
Yasmeen Nighat and other v. National Bank of Pakistan and others reported in PLD 1988 SC 391 wherein; it has been observed that the Banking Companies (Recovery of Loans) (Amendment)
Ordinance (II of 1983) would affect the pending proceedings and all the suits against the Banking Companies including the pending proceedings would have to be tried by a Special Court under the Banking Companies (Recovery of Loans) Ordinance (XIX of 1979). After reviewing the various provisions of Ordinance in juxtaposition with the provisions of Ordinance II of 1983 it has been observed by the Honourable Supreme Court in the case PLD 1981 SC 391 as follows:-- "It may be added that an examination of the provisions of Ordinance XIX of 1979, in juxtaposition with those of Ordinance II of 1983, shows that the Legislature by enacting section 6(4) of Ordinance X of 1979, intended to oust the jurisdiction of all other Courts in the matter of banking loans and to confer exclusive jurisdiction on Special Courts in respect of the matters which were made triable by the said Courts, under the terms of the said Ordinance and all such proceedings pending in any Court immediately before the commencing day of Ordinance XIX of 1979, stood transferred to the Special Court concerned. Under the provisions of the said Ordinance XIX of 1979 (under section 6(2)
(a) the jurisdiction of the Special Court was expressly excluded in relation to cases involving a sum of Rs. One lac or less. But by Ordinance II of 1983, the definition of the Special Court having been amended and subsection (2) (a) of section 6 of Ordinance XIX of 1979, having been omitted, the Special Court established under section 5(1) of the Ordinance became vested with the jurisdiction to try those cases which were specially excluded from its jurisdiction under section 6(2)(a) of Ordinance XIX of 1979. As a result of this extension, the Special Court was conferred the sole jurisdiction in such matter (the jurisdiction of all other Courts having been ousted in respect of such cases). The intendment of the law-maker which appears front the changes made by him, is that he intended that even such cases which under section 6(4) of the Ordinance were to be tried by the Civil Courts earlier were also to become triable by the Special Courts. This intention is also decipherable from the circumstance that with the omission of clause (a) of subsection (2) of section 6 of Ordinance XIX of 1979, the forum of the Civil Courts for the trial of such cases ceased altogether. Hence, it will not. Be reasonable to infer that the suits pending in the Civil Courts can continue to be tried by them, when their jurisdiction in respect of these cases has been completely taken away.
' The upshot is that in our opinion the view taken by the Peshawar High Court and the High Court of Sindh that the suits pending in the Civil Courts before the promulgation of Ordinance II of 1983, also stood transferred to the Special Courts, is correct while the view expressed by the Lahore High Court in National Bank of Pakistan v. Taj Muhammad PLD 1984 Lah. 417 and United Bank Ltd. v. Mian Abdul Khaliq PLD 1988 Lah. 225 is erroneous."
' Applying the above quoted principle of law the Honourable Supreme Court dismissed the appeal filed by Yousaf Ali Khan Barrister-at-Law (1994 SCMR 1007).
12. It is noteworthy that in the above reported judgments i.e. PLD 1988 SC 391, 1994 SCMR 1007, referred to above, the effect of clause (a) of the Proviso to subsection (4) of section 6 of the second Ordinance as amended by Banking Companies (Recovery of Loans) (Amendment) Ordinance, 1983 being not relevant to the proposition of which the Honourable Supreme Court was seized of, was not under consideration and the above noted amendment so introduced in the second Ordinance vide Ordinance II of 1983 was made far subsequent in time to the judgment in the case of Industrial Development Bank of Pakistan v. Messrs Nadeem Floor Mills and others reported in 1981 SCMR 143 and therefore, the aforesaid quoted judgment will have no effect on the proposition involved in the instant matter.
' As herein forenoted clause (a) of Proviso to subsection (4) of the section 6 second Ordinance was added much prior to the institution of the application by the petitioner Banking Company which provides that nothing in subsection (4) shall be deemed to affect the right of a Banking Company to seek any remedy before any Court that may be available under the law by which the Banking Company may have been established or under the law as amended from time to time.
Undoubtedly the petitioner is a Banking Company under the Banks Nationalization Act, 1974 and established by the first Ordinance (Industrial Development Bank of Pakistan Ordinance, 1961) is empowered by section 39 of the said Ordinance to apply to the District Judge within the local limits of whose jurisdiction the Industrial Concern carries on the whole or a part of its business or the office or branch of the Bank from which the loan was disbursed is situated for the recovery of the loan advanced to such Industrial Concern by reason of breach of any condition of any agreement between it and the industrial concern to which the loan has been granted or any person liable for repayment of that loan in the terms thereof or in compliance with the notice issued under section
38. The right of a Banking Company to apply to the District Judge for the recovery of the loan advanced to a Indus trial concern has been expressly saved by Clause (a) of Proviso to subsection
(4) of the section 6 of the first Ordinance and therefore, the jurisdiction of Special Court constituted under the second Ordinance as envisaged in section 2(0(1) and; the jurisdiction vesting in the Special Court in the matter as laid down in subsection (4) of the second Ordinance will not affect the jurisdiction of the District Judge to which the petitioner Banking Company applied for the recovery of the loan etc. Under section 39 of the first Ordinance, as such; the petitioner competently and validly applied for the recovery of loan advanced to the Industrial Concern in the Court of District Judge, consequently; the same cannot be adjudicated upon by Special Court constituted under the second Ordinance unless the petitioner Banking Company instead of filing of application under section 39 of the First Ordinance would have filed suit without availing such available remedy, before Special Court and therefore, the impugned order is not sustainable.
' Thus; in view of the foregoing reasons the impugned order is set aside and the case is remanded to the learned District Judge (Ad hoc), Quetta with direction to proceed with the matter in accordance with the provisions of the first Ordinance (Industrial Development Bank of Pakistan)
Ordinance (XXXI of 1961) on its own merits. Resultantly; petition is allowed leaving the parties to bear their on costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.