This revision under section 115, C.P.C. impugns the order dated 3-4-2003 passed by learned VI- Additional District Judge, Karachi South whereby the Civil Miscellaneous Appeal preferred by the applicant against the order of return of his plaint passed by II-Civil Judge, Karachi South was dismissed.
2. The applicants are a limited company running business of electronic appliances and are maintaining Account No.7527 with United Bank Limited, the respondent. It is the case of applicants that the aforesaid account was operated jointly and the cheques were to be signed by two authorized signatories, but from their account an amount of Rs.1,00,000 was drawn against a cheque bearing signature of only one of them. Initially, a suit was filed against the respondents by their sister concern Pak Electron in the Banking Court for recovery of money which was dismissed as withdrawn on 25-4-2002. The applicants filed a suit in the Court of Civil Judge, Karachi South for recovery of the same amount against respondent, but the plaint was returned by order dated 8-1- 2003 on the ground that the plaintiffs/applicants had no locus standi. Appeal preferred against the aforesaid order also met the same fate. The applicants, therefore, preferred this revision.
3. I have heard Mr. Ishrat Alavi and Mr. Zubair Ahmed Qureshi learned counsel for the parties and perused the relevant material placed on record..
4. From the pleadings it transpires that the cause of action in this case is founded on encashment of a cheque containing one signature alone, although it was agreed practice that a cheque of the applicant/plaintiff-Company was to be honoured, only when it was signed by two authorized signatories and in consequence of such encashment Rs.1,00,000 (Rupees One Lac) was drawn on 21-12-1999 from the respondent-Bank. The agreed practice of encashment on the basis of two signatures was not dispute during the arguments. It was also not disputed that the amount of Rs.1,00,000 had been drawn from the account of the applicant/plaintiff-Company. The serious contest however, was on the point that the matter essentially fell within the jurisdiction of Banking Court and the suit before a Civil Court was not competent.
5. Perusal of the order dated 8-1-2003 passed by the learned Civil Judge reveals that the Court took note of the order dated 25-4-2002 passed by the Banking Court and plaint was rejected, while returning the plaint it was directed that it may be presented in the Court of competent/proper jurisdiction but it was not mentioned as to which Court would be competent. The Appellate Court although held that the plaint was rightly returned but in its order the Court further touched the merits saying that the applicant who was appellant therein was responsible for missing of the cheque and had not joined as party the person who encashed the cheque. This observation seems to be incidental and cannot be sustained, since the culprit who had stolen the cheque was not known to the appellant, and; secondly, it was not a case under the Offences in Respect of Banks (Special Courts) Ordinance, 1984. In any case the matter rests on the question that whether the Civil Court had jurisdiction to entertain the plaint or not.
6. Admittedly, the order of return of plaint was passed on 8-1-2003 when the new law on the subject namely Financial Institutions (Recovery of Finances) Ordinance, 2001 was in force having been promulgated on 30-8-2001. Although the actual act of withdrawal of amount from the account of the applicant took place on 21-12-1999 when the repealed law namely Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was holding the field but, the suit was filed in the year 2002 when the aforementioned Ordinance (henceforth to be referred as "Ordinance XLVI of 2001") was in force. The Courts below have not made any observation referring to any of these statutes but it seems, their conclusions, were founded on Ordinance/ XLVI, 2001 and the learned counsel also directed their arguments in view of the aforesaid Ordinance XLVI of 2001 for yet another reason that the relevant provision of both laws were analogous and pari materia.
7. Mr. Ishrat Alavi submitted that in the Ordinance XLVI of 2001 the jurisdiction and procedure of Banking Courts is to be read initially from section 9 of the Ordinance XLVI of 2001 and in this context the other relevant provisions are also to be considered. According to him, the applicant was not a "customer" within the meaning of section 2(c) of the Ordinance XLVI of 2001 and as far the subject- matter of this suit is concerned it does not fall within the definition of "finance" as contemplated under section 2(b) thereof and that no "obligation" has arisen within the meaning of section 2(e) of this Ordinance, the applicant's cause could not therefore, be adjudicated upon by Banking Court, he was as such justified in filing the suit in the said Court.
8. Learned counsel for respondent contended that the definition of "finance" under section 2(d)(iii) as also other clauses are sufficient to circumscribe the subject-matter and this is a case to be heard and decided by the Banking Court. He also referred to the relevant provisions of the repealed AO 1997 (hereinafter to be called "Act, 1997").
9. For the sake of convenience section 9(1) of Or I nance, XLVI of 2001 is reproduced below:-- "9. Procedure of Banking Courts (1) where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power of attorney or otherwise."
10. Section 9 of the Ordinance, XLVI of 2001 or 1 or that matter the analogous provisions of the repealed Act spell out a similar and identical position that predominantly there should be a default in fulfilment of an "obligation" essentially by a "Customer" or by "Financial Institution" with regard to any "Finance" and then only the cause is to be adjudicated upon and decided by the Banking Court constituted under the Ordinance XLVI of 2001. In this context the repealed Act of 1997 would, of course, speak of a borrower or customer and Banking Company instead of Bank and in addition to finance it would include loan.
11. As regards the "customer", section 2(c) of the ordinance XLVI of 2001 defines the "customer" to means a person to whom finance has been extended by a financial institution and includes a person on whose behalf a guarantee or letter of credit has been issued by a financial institution as well as a surety or an indemnifier. The last para. of this definition is wholly out of context. As far the first portion is concerned it again refers to a person whom "finance" has been extended. The term "finance" has been defined under section 2(d) of Ordinance XLVI of 2001. The definition of finance contains six clauses yet it is not exhaustive owing to use of word "includes". Nevertheless, in examining the scope of finance, focus is to be laid on these clauses unless any other situation emerges from the Ordinance itself.
12. On comprehensive examination of the above clauses it would appear that no accommodation or facility as contemplated under clause (i) of the finance can be spelt out from the subject- matter and even other clauses are not attracted since neither the dispute relates to facility of guarantor etc. or financial enjoyment given by Financial Institution on behalf of customer nor a benami loan or facility of credit or charge cards is involved. Equally, it may be observed that the applicant was not borrower nor had he obtained a loan within the meaning of repealed Act, 1997.
As far clause (iii) is concerned it is reproduced hereinbelow:-- "facility of guarantees, indemnities, letters of credit or any other financial engagement which a financial institution may give issue or undertake on behalf of a customer, with a corresponding obligation by the customer to the financial institution"
13. None of these factors is attracted to the subject-matter, for, this case simply relates to negligence on the part of bank by overlooking the agreed and settled principle that the cheque could only be encashed when it was signed by two authorized signatories, irrespective of the fact that it was presented by a culprit or a gentleman. On the whole, it leads to an inevitable conclusion that definition of finance is not attracted to the cause of action in the instant matter.
14. The term obligation defined under section 2(e) of the Ordinance would again revolve around matters incidental/ ancillary to 'finance' and duties of a `customer' but the applicant does not fall within the definition of "customer".
15. The scope of repealed Act was examined by this Court in Nadeem Ghani v. United Bank Limited 2001 CLC 1904, the relevant observations made therein are recorded at para. 21 which run as under:-- "The Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was promulgated to provide exclusively to the Banking Companies operating in Pakistan a speedy procedure for recovery of the loans and finances extended by them to their borrowers and customers. The Banking Courts established under the Act, in addition to the powers available to them under the Civil Procedure Code, 1908, are permitted to follow or use any other manner as they may deem fit for the purpose of expeditious recovery of the loans or finances. This special law was enacted to meet the alarming economic situation which had arisen in the country on account of the defaults in payment of the loans and finances by the borrowers and customers of the domestic Banking Companies. Consequently -the jurisdiction of the Banking Courts is limited to cases where default is committed by a Banking Company or a customer in fulfilling their obligations arising out of the loan or finance agreements executed by them i.e. the special law applies to agreements executed and transactions entered into in Pakistan primarily under the non-interest banking system barring a few exceptions relating to transactions involving foreign exchange and interest payable thereon. The following provisions are relevant for the purpose of appreciating the powers and jurisdiction of the Banking Courts established under the Act and their territorial limits.
They are:--
16. From this point of view also it will be seen that the instant matter does not fall within the definition of Banking Court. The connotation of "finance" and other terms discussed above, were also examined by this Court in Karachi Electric Provident Fund v. National Investment (Unit) Trust 2003 CLD 1026 and Bank Alfalah Limited v. Iftikhar A. Malik 2003 CLD 363 and the rule laid down therein supports the conclusion drawn in the foregoing paras.
17. Mr. Zubair Ahmed Qureshi referred to case of Nasimuddin Siddiqui v. United Bank Limited 1998 CLC 1718 wherein different categories were summarized in para.22 of the judgment for the purpose of jurisdiction of Banking Court, or otherwise. But as discussed above, the cause of action I presently is wholly out of the definition of the aforementioned Banking laws, therefore, even following this authority the jurisdiction of Civil Court for this suit will not be affected.
18. Lastly, Mr. Zubair Ahmed Qureshi argued that revision against the impugned order is not competent. In this regard he relied on the case-law wherein the revision was found to the incompetent against the order of Special Court. In the instant case no order has been passed by a Special Court therefore, exercise of revisional jurisdiction is not open to question.
19. In result of foregoing discussion it is concluded that the suit was maintainable in the Civil Court and did not fall within the jurisdiction of Banking Court constituted under the Ordinance or the repealed Act, as such, the order passed by the Civil Judge could not be sustained in law.
Consequently the order of the Appellate Court maintaining the same is also wholly misconceived.
These orders demonstrate patent failure to exercise lawful jurisdiction and are accordingly set aside. The suit be admitted by the Civil Court subject to fulfillment of other legal requirements and their further proceedings be taken in accordance with law. The revision is allowed with no order as to costs as mostly interpretation of legal issues was involved.