' UMAR ATA BANDIAL, J.---This appeal has been filed against the judgment and decree dated 31-1- 2002 passed by the learned single Judge decreeing the suit by-respondent No,1 Bank ("Bank") for an amount of UAE Dhs.
11.800 million or equivalent thereof in Pakistani rupees, costs in the suit and cost of funds determined under section 3(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance") in favour of the plaintiff and against the defendants jointly and severally. The appellant before us is defendant No,1 in the suit. He is a Director of respondent No,2 company (defendant No,3 in the suit) and respondent No,3 (defendant No,2 in the suit) is the duly constituted attorney of the Directors of the Company. Both the appellant and the respondent No,3 are guarantors to the Bank in respect of financial facilities provided to the respondent No,2 company.
2. As mentioned in the impugned judgment, an ex parte judgment and decree was passed against the three defendants on 2-11-1999 in the suit. Only the appellant (defendant No,1) filed an application for setting aside of the said ex parte judgment and decree which was allowed by order dated 1-11-2000. Thereafter the appellant filed an application for leave to defend bearing PLA No,192-B of 2000 which was later amended purportedly to meet the requirements of the newly- promulgated Ordinance. This PLA was dismissed by the aforesaid judgment and decree dated 31- 1-2002 that is impugned in the appeal before us.
3. The focus of submissions by the learned counsel for the parties before us has been the appellant's jurisdictional objections to the maintainability of the Bank's suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001. In order to comprehend these jurisdictional objections, it is necessary first to traverse the salient facts of the case. On the strength of securities executed on 9-12-1991, the Bank's branch at Par Dubai extended financial facilities to the respondent No,2 company. The appellant is alleged to be guarantor to the Bank for the said facilities and also a signatory to an agreement dated 7-5-1994 claimed in the suit to be a mortgage agreement. Following default in payment of dues by, inter alia, the defendants in the suit and two other persons, the Bank filed recovery proceedings before the learned Court of first instance at Dubai which made its order dated 22-9-1996 declaring "in absentia to bind the defendants jointly to pay the plaintiff bank, the sum of Dhs 11,800,542.00 with interest of 9% as at the date of filing the case until full and final settlement and binding them with the court-fee any expenses and two hundred Dirhams lawyers expenses, rejecting the other requests."
4. Thereafter an appeal was filed by the Bank before the learned Dubai Court of Appeal which accepted the same by order dated 25-5-1998 and directed two persons who are not parties to the present proceedings to be additionally bound to pay the value of three unpaid cheques to the Bank. Based upon the said foreign judgments rendered by the learned. Courts at Dubai, the Bank filed its suit before this Court to recover the amount adjudicated against defendants. Paragraphs 20 and 21 of the plaint reproduced below explain that on quantum and grounds of liability, the foreign judgments constitute the foundation of the Bank's claim against the defendants arrayed in its suit before the learned single Judge:-- "20 That the defendants have defaulted/neglected to pay the amount towards satisfaction of the order/judgment issued by a foreign Court of competent jurisdiction, binding them jointly to pay Dhs. 11,800, 542.00 with interest. Hence this suit."
"21. That the plaintiff-Bank claims recovery of an amount of Dhs. 11,800,542 with interest at the, rate of 9% as from 3-9-1995 from the defendants jointly and severally, by enforcing their obligations under the guarantee and. in respect of order/judgment passed by the foreign Court of competent jurisdiction, on merits, in favour of the plaintiff bank as described earlier and by the sale of their personal assets and properties."
5. It is clear from the foregoing averments that the bank is suing on the foreign judgments of the Dubai Courts. This view is reinforced by a submission to such effect by the Bank's counsel that is noted in para.6 of the impugned judgment.
6. Learned counsel for the appellant has assailed the judgment of the learned single Judge on the ground that it fails to determine the objection to jurisdiction that the foreign judgments constitute res judicata and exclude determination of the original cause of action by the learned single Judge.
It is shown that the findings in the impugned judgment proceed upon a consideration of two distinct types of actions namely, claim on the foreign judgments combined with a claim based on the original cause of action. The first type of action is alleged to be unsuccessful because the statutory tests of recognition and enforceability of a foreign judgment were not applied by the impugned judgment. The second type of action is also claimed to be unavailable because it goes beyond the scope of the suit that is squarely based on the foreign judgments. The following dictum in Emirates Bank International Ltd. v. Messrs Usman Brothers and 9 others 1990 M LD 1779 that is noted in the impugned judgment elaborates this distinction:-- "5--Upon obtaining a foreign judgment three courses are open to the decree-holder i,e, (1) that he can obtain execution of the foreign judgment by proceeding under section 44-A of C.P.C., if the country from which the decree has been obtained is United Kingdom or any reciprocating territory and in that case he can outright obtain execution of that decree from District Court of concerned District of Pakistan and that he need not file a suit even and need not go through the procedure prescribed for the trial of the suit; (2) that he can file a suit in Pakistan on the basis of the foreign judgment treating it as the cause of action. In that case if the conditions prescribed in section 13, C.P.C. Are fulfilled, the judgment is conclusive between the parties and otherwise it is res judicata between them and -s such Courts in Pakistan are bound by its findings. Such suit however, is to be filed within the period of six years from the date of that judgment as provided under Article 117 of the Limitation Act, or (3) that he can file a suit on the original cause of action as it does not come to an end after passing of a foreign judgment, but remains intact until and unless that foreign judgment is satisfied. However, if the conditions mentioned in section 13 are not satisfied, then the decree will be open to collateral attack in Pakistan."
7. On the strength of a recent judgment dated 13-12-2005 by a learned Division Bench of this Court rendered in R.F.A. No,303 of 2003 titled Nusrat Mehdi Chaudhri v. Habib Bank Limited and another, learned counsel for the appellants submits that in a suit based on a foreign cause of action the consideration of three jurisdictional aspects is necessary, namely, jurisdiction over the subject- matter, over the parties and territorial jurisdiction. This treatment is stated to be lacking in the impugned judgment in the acceptance of the second type of action. With respect to the instant objection raised by the learned counsel, the learned Division Bench in the precedent case has observed as follows:- "We have heard the learned counsel for the parties and find that in the facts and circumstances of each case, the objection of jurisdiction raised by the appellants was not illusionary, frivolous or bald rather by all means it was/is substantial question of law, the determination of which, depends upon the ascertainment of certain "jurisdictional facts". And for such ascertainment, in all probability, the recording of the requisite evidence cannot be ruled out. In any case, we are of the view that the said question should not have been dealt by the Court in a summary manner, rather the three aspects of the jurisdiction, raised by the appellants and noted above, should have been considered, dilated upon and decide which is conspicuously missing in the present cases; resultantly, the case of the appellants warranted the grant of the leave."
8. Learned counsel for the respondent-Bank has opposed the appeal and in particular the foregoing objections on the plea that a suit based on a foreign cause of action is maintainable before Pakistani Courts under the criteria prescribed in section 20, C.P.C. And can be lawfully urged in tandem with a suit based on a foreign judgment. He has placed reliance on National Bank of Pakistan and 4 others v. Gammon Pakistan Limited PLD 1990 Karachi 209 and Emirates Bank International Ltd. v. Messrs Usman Brothers and 9 TO 1990 M LD 1779.
9. In the light of the latest view expressed by the Learned Division Bench of this Court, it appears necessary that the different facets of the objections to jurisdiction raised in the present case ought to have been dealt with particularity, Such scrutiny would have shown whether the efforts of Bank to simultaneously sail in two boats satisfied the prescribed tests to get a decree under the Ordinance. The two boats are the two types of actions combined before the learned single Judge, the foreign judgment as a cause of action and secondly, the original cause of action as the basis of the suit. There is merit in the contention of the learned counsel for the appellant that the scope and frame of Bank's suit precludes the Bank from advancing the above mentioned second type of action Apart from the contents of paras.20, 21 and 22 of the quantum and calculation of the relief prayed and the Bank's plea on the points of limitation prima facie show that as whole the suit has substance and effect only with reference to the foreign judgments. Accordingly, it would be relevant 1 air the Bank to first show whether on its present pleadings t can maintain its claim on the original cause of action.
10. With regard to the first type of action, the tests of recognition and enforceability of foreign judgments mentioned in section 13 of C.P.C. Need to be applied and satisfied before a decree on a foreign judgment is to be passed. This is particularly so where the foreign judgment is given in absentia for that would require its scrutiny on the touchstone of the rules of natural justice as applied in Pakistan. We, therefore, feel that the Bank's suit requires a deeper and a fresh look in the light of the relevant criteria that are applicable 1n the foregoing jurisdictional context.
11. Accordingly, for the foregoing reasons and following the view expressed by the learned Division Bench already noted above, this appeal is partly allowed for the learned single Judge to consider and decide afresh the different facets of the jurisdictional objections raised by the appellant. No order as to costs.
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