' MUHAMMAD KHALID MEHMOOD KHAN, J.--- The plaintiff being a private limited company incorporated under the Company Ordinance 1984 having its office at Marco House 147-Lane 11, Cavalry Ground, Lahore Cantt. (hereinafter referred to Company) filed a suit under section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001 (hereinafter referred as Ordinance) against Habib Bank Ltd and Messrs Thaheem & Company for declaration, permanent injunction and recovery of amount asserting that company deals in business of Export of rice and is doing it banking business with defendant No,1, the company is enjoying good financial reputation among the business circle as well as its bankeRs, Defendant No,2 is the customer of defendant No,1 who availed certain financial facilities against the security of pledged of stock of rice. The defendant No,2 was in financial constraints and was facing difficulties in discharge of its financial obligation with the defendant No,
1. The defendant-Bank introduced defendant No,2 with the company and requested to help it. The company on the assurance of defendant No,1 entered into a financial transaction to help defendant No,2 and to act as indemnifier for defendant No,2. The Regional General Manager of defendant No,1 Mr. Pervaiz Ahmed Sheikh was a key person whose interest was to secure the interest of defendant No,1, on his assurance and undertaking the company acted as indemnifier of defendant No,2 and as such the company is a customer in terms of section 2(c) of the Ordinance 2001.
2. The company on the asking of defendant No,1, was paying the amounts against the delivery of pledge stock of defendant No,2 to defendant No,1 and as such he was indemnifying defendant No,
1. The defendant No,1 delivered pledged stock to company against payment to the credit of defendant No,2. The defendant No,1 illegally stopped the delivery of pledged stock to the company in spite of receipt of Rs,22.50 Millions as a part price of pledged stock. The company due to illegal act of defendant No,1 failed to fulfil its obligation with its customer which it committed on the assurance of defendant No,l. The company due to the violation of agreement on the part of defendant No,1 suffered huge loss and reserved its right to recover the same through a separate suit and prayed for a decree of Rs,311.0 million along with 19% mark up from the date of suit till realization against defendant No,1 along with a decree for permanent injunction restraining the defendants from removing and selling the pledged stocks of defendant No,l.
3. Notices were issued to both the defendants, both the defendants filed their P.L.As. The defendant No,1 in its PLS No,158-B of 2010 attacked the jurisdiction of this Court for entertaining and deciding the suit. In addition to the said objection they have raised a number of other objections legal as well as factual and prayed for rejection of plaint under Order VII, Rule 11, C.P.C. Or return of plaint under Order VII, Rule 10, C.P.C. And in alternative permission to defend the suit unconditionally. The defendant No,2 through PLA No,175-B of 2010 raised basic objection regarding jurisdiction of this Court, however, defendant No,2 submitted that if there is any alleged agreement that is with the company and defendant No,1 and defendant No,2 has no role to play. He further submitted that no relief has been claimed against defendant-N .2 and as such as a matter of right they are entitled to defend the suit unconditionally.
4. The prayer of suit shows that the company is not claiming any relief against defendant No,2 for whom it is acted as indemnifier, however, for the disposal of two P.L.As. It is necessary that question of jurisdiction is dealt in the first instance.
5. The company is claiming that they on assurances/ understandings of defendant No,1 agreed to act as indemnifier of defendant No,2. The defendant No,2 is admittedly a customer of defendant No,1 and had availed certain finance facilities including the facility of cash finance against pledge of rice. The plaintiff company may be the account holder of defendant No,1 but is admittedly not raising any claim with reference to any finance against the plaintiff company.
' Section 9 of the Ordinance 2001 is read as under:--- "(9) Procedure of Banking Courts.-- (I) 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 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."
6. Bare perusal of said provision of law shows that where a customer or financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or the customer may bring a suit in the Banking Court for the redressal of their respective grievance. For ascertaining jurisdiction of this Code under the Ordinance, 2001 it is necessary that plaintiff should be the customer or financial institution and the subject matter of the claim should be the finance.
7. Under section 2(a) financial institution has been defined:-- "(i) any company whether incorporated within or outside Pakistan which transacts the business of banking or any associated or ancillary business in Pakistan through its branches within or outside Pakistan and includes a government savings bank, but excludes the State Bank of Pakistan;
(ii) a modaraba or modaraba management company, leasing company, investment bank, venture capital company, financing company, unit trust or mutual fund of any kind and credit or investment institution, corporation or company."
Under section 2(3) the customer has been defined:- "(c) "Customer" 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."
And the finance has been defined in section (d) which is ready as under:--- "(d) (i) an accommodation or facility provided on the basis of participation in profit and loss, mark- up or mark-down in price, hire-purchase, equity. Supports, lease, rent-sharing licensing charge or fee of any kind, purchase and sale of any property including commodities, patents, designs trade marks any copy rights, bills of exchange, promissory notes or other instruments with or without buy-back arrangement by a seller, participation term certificate, mushrika, morabaha, musawama, istisnah or modaraba certificate, term finance certificate;
(ii) facility or credit or charge cards;
(iii) 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;
(iv) a loan, advance, cash credit, overdraft, packing credit, a bill discounted and purchased or any other financial accommodation provided by a financial institution to a customer;
(v) a Benami loan or facility that is, a loan or facility the real beneficiary or recipient whereof is a person other than the person in whose name the loan or facility is advanced or granted;
(vi) Any amount due from a customer to a financial institution under a decree passed by a Civil Court or an award given by an arbitrator, any amount due from a customer to a financial institution which is the subject-matter of any pending suit, appeal or revising before any Court, any other facility availed by a customer from a financial institution."
8. From the perusal of above said provision of law, it is manifest and clear that customer is that person to whom finance has been extended by a financial institution or a person on whose behalf a guarantee or letter of credit has been issued by a financial institution or is a surety or an indemnifier.
9. The company is claiming it to be the customer/ indemnifier. For ascertaining the status of company it is necessary that the transaction subject matter of the suit be examined. According to the averments of plaint, the company claims that on the assurance of defendant No,1 they agreed to identify them for helping defendant No,2 who is a customer of bank. The said alleged oral agreement has been claimed on the agreement of indemnity. The averments of plaint shows that Plaintiff Company was depositing the price of pledge stocks pledged by defendant No,2 for securing its finance availed from defendant. No,
1. In fact it may be an agreement between company and defendant No,2, the defendant No,2 was selling its pledge stocks against certain price, as the defendant No,2 was not in a position to deliver the goods to plaintiff company and as such they agreed to deposit the agreed price of pledge stocks in the account of defendant No,2 and on the instructions of its customer, the defendant No,1 was handing over the delivery of the pledge stocks to company against receipt of price. The plaintiff company is not claiming that the defendant No,2 has caused any loss to defendant No,1 and for the payment of said loss they were depositing the amount in the account of defendant No,2. The plaintiff company was receiving the goods against payment which they are depositing in the account of defendant No,2 so in this transaction there is no privity of contract between the company and defendant No,
1. The defendant No,1 has not allowed any finance to the plaintiff company nor the company has executed an agreement of indemnity in favour of defendant No,1 on behalf of defendant No,2.
10. It is true that in the contract of indemnity it is not necessary for the indemnifier to act at the request of debtor but in this case there is no such agreement available on record nor the plaintiff has pleaded the same rather the gist of the company claim is that it purchased the rice from defendant No,2 on the inducement of defendant bank and as such the defendant bank is liable to indemnify the company. In the absence of any agreement of indemnity the inference will be that defendant No,1 is only acting on the instructions of defendant No,2 and is releasing its security of finance against repayment of finance. The pleadings of company shows that company is trying to give a colour of its own agreement with defendant No,2 in which defendant No,1 is not a party the contract of indemnity without any agreement in this behalf If the stance of company is admitted, it is the bank who can claim loss from the company and not the company from the bank. From the above said discussion it is clear that this Court under the special jurisdiction conferred upon under Ordinance, 2001 has no jurisdiction to decide the alleged controversy between the parties subject matter of the suit.
11. If the plaintiff company has any alleged agreement of indemnity that may be triable with some other competent Court of Law and not in this Court under its special jurisdiction.
12. In view of above the plaint is returned under Order VII, Rule 10, C.P.C. For presenting the same before the competent Court of law.
13. There is no order as to costs.