' SALMAN HAMID, J.---We, in the morning, after hearing the learned counsel for the appellant and learned counsel for the respondents and the DAG (on court notice), dismissed this appeal in limine, reasons whereof are these:-
2. The appellant being aggrieved by Order dated 23-11-2010, (Impugned Order), passed by a learned Single Judge of this court, (Single Judge) in Suit No,1649 of 2009, (the Suit) on C.M.A. No,426 of 2010, moved by respondent No,2 under Order VII, Rule 11, C.P.C., (CMA) for rejection of the plaint, filed instant appeal when the Single Judge returned the plaint of the Suit for its presentation to the Banking Court possessing jurisdiction.
3. Encapsulating, a suit was filed before this court on original side with prayers that the alleged loan guarantee is based on lost papers of appellant's House No,B-124, Sector 11-A, North Karachi, Karachi, (House) and therefore the same was bogus, forged and fraudulent and that the same was executed by putting forged signatures and thumb impression of the appellant hence void and not binding with a further prayer that the respondents (specially respondent No,2) be restrained from alienating or letting out the House and that the alleged mortgage deed in respect of the House was also forged and fabricated. Damages to the extent of Rs,7,000,000 were also claimed. The basis of such prayers was shown to be that the appellant was an old lady and was fully dependant on her sons and also owned the House, for which construction obtained a loan from the House Building.
Finance Corporation, (HBFC) against requisite documentation. All title documents of the House remained in the custody of HBFC. After payment of the entire loan, the title documents of the House were sought to be returned and necessary Deed of Redemption of Mortgage was thus asked to be executed. Before execution of Deed of Redemption it transpired that original documents of the House had been misplaced which misplacing was reported on 16-7-2002 at Police Station Khawaja Ajmer Nagri. Necessary publication in Daily Aman dated 17-8-2002 was also made. Duplicate documents of title of the House were obtained in September, 2002 from the office of Sub-Registrar "T" Division V, Karachi and necessary information was also given to the Director Land, CDGK, (KDA Wing) on 30-5-2003.
4. It was also mentioned in the Suit that upon receipt of Letter dated 9-9-2009 it for the first time transpired that the House had been mortgaged in favour of respondent No,2 by respondent No,1 and also that loan guarantee was also executed by the appellant. The appellant immediately through Letter dated 9-9-2009 responded, denying execution of any loan guarantee or creation of mortgage of the House in favour of respondent No,2. After notice dated 24-10-2009, the appellant filed the Suit with the prayers, mentioned therein (also highlighted hereinabove).
5. The respondents No,2, after receiving notice of the Suit, filed CMA on the grounds that the Suit was hit by subsection (4) of section 7 of Financial Institutions (Recovery of Finances) Ordinance 2001, (2001 Ordinance) inasmuch as that in view of the narration of the plaint of the Suit, the appellant was a customer of respondent No,2 within the meaning of section 2(c) of 2001 Ordinance and suit, if any, that was maintainable by the appellant against the respondent No,2 was under the banking jurisdiction. After hearing, CMA was allowed by way of Impugned Order and the plaint in the Suit was ordered to be returned for its presentation to the Banking Court having jurisdiction.
6. It was argued by the learned counsel for the appellant that the Single Judge erred in coming to the conclusion that the appellant was a customer of respondent No,2 within the meaning 2001 Ordinance and that because of such relationship of the appellant with the respondent No,2, the Suit by virtue of section 7(4) of 2001 Ordinance was barred and ought to have been filed before a Banking Court. It was asserted that the respondent No,2 being liable under the tort, and also that the appellant was not the customer of respondent No,2 or that no finance, as depicted in section 2(d) of 2001 Ordinance was obtained, the appellant was not required to file proceedings under section 9 of 2001 Ordinance. In support of his contentions, learned counsel for the appellant relied upon the case of M. Nujeebullah Q.Ureshi v. City Bank NA (2009 CLD 49).
7. Resisting the appeal, learned counsel for the respondent No,2 argued that by virtue of subsection
(4) of section 7 of 2001 Ordinance, no court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under the 2001 Ordinance, including a decision as to the existence or otherwise of a finance. Fortifying his arguments on subsection (4) of section 7 of 2001 Ordinance, it was also argued that the banking court would be within its competence to decide existence or otherwise of a finance and that the definition of finance as available under section 2(d)(iii) of 2001 Ordinance also includes facility of guarantees and indemnities. It was urged that admittedly in the suit itself a declaration was sought that alleged loan guarantee be declared void and not binding on the appellant; therefore prima facie depicted that the appellant was a customer within the meaning of 2001 Ordinance. Hence it was implored that the question of appellant being customer, and that whether finance was obtained by appellant or not or that whether any obligation to pay could have only been determined and decided in a banking suit by a banking judge of a Banking Court in terms of 2001 Ordinance and not in the Suit. It was also mentioned that Banking Suit No,2886 of 2009 has already been filed by the respondent No,2 and leave has been granted to the appellant.
8. The learned DAG (on court notice) and learned counsel for respondents Nos.1 and 3 adopted and supported the arguments of learned counsel for the respondent No,2. However, learned DAG added that no F.I.R. Was lodged by the appellant in respect of alleged misplacing of the title documents of the House.
9. We have heard arguments of the learned counsel for the appellant and respondents and perused the record. Bare examination of section 2(c) of 2001 Ordinance would show that 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 financial institution as well as his surety and indemnifier. The appellant having executed loan guarantee, is a surety within the definition of a customer as contained in 2001 A Ordinance. Similarly, section 2(d) of 2001 Ordinance by way of Sub-Clause (iii) says that finance also includes facility of guarantee and indemnities. Again on the touch stone of such definition the appellant once again falls within the meaning of a customer who acquired finance from the financial institution and such finance having not been repaid for any reason whatsoever, obligation for its repayment arises. The obligation by virtue of section 2(e) as contained in 2001 Ordinance amongst others includes mortgage and performance of an undertaking. Therefore, again the appellant falls within the pale of the provisions of 2001 Ordinance inasmuch as that mortgage in respect of the House was also created by the appellant in favour of the respondent No,2 (though it is disputed).
10. Similarly, under subsection (4) of section 7 of 2001 Ordinance it is provided that no other court than a Banking Court shall have the jurisdiction with respect to any matter to which the jurisdiction of Banking Court extends and that such Banking Court is also empowered to decide existence or otherwise of a finance. It, therefore, becomes abundantly clear that it is only the bankihg court, under the 2001 Ordinance which is competent to decide whether the appellant was a customer; whether any finance was extended to the appellant and whether such finance was repayable by the customer (Appellant) and that whether obligation for the payment of the finance arises to the customer (Appellant). Therefore, the Single Judge looking at all these aspects correctly returned the plaint of the Suit for its presentation to the Banking Court, possessing jurisdiction to try the same.
11. Coming to the case of M. Nujeebullah Qureshi (supra), cited by the learned counsel for the appellant, we may observe that in such case a banking suit against financial institution had been filed by Nujeebullah on the ground that his name was put on defaulter data check list by which enlistment Nujeebullah stated to have suffered losses and in turn he filed banking suit for declaration, permanent injunction and damages against the financial institution, which banking suit was dismissed by the Banking Court by observing that since nothing was due and payable by Nujeebullah to the financial institution on the date of filing of the banking suit, the relationship of customer ceased to exist. Upon appeal, a division bench of this court upheld the order of the banking court and further Observed that the case of Nujeebullah based on torturous liability arising out of an act and omission of State Bank of Pakistan by placing his name on data check list therefore Banking Court had no jurisdiction over a tort case based upon damages whereas in the present case by virtue of subsection (4) of section 7 of 2001 Ordinance, it would only be a Banking Court which will decide whether the appellant was a customer of respondent No,2 or otherwise and for such purpose it is only the Banking Court where the Suit could have been preferred. The precedent cited by the learned counsel for the appellant by no stretch helps or furthers her case.
The citation under given facts and circumstances of the case was misplaced and/or clearly distinguishable. In limine.