' SYED HASAN AZHAR RIZVI, J. By this single order I propose to decide the jurisdictional issue involved in all the above-numbered suits having common points of law and facts.
2. The plaintiffs, who are carrying on their business of Ship-breaking and imports scrapped and old ships thereby playing a major role in the Ship-breaker Industry in Pakistan for many years have filed above-numbered declaratory suits challenging the SRO 140(1)/2013, dated 26.2.2013 and SRO 243(1)/2013, dated 26.03.2013. The prayers made in the above-numbered suits are more or less the same. The prayers made in Suit No. 621/2013 are almost covered the prayers made in all other connected suits, which are reproduced below:--- "(i) Declare that the SRO bearing No. 140(1)/2013, dated 20.02.2013 & SRO bearing No. 243(I)/2G13 dated 26.03.2013 have been issued without lawful authority and is of no legal effect.
(ii) Declare that the Schedule of Income Tax Ordinance, 2001, is part and parcel of the statute and any amendment in the statute can only be done by an Act of Parliament.
(iii) Declare that no SRO can be issued under Section 53 of the Income Tax Ordinance, 2001 and that any amendment in Section 53 of the Income Tax Ordinance, 2001 shall only be effective from the beginning of taxing year after issuance of Notification.
(iv) Declare that under sub-section (3) of Section 53, no amendment in Section 53 of the Income Tax Ordinance, 2001, shall be valid without sending it to the national assembly for making it a proper law under the Constitution.
(v) Declare that the SRO bearing No. 140(1)/2013, dated 20.02.2013 & SRO bearing No. 243(1)/2013, dated 26.03.2013 are not a legal document as the same have not been notified in the official Gazette and therefore, the defendants cannot make any demand from the plaintiff under the aforesaid SROs.
(vi) Declare that a vested right has been created in favour of the plaintiff as he had entered into a Memorandum of Agreement before issuance of SRO bearing No. 243(1)/2013, dated 26.03.2013.
(vii) To permanently restrain the defendants and their subordinates from demanding any tax and applying the SRO 140(1)/2013, dated 26.02.2013 and SRO 243(1)/2013, dated 26.03.2013 on the vessel "MT ARWA" of the plaintiff.
(viii) To direct the defendants to accept G.D. From the plaintiff in terms of clause 9 of Part II of the second schedule of Income Tax Ordinance, 2001 and/also accept post dated cheque from the plaintiff in terms of SRO 592(1)/2012, dated 01.06.2012 find further allow the plaintiff to commence his ship-breaking operations i.e. Provide breaking & delivery permission and not create any hurdles/obstacles in the plaintiff's ship braking activity.
(ix) To grant any other relief which may be deemed appropriate by this Hon'ble Court in the circumstances of the case.
(x) Cost of the suit."
3. The matters came-up before the Court when notice was ordered to be issued to the defendants and restrained the defendants to make any retrospective demand from the plaintiffs in respect of their vessels. After service of summons, the defendants have caused their appearance through their learned Advocates and raised objection on the territorial jurisdiction of this Court and in some cases applications under Order VII, Rule 11, CPC for rejection of the plaint have been filed on the ground that the cause of action, if any, has accrued at Balochistan and the Courts at Karachi have no jurisdiction either to entertain the suit or to adjudicate upon the matter in controversy.
4. I have heard learned counsel for the plaintiffs and learned counsel for the defendants.
5. Mr. Rashid Anwer, learned counsel for the plaintiffs at the very outset submitted that this Court is fully competent to entertain and adjudicate upon the controversy. He further submitted that plaintiffs based at Karachi and L/Cs were also opened at Karachi. He also submitted that a vested right had been created in favour of the plaintiffs when the contract for importing the ship had been executed with the vendor and subsequently when the irrevocable letters of credit were established and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive act so as to destroy this right. He also made reference to Section 20(c), CPC and submitted that this Court has jurisdiction in the matters. He, therefore, submitted that both the Courts at Karachi and Balochistan have the jurisdiction ta entertain and adjudicate upon the matter in controversy. In support of fos submissions, he placed reliance on the following cases:---
2. PLD 1968 SC 387
5. 1996 CLC 539
7. 1996 SCMR 83
8. 1988 MLD 1551
10. 2002 CLD 527
11. PLD 2001 SC 340
13. PLD 1993 SC 395
14. 2001 YLR 3243
6. M/s. Junaid Ghaffar, lshral Alvi, Dr. Shafaat Nabi Sherwani, Haseebur Rehman, Advocates appearing for plaintiffs in connected suits have adopted the arguments advanced by Mr. Roshid Anwer, Advocate. Mr. Tanvir Ashraf, Advocate stated that the SRO bearing No. 140(1)/2013, dated 26.02.2013 & SRO bearing No. 243(1)/2013, dated 26.03.2013 are not a legal document as the same have not been notified in the official Gazette and therefore, the defendants cannot make any demand from the plaintiffs under the afore-said SROs. All the learned counsel made emphasis in Section 20(C), CPC. For convenience, sake, Section 20, CPC is reproduced below:- "20. Other suits to be instituted where defendants reside or cause of action arises---Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction:
(a) The defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) Any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
7. Conversely, Dr. Rana Muhammad Shamim, learned counsel appearing on behalf of the defendants submitted that this Court has no jurisdiction to entertain these suits. He urged that the vessels in question for the purpose of breaking were arrived and beached at Gadani Sea Port and goods declaration (G.D) for the import of vessels breaking were filed in the office of the Deputy Collector of Customs at Gadani, which falls within the jurisdiction of the Balochistan High Court. He further urged that suits are also not maintainable under Sections 217 and 218 of the Customs Act, 1969 and thus liable to be dismissed with heavy costs. He, therefore, contended that plaintiffs mala fidly approached to this Court directly instead of approaching the Court at Balochistan. In reply to the objection raised by the learned counsel for the plaintiffs that the SRO in question is not a public document and has not been published in the official Gazette, learned counsel for the defendants, has placed on record the said SRO published in the Official Gazette. He further argued that plaintiffs filed declaratory suit challenging the vires on subsequent withdrawal of exemption through impugned SROs. He added that the Government under special statutes, in exercise of its delegated powers, could issue notifications regarding incentive or imposition or withdrawal of customs duty and sales tax and such delegated powers of Government could not be checked or limited by filing declaratory suit under Section 42 of the Specific Relief Act, 1877. In support of his contentions, he placed reliance on the cases of M/S. SHADMAN COTTON MILLS LTD. v. FEDERATION OF PAKISTAN & ANOTHER (PLD 2009 Karachi 169), M/S. IBRAHIM FIBERS LTD. v. FEDERATION OF PAKISTAN & 3 OTHERS (2009 PTD 248), MRS. ROHI CHAUDHRY & 2 OTHERS v. FEDERATION OF PAKISTAN & 3 OTHERS (2010 PTD 1233) and SANDALBAR ENTERPRISES (PVT.) LTD. v. CENTRAL BOARD OF REVENUE & OTHERS (PLD 1997 SC 334). Learned counsel also cited two unreported cases i.e. Case No. W.P. 6581/2012 (M/s. Sethi and Sethi Sons v. The Federation of Pakistan etc.) and W.P. No. 3134/2011 (Mfr. Global International v.
Federation of Pakistan & others).
8. In rebuttal, Mr. Rashid Anwar, learned counsel for the plaintiffs submitted that all the cases referred to by the learned counsel for the defendants are of criminal cases and have no applicability with these cases. He further submitted that Section 217 of the Customs Act provided protection to the acts not done in good faith. He again placed reliance on the case of FLYING KRAFT PAPERS MILLS (PVT) LTD., CHARSADDA v. CENTRAL BOARD OF REVENUE, ISLAMABAD & 2 OTHERS (1997 SCMR 1874), wherein the Hon'ble apex Court had held that not only the order of Collector of Customs and Central Excise, Peshawar was in question in the petition but relief was also claimed against the Central Board of Revenue which functions at Islamabad, High Court at Peshawar and Rawalpindi Bench of Lahore High Court had the concurrent jurisdiction in the matter.
9. I have given due consideration to the arguments advanced by the learned counsel for the parties and perused the material available on record and the case-law cited by both the sides.
10. Indeed, it is not disputed that the vessels arrived at Gadani-anchorage and are presently lying anchored at Gadani outer Anchorage under their own power. It is also not disputed that the goods declaration were made at Gadani. The impugned SROs 140(1)/2013, dated 26.02.2013 and 143(1)/2013, dated 26.03.2013 were issued by the Government of Pakistan, Revenue Division, Islamabad. Demand notices against short payment of income tax on vessels were issued by the defendant No. 3 to the plaintiffs at their Gadani addresses. The point which requires consideration is as to whether in a case for impugning the SROs, under the circumstances of the case, a plaintiff can file a suit for declaratory relief at a place other than where the defendants are residing, carries on business, or personally works for gain.
11. A bare reading of above-quoted Section 20, CPC shows that the cause of action arises where the defendant resides, carries on business or personally works for gain. After noticing sub-clause (c) of Section 20, CPC, it is clear that a suit is to be instituted in a Court within the local limits of whose jurisdiction the cause of action wholly or in part arose. In the cases in hand, the learned counsel agitated chat these cases fall under Section 20(c) as the MOU signed at Karachi and the plaintiffs carries on their business also from Karachi. But at the same time, this fact cannot be ignored that the vessels arrived at Gadani anchorage and are presently lying anchored at Gadani outer Anchorage, the goods declaration were also made at Gadani and demand notices against short payment of income tax on vessels were issued by the defendant No. 3 to the plaintiffs at their Gadani addresses. Moreover, the impugn red SROs were issued by the Government of Pakistan, Revenue Division, Islamabad.
12. In order to ascertain the territorial jurisdiction of this Court, it is also to be seen whether the authorities arrayed as defendants herein are amenable to the jurisdiction of this Court. The cardinal defendant in these suit is defendant No. 3 (Collector of Customs (Gawadar) at Custom House Gadani is, no doubt, a person, body or authority, who performs functions in relation to the affairs of the Federal Government in all the Provinces. Similarly, defendants Nos. 1 and 2 are the functionaries/authorities of the Federal Government and perform functions in connection with the affairas of the Central Government. In the instant suits, the plaintiffs have challenged the action of the above defendants in the form of impugned SROs. Therefore, any action taken by the defendants in relation to any person/company in any of the Provinces of Pakistan would give the High Court of Province, in whose territory, action would affect such a person, jurisdiction to hear the case. In the cases in hand, the impugned SROs were issued by the Government of Pakistan, Revenue Division, Islamabad and the demand notices against short payment of income tax on vessels were issued by the defendant No. 3 to the plaintiffs at their Gadani addresses. Moreover, the plaintiffs themselves stated in the memo. of plaint that the cause of action arose when the information about the SRO 140(1)/2013 was received, on 8.3.2013 when the impugned demand notice 1 was received from the Deputy Collector of Customs and finally on 30.3.2013 when the impugned demand notice 2 threatening to auction the goods/ship was received from the Deputy Collector of Customs. The SROs issued by the Government of Pakistan, Revenue Division, Islamabad and the impugned notices were issued by the Deputy Collector of Customs (Gawadar) at Gadani and were received to the plaintiff at their Gadani addresses.
13. Clause (c) of Section 20, CPC, all classes of suits can be filed in a Court within the local limits of whose jurisdiction the cause of action arises, either wholly or in partly and the same is based on broad principle to avoid multiplicity of proceedings and inconvenience to the parties. But at the same time it is the duty of the Court that while considering the question of cause of action, the Court should apply its mind to the facts given in the plaint and not to any other matter. In the instant cases the plaints do not disclose anything regarding cause of action accrued within the jurisdiction of this Court. The plaintiffs were prejudiced with the SROs, which were issued by the Central Government and the demand notices, which were issued by the Deputy Collector of Customs, Gadani and also received to the plaintiffs at Gadani.
14. Most of the rulings cited by the parties, mention of which has been made in the preceding paragraphs, describe generally the law rather to territorial jurisdiction and a detailed discussion of the same is not necessary.
15. In view of the survey of the Case-law, referred to above, I am of the opinion that this Court is not competent to entertain these cases, therefore, plaints are rejected due to lack of territorial jurisdiction. However, the plaintiffs are at liberty to agitate their grievances either at Islamabad High Court or High Court at Balochistan, if they so advised.
16. Before parting with this order, it may be observed that bank guarantees furnished by the plaintiffs in terms of order dated 20.05.2013 shall remain intact for a period of fifteen (15) days from today, thereafter defendants are at liberty: to take action in accordance with law.