MUHAMMAD SHAN GUL, J. Through this judgment, the titled First Appeal against Order as also Civil Misc.
Applications No. 931-C & 932-C of 2019 are sought to be decided.
C.M.Nos. 931-C & 932-C of 2019
2. Civil Misc. Application No. 931-C/2019 has been filed for seeking restoration of the titled First Appeal against Order which was dismissed on account of non-prosecution on 11.11.2013. Since this application was moved on 22.3.2019, naturally it was accompanied by an application seeking condonation of delay under section 5 of the Limitation Act, 1908. The 'sufficient cause' explained in the application reveals that the original counsel for the petitioner passed away in the year 2013 and since the petitioner resides abroad as also in Karachi he was never informed about the appeal being dismissed for non-prosecution and therefore was never in the know about the dismissal of his appeal. These applications were taken up for hearing for the first time on 26.03.2019 and notice was issued to the respondents. Since the respondents were not appearing even after issuance of notices, it was ordered on 20.10.2021 by this Court that respondent No.2 i.e. the concerned chapter of United Bank Limited, at Vehari would be proceeded against ex-parte. Insofar as respondent No.1 i.e. Head Office of the concerned bank is concerned, repeated notices were issued in the Appeal as also in these applications but no one came forward to represent the bank and therefore, respondent No.1, too, is being proceeded against ex-parte today .
3. When these applications came up for hearing before this Bench, an inquiry was put to the office of this Court whether any notice pervi was issued to the then counsel for the petitioner for the fateful date i.e. 11.11.2013 on which date the appeal under consideration was dismissed for non-prosecution. This was considered necessary and imperative because it is the case of the petitioner that his counsel passed away in the first half of the year 2013 and that it is therefore that the petitioner was never informed about the date of hearing or for that matter about the dismissal of his appeal for non-prosecution. The office of this Court reported that notice pervi had been issued to the then counsel for the petitioner Mr. Khalid Pervaiz, Advocate but was not received back and therefore, the office established that notice pervi had been issued. However , the point that arose in the circumstances was about the date of death of the counsel for the petitioner and whether if the counsel had died and passed away prior to the fateful date of 1 1.11.2013 then the issuance of notice pervi became meaningless.
4. The notice pervi in question was issued on 02.11.2013 for the fateful date of 11.11.2013. Learned counsel for the petitioner has placed on record the death certificate of the then counsel, Mr. Khalid Pervaiz, Advocate who passed away on 30.04.2013 which is atleast 51/2 months before the present appeal was dismissed for non-prosecution.
Hence, there is no gainsaying that a notice pervi issued to a dead counsel is meaningless and of no value .
After having confirmed the fact that the then counsel for the petitioner had passed away in April, 2013 and that a notice pervi issued to him was therefore meaningless, the context in which the petitioner had moved the application under consideration became clear and it is therefore, that this fact is being taken as a sufficient cause to condone the delayed approach of the petitioner before this Court. If the notice for the date of hearing was issued to a dead counsel then there is no way that anyon e could have appeared and, likewise, there is no way that the petitioner could have learnt either about the fixation of the matter or about its dismissal. The petitioner claims that he arrived in Multan in March 2019 and tried to contact his counsel and it is then that he learnt that the counsel had passed away and that his appeal had been dismissed for non-prosecution and which is what prompted the petitioner to approach this Court immediately and file the applications under consideration.
5. Restoration of an appeal dismissed for non-prosecution is governed by Article 168 of the Limitation Act, 1908 for the purpose of gauging limitation. While a period of 30 days has been ordained in the said section as the period of limitation, section 5 of the Limitation Act has also been made applicable thereto and therefore, in terms of the law laid down in the case of Sindh Industrial Trading Estates vs. West Pakistan Water and Power Development Authority (PLD 1991 SC 250), if it is proved that the appellant was prevented by any sufficient cause then the Court shall readmit the appeal. It has also been acknowledged in the case of Abdur Raheem vs. Mubarak Ali (2006 MLD 1064 ) that section 5 of the Limitation Act is applicable and has to be read alongwith section 168 while considering the question of condonation of delay . Kindly also see PADSC vs. Pakistan National Industry (2004 YLR 1417 )
6. The benchmark or criteria for readmission beyond the period of limitation remains that of 'sufficient cause' .
Therefore, any prudent or reasonable individual having applied his mind to the facts of the instant case will indeed confirm that after the death of the then counsel for the petitioner in April 2013, notice pervi issued for 11.11.2013 was meaningless and of no value and hence the appeal had been dismissed for non-prosecution on account of no fault of the petitioner . Since the counsel for the petitioner had passed away , there was no way that the petitioner who now lives in Karachi could have learnt about the dismissal of his appeal.
7. It is trite that where an order is a nullity (as is the case with the order under challenge in FAO No. 49/2008, the present appeal) then challenge can be laid to such an order even after the period of limitation. The Hon'ble Supreme Court of Pakistan in the case of Mst. Yasmeen Bibi vs. Muhammad Ghazanfar Khan and others (PLD 2016 SC 613) at paragraph 19 has clearly held that "where an important point of law of public importance was involved delay could be condoned". In the case of Dr. Syed Sibtain Raza Naqvi vs. Hydrocarbon Development and others (2012 SCMR 377) at paragraph 8, it has been held that if an application was barred by time, then provisions of section 5 of the Limitation Act could be invoked by showing 'suf ficient cause'.
8. Furthermore, the postulates of Article 10-A of the Constitution also demand that the appellant should not be condemned unheard and should rather be af forded due process in the matter of determination of his civil rights.
9. In view of what has been noted above, both these applications are accepted and the delay in filing application for restoration of this appeal is condoned on account of the 'sufficient cause' discussed above and the application seeking restoration is allowed and the appeal is being taken up for hearing today .
FAO No. 49 of 2008
10. This First Appeal against Order is directed against an order dated 28.01.2008 passed by a learned Civil Judge Ist Class, Burewala whereby he returned the plaint filed by the appellant under Order VII Rule 10 CPC so as for the appellant to present the plaint before the court of proper jurisdiction. The order dated 28.01.2008 is being reproduced hereunder:- "28.1.08 Present: Leaned counsel for the parties.
From the contents of the pleadings it become clear that this court has no jurisdictio n to adjudicate upon this suit in the presence of the special law and special court under special law. So, the plaint is returned U/O 7 Rule 10 of CPC with the direction to file the same in the court of proper jurisdiction. File be consigned to the record room after its due completion."
Announced. 28.1.08 Muhammad T ariq, Civil Judge Ist Class, Burewala.
11. Facts in brief as spelt out in the plaint are that the appellant had deposited 700 prize bonds in the lockers of respondent bank (respondent No.2) and on account of negligence of the respondent bank, the prize bonds were stolen and it was prayed that a decree for payment of Rs. 67,50,000/- with profit be passed in favour of the appellant as against the respondent bank. As is evident, the Civil Court returned the plaint on the basis that the appellant ought to file the same before the Banking Court established under Financial Institutions (Recovery of Finances) Ordinance, 2001 and hence returned the plaint.
12. While the merits of the order shall be alluded to in the latter half of this narrative, what is immediately discernable from a bare perusal of the impugned order is the fact that the order does not qualify the test of a judicial order since it is a non speaking order and except for a bald reference to one reason, and that too, in a lackadaisical manner , there is no discourse whatsoever . It may also be mentioned here that the order under challenge does not allude to any facts presented by the appellant either and therefore, does not qualify the judicially acknowledged criteria of a judicial order .
13. On the legal plain, the order under challenge is erroneous and warrants to be declared to be of no legal effect on the following amongst other considerations:- JURISDICTION OF BANKING COURT : Jurisdiction of Banking Courts established under Financial Institutions (Recovery of Finances) Ordinance, 2001 ("FIO, 2001) is provided in Section 9(1) and the exclusive availability of such jurisdiction is governed by Section 7(4);
9. Procedure of Banking Courts.- (1) Where a customer or a financial institution commits a default in fulfillment 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.
2 (c) "customer" means a person to whom finance has been extended by a financial institution within or outside Pakistan 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; 2 (d) "finance" includes
(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 support, lease, rent-sharing, licensing charge or fee of any kind, purchase and sale of any property including commodities, patents, designs, trade marks and copy-rights, bills of exchange, promissory notes or other instruments with or without buy-back arrangement by a seller , participation term certificate, musharika, morabaha, musawama, istisnah or modaraba certificate, term finance certificate;
(ii) facility of 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;
(vii) any amount due from a customer to a financial institution which is the subject matter of any pending suit, appeal or revision before any court;
(viii) any amount of loan or facility availed by a person from a financial institution outside Pakistan who is for the time being resident in Pakistan.
(ix) any other facility availed by a customer from a financial Institution.
2 (e) "obligation" includes
(i) any agreement for the repayment or extension of time in repayment of a finance or for its restructuring or renewal or for payment or extension of time in payment of any other amounts relating to a finance or liquidated damages; and
(ii) any and all representations, warranti es and covenants made by or on behalf of the customer to a financial institution at any stage, including repre sentations, warranties and covenants with regard to the ownership, mortgage, pledge, hypothecation or assignment of, or other charge on, assets or properties or repayment of a finance or payment of any other amounts relating to a finance or performance of an undertaking or fulfillment of a promise; and
(iii) all duties imposed on the customer under this Ordinance
7. Powers of Banking Courts.-
(4) Subject to sub-section (5), 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 this Ordinance, including a decision as to the existence or otherwise of a finance and the execution of a decree passed by a Banking Court.
(5) Nothing in sub-section (4) shall be deemed to af fect--
(a) the right of a financial institution to seek any remedy before any court or otherwise that may be available to it under the law by which the financial institution may have been established; or
(b) the powers of the financial institution, or jurisdiction of any court such as is referred to in clause (a); or require the transfer to a Banking Court of any proceedings pending before any financial institution or such court immediately before the coming into force of this Ordinance.
14. In order to avail jurisdiction provided by a banking court there has to be a dispute between a Bank and its Customer regarding failure to fulfil obligations arising out of a finance or loan facility .
Messrs Summit Bank Limited through Manager vs. Messrs Qasim and Co. through Muhammad Alam and another ( 2015 SCMR 1341 )
17. As regards the appellant's contention that only the Banking Court, established under the Act had jurisdiction in the matter , it may be noted that, as is now clear from the above discussion, neither there was any question pertaining to "finance" as defined by section 9 of the Act, nor the question as to whether the respondents were "customers" in the context of the Act involved in the matter , and no documents were executed by the respondent securing re-payment of the alleged liability . The suit for recovery was filed by the respondents for the amount that was deducted out of their monies lying in their account, illegally and unauthorizedly and thus the Banking Court had no jurisdiction in the matter as the same was constituted to adjudicate upon the matter pertaining to "finance" between bank and its customer , we therefore, did not find any jurisdictional error in the matter .
Muhammad Ismail vs. Muhammad Adil ( 2021 CLD 586 ) (LHC-DB)
7. It is settled law that suit for permanent and mandatory injunction cannot be filed before the Banking Court rather to institute a suit before the Banking Court, requirement of Section 9(1) of the Ordinance has to be fulfilled.
8. From the above provisions of law, it is clear that under the Ordinance only those issues can be solved which are between the customers and the financial institutions in respect of finance and that too on the ground that any obligation has not been fulfilled. When the definitions, mentioned above, are read with the facts of the present case it is clear that the Appellant was not the customer of the Bank rather it was the Respondent who availed the loan facility in respect of the Vehicle and paid the monthly installments and in this respect NOC was issued in his favour by the Bank on 18.06.2013. Reliance is placed on "Marhaba Pakistan Internatinoal and others v. Habib Bank Limited and another" (2017 CLD 995) where it has been held that "any person other than as defined in section 2(c) of Financial Institutions (Recovery of finances) Ordinance, 2001 did not come within the definition of a 'customer'".
Marhaba Pakistan International and others vs. Habib Bank Limited and another ( 2017 CLD 995 (LHC)
8. In the above definitions, the word "customer" is limited to a person to whom finance has been extended and includes a person on whose behalf a guarantee or letter of assurance has been issued by a financial institution. It means, any persons, other than defined in section 2(c) of the Ordinance, do not come within the definition of a "customer". Merely being account-holders of the Respondent-Bank, the Appel lants cannot be considered as customers. And the amount allegedly credited in the account of the Appellants on deposit of a cheque also does not come within the purview of "finance". Similarly , any facility defined in the definition provided by a financial institution covers within the ambit of "finance". Hence, opening of an account and deposition of amount by an account holder would not be considered as finance.
12. In view of what has been discussed above, the Banking Court had no jurisdiction to try the suit between an account holder and the Banking Company when there was no dispute with the banking company in fulfilling any obligation with regard to any loan or finance. Sections 7(4) and 9(1) of aforesaid Ordinance provides that any dispute with regard to fulfilment of conditions of loan and liability arising out of the contract executed by the bank and the customer can be agitated in Banking Court but in the instant case the Appellants availed no financial facility from the Respondent No.1-Bank and was merely an account holder .
Amtex Limited through Director vs. Bank Islami Pakistan Ltd. and 8 others ( 2016 CLD 2007 )
31. While putting a construction on the term 'obligation', the purpose of defining the term in a certain manner has to be kept in view. Obviously , had the legislature intended the representations and covenants made by the financial institution to be part of 'obligation' so as to premise and found the suit under section 9, it would have spelt it out clearly and without equivocation. The intent of the legislature is not in doubt. It is that any alleged default in fulfillment of any obligation regarding any representation, warranties and covenants by a financial institution is not enforceable in the special jurisdiction under Ordinance, 2001 . This construction also lends credence to the scheme and policy of the Ordinance, 2001 which has been enacted primarily to act as an engine of recovery of defaulted finance by the financial institutions and not vice versa. The customers may have a cause of action but that is enforceable in the Courts of general jurisdiction only. The definition of the term 'obligation' in fact restricts the meaning of the term within a certain periphery . Rather than expanding it, the meaning is exhausted and limited. It is limited to only two facets of obligation. A contextualist approach will have to be employed here. It is equally true that rules of interpretation are merely tools employed by Courts to ascertain the true meaning of a provision in a statute in case of ambiguity . These rules are not immutable and are subject to exception. Every rule, in a given situation, is capable of being administered differently and according to context, with necessary variations.
Avari Hotels Limited and others vs. Investment Corporation of Pakistan and 6 others ( 2000 YLR 2407 )
Again from a bare reading of the above section it is clear that the jurisdiction of a Banking Court is only attracted where a' borrower/customer or a Bank commits a default in fulfilling any obligation with regard to any loan or finance . Only then could they institute a suit in the Banking Company by presenting a plaint duly supported by statement of account etc. So also it would be seen that the definition of the word "borrower" as per section 2(c) means a person who has obtained a loan under a system based on interest from a Banking Company and "customer" as per section 2(d) means a person who has obtained finance under a system which is not based on interest from a Banking Company . Of course, the definitions of the terms "Finance" and "loan" as given in section 2(e) and (f) of the Act are very wide and include not only an outright loan of money but involve numerous financial instruments as well including bills of exchange, promissory notes etc., the purpose of which is to cover all possible forms of banking and financial transactions.
In view of the above provisions of the Act, in my opinion, in order that a Banking Court may assume jurisdiction in any particular matter it first must be established that there is relationship of borrower/customer and banker between the parties and further that some default has been committed by either party with regard to any loan or finance, obtained by the borrower/customer from the Bank as a consequence of such relationship . In the present matter it is admitted by all concerned that although it may be that in the past there was a relationship of borrower/customer and banker between the parties but at present there is none as all the amounts owed by the plaintif f to the defendants have been fully paid back. In fact, the suit has not been filed by the plaintif f against the defendants for any alleged default in fulfilling any obligation by the defendant with regard to any loan or finance.
Atlantic Carpets through Partner vs. Messrs Emirates Bank International and another ( 2000 MLD 1850 ) "the customer can only file a suit under the applicable Act if there is some dispute with the banking company in fulfilling any obligation with regard to any loan or finance . Plaintif f in his entire suit has not stated a single word that the defendant-bank has committed default of this nature."
15. A customer operating a locker with a bank does not obtain a finance (as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001) while the jurisdiction of a banking court is limited to a dispute arising out of a finance facility between a customer and a Bank, hence, a banking Court cannot adjudicate the dispute of a bank' s liability regarding theft from its lockers under the jurisdiction conferred by Financial Institutions (Recovery of Finances) Ordinance, 2001.
16. After a careful consideration of the facts involved in the present matter and after perusing the precedent cases on the subject, it is clear that there is no question pertaining to any loan or finance involved in the present matter . Likewis e, there is no question of non-fulfillment of any obligation pertaining to any loan or finance involved in the present matter . There is, equally , no customer to whom any facility of finance or loan has been extended. Any other default in fulfilling warranties, covenants etc. by a bank in a matter not involving finance or loan is not enforceable under the special jurisdiction conferred by Financial Institutions (Recovery of Finances) Ordinance, 2001. There must be a relatio nship of a borrower/customer with a bank in respect of some finance or loan and some default in fulfilling obligations with respect to such facility of finance or loan and which is what attracts the jurisdiction of a banking Court established under Financial Institutions (Recovery of Finances) Ordinance, 2001. Such jurisdiction is not available in respect of any other matter and in this regard the following precedent case is very instructive!
17. The nature of relationship between a customer holding his possessions in a bank locker and the respective Bank is explained in PLD 2021 Sindh 28 in which the Sind High Court while functioning as a Court of plenary jurisdiction (trial Court) held: Mahmooda Tapal and another vs. Stan dard Chartered Bank (Pakistan) Limited and 5 others (PLD 2021 Sind 28)
15. Deposit for safe custody is a branch of the law of bailments . A bailment is the delivery of movable property by one person (the bailor , to another , the bailee) on condition that it shall, in due cours e, be redelivered to the bailor on his order . It may be stated that the person who hires a locker retains some control over it by having one key with himself but if the locker can be operated without any key then at once any impediment in the way of control and possession of the Bank to whom the locker belonged and in those strong-room it was to be found, would be removed and it could be said that the bank was in the position of a bailee. Keeping banker as bailees, one may say that the care which a banker is obliged to take is such care as an ordinarily efficient and prudent person can take in similar circumsta nces. The bank will not be liable if property held in safe custody is destroyed by fire or otherwise, lost or stolen unless there is negligence on the part of the bank, and the degree of negligence required to establish liability will depend on the relevant circumstances of the case.
In view of the above discussion, I am of the view that the defendant-Bank has owed a duty of protection and safety in respect of plaintif fs' subject locker , however , whether the same has been breached or not and any negligence could be attribut ed towards the defendant-bank, and further whether the plaintif fs suffered any loss due to missing of their contents of the locker , would only be possible after discussion of the evidence, led by the parties in the present case, which has been done in the later part of this judgment."
18. Evidence having not been allowed to be led in the present matter the order under challenge cannot be sustained.
19.Banking Courts can only adjudicate upon disputes regarding obligations arising out of a Finance facility extended by a Bank to its customer and the nature of duty cast upon the bank regarding the contents placed in a safe locker does not attract the provisions of Section 2(d) resultantly keeping the petitioner out of the sweep of the definition of a Customer under Section 2(c) of FIO, 2001. Hence, the banking Court does not have jurisdiction to decide the claim of the Petitioner .
20. For what has been discussed and noted above this appeal is allowed and the order dated 28.01.2008 passed by a Civil Judge First Class is set-aside and declared to be of no legal effect. The appellant is at liberty to file a suit before the Civil Court with respect to the present subject matter .