1. ' SAEEDUZZAMAN SIDDIQUI, J.--This appeal under section 12 of the Banking Companies (Recovery of Loans) Ordinance, 1979 (for the sake of convenience we will hereafter refer this Ordinance in this judgment as 'the Ordinance' only) has been filed by the appellant against the order of the Judge Special Court (Banking) for Sind, at Karachi, dated 28th July, 1981, directing return of the plaint to the appellant/plaintiff for presentation in the proper Court. The admitted facts of the case are as follows :- ' The appellant instituted a suit in this Court on 2nd April, 1979 for recovery of a sum of Rs, 1,06,340.75 alleged to be due against the respondent in respect of an overdraft account which was registered as Suit No, 14 of 1979. Upon promulgation of the Ordinance this suit was transferred to the Special Court constituted under the Ordinance. It appears that thereafter an ex narte decree in the above suit was passed in favour of the appellant on 13-4-1980 as prayed as the respondent allegedly did not appear in spite of service of summons. However, on an application made by the respondent under Order XXXVII, rule 4, C.P.C. The ex parte decree was set aside by order, dated 6th April, 1981, but the order setting aside the ex parte decree did not show that the Court also simultaneously granted leave to defend the suit to the respondent. Consequently the respondent on 27-5-1981 filed an application under Order XXXVII, rule 3, C. P. C. Before the Court praying that it may be clarified that the order setting aside ex parte decree also. Amounted to grant of leave to respondent to defend the suit, as he had already furnished Bank Guarantee to the extent of the amount claimed in the suit. However, before any order could be passed on the above application of respondent, the Court, on 11-7-1981 felt that it was not clear from the statement of account as to at what rate the interest was charged. The appellant's Advocate was accordingly directed to cause attendance of the officer who had verified and signed the plaint in the Court to satisfy if the interest was charged according to the agreement between the parties. In accordance with the above direction of the Court, an officer of the appellant appeared before the Court on 26-7-1981 and on that date the Court simultaneously took up the application of respondent for grant of leave to defend as well as the question of calculation of interest at the agreed rate on the amount of loan advanced to respondent. The Court after hearing the parties passed the following order :- "28-7-1981-This is a suit for the recovery of Rs, 1,06,340.75 on the basis of the promissory note executed by the defendant has filed the application Exh. 10 tax (sic) for leave to defend the suit.
2. Heard the advocates for the parties.
3. ' According to the promissory note, the agreed rate of interest between the parties was 94% with quarterly rests, whereas the plaintiffs prayed for decree at the interest of 14% per annum with quarterly rests. The statement of account filed by the plaintiffs did not show at what rate, the interest has been computed. The learned Advocate for the plaintiff admits that there is no other agreement between the parties regarding interest except promissory note. The plaintiffs, therefore, were asked to state whether in the statement of account the interest had been computed at the agreed rate of interest of 94% per annum with quarterly rates, if not they should prepare a fresh statement of account calculating the dues at the agreed rate of interest. They have filed a fresh statement of account which shows, that the amount due in March, 1979 when the suit had been filed, was Rs, 88,436.58. This amount is less than Rs, one lac and is not within the jurisdiction of this Court.
4. ' It is argued by the learned Advocate for the plaintiffs, that the Court can grant decree even for amount lesser than prayed for. Here the question of jurisdiction is involved. The plaintiffs have wrongly inflated their claim by calculating interest illegally at interest higher than the agreed interest to bring it within the jurisdiction of this Court. As the amount due is less than Rs, one lac this Court will have no jurisdiction. Plaint is, therefore, returned to the plaintiffs for presentation in proper Court having jurisdiction."
5. ' Mr. Mansoorul Arfin the learned counsel for the appellant has challenged the above order of the Court on the following grounds :-
(1) That while deciding the question of jurisdiction under Order VII, rule 10, C.P.C. The Court should have considered only the averments in the plaint and should not have taken into consideration the plea raised in the defence.
(2) That the Court while ordering return of the plaint lost sight of the fact that in paragraph 5 the plaintiff/appellant had specifically pleaded that by writing, dated 15th Feb. 1972, 31st Dec. 1973 and 30th June 1976, the respondent had admitted their liability with regard to the payment of specific sum of money, and the last acknowledgment in this regard which is, dated 30th June, 1976, shows that the amount then outstanding against the respondent was Rs, 83,705.43 and if the interest at the rate of 94% with quarterly rests is calculated on this amount until the date of the filing of the suit, the total amount payable by the respondent Comes to over Rs, 1 lac.
6. ' The learned counsel for the respondent on the other hand contended that the Special Court having reached the conclusion that the total amount of claim on the date of presentation of plaint being Rs 88,436.58 only, the Court rightly returned the plaint for presentation to the proper Court as the Special Court had jurisdiction to try the suit of which the value was Rs, one lac or above.
7. ' After hearing the learned counsel for the parties, we are of the view that this appeal could succeed on the short ground that provision of Order VII, rule 10, C.P.C. Did not apply to the facts and the circumstances of the case. The admitted position in the case is that Suit No, 14 of 1979 was instituted in this Court on 2nd April, .1979. It is not disputed before us that on the date of presentation of the plaint before this Court, whether the valuation of the suit be taken to be Rs, 1,06,340.75 or Rs, 88, 436.58, the suit was properly instituted. From the order sheet dated 24-9-1979 it is quite clear that the suit was transferred from this Court to the Special Court where it was registered under Banking Companies (Recovery of Loans) Ordinance. The order sheet, dated 24-9- 1979 reads as under : - "Dt. 24-9-1979. File received on transfer from the case High Court of Sind, Karachi. Register the case under Banking Companies (Recovery of Loans) Ordinance. Issue notice to Advocate of the plaintiff.
8. Issue summons to the defendants as per the summons in the suing suit after the process fee etc. Is paid by the plaintiff.
9. ' Ahmad Ali U. Qadri, Special Court Karachi."
10. Order VII, rule 10, C.P.C., in our view is not attracted in the circumstance of the present case as the suit was not instituted by the plaintiff/appellant before the Special Court. But the suit was received by that Court on transfer from another Court (High Court of Sind, Karachi) where the institution of the suit on the date of presentation of the plaint was fully competent and in accordance with law.
11. In such circumstances the Special Court could not have returned the plaint under Order VII, rule 10, C.P.C. But sent back the same to the Court from which it was received. In our view it is the defect of presentation of the plaint in the first instance in wrong Court which attracts the application of rule 10 of Order VII, C.P.C.
12. ' Apart from it we find from the averments made in the plaint that the amount in suit was also claimed by the appellant'/plaintiff on the basis of acknowledgments, dated 15-2-1972, 31-12-1973 and 30-6-1973, executed by the respondent in favour of appellant and if these acknowledgments are taken into consideration, it cannot be said that the amount of claim in the suit on the date of presentation of plaint was less than Rs, one lac, we have ourselves calculated the interest at the rate of 91% on the last sum mentioned in the acknowledgment, dated 30th June, 1976 and we find that the total claim of the appellant after calculating the interest on this amount up to the date of presentation of plaint (2-4-1979) comes to over Rs, one lac. The impugned order of the Court does not show that this contention of the plaintiff was taken into account or that the plaintiff gave up this contention before the Court. It is also not disputed before us that before passing the order dated 28th July, 1981 neither any preliminary issue was framed nor the parties were allowed to lead evidence The impugned order is based solely on the calculation filed by the office of Appellant, who appeared before the Court in response to the direction of the Court dated 11-7-1981 and filed a fresh statement of account as directed by the Court. In our view the procedure adopted by the learned Presiding Officer of the Special Court was not warranted by law. The plaint could be returned by a Court under Order VII, rule 10, C P.C. If it was presented before that Court and on the basis of the facts which are either admitted before it or which are not in dispute between the parties or on the basis of fact which the Court found after enquiry (which necessarily imply taking into consideration the contentions raised by the parties and the evidence produced before the Court) the Court comes to the conclusion that it did not have jurisdiction to try that suit and that some other Court had jurisdiction in the matter. This rule, however, is to be C read subject to the exception that when a suit is instituted in a Court of higher grade it is discretionary with that Court to return the plaint to the plaintiff as the rule requiring institution of suits in the Court of lowest grade competent to try the suit is a rule of convenience and procedures designed primarily to avoid overcrowding of superior Courts but their jurisdiction to try and dispose of the suit which should have been instituted in a Court of lower grade is not affected. However, the discretion vested in the Court of higher grade to return plaint is to be exercised keeping in view the settled legal principles laid down by the superior Courts in this regard after considering the facts and circumstances of each case, where for instance the objection is raised before a Court of higher grade that the suit should have been filed before a Court of lower grade at the stage, when the Court has already gone into evidence and concluded then instead of returning the plaint the proper course will be to decide the same.
13. ' In the case before us the plaintiff/appellant in the plaint took a positive stand that the respondent admitted his liability to pay a certain amount by acknowledgement. There is nothing on record to show that the appellant gave up this position before the Court and admitted that the total claim against the respondent was only Rs, 88,436.58. We also cannot ignore that the respondent was not even granted leave to defend in the case, when the impugned order was passed by the Special Court. In these circumstances the Special Court in all propriety should have postponed the decision on this issue until it had considered the grant of leave to respondent and had some material before it to come to the conclusion in this regard. The learned counsel for the appellant also pointed us that by amendment made in 1983 (Ordinance II of 1983) published on 30th January, 1983 all suits upto the value of Rs, 10 lacs are now cognizable by the Special Court constituted under the Ordinance. This is an additional reason which persuaded us to remand this case back to the Special Court constituted under the Ordinance. We accordingly accept this appeal, set aside the order, dated 28-7-1981 and remand the case back to the Special Court (Banking) Sind at Karachi, to try the suit from the, stage at which the plaint was returned to the plaintiff/appellant for presentation to proper Court, in accordance with law. However, in the circumstances of the case there will be no order as to cost. In view of the fact that we have remanded the case back to Special Court we do not feel it necessary to pass any separate order on the miscellaneous application pending in this case.