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1985 MLD 1189

NAROOMAL JETOMAL vs SPECIAL COURT (BANKING) SIND and 3 others

Citation1985 MLD 1189
CourtSindh High Court
Case No.Constitutional Petition No, D-130 of 1984
Date1985-08-04
Judge(s)Ali Madad Shah, Abdul Qadeer Chaudhry
ResultPetition allowed

' ABDUL QADEER CHAUDHRY, J.--This petition has arisen out of the following facts: ' The plaintiff/petitioner filed a suit for recovery of Rs, 1,77,500 against the Allied Bank. It was the case of the petitioner that in December, 1975 he had an account with the respondent No,2 and at the request of the petitioner the said respondent granted a cash credit facility to the petitioner up to a limit of rupees two lacs and as a collateral security against the said amount the petitioner's firm pledged with the said respondent their stock of paddy stored in their go downs, totaling 17,300 mounds and valued at that time at Rs, 4,32,500. In the year, 1976 Rice Mills in Pakistan were nationalized in accordance with the provisions of Rice Milling Control and Development Ordinance, 1976. The property of the rice mills including the stock of rice and paddy were taken possession of by the Rice Milling Corporation. According to the petitioner sometimes in 1977 petitioner came to know that the stock of rice and paddy lying with respondent No,2 had been auctioned in January, 1977 without knowledge of the petitioner. On enquiry the petitioner learnt that the sale proceeds of the said auction were not credited to the account of the petitioner's firm by respondent No,2. The petitioner thereafter filed a suit against the respondent No,2 for the recovery of Rs, 1,77,500 after deducting the dues of Rs, 3,80,000 which were outstanding against the petitioner in the respondent No,2's account. The said suit was later transferred to the respondent No,1 after coming into force of the Banking Companies (Recovery of Loans) Ordinance, 1979 hereafter referred to as the Ordinance.

2. While the said suit was still pending the respondent No,2 filed a suit before the respondent No,1 against the Rice Milling Corporation of Pakistan and the Government of Pakistan, respondents Nos.

3 and 4 respectively, and joined the petitioner and his firm together with one Bhag wandas as party to the said suit. The suit filed against the petitioner was decreed in the sum of Rs, 6,23,034 with costs and interest at the rate of 4% above the bank rate with quarterly rests from the date of the suit. However, no decree was passed against respondents Nos.3 and 4 herein.

3. During the pendency of the petitioner's suit he filed an application under Order VI, rule 17 read with Order I, rule 10, C.P.C. For joining respondents Nos. 3 and 4 as necessary parties. The petitioner also sought to increase the said amount from Rs,1,77,500 to Rs, 5,58,500 as the less amount was claimed due to bona fide mistake. The learned Special Judge dismissed the application by means of an order dated 8-11-1983 holding that the suit against the Rice Milling Corporation of Pakistan could not be filed as the Court can entertain the suit regarding the loan between the borrower and the bank as provided under section 6(1)(a) of the Ordinance. According to the definition borrower means a person who obtained a loan from Banking Company and includes surety or an indemnifier. The Rice Milling Corporation of Pakistan and the Government of Pakistan are not the borrowers from the defendant bank and as such they cannot be joined as party in the suit. As regards the increase of amount it was held that suit was filed originally in the Court of Senior Civil Judge, Dadu on 5-3-1977 which is received on 8-11-1979 when it was at stage of final hearing. The cause of action according to the plaintiff accrued on and about 1976 and the application for amendment was filed on 6-10-1981 therefore the application was barred by time.

4. A preliminary objection has been taken on behalf of the respondents that the petition is not maintainable as the impugned order is appealable under section 12 of the Ordinance. The learned counsel for the petitioner has submitted that the impugned order has been passed on an interlocutory application and it has not disposed of the suit before the Special Court and it is not appealable. To appreciate the contentions of the learned counsel for the parties, we may reproduce the relevant provisions for appeals contained in section 12 of the Ordinance, which reads as follows:- ' Section 12:- "Appeals.--(1) Any person aggrieved by any order, judgment decree or sentence of a Special Court may, within 30 days of such order, judgment, decree or sentence, prefer an appeal to the High Court within whose jurisdiction the order, judgment, decree or sentence is passed: ' Provided that no appeal shall lie from an interlocutory order which does not dispose of the entire case before the Special Court.

(2) An appeal under subsection (1) shall be on any one of the following grounds namely:-

(a) The decision being contrary to law or to some usage having the force of law, or (b) the decision having failed to determine a material issue of law or usage having the force of law, or (c) a substantial error apparent in the procedure provided by or under this Ordinance, which may possibly have produced error in the decision on merits.

(3) An appeal may be preferred under this section from a decision made ex parte.

(4) An appeal under this section shall be heard by a Bench of not less than two Judges.

(5) No appeal shall be admitted for hearing unless the appellant deposits in cash with the High Court an amount equivalent to the judgment against debtor, at the discretion of the High Court, furnishes security equal in value to such amount."

It is evident that the proviso to subsection (1) of section 12 of the Ordinance, reproduced above, bars an appeal from an interlocutory order which does not dispose of entire case before the Special Court. The important expression in the proviso clause is "entire case". In the instant case, the impugned order was passed on an interlocutory application under Order VI, rule 17, read with Order I, rule 10, C.P.C. For impleading MessRS,' Rice Milling Corporation of Pakistan and Government of Pakistan as the defendants in the suit and allowing consequential amendment in the body of the plaint. The learned Special Judge dismissed the application and ordered that the suit may be fixed for evidence. It follows that the suit itself was not disposed of by the impugned order and, therefore, the order was not appealable and the petitioner could challenge the order by way of a Constitutional Petition.

5. As regards the merits of the case, the learned counsel for the petitioner has urged that the respondents Nos. 3 and 4 are necessary parties and application under Order VI, rule 17 read with Order I. Rule 10, C.P.C. Should have been allowed for proper determination of dispute between the parties. According to him, the Court could have returned the plaint for its presentation to the proper Court if it were found on amendment of the plaint that the Court did not have the jurisdiction to proceed with the suit. Reliance has been placed in this respect on the cases, Kundan Lal v. Sri Narain Lal and others reported in AIR 1958 All. 96 and Nandula Bhavani Sankaram v. Saladi Mangamma and others reported in AIR 1949 Mad. 208, wherein it was held that the Court can allow amendment in the pleadings although it has no jurisdiction to try the suit.

6. The Special Judge has adopted the view that the Special Court can try only that suit in. Which the parties are only a borrower and a Banking Company and it does not have jurisdiction in the case where any other party also is impleaded. This view was inconsistent with the view adopted in another suit filed in the Court itself. Respondent No,2 herein had filed a suit No, 70/80 in the same Court against the petitioner and 4 others, which included the Rice Milling Corporation of Pakistan and Government of Pakistan, in respect of the same subject-matter, and the learned Court entertained the suit without any objection to jurisdiction and actually passed a decree against the petitioner herein. Moreover, the Ordinance does not confine jurisdiction of the Special Court only to a case where the parties to the suit are only the borrower and the Banking Company. Powers of the Special Court are enumerated under section 6 of the Ordinance. It is provided in clause (a) of section 6 of the Ordinance that. a Special Court shall, in the exercise of its civil jurisdiction, have in respect of a claim filed by a Banking Company against a borrower or by a borrower against a Banking Company in respect of or arising out of, a loan, all the powers vested in a civil Court under the Code of Civil Procedure, 1908. It is further provided under section 6(2) of the Ordinance that no Court other than the Special Court shall have or exercise any jurisdiction in respect of any matter to which the jurisdiction of a Special Court extends under the Ordinance. It follows that a Special Court has exclusive jurisdiction in respect of claims filed by a Banking Company against a borrower or by a borrower against a Banking Company in respect of or arising out of a loan to the extent specified in the Ordinance. The important fact to be noted is that the jurisdiction of the Special Court extends to a claim upto specified extent arising out of a loan in a suit filed by a Banking Company against a borrower or by a borrower against a Banking Company, but there does not seem any bar to the impleading of 3rd party also in such a suit. We, therefore, do not approve of the view adopted by the learned Special Judge.

7. The petitioner's application under Order VI, rule 17 read with Order I, rule 10, C.P.C. Was dismissed also on the ground that it was time-barred. The suit was not time-barred at the time it was filed. Of course, the Court has to determine whether the suit against the parties sought to be impleaded as defendants was time- barred. But the determination of that question would be on consideration of facts as to at what point of time cause of action had accrued to the petitioner against those defendants. As regards the amendment in the plaint for increasing the amount of claim, it would suffice to mention that the plaint did make mention of the entire claim projected in the suit but the claim was confined to the amount claimed after allowing set off for the claim of the respondent Bank. The question of limitation therefore needs determination at the regular trial of the suit and not at the intermediary stage.

8. For the reasons recorded above, we allow this petition and set aside the impugned order of the Special Judge. The learned Special Judge shall consider the application under Order VI, rule 17 read with Order I, rule 10, C.P.C. Afresh in the light of the observations made above.

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