ORDER RASHEED AHMAD, RIZVI, J.- Defendant No. 1 has filed this application (CMA No. 1839/95) under Order VII, Rule 10, C.P.C, praying that the plaint be returned to the plaintiff for Presenting the same before the Special Court having jurisdiction in the case. One of the grounds of the defendant No. 1 is that the subject-matter of suit is below Rs. 10 million as such, the proper forum available to the plaintiff is the Special Court, constituted under Section 6(1) (a) of the Banking Companies (Recovery of Loans) Ordinance, 1979.
2. The plaintiff is a private limited company and has filed the suit for permanent injunction against all the defendants and for damages of Rs. 8.66 million against defendant No. 1. The case of the plaintiff is that initially in the year 1985 the defendant No. 1, the Agricultural Development Bank (hereinafter referred as ADBP) extended loan of Rs. 3.30 million for expansion of their plant at Karachi which was subsequently enhanced. The plaintiff asked from the defendant No. 1 (ADBP) for increase in the working capital loan from Rs. 1.50 million to Rs. 2.50 million which was sanctioned vide Annexure C-l to the plaint but the defendant No. 1 unilaterally imposed certain other conditions which were not acceptable to the plaintiff. The plaintiff's grievance is that for furnishing additional security, they had to raise their assets which resulted in incurring of additional expenses of Rs. 2.2 million but the defendant disbured a small amount of only Rs. 1.54 million upto June, 1988.
Lt is further averred in the plaint that on the alleged failure of the plaintiff to repay/adjust the loan within the stipulated time, the defendant No. 2, namely, the Assistant Commissioner, Karachi East under the direction of defendant No. 1 issued notices for recovery of loan and to initiate action under section 81 of the Land Revenue Act. Subsequently, on 18th December, 1990, the defendant No. 2 issued another notice, this time under Section 82 of the Land Revenue Act, 1967.
3. The plaintiff is now resisting this claim/action of the defendant No. 1 on the plea, inter alia, that the amount claimed is being disputed bona fide by the plaintiff as the amount shown in the notices issued by the defendant No. 2 was not the amount due or recoverable from the plaintiffs.
4. On the pleas briefly stated above, the plaintiffs have prayed for the grant of the following reliefs:
(a) Injunction restraining the Defendants, their agents and servants and those working under them from taking action or making claim or recovery against the Plaintiff under the provisions of the Land Revenue Act or through the Revenue Authorities;
(b) Decree against Defendant No. 1 in the sum of Rs. 8.66 million and interest oh judgment at 20% per annum from date of suit till payment;
(c) Cost of suit:
(d) Such further and or other relief as the nature and circumstances of the case may require.
5. I have heard Mr. J.H. Rahimtoola, Advocate for the Plaintiffs and Mr. Rizwan Ahmad Siddiqui, Advocate for Defendant No. 1 in support of their respective contentions. Mr. Rizwan Ahmed Siddiqui referred to the case of M/s. Grain Systems (Pvt) Ltd. And others Versus Agricultural Development Bank (1993 SCMR 1996) and the order of this Court passed on Office Reference No. 259/74 reported in PLD 1994 Karachi 258. Mr. J.H. Rahimtoola, however argued that by virtue of Section 1(3) of the Banking Companies (Recovery of Loans) Ordinance. 1979, the provisions of the said law are not applicable to the defendant No. 1 (ADBP) and secondly this Court cannot be deprived of the jurisdiction through a Notification with retrospective effect. Lastly, he contended that defendant No. 1 is not entitled to seek recovery through coercive methods of Land Revenue Act as the amount outstanding against the plaintiff has not finally been ascertained or determined by a competent Court of Law. In support of his contention, learned Counsel for the plaintiffs relied upon the cases of Abdul Latif Versus The Government of West Pakistan & others (PLD 1962 SC 384) and Muhammad Akbar Cheema Versus The Province of West Pakistan & others (1984 SCMR 1047).
6. In order to appreciate the arguments advanced by the learned Counsel for the parties, it would be appropriate to refer to sub-sections (2) & (3) to Section 1 of the Banking Companies (Recovery of Loans) Ordinance. 1979 which reads as under: - "(2) It extends to the whole of Pakistan.
(3) It applies to all Banking Companies except the Agricultural Development Bank of Pakistan to which only such of the provisions of this Ordinance shall apply, and from such date, as the Federal Government may, by notification in the official Gazette, specify".
It has not been denied that by Notification bearing No. F.I(2)Bkg-IV/88-2198, dated 1.10.1992 the provisions of Ordinance, 1979 have been made applicable to defendant No. 1, namely, the Agricultural Development Bank of Pakistan. Since the application of this Ordinance to Agricultural Development Bank was not completely excluded but was made subject to the decision of the Federal Government to be notified in the official Gazette which Notification has been duly published, the Special Court in exercise of its civil jurisdiction have in respect of 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 in which outstanding amount of loan does not exceed ten million rupees, all the powers vested in a Civil Court under the Code of Civil Procedure, 1908. No Court other than a Special Court thus shall have or exercise any jurisdiction with respect to such matters.
Reference may here be usefully made to Section 6. Subsection (l)(a) and sub-section (4) of the said Ordinance, 1979.
A perusal of the^c would show that jurisdiction is barred of all Courts other than Special Court in respect of "any matter" and "all proceedings" to which the jurisdiction of a Special Court is extended under the Ordinance, 1979 including suits of such nature which involve question as to existence or otherwise of a loan and the execution of a decree passed by a Special Court including proceedings following the filing of an arbitration award and proceedings for the execution of a decree.
7. The proposition of law referred above was discussed in detail by my learned brother Mr. Wajihuddin Ahmed. J. In the case of M/s. Shafiq Hanif (Pvt.) Ltd.. Karachi Versus Bank of Credit and Commerce International (Overseas) Limited, Karachi (PLD 1993 Karachi 107) wherein after referring to the provisions of the "Banking Companies (Recovery of Loans) Ordinance, 1979" and the "Banking Tribunals Ordinance, 1984" the learned Single Judge held: "An examination of the quoted provisions makes it obvious that in relation to a claim filed by a banking company against a "customer" in respect of or arising out of "finance" provided by it, the jurisdiction of a Banking Tribunal in terms of sections 5 (1) (a) and 5 (3) of the Ordinance should be exclusive. The exclusiveness of this jurisdiction is further confirmed when section 5 (3) of the 1984 Legislation makes the Tribunal also judge of "the existence or otherwise of finance", a similar legislative precedent as to "loan" being found in section 6(4)of the Banking Companies Ordinance, 1979. These are manifest departures from the general principle that a domestic tribunal, unless otherwise provided, cannot be judge of its own jurisdiction. Nonetheless, but conversely, it will still remain for the Civil Courts to see, if called to do so, as to how far the statutes have operated to curtail their jurisdiction. Here, we at once find that a Banking Tribunal, relevant to the same provisions, as referred has no jurisdiction whatever in respect of a claim filed by a customer against a banking company even though such claim may be relating to "finance" (as defined) provided by the Banking company to the "customer". The omission appears to be deliberate because in the same context the equivalent provision in Banking Companies (Recovery of Loans)
Ordinance, namely, section 6 (1) (a) thereof clearly confers jurisdiction on a Special Court in respect of all claims whether by a Banking company against 'a' "borrower" or by a "borrower" against a banking company pertaining to a "loan" contracted within the terms of such Ordinance. It follows that if a "customer" covered by the 1984 Ordinance were to file a suit against a Banking company, as regards "finance" provided to him and covered by the Ordinance, he cannot file such an independent suit before a Banking Tribunal."
The law thus interpreted was cited with approval by the Hon'ble Supreme Court of Pakistan in the case of M/s. Grain Systems (Pvt.) Ltd., and the view of the learned Peshawar High Court in the case of Haji Nabiullah and others Versus M/s. Habib Bank Ltd. & others (PLD 1990 Peshawar 17) (wrongly printed as Habibullah in the case of Shafiq Hanif (Pvt.) Limited) was held to be legally incorrect.
8. Having made observations as above, the Hon'ble Supreme Court also examined the legal controversy between the parties referred to the relevant provisions of the Ordinance and held that: - "By means of Notification No. F.l(2)Bkg-IV/88-2198, dated 1.10.1992 the provisions of Ordinance, 1979 have been made applicable to the Agricultural Bank".
Hon'ble Supreme Court after examining the provisions of the Ordinance, 1979 and the Ordinance, 1984 further held "In the case of Agricultural Development Bank of Pakistan the Special Court constituted under the Ordinance, 1979 has the exclusive jurisdiction. The Special Court would have the jurisdiction in cases of "loans", "advance", "credit" and "finance". Another difference between these two Ordinances is that a borrower may also file a claim in Special Court under Ordinance, 1979 but a customer under Ordinance, 1984 has no such right to approach the Banking Tribunal. There is constraint on the power of Civil Court. It cannot encroach on the domain of Special Court. The civil remedy in respect of the (through Secretary Ministry of Interior, Govt, of Pakistan) Islamabad (Ch. Khurshid Ahmad, J) subject-matter of the present dispute is expressly barred by the provisions of Ordinance, 1979 against the respondent bank. All the disputes between the petitioners and the bank are to be adjudicated upon by the Special Court, constituted under the Ordinance. The finding of the learned High Court on this score is unexceptionable".
9. In view of this background and the law discussed above, in my opinion, this Court has no jurisdiction to entertain and try this suit filed by the plaintiffs.
10. Since it has been held by me that jurisdiction of this Court is barred it is not necessary for me to consider the legality or otherwise of the notices issued by the Revenue Authorities which may be raised before the Special Court. I am also informed that the Bank has already filed a suit for recovery against the plaintiffs which is pending in the Special Court at Karachi.
11. In the circumstances, I agree with the arguments of the learned counsel for the defendant No. 1 but instead of returning the plaint as prayed and as held by the Hon'ble Supreme Court in the case of M/s. Grain System (Pvt.) Ltd., I hereby transfer this suit to the Special Court established under the Banking Companies (Recovery of Loans) Ordinance,#1979 at Karachi for decision on merits.