' RANA BHAGWAN DAS, J.---This appeal captioned as one under section 3 of the Law Reforms Ordinance arises out of an order dated 4-3-1998 passed by a learned Single Judge nominated exclusively to hear cases arising out of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (hereinafter referred as the Act, 1997) in terms of section 5 of the Act in a suit by respondent No,1 against respondent No,2 and the appellant State Bank of Pakistan.
2. The facts appear to be that respondent No,1 filed a suit for accounts, specific performance, injunction and damages against both the defendants on the averments that upon introduction of Locally Manufactured Machinery (L.M.M.) Scheme by the Federal Government, respondent company was granted finance facility by I.D.B.P. (respondent No,2) for setting up heavy mechanical and machine tool factory as a down stream unit of Pakistan Steel Mills Corporation. Under the terms of the scheme the machinery and equipment to be used for availing of finance facility it was imperative that such machinery and equipment should have been locally manufactured.
Appellant State Bank under the scheme was required to reimburse the amount of facility disbursed by the I.D.B.P. To the borrowers and for this purpose appellant Bank was authorized to arrange inspection and verification of the machinery and equipment used for availing of the scheme. It so happened that NESPAK, appointed by the appellant bank on inspection of the machinery and equipment purchased by the respondent No,1 expressed the view that only 30-% of such machinery was locally manufactured whereas 70% of the machinery appeared to be imported. In view of this expert opinion appellant State Bank recalled the reimbursement made in favour of I.D.B.P. And also imposed a penalty of Rs,6.5 million upon respondent No,2 who on its part recalled the finance facility and converted it with mark up at the rate of 22% without rebate and 15% with rebate instead of at the rate of 5% mark up on which originally the finance facility was extended. In suit No,93 of 1995 filed by respondent No,1 following prayers were made:-- "(a) Direct defendant No,1 to specifically perform the contract between the plaintiff and defendant No,1 as amended from time to time, but excluding any arbitrary and one sided changes thereto and excluding the time taken up by the defendants illegal actions;
(b) Issue mandatory injunction against the defendant No,1, directing it to refund/credit an amount of Rs,20,052,403.79 to the plaintiff and all amounts charged thereon by way of interest/mark- up/penalties or otherwise as well as the effect of compounding thereof;
(c) Declare that the penalty imposed and conversion of the financial assistance under the L.M.M.
Scheme was illegal and without any justification;
(d) Restrain the defendant No,1 from charging any amount by way of interest/profit or any other predetermined rate of return by whatever name called upon any outstandings from the date it breached the contract it had entered into with the plaintiff till such time that this Hon'ble Court is graciously pleased to issue a decree for the specific performance thereof or till such time that it agrees to perform the said contract;
(e) Declare that the black-listing of the plaintiff and declaring it to be defaulter by the defendants was unjustified and illegal and direct the defendants to withdraw the same;
(f) Direct the defendant No,1 to render accounts to the plaintiff after removing all effect of the illegal penalty and conversion as stated in prayer No,(b) above.
(f) Restrain the defendants from instituting any proceedings or action against the plaintiff or in respect thereof by way of purported recovery of dues or otherwise until the determination of the present suit;
(g) Restrain defendant No,1 from instituting against the plaintiff or in respect thereof any proceedings for recovery under the Industrial Development Bank of Pakistan Ordinance, 1961 and in particular proceedings under section 41 thereof:
(h) For a money decree in the sum of Rs,1,50,000,000 as damages to be paid by the defendants, jointly and severally, to the plaintiff; or
(ii) For a decree of Rs,1,50,000,000 which should be credited/adjusted from the accounts of the plaintiff with defendant No, 1 and the balance thereof be paid to the plaintiff.
3. Both the defendants i,e, the appellant as well as respondent No,2 contested the suit by filing separate written statements upon which learned Single Judge settled the following preliminary issues.
(1) Whether the machinery used by the plaintiff was within the L.M.M. Scheme or not?
(2) Whether the State Bank of Pakistan defendant No,2, hereinabove rightly imposed the penalty on the I.D.B.P./ plaintiff? If so, its effect and what should the order be?
4. On the preliminary issues parties adduced evidence and submitted a number of documents in support of their respective claims and defences. Upon appraisal of the evidence on record and after hearing the parties, learned Single Judge held that machinery used by respondent No,1 did not fall within the L.M.M. Scheme. On issue No,2, he held that the appellant State Bank of Pakistan could not lawfully recall the finance and impose penalty on respondent No,1 or the respondent No,2.
With regard to the contention of the appellant Bank that respondent No,1 could not sue the appellant for want of privity of contract, learned Single Judge observed that appellant did not raise this plea in the written statement, therefore, such plea could not be allowed to be raised at the hearing of the preliminary issues.
5. Pre-admission notice was issued to the respondents. Persuant to such Court notice a preliminary objection has been raised by respondent No,1, to the maintainability of this appeal under section 21(5) of the Act, 1997 postulating that no appeal, review or revision shall lie against any interlocutory order of the Banking Court.
6. We have heard, learned counsel for the parties and examined the impugned order very carefully.
Mr. Abrar Hassan. Learned counsel for the appellant raised the following contentions in support of the appeal.
(i) That the claim for damages on account of tort averred in the plaint could not be lawfully adjudicated by the learned Single Judge exercising authority under the Act, 1997 and the impugned order was passed by him in exercise of the ordinary civil original jurisdiction of this Court.
(ii) That the respondents suit having been filed prior to the enactment of Act, 1997 it could only be deemed to have been transferred to the Banking Court in terms of section 7(6) of the Act upon a notice to the parties under section 9(3) of the Act, 1997.
(iii) That in any event there was no private of contract between respondent No,1 and the appellant therefore, the appellant would not be amenable to the jurisdiction of the Banking Court.
7. Conversely learned counsel for the respondents referred to the provisions of sections 5, 7(6), 9(1), 11 and 27 of the Act, 1997 to urge that the suit filed by respondent No,1 for settlement of accounts and specific performance of contract against appellant and the respondent bank was exclusively triable before the High Court under the provisions of Act,. 1997, elaborating that Mr. Mushtaq Ahmad Memon, J. Was nominated by the Hon'ble Chief Justice to exercise jurisdiction in respect of cases under the Act, 1997 in terms of section 5 of the Act. Learned counsel vociferously contended that the impugned order being passed by the High Court under the provisions of Act, 1997 being interlocutory in nature present appeal is barred by subsection (5) of section 21 of the Act, 1997.
8. In support of his contention (1) learned counsel for the appellant heavily relied upon Nasimuddin v. United Bank Ltd. 1998 CLC 1718 authored by our learned brother Rashid Ahmed Razvi. J. Illustrating the categories of cases which would fall exclusively within the jurisdiction of a Banking Court established under section 2(b) of Act, 1997. In all eight categories of the cases were enumerated in the judgment which exclude all suits for damages on tort from the purview of the jurisdiction of the Banking Court whereas all suits for damages arising out of breach of contract executed in respect of loan or finance between a Banking Company and a borrower or customer have been held to fall within the exclusive domain of the Banking Court. Learned counsel vehemently contended that the relief of damages claimed by respondent No,1 being relatable to wanton and wilful defamation in the sum of Rs, sixty million could not be appropriately adjudicated by the learned Single Judge under the provisions of Act, 1997.
9. The above contention with profound respects to the learned counsel is untenable and does not have the support of law. Indeed in the prayer clause the respondent No,1, has claimed (a) damages on account of cancelled contract in the sum of Rs,11,465,272, (b) damages on account of inability to do business on annual turnover of Rs,1.2 million in the amount of Rs,84,534,728 and (c) damages on account of wanton and wilful defamation and libel in the sum of Rs,60 million adding up to Rs,150 million. Apart from the fact that the reliefs under clauses (a) and (b) evidently fall within the exclusive domain of a Banking Court, the other reliefs seeking, specific performance of contract, mandatory injunction for refund of specific amount, declaration that the levy of penalty is illegal, direction to render accounts and different injunctions, seeking to restrain the defendants from recovering moneys, claiming interest and instituting legal proceedings are also matters within the exclusive jurisdiction of a Banking Court. The claim for damages made by the respondent No,1 is basically founded upon allegation of breach of contract and allegations relating to finance and the claim by way of damages for defamation is also relatable to the same. We are therefore, doubtful if the same could be considered as independent claim in tort. In any event a careful reading of the plaint shows that such relief is only ancillary to the main reliefs claimed by the respondent No,1. Moreover, we are quite clear in our minds, upon a plain reading of the Act, 1997 that a person cannot be allowed to seek ouster of the jurisdiction of an exclusive forum established by law by merely adding a claim in the nature of a tort arising out of legal relationship constituted by a contract for finance facilities. Such an interpretation would obviously obviate one of the main objects of the Act to constitute a special forum for adjudication of disputes between the banks and borrowers/ customers.
10. Learned counsel also referred to single bench decisions National and Grindlays Bank Ltd. v. N.P.
Miranda and 2 others 1984 CLC 2106 and United Bank Ltd. v. Mian Abdul Rashid and another 1987 CLC 331 which in our humble view do not lay down a contrary view. Both the cases are, therefore, of no avail to the appellant.
11. In support of the view expressed by us we may refer to Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109, dealing with an appeal from an order of a Division Bench of this Court under the provisions of Banking Companies (Recovery of Loans) Ordinance XIX of 1979. In this case apex Court firmly laid down that the jurisdiction conferred on the High Court under the Ordinance is special jurisdiction and while exercising such jurisdiction the High Court bears fictional character of a special Court as defined in the Ordinance. It is fundamental rule, that where an enactment creates a new jurisdiction and prescribes the manner in which that jurisdiction is to be exercised and further specifies the remedy, such remedy is exclusive and the party aggrieved by an order made in exercise of such jurisdiction must seek only such remedy and not others.
Referring to subsection (4) of section 6 of Ordinance XIX of 1979, Supreme Court held that the jurisdiction conferred by the Ordinance on the forums created thereunder seems to have been jealously guarded by the legislature and no Court other than the Special Court can have jurisdiction to deal therewith. Identical view was expressed in Muhammad Ayub Butt v. Allied Bank Ltd. PLD 1981 SC 359 and quite recently Hon'ble Supreme Court in Bolan Bank Limited v. Capricorn Enterprises (Pvt.) Ltd. 1998 SCM R 1961 referring to the earlier reported as well as unreported decisions expressed the following view: "The stand aken by the learned counsel is untenable for more than one reason. The Legislature has not provided any right of appeal against an interlocutory order of the Special Court. It is not understandable to how the instant appeal is competent."
12. For these reasons we are of the considered view that the learned Single Judge decided the preliminary issues while exercising his jurisdiction under the provisions of Act, 1997, therefore, the present appeal is patently barred by the provisions contained in section 21(5) of the Act, 1997.
13. Adverting to the second contention of Mr. Abrar Hassan, it may be observed that under section 2(b) of the Act Banking Court, in respect of loans exceeding Rs,30 million has been defined to be the High Court. Indeed under section 5 of Act, 1997 the Chief Justice is empowered to appoint a Judge of the Court to exclusively hear banking cases in the interest of their speedy disposal, but, what is important to bear in mind is that the Judge acting as Banking Court is not a persona designata on whom the jurisdiction vested by law is conferred. The Act confers the jurisdiction of a Banking Court in respect of certain cases upon the High Court, the Chief Justice whereof in turn appoints a Judge who exclusively empowered to exercise the functions of the Banking Court. In this respect provisions of the Act are substantially different from certain other laws where a High Court Judge is designated to perform the duties of a Special Tribunal as a persona designata, such as an Election Tribunal, a Special Appellate Court under the Customs Act etc. The suit being triable by the High Court itself (though by a Judge nominated by the Chief Justice), we are clearly of the opinion that no notice of transfer was necessary. In any event the parties having appeared before such Judge and the impugned order having been passed in their presence, we find Mr. Abrar Hassan's objection untenable.
14. In the light aforesaid discussion and the view taken by us last contention raised by the learned counsel has lost his efficacy. It is therefore unnecessary to deal with it At the conclusion of the hearing for reasons to be recorded later, by a short order we dismissed the appeal in limine.
Aforesaid are the reasons for the conclusion arrived at.