TASSADUQ HUSSAIN JILANI, J. - Petitioners are defendants in a recovery suit filed by the respondent Bank at Lahore. After seven years of filing the written statement before the learned Banking Court No. III, Lahore they filed two applications challenging the territorial jurisdiction of the said Court and prayed that the question of jurisdiction be decided at the first instance and that the plaint be returned for presentation before the proper Court in United Kingdom. Both the applications were dismissed vide order dated 21.10.1999 which is impugned in this Constitutional petition.
Facts in brief are that the petitioner company obtained a loan from the respondent Bank. On account of the alleged default, respondent was obliged to file suit in the Banking Court at Lahore on 10th January, 1989 for the recovery of Rs. 2,07,67,540.00 equivalent to Pound Sterling 610,810.22.
Permission to defend the suit was granted to the petitioner company on 21.2.1992. The case remained pending for one reason or the other and eventually following issues were framed as late as 17.5.1995:-
(i) Whether this Court lacks territorial jurisdiction to entertain the present suit and dispose of the same? OPD
(ii) Whether the suit was barred by time? OPD
(iii) Whether the suit has been tiled by incompetent persons? OPD
(iv) Whether the plaintiff has no cause of action? OPD
(v) Whether the plaintiff Bank was entitled to recover Rs. 2,07,67,540.00 with interest at the rate as claimed from defendants through sale of mortgaged properties and from the assets of the other defendants, jointly and severally? OPP
(vi) Relief.
The case was adjourned for recording of evidence on 28.6.1995. Some evidence was recorded and on 20.7.1999 petitioner filed an application under Order XIV, rule 2, C.P.C. And subsequent to that another application under Order VII, rule 10, CPC. Both were dismissed vide the impugned order.
2. Learned counsel for the petitioner has made following submissions in support of this petition:-
(i) that the petitioner company was incorporated in England and the petitioner resided in England, hence, only a Court in UK could have jurisdiction to decide the matter;
(ii) that the company was subject to law of UK and the properties which were mortgaged were also in England;
(iii) that the witnesses that plaintiff is likely to produce reside in England and the witnesses which the petitioner-defendant would produce in rebuttal also reside in England, therefore, it would be convenient for the parties to have the case tried at UK. The doctrine of "forum non-convenience" is fully attracted and Court in England not in Pakistan is the convenient and proper forum to decide the case.
1982 CLC 1625), Sh. Muhammad Ramzan Vs. Special Judge Banking Court (1986 MLD 614), Lala Dhanpat R.I Vs. Sri Prem Sunder Bharghava and others (AIR 1962 Allahahad 572), Ramdhari Lal and others Vs. Uday Narayan and others (AIR 1957 Patna 231), Sherin and 4 others Vs. Fazal Muhammad and 4 others (1995 SCMR 584), Abdullah Khan Vs. Mst. Abbasi Begum etc. (NLR 1982 Civil 110), Partap Singh Kairon Vs. Gurmej Singh (AIR 1958 Punjab 409), Janki Das and another Vs. Kalu Ram and another (AIR 1936 Patna 250), Udmi Ram, Ram Sarup Vs. Ghasi Ram, Sakhan Lal (AIR 1933 Allahahad 753), Spiliada Martitne Crop Vs. Cansulex Limited (1986 All England Law Reports 843), The Ahidin Daver's case (1984 1 All England Law Reports 470), Eleftheria Vs. Owners of Ship or Vessel Eleftheria (1969 2 All E.R. 641) and The Owners of the Atlantic Star Vs. The Owners of the Bona Spas (1973 All England Law Reports 176).
3. Learned counsel for the respondent Bank on the other hand opposed the petition by submitting that the entire evidence which plaintiff wishes to produce is available in Pakistan; that even the petitioners-defendants in the affidavit submitted alongwith the written statement before the learned Trial Court have shown their address to he that of Pakistan; that the applications had been moved to prolong the matter so that they can further delay the return of the loan. Learned counsel for the respondent has relied on Malik Ejaz Vs. Abdul Haleem and others (1999 MLD 1315), Muhammad Zaki and another Vs. Muhammad Taqi (PLD 1995 Karachi 416), Muhammad Sadiq Vs. Irshad Begum (1994 MLD 940) and Muhammad Yaqoob Khan Vs. Dalil Khan and 15 others (1993 CLC 633).
4. I have heard learned counsel for the parties, perused the record and have also gone through the case-law relied upon by the parties.
5. Mere incorporation of petitioner/defendant company in UK or their residence there at the time of execution of loan agreement would not necessarily exclude the jurisdiction of the Banking 'Court in Pakistan in the recovery proceedings initiated by the respondent Bank. The subsequent conduct of the petitioner, the change of their ordinary residence, the law applicable to the parties and which forum would he just and proper would also he decisive factors while deciding the question of territorial jurisdiction.
6. . It is not denied that there is no specific jurisdictional clause in the loan agreement between the parties. Being citizens and residents of Pakistan they are subject to the ordinary law of the land.
Section 20 of the CPC is relatable to the territorial jurisdiction -where a suit may he tiled. It reads as under:- "20. Other suits to he instituted where defendants reside or cause of action arises. -- Subject to the limitations aforesaid, every suit shall he instituted in a Court within the local limits of whose jurisdiction--
(a) the defendant, of each of the defendants where there are more than one at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (h)
(c) the cause of action, wholly or in part arises. Explanation I.
Explanation II. A corporation shall he deemed to carry on business at its sole or principal office in [Pakistan] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
7. The case of the respondents/plaintiffs is that petitioner/defendants now reside in Pakistan and the question of territorial jurisdiction has been raised to prolong the matter. The record of the Trial Court was requisitioned. They tiled PLA No. 20-B/89 in COS No. 4 of 1989 before the Trial Court seeking leave to defend the suit. Pakistan-defendant No. 2 tiled an affidavit alongwith the said application and the address given by the petitioner is "68-Shahrah-e-Quaid-e-Azam, Lahore".
Neither in the said application nor in the written statement tiled by the petitioner subsequently it has ever been denied that the petitioners now reside at the afore-referred address. Petitioner No. 3 Ruhina Zuhair has appended her identity card with this petition (bearing No. BR-743782) which was issued on 1.8.1996 and the address given in the said card is "39-El, Gulherg-III, Lahore". 1 have also gone through the documents annexed with the plaint and the evidence led by the plaintiff so far.
Exh.P-12 is a letter from T.Zuhair (petitioner No. 1) to the Executive Vice-President United Bank Limited, 29-Minoing Lane, London EC-3 (UK) dated 26.11.1984 and it reads as under:- "We refer to your various communications/letters to the Zonal Chief, Lahore, regarding the captioned loan liabilities.
I feel very much sorry that I could not contact you before my leaving London sometime during April, last. Now I am settled at Lahore and my address is as under:- "M/s. T.Zubair c/o Messrs Pak United Carpet Manufacturing Co. Ltd., 68-Shahrah-e-Quaid-e-Azam, Lahore (Pakistan)."
Yet another letter to the same effect was sent by T.Zubair to the respondent Bank in England (dated 30.12.1984), Exh.P-13 which is at page 83 of the file of the learned Trial Court. The afore-referred correspondence would indicate that the petitioners-defendants have shifted to Lahore and ordinarily reside here, therefore, they are within the territorial jurisdiction of Banking Court No. III, Lahore.
8. Having given the afore-mentioned addresses in the affidavit, in the identity card and having admitted in the correspondence with the respondent/plaintiff Bank that they have shifted to Lahore, the petitioners are estopped to raise the question of territorial jurisdiction by asserting that they resided in UK when the agreement was executed.
9. The argument that since the witnesses which the parties have to produce reside in England and the properties mortgaged against the loan are also in UK, therefore, a Court in UK would be a more convenient forum is not tenable. Firstly, because learned counsel for the respondent Bank has stated that the Bank has already produced the entire evidence before the Trial Court and only one witness remains which he undertook to produce on the next date. Secondly, petitioners/defendants have not either in the written statement filed before the Court or in the body of this Constitutional petition or even during arguments pointed out as to what evidence they wish to examine from United Kingdom. Even if they genuinely have some evidence of foreign origin, it is not difficult to bring it to the Banking Court at Lahore thanks to the modern means of communication. Either the witnesses can be brought to Pakistan or a commission can be appointed to record their statements in the United Kingdom. Thirdly, and as admitted by the petitioners in para 9 of the written statement filed in the Trial Court they have already sold the mortgaged properties in UK after seeking permission from the respondent Bank and have deposited the amount in the Bank in partial liquidation of loan.
"(a) Where the doctrine of forum non conveniens applies;
(b) Where there is a foreign choice of jurisdiction clause; and
(c) Where there is an agreement on arbitration."
As per Black's Law Dictionary, the term "forum non conveniens" refers to discretionary power of Court to decline jurisdiction when convenience of parties and ends of justice would be better served if actions were brought and tried in another forum (Sixth Edition-Centennial Edition 1891- 1991). Invoking this doctrine in a number of jurisdictions including UK and USA stays were granted where it was found that some other forum was the more appropriate than where the suit was filed.
In Eleftheria's case (1969-2 All ER 641) the House of Lords referred to following factors, which may be considered while deciding the question of stay and forum for trial:- "(i) In what country the evidence on the issues of fact is situated, or more readily available and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts;
(ii) Whether the law of the foreign Courts applies and, if so, whether it differs from English Law in any material respects;
(iii) With what country either party is connected and how closely;-
(iv) Whether the defendants genuinely desire trial in the foreign country or are only seeking procedural advantages;
(v) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would, (a) be deprived of security for that claim, (b) be unable to enforce any judgment obtained,
(c) be faced with a time-barred not applicable in England, or, (d) for political, racial, religious, or other reasons to he unlikely to guard a fair trial."
10. Perhaps the more celebrated judgment of the House of Lords on the afore-referred doctrine in Spiliada Martime Crop Vs. Cansulex Limited (1986 All England Law Reports 843) wherein at page 844 it was held as under:- "In considering. Whether there was another forum which was more appropriate the Court would look for that thrum with which the action has the most real and substantial connection, e.g. In terms of convenience or expense, availability of witnesses, the law governing the relevant transaction. And the places where the parties resided or carried on business. If the Court concluded that there was no other available thrum which was more appropriate than the English Court it would normally refuse a stay. If, however, the Court concluded that there was another thrum which was prima facie- more appropriate the Court would normally grant a stay unless there were circumstances militating against a stay, e.g. If the plaintiff would not obtain justice in the foreign jurisdiction."
According to J.G. Collier (at page 96 of the Conflict of Laws- 2nd Edition-Cambridge University Press) the afore-mentioned .Judgment has laid down following guidelines:- "(I) A stay will only he granted if the Court is satisfied that there is another available Court haying.
Competent jurisdiction which, because the case could he tried there suitabk for the interest of the parties and the ends of justice, is appropriate for the trial:
(2) In general the burden of persuading the Court to exercise its discretion to grant a stay rests on the defendant, although in respect of any matter raised by either party 'to .Persuade it one way or the other, the burden lies on the party who raises it:
(3) The defendant must show not only that England is: not the natural or appropriate forum but that there is one other forum which is clearly more appropriate. A distinctly more appropriate forum did not exist in the leading cases in which a stay had been granted, such as the Atlantic Star, MacShannon Vs. Rockware Glass Limited, Trendte.v Trading Corporation Vs. Credit Suisse and in the Abidin Daver.
(4) The Court must first look for factors which point to another forum , defined by Lord Keith in the Abidin Daver as with which the action had the most real and substantial connection'. These include factors affecting convenience or expense (including availability of witnesses) and others, such as which law governs the relevant transaction, or the respective places Of residence or business of the parties.
(5) If the Court concludes that no such forum exists, a stay will almost certainly he refused.
(6) It' it concludes that there is a prima facie more appropriate forum a stay will normally he granted. But if the plaintiff (on whom the burden now lies) can show that circumstances beyond those under (4) exist why a stay should not he granted, such as that he will clearly not he able to obtain justice in the foreign Court, a stay will be refused."
1 1. A critical study of the case-law on the application of the doctrine under discussion would indicate that "in virtually all of them the Courts have considered all the circumstances of the case, including considerations going beyond those of appropriateness. This has often been on the basis that the ultimate question is what justice demands and all the factors for and against a stay have to he considered together". (page 340 of the Cheshire and North's Private International Law--PM North JJ Fawcett- Thirteen Edition (Butterworth).
12. Recently the judgment of the House of Lords in the Pakistan National Shipping case (Baghlaf al Safer Factory company B.R. For Industry Limited Vs. Pakistan National Shipping Company has been a subject of academic interest with reference to the concept of "proper jurisdiction". It was a case in which a carriage of goods by sea contract, evidenced by bills of lading contained a choice of forum clause in favour of the carriers (the applicant/defendants in the case) place of business in Pakistan or at their option, of the forum of the place of final discharge of the goods (Saudi Arabia).
A breach of contract arose from partial damage to the goods, the cargo owners sued in England, the carriers raised the question of jurisdiction, stay was granted in their favour on their reasonable stand that they would waive the plea of limitation before the forum of option. Professor Olusoji Elias of the University of Buckingham, in his article "Private International Law 'Proper jurisdiction' and the Pakistan National Shipping case" (Amicus Curiae-Journal of the Society for Advanced Legal Studies- Issue No. 14- February, 1999) has spelt out following objective considerations which may influence the question of jurisdiction in transactional litigation:-
(i) "flexibility as to the content and the applicability of the relevant, particular thrum law, as well as the bearing it is to have on the issues;
(ii) party autonomy, beyond the validation of their choice-of-forum clauses and the submission of the give dispute to the one thrum, e.g. In relation to the right to waive or assert procedural rights which are exercisable in the other jurisdiction(s);
(iii) objectivity, rather than subjectivity; e.g., on the matter of reasonableness, in determining the jurisdiction with which the parties and their dispute are most closely connected;.
(iv) uniformity, predictability and consistency of result, regardless of the forum in which litigation is commenced, to he differentiated from the content; also the result of applying the choice-of-law rule of the particular jurisdiction, i.e. Procedural fairness in the case in point, the likelihood of delay and (or) fair trial if litigation took place in Pakistan;
(v) mandatory forum rules and forum public policy, as may be applicable to these issues (mostly in connection with the recognition and enforcement of judgments, where this arises);
(vi) procedural trade-offs between entitlements accruing from forum rules and from the rules of the other jurisdiction;
(vii) comity." He concluded as under:- The term "lex fori" (as per Black's Law Dictionary-Sixth Edition-Centennial Edition 1891-1991) means "the law of the forum, or Court; that is, the positive law of the State, country, or jurisdiction of whose judicial system the Court where is brought or remedy sought is an integral part".
13. Coming to the facts of the case in hand it is to he borne in mind that there is no specific choice of forum clause in the loan agreement. In absence of that clause the questions of "proper jurisdiction" or "appropriate forum" and the "natural forum", would have to resolve in the light of canons of equity i.e. What is just and reasonable for the parties and with reference to the country with which "the action has the most real and substantial connection" (Spiliada's case).
14. The foregoing principles of natural justice and reasonableness have to be harmonized with "the normal lex for rules" of the country where a suit is pending and stay of which is sought.
Petitioners/defendants besides being Pakistani citizens resides in Lahore as is evident from their correspondence with the respondent Bank. The affidavit tendered before the Trial Court and the Identity Card Which has been appended with this petition. In terms of Section 20 of the Civil Procedure Code, they have been rightly sued in Lahore. They have been unable to demonstrate before the Trial Court and before this Court as to how they would he at "relative disadvantage" if the trial is allowed to he held in Pakistan. No "personal" or "jurisdictional advantage" to the respondent-plaintiff and "corresponding disadvantage" to the petitioners is apparent in the proceedings at Lahore. The case is pending since 1989. They were granted leave to defend as far hack 1992. After seven years they have moved the application for return of plaint to the Court in UK.
During these years almost the entire evidence of the plaintiff (except one witness) has been recorded. It would he unjust and unreasonable at this belated stage to terminate the proceedings before the Trial Court and send the case to United Kingdom.
15. For what has been discussed above it is hereby declared and held as under:-
(i) that the Banking Court No. III, Lahore seized of the recovery suit subject-matter of this petition is the proper. Natural and appropriate forum for trial:
(ii) as the suit for recovery against the petitioner/defendant is pending decision for the last more than eleven years, the learned Trial Court is directed to decide the same within a period of two months of the receipt of this order.
16. This petition stands dismissed in terms of the afore-referred direction with no order as to costs.