MUHAMMAD SAIR ALI, J.- Haji Muhammad Nawaz Khokhar s/o Allah Ditta i.e. Plaintiff filed against United Bank Limited and 4 others, suit for recovery of 500 million as damages and for declaration and perpetual injunction. Upon summons, defendants filed P.L.A. No. 199-B-1998. On 23.11.1998, unconditional leave to defend the suit was granted by this Court. Written statement was filed on 7.2.2000 by the defendants. On 22.2.2001, issues were framed including issue No. 4, relating to jurisdiction to entertain and try the present suit by this Court. Parties filed their respective list of witnesses and documents and the case was fixed for evidence of the plaintiff. However, no evidence till date, has been recorded for one reason or the other.
2. Defendants have now filed C.M. No. 559-B-2002 under Order VII, Rule 11, C.P.C., seeking rejection of the plaint on the ground that this Court has no jurisdiction to entertain the present suit. And that the suit was not competent in banking jurisdiction of this Court as per the provisions of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (repealed Act) now replaced by Financial Institutions (Recovery of Finances) Ordinance, 2001.. Through this application, it is also stated that issue No. 4 relating to jurisdiction of this Court, being of legal and preliminary nature be determined, at this stage, in order to save the time of the. Court and that of the parties.
Contesting reply thereto has been filed by the plaintiff.
3. In support of his application, learned counsel for the applicants read out the contents of the plaint. It is submitted that the plaint has been filed in personal capacity by the plaintiff and also as Director of the company, but does not, at all, relate to commission of default by United Bank Limited qua the finance/loan extended to the company, who is not a plaintiff before this Court. Further that as per Section 9 of the repealed Act of 1997, a customer could only file a suit against a Banking company upon commission of default by the Banking company with regard to the loan/finance.
And further that bare reading of the plaint shows that the plaintiff has not raised any cause of action in terms of the contents of the plaint in his capacity as purported borrower or customer of the company. Reference in this regard is made to the case of "Muhammad Khalid Vs. Civil Judge"
(2001 YLR 905). Learned counsel for the applicants further relied upon the case of "Settlement and Rehabilitation Commissioner, Hyderabad and others Vs. Mannu Khan and others" (1973 SCM R 62), to state that question of jurisdiction should be settled at the outset in order to save the inconvenience and time of the Court as well as that of the parties.
4. Contrarily, the learned counsel for the plaintiff stated that question of jurisdiction in terms of the repealed Act of 1997 or under the Ordinance of 2001, is a mixed question of law and fact, wherefore, plaintiff is entitled to prove in evidence breach of the defendant Bank qua finance/loan and agreements signed thereto by the parties. Further that fragmentary decisions have been discouraged by the Hon'ble Supreme Court of Pakistan in the case reported as 1993 SCM R 2101.
Further that for decision of application under Order VII, Rule 11, C.P.C., only contents of the plaint have to be looked into as per the law pronounced in the cases reported as 1990 SCM R 1630 and 1991 SCM R 2030.
5. I have considered the submissions of the learned counsel for the parties and have also thoroughly examined the plaint. In the plaint, it has been admitted by the plaintiff that the finance or loan was obtained by N. Khokhar Textile Industry Limited; a public limited company, of which the-plaintiff was initially a Director and share-holder. It is pleaded in the plaint that it was after examination of credentials and profitability of the company that the finance was advanced by the defendant No. 1. The plaint goes on the state in paras 5, 6, 7, 8, 9 and 10 that the defendant Bank acting upon the instigation and prompting of political adversaries of the plaintiff, started damaging, harassing and raising causes against the plaintiff as well as the above-stated public limited company. This ultimately resulted in allegedly and maliciously filing a false criminal case under Sections 406, 409, 417, 418 and 420, PPC with the FIA, Rawalpindi vide F.I.R. No. 3 of 1995, whereunder, plaintiff was arrested and detained for more than one month till grant of bail. "The said act has created a lot of humiliation and thus lowered the image of the plaintiff in the eyes of public in general." In para 9(ii), at page 12 of the plaint, it is further stated that the defendant Bank, without any cause or reasons, filed a civil suit against the company, the plaintiff and other Directors for recovery of Rs. 520.373 million and the said suit was duly compromised on the terms and conditions contained in judgment and decree dated 21.6.1995 passed by learned Banking Tribunal, Rawalpindi. Contents of para 12 read with prayer in the plaint are reproduced hereunder alongwith the prayer:- Pan-12: "That the plaintiff sustained a lot of losses in his personal capacity and in the capacity of Director of M/s. N. Khokhar Textile Industries. The plaintiff is going to file the present suit in his personal capacity and shall file a separate suit alongwith the company N. Khokhar Textile Industry as an Ex-Director by a separate suit. The plaintiff sustained the following losses in is personal capacity:-
(a) Loss of time & reputation Rs.300,000,000/-
(b) Loss in business Rs.100,000,000/-
(c) Injuries to the body and soulRs. 1 00,000,000/- Total:- Rs. Five hundred million only.Rs.500,000,000/- Prayer:--
(a) A decree for recovery of Rs. 500,000,000/- (Rs. Five hundred million only) as detailed in para 12 of the plaint
(b) A decree for declaration to the effect that the acts of the defendant-Bank, to consider the plaintiff as a Director (after his resignation from the Directorship and transfer of his shares), all the proceedings, acts, decisions and the demand, liabilities created thereof by the defendant Bank are mala fide, illegal, void, in violative of the contract, Fundamental Rights, Guaranteed under the Constitution of Pakistan, hence ineffective upon the rights of the plaintiff;
(c) As a consequential relief, a decree for permanent injunction restraining the defendants Bank from creating any demand, liability, by considering the plaintiff as a Director, beneficiary, or share- holder of the N. Khokhar Textile Mills Ltd., or taking any action or doing any act which constitute an invasion over the rights of the plaintiff, or prejudicial to the rights of the plaintiff in any manner whatsoever; and
(d) Any other relief which this Hon'ble Court proper.
6. In the above reproduced para 12, it has been categorically stated by the plaintiff that he has filed the suit in his personal capacity and in the capacity of Director of N. Khokhar Textile Industry Limited i.e. The company. It is also evident in the above-quoted prayer part that the plaintiff has sought a decree against the Bank apparently for his personal malicious prosecution or at maximum for defamation and a decree for declaration, in terms of prayer-B, has been requested to be sought against acts of the Bank, considering the plaintiff as Director of the company and prayed for (part c) perpetual injunction, restraining the Bank to create any demand or liability against the plaintiff by "considering the plaintiff as Director, beneficiary, or share-holder of the company, or taking any action or doing any act which constitute an invasion over the rights of the plaintiff, or prejudicial to the rights of the plaintiff in any manner".
7. It is, thus, evident that the entire plaint has been framed and structured on the basis of personal grievances, complaints or purported cause of action to the plaintiff as Haji Muhammad Nawaz Khokhar or as purported Director of the company. The law is well-settled that a suit for recovery, on the basis of finance or loan can only be filed by a Banking company against persons who fall within the definition of "customers or borrowers", which have been defined as the persons obtaining loan or indemnifying or securing loan in their capacity as indemnifiers, sureties or guarantors etc. The contents of the plaint as well as those 9f the prayer show that plaintiff's cause of action against the defendants is in his personal capacity or in the capacity as Director of the company. Capacity of a Director or a share-holder of a company cannot be equated with. The capacity of a person as surety, indemnifier or guarantor of a company. In a number of cases, law stands settled on the proposition that a person, only in the capacity of share-holder of a company or that of a Director, does not fall within tile definition of a customer or borrower.
8. Since the present suit has been filed by the plaintiff in his personal capacity or in his capacity as Director of a public limited company. I am, therefore, of the opinion that this Court has no jurisdiction to entertain and try the present suit. Plaintiff has not sued the defendants with regard to his capacity as guarantor, indemnifier, mortgagor or surety i.e. Obligations arising out of finance.
The present suit, thus, does not relate and does not arise out of finance or advance by United Bank Limited to N. Khokhar Textile Industries Limited.
9. In view thereof, the cause raised in the suit, is not triable by this Court. In absence of jurisdiction, the provisions invokable are contained in Order VII, Rule 10, C.P.C. And not in Order VII, Rule 11, C.P.C.
This application is, therefore, disposed of with the direction that plaint be returned to the plaintiff for institution of the same before the Court of competent jurisdiction, if so advised. Documents be also returned alongwith the plaint as per procedure.