1. ' The paramount question to be addressed in this matter is whether the valuation fixed by the plaintiff in suit or the valuation of counter-claim set up by the defendant in application for leave to defend the suit, would be determining factor for the purpose of jurisdiction of the Banking Court.
2. ' The above question has arisen in the following circumstances:-- ' The plaintiff filed suit for recovery against the defendants-borroweRs, The valuation of the suit, according to para.23, has been fixed at Rs,28,597,691.23 plus US$ 51,070.05. Thus the valuation of the suit is more than thirty million but less than fifty million. The above suit was filed in this Court under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (in short Act, 1997), whereunder the pecuniary jurisdiction of Banking Court (High Court) under sub-clause (ii) of clause (b) of section 2, was exceeding thirty million. The Act of 1997, has been repealed and Financial Institutions (Recovery of Finance) Ordinance, 2001, has been promulgated, whereby the pecuniary jurisdiction of Banking Court, defined under sub-clause (i) of clause (b) of section 2 has been raised to Rs,50 million instead of Rs,30 million. The defendant filed an application for leave to defend the suit wherein counter-claim has been set up in the sum of Rs,55 million. This application remained pending, when the above Ordinance was promulgated, containing a provision of transfer of cases pending in this Court on banking side in terms of section 7(6) of the Ordinance.
3. ' According to subsection (6) of section 7 of the Ordinance, 2001, all proceedings pending in Banking Court constituted under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, including suits for recovery of loan, as defined under that Act, shall stand transferred to or deemed to be transferred to be heard and disposed of by the Banking Court, having jurisdiction under this Ordinance. On transfer of proceedings under this subsection, the parties shall appear before the Banking Court concerned on the date previously fixed.
4. ' Therefore the case's pending in this Court on banking side, valuation of which is less than Rs,50 million stand transferred to the Banking Court established under section 5 of the offences having pecuniary jurisdiction to the extent of not exceeding Rs,50 million.
5. ' The valuation of the present suit is definitely less than Rs,50 million. Therefore, under the law the suit stands transferred in terms of subsection (6) of section 7 of the Ordinance to the Banking Court as defined in section 2(b)(i) of the Ordinance. In view of counter-claim the suit has not been sent to the said Court by office.
6. ' I have heard Mr. Arshad Tayabally, Advocate. His contention was that the valuation of the suit is to be taken for the purpose of jurisdiction and not the valuation of the counter-claim set up by the defendant and to support his contention, he referred the case of United Bank Ltd. v. Jaffer Flour Mills (PLD 1985 Lahore 541) authored by a learned Single Judge of Lahore High Court. Similar question was addressed by the Bench in paras.12 and 14 of the reference, which are reproduced as follows:-- "12. Strictly speaking the question requiring determination at this stage is whether the transfer of the two suits to this Court under the Banking Companies (Recovery of Loans) Ordinance, 1979, is valid.
7. The answer to this question will depend on the jurisdictional value of the two suits. It is undeniable that taken individually and irrespective of the consideration arising from consolidation of suits and submission of counter-claim in one suit, the suits are manifestly valued at less than rupees ten lacs each. That being so, they are triable by Special Court as defined by section 2(f)(i) of the Ordinance and their transfer to the High Court is not warranted or called for by any provision of the Ordinance.
14. In the above view Of the matter, the two suits alongwith the counter-claim shall have to go back to the Special Judge (Banking) Special Court set up under section 2(f)(i) of the Ordinance for disposal according to law."
8. ' Conversely, Mr. Qazi Faez Isa's contention, after referring to the definition of Banking Court in terms of section 2(b)(i), of the Ordinance was that such Court's jurisdiction has been defined by phrase "in respect of a case in which the claim does not exceed fifty million rupees", said provision does not make mention of a counter-claim. Where there is a counter-claim, the valuation of such counter-claim, if higher, will be the valuation of the suit for the purpose of jurisdiction, as such this Court (High Court) as Banking Court can assume the jurisdiction in the matters valuation of which is less than pecuniary limits of the Court. He referred the judgment in Jehangir Khan v. Banking Tribunal, Karachi (2002 CLD 1466), in support of his contention. The relevant facts were that due to pendency of two rival suits, one before this Court on banking side and another before Banking Court defined under the provisions of section 2(b)(ii), the jurisdiction of this Court was invoked under section 24 of C.P.C. To transfer the case pending before Banking Court to this Court to avoid conflict of decision. The objection taken was that this Court cannot try the suit being less than the pecuniary jurisdiction of this Court. The contention raised was not found favour, and the matter was transferred to this Court. The relevant observation is as follows:-- "Upon the above discussion, I am satisfied that this Court has jurisdiction to proceed with a suit filed under the Act of 1997 wherein the subject-matter is less than the Rs,30 million. I am also satisfied that it will be proper, convenient and in the interest of justice that both the aforesaid suits should be tried by one and the same Court as parties therein are the same and the issues/disputes which require determination are also identical and similar. If the above two suits are allowed to proceed in two different Courts then the possibility of conflicting decisions/ findings being given cannot be ruled out which would cause prejudice and injustice to the parties."
9. ' There is no cavil with the proposition stated therein. Jurisdiction of, this Court under section 24, C.P.C. Cannot be equated with transfer of a case by operation of law. Once the suit under law stands transferred, the same cannot be retained on the ground that conferment of jurisdiction at a higher level on this Court by the Ordinance, 2001 would not deprive this Court of its power to proceed with the matter less than the lower pecuniary limit of this Court. Such exercise would render the provisions of subsection (6) of section 7 of the Ordinance, IA 2001 as nugatory and redundant.
10. ' The apex Court in Naimat Ali v. Dewan Jairam Dass (PLD 1983 SC 5) has highlighted the distinction between "set off' and "counter-claim" by stating as follows:-- "There is well recognized distinction between a suit and a counter-claim. Although in one sense both are identical inasmuch as they are cross actions on the part of the defendant but a set-off is essentially a weapon of defence. If the defendant succeeds in establishing it, it serves the purpose of answering to the plaintiffs claimed either wholly or pro tanto because a set-off is really a debt claim by the defendant against the plaintiff to counter-balance a debt claimed by the defendant against the defendant. A counter-claim, on the other hand, is essentially a weapon of offence and is not really relevant as a plea in defence to the claim of the plaintiff. It enables a defendant to enforce a claim against the plaintiff as effectually as in an independent action. Its essential nature is that of a cross-suit pleaded through the means of the written statement in the same suit.
11. ' The answer to the question will be jurisdictional value of the suit. In the instant case, the value of the suit is less than lower limit of pecuniary jurisdiction of this Court on banking side. The case by operation of law stood transferred to the Banking Court having jurisdiction. The counter-claim has been set up through leave to defend application, which is still not allowed and fait of the counter- claim is dependent on the result of the said application though the counter-claim, for all purposes, is separate claim/suit.
12. ' The upshot of the above discussion is that the office has failed to send the suit to Banking Court on wrong notion on the basis of valuation of counter-claim set up through application for leave to defend. Consequently, the office is directed to transfer the case to the Court having jurisdiction in the matter. The defendant may apply for treating the counter-claim a separate suit.