' This order will dispose of an application under Order VII, rule 11, C.P.C. Moved by the defendant for rejection of the plaint.
' The facts leading to the filing of this suit as enumerated in the plaint are, inter alia, as follows:-- "Masood Asif and his wife Nasreen Akhtar (plaintiffs Nos. 1 and 2) are carrying on business through Messrs Jenice Limited (plaintiff No,3), a company incorporated in England. Plaintiffs Nos.1 and 2 allege that they are nationals of Pakistan residing in England, and doing business there. In 1990, on inducement of the officers of United Bank Limited, (UBL), Jenice shifted its business to the said bank, however, on account of the conduct of U.B.L., the plaintiffs suffered economic losses, whereupon the plaintiffs filed Suit No,1189 of 1997 in the High Court of Sindh at Karachi for Declaration, Permanent Injunction and Recovery of Damages amounting to Pounds Stg.
10.945 Million. The plaintiffs also filed an interlocutory application to restrain U.B.L. From appointing administrative receiver of Jenice pursuant to debenture dated 10-8-1990 on which the Court ordered notice against which they filed Civil Petition No,1018 of 1997 directly in the Supreme Court of Pakistan, which was subsequently withdrawn. The plaintiffs also filed Civil Petition No,2 of 1998 against another interlocutory order of the High Court dated 24-12-1997. The Supreme Court without deciding the question of maintainability of the petition which was raised by the defendant, disposed of the same with the direction that if the plaintiffs deposited with U.B.L. Within one week from 5-2-1998 a sum of Pounds 3 Million, the undertaking given by the Bank before this Court in Suit No,1189 of 1997-would remain operative until disposal of C.M.A. 6254 of 1997 and if the plaintiffs did not do so, the undertaking given by the Bank before the High Court in the civil suit shall stand discharged. Review Petition No,1 of 1998" filed against the aforesaid order was dismissed on 11-2- 1998. It transpires that on 16-2-1998, the parties executed a Settlement in England whereby the plaintiffs agreed to pay a sum of Four Million Pounds as against the agreed debt of Pound Sterling 6,570,774.25 due from the plaintiffs to the Bank within a period of 60 days from the date of the Deed. Thereafter, the plaintiffs unconditionally withdrew Suit No,1189 of 1997 from this Court, and the parties entered into a Supplementary Deed whereby U.B.L. Agreed that in case Jenice paid a sum of Pounds 80,000 to it on or before 25-5-1998, the time for payment of the settled amount would stand extended to 1-6-1998. Accordingly the plaintiffs . Allegedly paid the stipulated sum of Pounds 80,000. It is the case of the plaintiffs that subsequently further discussions and negotiations regarding settlement of the outstanding amount took place between the parties and U.B.L. Agreed to extend the time for payment. However, in spite of promise, the terms of the agreement arrived at between the parties on 28-1-1999 in substitution of settlement deed dated 16-2-1998 were not put in writing and U.B.L. Placed Administrative Receivers of Jenice and Receivers of the mortgaged properties. The plaintiffs further allege that the reason why U.B.L. Renegade from their agreement was U.B.L.'s problem with the Bank of England, which is the regulatory authority for banking in U.K.
That due to the above acts on the part of the officers of defendant, the properties of the plaintiffs are being destroyed and that the plaintiffs have been grossly wronged. The defendant is liable to specifically perform it's agreement to allow the plaintiffs to liquidate the agreed debt. As U.B.L. Is a Banking Company incorporated under Pakistan Law and has its registered office at I. I. Chundrigar Road, Karachi, the plaintiffs filed the present suit on 6-12-1999 seeking, the following reliefs:--
(a) Declaration that the appointment of the receivers over the assets and personal properties of plaintiffs Nos. 1 and 2 who are the sole shareholders of plaintiffs-Company, by the defendant, its officers functionaries, representative agents and solicitors be declared illegal, unconscionable, mala fide, arbitrary, void and of no legal effect, without lawful authority and ineffective as regards properties and assets of plaintiffs Nos.1 and 2 and assets of the plaintiffs-Company.
(b) mandatory injunction requiring the defendant to remove directly or acting through its officers, functionaries, representatives, agents and solicitors, the receivers over the personal properties of the plaintiffs Nos. 1 and 2 and assets in the name of plaintiffs-Company.
(c) perpetual injunction restraining the defendant directly or through its officers, functionaries, representatives, agents and solicitors and the receivers, from dealing with in any manner, or disposing of, the personal properties of plaintiffs Nos.1 and 2 and the assets and business of the plaintiffs-Company.
(d) requiring the defendant directly or through its officers, functionaries, representatives, agents, and solicitors to specifically perform the agreement of 28-1-1999 and suitably varied as aforesaid, the price being adjusted, mutatis mutandis for money's already received.
(e) decree for rupees of equivalent G.B.P. 5,200,000 as damages to the plaintiffs against the defendant.
(f) compensation at the rate of 6% per annum on the amount of damages from the date of the institution of the suit till the realization of decretal amount.
(g) restraining the defendant, its officers, functionaries, agents, representatives and the receivers from taking any other detrimental action against the petitioners Nos.1 and 2 and the petitioners company.
2. It seems that alongwith the plaint the plaintiffs filed two applications for injunction which were dismissed by a learned Judge of this Court vide order dated 19-1-2000. The defendants also moved an application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997, for grant of leave to defend the suit. The said application was allowed vide order dated 13-10-2000. Besides, the learned Judge stayed the proceedings of the suit further directing the plaintiffs to agitate their disputes in London in accordance with the English Law and get it decided by English Court as expressly agreed by them.
3. Both the above orders were challenged in Spl. H.C.A. No,316 of 2000. In the appeal a short order was passed on 7-11-2000 in the following terms:-- "Having heard the learned counsel for the parties at the length and examined the respective contentions put across by them, we have, for detailed reasons to be recorded separately, reached the following conclusions.
(i) That the appellants had failed to make out a prima facie case or establish any other requirement of the grant of interim injunction and therefore, the order of learned Single Judge dated 19-1-2000 was just and proper. We find no reason to interfere therewith and dismiss the appeal against the same.
(ii) That the order dated 13-10-2000 to the extent to which leave to defend the suit is granted to the respondents is also unexceptionable and does not call for any interference.
(iii) That with profound respects, "however, we are of the view that the disputes between the parties having been already resolved through proceedings in the Courts of United Kingdom, which prima facie had jurisdiction to do so, there was no occasion to stay, the above suit in terms of the above principles laid down by the Honourable Supreme Court in M.A. Chaudhry v. Mitsui OSK Lines, Limited PLD 1970 SC 373, and the specific provisions of section 9(2) of the Banking Companies (Recovery of Loans, Credits, Advances and Finances) Act, 1997. We are, therefore, constrained to set aside the impugned order dated 13-10-2000 to that pretext.
(iv) Accordingly the respondents will be free to enforce the judgments of the Courts of United Kingdom in accordance with applicable laws of the United Kingdom in any manner permissible under the law including through attachment and sale of mortgaged property. They would also be free to raise the question of jurisdiction of the learned Banking Court before the said Court and the Court may also exercise its powers under Order 7, rule 11, C.P.C. The appeal stands disposed of in terms of the above.
(v) We must express our gratitude to both Mr. Muhammad Akram Shaikh and Mr. Sajid Zahid, Advocates for their valuable assistance."
' Above order was impugned before the Honourable Supreme Court in Civil Petition No,1665 of 2000, which was disposed of vide order dated 22-4-2003. It was submitted before the Honourable Supreme Court that an application under Order VII, rule 11, C.P.C. Is pending adjudication in this Court, a direction was given to this Court to dispose of the same as expeditiously as possible so that it stands concluded within 15 days.
4. Mr. Sajid Zahid, learned counsel for the defendant advanced arguments in support of the application under Order VII, rule 11, C.P.C. While Mr. Farogh Naseem, Advocate, argued the case on behalf of the plaintiffs.
5. Very lengthy arguments were addressed by Mr. Sajid Zahid in support of the application under Order VII, rule 11, C.P.C. However, most of the time was exhausted by the learned counsel in giving the chequered history of the case. Learned counsel in his written submissions went to the extent of stating that, it was "a fit case for the Honourable Court to exercise its powers under Order VII, rule 11, C.P.C. For rejection of plaint as directed by the High Court and the Supreme Court" (emphasis supplied). By raising the plea in the above manner learned counsel for the defendant attempted to create a wrong impression, which was uncalled for misleading rather dismaying. The main thrust of arguments advanced by the learned counsel for the defendant was that plaint does not disclose a cause of action and, secondly, the suit was hit by the principal of res judicata as the dispute in respect of the same subject-matter between the same parties was already decided by the English Courts and the contentions of the plaintiff were dealt with properly and repelled. In the first instance it was argued that the judgments given by the English Courts were conclusive as provided under section 13, C.P.C., however, when Mr. Farogh Naseem addressed the arguments to controvert the contentions raised with regard to the applicability of section 13, C.P.C., learned counsel for the defendant stated that he was not pressing his arguments in respect' of section 13, C.P.C. And was only pressing for rejection of plaint as it was hit by the doctrine of res judicata and that it did not disclose a cause of action. Learned counsel for the defendant also challenged the jurisdiction of this Court to hear and adjudicate upon the matter on the plea that the plaintiffs were residing in U.K., the properties were situated in U.K. And that the finance facility was also availed at U.K. And that the English Courts have delivered final verdict.
6. Conversely, it was contended by Mr. Farogh Naseem Advocate, that the plaint disclosed the cause of action. It was argued that according to the English Law the cases were disposed of in a summary manner in which no evidence was recorded, with the result that plea of fraud, oral agreements and enforcement thereof, and the compensation for the wrongs raised in the instant suit were never adjudged. He vehemently contended that after the written agreement, an oral agreement also took place on 28-1-1999 between the parties and consequent upon the oral agreement, novation of the previous settlement deed dated 16-2-1998 was also claimed through the oral agreement dated 28-1-1999. Specific performance of the said oral agreement was being sought by the plaintiffs, besides the compensation for the wrongs allegedly committed by the defendants. He further argued that the acts of the defendant, its officers, functionaries and representatives were fraudulent, based on mala fide and were motivated by malice. It was thus argued that the above allegations could only be adjudicated by recording evidence in the matter.
Regarding territorial jurisdiction, it was contended that the Head Office of the defendants was since situated at Karachi, this Court shall have the jurisdiction to adjudicate the claim of the plaintiffs.
With regard to the plea of res judicata, it was argued that admittedly foreign judgments in the instant case were not conclusive, as the reasons given in the said judgments were not sufficient to hold that the prayers in the instant suit for damages and Specific Performance of Contract were hit by res judicata, as the conditions stipulated under section 11, C.P.C. Were not fulfilled.
7. Both the learned counsel relied upon a number of authorities in support of their respective contentions.
8. Arguments rendered by learned counsel for the parties and case-law referred by them has been considered and the material placed on record has been examined.
9. It is now well-settled that for deciding application under Order VII, rule 11, C.P.C. The contents of the plaint are to be looked into besides any other material available on record before Court, which is not disputed by the plaintiff. However, the plaint could not be rejected by taking into consideration plea of defendant, which is disputed and denied by the plaintiff.
' No doubt the plaint has to be rejected, in case the same does not disclose any cause of action.
However, for the said purpose the averments made in the plaint are to be considered and the plaint should not be rejected for the reason that formidable objections are raised in defence.
Where the matter requires factual investigation the plaintiff must be given an opportunity to substantiate his case.
10. Adverting to the facts of the case in hand plaintiffs have pleaded that the officers, functionaries and representatives of the defendant acted in fraudulent manner and lured the plaintiffs into the agreement on 28-1-1999 and the exchange of contracts with India Builders and then renegade on its promises. It is the case of the plaintiffs that after lengthy deliberations, oral agreement took place between the parties. It is further alleged that the defendant by making the plaintiffs believe that the defendant would abide by its representations and agreements prevented the plaintiffs from raising finances through alternative sources and means. It is specifically stated that the cause of action arose in favour of the plaintiffs and against the defendant when the contract was formed between parties, on various occasions when the plaintiffs relied on the representations and promises of the defendant. The same continues to accrue because of the incessant refusal of the defendant to accede to the demand and claim of the plaintiff. There are allegations of fraud and misrepresentation.
' The plain reading of the pleadings reveals that the plaintiffs have a cause of action and that a factual inquiry in the matter is inevitable.
11. This view finds support from the case of Muhammad Altaf and others v. Abdur Rehman Khan and others 2001 SCM R 953, wherein the Honourable Supreme Court upheld the judgment of the Division Bench whereby it was held that the allegation of fraud which was also averred in the plaint, could not have been resolved without recording evidence.
12. The circumstances discussed hereinabove, make it abundantly clear that the plaintiffs have a cause of action and the plaint could not be rejected on this ground. Contentions raised by the learned counsel for defendant being without substance are repelled.
13. With regard to the applicability of clause (d) of Order 7, rule 11, C.P.C., their lordships of Honourable Supreme Court in the case of Mumtaz Khan v. Nawab Khan and 5 others 2000 SCM R 53, were pleased to observe as under:-- "Clause (d) of Order VII, rule 11, C.P.C. Is applicable where the suit appears to be prima facie barred by any law, from a perusal of the statement in the plaint and no inquiry is needed. For instance, where a suit is time-barred, or is bad for multifariousness, or where a requirement as to prior notice has not been fulfilled or where consent of Advocate-General has not been obtained under section 92, C.P.C. Or the suit is filed by an unregistered Firm or issue raised concerning the execution, discharge or satisfaction of a decree and a cognizance is barred under section 47, read with Order XXI, rules 22 and 103, C.P.C."
14. In Province of Punjab, through Chief Secretary and 5 others v. Malik Ibrahim & Sons and 5 others 2000 SCM R 1172 a case relied upon by learned counsel for defendant himself, it was observed by Honourable Supreme Court that in order to attract the principal of res judicata following five conditions must be complied with:--
(1) The matter directly and substantially in issue in the subsequent suit or issue must be the same matter which was directly and substantially in issue either actually or constructively in the former suit.
(2) The former suit must have been a suit between the same parties or between parties under whom they or anyone of them claim.
(3) The parties as aforesaid must have litigated under the same title in the former suit.
(4) The Court which decided the former suit must have been a Court competent to try the subsequent suit in which such issue is subsequently raised.
(5) The matter directly and substantially in issue in the subsequent suit must have been heard and finally decided by the Court in the first suit.
15. In the case of Hafiz Noor Muhammad and others v. Ghulam Rasul and others 1999 SCM R 705, it was held that the Courts in order to apply bar of res judicata must first determine whether the issue was raised, determined and decided in the former proceedings between the parties. Where there was no indication that the question involved has been conclusively determined by the forum in the earlier litigation, invoking of principles of res judicata was not justified.
16. As stated earlier, during the course of arguments it was candidly conceded by the learned counsel for defendants that the foreign judgments in the present matter were not conclusive and therefore, the provisions of section 13, C.P.C. Were not applicable insofar as the present controversy is concerned. Even otherwise no findings with regard to the claim of the plaintiffs in the present suit were given by the foreign Courts. In the result the conditions laid down for applying doctrine of res judicata in the matter were neither fulfilled nor satisfied.
17. Undoubtedly no proceedings between the parties ever took place in any Court in Pakistan and if the applicability of the judgments given by the foreign Courts is excluded the contention with regard to res judicata would be rendered absolutely untenable and devoid of force. Resultantly the plea has to be rejected.
18. Adverting to the contentions raised by the learned counsel for the defendant, he himself during the course of arguments admitted that since the Head Office of the defendant bank was situated at Karachi, this Court will have the jurisdiction to adjudicate upon the matter as provided under section 20 of the Code of Civil Procedure, though the learned counsel termed it to be 'technical jurisdiction'.
19. While disposing of the injunction application, learned Judge of this Court observed in his order that "in my view the various judgments cited by the learned counsel, pertaining to issue of jurisdiction, do not require to be discussed separately at this stage. The learned counsel for the defendant-Bank has not disputed the maintainability of the suit by contending want of jurisdiction, rather the amenability of the defendant Bank to jurisdiction of this Court has been admitted". (Emphasis supplied). However, while concluding the judgment, learned Judge observed that the question of jurisdiction is left to be decided at a later stage.
20. Subsequently, the defendant moved an application for leave to defend which was granted.
However, the plea of rejection of plaint advance by the defendant was not accepted. Yet the learned Judge while granting leave to the defendants to defend the suit, passed orders for staying the suit. The order passed by the learned Single Judge was upheld in High Court appeal, except that it was set aside to the extent of stay of proceedings, as discussed above.
21. In this suit according to prayer clause (d) the plaintiff seeks a direction requiring the defendant- Bank to specifically perform the agreement dated 28-1-1999 and suitably varied as aforesaid, the price being adjusted, mutatis mutandis for moneys already received. The averments made in the plaint have mostly been disputed by the defendants in their application for leave to defend. In my humble view the facts and the circumstances of the case do not warrant the rejection of plaint, as urged by the defendants. Admittedly there are factual controversies, which could only be resolved by recording evidence, after framing of appropriate issues and not otherwise.
' The application is accordingly dismissed. Office is directed to fix the matter in the first week of August, 2003 for settlement of issues.