P L D 2015 Lahore 140 (PLP)

EJAZ UL AHSAN, J.

Through this constitutional petition, the petitioner challenges an order dated 4-9-2009 passed by the learned Judge Consumer Court, Sargodha. Through the impugned order, the learned Judge has rejected a preliminary objection raised by the petitioner regarding jurisdiction of the District Consumer Court to adjudicate the matter.

2. The brief facts of the case are that respondent No.2 approached the petitioner-company with the request to avail a lease finance facility for purchase of a car. The request was accepted and the petitioner agreed to allow a lease finance facility for purchase of a Toyota Corolla-XLI vehicle. Respondent No.2 executed the required lease finance agreement, which envisaged a three years lease period with monthly rental of Rs.25823. The payment of monthly rentals was to commence from 15-5-2007 and terminate on 1-5-2010. As per terms of the lease agreement, the vehicle was to be insured, which was done.

3. It appears that respondent No.2 defaulted in his payment obligation after paying only two monthly rentals on time. The rest were recovered with great difficulty and delay. While the vehicle was in possession of respondent No.2, it met an accident. As a result, respondent No.2 lodged a claim of Rs.1,28,000 with SICL Insurance Company. The respondent dealt with the Insurance Company himself and get the vehicle repaired. It is alleged that from 1-3-2008, respondent No.2 continuously committed default in payment of monthly rentals, in consequence of which a legal notice was served on him. On his failure to respond, the petitioner re-possessed the vehicle on 20-3-2009 in terms of the Lease Finance Agreement. At the relevant time, respondent No.2 was in default for about a year.

4. On 20-3-2009, the petitioner served a notice on respondent No.2 to call upon him to clear the rental dues, failing which the vehicle would be put to auction. The vehicle in question was parked in the warehouse, of the petitioner in Faisalabad.

5. In response to the legal notice, respondent No.2 paid the outstanding rentals, where-after he was asked to take delivery of the vehicle. However, he refused to do so, alleging that certain parts including doors, dash-board, headlights, bonnet and trunk of the vehicle had been replaced. He claimed that on account of the alleged replacement, he had- suffered a loss of Rs.400,000, which was denied by the petitioner. At this stage, respondent No.2 filed a complaint under section 28 of the Punjab Consumer Protection Act, 2005 in the Consumer Court Sargodha. The petitioner was summoned, who filed its reply to the complaint. In its reply, the petitioner raised a preliminary objection regarding jurisdiction of the Consumer Court on the ground that where theft had been alleged the case did not fall under the head of "defective product" or "defective service", as defined under the Punjab Consumer Protection Act, 2005. As such the Consumer Court lacked jurisdiction in the matter. The stance taken by the petitioner was that in case there was any default of any obligation on the part of either side, the Banking Court under section 7(iv) of Financial Institutions (Recovery of Finances) Ordinance, 2001 had the exclusive jurisdiction to adjudicate the matter. Vide order dated 4-9-2009 the Consumer Court rejected the objection and held that it had jurisdiction in the matter. Hence, this petition.

6. The learned counsel for the petitioners submits that there is a relationship of Financial Institution and Customer between the parties. In case of any alleged default of any obligation on the part of the parties, the Banking Court has exclusive jurisdiction to adjudicate upon such alleged default. He further maintains that the Consumer Court established under section 26 of the Punjab Consumer Protection Act, 2005 can take cognizance of a claim or damages arising out of contravention of the provisions of the said Act if the "Product" as defined under section 2(j) of the Punjab Consumer Protection Act, 2005 or "Services" as defined under section 2(k) of the said Act are defective. He maintains that petitioner is neither manufacturer of the vehicle in question nor has it provided any service in relation to the said vehicle. He argues that relationship between the petitioner and respondent No.2 arises out of a lease finance agreement, regarding which a Banking Court of competent jurisdiction has the exclusive jurisdiction. Further, at best, the allegation against the petitioner-bank relates to failure on its part to take care of the vehicle while in its custody. At best such failure can be termed as breach of an obligation that the petitioner bank owed to its customer in terms of the lease finance agreement. The learned counsel further argues that the learned Consumer Court fell in error in ignoring paragraph-3 of the petition, in which respondent No.2 alleged that parts of the vehicle in question were stolen while in custody of the petitioner. He maintains that loss of parts of vehicle while in custody of the petitioner does not fall in the definition of "defective products" or "services". He finally argues that the learned Consumer Court has illegally assumed jurisdiction in the matter and has also lost sight of the fact that the claim having been filed beyond 30 days period of limitation could not have been entertained.

7. The learned counsel for respondent No.2 on the other hand submits that Consumer Court had the jurisdiction in the matter. Admittedly, the vehicle in question was re-possessed by the petitioner and certain parts of the car were removed while in custody of the bank on account of its negligence. Therefore, the Consumer Court was the correct forum for redressal of the grievances of respondent No.2, as the petitioner-bank had provided defective services.

8. The question requiring determination by this Court is whether the Banking Court established under the provision of the Financial Institutions (Recovery of Finances) Ordinance, 2001 has the exclusive jurisdiction to adjudicate upon the dispute between the parties. In order to answer the said question one has to keep in mind following material facts:- (i) The petitioner is a financial institution, as defined in FIO, 2001. In section 2(a)(ii), the word Financial Institution has been defined as follows:- "Financial Institution means and includes:- A Mudarba or Mudarba management company, investment bank" (ii) Respondent No.2 is admittedly a "customer", who has been defined to mean a person to whom finance has been extended by a financial institution. (iii) Respondent No.2 had availed finance by way of a lease arrangement from the petitioner. The term finance as defined in section 2(d) of the FIO includes a lease. (iv) Section 4 of the FIO provides that the provisions of the Ordinance shall have effect notwithstanding any inconsistent therewith contained in any other law for the time being in force. (v) Section 7(4) of the FIO provides that no Court other than a banking shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a banking court extends under the Ordinance.

9. It is also significant to note that the relationship between the parties was rooted in a vehicle lease agreement, which was duly signed 0 by respondent No.2 and has not at any stage been denied. Both parties were bound by the terms and conditions of the vehicle lease agreement and any violation on the part of either would constitute "default in I fulfilment of any obligation with regard to any finance as envisaged in section 9 of the FIO". Such default, if alleged to have been committed by the financial institution empowers the customer to institute a suit in the banking court by presenting a plaint and following the procedure prescribed in section 9 of the FIO.

10. Perusal of the Punjab Consumer Protection Act, 2005 makes its abundantly clear that the Consumer Courts have been set up to protect consumers from manufacturers of defective product or providers of defective services. Section 4 of the Act provides as follows:-

4. Liability for defective products.

(1) The manufacturer of a product shall be liable to a consumer for damages approximately caused by a characteristic of the product that renders the product defective when such damage arose from a reasonably anticipated use of the product by a consumer. (2) A product shall be defective only if-- (a) it is defective in construction or composition as provided in section 5; (b) it is defective in design as provided in section 6; (c) it is defective because an adequate warning has not been given as provided in section 7; and (d) it is defective because it does not conform to an express warranty of the manufacturer as provided in section

8. The words "product" and "service" have been defined in section 2(j) & (k) of the Act. For ease of reference the same are reproduced below:- (j) "Product" has the same meaning as assigned to the word "goods" in the Sale of Goods Act, 1930, and includes products which have been subsequently incorporated into another product or an immovable but does not include animals or plants or natural fruits and other raw products, in their natural state, that are derived from animals or plants. (k) "Services" includes the provision of any kind of facilities or advice or assistance such as provision of medical, legal or engineering services but does not include

(i) the rendering of any service under a contract of personal service; (ii) the rendering of non-professional services like astrology or palmistry; or (iii) a service, the essence of which is to deliver judgment by a Court of law or arbitrator;

11. It may be seen that the case of respondent No.2 is not that the petitioner provided a defective product or that it was under an obligation to provide services, which it either failed to provide or if provided, were defective and not of the standard that had mutually been agreed. The petitioner could not have complained of a defective product for the reason that the petitioner was not manufacturer or dealer of the vehicle in question. Likewise, no claim for defective services could be raised for the reason that the petitioner had not undertaken any obligation to provide services having direct nexus or connection with the leased vehicle. The claim of the petitioner is that the bank failed to fulfil its obligation towards him as a customer, when it failed to take proper care of the vehicle, which the petitioner bank had lawfully re-possessed insofar as certain parts were allegedly replaced or stolen. I am, therefore, of the opinion that the claim of the petitioner is based on the lease agreement between the parties and his cause of action arises out of failure on the part of the bank to fulfil an obligation towards him to keep the vehicle safe after it was repossessed. That being so, the case of the petitioner is covered by section 9 of the FIO, on the basis of which he can file a claim against the petitioner. Such claim in terms of section 7(4) of the FIO can be filed only in a banking court, for which such court has exclusive jurisdiction. This conclusion is further supported by the provisions of section 3 of the Punjab Consumer Protection Act, 2005, which envisages that the provisions of the Act shall be in addition to and not in derogation of provisions of any other law for the time being in force. Even otherwise where a specific remedy is available under a Special Law, General Law cannot be resorted to. It is also clear that in disputes between customers and Financial Institutions where breach of any obligation is alleged on the part of either party resort to Courts other than a Banking Court constituted under the provisions of the FIO is barred.

12. I am, therefore, in no manner of doubt that the relationship between the petitioner and respondent No.2 is that of financial institution and customer. The alleged replacement/theft of certain parts of the vehicle while in custody of the bank, if proved may constitute default in fulfilment of an obligation on the part of the petitioner for determination of which dispute exclusive jurisdiction lies with the banking court established under the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

13. For reasons recorded above, this petition is allowed. The impugned order dated 4-9-2009 passed by the learned Judge Consumer Court, Sargodha in case titled 'Malik Ahmad Nawaz v. Askari Leasing Ltd.' is set aside. The plaint in the matter shall be returned to the respondent for filing the same in the competent court. MH/A-181/L Petition allowed.