2006 PLP 826 (CLD)

MIAN HAMID FAROOQ, J.

Present appeal filed by the appellants/judgment-debtors, proceeds against judgment and decree, dated 6-12-2003, whereby the learned Judge Banking Court decreed respondent's suit for recovery of U.S. $ 8880.

2. The respondent/plaintiff filed a suit for declaration and recovery of U.S. $ 8880 against the appellants and three other persons, before the learned Judge Banking Court, inter alia, pleading that he purchased travellers cheques worth U.S. $ 1480 and $ 7400 on 8-8-1996 and 10-8-1996 respectively, issued by the appellants from one Elahi Zahoor, who was holding those travellers cheques; he paid equivalent price in local currency to said Elahi Zahoor subsequently, the plaintiff submitted the travellers cheques to different banks who informed that the appellants refused to encash the travellers cheques on the ground that the same were reportedly stolen/ lost, which necessitated the filing of the suit for declaration and recovery of a sum of U.S. $ 8880. The appellants filed a joint application, seeking leave to defend the suit, inter alia, urging that the suit is not maintainable, as the suit amount is not a "finance"; there is no relationship of "customer" and "financial institution" between the parties; the plaintiff never purchased the travellers cheques from the appellants and the appellants have no privity of contract with the respondent. The learned Judge Banking Court, after finding that the relationship of "customer" and "financial institution" does exist between the parties, proceeded to pass a decree for the recovery of U.S. $ 8880 in favour of the respondent and against the appellants, vide impugned judgment and decree, dated 6-12-2003 hence the present appeal.

3. Learned counsel for the appellants, while referring to section 2(c) and (d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance, 2001), states that since the respondent was not a "customer" and no "finance facility" was granted to the plaintiff, therefore, the learned Judge Banking Court lacks jurisdiction to adjudicate upon the suit. He has added that even according to the averments of the plaint, travellers cheques were not purchased by the respondent from the appellants. Conversely, the learned counsel for the respondent, while supporting the impugned judgment and relying upon Qatar Airways PLC v. ANZ Grindlays Bank 2000 CLC 1455 submits that the learned Judge Banking Court has the jurisdiction to try the suit and the same has rightly been decreed.

4. We have heard the learned counsel examined the impugned judgment and perused the summoned record. To our mind, following questions of law and facts do arise in the case:-- (i) whether respondent No.1 is a "customer" within the meaning and scope of section 2(c) of the Ordinance, 2001; (ii) whether any "finance" within the contemplation and scope of section 2(d) of the Ordinance, 2001 was granted to the respondent. (iii) whether Judge Banking Court has jurisdiction to try the suit; (iv) whether the travellers cheques fall within the scope and term of "finance" as defined in section 2(d) of the Ordinance, 2001; (v) whether the appellants are liable to make good the loss of travellers cheques purchased by the respondent from Elahi Zahoor, the original holder of travellers cheques;

5. We have examined the impugned judgment in juxta?position with the aforenoted questions of law and facts and find that the learned Judge Banking Court did not deal with the said questions in its true perspective and felt it satisfied only after coming to the conclusion that the "travellers cheques would be covered by the term or any other facility availed by the customer from the financial institution". Similarly, it has been held without assigning any cogent reason that as soon as the travellers cheques were issued to its holder, it becomes "customer". In the above perspective, we feel that the appellants did raise substantial questions of law and facts in respect of which evidence needs to be recorded. We are of the view that the appellants have made out a case for the grant of leave to defend the suit. The learned Judge Banking Court should have granted the appellants leave to defend the suit, if not unconditional, then at least subject to some conditions. We feel that the appellants are entitled for leave to defend the suit subject to furnishing of bank guarantee. The appellants have furnished the bank guarantee in this Court, which will be considered a condition for leave to defend the suit. Thus, we are not inclined to maintain the impugned decree. As we are persuaded to remand the case to the learned Judge Banking Court, therefore, we have deliberately refrained ourselves from giving any findings on any of the issues involved in the case, lest it may cause any prejudice to the case of either of the parties.

6. In view of the above, the present appeal is decided in the following terms:

(i) Appeal is allowed and the impugned judgment and decree, dated 6-12-2003 is set aside. (ii) Appellants' application for leave to defend the suit is also accepted and they are granted leave to defend the suit subject to the condition of furnishing bank guarantee equal to the suit amount. (iii) With the acceptance of this appeal the bank guarantee, furnished by the appellants, shall not be deemed to be c discharged and it shall remain in force till the decision of the suit. (iv) The learned Banking Court, in its discretion, may require the appellants to furnish fresh bank guarantee for the suit amount. (v) Respondent's suit shall be deemed to be pending before the learned Judge Banking Court, who shall decide (as noted above) the same after framing issues, recording the evidence of the parties and of course in accordance with law within a period of three months from today. (vi) No order as to costs. S.A.K./A-67/L???????????????????????????????????????????????????????????????????????????????????? Appeal accepted.