1992 PLP 474 (MLD)

M/s. Leepa Shoes Limited, is a duly incorporated Company under the laws of Azad Jammu and Kashmir, National Development Finance Corporation, the petitioner, is also stated to be a Corporation established in Pakistan under the National Development Finance Corporation Act, 1973.

2. M/s. Leepa Shoes Ltd. brought a suit for specific performance of agreement, made between the parties and for payment of damages, as consequential relief. The suit was instituted in the Court of District Judge, Mirpur, on May 7, 1991. It was averred that the plaintiff‑Company set up an industry for manufacturing the shoes. It approached the defendant‑petitioner for providing a facility of loan. On satisfaction by feasibility report and allied matters, the defendant‑petitioner agreed to patronize and finance the plaintiff company. It was alleged that the plaintiff‑company went into commercial production iti August, 1988. The finished products were handed over to the defendant‑petitioner, in compliance with the terms of loan. Thus, the finished goods and the raw material remained in the custody of the defendant. The plaintiff, in order to meet its requirements, sought further financial assistance in the shape of loan, in the sum of Rs.16.5 millions, from the defendant petitioner. The defendant agreed to sanction Rs.13.96 millions, on February 6, 1990. The plaintiff furnished adequate security for the said loan. Nevertheless, it was averred that the amount of Rs.13.96 millions, sanctioned as loan in favour of the plaintiff, was not released. In. consequence of such default on the part of the defendant, the plaintiff suffered financial loss as described in the plaint. It was averred that the defendant was under legal obligation to perform its part of the contract, as the plaintiff was ever willing to perform its part. Failure of the defendant to release the amount was ascribed as mala fide. In view of the averments made in the plaint, it was explained that the plaintiff company was constrained to bring an action against the defendant before the Court.

3. The defendant‑petitioner filed an application before the learned District Judge, on June 8, 1991, seeking rejection of the plaint, under Order 7, Rule 11 read with section 151, C.P.C. It was alleged that the plaint of the plaintiff company did not disclose cause of action as such, it was liable to be rejected. It was further averred that in view of the statement of facts made in the plaint, the suit was barred by law.

4. The learned District Judge disagreed with the aforesaid contention of the petitioner, as such dismissed the application, vide the impugned order, passed on July 9, 1991. This order has been assailed in present petition.

5. Before taking up the points raised in the petition, it is relevant to state here that the petition was presented in this Court by Mr. Farrukh Karim Qureshi, Advocate on September 26,1991. On November 17, when the petition came up for hearing, Mr. Qureshi prayed for adjournment on the ground that the petition was to be argued by Mr. K.MA. Samdani, Senior Advocate. The request was granted and hearing was postponed to December

19. On that day, neither Mr. Samdani nor Mr. Qureshi had courtesy to put up their appearance and one Mr. Tariq Waheed who claimed as an Assistant of Mr. Samdani, put up his appearance, with a further oral request for adjournment. Mr. Waheed stated at the Bar that the senior counsel was pre‑occupied and Mr. Qureshi had gone to England, as such they were unable to put up their personal appearance.

6. The present petition raises a small legal proposition relating to rejection of plaint for want of cause of action and limitation. Thus, it obviously deserves expeditious disposal. In this view of the matter, arguments were heard from the opposite side.

7. A plaint is to be rejected in the cases: (i) Where it does not disclose cause of action; (ii) where the relief claimed is under‑valued and the plaintiff fails to correct the valuation within stipulated period fixed by the Court; (iii) where the plaint is written upon insufficiently stamped paper and plaintiff fails to supply the requisite stamp paper within the time fixed by the Court; and (iv) where the suit appears from the plaint to be barred by law. .

8. In the present case, rejection of plaint was sought for want of cause of action and limitation. The term "cause of action' has not been defined in the Civil Procedure Code. It is construed in its general sense and refers to averment of facts or state of facts stated in the plaint, giving rise to a claim or right of plaintiff, against the defendant, sufficient to enable the Court in rendering the judgment or to grant relief. Its scope and significance was considered by this Court in Mst. Resham Bibi's case (PLD 1981 AJ&K 16): "‑‑‑The expression `cause of action' used in the Code in its general sense, refers to and signifies averment of facts or state of facts, giving rise to a claim or right of the plaintiff, against the defendant, sufficient to enable a Court in rendering a judgment or to grant relief. It excludes relief sought for and plea of defendant. It may mean facts or allegations, contemplating a claim or right and infringement of a right. In order to ascetain the cause of action, it is incumbent upon the Court to apply its mind to the averment of facts, made in the plain and conclude as to whether presuming the averments, to be true, it can grant the relief to the plaintiff or not. In case it is not satisfied that on such presumption or on proving the allegations, relief can be allowed, it shall reject the plaint by invoking provisions of rule 11." It is relevant to state here that the expression "cause of action" does not include the evidence appended with the plaint or proposed to be adduced in support of respective claims of the parties.

9. The other aspect of the proposition is that while considering the point of cause of action, the Court has to decide ‑the absence or presence of cause of action, from the facts stated in the plaint and not from the written statement. Thus, the facts stated in the plaint alone are to be construed to determine whether such facts constituted a cause of action or not.

10. In the present case, the plaintiff‑Company brought action against the defendant‑petitioner, on the basis of agreement to advance the financial facilities to plaintiff on providing sufficient security. The agreement in question was undenied even in the application, seeking rejection of the plaint. However, the grievance of the plaintiff was that the terms of agreement ought to be C fulfilled by the defendant; were not being complied with despite the fact that the plaintiff performed his part of the contract. The grounds raised in support of the alleged claim in the plaint, prima facie, constitute a cause‑of action in favour of the plaintiff. Thus, the plaint was not liable to rejection on this score.

11. The next objection was that the suit was barred by law. The alleged agreement to provide financial facilities to the plaintiff by the defendant was stated to have been made on February 6, 1990. The amount in question was to be released thereafter by the defendant to plaintiff. As the amount was not released in due time, in the light of the specified terms of agreement, it gave cause to plaintiff to bring an action against the defendant. The defendant petitioner failed to elaborate as to how the suit was barred by law. The statement of facts listed in the plaint, prima facie, does not hit the suit on the ground of limitation. No other point was canvassed in the application or the revision petition for rejection of the plaint under the provisions of Rule 11 of Order 7, C.P.C.

12. Another objection raised in the application confined to jurisdiction of the Court. It was averred that the agreement in question related to advancement of loan and its recovery, as postulated under the provisions of Banking Companies (Recovery of Loans) Ordinance, 1979. This was a special law, as such according to the provisions of the Ordinance, a Special Court was empowered to adjudicate upon the claim filed by the Banking Company against a borrower or by a borrower against the Banking Company respectively.

13. It is correct that under the provisions of Banking Companies (Recovery of. Loans) Ordinance, 1979, as enforced in Azad Jammu and Kashmir in 1980, an action for recovery of loan by a Banking Company against a borrower or by a borrower against a Banking Company, was determinable by a Special Court. The jurisdiction of ordinary Civil Court was expressly posted. On adaptation of the aforesaid law in Azad Jammu and Kashmir, no independent, Special Court in the light of the said law, was created in Azad Kashmir. Nevertheless, it was deemed expedient to empower the District and Sessions Judges in all the Districts, of Azad Jammu and Kashmir, to exercise the powers of Special Court (Banking Tribunal) in that regard. This jurisdiction was conferred vide Notification No. Admn. A‑5/HC/Part‑II/48‑88 of February 8, 1989. It was postulated that the powers of the Special Court (Banking Tribunal) were conferred on the District and Sessions Judges, under the provisions of section 2(iii) of Azad Jammu and Kashmir Banking Companies (Recovery of Loans) Act, 1980. As the jurisdiction of the Special Court was conferred on the District and Sessions Judge, that Court alone was competent to entertain and dispose of actions instituted under the provisions of Azad Jammu and Kashmir Banking Companies (Recovery of Loans) Act, 1980. The objection to jurisdiction, ordinarily, is raised in written statement and the Court is called upon to decide the issue before proceeding further. But it is equally enjoined upon the Court to scrutinize the plaint before assumption of its jurisdiction. When it is satisfied that jurisdiction vested in the Court, only then process was issued to defendant.

14. The Court of District Judge is the principal Court of the District. Ordinarily, all actions of the civil nature falling within its territorial jurisdiction are triable by the Court. In present case, the suit was instituted on the assumption that the Court of District Judge being the principal Court was competent to try the suit. .

15. The objection relating to jurisdiction of the District Judge was raised in the application and the revision petition on the premises that the agreement under consideration having been made between the Banking Company and borrower, was likely to be ordered to be performed by a Special Court under the Banking Companies (Recovery of Loans) Act and not by a Civil Court of ordinary jurisdiction. In case the objection is sustained, even then the suit is triable by the District Judge in his capacity as Special Court. In that case, the plaintiff shall have to amend the name of the Court from District Judge to a Special Court and the forum shall remain the same. This is purely a clerical and procedural action, not necessitating rejection of the plaint or dismissal of I the suit, as emphasised by the petitioner. The objection is disposed of accordingly.

16. The learned District Judge dismissed the application of the petitioner, as, in his view, the objection raised in the application could not be raised without filing the written statement. The approach was erroneous as. the rejection of plaint could be sought on all or either of, the grounds described under Rule 11, Order 7, C.P.C. at any stage of the proceedings. The language used in Rule 11, does not specify a definite stage of the proceedings for seeking rejection of the plaint. It is enjoined upon the Court to peruse the statement of facts listed in the plaint for its satisfaction as to whether the cause of action was available or not. The Court has to examine the pleadings to ascertain that the plaint was not barred by law, in addition to points of valuation of the suit and payment of stamp duty. . Such scrutiny has to be made at the time of registration of the suit and prior to issuance of summons to defendant. When attention of the Court is invited to these points, it becomes all the more imperative to advert to the points for satisfaction. The other weak aspect of the impugned order is that it was not self speaking. A judicial order is never cryptic and obscure. The order of the District Judge is, therefore, not sustainable.

17. One of the measures to dispose of the petition was to reverse the order of the District Judge and remand the case for re‑writing of the order, in the light of the objections raised in the application of the petitioner. The other adequate device was to decide all the objections in this Court, to avoid likely delay in the disposal of the suit. Thus, keeping*in view the interest of justice, it is deemed expedient to dispose of the objections raised in the application at this level, instead of remanding the case to the District Judge for his reconsideration and fresh decision on the objections.

18. As the objections raised in the application and the revision petition are not found sustainable, the petition is hereby dismissed. No order as to costs. K.BA./500/H.CA Petition dismissed