1999 PLP 1953 (CLC)

6. All the parties have referred certain provisions of the Act, 1997; therefore, it will be advantageous to reproduce the same ,in order to appreciate their respective submissions:‑‑ "Section 7(4). Subject to subsection (5). no Court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under this Act, including a decision as to the existence or otherwise of a loan or finance and the execution of a decree passed by a Banking Court. Section 7(6). All proceedings, including proceedings following the filing of an arbitration award and proceedings for the execution of a decree within the jurisdiction of a Banking Court, pending in any Special Court constituted under the Banking Companies (Recovery of Loans) Ordinance, 1979 (XXV of 1997), Banking Companies (Recovery of Loans, Advances, Credits or Finances) Ordinance, 1997 (XXV of 1997) or any Banking Tribunal under the Banking Tribunals Ordinance, 1984 (LVIII of 1984) or any other Court including a High Court shall stand transferred to or deemed to be transferred to the Banking Court having jurisdiction. On transfer of a proceedings _under this subsection a Banking Court shall require the attendance of the parties through notice issued in accordance with the procedure for service of summons or laid down in subsection (3) of section

9. Section 7(7). In respect of proceedings transferred to a Banking Court under subsection (6) the Banking Court shall proceed from the stage which the proceedings had reached immediately prior to the transfer and shall not be bound to recall and rehear any witness and may act on the evidence already recorded or produced before the Court or Tribunal from which the proceedings were transferred. Section 9(1). Where a borrower or a customer or a banking company commits a default in fulfilling any obligation with regard to any loan or h, finance the banking company or, as the case may be, the borrower or customer, may institute a suit in the Banking Court by presenting a plaint duly supported by a statement of account which shall be verified on oath in the case of a banking company by the Branch Manager or such other officer as the Board of Directors of a banking company may authorize in this behalf. Copies of the plaint shall also be filed along .therewith in sufficient numbers so that there is one copy for each defendant and one extra copy."

7. Recently, in the case Nasimuddin Siddiqui and others v. U.B.L. and others (Suit No.475 of 1993), more or less, identical objections were raised in view of the provisions of newly enacted Banking Companies Act, 1997. After making reference to several reported cases including Kamran Industry Pvt. Ltd. v. Industrial Development Bank 1993 SCMR 1996, Pakistan Fisheries Ltd. v. United Bank Ltd, PLD 1993 SC

109. General Investment Ltd. v. Dubaee Bank Limited 1982 CLC 2252, Shameem Siddiqui v. Government of Pakistan and others 1985 MLD 951, Messrs National Motors Limited v. Muslim Commercial Bank Limited 1982 CLC 236, Hajee Nabiullah and another v. Habib Bank Limited and others PLD 19 PS 17 (sic), and the case of Messrs Shafiq Haneef (Private) Limited, Karachi) Y. Bank of Credit and Commerce International Overseas Limited, Karachi PLD 1993 Kar. 107, it was held, inter alia_ that in addition to the suits for recovery of loan and finances filed by a Ranking Company , the newly established Banking Court is competent to hear and adjudicate cases of the following nature:‑‑ (a) All suits filed by the Banking Companies against borrower or customer for recovery of loan or Finance, either based on interest or mark‑up as defined in the Act, 1997. (b) All suits or claims filed by a borrower or customer against the Banking Company claiming any adjustment, set off or setting up a counter‑claim either through an independent suit or in a suit filed by a Banking Company. (c) Suits for accounts arising out of a Loan or Finance as defined in the Act, 1997. (d) Suits for specific performance seeking enforcement of an agreement or contract to pay or repay any Loan or Finance or to perform any obligation arising out of such agreement. (e) All the suits for declaration as to legality, validity or otherwise of a document which creates Loan or Finance as defined in the Act, 1997. (f) All the suits for cancellation of any instrument through which any liability to pay or to repay a Loan or Finance may arise: (g) All the suits for prohibitory injunction which may restrain any of the parties namely, Banking Companies, borrower or customer from performing their obligations and duties arising out of such business pertaining to Loan or Finance. In the like manner, all suits in the nature of mandatory, injunction. (h) All the suits for damages (excluding tort cases) arising out of the breach of contract executed in respect of Loan or Finance between the Banking Company on the one hand and the borrower or customer on the other. 8. 1 have considered arguments of all the learned Advocates. The main relief which the plaintiff has prayed is in respect of his shares belonging to Messrs Boots Company Pakistan Limited which were pledged against the grant of two loans/finances in order to grant declaration that the plaintiff is still owner of these shares which were sold by the defendant No.

1. It is to be seen as to what were the terms and conditions for the grant of these two finances and what were the obligations of the plaintiff who is a borrower and the contractual obligations of the defendant No. l who is a Banking Company arising out of such finances. Determination of all these questions eminently falls within the domain of a Banking Court as established under the Act, 1997. The remaining relief for grant of damages. For the purpose of granting a perpetual injunction and even to grant damages in the shape of monetary compensation, the foremost question which is to be decided first is the question of the status of the shares of the plaintiff. The plaintiff would be entitled to the consequential reliefs or for the matter to damages, if he succeeds in obtaining the declaration as prayed for a plaintiff cannot be permitted to bifurcate the claims of declarations and damages. According to subsection (1)(a) to section 7 of the Act, 1997 a Banking Court shall have all the powers vested in a Civil Court under the Code of Civil Procedure, 1908 Subsection (2) of the section 7 of the Act, 1997 entitles a Banking Court to follow the procedure laid down in the C.P.C. and the Code of Criminal Procedure, 1998, where no such procedure is provided in the Act, 1997. In this view of the matter I do not see any prohibition that a plaintiff may not be entitled to unite in the same suit several cases of action against the same defendant or the same set of defendants as provided in Order 2, Rule (3), C.P.C. There is no bar or prohibition on the Special Court not to entertain or adjudicate any connected issues arising out of the same cause of action.

9. It 'was also argued by Mr. Muhammad Ali Sayeed that if the suit is transferred to the Banking Court then it will amount to putting defendants Nos.3 to 6 under hardship and rigours of a summary proceedings. He has expressed his apprehension that after transfer of the suit to the Banking Court these defendants will be required to obtain leave to defend from the Banking Court as provided under section 9(4) of the Act, 1997. I am not in agreement with the submissions of Mr. Muhammad Ali Sayeed. The procedure provided in subsection (4) to section 9 is meant for those plaints and suits which are filed subsequent to coming into force of the Act, 1997, which is clear from the language used in subsections (1) and (3) to section 9 of the Act, 1997. However, for the cases which come before a Banking Court shall be governed by subsection (7) to section 7 of the Act, 1997. According to these provisions, if a suit is transferred to a Banking Court as provided under subsection 7(6), the Banking Court shall proceed from the stage which the proceedings had reached immediately prior to the transfer. It is further provided in section 7(7) that on transfer of the case to the Banking Court. the said Court shall not be bound to recall and rehear any c witness and may act on the evidence already recorded or produced before the Court or Tribunal from which the proceedings are transferred. The provisions of sections 7 and a9 are quite different. One prescribes, the procedure in the case of a transfer of a suit while the other provides the procedure for filing a suit under the new Act. Therefore, the apprehension expressed on behalf of defendants Nos.3 to 6 that they will be required to obtain leave to defend the above suit after its transfer to a Banking Court is misconceived.

10. Mr. Zahid Burhani has submitted that only those suits are liable to be D transferred to ‑a Banking Court which were either pending in the Special Court constituted under the Banking Companies Ordinance, 1979 or under Banking Tribunal Ordinance, 1984 .and that the instant suit which was filed under section 9, C.P.C. is not liable to be transferred to a Banking Court. This is not the spirit of subsection (6) to section 7 of the Act, 1997. According to this provision "all proceedings including proceedings following the filing of an arbitration award and for the execution of a decree pending before the Banking Courts or Banking Tribunals including any other Court shall stand transferred. It will be seen that I in addition to the earlier three Banking Courts/Tribunals it is also mentioned in section 7(6) that all proceedings pending in any other Court including a High Court has also been used. Subsection (6) to section 7, in my considered view, does not limit transfer of the suits pending in the Banking Courts or Banking Tribunals. The term "all proceedings", if read with the phrase "or any other E Court including a High Court",_as used in section 7(6), clearly indicates that all such suits which fall within the scope of Act, 1997 are liable to be transferred, irrespective ‑of the fact that such suit was pending in a Court of common jurisdiction. If what Mr. Burhani has suggested is upheld, then it will defeat the aim and object of this new enactment. Therefore, this suit is also liable to be transferred. It was also argued that the defendants Nos.3 to 6 have no privity of contract with either the plaintiff or with the Banking Company, and therefore, by impleading them in the suit, it has lost its character of a Banking suit. None of the Advocates appearing for the defendants were able to sight any law to support this contention. I‑ am unable to subscribe to their views. The relief being sought by the plaintiff against defendants Nos.2 to 6 is mainly for the damages: As held by me in the earlier portion of this order, it will not be permissible to the plaintiff to split its several claims and file two separate suits. The recent trend of the Superior Judiciary in Pakistan is to discourage multiplicity of proceedings. I am of .the considered view that the presence of the defendants Nos.2 to 6 is not likely to change nature of the suit or in any manner effect the jurisdiction of a Banking Court. The doctrine of sinker is not applicable to the facts of the instant case. I would not like to dilate upon this doctrine in detail as none of the parties have made any submission on this point. If any guidance is needed, please see Atta Muhammad v. Ahmad Bakhsh and 2 others PLD 1971 Lah. 401, Mehr Allah Ditta and another v. Muhammad Ali and another PLD 1972, SC 59 and Muhammad Ramzan and 12 others v. The Member (Revenue) Board of Revenue, Punjab, Lahore and 7 others 1994 SCMR 55.

11. As a result of above discussion, this suit stands transferred to the concerned Judge of this Court as appointed by the Honourable Chief Justice of this Court persuant to section 5 of the Act, 1997 . H.B.T./A‑242/K Suit transferred.