2015 PLP 1694 (SCMR)

MIAN SAQIB NISAR, J.

Petitioner is a banking company/financial institution which is registered in Pakistan and has its branches abroad including in Dubai. The respondents availed a financial facility from the petitioner in Dubai against some security provided there. However, they allegedly violated the terms of the agreement/finance and per the case of the petitioner they have come over to Pakistan. In order to recover the amount due, the petitioner brought a suit against the respondents-defendants before the Banking Court at Lahore per the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance). The respondents-defendants appeared in the matters filed the leave application and have contested the territorial jurisdiction of the Banking Court on a number of grounds. A preliminary issue in this context was framed and the Banking Court has allowed the objection and directed the return of the plaint to the petitioner. The petitioner then challenged this verdict/judgment through a regular first appeal before the Lahore High Court, but in vain.

2. Learned counsel for the petitioner has argued that where a financial institution is registered in Pakistan but carries on its business abroad and also makes financial transactions there, the provisions of section 9 of the Ordinance shall still be attracted. It is also argued that the provisions of section 9 of the Ordinance are not restricted to the financial transaction conducted in Pakistan, but would have extra-territorial limits as well. It is further submitted that the view set out by the learned High Court that such financial transaction inter se the petitioner and the respondents is based upon interest and, therefore, is void in terms of section 23 of the Contract Act, 1872 and on account of the same, such money due in the transaction is not recoverable, is based upon misconception of law. Besides as the courts had held that Pakistani courts would have no jurisdiction, therefore, it was absolutely unnecessary to make any comment in this regard which, therefore, is something extraneous and must be declared illegal. It is further submitted that the view set out by the learned High Court that section 20 of the C.P.C. is procedural in nature, therefore, would not be relevant for the purposes of conferring jurisdiction upon the Pakistani courts is misconceived, because not only the said provisions but the law settled till date is that the creditor can follow the debtor. This principle is duly applicable and attracted to the case in hand. In support of her contentions, reliance has been placed upon Mian Mehmood Ahmad v. Hong Kong and Shanghai Banking Corporation Ltd. through Manager and 6 others (2010 CLD 293). Further reliance is place upon Valuegold Limited and 2 others v. United Bank Limited (PLD 1999 Karachi 1). Since this case is one of first impression and there is no pronouncement by this Court in this context, thus leave is granted, inter alia, to consider the above. C.M.A. No. 2098 of 2015:

3. Notice. In the meantime, the operation of the impugned judgments of the courts below are suspended. MH/H-6/SC Leave granted.