1988 PLP 59 (CLC)

He therefore contended that since the defendant was not residing at Karachi, hence even if according to the plaint the cause of action has partly accrued at Karachi then also this Court had no jurisdiction. I do not agree with this contention of the defendant's counsel. Section 120 C.P.C. reads as under:‑ "

120. Provisions not applicable to High Court in Original Civil Jurisdiction: ‑ (1) The following provisions shall not apply to High Court in the exercise of its original Civil jurisdiction, namely sections 16, 17 and 20." The plain reading of this section would show that the section does not in any way restrict the original civil jurisdiction of a High Court but it on the contrary enlarges the same. This section on the other hand removes the restrictions imposed under sections 16, 17 and 20 C. P. C. on the jurisdiction of the High Court. Original Civil jurisdiction was initially granted to this Court when it was established as Chief Court, by section 8 of Sind Courts Act 1926 (Sind Act VII of 1926) and was continued by Section 5 of High Court of West Pakistan Establishment Order 1955 and subsequent legislation in this behalf with respect to suits exceeding a particular limit in value (Presently Rs.100,000). It also finds its origin in the general principle of common law, equity and good conscience granting, original Civil jurisdiction to the High Court, referred to in ILR 24 Bombay 407 which reads thus:‑ "The general principles is clearly stated by Lord Cottenham in Ex‑parte Pllard (1840 Mont. and Chit 239) where he says (PP 250): "If indeed the law of the country where the land is situate should not permit or not enable the defendants to do what the Court might otherwise think it right to decree, it would be useless and unjust to direct him to do the act; but when there is no such impediment the Courts of this country, in the exercise of their jurisdiction over contracts made here, or in administering equities between parties residing here, act upon their own rules, and are not influenced by any consideration of what the effect of such contracts might be in the country where the lands are situate, or of the manner in which the Courts of such countries might deal with such equities." Then again it is laid down by Lord Sellborene in Ewing v. Orr Ewing (1883) 9 A C 34 at P.40: "The Courts of Equity in England, are and always have been Courts of conscience, operating in personam and not in rem and in the exercise of this personal jurisdiction they have always been accustomed to compel the performance of contracts and trusts as to subjects which were not either locally or ratione domicilli within their jurisdiction. They have done so, as to land, in Scotland, in Ireland, in Colonies, in foreign countries." Mr. Naimur Rehman had placed reliance on P L D 1964 (W.P.) Karachi 11, W.P.I.D.C. v. Fateh Textile Mills Limited. This ruling was in suit for possession of Talpur Textile Mills which was situated at Tando Mohammad Khan in District Hyderabad outside the ordinary civil jurisdiction of a civil Court of District Karachi. Section 16 C . P. C . provided for filing of such suit at the place where such immovable property was situated. Abdur Rahim Kharal, J. after taking into consideration the various statute governing the jurisdiction of this Court came to the conclusion that the provisions of Section 120 of C.P.C. were enacted for enlarging the jurisdiction of this Court rather than restricting the same. It will be useful to reproduce the following passage from the said judgment:‑ "

12. Sections 16, 17 and 20 and clause 12 of the Letters Patent prescribed the forum and the place for suing. But these sections do not apply to High Court. Section 5 of the High Court of West Pakistan Establishment Order, 1955 and also Section 8 of Sind Act VII of 1926 do not prescribe the place of suing. Section 5, only saves the jurisdiction of Karachi Bench as exercised by it under section 8 of Sind Act of 1926. It is my view that the jurisdiction of the High Court has been enlarged rather than restricted by removing altogether the restrictions contained in sections 16, 17 and

20. The Legislature could never have intended to take away the jurisdiction of the West Pakistan High Court (Chief Court of Sind) altogether, since the High Court got that jurisdiction as a place of suing through these sections. Two alternative conclusions can arise from the non‑applicability of sections 16, 17 and 20 C.P.C. to the High Courts. Firstly that the West Pakistan High Court could not entertain any suit, whatsoever, and secondly, it could entertain suits from all places within its jurisdiction. It is true that all the District Courts except Karachi District Court have no limit prescribed to their pecuniary jurisdiction. The present suit could, therefore, be filed at Hyderabad. The question for decision, however, before me is whether it could not be instituted in the High Court at Karachi. The restrictions prescribed by sections 16, 17 and 20, C . P. C . having been removed the original jurisdiction of the High Court is enlarged and it has jurisdiction to entertain the present suit." Hence this ruling instead of supporting the contention of the learned counsel for the defendant on the contrary goes against him The next ruling cited by Mr. Naimur Rehman Advocate for the defendant is reported in P L D 1975 Kar. 138 (Muhammad Shabbir Khan v Abu Dhabi Petroleum Co. Limited) In this ruling it was held as follows:‑ "These issues may conveniently .be considered together as they raise the common question as to the jurisdiction of this Court to entertain the suit. Mr. N. Awan, learned counsel for the plaintiff relying on section 20 C .P. C . submitted that the Court had jurisdiction on two grounds, as (a) part of the cause of action arose at Karachi, namely, the plaintiff's first agreement of service dated 27‑1‑1961 Exh. 10 was concluded at Karachi, and. (b) the defendant carries on business in Karachi through B.P. (Pakistan) Limited as its agents. With regard to the first ground, the agreement of service dated 27‑1‑1961 Ex.10 was entered into with Qatar Petroleum Company Limited and not with the defendant and in its place, a new agreement of service was concluded between the plaintiff and the defendant at Tarif, under Exh. 10/2 dated 27‑8‑1961, where the plaintiff accepted the same on 6‑9‑1961. The plaintiff was therefore, not in the employment of the defendant immediately before concluding the second agreement Exh.10/2. No cause of action, therefore, arose within jurisdiction of this Court. Moreover, as pointed out by Mr. Saleem Akhtar, learned counsel for the defendant, section 20, C . P . C . does not apply to the High Court by virtue of section 120 C . P . C . He referred to West Pakistan Industrial Development Corporation v. Fateh Textile Mills Ltd. in which it was observed by Kharal, J., that in the absence of statutory provisions regarding the place and forum of suing applicable to the High Court, the general principle of law was applicable, according to which the plaintiff has no right to sue a defendant in a personal action except when he resides or carries on business within the jurisdiction of the Court." This ruling is distinguishable from the present case in‑much as it was held in this ruling on the basis of evidence that no cause of action, not even a part of it, had accrued to the plaintiff at Karachi. It was therefore held that when no cause of action had accrued at Karachi and the defendant was also not residing at Karachi, therefore, this Court had no jurisdiction. In the present case it is averred in the plaint that a part of cause of action had accrued at Karachi. By now it is a settled law that the averments in the plaint are to be taken as true for disposal of an application under Order VII, Rule 10, C.P.C. The proposition is so well settled that it does not require an authority. Yet reference in this connection can be made to 1980 CLC 433 Shahnoor Studio v. W.Z. Studio P L D 1980 Lah. 534, Zor Engineering v. State Bank and P L D 1981 Lah. 153 Mohammad Ahmad Butt v. L.D.A., where it has been held that facts necessary for disposal of an application under Order VII, Rule 11, C.P.C. are to be gathered from the plaint alone and the material produced by the other side cannot be taken into consideration. This principle in my view also applies to Order VII, Rule 10,. C.P.C. In A I R 1917 Pat. 334 (D.B.) (Abdul Ghafoor v. Mehtab) it was held that to decide the question of jurisdiction under Order VII, Rule 10, C.P.C. it is the plaint and the plaint alone that should be considered. It is therefore clear that the contention of the defendant's counsel is not supported either from the provisions of section 1201 CPC or from either of these two authorities cited by defendant's counsel. I am therefore of the clear view that this Court in exercise of its original jurisdiction, can entertain all suits value whereof exceeds Rs.1,00,000 (i) when the defendant resides at Karachi notwithstanding the restrictions contained under sections 16, 17 and 20 CPC, or (ii) when the Civil Courts of Karachi have jurisdiction to entertain it but D for the pecuniary limit imposed upon them. Since the Civil Courts of Karachi had jurisdiction to entertain this suit because according to the plaint a part of cause of action had accrued at Karachi, therefore this Court would assume that jurisdiction because value of the suit exceeds Rs. one lac. Moreover in view of Order 49, Rule 3, C.P.C. the provisions of Order VII, Rule 10, C.P.C. do not apply to this Court. Hence I hold that the objection as to jurisdiction raised by defendant under Order VII, Rule 10, C.P.C. is not valid and the said objection is therefore disallowed. The next objection relates to the stay of the suit under Section 34 of the Arbitration Act. It will be useful to reproduce section 34 hereunder:‑ "

34. Power to stay legal proceedings where there is an arbitration agreement.‑‑Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commended, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings." Mr. Naimur Rehman referred to the agreement, photo copy of which is filed by the defendant as Annexure 'A' with this application. Para (VIII) of the said agreement is an arbitration clause which reads as under:‑ "Should any question or difference or dispute arises between the parties thereunder as to the interpretation of this Agreement or as to any matter or thing arising thereunder or connected therewith, such question or difference or dispute shall be referred to an Arbitrator of mutual agreement and his award will be final and binding on both the parties." He contended that it provided for reference of the dispute arising thereunder or connected therewith to an arbitrator. He further pointed out that the defendant had already made such reference to the Arbitration. Mr. Ghulam Mohammad Ibrahim counsel for the plaintiff submitted that the agreement had to commence only after a guarantee acceptable to the plaintiff's banker was furnished by the defendant. The guarantee was furnished by the defendant but it was not acceptable to the plaintiff's banker and therefore according to him the agreement had not commenced. Since the pesticides, which is subject‑matter of this suit was supplied before commencing of the agreement therefore it was a supply made independent of and out side the provisions of the agreement and the plaintiff was therefore not bound to refer the matter to the Arbitrator. The question as to whether the supply wasi within the agreement or not is a question of fact and will have to I be decided after evidence is recorded. If the existence of an arbitration I agreement or its validity is challenged a Court cannot stay the proceedings until and unless it comes to the conclusion that the agreement exists or it is valio. Since in this case the very; commencement or in other words the existence of the agreement at the time when the supply was made is disputed, no stay can be', granted under section 34 of the arbitration Act, until and unless the Court comes to the conclusion after recording the evidence and holds that the agreement had commenced. Reference in this connection may be made to P L D 1982 Karachi 778 (Asian Mutual Insurance Co. v. Pakistan Insurance Co., where it was held as under:‑ "In our view whenever a question as to the existence of validity of an arbitration agreement or to have its effect determined, is raised by way of an application under section 33 of the Arbitration Act before a Court, the Court is bound to decide the same and to such proceedings, the provision of section 34 of the Arbitration Act would not apply, for the language employed in section 33 is couched in mandatory terms. Even otherwise under section 34 of the Arbitration Act a Court can stay the proceedings only after holding, if the existence of an arbitration agreement or its validity is challenged, that the same exists or is valid." The contention of Mr. Naimur Rehman that the question as to whethet the agreement had commenced or not was a question of interpretation of the contract and not a condition precedent to Suit t also does not appear to be correct. Under these circumstances I do not find any merit in this application which appears to be incompetent and is therefore dismissed. The observations made in this order are tentative and shall not be taken to prejudice the proceeding filed by the defendant before the Arbitration or the contentions that the defendant proposes to raise during the trial of this suit. The defendant is called upon to file his Written Statement within a period of six weeks. A . A . / A‑182 / K Application dismissed.