2011 SCMR 806 (PLP)

JAWWAD S. KHAWAJA, J.

The appellant, Victor Electronics Appliances Industries Pvt. Ltd. impugns the appellate judgment dated 20-12-2006 passed by a learned Division Bench of the High Court in H.C.A. No. 115 of 2005.

2. The issue before us is very straightforward: It relates to jurisdiction. It is admitted by both sides that the appellant and the respondent-Bank have a relationship between them of customer and Bank, respectively. Furthermore, from the contents of the plaint, it is also clear that the appellant was availing financial facilities advanced by the Bank including a facility for establishing Letters of Credit.

3. The question of jurisdiction arose because the appellant filed a civil suit under the ordinary law and not a suit under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The learned Judge trying the suit passed a decree in favour of the appellant for a sum of Rs.10 million. The respondent-Bank impugned the said decree by filing an appeal. We note that the respondent-Bank in its written statement, had taken the express preliminary objection that the jurisdiction in the case was vested in the Banking Court established under the aforesaid statute. No issue, however, was framed on this objection and consequently, the matter of jurisdiction could not be adjudicated at the trial. During the appeal, however, the present appellant made a statement which has been noted in paragraph 5 of the impugned judgment. Relevant extracts from the said paragraph are reproduced as under:- "In the light of above order this matter was again fixed for re-hearing on 20-12-2006 and the ground of jurisdiction was apprised to the learned counsel for the respective parties. In the light of the reasons expressed in the detailed order dated 14-11-2006 learned counsel for the respondent conceded the legal position and stated that his case may be sent to the Banking Court for further adjudication. Since the learned counsel for the respondents has conceded that only the Banking Court has jurisdiction where a customer or a financial Institution commits a default in fulfillment of any obligation as (sic) to file plaint in Banking Court as prescribed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001." "Since the learned counsel for the respondent has not contested the matter on the point of jurisdiction, therefore, the impugned judgment and decree passed by the Court in Suit No.1221 of 2002 are set aside."

4. Faced with the above concession, recorded at the appellate stage, learned counsel for the appellant argued that jurisdiction of a Court could not be created through a concession or even through an agreement between the parties. We are not inclined to accept this contention in the context and circumstances of this case. It is true that as a general proposition of law there can be no cavil with the argument that jurisdiction of a court cannot be created through agreement between the parties. In the present case, however, the plaint itself indicates that the cause of action alleged therein, arose in favour of the appellant/plaintiff on account of failure of the respondent-Bank to establish a Letter of Credit within an agreed timeframe. Letters of Credit have specifically been included in the definition of `finance' in the Financial Institutions (Recovery of Finances) 'Ordinance, 2001. Therefore, bearing in mind the provisions of section 9 of the statute ibid and the concession duly made and recorded in the impugned judgment (reproduced above) it is the Banking Court which has jurisdiction in the case. In the circumstances, we find no reason for interfering in the said judgment. This appeal is, therefore dismissed. There shall be no order as to costs. S.A.K./V-2/SC Appeal dismissed.