2011 C L D 7 8 5
[Quetta]
Before Jamal Khan Mandokhail and Mrs. Syeda Tahira Safdar, JJ
Haji DAD MUHAMMAD ---Appellant
Versus
MUSLIM COMMERCIAL BANK LIMITED ---Responde nt
High Court Appeals Nos. 9 and 10 of 2004, decided on 16th March, 2011.
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) ---
----Ss. 2(c)(d), 7, 9 & 22 ---Suit for recovery of amount and damage --- "Customer" and
"Finance" --- Definition ---Jurisdiction of Banking Court ---Scope ---Plaintiffs had alleged in
their plaints that they were maintaining account in the defendant Bank, which account was
not properly maintained and the Bank had failed to perform its liabilities; that they had
deposited various amounts in cash as well as through cheques and other negotiable
instruments, but Bank had failed to credit said amount in their accounts and that the Bank had
illegally detained the amount and was not ready to pay it to the plaintiffs ---Maintainability of
suit filed by the plaintiffs was objected to by the Bank alleging that Banking Court had no
jurisdiction in the matter as plaintiffs did not come within the definition of "customer" and
their claim also did not come within the definition of 'finance" as defined in S.2(c)(d) of
Financial Institutions (Recovery of Finances) Ordinance, 2001 ---Banking Court accepting
objection of defendant Bank, returned both the plaints to the plaintiffs ---Validity ---Word
'customer' in S.2(c) of Financial Ins titutions (Recovery of Finances) Ordinance, 2001 was
limited to a person on whom finance had been extended and it included a person on whose
behalf a guarantee or letter of assurance had been issued by the financial institution and
person, other than defin ed in said section would not come within the definition of a
'customer' ---Mere being an account -holder of the Bank, plaintiffs could not be considered as
'customers'; and amount allegedly deposited by the plaintiffs also would not come within
the purview o f finance' ---Opening of an account and depositing of amount by an account -
holder would not be considered as finance' ---All claims relating to advancement of 'loan'
or default in fulfilment of an obligation pertaining to any finance' was triable by the Bank ing
Court ---Law had not permitted any other claim to be tried by a Banking Court ---Plaintiffs
in the present case had claimed that they had deposited their amount with the defendant
Bank, but had not been credited in their account ---Claim of the plaintiffs , did not come within
the jurisdiction of the Banking Court ---No illegality or irregularity having been found in the
impugned orders, appeals were dismissed by High Court.
Gul Hassan for Appellants.
Muhammad Zahid Muqeem Ansari and Syed Pervaiz Akhta r for Respondent.
Date of hearing: 2nd August, 2010.
JUDGMENT
JAMAL KHAN MANDOKHAIL, J .---Both the appeals are identical in nature, therefore;
we intend to dispose of them through a common judgment.
2. Brief facts of the case are that the appell ants have filed their separate suits for recovery of
amount and damages. It is alleged in the suit that they are maintaining an account in the
Muslim Commercial Bank (the respondent in both the appeals), which was not properly
maintained and has failed to perform its liabilities. It is mainly contended that the appellants
deposited various amount in cash as well as through. cheques and other negotiable
instruments, but the Bank has failed to credit these amounts in their accounts. It is claimed
that the amo unt is outstanding against the bank, and the respondent has illegally detained it
and not ready to pay it to the appellants.
Initially, both the appellants filed their separate civil suits against the respondent in the court
of Senior Civil Judge -I, Quet ta. The respondent by filing its written statement, to both the
suits, raised an objection that the civil court has no jurisdiction to entertain the suit as
contemplated in the Financial Institutions (Recovery of Finances) Ordinance, 2001.
The appellants having regarded the objection, withdrawn both the suits, consequently they
approached the Banking Court, Balochistan Quetta by way of filing Suit No.128 of 2003 and
Suit No.141 of 2003, respectively. The respondent again raised an objection on both the su its,
alleging therein that the Banking Court has no jurisdiction in the matter, as the
appellants/plaintiffs do not come within the definition of "customer". Similarly, their claim
also does not come within the definition of "finance", as defined in sectio n 2 of the
Ordinance.
The Banking Court, after hearing the parties, accepted the objection of the respondent and
held that it has no jurisdiction to entertain the claim of the appellants, as such, returned both
the plaints to the appellants, through sepa rate orders dated 1st September, 2004.
Feeling aggrieved from the Impugned orders, the appellants preferred High Court appeal No
09 of 2004 and High Court Appeal No.10 of 2004, respectively.
The learned counsel for the appellants (S) argued that the ap pellants is/are account -
holders/customers of the respondent -Bank and they had credited an amount with it, therefore,
the appellants come within the definition of "customer" and amount deposited, comes within
the definition of "finance". In such circumstanc es the Banking Court had the jurisdiction to
entertain the matter. He further argued that the earlier suits was withdrawn on the Objection
of the respondents, and have filed the present suit before the Banking Court. He stated that
now the respondents is e stopped under the law to raise same objection. According to him the
Banking Court has wrongly returned the plaint to the appellants, therefore the orders
impugned in both the appeals are liable to be set aside.
On the other hand, the learned counsel for the respondent has vehemently opposed the
contention and submitted that the Banking Court has rightly returned the plaint to the
appellants. He stated that the appellants do not come within the definition of "customer" and
the amount of recovery and damage s cannot be termed as "finance".
We have heard the learned -counsel for the parties and have perused the record. The term
customer is defined in section 2(c) of the Financial Institutions (Recovery of Finances)
Ordinance (XLVI of 2001), which is reproduce d hereinbelow: --
(c) "customer" means a person to whom finance has been extended by a financial
institution and includes a person on whose behalf a guarantee or letter of credit has
been issued by a financial institution as well as a surety or an indemn ifier;
Whereas, the word finance has been defined in section 2(d) of the Financial Institutions
(Recovery of Finances) Ordinance (XLVI of 2001), which is reproduced hereinbelow: --
(d) "finance" Includes -
(1) an accommodation or facility provided on the basis of participation in profit and
loss, mark -up or mark -down in price, hire -purchase, equity support, lease, rent -
sharing, licensing charge of fee of any kind, purchase and sale of any property
including commodities patents, designs trade marks and copy -rights, bills of
exchange, promissory notes or other instruments with, or without buyback
arrangement by a seller, participation term certificate, musharika, morabaha,
musawama, istisnah or modaraba certificate, term finance certificate;
(ii) facili ty of credit or charge cards;
(iii) facility of guarantees, indemnities, letters of credit or any other financial
engagement which a financial institution may give, issue or undertake on behalf of
a customer with a corresponding obligation by the custome r to the financial
institution;
(iv) a loan, advance, cash credit, overdraft, packing credit, a bill discounted and
purchased or any other financi al accommodation provided by a financial
institution to a customer;
(v) a benami loan or facility that is, a loan or facility the real beneficiary or recipient
whereof is a person other than the person in whose name the loan or facility is
advanced or granted;
(vi) any amount due from a customer to a financial institution under a decree passed
by a Civil Cou rt or an award given by an arbitrator; any amount due from a customer
to a financial institution which is the subject matter of any pending suit, appeal or
revision before any Court; any other facility availed by a customer from a financial
institution.
In the above definitions, the word "customer" is limited to a person to whom finance has been
extended and includes a person on whose behalf a guarantee or letter of assurance has been
issued by a financial institution. It means, the persons, other than de fined in section 2(c) of
the Ordinance, do not come within the definition of a "customer". Merely being account -
holders of the respondents, the appellants cannot be considered as customers. And the amount
allegedly deposited by the appellants also does not come within the purview of "finance".
Similarly, any facility defined in the definition provided by a financial institution covers
within the ambit of "finance". Hence, opening of an account and deposition of amount by an
account holder would not be consi dered as finance.
After the promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001,
Special Banking Court has been constituted. Section 9 of the Ordinance which provides the
procedure to approach Banking Court, is reproduced as und er:--
9. Procedure of Banking Court . (1) Where a customer or a financial institution
commits a default in fulfilment of an obligation with regard to any finance, the
financial institution or, as the case may be, the customer, may institute a suit in the
Banking Court by presenting a plaint which shall be verified on oath, in the case of a
financial institution by the Branch Manager or such other officer of the financial
institution as may be duly authorized in this behalf by power of attorney or otherwise .
Reading of above section clearly shows that all the claims relating to advancement of "loan"
or defaults in fulfilment of an obligation pertaining to any "finance", is triable by a Banking
Court. The law has not permitted any other claim to be tried by a Banking Court.
In the present, case, the appellants have claimed that they had deposited their amount with the
respondent -Bank, but has not been credited in their account. Their claim of recovery of
amount and damage do not come within the jurisdictio n of the Banking Court in the light of
above t discussion. Having regard to the facts and considering the law, we find no illegality
or irregularity in the impugned orders.
It is an admitted fact that the earlier suits filed by the appellants in the cour t of Senior
Civil Judge -I, Quetta, was withdrawn on the objection of the respondents. Since the
appellants were not properly guided by their counsel and the Senior Civil Judge has also
not taken into consideration the relevant law before agreeing for the w ithdrawal of the suit.
Having regard to such facts, the counsel for the appellants as well as the Senior Civil Judge
have not acted judiciously, which has resulted in the return of the earlier suits.
Due to a baseless objection of the respondent, and on ill advice of the counsel for appellants,
and also by not applying judicial mind by the Senior Civil Judge, their earlier suits were
withdrawn. In such view of the fact, the appellants should not be penalized for the bona
fide mistake of their counsel and a Senior Civil Judge. Since a valuable right of the appellants
is involved in the matter, therefore the plaint is/are hereby return to the appellants for
presenting it before the ordinary civil courts, having pecuniary jurisdiction, within 60 days,
after r eceiving a copy of the order, if desire so. In case the appellants approach to civil
court within such period, the withdrawal of the earlier suit shall not be a hurdle in their way.
Thus in view of what has been stated and discussed hereinabove, the appe als are disposed of
accordingly.
H.B.T./15/Q Order accordingly.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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