IN THE HIGH COURT OF SINDH AT KARACHI
Present:
Mr. Justice Khilji Arif Hussain
Mr. Justice Arshad Noor Khan
Date of hearing 04.2.2009
Appellant : Through Mrs. Erum Yaqoob, advocate.
Respondents : Through Mr. Sardar Mohammad Yousuf,
Advocate.
O R D E R
Arshad Noor Khan, J.- This appeal has been filed under section 3 of the Law Reform Ordinance, 1972 read with section 15 of Code of Civil Procedure (Amendment) Ordinance, 1980 against the order dated 30.9.2004 passed by the learned Single Judge of this Court in suit No. 568/2001 whereby the plaint has been returned to the appellant under order VII rule 10, C.P.C. for presentation before the proper court.
The fats leading rise to the present petition in brief are that the appellants are running their business at Karachi having their Head office at first floor, Stock Exchange Building, Stock Exchange Road, off. I.I. Chundrigar Road, Karachi. The respondents were incorporated in Pakistan on March 1990 as private limited company and were converted into public limited company in December 1993. It is further stated in the memo of appeal that the respondent having its registered office at Plot No. 15, Phase-3, Industrial State, NWFP and the company has a liaison office at Karachi situated at 11/139, Jamaluddin Afghani Road, Sharafabad, near Bahadurabad, Karachi in the year 1995-96. The appellants entered into a memo of understanding with the respondents and agreed to provide Rs. 52 millions as a finance for manufacturing Jam, Jelly, Ice cream syrups, custard powder, pickles, essence, juices and other food products and were further agreed in between them that the finance provided by the appellant would be sold and delivered to the appellants and would be repurchased from him at a higher purchase price, which would be the profit (Badla) and the respondents would pay the amount of repurchase price and profit (Badla) to the appellant. The memo of understanding was executed on December 26, 1995 and for the purpose of security of the finance, provided to the respondents, the respondents handed over five post-dated cheques to the appellant, out of five, two cheques when presented were bounced, thereafter the appellants filed summary suit against the respondents. The respondents appeared and filed application under order 37 rule 3, CPC for leave to defend the suit and also filed application under order VII rule 11, CPC (CMA. No. 3215/2008) for rejection of plaint. The appellant also resisted the said application. Learned Single Judge heard the arguments on behalf of the respondents and instead of grant of the application under order VII rule 11, CPC, the plaint was returned under order VII rule 10 CPC to the appellant for proper presentation before the proper court, hence the present appeal.
We have heard Mrs. Erum Yaqoob, advocate for the appellant and Mr. Sardar Mohammad Yousuf, advocate for the respondents.
Learned counsel for the appellant vehemently contended that the respondents are also running their business through their branch office at Karachi and the memo of understanding was also executed at Karachi and that the cheques presented for encashment were also bounced at Karachi, therefore under section 20, C.P.C. this court is competent to entertain and adjudicate upon the matter in between the parties. In support of her contention, she has relied upon the case of M/s. Brady and Company (Pakistan) Limited vs. Syed Saigol Industries Limited, reported in 1981 SCMR 494; the case of National Investment Trust Ltd. v Lawrencepur Woolen Textile Mills Ltd, reported in 2002 CLD 527.
Mr. Sardar Mohammad Yousuf, advocate for the respondents while controverting the arguments advances by the learned counsel for the appellants has contended that the learned Single Judge had no territorial jurisdiction to entertain the suit and rightly returned the case to the plaintiff and the suit filed by the appellant was barred under article 64-A of the Limitation Act and that the factory of the respondents and respondents company is situated at NWFP and also the cheques were issued at Islamabad and two of them were dishonored in Islamabad, therefore the whole transaction was completed either at Islamabad or at NWFP, therefore the suit at Karachi could not be filed.
We have considered the arguments advanced on behalf of the parties and have gone through the material available before us.
At the very outset, we have gone through the order dated 30.9.2004 passed by the learned Single Judge and we observed that while hearing the argument on application under order VII rule 11, CPC, the learned Single Judge returned the plaint to the appellant for proper presentation before the proper court. The relevant para of the order impugned is usefully quoted herein below for the sake of convenient:-
“I have examined contentions of the learned counsel for the defendant. There is nothing in rebuttal, contentions of the learned counsel for the defendant are based on the documents filed by the plaintiff along with the plaint. Under these circumstances, I have no hesitation to hold that this court has no territorial jurisdiction and the plaint is liable to be returned for filing before the court having jurisdiction. Orders accordingly.
I am refraining from passing any order on the point of limitation because I have already taken a view that this court has no territorial jurisdiction, hence no such order is required under the circumstances.”
The learned Single Judge has, therefore, returned the plaint by observing that this Court has no territorial jurisdiction. For the purpose of ascertaining, as to whether this court has territorial jurisdiction or not to entertain and adjudicate upon the matter in between the parties, it is to be examined as to whether the respondents are running their business wholly in NWFP or are running their business at Karachi through their branch office, as section 20, CPC postulates about filing of the suit at both places where the defendants are running their business wholly or partly or the place where the cause of action accrued wholly or partly. In the present case, the appellants are claiming the execution of memo of understanding on 26th December 1995 at Karachi vide para 19 of the plaint. Para 19 of the plaint wherein plaintiff stated that memo of understanding was executed between them and five cheques were also handed over to them at Karachi and the respondents are running their branch office at Karachi, therefore this court has jurisdiction to entertain and adjudicate upon the matter, which has not been satisfactorily controverted by the respondent in his objections.
In para 3, the appellant has asserted that the respondents company have its registered office at NWFP and company has a liaison office at Karachi situated at 11/129, Jamaluddin Afghani Road, Sharafabad, near Bahadurabad, Karachi. The said assertion as well as execution of memo of understanding has not been specifically controverted by the respondents, and in the application for leave to defend the suit, it is only alleged by the respondents that the signatures on memo of understanding was forged one which is a matter of recording evidence and adjudication in the light of the evidence. The appellants have also asserted the issuance of five post-dated cheques in paras 12 and 13 of the suit and have also asserted that the two cheques on presentation were bounced and have also produced the photocopy of five cheques allegedly handed over to them by the respondents. Out of five cheques, three cheques appear to have been drawn on M.C.B., FTC branch, Karachi and two of the cheques are drawn on Bank of Khyber, Islamabad. The cheques of M.C.B., FTC branch, Karachi shows that the respondents have bank account at Karachi, therefore the possibility of passing over the cheques drawn on M.C.B. by the respondents could not be doubted. The appellant have also produced two slips issued by the bank of Khyber dated 15.3.1997 and 19.3.1997 and at the bottom of the slip dated 19.3.1997, it has been shown that it was issued by the Manager, M.C.B., Karachi branch, thereby informing the appellant about bounce of the cheque. The appellants have also produced letters dated 29.1.1996 and 08.1.1999 which are on the letter-head of respondents and at the bottom of both of these letters, the address of the respondents as their head office at Karachi “Head Office – 11/139, Jamaluddin Afghani Road, Sharafabad, near Bahadurabad, Karachi-7488, Pakistan,” has been mentioned which also shows that the respondent are running their business through their branch office at Karachi as such, by virtue of section 20, C.P.C. suit against the respondents is also competent at Karachi, where the two cheques issued by the respondents were also bounced.
In the case of M/s. Brady and Company (Pakistan) Ltd., supra, the Hon’ble Supreme Court while examining the scope of section 20 CPC was pleased to observe that the corporation can be set to carry on business at the head office or at the place where it has his branch in respect of the cause of action which accrues wholly or at part at the place where the branch office is situated. In the present case also the branch office of the respondents is situated at Karachi, therefore, the court at Karachi could not be precluded to admit and adjudicate upon the case at Karachi.
In the case of M/s. National Investment Trust Ltd., supra, the learned Single Judge of this Court while dealing with section 20, C.P.C. was also pleased to observe that the suit can be filed within the territorial jurisdiction of the court where the cause of action or any part thereof arose irrespective of the question whether the defendants corporation had principal or subordinate office within such jurisdiction. The question of territorial jurisdiction however can only be decided on the basis of case made out by the plaintiff and not the defence set up by the defendants. In the present case also, the respondents/defendants have set up the defence at the Karachi and Karachi possess no territorial jurisdiction to entertain and adjudicate upon the matter in between the parties as the respondents are running their business at NWFP, except on this score along the plaint could not be returned to the appellant for proper presentation before the proper court.
There is, therefore sufficient averment contained in the plaint, which speak about the execution of memo of understanding in the month of December 1995 at Karachi where also five post dated cheques allegedly were issued and passed on to the appellants by the respondents and that the respondents are also running their business at Karachi through their branch office and the three cheques, out of five cheques speak out M.C.B., FTC branch, Karachi, as such there is sufficient material available on record to infer that the respondents are running their business wholly or partly at Karachi and the cause of action also accrued to the plaintiff to file the suit at Karachi and the learned Single Judge while dealing with this aspect of the matter did not examine the averment contained in the plaint. There is sufficient material available on record to hold that the cause of action wholly or partly accrued at Karachi, therefore, this court is competent to entertain and adjudicate upon the matter.
Apart from the aforesaid discussion, it is also emerged out from the face of the impugned order that the plaintiff was not heard by the learned Single Judge at the time of passing the impugned order as the presence of the counsel for the appellant is marked on the top of the order which also shows that the appellant has been condemned unheard before passing the order impugned which is also a violation of the principle of natural justice.
All the aforesaid reasons and circumstances show that the order impugned is not liable to be sustained. Appeal is, therefore, allowed. The order dated 30.9.2004 passed by the learned Single Judge is hereby set-aside and the matter is remanded to the learned Single Judge for decision afresh on other aspects of the matter including the point of limitation.
Appeal was allowed by short order dated 04.2.2009 for the reasons to be recorded later on. The above are the reasons of the same.
J U D G E
J U D G E
D:\Justice Arshad Noor\Judgments-orders\HCA No. 280-2004(04.2.09)\zahid.