REGIONAL DEVELOPMENT FINANCE CORPORATION vs Haji GUL HASSAN and another
This civil appeal before the Supreme Court of Pakistan arose from a judgment of the Peshawar High Court, which had set aside a banking court decree in favor of the Regional Development Finance Corporation against Haji Gul Hassan on the ground of lack of territorial jurisdiction. The core legal question was whether the Banking Court at Peshawar lacked territorial jurisdiction and whether an objection as to territorial jurisdiction could be raised for the first time in an appellate court. The Supreme Court held that under Section 20 of the Code of Civil Procedure 1908, a suit may be instituted where the defendant resides, and that under Section 21 of the Code of Civil Procedure 1908, objections regarding territorial jurisdiction cannot be entertained by an appellate or revisional court unless raised at the earliest opportunity in the court of first instance. The appeal was accordingly accepted, the High Court judgment was set aside, and the matter was remanded for decision on merits.
- Can a defendant raise an objection regarding territorial jurisdiction for the first time before an appellate or revisional court?
- Does a banking court where the defendant resides have territorial jurisdiction to adjudicate a recovery suit under the Code of Civil Procedure 1908?
- What are the jurisdictional grounds available for instituting a suit under Section 20 of the Code of Civil Procedure 1908?
- Order XXXVII Rule 2, Code of Civil Procedure 1908
- Section 20, Code of Civil Procedure 1908
- Section 21, Code of Civil Procedure 1908
Sardar Muhammad Raza Khan, J.--Regional Development Finance Corporation Islamabad filed a suit against Haji Gul Hassan for the recovery of Rs, 27,103,92.40 before Judge Banking Court No, II NWFP Peshawar. Leave to defend having been refused to the defendant, the suit of Finance Corporation was decreed vide judgment and decree dated 20.7.1998.
2. Haji Gul Hassan filed an appeal before Peshawar High Court. A learned Division Bench vide judgment dated 3.10.2000 accepted the appeal and set aside the decree aforesaid, on the ground mainly that the learned Judge Banking Court No, II lacked territorial jurisdiction because all the documents of loan facility had been prepared, executed and finalized at Islamabad.
3. It is a matter of common knowledge that the suits of the nature in question are filed under Order XXXVII, Rule 2 of the Code of Civil Procedure and so the provisions of the Code squarely apply thereto. Section 20 CPC categorically lays down that such suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Admittedly, the defendant resides within the local limits of the Banking Court where the suit was instituted. The objection qua jurisdiction of the Court at such belated stage was not only mistaken but mala fide in order only to prolong the matter. Whereas, the fact is that the Court at Peshawar was perfectly suited to the defendant as compared to any Court at Islamabad.
4. No doubt, under sub-clause (c) of Section 20, the Court within the territorial jurisdiction of which the cause of action had arisen also would have the jurisdiction to adjudicate upon the matter yet sub clause (a) and (b) equally confer jurisdiction in the Court within the local limits of whose jurisdiction, the defendant resides. The plaintiff has chosen the first option which was not at all illegal.
5. The objection in the instant case is with regard to the territorial jurisdiction of the Court. Under Section 21 CPC no such objection qua territorial jurisdiction can be allowed to be taken before the appellate or revisional Court unless such objection is taken in the Court of first instance i,e, the trial Court. The application for leave to defend would clearly indicate that no such objection about territorial jurisdiction was ever taken by the defendant at the earliest possible opportunity. Such draw back was pointed out by Mr. Fasi-ul-Mulk learned counsel for the Corporation before the High Court but the stance taken with reference to Section 21 CPC was repelled. We hold that it was wrongly repelled and the provisions of Section 21 CPC could not be so conveniently avoided.
6. Consequently, the appeal is accepted, the impugned judgment dated 3.10.2000 is set aside and the case is remanded to the learned High Court for decision on merits. FAB No, 57 of 1998 stands revived. The learned High Court shall decide the matter as early as possible.