M/s. SEZEI TURKES FAYZI AKKAYA CONSTRUCTION COMPANY (STFA) vs M/s.
This civil appeal arose from an application filed under Order VII Rule 11 of the Code of Civil Procedure 1908, challenging the territorial jurisdiction of the Civil Courts in Islamabad regarding a contract dispute. The core legal question was whether the suit was maintainable in Islamabad or if jurisdiction vested in the courts at Karachi, where the contract was to be performed. The appellant, a corporate entity, argued that under Section 20 of the Code of Civil Procedure 1908, specifically Explanation No. 2, jurisdiction is determined by the location of the principal office or where the cause of action arises. The Supreme Court held that since the contract was to be performed in Karachi, the cause of action vested jurisdiction in the courts at Karachi, not Islamabad. The Court emphasized that for corporate entities, jurisdiction is tied to the place of business or the location where the cause of action arises. Consequently, the appeal was allowed, the lower courts' orders were set aside, and the plaint was ordered to be returned for filing in the competent court at Karachi.
- Does the place of performance of a contract determine the territorial jurisdiction for a civil suit?
- How does Explanation No. 2 to Section 20 of the Code of Civil Procedure 1908 apply to corporate entities regarding jurisdiction?
- Can a plaint be returned for filing in a competent court if the initial court lacks territorial jurisdiction?
- Order VII Rule 11, Code of Civil Procedure 1908
- Section 20, Code of Civil Procedure 1908
ORDER
Jawwad S. Khawaja, J.--Leave to appeal was granted in this case vide order dated 29.7.2009. The case before us is straightforward. It arises from an application under Order 7 Rule 11 CPC., This application was filed by the appellant, namely M/s. Sezai Turkes Feyzi Akkaya Construction Company (STFA), on the ground that the Courts in Kanbul had jurisdiction or in the alternate the Courts in Karachi would have jurisdiction and not the Civil. Courts at Islamabad. In support of this plea, the appellant STFA had referred to the provisions of Section 20 CPC as interpreted by this Court in the case titled M.A. Chowghury vs. Mitsui 0.S.K Lines Ltd. & 3 others (PLD 1970 SC 373).
Explanation No, 2 is specific to corporate entities such as STFA. It stipulates that a corporate entity "shall be deemed to carry on business at its sole or principal office in Pakistan or in respect of any cause of action arising at any place where it has also a subordinate office, at such place" This explanation has been examined extensively in the case of Mitsui (supra).
2. In the facts of the present case, it is clear that the contract entered into between the two Turkish Companies was to be performed in Karachi. As such, the cause of action vests jurisdiction in the Courts at Karachi in line with the ratio of the afore-cited case. Faced with the above situation, learned counsel/AOR for the respondent Company stated that there was another Company, namely Hakas Pvt. Ltd., which had its place of business in Islamabad. This, however, may not be relevant because M/s. Ekon Yapi Onarim had filed suit against M/s. Sezai Turkes Feyzi Akkaya Construction Company (appellant herein) and Port Qasim Authority and Hakas Company Ltd.
(Respondent 2-3 herein). We have been informed that M/s. Hakas Pvt. Ltd., though having its office in Islamabad, has been proceeded against ex-parte in the trial Court and also chose not to appear in the High Court.
3. In view of the foregoing discussion and following the ratio in the case of Mitsui (supra), we are clear that in this case the Courts at Islamabad had not been vested with jurisdiction and it was the Courts at Karachi where the suit ought to have been filed. In view of the foregoing discussion, this appeal is allowed and the order of the trial Court dated 24.4.2007 and the High Court dated 9.5.2008 are set aside. The plaint, on application of the respondent-plaintiff, shall be returned and the plaintiff, may if so advised, file it before the competent Court at Karachi.