YASMEEN NIGHAT Versus N.B.P.

1. NASIM HASAN SHAH, J.‑‑This judgment will dispose of Civil Appeals Nos.67, 68 and 69 of 1985, because all these appeals raise the same question of law, namely, whether the suits of the value of Rs.one lac or below in respect of the recovery of loans from banking companies which were then pending in Civil Courts, stood transferred to the Special Courts on the promulgation of the Banking Companies (Recovery of Loans) (Amendment) Ordinance, 1983. This question has arisen as follows:‑

2. The President of Pakistan, in order to provide for a summary procedure for recovery of loans taken from banking companies, promulgated Ordinance XXIII of 1978 entitled Banking Companies (Recovery of Loans) Ordinance, 1978. This Ordinance was repealed and re‑enacted on 27th March, 1979, by Ordinance XIX of 1979 entitled the Banking Companies (Recovery of Loans) Ordinance, 1979, which came into force on the first of April, 1979. According to the provisions of Ordinance, a Special Court was constituted for exercising jurisdiction in respect of claims filed by banking companies in respect of, or arising out of loans granted by them (section 6). However, every such claim was not to be adjudicated by the Special Court and in cases in which the outstanding amount of the loan did not exceed one lac rupees these would continue to be tried by the ordinary Civil Courts (vide section 6(2)(a) ibid). As section 6 of the Ordinance is of importance, the relevant portions thereof may be reproduced hereunder with advantage:‑

3. "6. Powers of Special Court. ‑‑(1) A Special Court shall‑‑

(a) in the exercise of its civil jurisdiction, have, in respect of a claim filed by a banking company against a borrower or by a borrower against a banking company in respect of, or arising out of, a loan, all the powers vested in a civil Court under the Code of Civil Procedure, 1908 (Act V of 1908);

(2) Notwithstanding anything contained in subsection (1), a Special Court shall have no civil jurisdiction in a case in which‑‑

(a) the outstanding amount of the loan does not exceed one lac rupees;

(4) No Court other than a Special Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Special Court extends under this Ordinance, including a decision as to the existence or otherwise of a loan and the execution of a decree passed by a Special Court, and all proceedings, including proceedings following the filing of an arbitration award and proceedings for the execution of a decree within the jurisdiction of a Special Court, by whatever Court passed, which may be pending in any Court immediately before the commencing day shall stand transferred to the Special Court."

4. It may be mentioned that the term "Special Court" was defined by clause (f) of section 2 of the Ordinance of 1979 "to mean a, Special Court established under section 5" and section 5 was couche )d in the following terms:‑

5. "5. Establishment of Sp ecial Courts.‑‑(1) The Federal Government may, by notification in the official Gazette, establish as many Special Courts as it considers necessary, and where it establishes more than one Special Court, shall specify in the notification the territorial limits within which each one of them shall exercise jurisdiction under this Ordinance.

(2) A Special Court shall consist of a person who is a District Judge."

6. The result of the promulgation of the Ordinance of 1979 was that as from Ist April, 1979, suits filed by banking companies against borrowers or by borrowers against the banking companies in respect of, or arising out of, a loan where the amount did not exceed Rs.one lac continued to be entertained by the Civil Courts having jurisdiction in the matter while suits, exceeding that amount, became triable by Special Courts.

7. However, in less than four years after the promulgation of this Ordinance, the need for amending it further was felt. Accordingly, on 13th January, 1983 Ordinance II of 1983, called the Banking Companies (Recovery of Loans) (Amendment) Ordinance, 1983, was issued to amend the Banking Companies (Recovery of Loans) Ordinance 1979 further. The significant amendments brought about through this new Ordinance were that the definition of "Special Court" as given in the Ordinance of 1979 (vide clause (f) of section 2) was radically altered and replaced by the following definition:

(f) "Special Court" means‑‑

(i) in respect of a case in which the outstanding amount of the loan does not exceed one million rupees, or the trial of offences punishable under this Ordinance, a person who is or has been a District Judge or an Additional District Judge and is appointed by the Federal Government, by notification in the official Gazette, to be a Special Court to exercise jurisdiction within such territorial limits as may be specified in the notification, and, in the absence of such appointment, the District Judge; and (ii) in respect of any other case, the High Court in the exercise of original civil jurisdiction."

8. Since the Special Court was now to be the only Court to exercise jurisdiction in such matters, transfer of pending cases was provided for by section 8 of the amending Ordinance. Subsection (1)I of section 8 is relevant for our purpose and it is, therefore, being reproduced below: ‑

9. "8. Transfer of pending cases .‑‑(1) Any case which, immediately before the commencement of this Ordinance, was pending before a Special Court established under section 5 of the said Ordinance shall, on such commencement, stand transferred to the Special Court which would have had jurisdiction in the case had it been instituted after such commencement."

10. On account of these amendments the question arose as to what was the effect of these amendments on pending cases? More precisely as to whether the result of the amendment of the definition of the expression ":Special Court" given in Ordinance XIX of 1979 by I Ordinance II of 1983 implied that suits regarding recovery of bank loans of the value of Rs.one lac or below, which were pending in the Civil Courts on that date, were also to stand transferred to the "Special Courts" or whether these suits continued to be tried by the Civil Courts as hithertofore? The Peshawar High Court in the case of Mst. Yasmeen Nighat v. National Bank of Pakistan P L D 1984 Pesh. 188 and Begum Qaiser Sultana v. United Bank Limited (Civil Revision 47 of 1984), held that all such suits also stood transferred for trial to the Special Court; (and these two judgments in these two cases are impugned before us through Civil Appeals Nos.67 and 68 of 1985). Similarly, the High Court of Sind in the case of District Judge, Karachi v. Deputy Attorney‑General of Sind, Karachi and another (Civil, Reference No.95 of 1984) also took the same view. This judgment too is questioned before us, in Civil Appeal No.69 of 1985, Federation of Pakistan v. District Judge, Karachi and another. However, the Lahore High Court took the view in the case of National Bank of Pakistan v. Taj Muhammad P L D 1984 Lah. 417 that though normally procedural amendments including those purporting to transfer jurisdiction over certain causes of action, operate retroactively but when a new forum is created providing for a less convenient remedy an amendment of this kind should not be treated as a procedural amendment and given retrospective effect. It, therefore, held that the amendment concerning the forum for recovery of bank loan of Rs.one lac or less would be considered prospective and would not affect pending cases. In a subsequent decision the same High Court in United Bank Ltd. v. Mian Abdul Khaliq P L D 1988 Lah. 225 further clarified its earlier judgment observing that the effect of tte amending Ordinance II of 1983 was that cases relating to outstanding amount of the loan upto the value of rupees one lac which were filed after the commencement of Ordinance XIX of 1979 (Ist April, 1979) and before Ordinance II of 798.1 (:10th January, 1983) remained triable by the Civil Courts which were competent to try the same. Thus, only such cases instituted on or after 30th January, 1983 were exclusively triahle by the Special Court while cases instituted before the said date and after commencement of Ordinance XI X of 1979 remained triable by the Courts where the same were instituted originally.

11. A clear cleavage of opinion between the High Courts of Pakistan on this issue having arisen, it is, therefore, necessary to examine this matter with some care. Accordingly, we have carefully examined it, with the help of the learned counsel for the parties and the learned Deputy Attorney‑General of Pakistan.

12. The rule applicable in such situations was stated by this Court sometime ago, namely, in the case of Adnan Afzal v. Sher Afzal PLD 1969 S C 187. Herein the question was whether proceedings for maintenance of a child, which were instituted under section 488, Cr.P. C. would stand transferred to the Family Courts Act (XXXV of 1964) which, inter alia, had conferred exclusive jurisdiction in such matters to the Family Courts or would continue in the Court of the Magistrates where they were instituted.

13. After examining the relevant provisions of the Family Courts Act, this Court observed:‑

14. "From these provisions it is clear beyond any doubt that as from the 5th of April 1966, when Judges of Family Courts became invested with powers of Magistrates of First Class, the only Court which had jurisdiction to entertain, hear and adjudicate upon matters specified in the Schedule, was the Family Court. The question, however, is that did this also affect pending proceedings or, in other words, did the provisions of the Family Courts Act have retroactive effect.

15. The Court thereafter referred to certain classic works on interpretation of the statutes and the relevant case‑law and its conclusions were stated as follows:‑

16. "Looking at the provisions as a whole we are of the view that all that the. Family Courts Act has done if‑ that it has changed the forum, altered the method of the trial and empowered the Court to grant better remedies. It has; thus, in every sense of the term, brought about only procedural changes and not affected any substantive right. According to the general rule of interpretation, therefore, a procedural statute is to be given retroactive effect unless the law contains a contrary indication. There is no such contrary indication in the West Pakistan Family Courts Act. We would, therefore, hold that the Act affected also pending proceedings and the District Magistrate was right in holding that the Courts of Magistrates had no longer any jurisdiction either to entertain, hear or adjudicate upon a matter relating to maintenance."

17. The situation in the present cases is similar and as there is no contrary indication in Ordinance II of 1983 we are of the opinion, therefore, that in the present cases too the amending Ordinance (II of 1983) would affect the pending proceedings and all the suits would have to be tried by the Special Court. ..

18. It may be added that an examination of the provisions of Ordinance XIX of 1979 in juxtaposition with those of Ordinance II of 1983 shows that the legislature by enacting section 6(4) of Ordinance XIX of 1979 intended to oust the jurisdiction of all other Courts in the matter of banking loans and to confer exclusive jurisdiction on Special Courts in respect of the matters which were made triable by the said Courts, under the terms of the said Ordinance and all such proceedings pending in any Court immediately before the commencing day of Ordinance XIX of 1979 stood transferred to the Special Court concerned. Under the provisions of the said Ordinance XIX of 1979 (under section 6(2)(a)) the jurisdiction of the Special Court was expressly excluded in relation to cases involving a sum of Rs.one lac or less. But by Ordinance II of 1983, the definition of the Special Court having been amended and subsection (2)(a) of section 6 of Ordinance XIX of 1979 having been omitted, the Special Court established under section 5(1) of the Ordinance became vested with the jurisdiction to try those cases which were specially excluded from its jurisdiction under section 6(2)(a) of Ordinance XIX of 1979. As a result of this extension, the Special Court was conferred the sole jurisdiction in such matters (the jurisdiction of all other Courts having been ousted in respect of such cases). The intendment of the law‑maker which appears from the changes made by him, is that he intended that even such cases which under section 6(4) of the Ordinance were to be tried by the Civil Courts earlier were also to become triable by the Special Courts. This intention is also decipherable from the circumstance that with the omission of clause (a) of subsection (2) of section 6 of Ordinance XIX of 1979 the forum of the Civil Courts for the trial of such cases ceased altogether. Hence, it will not be reasonable to infer that the suits pending in the Civil Courts can continue to be tried by them, when their jurisdiction in respect of these cases has been completely taken away.

19. The upshot is that in our opinion the view taken by the Peshawar High Court and the High Court of Sind that the suits pending in the Civil Courts before the promulgation of Ordinance II of 1983 also stood transferred to the Special Courts, is correct while the view expressed by the Lahore High Court in National Bank of Pakistan v. Taj Muhammad P L D 1984 Lah. 417 and United Bank Ltd. v. Mian Abdul Khaliq P L D 1988 Lah. 225 is erroneous.

20. The result is that Civil Appeals Nos.67, 68 and 69 of 1985 filed to challenge the judgments of the Peshawar High Court and the High Court of Sind must fail and are, accordingly, dismissed. In view, however, of difficult question involved in these matters, the parties will be left to bear their own costs.

21. M . B.A. /12/ 4‑S Appeals dismissed.