Messrs NARUMAL JETOMAL And Another vs SPECIAL COURT OF SIND And Other
This matter concerns a petition for leave to appeal against an order of the Sind High Court, which dismissed a constitutional petition challenging the jurisdiction of a Special Court established under the Banking Companies (Recovery of Loans) Ordinance, 1979. The petitioners, whose rice mill and pledged paddy stocks were nationalized by the Government, faced a recovery suit filed by the respondent bank regarding a cash credit facility. The petitioners contended that the suit was incompetent before the Special Court, arguing that the Rice Milling Corporation of Pakistan and the Government were necessary parties who should have been the primary defendants. The Supreme Court observed that the legal points raised by the petitioners, particularly regarding the competency of the suit under the special provisions of the Banking Ordinance given the involvement of nationalized entities, warranted further examination. Consequently, the Court granted leave to appeal to consider whether the Special Court possessed the requisite jurisdiction to adjudicate the recovery suit under the circumstances presented.
- Is a suit for recovery of a cash credit facility competent before a Special Court under the Banking Companies (Recovery of Loans) Ordinance, 1979, when the underlying pledged assets were nationalized?
- Does the involvement of the Rice Milling Corporation of Pakistan and the Government as necessary parties affect the jurisdiction of a Special Court established under the Banking Companies (Recovery of Loans) Ordinance, 1979?
- Article 9, Provisional Constitution Order 1981
- Banking Companies (Recovery of Loans) Ordinance 1979
ORDER
1. ABDUL KADIR SHAIKH, J.--Facts of this case briefly stated are that petitioners were granted cash credit facility by Allied Bank of Pakistan Limited, respondent No. 2, on the pledge of their stocks of paddy in their Rice Mill. In 1976, petitioners' Rice Mill and the other Rice Mills in Pakistan were nationalised, and accordingly not only the Rice Mill belonging to the petitioners but also the stocks of paddy lying there were taken over by the Government. The stocks of paddy pledged with the respondent No. 2 were sold at their instance and respondent No. 2 afterwards filed a suit against the petitioners for recovery of Rs.6,23,034 due against the cash credit facility granted to them. The suit was afterwards transferred for trial before the Judge of the Special Court established under the Banking Companies (Recovery of Loans) Ordinance, 1979.
2. Petitioners filed a petition under Article 9 of the Provisional Constitution Order, 1981 in Sind High Court seeking to challenge the jurisdiction of the Judge of the Special Court on the ground that he was not competent to deal with the suit. The petition was dismissed by the High Court, and petitioners now seek leave to appeal.
3. Mr. Mamoon Kazi, learned counsel for the petitioners submits that in view of the fact that the Rice Milling Corporation of Pakistan and the Government are necessary parties, and in fact should be the main defendants, the suit under the special provisions of the Banking Ordinance is not competent.
4. This point of law and the others raised in support of the petition deserve consideration. Leave is granted. Security Rs.2, 500.