Pakistan Case Law
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1998 SCMR 2389
[Supreme Court of Pakistan]
Present: Nasir Aslam Zahid, Ajmal Mian, Munawar Ahmed Mirza, JJ

AMIN TEXTILE MILLS (PVT.) LTD. Versus ISLAMIC REPUBLIC OF PAKISTAN and 3

Civil Petition No,797 of 1998, decided on 1st July, 1998.
Authored by Nasir Aslam Zahid. Result: Petition dismissed.
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Summary

This petition for leave to appeal was filed against the Lahore High Court's dismissal of a writ petition for lack of territorial jurisdiction. The petitioner, a textile company, challenged the legality of a bank's demand for central excise duty, which was based on an amendment to the Central Excise and Salt Act 1944 introduced by the Finance Act 1991. The petitioner argued that because the Central Board of Revenue and the Federal Government were headquartered in Islamabad, the Lahore High Court possessed jurisdiction. The Supreme Court examined whether the Lahore High Court correctly declined jurisdiction, focusing on the "dominant object" of the litigation. The Court held that the primary objective of the writ petition was to challenge a loan repayment demand and related financial facilities executed and payable in Karachi. Following the principle established in Sandalbar Enterprises (Pvt.) Ltd. v. Central Board of Revenue, the Court affirmed that courts must determine jurisdiction based on the dominant object of the petition rather than ancillary grounds. Consequently, the Court dismissed the petition, confirming that the Lahore High Court lacked territorial jurisdiction.

Questions settled in this judgment
  • Does a High Court have territorial jurisdiction to hear a writ petition where the dominant object of the litigation relates to a cause of action arising outside its territorial limits?
  • Should the territorial jurisdiction of a court be determined by the primary relief sought or by the location of the regulatory authority involved?
  • Can an objection regarding the place of suing be raised for the first time in appellate proceedings if it was not raised at the earliest opportunity in the court of first instance?
Laws & provisions referred
territorial jurisdictionwrit petitiondominant objectmaintainabilityplace of suingcentral excise duty

ORDER

NASIR ASLAM ZAHID, J.---This petition for leave has been filed against the impugned order dated 4-5-1998 of the Lahore High Court dismissing Writ Petition No,1655 of 1996 filed by petitioner Amin Textile Mills (Pvt) Ltd. For want of territorial jurisdiction. Respondent No,1 in this petition is Islamic Republic of Pakistan through Secretary, Ministry of Finance, Govt. Of Pakistan, Islamabad; respondent No,2 is Central Board of Revenue, Islamabad; respondent No,3 is Collector, Central Excise & Land Customs, Customs House, Lahore, and respondent No,4 is Habib Credit & Exchange Bank Ltd, Karachi (hereinafter referred to as "the Bank"). We have heard Raja Muhammad Ibrahim Satti, learned counsel for the petitioner and Maulvi Anwarul Haq, learned D.A.G., who has appeared pursuant to notice. We have also referred to the relevant record.

2.Respondent No,4 is the successor of the Bank of Credit and Commerce International (Overseas) Ltd., which has since been liquidated. Petitioner was sanctioned a loan by the predecessor of the bank and other financial facilities were also availed by the petitioner and a huge amount is due from the petitioner company to the Bank. According to the petitioner, an agreement dated 6-6- 1994 u as signed by the petitioner and the Bank whereby the petitioner accepted its ability mentioned in the agreement and the Bank agreed to reschedule the loan.

According to the petitioner, payments are being made to the Bank according to the terms of the said agreement.

The case of the petitioner is that by Finance Act 1991, Central Excise and Salt Act 1944 was amended and pursuant to the said amendment, the Bank was demanding certain central excise duty also and, according to the petitioner, the said demand of the Bank on the direction of respondents No,2 and 3 is unlawful inasmuch as the concerned amendment in the Schedule to the Central Excise and Salt Act 1944 by the Finance Act 1991 is ultra vires the Constitution and the law.

As observed, by the impugned order dated 4-5-1998, the Writ Petition filed at Lahore by the petitioner was dismissed for want of territorial jurisdiction.

3.Raja Muhammad Ibrahim Satti, learned counsel for the petitioner, in support of the present petition for leave submitted that as the impugned provision of the law (Finance Act 1991) was being challenged and respondents No,1 and 2 have their headquarters in Islamabad and respondent No,3 is based in Lahore, the Writ Petition was maintainable before the Lahore High Court.

When it was pointed out to learned counsel that the Writ Petition was not maintainable for want of territorial jurisdiction before the Lahore High Court in view of the decision of this Court in the case of Sandalbar Enterprises (Pvt.) Ltd. v. Central Board of Revenue (PLD 1997 SC 334), learned counsel referred to a later decision in the case of Flying Kraft Paper Mills v. Central Board of Revenue (1997 SCM R 1874) and argued that, in the case of Flying Kraft Paper Mills, the earlier decision in the case of Sandalbar Enterprises (Pvt). Ltd. Was distinguished.

4.In the present case, the basic relief the petitioner is seeking is against the demand of the Bank at Karachi. Admittedly, the loan and other facilities were taken by the petitioner at Karachi and the loan is repayable at Karachi; all the documents in relation to the loan were also executed at Karachi. As observed, what the petitioner wants is that the demand of the Bank in relation to the loan and other facilities taken by the petitioner should be declared as invalid and based his case in the Writ Petition on the amendment made in the law as for back as in 1991. We have also noticed that the Writ Petition in the High Court was filed in 1991, that is, after about 5 years of the amendment in the law.

5.In the case of Sandalbar Enterprises (supra) it was observed as follows:--

"We may_ observe that it has become a common practice to file a writ Petition either at Peshawar, or Lahore, or Rawalpindi or Multan etc. To challenge the order of assessment passed at Karachi by adding a ground for impugning the notification under which a particular levy is imposed.

' This practice is to be depreciated. The Court is to see, what is the dominant object of filing of the writ Petition. In the present case, the dominant object was not to pay the regulatory duty assessed by a Customs official at Karachi, We are, therefore, not inclined to grant leave. Leave is refused."

As regards reliance placed by the learned counsel for the petitioner on the case of Flying Kraft Paper Mills, it may be observed that the judgment in that case did not review the earlier decision in the case of Sandalbar Enterprises, but observed as follows:--

"We will first deal with the contention of learned Deputy Attorney-General relating to maintainability of the above proceedings. The first objection of the learned Deputy Attorney-General is that the Rawalpindi Bench of Lahore High Court, had no territorial jurisdiction in the case as the order impugned in the writ petition was passed by the Collector of Customs and Central Excise functioning at Peshawar. In support of his contention the learned counsel relied on the case of Sandalbar Enterprises v. C.B.R. (PLD 1997 SC 334). In reply to the above contention of learned Deputy Attorney-General, Mr. Pirzada argued that no objection regarding territorial jurisdiction of the Rawalpindi Bench of Lahore High Court was raised by the respondent either in the first round of the litigation or in the second round, though in the second round the matter came up before this Court also. It is accordingly, argued by Mr. Piizada that the subject matter of the present litigation having arisen from the two previous rounds of litigation, the respondents are not entitled now to raise the objection regarding territorial jurisdiction of the Court for the first time before this Court. Mr. Pirzada in support of his contention referred to section 21, C.P.C. Which requires that objection as to the place of suing must be raised at the earliest opportunity and unless such objection has been raised before the Court of first instance, The revisional or appellate Court will not entertain such objection except in cases where it resulted in the failure of justice. Mr. Pirzada further contended that in the present case not only the order of Collector of Customs and Central Excise was in question but relief is also claimed against the Central Board of Revenue, which functions at Islamabad and therefore, the High Court at Peshawar and Rawalpindi Bench of Lahore High Court had concurrent jurisdiction in the matter: The contention of Mr. Pirzada, the learned counsel for the appellant is not without force."

We are of the view that the case of Flying Kraft Mills (supra) does not help the petitioner and is also clearly distinguishable as is evident from the observations reproduced hereinabove.

6.The matter essentially relates to the demand of the Bank in respect of a loan and other facilities taken by the petitioner at Karachi from the Bank and, as observed, the dues of the Bank are payable at Karachi and even, according to the petitioner, the agreement dated 6-6-1994 with the Bank was executed at Karachi and payments are being made in instalments to the Bank. In filing the Writ Petition the dominant object was to avoid the demand of the Bank and, in the facts and circumstances, Lahore High Court had no territorial jurisdiction in the matter.

7.We find no merit in this petition which is dismissed and leave is refused.

Cited by 23 cases

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