BANKERS EQUITY LTD. vs IQAS WEAVING MILLS (PVT.) LTD.

ORDER

"That Court of appropriate jurisdiction at Karachi shall be proper Court to entertain all matters arising out of, or under the Agreement. "

2. It is contended by the learned counsel for the defendants that by agreement the parties chose and selected a venue and Court in the matter, i.e., Karachi, the same is binding on the parties and the suit could be filed only before a Court of appropriate jurisdiction at Karachi. The learned counsel relies on, State Life Insurance Corporation of Pakistan v. Rana Muhammad Salem 1987 SCM R 393, Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCM R 1174 and Messrs E.F.U. General Insurance Limited and others v. Fahimul Haq 1997 CLC 1441 to contend that such a choice of forum by the parties is not illegal, rather they should be bound by the same.

3. On the other hand, the learned counsel for the plaintiff contends that the defendant is situated at Lahore, within the jurisdiction of this Court and the cause of action has also arisen partially at Lahore, therefore, this Court has jurisdiction in the matter. He relies on Muhammad Yasin and 2 others v. Ch. Muhammad Abdul Aziz PLD 1993 SC 395 that a suit for recovery of amount can be instituted within the local limits of a Court where cause of action, wholly or in part, arises. It is further contended that clause 10.4 of the Agreement is not part of the other agreements.

4. The plaintiff had chosen to incorporate clause 10.4 in the agreement, dated 24-5-1992, the execution of which, or existence of the said clause, is not denied. Both the parties agreed that a Court of appropriate jurisdiction at Karachi shall be the proper Court to entertain all matters arising out of, or under the Agreement. The finance facility was extended by the plaintiff under the said Agreement whereas some claims based on other transactions have also been conjoined in the suit. In State Life Insurance Corporation of Pakistan v. Rana Muhammad Salem (supra) an objection to the f ling of the suit at Lyallpur (now Faisalabad) was raised by the appellant that the parties had agreed that it will be Civil Court at Lahore which will have jurisdiction in the matter. The objection as to the territorial jurisdiction so taken by the appellant was overruled by the trial Court, which order was maintained by the High Court. On appeal their Lordships of the Supreme Court after considering the affect and import of section 28 of the Contract Act (IX of 1872) and sections 9 and 20, C.P.C. Came to the conclusion that "when two or more Courts have jurisdiction to try a suit and the parties mutually agreed to choose, or taken their dispute to one of them, there is no violation of the law nor was it contrary to the public policy". The appeal was accordingly accepted taking the view that it was the Lahore Court which had jurisdiction in the matter. In Messrs Kadir Motors (Regd.), Rawalpindi v Messrs National Motors Ltd., Karachi and 3 others (supra) also the same view was filed by their Lordships by following the rule laid down in the case of State Life Insurance Corporation of Pakistan. It was observed that the parties could select and decide by agreement to get their disputes decided by a particular Court for their convenience. The same view was held in the case of Messrs E.F.U. General Insurance Limited and others v. Fahimul Haq (supra) by a Division Bench of Blochistan High Court.

5. In the instant case, the agreements were signed at Karachi although the defendants were situated in Lahore. It appears that the plaintiff kept it view its convenience and exercised its choice as to the Court at Karachi, to which the defendants agreed. It is not the case of either party that the Karachi Court would have no jurisdiction in the matter. The choice so made by the parties, is of binding nature and is neither illegal nor contrary to the public policy. The precedent cited by the learned counsel for the plaintiff namely Muhammad Yasin and 2 others v. Ch. Muhammad Abdul Aziz (supra) is not apt in the facts and circumstances of this case inasmuch as in the said case there was no agreement between the parties as to choice of forum. The objection taken by the learned counsel for the defendants has in the circumstances, thus, substance and prevails.