| Case ID |
00b5ee46-680c-4e23-b768-8b482545f748 |
| Body |
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| Case Number |
C.O.S. No.2 of 2004 |
| Decision Date |
Dec 07, 2009 |
| Hearing Date |
Dec 07, 2009 |
| Decision |
The Lahore High Court adjudicated the case brought by Mian Mehmood Ahmad against HONG KONG AND SHANGHAI BANKING CORPORATION LTD. and six others. The court determined that the plaint did not fall within the jurisdiction of the Banking Court as defined under the Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001). The plaintiff's claim primarily pertained to a dispute with defendant No.4, Electro Centre Ltd., regarding a letter of credit, which did not establish a relationship between the plaintiff and the financial institution as mandated by the ordinance. Furthermore, the plaintiff sought damages for breach of contract and other consequential losses that exceeded the recovery scope of the Banking Court. Consequently, the court returned the plaint to be filed in a court of competent plenary jurisdiction under the Civil Procedure Code. The decision emphasized the importance of adhering to jurisdictional boundaries set by specialized financial laws to ensure appropriate legal proceedings and prevent misuse of banking court privileges. |
| Summary |
In the landmark case reported as 2010 SLD 2630 and 2010 CLD 293 at the Lahore High Court, plaintiff Mian Mehmood Ahmad filed a suit against HONG KONG AND SHANGHAI BANKING CORPORATION LTD. and six others under the Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001). The core issue revolved around the jurisdiction of the specialized Banking Court in handling disputes related to financial obligations and instruments like letters of credit. The plaintiff sought enforcement of an irrevocable transferable letter of credit (L/C) and claimed damages for alleged breaches by the defendants, including failure to credit his account with the negotiated amount. The court meticulously analyzed whether the dispute fell within the defined parameters of 'finance' and the relationship between a 'financial institution' and a 'customer' as stipulated by the ordinance. It was determined that the plaintiff's primary grievance was with Electro Centre Ltd., the beneficiary of the L/C, rather than directly with a financial institution, thus falling outside the jurisdiction of the Banking Court. Furthermore, the plaintiff's claims for damages extended beyond the scope of financial recovery envisioned by the ordinance. The Lahore High Court emphasized the necessity for strict adherence to jurisdictional provisions to maintain the efficacy and specialization of financial dispute resolution mechanisms. By returning the plaint for filing in a court of competent plenary jurisdiction, the decision reinforced the hierarchical and procedural boundaries essential for the orderly administration of justice in financial matters. This case underscores the critical importance of clear legal definitions and the proper application of specialized financial laws in Pakistan, providing a pivotal reference for future litigations involving banking and financial institutions. |
| Court |
Lahore High Court
|
| Entities Involved |
State Bank of Pakistan,
Ali Muhammad,
PASSCO,
Haji Alvi Khan and Company,
Messrs Allied Bank of Pakistan Limited, Abbottabad,
Zarai Tariqiati Bank Ltd.,
Chaudhry Mukhtar Ahmad,
Messrs Platinum Insurance Company,
Messrs United Distributors Pakistan Limited,
Sherin and others,
Messrs Elahi Cotton Mills Ltd
|
| Judges |
MIAN SAQIB NISAR
|
| Lawyers |
Akhtar Javed,
Munawar-ul-Islam
|
| Petitioners |
Mian Mehmood Ahmad
|
| Respondents |
6 others,
HONG KONG AND SHANGHAI BANKING CORPORATION LTD.
|
| Citations |
2010 SLD 2630,
2010 CLD 293
|
| Other Citations |
Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512,
Sherin and 4 others v. Fazal Muhammad and 4 others 1995 SCMR 584,
PASSCO v. Omer Bilal Traders (Pvt.) Limited 2007 CLD 492,
Qatar Airways PLC v. ANZ Grindlays Bank 2000 CLC 1455,
Ahmad Murad Malik v. Presiding Officer, Banking Court 2002 CLD 577,
Habib Bank Limited v. Messrs The English Engineering Company and 2 others 2005 CLD 292,
Procter and Gamble Pakistan (Pvt.) Ltd. Karachi v. Bank Al-Falah Limited Karachi and 2 others 2007 CLD 1532,
Messrs Shah Jewana Textile Mills Ltd. Lahore v. United Bank Ltd. PLD 2000 Lah. 162,
Sheikh Nazir Ahmad v. House Building Finance Corporation 2002 CLD 1634,
Manzoor Ahmad v. Agricultural Development Bank of Pakistan 2005 CLD 653,
Messrs Waheed Corporation v. Allied Bank of Pakistan 2003 CLD 245,
Akhtar Ali Parvez v. Altafur Rehman PLD 1963 (W.P.) Lah. 390,
Muhammad Ismail v. Israr Ahmad PLD 1961 (W.P.) Lah. 601,
Col. Javed Iqbal Lodhi v. Lt. Col. Nadeem Ahmar and another 2007 CLC 831,
Muhammad Saleh v. The Chief Settlement Commissioner PLD 1972 SC 326,
Haji Alvi Khan and Company v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362,
Zarai Tariqiati Bank Ltd. v. Hassan Aftab Fatiana 2009 CLD 36,
Chaudhry Mukhtar Ahmad v. National Bank of Pakistan and others 2007 CLD 501,
Messrs Platinum Insurance Company v. Messrs Highways Bridge, Contractor International (Pvt.) Ltd. and another 1997 MLD 2394,
Messrs United Distributors Pakistan Limited v. Ahmad Zarie Services and another 1997 MLD 1835,
Abdul Rehman Allana v. Citibank 2003 CLD 1843,
PICIC v. Frontier Cermics Ltd. and others 2000 CLC 287,
Ali Muhammad and 6 others v. Secretary, Board of Revenue, Sindh, Hyderabad and 9 others PLD 1997 Kar. 747,
Messrs Elahi Cotton Mills Ltd and others v. Federation of Pakistan PLD 1997 SC 582
|
| Laws Involved |
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001),
Constitution of Pakistan (1973),
Civil Procedure Code (V of 1908)
|
| Sections |
2(a),
2(d),
2(b),
5,
9,
Art.175(112),
Order VII Rule 11,
Order VII Rule 10,
Order XXXVII Rule 3
|