M/S Shah Medicos Vs Government of Khyber Pakhtunkhwa and 02 others

THE PESHAWAR HIGH COURT, PESHAWAR

(APPELLATE JURISDICTION)

F.A.O. No. 206-P/2025 Date of hearing: 21.01.2026

APPELLANT: M/s. Shah Medicos, Mateen Medical Centre near KTH Peshawar through its proprietor Syed Wajid Ali Shah THROUGH Mr. Aamir Javed, Advocate.

RESPONDENTS: Government of Khyber Pakhtunkhwa through its Chief Secretary) By Mr. Yasir Khalid, Additional Advocate General, (Medical Teaching Institution KTH/KMC/KCD Peshawar & 02 others THROUGH Mr. Asif Yousafzai, Advocate.

JUDGMENT

MUHAMMAD FAHEEM WALI, J.- This appeal is directed against the order dated 17.07.2025, passed by the learned Additional District Judge-XIX, Peshawar (trial court), allowing the respondents’ application under Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC) for the return of the plaint due to lack of jurisdiction.

2.Briefly, the facts are that the appellant/plaintiff instituted a suit against the respondents/defendants seeking a declaration, specific performance of a rate contract agreement, permanent and mandatory injunctions, and recovery of outstanding amounts, as detailed in the plaint. Upon being summoned, the respondents appeared and filed an application

under Order VII Rule 10 CPC, praying for the return of the plaint for presentation before a court of competent jurisdiction.

The appellant submitted a reply contesting the application. After hearing the learned counsel for the parties, the learned trial Court, through the impugned order dated 17.07.2025, allowed the application and returned the plaint in terms of Order VII Rule 10 CPC, leading to the filing of the present appeal.

3.I have heard arguments of learned counsel for the parties and gone through the record with their able assistance.

4.The main thrust of arguments of learned counsel for the appellant is that the impugned order is bad in law and on facts and is liable to be set aside, as the learned trial Court failed to appreciate that the MTI Tribunal established under the hyber Pakhtunkhwa Medical Teaching Institutions Reforms Act, 2015 (MTI Act) is primarily meant for redressal of grievances of employees under Section 16(8) and members of the Board of Governors under Section 16-A, and the Act does not provide any mechanism for adjudication of contractual disputes relating to local purchase contractors, nor does it empower the Tribunal to record evidence or pass and execute a money decree. It is further argued that civil courts are courts of plenary jurisdiction and their jurisdiction can only be ousted through an express statutory bar, which is missing in the MTI Act. Lastly, it is

maintained that the appellant seeks specific performance, mandatory injunction and recovery of outstanding amount reliefs that can only be granted through a decree under CPC, whereas the MTI Tribunal lacks authority to pass or execute such a decree, rendering the return of the plaint legally unsustainable.

5.Perusal of record reveals that the appellant, being a duly licensed pharmaceutical supplier, was awarded the contract pursuant to NIT dated 21.08.2022 and thereafter executed a Rate Contract Agreement on 07.10.2022, which was extended from time to time and remained operative till 04.10.2025. The record further reveals that although the appellant continued to supply medicines and allied items at the agreed rates, but the respondents failed to clear duly verified bills, resulting in accumulation of outstanding dues exceeding Rs. 903 million, which were partly acknowledged in official meetings. Despite the subsisting agreement and admitted liabilities, the respondents allegedly issued a fresh tender and prematurely terminated the contract without lawful justification. It is maintained by learned counsel for the appellant that the controversy is contractual in nature and falls within the jurisdiction of the civil court; that the cause of action accrued within the territorial jurisdiction of the

Court; and that the suit was properly valued and thus competently maintainable.

6.The moot point for determination is whether the controversy between the parties, stemming from a Rate Contract Agreement executed between the appellant, an independent pharmaceutical supplier, and MTI, is essentially a dispute arising out of contractual obligations. Since the appellant was not an employee of MTI but an independent contractor engaged through a formal agreement, the question is whether the matter pertains to enforcement of contractual rights and recovery of outstanding payments, thereby falling within the domain of civil jurisdiction. Consequently, it is to be examined whether the learned trial Court was legally justified in returning the plaint under Order VII Rule 10 CPC for want of jurisdiction, or whether the suit was rightly maintainable before the civil court as a claim based on contractual liability.

7.In order to reach at a just conclusion, this court deems it appropriate to reproduce Section 2 (g-i) of the MTI Act, which reads as under:

“(g-i) “employee” means,- (i) an employee of a Medical Teaching Institution appointed under this Act and regulations made under this Act; or

(ii)an existing employee of the Medical Teaching Institution, appointed by the Management Council,

under the Khyber Pakhtunkhwa Medical and Health Institution and Regulation of Health Care Services Ordinance, 2002, prior to promulgation of the Khyber Pakhtunkhwa Medical Teaching Institutions Reforms (Amendment) Act, 2018; or

(iii)a civil servant, who has opted to become an employee of Medical Teaching Institution under section 16 of this Act; or

(iv)a civil servant, who is on deputation to Medical Teaching Institution.”

From the above-quoted provision, it divulges that the appellant does not fall within the definition of an employee. In that case, it is difficult to understand on what compelling grounds the learned trial Court returned the plaint under Order VII Rule 10 CPC for want of jurisdiction, despite being fully aware that the appellant was not an employee of the Medical Teaching Institution.

8.Apart from the foregoing, it is noted that the learned trial Court referred to Section 16-A of the MTI Act, observing that the matter now agitated before the civil court falls within the jurisdiction of the Appellate Tribunal established under the Act. For clarity and reference, Section 16-A of the said Act is reproduced below:

“16-A. [Appellate Tribunal.--- (1) Government shall, by notification in the official Gazette, establish an Appellate Tribunal to hear appeals under sub-section (7) of section 5 and sub-section (8) of section 16 of this

Act and other matters related to or arising from the provisions of this Act.

(2)The Appellate Tribunal shall consist of a Chairman and such other members, not exceeding four in number, as the Government may appoint, in such a manner as may be prescribed by rules.

(3)The Chairman and other members of the Appellate Tribunal shall have such qualification and experience of service as may be prescribed by rules.

(4)The Chairman and the other members of the Appellate Tribunal shall be appointed for a term of three (03) years, in such a manner and with such other terms and conditions of services as the Government may prescribe by rules.

(5)The Appellate Tribunal shall have such staff with such terms and conditions of service as the Government may determined and until such staff is appointed, the Health Department, Government of Khyber Pakhtunkhwa shall provide Secretariat support to the Appellate Tribunal.”

It is also discernible from the above-quoted provision that while the Appellate Tribunal may hear appeals under Sub- Section (7) of Section 5 or Sub-Section (8) of Section 16 of the Act and other matters arising out from the provisions, such jurisdiction extends only to aggrieved persons, those being employees of the MTI or member of the Board of Governors. In the present case, the appellant was neither an employee nor member of the Board as envisaged under Section 5 of the Act, but had merely entered into a contractual agreement with the MTI, which does not confer jurisdiction upon the Tribunal to

entertain any grievance of the petitioner/plaintiff under its Appellate jurisdiction specifically reserved for a particular class.

Although, as per Sub-Section 1 of Section 16-A, the Tribunal is empowered to take cognizance of the “matters relating to or arising from the provisions of the Act”, but taking into consideration, the controversy involved in the suit, it is abundantly clear that the same does not relate to a matter which arises from any of the provisions of the MTI Act, therefore, the tribunal lacks the jurisdiction to entertain the grievance.

9.Furthermore, it is apparent from record that the appellant, being a duly licensed pharmaceutical supplier, was awarded the contract and executed a Rate Contract Agreement on 07.10.2022, which was extended from time to time and remained operative till 04.10.2025. It is further apparent from the provisions of the MTI Act, that the Appellate Tribunal established under Section 16-A has jurisdiction exclusively over grievances of employees of the MTI or members of the Board of Governors. The appellant, being an independent contractor, does not fall within this definition. Therefore, the learned trial Court’s conclusion that the matter falls within the Tribunal’s jurisdiction under Section 16-A is legally unsound. The Tribunal has no power to adjudicate contractual disputes between the MTI and

independent suppliers, nor can it pass or execute a decree for recovery of money.

10.All the tribunals established under the Federal or Provincial laws stems from Article 212 of the Constitution of the Islamic Republic of Pakistan, 1973, which for the sake of convenience is reproduced hereunder.

Article 212. Administrative Courts and Tribunals.

(1)Notwithstanding anything hereinbefore contained, the appropriate Legislature may by Act provide for the establishment of one or more Administrative Courts or Tribunals to exercise exclusive jurisdiction in respect of—

(a)matters relating to the terms and conditions of persons who are or have been in the service of Pakistan, including disciplinary matters;

(b)matters relating to claims arising from tortious acts of Government, or any person in the service of Pakistan, or of any local or other authority empowered by law to levy any tax or cess and any servant of such authority acting in the discharge of his duties as such servant; or

(c)matters relating to the acquisition, administration and disposal of any property which is deemed to be enemy property under any law.

(2)Notwithstanding anything hereinbefore contained, where any Administrative Court or Tribunal is established under clause (1), no other court shall grant an injunction, make any order or entertain any proceedings in respect of any matter to which the jurisdiction of such Administrative Court or Tribunal extends.”

Under Article 212(2), a Tribunal established under Provincial laws may exercise jurisdiction over matters assigned to it by statute; however, for such jurisdiction to be “exclusive,” thereby barring all other courts from taking cognizance, specific constitutional requirements must be met. In the absence of such requirements, the matters falling within the Tribunal’s purview can still be agitated before a Civil Court (being a court of ultimate civil jurisdiction), the High Court under its constitutional jurisdiction, or any other forum recognized by law.

Consequently, the jurisdiction enjoyed by such a Tribunal is not exclusive, and other courts may legally exercise jurisdiction over these matters unless the power of exclusive jurisdiction has been expressly conferred by Majlis-e-Shoora (Parliament) through an Act passed pursuant to a resolution by the concerned Provincial Assembly or by strict adherence to the legislative competence required to invoke the ouster clause of Article 212(2). In the absence of such legislative cover extending the strict application of Article 212(2) to the Tribunal, its jurisdiction over the subject matters enshrined in its enabling statute cannot be deemed exclusive so as to oust the plenary jurisdiction of the Civil Courts.

11.It is imperative to mention here that the question of co-extensive jurisdiction of the Tribunal and Civil Court involved

in this appeal has earlier been raised before the Hon’ble Supreme Court in the case of Syed Asghar Ali Shah & another v. Kaleem Arshad & others reported as 2024 SCMR 563 where it has been held as under: -

“Clause (2) of Article 212 is, in our opinion, merely an ouster clause and not a jurisdiction clause. In case of Federal Tribunals, it provides that no other court can take jurisdiction over any matter which falls under the subject matter of the Administrative Tribunal established under Article 212(1). If clause (2) has not been made applicable to a Provincial Tribunal, it at best means that there are other forums also available to redress the grievance of the officers, e.g., the High Court under Article 199 or the Civil Courts under Section 9 of the Civil Procedure Code, 1908. In the absence of clause (2), all the judicial forums in a Province have concurrent jurisdiction along with the Provincial Administrative Tribunal.”

In the above case, it has been unequivocally clarified that no tribunal established under a Provincial law can exercise exclusive jurisdiction unless explicitly conferred under Article 212 of the Constitution, and in the absence of such constitutional exclusivity, civil courts retain concurrent jurisdiction under Section 9 of CPC. By necessary implication, it means that in addition to the redressal of grievance by the Board or Tribunal, the aggrieved party, who can either be the employee or a Board member, has the option either to file a writ petition under Article

199 of the Constitution or to seek relief before civil courts under Section 9 CPC.

In the instant case, the appellant who is neither an employee nor member of the Board and his case also does not fall within “any of the matters related to or arising from the MTI Act”; therefore, it has rightly approached the civil court to enforce his contractual rights, but the learned trial Court, due to misapplication of law, returned the plaint under Order VII Rule 10 CPC on the alleged ground of lack of jurisdiction. Such a finding is legally untenable, as the civil court has plenary jurisdiction to entertain claims arising from contractual obligations, including recovery of outstanding dues and specific performance.

12.It is pertinent to note that the jurisdiction of the Civil Court under Section 9 CPC, is the rule, while the exclusion of its jurisdiction is an exception. Section 9 confers upon Civil Courts a plenary jurisdiction to adjudicate all suits of a civil nature, unless cognizance is either expressly or impliedly barred by a special statute. This provision is governed by the fundamental legal maxim ubi jus ibi remedium—where there is a right, there must be a remedy. In cases involving purely contractual obligations between a statutory body and a private individual, the nature of the dispute is civil and commercial,

distinct from administrative or service matters. This distinction stems from the understanding that when the State or its instrumentalities or autonomous bodies descend into the arena of commerce and enter into private contracts with citizens, the law strips them of their sovereign immunity in matters of contractual obligations, treating them pari passu with any other private litigant. In this context, a special statute, such as the MTI Act, which establishes a Tribunal with specific, limited jurisdiction over employees and internal management, cannot be interpreted to impliedly oust the jurisdiction of the Civil Court regarding third-party commercial disputes where the Tribunal lacks statutory competence to grant the relief sought. To hold otherwise would render the appellant remediless, creating a legal vacuum repugnant to the administration of justice. Therefore, in the absence of an effective alternative forum capable of adjudicating the specific dispute and granting the requisite relief, the Civil Court retains its inherent jurisdiction to entertain the suit and determine the rights and liabilities of the parties in accordance with the law. Consequently, the impugned order is legally untenable and calls for interference by this court.

13.In view of what has been discussed hereinabove, this appeal is allowed, the impugned order dated 17.07.2025 is set aside, and the matter is remanded to the learned trial Court

with direction to adjudicate the suit strictly in accordance with law, after affording both parties full opportunity to produce evidence and lead their respective cases, and thereafter deliver a reasoned judgment in accordance with law.

Announced:

Sd/-

JUDGE

Research Assistance: Mazhar Ali Khan, Research & Reference Officer /*Saif. SCS*/