Executive Vice President vs Brig. (R) Mian Hameed-ud-din

2010 C L D 823

[Peshawar]

Before Ejaz Afzal Khan C.J. and Mazhar Alam Khan, Miankhel, J

EXECUTIVE VICE-PRESIDENT and another---Appellants

Versus

Brig. (R) MIAN HAMEED-UD-DIN---Respondent

F.A.B. No.7 of 2007, decided on 25th March, 2010.

(a)Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss.2, 9 & 22---Suit for claiming profit on certificate of investment--Suit decreed by Banking Court---Validity---Banking Court had no jurisdiction to entertain such suit for not being a suit between a customer and Financial Institution---Plaintiff had been treated like a shuttlecock by Civil Court, Banking Court and then by High Court---Judgment of the Banking Court though having no jurisdiction in circumstances could be treated a decision as if given by a competent court of law having jurisdiction in such matter.

Nawab Syed Raunaq Ali and others v. Chief Settlement Commissioner and others PLD 973 SC 236 and Abdul Majid and others v. The State Transport Appellate Authority, Bihar and others AIR 1960 at Patna 333 rel.

(b)Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ---S.9---Suit for claiming profit @ 14% per annum on certificate of investment---Plaintiffs plea was that subsequent variation in such promised rate of profit by Bank was unjustified---Validity- --Plaintiff before purchasing such certificate had signed Application Form by accepting all its terms and conditions appearing thereon---Plaintiff had agreed to abide by all rules and regulations relating to such certificate---Amount of profit on such certificate was calculable on monthly basis under PLS system and rate of profit thereon was to be announced by Bank subject to change without notice---Reduced rate of discount announced by State Bank had compelled Bank to revise rate of profit subsequently, intimation of which had been given to plaintiff--- Plaintiff had an option either to continue with revised schedule of profit or encash his certificate without payment of any charges---Plaintiff could not claim rate of profit at 14%, but was entitled to receive at revised rate intimated by Bank---Suit was dismissed in circumstances.

Shumail Ahmad Butt for Appellants.

Mian Fazal Wahab for Respondent.

Date of hearing: 25th March, 2010.

JUDGMENT

MAZHAR ALAM KHAN MIANKIIEL, J.---Suit of the appellants for declaration etc. was decreed by the Banking Judge vide judgment dated 11-11-2006, entitling respondent to profit @ 4% on the amount deposited w.e.f. February, 2003 to 6-2-2006.

2.The learned counsel appearing on behalf of the appellants in the first instance questioned the jurisdiction of the Banking Court to decide the question of the type raised in this case by referring to definition of expression 'customer', 'finance' and 'obligation'. He then by referring to the terms and conditions regulating certificate of investment (COI) for a fixed term. contended that when it has been expressly provided that profit will be paid upon maturity date unless renewed, modified, amended, changed during the agreed period and that the amount of investment. On COI shall be calculated on monthly basis under PLS system at the rate announced by Askari Leasing Limited and is subject to change without notice, no person could claim profit at he rate it was available at the time of making investment.

3.As against that the learned counsel appearing on behalf of the respondent contended that once it was promised by the Bank that the respondent would be entitled to 14% profit per annum subsequent variation therein was unjustified and that the judgment and decree of the learned Banking Court being in consonance with the terms and conditions of investment is not open to any exception.

4.We have gone through the record carefully and have considered the submissions made by the learned counsel for the parties.

5.Though the question of jurisdiction appears to be valid on the face of it but we would not touch it at this stage when the respondent has been treated like a shuttlecock by the Civil and Banking Courts and then by this Court and we have no hesitation in our minds to hold that even though in the circumstances of the case, the Banking Court had no jurisdiction to have entertained the present case as it was not a dispute between a customer and the financial institution as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001 but the decision given as such can well be treated a decision as if given by a competent Court of law having the jurisdiction in the matter. Reliance in this regard can well be placed on Nawab Syed Raunaq Ali etc. v. Chief Settlement Commissioner and others PLD 973 SC 236. Relevant part of the judgment is reproduced below:--

"An order in the nature of a writ of certiorari or mandamus is a discretionary order. Its object is to foster justice and rights a wrong. Therefore, before a person can be permitted to invoke this discretionary power of a Court, it must be shown that the order sought to be set aside had occasioned some injustice to the parties. If it does not work any injustice to any party, rather it cures a manifest illegality, then the extraordinary jurisdiction ought not to be allowed to be invoked.

Where, therefore, the High Court, in its extraordinary jurisdiction under Article 98 of the Constitution of 1962, had come to the conclusion, that the orders of the Deputy Claims Commissioners verifying the claims of certain persons were illegal and without jurisdiction, it was held that it could legitimately refuse to set aside the order of the Officer on Special Duty (Central Record Office), even though the latter was clearly without jurisdiction."

Similar view was also taken in case of Abdul Majid and others v. The State Transport Appellate Authority, Bihar and others AIR 1960 at Patna 333. The relevant part of the judgment is reproduced as follows:

"(b) Constitution of India, Art.226---Certiorari, writ of---when can issue---Person invoking jurisdiction under Art.226 must show that impugned order has occasioned injustice to parties.

The writ of certiorari is not a writ of course. It is a discretionary remedy. The very object of this writ is to foster justice and right a wrong. Hence, before a person can be entitled to invoke the prerogative power of the Court under Art.226 of the Constitution, it must be shown that the order to be set aside must have occasioned injustice to the parties.

Where the order of the R.T.A. granting renewal of permits was manifestly without jurisdiction and the order of the Appellate Authority setting aside that order was also erroneous and illegal but did not work injustice to any party the extraordinary jurisdiction under Art.226 could not, be invoked to annul it."

6.Before we appreciate the merits of the case, we would like to refer to the relevant terms and conditions appearing on the application forms and the COIs:--

"I /We the undersigned wish to purchase registered certificate (s) of investment (COIs) of Askari Leasing Limited as specified above. I/We agree to provide any documents required. I/We acknowledge that I/We have read the terms and conditions on the back of the application and agree to abide by them and such other rules as may be enforced from time to time. I/We agree to inform you of any changes in the information provided in this form and in related documents. I/We confirm that to the best of my knowledge and belief the information given above is correct. I/We will indemnify you against any loss or damage you may suffer should any of the above information prove incorrect. I/We authorize Askari Leasing Limited to make such inquiries to keep up such references as if may consider necessary in regard to operations of COIs. I/We further agree to abide by the Askari's rules and regulations for profit and loss sharing and hereby authorize Askari

to invest the amount of my/our deposit in any manner Askari deems fit under the profit and loss sharing system. Profit/Loss if any as determined by Askari will be acceptable to me/us."

Certificate of Investment

Terms and Conditions

"9. In case of premature encashment of the COI, profit will be paid at the reduced rates according to the term completed. Profit if any paid earlier at a higher rate will be recovered from the principal amount. However, no profit will be paid, if encashed before the completion of three months.

10.The amount of return on a COI shall be calculated on a monthly basis. Profit will be calculated and declared under PLS system. Profit will be distributed at the rate to be announced by Askari Leasing Limited and are subject to change without notice. Profit entitlement will be different for different maturity periods."

7.Eight number of COIs amounting to Rs.50,000 each were purchased by the respondent through application dated 6-2-2001. The respondent before the purchase of COIs had signed the Application Form by accepting all its terms and conditions. The bare reading of the above quoted terms of arrangement clearly reflects that the respondent will abide by all rules and regulations in this regard. The amount of profit/return on COIs will be calculated on monthly basis under PLS system and the rate of profit will be announced by the appellants subject to change without notice. Later on the appellants were compelled to revise the rate of profit on COIs because of the reduced rate of discount announced by the State Bank of Pakistan and the appellants vide their letter dated 31-1-2003 informed the respondent regarding the revision of the rate of profit where in it was clearly mentioned that after January 31, 2003, the revised rate of profit/return will be payable to the respondent. Besides, the respondent was also given an option either to continue with the investment or to go for encashment and in case of premature encashment, there will be no premature encashment charges as was provided in clause (9) of the terms and conditions as quoted above.

8.In this state of affairs, when the appellants were compelled to revise their rates of return/profit because of the State Bank of Pakistan Policy and they accordingly informed the respondent then it was up to the respondent to continue with the newly introduced policy or to encash his COIs for which he I was not required to pay any charges. The failure of the respondent to realize the situation and to abide by the terms and conditions as quoted above, would not clothe him with a cause to challenge the revised schedule of profit/return.

9.So, in this state of affairs, the respondent cannot claim the rate of profit/return at 14% and is entitled to receive at the revised rate intimated by the appellants. We thus have no option but to allow the present appeal by setting aside the judgment and decree passed by the Banking Court with no order as to costs.

S.A.K./155/P Appeal accepted.