ORDER WITH THE SIGNATURE OF THE JUDGE

For Re-hearing:

1. For orders on CMA No. 2350/2011

2. For hearing of Main Case.

3. For orders on CMA No. 2351/2011

4. For orders on CMA No. 2352/2-11

5. For orders on CMA No. 1661/2013

6. For orders on CMA No. 1659/2013

13.11.2015

Mr. Shahid Ikram Siddiqui, advocate for the appellants.

Ms. Sofia Saeed Shah, advocate for Respondent No. 1.

Impugned in this appeal is a judgment and decree passed by the learned Single Judge under the banking jurisdiction of this Court. The finance facility, which the appellants availed and the quantum of the amount determined by the banking court is not in dispute. The only dispute is with regard to the territorial jurisdiction for entertaining the recovery suit. Case of the appellants before the learned Single Judge was that as the appellant is based in Multan and finance facility was availed against mortgage of the property located in Mozaffar Garh and the correspondence for seeking financial facility was also addressed to the Lahore office of the respondent, the Banking Court in Karachi had no jurisdiction to try the suit merely for the reason that principal office of the respondent is in Karachi. While dealing with the question of jurisdiction, learned Single Judge held that the letter seeking rescheduling of installments was addressed to the respondent at Karachi office. Learned counsel for the appellants contended that the question of jurisdiction was wrongly decided for the reason that merely addressing of a letter to the Karachi office would not confer territorial jurisdiction to the Banking Court at Karachi, more-so when the request which was made for rescheduling of installments in such letter was also not accepted by the respondent. He further contended that the property that was mortgaged with the respondent was already mortgaged with Allied Bank Limited, i.e. the respondent No. 2 and in this regard a parri-passu agreement was executed on 20.07.2006 and Clause 21 of the said agreement provides that the Courts of Multan shall have exclusive jurisdiction over any matter or dispute arising out of or in connection with the said agreement. He further contended that this ouster clause in the parri-passu agreement is enforceable and has been so held in several decisions of the Hon’ble Supreme Court also. In this regard he referred judgments which include judgments reported in 1987 SCMR 392 and 1992 SCMR 1174.

In response to the arguments of the appellants’ counsel, Ms. Sofia Saeed Shah, counsel for Respondent No. 1 contended that the parri-passu agreement, which contained an ouster clause with regard to the jurisdiction was not executed by Respondent No. 1 as it was executed by Allied Bank Limited only which bank also held charge on the same property. She then referred to the letter of guarantee, executed by the guarantor of Appellant No. 1 wherein the address of the respondent is shown to be of Karachi. She further referred to a promissory note which too contained the address of the respondent at Karachi. She has also contended that repayments were made and extension in installments was sought on the basis of the correspondence addressed to Karachi office.

We have examined the documents that have been filed by the appellants as well as R&Ps that has been summoned. It is an admitted position that the appellant is based in Multan and the mortgaged property is in Muzaffar Garh and in terms of Section 20(c), C.P.C., both the courts in Karachi as well as in Multan had jurisdiction to try a suit. The jurisdiction could have been curtailed through an agreement between the parties by providing an ouster clause. We have also perused the said clause in the parri-passu agreement. This clause can validly be enforced against such party that has executed the same. In the present case, however, the parri-passu agreement was not executed by Respondent No. 1. Such agreement therefore may be binding on Respondent No. 2, Allied Bank Limited but not on Respondent No. 1. Hence the provision of Section 20(c), CPC are fully attracted in this case. As the sanction letter of the respondent was also executed at the principal office located in Karachi so the correspondence addressed to the respondent seeking rescheduling of installments may not be sufficient to determine the jurisdiction as the fact remains that in absence of ouster clause, provisions of Section 20(c), C.P.C. are attracted which fully permit Respondent No. 1 to file suit for recovery in Karachi as well. This appeal is, therefore, dismissed.

CHIEF JUSTICE

J U D G E

Zahid Baig