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Petitioner: China Mobile Pakistan Limited (Cmpak Limited/Zone) through Legal Advisor (South) and another VS Respondent: Federation of Pakistan through Secretary, Ministry of Information, Technology and Telecommunication and 3 others
Court Name: Sindh High Court Judge(s): Nadeem Akhtar Title:China Mobile Pakistan Limited (Cmpak Limited/Zone) through Legal
Advisor (South) and another vs Federation of Pakistan through Secretary, Ministry of Information, Technology and Telecommunication and 3 others Case No.: Suit No. 950 of 2021 Date of Judgment:2021-11-08 Reported As: PLD 2022 Sindh 319 Result: Application dismissed Judgment ORDER C.M.A. No 8722 of 2021 NADEEM AKHTAR, J.---Through this application under Order VII, Rule 10, C.P.C., defendants 3 and 4 have prayed that the plaint of the instant Suit be returned to the plaintiffs for presentation before the Court having jurisdiction to entertain and adjudicate the Suit. According to the said defendants, this Court does not have the territorial jurisdiction in respect of this Suit the cause of action or any part thereof, as alleged in the plaint or otherwise, did not accrue within the jurisdiction of this Court; and, the principal office of each of the defendants is located outside the territorial jurisdiction of this Court. In order to decide this question, the averments and allegations made in the plaint have to be examined closely. Due to this reason and also as extensive arguments were advanced by learned counsel for the parties, this order has become a bit lengthier than expected. 2. The facts relevant for deciding the application at hand, as averred in the plaint, are that plaintiff No.1 is an unlisted public limited company engaged in the business of providing telecommunication services in Pakistan since the year 2004 when the first GSM license was issued to it by defendant No.3/Pakistan Telecommunication Authority ('PTA') for cellular mobile service 2G under section 21 of the Pakistan Telecommunication (Reorganization) Act, 1996, ('the Act'). Plaintiff No.2 is a shareholder of the plaintiff No.1-company. On 07.10.2013, the Government of Pakistan issued a Policy Directive under Section 8 of the Act for auctioning the spectrum for introducing the Next Generation Mobile Services ('NGMS'), commonly known as 3G services. As per the said Policy Directive, it was the responsibility of PTA to conduct a transparent competitive auction wherein all
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existing cellular mobile operators, including plaintiff No.1, were eligible to participate. Additionally, under Section 5 of the Act, PTA had the power to undertake an auction on such terms and conditions as it may determine from time to time for licensing the radio frequency spectrum allocated and specified by defendant No.4/Frequency Allocation Board ('FAB') constituted under the Act. Under section 43 of the Act, FAB has the exclusive authority to allocate and assign portions of the radio frequency spectrum, inter alia, to the providers of telecommunication services and telecommunication systems. It was represented to the Plaintiffs that FAB had "30 MHz in 1.9 GHz/2.1 GHz" band available for auction. Prior to the auction, the trials/testing of the temporary assignment of spectrum band in the range 1935-1940/2125-2130 MHz ('F-4 band') was authorized by FAB on 24.02.2014. Upon running such trials, no interference was found therein by plaintiff No.1 who was led to believe that the F-4 band was representative of the other bands that were being made available for auction. On the basis of such test run on the F-4 band made available to it by FAB, plaintiff No.1 made substantial investment for procuring a clean and non-interfered spectrum for providing NGMS services to its customers. The auction of the spectrum was conducted by PTA on 23.04.2014 wherein plaintiff No.1 participated along with other bidders and also deposited the security amount required for participating in the auction. On 25.04.2014, PTA issued a letter to plaintiff No.1 informing it that it was the provisional winner of the spectrum band of 1920-1930 MHz paired with 2110-2120 MHz (F-1 and F-2 bands) for which plaintiff No.1 made a payment of US $ 306,920,000.00 plus 10% advance income tax thereon, making the total payment of about US $ 500.000 million. Consequently, license No. NGMS-01/WLL&M/PTA/ 2014 dated 21.05.2014 was issued by PTA granting permission to plaintiff No.1 to use the spectrum specified therein for providing NGMS services to its customers for a period of fifteen (15) years. The license was granted to plaintiff No.1 subject to the terms and conditions and the roll-out obligations stipulated therein, including payment of license fee and other amounts and maintenance of Quality of Service ('QoS') by plaintiff No. 1. 3. It is the case of plaintiff No.1 that despite its fulfillment of the terms and conditions of the license and the roll-out obligations stipulated therein, the spectrum in the F-1 and F-2 bands granted to it by PTA was compromised as it suffered from interference. This fact was brought to the notice of PTA by plaintiff No.1 vide its letter dated 09.06.2014 along with a comprehensive technical report, wherein the reason for such interference was specifically highlighted i.e. the illegal use of Digitally Enhanced Cordless Telecommunications ('DECT') phones that were being sold by PTA on its website. PTA was requested by Plaintiff No.1 to immediately stop selling DECT phones. No action was taken by PTA and FAB due to which plaintiff No.1 continued to incur heavy losses because of the continuous interference in its spectrum bands. Plaintiff No.1 issued further letters dated 17.02.2015 and 04.05.2015 to FAB and held several meetings with the officials of PTA and FAB, but its grievance was not redressed as PTA failed in providing an interference free spectrum to plaintiff No. 1. Vide letter dated 11.08.2015, FAB acknowledged the fact that the interference was due to the illegal sale and operation of DECT cordless phones and FAB in coordination with PTA was in the process of monitoring and identifying the locations of their illegal operation. However, no remedial steps were offered or taken by FAB in this behalf. In the above background, plaintiff No.1 served a `Notice of Claim' to PTA on 07.10.2015 whereby the assurances given to it at the time of auction of the subject spectrum with regard to its quality were highlighted; and, a request was made that an alternate band of spectrum in the range 1950-1955 MHz/2140-2145 MHz (F-7) be provided as a substitute for the interfered spectrum, and the auction price of 5 MHz be refunded to plaintiff No.1 along with markup. An alternate proposal for compensation was also made by plaintiff No.1 in its aforesaid Notice of Claim. Vide letter dated 11.03.2016, FAB acknowledged that the degradation in the QoS in the plaintiff No.1's spectrum was caused due to illegal operation of DECT cordless phones, and accordingly spectrum band 1950-1955/2140-2145 MHz ('F-7') was temporarily assigned to plaintiff No. 1. In its 42nd meeting, it was resolved by FAB that action will be initiated for resolution of the
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interference in the plaintiff No.1's spectrum and F-7 will be stopped upon elimination of the interference by DECT cordless phones. Several letters and reminders were sent by plaintiff No.1 to PTA and FAB requesting for an early resolution of the interference in the plaintiff No. 1's spectrum, but no action was taken in this behalf. 4. The plaintiffs have further averred that plaintiff No.1 filed an application with PTA on 19.04.2018 seeking an amendment in its license whereby it could be provided the F-7 band as compensation/replacement for the interfered spectrum assigned to it in the year 2014, or in the alternative an offset against its payment obligations under the license in the sum of US $ 225 million. The amendment sought by plaintiff No.1 was declined by PTA vide its decision dated 20.06.2019. The said decision was challenged by plaintiff No.1 before the learned Islamabad High Court in F.A.O. No.128/2019 which was dismissed vide order dated 17.09.2019 with direction to plaintiff No.1, PTA and FAB to mutually settle the issue within three months by way of consultation and negotiations, and further direction to PTA and FAB to determine the cost incurred by plaintiff No.1 due to interference and to assess the effect of the use of the F-7 band by plaintiff No.1. Plaintiff No.1 and PTA filed Civil Petitions Nos. 3683/2019 and 4228/2019, respectively, before the Hon'ble Supreme Court against the aforesaid order dated 17.09.2019. Through common order dated 31.01.2020 passed with the consent of the parties, both the above petitions were disposed of by the Hon'ble Supreme Court by referring the matter to defendant No.2/the Ministry of Information, Technology and Telecommunication to examine it holistically, after hearing all the parties concerned and taking assistance from PTA and FAB to the maximum possible extent and to decide the matter within thirty days, strictly in accordance with law and without being influenced by any of the observations made by the learned Islamabad High Court. Through the impugned decision communicated vide letter dated 06.04.2021, it was concluded by defendant No.2 that as plaintiff No.1 has availed additional spectrum for quite some time without any charge, it should vacate the same immediately to make it available for disposal through auction; and, usage of additional spectrum has to be charged with effect from 12.03.2018 till the date of its withdrawal, the cost whereof payable by plaintiff No.1 should be determined by PTA. 5. In the above background, the present Suit has been instituted by the plaintiffs praying, inter alia, that the impugned decision be declared as unlawful, unreasonable, arbitrary and unconstitutional; PTA and FAB be directed to fulfil their statutory obligation by removing the interference in the spectrum, and in case of their failure, they may be directed to provide an alternative spectrum to plaintiff No.1; and, it may be declared that till such time plaintiff No.1 is entitled to use the additional F-7 band as compensation. 6. It was submitted by. Mr. Omer Soomro, learned counsel for defendants 3 and 4, that this Court does not have the territorial jurisdiction to entertain the -instant Suit. In support of his above submission, he contended that at the time of institution of a Suit the territorial jurisdiction of the Court can be determined only under Clauses (a), (b) and/or (c) of section 20, C.P.C., which envisage a three-pronged test for determining the Court in which a Suit should be instituted; and, in order to invoke the jurisdiction of a particular Court, the plaintiff has to satisfy the conditions laid down in any one of the said Clauses of section 20, C.P.C. in relation to that Court. He further contended that Clause (a) of section 20, C.P.C. provides that every Suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant, or each of the defendants where there are more than one, at the time of institution of the Suit, actually and voluntarily reside(s) or carry(ies) on business or personally work(s) for gain; and, before exercising jurisdiction, the Court is duty-bound to ensure that the mandatory requirement of section 20(a) ibid is met by the plaintiff. He submitted that in the instant case this Court has to see whether the principal office of each of the defendants is located within its territorial jurisdiction or not. He further submitted that it is an admitted position that all the defendants have their principal office/headquarter at Islamabad,
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and defendants 3 and 4 have only their zonal office and branch office, respectively, at Karachi. According to him, only the principal office/headquarter of the defendants can be considered as the place where they carry on business as contemplated in Section 20(a) ibid, and the zonal office and branch office of defendants 3 and 4 do not fall within the definition of such place in terms of section 20(a) ibid. It was strongly asserted by him that this Suit ought to have been instituted only before the civil Court at Islamabad as all the defendants have their principal office and headquarter at Islamabad, and the correspondence made by defendants 3 and 4 with the plaintiffs in relation to the dispute at hand was also carried out from their respective headquarters/principal offices in Islamabad. 7. Mr. Soomro further submitted that Clause (b) of section 20, C.P.C. provides that where at the time of institution of the Suit any of the defendants, when there are more than one, does not reside or carry on business within the territorial jurisdiction of the Court, the Suit can be instituted before such Court only with the leave of that Court or if such defendant acquiesces the institution. He submitted that the above Mandatory requirement of section 20(b) ibid has also not been fulfilled by the plaintiffs. He further submitted that though the plaintiffs have not sought the leave of this Court under section 20(b) ibid for instituting the present Suit, however, leave cannot be granted to them as the main relief sought by them is against defendant No.2 which admittedly carries on business only at Islamabad. Learned counsel also referred to Clause (c) of section 20, C.P.C. and submitted that the said Clause provides that a Court may exercise jurisdiction in, respect of a matter where the cause of action arises within its jurisdiction. It was pointed out by him that the auction of the subject spectrum was held at Islamabad; the license in respect thereof was issued in favour of plaintiff No.1 at Islamabad; the alleged interference in the spectrum was agitated by plaintiff No.1 at Islamabad; the additional spectrum was granted to plaintiff No.1 at Islamabad; the application seeking amendment in the license was filed by plaintiff No.1 at Islamabad; the said application was rejected by PTA at Islamabad which decision was challenged by plaintiff No.1 before the learned Islamabad High Court and then before the Hon'ble Supreme Court; and, the impugned decision by defendant No.2 in compliance of the consent order passed by the Hon'ble Supreme Court was also taken at Islamabad. It was urged by him that the cause of action alleged in this Suit accrued at Islamabad at all stages, and it did not accrue at Karachi at any stage. It was finally urged by the learned counsel that in view of his above submissions, this Court does not have territorial jurisdiction to entertain and try the instant Suit under any of the Clauses of section 20, C.P.C., and thus the plaint is liable to be returned to the plaintiffs for presentation before the Court of competent jurisdiction. 8. In support of his above submissions, learned counsel for defendants 3 and 4 relied upon the Province of Sindh v. Haft Razzaq and others PLD 2017 SC 207, Amin Textile Mills (Pvt.) Ltd. v. Islamic Republic of Pakistan and 3 others 1998 SCMR 2389, Sandalbar Enterprises (Pvt.) Ltd. v. Central Board of Revenue and others PLD 1997 SC 334, WAPDA and 2 others v. Mian Ghulam Bari PLD.1991 SC 780, Muhammad Naved Aslam and 3 others v. Mst. Aisha Siddiqui and 14 others 2011 CLC 1176, Rimpa Sunbeam Co-Operative Housing Society Ltd. through Managing Director v. Karachi Metropolitan Corporation through Administrator PLD 2006 Karachi 444, Murlidhar P. Gangwani (Engineer) v. Engineer Aftab Islam Agha and others 2005 MLD 1506 and Dr. Zahoor Ahmed Shah v. Pakistan Medical and Dental Council through Secretary and another 2005 MLD 718. 9. On the other hand, Mr. Salman Akram Raja, learned counsel for the plaintiffs, contended that defendants 1 and 2, being Federal Authorities, are deemed to function all across the country, including Karachi, and defendants 3 and 4 admittedly have their offices at Karachi; it is well-settled that if the decisions and actions taken by the Federal Government and/or its Authorities take effect all across the country, they are deemed to be functioning all across the country; it is also well-
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settled that in determining the cause of action and the facts that have to be proved by the plaintiff in order to succeed, the averments made in the plaint are to be accepted as true; the term "cause of action" has not been defined in C.P.C.,. but it is well-settled that it is said to arise at a place from where the bundle of facts that are necessary to prove the Suit emanate from; the main relief sought by the plaintiffs is for a declaration that the impugned decision dated 06.04.2021 by defendant No.2 is unreasonable, arbitrary and of no legal effect: the question of unreasonableness and arbitrariness of the impugned decision and the effect thereof on the plaintiff No.1's business all across Pakistan, including Karachi, which is the single largest market for plaintiff No.1, could be established only through evidence as it is a not pure question of law, but is a mixed question of law and fact; it is well-settled that the reasonability or otherwise of an act is a question of fact which should be decided on the basis of evidence; as the impugned decision has affected the plaintiff No. l's right and business all across the country, the cause of action has accrued to plaintiff No.1 within the territorial jurisdiction of civil Courts all across the country, including Karachi, and as such all such Courts, including this Court, have concurrent jurisdiction to entertain this Suit; there is no bar under the law that disentitles or prohibits the plaintiffs from invoking the jurisdiction of this Court, particularly when' the cause of action has accrued to them at Karachi 'which is the single largest market for plaintiff No. 1. and where the impact of the impugned decision has been felt the most; the spectrum bands allocated to plaintiff No.1 are not confined to the geographical limits of Islamabad or any one particular city, but are spread over all across Pakistan; the highest number of cellular phones affected nationwide due to interference are in Karachi which is about 50% of interference in the entire spectrum band allocated to plaintiff No.1 nationwide; the largest bulk of the plaintiff No.1's customers is in Karachi and due to this reason the maximum loss of revenue due to interference is in Karachi; these particular questions i.e. whether the cause of action accrued at Karachi and whether most of the adverse effect of the impugned decision in relation to the plaintiff No.1's business was it Karachi, require inquiry and cannot be decided without evidence; under the "take-effect test" and "take-effect" doctrine, the jurisdiction of this Court stands expanded under section 120, C.P.C. and also as the original civil jurisdiction of this Court is distinct from the ordinary civil jurisdiction of civil Courts in general; the objections raised by defendants 3 and 4 with regard to the jurisdiction of this Court by relying upon section 20, C.P.C. are liable to be rejected as the provisions of the said Section are inapplicable to this Court in view of section 120, C.P.C.; without prejudice to the above submission with regard to section 120, C.P.C., die requirement of section 20(c), C.P.C. stands fully satisfied in the instant case; and, this Court has entertained and adjudicated a large number of Suits in the past wherein the defendants, being Federal entities or corporations, did not have their principal place of business at Karachi, and a large number of such Suits is still subjudice before this Court. 10. In support of his above submissions, learned counsel for the plaintiffs placed reliance upon, Searle IV Solution (Pvt.) Limited and others v. Federation of Pakistan and others 2018 SCMR 1444, The Federal Government through Secretary Interior Government of Pakistan v. Ms. Ayyan Ali and others 2017 SCMR 1179, Mian Asghar Ali v. Government of Punjab through Secretary (Colonies) BOR Lahore and others 2017 SCMR 118, Liberty Papers Ltd. and others v. Human Rights Commission of Pakistan PLD 2015 SC 42, Qazi Abdul Jalil v. N.W.F.P. Forest Development Corporation through Chairman and others 2010 SCMR 1933, Province of Punjab through District Collector, Mianwali and others v. Mehmood-ul-Hassan Khan, 2007 SCMR 933, State Life Insurance Corporation of Pakistan through its Chairman and another v. Director General Military Lands and Cantonments, Rawalpindi and 4 others 2005 SCMR 177, Sandalbar Enterprises (Pvt.) Ltd. v. Central Board of Revenue and others PLD 1997 SC 334, Messrs Al-Iblagh Limited, Lahore v. The Copyright Board, Karachi and others 1985 SCMR 758, Said and others v. Fazal, Hussain and others PLD 1959 SC (Pak.) 356, Muhammad Usman Memon v. D.C.O. Hyderabad and
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others 2021 MLD 200, Muhammad Azeem v. Mst. Rani through Special Attorney and 2 others 2020 YLR 1932 (Sindh), Safe Mix Concrete Limited through Company Secretary v. Pakistan through Secretary (Revenue Division) and 4 others 2020 CLC 602 (Sindh), Mrs. Humera Imran through Attorney v. Government of Pakistan, Ministry of Defence and Production through Secretary and 3 others PLD 2019 Sindh 467, Telecard Limited through representative v. Federation of Pakistan through Secretary and 2 others 2019 MLD 1053, Habib Bank. Limited and another v. Haji Riaz Ahmed and another, 2017 CLC 1671, Miss. Ayya n Ali v. Federation of Pakistan and others 2017 PCr.LJ 920, Messrs MIA Corporation (Pvt.) Limited v. Pakistan PWD and others PLD 2017 Islamabad 29, Tanveer Hussain Manji and 3 others v. Federation of Pak: man through Secretary Interior and 3 others 2016 CLC 1534, Ms. Namoos Zaheer v. Azfar Hussain and another, 2016 CLC 1425 (Islamabad), Karachi Electric Supply Company through Authorized Officer v. Karachi Water and Sewerage Board through Managing Director and 3 others 2015 YLR 967, Gen. (Retd) Pervez Musharraf through Attorney v. Pakistan through Secretary Interior and others PLD 2014 Sindh 389, Muhammad Nawaz Khan through legal heirs and others v. Province of Punjab through Collector and others 2014 YLR 1222, Haji Riaz Ahmed through attorney and another v. Messrs Habib Bank Limited through President and 2 others 2012 CLD 491, Normeen Shafi v. Amjad Shafi and 5 others PLD 2011 Karachi 416, Digital World Pakistan (Pvt.) Limited through Chief Executive v. Samsung Gulf Electronics FZE through Managing Director/Chief Executive Officer and another, PLD 2010 Karachi 274, LPG Association of Pakistan through Chairman v. Federation of Pakistan through Secretary, Ministry of Petroleum and Natural Resources, Islamabad and 8 others 2009 CLD 1498, Murlidhar P. Gangwani (Engineer) v. Engineer Aftab Islam Agha and others 2005 MLD 1506, Muhammad Tariq Mehmood and 2 others v. Anjuman Kashmiri Bardari Khisht Faroshan through President Abdul Ashfaq and 21 others 2003 CLC 335 (Lahore), Pfizer Limited and another v. Wilson's Pharmaceuticals, 2002 CLD 1653, Messrs Lucky Cement Limited v. The Central Board of Revenue and others PLD 2001 Peshawar 7, Haji Hafeezuddin and others v. Lucas Service Pakistan Limited, PLD 2000 Karachi 58, Syed Muhammad Anwar Tobal v. Messrs Bangladesh Shipping Corporation, 1991 CLC 473 and West Pakistan Industrial. Development Corporation v. Messrs Fateh Textile Mills Ltd., PLD 1964 (W.P.) Karachi 11. 11. The first objection with regard to the territorial jurisdiction of this Court was raised by learned counsel for defendants 3 and 4 by relying upon Clause (a) of section 20, C.P.C. According to him, as all the defendants have their principal office/headquarter at Islamabad, and defendants 3 and 4 have only their zonal office and branch office, respectively, at Karachi, this Suit ought to have been instituted before the Civil Court at Islamabad and not before this Court. The second objection raised by the learned counsel was that the plaintiffs have not sought the leave of this Court under Clause (b) of section 20, C.P.C. for instituting the present Suit, and in any event leave cannot be granted to them as the main relief sought by them is against defendant No.2 which has its headquarter only at Islamabad. His second objection is interlinked with the first one. In the instant case, defendant No.1 is the Federation of Pakistan, and defendant No.2 is the Ministry of Information, Technology and Telecommunication of the Government of Pakistan; defendant No.3 (PTA), which is a body corporate, has been established by the Federal Government under Sections 3 of the Act by a notification in the official gazette, and its members, including the Chairman, are appointed by the Federal Government; and, defendant No.4 (FAB) has also been established by the Federal Government by a notification in the official gazette under sections 42 of the Act, which comprises of the Chairman and one Executive Director appointed by the Federal Government, the Chairman of PTA and one nominee each from the Federal. Ministries mentioned in section 43(iv) of the Act. Thus, the defendants in the present Suit are either the. Federation or the Federal entities/authorities established, controlled and managed by the Government of Pakistan.
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12. In 2017 SCM R 1179 (supra), wherein…
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