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Petitioner: MANZAR MASOOD VS Respondent: BANK ISLAMI PAKISTAN LIMITED through President
Court Name: Sindh High Court Judge(s): Salahuddin Panhwar Title: MANZAR MASOOD vs BANK ISLAMI PAKISTAN LIMITED through President Case No.: Civil Suit No, 428 of 2012 Date of Judgment:2017-04-03 Reported As: 2017 CLD 1497 Result: Suit decreed
JUDGMENT
JUDGMENT SALAHUDDIN PANHWAR, J.---Plaintiff filed this suit for Compensation and Damages pleading therein that he owns and is proprietor of M/s. Sardar CNG Filling Station situated in Gulistan- eJauhar, Karachi and his sons namely Muhammad Ashraf, Muhammad Shoaib and Muhammad Khalid are partners in that business; that in the year 2007 plaintiff and his partners were granted Ijara Finance Facility of Rs,14.23 million and Letter of Guarantee Facility of Rs,3.3 million in favour of SSGC in respect of said CNG Filling Station, by the defendant subject to mortgage of bungalow owned by plaintiff bearing No,C-103, Block-J, North Nazimabad, Karachi, measuring 600 square yards comprising of ground and first floors, west opened corner, situating at posh area having direct approach from 320 feet wide main road; that plaintiff handed over original documents of the bungalow to defendant on 16.05.2007 for mortgaging for the purpose of loan facility which documents file included (i) original registered lease deed dated 06.11.1968, (ii) mutation order dated 06.05.1972, (iii) registered gift deed dated 18.11.1989 and (iv) mutation order dated 11.01.1990 in favour of plaintiff, were received and acknowledged by defendant and thereafter the bungalow was mortgaged vide mortgage deed dated 15.05.2007. It is pleaded that plaintiff has paid off the loan facility, defendant issued clearance letter on 06.09.2010 thereby letter of guarantee furnished in favour of SSGC was withdrawn and defendant issued no objection dated 05.03.2012 for redemption of said mortgaged property however officers of defendant adopted delay tactics in the matter of such redemption; plaintiff received information from officials of defendant that original documents of the property have been misplaced by officers of defendant, plaintiff made request on 29.06.2011 and 15.07.2011 to allow him to examine the original documents but defendants failed to respond; the plaintiff made a complaint to Banking Mohtasib of Pakistan on 07.07.2011 and
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19.07.2011 against defendant, enquiry was made but plaintiff could not get his grievances redressed as authorities informed him to seek remedy before proper forum. It is further pleaded that plaintiff got valuation certificate of the property from Gandhara Consultant Architecture, property was examined and after considering all aspects value was estimated at Rs,30 million, said consultant also issued certificate that if original documents of the property are misplaced/lost then keeping in view the risk of fraud cheating and corruption being played concerning landed properties, the value of the property on duplicate documents will be reduced and depreciated by 50% as genuine buyers do not take any risk purchasing such .properties on duplicate documents; that due to loss of original documents the plaintiff went under continuous mental shock, tortures and agony keeping in view future consequences and continued risk of devaluation of the property hence prayed that:- a)This Court be pleased to pass decree against the defendant in favour of plaintiff granting the compensation of Rs,15 million for deprecation and devaluation of the property No,C-103, Block J, KDA Scheme No,2, North Nazimabad Karachi and Rs,15 million as damages for the shock and mental tortures caused to the plaintiff in all Rs,30 million. b) Any appropriate relief as deemed fit under the circumstances. 2. Defendant raised legal objections that plaintiff has no cause of action and that instant suit relates to dispute between a customer and financial institution hence suit has wrongly been filed in ordinary civil jurisdiction. It is pleaded that defendant bank has complied with the orders of Banking Mohtasib and State Bank of Pakistan in letter and spirit and has settled all disputes with plaintiff by arranging certified true copies of all relevant documents; that plaintiff has incorporated inflated damages only to ensure that instant case is filed before this Court; that instant suit is filed on imaginary ground that value of property would depreciate by 50% as again no proof has been annexed that this would be the scenario while value of property does not depreciate rather increases with the passage of time; it is denied that plaintiff or his sons have been subject to any mental torture or agony by defendant or its officials or that defendant's officials have any personal grievance, dislike or hatred against plaintiff to subject him or his sons to torture. Defendant prayed for dismissal of suit. 3. On pleadings of the parties following issues were framed:- 1) Whether original title documents of plaintiff's bungalow bearing No, C-103, Block J, KDA Scheme No, 2, North Karachi misplaced/lost by the defendant? 2) Whether if original title documents misplaced/lost, the sale value on duplicate documents of this property depreciated/devalued by 50%? 3) Whether plaintiff is entitled for compensation/damages as prayed by him on account of depreciation of the price of his property and damages for shock and mental torture? 4) Whether the defendant is liable to pay the compensation/ damages to plaintiff? 5) Whether the suit filed without cause of action and not maintainable? 6) What should the decree be? 4. Commissioner was appointed to record evidence; parties filed their respective affidavits in evidence. Plaintiff Manzar Masood examined himself and produced his affidavit-in-evidence and other documents who was also cross-examined and then side of the plaintiff was closed. On the other hand, defendant-bank examined DW-1 Farogh Ahmed Siddiqui and DW-2 Muhammad Mazharuddin who were also cross-examined and then the side of the defendant-bank was closed. Accordingly, commission was returned duly completed. 5. Heard learned counsel for parties, perused the record. 6. Learned counsel for plaintiff argued that plaintiff consulted with Gandhara Consultant Architecture, property was examined and after considering all aspects value was estimated at Rs,30 million, said consultant also issued certificate that if original documents of the property are
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misplaced/lost, the value of the property on duplicate documents will be reduced and depreciated by 50% as genuine buyers do not take risk purchasing such properties; that due to loss of original documents of highly expensive property by the defendant, the plaintiff remained under continuous mental shock, tortures and agony in view future consequences and continued risk of devaluation of the property therefore estimated the loss to the property at Rs,15 million and Rs,15 million as damages for shock and mental tortures caused to plaintiff. 7. Learned counsel for defendant contended that plaintiff has invoked wrong jurisdiction as in view of section 7, subsection (4) suit should have been instituted in Banking Court; that plaintiff can only maintain present suit before this Court if he has a claim under tort which requires that plaintiff suffers an actual damage and not a presumption of damages in future and for that plaintiff would have to put his property in market for sale which was not done as admitted in his cross- examination and as such plaintiff has no cause of action; that defendant bank in order to compensate the plaintiff obtained certified true copies of misplaced documents and plaintiff most willingly accepted the same; that plaintiff preferred the suit only on sole ground that value of property has depreciated because of loss of original documents; mental agony though pleaded but in cross-examination plaintiff admitted that he had not approached to his consultant for treatment of mental agony and stress as he is himself a homeopathic doctor; that there is no method to quantify a loss that has not incurred as if plaintiff were to sell the property after 20 years, defendant cannot be held liable to pay the amount to compensate the difference between actual price and alleged depreciated value; report by Ghandhara Consultant without calling the author as witness, though defendant filed application for calling the author as witness but same was dismissed; that plaintiff suffered no loss and failed to establish any damages hence suit is liable to be dismissed. Learned counsel relied upon 2012 CLD 483, 2009 CLD 49, 2014 CLC 5 and 1970 SCM R 506. FINDINGS. Issue No. 1In affirmative. Issue No. 2As discussed. Issue No. 3In affirmative. Issue No. 4In affirmative. Issue No. 5In negative. Issue No. 6Suit is decreed for an amount of Rs, 7,000,000/- (Rupees seven million). ISSUE NO.5 Whether the suit filed without cause of action and not maintainable? 8. Since the above issue is framed to see competency and maintainability of the suit therefore, it would be in all fairness to decide this issue first. The objection to jurisdiction of this Court has been insisted with reference to subsection (4) of Section-7 of Financial Institutions (Recovery of Finances) Ordinance, 2001. The jurisdiction of the Banking Court, the perusal of the Ordinance, in particular the section 9 which starts as: "Section 9(1) Where a customer or a financial institution commits a default in fulfillment of any obligation with regard any finance, </i></u>the financial institution or, as the case may be, the customer, may....
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prima facie would make it clear that it is confined to disputes, committed either by 'financial institution' (section 2(a)) or 'Customer' (section 2(c)) with regarding to 'finance' (section 2(d)) or 'obligation' (section 2(e)) only. Since, the terms 'financial institution'; 'customer' and 'finance' need no much debate nor are disputed yet jurisdiction is being challenged hence interpretation, if any, would require a direct referral to last definition i,e,, 'obligation' as defined by section 2(e) of the Ordinance i,e,: "(e) "obligation" includes: i)any agreement for the repayment or extension of time in repayment of finance or for its restructuring or renewal of for payment of extension of time in payment of any other amount relating to finance or liquidated damages; and ii)any and all representations, warranties, covenants made by or on behalf of the customer to a financial institution at any stage, including representations, warranties, covenants with regard to ownership, mortgage, pledge, hypothecation or assignment of, or other charge on assets or properties or repayment of a finance or payment of any other amount relating to finance, performance of an undertaking or fulfillment of a promise; and iii)all duties imposed on the customer under this Ordinance, and The definition of obligation also does not extend the jurisdiction of Banking Court rather affirms that only disputes relating to finance between the Customer and Financial Institution can competently brought before the Banking Court. Since, much insist has been laid to section 7(4) of the Ordinance in support of ousting the jurisdiction of this Court hence it would be appropriate to have a direct referral thereto so as to see whether same extends jurisdiction of Banking Court or otherwise. The section 7(4) of the Ordinance reads as: "(4) Subject to subsection (5), no Court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter "to which the jurisdiction of a Banking Court extends under this Ordinance, <u>including a decision as to the existence or otherwise of a finance</u> and the execution of a decree passed by a Banking Court." The above provision first confines the jurisdiction of the Banking Court to 'any matter to which jurisdiction of a Banking Court' extends under this Ordinance i,e, a dispute between Customer and Financial Institution over finance or obligations and then vests jurisdiction to pass a declaratory decree with regard to existence or otherwise of a 'finance' which too appears to be with an object that one (customer or financial institution) could not dispute jurisdiction of Banking Court merely by denying finance'. In short, it could safely be concluded that whenever there is a: i) default either by a Customer or a Financial Institution with regard to finance or obligations arising therefrom upon Customer and Financial institution; and ii)dispute with regard to existence or otherwise of a finance between customer and Financial institution. then it shall be Banking Court alone to entertain such a lis for passing appropriate order. Thus, before insisting application of the Ordinance, one shall be required to prima fade establish that: i)parties claim within status of 'customer' or 'financial institution'; ii)the dispute is relating to 'finance' or 'obligation' , as defined by this Ordinance; Now, on said touchstone let's examine the instant case. In the instant matter, it is not disputed that parties though enjoyed the status of 'customer' and 'financial institution' for purpose of availing a finance' but admittedly such relationship (status) came to an end when undisputedly the plaintiff re-paid the all dues of the defendant-bank, as is evident from the 'redemption deed', executed by the defendant-bank wherein admitting as: "AND WHEREAS the entire sum of money due to the Bank and wing (owing) from the said borrower in connection with the said advance has been fully and trully (truly) repaid. " Besides, it is also a matter of record that the plaintiff has not alleged any default against the
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defendant-bank towards its (defendant-bank's) obligation with reference to finance but has set- up his claims of 'Compensation and Damages' with reference to a duty, fell upon the defendant- bank, after satisfactory completion of obligations both by Customer and Bank i,e, 'non-return of original property documents' and claimed consequence thereof i,e, 'shocks etc.' which would fall within meaning of 'tort case'. The Banking Court has no jurisdiction to try such a suit but jurisdiction would squarely fall with ordinary but competent Civil Court. The reference can well be made to the case of Mst. Arifa Shams through Special Attorney v. Muhammad Imtiaz Ahsan and 2 others (2012 CLD 483), relied by counsel for defendant, wherein such distinction was properly appreciated. The relevant portions of the judgment are made hereunder:- "10. Similarly, under subsection (4) of section 7 of 2001 Ordinance, it is provided that no other court than a Banking Court shall have the jurisdiction with respect to any matter to which the jurisdiction of Banking Court extends and that such Banking Court is also empowered to decide existence or otherwise of a finance. It, therefore, becomes abundantly clear that it is only the banking court, under the 2001 Ordinance which is competent to decide whether the appellant was a customer; whether any finance was extended to the appellant and whether such finance was repayable by the customer (Appellant) and that whether obligation for the payment of the finance arises to the customer (Appellant). Therefore, the Single Judge, looking at all these aspects correctly returned the plaint of the Suit for its presentation to the Banking Court, possessing jurisdiction to try the same." 11. Coming to the case of M. Nujeebullah Qureshi, cited by the learned counsel for the appellant, we may observe that in such case a banking suit against financial institution had been filed by Nujeebullah on the ground that his name was put on defaulter data check list by which enlistment Nujeebullah stated to have suffered losses and in turn he filed banking suit for declaration, permanent injunction and damages against the financial institution, <u>which banking suit was dismissed by the Banking Court by observing that since nothing was due and payable by Nujeebullah to the financial institution on the date of filing of the banking suit, the relationship of customer ceased to exist. </u>Upon appeal, a division bench of this court upheld the order of the banking court and further observed that the case of <u>Nujeebullah based on torturous liability arising out of an act and omission of State Bank of Pakistan by placing his name on data check list therefore Banking Court had no jurisdiction over a tort case based upon damages</u> whereas in the........ In view of the above discussion, the issue No,5 is answered as 'negative'. ISSUE NO.1. "Whether original title documents of plaintiff's bungalow bearing No,C-103, Block J, KDA Scheme No,2, North Karachi misplaced/lost by the ,defendant?" 9. The initial burden was upon the plaintiff to prove this issue who discharged the same by producing the letter (Ex.P/1), addressed to Branch Manager with subject 'Receiving of Original Property Documents'; complaint to Banking Mohtasib (Ex.P/5) for 'Loss of Property Mortgaged File'; order of Banking Mohtasib (Ex.P/8); redemption deed (Ex.P/12) wherein defendant-bank's attorney admitted as "AND the Bankislami has returned CTC documents in lieu of original documents, as the Bank has lost the original property documents of C-103, Block-J, North Nazimabad, Karachi" hence the burden stood shifted upon the defendant-bank to disprove otherwise. At this juncture it is material to mention that defendant-bank made no clear denial to such claim of the plaintiff regarding loss of original documents by the defendant-bank, as shall stand evident from the documents, relied and produced by the defendant-bank itself i,e,: Document filed with written statement as annexure P-3</u> which is a letter of the defendant-bank itself. The paras-3 and 4 of such letter read as: "During July, 2011, client asked from our branch for showing of <u>original property documents. </u>
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We informed them that we are in search of that and <u> as we find it out we will inform the same. They had taken the matter with Banking Mohtasib (BM). After formal correspondence and discussion, BM vide their letter No,2011-514-7210 dated 21st Oct 2011, directed the Bank "to arrange Certified true Copies of property documents of Complainant from the office of the Registrar at Bank's expenses... ensure the complainant that as and when original file will be traced out the same would be properly placed in the record or delivered to the complainant as per requisite".The order enclosed and marked as annexure 'C' After necessary arrangements, on 25th Nov. 201,1, one of our Banks; representative contacted the Customer and copy of Certified True Copies (CTC) of property documents were delivered to the complainant at his residence vide our letter no... The above letter, produced with written statement while placing reliance thereon, itself was sufficient to conclude that 'original documents' were deposited with defendant-bank which were lost/misplaced by defendant-bank. It was the document, produced by the defendant-bank with written statement, hence the defendant-bank legally cannot seek an exception to contents of such documents because the settled principle of law is that 'no one would like to make any admission against his own interest unless the same was true' . Reliance can safely be placed on the case of Muhammad Yaqoob through L.Rs, v. Feroze Khan and others (2003 SCM R 41), wherein it is held as: "We are not persuaded to agree with Chaudhry Muhammad Tarique, learned Advocate Supreme Court that admission of Muhammad Yaqoob be treated as an innocent admission as it would be a new phenomenon having no legal foundation at all as no one would like to make any admission against his own interest unless the same was true. In this regard reference can also be made to Article 31 of the Qanun-e-Shahadat Order, 1984 and thus the principle that no ane would make any admission against his own interest has rightly been taken into consideration by the learned forums below." I am mindful of the fact though the defendant-bank has not produced that document during course of examination but such deliberate act of not exhibiting such a document shall not cause any prejudice to binding effect of such document of the defendant-bank itself particularly when it was owned at time of filing written statement. Such document shall earn a status of 'admission' hence legally the defendant-bank cannot build its case beyond or contradictory to its own pleadings. Reference may well be made to the case of Muhammad lqbal v. Mehboob Alam (2015 SCM R 21) wherein it is held as: "It is a settled principle of law that a fact admitted needs no proof, especially when such admission has been made in the written statement (see PLD 1975 SC 242), and it is also settled that no litigant can be allowed to build and prove his case beyond the scope of his pleadings....... Even otherwise, a reference to an answer to a question, posed to DW-2 Muhammad Mazharuddin, shall ease the conclusion to the issue under discussion which is: "It is correct that the documents mentioned in para 3 of my affidavit-in-evidence are in custody of Head of Credit Administration of defendant bank. That the documents misplaced from the custody of Mr. Muhammad Furqan. I have no knowledge that the defendant bank have taken my (any) departmental enquiry against the said person. It is not (in) my knowledge that the defendants bank has taken any action against the said person." Not only did this but the defendant-bank produced certificate of revaluation (Ex.D/3) which also contains an admission of the defendant-bank i,e,, "We.... with a firm information that original title documents of property were misplaced from Bank. This was the document of the defendant-bank itself which has been exhibited hence contents thereof are binding upon the defendant-bank wherein the defendant-bank admitted that original title documents of property were misplaced from Bank. In view of above, the issue No,1 is answered as 'affirmative'. ISSUE NO.2
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"Whether if original title documents misplaced/lost, the sale value on duplicate documents of this property depreciated/ devalued by 50%?" 10.The burden to prove this issue lies upon the plaintiff; for which the plaintiff examined himself only and produced valuation certificate and Certificate, issued by GANDHARA CONSULTANTS, an Architecture consultant on panel of the defendant-bank. The Certificate (Ex.P/11), being sole documents in proof of such claim of the plaintiff, is referred directly which reads as: "If the original documents of this property are misplaced/ lost/theft then keeping in view the RISK FACTOR due to fraud, Cheating and Corruption in Pakistan (especially in Land concerned Govt. Departments), the Re-sale valve of this property on duplicate documents (CTC) will depreciate by 50%. As this double west open corner property is situated in a posh area of North Nazimabad, Where usually the Genuine Buyers do not take any sort of risk. Hence, on CTC duplicate documents, the Value of the said property will be Rs,15,000,000/- (Rupees in Word Fifteen Million Only)." From the above, it is evident that opinion with regard to depreciation was based with specific reference to 'misplaced/lost/theft' of original title documents. 11.Before going any further, I feel it quite necessary to add here that in the instant matter the expertise is even acceptable to the defendant-bank which fact shall stand evident that defendant-bank itself approached for an opinion to GANDHARA CONSULTANTS therefore, expertise and opinion of GANDHARA CONSULTANTS, being acceptable to both of the parties, does matter for forming an opinion within meaning of Articles 59 and 63 of the Qanun-e-Shahadat Order, 1984. 12. The defendant-bank did produce the 'revaluation certificate', filed by the defendant-bank (Ex.D/3) so as to disprove the contents of the certificate, produced by the plaintiff, in proof of his claim which reads as: "We have re-evaluated the captioned property, on the basis of the fact that Bank have produced us certified copies of the title documents including mutation, with a firm information that original title documents of property were misplaced from Bank. Under such circumstances we found no risk or chances of fraud and issuing annexed report without prejudice and keeping in considering the received documents. Further clarified that previously we did not valuate the above said property in question previously we only issued a certificate at owner's request on the basis of fact and circumstances brought by him before its." From above it is quite evident that the expert did not deny the issuance of earlier certificate nor categorically denied the earlier opinion/view but attempted to have faded earlier while saying that 'since original title documents were lost by bank hence there is no risk or chances of fraud'. I am unable, to understand that how a loss of 'original title document' by a bank would be justified differently from the loss of 'original title…
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