CITIBANK N.A. vs MUHAMMAD TASLEEM Ss — 2024 CLD 1536 KARACHI-HIGH-COURT-SINDH

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CITIBANK N.A. VS MUHAMMAD TASLEEM Ss. 2(d), 9 & 16(3)---Suit for recovery of damages filed before the Banking Court---Maintainability---Claim for damages grounded in tort---Effect---Agreement between the parties in relation to the finance facility---Customer filed a suit against the Bank for declaration / possession, etc., including prayer for recovery of damages---Prayer(s) sought by the plaintiff /customer stemmed from Bank's act of repossession of motor vehicle obtained by the plaintiff / customer through car finance facility---Appellant/Bank preferred appeal against the judgment passed by Banking Court in favour of customer accepting his claim of damages---Argument of the appellant /Bank was that as the claim of the respondent (plaintiff /customer) was for damages based on an allegation of a tortuous act, the matter did not fall within the ambit of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (' the Ordinance 2001'), and hence not within the jurisdiction of the Banking Court; that, as the respondent / customer had defaulted in its repayment obligations, repossession of the vehicle had ensued validly for cause within the scope of S.16 (3) of the Ordinance, 2001 as underlying agreements entered into between the parties in relation to the finance facility---Validity---Plaint along with prayer(s), revealed that the claim of the plaintiff (respondent / customer) for damages predicated on the assertion that the act of repossession undertaken at the behest of the appellant had been wrongful and had caused him mental suffering and loss of reputation in the sum claimed ; thus ,the said claim was grounded in tort---Whilst a suit for damages arising out of a breach of contract executed in respect of a loan or finance between the Banking Company on the one hand and the borrower or customer on the other could be entertained by the Banking Court, however, a suit based on tort did not full within the competence of such forum and claim for damages in tort was struck out---A claim for pecuniary compensation could either arise from a tortious act i.e. not based on any contract or a breach of a contractual obligation not pertaining to an accommodation of facility of finance as defined under S. 2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and for these two categories of claims obviously the Banking Court is not the appropriate forum---However, a claim for pecuniary compensation could also arise on account of the failure of a financial institution to fulfill its obligation in relation to any financial accommodation or facility---It is this category of claim which certainly comes within the scope of S.9 of financial institutions (Recovery of Finances) Ordinance, 2001 and a suit relating thereto is always maintainable before a Banking court---However, a perusal of even the affidavit-in-evidence filed by the respondent /customer reflected the same to be bereft of any assertion whatsoever regarding the mental suffering or loss of reputation alleged in the plaint, failing even to incorporate the averments set out in the relevant paragraphs, as such, the burden of proof as to damage remained completely undischarged---Where the damages claimed are not alleged to represent economic loss associated with a breach of contract but are based purely in tort, and also remain unproven to any degree, the determination of the Banking Court cannot stand on either the jurisdictional or evidentiary plane---High Court set-aside the impugned judgment passed by the Banking Court---Appeal, filed by the Bank, was allowed, in circumstances.

CITIBANK N.A. vs MUHAMMAD TASLEEM Ss — 2024 CLD 1536 KARACHI-HIGH-COURT-SINDH

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