KARACHI: The Sindh High Court on Wednesday called for setting up commercial courts in the province, particularly in Karachi, to address the grievances of litigants with regard to trade disputes and to reduce the backlog of cases from higher judiciary.

A two-judge bench comprising Chief Justice Ahmed Ali M. Shaikh and Justice Yousuf Ali Sayeed made these observations while disposing of two petitions filed against curtailment of pecuniary jurisdiction of district courts in Karachi.

The bench ruled that commercial courts had already been established in Punjab on an initiative of the Lahore High Court and there was no reason as to why such “a salutary step may not be taken in this province”.

The commercial courts in Punjab were established in 2021 following promulgation of the Punjab Commercial Courts Ordinance, 2021.

Asks provincial govt to remove cap on pecuniary limitation of civil courts in Karachi

“Indeed, in view of its history, the Original Side could readily be restructured as a commercial court, subject of course to suitable definition of what constitutes a ‘commercial case’ and a ‘commercial dispute’, with the jurisdiction to hear commercial suits above a pecuniary threshold.

“As in the Punjab, a network of courts could then also be established at the district level in Karachi (subject to a pecuniary limit) and at such other locations where the need is determined, without that pecuniary limitation,” it added.

In its verdict, the bench said that the need for commercial courts had been recognised since long as the same was observed in a report prepared by the Law and Justice Commission of Pakistan (LJCP) at the time of enhancement of the pecuniary limit from Rs500,000 to Rs3 million in 2002.

Currently, the pecuniary jurisdiction of subordinate judiciary of Karachi is at Rs65m, which was enhanced in December 2021 from Rs15m.

The bench directed the provincial government to give immediate consideration to the overwhelming pendency of civil cases at the high court and to eliminate the exception to the pecuniary jurisdiction of district judiciary of Karachi.

It was pointed out in the petitions such a curtailment was discriminatory as such pecuniary jurisdiction was otherwise unlimited across Sindh and in fact throughout the country. Also, the Sindh Bar Council, Sindh High Court Bar Association, Karachi Bar Association and Malir Bar Association all unequivocally supported the conferment of unlimited pecuniary jurisdiction upon the district judiciary at Karachi.

As the per a report of the LJCP, the law reform commission (1958-59) headed by Justice S. A. Rehman had recommended conferring of unlimited pecuniary jurisdiction upon the civil judge at Karachi and for commercial cases especially trained commercial civil judges be posted at Karachi.

The law reform commission (1967-70) headed by Justice Hamood-ur-Rehman also recommended that commercial courts presided over by especially trained senior judicial officers should be set up at Karachi, Lahore, Multan, Faisalabad and Hyderabad as commerce and trade including international trade were fast developing in the country and with the progressive increase in commerce and trade, disputes arising therefrom are also on the increase, the report stated.

The SHC in its judgement stated, “We are cognizant that commercial courts have already been established in the Punjab under the initiative of the Lahore High Court, and see no reason why such a salutary step may not be taken in this province, especially when Karachi is well recognised as a centre of commerce and the economic engine of the country.”

It noted that besides pecuniary jurisdiction of district judiciary of Karachi, there was still a genuine purpose to be served by preserving original side jurisdiction of the SHC to the extent of suits involving commercial disputes.

“Obviously, such measures require legislative steps. Accordingly, in view of the foregoing, we dispose of these Petitions while directing the Provincial Government to give immediate consideration to the overwhelming quantum of pendency on the Original Side, as reflected in Schedule-1, and consider such remedial action as it thought best, whether through tabling an amendment to Section 7 and other related provisions of the Ordinance to eliminate the exception to the jurisdiction of the District Judge in respect of Karachi District, or limit that exception to encompass only those civil suits and proceedings that fall above the prescribed pecuniary threshold and at the same time are of a commercial nature, involving commercial disputes,” it concluded.

Published in Dawn, March 2nd, 2023