1998 PLP 2065 (CLC)

Mian Rafique Saigol and another v. Bank of Credit & Commerce International (Overseas) Ltd. and another PLD 1996 SC 749 rel. Mirza Naseer Ahmed for Petitioners. Muhammad Aslam Khan for Respondents Date of hearing: 18th November, 1997 This judgment will dispose of Writ Petitions Nos.1246 and 1360 of 1982 as these are directed against one and the same order of the Special Judge Banking, dated 8‑2‑1982, by which order the learned Judge granted the applications of the petitioners for leave to appear and defend the suit on the condition of deposit of the amount in Court. By the same order the respondent Bank was granted permission to defend the counter‑suit unconditionally. Writ Petition No. 1246 of 1982 has been filed by principal debtors while Writ Petition No. 1360 of 1982 by guarantor.

2. The suit of the bank was based on the facts that at the asking of the principal‑debtors and on the guarantee of the guarantor the bank opened/confirmed irrevocable Letters of Credit in favour of Messrs Ibrahim Pasha and Trading Establishment Abu Dhabi on the terms and conditions contained in the letter as regards payment of interest etc. It is also claimed that the guarantor and respondent No.3 in Writ Petition No.1246 of 1982 executed equitable mortgage of plots of land described in para. No.8 of the plaint, to secure the dues of the Bank. A decree for Rs.4,44,300 was prayed for. Immediately, thereafter, it seems the principal debtor also fled a suit against the Bank for recovery of Rs.5,35,000 on the ground that the amount of Letter of Credit was paid unauthorisedly by the Bank for which unauthorised act the petitioners also suffered loss. The petitioners also filed an application under Order 37, Rule 2, C.P.C. for leave to appear and defend the suit, on the grounds upon which their suit against the Bank was based. The Bank also applied for leave to defend the suit. It seems both the suits were consolidated and after hearing, the petitioners were granted leave to defend the suit conditionally on deposit of the suit amount by the next date of hearing while the Bank was also granted the permission but unconditionally. As noted, these two petitions under Article 9 of the erstwhile Provision Constitution Order, 1981 have been filed.

3. In support of the petitions it is contended that in deciding the leave applications the learned Special Judge has not kept in view the well‑established principles as laid down in law and number of decided cases. In specific, it is urged that the learned Judge failed to consider that the petitioners had showed a very plausible defence. It is also urged that the learned Judge failed to notice that the roan was secured by equitable mortgage of plots of land. The condition of deposit, in the circumstances, is described as oppressive and fanciful.

4. On behalf of the Bank it is urged that these petitions are not maintainable as these are directed against the interim order and reliance for this purpose is placed on Messrs Zulfiqar Associates Ltd. v. Allied Bank of Pakistan Ltd, and 3 others 1985 SCMR 1570 and Crescent Factories Vegetable Ghee Mills and 5 others v. National Bank of Pakistan, District Courts Branch, Sahiwal and another PLD 1985 Lah.

150. On merits, of course the order of the Special Judge has been supported. In reply, learned counsel for the petitioners has referred to Messrs S.M. Ayub & Co. and others v. National Bank of Pakistan and others ' 1983 CLC 2828 to show that Constitutional petition is maintainable 'against interim orders if they are arbitrary, fanciful, oppressive and have been passed in disregard of the relevant factors.

5. It is correct that by and large in Constitutional jurisdiction, judicial review is not exercised against interim orders but this is not an inflexible rule. It may be noted that terms of Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 do not debar filing of petitions against the interim orders. It seems to be a rule of practice developed by the Courts themselves and the logic seems to be that interference at interim stage delays the disposal of cases and further, in any case, the illegality of the interim orders can always be examined in proceeding against final orders. The exceptions to the above rules, of course are cases where although the order is interim but is shown to have been passed without jurisdiction or is so unjust, oppressive and fanciful that it does not satisfy the judicial conscience of the Court. Another category of such cases is that where the orders have been in complete disregard of the relevant considerations and if challenge to the same is not permitted and the parties are asked to wait for final judgment, it is likely to create untold difficulties. Such an order will, therefore, be fanciful and oppressive. This seems to be the 'view taken in Messrs S.M. Ayub & Co. and others v. National Bank of Pakistan and others 1983 CLC 2828 (supra). The judgments relied upon by the learned counsel for the Bank namely 1985 SCMR 1570 and PLD 1985 Lahore 150 (supra), proceed on different facts and in my humble view do not displace the above statement of law. In fact, the Supreme Court judgment itself recognises that in cases of perversity, fancifufness and arbitrariness, the High Court can interfere against interim orders.

6. Coming to the facts of this case it is noticed that the learned Judge has altogether ignored the averments contained in Para. No.8 of the Bank's plaint I that the loan was secured by equitable mortgage. In my view this was relevant consideration and ought to have been noticed while deciding whether to give conditional or unconditional leave, inasmuch as the Special Judge himself concluded that "the matter does not appear to be without difficulty..." In other words, the learned Judge was of the view that the petitioners have been able to disclose plausible defence and the defence they were raising required to be probed as the matter was not without difficulty". The order, therefore, will I have to be described as fanciful, if not perverse and arbitrary. In this connection, reliance of the learned counsel for the petitioners of Mian Rafique Saigol and another v. Bank of Credit & Commerce International (Overseas) Ltd. and another PLD 1996 SC 749 is entirely appropriate, as this judgment sums up the statement of law on the question of leave, in depth.

7. For what has been stated above, these two petitions are allowed. The impugned order of the Special Judge Banking, dated 8‑2‑1982 is hereby held to have been passed without lawful authority and, therefore, of no legal effect: The leave applications of the petitioners as well as of the Bank shall be deemed to be pending and will now be decided in the light of this judgment and the judgment of the Supreme Court of Pakistan in PLD 1996 Supreme Court 749 (supra). The parties are left to bear their own costs.

8. In view of the fact that the suits are considerably old, the learned Special Judge Banking may examine the advisability of expending their hearing. R.M.S./B‑37/L Order accordingly.