2018 PLP 1447 (CLD)

CH. MUHAMMAD IBRAHIM ZIA, C.J.

The captioned appeal by leave of the Court has been filed against the judgment of the High Court dated 15.09.2017, whereby, the appeal filed by the appellant herein, has been dismissed.

2. The brief Facts of the case are that respondent No.1, herein, filed a suit for recovery of Rs. 92,03,000.48/- against the appellant, herein, before the District Judge, Mirpur on 16.11.1989, which was decreed vide judgment and decree dated 18.05.1995. It is alleged that the respondent through its authorized authorities had written off the loan through its annual report for the year 1995 issued on 31.12.1995 but despite this an application for execution of the decree dated 18.05.1995 was filed before the trial Court. The learned trial Court vide order dated 19.04.2001 proceeded for execution of the decree. The matter of execution came up before the High Court in an appeal which was dismissed being hopelessly time barred. The findings of the High Court were upheld by this Court. It is claimed by the appellant that despite the fact that the matter of written off loan has attained finality in the light of annual report issued on 31.12.1995, the respondent-bank has applied for execution of the decree dated 18.05.1995, therefore, the appellant filed a suit before the Banking Court, Mirpur on 19.08.2013 for settlement of the written off loan. The defendants were summoned and after hearing the arguments, the learned trial Court fixed the case for judgment on 23.09.2013, however, the defendant-respondent filed an application on 14.09.2013 for shortening of the date with the request for hearing the arguments on section 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter to be referred as Ordinance, 2001). The learned Banking Court heard the arguments on section 8 of Ordinance, 2001 and vide judgment dated 25.09.2013 dismissed the suit. Against this judgment of the trial Court an appeal was preferred before the High Court which has been dismissed through the impugned judgment, hence, this appeal by leave of the Court.

3. Sheikh Masood Iqbal, Advocate, the learned counsel for the appellant after narration of necessary facts submitted that according to the admitted document after passing of the decree by the trial Court on 18.05.1995 the respondent has written off the claimed decretal amount on 31.12.1995. After writing off the decretal amount, the respondent-bank legally cannot claim the execution of the decree. The matter remained pending in the execution proceeding. The respondent-bank failed to file any suit under the provisions of section 8 of Ordinance, 2001 for recovery of the written off amount, hence, the matter of written off amount attained finality but despite this the claim of the respondent-bank for decretal amount being against law forced the appellant to file a suit in the Banking Court on 19.08.2013. The learned Judge of the Banking Court in quite disregard of the statutory provisions of sections 9 and 10 of Ordinance, 2001 merely on the frivolous application of an unauthorized so called representative of the defendant-respondent fixed the case for arguments on section 8 of Ordinance, 2001 and dismissed the suit which order on the face of it is against law. The learned High Court also fell in error of law while dismissing the appeal on the pretext of application of section 8 of Ordinance, 2001 which has no nexus with the facts of this case. Same like, the observation that the matter has been authoritatively resolved by the apex Court or the High Court is also against law because against the orders passed by the executing Court, the appeal was dismissed by the High Court on the ground of limitation and the same view was upheld by the apex Court, whereas, the proposition of written off amount is quite different. The failure of the respondent-bank to file suit under section 8 of Ordinance, 2001 resulted into accruing the right in favour of plaintiff-appellant, thus, the dismissal of his suit is against law.

4. Conversely, Mr. Muhammad Siddique Chaudhary, Advocate, the learned counsel for the respondent-Bank forcefully defended the impugned judgment and submitted that the decree passed has attained the finality. The claim of written off amount is baseless as it is merely referred in the bank statement according to the audit report as dead debt, thus, it cannot be said that the amount has been written off. Moreover, this stand of the plaintiff-appellant has been refuted by the trial Court upto this Court, thus, the impugned -judgment has rightly been passed.

5. We have considered the arguments of the learned counsel for the parties and examined the record made available. The examination of the file of the Banking Court reveals that the appellant filed a suit on 19.08.2013 which was entertained and the defendant-respondents were summoned, whereas, the prayed interim injunction was also granted. The completion of summoning process was ordered on some dates of hearing, however, before the date of judgment i.e. 23.09.2013 an application was filed by the defendant-respondent for early hearing of the suit with the request. On filing of this application, the trial Court heard the arguments on section 8 of Ordinance, 2001 and consequently dismissed the suit vide judgment dated 25.09.2013 merely on the ground that the execution proceeding of the decree are already in progress and the respondent-bank can also file suit under section 8 of Ordinance, 2001 for recovery of written off loan. This view has been upheld by the learned High Court through the impugned judgment.

6. Regrettably, the important propositions involved in this case have been neglected by the Courts below. So far as the application of section 8 of the Ordinance, 2001 is concerned, it appears to be misconceived. According to this statutory provision the written off amount has attained the legal status and the Bank has been provided an opportunity to file suit for recovery of such written off amount if it is result of political reason other than bona fide business consideration. In this regard, the case reported as Sahibzadi Shah Bano Khan v. Messrs City Bank N.A. [2006 CLD 258] can be referred wherein it has been held that this provision is made only to enable the Banks to effect recovery of finance from the borrowers, which have been written off or adjusted for political reason other than bona fide business consideration. Be that as it may, for dismissal of the suit neither this provision is attracted nor has any nexus rather it indirectly supports the version of plaintiff-appellant that the Bank has not filed a suit within the prescribed limitation for setting aside the written off amount.

7. The other contention that previously the High Court or this Court has recorded the findings in this case, also appears to be misconceived as against the orders of the executing Court the appeal filed in the High Court was dismissed on the question of limitation which was upheld by this Court and no findings on merits of the case regarding the written off amount were passed.

8. The Ordinance, 2001 provides a comprehensive procedure for conducting the proceedings in the suit. Under section 9, the customer or financial institution both are entitled to file the suit if anyone commits default in fulfillment of any obligation with regard to any finance. The factual proposition whether the written off amount falls within the 'obligation', has also to be determined by the trial Court. Once a suit is filed and notices are issued, section 10 of Ordinance, 2001 comes into operation which speaks that after service of the summons, the defendants have to obtain the leave from the Banking Court to defend the suit and in default of doing so the allegations of facts in the plaint shall be deemed admitted and the Banking Court may pass the decree, whereas, in this case the trial Court has totally violated these provisions. Neither the defendant-appellant has been provided opportunity to file an application for leave to defend nor the proceedings have been conducted according to the procedure prescribed by the special law. The dismissal of the suit merely on the application for shortening the date in which the only sentence written is, is totally against the norms of judicial proceeding and violation of the statutory provisions, therefore, the proceedings conducted by the Banking Court are not sustainable. The learned High Court has also not applied its judicial mind to take notice of such legal lapses.

9. As observed hereinabove that the proceedings conducted by the trial Court are violative of the statutory provisions, hence, the same are not maintainable. In this state of affairs, we do not feel any necessity to discuss the other propositions or merits of the case which are left open to be attended to and resolved by the Banking Court while conducting the proceedings strictly according to the provisions of special law. The trial Court is also at liberty to decide all the propositions with independent mind without taking any influence from this judgment or the impugned judgment of the High Court. For the above stated reasons, this appeal stands accepted. Consequently, the case is remanded to the Banking Court for proceeding further according to law in the light of hereinabove observations. KMZ/27/SC(AJ&K) Case remanded.