2019 PLP 996 (CLD)

This regular first appeal is filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance) challenging judgment and decree dated 16.05.2014 passed by the banking court.

2. Brief facts of the case are that the appellant instituted a suit against the respondent seeking recovery of Rs.138,011.02 due under a credit card facility. The respondent did not enter appearance before the banking court pursuant to the summons issued by it and was accordingly proceeded against ex parte. Notwithstanding the fact that the respondent did not file any application for leave to defend, the banking court dismissed the suit of the appellant holding it to be barred by limitation, hence this appeal.

3. Learned counsel for the appellant submitted that the period of limitation for filing of the suit on credit card facility was not provided for in the first schedule to the Limitation Act, 1908 and was thus governed by the residuary Article 120 which provided a period of six years. Reliance was also placed on a judgment rendered by Dehli District Court.

4. It is apparent from the plaint that the finance facility was provided by appellant bank to the respondent on 23.08.2007 with expiry on 31.08.2012. As per the statement of account, the last payment was received by the appellant bank from the respondent on 18.10.2010 whereas the suit was filed on 16.05.2014. It is stated in the plaint that a number of reminders was issued to the respondent for payment of the outstanding dues but to no avail. The reminders allegedly issued to the respondent, however, were not appended with the plaint by the appellant bank.

5. The contention of the learned counsel for the appellant that there is no provision in the Limitation Act dealing with the recovery of dues under credit card facility is not correct. There are number of Articles in the First Schedule to the Limitation Act which deal with the suit for the recovery in respect of amount lent by a creditor. Article 57 of the Limitation Act provides a period of three years for money payable for money lent starting from when the loan is made. This Article clearly covers the suit for recovery of amount filed by appellant bank against the respondent. Reference in this regard is made to a judgment reported as Muhammad Suleman v. Habib Bank Limited 1987 MLD 2757 which dealt with a banking suit. In this case the bank had allowed overdraft facility to the customer and on his default filed a suit for recovery which was decreed ex-parte. In appeal/revision a question of limitation was raised by the customer on which the following observations were made by the Court: In the present case there is no contest on the point that the suit against the applicant was filed by the respondents on 18-04 -1979 for recovery of money loaned to the applicant on 1-3-1975 respectively. Since admittedly, the case was to be governed by Article 57 of the Limitation Act, which provides for a period of three years to file a suit, which period is to be reckoned from the date when the money was lent, the suit of the respondent, was clearly time-barred. The view taken by the learned subordinate Courts is therefore, not correct. There is, therefore, no doubt in our mind that Article 57 of the Limitation Act, 1908, apart from others, is also applicable to a suit for recovery of amount by a bank/Financial Institution.

6. It may be stated that the appellant did not append with the suit any document reflecting the agreement between the parties regarding mode of payment. Be that as it may, money drawn by the customer under a credit card facility becomes immediately due and payable. Any repayment made by the customer shall of course have the effect of extending the period of limitation. In this manner, a period of three years was available to the appellant from the date (18.10.2010) when last repayment was received by the respondent to have filed its suit. The appellant, however, did not file the suit within a period of three years starting from 18.10.2010. The suit filed by the appellant was beyond the period prescribed in Article 57 and was thus was rightly held to be barred by limitation by the banking court. The judgment rendered by the Delhi District Court is not binding on this Court and otherwise does not depict the correct statement of law on the subject.

7. This appeal being devoid of any merit is accordingly dismissed. SA/M-32/L Appeal dismissed.