2007 PLP 687 (CLD)

MIAN HAMID FAROOQ, J.

Appellants, through the present appeal, have called in question order dated 15-5-2006, whereby the learned Judge Banking Court, dismissed their application for setting aside ex parte judgment and decree dated 8-4-2004.

2. Facts of the case, in brief, are that the respondent-Bank filed the suit for recovery of Rs.5,06,846, against the appellants, before the Judge Banking Court. The learned Judge issued summons to the appellants, through registered post and by proclamation in two newspapers and he after finding that the appellants have been served through proclamation in the newspapers proceeded to pass an ex parte decree dated 8-4-2005 for a sum Rs.5,06,846 along with costs and costs of funds, against the appellants. The appellants, on 20-4-2004, filed two applications, one under section 12 of Financial Institutions Recovery of Finances) Ordinance, 2001 (Ordinance), for setting aside the ex parte decree dated 8-4-2004 and another seeking leave to defend the suit. The respondent-Bank contested both the applications. The learned Judge Banking Court dismissed appellants' first application, while later application appears to be still pending, vide impugned order dated 15-5-2006, hence the present appeal.

3. Learned counsel for the appellant states that the initial process issued by the learned Judge Banking Court for the service of the appellants was not in consonance with the provision of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, and, therefore, all the ensuing proceedings have little value in the eyes of law. In this, behalf reliance is placed upon Muhammad Azwar Siddiqui v. Chief Executive Union Leasing Limited and 2 others 2006 CLD

946. Conversely, the learned counsel for the respondent-Bank, while supporting the impugned order, has submitted that the appellants were served in accordance with law and since they failed to file the requisite application for leave to defend the suit, therefore, the suit was rightly decreed.

4. We have heard the learned counsel for the parties and examined the summoned record with the assistance of both the learned counsel. We find from the record that the respondent-Bank, on 24-10-2003, instituted the suit and on the same date, the learned Judge, after receiving the plaint, issued summons to the appellants through registered post and by proclamation in two daily newspapers i.e. on "News" and "Khabrain". On three subsequent dates, i.e. 2-12-2003, 26-1-2004 and 26-2-2004, the case was adjourned without any progress, as the respondent-Bank failed to deposit the expenses necessary for the issuance of process. Finally, on 8-4-2004, the learned Judge Banking Court, after finding that the appellants have been served through proclamation, proceeded to pass an ex parte order and on the same date passed the ex parte decree for a sum of Rs.5,06,846 against the appellants. It appears appropriate to reproduce orders dated 27-10-2003 and 8-4-2004, which read as follows:-- "27-10-2003. Learned counsel for the plaintiff-Bank present. The suit is fresh. Be registered. Notices to the defendants be issued through registered envelopes for 2-12-2003 and press proclamations in the daily "The News" and "Khabrain" be also published for the said date. Process fee be deposited within four days." 4-A. Section 9(5) of the Ordinance, 2001 envisages that when a plaint is presented to the Banking Court, it shall issue summons, which shall be served on the defendant through the bailiff or process server of the Banking Court, by registered post acknowledgement due, by courier and by publication in one English language and one Urdu language daily newspaper, and service duly effected in anyone of the aforesaid modes shall be deemed to be valid service for purposes of the Ordinance. In this case, as noted above, the Banking Court, on 27-10-2003, issued summons to the appellants only through registered envelopes and by proclamation in two newspapers., Placing the provision of section 9(5) of the Ordinance in juxtaposition with order dated 27-10-2003, it leads to the irresistible conclusion that the learned Judge Banking Court issued summons to the appellants contrary to the said provision of law. As noted above, section 9(5) of the Ordinance provides that the summons shall be issued to a defendant through four modes of service, viz. bailiff or process server, by registered post acknowledgement due, by courier service and by publication in two newspapers, while the learned Judge Banking Court thought it fit in his own wisdom to issue summons only through two modes. It may be noted that the learned Banking Judge has no jurisdiction to deviate from the procedure laid down in section 9(5), ibid, and adopt his own procedure. The learned Court, thus, failed to resort to the procedure prescribed in the special statute (Financial institutions (Recovery of Finances) Ordinance, 2001) and has unnecessarily bypassed the procedure of service prescribed therein, while the learned Judge Banking Court, who is the creature of the said statute, is bound to adopt and obey the said procedure. In view whereof, we feel that the procedure adopted for service of the appellants was defective, violative of law and had definitely caused prejudice to the appellants. Although postal receipts, which were on record, showed that the summons were sent by registered post, yet no acknowledgment is on record showing that the appellants were served through postal service. To our mind, the learned Judge Banking Court failed to issue summons as prescribed under the law and the appellants were not served in accordance with law, therefore, it would have been in the fitness of things and interest of justice if the learned Judge Banking Court would have set aside the ex parte decree.

5. As the basic order dated 27-10-2003 for issuance of summons was contrary to the mandatory provision of law, therefore, all subsequent orders passed and the superstructure made thereon would automatically fall to the ground. It has been held in Yousaf All v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 that:-- "And if on the basis of a void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders, together with the superstructure of rights and obligations built upon them, must, unless some statute or principle of law recognizing as legal the changed position of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded."

6. In the above backdrop, we have examined the impugned order dated 15-5-2006 and find that the learned Judge Banking Court without adverting to the material aspect of the case, qua the service of the appellants, has erroneously held that the appellants were served. We feel that while rendering the said findings, the learned judge was completely oblivious of the fact that he himself failed to summon the appellants through the process prescribed by the special statute. To our mind, the learned Judge Banking Court, at the first instance, should have adopted the procedure as prescribed under section 9(5) of the Ordinance, 2001, secondly, in the present scenario, he should not have passed the ex parte decree only on the basis of publication in the newspapers and if he erroneously passed the decree, then he ought to have set aside the same when such an application was brought before him. This sort of hasty and illegal decisions cannot be countenanced under any stretch of imagination. It is expected from a judicial officer. especially of the rank of a District Judge, to be extremely careful, conscious and abreast of the provision of law, while deciding valuable rights of the parties, which in the instant case, to say the least, the learned. Judge Banking Court failed to abide by. Here it appears appropriate to quote pare.18 of the judgment reported as Board of Intermediate and Secondary Education Lahore through its Chairman and another v. Mst. Salma Afroze and 2 others PLD 1992 SC 263, which reads as under:- 18. "The learned counsel who represented the respondents in the High Court by not bringing to the notice of the High Court the law laid down by this Court on the subject did not render good service to their clients. Besides, it has been laid down by this Court in Muhammad Sarwar v. The State PLD 1969 SC 278 that a Judge must know the adage that a Judge must wear all the laws of the country on the sleeve of his robe and failure of the counsel to property advise him is not a complete excuse in the matter." (underlining is ours). The learned counsel for the appellants has rightly relied upon the case of Muhammad Azwar Siddiqui (ibid) which on all fours is applicable to the facts of the present case.

7. In the above perspective, we are persuaded to set aside the impugned order and to accept appellant's application for setting aside of the ex parte judgment and decree and to remand the case, which we hereby do.

8. For the foregoing reasons, the appeal is decided in the following terms:-- (i) The present appeal is allowed and the impugned order dated 15-5-2006 is set aside. (ii) Appellants' application under section 12 of the Ordinance, 2001, is also allowed and the ex parte judgment and decree dated 8-4-2004 is also set aside. (iii) The appellants had already filed the application for leave to defend the suit, which shall be deemed to be pending before the learned Judge Banking Court, who, at the first instance, shall decide the said application and then the suit, if need arises, after hearing the parties and of course in accordance with law. No order as to costs. M.B.A./N-25/L??????????????????????????????????????????????????????????????????????????????????? Appeal allowed.