2007L5034 (PLP)

This R.F.A. proceeds against order dated 10-10-2006, passed by learned Single Judge in chamber (Banking jurisdiction) of this Court whereby C.M. No.100/C of 2006, filed by the appellants in COS No.6 of 2005, was dismissed.

2. Learned counsel for the appellants contends that the impugned order fails to take note of the provisions of section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 read with Order VIII, rule 6, C.P.C. and Order XX, Rule 19, C.P.C. According to him the impugned order has the effect of dismissing of claim of set off and as such this RFA is competent.

3. We have gone through the copies of the records appended with this RFA with the assistance of the learned counsel. The respondent-Bank filed a suit against the appellant for recovery of Rs.81,050,620.35. The appellants were served in the manner prescribed and they filed application for leave to defend under section 10 of the said Ordinance. This appears to be an elaborate document spread over 57 pages. The respondent-Bank filed its reply. Along with this reply several documents, which are stated to be comprised of more than 1000 pages, were filed. It was in response to this reply that C.M. No.100 of 2006 was filed claiming set off in rebuttal of what, according to the appellant, was a new claim set up by the respondent-Bank in its replication on 9-1 1-2005 filed to the said PLA on 9-4-2005. The impugned order purports to dismiss the said C.M.

4. We have given some thought to the said contentions of the learned counsel and have examined the impugned order accordingly. To our mind, the impugned order does not at all disclose that the learned Single Judge did not take note of the said provisions of law while deciding the same. What learned Judge has observed and we may say, repeatedly, is that a set off in terms of Order XIII, rule 6, C.P.C. cannot be competently claimed by the appellant without grant of leave to defend the suit, which application, admittedly is still pending. There is no doubt in our mind that a set off whether legal (under Order VIII, rule 6, C.P.C.) or equitable i.e., whether it is in respect of ascertained amount or an unascertained sum of money, primarily constitutes a defence in the suit itself. Reference may be made to the case, Syed Niamat Ali and 4 others v. Dewan Jairam Dass and another PLD 1983 SC

5. Section 10(1) of the said Ordinance, 2001, lays down in specific terms that where summons have been served as prescribed in section 9(5) thereof the defendant shall not be entitled to defend the suit unless he obtained leave from the Banking Court, as provided in the said provisions of law. It will thus been seen that what is being claimed as legal set off or an equitable set off or a counter claim or a combination of any or all of the same, it is a defence and for purposes of raising any defence in a suit filed in terms of section 9 of the said Ordinance, obtaining of leave to defend is a condition precedent for setting up the same.

5. Learned counsel for the appellant has also raised objections to some of the documents being relied upon by the plaintiff-Bank as also to some entries in the statement of account produced before the learned single Judge. However, this matter has been left open by the learned Judge for consideration in accordance with the directions contained in the impugned order.

6. R.F.A. accordingly is disposed of in light of the above observations. F.B./J-33/L Order accordingly.