2005 PLP 361 (CLD)

The above order was challenged by the appellants through Writ Petition No.2834 of 1989.

5. From thence onwards, the matter remained pending because of the change in the formation of the late Banking Tribunals and also because of the pendency of the above Constitutional petitions before this Court.

6. In the meanwhile, the appellants' suit for damages was decreed by the learned Civil Judge, Lahore by issuing a decree for damages of Rs.10,23,200 in their favour and against the Bank. R.F.A. No.41 of 1994 was filed by the Bank against the above judgment and decree and R.F.A. No.71 of 1994 was filed by the appellants for enhancement of the decretal amount. These appeals were decided through judgment and decree dated 16‑10‑1997 by an Honourable Division Bench of this Court. The judgment and decree for damages of Rs.10,23,200 in favour of the appellants was set aside. The appellants' suit was also dismissed.

7. The proceedings in Bank's suit, however, remained stayed till the dismissal of appellants' Writ Petition No.544 of 1989 through judgment dated 1‑2‑2001 whereafter the suit was restored and reactivated on 25‑6‑2001.

8. This suit was decreed by the learned Judge Banking Court‑V, Lahore through judgment and decree dated 1‑10‑2001 For the reason that order dated 10‑5‑1989 passed under section 6(6) of the late Banking Tribunals Ordinance, 1984, for deposit of Rs.4,00,000 and to furnish security for the remaining amount of Rs.3,03,885, was not complied with by the appellants. The decree was for recovery of Rs.7,03,885 with costs and mark‑up till realization of the decretal amount. Liquidated damages were disallowed. By order of the same date, the suit was converted into the execution proceedings to enforce the decree.

9. The present R.F.A. has been filed by the appellants against the above referred judgment and decree dated 1‑10‑2001 in favour of the respondent‑Bank.

10. The learned counsel for the appellants contended that order of deposit dated 10‑5‑1989 was passed by the then Banking Tribunal during currency of order of stay of proceedings granted by this Court in above referred Writ Petition No.544 of 1989 and in Writ Petition No.2834 of 1987. And that Writ Petition No.2834 of 1989 challenging the said order of deposit dated 10‑5‑1989 was pending when the impugned decree dated 1‑10‑2001 was passed. It was also claimed that the law applicable at the time of the impugned decree did not allow a decree on non‑deposit of the amount as was mandated in section 6(6) of the late Banking Tribunals Ordinance, 1984 which had since been repealed. Contrarily, the learned counsel for the respondent‑Bank supported the impugned judgment and decree.

11. We have considered the submissions of the learned counsel for the parties. The impugned decree dated 1‑10‑2001 was passed against the appellants for purported non‑compliance with order dated 10‑5‑1989 passed by the then Banking Tribunal in exercise of powers under section 6(6) of the Banking Tribunals Ordinance, 1984; since repealed. The appellants were directed by the Tribunal to deposit Rs.4,00,000 in cash and furnish security for the remaining suit amount of Rs.3,03,885 within a period of one month. The appellants challenged order dated 10‑5‑1989 through Writ Petition No.2834 of 1989. This Writ Petition was, however, dismissed on 9‑4‑2002 principally for the reason that the same had become infructuous upon filing of the present appeal by the appellants against the impugned decree dated 1‑10‑2001. The dismissal of the said Constitutional petition was thus not on merits.

12. Between 18‑5‑1989; the date of the order of deposit under section 6(6) of the late Banking Tribunals Ordinance, 1984 and 1‑10‑2001 i.e. the date of the impugned decree, the legal position under went metamorphosis. Provisions of section 6(6) of the Banking Tribunals Ordinance, 1984 (LVIII of 1984) were struck down by an Honourable Full Bench of this Court in the judgment pronounced in the leading case of "Messrs Chenab Cement Product (Pvt.) Limited and others v. Banking Tribunal, Lahore and others" PLD 1996 Lahore 672 with the following observations:‑‑ " .There cannot be any two opinions that the subsection (6) as it stands presently is not only unreasonable, unjust, unfair and if we may so say with respect is even despotic and amounts to Legislative judgment. We have, therefore, no hesitation to striking it down with the result that subsection (6) of section 6 as originally enacted would stand revived." Certain other provisions of the Ordinance, 1984 were also held to be ultra vires the Constitution of the Islamic Republic of Pakistan, 1973.

13. The Banking Tribunals Ordinance, 1984 (LVIII of 1984) was thereafter repealed and the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance, 1997 (XXV of 1997) was introduced to occupy the field. This Ordinance, on repeal, was also replaced on 31st May, 1997 by the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (XV of 1997). Under section 7(6) of this Act, all the pending proceedings and cases stood transferred to and were deemed to have been transferred to the Banking Courts created under section 4 thereof. However, on 30‑8‑2001, Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (XV of 1997) was also repealed. It was substituted by the Financial Institutions (Recovery of Finances) Ordinance, 2001 (XLVI of 2001). Under subsection (6) of section 7 of the Ordinance (XLVI of 2001), all proceedings, cases and suits stood transferred to and were deemed to have been transferred to and heard and disposed of by the Banking Courts having jurisdiction under this Ordinance. These Banking Courts were established under section 5 of the said Ordinance.

14. The above recorded Statutory perspective thus reveals that upon repeal of the Banking Tribunals Ordinance, 1984, the suit of the respondent‑Bank stood transferred to the learned Banking Court under the provisions of the Banking Companies (Recovery of Loans, I Advances, Credits and Finances) Act, 1997 (XV of 1997). And that upon the replacement of the Act of 1997 by Financial Institutions (Recovery of Finances) Ordinance, 2001, this suit came under jurisdiction of the Banking Court established under the Ordinance of 2001. The Banking Court‑V, Lahore was one such Court. This Court passed the impugned judgment and decree on 1‑10‑2001 i.e. 31 days after the promulgation of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The learned Judge Banking Court‑V, Lahore appears to have passed the impugned judgment and decree on an automatic motion without considering the effect of the above referred judgment in the case of "Messrs Chenab Cement Product (Pvt.) Limited and others v. Banking Tribunal, Lahore and others" PLD 1996 Lahore 672 wherein subsection (6) of section 6 of the 1984 Ordinance had been struck down. The learned Judge Banking Court also did not take into account the legal consequences of the repeal of the Banking Tribunals Ordinance, 1984. He was also obligated to determine as to whether such a decree could be passed on 10-10‑2001 after repeal of the said Ordinance, 1984 and as to whether under the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which was then the law applicable to the suit, could a decree as visualized under subsection (6) of the repealed Banking Tribunals Ordinance, 1984, be passed.

15. Furthermore, .the impugned judgment does not show as to whether the appellants were given an opportunity by the learned Banking Court to produce before the Court an interim order staying proceedings of the suit (if any), passed in Writ Petition No.2834 of 1989 which was then pending against order dated 6‑1‑1989.

16. The above questions could have been decided and adjudicated upon by this Court but no assistance was provided by any of the parties on the above referred issues. We thus deem it appropriate not to express our pinion thereupon. We are, however, convinced that the learned Banking Court could not have validly passed the impugned judgment and decree dated 1‑10‑2001 without determining the above questions. The impugned judgment and decree is therefore set aside. The matter is remitted back to the learned Banking Court‑V, Lahore for redecision of the suit in accordance with the law keeping in view the observations made in this judgment.

17. The learned Banking Court shall proceed in the suit from the stage the proceedings hard reached immediately prior to the transfer of the suit to the learned Banking Court in terms of subsections (6) and (7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

18. This appeal is thus accepted in above terms with no order as to costs. S.A.K./M‑281/L Case remanded.