2019 PLP 546 (CLD)

JAWAD HASSAN, J.

Through this Regular First Appeal, filed under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the "Ordinance"), the Appellant has challenged the validity of judgment dated 19.11.2014 passed by the Banking Court No.IV, Lahore (the "Banking Court") whereby the plaint in the suit filed by the Appellant was rejected while applying the principle of res judicata.

2. Learned counsel for the Appellant inter alia argued that Banking Court has passed the impugned judgment without taking into consideration the fact that the nature of the suit filed by the Respondent No.1 Bank was totally different from the suit filed by the Appellant; that the suit filed by the Appellant was required to be decided on merits after recording of evidence; that the Banking Court erred in law and failed to consider the fact that the Appellant has filed the suit on account of illegalities and breaches of contractual obligations committed by the Respondent No.1 Bank and thus causing enormous losses to the Appellant for which the Appellant had also claimed recovery of Rs.48,775,000/- against the present Respondent, which claim of the Appellant was not in the case filed by the Respondent No.1 Bank, as such the impugned judgment passed without considering this aspect of the matter is liable to be set aside.

3. On the contrary, learned counsel for the Respondent No.1 Bank vehemently contested the arguments advanced by the learned counsel for the Appellant and prayed for dismissal of the Appeal on the grounds that the impugned judgment has rightly been passed as the claims of the Appellant in the suit have already been adjudicated upon by the same Court and the principle of res judicata duly applied in the instant case. In support of his contentions learned counsel placed reliance on the case titled Modern Knitting and Woolen Spinners (Pvt.) Ltd and another v. Manzur Ahmed Sheikh and 3 others (2007 CLD 1071).

4. We have heard the arguments of both the sides and perused the record.

5. The examination of the record reveals that the Appellant filed a suit against the Respondents seeking therein multiple claims viz.. declaration, recovery of Rs.48,775,000/-, rendition of accounts, cancellation of documents and redemption of mortgaged property. After accepting the petition of the Respondents for leave to defend, the Banking Court framed the issues including issue No.7. While dealing the issue No.7 as preliminary issue, the Banking Court observed that the suit of the Appellant cannot proceed after decreeing the suit of the Defendant Bank on the same cause of action against the Appellant; consequently, the plaint is rejected. Mainly, the plaint of the suit filed by the Appellant was rejected by the Banking Court by following the principle of res judicata. The Respondent No.1 Bank had filed the suit against the Appellant on the basis of running finance facility whereas the suit of the Appellant based on cash finance, as such the nature of both the suits is different in toto. Further, the claims of the Appellant are different from the grounds taken by him against the suit filed by Respondent No.1 in the petition for leave to defend. Therefore, the provisions of section 11 of the C.P.C. are not attracted to the suit filed by the Appellant as the doctrine of res judicata requires that no Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. We, therefore, are in concurrence with the arguments of the learned counsel for the Appellant that the impugned judgment is liable to be set aside on the abovementioned grounds. Furthermore, when the above situation that how the nature of the suit filed by the Appellant is similar to the earlier suit of the Respondent No.1 Bank, the learned counsel for the Respondent No.1 could not submit any tangible reply rather reiterated the grounds of the impugned judgment. Moreover, the judgment cited by the learned counsel for the Respondent No.1 cannot be relied upon as the facts and circumstances of the same are distinguishable from the case in hand.

6. On the touchstone of the above discussion, we are of the considered opinion that the Banking Court was not justified to pass the impugned judgment on the basis of principle of res judicata; consequently, the Appeal in hand is hereby allowed and the impugned judgment is hereby set aside. The case is remanded to the Banking Court which shall be deemed to be pending and the Banking Court shall decide the matter after recording of evidence on the already framed issues strictly in accordance with law, expeditiously. Those present are directed to appear before the Banking Court on 20.03.2019. MH/T-4/L Case remanded.