2005 PLP 663 (CLD)

The brief facts out of which present appeal arises are that respondent-Bank filed a suit for recovery against the appellants amounting to Rs.16,14,976 in the Banking Court No.I. Appellants filed application for leave to defend on 18-9-2001. During the pendency of the application law was amended and Financial Institutions (Recovery of Finances) Ordinance 2001 was legislated and came into force. Appellants filed other application for leave to defend the suit before the said Banking Court on 28-9-2001. The Banking Court passed the ex parte decree against the appellants on 22-10-2001. Appellants being aggrieved filed application for setting aside the ex parte decree on 16-11-2001 before the Banking Court No.1, which was dismissed vide impugned order dated 17-6-2002, hence the present appeal.

2. Learned counsel of the appellants submits that counsel of the appellants could not appear before the Banking Court on 22-10-2001 on account of death of his close relative. He requested Mr. Asim Nadeem, Advocate to appear before the Banking Court and make request for adjournment. The said Advocate appeared before Banking Court No.II instead of B.C. No.1 and had made request for adjournment on behalf of the counsel of the appellants in case titled A.D.B.P. v. Muhammad Iqbal, which was mentioned in the cause list at Sr.No.6, which was adjourned for 12-11-2001. However, an ex parte decree was passed in this case. The said counsel could not appear on behalf of the original counsel before Banking Court No.1 by mistake as title of both the cases are same and in fact between the same parties. This fact was not considered by the Banking Court No.1 in its true perspective. He further submits that application of the appellants is supported by affidavit of original counsel as well as the counsel who appeared on behalf of the original counsel. This fact was also not considered by the trial Court in its true perspective. He further urges that Banking Court erred in law to pass ex parte decree against the appellants on 22-10-2001, which is not in consonance with the record of the trial Court. He further submits that appellants have no remedy to file application under section 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and the application filed by the appellants is maintainable before the Banking Court under Order 9, rule 13, C.P.C. in view of section 7(2) of said Ordinance.

3. Learned counsel of the respondents submits that Banking Court was justified to dismiss the application of the appellants as time-barred as the appellants have only remedy to file application before the Banking Court under section 12 of the Ordinance, ibid and admittedly appellants have not filed application within the prescribed period of 21 days, therefore, Banking Court was justified to dismiss the application as time-barred. In support of his contention, he relied upon the following judgments:-- (i) Messrs Kapur Textile Mills Limited through Chief Executive v. Bankers Equity Limited through Chief Executive 2002 CLD 298. (ii) Khalid Pervaiz v. United Bank Limited 2002 CLD 399. (iii) M. Afzal v. Allied Bank of Pakistan Ltd. and another 2003 CLD 765.

4. We have considered the contentions of the learned counsel of the parties and perused the record ourselves.

5. It is better and appropriate to reproduce orders dated 24-9-2001 and 22-10-2001 to resolve the controversy between the parties. Bare reading of the aforesaid orders clearly reveal that case was adjourned by the Banking Court on 24-9-2001 for 22-10-2001 with the direction to the respondent-Bank to file replies of the applications of the appellants. Respondent-Bank did not file replies of the applications as is evident from the aforesaid order dated 22-10-2001, therefore, Banking Court erred in law to pass the impugned decree against the appellants on 22-10-2001. It is settled principle of law that when the basic order is without lawful authority, then the superstructure shall have to fall on the ground automatically as per law laid down by the Division Bench of this Court and the Honourable Supreme Court in the following judgments:-- (i) Crescent Sugar Mills and Distillery Ltd. Faisalabad v. Central Board of Revenue, Islamabad and 2 others PLD 1982 Lahore 1. (ii) Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 Supreme Court (Pak.)

104. The Banking Court erred in law to pass the ex parte decree against the appellant on 22-10-2001, therefore, subsequent order passed on the application of the appellants for setting aside the ex parte decree is not sustainable in the eye of law. It is pertinent to mention here that case was fixed on 22-10-2001 as mentioned above to file replies of the applications by the respondent-Bank, therefore, it was not date of hearing of the main case as well as for arguments on the applications of appellants coupled with the fact respondent-Bank also did not file replies of the applications. In such situation, the Banking Court should have adjourned the case for filing of replies and arguments on the same. Therefore, Banking Court erred in law to pass the impugned decree against the appellants on 22-10-2001, which is not in consonance with the law laid down by the Honourable Supreme Court in judgment reported as Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar and another PLD 1975 SC

678. It is settled principle of law that nobody should be prejudiced by act of Court of law laid down by the D.B. of this Court in Irshad Ali s case PLD 1975 Lahore 7.

6. In view of what has been discussed above, ex parte decree dated 22-10-2001 and order dated 27-6-2002 are set aside. Meaning thereby, the applications filed by the appellants for leave to defend and suit of the respondent-Bank shall be deemed to be pending adjudication before the Banking Court No.1. Parties are directed to appear before the Banking Court No.1 on 17-2-2005, who is directed to decide the case afresh as expeditiously as possible. Parties and their counsel are directed to cooperate with the Banking Court, so that matter may be concluded within the prescribed period. In case any of the party/its counsel fails to cooperate with the Banking Court then the Banking Court shall invoke penal provision against the said party. It is settled principle of law that each and every case is to be decided on its own peculiar circumstances and facts as per law laid down by the Honourable Supreme Court in Trustees of the Port of Karachi v. Muhammad Saleem 1994 SCMR 2213. The judgments cited by the learned counsel of the respondent are distinguishable on facts and law as in the present case as mentioned above the basic ex parte decree passed by the Banking Court against the appellants is without lawful authority and nullity, therefore, judgment cited by the learned counsel of the respondent-Bank is not attracted in the present case. M.B.A./M-867/L Order accordingly.