2004 PLP 771 (CLD)

‑‑‑‑Ss.10, 9 & 12(3)‑‑‑Leave to defend suit‑‑‑Defendants who were not properly served by the Banking Court and an ex parte decree was passed against them deposited a reasonable amount with the creditor Bank which showed their bona fides‑‑‑High Court, in circumstances, granted leave to defend the suit to the defendants and allowed them a period of ten days for filing the written statement and directed that if they failed to do so, then the application already on record for leave to defend the suit shall be treated as written statement on behalf of the defendants and Banking Court shall decide the suit, which shall be deemed to be pending after hearing the parties in accordance with law. C.M. Sarwar for Appellant. Sardar Muhammad Tariq Dreshak for Respondent. Date of hearing: 22nd October, 2002. MIAN HAMID FAROOQ, J.‑‑‑Through the filing of the present appeal, under section 21 of Act XV of 1997, the appellants have called in question order dated 23‑5‑2001, whereby, learned Judge Banking Court dismissed their application, filed under section 12 of Act XV of 1997, for setting aside the ex parte judgment and decree, dated 23‑12‑2000, passed against the appellants.

2. Precisely stated, the facts leading to the filing of the present appeal are that the respondent‑Bank filed a suit for recovery of Rs.3,10,554, against the appellants before the Judge Banking Court and upon the presentation of the plaint, the learned Judge issued summons to the appellants, being defendants in the suit, through all the modes of service provided under section 9(3) of Act XV of 1997. Pursuant to the above, tile learned Judge Banking Court, after finding that despite the service of the appellants, no application for leave to defend the suit has been filed, proceeded to pass an ex parte decree, against the appellants, vide judgment and decree, dated 23‑12‑2000. Subsequently, the appellants, on 9‑1‑2001, filed an application under section 12 of Act XV of 1997 seeking setting aside of aforenoted ex parte judgment and decree, which application was contested by the respondent‑Bank and ultimately the learned Judge Banking Court, after finding that "the defendants were served through all the relevant modes," dismissed the said application vide order dated 23‑5‑2001, hence the present appeal.

3. Learned counsel for the appellants has contended that appellants were not served through any of the modes of service, therefore, no decree could have been passed against them. He has further contended that the publication of summons did not take place in the newspaper having wide circulation, therefore, the process issued by the learned Banking Court was in negation of the mandatory provisions of law. He has further added that although the appellants were not served, as noted above, yet one of the appellants filed an application for leave to defend the suit, but the learned Banking Court did not decide the same deeming as if no application has been filed. Conversely, learned counsel representing the respondent‑Bank, while supporting the impugned judgment and decree dated 23‑12‑2000 and the subsequent order dated 23‑5‑2001, has vehemently asserted that as the appellants were served through all the modes of service and they did not file any application, therefore, the learned Banking Court was empowered to pass an ex parte decree, which is not open to any exception. He has further submitted that as the appellants were properly served, therefore, application under section 12 of Act XV of 1997 was devoid of any merits and the same has rightly been dismissed by the learned Judge Banking Court.

4. Upon the examination of the available record, we find that upon the presentation of plaint; the learned Judge Banking Court issued summons, as required under section 9(3) of Act XV of 1997, and directed that the summons shall be served through Bailiff of the Court, by registered post acknowledgement due, by courier service and publication in Urdu Daily 'Din' and in English Daily 'The News' and the case was adjourned to 23‑12‑2000, on which date the learned Judge Banking Court, after finding that no application for leave to defend the suit has been filed, proceeded to pass an ex parte decree. The first question, which arises in the present case is as to whether' the appellants were served through any of the modes of service as prescribed under the law as noted above. Firstly coming to the summons sent through the Process Server, we find that the same was addressed to "Mehmood Brothers through Mehmood Ahmed and Mr. Asif Mehmood". The report of the Process Server, which appears on the back of the said summon, shows that it was not received by either Mehmood Ahmed or Asif Mehmood. According to the report although the defendants were present, but they refused to receive the summon and thus he affixed the summons on the address given therein. We find from this notice that it has not been witnessed by any of the persons of the locality and no affidavit has been given by the said Bailiff in support of the said refusal report. There is a stamp of "Nazir" Banking Court showing that Process Server namely Sher Afzal has sworn before the said Nazir. However, it is not clear that what facts were shown by the said Process Server before the Nazir. We are of the view that the said alleged swear was not in accordance with law as we feel that Nazir is not competent Judicial Officer before whom swear can be administered under the law. The next question in this regard would be as to whether the Process Server has affixed the summon in accordance with the provisions of Order V, rule 17, C.P.C., when the same was statedly refused to be received by the appellants. We find from the record that the learned Judge, Banking Court, before proceeding ex parte, did not satisfy itself that in fact the defendants purposely avoided service thereby attracting the provisions of Order V, rule 17, C.P.C. It is not evident from the record of the case that the Process Server used all due and reasonable diligence to locate the defendants. Further more, the Process Server did not mention time as well as identity of house visited by him. We are of the view that the Process Server, in the present circumstances, was not empowered to affix the summons, even if the same were refused to be received by the appellants. We are of the further view that these summones were never served upon the appellants and the alleged reported affixation is not in accordance with law, thus, we conclude that the said summon was not at all served, on which much reliance has been placed by the learned Banking Court, while passing, the impugned order.

5. It is discernible from the record that the appellants were not served either through courier service or by registered post acknowledgement due, as we do not find any acknowledgement to the effect that the registered notices were, in fact, received by the appellants. There is nothing on the file showing that the summons, sent through courier service or/and by registered post, were received by the appellants, therefore, no reliance can be placed on these modes of service before saddling the appellants with such huge liabilities.

6. Now coming to the publication of summons made in the two newspaper. It is a matter of record that the learned Banking Court ordered for the issuance of summons also by way of publication in the two daily newspapers i.e. 'Din' and "The Newspaper", under section 9(3) of Act XV of 1997, it has been provided that in addition to other modes of service, the summons shall be served through publication in one English language and one Urdu language daily newspaper and that the Banking Court shall ensure that the publication of summons shall take place in newspapers with a wide circulation within its territorial limits. As noted above in this case, the publication was made in daily newspapers i.e. 'Din' and 'The Newspaper' which in our view have a limited circulation. It has purposely been made incumbent upon the Banking Courts to ensure that the publication is made in the newspapers having a wide circulation, so that the defendant could attain knowledge about the institution of the suit through any of the modes of service, including the publication. The two newspapers, in which the publication was effected, can hardly said to be having a wide circulation. Learned Banking Court, while ordering the publication of summons in these two newspapers, has negated the mandatory provisions of section 9(3) of the Act XV of 1997 and has considered the legal requirement of publication of summons only as a formality. As the publication has not been effected in consonance with the intention of the aforenoted provisions of law, thus, it cannot be said that either the publication of summons has taken place in the newspapers having a wide circulation or that the appellants were served through the aforenoted mode of service, therefore, we are of the view that the appellants were not served through the publication in the newspapers. The resume of the above discussion is that the appellants were not served through any of the modes of services, as provided under the law and the approach of the learned Banking Court that the appellants have been served through all of the modes of service is perfunctory, in complete oblivion of the facts of the case and laws on the subject, thus, we are not inclined to maintain the impugned order.

7. There is yet another aspect of the case, as from the perusal of the record, we find that one of the appellants filed an application for leave to defend the suit, which was neither taken into consideration by the learned Banking Court nor decided. It is evident from the order‑sheet that the learned Banking Court even did not take notice of the said application and after finding that no application has been filed, proceeded to decree the suit. If an application, even if time‑barred, was filed before the learned Banking Court, it was incumbent upon the learned Judge to have decided the said application one way or the other. To our mind the learned Judge Banking Court has completely misread the record and that is the reason why the application was not decided.

8. Upon the examination of the impugned order, we find that the same is not sustainable, neither in consonance with law nor in accordance with the record of the case and the same deserves to be set aside. Furthermore, we find from the record of the appeal that the appellants have paid a sum of Rs.2,00,000 to the respondent‑Bank with the hope that the Bank, on reconsideration of the matter, may waive the amount charged by way of interest/mark‑up, but it appears that the matter is still under consideration before the competent authorities, who appear to have sitting over the matter.

9. Upshot of the above discussion is that present appeal is allowed and the impugned order dated 23‑5‑2001 is hereby set aside with no order as to costs. Resultantly, the application filed by the appellants for setting aside the ex parte judgment and decree dated 23‑12‑2000 is accepted and consequently the judgment and decree dated 23‑12‑2000 is also set aside. As noted above, the appellants have deposited a sum of Rs.2,00,000, which shows their bona fides, thus, we also grant them leave to defend the suit and allow them a period of 10 days for filing the written statement and if they fail to file written statement, then the application already on record for leave to defend the suit shall be treated as written statement on behalf of the appellants and the learned Banking Court shall decide the suit, which shall deem to be pending, after hearing the parties and of course in accordance with law. M.B.A./M‑1552/L Appeal allowed.