2024 PLP 758 (CLD)

S M ATTIQUE SHAH, J.

Through the appeal in hand, the appellant has called in question the judgment and decree of the learned Judge Banking Court-I, Peshawar dated 10.11.2011, whereby, his leave to defend application was rejected and the recovery suit of the respondent-bank was decreed, except liquidated damages, if any, against him with costs of funds and costs of the suit.

2. Brief facts of the case are that the appellant applied for the Hire-Purchase of 1000 cc Motor Car (Santro) Model, 2001 through a prescribed form to the respondent-company, which was accepted by the respondent-company and pursuant thereto, the appellant executed a Hire-Purchase Agreement with the respondent-company for a period of 60 months. After execution of said agreement, the respondent-company paid the full price of the motorcar to the seller and delivered the same to the appellant against a property receipt on 13.10.2006. Respondent No.2 stood his guarantor and he too, executed an undertaking in favour of the respondent-bank. However, it was pursuant to the repeated requests of respondent-company to the appellant and his guarantor to fulfill their contractual obligations and their failure / refusal to do so, when the respondent-company filed the instant recovery suit against them. Initially, the suit was ex parte decreed in favour of the respondent-company on 20.05.2011, however, the same was set aside on the application of appellant vide order 13.08.2011 and thereafter, the appellant filed application for leave to defend the suit. Learned trial court, after receiving replication and hearing the learned counsel for the parties, rejected the said application and in turn decreed the suit of the respondent-company as prayed for along with costs of funds and costs of the suit expect liquidated damages, if any, through the impugned judgment and decree and the execution proceedings were set in motion within the meaning of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

3. Heard. Record perused.

4. Legal question for determination before this court in the instant appeal is that as to whether the recovery suit filed on behalf of the respondent-company on 09.04.2011 was competent before the worthy Judge Banking Court Peshawar given the fact that the Provisional Manager was appointed by the court under section 308 (c) of the Companies Act, 2017 on 01.02.2010, winding up order of the respondent-company was passed on 21.03.2013 and; the official liquidator was appointed on the same very date i.e. 21.03.2023. Section 310 of the Companies Act 2017 is clear enough to deal with such situation. At this stage, it would be more apt to reproduce Section 310 of ibid Act, which read as under :- Section

310. Suits stayed on winding up order.- (1) When a winding up order has been made or a provisional manager has been appointed, no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the court, and subject to such terms as the court may impose. (2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of, any suit or proceeding by or against the company. (3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by the Court.

5. It is abundantly clear from the aforesaid provisions of law that no suit shall be proceeded with or commenced against a company regarding which either a winding up order is passed or the provisional manager is appointed without the leave or permission of the court before which the winding up proceedings are pending. Undoubtedly, the said court has also the jurisdiction to entertain, dispose of any suit or proceeding by or against the company. It is further clarified that in case any proceeding by or against the company, which is pending in any other court can be transferred to and disposed of by the court which is dealing with the matter of winding up the company. In the instant case, the Provisional Manager was appointed on 01.02.2010 and; the recovery suit was filed by the respondent-company through Mr. Mohammad Mustajab Siddiqui, Deputy Manager Operations before the learned Judge Banking Court on 09.04.2011, after the commencement of the winding up proceedings of the said company, which was not maintainable / competent being against the very mandate of the ibid provision of section 310 of the Companies Act, 2017. More so, the Authority Letter of said Deputy Manager Operation appended with the suit reflects that he was authorized by the Company Secretary to file and contest the suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2011 or any other law in vogue and / or institute criminal suit in any court upto the Supreme Court of Pakistan against the appellant (Mr. Faqeer Muhammad) Lessee and or guarantor Mr. Naimat Ullah on behalf of the company on 26th May 2009 before the commencement of winding up proceedings of the respondent-company and; the said authority letter lost its legal efficacy, after the appointment of Provisional Manager on 01.02.2010. As such, he was even not competent to file the instant suit against the appellant before the learned Banking Court Peshawar. Besides, the available record is also completely silent in respect of any permission / leave obtained from the concerned court to file the suit against the appellant before the learned Banking Court Peshawar. In view thereof, this court reaches to the conclusion that the suit was filed before the learned Judge Banking Court without the leave of the court, which was not competent in the given circumstances of the case. The respondent-company ought to have filed the suit after obtaining leave of the court in terms of the provision of section 310 of the Companies Act, 2017. Such legal aspect of the case has not been considered by the learned Judge Banking Court while decreeing the suit of the respondent-company against the appellant through the impugned judgment and; decree. Such findings of the learned Banking Court Peshawar suffer from illegality and material irregularity, hence warrant interference of this court through the present appeal. 2013 CLD 1568 (Sindh) Messrs GAC Pakistan (Pvt.) Ltd. v. E.F.U. General Insurance Ltd and 2 others.

7. Such being the position, this appeal is allowed, impugned judgment and; decree dated 10.11.2011 is set aside and the matter is remitted back to the learned Judge Banking Court for its decision afresh strictly in accordance with law, after due compliance of the provisions of section 310 of the Companies Act, 2017. MQ/33/P Appeal allowed.