2005 PLP 923 (CLD)

(1) Whether the suit is pre‑mature and has been filed without any cause of action and is liable to be dismissed? OPD (2) Whether the agreement of sale and purchase dated 8‑1‑1989 annexed as annexure F gives jurisdiction to this Court to try the suit as it is a case of purchase of property and it does not fall within the definition of finance? OPD (3) Whether the promissory not# dated 10‑1‑1989 is valid piece of document being without considera tion? OPD (4) Whether the plaintiff is entitled to the decree prayed for on the basis of the pleadings? OPP. (5) Relief. The learned Judge Banking Court, on 10‑6‑1999, recorded bank's/plaintiffs evidence (P.W.1) and adjourned the case to 15‑6‑1999, on which date the learned Banking Court, after hearing the ex parte arguments, proceeded to pass the impugned judgment and decree for the recovery of Rs.4,65,494 with costs against the appellants, hence the present appeal.

3. Learned counsel for the appellants has contended that the appellants were not provided sufficient opportunity to defend the suit and respondent's witness was recorded in the absence of the appellants as well as their learned counsel, inasmuch as they were neither allowed to cross‑examine the witnesses nor produce their own witnesses. The learned counsel has further submitted that after the institution of the appeal, incentive scheme was introduced by the respondent‑Bank and the appellants have filed the application under that scheme, but their application has not yet been decided. He has added that without conceding to his contentions, the appellants have duly satisfied the decree under challenge, as is evident from the contents of their application (C.M. No.2‑C of 2004), filed in this Court. Conversely the learned counsel for the respondent, while refuting the aforesaid contentions has supported the impugned judgment and decree and asserted that the same was validly and legally passed.

4. In view of the arguments of the learned counsel for the parties, we have examined the available record and perused the impugned judgment. We find from the record that after framing the issues, the case was adjourned for recording the evidence of the respondent‑Bank, but the same could not be recorded on account of various reasons. On 10‑6‑1999, the learned Judge Banking Court recorded the evidence of the respondent‑Bank in the absence of the appellants and their learned counsel. We find from the said order that although it has been observed therein that none represented the appellants till 2‑15 p.m., yet the learned Banking Court without passing any ; ex parte order, proceeded to record the evidence (P.W.1) of the respondent's bank and it closed its evidence on the same date. To our mind, if the learned Judge Banking Court was to record the evidence, then it ought to have, firstly, passed the ex parte order, against the appellants, and thereafter to record Bank's evidence either on the same day or on the succeeding date. Thus the learned Judge Banking Court committed legal error, while recording Bank's evidence, without proceeding ex parte against the appellants. Furthermore the learned Banking Court, after recording evidence of the plaintiff did not fix the case for I recording evidence of the appellants and straight away fixed the case for hearing ex parte arguments of the respondent‑Bank. When no ex parte order was passed against the appellants, then the learned Judge Banking Court was under an obligation to provide them an opportunity to produce their evidence. We feel that the consequence, of not passing the ex parte order against the appellants on 10‑6‑1999, was that the appellants were very much in the field and so long as ex parte order was not passed against them, they were entitled to cross‑examine P.W.1 and to lead their affirmative/rebuttal evidence, which right was unlawfully denied to them. Had the appellants been proceeded ex parte on 10‑6‑1999, in that case, the order for the fixation of the ex parte arguments would have been proper and legal. Under the present set of circumstances, the learned Banking Court should have, at least, provided one opportunity to the defendants for producing their witnesses. In view whereof, we are of the view that the appellants have been condemned unheard.

5. There is another aspect of the case. Upon the examination of the impugned judgment, we find that the learned Banking Court did not decide Issues Nos.1 to and felt contended only after giving sketchy findings on Issue No.4. Even if the appellants were not allowed to lead the evidence, the learned Banking Court was obliged to render the findings on the said issues, inasmuch as the question of jurisdiction was raised by the appellants and Issue No.2 was framed on the said controversy.

6. As the basic order dated 10‑6‑1999 is not sustainable in law, therefore, the superstructure made thereon in the shape of judgment and decree is also not of any consequence. It has been held in Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 that:‑‑ "And if on the basis of a void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders, together with the superstructure of rights and obligations built upon them, must, unless some statute or principle of law recognizing as legal the changed position of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded."

7. In the above perspective, we are of the view that the learned Banking Court, while passing the impugned decree has committed legal errors, inasmuch as the appellants have been condemned unheard. The impugned judgment suffers from legal errors/defects, therefore, we are inclined to the set the same aside.

8. Upshot of the above discussion is that the present appeal is allowed and the impugned judgment and decree is .set aside with no order as to costs. Resultantly respondent's suit shall be deemed to be pending before the learned Banking Court, which shall provide reasonable opportunity to the appellants to cross‑examine P.W.1 anti also to produce their evidence and thereafter to decide the suit, afresh, in accordance with law and after hearing the parties within a period of four months from today. We find from the interim orders passed by this Court that the appellants have deposited certain amount from time to time with the Deputy Registrar of this Court. As the decree has been set aside, therefore, the appellants are entitled to withdraw the said amount according to the rules and procedure. S.A.K./M‑907/L Appeal accepted.