2007 PLP 997 (CLD)

SYED ASGHAR HAIDER, J.

The respondent bank filed a suit for recovery of Rs.59,04,819 against the appellants, summons were issued, in response thereto the appellants appeared and filed PLA. The respondent bank filed replication. Thereafter the respondent bank filed two misc. applications and the proceedings were adjourned. On 6-12-2004, these applications were withdrawn by the counsel for the respondent bank and on the same date the appellant's PLA was dismissed for non-prosecution and the suit decreed. Aggrieved thereof the appellants filed an application, seeking the setting aside of the ex paste judgment and decree. The respondent bank filed reply. The appellants later made an application under Order VI, rule 17, C.P.C. praying for amendment in the stated application the prayer was granted, an amended application under Order IX, rule 13 read with section 151, C.P.C. was filed. The respondent Bank filed reply, the application was dismissed on 4-10-2006. Aggrieved thereof the present appeal.

2. Learned counsel for the appellants contended that order dated 6-12-2004, is void and without jurisdiction, PLA could not be dismissed in default, application under Order IX, rule 13, C.P.C. was in consonance with law, based upon cogent and tangible reasons, but was illegally dismissed, thus, the impugned order suffers from error of law and facts, therefore, it be set aside. To fortify his arguments learned counsel for the appellants relied on the following precedents: (i) Muneer Floor Mills (Private) Limited and 4 others v. National Bank of Pakistan through Chief. Manager and 2 others 2005 CLD 1019; (ii) Kamran Co. and others v. Messrs Modern Motors and another PLD 1990 SC 713; (iii) Nowsheri Khan v. Said Ahmad Shah 1983 SCMR 1092; (iv) Delta Weavers (Pvt.) Limited through Director and 3 others v. Allied Bank of Pakistan Limited 2003 CLD 1751; (v) Haji Khudai Nazar and another v. Haji Abdul Bari 1997 SCMR 1986; (vi) Messrs Baghpotee Services (Private) Ltd. and others v. Messrs Allied Bank of Pakistan Ltd. 2001 CLC 1363; (vii) Messrs Rose Incorporate, Bajwa Manzil and 4 others v. Messrs Bolan Bank Limited 2002 CLD 598; (viii) Shafis Pak Associates (Pvt.) Limited through Chief Executive and another v. Habib Bank Limited and 3 others 2002 CLD 379 and (ix) Muhammad Iftikhar through Special Attorney v. Zarai Taraqiati Bank Limited through Chairman and another 2005 CLD 1454.

3. Learned counsel for the respondent bank vigorously defended the impugned order and submitted that the appellants have not challenged the order of dismissal of PLA, or the judgment and decree dated 6-12-2004, but have only sought setting aside of the order made on 4-10-2006, whereby the application under Order IX, rule 13, C.P.C. was dismissed, therefore, the judgment and decree cannot be set aside, he also submits that PLA can be dismissed for non-prosecution, to fortify his contentions he relied upon the following precedents: (i) 2004 CLD 854 (ii) National Development Finance Corporation v. Sheikhoo Cooking Oil Mills Limited and 7 others 2002 CLD 341. (iii) United Bank Ltd. v. Messrs Zafar Textile Mills Ltd. 2000 CLC 1330.

4. We have heard the learned counsel for the parties and perused the impugned order, as well as, the judgment and decree dated 6-12-2004. The pivotal question for adjudication is, as to whether the Banking Court is bestowed with powers to dismiss PLA for non-prosecution or not.

5. Section 10(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 reads:- "

10. Leave to defend.

(1) In any case in which the summons has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided to defend the same; and in default of his doing so, the. allegation of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Banking Court may require in the interest of justice." Therefore, it is clear and un-ambiguous that the defendant has no right in law to defend the suit unless he obtains leave from the Court. Section 10(2) states that the leave application has to be filed within 30 days of service by any mode, it reads:-- "10(2) The defendant shall file the application for leave to defend within thirty days of the date of first service by any one of the modes laid down in subsection (5) of section 9: Provided that where service has been validly effected only through publication in the newspapers, the Banking Court may extend the time for filing- an application for leave to defend if satisfied that the defendant did not have knowledge thereof."' Section 10(3) and (5) deal with format of leave application, and documents to be filed with it. Section 10(6) requires compliance of these requirements and power to reject the application in case of non-compliance after providing an opportunity to defendant to show good cause for non-compliance. Therefore, a duty has been cast upon the Banking Court to examine the PLA and ensure that it fulfils the requirements of law and only thereafter allow it to be placed on record.

6. Section 10(8) reads:- (8)" Subject to section 11, the Banking Court shall grant the defendant leave to defend the suit if on consideration of the contents of the plaint, the application for leave to defend and the reply thereto, it is of the view that substantial questions of law or fact have been raised in respect of which evidence needs to be recorded." The Banking Court is, therefore, required to read the contents of the plaint, the application for leave to defend, the replication, and determine whether any questions of law and fact have been raised, which need recording of evidence.

7. Thereafter section 10(9) bestows upon the Banking Court powers, to grant conditional or unconditional leave. Section 10(11) bestows upon the Banking Court powers to reject the PLA if it does not fulfil the conditions for the grant of leave and thereafter decree the suit forthwith.

8. The position, therefore, which emerges from reading section 10(ibid) is clear and unambiguous, the defendant is required to file PLA, in accordance with the conditions enumerated in section 10 of the Ordinance, the Banking Court is required to examine it and if it fulfils the requirements set there to place it on record. But once PLA is part of record, it is the cardinal duty of the Banking Court, to consider the plaint, the PLA and the replication filed, and thereafter proceed to grant leave conditional or unconditional or reject the application under section 10(11) of the Ordinance. The Banking Court, therefore, is required to consider and decide the application on merits, it has been left with no other choice in this context. The Ordinance does not visualize the dismissal of application for non-prosecution, no such powers have been conferred upon the Banking Court, proceeding otherwise, amounts to defeating the legislative intent, thus, the dismissal for non-prosecution of the appellants PLA, was without jurisdiction and patently illegal.

9. Learned counsel for the respondent-Bank contended lastly that the appellants have not filed appeal against the judgment and decree dated 6-12-2004 and have only assailed the order dated 4-10-2006. The impugned order dated 4-10-2006, is based upon the dismissal of an application seeking setting aside of the ex parte proceedings, wherein not only the appellants PLA was dismissed for non-prosecution, but suit decreed as well. As the order for dismissal of PLA for non-prosecution was completely without jurisdiction, therefore, the entire structure built upon it is bound to fall, even otherwise this Court has ample powers under Order XLI, rule 33, C.P.C. to pass appropriate orders if the matter so requires. Therefore, we allow this appeal set aside the impugned order dated 4-10-2006 and the judgment and decree dated 6-12-2004 passed by the Banking Court No.IV, Lahore. The appellants PLA shall be deemed to be pending with the Banking Court, which shall proceed to decide it on merits in accordance with law. No order as to costs. M.B.A./A-134/L Appeal allowed.