2003 PLP 254 (CLD)

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑ ‑‑‑‑Ss.12, 9(5) & 10(1)‑‑‑Application for setting aside ex parte decree‑‑Objection of plaintiff was that such application was time‑barred‑‑‑Validity‑‑‑Proper service of defendants had not been effected through any of the prescribed modes of service‑‑‑Defendants, thus, could not be said to have knowledge of passing of decree prior to filing of such application‑‑‑Defendants had filed application within 21 days of their knowledge‑‑‑Application was within time‑‑‑Objection was repelled in circumstances. Sajid Mehmood Sheikh for Appellants. Mushtaq Ahmad Khan for Respondent. Date of hearing: 19th September, 2002. MIAN HAMID FAROOQ, J.‑The appellants/judgment‑debtors, through the filing of this appeal, under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, have called in question order dated 22‑5‑2002, whereby the learned Judge, Banking Court, dismissed an application, filed by the appellants, for setting aside the ex parte judgment and decree dated 9‑1‑2002. Briefly stated the facts necessary for the decision of the present appeal are that the respondent‑Bank filed a suit for the recovery of Rs.6,65,161.54 against the appellants, before the learned Judge, Banking Court, under the provisions of Ordinance, XLVI of 2001, wherein the learned Banking Court issued the summons through all the modes of service, as prescribed under the law. As the appellants neither appeared nor filed any application seeking leave to defend the suit, therefore, the learned Banking Court passed a decree for the recovery of Rs.6,65,161,54, with costs of suit and cost of funds, against the appellants, jointly and severally vide judgment and decree dated 29‑1‑2002. The appellants, on 21‑3‑2002, filed an application, purportedly, under section 12 of Ordinance, 2001, for setting aside the aforenoted ex parte judgment and decree, which was opposed by the respondent‑Bank by way of filing the reply of the said application and ultimately, the learned Banking Court finding that the application is barred by time and the appellants were sufficiently served, dismissed the said application vide order dated 22‑5‑2002, hence, the present appeal.

3. Learned counsel for the appellant has contended that the appellants were not properly and sufficiently served, as prescribed under the' law inasmuch as no personal service of any of the appellants was effected. He has further submitted that the application under section 12 of Ordinance, 2001, was within time, as the same was filed within 21 days of the date of the knowledge of passing of the decree and as the summons were not duly served upon the appellants, therefore, the application filed within 21 days from the date of knowledge was within time. Conversely, the learned counsel for the respondent‑Bank, while supporting the impugned judgment/decree has submitted that as the appellants were served through the publication in the newspapers, the same was deemed to be sufficient service and therefore, the ex parte judgment and decree was rightly passed by the learned Banking Court. He has added that the decree was passed on 29‑1‑2002, while the application for setting aside the ex parte decree was filed on 21‑3‑2002, therefore, the same was out of time and the findings by the learned Banking Court on the point of limitation are not open to exception.

4. Upon the examination of the record of the case, we find that after the plaint was presented to the Banking Court, it issued summons, as per the requirement of section 9(5) of Ordinance, 2001, through all the modes of service including the publication of summons in daily 'News' and 'Saadat'. Admittedly, the appellants were not served through bailiff/process‑server of the Banking Court nor through registered post acknowledgement due nor by courier service. Although the summons were also sent to the appellants through registered post, yet we do not find on record any acknowledgement due evidencing the fact that the appellants did receive those registered letters containing the summons. The registered letters sent through the postal receipts, were not even received back by the learned Court undelivered, as they are not on the record of the case. As regards the summons issued by courier service, the envelops containing the summons were sent back to the Banking Court by the courier agency with the report viz. "out of our service area". It flows from the above, that the appellants were not personally served in any of the modes enumerated above. Having said, that now the only mode of service remains in field is the publication of summons in the daily newspaper. The summons were published in the daily "News" (English language) and daily "Saadat" (Urdu language) in their prints dated 7‑10‑2001 and 21‑9‑2001 respectively. The learned Banking Court, while dismissing the application, filed by the appellants, has also relied upon this mode of service and after finding that the appellants were served through the publication in the newspaper, thus, having knowledge of the pendency of the suit, dismissed the application of the appellants. The learned counsel for the respondent‑Bank confronted with the fate of the aforenoted three modes of service, has also fallen back upon the mode of service through publication in the newspapers.

5. Now the question arises as to whether, in the present case, the service of the appellants have duly been effected through the publication made in the newspaper, as according to law, the service duly effected in any of the modes, prescribed under section 9(5) of Ordinance, 2001, shall be deemed to be a valid service for purposes of the Ordinance, 2001. We have examined the aforenoted provisions and find that it has been made encumbent upon a Banking Court to ensure that the publication of summons takes place in newspapers with a wide circulation. Intention of the Legislature, in, prescribing different modes of service in section 9(5) of Ordinance, 2001, is that the summons should be sent through all the four modes and that the publication shall be effected in the newspaper with wide circulation, so that defendant, wherever he may be living, must come to know through any of the modes of service about the institution of the suit. That is the reason at the fag‑end of section 9(5) of Ordinance, 2001, it has made necessary for the Banking Court to ensure that the publication of summons takes place in the newspapers with wide circulation. To our mind, the newspaper 'Saadat' is not a newspaper with a wide circulation and appears to be a newspaper, which has a local circulation. Even the learned counsel for the respondent‑Bank could not deny that this newspaper has a limited circulation and that too, within the District of Faisalabad, whereas even the addresses of the appellants, given in this publication, were of Toba Tek Singh. In these circumstances, it can be rightly argued that the publication of the summons in the newspaper has not been made in accordance with law. We are of the view that in this case, the intention of the Legislature has not been meted out, as noted above. The summons in the daily newspaper of Urdu language, was made in the newspaper having a limited circulation and thus, the intention of the law has not been fulfilled. The learned Banking Court has not sufficiently and adequately complied with the provisions of section 9(5) of the Ordinance, 2001, thus, we are of the view that the service of the appellants was not effected in accordance with the provisions of law.

6. Now coming to the objection raised by the learned counsel for the respondent‑Bank, that the application seeking setting aside of ex parte judgment and decree was barred by time. Obviously, the said application was filed by the appellants under section 12 of the Ordinance, 2001, which prescribes that in case of a passing of decree under section 10(1) of Ordinance, 2001, a defendant may within 21 days of the date of the decree, or where the summon was not duly served when he has knowledge of the decree apply to the Banking Court for an order to set it aside. Sc far as the first portion of section 12 is concerned obviously the same will not be applicable in the present case, as the defendants were not properly served, as noted above. The learned counsel has rightly argued that this application filed within 21 days of the date of the knowledge is within time, which argument finds support from the provisions of section 12 of Ordinance, 2001 which, inter alia, provides that when the summons were not served, the defendant can file an application within 21 days from the date of the knowledge. As we have held above, that proper service of the appellants was not effected through any of the modes of service, as prescribed under the law, therefore, it cannot be said that prior to the filing of the application, the appellants had the knowledge of the passing of the decree. The appellants did file the application for setting aside of ex parte judgment and decree within 21 days of their knowledge thus, the application was within time and the objection of the learned counsel for the respondent‑Bank is misdirected thus, repelled.

7. Upon the examination of the impugned order, we find that the learned Banking Court proceeded to dismiss the appellants' application without taking into consideration the aforenoted legal requirements and the same was rendered in complete oblivion of the law on the subject and the facts on record, thus, we are inclined to interfere in the impugned order.

8. Upshot of the above discussion is that the present appeal is allowed and the impugned order dated 22‑5‑2002, is set aside with no order as to costs. The result would be that the suit for recovery, filed by the respondent‑Bank, shall deem to be pending before the learned Judge, Banking Court and the appellants are allowed to file an application, under section 10 of Ordinance, 2001, for leave to defend the suit before the learned Banking Court within 10 days from today, as per the requirement of section 12 of Ordinance, 2001. S.A.K./Q‑26/L Order accordingly.