2015 PLP 818 (CLD)

M. SOHAIL IQBAL BHATTI, J.

Through this appeal, the appellants have sought an exception to the order dated 2-4-2012 passed by learned Judge Banking Court No.IV, Lahore.

2. The facts of the case are that the respondent bank filed a suit for recovery of Rs:1,56,09,129/52 against the appellants on 14-6-2011. In response to the summons issued under section 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 the appellants failed to appear and file an application for leave to appear and defend the suit and therefore the learned Judge Banking Court passed the judgment and decree dated 12-8-2011 against the appellants. The appellants filed an application under section 12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with Order IX, Rule 13 of C.P.C. for setting aside the judgment and decree dated 12-8-2011 which was dismissed by the learned Judge Banking Court No.IV, Lahore through impugned order dated 2-4-2012, hence this appeal.

3. The learned counsel for the appellants argued that while passing the impugned order, the learned Judge Banking Court acted in an arbitrary and illegal manner. It is further argued that notices had not been served upon the appellants in any of the modes provided under the law and thus the judgment and decree dated 12-8-2011 was liable to be set aside.

4. On the other hand, the learned counsel for the respondent bank vehemently opposed the arguments advanced by learned counsel for the appellants and argued that it is astonishing that initially appellants (as alleged) were not served at the address provided in the plaint but the notices under Order XXI, Rule 66, C.P.C. were also sent at the same address as is mentioned in the plaint and the appellants appeared before the Court in compliance with the notices issued in execution proceedings. It has been further argued that the appellants had not complied with the mandatory provision of subsection (2) of section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and thus the appeal was liable to be dismissed on this score only.

5. We have considered the arguments advanced by the learned counsel for the parties and have also gone through the documents attached with this appeal.

6. The case of the appellants is that notices could not have been served. We have observed that it has never been the case of the appellants that notices have not been served on account of any change of address. The memo of the parties attached with this appeal mentions the same address of the appellants which has been mentioned in the plaint. We have further observed that according to the report of the bailiff; the appellant No.2 who is a sole proprietor of appellant No.1 was not available at the business address and the employee namely Muhammad Sarwar showed his inability to call appellant No.2 and the same bailiff went to the residential address of appellant No.2, he was informed that the appellant No.2 can be contacted at his business address. Apparently, it seems that appellants had been trying to avoid service of summons through bailiff of the Court.

7. At this stage, it would be useful to reproduce section 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which as under:-- (5) On a plaint being presented to the Banking Court, a summons in Form No.4 in Appendix "B" to the Code of Civil Procedure, 1908 (Act V of 1908) or in such form as may, from time to time, be prescribed by rules, shall be served on the defendant through the bailiff or process-server of the Banking Court, by registered post acknowledgment due, by courier and by publication in one English language and one Urdu language daily newspaper, and service duly effected in any one of the aforesaid modes shall be deemed to be valid service for purposes of this Ordinance. In the case of service of the summons through the bailiff or process-server, a copy of the plaint shall be attached therewith and in all other cases the defendant shall be entitled to obtain a copy of the plaint from the office of the Banking Court without making a written application but against due acknowledgement. The Banking Court shall ensure that the publication of summons takes place in newspapers with a wide circulation within its territorial limits."

8. Plain reading of subsection (5) of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 shows that upon presentation of the plaint, the Banking Court is to issue notice to the defendant in all the modes provided under the law and the service effected in any one of the modes would be deemed to be a sufficient service.

9. The Hon'ble Supreme Court of Pakistan in a judgment reported in Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited (PLD 1990 Supreme Court 497) has held that the service effected through publication of notice in a newspaper is a valid service. The Hon'ble Supreme Court of Pakistan while discussing the scope of service through publication in the newspaper in the banking matters has held as under in Para No.9 of the judgment:- "We are inclined to hold that the view taken in the last referred case of Karachi is in consonance with the spirit of the Ordinance and the Rules framed thereunder. It is a matter of common knowledge that defaulter borrowers in suits brought against them particularly by the financial institutions used to delay the disposal of the suits by avoiding the service of the summons. In order to expedite the disposal of the suits to be brought by the Banking Companies, the Ordinance was promulgated, which contains special provisions and which inter alia provide that a suit brought by a Banking Company for the recovery of loan is to be tried in summary manner under Order XXXVII. Section 15 of the Ordinance empowers the Federal Government by a notification in the official Gazette to make rules for carrying out the purposes of the Ordinance. In pursuance whereof the rules have been framed. The underlined object of Rule 8 is to avoid the delay in the service of the summons and, therefore, it has been provided that the summons are to be issued simultaneously in three different modes referred to hereinabove, which is the requirement of the above rule. Obviously for the reason that if the summons is not served through a bailiff or by a registered post acknowledgement due, it would be served in any case by publication. In other words, the service is to be held good if a defendant is served by any of the above three modes of service provided for in Rule 8."

10. The legislature while promulgating Financial Institutions (Recovery of Finances) Ordinance, 2001 went a step further while framing subsection (5) of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to ensure that the service is effected upon the defaulter borrowers at the earliest, so that the disposal of recovery suits is not delayed.

11. In the present case, the service has been effected upon the appellants through publication in two newspapers. While following the dictum laid down in PLD 1990 Supreme Court 497 supra by the Hon'ble Supreme Court of Pakistan, this Court in a judgment reported in Khawaja Muhammad Bilal v. Union Bank Limited through Branch Manager (2004 CLD 1555 [Lahore]) has held that in case of publication of notices in newspaper, the service upon the defendants would be deemed to have been effected.

12. In the present case, we have observed that the appellant No.2 was trying to play hide and seek with the bailiff of the Court. The notices had been sent to the appellants through registered post also. The effect of service by registered post is given in section 27 of the General Clauses Act, 1897 which is reproduced below:- "

27. Meaning of service by post.

Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post whether the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."

13. For what has been discussed above, we are not inclined to agree with the arguments of the learned counsel for the appellants and interfere with the order passed by learned Judge Banking Court. Resultantly, this appeal being devoid of any merits is dismissed. KMZ/W-1/L Appeal dismissed.