1997 PLP 2244 (MLD)

Muslim Commercial Bank Limited v. Altaf Hussain 1990 MLD 1258 ref. Munir A. Malik for Plaintiff. Mushir Alam for Defendants. In this suit for recovery of U.S. Dollars 31,42,277.14 under the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter referred to as the Ordinance, 1979) payable in equivalent Pakistani rupees at the exchange rate fixed by the State Bank of Pakistan, defendants Nos.1 and 2 have moved this application for grant of leave to defend the suit unconditionally.

2. It is the case of the plaintiff‑company that they advanced a loan of Rs.23 millions to the defendant No.1 company for establishment of a plant for manufacture of Ferro Silicon. As the said company with defendants Nos.2 and 6 as its Directors failed to pay back the loan amount with interest thereon this suit was filed for recovery.

3. In support of the application for leave to defend Mr. Mushir Alain, learned counsel for the defendants advanced two grounds firstly, that the defendant's plant could not be established for want of disbursement of loan from other members of the consortium as the estimated cost of the plant was Rs.153 millions and secondly that the entire loan amount advanced by the plaintiffs was secured by registered mortgage of immovable property as well as hypothecation of machinery of the plant.

4. Prayer for leave to defend the suit was seriously contested by plaintiffs who pleaded the bar of limitation inasmuch as the defendants were served with summons of the suit by way of publication dated 8‑5‑1991 whereas the instant application was filed on 13‑6‑1991. Mr. Mashir Alain, learned counsel for the defendants earnestly submitted that on being engaged by the defendants he filed his Vakalatnama in office on 5‑6‑1991; moved an application for a copy of the plaint on 12‑6‑1991 and on receipt thereof made the present application on 13‑6‑1991. In support of his submission that the application was filed within time because the publication in paper could not be accompanied by a copy of the plaint, learned counsel referred to Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 which provides the mode of service of summons on the defendant through process‑server, registered post as well as by publication. S.R.O. 71(1)/88, dated 3‑1‑1988 issued later lays down that service of summons in any of the aforesaid modes shall be deemed proper and valid service for the purpose of Ordinance, 1979.

5. Relying on Muslim Commercial Bank Limited v. Altaf Hussain 1990 MLD 1258 laying down that the commutation of period of limitation of 10 days does not start running before the date when defendant had filed application under Order XXXVII, rule 4, C.P.C. when summons in Form‑4 Appendix 'B', C.P.C. alongwith a copy of the plaint was not served upon him. On the other hand, Mr. Munir A. Malik learned counsel for plaintiffs referred to the Supreme Court judgment in Ahmed Autos v. Allied Bank Limited PLD 1990 SC 497 laying down that there is no doubt that in Form‑4 of Appendix 'B', C.P.C., it has been stated that a copy of the plaint is annexed but a copy of plaint cannot be enclosed for effecting service by publication does not in any way affect the validity of service as it is one of the modes of service provided for under Rule

8. Rule 8 of the Rules, 1980 referred to above was held as not violative of Order XXXVII, C.P.C. having been competently framed by competent Authority. In view of the dictum to the contrary laid down by their Lordships of the Supreme Court the view expressed in the Karachi case cannot be followed and computing the period of 10 days from the date of valid service by publication, application for leave to defend made on 13‑6‑1991 is hopelessly barred by time. It is accordingly dismissed on this short ground.

6. As the suit has been filed under the provisions of Ordinance, 1979 and provisions of Order XXXVII, C. P. C., are made applicable in the trial of such suits, the allegations made in the plaint shall be deemed to be admitted and the plaintiff entitled to the decree. In view of the aforesaid proposition of law, plaintiff's suit is decreed with costs and interest at the agreed rate of 15 % as prayed. A preliminary decree under Order XXXIV, C.P.C., for the sale of property under mortgage shall be framed in the first instance. A.A,/P‑31/K Suit decreed.