2014 PLP 1181 (CLD)

ABDUL LATIF KHAN, J.

Aggrieved of the order dated 22-4-2010 of learned Banking Court-II, Peshawar, whereby the suit of the appellant was returned to him under Order VII, rule 11, C.P.C. for presenting before the proper forum.

2. Short facts of the instant appeal are that the appellant-plaintiff filed a suit for declaration and damages sustained by him against the respondent in the Banking Court, Peshawar. The respondents appeared before the learned banking court and submitted two applications, under section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and under Order VII, rule 11, C.P.C. for the rejection of plaint. The learned banking court after obtaining replies and hearing the learned counsel for the parties, passed the impugned order dated 22-4-2010, hence the instant appeal.

3. The learned counsel for the appellant contended that banking court has passed the impugned order in slipshod manner, harsh in nature and violently against principle of natural justice. It was argued that the appellant claimed damages in the instant suit and to this effect the suit of the appellant-plaintiff was returned by the civil court as well as insurance tribunal and was directed to approach the banking court. He argued that the banking court has also rejected the plaint of the instant suit under Order VII, rule 11, C.P.C. on the ground of lack of jurisdiction. He contended that the banking court has travelled beyond jurisdiction by rejecting the plaint as the appellant-plaintiff has left with no forum to be approached for his redressal. He contended that the banking court ought to have adopted the procedure but without observing the same, the plaint has been wrongly rejected at initial stage.

4. As against that, the learned counsel for the respondents contended that under Insurance Ordinance XXXIX of 2000 the insurance tribunal has jurisdiction to entertain the matter instead of banking court and the impugned order has been passed strictly in accordance with law.

5. We have heard the arguments of the learned counsel for the parties and record perused with their valuable assistance.

6. The perusal of the record reveals that the appellant has filed the suit against the bank and United Insurance for recovery of damages before learned civil court which was returned under Order VII, rule 10, C.P.C. He then file a suit before Insurance Tribunal/District Judge, Peshawar wherefrom the suit was dismissed as withdrawn on the ground that the remedy is to be sought from banking tribunal. The matter was taken to the banking court, Peshawar. The defendants filed application for leave to defend as well as application under Order VII, rule 11, C.P.C. The learned banking court vide impugned order accepted the application moved under Order VII, rule 11, C.P.C. on the ground of lack of jurisdiction by dint of impugned order.

7. The procedure for banking court has been prescribed in section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 wherein the customer or financial institution in case of default in fulfilment of any obligation with regard to any finance made, file a suit in banking court. There is no provision in the Ordinance regarding jurisdiction of banking court in. matter relating to the finance/loan. Section 9 empowers to adjudicate the matter brought by customer before the court. The banking court being creation of the statute has to follow the provision of statute strictly in accordance with law instead by passing the procedure provided under section 9 of the Ordinance. The banking court has passed the impugned order in slipshod manner and beyond the jurisdiction vested in it. The impugned order has been passed in casual manner instead of deciding the application moved by defendants for leave to defend and the impugned order has been passed on the application moved under Order VII, rule 11, C.P.C. which is not warranted by law. The banking court was under obligation to decide the application for leave to defend first in order to determine the locus standi of defendant, and in case the defendants failed to establish locus standi to defend the suit then he had no right to file any other application including under Order VII, rule 11, C.P.C. Rejection of plaint under Order VII, rule 11, C.P.C. prior to the grant of leave to defend amounts to deviation from the provision of Financial Institutions (Recovery of Finances) Ordinance, 2001. If the banking court comes to the conclusion, after the grant of leave to defend to the defendants, that substantial question of facts and law has been raised by the defendants, then of course the rejection or dismissal of plaint can be considered but prior to that stage the exercise of jurisdiction would amount to departure from procedure, law besides.

8. The perusal of impugned order shows that the plaint has been rejected under Order VII, rule 11, C.P.C. on the ground of lack of jurisdiction which is incorrect application of law. In fact it is rule 10 of Order VII, C.P.C. which is applicable in like cases and the grounds for which altogether are different as to the grounds enumerated in Order VII, rule 11, C.P.C. Moreover, no reasons are assigned in the impugned order. The plaints/suits are returned and dismissed from two different forums have also ignored by the banking court and passed the impugned order in haste and harsh manner.

9. For reasons stated above, we accept this appeal and set aside impugned order, and the case is remanded to the learned banking court with direction to decide the matter in accordance with law. The parties are directed to appear before the learned banking court. AG/278/P Appeal allowed.