2005 PLP 521 (CLD)

(4) Upon the defendant failing to file a reply within the time given in the show‑cause notice under section (2) or upon rejection by the Banking Tribunal of the plea taken by him in the reply, the Banking Tribunal shall pass a decree as prayed for in the plaint. Banking Companies (Recovery of Loans, Advances Credits and Finances) Ordinance XXV of 1997, was the Fourth Enactment in the series, whereby, `the Banking Companies (Recovery of Loan) Ordinance, 1979' and `the Banking Tribunal Ordinance, 1984' were modified, consolidated and re‑enacted on 4‑2‑1997. Section 9(2) thereof, provided following procedure to be observed by the Banking Court:‑‑ Section

9. Procedure of Banking Court: (1)‑‑‑‑‑‑‑‑ (2) On the plaint being filed with the Banking Court in accordance with the provisions of subsection (1), the Banking Court shall issue summons or notice requiring the defendant to show cause, within twenty‑one days of the service of such summons or notice, as to why the decree as prayed for in the plaint should not be passed against him. The summons or notice under the section shall be served on the defendant through the bailiff of the Court, by registered post acknowledgement due and by publication, and service in any of the aforesaid modes shall be deemed valid service for the purpose of the Ordinance. (3) Upon the defendant failing to file a reply within the time given in the show‑cause notice under section (2) or upon rejection by the Banking Court of the plea taken by him in the reply, the Banking Court shall pass a decree as prayed for in the plaint. Ordinance XXV of 1997 was repealed by Fifth Enactment in series of succession i.e. `Banking Companies Recovery of Loans, Advances Credits and Finances) Act, 1997'. It was promulgated on 2nd June, 1997. Instant petition relates to this very Enactment, section 10 of which, provided as under:‑‑ "Subject to section 11, the Banking Court shall, upon an application made by a defendant within twenty‑one days, give leave to defend the suit, if a serious and bona fide dispute is raised thereby: Provided that where service has been validly effected only through publication in the newspaper 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." Last mentioned Act of 1997, was succeeded by Sixth Enactment being `Financial Institutions (Recovery of Finances) Ordinance, 2001' enforced on 30‑8‑2001, which still holds the field, section 10(9) thereof, reads as follows:‑‑ "Section

9. 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 allegations 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. (2) ............... (3) ............... (4) ............... (5) ............... (6) ............... (7) ............... (8) ............... (9) In granting leave under subsection (8), the Banking Court may impose such conditions as it may deem appropriate in the circumstances of the case, including conditions as to deposit of cash or furnishing of security." On examination and comparison of the relevant provisions of various Enactments as reproduced above, it appears that, under the Banking Companies (Recovery of Loan) Ordinance, 1978, Banking Companies (Recovery of Loan) Ordinance, 1979 and Financial Institutions (Recovery of Finances) Ordinance, 2001 the Banking Court could grant leave to defend subject to condition as to security or otherwise. However, in terms of Fifth Enactment in series of succession i.e. Banking Companies (Recovery of Loans Advances, Credits and Finances) Act, 1997. Leave to defend without any condition of security could be granted provided serious and bona fide dispute was raised. In all other Banking Enactments on the subject, the Banking Court could permit to defend the suit, where the defendant within specified time was able to show as to why decree as prayed for in the plaint should not be passed against him. Petition in hand is in respect of banking suit founded on Act of 1997. On perusal of section 10 of the Act, 1997, it is apparent that the Banking Court shall "give leave to defend the suit, if a serious and bona fide dispute is raised thereby. In the instant case, on the leave to defend application, learned Banking Court had arrived at a conclusion that, "it appears that in the affidavit the defendant has shown prima facie defence in order to obtain leave to defend" but the Banking Court granted leave to defend application, "conditionally subject to deposit of the suit amount, within 10 days". Once a Banking Court, deciding leave to defend application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 came to the conclusion that, "it appears that in the affidavit the defendant has shown prima facie defence in order to obtain leave to defend" the Court was obliged to grant leave to defend without attaching any condition thereto. From a bare perusal of various provisions of different Banking Enactments both, before and after the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, it becomes abundantly clear that, a departure was made in the Act No. XV of 1997. Legislature in its wisdom did not attach any condition on the exercise of discretion of Banking Court while granting leave to defend the suit provided that, if a serious and bona fide dispute is raised by the defendant. A learned Division Bench of this Court confronted with similar situation in the case of Agrofoster (Pvt.) Ltd. and 2 others v. Judge, Banking Court No.5, Karachi and another PLD 1999 Karachi 398 at page 401 held as follows:‑ "Once' the case is found fit for granting leave no condition of furnishing security can be attached, as it would tantamount to reading more than what actually the Legislature has mentioned in said section. Any other construction, which contradicts the letters of a statute and permits substitution of views other than expounded by Legislature, shall, as a rule, be avoided. Neither the principle of aforesaid maxim is applicable to this case nor the plea of substantial justice to both the parties would apply. The Legislature in its wisdom has not thought it proper to put any condition for seeking leave to defend the suit, except mentioned earlier." Cited case is applicable on all fours in the case in hand, we respectfully follow the same. In the facts and circumstances, accordingly, the petition is allowed. Leave to defend shall be considered to have been granted without any condition attached. Mr. Saleem Thapdawala learned counsel for the petitioner submits that, the Written Statement has already been filed, let the matter be proceeded and decided by the concerned learned Banking Court in accordance with law at an early date. Mr. Tasawer Ali Hashmi does not oppose the request. Since this controversy is pending for quite C sometime, learned counsel appearing for respondent No.2 appears to be justified in seeking direction for disposal of the suit at an early date. Learned Banking Court is accordingly directed to decide the suit preferably within a period of four (4) months from the date of receipt of copy of this order. M. B.A./M‑176/K Order accordingly.