1990 PLP 1258 (MLD)

Habib Bank Ltd. v. M. Tufail and Brothers 1987 MLD 2953 ref. United Bank Ltd. v. Ali Habib & Co. 1988 C L C 292 rel. Muhammad Haneef for Plaintiff. Nuruddin Sarki for Defendants. Defendants Altaf Hussain and others have moved this application for setting aside of the judgment and the decree passed against them in this summary suit. The suit was filed by the plaintiff Muslim Commercial Bank Ltd. under section 7 of the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter to be referred as the Ordinance) for recovery of Rs. 11,15,604 from the defendants. The defendants were issued process through publication as well as through bailiff and through registered post. The summons sent through bailiff came back un-served with report "shifted". However, the service by publication was held good and the suit was decreed under the judgment dated 25‑4‑1989. Mr. Nooruddin Sarki, learned counsel for the defendants/petitioners has referred to Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 and argued that the defendants should have been sent summons and notices through bailiff of the Court and by registered post A.D., besides by publication and that the defendants were not properly served with summons and notices of this suit. In support, learned counsel referred to the cases of (i) Pakistan Insurance Corporation v. Grindlays Bank Ltd. and another 1987 C L C 2164, (ii) M/s. Union Bank of the Middle East Ltd. v. M/s. Zubna Ltd. and others P L D 1987 Kar. 206 and (iii) United Bank Ltd. v. M/s. Nishat Chemical Industries Ltd. and others 1986 C L C 1985. In (i) above it was observed that Rule 8 of Banking Companies (Recovery of Loans) Rules has provided three simultaneous modes of service. In the same case it was held that though the attempt to effect service of summons or notice is to be made simultaneously by the three modes, but the service, can be held good if a defendant is served by any one or more of the prescribed modes of service.. In (ii) and (iii) above the view taken was that all the three modes of service mentioned under Rule 8 of the 'said Rules, are to be adopted simultaneously. In (ii) above it was added that if the defendants were served by publication and also through bailiff, insistence for service by registered post also would not be in consonance with the policy of the Ordinance and the Rules thereunder. In (iii) above it was added that the summons published under Rule 8 of said Rules can be held to be due and proper service if it is established that the defendant is avoiding the service through bailiff and by post or his whereabouts are not known. Diary maintained by the Additional Registrar in this case shows that process was sent to the defendants by all the three modes prescribed by Rule 8 of the said Rules. However, the defendants were not served through all the three modes and they were served by publication. Mr. Muhamad Hanif Khan, learned counsel for the plaintiff challenged the present application to be time‑barred. Referring to the provisions contained by Order 37 Rule 4 of C.P.C. he argued that in the supporting affidavit the defendants had not challenged the averments made in the plaint and they had not disputed the statement of accounts or execution of the documents. It was next argued that while moving an application under Order 37 Rule 4 of C.P.C., the defendants had to make out, not only that they were not properly served with the process, but they had also to make out a case for grant of leave to defend. In support, learned counsel for the plaintiff cited the cases of (i) Abdullah Arain v. M/s. National Bank of Pakistan and others P L D 1988 Kar. 334, (ii) Bank of Oman Ltd. v. M/s. East Asia Trading Company Ltd. and others 1987 C L C 288, (iii) M/s. Habib Bank Ltd. v. M. Tufail and Brothers 1987 M L D 2953, (iv) Yousuf Garments and others v. Grindlays Bank Ltd. and another 1988 C L C 1214 (v) Pakistan Insurance Corporation v. Grindlays Bank Ltd. and others 1987 C L C 2164, (vi) M/s. United Bank Ltd. v. Ali Habib & Co. 1988 CLC

292. In the present case the process was issued for the defendants, in the manner laid down by Rule 8 of Banking Companies (Recovery of Loans) Rules. However, the defendants were .not served personally or even by pasting. They were served only by publication. Even the process sent by registered post was not served upon them. Although the attempt to effect service of summons/notice is to be made simultaneously by the three modes, but the service can be held good, if a defendant is served by any one or more of the prescribed modes of service, as held in the case of Pakistan Insurance Corporation v. Grindlays Bank Ltd. and others 1987 CLC 2164 by a Division Bench of this Court. It was observed by a learned Single Judge of this Court in the case of United Bank Ltd. v. Ali Habib & Company 1988 C L C 292 cited by learned counsel for the plaintiff, that service by publication is on same footings as service by summons or by registered post. In the same case the view taken was that service against the defendant cannot be considered good service unless summons have been served in Form No.4 of Appendix B of C.P.C. alongwith a copy of plaint either in person or through his agent or in the manner prescribed under Order 5 Rule 17 of C.P.C. and Rule 141 of the Sindh Chief Courts Rules (O.S.). In the cited case although the defendant was served by publication which was considered to be on same footing as service by summons or by registered post, the view taken was that the period of limitation of 10 days will not start running against the defendant, till he was served with summons in Form 4 alongwith copy of the plaint. This view has been expressed in a case which has been cited by learned counsel for the plaintiff and the reasoning in the cited case appears to be sound. Applying same reasoning to the instant case, it would appear that the defendants have not been served with the summons or notice in Form 4 of Appendix "B" of C.P.C. and consequently the time of limitation has not started running, although they were served by publication. The law favours adjudication of disputes on merits. The other authorities cited by learned counsel for the plaintiff do not stand in the way of setting aside of the decree under Order 37, Rule 4 of C.P.C. In the case of Abdullah Arain P L D 1988. Kar. 334 dismissal of an application under Order 37 Rule 4 of C.P.C. was ,upheld as the defendants had no case on merits. In the case of Yousuf Garments 1988 C L C 1214 the factum of obtaining of loan and execution of the documents had been admitted and the trial Court ordered deposit of disputed amount as a condition precedent for permission to defend the suit. In the case of Bank of Oman Ltd. 1987 C L C 288 the submission that the Bank acted recklessly in advancing the loan was not accepted for the purposes of granting to the defendants the leave to defend the suit. In the case of Habib Bank Ltd. 1987 M L D 2953 plaintiffs case was fortified by a number of documents, the execution of which was either admitted by the defendant or not denied by him and the defendant did not deny having obtained the loan and overdraft facility and in the circumstances leave to defend was refused. Contention of learned counsel for the plaintiff that acceptance of the application under Order 37, Rule 4 of C.P.C. would amount to grant of leave to defend is not supported by any authority. Consequently it was not essential for the defendants to deny case of the plaintiff on merits, in their application under Order 37, Rule 4 of C.P.C. In view of the above discussion and relying on the case of United Bank Limited reported in 1988 C L C 292, I accept the application under Order 37 Rule 4 of C.P.C. and set aside the decree passed against the defendants. The matter is adjourned to a date in office for further proceedings. A.A./M‑1071/K?????????????????????????????????????????????????????????????????????????????????? Application accepted.