2013 PLP 627 (CLD)

FAROOQ ALI CHANNA, J.

Through this appeal the appellant has assailed the order dated 24-12-2010, passed by the learned Single Judge of this Court dismissing the application under Order I, Rule 10, C.P.C. filed by the appellant in Suit No.B-31 of 2010 (NIB Bank Ltd. v. All Hamid Travels and others) before Banking Court filed by the respondent No.1 for recovery of Rs.56,543,164 jointly and severally against the respondent Nos.2 to 4, who had defaulted during repayment of loan obtained from the respondent No.1 against several mortgaged properties including the double storied residential house constructed on residential Plot No.C-256, measuring 600 sq. Yds. situated in Block-D. Federal "B" Area, KDA Scheme No.16, Karachi, claimed by the appellant to have purchased the same from the respondent No.2 under a valid Sale Agreement executed on 8-4-2009.

2. The learned counsel for the appellant has argued that the appellant is the bona fide, purchaser of mortgaged property mentioned above the possession whereof was handed over to him inasmuch his valuable rights have been created on it as such he was the necessary party to be impleaded in Suit No.B-31/2010 but the learned Single Judge has declined his request on the ground that the appellant has filed his-own suit against the respondent No.2, therefore, he has nothing to do with the suit filed by the respondent No.1. Learned counsel has further contended that there is no bar in purchasing the mortgaged property in question. In support of his contention, learned counsel has placed reliance upon the case of Simi Din and others v. Khushi Muhammad reported as 2002 YLR 1643. Learned counsel has further contended that legally the appellant has become the owner of the subject property hence the bank has to treat him as mortgager. Per learned counsel, by virtue of the Ordinance, 2001, a mortgager is the necessary party in recovery proceedings as if a money decree is passed against the respondent Nos.2 to 4, the appellant will he the ultimate sufferer, as the decretal amount will he recovered by sale of mortgaged property purchased by him during pendency of the case.

3. Learned advocate for the respondent No.1 has supported the impugned order passed by the learned Banking Judge and has also opposed the maintainability of the application Under Order I, Rule 10, C.P.C. filed by the appellant. It has been contended that the respondent-bank has no claim against the appellant nor his status comes within the meaning of "Customer as defined under section 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, he cannot be impleaded as necessary or proper party in suit for recovery of loan tiled by the Financial Institution against the "Customer".

4. We have heard both the learned counsel and perused the record. The only question which is to be examined in the instant appeal is to examine legal status of the appellant and to determine as to whether the appellant could he impleaded as defendant in the suit, being a necessary and proper party. In the banking suits filed under the Financial Institutions (Recovery of Finances) Ordinance, 2001, the relationship between the parties as Financial Institution and Customer is a pre requisite and unless such relationship exists between the parties, provisions of Banking Ordinance. 2001 cannot be invoked. Only such person can he impleaded as a necessary party to the proceeding under the Banking jurisdiction who can show either the existence of an agreement with the Bank/Financial Institution or his course of dealing with the Bank in the capacities as enumerated in section 2(c) of the Ordinance, 2001. Such requirement of law appears to be missing in the instant case. The mere fact that the appellant has purchased the mortgaged property through an agreement to sell from a mortgager, he would not acquire the status of a "Customer" as defined under section 2(c) of the 'Ordinance. 2001. Sale transaction was between two private persons, without the consent/involvement of the Bank, when there is no existence of relationship between the Financial Institution and the subsequent purchaser of mortgaged property. Therefore, no proceedings for and against a person, who is neither a Financial Institution nor a Customer, would be maintainable before the Banking Courts. So far as the claim of the appellant having purchased the mortgaged property from the respondent No.2 is concerned, admittedly the appellant has already availed of the remedy provided under the Law by filing a separate suit against respondent No.2 wherein the respondent No.1-Bank has also been impleaded as party.

5. For the reasons disclosed hereinabove, we do not find any error in the impugned order passed by the learned Single Judge which is based on correct law. The appellant could not make out a prima facie case whereby he could be impleaded as a necessary and proper party in the suit as mere execution of agreement to sell a mortgaged property and its possession would not create any legal right in his favour in Banking proceedings.

6. Accordingly, we do not find any merits in the instant appeal which was dismissed vide our short order dated 26-9-2012 and these are the reasons for such short order. SAK/M-126/K Appeal dismissed.