2005 PLP 1247 (CLD)

MIAN HAMID FAROOQ, J.

Appellant, through the filing of the present first appeal, has called in question judgment and decree dated 2-10-1996 and order dated 2-8-1997, passed by the Banking Tribunal and the Banking Court, respectively, whereby respondent No.1's suit for recovery was decreed against the appellant and respondents Nos.2 and 3. and appellant's application, for setting aside the ex parte decree, was dismissed.

2. Precisely stated facts of the case are that the respondent-Bank, on 30-6-1996, filed the suit for the recovery of Rs.3,64,064.40, against the appellant and respondents Nos.2 and 3 (defendants), before the then Banking Tribunal, which issued notices to the defendants through three modes of service, as provided under the relevant law. Pursuant to the receipt of show-cause notice, issued under section 6(2) of the Banking Tribunal Ordinance, 1984, (since repealed), the appellant filed reply to the show-cause notice, while respondent No.2 absented from the proceedings and thus was proceeded ex parte. The defunct Banking Tribunal, after hearing the parties, rejected appellant's reply to the show-cause notice and then proceeded to pass a decree for the recovery of Rs.3,64,064.40, against the appellant and respondents Nos.2 and 3, vide impugned judgment and decree dated 2-10-1996. Thereafter the appellant filed an application, under section 6(5) of the Banking Tribunal Ordinance, 1984, for setting aside the aforesaid judgment and decree to its extent, however, the same was also dismissed by the learned Banking Court, vide order, dated 2-8-1997, hence the present appeal.

3. Learned counsel for the appellant, while relying upon Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lahore 672, submits that the impugned judgment and decree was passed by the Banking Tribunal after pronouncement of the aforesaid judgment, therefore, the impugned decree and the ensuing order are without jurisdiction and, thus, the same be set aside. Conversely, the learned counsel for respondent No.1 has refuted the aforesaid contention. None has entered appearance on behalf of respondents Nos.2 and 3.

4. We have examined the afore-cited judgment of Messrs Chenab Cement Product and find that Full Bench of this Court, while disposing of various Constitutional petitions, wherein the decrees passed by the Banking Tribunals were challenged, declared certain provisions of Banking Tribunal Ordinance, 1984, as unconstitutional and the notifications appointing the Presiding Officers of the learned Banking Tribunal, issued under the Banking Tribunal Ordinance, 1984, were also declared un-Constitutional and, thus, quashed. It would be appropriate to reproduce para.11 of the said judgment, which reads as follow: "For the above reasons, section 4, section 6(6) as amended by Act VII of 1990 (as it presently stands), first proviso to section 9 of the Banking Tribunals Ordinance, 1984 are hereby declared un-Constitutional as these erode the independence of judiciary and are hit by Article 175 read with Articles 2-A, 4, 8 and Article 25 of the Constitutional of Islamic Republic of Pakistan and the notifications appointing. Presiding Officers of the Banking Tribunals issued under the Banking Tribunals Ordinance, 1984 are equally un-Constitutional and without lawful authority and are hereby quashed."

5. We have examined the impugned judgment and find that it was passed by the Banking Tribunal, on 2-10-1996, whereas the judgment in the case of Messrs Chenab Cement Product (ibid) was rendered by this Court, on 21-7-1996, meaning thereby that the impugned decree was passed by the learned Banking Tribunal alter pronouncement of judgment in Messrs Chenab Cement Product, (supra). As the judgment was passed by the Banking Tribunal when the notifications appointing the Presiding Officers of the Banking Tribunals were declared un-Constitutional and without lawful authority, therefore, at the time of the passing of the impugned judgment the learned Banking Tribunal had no jurisdiction. In view whereof, we are persuaded to set aside impugned judgment and decree, which we hereby do.

6. Impugned order dated 2-8-1997, which ensued from the judgment and decree, which has been held to be without jurisdiction, shall fall to the ground. It has been held in Yousaf Ali v. Muhammad Aslam Zia and 2 others PLD 1958 SC 104 as under: "And if on the basis of a void order being subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders together with the superstructure of rights and obligations built upon them, must, unless some statute or principle of law recognizing as legal the changed position of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded." Thus, order dated 2-8-1997, is also set aside.

7. In view of the above, the present appeal is decided in the following terms: (i) The appeal is allowed and the impugned judgment and decree dated 2-10-1996, passed by the defunct Banking Tribunal, qua the appellant, and order dated 2-8-1977, passed by the Banking Court are set aside. (ii) Appellant's reply to the show-cause notice, which is now to be treated as leave application, and respondent-Bank's suit for recovery of Rs,3,64,065.40, filed against the appellant and respondents Nos.2 and 3, (Suit No.128 of 1996), shall be deemed to be pending before the newly-constituted Banking Courts, Lahore, established under section 8 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. (iii) Banking Court shall decide the leave application and the suit, afresh, after hearing the, parties and in accordance with the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, within a period of four months from the date of receipt of the record. (iv) Parties are directed to appear before the Administrative Judge, Banking Court, Lahore, on 15-4-2005, who may decide the lis himself or entrust the case to any other Court, according to his own administrative arrangements. (v) No order as to costs. (vi) Office is directed to immediately transmit the record of the learned Banking Court, so as to reach before the date indicated above. M.H./S-358/L Case remanded.