Messrs MUMTAZ TRADERS and 3 others vs Messrs HABIB BANK LIMITED and another
This constitutional petition arose from a recovery suit filed by respondent bank under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 before the Banking Court. The petitioners' application for leave to defend under section 10 of the Ordinance was dismissed for non-prosecution, and their subsequent restoration application was also dismissed. The core legal question concerned whether sufficient cause was shown for the non-appearance of the petitioners' counsel, who was allegedly engaged at the High Court's principal seat on the relevant date. The Sindh High Court allowed the constitutional petition, setting aside the dismissal order and restoring the leave to defend application for decision on merits, subject to the payment of costs and strict timelines for disposal. The key principle laid down is that where counsel's engagement in a superior court on the same date is substantiated, a default in a lower court may be set aside in the interest of justice to ensure a trial on the merits.
- Whether an application for leave to defend dismissed for non-prosecution under the Financial Institutions (Recovery of Finances) Ordinance, 2001 can be restored?
- Can a constitutional petition be maintained against an order dismissing an application to set aside a default order in a banking suit?
- Does the engagement of counsel in the High Court constitute sufficient ground to set aside a dismissal for non-prosecution in a Banking Court?
- Section 9, Financial Institutions (Recovery of Finances) Ordinance 2001
- Section 10, Financial Institutions (Recovery of Finances) Ordinance 2001
- Order IX Rule 7, Code of Civil Procedure 1908
- Section 151, Code of Civil Procedure 1908
ORDER
1. ' AZIZULLAH M. MEMON, J. ---Heard learned counsel for the contesting parties.
2. ' Respondent No,1 filed suit bearing No,197 of .2004 before Banking Court No,1, Sukkur for recovery of an amount of Rs,5,26,672 against the petitioners, under section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001. Defendants/petitioners were served with the process, made appearance in the said learned Court through their advocate, and filed an application under section 10 of the said Ordinance with a prayer to grant leave to them to defend the suit, but the same was dismissed for non-prosecution vide order dated 26th January, 2006, whereafter they filed an application under Order IX, Rule 7, C.P.C. Read with section 151, C.P.C. With a prayer to set aside the said order dated 26th January, 2006 and the application under section 10 of the said ordinance may be heard and decided on merits.
3. ' Vide order dated 7-3-2006 the said restoration application was dismissed by learned Banking Court No,
1. Hence the defendants/petitioners have filed this Constitutional Petition with a prayer to restore the said application under section 10 of the said Ordinance to defend themselves in the said suit.
4. ' Learned counsel for the petitioner has placed a photo copy of daily cause list, issued for hearing of cases fixed at the Principal Seat of this Court at Karachi on 26-1-2006, which indicates that Mr. Mukesh Kumar G. Karara advocate was engaged by the petitioner of the Constitutional Petition No,1723 of 2005, which was fixed for hearing at the Principal Seat on 26th January, 2006. Learned counsel has not placed any other document to prove that Mr. Mukesh Kumar actually appeared at the Principal Seat in the said Constitutional Petition, instead he is said to have filed an affidavit before the learned Banking Court to assert that he had actually made appearance at the Principal Seat of this Court on the said date. Learned counsel for the petitioner therefore argued that because Mr. Mukesh Kumar was not available at Sukkur, therefore he had deputed his junior counsel to appear before Banking Court and to seek adjournment of the said application under section 10 of the said Ordinance (which had been dismissed for non-prosecution).
5. Looking at the fact that memo. Of this Constitutional Petition states that Mr. Mukesh Kumar had filed his personal affidavit, deposing therein that he had actually made appearance before the Principal Seat of this Court at Karachi, A this Constitutional Petition is allowed and the impugned order dated 26th January, 2006 is set aside, in consequence whereof, the application under section 10 of the above said Ordinance is restored for its disposal according to law, subject to payment of cost of Rs,5,000 by the petitioners/defendants to plaintiff/ respondent No,1, and further provided that no further adjournment shall be granted to petitioners/defendants by the learned Banking Court, and the suit in question shall be heard and decided within a period of four months from the date of receipt of this order by Banking Court.
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- ASIF KUDIA vs Messrs KASB BANK LIMITED and others 2014 CLD 1548
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- Asif Kudia vs KASB Bank Limited