DILI JAN OIL MILL Versus NATIONAL BANK OF PAKISTAN

ABDUL HAMEED BALOCH, J.--- This High Court Appeal under section 22 of the Financial Institutions ("the Ordinance 2001") has been filed against the judgment and decree dated 29.03.2017 (impugned judgment and decree) passed by the Judge, Banking Court Balochistan, Quetta (trial Court), whereby the suit filed by the respondent/decree holder for recovery of Rs.74,52,792/- was decreed along with cost of fund @ Rs.7.28% from the date of default till the realization of decretal amount in favour of plaintiff/bank.

2. Brief facts leading to file the instant appeal are that the respondent bank filed the referred suit before the trial court, alleging therein that the appellant No.1/borrower applied for Finance Loan and requested for loan amount upto the limit of Rs.50,00,000/- (rupees five million only), which request was duly entertained by the bank and the loan was sanctioned; that the borrower after availing the loan facility, did not abide by the terms and conditions of the agreement nor cleared the liability of outstanding amount, whereupon the respondent bank approached the borrower for depositing the outstanding liability along with mark-up as per agreed terms and conditions of the agreement, but the defendant/appellants failed to do the needful, as such on 15.04.2016 the respondent filed the referred suit.

3. After institution of the suit, notices were issued to the defendant/borrower and publication was also made in the local press and on 22.07.2016 the appellant/borrower filed application for leave to defend the suit and denied the signature on the documents so produced by the plaintiff/bank.

4. The plaintiff/bank filed rejoinder to the application for leave to defend and contended that the application for leave to defend filed by the appellants is time barred as the application is not confirmatory with the mandatory provision of section 10(3)(5) of the Ordinance 2001 and prayed for rejection of the application. The trial court after hearing both the parties, decreed the suit in favour of respondent bank vide impugned judgment and decree. Hence this appeal.

It is pertinent to mention here that this appeal pertains to the year 2017 but since admitting this appeal for regular hearing, only on 19.04.2017 counsel for both the parties appeared, but since than none appeared on behalf of the parties, therefore we are left with no other option but to decide the same on the basis of available record.

5. We have perused the record. Under section 9 of the Ordinance 2001, where the customer or financial institute commits a default in fulfillment of any obligation with regard to any finance, may present suit before the banking court. Subsection (1) of section 9 of the Ordinance 2001 being relevant is reproduced as under:

(1) Where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorised in this behalf by power of attorney or otherwise.

6. It is the mandate of subsection (3) of section 9 of the Ordinance 2001 that plaintiff in such cases shall specifically state the amount of finance availed by the defendant, repayment made by him, the date thereof and the amount of finance repayable by such defendant. On the other hand, the defendant/customer is also under legal obligation to put in a definite response to the banks, with regard to the claim of plaintiff and amount disputed by him as repayable to the plaintiff and in this respect the defendant/borrower is required to comply the mandate of subsections (3), (4), (5) of section 10 of the Ordinance, 2001. The appellant/borrow/defendant is under legal obligation to file the application for leave to defend within the stipulated period as provided under subsection (2) of section 10 of the Ordinance, 2001. Subsection (2) of section 10 of the Ordinance, 2001 being relevant is reproduced as under:

(2) The defendant shall file the application for leave to defend within thirty days of the date of first service by any one of the modes laid down in sub section (5) of section 9:

Provided that where service has been validly effected only through publication in the newspaper, the Banking Court may extend the time for filling an application for leave to defend if satisfied that the defendant did not have knowledge thereof.

7. Admittedly on 15.04.2016 the respondent/bank filed the referred suit before the trial court, whereas the appellant filed the application for leave to defend on 22.07.2017 after more than ninety days of filing of the suit. In terms of subsection (2) of section 10 of the Ordinance 2001, the appellant was required to make application for leave to defend within the stipulated period of 30 days of date of service. The mode of service has been described in subsection (5) of section 9 of the Ordinance 2001, which read as under:

(5) On a plaint being presented to the Banking Court, a summons in Form No.4 in Appendix 'B' to the Code of Civil Procedure, 1908 (Act V of 1908) or in such other form as may, from time to time, be prescribed by rules, shall be served on the defendant through the bailiff or process-server of the Banking Court, by registered post acknowledgement due, by courier and by publication in one English language and one Urdu language daily newspaper, and service duly effected in any one of the aforesaid modes shall be deemed to be valid service for purposes of this Ordinance. In the case of service of the summons through the bailiff or process-server, a copy of the plaint shall be attached therewith and in all other cases the defendant shall be entitled to obtain a copy of the plaint from the office of the Banking Court without making a written application but against due acknowledgement: The Banking Court shall ensure that the publication of summons takes place in newspaper with a wide circulation within its territorial limits.

8. The rule of interpretation of law is that the words used by the legislature are to be read in ordinary meaning. Bear reading of section 9(5) of the Ordinance 2001 manifests that after filing plaint before the banking court, summon shall be served in a manner as provided under the above referred provision. Under section 10(2) of the Ordinance 2001, it is obligation upon the defendant to file the application for leave to defend within thirty days of the service. Publication in daily newspaper is one of the valid service under the Ordinance 2001. The appellant/defendant filed application for leave to defend after more than ninety (90) days of presentation of the suit and after 60 days of the publication.

9. On the other hand, the respondent bank fulfilled all the requirements as per subsections (2) and (3) of section 9 of the Ordinance 2001 by placing all admissible documentary evidence including statement of account in respect of finance.

In view of the above fact and circumstances, the trial court has rightly decreed the suit in favour of the plaintiff/respondent bank. Consequently, we do not observe any illegality or material irregularity in the impugned judgment and decree, warranting interference by this court, as such the appeal being devoid of merits is dismissed.

KMZ/267/Bal. Appeal dismissed.