CITIBANK N.A. vs JUDGE, BANKING COURT-IV and 2 others

SYED NAJAM-UL-HASSAN KAZMI, J.--- This judgment will dispose of R.F.A. No.158 of 1998, which calls in question judgment and decree, dated 3-4-1998 of the learned Judge Banking Court-IV, Lahore.

2. Facts necessary for the decision of this appeal are that appellant filed a suit for recovery of Rs.67,63,528 against the respondents on the ground that the respondents had failed to repay the outstanding amount of financial assistance. Respondents Nos.2 and 3 filed an application for leave to appear and defend the suit, in which, amongst others, one of the grounds that the suit had not been properly instituted by a duly authorised person. The learned Judge Banking Court vide judgment, dated 3-4-1998 dismissed the suit on assumption that the plaint, did not fulfil the requirement of subsection 9(1) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, as the power of attorney was not placed on record.

3. Learned counsel for the appellant submitted that the suit could not be dismissed without issue and evidence, section 9 of the Act (ibid), did not visualise dismissal of suit in the present circumstances and that the provisions were totally misconstrued and misapplied by the learned Judge Banking Court. It was added that the appellant was not allowed opportunity to power of attorney and the suit was dismissed in a haste.

4. In defence, it was argued by learned counsel for the respondents that in the absence of copy of power of attorney annexed with the plaint, the suit would be incompetent, having not been framed as per requirement of section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. Reference was made to National Bank of Pakistan and others v. Karachi Development Authority and others PLD 1999 Kar. 260.

5. From the perusal of record and on careful study of section 9 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, it is observed that for the reasons hereafter, impugned judgment cannot sustain.

6. The suit filed by the appellant was for recovery of Rs.67,63,528. In the plaint, it was specifically mentioned that the suit was instituted and signed by a duly and lawfully authorised attorney. One of the objects in the A application for leave to appear and defend the suit was that the suit was not properly instituted by a duly authorised person. The learned Judge Banking Court assumed that under section 9 of the Act (ibid), the suit would not be maintainable, if the power of attorney has not been placed on record. This view appears to be based on misinterpretation and misunderstanding of the legal import of section 9 of the Act. Section 9 contemplates that the Banking Company may institute a suit by presenting a plaint duly supported by statement of accounts which should be verified by oath in the case of Banking Company by the Branch Manger or such other member as the Board of Directors of the Company may authorise in this behalf.

Copies of the plaint shall also be filed alongwith the plaint. From the provisions of section 9, it is discernible that requirement of law is to file a plaint alongwith the statement of accounts. Of course, plaint has to be filed by a duly and lawfully authorised person. Section 9 does not provide that if copy of power of attorney is not filed alongwith the plaint, the plaint should be rejected or suit should be dismissed. At best, the absence of copy of power of attorney could have been a ground for consideration, while deciding the question of granting leave to appear and defend the suit but nevertheless, the suit could not be dismissed, straightaway, due to non-filing of copy of power of attorney, at the time of deciding the application for leave to appear and defend the suit.

The case of National Bank of Pakistan and others v. Karachi Development Authority and others PLD 1999 Kar. 260, does not help the respondents on account of distinguishing fact. In that case written statement was filed, issues framed and evidence was recorded and at the time of final decision of suit, it was considered, if the suit was filed by a duly authorised person on behalf of the bank. It was not a case in which the suit was dismissed on account of non-filing of copy of power of attorney at the stage of decision of application for leave to appear and defend the suit, and therefore, the precedent case does not help the respondents in advancing their plea or for justifying the impugned judgment.

7. Even otherwise, whether or not, the suit was instituted by a duly authorised person, will be a question of fact, which cannot be decided without proper evidence. In this view of the matter, the learned Judge Banking Court could have allowed time for filing of power of attorney and attended to the question thereafter by granting necessary opportunity of evidence. Dismissal of suit in a summary manner and that too in violation of rule of natural justice, was neither proper nor permissible in law.

8. For the reasons above, this appeal is allowed, impugned judgment is set aside, with the result that suit of the appellant shall be deemed to be pending, which shall now be decided by the learned Judge Banking Court, on merit and in accordance with law, in the light of observations hereinabove.