Messrs TRISTAR POLYESTER LIMITED and anothers vs CITI BANK

' MUNIR A. SHEIKH, J.----This appeal by leave of the Court is directed against the order, dated 7-9- 1998 of the High Court of Sindh, Karachi (Banking Jurisdiction) passed in Suit No,486 of 1998 through which application made by the respondent for condonation of delay in filing the application for grant of leave to appear and defend the suit, has been accepted subject to payment of Rs,20,000 as costs.

2. The facts of the case briefly stated are that the present petitioners/plaintiffs filed a suit against the respondents-bank for the recovery of certain amounts on account of damages in connection with a loan facility sanctioned by the Bank in their favour. Summons were issued in the said suit through Bailiff, by a courier and the same were also published in newspaper. Admittedly, summons through Bailiff were served on 20-4-1998 and by a courier and through publication on 22-4-1998.

Learned counsel for the defendant/respondent filed power of attorney on 24-4-1998 and sought adjournment/time to file formal application for leave to defend the suit which was filed on 13-5- 1998. There was a delay of three days in filing the said application from the date of service of summons through Bailiff. Such an application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was required to be filed within 21 days after the date of service of summons in the prescribed manner. No application was, however, filed simultaneously for condoning the delay. Subsequently when on 12-6-1998 the present petitioners/plaintiffs filed statement stating that the application for leave to appear and defend the suit was barred by time, learned counsel for the respondent-defendant sought time to submit a formal application for condonation of delay which was subsequently filed on 8-6-1998.

3. As is manifest from the impugned order, this application, when came up for hearing, Mr. Talibuddin, learned counsel for the respondent-defendant in the first instance attempted to argue that applications seeking condonation of delay had been filed by way of abundant precaution, for in his opinion, the application for leave to appear and defend the suit had been filed within time as according to him, out of the three modes of service of summons prescribed in the Act for computation of period of limitation for an application under section 10 ibid for leave to appear and defend the suit, the latest date of service was to be taken into consideration and since the defendant was served through courier as well as publication on 22-4-1998 which was the latest date of service out of the three modes, therefore, the application made on 13-5-1998 was within prescribed period of 21 days. In support of this, he relied upon judgment in the case of Allied Bank of Pakistan v. M/s. Tahir Traders and 8 others (PLD 1986 Karachi 369). The delay was, however, sought to be condoned under section 5 of the Limitation Act on the ground of professional itinerary and travels during the relevant period of the learned counsel. He attempted to show that during the relevant period, he was extremely busy, therefore, the delay, if any, was not caused on account of any contumacy or negligence or was not wilful as such, the same may be condoned. The learned Judge in Chamber of the High Court came to the conclusion that the professional engagements and travels in connection therewith of learned counsel for the defendant was not relevant and sufficient grounds for condonation of delay. It was, however, observed that the contention of learned counsel that he was under the impression that according to the judgment in the case of Allied Bank (supra) that period of 21 days was to start from the latest date of service of summons out of the three modes, therefore, though the said judgment had been set aside by this Court in the case of Union Bank of Middle East v. M/s. Zubia (PLD 1987 Kar. 206) in which it was held that the date of service of summons through Bailiff was relevant for computation of period of limitation for making such an application which view was reaffirmed in the case of Ahmad Autos v. Allied Bank of Pakistan (PLD 1990 SC 417), as such, the application was barred by time by three days but since the concept of the learned counsel that application could be filed within 21 days from the date of latest service out of the three modes was based on the judgment of the Sindh High Court though the fact that the view taken in the aforementioned judgment had been subsequently overruled as such could not be treated as gross negligence of such magnitude as to disentitle the defendant from seeking adjudication on merits, therefore, the Court proceeded to condone the delay through the impugned judgment, dated 7-9-1998 against which this appeal by leave of the Court is directed.

4. Leave to appeal was granted to consider the following points:- "(i) Whether section 5 of the Limitation Act is applicable in view of bar contained in section 29 of the Act?

(ii) Whether the High Court was not obliged to dismiss the application for leave to appeal to defend having held that there was no sufficient case?

(iii) Whether the leave application has been granted and the delay condoned on justifiable grounds? And

(iv) Whether the petition for leave to appeal is not maintainable having arisen out of an interim order?"

5. It would be appropriate to take up Point No,4 first as it relates to the maintainability of the petition for special leave to appeal against the impugned order of the learned Judge of the High Court acting as Banking Court under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The main burden of arguments of learned counsel for the respondent in support of his objection that the petition for special leave to appeal was not maintainable, was that a learned Judge of the High Court while trying a suit under the said Act was constituted and acted as a Banking Court, as such, was not a High Court within the meaning of the expression "High Court" as used in Article 185(3) of the Constitution, as such, the question of maintainability of appeal against the impugned order has to be looked from the point of view that the same had been passed by a Banking Court. He maintained that since the impugned order has been passed by a Banking Court, therefore, the question of maintainability of appeal against the impugned order has to be determined in the light of the provisions providing remedy of appeal, review, etc., by the Act itself. He referred to section 21(5) ibid which reads as under:-- "(5) No appeal, review, or revision shall lie against any interlocutory order of the Banking Court other than an order passed under subsection (6) of section 18."

' He argued that it has been expressly provided therein that no appeal, review or revision was competent against an interlocutory order passed by a Banking Court and the order impugned in the present petition being interlocutory in nature, therefore, the petition was wholly misconceived and not maintainable.

6. In amplification of the above argument of learned counsel for the appellants, we may in order to ascertain as to the nature of jurisdiction a learned Judge of the High Court was exercising in a banking case, refer to section 2(b) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 which defines ' Banking Court' as under:- "(b) 'Banking Court' means:--

(i) in respect of a case in which the outstanding amount of claim based on a loan or finance does not exceed thirty million rupees or the trial of offences under this Act, the Court established under.

Section 4; and

(ii) in respect of any other case, the High Court."

7. High Court was constituted as a Banking Court and while trying a suit filed under the Act, it was not a High Court in its ordinary meanings exercising jurisdiction as such, whereas on the other hand it was exercising special jurisdiction having been constituted as a 'Banking Court' .

8. The question whether petition for leave to appeal is maintainable against an order passed by a learned Judge of the High Court in the exercise of his jurisdiction under the Act as Banking Court came up for consideration before this Court in the case of Bolan Bank Limited v. Capricorn Enterprise (Pvt.) Ltd. (1998 SCM R 1961) in which after relying upon unreported judgments in the cases of Ashira Khatoon v. Muslim Commercial Bank Ltd., and others (C.A. No,193-K of 1992) and Muhammad Ayub Butt v. Allied Bank Ltd. (PLD 1981 SC 359) it was held that the Banking Court as defined in the Act was similar to a Special Court as defined in section 2(f) of the Banking Companies (Recovery of Loans), Ordinance, 1979 as regards nature of jurisdiction in banking cases, therefore, any order passed by a learned Judge of the High Court as such was in the capacity of a Banking Court and not the High Court in its ordinary jurisdiction, therefore, no appeal was competent as the Act under which the suit was being tried had provided that no appeal would lie against interlocutory orders of the said Court, therefore, petition for leave to appeal was not maintainable against such orders in the cases under the Banking Companies (Recovery of Loans, Advances, Credits. And Finances) Act, 1997 by virtue of section 21(5) ibid.

9. In view of the interpretation of the relevant provisions of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 made in the aforementioned cases decided by this Court, it would be difficult to hold that the present petition is maintainable. Learned counsel for the appellants placed reliance on the cases of Abdul Ghaffar and others v. Mst. Mumtaz (PLD 1982 SC 88) and Mohtarma Benazir Bhutto, Leader of the Opposition, Bilawal House, Clifton, Karachi and another v. The State through Chief Ehtesab Commissioner, Islamabad (1999 SCM R 759) and argued that in the first-mentioned case, the High Court while hearing appeal under section 21 of the Sindh Rented Premises Ordinance (XVII of 1979) was held to be a High Court as such, and in the latter case, a Bench of the High Court nominated by the Chief Justice to hear a reference filed under the Ehtesab Act (IX of 1976) was held to be a High Court in the ordinary meanings as defined in the Constitution exercising its jurisdiction as such, therefore, High Court while hearing banking cases should also be held to be exercising jurisdiction as High .Court as contemplated by Article 185(3) of the Constitution. Since no appeal was maintainable under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 under which the suit had been filed against the impugned order being interlocutory order, therefore, petition for special leave to appeal under Article 185(3) of the Constitution would be maintainable, for where no appeal lies under Article 185(2) of the Constitution against the judgment/order of a High Court, appeal by special leave to appeal is competent under sub-Article (3) thereof. He also argued that a Sub-Constitutional Legislation could not in any manner control the Constitutional jurisdiction of this Court.

10. In the case of Abdul Ghaffar (PLD 1982 SC 88) (supra) referred to by the learned counsel for the appellants, the question which arose for determination was whether section 5 of the Limitation Act was applicable to an appeal under section 21 of the Sindh Rented Premises Ordinance (XVII of 1979) for condonation of delay in filng the same the decision of which was dependent upon the question as to whether the period of limitation prescribed under the said special law for an appeal was the same as was prescribed under the Limitation Act for filing appeal against the judgment and decree of a Court in the High Court, it was held that High Court while hearing the appeal under the said Ordinance was the same High Court as was mentioned in Article 156 of the Limitation Act, and since the period of limitation prescribed by the said special law was different from the period of limitation prescribed under the Limitation Act, therefore, section 5 of the Limitation Act was held to be not applicable by virtue of section 29 thereof. The facts and the rule laid down in this judgment are distinguishable in material aspects inasmuch as High Court was not constituted as an Appellate Tribunal or Special Court or Appellate Authority as distinguished from its ordinary jurisdiction as High Court while hearing the appeal under the Ordinance, therefore, while hearing the said appeal, it was rightly held to be a High Court in its ordinary meanings as defined in the Constitution and not a Special Court or Tribunal. In the other case, after examining various provisions of Ehtesab Ordinance, this Court came to the conclusion that a Bench of the High Court to be nominated by the Chief Justice to hear a reference filed in the High Court under the Ehtesab Ordinance in respect of which the Chief Justice retained the power to reconstitute the Bench, the High Court was exercising its ordinary jurisdiction as such, therefore, was subject to jurisdiction of this Court under Article 186 of the Constitution for the purposes of transfer of a case from one High Court to another.

11. In the present case, the rule laid down in the case of Bolan Bank Limited (supra) (1998 SCM R 1961) is directly attracted that being a case under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 in which it was held that petition for leave to appeal was not maintainable against an interlocutory order of a learned Judge of the High Court passed in a suit under the said Act as he while exercising jurisdiction under the Act was a Banking Court therefore, petition for leave to appeal which would have been maintainable against an order of the High Court passed in its ordinary jurisdiction as such, was not maintainable. It has been clarified in this judgment that against the judgment and decree of a learned Judge of the High Court trying the suit under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the appeal would lie to a Division Bench of the High Court as provided in the said Act.

12. There is no denial of the fact that the order impugned in the present petition passed by a learned Judge of the High Court as 'Banking Court' under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 is an interlocutory order not falling in the categories of orders under section 18(6) of the Act, therefore, in view of the rule laid down in 1998 SCM R 1961, petition for leave to appeal is not maintainable. It may be open to the appellants to challenge the said order in appeal against the final judgment and decree if passed against it if permitted by law. In view of the view taken by us about the maintainability of the petition, we are not called upon to discuss the merits of the case as to the validity of the impugned order and applicability or non-applicability of section 5 of the Limitation Act to an application filed under the Act for grant of leave to appear and defend which may be decided in the appeal against the final judgment and decree on its own merits if raised.

13. For the foregoing reasons, petition for leave to appeal against the impugned order is not maintainable, therefore, the appeal is dismissed with no order as to costs.