' MUHAMMAD MUZAMMAL KHAN, J.---This first appeal assails the judgment and decree dated 1-1.0- 2002 passed by Banking Court No,II, Faisalabad whereby the appellant's application for grant of leave to defend the suit, filed by the respondent, was dismissed and in result thereof, a decree for recovery of US $ 5841 with future mark-up at the stipulated rate, was passed against the appellant.
2. Precisely, relevant facts are that the respondent filed a suit for recovery of US $ 5841.52 which were lying in his foreign currency Account FSA No,0003460004 opened on 1-1-1995 with the appellant's Branch at Satiana Road, Faisalabad. The respondent being a goldsmith by profession, transacted with one Jehangir Mehmood for sale of gold ornaments of the value of Rs.1,38,000 in lieu of which a Demand Draft bearing No,151098 drawn on Arabian Exchange and Finance Organization, payable on presentation subject to confirmation from Habib Bank Limited, 44-Wallstreet, New York, USA, was handed over to the respondent. It was presented to the appellant on 30-9-1996 for collection. The appellant's bank requested Habib American Bank, 99-Madison Avenue, New York, USA, its corresponding Bank, to collect the proceeds, under the above referred instrument for it. The corresponding bank confirmed the availability of funds in the payee bank through a fax information dated 24-10-1995, accordingly, the appellants bank credited the amount of US $ 5000 in the account of the respondent on 27-10-1996 which was withdrawn by him on 29-10-1996, against a promissory note executed by him indemnifying the appellant, in case of any discrepancy in the instrument in form of dishonour etc. Subsequently, it transpired that instrument was forged, as there was no Organization in the name and style of "Arabian Exchange and Finance Organization" on whom the said instrument was drawn. On this information, the appellant bank debited the amount of dishonoured Demand Draft to the respondent's account on 12-1-1997 because this amount was earlier credited from his account. The respondent was informed of the status of the transaction and of the nature of the forged instrument which necessitated filing of instant suit which initially was instituted before the learned Senior Civil Judge, Faisalabad wherefrom, the plaint was returned and thereafter, it was presented before the Banking Court on 4- 4-2002. The return of plaint occasioned, on an objection of the appellant-Bank.
3. The appellants being defendants in the suit, filed an application for grant of leave to defend it, on the ground that suit is false and frivolous and that there was no pivity of contract regarding payment of the said amount between the parties and that there was no relationship between the parties as that of debtor and creditor because the appellants were acting as an agent of the respondent who deposited a Demand Draft for collection purposes. It was also alleged in the application that suit is barred by limitation as the transaction took place in the year, 1997 whereas the suit was filed on 4-4-2002. The appellants also denied its responsibility regarding 'genuineness/authenticity of the draft, which was accepted by the respondent himself from his customer namely, Mr. Jehangir Mehmood at his own cost and risk. The appellants also pleaded that the instrument deposited with it, just for collection purposes, turning down to be a forged, does not make the appellants responsible for payment thereunder. The learned Presiding Officer, who was seized of the matter after hearing the parties, dismissed the application of the appellants seeking leave to defend the suit and simultaneously decreed the suit of respondent for recovery of US $ 5841.52 with future markup. The appellants aggrieved of the decision dated 1-10-2002 filed instant appeal which was admitted to regular hearing and respondent in response to notice, has appeared through his counsel.
4. Learned counsel for the appellant submitted that the appellants had not participated in the acceptance of Demand Draft amounting to US $ 5841 which was accepted by the respondent himself and was simply deposited with the appellants for collection. The instrument deposited with the appellants was subsequently found in genuine/forged and the appellants being only a collecting bank cannot be burdened with liability of payment of amount under the said instrument.
He further submitted that by deposit of Demand Draft in question; no relationship of debtor and creditor was created between the parties and thus, suit before the Banking Court was not maintainable under the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001.
It was also urged that suit of the respondent on the face of it, was filed beyond the limitation provided by law and thus, could not have been decreed but a contrary view taken by the learned trial Judge is not in consonance with the settled proposition of law, regarding applicability of section 14 of the Limitation Act, 1908, which, according to him, were not applicable to the suit in hand. He further elaborated his arguments by saying that suit against the appellant was not competent because the respondent if aggrieved of non-payment under the demand draft in question, he must file suit against the Organization on whom it was drawn, or against the person who delivered it to the respondent i.e. Mr. Jehangir Mehmood with whom the appellants/bank has no concern of any kind.
5. Learned counsel appearing on behalf of the respondent refuted the arguments of the appellants, supported judgment and decree passed by the Banking Court and urged that since the appellants admitted deposit of demand draft amounting to US $ 5841 in account of the respondent and payment under it, was confirmed by the appellants corresponding bank in USA, the respondent cannot be refused payment thereunder. He further contended that payment under demand draft having been made to the respondent, entries of his bank account could not have been reversed at his back and thus, relationship of creditor and debtor did exist between the parties and the suit was rightly filed before the Banking Court under the relevant provisions of law applicable. Refuting the arguments regarding limitation, learned counsel for the respondent submitted that in view of provisions of section 14 of the Limitation Act, 1908, the time spent in honestly and diligently following the suit before the learned Senior Civil Judge, has to be excluded and by so doing, suit was within the period prescribed.
6. We have anxiously considered the respective arguments of the learned counsel for the parties and have examined the record appended herewith. Prima facie, the appellants acted only as an agent of the respondent for collection of the demand draft, accepted by himself from a third party to which the appellants have no participation. Liability of the appellants to pay amount under the said demand draft or adjusting payment made by it, out of the account maintained by the respondent, could not be set to rest, without recording of evidence. Respective stands of the parties, besides applicability of section 14 of the Limitation Act, 1908 for bringing the suit within the period of limitation prescribed by a special statute i.e. Financial Institutions (Recovery of Finances)
Ordinance, 2001, required a full-fledged trial and this matter could not have been decided summarily, like it has been attended and settled by the Banking Court through the impugned judgment and decree. We are of the considered view that the appellants had a case of grant of leave to defend the suit, for the reasons noted above and thus, in our opinion, the judgment and decree dated 1-10-2002 passed by the Banking Court No,II, Faisalabad, impugned is not maintainable. We, accordingly, accepted this appeal, set aside the judgment and decree, above referred dated 1-10-2002 and accept application of the appellants seeking leave to defend the suit and grant them the requisite leave, with the result that the appellants will be permitted to file a written statement thereafter the suit shall be decided in accordance with law. Parties are directed to appear before the Banking Court No,II, Faisalabad on 14-4-2004 who will bear their own cots, as regards instant appeal.