' The brief facts out of which present appeal arises are that the appellants secured loan from the respondent, Bank for purchase of Tractor. An agreement was also executed between the parties.
Appellants filed suit for rendition of accounts before the Judge Banking Court, Sargodha on 4-3- 2003. The contents of the plaint reveal that respondent-Bank issued demand notice to the appellants regarding .Recovery of Rs.2,76,276 on 7-11-2002, which is illegal against law and facts, based on mala fide and as such liable to be cancelled with the prayer that respondent-Bank be restrained from charging any profit and mark-up from the appellants. The respondent-Bank filed an application for seeking leave to defend. The learned Banking Court dismissed the suit vide impugned judgment and decree dated 16-12-2003.
2. Appellants being dissatisfied filed this appeal.
3. The learned counsel of the appellants submits that the impugned judgment and decree dated 16-12-2003 is based on misreading and non-reading of the notification issued by the State Bank of Pakistan vide Circular No,27, dated 29-10-1995 and on the basis of circular State Bank of Pakistan also issued instructions to the Regional Managers/ Managers to the Bank on 26-12-1995. The learned counsel of the appellants submits that appellants secured loan from the respondent-Bank on 24-3-1993 and Circular No,27 was issued by the State Bank of Pakistan on 29-10-1995, therefore, said notification should have prospective effect and not retrospective, whereas, he further submits that impugned judgment and decree is result of misreading and non-reading of the record. He further submits that Circular No,27, dated 29-10-1995 was presented before Banking Court at the time of hearing the case, therefore, the impugned judgment and decree is without lawful authority.
4. The learned counsel of the respondent-Bank submits that the State Bank of Pakistan is competent to issue instructions under section 25 of the Banking Companies Ordinance, 1962 qua all the matters with regard to financial institution including enhancement of interest. He further submits that an agreement was executed between the appellants and the respondent-Bank according to the terms of agreement vide Clause 23, respondent-Bank is competent to charge 16.5% late repayment' charges. He also submits that the appellants have not deposited the instalments in terms of the agreement and schedule issued by the respondent-Bank at the time of sanctioning loan to the appellants. He summed up his arguments that Banking Court was justified to dismiss the suit of the appellants.
5. We have given anxious consideration to the contentions of the learned counsel of the parties and perused the record ourselves. It is no doubt that the State Bank of Pakistan is well within its ' rights to issue instructions to the financial institution by virtue of section A 25 of the Banking Companies Ordinance, 1962 including enhancement of interest. It is settled principle of law that Circular issued by the State Bank of Pakistan has prospective effect and not retrospective effect in arriving to this conclusion. We are fortified by the following judgments Hashwani Hotels Limited v.
Federation of Pakistan and others PLD 1997 SC 315, Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026 and Pakistan through Secretary, Ministry of Commerce and' 2 others v. Salahuddin and 3 others PLD 1991 SC 546. It is settled principle of law that instructions issued by the authorities have always prospective effect and not retrospective effect even the law framed by the competent authority i.e. Legislative body cannot be taken effect retrospectively unless and until it is specifically mentioned by the Legislature in the enactment itself as the law laid down by the Honourable Supreme Court in the following judgments Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546 and Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCM R 1652. It is also settled principle of law that Courts are duty bound to decide the controversy between the parties after judicial application of mind as the law laid down by the Honourable Supreme Court in Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 1739. It is the duty of the public functionaries to decide the controversy between the parties after application of judicial mind with reasons after addition section 24-A newly added in General Clauses Act which is a procedural in character, therefore, it has retrospective effect as the law laid down by the Honourable Supreme Court in Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam. International Airport Karachi and others 1998 SCM R 2268 and Zain Yar Khan v. The Chief Engineer, C.R.B.C., WAPDA, D.I. Khan 1998 SCM R 2419.
6. In view of the above, the impugned judgment and decree is set aside meaning thereby the suit filed by the appellants shall be deemed to be pending adjudication before the Banking Court. The parties are directed to appear before Banking Court on 27-5-2004, who is directed to decide the case afresh in accordance with law including effect of Circular No,27, dated 29-10-1995 of State Bank of Pakistan, as expeditiously as possible. The parties and their counsel are directed to co- operate with the Presiding Officer of the Court so that matter may be concluded within prescribed period, in case any party or his counsel fails to co-operate with the Court then Court is directed to take penal action against the said party in accordance with law.
7. With the above observations, this appeal is disposed of.