MIAN HAMID FAROOQ, J.---This single judgment shall, decide the, present appeal R.F.A.No.902 of 2001, titled Messrs Ravi Enterprises and another v. Allied Bank of Pakistan and others) and the connected appeal (R.F.A. No.901 of 2001, titled Allied Bank of Pakistan v. Ravi Enterprises and another), as common questions of law and facts are involved in both the appeals and they have arisen, out of one and the same judgment.
2. Both the appeals in hand proceed against the judgment and decree dated 14-11-2001, whereby the learned Judge Banking Court, partly decreed appellant's suit for recovery to the extent of Rs.
65,24,992 in their favour.
3. Precisely stated the facts relevant for the decision of the present appeals ' are that the appellants/plaintiffs, on 15-1-2000, filed the suit for recovery of damages amounting to Rs.99.24,992 (first suit) against the respondent-Bank before the learned Judge Banking Court, Lahore. Details of damages claimed by the appellants in their plaint read as under:- Loss incurred on account of. deterioration of goods to the tune ofRs. 55, 24. 992 Loss of Business Rs .15,00,000 Loss of good-will. Rs.20.00,000 Loss of time and torture Rs.9,00,000 Total Rs.99,24,992 Subsequently Allied Bank of Pakistan filed the suit for recovery of Rs.84,71,000, against the appellants (2nd suit), before the same Court, wherein the appellants filed the application for the .grant of leave to defend the suit. The learned Banking Court, after dismissing their application, proceeded to pass the decree for the recovery of Rs.49,99,593, in favour of the respondent-Bank, vide judgment and decree dated 12-10-2000. The appellants filed the appeal (R.F.A. No.480 of 2000) against the said decree, which has today been decided by this Court, vide separate judgment of even date.
4. Reverting back to the first suit, wherein the respondent-Bank, on 8-3-2000, filed the application for leave to appear and defend the suit, but the same was dismissed by the learned Banking Court, vide order dated 12-10-2001 on the ground that it was hopelessly barred by time. Whereafter the learned Banking Court, after finding that since this is a suit for recovery of damages and cannot be summarily decreed, proceeded to fix the case for recording evidence of the appellants/plaintiffs.
The respondent-Bank filed the application requesting therein that it may be permitted to cross- examine the witnesses, proposed .to be produced by - the appellants/plaintiff, but the learned Banking Court dismissed the said application, vide order dated 20-6-2001. Another application, filed by the respondent-Bank, under Order 1, rule 10, C.P.C. for impleading Messrs Kings International Forwarding Agency, the clearing Agent, was also dismissed, vide order dated 8-8-2001. The appellants in their oral evidence produced Imran Raza, Israr Ahmad, Mian .Muhammad Jehangir and Imtiaz as P.W.1 to P.W.4, while certain documents were admitted in evidence and exhibited as Exh.P.1 to Exh.P.42. The learned Judge Banking Court partly decreed appellant's suit awarding them the amount of Rs.65,24,992, as damages, as against the suit amount of Rs.99,24,992, vide impugned judgment and decree dated 14-11-2001. Both the parties felt dissatisfied with the said decision. The appellants filed the present appeal (R.F.A. No.902 of 2001) for the recovery of remaining amount of Rs.34,00,000 and modification of the decree, while the respondent-Bank filed the connected appeal (R.F.A. No.901 of 2001), seeking setting aside of the said judgment and decree.
5. The learned counsel for the appellants has contended that the appellants have proved their case to the hilt by adducing documentary as well as oral evidence and therefore, were entitled to recover the total suit amount (Rs.99.24,992) but the learned Banking Court, while partly decreeing appellant's suit, has committed legal errors, therefore, the impugned decree be modified and the deducted amount of Rs.34,00,000 may also be awarded. Conversely the learned counsel for the respondent-Bank, while refuting the said contentions, has submitted that though respondent- Bank's leave application was dismissed, as barred by time, but the bank was at least entitled to cross-examine appellant's witnesses, as suit for damages is to be decided after recording evidence and due application of mind. He has adde, that respondent-Bank's application, seeking permission to cross-examine appellant's witnesses, was illegally rejected. He has relied upon Messrs Qureshi Salt and Spices. Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCM R 2353: Haji Usman v. Haji Shafi-ur- Rehman 1988 CLC 1443 and Muhammad Ishaq and others v. Muhammad Ismail and others PLD 1989 Lahore 193.
6. Admittedly, the respondent-Bank filed time-barred application for leave to defend the suit, which was dismissed by the learned Banking Court, vide order dated 12-10-2001, which order has since attained finality. Despite that as the appellants have claimed damages, therefore, the respondent- Bank could not be treated as a dead person for the remaining proceedings. In the case in hand the learned Banking Court could not have passed the decree for colossal amount merely on the basis of the ex parte evidence, produced by the appellants, which to our mind is not sufficient to even partially decree appellant's suit. It is true that the learned Banking Court, after dismissal of respondent-Bank's application for leave to defend the suit, refused to straightaway pass the decree and called upon the appellants to produce the evidence, which, in fact was recorded, but it is equally true that the respondent-Bank was not allowed to even cross-examine appellant's witnesses and to object to the admissibility of documents. To our mind, after the dismissal of respondent-Bank's leave application, although under the law it could not file the written statement and is precluded from producing its own witnesses, yet it was at least entitled to cross-examine appellant's witnesses. Even if the respondent-Bank failed to file any application for leave to defend the suit, the learned Banking Court was still legally obliged to decide the suit for damages after recording plaintiffs evidence in support of his claim, thereby providing adequate opportunity to the respondent-Bank to cross-examine the witnesses. In such-like case, even if the defendant does not appear before the learned Banking Court or he is not granted leave, the Banking Court is not absolved of its duty to apply its mind to the facts and circumstances of each case. Honourable Supreme Court of Pakistan in the case reported as Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCM R 2353 has held as under:-- "We would not like to express our view on the question as to, whether the appellant's claim for damages for the above sum of Rs.4,08,53,000 can be said to have arisen out of a loan. However, we would observe that the above question needs examination. The learned Judge in Chambers acting as Special Court could not have passed a decree straightaway as the present claim for damages cannot be equated with a suit founded on a negotiable instrument. In this behalf reference may be made to the case of Haji Ali Khan & Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362 relied upon by Raja Muhammad Akram, learned Senior Advocate Supreme Court for the respondents, wherein while construing Rules 3 and 4, Order XXXVII, C.P.C. this Court held as under:--- "(10) The ratio decidendi of the above referred cases seems to be that if a defendant fails to appear or fails to obtain leave to defend in response to a summons served in Form No.4 provided in Appendix B to the C.P.C. or fails to fulfil the condition on which leave was granted where the Court refuses to grant leave, the Court is to pass a decree. It may further be observed that in sub-rule (2) of Rule 2, C.P.C., it has been provided that if a defendant fails to appear or defaults in obtaining leave, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree, but no such consequences are provided for in Rule 3 of the above Order in a case where the Court refuses to grant leave or the defendant fails to fulfil the condition on which leave was granted. In our view, notwithstanding the above omission in Rule 3, the effect of refusal of the Court to grant leave or failure on the part of the defendant to comply with the condition of the leave, will be the same i.e. the defendant shall not be entitled to defend the suit on any ground and the Court would pass a decree in favour of the plaintiff. However, this does not necessarily mean that the Court is not required to apply its mind to the facts and the documents before it. Every Court is required to apply its mind before passing any order or judgment notwithstanding the factum that no person has appeared before it to oppose such an order or that the person who wanted to oppose was not allowed to oppose because he failed to fulfil the requirements of law."
7. In this case, when the suit was fixed for recording evidence of the appellants, the respondent- Bank filed the application with the prayer that it be permitted to cross examine the witnesses, proposed to be produced by the appellants, but the said application was dismissed by the learned Banking Court, on 20-6-2001, on the plea that the leave application, filed by the Bank had already been dismissed. It would be appropriate to reproduce the relevant portion of the order dated 20-6- 2001, on the basis of which, the respondent-Bank was declined to cross-examine appellant's witnesses "As application for leave to defend filed by the petitioner bank has been dismissed, therefore, defendant-Bank cannot be permitted to cross-examine the witnesses to be produced by the plaintiff. Even otherwise, the acceptance of this application shall amount to review of order dated 12-10-2001. Accordingly I see no force in this application so same is hereby dismissed."
It flows from the above that the respondent-Bank was not allowed to cross-examine appellant's witnesses and was knocked out on the ground that its leave application was dismissed. To say the least, the said approach of the learned Banking Court is perfunctory, was the result of misappreciation of law on the subject and cannot be countenanced under any stretch of imagination. The learned Banking Court in fact misdirected itself by holding that the respondent- Bank is not entitled to cross-examine appellant's witnesses. Even in case, when the defence of a defendant is struck off under the provisions of Order VIII, rule 10, C.P.C., the defendant has been given a right of participation in the remaining proceedings in the suit and is allowed to cross- examine plaintiffs witnesses. It has been held in the case of Muhammad Ishaq and others v.
Muhammad Ismail and others PLD 1989 Lahore 193 that a defendant, whose defence was struck off, still has the right of participation in the proceedings and is entitled to cross-examine plaintiffs witnesses. Similar view was taken by Sindh High Court in the case reported as Haji Usman v. Haji Shafi-ur-Rehman 1988 CLC 1443.
8. In the said back drop, while placing the principles of law decided in the aforenoted judgments in juxtaposition with the facts of the present cases, we are of the view that the learned Banking. Court, while declining to allow the respondent-Bank to cross-examine appellant's witnesses and thus completely knocking it out from the proceedings has definitely committed legal errors. As a matter of fact, the learned Banking Court, at the time of recording appellant's witnesses ought to have allowed, of its own accord, the respondent-Bank to cross-examine appellant's witnesses and also to object to the admissibility and enforceability of the documents, proposed to be produced by the appellants. The impugned judgment suffers from serious legal defects, as we additionally feel that the respondent-Bank has been condemned unheard. Thus we are firm in our views that the impugned judgment cannot be allowed to be. sustained, we are inclined to set it aside and remand the case to the learned Banking Court.
9. Upshot of the above discussion is that the respondent-Bank's appeal (R.F.A. No.9011 of 2001) is allowed and the impugned judgment and decree dated 14-11-2001, is set aside. Simultaneously, appellant's appeal (R.F.A. No.902 of 2001) stands dismissed. Resultantly appellant's suit for recovery of Rs.99,24,992 titled "Messrs Ravi Enterprises and another v. Allied Bank of Pakistan Limited" shall be deemed to be pending before the learned Judge Banking Court, Lahore, who shall decide the same, afresh, after calling upon the appellants/ plaintiffs to produce evidence in support of their claim and also providing adequate opportunity to the respondent-Bank to cross-examine plaintiffs witnesses and to raise objections regarding the admissibility and authenticity of documents, if produced by the plaintiffs. Needless to add that the respondent-Bank shall not be allowed to lead their evidence or to produce any document, as they failed to seek leave to defend the suit. Parties shall bear their own costs.
Since the suit was filed as far back as on 15-1-2000, therefore, the learned Banking Court shall finally decide the suit, as noted above and of course in accordance with law within a period of 6 months from today.