1. ' Exemption application is granted subject to dl just exceptions.
2. The petitioners have impugned order dated 29-8-2001 passed in Suit No,1288 of 2000 passed by the learned Banking Court No,III, Karachi. Whereby, application under section 10 of the Banking Companies Act, 1997 filed by the petitioner/defendant was granted "subject to deposit of the suit amount within 10 days and then to file the written statement within seven (7) days thereafter."
2. ' It is the case of petitioner that in terms of section 10 of Act of 1997 thereof unconditional leave to der fend is "to be granted in case a bona fide dispute is raised thereby." Mr. Salim Thapdawala, learned counsel appearing for the petitioner, contends that, under the Act of 1997, unlike the "Predecessor Acts" and so also "Successor Acts", no discretion was vested in the Banking Courts to grant leave to defend subject to security. According to him in case, a bona fide dispute is raised, petitioner as a matter of right is entitled to unconditional leave to defend. In support of his contention, he has relied upon a case decided by this Court under the said enactment reported as Agrofoster (Pvt.) Ltd. And 2 others v. Judge, Banking Court No,5, Karachi and another PLD 1999 Karachi 398.
3. ' Mr. Tasawar Ali Hashmi, learned counsel appearing for the respondent No,2 when confronted with the above legal position contends that, discretion to impose condition while deciding leave to defend as contained in predecessor enactment, is not provided for in the Act XV of 1997. He, however, contended that by virtue of section 10(9) of Financial Institution (Recovery of Finances)
4. Ordinance, 2001, the Court is now vested with jurisdiction to grant leave to defend with or without furnishing security. According to him, since the case will proceed in accordance with the later enactment therefore, order may be considered under the Ordinance, 2001. Argument on the face of it is preposterous Ordinance, 2001 was promulgated on 30-8-2001, whereas, impugned order was passed a day earlier on 29-8-2001, therefore, impugned order could not be treated as order under the Ordinance, 2001.
5. ' It is observed that, Suit No,1282 of 2000 was filed by the respondent No,2, Habib Bank Limited, against the petitioner in the Banking Court No,III, Karachi, under the then Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. Leave to defend application was filed by the defendant/petitioner under section 10 thereof, learned Banking Court No,III, after hearing the parties passed the following impugned order dated 29-8-2001:-- "Heard the learned counsel for the parties and perused the record, it appears that in the affidavit the defendant has shown prima facie defence in order to obtain leave to defend. Hence the above application is allowed conditionally subject to deposit of the suit amount, within 10 days an :hen they file written statement within 10 days."
6. ' In order to appreciate the contentions of learned counsel it would be beneficial to glance through relevant provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances)
7. Act, 1997 and the predecessor and successor Enactments; ' First Enactment in the series was Banking Companies (Recovery of Loan) Ordinance No,XXIII of 1978 promulgated on 29-5-1978. Section 9(2) thereof, dealt with leave to defend, which reads as follows:-- Section 9. Procedure of Special Court: (1).----
(2) In exercise of its civil jurisdiction, the Special Court shall in all suits before it, including suits based on mortgages of all kinds on statement of accounts for recovery of money paid to or to the order of, defendant, follow the summary procedure provided for in Order XXXVII in the First Schedule to the Code of Civil Procedure, 1908.
8. ' Order XXXVI, rule 3(2), C.P.C. Provides "Leave to defend may be given unconditionally or subject to such terms as to payment into Court giving security framing and recording issues or otherwise as the Court thinks fit."
9. ' Second Enactment in the series being Banking Companies (Recovery of Loan) Ordinance, 1979 was promulgated on 27-3-1979. It repealed and with certain modification re-enacted the Ordinance of 1978. Section 7(2) thereof dealing with leave to defend, was in pari materia with section 9(2) of the repealed Ordinance 1978, which is not being reproduced to avoid repetition.
10. ' Third in the series being Banking Tribunal Ordinance No,LVIII of 1984, promulgated on 31-12-1984.
11. Procedure, provided for defending the banking suit was contained in section 6 ibid, which read as follows:-- 6(1) .........
(2) On plaint being filed with the Banking Tribunal in accordance with the provisions of subsection [1), the Banking Tribunal shall issue notice requiring the defendant to show cause within ten days of the service of such notice, as to why decree as prayed for in the plaint should not be passed against him.
(3) .......
(4) Upon the defendant failing to file a reply within the time given in the show-cause notice under section (2) or upon rejection by the Banking Tribunal of the plea taken by him in the reply, the Banking Tribunal shall pass a decree as prayed for in the plaint.
12. Banking Companies (Recovery of Loans, Advances Credits and Finances) Ordinance XXV of 1997, was the Fourth Enactment in the series, whereby, 'the Banking Companies (Recovery of Loan)
13. Ordinance, 1979' and 'the Banking Tribunal Ordinance, 1984' were modified, consolidated and re- enacted on 4-2-1997. Section 9(2) thereof, provided following procedure to be observed by the Banking Court:-- ' Section 9. Procedure of Banking Court: (1)----------
(2) On the plaint being filed with the Banking Court in accordance with the provisions of subsection (1), the Banking Court shall issue summons or notice requiring the defendant to show cause, within twenty-one days of the service of such summons or notice, as to why the decree as prayed for in the plaint should not be passed against him. The summons or notice under the section shall be served on the defendant through the bailiff of the Court, by registered post acknowledgement due and by publication, and service in any of the aforesaid modes shall be deemed valid service for the purpose of the Ordinance.
(3) Upon the defendant failing to file a reply within the time given in the show-cause notice under section (2) or upon rejection by the Banking Court of the plea taken by him in the .Reply, the Banking Court shall pass a decree as prayed for in the plaint.
14. ' Ordinance XXV of 1997 was repealed by Fifth Enactment in series of succession i.e. 'Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997'. It was promulgated on 2nd June, 1997. Instant petition relates to this very Enactment, section 10 of which, provided as under:-- "Subject to section 11, the Banking Court shall, upon an application made by a defendant within twenty-one days, give leave to defend the suit, if a serious and bona fide dispute is raised thereby: ' Provided that where service has been validly effected only through publication in the newspaper the Banking Court may extend the time for filing an application for leave to defend if satisfied that the defendant did not have knowledge thereof."
15. ' Last mentioned Act of 1997, was succeeded by Sixth Enactment being 'Financial Institutions (Recovery of Finances) Ordinance, 2001' enforced on 30-8-2001, which still holds the field, section 10(9) thereof, read s as follows:-- "Section 9. Leave to defend:---
(1) In any case in which the summons has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided to defend the same, and, in default of his doing so, the allegations of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Banking Court may require in the interest of justice.
16. (2)
17. (3)
18. (4)
19. (5)
(6) ...............
(7) ...............
(8) ...............
(9) In granting leave under subsection (8), the Banking Court may impose such conditions as it may deem appropriate in the circumstances of the case, including conditions as to deposit of cash or furnishing of security."
20. ' On examination and comparison of the relevant provisions of various Enactments as reproduced above, it appears that, under the Banking Companies (Recovery of Loan) Ordinance, 1978, Banking Companies (Recovery of Loan) Ordinance, 1979 and Financial Institutions (Recovery of Finances)
21. Ordinance, 2001 the Banking Court could grant leave to defend subject to condition as to security or otherwise. However, in terms of Fifth Enactment in series of succession i.e. Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. Leave to defend without any condition of security could be granted provided serious and bona fide dispute was raised. In all other Banking Enactments on the subject, the Banking Court could permit to defend the suit, where the defendant within specified time was able to show as to why decree as prayed for in the plaint should not be passed against him.
22. ' Petition in hand is in respect of banking suit founded on Act of 1997. On perusal of section 10 of the Act, 1997, it is apparent that the Banking Court shall "give leave to defend the suit, if a serious and bona fide dispute is raised thereby. In the instant case, on the leave to defend application, learned Banking Court had arrived at a conclusion that, "it appears that in the affidavit the defendant has shown prima facie defence in order to obtain leave to defend" but the Banking Court granted leave to defend application, "conditionally subject to deposit of the suit amount, within 10 days".
23. ' Once a Banking Court, deciding leave to defend application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 came to the conclusion that, "it appears that in the affidavit the defendant has shown prima facie defence in order to obtain leave to defend" the Court was obliged to grant leave to defend without attaching any condition thereto.
24. ' From a bare perusal of various provisions of different Banking Enactments both, before and after the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, it becomes abundantly clear that, a departure was made in the Act No, XV of 1997. Legislature in its wisdom did not attach any condition on the exercise of discretion of Banking Court while granting A leave to defend the suit provided that, if a serious and bona fide dispute is raised by the defendant.
25. ' A learned Division Bench of this Court confronted with similar situation in the case of Agrofoster (Pvt.) Ltd. And 2 others v. Judge, Banking Court No,5, Karachi and another PLD 1999 Karachi 398 at page 401 held as follows:-- "Once the case is found fit for granting leave no condition of furnishing security can be attached, as it would tantamount to reading more than what actually the Legislature has mentioned in said section. Any other construction, which contradicts the letters of a statute and Permits substitution of views other than expounded by Legislature, shall, as a rule, be avoided. Neither the principle of aforesaid maxim is applicable to this case nor the plea of substantial justice to both the parties would apply. The Legislature in its wisdom has not thought it proper to put any condition for seeking leave to defend the suit, except mentioned earlier."
26. ' Cited case is applicable on all fours in the case in hand, we respectfully follow the same.
27. ' In the facts and circumstances, accordingly, the petition is allowed. Leave to defend shall be considered to have been granted without any condition attached.
28. ' Mr. Saleem Thapdawala learned counsel for the petitioner submits that, the Written Statement has already been filed, let the matter be proceeded and decided by the concerned learned Banking Court in accordance with law at an early date. Mr. Tasawer Ali Hashmi does not oppose the request. Since this controversy is pending for quite sometime, learned counsel appearing for respondent No,2 appears to be justified in seeking direction for disposal of the suit at an early date.
29. Learned Banking Court is accordingly directed to decide the suit preferably within a period of four
(4) months from the date of receipt of copy of this order.