Parvez Ahmad, J.--The appellants through the present appeal have assailed the judgment and decree dated 12.2.1999 of the Banking Court No, 1, Faisalabad by virtue of which their application for leave to appear and defend the suit for recovery of money, brought by the respondent Bank, was dismissed and the suit of the respondent bank was decreed in its favour.
2. The facts giving rise to the present appeal are that the respondent bank instituted a suit under Section 9 of the Banking Companies (Recovery of the Loans, Advances, Credits and Finances) Act, 1997 for recovery of Rs, 6,27,710.00 as principal amount and mark up thereon at the rate of 60 paisas per thousand on daily products and with other charges and expenses till the full and final liquidation of the liability. It was alleged that Appellant No, 1/Defendant No, 1 was a commercial exporter of Hosiery goods and started business through the plaintiff/respondent bank. The Defendant No, 1 presented to the bank for negotiation two export bills against sites/letter of Credit No, 4031 covering Air Ways Bills of LUFTHANSA Air Company The details of the bills are as under: Sr. No, Bill No, Date Amount F.C.Amount Pak Rs,Name of the Bank
1. 6642/93 21.7.1993 DM10000 164,540/- WGZ. Bank West Beutsche
2. 6674/93 31.7.1993 DM10000 170,231/- Bank Germany The bank while taking into consideration the good relation of the appellant/defendant trusted them and purchased the said bills and made payment of the amount of Rs, 334,771/- and sent these bills to the foreign bank/buyer for the realization of the proceeds of the goods but the L/C opening bank refused to honour the documents on 29.7.1993 due to following discrepancies:-- Terms of delivery not as per L/C.
Signature of the shipper is missing on Air Way Bill.
Not showing that original certificate of origin accompany the goods.
C/o in original: After the rejection of the documents the plaintiff bank contacted the defendants and requested them to remove the discrepancies. The plaintiff bank resubmitted the documents but of no avail.
During this lot of correspondence alleged to have had taken place in between the plaintiff bank and foreign bank/buyer. After the refusal of the foreign bank the plaintiff bank approached the defendants for liquidation of their liability and wrote several letters but of no avail. With this background the plaintiff bank instituted the above said suit for recovery in which notices were issued to the appellants/defendants vide order dated 2.2.1998 in which it was mentioned that the leave to defend was to be obtained by them. However, the Banking Court upon submission of an application for leave to defend, which was filed on 24.4.1998, held that the application in view of the fact of their service having been effected on 4.2.1998 was hopelessly barred by time and dismissed the same and accordingly passed a decree vide impugned judgment -dated 12.2.1999, hence the present appeal.
3. We have heard the learned counsel for the appellants as none has turned up on behalf of the respondent bank and perused the entire material made available before this Court.
The history of the fact given above clearly indicates that the application for leave to defend submitted by the appellants before the Banking Court was barred by time. In spite of repeated adjournments, the learned counsel for the appellants has failed to assist this Court as whether any application for extension of time for leave to defend could be moved under the law and whether the Court was having any jurisdiction to condone such delay. Apart from it the learned counsel for the appellants conceded that no application to condone the delay in filing the application for leave to defend was ever moved before the Banking Court or before this Court till today. With this background we up-hold the findings of the Banking Court to the extent of dismissal of the application for leave to defend and maintain it. However, there is an important aspect of the matter that whether the dismissal of the application for leave to defend entitles the Court to immediately pass a decree in the suit. For this purpose sub-sections (3) & (4) of Section 9 of the Act, 1997 are relevant, Which read as under: "9. Procedure of Banking Courts.-- (1)..............................................
(2).............................................. #(3) On a plaint being presented to the Banking Court a summons in Form No, 4 in Appendix "B" to the Code of Civil Procedure (Act V of 1908), or in such other form as may, from time to time, be prescribed by rules, shall be served on the defendant through the bailiff or process sever of the Banking Court, by registered post acknowledgement due, by courier and by publication in one English language and one Urdu language daily newspaper and service duly effected in any one of the aforesaid modes shall be deemed to be valid service for purposes of this Act. In the case of service of the summons through the bailiff or process-server a copy of the plaint shall be attached therewith and in all other cases the defendant shall be entitled to obtain a copy of the plaint from the office of the Banking Court without making a written application. The Court shall ensure that the publication of summons shall take place in newspapers with a wide circulation within its territorial limits.
(4) In any case in which the summons has been served on the defendant as provided for in sub- section (3) the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided so 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 and such other material as the Court may require in the interest of justice."
It is clear from the above sub-sections of Section 9 that it is discretionary upon the Court to pass a decree upon dismissal of application for leave to defend but where the questions with regard to its jurisdiction, limitation and nature of claimed amount are involved it is obligatory upon the Court to firstly decide these questions and then decide the suit. It is established from the impugned judgment that the learned Banking Court after dismissal of the application for leave to defend on the ground of limitation did not bother to consider the other important objections riased in the matter and straightway decreed the suit, which is not warranted by law, as such the judgment of the Banking Court to the extent of decreeing of the suit suffers from illegality and material irregularity.
4. In view of the above, the instant appeal is disposed of that the order of Banking Court to the extent of order of dismissal of application for leave to defend the suit is up-held and the appeal to the extent of decreeing of the suit is accepted and the impugned decree dated 12.2.1999 is set aside with a direction to the Banking Court to decide the suit afresh after first considering the points of jurisdiction, limitation and nature of the claimed amount. The Banking Court shall complete this exercise within a period of two months from the receipt of this order.