JDUGMENT MIAN HAMID FAROOQ, J.---Appellant/plaintiff, through the filing of the present first appeal, under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, has called in question judgment dated 9-9-1998, whereby the learned Judge Banking Court rejected the plaint in appellant's suit for recovery.
2. Facts leading to the filing of the present appeal are that the appellant-Bank, on 10-1-1998, filed the suit for recovery of Rs.18.299 Million, along with mark-up and other charges etc. against the respondents, before the Judge Banking Court, Lahore. Pursuant to the receipt of summons, respondents Nos.1 to 4 filed a petition seeking leave to defend the suit, however, respondents Nos.5 and 6 did not file any such application and their defence was struck off. The contesting defendants filed two applications, one for stay of the proceedings before the Banking Court and the other for impleading Ghee Corporation of Pakistan in the suit. The learned Judge Banking Court, after hearing the parties, dismissed both the applications through separate orders, both dated 25-5- 1998. Subsequently the learned Judge Banking Court, without deciding the leave application, either way, in purported exercise of powers under Order VII, rule 11, C.P.C., proceeded to reject the plaint in appellant's suit for recovery, vide impugned judgment dated 9-9-1998, hence the present appeal.
3. Respondents were proceeded ex parte by this Court, vide order dated 17-1-2005.
4. Learned counsel for the appellant has contended that on the one hand application filed by defendants Nos.1 to 4, for impleading Ghee Corporation as defendant in the suit, was rejected and on the other hand appellant's plaint was rejected while holding that the plaintiff has only cause of action against Ghee Corporation. He has further submitted that Suraj Ghee Industries, is a separate legal entity and the impugned judgment is not sustainable.
5. We have heard the learned counsel and examined the available record. We find from the summoned record that respondents Nos.1 to 4/defendants Nos.1 to 4, on 25-2-1998, filed a petition seeking leave to defend the suit, which was replied by the appellant-Bank, but the same was not decided by the learned Banking Court either through a separate order or by the impugned judgment. Under the law, the learned Banking Court was obliged to decide the leave application on its own merits, either way, before embarking upon the suit. If the learned Banking Court was of the view that serious and bona fide questions were raised by the contesting respondents, then, at best, leave to defend could have been granted to the said respondent. To our mind, at that point of time, the learned Banking Court, without deciding the leave application, was not empowered to reject the plaint or dismiss the suit. The impugned judgment is violative of the law laid down by this Court in the cases of Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245 and Sheikh Muhammad Kashif v. Askari Leasing Limited through Manager/Chief Executive of Branch/Recovery Officer 2004 CLD 1645.
6. Placing the aforenoted facts in juxta-position with the provisions of section 9(4) read with section 10 of Act XV of 1997, it is evident that the learned Banking Court did not adopt the procedure as prescribed in the said statute and has, in fact, gone outside the scope of said provisions of law.
It has, inter alia, been held in the aforenoted judgments that the Banking Courts, which were created, and established under a special law, are creature of the statute and, of course, are bound by the provisions and procedure prescribed under the particular statute. Admittedly, the contesting respondents did file the application for leave to defend the suit, but the learned Banking Court failed to decide the said application, thus, the same shall be deemed to be pending. The impugned judgment is thus, violative of the said provisions of law and the learned Banking Court has completely bypassed the procedure prescribed for Banking Court, as noted above.
7. In the above perspective, we have examined 1 the impugned judgment and find that the same is not sustainable in law, inasmuch as the same is violative of law laid down in the aforenoted two cases, thus, we are inclined to set it aside.
Upshot of the above discussion is that the present appeal is allowed and the impugned judgment dated 9-9-1998, is set aside with no order as to costs. Resultantly, the appellant's suit for recovery (titled National Bank of Pakistan v. Messrs Suraj Ghee Industries Limited and others) and respondents Nos.1 to 4's application for leave to defend the suit shall be deemed to be pending before the learned Judge Banking Court, who shall firstly decide the said application and then the suit, after hearing the parties, and, of course, in accordance with law.