MIAN HAMID FAROOQ, J.-- The appellant/plaintiff , through the filing of the present appeal, has called_ in question judgment and decree dated 29-1-2002, whereby the learned Banking Court, rejected the plaint, in a suit , filed by the appellant , in exercise of its powers under Order. VII Rule 11 CPC.
2. Facts, leading to the filing of the present appeal are that pursuance to the receipt of the notice under section 81 of the Land Revenue Act, whereby the respondents raised a demand of Rs.
3,69,810/- from the appellant, he filed a suit for declaration and permanent injunction thereby challenging the aforesaid notice, before the learned Banking Court at Lahore. Consequent to the above, the learned Banking Court issued summons to the respondent as required under section 9(5) of Financial Institutions (Recovery of Finance) Ordinance, 2001, and thereupon the respondents filed an application seeking leave to defend the suit, which was replied by the appellant. Ultimately, after hearing the arguments on the said application, the learned Banking Court, instead of deciding the said application one way or the other, proceeded to reject the plaint in purported exercise of jurisdiction under Order VII rule 11 CPC in the aforenoted suit, filed by the appellant vide judgment and decree dated 29-1-2002, hence the present appeal.
3. It is represented case and Sardar Muhammad Hayat, Advocate, appeared on behalf of respondent No. 2 on the last date of hearing. Today he has sent a written request for the adjournment of the case on the plea "that he is out of station for his personal matter". Being guided by the principle laid down by the Hon'ble Apex Court of the country in a case reported as Muhammad Akram and others vs. Sardar Muhammad and another (2002 SCM R 526), wherein it has been held that "personal engagement of a counsel could not be given preference to his professional duties towards the Court". We are not inclined to entertain the said request, hence, we are constrained to hear the appeal in the absence of the learned counsel for the respondents.
4. Learned Counsel for the appellant has contended that the learned Banking Court, while hearing the application for leave to defend the suit could not have legally rejected the plaint. He has further contended that the impugned judgment an decree has been passed in complete oblivion of the facts of the case and law on the subject inasmuch the provisions of section 10 of Financial Institutions (Recovery of Finance) Ordinance, 2001, ahs completely been ignored.
5. After taking into consideration the law on the subject and facts of the case, we are of the view that the contentions raised by the learned counsel are of great substance.
6. Upon the examination of the record of the case and the perusal of the impugned judgment, we find that the approach of the learned Banking Court, to say the least, in rejecting the plaint, is perfunctory and ' cannot be countenanced under any stretch of imagination. By passing the impugned judgment, the learned Banking Court has in fact gone out side the scope of section 10(8) of the aforesaid Ordinance. Admittedly, the respondents filed an application seeking leave to defend the suit, which was to be decided by the learned Banking Court either way. Upon filing an application for leave to defend the suit by a defendant, the Banking Court, as per the provisions of section 10(8) of Ordinance, 2001, shall grant the defendant leave to defend the suit, if it finds that the substantial questions of law and facts have been raised in respect of which evidence needs to be recorded. It has no where been provided under section 10 of the aforenoted ordinance, which deals with the application to leave to defend, that while hearing the application for leave to defend the suit, the learned Banking Court is competent to straightway reject the plaint. There 'cannot be any cavil to the proposition that the Banking Court, which were established under section 5 of ordinance, 2001, are the creature of the statute and, of course, are bound by the provisions of that statute. If the learned Banking Court was of the view substantial questions of law and facts have been raised by the respondents, then, at best, leave lo defend could have been granted to the respondents but to our mind, no way, at that point of time, either the suit or the plaint could have been dismissed/rejected, as has been done in the present case. While deliberating upon the similar issue, the Hon'ble Sindh High Court in a case reported as Messrs Platinum Insurance Company through Chief Executive Vs. Messrs Highways Bridge, Contractor International (Pvt) Ltd.
And another (1997 M LD 2394) has held as under: "---O,XXXVII Rule 3.---Suit in summary jurisdiction---Court before grant of leave to defend suit could neither dismiss suit, nor reject plaint, not pass any adverse order against plaintiffs on objection/assertions of defendant---Such question, however, could be considered at final hearing of suit-- --No case was made out for grant of conditional leave--- Defendants were, however granted leave to defend the suit subject to furnishing bank guarantee in suit amount within specified period."
7. Perusal of the order -sheet manifests that the learned Banking Court, on 24-10-2001. Issued summons to the respondents, as provided under the aforenoted Ordinance, and in response thereto, an application for leave to defend was filed by them and the Iis was adjourned to 4-12002, for filing the reply on behalf of the appellant. Said reply was filed on 4-1-2002, reply to the application for grant of temporary injunction was filed on 17-1-2002, thereupon the learned Banking Court heard the arguments on 22-1-2002 and the case was - adjourned to 25-1-2002 for the announcement of the order on the leave application, which was, in fact, announced on 29-1-2002 and the plaint was rejected. It flows from the above narrative that from the very inception the main suit was never fixed for h earring and the entire proceedings were undertaken by the learned Banking Court on the application for leave to defend the suit. The parties addressed arguments on the said application and the same was fixed for the announcement of the order. We are of the view that the suit at that stage was not pending before the learned Banking Court and the proceedings were undertaken only on an application for leave to defend the suit. As the suit was not fixed for hearing, therefore, the learned Banking Court could not have rejected the plaint, as has erroneously been done in the present case. It is settled law that the defendant cannot even file any ancillary/interlocutory application and have no right to defend the suit, unless he is allowed by the Court to defend the suit. Reference can be made to a case reported as Messrs United Distributors Pakistan Limited Vs. Ahmad Zarie Services and another (1997 M LD 1835), wherein it has been held that till such time as leave to defend was granted, defendant could not even file interlocutory of Court etc. As noted above, the learned Banking Court at the maximum could have granted leave to defend the suit to the respondents and thereafter decided the case in accordance with law.
Undoubtedly, after the grant of leave and treating the leave applications written statement, the respondents were within their rights to have filed an application under Order VII Rule 11CPC and if the Court reached the conclusion that the case falls under any of the clauses of. Order VII rule 11 CPC., of course, plaint could have been rejected, but in no way before the grant of leave to defend the suit.
8. We have examined the impugned judgment in juxta position with the facts of the case and law on the subject and find that the same is in clear conflict with the express provisions of Ordinance,2001, exceptionable and we are inclined to interfere in the said judgment and decree.
9. As this stage, the learned counsel for the appellant has submitted that he has no objection if the respondents are granted leave to defend the suit and the learned Banking Court be directed to decide the suit in accordance with law. As a matter of fact, we were inclined to direct the learned Banking Court to, firstly, decide the application for leave to defend the suit, but in view of the said statement of the learned counsel for the appellant, that too, in absence of the learned counsel for the respondent, we see no impediment in acceding to the said concession, thus, the application for leave to defend filed by the respondents, is hereby accepted and the respondents are granted leave to defend the suit.
10. Upshot of the above discussions that the present appeal is allowed and the impugned judgment and decree dated 29-1-2002 is set aside with no order as to costs. The result would be that the suit filed by the plaintiff titled "Sajid Saleem Vs. Small Business Finance Corporation" shall deem to be pending before the learned Banking Court and as the leave to defend has been granted to the respondents, therefore, the said leave application shall be treated as written statement. The learned Banking Court shall decide the suit after providing sufficient opportunity of hearing to the parties and of course, in accordance with law preferably within a period of six months. .