' MIAN HAMID FAROOQ, J.---Appellant/plaintiff, through the present appeal, filed under the provisions of section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, (Ordinance), has assailed the order, dated 1-4-2005, whereby the learned Judge Banking Court returned the plaint of appellant's suit, in exercise of powers under Order VII, rule 10, C.P.C. For its presentation to the proper Court.
2. Precisely stated the facts of the case are that the appellant on 3-10-2000, filed the suit for recovery of guarantee amount of Rs,3,3,78,200 against the respondents, before the learned Judge Banking Court, inter alia, pleading that it placed order for supply of certain goods to respondent No,2, which furnished a performance/warranty bond guarantee No,47/18, dated 24-2-1995 for Rs,33,78,200 as 10 % of the total value of the purchase order, respondent No,2 failed to deliver the goods, as per schedule, the appellant required respondent No,1 for encashment of bank guarantee and respondent No,1 refused to encash the bank guarantee, which necessitated filing of the suit for recovery. The respondents were summoned, through all the modes of service prescribed under the law, and in response thereto, both the respondents filed separate applications, seeking leave to defend the suit, wherein, besides raising certain preliminary objections, it was urged that the validity of the guarantee period has already expired, therefore, the appellant is not entitled to encash the bank guarantee. With the change in law, the respondents submitted amended/revised applications for leave to defend the suit, which were opposed by the appellant, through filing its replies. Respondent No,2 filed the application under Order VII, rule 11, C.P.C. For rejection of the plaint, but the same was not decided and the learned Court fixed the case for hearing respondents' applications for leave to defend the suit. In the ultimate analysis, the learned Judge Banking Court, after coming to the conclusion that beneficiary of the bank guarantee is not included in the definition of "customer", as defined in Ordinance, 2001 and thus the Banking Court has no jurisdiction, to order for return of the plaint for its presentation to the proper Court, in exercise of the powers under Order VII, rule 10, C.P.C. Vide impugned order, dated 1-4-2005, hence the present appeal.
3. Learned counsel for the appellant contends that the respondents filed applications for leave to defend the suit, which were followed by amended/revised applications, but the learned Judge Banking Court, instead of deciding those applications, proceeded to return the plaint through the impugned order, which course of action is not recognized under the law. He has added that the learned Banking Court was under an obligation to decide leave applications and then to proceed with the case. He has relied upon. Messrs Waheed Corporation through Proprietor and another v.
Allied Bank of Pakistan through Manager 2003 CLD 245; Sheikh Muhammad Kashif v. Askari Leasing Limited through Manager/Chief Executive of Branch/Recovery Officer 2004 CLD 1645; Falcon Ventures Pvt. Ltd. Through Chief Executive Iftikhar Ahmad v. Punjab Banking Court No,II, Lahore and another 2004 CLD 726 and Manzoor Ahmad and another v. Agricultural Development Bank of Pakistan through Manager Nankana Sahib Branch and 3 others 2005 CLD 653. Conversely the learned counsel for respondent No,1 has stated that since the plaintiff is not the "customer", therefore, the learned Judge Banking Court does not have jurisdiction to decide the suit, "thus, the impugned order is not open to exception. Learned counsel for respondent No,2, while supporting the impugned order, has submitted that it is settled law that the objection to the jurisdiction should be decided first. He has added that as the appellant does not fall within the definition of "customer" neither any "finance" was advanced to the respondents, therefore, the learned Judge Banking Court has rightly returned the plaint on account of lack of jurisdiction. He has placed his reliance on Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353; Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362 and S.M. Akil Firkee v. Muhammad Qamaruz Zaman PLD 1982 Karachi 745.
4. We have heard the learned counsel and examined the summoned record. When the plaint was presented before the then learned Judge Banking Court, it issued summons to the defendants through ordinary process, by registered post acknowledgment due by courier service and by publication in two newspapers. In response thereto both the respondents filed the applications for leave to appear and defend the suit, which were followed by the amended/revised applications under Ordinance, 2001. Admittedly the said applications were not decided by the learned Banking Court, while it was obliged under the law to firstly decide respondent's applications for leave to defend the suit. Thus, we feel that the lean ie:1 Judge Banking Court has, in fact, gone outside the scope of section 10(8) of the Ordinance, 2001. Both the respondents filed the applications for leave to defend the suit, as noted above, which were to be decided by the learned Judge Banking Court on its merits. Section 10(8) of the Ordinance, 2001 provide 3 that the Banking Court shall grant the defendant leave to defend the suit, if it finds that substantial questions of law and facts have been raised in respect of which the evidence needs to be recorded. It has nowhere been provided in section 10 of the Ordinance that at the time of hearing the leave applications, the Banking Court is competent to either reject or return the plaint. If the learned Banking Court was of the view that respondents have raised substantial questions of law and facts, then leave could have been granted but the plaint could not be returned or rejected at that point of time. Needless to add that the Banking Courts, which are the creature of the statute, are bound by the provisions and procedure provided under that statute. The questions involved in the present appeal were examined by this Court in the cases reported as Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245; Sheikh Muhammad K, shif v.
Askari Leasing Limited through Manager/Chief Execu Live of Branch/Recovery Officer 2004 CLD 1645; Falcon Ventures Pvt. Ltd. Through Chief Executive, Iftikhar Ahmad v. Punjab Banking Court No,II, Lahore and another 2004 CLD 726 and Manzoor Ahmad and another v. Agricultural Development Bank of Pakistan through Manager Nankana Sahib Branch and 3 others 2005 CLD 653, which principles of law are completely applicable to the facts and circumstances of the present case. It has been held in the case of Messrs Waheed Corporaton (ibid), which has been reproduced in the case of Manzoor Ahmad and another (supra) that "Undoubtedly after the grant of leave to defend and treating the leave application as written statement, the respondents are within their right to have filed an application under Order VII, rule 11, C.P.C. And if the Court reaches the conclusion that the case falls under any of the clauses of Order VII, rule 11, C.P.C. Of course, plaint could have been rejected, but in no way before the grant of leave to defend the suit."
5. As regards the judgments relied upon by the learned counsel for respondent No,2, there cannot possibly be any cavil to the proposition of law laid down in the said cases, however, in none of the cases, the questions involved in the present case were dealt with and decided. The said judgments do not in any way advance the case of the respondents.
6. In the above perspective, we have examined the impugned order and find that the same is not in consonance with the law, thus we are persuaded to set it aside and remand the case to the learned Banking Judge.
7. In view of the above, the present appeal is decided in the following terms:---
(i) Instant appeal is allowed and the impugned order, dated 1-4-2005 is set aside.
(ii) Resultantly respondents' applications for leave to defend the suit and appellant's suit, both, shall be deemed to pending before the learned Judge, Banking Court, who shall decide the leave applications and the suit, after hearing the parties and of course in accordance with law.
(iii) No order as to costs.
' Parties are directed to appear before the learned Judge, Banking Court No, III, Lahore on 14-4- 2006. Office is directed to immediately transmit the record to the concerned Banking Court.