ANWAR ZAHEER JAMALI, J.- By this appeal, under section 22(5) of the Financial Institutions (Recovery of Finances) Ordinance, '200I (hereinafter referred to as the "Ordinance of 2001"), the appellant has challenged the judgment and decree, dated 11-5-2004 and 12-6-2004 respectively passed by Banking Court No. 1, at Karachi in Suit No. 6 of 2004, whereby the said suit was decreed against him in the sum of Rs. 7.8 million with costs and cost of fund at 8% from the date of filing of the suit till realization, and prayer of respondent for the sale of mortgaged property was also allowed.
2. Briefly stated, relevant facts of the case are that on 28-1-2004, respondent had instituted a suit of recovery of Rs. 1,28,63,803.00 against the appellant before the Banking Court No. 1 Karachi basing their claim against him. Inter alia, on the memorandum of deposit of title deeds executed by the appellant in their favour on 4-2-1998.
3. Before the Banking Court, such suit instituted by the respondent, after completion of required legal formalities of service of summons/notice on the appellant, proceeded ex parte against him, and ended in the passing of impugned judgment and decree ill the terms, as noted above.
4. On 1-2-2006 at the time of hearing of this' appeal, it was brought to our notice by learned counsel for the appellant that against the judgment and decree an application for setting aside such judgment and decree was also moved by the appellant, which was still pending for . Disposal before the Banking Court, In such circumstances, it was ordered by this Court that the parties will appeal before the Banking Court on 18-2-2006 and the Banking Court will hear and decide the said pending application of the appellant within four weeks.
5. On 8-3-2006, learned counsel have informed us about the dismissal of such application by the Banking Court vide order, dated 25-2-2006.
6. On 22-3-2006, the appeal arising out of such order passed by the Banking Court, being 1st Appeal No. 15 of 2006 was fixed before us, which was heard and dismissed, vide order, dated 22-3- 2006 for the following reasons- "5. Indeed, the assertion of the learned counsel as regards the permanent residence of the appellant is supported by some documents hut the fact remairis that while making dealings with the respondent, he had given the same address on which, after institution of the suit, notices/summons were issued to him from the Banking Court, through ordinary mode, registered post A.D. And courier service -and simuItaneously publication of notices in one English and one Urdu newspapers of wide circulation was effected to meet the requirement of law. Before us it has not been denied by the learned counsel for the appellant that the appellant has not informed the respondent Modaraba about his alleged change of address in case he had vacated his residence at Karachi and started permanently residing at his village in District Mirpurkhas. Further in his application under section 12 of the Ordinance of 2001 the appellant deliberately did not disclose certain material facts that in what capacity he was occupying the said flat in Ali's Apartments, Korangi Road, Karachi when he had allegedly vacated such flat; who is now in occupation of said flat and in what capacity; as in the normal course of human behaviour if one shifts from the premises in his occupation (may be rented or self-owned), more particularly when facinglitigation and disputes, he does inform the new occupants of the flat or the management of the apartments in a project, about his new/permanent add'ess so that important correspondences/letters/notices may either be redirected to him on such address or at ieast his new address may be disclosed to the carrier. The' appellant being mum on all these material facts cannot take benefit of his own casual attitude in this regard.
6. The learned Banking Court Judge has taken careful examination of the relevant material placed before him and aptly noted that even in the memo, of appeal presented by the appellant in the, year 2003, being 1st Appeal No. 52/2003 he has shown his same address which was mentioned in the title cf the plaint in Suit No. 6/2004. Moreover, on bare perusal of the signatures of the appellant on his NIC and other documents purportedly executed by him in favour of the respondent-Bank, execution whereof at least to the extent of such signatures is not denied, we are constrained to observe that the stand taken by the appellant that neither he can read nor write English is baseless, as the firmness and fluency of his signatures is clearly indicative of the fact that he deliberately hid material facts from the Court, to make out some case for getting set asid' the ex parte judgment and decree."
7. In the present appeal, firstly the gr evance of the appellant is as regards passing of ex parte judgment and decree without any notice or opp lunity of hearing o him. This aspect of the case is now a past and closed transaction in view of the order of the Banking Court, dated 25-2-2006 and ;he order of this Court in 1st Appeal No. 15 of 2006 referred above.
8 Mr. .Tiamat Jethanand, lea ned counsel for appellant, after nar.Ation of relevant, facts of the case in detail has raised following contentions-
(i) I;; view of the earlier judgment and decree, dated 7-5-2003 passed in Suit No. 2 of 2001 which also related to the same cause of action, subsequent Suit No 6 of 2004 was barred under section 11 and Order II, Rule 2, C.P.C. .
(ii) The provisions of Order XXXIV, rule 14, C.P.C, were not attracted in the filing of Suit No. 6 of 2004 as held by the Banking Court in its impugned judgment.
(iii) The Memorandum of equitable mortgage by deposit of title documents, dated 4-2-1998 was unregistered, therefore, by virtue of section 56 of the Transfer of Property Act, no rights were created in favour of respondent to sue the appellant on the basis of such documents.
(iv) By virtue of sub-section (3) to section 25 of the Modaraba Ordinance XXXI of 1980, the Banking Court No. 1 at Karachi, which passed the impugned judgment and decree against the appellant had no jurisdiction in the matter.
(v) The suit Instituted by the respondent, was not maintainable in law, as it was filed by an unauthorized person, holding no valid authority on behalf of the respondent.
(vi) The signatures of the appellant on the Memorandum of Mortgage Deed, dated 4-2- 1998 were obtained on blank document thus without holding enquiry to this effect the Banking Court was not justified in passing impugned judgment and decree on that basis.
(vii) Musharika agreement, dated 19-12-1997, contained arbitration clause, therefore, without first exhausting such remedy, suit was not maintainable before the Banking Court.
(viii) The Banking Court had not bothered even to examine the original documents for the respondent, which formed basis of passing of impugned judgment and decree against the appellant, therefore, passing of such decree was illegal and unwarranted by law.
9. In support of his contentions, learned counsel placed reliance on the following cases-
(a) Hussain Bakhsh v. Settlement Commissioner, Rawalpindi and others PLD 1970 SC 512; (b)
Hudaybia Textile Mills Itd. v. Allied Bank of Pakistan v. S A. Sattar and others PLD 1962 Kar. 271; (d)
Hatimbhai v. Karimbhai 1993 MLD 988; (e) Abdul Hakim and two others v. Saadullah Khan and two others PLD .1970 SC 63; (f) Aziz Ahmad and others v. Mst. Hajran Bibi and another 1987 SCMR. 527;
(g) M.K. Abbasi v. United Bank Itd., 1983 CLC 482; (h) Allah Dad v. Mehmood Shah 1990 CLC 33; (i)
Azirannessa Bewa v. United Bank of India Itd. PLD 1963 Decca 13; (j) Messrs Eagle Star Insurance Co.
Itd. v. Messrs Usman Sons Itd. and others PLD 1969 Kar. 123; (k) Maqsood Ahmed and others v.
Salman Ali PLD 2003 SC 31.
10. In reply, Mr. Nadeem Akhtar, learned counsel for respondent made following submissions-(i)
Neither the provisions of Order II, Rule 2, C.P.C, nor the provisions of section 11, C.P.C, were attracted to the fact of present case as in the earlier Suit No. 2/2001, the appellant was not a party. Further the plaintiffs in the earlier two Suits Nos. 487 of 2001 (old number B- 10/2000) and 2/2001 were second Prudential Modaraba, while the third Suit No. 6 of 2004 was instituted by First Prudential Modaraba after merger of first, second and third prudential Modaraba in terms of the order of merger dated 26-8-2002 passed by the Lahore High Court. To fortify his submission, learned counsel made reference to the following cases.
(a) Bank of Credit and Commerce International (Overseas) Itd. v. The Banking Tribunal for Sind and Baluchistan and two others 1990 MLD 309; (b) Phani Bhusan Mukherjeee and others v. Rajendra Nandan Goswa mi and another AIR 1947 Calcutta 11; (c) Saadullah Khan and six others v. Mir Piayo Khan and 14 others PLD 1970 Pesh. 150; (d) Abdul Hakim and two others v. Saadullah Khan and two others PLD 1970 SC 63; (e) Rafia Begum v. Mirajuddin and others PLD 1959 W.P. (Lahore) 890; (f)
Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162.
(ii) Mere wrong reference of some provision of law would not affect the maintainability of the suit as it is not the form but the substance of the suit which is material for this purpose.
(iii) For creation of equitable mortgage, even execution of document was not necessary in terms of section 58 of the Transfer of Property Act, therefore, execution of Memorandum of Mortgage Deed mentioning therein creation of equitable mortgage by the appellant on some earlier date, would not require any registration. In this context, reference was made to the case of Muhammad Sarwar Khan v. Habib Bank Itd. (2004 CLD 881).
(iv) The contention of bar of jurisdiction in terms of sub-section (3) to section 25 of the Ordinance.
XXXI of 1980, was baseless as on promulgation of Ordinance of 2001, option was available to the respondent-Bank for filing of suit before the Banking Court at Karachi as held in the cases.(a) First Grindlays Modaraba v. Pakistan Cement Itd. And two others 2000 CLC 2017; (b) Abdul Basit Zahid and another v. Modaraba Al- Tijarah and another 2002 CLD 46; (c) National Bank of Pakistan v. First Tawaka! Modaraba 2002 CLD 1018.
(v) Paragraph 13 of the plaint in Suit No. 6 of 2004 clearly goes to show that the suit was signed, verified and instituted by duly authorized representative of the- respondent Modaraba and photostat copy of such power-of-attorney was also annexed with the plaint as Annexure P17
(vi) Once the appellant has admitted his signature on the memorandum of mortgage deed, dated 4-2-1998, coupled with original title documents in possession of respondent and after due service of notice in the suit he failed to appear and apply for leave to defend before the Banking Court such plea is not tenable at this stage more particularly after dismissal of HCA No. 15 of 2006 vide order, dated 22-3-2006.
(vii) The plea of reference to arbitration is also not tenable for the reason that the appellant after service of notice/summons in the suit, failed to apply for leave to defend within the stipulated period and even his application for setting aside the ex parte judgment and decree and the appeal arising therefore > have een dismissed.
(viii) The Banking Court while passing the impugned judgment and decree has taken into consideration all the original documents relevant for the adjudication of controversy. Moreover, even the appellant has not disputed execution of Memorandum of Deposit of title deeds dated 4- 2-1998 by him in favour of respondent, which formed basis for passing of impugned judgment and decree against him.
11. We have carefully considered the arguments advanced by the learned counsel and perused the material placed on record as well as relevant provisions of law and the case-law referred by them in support of their respective contentions.
12. The undisputed facts of the case are that earlier Second Prudential Modaraba and instituted Suit No. B-10 of 2001 before this Court, based on Musharika Agreement, dated 19-12-1997 which was transferred to the Banking Court No. 1 at Karachi, and re-numbered as Suit No. 487/2001. In this suit, appellant was defendant No. 10 and it was decreed in favour of Second Prudential Modaraba vide Judgment, dated 1-9-2003, against all the defendants in the suit including the present appellant.
An appeal preferred by the present appellant against such judgment passed in Suit No. 487 of 2001 was disposed of by this Gou t vide its order dated 19-5-2004, which reads as under- "During the hearing the appellant's counsel has stated that the appellant is ready and willing to deposit the decretal amount with the Nazir of this Court within two months with the condition that the respondent No. 1 will surrender the title documents to the Nazir. The respondent No. 1's counsel contended that the respondent No. 1 is clothed with decree against the appellant based on second charge in respect of some other facility but in respect of the same property. On deposit, the Nazir will calculate the amount of decree till the- date of deposit and in'case the respondent points out any other decree clouding the said property, the appellant undertakes to satisfy the amount of that decree as well. On deposit of the title deeds with the Nazir the Nazir will release the amount in favour of the respondent, In case the appellant falls to deposit the decretal amount, the appeal would be deemed to be dismissed.
With the above observation the appeal stands disposed of."
13 On 26-1-2001 Suit No. 2/2001 was also instituted by Second Prudential Modaraba against three defendants, In this suit appellant was not a party, this suit was decreed by the Banking Court No. 1, Karachi, vide judgment dated 7-5-2003 followed by the preparation of decree.
14. On 28-1-2004, 'Suit No. 6 of 2004 was instituted by the respondent First Prudential Modaraba only against the appellant which was mainly based on the memorandum of deposit of Title Deed, dated 4-2-1998, admittedly signed and executed by the appellant was held good and upon his failure to move the Banking Court for leave to defend in the suit by impugned judgment and decree suit was decreed against him. As observed above, application for setting aside ex parte decree subsequently moved by the appellant was dismissed by the Banking Court vide Order, dated 25-2- 2006 and such order was maintained ' by the Court Vide its order dated 22.3.2006 passed in HCA No. 15 of 2006. Thus the pleas of the appellant with reference to non-invoking of arbitration clause of the agreement, alleged signing of Memorandum of Deposit of Title Deeds in the blank form; passing of decree allegedly on the basis of only Photostat copies of the document; and institution of suit by a person not duly authorized on behalf, of respondent, are not tenable in law at this stage.
Even otherwise, Mr. Nadeem Akhtar, in his reply arguments, has satisfactory repelled such legal pleas of the appellant. As regards the plea of Mr. Jhamat Jethanand, with reference to the applicability of Order II, rule 2, C.P.C, and section 11, C.P.C, it will be seen that none of the two provisions of law referred by him, have any relevancy or applicability to the facts and circumstances of the present case. As admittedly the appellant was not party to Suit No. 2/2001 and further the respondent had never relinquished any part of their claim against the appellant at the time of institution of said suit. Mere fact that at the time of institution of Suit No. 2 of 2001 the respondent had not impleaded/arrayed the present appellant as one of the defendants in the suit will not justify a conclusion that the claim against the appellant based on equitable mortgage vis- a-vis the memorandum of deposit of title deeds executed by him on 4-2-1998 was relinquished, In, our view creation of equitable mortgage and execution of deed of deposit of title documents has given an independent cause of action to the respondent for obtaining a decree against the appellant for sale of his mortgaged property. The plea of Mr. Jhamat Jethanand, with reference to Order XXXIV, rule 14, C.P.C, has also no force as the decree passed in earlier suit was not a money decree against the appellant and the respondent had, therefore, independent right against the appellant to file a separate suit for recovery of decrial amount from him to the extent of equitable mortgage created by.Him in their favour, if they so choose, Mr. Jhamat Jethanand has not been able to cite any provision of law which had debarred the respondent from filing of such suit against they appellant separately at a later stage. The submission of Mr. Jhamat Jethanand with reference to the purported bar provided under sub- section (3) to section 25 of the Ordinance XXXI of 1980 has also no force as the Ordinance of 2001 is subsequent legislation and section 4 of this Ordinance furnishers complete answer to such objection. We also fully agree with the conclusion recorded by the learned single Judge of this Court in the case of First Grindlays Modaraba (supra) wherein, while examining the merit of similar question raised before him, he held that Act of 1997 (now repealed and superseded by the Ordinance of 2001), being special enactment and subsequent one supersedes the provisions of earlier special enactment (Ordinance XXXI of 1980), therefore, the plaintiff had option to file the suit for recovery under sub-section (1) to section 9 of the Act of 1997 (now sub-section (1) to section 8 of Ordinance of 2001), in addition to the right available to them under sub-section (1)(a) of section 25 of the Ordinance XXXI of 1980.
15. The contention as regards Tion-registration of memorandum of deposit of title deed dated 4-2- 1998 and its implication has also no force. A complete answer to such objection is available in the case of Muhammad Sarwar Khan (supra). The relevant discussion reads as under- "Second limb of, the arguments of respondent's counsel was that the instant appeal emanates from the provisions of special law i.e. Banking Companies (Recovery of Loans, Advances, Credits and Finances, Act, 1997, which contains an overriding provisions in sub-section (4) of section 17 ibid, which over sides all the provisions of general law in this regard. Sub-' section (4) thereof says that notwithstanding anything contained in any other law, the Banking Court shall not refuse to accept in evidence any document creating, or purporting to create, or indicating the creation of a mortgage, charge, pledge or hypothecation in relation to property merely because it is improperly stamped or is not registered and no such document shall be impoundable by the Banking Court.
Therefore, the plea is not tenable.
The dictum of the cases cited by leamed counsel for the appellant interpreting clause (c) of section 49 of the Registration Act is inapt in view of the appeal of the said clause. Secondly sub- section (4) of section 17 of the late Act XV of 1997 override the provisions of general law and not only makes the documents admissible but also creates right in absence of registration.
16. Besides on acts, in the instant case. Memorandum of Deposit of Title Deeds dated 4-2-1998 will not be affected by the provisions of section 17 read with section 49 of the Registration Act due to its non-registration as the equitable mortgage was created on deposit of original title deeds of the property with the respondent Prudential Modaraba and the Memorandum of Deposit of Title Deed executed between the parties later on parties only a recital of such fact.
17. Foregoing are the feasons for our short order, . Dated 5-4-2006 whereby this appeal was dismissed along with Jisted application.