' SYED HAMID ALI SHAH, J.---Financial assistance in respect of four lease finance facilities, was availed by respondent No,1 through its former management. The appellant instituted suit No,24 of 1997 on 15-1-1997, in the Banking Court No,2, Lahore, which was decreed vide judgment and decree dated 11-11-1997. Two-fold relief was granted to the appellant, i,e, recovery of Rs,15,933,496 and re- possession of leased equipment. The parties, in the course of execution of decree, settled the matter amicably. The execution proceedings were resultantly withdrawn, consequently, respondents Nos. 2 and 3 took over management of the company and they acknowledged the outstanding liability and agreed to a. New repayment schedule, whereby a sum of Rs,41,798,474 was undertaken to be paid in 48 instalments. The parties in view of the settlement agreement dated 2-8-1999 executed various documents on the same day including Equipment Lease Agreement, D.P. Note amounting to Rs,41,798,474, revival letter and personal guarantee etc. The respondents having three instalments, committed default in the payment of outstanding rentals, which led to filing fresh suit against the respondents. Learned Banking Court, vide judgment and decree dated 19-1-2002, observed that decree-holder was duty bound to certify the payments received out of the court under Order XXI Rule 2(1), C.P.C. The decree passed against the defendants has not been disowned by the respondents, therefore, earlier decree in favour of the appellant, operates against the appellant, as res judicata and bars the institution of fresh suit.
Learned court rejected the plaint under Order VII, rule 11 C.P.C. And directed the execution of the decree dated 11-11-1997, hence this appeal.
2. It is contended by learned counsel for the appellant that during the course of execution fresh agreement was executed and the execution application was dismissed as withdrawn, vide order dated 17-1-2000. Fresh "Equipment Lease Agreement" was signed and executed by the new management, on behalf of the respondent company. Learned counsel has emphasized that provisions of Order XXI, Rule 2, C.P.C. Are attracted only when the matter is before the Executing Court. In the case in hand, fresh suit has been filed on an independent agreement and also on a fresh cause. It was submitted that the decree merged into an agreement dated 2-8-1999 and fresh suit was filed on the basis of a new agreement. Thus application of provisions of Rule 2 ibid and principle of res judicata, have no application. Learned counsel has referred to para.6 of the application for leave to defend the suit, where the respondents have admitted that new management, after entering into agreement, obtained possession, re-commenced the business and injected capital. Learned counsel has added that signing of an agreement, delivery of possession of the premises, in pursuance of the agreement on behalf of new management, are admitted fact, thus, the court had wrongly applied, Rule 2 of Order XXI, C.P.C. And principle of res judicata, to the suit of the appellant/plaintiff. Learned counsel has further submitted that default in payment of the rentals is non-fulfilment of the obligation, which gave cause to the appellant under section 9(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, for fresh suit.
3. Learned counsel for the respondents, on the other hand, stood behind the impugned judgment and decree. He has submitted that provisions of Civil Procedure Code, are applicable to the suits filed under the provisions of Ordinance, 2001, as envisaged in section 7(6) of the Ordinance. He added that provisions of Section 11 as well as Order XXIII Rules 1, 2 and 3, C.P.C. Can be applied to the instant controversy. Learned counsel went on to argue that the appellant at the time of withdrawal of the suit, had not sought permission for filing of the fresh suit in case of default, therefore, the petitioner is stopped to file the instant suit. While referring to the provisions of Order XXIII Rules 1, 2 and 3, C.P.C. Learned counsel has submitted that settlement agreement was not filed in the course of execution of decree nor the execution proceedings were withdrawn as per conditions laid down in the settlement agreement. The appellant is precluded from instituting the fresh suit. Learned counsel summed up his arguments with the contention that the suit of the plaintiff/appellant is barred by the principle of estoppel within the contemplation of Article 114 of the Qanun-e- Shahadat Order, 1984.
4. Heard learned counsel for the parties and perused the record.
5. The earlier suit filed by the appellant was based on Equipment Lease Agreement, which was arrived at between the appellant and former management of respondent No,
1. At the time of withdrawal of the execution proceedings, fresh Equipment Lease Agreement was signed and executed by the appellant wherein the parties to contract are new management of respondent No,1 viz. Respondents Nos.2 and 3. New management had entered into compromise, took over the possession of the project and signed fresh set of loan documents. The execution whereof is not denied, although it is asserted in the leave application that lease equipment agreement is result of undue influence and was executed by the new management through mistake of law. The promise to pay the decretal amount, in 48 rentals, is a valid consideration within the contemplation of section 25 of the Contract Act, 1872. Instant suit is not based on the agreement, which was subject- matter of the earlier suit and default was committed under Lease Equipment Agreement dated 2- 8-1999. Learned Banking Court has erroneously held that the suit is hit by the principle of res judicata and there is bar of provisions o Order XXI, Rule 2, C.P.C. The impugned judgment even A otherwise is not sustainable in the eye of law as the court has proceeded to decide the main suit without deciding pending applications. Disposal of the suit without disposing of pending application is violative of law. In this connection, reference can be made to the cases of "United Bank Limited through Attorneys v. Messrs Home Aids Corporation through Managing Director and 6 others" 2002 CLD 875 and "Sh. Muhammad Kashif v. Askari Leasing Limited through Manager/Chie Executive of Branch/Recovery Officer" 2004 CLD 1645.
6. For the foregoing, this appeal is allowed and the impugned judgment and decree is set aside, with the result that the suit of the appellant is deemed to be pending, before learned Banking Court. Learned court will decide the application for leave to defend the suit and also the suit of the plaintiff, on its own merit, within the parameters of law.