' This appeal impugns the terse an ad-interim order dated 9-4-2007 disposing of the suit by respondent No,1 for declaration and permanent injunction filed against the appellant bank. The impugned order directs that the bank shall proceed first against the principal-debtor and thereafter against the surety for the recovery of its dues. Notices have been issued repeatedly to the respondents who have not entered appearance in answer thereto. Respondent No,2 has already been proceeded against ex parte. Respondents Nos.1 and 3 are proceeded against ex parte now.
2. Learned counsel for the appellant bank submits that the ex parte direction given by the learned Banking Court in the impugned order is violative of statutory law reflected in section 128 of the Contract Act, 1872 which has been reiterated by the Honourable Supreme Court in Rafique Hazquel Masih v. Bank Alfalah Ltd. And others 2005 SCM R 72, to the effect that the liability of a surety is co- extensive with that of a principal-debtor. No condition can be imposed by a Court of the said statutory right of a claiment.
3. Be that as it may, under section 9(5) of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, the disposl of the suit must be preceded by notices and hearing to A the defendants. Both the statutory requirements have been discarded by the impugned order. It is accordingly, set aside and the appeal is allowed.