' MUNIB AKHTAR, J.---The application presently under consideration, C.M.A. 9336 of 2011, arises in the following circumstances. The instant suit is a banking suit filed under the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("2001 Ordinance") by the plaintiff bank against the two defendants named therein. The defendants were duly served and jointly filed a leave to defend application ("leave application"). It appears that thereafter the matter was fixed from time to time for consideration of the leave application but ultimately on account of the non-appearance of the defendants, they were given a final opportunity by means of the order dated 3-5-2011. On the next date on which the suit came up for hearing, which was 18-8-2011, neither the defendants nor learned counsel then appearing on their behalf were in attendance and the learned single Judge before whom the matter was placed was pleased to dismiss the leave application for non- prosecution. The learned single Judge then proceeded, with the assistance of learned counsel for the plaintiff bank, to go through the plaint and attached documents, and after considering the same, decreed the suit as prayed. By means of the present application, the defendants seek the recall of the order dated 18-8-2011 and permission to pursue their leave application.
2. Learned counsel now appearing for the defendants submitted that the absence on 18-8-2011 of learned counsel, then appearing for them was entirely unintentional since the said advocate, Mr. Abdul Hameed Yousufi, had already been granted general adjournment in his cases from 16-8-2011 to 15-9-2011, except those date by court, on account of his proceeding for umrah. Learned counsel submitted that admittedly the crucial date, i,e, 18-8-2011, was not a date fixed by court and he contended that the present suit ought not therefore to have been fixed at all on that date. He submitted that the office had fixed the case mistakenly. Perhaps being unaware of the grant of the general adjournment. It was because of the general adjournment that no one appeared when the case was called up. Learned counsel submitted that it was well settled that an act of the court could not be to the prejudice of any party and in the present case, the blame lay with the office of the Court and not the defendants or their advocate. In this regard he relied on Chaoudhry Mairajuddin v. West Pakistan Province and others 1970 SCM R 96. Learned counsel further contended that in any case, the leave application could not have been dismissed outright for non- prosecution without any application of mind to the contents thereof. His case was that once a leave to defend application has been filed, it is mandatory for the court to consider the same regardless of whether the defendant concerned or learned counsel appearing on his behalf are in attendance or not, and this followed directly from the use of the word "shall" in. Subsection (8) of section 10 of the 2001 Ordinance. In this regard he relied on a Division Bench judgment of the Lahore High Court reported' as Abid Aziz Khan and 2 others v. Bank of Punjab 2007 CLD 997 in which it has been observed as follows:-- "The [20011 Ordinance does not visualize the dismissal of application for non-prosecution, no such powers have been conferred upon the Banking Court, proceeding otherwise, amounts to defeating the legislative intent, thus, the dismissal for non-prosecution of the appellants PLA, was without jurisdiction and patently illegal" (pp. 1001-1002).
' He submitted that the defendants were entitled to have the decree set aside, and their leave application considered on its merits.
3. Learned counsel for the plaintiff bank opposed the application. He submitted that the plaintiffs suit had been decreed, and relying on section 27 of the 2001 Ordinance, submitted that it was no longer open to this Court to entertain, consider or decide any such application as presently filed. He submitted that the defendants' grievance, if any, could only be addressed by way of an appeal under section 22. In such an appeal, it would be open to them to raise and take all such grounds as they deemed appropriate, including those presently taken, but the present application was not maintainable. Learned counsel also referred to the affidavit in support of the application, which has been sworn by one of the defendants and in which it appears that the said defendant has stated that he was in fact present in Court on 18-8-2011. Learned , counsel submitted that the defendant, being in attendance, ought to have come forward when the case was called up (which apparently happened more than once) but he failed to do so. He contended that this negligence and inattention was entirely the defendants' own doing and to their account and if they were negligent or careless in pursuing their case, then neither the Court nor its office could be held responsible nor should the plaintiff be made to suffer on account of the same.
4. During the course of the hearing, a question arose as to whether section 12(2), C.P.C. Was or was not applicable to the facts and circumstances of the present case. Learned counsel for the plaintiff bank submitted that the aforesaid provision did not apply at all to the court while exercising jurisdiction under the 2001 Ordinance and placed reliance on section 27, which according to him created a complete bar in this regard. He emphasized that the only remedy was by way of appeal and not otherwise. He referred to Dr. Asad Pervez Sheikh v. National Bank of Pakistan 2005 CLD 438, a decision of a learned Division Bench of the Lahore High Court. In this case the question of whether section 12(2), C.P.C. Was applicable in relation to suits under the 2001 Ordinance was considered and the relevant case-law discussed. In particular the learned Division Bench considered the effect of a Division Bench judgment of this Court reported as Dadabhoy Cement Industries Limited and others v. National Development Finance Corporation, Karachi 2002 CLC 166, from which an appeal had been taken to the Supreme Court, whose decision is reported under the same title at PLD 2002 SC 500. Learned counsel submitted that it was clear from the discussion by the Lahore High Court (at pp. 441-443) that the Supreme Court had not held that section 12(2), C.P.C. Was applicable to suits under the 2001 Ordinance. Without prejudice to this submission, and in the alternative, learned counsel submitted that in any case if at all section 12(2), C.P.C. Was applicable, it could only be on account of an alleged want of jurisdiction and not otherwise. He contended that in the facts and circumstances of the present case, it was clear from the order dated 18-8-2011 that it was at most (which he vehemently denied) a case of irregular or incorrect exercise of jurisdiction, which was something altogether different from want of jurisdiction itself. Thus, on any view, section 12(2), C.P.C.
Was not applicable and the present application entirely misconceived. Finally, learned counsel submitted that a bare perusal of the leave application indicated that in fact the defendants had admitted the claim of the plaintiff and thus the suit would have been decreed anyway. The present application was wholly without merit.
5. I have heard learned counsel as above and have considered the record with their assistance and the case-law relied upon. Upon a consideration of the same I have come to the conclusion, for the reasons stated below, that this application ought to be allowed in the manner hereinafter stated.
6. In my view, the resolution of the matter turns entirely on principle and the proper interpretation of the relevant statutory provisions. The fact therefore that one of the defendants was present in Court on 18-8-2011 does not in any manner impact on the consideraition of the present application.
In any case, it is to be noted that it was only the defendant No,1 who was present, and this defendant was doing business as a sole proprietor for which the finance facilities were made available. The defendant No,2 was sued as a guarantor and although the two defendants appear to be husband and wife (respectively), the defendant No,2 of course has her own legal rights, which need to be kept in mind. For this reason alone, the objection taken in this regard by learned counsel for the bank cannot be sustained.
7. A perusal of the order dated 18-8-2011 shows that it is a composite order, which must, in law, be deemed as comprising of two separate and distinct orders. The first of these orders ("the first order") is contained in the first paragraph and deals with the leave application. The second order, which follows on from the first, deals with whether any, and if so what, relief is to be granted to the plaintiff ("the second order"). As regards the first order, it is clear that the leave application was dismissed for non-prosecution alone without the learned single Judge at all applying his mind to the application as such The second order necessarily depends on the fate of the first order and stands or falls with the latter. The key question therefore is whether the first order, simply dismissing the leave application for non-prosecution, was an order that could have been made by the Court.
Of course, it also needs to be considered whether any grievance with regard to the dismissal for non-prosecution can be taken up by means of the present application or can only be taken as a ground in an appeal filed under section 22.
8. In my view, if at all the validity or lawfulness of the first order can be challenged or questioned before me that can only be by way or reason of section 12(2), C.P.C. As noted above, learned counsel for the plaintiff bank contended that this provision is not applicable to suits under the 2001 Ordinance and no such conclusion was arrived at by the Supreme Court in the Dadabhoy Cement case. It is not necessary for me to consider the discussion in the Lahore High Court decision relied upon by learned counsel for the plaintiff. This is so because it is not contended that the Supreme Court has held that section 12(2) is not applicable. I am obviously bound by a Division Bench judgment of .This Court and' in my view, one such decision, reported as Khairpur Textile Mills Ltd. v.
National Bank of Pakistan and another 2003 CLD 326, is directly on the point and therefore conclusive insofar as I am concerned. After an extensive consideration of the case-law, including both the Dadabhoy Cement decisions noted above, the learned Division Bench expressly concluded and held as follows with regard to the 2001 Ordinance:-- "42. For the foregoing reasons, it is held that the provisions contained in section 12(2), C.P.C. Are applicable to the proceedings arising out of the Banking Laws in the appropriate cases, and the application under section 12(2) is maintainable." (pg. 348)
' I may note that earlier, another learned Division Bench of this Court in National Bank of Pakistan v.
Khairpur Textile Mills Ltd. 2001 CLC 1187 had held that section 12(2) is applicable to proceedings under the precedent legislation, the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. As is clear from the decision of the Lahore High Court relied upon by learned counsel for the plaintiff, and the earlier case-law therein cited, the contrary view has prevailed with that Court.. In other words, there is a divergence of opinion between this Court and the Lahore High Court on this point. Be that as it may (and subject always to decisions of the Supreme Court), I am bound by the law laid down by this Court. I must therefore proceed on the basis that section 12(2), C.P.C. Is applicable.
9. As correctly pointed out by learned counsel for the plaintiff (as part of his alternative submission), section 12(2) can apply to the facts and circumstances of the present case only if it is shown that there was want of jurisdiction in respect to the making of the first order. As noted, learned counsel for the defendants has in this regard relied on the decision of the Lahore High Court in the Abid Aziz Khan case and the relevant portion of the judgment has been reproduced above.
10. After having considered the matter, I find myself in respectful agreement with the reasoning of, and conclusion arrived at, by the Lahore High Court. It appears to me that the provisions of subsection (8) of section 10 have been intentionally cast in mandatory terms by using the word "shall". Therefore, once a leave to defend application has been filed, it is the statutory duty of the court to consider the same regardless of whether the defendant concerned or learned counsel appearing on his behalf is present or not. If the court is satisfied that there is even a. Single substantial question of law or fact that has been raised, then leave to defend must be granted (of course in terms, and subject to the other relevant provisions of, the 2001 Ordinance). In other words.
The order disposing of a leave to defend application must show on the face of it that there has been some application of mind to the application and the contents thereof. If the order shows that there has been no application of mind at all then in my view, as concluded by the Lahore High Court, the order dismissing the application is without jurisdiction. In the present case. a perusal of the first order, and indeed the order of 18-8-2011 in its entirety. Leaves no doubt that there was no application of mind at all to the leave application and it was simply dismissed for non-prosecution.
I would therefore conclude, with respect, that the order made in this regard (i,e, the first order) is not sustainable in law and suffers from want of jurisdiction and A hence is liable to be set aside in terms of section 12(2), C.P.C. It necessarily follows from this that the second order, whereby the suit was decreed, must also be set aside or in other words, that the order dated 18-8-2011 fails in its entirety.
11. In my view, the alternative submission put forward by learned counsel for the plaintiff, namely that dismissal of the leave application for non-prosecution was merely an incorrect or irregular exercise of jurisdiction cannot be accepted. That would be the case if, for example, the impugned order had shown on the face of it that there had been some application of mind to the leave application and the grievance was that on such consideration it had been wrongly dismissed. But this is not such a case. Here the leave application was not considered at all. For the reasons stated above, I have concluded that the court exercising jurisdiction under the B 2001 Ordinance lacks the jurisdiction not to consider the leave application at all, which is what dismissal for non-prosecution simpiiciter is tantamount to. Had this been a case of an incorrect or irregular exercise of jurisdiction, then of course such an objection could only have been taken up in an appeal under section 22. But the case at hand is of a different nature, and with the utmost respect, the Court has here purported to do something which it did not the jurisdiction to do. The alternative submission by learned counsel cannot therefore be accepted.
12. Insofar as the other submission by learned counsel namely that the claim of the plaintiff bank has in any case been admitted by the defendants in the leave application, it is to be noted that this was strongly opposed by learned counsel for the defendants. A perusal of the leave application also shows that if at all there is any admission it is only to the extent of the principal amount involved and that there were other issues that were raised in the leave application. The application could .Not therefore have been dismissed simply on the ground that the liability was admitted. But in my view, fly submission by learned counsel for the plaintiff presently-under consideration cannot be accepted for a more fundamental reason. The issue before me, to which I have given my answer as above, is whether the impugned order (i,e,, the first order) suffers from want or lack of jurisdiction. What the court would have, or ought to have, done if it had properly exercised its jurisdiction (i,e,, applied its mind to the leave application) is a different matter altogether and in my view the two issues are distinct and separate and cannot (and ought not to) be conflated. Even if ultimately the leave application is doomed to fail on the merest application of mind by the Court (as seems to be the contention of learned counsel for the plaintiff) that cannot provide a post facto justification for an order, namely one of dismissal for non-prosecution, that was without jurisdiction.
13. During the course of the hearing, learned counsel for the plaintiff bank accepted, in my view quite correctly, that it is the substance of the relief sought by the applicant that is relevant and not the specific provision that has been cited in the application. Accordingly, although the present application has not as such been moved under section 12(2), C.P.C., its substance accords with .That provision and I have therefore treated it as such. As noted above, I was assisted by learned counsel during the course of the hearing on this basis.
14. In view of the foregoing discussion this application is allowed. The order dated 18-8-2011 is set aside along with the decree made in the suit and the leave to defend application of the defendants stands restored to its position as on that date. The office is directed to now list this application for hearing.