' ABDUS SATTAR ASGHAR, J.---This Regular First Appeal is lodged against the order dated 8-2-2012 passed by the learned Judge, Banking Court No,II, Multan, whereby the appellant's suit for declaration etc., against the respondent Bank has been dismissed.
2. Brief facts leading to this appeal are that appellant filed a suit for declaration against the respondent Bank alleging that he had availed the facility of agriculture loan/finance in May 1999 and returned a sum of Rs,2,21,000 on 28-2-2005 but the clearance certificate was not issued to him; that the appellant has also returned subsequently availed further agricultural loan facility amounts and nothing is outstanding against him; that the respondent Bank is not inclined to make any rendition of accounts with the appellant and is adamant to sell out his mortgaged agricultural land through auction besides initiating other actions . Thus the suit was lodged on 7-7-2005.
3. The respondent Bank initially moved an application under Order VII, rule 11, C.P.C. And another application seeking leave to defend the suit. Later on the learned counsel for the respondent Bank withdrew his application under Order VII, rule 11, C.P.C. On 1-7-2006 which was dismissed accordingly. Consequently leave to defend was allowed and vide order dated 12-5-2007 following issues were framed as arising out of the divergent pleadings of the parties:--
(1) Whether the suit is mala fide and plaintiff has not come with clean hands. If so, its effect? OPD
(2) Whether earlier similar suit of the plaintiff has already been dismissed for want of prosecution. If so, its effect? OPD
(3) Whether the plaintiff is liable to pay Rs,2,25,784 till 30-6-2005? OPD
(4) Whether the plaintiff is entitled to declaration claimed for? OPP
(5) Relief.
4. Record further reveals that since 12-5-2007 up till 7-2-2012 on six occasions plaintiff brought his witnesses whose statements could not be recorded due to non-availability of the learned counsel for the respondent or some other reasons. On 7-2-2012 when the case was fixed for appellant's evidence, learned counsel for the respondent Bank stated that the respondent Bank shall not adopt any coercive measures against the plaintiff (appellant) for recovery of loan without determination from the competent court. On the same day learned counsel for the appellant/plaintiff advanced his arguments and made a request for adjournment to produce case-law to substantiate his plea.
The matter was therefore adjourned to 8-2-2012. On the said date i.e, 8-2-2012 the learned trial Court dismissed the appellant's suit through the impugned order, which reads below:- "Plaintiff has filed this suit for declaration mainly praying for restraining defendants to adopt coercive measures for recovery of loan amount without its determination by a competent court.
(2) On 7-2-2012 learned counsel for defendant made statement that defendant/bank shall not adopt any coercive measures against plaintiff for recovery of loan without determination from competent court.
(3) In view of above statement made by learned counsel for defendant, plaintiff has no more cause of action. Although learned counsel for plaintiff has produced case-law cited as 2003 CLD 911 (Lahore] (Muhammad Khalid Butt v. United Bank Limited) and 2007 CLD 634 [Lahore] (M.L Traders v. Judge, Banking Court No, IV, Lahore) in order to plea that issues in the case has already been framed and this case was transferred to this court by the order of honourable High Court on transfer application filed by plaintiff.
(4) The referred case; law are distinguishable as in the said cases there were different proposition, whereas in the instant case, counsel for defendant has fairly stated that defendant shall not adopt any coercive ' measures against plaintiff for recovery of loan without its determination by competent court as is prayed in plaint. Further that suit for recovery of outstanding amount against present plaintiff has already been filed, which is sub judice before this court and fixed for today, wherein determination as to whether plaintiff has paid or not the loan amount as per agreement can be conveniently determined. Reliance is placed on 2006 CLD 1811.
(5) As far as transfer of the case from Banking Court-I, Multan to this court by the order of honourable High. Court is concerned, suffice it to observe that order was to the effect of transfer of case and not for consolidation of the case with suit for recovery filed by defendant bank. That's being so, instant suit stands dismissed accordingly. Defendant shall be bound by the statement made by its counsel. File be consigned to the record room after due completion."
5. It is argued by the learned counsel for the appellant that the impugned order is against law and facts, passed without lawful authority, untenable in law and liable to set aside. He has also taken reliance upon (i) Muhammad Khalid Butt v. United Bank Limited (2003 CLD 911-Lahore) (ii) M.L.
Traders through _Proprietor and others v. Judge, Banking Court No, IV, Lahore and 2 others (2007 CLD 634 Lahore).
6. On the other hand, learned counsel for the respondent Bank has argued that since the Bank has also lodged a suit for recovery of the disputed amount against the appellant which is pending adjudication before the learned trial court therefore in the light of his statement dated 7-2-2012 the learned, trial court had rightly dismissed the suit through the impugned order in accordance with law.
7. We have given patient hearing to the learned counsel for the parties and carefully gone through the record.
8. Perusal of the impugned order transpires that the learned trial court has dismissed the appellant's ' suit maintaining that since the recovery suit lodged by the respondent Bank is sub judice therefore the matter in question can be conveniently determined in the recovery suit lodged by the respondent Bank and in view of the statement of the learned counsel for the respondent, the appellant no more has a cause of action.
9. At the out-set, it is pertinent to mention that in terms of section 9(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter to be called the Ordinance) if a financial institution commits a default in fulfillment of any obligation with regard to any finance the customer is also competent to institute a suit in the Banking Court by presenting a plaint. Provision of section 9(1) of the Ordinance is reproduced hereunder for ready reference:-- "9. Procedure of Banking Courts.- --(1) Where a customer or a financial institution commits a default in fulfillment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the, Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power-of-attorney or otherwise."
10. The Financial Institutions (Recovery of Finances) Ordinance 2001 is a special law, however fact remains that a. Banking Court shall, in all matters with respect to which the procedure has not been provided for in the Ordinance, follow the procedure laid' down in the Code of Civil Procedure, 1908. In this regard relevant provisions of section 7(1)(a) and (2) of the Ordinance are reproduced hereunder for ready reference:- "7. Powers of Banking Courts.---(1) Subject the provisions of this Ordinance, a Banking Court shall--
(a) in the exercise of its civil jurisdiction have all the powers vested in a Civil Court under the Civil Procedure Code, 1908 (Act V of 1908);
(2) A Banking Court shall in all matters with respect to which the procedure has not been provided for in this Ordinance, follow the procedure laid down in the Code of Civil Procedure, 1908 (Act V of 1908) and the Code of Criminal Procedure, 1898 (Act V of 1898)."
11. The Ordinance itself does not furnish any procedure with regard to scrutiny of the plaint, therefore, in the light of the provision of section 7(2) of the Ordinance, procedure laid down under Order VII, rule 11, C.P.C. Is applicable to the plaints lodged before the Banking Court. For ready reference provision of Order VII, rule 11, C.P.C. Is reproduced hereunder:-- "0. VII, R.11, Rejection of plaint. ---The plaint shall be rejected in the following cases:--
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;
(d) Where the suit appears from the statement in the plaint to be barred by any law."
12. In the instant case respondent's earlier plea for rejection of the plaint under Order VII, rule 7, C.P.C. Has been dismissed as withdrawn vide order dated 1-7-2006 passed by the learned trial Court and consequently leave to defend was allowed to the respondent Bank resulting into framing of issues on the basis of divergent .Pleadings of the parties and thereafter appellant's suit was adjourned for recording of evidence.
13. The expression 'cause of action' means the cause for which the suit was brought. The term 'action' means the proceedings in which a legal demand of a right is made. The term 'cause of action' refers to every fact which, if traversed, it should be necessary for the plaintiff to prove in order to support his right to judgment and which if not proved gives the defendant a right to judgment and for this purpose only facts stated in the plaint are to be construed to determine whether they constitute a cause of action. Therefore it is obvious that relevant material to determine as to whether the appellant had a cause of action to file the suit was only the facts stated in the plaint. It is astonishing that the learned trial court instead of taking into consideration the facts given in the plaint has formulated the opinion in the impugned order that in the light of the statement of the learned counsel for the respondent Bank the plaintiff lacks a cause of action. It is also pertinent to notice that on formulating an erroneous opinion that the appellant lacks cause of action the learned trial court instead of rejecting the plaint has dismissed the suit which is not warranted in law. Certainly the appellant could not be non-suited in the circumstances of this case merely on the basis of a statement made by the learned counsel for the respondent Bank.
' There is no cavil to the proposition that in the suit for declaration lodged by the appellant and the recovery suit instituted by the respondent Bank subject matter and the issues directly and substantially are the same. Certainly if the appellant's suit is decreed the respondent's suit for recovery is bound to fail and vice versa. At this juncture learned counsel for the appellant has submitted that his application for leave to defend in the suit for recovery lodged by the Bank is yet pending adjudication. Therefore, dismissal of appellant's suit will render him remediless if his application for leave to defend in the suit for recovery lodged by the Bank is not allowed. Be that as it may, such state of affairs therefore would be violative to the provisions of Article 10-A of the Constitution which ensures right of fair trial and due process to the appellant for determination of his civil rights and obligations. Besides, appellant's suit could be dismissed for want of cause of action merely on the premises that the learned counsel for the respondent Bank has made a statement that the respondent Bank shall not adopt any coercive measures against the plaintiff (appellant) for recovery of loan without determination from the competent court. In the attending circumstances consolidated trial of both the suits between the parties was not only expedient in, the interest of justice as well as in the interest of parties but it was also necessary to avoid conflict of judgments. Reliance be made upon Messrs First Women Bank Limited v. Registrar, High Court of Sindh, Karachi and 4 others (2004 SCM R 108).
15. We have carefully gone through the case of Messrs A-Umar Fabrics through Proprietor and 2 others v. Habib Bank Limited through General Attorney/Manager (2006 CLD 1181-Lahore) relied upon by the learned trial court in support of the impugned order. Facts of the cited case are altogether distinct and distinguishable from the facts of the case in hand, therefore the dictum laid down in the cited case cannot be siphoned on to the facts of this case and is of no avail to the respondent Bank.
16. For the above discussion and reasons, this appeal is allowed, the impugned order dated 8-2- 2012 is set aside and the case is remanded back to the learned trial Court with the direction to consolidate both the suits and after framing of issues arising out of divergent pleadings of the parties conduct the trial in accordance with law to avoid conflicting judgments.