' MUHAMMAD KHALID MEHMOOD KHAN, J.---The appellant has assailed the judgment of learned banking court dated 25-11-2005, whereby the execution petition of decree dated 3-2-1998 was dismissed being barred by time.
2. The appellant filed a suit for recovery of Rs,42,682,871 against the respondents. The learned banking court on 3-2-1998 passed decree in favour of appellant. One of the judgment debtors, the respondent No,1 a public limited company was ordered to be wound up on 24-4-1998 by the learned Company Court. The appellant submitted its claim under the decree dated 3-2-1998 to the Official Liquidator. The Official Liquidator paid the part of decree Rs,4 Million to the decree holder/appellant on 14-11-2001. The appellant filed the execution of decree on 12-7-2003, before the learned Banking Court. The respondents/judgment debtors opposed the execution of decree on the ground of limitation. The learned judge banking court accepted the respondent/ judgment debtors' objection and dismissed the execution on 25-11-2005. Hence, this appeal.
3. Learned counsel for appellant submits that the impugned order is against the law and facts of the case. The execution proceedings in the instant case will be governed under special law which specifically provides that on the written application of decree holder, the court will forthwith order the execution of decree or order at any time seven days after passing of decree or order. Learned counsel submits that the facts of the judgment relied upon United Bank Limited Bank Square Branch. Lahore v. Fateh Hayat Khan Tiwana and 7 others (2004 CLD 223) are not applicable on the facts of present case. Learned counsel submits that decree was passed under a special law and as such law of limitation will not be applicable and even if it is admitted for the sake of arguments that limitation is applicable in the appellant's case, under Section 18 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 the execution application of decree can be filed after seven days of the passing of decree at any time and the clog of Article 181 of the Limitation Act will not be applicable, hence the impugned judgment is against the facts and law.
He has relied on Muhammad Sher u. Muhammad Khan (PLD 1975 Lahore 1016) and Muhammad Jalat Khan and another v. Ghulam Sarwar (deceased) represented by legal heirs) and 3 others (1986 CLC 552).
4. Learned counsel for respondents/judgment debtors submits that under Article 181 of the Limitation Act, 1908 read with section 48 of the C.P.C., the decree holder is bound to file first application of execution of decree within three years and subsequent applications within six years.
Admittedly the appellant has not filed first execution application within three years and as such the instant execution application being first application is not maintainable. He has relied on United Bank Limited Bank Square Branch, Lahore v. Fateh Hayat Khan Tiwana and others (2004 CLD 223) and supports the impugned judgment.
5. Heard. Record perused.
6. It is an admitted fact between the parties that the decree sought to be executed was passed on 3-2-1998 under the then Banking Companies (Recovery of Loans, Advances, Credits and Finances)
Act, 1997 (hereinafter referred to as Act of 1997).
7. Section 18 of the Act of 1997 deals with the execution of decree passed under the Act of 1997. For better appreciation of the above provision of law, it is reproduced as under:-- "18. Execution of decree.---(1) The Banking Court shall, on the written application of the decree- holder, forthwith order execution of the decree or order at any time seven days after the passing of the decree or order and, where the decree or order pertains to money, may direct that the amount covered by the decree or order, as the case may be, shall be recovered in accordance with the provisions of the Code of Civil Procedure, 1908, or any other law for the time being in force or in such other manner as the Banking Court may deem fit: ' Provided that, the Banking Court may, at the time of passing a final decree, pass an order of the nature contemplated by subsection (1) of section 16 to the extent of the decretal amount.
(2) ...........................................
(3) ...........................................
(4) ..........................................................
(5) ...........................................
(6) ..................................
8. Section 22 of the Act of 1997 provides as under:-- "22. Application of the Limitation Act, 1908, Act IX of 1908. (1) Subject to sub-section (2), the provisions of the Limitation Act, 1908 (Act IX of 1908), shall not apply to any suit, application or other proceedings filed or transferred to a Banking Court under this Act.
(2) The provisions of the Limitation Act, 1908 (Act DC of 1908) shall apply to all cases instituted or filed in a Banking Court after the coming into force of this Act: ' Provided that in relation to past transactions a fresh cause of action will be deemed to arise, for purposes of limitation only, on the date on which this Act comes into force".
9. From the perusal of Section 22 of the Act of 1997, it is clear that Limitation Act, 1908 is applicable on all those cases and proceedings which are filed under the Act of 1997, however for the past transactions a fresh cause of action will be available to the parties for the purposes of limitation. In the present case the appellant's case falls within the mischief of section 22(2) of the Act of 1997 as the suit was filed after the promulgation of Act of 1997. The decree was passed on 3-2-1998 against a Public Limited Company, its directors and guarantors. It appears that liquidation proceedings against the company were pending disposal before the learned Company Judge of this Court, the learned Company Judge passed a winding up order 24-6-1998 meaning thereby after passing the decree one of the judgment debtor was ordered to be wound up.
10. Under section 316 of the Companies Ordinance, 1984, suits and proceedings pending against company could not proceed unless permitted by the learned Company Judge.
11. Section 316 of the Companies Ordinance, 1984 is reproduced as under:- "316. Suits staged on winding up order.---(1) When a winding up order has been made or a provisional manager has been appointed, no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
(2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of any suit or proceeding by or against the company.
(3) any suit or proceeding by or against the company which is pending in any Court other than that in which the winding up of the company is proceeding may notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by the Court".
12. The perusal of above provision of law shows that on passing of winding up order or appointment of provisional manager a suit or other legal proceedings shall proceed or commence against the company except by leave of the court and subject to such terms as the Court may impose.
Admittedly the winding up order against one of the judgment debtors was passed on 24-6-1998, hence the execution of decree stands stayed automatically. Subsections (2) and (3) of section 316 of the Companies Ordinance, 1984 clearly show that the Company Court has a jurisdiction to decide any suit or proceedings by or against a company (in liquidation) or any such suit or proceedings which may be pending before any other court may be transferred to and disposed of by the Court in winding up proceedings.
13. It is not the dispute between the parties that the principal judgment debtor is not the company.
After the winding up order the decree holder approached the Company Court for execution of decree. The learned Company Court entertained the execution application and finally on 14-11-2001 accepted the decree holder's claim partially and finalized the execution of decree against A judgment debtor No,
1. The pendency of execution of decree before the learned Company Court establishes the fact that the appellant filed execution of decree within three years of the passing of decree and as such the argument of learned counsel for respondent that appellant has failed to file the execution of decree within three years of the decree has no force and is devoid of merit.
14. The other argument of learned counsel for appellant that under Section 18 of the Act of 1997, the Banking Court shall on the written application of the decree holder forthwith order for execution of a decree or order at any time seven days after the passing of decree or order shows that Article 181 of the Limitation Act is not applicable on a decree passed under the Act of 1997, this argument of learned counsel is devoid of any merit for the simple reason that under section 22 of the Act of 1997 specifically provides that provision of Limitation Act, 1908 shall apply to all the cases instituted or filed in Banking Court after coming into force the Act. Admittedly the appellant filed suit under the Act of 1997 and decree was passed on 3-2-1998 under the said Act, hence the Limitation Act of 1908 is applicable in the present case.
15. The upshot of the above discussion is that the impugned judgment dated 25-11-2005 is set aside and the case is remanded to the learned Banking Court for proceeding with the execution petition.