C.M. No,595-B of 2012 ' MUHAMMAD KHALID MEHMOOD KHAN, J.---Through this application the applicant/plaintiff wants to withdraw the suit with the permission to file afresh, claiming that it is revealed that there exists some formal defect in the suit due to which he plaintiff apprehends that the bank may suffer huge loss, therefore, it is in the interest of justice that plaintiff be allowed to withdraw the suit with the permission to file fresh suit on the subject matter.
2. The respondents/defendants have opposed the said application claiming that the application does not comply with the mandatory provision of law under Order XXIII, Rule 1, C.P.C. As no formal defect has been pointed out or asserted in the application. The application is vague, evasive and unfounded. If the permission sought for is allowed, the defendant will suffer loss.
3. Learned counsel for applicant/plaintiff submits that the Court has the powers to allow withdrawal of suit with permission to file afresh even on oral request of the plaintiff. Further submits that this Court has the power to allow withdrawal of suit with the permission to file a fresh suit in the interest of justice as it is the intention of law that all suits should be decided on merits. Learned counsel for applicant/plaintiff has relied on Sardar Muhammad Kazim Ziauddin Durrani and others v. Sardar Muhammad Asim Fakhuruddin Durrani and others (2001 SCM R 148), Municipal Committee Chakwal v. Ch. Fateh Khan and others, (PLD 1959 (W.P) Lahore 535), Pehlwan and others v. Haji Muhammad Muran and others (2005 SCM R 1405), Muhammad Saleem v. Muhammad Tariq (2009 CLC 1295), Mana and 4 others v. Hussain Bakhsh and 5 others (1993 CLC 1400), Ghulam Farid and 2 others v. Muhammad Ashraf and 8 others (2000 YLR 2166) and Ismail v. (I) Fida Ali and (2) Sayyed Iqbal Shabbir (PLD 1965 Supreme Court 634).
4. Learned counsel for respondents/defendants submits that the application is designed to frustrate the permission allowed to respondents/defendants to defend the suit unconditionally.
Learned counsel further submits that no alleged formal defect has been pointed out in the entire application. Further submits that permission can only be granted to remove the defect which is apparent or formal in the frame of suit and in its presence the suit may fail where the defect is latent and touches the merits, of the case then permission to withdraw the suit cannot be allowed.
Learned counsel submits that under Order XXIII, Rule 1, C.P.C. The petitioner/plaintiff has to establish the following defects:--
(a) There exists a formal defect in the suit;
(b) The Court is satisfied that the suit of plaintiff will fail on account of said formal defect.
' Learned counsel for defendants/respondents adds that it is the duty of plaintiff to show existence of formal defect by specifically asserting in the application for withdrawal of suit. The formal defect pertains to the frame of suit but where formal defect touches the merits of case, the same could not be said a formal defect. Learned counsel has relied on Karamat Ali Khan and another v. Sardar Ali and 29 others (PLD 2001 Supreme Court (AJ&K) 30), Ahban Uthool Village, v. Ahban Zani Village (PLD 2004 Peshawar 198), Mana and 4 others v. Hussain Bakhsh and 5 others (1993 CLC 1400), Sardar Muhammad Kazim Ziauddin Durrani and others v. Sardar Muhammad Asim Fakhuruddin Durrani and others (2001 SCM R 148) and Muhammad Din v. Atta Muhammad and others (PLD 1957 (P.W.) Lahore 971).
5. Heard. Record perused.
6. The petitioner/plaintiff filed a suit for recovery of Rs,494,400 Million against the respondents/defendants under section 9 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 (hereinafter referred to as F.I.O.), the respondents/defendants filed application under section 10 of the F.I.O. For permission to defend the suit. The defendants' application was accepted on 13-3-2012 and defendants were allowed to defend the suit unconditionally. Issues have been framed and the case is fixed for recording the evidence.
7. The suit against defendants/respondents is under a special law i,e, Financial Institutions (Recovery of Finances) Ordinance, 2001. Section 9(3) of the F.I.O. Provides the necessary ingredients of plaint under section 9 of the F.I.O. It is also incumbent upon the plaintiff fo annex statement of account duly certified under the Bankers Books Evidence Act, 1891 and all relevant documents.
Likewise the defendants/respondents under section 10 of the F.I.O. Are also bound to provide certain information/claim in the application. Thus, the plaint under Order VI, Rules 1, 2, 3, 4, 5 and 6, C.P.C.
Has different parameters whereas the plaint under section 9 of the F.I.O. Is different from the provisions of Order VI, Rules 1, 2, 3, 4, 5 and 6, C.P.C. It is also an admitted fact that the F.I.O. Provides its own procedure for regulating the proceedings between the parties but where the F.I.O. Did not provide any procedure, the C.P.C. Is applicable.
8. The non-compliance of provision of section 9 of the F.I.O. On the part of plaintiff did not provide any penalty or consequences, but non-fulfillment of the legal requirements as set out in section 10(5) of the F.I.O. The Court has the power to reject the application.
9. The argument of learned counsel for applicant/plaintiff is that filing of formal application is not mandatory, the Court enjoys the powers to allow withdrawal of suit even on the oral request of plaintiff. Learned counsel has heavily relied on Ismail v. (1) Fida Ali, and (2) Sayyed lqbal Shabbir (PLD 1965 Supreme Court 634). The facts of said case are that suit under Order XXXVII was filed on the basis of DP Note, there was endorsement of other person on the said DP Note that he guarantees the amount of DP Note. The Hon'ble Supreme Court of Pakistan came to the conclusion that the guarantee does not fall within the preview of Order XXXVII, C.P.C. And on the oral request of plaintiff allowed to withdraw the suit with permission to file a fresh suit. The Hon'ble Supreme Court of Pakistan has held as under:-- "As the plaintiff's suit under Order XXXVII, rule 2, C.P. C. Is liable to be dismissed on account of a legal defect, we grant permission to withdraw the suit against the appellant with permission to file a fresh suit for such relief as may be available to him in law. In the result the appeal is allowed and the decree passed against the appellant by the High Court of West Pakistan Karachi, is set aside with costs."
10. The facts of case Mana and 4 others v. Hussain Bakhsh and 5 others (1993 CLC 1400) has no bearing on the facts of this case as in that case suit was withdrawn with the consent of both the parties. The Hon'ble Supreme Court of Pakistan in a case Sardar Muhammad Kazim Ziauddin Durrani and others v. Sardar Muhammad Asim Fakhuruddin Durrani and others (2001 SCM R 148) has held as under:-- "From perusal of above meaning of the word "defect" conveniently it can be visualized with reference to a suit framed under the C. P. C. That if it is not arranged in accordance with Order VI, Rules I to 4, 14 and 15 or Order VII, Rules 1 to 7, C. P. C. Then it would be deemed that suit suffers from defect. However, such defect itself shall not be deficient to grant permission to withdraw the suit unless it is not shown that for any one of formal defects the suit is likely to fail, which' mean that the nature of the defect must be apparent but not latent because as far as former category of defect is concerned, it is visible and is not liable to be explored after an inquiry, because if there is procedural departures in the form or arrangement of the suit obviously it would be apparent and if there is substantial defect in the suit it would fall under the latter category which can only be unearthed after recording of evidence. Therefore permission can only be granted to remove a defect which is apparent or formal and its presence in the suit may fail it, but if it is latent and touches merits of the case, then permission to withdraw the suit on this score cannot be granted."
The case of respondents/defendants is that in the absence of any pleading of formal defect in the application the Court cannot ascertain itself formal defect of suit which may finally resulted in the dismissal of suit. As no procedure is provided in the F.I.O. After grant of leave to defend the suit and as such procedure provided in the C.P.C. For deciding the suit will be applicable in the subsequent proceedings. 'The defendants' application for permission to defend the suit has been allowed unconditionally, the issues have been framed, the plaintiff has to prove his case on merits by recording the evidence. The plaintiff's suit is a suit for recovery of finances allowed to respondents/defendants under finance agreement or agreements. Likewise the defendants have to defend their case on the basis of their assertions or written statement and the Court has to pass a decree according to the pleadings and evidence adduced by the parties.
11. The applicant/plaintiff has not pointed out any alleged formal defect which may resulted in the dismissal of suit and as such every opportunity is available to plaintiff to adduce the evidence or to amend his plaint in accordance with law if the plaintiff thinks that there is some formal defect in the frame of suit. In these circumstances the application fails and dismissed.