The is a petition under Article 9 of the Provisional Constitution Order, 1981, whereby ljaz Ahmad Piracha petitioner watts this Court to declare the order dated 25th May, 1981 passed by Mr. Salah- ud-Din Zafar, Special Judge Banking-I1, Lahore, to be without lawful authority and of no legal effect.
The petitioner is defendant in a suit brought by Habib Bank Limited, respondent No. 2 herein, for the recovery of Rs. 12,33,607.55. Limited, 'The petitioner moved an application under Order XXXVII, rule 2, C.P.C. For leave to appeal and defend the suit. On 23rd May, 1981, the learned Special Court passed the following order
3. Before me, Malik Iqbal Rasool, learned counsel tot me peti--tioner has attacked this order of the Special Court granting leave to defend the suit on payment of the entire amount of Rs. 12,33,607.55.
It is urged that the order is illegal, of no legal effect and, in any case, unconditional leave to defend ought to have been granted in the circumstances of the case.
4. On the other hand, Ch. M. A. Latif Amritsari, learned counsel for respondent No. 2 has vehemently defended the impugned order. He submits that the learned Special Judge was well within his authority to pass the impugned order for the reasons that under section 7 of the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter called the Ordinance), he shall follow the summary procedure provided for under Order XXXVII, C.P.C. And, in any case, the impugned order being interlocutory, the High Court in its constitutional jurisdiction shall not interfere with the same.
5. I have gone through the material placed on record of this petition with care and have considered the arguments addressed by the learned counsel for the parties.I am of the opinion that the impugned order is in excess of jurisdiction, arbitrary, has flouted the provisions of relevant law and is thus liable to be interfered with for the following reasons :-
(i) It is arbitrary because the impugned order shows that the same has been passed as a matter of course without applying mind to the relevant facts and law.
Doubtless, under Order XXXVII, rule 3, C.P.C. The defendant has no right to defend the suit unless the Court grants leave and while granting leave to defend the Court may impose conditions involving payment into the Court, furnishing Bank Guarantee or security, etc. As the Court thinks fit. The trial Court has been given discretion in the matter of imposing the condition which, undoubtedly, is to be exercised judiciously and not arbitrarily and the condition should accord with the situation. If the amount is secured or the defendant has good prima facie case the Court should grant unconditional leave and if the defendant has only arguable case the Court may grant leave subject to furnishing security. As no appeal or revision lies against the interlocutory order, I am of the view that it was all the more necessary that the trial Court should have passed interlocutory order with care and caution. It should apply its mind to the facts the defence plea, material before it and should see that the "condition imposed are not harsh one and these accord with the situation. In case the trial Court intends to impose extreme condition, i.e. Payment into the Court of the entire amount, the Court is expected to pass a speaking order indicating that it has applied its mind to the facts, the defence and the propriety of the condition of payment into the Court of the entire amount. In this case, unfortunately, I find that the impugned order bas been passed without going through the plaint, the application submitted by the petitioner for leave to defend and without reading Order XXXVII, rules 2 and 3, C.P.C, carefully and the learned Specify Court has passed the impugned order as a matte of course in violation of the principles governing the exercise of judicial discretion.
For the foregoing reasons, I am of the view that the impugned order has been passed in excess of jurisdiction and in violation of the law and principles governing the exercise of jurisdiction.
6. Learned counsel for the respondent states that in spite of these findings this Court should not interfere with the impugned order because the same is an interlocutory one. In support of this he has placed reliance on International Food Centre Limited v. United Bank Limited and two others (1982 CLC 108).
7. I have gone through the judgment referred so above. I find that the same is based on altogether different facts, I am of the considered opinion that is this Court is satisfied that an interlocutory order suffers from infirmities affecting the jurisdiction of the Court or tribunal then it would be failing in its constitutional duties to refuse to interfere with the same and allow a Court or tribunal to pass illegal, arbitrary and harsh orders under the cover of Special .Law because once a Court comes to the conclusion that the Court or tribunal has exceeded the jurisdiction by flouting the provision of relevant law, has violated the principles governing the exercise of judicial discretion, acted arbitrarily, passed an illegal and unfair order without applying its mind to the factual and legal aspect of the matter, it would then be the duty of this Court while sitting in its constitutional duties to strike down such order regardless of the fact that the interference may defeat the legislative intent, i.e. Speedy and efficacious method for the recovery of loan advance by the Bank. I realise the difficulty but at the same time sitting as a Court of Law this Court cannot permit a Court or tribunal to act in a manner in which the learned Special Judge has acted passing the impugned order recovery of a huge amount.
8. The result is that the petition is accepted and it is declared that the impugned order having been passed without lawful authority is illegal and of no legal effect, and the same is hereby set aside with the direction to the learned Special Court to apply its mind to the legal and factual aspect of the matter and proceed in accordance with law. No order as to costs.