QALANDAR ALI KHAN, J.---Messrs Ali Match Industries Limited, a company incorporated under the Companies Act 1913, (hereinafter referred to as the Company) approached the Equity Participation Fund (E.P.F), and secured equity support of Rs.700000/- disbursed in the year 1975. The Company, however, could not repurchase the shares as per agreement nor repaid the amount to the E.P.F. A sum of Rs.650000/- stood due against the Company. Therefore, the E.P.F., having been declared as banking company by the Federal Government vide Notification dated 4.2.1987, approached the Banking Court, Hazara Division, Abbottabad, through a suit under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, for a decree for recovery of Rs.650,000/- along with future guaranteed dividend/Mark-up at the prevailing rate till the final payment with all other charges etc, as agreed.
2. After service of notice of the suit, the Company applied for leave to defend the suit on several legal and factual grounds, including objection to the maintainability of the suit not filed by the competent/authorized person, besides holding the E.P.F responsible for inability on the part of the company to repurchase the share holding, as, according to the Company, the E.P.F had equally managed, controlled and participated in the affairs of the company by appointing its nominee as a director of the Company, and thus equally responsible for the crises being faced by the company and its inability to repurchase the share holding from the E.P.F; and further that auction and sale of assets of the company in execution of a decree of Rs.4457607/- by the IDBP through the Banking Court, Hazara Division, Abbottabad, followed by removal of machinery and equipment etc by the auction purchases added to the woes of the company.
3. The application for leave to defend was resisted by E.P.F, and in its reply to the application, the E.P.F controverted claims of the company by not only defending its suit against the company but also raising several issues like interest free loan of Rs.50000/- claimed by the company in its application for leave to defend. The E.P.F also moved application for amendment in the plaint, which was accepted by the learned Banking Court on payment of cost of Rs.1000/- despite resistance by the company. After filing of amended plaint by the E.P.F, the company also moved amended application for leave to defend on the aforementioned grounds in the initial application for leave to defend, and the reply thereto by the E.P.F also contained the same objections/issues.
While adjudicating upon the application for leave to defend vide judgment dated 17.08.2004, the learned Banking Court only dealt with the objection of the company to the maintainability of the suit on the ground of the same not being verified by competent person; and rejected application for leave to defend after holding the objection of the company not sustainable and observing that no other solid point has been pressed by the learned counsel for the defendants".
4. Aggrieved of the judgment of the learned Banking Court, the Company filed appeal under section 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, in this Court, which was accepted vide judgment dated 07.09.2005; and judgment and decree of the learned Banking Court was set aside and plaint was rejected on the ground of the same being incompetently instituted.
The E.P.F preferred appeal against the judgment of this Court, and the august Supreme Court of Pakistan, while allowing the appeal, set aside the impugned judgment and remanded the case to this Court for its decision afresh on merits.
5. We have heard arguments of learned counsel for the parties and have also gone through the record with their valuable assistance.
6. The august Apex Court has remanded the case to this Court for its decision afresh on merits; but it would be seen that the learned trial Court/Banking Court has not decided the case on merits so as to provide basis for decision of the appeal on merits. The learned Banking Court rejected application for leave to defend after only dealing with the question of maintainability of the suit and observing that no other point was pressed by the learned counsel for the defendants. Likewise, this Court accepted the appeal and set aside the judgment and decree of the Banking Court and rejected the plaint on the ground that suit was incompetently instituted. As such, there has been no decision of the case on merits.
7. Having said that, the next question would be that was/were there any triable issue/issues requiring adjudication on merits. The answer, obviously, is in the affirmative, as pointed out above, several triable issues like equal responsibility of the E.P.F in the management of the company and bringing the functioning of the company to a standstill in the year 1996 due to auction and removal of machinery and equipment etc by the auction purchaser were raised in the application for leave to defend; and such objections to the suit going to the roots of the case, certainly, required adjudication on merits, in the light of judgments in cases reported as 2004 CLD 587 (Lahore), 2008 CLD 427 (Lahore), 2005 CLD 588 (Lahore) and 2003 CLD 1527 (Lahore).
8. The impugned judgment dated 17.08.2004 of the learned Banking Court, Hazara 'Division, Abbottabad, on the other hand, would show that the application for leave to defend was dealt with in a cursory manner, without adverting to the facts alleged in the application of the company and contested by the E.P.F, thus giving rise to several triable issues, requiring adjudication on merits by the learned trial Court/Banking Court.
9. In view of the above, and in the light of judgment of the august Apex Court for decision of the case on merits, the appeal is allowed in the terms that the case is remanded to the learned Banking Court, Hazara B Division, Abbottabad, for its decision afresh on merits, at the earliest, preferably within three months, in accordance with the judgment dated 09.05.2014 of the august Apex Court and also by following the law and judgments of the superior Courts in this behalf.