' AZIZ-UR-REHMAN, J.---By means of above applications, filed under section 10 of Financial Institutions [Recovery of Finances] Ordinance, 2001 [In short F.I.O., 2001], the Defendants are seeking rejection of the plaint with an alternate prayer for granting leave to appear and defend the above suit filed by the Plaintiff through Mr. Khurram Faizab Khan son of Muhammad Faizab Khan as an authorized Attorney of the Plaintiffs Financial Institution under section 9 of F.
1.0., 2001, for recovery of Rs,191,190,736/- along with liquidated damages, costs, charges and cost of funds, till realization of the whole decretal amount, who besides well conversant with the facts of the case, is duly authorized to sign and verify the plaint, institute these proceedings and do all such acts, deeds and things which are necessary and incidental thereto. Photocopy of the 'Sub-Power of Attorney' in favour of the aforesaid officer of the Plaintiff's Financial Institution has also been filed along with plaint as Annexure 'A'.
2. Precisely, the relevant facts in the back ground are stated as follows:-
3. The Plaintiff is a company incorporated and existing under the laws of Pakistan having its registered office at 1st Floor, Tower-A, Finance and Trade Centre, Shahrah-e-Faisal, Karachi, wherefrom it is carrying on its' investment business.
4. The Defendant No,1 is a Public Limited Company incorporated and existing under the laws of Pakistan and having its' registered office. At Nishatabad, Faisalabad, Punjab. Defendant No,! Viz. Chenab Public Limited Company, is a 'Principal Customer' and Defendants Nos.2 to 10 are guarantors of Defendant No,1 as they have executed their 'personal guarantees' [annexed with plaint for and regarding to secure the liabilities of the Defendant No,1 'Principal Customer'. All the Defendants are thus 'customers' of the Plaintiff in terms of section 2[c] as defined in the Financial Institutions [Recovery of Finances] Ordinance, 2001 [Ordinance No,XLV1 of 2001].
5. Per assertions made in the plaint, upon requests based on representations and warranties of the Defendants, the Plaintiff as being a Financial Institution within the meaning of section 2[a] of F.I.O., 2001, extended from time to time various Finance Facilities to Defendant No,1 including the following:- i) Finance Facility-I: ' A term finance facility of Rs,100,000,000/- pursuant to 'Term Finance Agreement' dated February, 2006 as amended by 'First Addendum' to Finance Agreement dated June 1, 2007 and 'Second Addendum' to Finance Agreement dated March 28, 2009 [Finance Agreement-I]. ii) Finance Facility-II: ' A term Finance Facility of Rs,50,000,000/- pursuant to 'Term Finance Agreement' dated March 15, 2006 as amended by 'First Addendum' to Finance Agreement dated June 1, 2007 and 'Second Addendum' to Finance Agreement dated March 28, 2009 [Finance Agreement-II]. iii) Finance Facility-III: ' A Syndicated Term Finance facility, pursuant to 'Syndicated Term Finance Agreement' dated October 20, 2003 as amended by 'First Supplemental' to 'Syndicated Terms Finance Agreement' dated December 30, 2006 and 'Second Supplemental' to 'Syndicated Term Finance Agreement' dated March 28, 2009 [Syndicate Term Finance Agreement] for an aggregate amount of Rs,160,000,000/-. Defendant No,l's share in the syndicate Term Finance Facility amount is Rs,80,000,000.
6. According to the Plaintiff, the Finance Facility-In, was subsequently 'refinanced'/'restructured' under LTF-EOP Scheme of the State Bank of Pakistan [In short SBP] vide the aforementioned 'First Supplemental' and 'Second Supplemental'. In order to secure the aforesaid finance facilities, the Defendants created 'joint pan I passu mortgage' by deposit of 'original title deeds'/'documents' pertaining and relating to all the pieces and parcels of land well described and mentioned in para 5(i) and (a) to (c) and also a joint ranking 'pan I passu charge' by way of hypothecation over the Defendant No,l's all present and future plant, machinery and equipments etc. Etc. Well mentioned/described in para 5(ii) of the plaint in favour of the plaintiff. Further, apart from 'Demand Promissory Notes', signed and executed by the Defendants No,I in the years, 2003 and 2006, the Defendants Nos.2 to 8 in their capacities as guarantors also signed and executed 'Personal Guarantees' for the amounts mentioned therein in the years, 2003 and 2006. All the relevant documents relied upon by the Plaintiff are annexed as Annexures 'B' B-1 to B-22, 'C' and `C- 1' to 'C-42', 'D', 'D-1' to 'D-4', 'E', E-1' to 'E-3'F' and 'F-1' to 'F-6' to the plaint.
7. Per version of the Plaintiff, the Finance Facilities granted to and availed by the Defendant No,1 were fully utilized, however, the Defendants in breach of the mutually agreed 'terms' and 'conditions' as per the various 'finance documents' and 'security documents', failed and/or avoided to repay the outstanding amounts to the plaintiff Financial Institution as and when it fell due from the Defendants in respect of the aforesaid facilities.
8. Despite, time and again requests for repayment of the outstanding dues, the Defendants, nonetheless, failed and/or neglected to repay/liquidate the outstanding amounts. On account of such failure, the Plaintiff's Financial Institution, consequently, did compel to recall the finance facilities granted to and availed by the Defendant No,1 through its' legal notice of August 26, 2010, clearly asking all the Defendants to pay the then outstanding amount in the sum of Rs,182,344,826/- together with 'liquidated damages' and 'cost of funds' within 14 days. The Defendants however, again failed and/or neglected to discharge their legal obligations in contravention of their commitments and as such they 'committed default' in repayment of the outstanding dues owed the Plaintiff.
9. Per 'Para 10' of the plaint, the 'cause of action' in favour of the Plaintiff has arisen against the Defendants on various dates/occasions i.e, when the request made by the Defendants was granted for the availment of finance facility[ies] and also on several other dates when the Defendants 'signed' and 'executed' various finance and other security documents vis-a-vis the finance facility[ies] granted to and availed by the Defendant No,!. Also on dates, when despite requests, the Defendants' failed and/or neglected to honour their 'commitments /discharge their obligations and consequently they rendered themselves as defaulters. Lastly, when they were asked to make payment of the 'amounts recalled' but again they failed and/or refused to do so, hence, this suit for recovery of the amounts under section 9 of F.I.O., 2001 [Ordinance No,XLVI of 2001].
10. On filing of the above suit on 21.01.2011, process was issued to the Defendants by all modes as 'prescribed in terms of section 9(5) of F.I.O., 2001 including publication in Newspapers i.e, Daily Dawn' English Lahore, Daily 'Jung' Karachi and Daily 'Jung' Lahore, all dated 26-01-2011. Upon service, the Defendants did come forward and filed their 'Leave-to-Defend Applications' wherein inter alia a prayer for 'rejection of the plaint' and in the alternative they have also sought unconditional 'leave- to-defend' the above suit.
11. The Defendants in their 'Leave-to-Defend Applications' have not only denied the 'averments' and 'assertions' made by the Plaintiff which they in their opinion deemed contrary to their stand but also raised 'certain crucial objections' vis-a-vis the maintainability and/or competency of the above suit. Out of the various objections, the two more relevant 'common and 'prime' objections raised by the Defendants in their Leave-to-Defend Applications read as follows:- i) That the Plaintiff has miserably failed to fulfill the requirements of section 9(3)(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001 which requires the Plaintiff to specify in the plaint, the amount of finance availed. No proof of disbursement has either been attached with the suit that the requirements of section 9 of F.I.O., 2001, are mandatory in nature and same are not just the 'technicalities' or 'formalities'. The absence of compliance of section 9 of F.I.O., 2001, warrants rejection of the plaint/suit being incompetent. Likewise, the requirement of section 9(3)(b) of F.I.O., 2001 has also been violated by concealing .The material facts from this Court. The aforementioned non-compliance of law is amounting to non-providing adequate, proper and reasonable opportunity of defence to the answering defendants)/applicant(s) and plaint, is liable to be rejected. ii) That the Plaintiff has, further, violated section 9 of F.I.O., 2001, by not attaching the proper 'statement of account' with the plaint. The alleged statements of accounts attached with the plaint are deficient and aviolative of law as under:- a. Law requires that the !Statement of account' must be disclosing each and every entry/transaction including the amount disbursed to the customer. In the present case*, no 'principal amount' or the 'disbursed amount' has been shown. These violations are being done, deliberately to conceal the irregularities and violations of the alleged agreements committed by the Plaintiff. b.The alleged statements of accounts are not reflecting amount adjusted towards' the mark up and amount adjusted towards principal. The so-called entries reflected are bogus and against the alleged agreements themselves. c. The Plaintiff has even failed to mention the account numbers (being maintained with the Plaintiff) of the answering Defendant in the plaint or the documents attached. d. The statement of accounts for term finance facilities are in manner and mode of lease finance instead of term finance. e. The alleged statements of accounts are not certified as required under section 9 of Finance Institutions (Recovery of Finances) Ordinance, 2001 as well as Banker's Books Evidence Act, 1891. The person signing the same is neither the branch manager nor he is authorized in the regard as per the law. f. The alleged statements of accounts produced by the bank in support of the claim is just a recovery certificate to which no presumption of truth is attached under law. g. The alleged statements of accounts are even otherwise, false, fictitious and incomplete. Rather the same are not statements of accounts. h. The alleged statement of accounts themselves contradict the claim of the Plaintiff. There are serious contradiction between the statement of accounts and the alleged agreements. The said serious contradiction cannot be resolved without recording evidence for which the grant of unconditional leave to appear and defend the suit is essential.
12. Moreover, in the Leave to Defend Applications, it has also been alleged that the 'finance agreements' are 'uncertain' and this factum besides being quite evident is also reflected from the difference of the amount claimed in the suit and shown in the alleged 'statement of accounts'. The alleged 'demand promissory notes and the 'security documents' attached with the suit itself show that the Defendants have deviated from standard banking practice. Besides, under Article 10-A, inserted in Constitution of Islamic Republic of Pakistan 1973 [18th amendment] through Act X of 2010, in the Constitution of Islamic Republic of Pakistan 1973, the Defendants, in any event, are within their vested rights to have a 'fair trial' and 'due process' regarding determination of their liability, if any. And no condition whatsoever can be imposed on the rights of a Defendant who wishes to oppose and/or defend any suit/proceedings initiated. Otherwise, it would have the effect of eclipsing the constitutional right of 'fair trial' and 'due process'. Being relevant Article 10-A is reproduced herein:- "10-A. Right to fair trial---For the determination of his civil rights and obligations or in any criminal charge against him a person shall be entitled to a fair trial and due process. "
13. According to the Defendants' stand, law never intends that the dispute between the parties be decided on the basis of technicalities. Rather law is meant for 'advancement of justice', of course purely on merits. Per Defendants' stand, justice can only be done if parties are afforded a fair opportunity of being heard while also observing the principle of 'due process'.
14. Apart from the above, it has also been pleaded on behalf of the Defendants that the three separate alleged finance agreements involved in the case in hand, pertain to totally 'independent transactions'/'causes' and apparently having no relation with each other at all. These agreements, per stand of the Defendants have wrongly been amalgamated in one suit. The instant suit, on this score as well, is also 'liable to be rejected inter alia on account of 'mis-joinder' of 'causes of action' allegedly stated to have been raised in favour of the Plaintiff. Moreover, the 'finance agreements' have been signed without any 'lawful authority' thus the same are not binding on the Limited Company. The Defendant No, 1 's company, can only act or perform through its' duly authorized persons which however, in the case in hand there is none. Any undertaking given, can only be binding on the Defendant No, l's company if the 'signatories' thereon are duly authorized in that regard. There is no 'valid resolution' of BoD of Defendants No, l's company [or attached with suit] that is to say in favour of the signatories of document, hence, all the 'Finance agreements' ex-facie are without any authority as such are not binding on the Company and/or the answering Defendants and consequently, the suit is liable to be dismissed/rejected on this ground as well.
15. On service of Leave to Defend Applications, the plaintiff has also filed its' replies [Replica] under section 10(7) of F.I.O., 2001 [XLVI of 20011 wherein, all adverse allegations have been emphatically denied as being untrue, frivolous, mala fide and misconceived. The two 'prime preliminary objections' referred to hereinabove under the heading of 'Grounds'/'Preliminary objections' raised by the Defendants at sub-paras 5 and 6 of C.M.A. No,2629 of 2011, filed by Defendant Company; have been replied by the Plaintiff in the following words:- "That the contents of Paragraphs 5 to 8 of the Application are specifically and vehemently denied being false, baseless and misconceived. It is respectfully submitted that the Plaintiff fulfilled the requirements of Section 9(3) filed break-up as Annexures "E" to "E-2" and Statement of Account in accordance with Bankers' Books Evidence Act, 1891 as Annex "E-3". Hence the objection raised by the Defendant No,1 is not maintainable and Application under reply is liable to be dismissed with cost". [Underlining is mine].
16. Lastly, on 06.10.2015 when the aforesaid Leave to Defend Applications came-up before me then I heard Mr. Salman J. Mirza, learned counsel for the Defendants and Mr. Aijaz Hussain Shirazi, learned counsel for the Plaintiff Company and also perused the record with their assistance.
17. Keeping in view inter alia, the above 'prime objections' regarding maintainability of the suit mainly on the touch stone of section 9(2)(3) of F.I.O., 2001 [XLVI of 2001], it would be appropriate to reproduce herein section 9 of F.
1.0., 2001, which reads as follows:-
9. Procedure of Banking Courts. ----f1) 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.
(2) The plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers' Books Evidence Act, 1891 (XVIII of 1891), and all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account and other relevant documents shall be filed with the Banking Court in sufficient numbers so that there is one set of copies for each defendant and one extra copy.
(3) The plaint, in the case of a suit for recovery instituted by a financial institution, shall specifically State--- [Underlining is mine].
(a) the amount of finance availed by the defendant from the financial institution;
(b) the amounts paid by the defendant to the financial institution and the dates of payment; and
(c) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution up to the date of institution of the suit.
(4)........
(5)........
18. Under section 9 of F.I.O., 2001 [Ordinance XLVI of 2001], as appears where a 'customer or a 'Financial Institution' commits a 'default' in fulfilment 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 authoriseti in this behalf by power of attorney or otherwise. Moreover, A in terms of subsection [2] of section 9 of F.I.O., 2001, the 'plaint' shall be supported by a 'statement of account' which in the case of a Financial Institution shall be 'duly certified' under the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891], and accompanied with all other 'relevant documents' relating to the grant of finance. In terms of subsection [2] of section 9 of F.I.O., 2001, copies of the 'plaint', 'statement of account' and other 'relevant documents' also needed to be filed with the Banking Court in sufficient numbers so that there is one set of copies for each Defendant and one extra copy.
19. Evidently, as per subsection (2) of section 9 of F.I.O., 2001, the plaint in the case of Financial Institution shall be 'duly supported by a 'certified statement of account' as being duly certified under the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 18911. It is worth to note,`that the use of words 'the plaint shall be supported' preceding the words 'duly certified statement of account' actually rende- the compliance of section 9 of F.I.O., 2001 as 'mandatory'. In case of 'noncompliance' of this 'mandatory requirement' the 'Financial Institution' is bound to face the adverse consequences. The word, 'support' read in the mandatory perspective of the word 'shall' makes the plaint filed by the Financial Institutions as totally dependent upon the 'statement of account' duly 'certified' under the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891]. If these 'mandatory requirements' as provided under subsection [2] of section 9 of F.I.O., 2001 are fulfilled then only the plaint may be sustained otherwise, not. In this aspect of the matter reliance can be placed on the case of Elbow Room and another v. MC Bank Limited [2014 CLD 985 D.B] wherein the Division Bench of this court has observed as follows:- "7. ... The Legislature has used the word "supported" as employed in section 9(2) of Ordnance, 2001; which means that if the suit is not supported by the Statement of Account it would not be competent. The word "support" read in the mandatory perspective of the word "shall" makes the plaint filed by a financial institution, totally dependent upon duly certified statement of account on the "support" of which a plaint may stand and sustain as per section 9(1) and (2) of Ordinance, 2001... "[Underlining is mine].
20. Besides, reference can also be made to the case of Bankers' Equity Ltd v. Messrs Bentonite Pakistan Limited and others [2003 CLD 931] wherein, after thoroughly discussing the meaning of the word 'support', it was observed/held as follows:- "10. ... definition and nature of term 'support' subsections (1) and (2) of section 9 of the Ordinance, 2001, can safely and logically be interpreted by holding that suit of a Banking Company cannot hold, endure, sustain, stand and be instituted without life support and foundation of a duly certified Statement of Account and the said documents for the plaint, wherefor, noncompliance with express provisions of law bars a suit through a plaint unsupported by a Statement of Account duly certified under Bankers' Books Evidence Act, 1891 and the documents relating to grant of finance.
11. 1 am reinforced in my above opinion by the difference of phraseology used in provisions contained in subsections (1) and (2) of section 9 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, and the provisions of Rules 14 and 17 of Order VII of C.P.C. Said rules 14 and 17 relate to production of documents in the Court upon presentation of a plaint. These provisions read as under:-- ' Rule.
14. "Production of document on which plaintiff sues.---(1) Where a plaintiff sues upon a document in his possession or power, he shall produce it in Court when the plaint is presented, and shall at the same time deliver the document or a copy thereof to be filed with the plaint.
(2) List of other documents. ---(2) Where he relies on any other documents (whether in his possession or power or not) as evidence in support of his claim, he shall enter such documents in a list to be added or annexed to the plaint."
' Rule 17. "Production of shop-book---(I) Save insofar as is otherwise provided by the Bankers' Books Evidence Act, 1891, where the document on which the plaintiff sues is an entry in a shop-book or other account in his possession or power, the plaintiff shall produce the book or account at the time of filing the plaint, together with a copy of the entry on which he relies.
' Original entry to be marked and returned.---(2) The Court, or such officer as it appoints in his behalf shall forthwith mark the document for the, purpose of identification; and after examining and comparing the copy with the original, shall if it is found correct, certify it to be so and return the book to the plaintiff and cause the copy to be filed."
' The requirement under these rules is that a plaintiff shall "produce" documents or shop-books or accounts sued upon, when the plaint is presented and the plaintiff shall at the same time deliver the document or file thelcopy thereof with the plaint. These rules visualize total independence of the plaint, the documents, the books of account or shop-books. The documents/accounts relied upon corn be subsequently produced with permission of the Court under Order XI, Rule 14 or under Order XIII, Rule 2 or under section 151, C.P.C. The consequence of non-production of documents along with the plaint are that the same "shall not, without the leave of the Court be received in evidence" under Rule 18 of Order VII C.P.C. Or shall not be received in evidence "at any subsequent stage of the proceedings unless good cause is shown to the satisfaction of the Court for non- production thereof under rule 2 of Order X111, C.P.C.
'The obvious distinction between the above said Rules and subsection (2) of section 9 of the Ordinance, 2001 is that above quoted Rules of C.P.C. Require "Production of documents" along with the plaint or on the first hearing of the suit while subsections (1) and (2) of section 9 of the Ordinance, 2001 provide that civil suit shall be filed through a plaint "supported" by a duly certified Statement of Accounts and documents of finance. The words "to produce documents along with the plaint" used in C.P.C. Connote meanings different from the words "plaint shall be supported by a Statement of Accounts---" under section 9 of the Ordinance. The distinction thereto is obvious, C.P.C. Allows a plaint independent of production of documents as consequence of non-filing thereto is inadmissibility of documents in evidence if leave of the Court is not obtained for subsequent production of the same. Contrarily, legislators' chose not to use the word "produced" under section 9 of the Ordinance but used the word "plaint shall be supported by a statement of Accounts and documents of finance. The freedom of subsequent production of Statement of Accounts and documents of finance (not filed with the plaint) has been taken away from the plaintiff under section 9 of the Ordinance, 2001, which require plaint, Statements of Accounts or documents of finance together to initiate a civil suit on behalf of Banking Institution. [Underlining is mine].
21. From the mandatory obligations imposed by section 9 of F.I.O., 2001, it is quite clear that a Defendant in a suit filed by the 'Financial Institution' for recovery must and, of course, be confronted with the best possible re-structured/well framed case that a Plaintiff can put forward from the very inception. The foundation of a banking suit; which normally is a suit 'on accounts' thus inter alia must be supported with a 'certified statement of account' which shall be duly 'certified' within the meaning of section 2(8) of Bankers' Books of Evidence Act, 1891 [Act XVIII of 1891]. The production of a 'certified 'statement of account' in 'support' of the 'plaint' is thus not only 'mandatory' but also a very necessary 'pre-condition' for charging the Defendant(s)] with any liability[ies] in a suit for recovery filed by a 'Financial Institution'. On this aspect reference can be made to the case of Apollo Textile Mills Limited and others v. Soneri Bank Limited [2012 CLD 337] wherein, the Hontle Supreme Court of Pakistan has observed as follows:- "15 ... The rationale of the schematic discipline of Ordinance of 2001 is evident. A banking suit is normally a suit on Accounts which are duly ledgered and maintained compulsorily in the books of Accounts in terms of the laws, rules and banking practice. As such instead of leaving it to the opinion of the parties to make general assertions on Accounts, the Ordinance binds both the sides to be absolutely specific on accounts. The parties to a suit have been obligated equally to definitively plead and to specifically state their respective accounts" [Underlining is mine].
22. For better understanding of the points involved and as argued by the learned counsel for the parties, I would also like to refer to and reproduce herein the definition of a 'statement of account' from the 'Encyclopaedia of Banking of Finance' by Gelmn G. Maunn F.L. Garcia and Charles J., which reads as follows:- A continuous daily posted record showing in detail all debits and credits and balance as of the close of the period, usually one month. The statement of account is rendered by a Commercial Bank, Broker, or other business to its customeRs, These accounts give dates and descriptions and permit the D customer to verify the Bank's record with his own. If difference occurs, they can then be investigated when the customer reports back through the reconcilement blank usually enclosed with the statement". [Emphasis supplied].
23. Mr. Salman J. Mirza while, arguing the 'Leave-to-Defend Applications' forcefully contended that apart from the 'certified statement of account' as required under section 9(2) of F.1.0., 2001, [Ordinance No,XLVI of 2001] all other documents being and pertaining to the grant of Finance Facility[ies] are also mandatorily needed to be produced along with the plaint which per learned counsel for the Defendants, is the true and absolute intention of F.I.O., 2001 because thereby, not only the liability of the Defendants' as per the definition of 'statement of account' is particularized but also established. Otherwise, a Defendant would not be able to frame his/its' defence suitably and properly by raising 'substantial questions' of law and fact within the limited specified, period of '30 days' of the date of 'first service' upon a Defendant by any of the modes laid down in subsection
(5) of section 9 of F,I.O., 2001.
24. Likewise, a Defendant is also under legal obligation to definitely plead and specifically state his/its' accounts. Significantly, the provisions of sections 9 and 10 of F.I.O., 2001 [Ordinance No,XLVI of 2001] are not only mandatory as argued by learned counsel for the parties but also in the event of 'non-compliance' therewith parties to the suit shall indeed to suffer. A Financial Institution if, fails to adhere strictly to this 'mandatory requirement' of law, then a Defendant, of course, besides entitled for the grant of a leave to defend the Suit or otherwise, he may be within his/its' right to contest for rejection of the plaint. Moreover, merely on the basis and strength of 'documents' filed along with the replication or replica the Defendant[s] in no event could be deprived to have an order for grant of leave to defend the suit inter alia for want of proper opportunity of rebuttal, if otherwise, the Defendants got succeed in raising substantial questions of law or facts. Relaice, on this aspect of the matter can be placed on the case of Bankers' Equity Ltd. v. Messrs Bentonite Pakistan Limited and others [2003 CLD 931] wherein it was observed as follows:- "7.In view of the above, subsection (2) of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 makes it mandatory for a Banking institution to support its plaint in a suit against the customer by a Statement of Account duly certified under the Bankers' Books Evidence Act, 1891 and also by all other relevant documents relating to grant of finance. Without such a 'Statement of Account filed along with the plaint, a customer will obviously remain totally unaware of the amount advanced, mark-up charged and the basis, break-up, premise, mode of calculation of account, nature of default and the actual amount of Bank's claim against the defendant-customer. He will thus be unable to frame his defence within the limited period prescribed by law, to show reasonable, serious and plausible grounds of contest to be able to seek and obtain leave to defend the suit. Absence of filing the requisite Statements of Account along with the plaint, will essentially amount to absence of providing adequate, proper and reasonable opportunity of defence to the defending customer. Being thus unable to file a proper leave petition within thirty days under section 10(2) of the Ordinance of 2001 or within twenty one days under section 10(12) ibid, such a customer may or may not later be able to amend his leave petition. His defence shall, thus be rendered illusory, hence denied. Upon the compliance a Banking Company with the provisions of section 9(2) of the Ordinance of 2001, depends the right of defence of a defendant in the summary suits as visualized under the Ordinance, wherefor, the filing of duly certified Statements of Account by a Banking company along with its plaint, cannot be taken to be oi mere formality or a technicality. This provision can only be held to be mandatory. Without strict compliance wherewith, the plaint is incomplete and cannot become basis ofa suit under this law.
8. Another word employed in subsection (2) of section 9 ibid, requires deeper consideration as this word has a direct bearing and impact on the essential mandate contained in this provision of law.
This subsection provides that "plaint shall be supported by a Statement of Account" duly certified under the Bankers' Books Evidence Act, 1891 and all other relevant documents relating to the grant of finance.
' In my opinion, the word 'support' read in the mandatory perspective of word 'shall, makes the plaint filed by a Banking institution, as totally dependent upon duly certified Statement of Account; on the 'support' of which can a plaint stand and sustain as per section 9(1) and (2) ,O'id. Plaint is subservient to or upon the statement of Account its life, sustainability, security and maintenance.
Without support of such Statement of Account (and documents) a plaint by itself cannot be presumed to stand independent. No building can be raised, constructed or created without the support of a foundation, columns and walls. Likewise, as per provisions of law, a plaint cannot be structured, constructed, built, or raised without the foundation of a duly certified Statement of Account and the requisite documents. In fact the three i.e, plaint, Statement of Account and the documents, though distinct, do not enjoy independence of existence in terms of subsection (2) of section 9 ibid. They are inseparable, indivisible and interdependent. Under subsections (1) and (2) of section 9 ibid, no suit in the Banking Court can be instituted by a banking Company through a plaint without the requisite statement of Account and documents. [Underlining is mine]
25. Mr. Aijaz Hussain Shirazi, learned counsel for the plaintiff conversely, argued that the Plaintiff's Institution has duly fulfilled all the 'mandatory requirements' of section 9 of F.I.O., 2001 by way of filing inter alia the 'statement of account' in accordance with the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891] and if, any lacuna was left over at the time of filing of the suit for recovery that has now been cured/fulfilled by the Plaintiff Institution i.e, at the stage of filing of the replica in answer to the Defendants' Leave to Defend Applications'. As far as this argument of the learned counsel of the Plaintiffs Institution is concerned, the same in my view, besides 'misconceived' is 'misleading' as the Defendants to the knowledge of the Plaintiff have 'no opportunity' to suitably rebut the new built-up case and/or all other documents brought on record through replication/replica. The 'mandatory requirements' as provided in terms of section 9 of F.1.0., 2001, it is significant to note, in no way can be postponed/or otherwise, rectified subsequently by way of replication/replica and/or through other documents if brought on record with replication [replica].
The opportunity, as having been given to the Plaintiff in terms of subsection (7) of section 10 of F.I.O., 2001 [XLVI of 2001] is obviously a limited opportunity that is to only to the extent of 'reply' in answer to the 'Leave to Defend Application[s]'. On this aspect of the matter, reliance can be placed on the case of Habib Metropolitan Bank Limited V. Abid Nisar [2014 CLD 1367] which reads as under:- "... Compliance of mandatory provision of law is more important than wisdom of individual which negates such compliance. The scheme of sections 9 and 10 of Ordinance 2001 is such that once a suit is filed and leave application is preferred the consequences must follow as the scheme of Ordinance 2001 does not provide filling up of lacuna at later stage and hence not curable. "
26. Otherwise, it will tantamount to defeat the 'intent' and 'object' of the Provisions of F.I.O., 2001 which Ordinance by itself besides, being a special law, the Provisions thereof also override all other laws and as such, need to be strictly complied with. Moreover, the case built-up and documents brought on through replication, if given weight then this will also be against the concept of a 'fair trial' and 'due process' as mandated by Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973. The Provisions of Ordinance, 2001, nevertheless, need strict compliance from the very inception and cannot be left at the whims and sweet will of the Financial Institution to cover up the left over lacuna and shortcomings as per its' will at the stage of filing of replication [replica].
27. Reliance on the aforesaid aspect of the matter can also be placed on the case of Appollo Textile Mill Ltd. v. Soneri Bank Ltd. [supra] wherein, the Hon'ble Supreme Court of Pakistan while, dilating upon the 'mandatory nature' of the provisions of F.I.O., 2001 [Ordinance No,XLVI of 2001] , and adverse consequences thereof on account of non-fulfillment the provisions thereof has observed/held as follows:- "18. The Financial Institutions (Recovery of Finances) Ordinance, 2001 i.e, is a special law. It provides a special procedure for the banking suits. The provisions of the Ordinance, 2001 under section 4 thereof override all other laws. The provisions contained in the said Sections require strict compliance. Non-compliance therewith attract as above referred, consequences of refection of leave petition along with decree etc. Etc. ' Applying all the settled and well known principles to determine the mandatory construction of a provision of law, the said provisions cannot but be held to be mandatory. This Court in the case of 'Niaz Muhammad v. Fazal Raqib' (PLD 1974 SC 134) held that:-- "It is true that no universal rule can be laid down for the construction of statutes as to whether mandatory enactments shall be considered directory only or obligatory With an implied nullification for disobedience. Ills the duty of the Courts to try to get at the real intention of the legislature, by carefully attending to the whole scope of the statute to be construed. As a general rule however, a statue is understood to be directory when it contains matter merely of direction, but not when those directions are followed up by an express provision that, in default of following them, the facts shall be null and void. To put it differently, if the Act is directory, its disobedience does not entail any invalidity: if the Act is mandatory disobedience entails serious legal consequences amounting to the invalidity of the act done in disobedience to the provision".
[Underlining is mine]
21. The similarity of the provisions legislated in sections 9 and 10 ibid as discussed above leads to identical consequences in the absence of the demanded Accounts and the documents. Suit of the plaintiff institution will be rejectable while de endants' leave petition will be ex osed to rejection etc. A Plaintiff institution may be rendered unable or deficient in appropriately setting up its answers to the accounts, disputed amounts and facts of the defendant in reply to the leave application as per section 10(8) ibid. And that in the absence of the requisite accounts and the facts etc. In defence filed by a 'defendant in the leave petition, a plaintiff will remain unaware of the admitted or denied or disputed accounts and facts of the defendants, to adequately, seriously and reasonably pursue the suit and its trial. This will obviously defeat the intent and the object of the provided provisions of The Financial Institutions (Recovery of Finances) Ordinance, 2001). "
[Emphasis supplied]
28. Mr. Salman J. Mirza, learned counsel for the Defendants also seriously objected to the 'certificate' appears on the 'statement of account' and argued in vehemence that the said 'certificate' ex-facie fell short of the necessary 'ingredients' as required under subsection (8) of section 2 of Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891]. Per learned counsel the so- called 'statement of account' placed on record, apart from being not a 'statement of account' but a 'recovery certificate' has also not been certified by an official as contemplated under section 2(8) of the Bankers' Books Evidence Act, 1891. To properly understand the contention of Mr. Salman J.
Mirza, section 2(8) of Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891] needs to be reproduced herein below:- 2(8) "certified copy" means a copy of any entry in the books of a bank together with a certificate written at the foot of such copy that it is true copy of such entry, that such entry is continued in one of the ordinary books of the bank and was made in the usual and ordinary course of business and that such book is still in the custody of the bank, such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title. [Underlining is mine]
29. From perusal of section 2(8) of Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891], it is quite clear that a 'certificate given at the foot of a 'statement of account' so as to make it a 'certified copy' of 'statement of account' must state the requisite ingredients as follows:-
(1) it is true copy of the such entry,
(ii) such entry is contained in one of the ordinary's books of bank,
(iii) it was made in the usual and ordinary course of business,
(iv) such book is still in the custody of the bank,
(v) it must be dated; and
(vi) subscribed by the principal accountant or manager of the bank with his name and official title.
30. Now to see and judge whether the 'statement of account' [Annexure 'E-3'] with the plaint has been duly certified as required in terms of subsection (8) of section 2 of Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891], as vehemently contended by Mr. Aijaz Hussain Shirazi, learned counsel for the Plaintiff or the case is otherwise, as argued by Mr. Salman J. Mirza, learned counsel, for the Defendants in contra. To see whether the 'certificate' given on the so-called statement of account [Annexure E-3 to the plaint] possesses the requisite ingredients as per section 2[8], of Bankers'
Books Evidence Act, 1891 [Act No,XVIII of 1891] or not, the 'certificate' given and appears on the 'statement of account' needs to be reproduced here below:- ' Certified that the above is true copy of the entries made in the ordinary course of business in the account of Chenab Limited. In our Ledgers which are ordinary Books of our Bank and are still in our possession. "
31. The above 'certificate' in juxtaposition's comparison would show that the same besides 'un- dated' does not bear the 'name' and 'official title' of Subscriber i.e, Principal Accountant or Manager of the Bank. For the purposes of subsection (2) of section 9 of F.I.O., 2001 [XLVI of 2001], it is needless to say, the word 'Bank' must and of I course, can be read as meaning the 'Financial Institution' and 'Principal Accountant' as meaning 'Chief Financial Officer'. In support of this proposition, Reliance can be placed on the case of Soneri Bank Limited v. Messrs Compass Trading Corporation (Pvt.)
Ltd. Through Director/Chief Executive and 3 others [2012 CLD 1302] wherein on the above aspect of the matter it was held/observed as follows:- "30. ... For purposes of section 9(2) of the 2001 Ordinance, the word "bank" must of course be read as meaning 'financial institution". Equally, the term "principal accountant" can, in light of the principle of interpretation that a statute should be regarded as "always speaking" and its interpretation, adapted to meet ever-changing conditions, be regarded as including a modern day equivalent, such as a chief financial officer... "
32. Moreover, the signatures appear on the 'rubber stamp' affixed on each page of the so-called 'statement of account [annexed with plaint and replica] if, are tallied with the signatures[s], appear on the 'plaint', then one can conveniently see and conclude that these are the signatures of Khurram Faizab Khan son of Muhammad Faizab Khan who per averments is the duly constituted 'sub-attorney' of the Plaintiffs Institution through whom the instant suit inter alia for recovery of Rs,191,190,376/- has been filed. The 'sub-power of Attorney' in favour of the aforesaid officer, no doubt, has been duly signed and executed by 'Principal Attorney' viz. Agha Ahmed Shah son of Agha Akber Shah in favour of Khurram Faizab Khan son of Muhammad Faizab Khan. The relevant clauses from the 'Sub-Power of Attorney' reads as follows:-
1. To commence, prosecute, continue and defend all actions, suits or legal proceeding whether civil, criminal or revenue including processing to procure or establish the bankruptcy or insolvency of any persons or firm or liquidation or winding up of any company to compromise or refer to arbitration any claims or disputes either in such suits or proceedings otherwise, to appoint Solicitors, Advocates, Pleaders, Vakils and other legal agents, to make, sign, verify execute plaints, petitions, written statements, Memorandum of Appeal, Applications, tabular statements expedient or necessary in the opinion of the Attorney to be made, signed executed, verified, presented or filed.
2. To do generally all acts, deeds and things not herein specifically mentioned which are necessary or requisite or expedient to carry on and manage the business of Pak Oman or which will be necessary or requisite or expedient for the better and more effectively doing and performing the several acts, deeds and things aforesaid or incidental therefore.
33. Bare perusal of the aforesaid clauses of 'SUB-POWER OF ATTORNEY' would show that Mr. Khurram Faizyab son of Muhammad Faizyab has not been specifically authorized to 'certify the statement of account[s]' annexed with plaint and/or the 'replication' [Replica].
' Moreover, the 'statement of account' annexed with plaint and/or replica in the case in hand does not fall fit in the definition of a statement of account as defined in the 'Encyclopedia of Banking of Finance' by Gelmn G. Maunn F.L. Garcia and Charles J. According to which definition, a statement of account is a continuous daily posted record showing in detail all 'debits', 'credits' and 'balance' as of the close of the period, usually one month. The 'statement of account' is rendered by a Commercial Bank, Broker, or other business to its customeRs, These accounts give 'dates' and 'descriptions' and permit the customer to verify the Bank's record with his own. If difference occurs, they can then be investigated when the customer reports back through the reconcilement blank usually enclosed with the statement. The 'statement of account' as the case in hand is however, does not qualifying to be called a 'statement of account' if read in juxtaposition of the definition of a statement of account.
34. Ex-facie, on the record of the instant suit there is no valid and proper 'statement of account' which can be said as duly 'certified' in terms of section 2[8] of Bankers' Book Evidence Act, 1891 [Act No,XVIII of 1891] on the basis thereof the Defendants herein can be charged with any liability[ies] or otherwise such copy of statement of account can be received as prima facie proofs/evidence of the entries in the statement of account. At this juncture, reference can be made to the 'preamble' of the Bankers' Books Evidence Act, 1891 [Act XVIII of 1891] which reads as follows:- "An Act to amend the Law of Evidence with respect of Banker's Books.
' Whereas it is expedient to amend the Law of Evidence with respect to Bankers Books. It is hereby enacted as follows: -
1. Scope. The object of the Act is to render entries in bankers' books admissible in evidence and to enable copies of the entries to be sued instead of compelling the Bank to produce the original entries. Such a copy must be received as prima facie evidence not only of the existence of such entries but also of the matters, transactions and accounts therein recorded. " [Underlining is mine].
35. Preamble, needless to say, is a gateway to understand an Act and always it is used as a key to interpret the provisions of an Act which in the case in hand is Bankers' Books Evidence Act, 1891.
From the preamble of the Bankers' Books Evidence Act [Act No,XVIII of 1891], it is quite evident, that the object of Act was to render the entries in Bankers' Books as admissible in evidence only by producing copies of such entries instead of producing the original entries contained in ledgers/Book of Accounts. In view of this position and as to attach 'presumption of truth' to such entries of a statement of account it must be properly 'certified' in terms of section 2(8) of Bankers'
Books Evidence Act, 1891 [Act No,XVIII of 18911 The entries in a 'statement of account' may loose the presumption of truth if all or any of the entries are/is denied specifically by pin-pointing the same.
On the record if, however, the liability is admitted otherwise, by Customer[s]/Borrower[s] then, of course, this situation would change/not absolutely applicable and, of course, in such like situation suit can be decreed on the basis of admission of liability but this, however, would be subject to the fulfillment of requirement of section 9(3) of F.I.O., 2001 [XLVI of 20011. Section 4 of the Bankers' Books Evidence Act, 1891 being relevant reads as follows:- "4. Mode of proof of entries in bankers' books.---Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as the original entry itself is now by law admissible, but not further or otherwise. " [Underlining is mine]
36. From the perusal of the 'preamble' of the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 18911 the 'intent' and 'purpose' of amending the law of evidence is quite clear. The changes thus brought through Section 4 of the Bankers' Boas Evidence Act, 1891, which section itself however, is subject to the provision of Bankers' Books Evidence Act 1891, attaches 'presumption of truth' to entries of a duly 'certified statement of account'. The effect and scope of section 4 of Bankers' Books Evidence Act, 1981 [XVIII of 1891] came-up for consideration in the case of Muhammad Siddiqui Muhammad and another v. Austrilasia Book Limited [PLD 1966 SC 684 Rel. Pg 698], wherein, the apex Court has observed to the extent and effect as follows:- "It will be observed that all that this section says is that the certified copy shall be prima facie evidence of the existence of such an entry in the books of the bank and shall be admitted as evidence of the matters, transactions and accounts therein recorded to the same extent as the original entry itself is now by law admissible, but no further or otherwise. It does not purport, therefore, to give the certified copy any greater efficacy than the original itself. It merely provides a simplified mode of proof of the original entry, provided the original entry itself is relevant to the enquiry or was admissible under the law prevailing in 1891. The Evidence Act, which was enacted in 1872, was a law applicable on the date of the enactment of the Bankers Books Evidence Act, and it clearly governed the proof of the original entry. If under that Act the original entry was not by itself sufficient to charge a person with liability the certification of that entry under the latter Act could not make it so. We must not also confuse between admissibility in evidence and sufficiency to charge with liability. It is with the latter that we are concerned here and this is not dealt with by the Bankers' Books Evidence Act. " [Underlining is mine].
37. Mr. Salman J. Mirza further argued that the plaint as framed and filed is liable to be rejected straight away as the Plaintiffs Institution has badly failed to fulfill the 'mandatory requirements' of subsection (3) of section 9 of F.I.O., 2001 [XLVI of 2001] as well. Per learned counsel, a Defendant if, fails to fulfill the 'mandatory requirements' of subsections [3], [4] and [5] of section 10 of F.I.O., 2001, then, no doubt, in such like situation, the Leave to Defend Application filed on behalf of a Defendant shall be rejected in terms of subsection (6) of section 10, F.1.0., 2001 unless the Defendant discloses, 'sufficient cause' for his inability to comply with any such requirement. Being relevant subsections [1]; [2], [3], [4], [5], [6], [7], [8] of section 10 of F.I.O., 2001 [Ordinance No,XLVI of 2001] are reproduced herein below:- "10. Leave to defend.--(1) In any case in which the summons has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided to defend the same; and in default of his doing so, the allegations of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Banking Court may require in the interests of justice.
(2) The defendant shall file the application for leave to defend within thirty days of the date of first service by any one of the modes laid down in subsection (5) of section 9: Provided that where service has been validly effected only through publication in the newspapers, the Banking Court may extend the time for filing an application for leave to defend if satisfied that the defendant did not have knowledge thereof
(3) The application for leave to defend shall be in the form of a written statement, and shall contain a summary of the substantial questions of law as well as fact in respect of which, in the opinion of the defendant, evidence needs to be recorded.
(4) In the case of a suit for recovery instituted by financial institution the application for leave to defend shall also specifically state the following:-
(a) the amount of finance availed by the defendant ,from the financial institution; the amount paid by the defendant to the financial institution and the dates of payments;
(b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution up to the date of institution of the suit;
(c) the amounts of finance and other amount crediting to the finance payable by the defendant to the financial institution up to the date of institution of the suit;
(d) the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof. Explanation. --For the purposes of clause (b) any payment made to a financial institution by a customer in respect of a finance shall be appropriated first against other amounts relating to the finance. And the balance, if any, against the principal amount of the finance.
(5) The application for leave to defend shall be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him,
(6) An application for leave to defend which does not comply with the requirements of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement.
(7) The plaintiff shall be given an opportunity of filing a reply to the application for leave to defend, in the form of a replication.
(8) Subject to section 11, the Banking Court; shall grant the defendant leave to defend the suit if on consideration of the contents of the plaint, the application for leave to defend and the reply thereto it is of the view that substantial questions of law or fact have been raised in respect of which evidence needs to be recorded. [Underlining is mine].
(11)...
(12)...
38. Both the Financial Institution and 'customer' under sections 9(3) and 10(4) respectively have identical statutory obligations to plead and state clearly the 'finances availed' by a defendant, 'repayments' made by him, the dates thereof, and the amounts of finance repayable by such defendant. A Defendant besides, has also been saddled with further responsibility to also specify the 'amounts disputed' by him and facts in support thereof. A defending 'customer' has thus been made responsible to also put forward a definite case in response and as required in terms of sections 10(3), (4) and (5) of F.I.O., 2001 [XLVI of 2001]. Moreover, a Defendant is also required to compulsorily plead in his Leave to Defend Application his/its' accounts and the facts regarding amounts if, disputed as not repayable by him to the Plaintiff. In terms of subsection (8) of section 10 and subject to subsection (11), Leave to Defend the suit to a Defendant shall be granted on the consideration of the 'contents' of plaint, Leave to Defend Application and Replication Replical if, Banking Court is of the view that 'substantial questions' of law or fact have been raised and in respect thereof evidence needs to be recorded.
39. The scope of a Banking suit as evident from perusal of the aforesaid provisions of F.I.O., 2001 has been well defined. The controversies in view of the provisions of sections 9 and 10 of F.I.O., 2001 [Ordinance No,XLVI of 2001] have also been restricted/confined to the 'availed', 'claimed', 'disputed amounts' and facts in support thereof. The 'controversial details', the 'unnecessary facts', 'time for the trial' of the 'Hs' has also been curtailed and specified. The trial of 'Hs' in the Banking suit has thus been restricted to the 'quantum of amounts' claimed and 'disputed'. All this shows that a Banking suit in actual facts is a suit on accounts based on 'credit', 'debit' and balance entries maintained and ledgered in the Books of Accounts.
40. Conversely, Mr. Aijaz Hussain Sheerazi, learned counsel for the Plaintiffs Institution forcefully denied the contention of Mr. Salman J. Mirza, learned counsel for the Defendants vis-a-vis rejection of the plaint much-less for want of the 'mandatory requirements' in terms of section 9(2)(3) of F.I.O., 2001. Per Mr. Shirazi, the objection raised to the effect is not only 'mis-conceived' but also 'mis- leading' as the Plaintiffs Institution has already filed the 'break-ups of liability[ies]' along with with the plaint and as such the 'mandatory requirements' of section 9(2) and (3) under circumstances shall be deemed as having been duly fulfilled. According to Mr. Shirazi, the plaint on this score alone cannot be 'rejected' as has been emphatically urged by Mr. Salman J. Mirza learned counsel for the Defendants. Mr. Aijaz Hussain Shirazi, further argued that all the above Leave-to-Defend Applications filed by the Defendants herein are also short of the 'requisite mandatory ingredients' as provided in subsection 9(3)(4)(5) of F.I.O. Of 2001 as such instead of plaint the Leave-to-Defend Applications are obviously liable to be rejected. The suit filed by the Plaintiffs Institution, per Mr. Aijaz Hussain Shirazi, deserves to be decreed in terms of section 10(11) of F.I.O., 2001. Needless to say, under law things should be done as they are required under law to be done or otherwise, not to be done at all.
41. Manifestly, and as argued by the learned counsel for the parties the provisions of sections 9 and 10 of F.I.O., 2001 are not only mandatory but also it oblige the parties to a suit to compulsorily plead and state the nature of accounts etc in terms thereof In case of 'noncompliance', both the parties, however, in my view, have to face the identical legal consequences. The provisions of sections 9 and 10 of F.I.O., 2001 'it is significant to note, came-up under scrutiny/discussion in the case of Bankers' Equity Ltd. And 5 others v. Messrs Bentonite Pakistan Ltd. Through Chief Executive and 7 others [2010 CLD 651], wherein the Hon'ble Division Bench of Lahore High Court, Lahore while, upholding the order passed by a Hon'ble Single Judge of Lahore High Court, Lahore whereby, the Hon'ble Single Judge had rejected the plaint after rejection of the Leave-to-Defend Application on its own motion/examination of the plaint simultaneously. The relevant paras therefrom are reproduced as under:-
18. The contention of the learned counsel for the appellants that after the dismissal of the petition for leave to appear by the Judge Banking Court, the suit of the plaintiffs should have been decreed automatically is not correct. The Courts of law are under a legal obligation to apply their mind and correct law notwithstanding the fact that defendant in the suit has appeared or not before the Courts during the proceedings. Reliance is placed upon judgment reported as Haji All Khan and Company, Abbotabad v. Messrs Allied Bank of Pakistan Limited, Abbotabad PLD 1995 SC 362.
19. Respectfully following the case-law already holding them field, this Court is of the confirmed opinion that the statement of facts narrating the accounts given in paragraph No,18 of the plaint and reflected in the documents annexed with the plaint have been held to be not a statement of account as visualized by the provisions of Bankers' Books Evidence Act, 1891 and therefore the plaint in the suit instituted by the appellants was not supported by the statement of accounts as per provisions of section 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which provisions are held in the earlier judgments passed by the two Division Benches of this Court to be mandatory. The plaint has, therefore been rightly rejected by the learned Judge Banking Court/Single Judge of this Court vide impugned judgment dated 13-3-2002.
20. It shall be further important to submit that a rejection of plaint under Order VII, rule 11 of C.P.C.
Does not preclude a plaintiff from instituting a subsequent suit on the basis of same cause of action and which provision is contained in Order VII, rule, 13 of C.P.C., which is reproduced as under:- "Order VII, Rule 13 of C.P.C. When rejection of plaint does not preclude presentation of fresh plaint:- -The rejection of the plaint on any of the grounds hereinbefore mentioned shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action. "
42. No doubt, being a necessity of law this is also in the interest of litigants that an incompetent suit should not be allowed to continue further and encumber the legal proceedings in a futile manner.
A 'still born suit', it is needless to say, is in the interest of parties to be buried R at its' inception and that too without formal funeral ceremony. From the case of S.M. Shafi Ahmed Zaidi through Legal heirs v. Malik Hassan Ali Khan (Mom) through Legal Heirs [2002 SCMR 338], relevant observations of the apex Court on this aspect of the matter read as follows:- "14. Besides, averments made in the plaint other material available on record which on its own strength is legally sufficient to completely refute the claim of the plaintiff can also be looked into for the purpose of rejection of the plaint. It does not necessarily mean that the other material shall be taken as conclusive proof of the facts stated therein, but it actually moderates that other material on its own intrinsic value be considered along with the averments made in the plaint."
17. ...It is the requirement of law that incompetent suit shall be buried at its inception. It is in the interest of the litigating parties and the Judicial institution itself. The parties are saved with their time and unnecessary expenses and the Courts get more time to devote it for the genuine causes...
43. Moreover, in view of the dictum laid down in the Appollol Textile Mill Ltd. v. Soneri Bank Ltd. Both the plaint and the Leave-to-Defend Application[s] are liable to be rejected for want of 'mandatory requirements' of sections 9 and 10 of F.I.O., 2001 [Ordinance XLVI of 2001]. Para 21 being relevant therefrom reads as follows:-
21. The similarity of the provisions legislated in sections 9 and 10 ibid, as discussed above, leads to identical consequences in the absence of the demanded Accounts and the documents. Suit of the plaintiff institution will be rejectable while defendants' leave petition will be exposed to rejection etc. A Plaintiff institution may be rendered unable or deficient in oppropriately setting up its answers to the accounts, disputed amounts and facts of the defendant in reply to the leave application as per section 10(8) ibid. And that in the absence of the requisite accounts and the facts etc. In defence filed by a defendant in the leave petition, a plaintiff will remain unaware of the admitted or denied or disputed accounts and facts of the defendants, to adequately, seriously and reasonably pursue the suit and its trial. This will obviously defeat the intent and the object of the provided provisions of The Financial Institutions (Recovery of Finances) (Ordinance, 2001). "
[Underlining is mine].
44. As far as the question of 'territorial jurisdiction' raised by Mr. Salman J. Mirza, learned counsel for the Defendants is concerned, the same, in my view, merits no consideration as admittedly all requests for the availment of the Finance Facilities, its' disbursement/drawdown were sent by the Defendants to the Plaintiff at its' Registered Office' at Karachi. Sanction letter and partial refinancing under LTF-EOP Scheme of the State Bank of Pakistan has also been made at Karachi. The repayments of the overdue amounts have also been made by Defendant No,1 in its' account maintained at Karachi. Besides, the Defendants have also failed to deposit the overdue outstanding amount in the aforesaid account at Karachi. The causes of action' since have arisen at Karachi, therefore, this Hon'ble Court has jurisdiction to entertain the instant suit". Needless to say, even a fraction of cause of action gives 'territorial jurisdiction' to this Court to decide the lis in question. In the present case, it is also clear from the record that the Defendants have also committed 'default' at Karachi that is to say within the 'territorial jurisdiction' of this Court. Moreover, the Plaintiff s registered head office is also situated at Karachi. Under the narrated facts and circumstances of the case and in view of the causes of action arisen at Karachi, this Court has territorial jurisdiction over the lis involved in the case in hand.
45. With regard to aforesaid aspect of the matter reliance can be placed on the case of Regional Development Finance Corporation v. Haji Gul Hassan and another [2009 SCMR 706] wherein it was observed as under:- '4. No doubt, under sub-clause (c) of section 20, the Court within the territorial jurisdiction of .Which the cause of action had arisen also would have the jurisdiction to adjudicate upon the matter yet sub-clauses (a) and (b) equally confer jurisdiction in the Court within the local limits of whose jurisdiction, the defendant resides. The plaintiff has chosen the first option which was not at all illegal.
46. The case laws cited by Salman J. Mirza, learned counsel for the Defendants i.e, Bankers' Equity Ltd. And 5 others v. Messrs Bentonite Pakistan Ltd. Through Chief Executive and 7 others [2010 CLD 651], Elbow Room and another v. MC Bank Limited [2014 CLD 985 (D.B.)], Messrs Dhrala Oil Mills through Partners/Guarantors and 4 others v. The Bank of Punjab through Branch Manager [2014 CLD 153], Habib Metropolitan Bank Limited v. Abid Nisar [2014 CLD 1367], Soneri Bank Limited v.
Messrs Compass Trading Corporation (Pvt.) Ltd. Through Director/Chief Executive and 3 others [2012 CLD 1302], Pakistan Kuwait Investment Company (Pvt.) Ltd through Authorized Representative v. Messrs Active Apparels International and 6 others [2012 CLD 1036], Messrs Bank Alfalah Ltd. v. The Presiding Officer and another [2014 CLD 160] besides, relevant are well applicable under the facts and circumstances of the case. While, the case laws i.e, Bela Automotives Ltd. v. Habib Bank Ltd.
[2005 CLD 893], Civil Aviation Authority, Karachi v. Messrs Data International (Data Baggage House), Karachi and 2 others [PLD 1993 Karachi 700] cited by Mr. Aijaz Hussain Shirazi, learned counsel for the Plaintiff besides, being irrelevant are distinguishable under the facts and circumstances of the present case.
47. For all the above, I have come to the conclusion that both the parties to the suit have badly failed to fulfill the 'mandatory requirements' as per provisions of sections 9 and 10 of F.I.O., 2001 [Ordinance XLVI of 20011 as such not only the 'leave-to-defend applications' filed by the Defendants are rejectable but the plaint as well.
48. Resultantly, besides rejection the LEAVE-TO-Defend Applications, the plaint is also rejected.
Needless to say, the rejection of plaint under Order VII, Rule 11, C.P.C. Does not preclude a Plaintiff from presentation of a fresh plaint in respect of the same cause of action.
Plaint rejected.