' This is an appeal filed under section 22 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 (the Ordinance) against judgment and decree dated 04.05.2011 whereby the suit filed by the appellant bank was ordered to be dismissed.
2. Brief facts of the case are that the appellant bank filed a suit (suit No.280 of 2001) against respondents Nos.1 and 2 for the recovery of Rs. 553,085 on account of a loan granted under Prime Minister Self Employment Scheme. The said loan was repayable in seven years in 72 installments with one year grace period. A decree was passed in the said suit by the banking court on 31.01.2002 in the sum of Rs. 189,127/-representing the defaulted amount of 23 installments, which had become due and payable by the time the said suit was filed. It was further held in the said judgment as under: ' Since the decree has been passed with regard to the default installments, therefore, the defendants shall keep on depositing future installments of the loan as per terms and conditions of the agreement. The plaintiff shall be entitled to recover cost of funds at the rate of Rs. 8,612 w.e.f.
01.02.2002 till realization for the whole decretal amount. Costs to follow. (emphasis supplied)
3. It appears that the appellant bank did not file the execution of the decree but filed another suit (Suit No.388 of 2008) on 10.09.2008 against respondents Nos.1 and 2 for the recovery of Rs.867,863/- on the same cause of action as was alleged in the earlier suit without mentioning the fact that earlier suit had been partially decreed on 31.01.2002. Respondents Nos.1 and 2 filed their application for leave to defend and, inter alia, took the plea res judicata. After hearing the parties at the leave stage, the banking court vide order dated 04.05.2011 dismissed the suit filed by the appellant bank on the ground that the decree in the first suit had attained finality and., therefore, the second suit on the same cause of action was barred.
4. After hearing the arguments of the learned counsel for the parties, it is clear that decree dated 04.05.2011 passed by the banking court cannot be sustained. The banking court in the first place could not have dismissed the suit filed by the appellant at the leave stage. The proper course to be adopted by the banking court was to grant leave to defend the suit to the respondents and then to frame issues for its decision thereon. Furthermore, the judgment in the first suit by the banking court directed the respondents to keep on depositing the A installment amount of the loan as per terms of the agreement. It needs to be thrashed out as to whether the said direction furnished a fresh cause of action to the appellant bank as prima facie the agreement and the balance installment amounts were kept alive by the said direction. It may also be noted that the banking court did not disclose under which provision of law the second suit filed by the appellant bank was time barred. We do not propose to dilate on this aspect of the matter lest it would prejudice the case of either of the parties before the banking court.
5. In the circumstances, this appeal is allowed and order and decree dated 04.05.2011 is set aside with the result that the suit No.388 of 2008 filed by the appellant bank shall be deemed to be pending before the banking court which shall be decided by it after granting leave to defend the suit to the respondents.