This is a petition under Article 9 of the Provisional Constitution Order, 1981, whereby Messrs Shahzad Ice Factory and others, the petitioners, want this Court to declare the order dated 15-8-1981 passed by the learned Special Judge, Banking Court II, Lahore, to be without lawful authority and of no legal effect.
2. The petitioners are defendants in the suit brought by the United Bank Limited, respondent herein, for the recovery of Rs. 17,09,059.68.
3. The suit was filed under the ordinary procedure before the Civil Judge Ist Class, Multan, on 8-12- 1977, and the ordinary summons under section 27, C. P. C. Were issued to the defendants to appear and answer the plaint. The defendants appeared, filed written statement, issues were framed, the parties adduced evidence, arguments were heard and the case was ripe for judgment when the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter called the Ordinance) was promulgated and by virtue of its subsection (4) of section 6, the suit stood transferred to the Special Court, Lahore, established under section 5 of the Ordinance.
4. On receipt of the records, the learned Special Court issued ordinary summons/notices to the petitioners to appear in the Court at Multan on 15-6-1981. It is to be noted that on I 5-6-1981 counsel for the petitioners-- defendants Nos. 1 and 2 appeared but Mst. Zarina defendant-petitioner No., 3 herein, did not appear in spite of substituted service. Learned counsel for petitioners Nos. 1 and 2 promised to file his power of attorney on behalf of the absentee defendant (petitioner No. 3) on the next date, but the learned Judge without passing any order for ex parte proceedings against Mst.
Zarina and without waiting for the proper representation of defendant No. 3 i.e. filing of the power of attorney in-favour of the learned counsel and without any application supported by an affidavit by the defendants Nos. 1 and 2 for leave to defend the suit passed the following order on 15-6-1981 :-
5. Before me, Ch. M. A. Latif Amritsari, learned counsel for the petitioners attacked this order of the Special Court granting leave to defend the suit on payment of the entire amount of Rs. 17,09,059.68.
It is urged before me that the order is illegal, of no legal effect and in any case, in the circumstances, unconditional leave to defend ought to have been granted. Learned counsel raised the following points :-
(i) that the suit having been filed long. Before the promulgation of Banking Companies (Recovery of Loans) Ordinance, the Special Court respondent No. I was not competent to pass the impugned order under Order XXXVII, rule 3, C. P. C. Without first having issued summons in Form 4 of Appendix B under Order XXXVII, rule 2, C. P. C.;
(ii) that the Special Court respondent No. 1 was not competent to pass the impugned order without any application by the defendants ; and
(iii) that in the instant case written statement having already been submitted, issues framed, evidence recorded, case being ripe for judgment, there was thus no occasion to grant leave to defend the suit and the learned Special Judge could easily have avoided the delay by acting on the evidence d1ready recorded by the Court from which the proceedings have been transferred.
6. On the other hand, Mr. M. Sultan Alam, learned counsel for the respondent 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 reason that under section 7 of 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. Reliance is placed on International Food Centre Ltd. v. The United Bank Limited and 2 others 1982 CLC 108
7. 1 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 illegal, passed in excess of jurisdiction, arbitrary, has flouted the provisions of the relevant law and is thus liable to be interfered with for the following reasons :-
(i) it is illegal and passed in excess of jurisdiction because the pre--requisite for the grant of leave to defend the suit i.e. summons in Form 4 of Appendix B should have been issued to enable the defendant to move an application supported by an affidavit as contemplated by rule 3 of Order XXXVII to seek leave to defend the suit, has not been adhered to by the Special Judge. It is to be noted that under rule 2 of Order XXXVII, no other Form has been prescribed so far. Form 4, Appendix B is as follows :--- "SUMMONS IN SUMMARY SUIT ON NEGOTIABLE 'INSTRUMENT (O. XXXVII, R. 2)
(Title)
To (Name, description and place of residence).
Whereas has instituted a suit against you under Order XXXVII of the Code of Civil Procedure, 1908, for Rs.balance of principal and interest due to him as the of aof which a copy is hereto annexed you are hereby summoned to obtain leave from the Court within ten days from the service thereof to appear and defend the suit, and within such time to cause an appearance to be entered for you. In default whereof the plaintiff will be entitled at any time after the expiration of such ten days to obtain a decree for the sum of Rs.And the sum of Rs.For costs together with such interest, if any, from the date of the institution of the suit as the Court may Order.
Leave to appeal may be obtained on any application to the Court supported by affidavit or declaration showing that there is a defence to the suit on the merits, or that it is reasonable that you should be allowed to appear in the suit.
Given under my hand and the seal of the Court, this day of19.
JUDGE."
Order XXXVII, rule 2, C. P. C. Reads as follows :- "(1) All suits upon bills of exchange, hundies or promissory notes, may, in case if plaintiff desires to proceed hereunder, be instituted by presenting a plaint in the form prescribed ; but the summons shall be in Form No. 4 in Appendix B or in such other form as may be from time to time prescribed.
(2) In any case in which the plaint and summons are in such forms, respectively the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend ; and, in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted.
Rule 3 is as follows :- "3.--(1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.
(2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security as the Court thinks fit."
There is no denying that the Banking Companies (Recovery of Loans Ordinance is a special law and was enacted for the purpose of providing a speedy and efficacious method for the recovery of loan advanced by the Bank and for this purpose summary procedure ha been made applicable by subsection (2) of section 7. Under sub-rule (2 of rule 2 of Order XXXVII, C. P. C., the defendant cannot defend the suit unless the leave is granted to him, but I am of the opinion that when special law provides for a special procedure for doing thing in a particular manner such things should be done.
In that manner or not at all, that the procedure is construed to be imperative laid down in rule 2 of Order XXXVII, C. P. C. Are the condition precedent to conferring jurisdiction upon the Court to consider the question of the grant or refusal of leave to defend the suit and that the learned Special Court could grant leave upon the application for leave to defend by the defendant supported by an affidavit and not otherwise.
(ii) on the transfer of case from the Civil Court there were two method open to the Court First.-It could act on the evidence recorded by the civil Court under subsection (5) of section 6 of the Ordinance read with rule 7 of Order XXXVII, C. P. C. Which reads as follows :- "As provided by this Order, the procedure in suits hereunder shall the same as the procedure in suits instituted in the ordinary manner," and after having heard the arguments the Court could easily decide they suit forthwith ; Second-it was open to the Special Court to follow the summary procedure provided in Order XXXVII and in that case the Special Judge should have first acted in accordance with rule 2 of Order XXXVII, C. P. C. And should have issued special summons prescribed in Form 4 to Appendix B which was a condition precedent to conferring jurisdic--tion for an action under rule 3 of that Order and it was all the more necessary to have issued summons in Form 4 Appendix B to enable them to appear and move an application for leave to defend the suit. It is well-recognized principle of law that in case where a Statute provides a procedure for doing a thing in a particular manner that 'thing should be done in that manner and in no other way or it should not be done -t all. Indeed such statute impliedly prohibits doing of a thing in any other manner particularly when the procedure is laid down for taking proceedings before a Special Court where such procedure is construed to be imperative one, as doing of the act under the statute is a condition precedent to conferring jurisdiction upon the Court. 7 he non-compliance of such act in no way can be ignored or dispensed with as it will invalidate the superstructure. It should be noted that written statement had already been filed, evidence recorded, case ripe for judgment. On the transfer of the case the learned Special Court instead of issuing special summons in Form 4 of Appendix B issued ordinary process for the appearance of the defendant and without any application supported by an affidavit as contemplated by rule 3 of Order XXXVII, C. P. C. Passed the impugned order. There is no room for doubt that Order XXXVII, rule 3 contemplates the written application supported by an affidavit.
For the foregoing reasons I am of the opinion that the impugned order having been passed without jurisdiction is illegal.
It is arbitrary because the operative part of the 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 any leave and while granting the leave to defend the Court may impose conditions involving payment into the Court, furnishing Bank guarantee or security etc. As the Court think fit. The trial Court has been given discretion in the matter of imposing the conditions which, undoubtedly, is to be exercised judiciously and not arbitrary and the condition should accord with the situation. If the loan is secured or the defendant b prima facie good use, the Court should grant unconditional leave an if the defendant has only an arguable case the Court may grant leave subject to furnishing security. As no appeal or revision lies against the interlocutory orders, I am of the view that it was all the more necessary that the learned trial Court should pass interlocutory order with care and caution. It should apply its mind to the facts material before it and should see that the conditions imposed are not harsh one and these accord with the situation. I am of the opinion that 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, proposed defence and the propriety of the condition of payment into the Court of the entire amount. 1n this case, unfortunately, I find the impugned order of one sentence i.e. has been passed as a matter of course and has been passed in violation of the principles governing the exercise of judicial discretion.
(iii) it is unwarranted for the reason that it was passed on 15-6- 1981 when Mst. Zarina was not being legally and properly represented. Learned counsel could not represented her without any authority. The that Court either may have proceeded ex parte or should not have Parse the impugned order at all till Mst. Zarina was legally represented.
For the foregoing reasons I am of the opinion that the impugned order is illegal, and has been passed in violation of law and principle governing the exercise of jurisdiction.
8.Learned counsel for the respondent states that in spite of this finding, this Court shall not interfere with the impugned order b because the same is an interlocutory one. In support of this he has placed reliance on Inter-- national Food Centre Ltd. v. The United Bank Limited and ,2 others.
9. I have gone through the judgment and find that the same is based on altogether different facts. I am of the considered opinion that if this Court is satisfied that an interlocutory order suffers from infirmities affecting the jurisdiction of a Court or Tribunal, then it would be failing in its constitutional duties to refuse to interfere and allow the Court or Tribunal to pass illegal orders under the cover of Special Law because once the Court comes to a conclusion that the Court or Tribunal has exceeded jurisdiction by flouting the provisions 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, it would, then be the duty of this Court white sitting in its constitutional duties to strike down such order regardless of the fact that the interference may defeat the legislative intent i.e. a speedy and efficacious method for the recovery of loans advanced 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 which the learned Special Judge acted by passing this order in in suit for the recovery of Rs. 17,09,059.68.
The result is that this 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 a direction to the Special Court to apply its mind to the legal and factual aspect of the matter and decide the suit in accordance with law. No order as to costs.