MUHAMMAD SAJID MEHMOOD SETHI, J.- Through instant appeal, order dated 24.11.2016 passed by learned Judge Banking Court, Bahawalpur , has been assailed, whereby application for setting aside ex-parte judgment and decree dated 08.07.2015, filed by appellants was dismissed.
2. Brief facts of the case are that respondent-bank filed a suit, under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter "FIO, 2001" ) for recovery of Rs. 19,495,823.69 against appellants and others, which was contest ed by appellants by filing application for leave to defend the suit whereas other defendants were proceeded against ex-parte owing to their non-appe arance. On 16.04.2014, leave application of appellants was dismissed due to non-prosecution. Appellants filed application for restoration of their leave application on same day, which was resisted by respondent-bank by filing reply . Subsequently , said restoration application was also dismissed for non-prosecution on 01.07.2015. Learned Judge Banking Court, after recording ex-parte evidence of respondent-bank, ex-parte decreed the suit vide judgment and decree dated 08.07.2015. Appellants filed application under Section 12 of the FIO, 2001 read with Section 12(2) and Order IX Rule 13 of the Code of Civil Procedure, 1908, for setting aside said ex-parte judgm ent and decree on 28.07.2015, but said application was dismissed vide order dated 24.11.2016. Through instant appeal, said order has been assailed.
3. Learned counsel for appellants submit s that mandatory requirements of law were not fulfilled while filing suit by respondent-bank. He adds that the Court could not have passed the impugned order without considering the contents of the application. He further submits that if application was not maintainable under Section 12 of the FIO, 2001, the Court should have considered the application having been moved under Section 12(2) and Order IX Rule 13 of C.P.C. instead of holding it not maintainable under the law. He contends that leave application was not decided on merits, therefore, impugned order is void ab-initio and not sustainable in the eye of law. In support of his contentions, he has placed reliance upon Messrs Awan Electronics (Pvt.) Limited through Chief Executive and 2 others v. National Bank of Pakistan through Branch Manager and another (2005 CLD 1660 ), Nasim Nizami v.
Habib Bank Limited (2006 CLD 1213 ), Abid Aziz Khan and 2 others v. Bank of Punjab through Branch Manager (2007 CLD 997), Pak American Commercial (Pvt.) Ltd. through Director v. Humayoun Latif and 7 others (PLD 2008 Karachi 540), United Bank Limited v. Mehmood Ilyas Khan and another (2012 CLD 1372 ) and Crescent Jute Products v . A.D.J., Faisalabad & 2 others (PLJ 2015 Lahore 800 ).
4. On the other hand, learned counsel for respondent-bank defends the impugned order and submits that conduct of appellants was contumacious as their leave application as well as restoration application was dismissed due to non-prosecution. He further submits that after passing of decree the only remedy available with the appellants was to file appeal under Section 22 of the FIO, 2001. He has relied upon Tariq Mehmood v. Atlas Bank Ltd. through Authorized Agent (2015 CLD 959 ).
5. Arguments heard. Record perused.
6. The operative part of impugned order is reproduced hereunder:- "6. From perusal of petition as well as record attached with the petition in hand it is evident that the petitioners previous counsel has not submitted his affidavit in support of petitioners contention that due to busy in High Court regarding disposal of old cases he could not appear before the court to pursue the suit which resulted into dismissal of their application and decree. Moreover, perusal of the petition it is evident that specific date of knowledge of dismissal of application for restoration of parent application for restoration of application for leave to defend the suit and ex parte proceedings have not been mentioned by the petitioners in this petition and name of the person or official of the court through whom they came to know about dismissal of their petition and passing of decree has not been given in the petition. It is important to note that the defendant No.2 has mentioned in the application that through bailiff of the court he came to know about decree of their case when he appeared in the court in consequences of execution proceedings of another suit whereas the defendant No.3 has not given date and time regarding getting knowledge of this decree. It means that the defendant No.3 had knowledge of proceedings of the suit dismissal of application for leave to defend the suit and application for restoration of application for leave to PLA. She intentionally did not appear in court. In this case the defendants/petitioners had appeared before this court and filed application leave to defend the suit which was dismissed and thereafter decree was passed against the petitioners. The application u/s 12 of Financial Institution Ordinance, 2001 is therefore, not maintainable in the present case as it has not been the case of the petitioners that summons were not duly served upon them and on account of such fact they could not appear and file application for leave to defend the suit u/s 10 of Financial Institution Ordinance 2001. After passing of order and decree by this court the only remedy available to the petitioners was to file an appeal u/s 22 of Financial Institution Ordinance 2001.
Moreover , the petition for setting aside the decree is also not maintainable in view of section 27 of the Financial Institution Ordinance 2001. In the light of above discussion the application in hand is hereby dismissed."
7. The above reproduced part of the impugned order shows that learned Judge Banking Court proceeded to dismiss the application seeking setting aside of ex-parte judgment and decree on the ground that appellants had knowledge of the proceedings but intentionally did not appear before the Court and that no date and time regarding getting alleged knowledge of the decree had been given by them. It was further observed that only remedy available with appellants was to file appeal under Section 22 of the FIO, 2001, therefore, application in question was not competent.
8. Under the law, once leave application was filed then the Banking Court was under a legal duty to consider the same regardless of non-appearance of appellants and their counsel. As per Section 10(8) of the FIO, 2001, Banking Court is required to read the contents of the plaint, the application for leave to defend the suit, the replication and determine whether any questions of law and fact have been raised, which need recording of evidence. Section 10(9) bestows powers upon the Banking Court, to grant cond itional or unconditional leave to defendant(s). Section 10(11) empowers the Banking Court to reject leave application if it does not fulfill the conditions for the grant of leave and thereafter decree the suit forthwith. After examining the provision of Section 10 of the FIO, 2001, we are of the view that the Banking Court is required to consider and decide leave application on merits and there is no other choice left with the Banking Court. The FIO, 2001, does not envisage dismissal of leave application for non-prosecution and it does not confer any such power upon the Banking Court. Proceeding otherwise than the FIO, 2001, would defeat the intent of legislature, thus, dismissal of leave application due to non- prosecution was without jurisdiction and patently illegal. Reference can be made to the case of Abdul Aziz Khan supra.
Dismissal of leave application must show application of mind by the Court to its contents. The Court is under duty to grant leave if it is satisfied that there was even a single substantial question of law and fact raised therein. The Court while dismissing leave application had not even considered the same, therefore, impugned order as well as ex-parte decree was without jurisdiction and liable to be set-aside under Section 12(2) of C.P.C. Reliance in this regard is placed upon the case of Mehmood Ilyas Khan supra.
9. It would be relevant to observe here that substance of relief sought by the appellants was relevant and not the specific provision cited in the application. Where substance of application accorded with a particular provision then the same would be treated thereunder . Learned Judge Banking Court without considering that application was not only filed under Section 12 of the FIO, 2001 but also under Section 12(2) as well as Order IX Rule 13 CPC, wrongly proceeded to declare the same as not maintainable. Needless to observe here that appellants on showing 'sufficient cause' for their non-appearance could seek setting aside of ex-parte decree under Order IX Rule 13 C.P.C. We are not convinced by the argument of learned counsel for respondent that non-appearance of appellants' counsel was deliberate and thus entail the consequences of ex-parte decree. However , we find that the appellants were bit negligent in pursuing their leave application as well as subsequent restoration application. But, for such negligence, award of ex-parte decree of massive amount would be too harsh. Even if provisions of Section 12 of the FIO, 2001 were not applicable, the Court could have exercised its powe rs either under Section 12(2) or Order IX Rule 13 CPC, which by virtue of Section 7(2) of the FIO, 2001, were duly applicable.
10. So far as limitation for second application for restoration of parent application is concerned, suffice it to say that though no express provision for period of limitation for such application is provided in the Limitation Act, 1908, but in all such like cases Article 181 would be applicable, as this Article is a residuary Article which applies to all applications for which no express provision is made in the Limitation Act and it provides a period of three years for filing such application. In the present case, if date of knowledge is assumed to be the date on which restoration application was dismissed even then application in question was within time. Reference can be made to the case of Nasim Nizami supra. Even otherwise, decree has also been challenged by moving application under Section 12(2) C.P.C. which can be filed within 3 years as provided under Article 181 of the Limitation Act, therefore, non-mentioning of date and time regarding getting knowledge of ex-parte decree would be of no effect against the applicant so far the application is filed within the time prescribed by law.
11. So far as the case of Tariq Mehmood supra, relied upon by respondent-bank, is concerned, suffice it to say that in that judgment learned Division Bench of this Court has held that once leave application is filed, application under Section 12 of the FIO, 2001 was not maintainable, however, it was nowhere held that application under Section 12(2) read with Order IX Rule 13 of C.P.C. would not be sustainable. It has been held by this Court in the cases of Messrs Awan Electronics (Pvt.) Limited and Mehmood Ilyas Khan supra, that application under the provisions of Section 12(2) and Order IX Rule 13 C.P.C. was maintainable in circumstances.
12. The bar of Section 27 of the FIO, 2001 is not attracted in the case of application filed under Order IX Rule 9 CPC or Section 12(2) CPC. Section 27 of the FIO, 2001 provides that "no court or any other authority " subject to Section 22 of to the Ordinance, has jurisdiction to revise, review , or call in quest ion any proceedings, judgment, decree or order of Banking Court. Meaning thereby , inherent jurisdiction of Banking Court has not been ousted by Section 27. There is no specific provision available in FIO 2001 debarring the application under Order IX Rule 9 CPC or application under Section 12(2) CPC. Reference can be made to Nisar Ahmed Afzal v. Muslim Commercial Bank (2014 CLD 390), P. Q. Chemicals v. A. W. Brothers (2005 CLD 169) and Khairpur Textile Mills Ltd. v. National Bank of Pakistan (2003 CLD 326 ).
13. It would be relevant to observe here that when basic order is void ab initio, the whole series of subsequent orders, together with the superstructure of rights and obligations built upon them must fall to the ground because such orders have no foundation being based on void order. It is also well-established that pure question of law can be raised at any stage of proceedings. In this regard, reference can be made to Talib Hussain and others v. Member, Board of Revenue and others (2003 SCMR 549), Mustafa Lakhani v. Pakistan Defense Officers Housing Authority, Karachi (2006 SCJ 702), Almas Ahmad Fiaz v. Secretary Government of the Punjab Housing and Physical Planning Development, Lahore and another (2006 SCMR 783), Moulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others (PLD 2008 Supreme Court 663), Abdul Hameed v.
Deputy Commissioner / Administrator, Zila Council Mandi Bahauddin and 4 others (1997 CLC 540), Muhammad Siddiq v. Ashraf Ali and 3 others (2000 MLD 781), Faisal Jameel v. The State (2007 MLD 355), Secretary Communication and Works Department Government of Balochistan and others v. Dad Baksh and another (2013 CLC 343) and Muhammad Iqbal v. Muhammad Ahmed Ramzani and 2 others (2014 CLC 1392).
In the case of Abdul Hameed supra, this Court made the following observations regarding a void order:- "9. ....................................................... It is firmly settled law that if basic order or an act was void any superstructure based on such void act would automatically fall to the ground and will be of no legal efficacy . This principle has been settled by the Supreme Court in a case reported as Yousaf Ali v. Muhammad Aslam Zia and 2 others (PLD 1958 Supreme Court (Pak.) 104),as such, the confirmation of the auction which was ab initio void and execution of formal agreement were also equally void and of no legal effect, therefore, the Constitutional petition before this Court directly could be filed in respect of such acts and the remedy of appeal or revision, if any, if had not been availed, the same did not adversely affect the maintainability of the Constitutional petition particularly in view of the fact that the Chief Minister himself intervened and had cancelled the lease."
14. In view of above discussion, instant appeal is allowed and impugned order is set-aside. The matter is remitted to learned Judge Banking Court and consequently leave application of the appellants shall be deemed to be pending, and shall be decided afresh strictly in accordance with law, within a period of 30-days. Parties are directed to appear before learned Judge Banking Court, along with copy of this judgment, on 10.04.2017.