ABID AZIZ SHEIKH, J. This objection petition under sections 47 and 48 read with order XXI rule 2 of Code of Civil Procedure, 1908 ("CPC") and section 7(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance") has been filed on behalf of judgment debtor company for rejection of titled execution petition.
2. Learned counsel for the applicant/judgment debtor submits that the execution petition is grossly barred by time.
He explained that consent decree was passed on 02.07.1999 whereas executio n was filed on 27.04.201 1. He submits that first execution could be filed within period of three years from the passing of the decree and second execution could be filed within maximum period of six years, hence this execution is liable to be dismissed. He placed reliance on National Bank of Pakistan vs. Gammon of Pakistan Ltd. (2009 CLD 330) and National Bank of Pakistan through S.V.P. SAMG (North) vs. Messrs Taj Textile Mills Ltd. through Chief executive and 4 others (2011 CLD 157). Learned counsel further submits that consent decree dated 02.07.1999 was passed under Banking Companies (Recovery of Loans, Advances, Credit and Finances) Act, 1997 ("Act") whereas execution is filed under the Ordinance which is not maintainable. He further submits that under section 7(6) of the Ordinance, only pending proceedings were to be transferred to the Banking Court under the Ordinance, whereas this execution petition being not pending at relevant time cannot be executed under the provision of the Ordinance but only Civil Court has jurisdiction in the matter. He further submits that after consent decree dated 02.07.1999, parties have entered into fresh agreement dated 10.08.2005 whereby fresh terms and conditions of Demand Finance II (DF II) and Demand Finance III (DF III) were agreed, therefore, the consent decree dated 02.07.1999 has been novated. He further submits that the decree dated 02.07.1999 being already novated, the only remedy available with the decree holder bank is to file fresh suit and not to seek execution of decree.
Reliance is placed on Peer Dil and others vs. Dad Muhammad (2009 SCMR 1268 ), Fakir Abdullah and others vs. Government of Sindh through Secretary to Government of Sindh, Revenue Department, Sindh Secretariat, Karachi and others (PLD 2001 SC 131) and National Bank of Pakistan through Zonal Chief vs. Messrs Saif Nadeem Electro Limited and others (2003 CLD 1468 ). He further submits that regarding DF III, the decree holder bank in C.M. No.1223/201 1 itself admitted that amount of Rs.14,22,96,000/- has already been paid back. Submits that decree holder bank also placed on record the statement of account (Mark-D) showing credit of said amount.
He submits that in the given circumstances, recovery of amount against DF III is not justified.
3. Learned counsel for the decree holder bank on the other hand submits that the claim against Demand Finance I (DF I) has already been adjusted and decree holder bank's claim in this execution is only in respect of DF II for an amount of Rs.32,84,34,474/- and DF III for an amount of Rs.14,22,96,000/-. He submits that as per settlement agreement dated 02.07.1999 which was resulted into consent decree dated 02.07.1999, the amount against DF II was to be paid back in 15 years, in half yearly installments starting from 01.07.2002 and ending on 01.01.2014, whereas amount against DF III was payable in 24, half yearly equal installments ending on 01.01.2014. He in the circumstances submits that execution filed due to default in payment of these installments on 27.04.2011 was within limitation as prescribed under Articles 181 and 183 of the first schedule of the Limitation Act, 1908 (Limitation Act). He further submits that though the decree was passed under the Act, however, the execution of said decree is maintainable before this Court under the Ordinance in view of section 7(6) of the Ordinance. He submits that subsequent agreement dated 10.08.2005 was regarding various finance facilities including DF II and DF III. Submits that all those finance facilities under subsequent agreement are already adjusted whereas regarding DF II and DF III, no material change was made in the compromise decree dated 02.07.1999, therefore, the consent decree was not novated and Executing Court u/s 47 of CPC can execute the decree. The learned counsel further submits that regarding DF II, complete statement of account has been placed on record according to which last payment made by the judgment debtor was on 20.10.2010 and thereafter no payment was made, hence execution was lawfully filed on 27.04.2011. Submits that regarding DF III, statement of account is also placed on record, however, in C.M. No.1223/2011, it was inadvertently mentioned that amount against DF III was adjusted. He submits that the statement of account regarding entry of Rs.14,22,96,000/-against DF III is also result of inadvertent error on part of decree holder bank.
4. I have heard learned counsel for the parties and perused the record with their able assistance.
5. The first objection is that execution is time barred.To determine question whether this execution petition filed on 27.04.2011 is barred by time, it is necessary to examine the terms of the consent decree dated 02.07.1999.
The decree was passed on 02.07.1999 in terms of the compromise dated 02.07.1999 which was also made part of the consent decree. In terms of clause 5(iv) of the compromise decree, the mark up price of Rs.703.824 Million of DF II was to be paid in 15 years inclusive of grace period of three years, in half yearly equal installments of Rs.29.326 Million, starting from 01.07.2002 and ending on 01.01.2014. The statement of account of DF II annexed with C.M. No.377/2017 shows that judgment debtor company was making payment against said DF II facility from time to time and last of said payment for Rs.5,00,000/- was made on 28.10.2010. The judgment debtor did not make any payment against DF II after 28.10.2010, therefore, defaulted in payment as per terms of the agreement dated 02.07.1999 which culminated into consent decree. The limitation for the purpose of filing execution to recover the remaining amount under the decree dated 02.07.1999 commenced from the date of default in payment under the said decree. Similarly in case of DF III, as per clause 5(v) of the compromise decree dated 02.07.1999, the amount was payable in 24 half yearly equal installments of Rs.5.929 Million commencing from 01.07.2002 and ending on 01.01.2014. The aforesaid outstanding liabilities of DF II and DF III was also acknowledged by the judgment debtors in subsequent agreement dated 10.08.2005. Therefore, the execution petition for DF III filed before the expiry period of scheduled installments, cannot be held to be barred by limitation.
6. The limitation for filing execution under Article 181 of the first schedule of the Limitation Act is three years from the date when the right to apply accrues. In Bank of Credit and Commerce vs. Messrs Global Produce (1998 MLD 1759) Court held that when decree had permitted payment of decretal amount in installments, right to apply for execution would accrue when installments become due and not earlier. In Sh. Muhammad Ali vs. Messrs China Silk House and another (1985 CLC 679) Court held that when decretal amount was payable by installments and on default, entire decretal amount would become due, then time would run from the date of such default. In this execution, the decretal amount being payable in installments by 01.01.2014, the execution filed on 27.04.2011 on default is within limitation. The argument of the judgment debtor/applicant that period of limitation was to commence from the date of decree, could only be applicable if payments under the decree were recoverable forthwith and not in 15 years installments. The case law relied upon by the judgme nt debtor/applicant is also not in respect of decree payable in installments, hence not applicable.
7. The next argument of the judgment debtor/applicant is that decree dated 02.07.1999 being passed under the Act, the execution on 27.04.201 1 could not be filed under the Ordinance before this Court but should have been filed before Civil Court. I have carefully considered this argument. To examine this argument, it is necessary to see provision of section 7(4) and (6) of the Ordinance, which are reproduced hereunder:-
7. Powers of Banking Courts.- ................... (4) Subject to sub-section (5), no Court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under this Ordinance, including a decision as to the existence or otherwise of a finance and the execution of a decree passed by a Banking Court.
(6) All proceedings pending in any Banking Court constituted under the Banking Companies (Recovery of Loans, Advances, Credits or Finances) Act, 1997; (XV of 1997), including suits for recovery of "loans" as defined under that Act shall stand transferred to, or be deemed to be transferred to, and heard and disposed of by, the Banking Court having jurisdiction under this Ordinance. On transfer of proceedings under this sub-section, the parties shall appear before the Banking Court concerned on the date previously fixed.
Plain reading of section 7(4) shows that no court other than Banking Court shall have jurisdiction with respect to any matter to which the jurisdiction of Banking Court extends under the Ordinance including execution of a decree passed by Banking Court. Whereas under sub-section (6) of section 7 of the Ordinance, all proceedings pending in any Banking Court under the Act shall stand transferred to or be deemed to be transferred to Banking Court under the Ordinance. Admittedly decree dated 02.07.1999 was passed under the Act and if execution for said decree was filed before promulgation of Ordinance, the said execution would have been transferred and disposed of by this Court under the Ordinance in view of section 7(6) of the Ordinance. This leaves no manner of doubt that this Court under the Ordinance indeed has the jurisdiction to execute the decree passed by Banking Court under the Act.
Section 7(4) of the Ordinance is an ouster clause, which envisages that the Banking Court has exclusive jurisdiction with respect to any matter , to which the jurisdiction of Banking Court under the Ordinance extends. In view of express provisions of section 7(4) and 7(6) of the Ordinance, it will be a fallacy to conclude that execution if filed before promulgation of Ordinance will be executed by Banking Court but if filed after promulgation of Ordinance will be executed by Civil Court. Though ouster clauses are to be construed strictly , however , the words "with respect to any matter" used in section 7(4) of the Ordinance, speaks the intention of the legislation. This expression not only widens the scope of this ouster clause but also encompass within exclusive jurisdiction of Banking Court, the execution of decree passed under the Act. The holistic reading of section 7 of the Ordinance postulates that this Court under the Ordinance has jurisdiction to execute decree passed under the Act. In this regard reliance is also placed on United Bank Limited vs. M/s J. Tylor and Co. Limited (2002 CLD 917), M. Anwar Saleem vs. United Bank Limited and others (2002 PCTLR 924), Saudi Pak Kalabagh and others vs. Judge Banking Court and others (2008 CLD 431 ).
8. The next argument of the judgment debtor/applicant that decree dated 02.07.1999 has been novated due to subsequent agreement dated 10.08.2005, is also not supported by record. The perusal of agreement dated 10.08.2005 shows that in respect of DF II, merely expiry date was changed from 30.11.201 1 to 31.08.2014 and further for period from 01.07.2003 to 30.06.2005 instead of markup, cost of fund was recommended to be charged.
In said agreement, regarding DF III, only expiry date was extended from 30.11.201 1 to 31.12.2017. These changes in DF II and III through subsequent agreement dated 10.08.2005, does not materially change the consent decree dated 02.07.1999. The change of expiry date in DF II and DF III and concessio n of markup were neither new contracts nor it rescinded or altered the original compromise resulted into consent decree dated 02.07.1999.
Therefore by no mean, compromise decree dated 02.07.1999 is novated u/s 62 of the Contract Act, 1872.
9. This Court repeatedly held that in absence of any material change in the compromise decree, the Executing Court would be in a position to execute the decree u/s 47 CPC and Executing Court can also take into consideration event of agreements and understandings arrived at between the decree holder bank and judgment debtors even after passing of the compromise decree. In this regard reliance is place on Industrial Development Bank of Pakistan through Vice-Presiden t IDBP vs. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical ltd. and 9 others (PLD 2009 Lahore 176), SAMBA Bank Ltd. vs. Messrs Syed Bhais and others (2013 CLD 2080 ), Messrs Montgomery Flour and General Mills, Sahiwal through Chief Executive vs. MCB Bank Ltd. (Formerly Muslim Commercial Bank Limited), Sahiwal through Branch Mana ger/Attorney and 7 others (2015 CLD 1590 ), Barkat Ullah through Legal Heirs and 12 others vs. Wali Muhammad through Legal Heirs and 3 others (1994 SCMR 1737 ), Mrs. Mussarat Shaukat Ali vs. Mrs. Safia Khatoon and others (1994 SCMR 2189 ) and Habib Ahmad vs. Meezan Bank Limited and 5 others (2016 CLD 527). The case law relied upon by the judgment debtors is not applicable to facts and circumstances of this case because in said judgments, the contract was materially changed which resulted into novation of the compromise decree.
10. I have next considered the argument of the judgment debtor/applicant that claim of Rs.142.296 Million against DF-III being already been paid off, the said amount cannot be recovered by the decree holder bank through this execution. Admittedly in Para 5 of C.M. No.1223/201 1, the decree holder bank specifically recorded that amount of Rs.14,22,96,000/- against DF III has been paid off. Alongwith said application, the decree holder bank has also produced statement of account as Mark-D, where the said amount was shown to be paid off and credited on 06.01.2006 against DF III. The learned counsel for the decree holder bank, however , submits that Para 5 of said application and statement of account appended therewith was result of inadvertent error on part of decree holder bank and this fact was also informed to this Court on 26.02.2016. Notwithstanding the above stance taken by the decree holder bank, the fact remains that amount of Rs.142.296 Million against DF III is shown to be adjusted by the decree holder bank itself in the statement of account. Therefore, unless it is established by recording of evidence that this amount was not actually adjusted or paid off, the decree holder bank cannot make recovery of said amount through this execution.
11. In view of above, this objection petition is dismissed to the extent of amount of Rs.32,84,34,474/- under DF II. However , regarding recovery of Rs.14,22,96,000/- under DF III, the objection petition shall be decided after framing of issues and recording of evidence.