ALI BAQAR NAJAFI, J.---This Regular First Appeal under section 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 is directed against the judgment and decree dated 22.04.2014 passed by learned Judge Banking Court-I, Multan whereby suit of the respondent/bank for recovery of Rs. 3,112,016/- titled "Allied Bank Limited v. M/s. Shaheen Enterprises and others" was decreed against the appellants on merits to the extent of Rs. 27,52,984/- while dismissing the application of the appellants for leave to contest/defend, with costs of suit and costs of funds. The operative part of the judgment is reproduced as under:- "Therefore, the suit of plaintiff bank is, hereby partially decreed in its favour and against the defendants jointly and severally for recovery of Rs. 27,25,984/- with cost of the suit and cost of funds to be charged on the decretal amount from the date of default i.e. 01.06.2010 regarding both the running finance facility as well as bank guarantee facilities till final realization of the entire decretal amount as certified by the State Bank of Pakistan from time to time while the suit of the plaintiff bank to the extent of remaining claim is dismissed. Decree-sheet be prepared in accordance with law. The defendants are directed to liquidate their liability within 30 days, whereafter, decree shall be executable against them".
2. Briefly, the facts giving rise to the filing of the present appeal are that respondent/bank filed a suit for recovery of Rs. 3,112,016/-calculated up to 25.06.2012 along with cost of funds and cost of suit and other expenses/charges from the default till the date of final realization of the decretal amount by the sale of mortgaged properties/hypothecated stock etc. against they appellants on the ground that appellant No.1 was a partnership concern and the appellants Nos. 2 and 3 were its partners whereas appellants Nos. 3 and 4 were the guarantors/partners who availed fund based/non-fund based facilities by sanctioning, renewing and enhancing the same from time to time till 31.05.2009 up to Rs.44,00,000/- (Rs. 19,00,000/- for RF and Rs. 25,00,000/- for BG). It was also alleged that appellants requested the respondent/bank on 18.04.2009 for renewal of the existing funds; i.e. running finance facility of Rs. 19,00,000/- as a debit balance on Rs. 18,99,107/-. The bank in the light of Banking Arrangement Letter dated 18.06.2009, executed documents mentioned in para 7 of the plaint but the appellants did not adjust the liability, therefore, the suit was filed.
3. The appellants submitted their petition for leave to defend by raising preliminary objections to which the respondent/bank also submitted written reply.
4. The learned Banking Court No. I, Multan refused to grant leave to defend and proceeded to decide the banking suit on merits. It decreed the suit primarily on the ground that the appellants were served personally on 25.09.2013 whereas they submitted their leave to defend on 02.12.2013 much beyond the period of limitation of 30 days and that availing of finance facility and execution of loan document were also not disputed. It was further observed that application for closing of account allegedly filed by the appellants was also not shown to the banking court and that no entry in the statement of account was disputed by them which otherwise carried the presumption of truth. It was also observed that provisions of section 10(3)(4)(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were not complied with while filing the application for leave to defend.
5. Learned counsel for the appellants submits that the application for leave to defend was filed within time yet it was dismissed being time barred and that the legally permissible mark-up was not imposed. Lastly, submits that appellants have already deposited the amount to the extent of Rs. 9,00,000/- and as such recovery suit ought to have been dismissed.
6. Conversely, learned counsel appearing on behalf of the decree holder/bank submits that no plausible defence was offered in the application for leave to defend which was also filed beyond the period of limitation yet the learned Banking Court No. I, Multan has decided the suit on merits keeping in view all the relevant documents as well as the relevant law.
7. Arguments heard. Record perused.
8. The suit for the recovery of amount of Rs.3,112,016/- was filed by the respondent/bank on 16.09.2013 before the Banking Court and the notices were issued to the appellants for 11.11.2013. On 11.11.2013 application for leave to defend was filed, though on 25.09.2013 appellant No.4/Riaz-ur- Rehman, was(sic.) reveals that other appellants also gained the knowledge about the pendency of the recovery suit same day since they all were closely related. The acknowledgment due also did not return to the court. The courier service receipts also revealed that it was sent on 18.09.2013. The advertisement in the newspaper was also published on 19.09.2013. With this reference filing of the application for leave to contest on 11.11.2013 was -a delayed act which is beyond the prescribed period of 30 days. Under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 such an application is to be filed within 30 days. Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 is reproduced as under:-
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.- Here reliance can also be placed upon Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited (PLD 1990 Supreme Court 497). Relevant (sic.)
"...........It is a matter of common knowledge that defaulter borrowers in suits brought against them particularly by the financial institutions used to delay the disposal of the suits by avoiding the service of the summons. In 'order to expedite the disposal of the suits to be brought by the Banking Companies the Ordinance was promulgated, which contains special provisions and which inter alia provide that a suit brought by a Banking Company for the recovery of loan is to be tried in summary manner under Order XXXVII. Section 15 of the Ordinance empowers the Federal Government by a notification in the official Gazette to make rules for carrying out the purposes of the Ordinance. In pursuance whereof the rules have been framed. The underlined object of Rule 8 is to avoid the delay in the service of the summons and, therefore, it has been provided that the summons are to be issued simultaneously in three different modes referred to hereinabove, which is the requirement of the above rule. Obviously for the reason that if the summons is not served through a bailiff or by a registered post acknowledgement due, it would be served in any case by publication. In other words, the service is to be held good if a defendant is served by any of the above three modes of service provided for in Rule 8.... "
9. Besides, in the application for leave to contest the availing of finance facility is not denied and it was only alleged in paragraph No. 4 of the application for leave to contest that after expiry of the loan on 15.05.2010 the suit was filed on 19.09.2013 after a period of 3 years. This ground alone was not sufficient for granting leave to contest as the same could be filed by the respondent/bank from the date of refusal by the appellants. Besides, the entries of the bank statement were not denied, the status of creditor and debtor is also admitted between the parties, the recovery suit was filed by the Manager who is a duly(sic.) therefore, has not committed any illegality warranting interference by this appellate Court.
10.Keeping in view the above, this appeal has no merits and is, therefore, dismissed.