ASIM HAFEEZ, J.---This appeal is directed against the order dated 12.03,2019, whereby learned Single Judge in Chambers, while exercising jurisdiction under Financial Institutions (Recovery of Finances) Ordinance, 2001 ("The Ordinance "), dismissed appellant's application seeking setting aside of ex-parte Judgment and decree dated 07.09.2018.
2. Facts are straightforward. Respondent Financial Institution filed suit under section 9 of the Ordinance for seeking recovery of Rs.165,146,610/- against the appellants, claiming default in the performance of contractual obligations qua the Finance facilities extended -- details whereof were provided in the Plaint. On 05.12.2017, when the case came up for hearing, orders were passed for service of appellants (impleaded as defendants) through ordinary mode as well as by registered post A.D and courier , which order was slightly modified on 18.12.7017, whereby order for issuance of notices was again passed including publication in the newspapers. Whether service of notice(s) by all of any one of the modes of service was effected? No finding qua effective service was recorded by the Court by or on 24,05.2018 when case came up for hearing. And again order was passed for issuance of notices through all modes as specified in section 9(5) of the Ordinance, which order was passed in the presence of the counsel for the respondent Financial Institution. Thereafter , the case came up for hearing on 07.09.2018, when it was decreed ex-parte, holding that despite effective service appellants -- then the defendants -- had failed to submit application for leave to defend. Appellants filed application for seeking setting-aside of ex parte decree, upon which notices were issued on 15.10.2018. Application was heard and dismissed on 12.03.2019, hence, this appeal,
3. Learned counsel for the appellants contends that pursuant to the notices issued in terms of order dated 24.05.2018 service was effected and application for leave to defend was filed on 3rd September 2018 first day of the opening of this court after summer vacations -- in the office, however notwithstanding the availability of application, same was not placed before the Court when case came up for hearing on 07.09.201.8. And suit was decreed ex-parte on the assumption that no application was filed. Adds that application for leave to defend was within limitation, upon extending benefit of section 4 of the Limitation Act, 1908 - as summer vacations commenced from 02.07.2018 and ended on 01.09.2018. Lastly submits that while issuing ex-parte decree material questions of law and fact were overlooked, which caused serious prejudice.
4. Conversely , learned counsel for the respondent Financial Institution contends that summons / notices were issued through all modes in terms of section 9(5) of the Ordinance, 2001 vide order passed on 18.12.2017, whereby service stood effected on the appellants, and no application for leave to defend was filed. Adds that even the application filed pursuant to the order dated 24.05.2018 -- whereby service was repeated -- was beyond the statutory period provided in section 10 of the Ordinance. Learned counsel defended the order impugned and ex- parte decree.
5. Arguments heard. Record perused.
6. There is not much dispute qua the fact that application for leave to defend was filed in the office on 03.09.2018 but, incidentally , not placed before the Court on 07.09.2018. This case has a peculiar characteristic; order for issuance of notices was passed on 24.05.2018, irrespective of the fact that notices were earlier issued and claimed to have been served on the appellants. Order dated 24.05.2018 was acted upon without any objection or even a slightest reservation on the part of the Financial Institution that service was earlier effected and no application for leave to defend was filed. Now, in this backdrop, we proceed to adjudicate upon the matter in issue. It appears from the order impugned, of 12.03.2019, that Appellants application for setting aside ex-parte decree was dismissed primarily on two grounds; firstly , that service was validly effected upon the appellants through notices issued and publication in terms of orders dated 05.12.2018 and 18.12.2018 -- in which case service stood effectively made and no application for leave to defend was filed within stipulated time. And secondly , that the application for leave to defend, even in terms of notices/ publication issued pursuant to order dated 24.05.2018; was beyond 30 days - prescribed period of limitation. In the order impugned it was specifically observed that notices through courier were served on 29.05.2018, and through publication on 31.05.2018 and 01.06.2018 in Daily Nation and Nawa-i-W aqt, respectively , and since the summer vacations lasted from 02.07.2018 to 01.09.2018, therefore, application seeking leave to defend, filed on 03.09.2018, was beyond prescribed 30 days.
The observation regarding service of appellants through courier 'TCS' on 29.05.2018 is not corroborated from the record. Notices through courier were actually issued on 29.05.2018, however , there is no report on record regarding service or alleged refusal to accept service. One of courier envelop -- to appellant No.3 - showed refusal to accept on 04.06.2018. We have examined the notices/consignments booking slips, which showed that notices were booked for delivery , at NAZ Cinema franchise office of TCS, on 29.05.2018, between 6:44 pm to 6:48 pm.
Acknowledgment due cards showed delivery on 08.06.2018. Record further revealed that summons/notices through ordinary mode were issued on 29.05.2018 but stood served on different dates, on 04.06.2018, 07.06.2018 and 03.09.2018. We have examined the office report, which is silent regarding actual/ef fective service through Notices. Astonishingly , service of one of the appellants was shown to have effected through telephone. it is evident that notices were published in Lahore edition of daily 'Nation' on 31.05.2018 and Multan edition of daily 'Nawa-i- Waqt' on 01.06.2018, which, perhaps, was the only mode through which presumably service of notice could be held valid and effective in law. Viewed from this angle, application for leave to defend filed on 03.09.2018 is apparently beyond the limitation prescribed. There is no cavil that application for leave to defend should be filed within 30 days of the date of first service by any mode of the modes laid down in subsection (5) of section 9 of the Ordinance -- as required in terms of subsection (2) of section 10 of the Ordinan ce. However , while interpreting subsection (2) of section 10, ibid, one cannot overlook or undermine the significance of proviso thereto, which, for ease of reference, is reproduced hereunder: "(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.
Provided that where service has been validly effected only through publication in newspapers, the Banking Court may extend the time for filing an applic ation for leave to defend if satisfied that the defendant did not have knowledge thereof".
(Emphasis supplied)
7. In terms of proviso, where service has been validly effected only through publication, the Court may extend the time for filing an application for leave to defend. In this case, as apparent from the record, valid and effective service was only effected through the publication -- effective service through other modes remained obscured and unsubstantiated, we are therefore, convinced that, in the facts and circumsta nces of this case, proviso to subsection (2) of section 10 of the Ordinance is attracted. However , before extending benefit of the above-referred proviso it is appropriate to adjudicate upon the second ground for dismissal of the application under reference.
8. With regard to the order of service on 24.05.2018, it was observed in the order impugned that 'This Court erroneously passed the order on 24.05.2018 for repeating service of summons on the defendants as it overlooked the fact that service had already been effected on them'. Before highlighting the significance of order dated 24.05.2018, in the context of the right of the appellants, it is notable that respondent Financial Institution -- apparently being the beneficiary of earlier service effected -- has not objected to the order of fresh service, instead same was acted upon in letter and spirit. There was a complete acquiescence on the part of the respondent Financial Institution. In view of this, observation of erroneousness of order of 24.05.2018 is inappropriate and unwarranted. In the wake of the order , a right has been accrued to the appellants, which right cannot be denied by attributing error on the part of the Court, and even if was termed as 'inadvertent error' it should not prejudice the appellants being act of the Court. Reference is made to the decision in the cases of Ikramullah v, Said Jamal (1980 SCMR 375) and Muhammad Yar through Legal Heirs v, Muhammad (2003 SCMR 1772 ), There is another way of looking at the order of 24.05.2018; which can be construed as conscious indulgence by learned Single Judge in Chambers, feeling dissatisfied or unconvinced with the process of summons/notices earlier carried into effect, In these circumstances, we hold that act of the court -- acquiesced and acted upon by the respondent Financial Institution without any objection -- shall not prejudice the appellants, who are entitled to defend the proceedings and claim of recovery , It is evident from perusal of order impugned that the learned Single Judge in Chambers held that summer vacations continued from 02.07.2018 to 01,09.2018 and leave application filed on 03.09.2018 was otherwise beyond limitation, We have examined the office Notific ation, showing vacations period from 02.07,2018 to 01.09.2018, 2nd of September was Sunday , hence, applic ation filed on 03.09.2018 is in accordance with the mandate of section 4 of the Limitation Act, 1908. On this count also the order impugned is erroneous.
10. In view of aforesaid narration, we are of considered opinion that appellants succeeded in making out a case to claim benefit in terms of proviso to subsection (2) of section 10 of the Ordinance, we, therefore, extend the time for filing of application for leave to defend and hold that application for leave to defend, filed by the appellants on 03.09.2018, be treated as validly filed and same be adjudicated upon on its own merits. .11. Consequently , we allow this appeal, set-aside the order dated 12.03.2019 and ex-parte judgment and decree dated 07.09.2018. Application for leave to defend shall be deemed pending before the learned Single Judge in Chambers. Office shall fix the suit bearing COS No.04/2017 and application for leave to defend accordingly , after issuance of notices to the parties and indicating names of the learned counsel in the cause-list. No order as to the costs.