SULTAN TANVIR AHMAD, J. The present Appeal, under Section 22 of Financial Institution (Recovery of Finance) Ordinance, 2001 ('FIO, 2001'), is filed against the judgment and decree dated 04.09.2019 passed by learned Banking Court, Bahawalpur (the 'Banking Court'), whereby suit of Respondent No. 1 (the 'Respondent-Bank') has been decreed to the extent of Rs.5,243,990.87 with costs of suit and cost of funds.
2. The fact, necessary for the disposal of the present appeal, are that the Respondent-Bank filed suit dated 15.03.2007 for recovery of Rs.7,654,523.49 along with cost of funds and costs of the suit, for the purported default of three different finance facilities. The appellants filed their leave applications for seeking permission to defend the suit, which were dismissed on 13.05.2017.
Nevertheless, the learned Banking Court proceeded to call evidence of the Respondent-Bank.
Thereafter, the Respondent-Bank produced oral as well documentary evidence. The learned Banking Court decreed the suit to the extent of Rs.5,243,990/- along with costs of suit and cost of funds from expiry of finance period (31.12.2006) till realization of principal amount, against the facility of cash finance vide judgment and decree dated 04.09.2019. The suit, to the extent of facilities of bank guarantee and running finance, has been dismissed. Aggrieved from the aforesaid judgment and decree with respect to cash finance the present appeal has been filed.
3. Mr. M. Basit Babar Chughtai, learned counsel for the appellants has submitted that the procedure adopted by the learned Banking Court of rejecting the leave application of the appellants and then to proceed with the recording of evidence of the Respondent-Bank is a material irregularity, which is fatal for the case; that Section 10(12) of FIO, 2001 clearly provides that where application for leave to defend is rejected, the Banking Court is obliged to pass judgment and decree. Learned Court has submitted that the judgment and decree, required to be passed forthwith, should be based on the available material / documents, thus, allowing the Respondent-Bank to produce evidence and granting opportunity to bring further documents on record, to fill up the lacunae, has caused material prejudice to the interest of the appellants, therefore, the impugned judgment and decree is nullity in the law.
4. Conversely, Mr. Ali Raza Kabeer learned counsel for the Respondent-Bank has submitted that after rejection of leave application, the learned Banking Court has merely verified the documents and averments of the Respondent-Bank, by calling the evidence, which has not caused any prejudice to the appellants. Learned counsel has further submitted that even if calling such evidence is an irregularity, the appellants should have shown some injury, impact or effect caused to the appellants. In this regard, learned counsel has relied upon case titled "Zakaria Ghani and 4 others Versus Muhammad Ikhlaq Memon and 8 others"(PLD 2016 SC 229) and "FAYSAL BANK LIMTED Versus SAJJAD ASLAM and others" (2022 CLD 123); that the object of the legislature is expeditious justice and lapse on the part of the learned Banking Court, to call the evidence, does not violate the subsequent proceedings.
5. We have heard the arguments of the learned counsel for the parties and with their able assistance, record has been perused.
6. Before dealing with the controversy raised by the parties, it will be beneficial to reproduce the relevant provisions of FIO, 2001:- 10(11). Where the application for leave to defend is accepted, the Banking Court shall treat the application as a written statement, and in its order granting leave shall frame issues relating to the substantial questions of law or fact, and, subject to fulfillment of any conditions attached to grant of leave, fix a date for recording of evidence thereon and disposal of the suit.
10(12). Where the application for leave to defend is rejected or where a defendant fails to fulfill the conditions attached to the grant of leave to defend, the Banking Court shall forthwith proceed to pass judgment and decree in favour of the plaintiff against the defendant.
(Emphasis supplied)
7. The consequence of accepting or rejecting the leave application is clearly given in the above reproduced provisions. The acceptance of leave has result of treating the same as written statement, framing issues as to substantial questions of law and facts, followed by recording of evidence. However, when the leave application is rejected, the Banking Court is required to pass judgment and decree. Section 10(12) above, provides that upon rejection of leave application the Banking Court shall forthwith pass judgment and decree. The word 'forthwith' is preceded by 'shall' that hardly leaves any discretion with the Court but to pass judgment and decree on the material that is available on record. This proposition has already been discussed in various cases including the cases titled "Mrs. Jawahar Afzal Versus Messrs UNITED BANK LIMTED (2003 CLD 119), "Messrs UNITED BANK LIMITED through Authorized Attorney Versus Banking Court No. II and 2 others"
(2012 CLD 1556) and "Khurram Farooq Versus BANK AL-FALAH LIMITED and another" (2018 CLD 1417). Paragraph 11 of judgment of Honourable Sindh High Court in United Bank Limited case (Supra) elaborates relevant provisions as follows:- "11. After carefully examining the entire section 10 of the Ordinance and particularly its subsection (11), we have come to the conclusion that the word "forthwith" specifically mentioned in section 10(11) of the Ordinance was introduced by the legislature for the first time with a clear and specific object, that is, for expeditious disposal of a banking Suit whether filed by a financial institution or by a customer. The word "forthwith" is not meaningless and it cannot be ignored or interpreted casually. The word "forthwith" along with the word "shall" used in section 10(11) casts a duty upon the Banking Court to decree the Suit in favour of the plaintiff against the defendant immediately when defendant's application for leave to defend is rejected or where a defendant fails to fulfill the conditions attached to the grant of leave to defend. In our opinion the object of inserting this new provision was not to cause prejudice to any party, but was to provide an expeditious and equitable relief in banking Suits to the plaintiff after dismissal of defendant's application for leave to defend. We have said so because of the reason that if a defendant successfully makes out a case for grant of leave to defend by raising substantial question(s) of law or fact, leave would be granted to him and the suit will proceed further. In such an event, obviously the implications of section 10(11) shall not follow. On the other hand, if defendant's application for leave to defend is rejected for where a defendant fails to fulfill the conditions attached to the grant of leave to defend, the plaintiff should not be compelled to wait any longer or to suffer further, and the decree must follow forthwith in his favour. In order to further understand the reason, and object for using the word "forthwith" in section 10(11) of the Ordinance, we consulted the following well known and authentic legal dictionaries wherein this word has been defined as under:-- Black's Law Dictionary (Seventh Edition): Forthwith- Immediately; without delay; directly; promptly; within reasonable time under the circumstances.
Chambers 21st Century Dictionary (1996 Edition): Forthwith - Immediately; at once.
K J Aryer's Judicial Dictionary (A complete Law Lexicon) Thirteenth Edition: "When a statute require that something shall be done 'forthwith' or 'immediately' or even 'instantly' it should probably be understood as allowing a reasonable time for doing it."
"Expression Cforthwith' should be construed to mean Cwithin reasonable period'"
P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edition, Volume 2) D-I 2005: "Occasionally the worth "forthwith" means as soon as possible after the occurrence of some specific intervening event expressed or implied from the context. For example, the making of an application."
"Forthwith means immediately or without delay".
"Forthwith means "as soon as possible; without any delay".
Words and Phrases (Permanent Edition) Volume 17: "Forthwith" is convertible with "at once" and Cprompt," and, in its ordinary acceptation, means "at the same point of time; immediately; without delay; at one and the same time; simultaneously; directly."
8. The Honourable Supreme Court of Pakistan in case titled "APOLLO TEXTILE MILLS LTD. and others Versus SONERI BANK LTD." (2012 CLD 337) while interpreting the relevant provisions of FIO, 2001, has elaborated the responsibilities of the parties (customer and financial institution) vis-a-vis pleading and stating particulars of finance in definitive and clear manners. The consequence of non- compliance of Section 9 & 10 of FIO, 2001, have also been elaborated and complete guideline is given with the direction to the Banking Courts, to remain within parametrical scope of claimed and disputed accounts, as follows:- "To scope of the suit thus becomes well defined. The controversies are confined to the claimed and / or the disputed numbers, facts and reasons thereof. Unnecessary controversial details, the evidence thereto and the time of the trial, are curtailed. The trial would remain within the laid out parametrical scope of the claimed and the disputed accounts".
9. Reverting to the case at hand, it appears that the learned Banking Court has failed to take into account the law in proper prospective, right from the stage when leave rejecting order was passed till the final judgment and decree. If sufficient material was available on record and suit of the Respondent-Bank was in accord with Section 9 of FIO, 2001, which was not disputed by the appellants as per Section 10 of FIO, 2001, then there was no need to proceed further for recording evidence, however, if the learned Banking Court on consideration of plaint, leave application and the reply thereto was of the view that some substantial question of law and / or fact have been raised, which require evidence, then procedure of law as envisaged in Sections 10(9), (10) & (11) should be followed.
10. As far as the contention of learned counsel of Respondent-Bank that no prejudice is caused by calling evidence by the learned Banking Court is concerned, it is suffice to observe that learned Banking Court while allowing the claim has relied upon the evidence produced by the Respondent- Bank, particularly statement of PW-1, which is recorded in violation of law discussed above. The statute / FIO, 2001, has provided procedure and the learned Banking Court should have followed the same. The Division Bench of Honourable Sindh High Court in United Bank Limited case (Supra), in this particular regard, has already observed as follows: - "13. It is settled principle of law that where any statute provides a procedure for doing a thing in a particular manner that thing should be done in that particular manner and in no other manner. In the instant case, the Banking Court ought to have proceeded to pass judgment and decree forthwith upon dismissal of the application for leave to defend filed by the respondents 2 and 3 as particularly provided in section 10(11) of the Ordinance. By not doing so, the Banking Court did not follow the procedure which has been particularly prescribed by the Ordinance. Dismissal of application for leave to defend the suit means that accounts between the parties can be settled without recording of evidence. When no evidence is required to settle the accounts then the decree for settlement of accounts is to follow as no other step is left in the suit to be taken other than passing of the decree on the basis of the accounts already placed before the court by the parties"
11. The above circumstances have left this Court with no other choice but make an order of remand.
Therefore, the impugned judgment and decree is set-aside and the case, to the extent of cash finance, is remanded to the learned Banking Court where the suit of the Respondent-Bank as well as leave application of the appellants shall be deemed to be pending. The learned Banking Court is directed to decide the case after strict adherence of above discussed law. The learned Banking Court shall decide the case on priority and if need be by conducting the hearing on day to day basis. No order as to costs.