SULTAN TANVIR AHMAD, J.---The present Appeal is filed, under section 22 of the Financial Institutions (Recovery of" Finances) Ordinance, 2001 (XLVI of 2001) (the "Ordinance"), against the Judgment and Decree dated 30.11.2021 passed by the learned Judge Banking Court, Bahawalpur.
2. The facts, necessary for disposal of present appeal, are that on 08.08.2011 respondent No.1 instituted suit for recovery of Rs.12.24 million along with cost of funds, mark-up and other expenses under, section 9 of the Ordinance. The Appellants filed their respective leave applications, which were accepted by the learned Banking Court. Upon grant of the leave the following issues were framed by the learned Banking Court, out of divergent pleadings of the parties:-
1. Whether the plaintiff has no cause of action to file the instant suit? OPD
2. Whether the suit is bad in the eye of law and is not maintainable due to the non-compliance of the provisions under section 9, subsection (2) and (3) of the FLO, 2001? OPD
3. Whether the plaint of suit is liable to be rejected on the ground that the person who had signed the plaint was not authorized by the plaintiff to do so and the plaintiff has failed to comply with section 9(1) of the F.I.O, 2001? OPD
4. Whether the plaintiff is stopped to bring the suit on account of his words and conduct? OPD
5. Whether the plaintiff is entitled to recover a sum of Rs.12.24 Million along with cost of funds, all expenses, costs and liquidated damages from the defendants till the final liquidation of liability?
OPP
3. On behalf of Respondent-Bank, one Muhammad Arshad, Manager Ahmadpur East Branch of the Respondent-Bank appeared as PW-1 and in documentary evidence various documents including Demand Promissory Notes, Letter of Continuity, Letter of Hypothecation, Memorandums of Deposit of Title Deeds, Finance Agreements, Guarantee Letters, Mortgage Deed, Approval Memorandum etc. were brought on record as Ex.P-2 to Ex.P-16 and the statement of account between 3I.O3.2010 till 30.06.2011 is also brought on record in the shape of Ex.P-1. -
4. The Appellants conducted cross-examination of the aforesaid witness of the Respondent-Bank, however, they failed to produce any evidence despite availing several opportunities, which resulted into closing their right to produce evidence under Order XVII, rule 3 of the Civil Procedure Code, 1908 (the `Code').
5. The learned trial Court gave issue-wise findings and decreed the suit vide Judgment and Decree dated 30.11.2021 in the following manners:- "For the forgoing reasons and as per my issue wise finding suit is decreed against the defendants' in the sum of Rs.9,352,545.25 with cost of suit and cost of fund since date of default 28/07/2009.
However, the request of plaintiff/bank regarding future markup and liquidated damages is turned down. The decretal amount will be recoverable from the mortgaged property and if the decree is not satisfied the remaining decretal amount will be recoverable from the other moveable and immovable property own by the defendants. If the decretal amount is not paid within-30-days, the file will be converted into execution automatically."
6. Mr. Muhammad Basit Babar Chughtai, learned counsel for the Appellants has submitted that the impugned Judgment and Decree dated 30.11.2021 passed by the learned Judge Banking Court Bahawalpur is illegal, against the law, facts, having no effect upon the rights of the Appellants and same is liable to be set-aside as having been passed illegally and with material irregularity. It is added that the impugned Judgment is non-speaking, sketchy, vague and as such, not sustainable in the eyes of law. It is further submitted that Respondent-Bank has instituted the suit through Mr. Salman Saeed but no power of attorney on behalf of the Respondent-Bank is attached with the plaint and as such the suit is filed in absence of any authority or authorization, as necessitated by section 9 of the Ordinance. It is added that the plaint does not fulfill the requirement of sections 9(2) and (3) of the Ordinance, therefore, the same is liable to be rejected under Order VII, rule 11 of the Code.
7. Conversely, Mr. Riaz Ahmed Ch., learned counsel for the Respondent-Bank has vehemently opposed this Appeal and he has submitted that failure to produce evidence on the part of the Appellants and Respondent No.2 to prove the assertions in the leave applications discharging the burden of proof as to the issues framed is sufficient to dismiss the present appeal; that the Appellants, after availing the finance and committing default, is attempting to delay the recovery on the basis of lame excuses, which is not permissible in law.
8. We have heard the arguments of the learned counsel for the parties and perused the record with their able assistance.
9. The plaint and power of attorney in favor of learned counsel (Mr. Nasir Ahmad Kamboh, Advocate) for filing the suit are signed by Mr. Salman Saeed, Executive Vice President of the Bank.
The plaint is also verified by Mr. Salman Saeed. We have examined the documents filed with the plaint and relied by the Bank under section 9(2) and (3) of the Ordinance as well as the list of reliance filed under Order XIII, Rules 1 and 2 of the Code, which reflect that this plaint was not accompanied by any power of attorney of the bank, resolution or authorization through memorandum or articles. Here, it will be beneficial to reproduce section 9(1) of the Ordinance:-
9. Procedure of Bank Courts.---(1) Where a customer or a financial institution commits a default in fulfillment of any obligation was regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power-of-attorney or otherwise.
(Emphasis supplied)
10. Reading of above reveals that suit in the Banking Court is required to be instituted by presenting a plaint, which must be verified on Oath and when the suit is instituted by a Financial Institution the same is required to be verified by Branch Manager or such other officer of the Financial Institution who is duly authorized to institute the suit by way of power of attorney or otherwise. The term institute has already been defined in cases titled "Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd." (PLD 1966 SC 684) and "Bashir Ahmad v. Plastic Bag Packaging Limited and others" (PLD 1991 Lahore 386) as having distinct meaning of 'initiative and decision for taking some action', as against the word `filing' which is a ministerial an consequential act following the intent of institution. Admittedly, Mr. Salman Saeed is not branch manager of the Bank and the question arises that as to whether he was authorized to institute the suit or verify the plaint. In the circumstances when the officer is not a branch manager or carrying such functions of the branch it is essential that he must be authorized by the Financial Institution by power of attorney or some other documents to institute the suit. The word "or otherwise", for the purposes of institution of the suit besides authority by way of power of attorney was introduced by the Ordinance for the first time in the legislative history of Banking Special Laws. The Honourable Sindh High Court in case titled "The Bank of Punjab v. Arif Ali Shah Bukhari" (2016 CLD 1301) while interpreting the aforesaid provision of the Ordinance and the word otherwise reached to the conclusion that the said word enlarges the scope of the instruments by way of which a Financial Institution can authorize its officer to institute the suit and included the documents like special power of attorney, authority letter or board resolution on the strength whereof, an officer of Financial Institution can competently institute a suit in the Court and verify pleading on oath. It will be advantageous to reproduce the relevant extract of the aforesaid judgment:- "From perusal of above provision of law, it is quite evident that 'plaint' perusal case of a 'Financial Institution' is to be 'verified on oath' by the 'Branch Manager' or such other officer of the Financia1 Institution as may be duly authorized by 'Power of Attorney' or 'otherwise'. Needless to say the word 'otherwise' used in subsection (1) of section 9 of F.I.O., 2001 [Ordinance No. XLVI of 2001], in my view, needs not to be given 'restrictive meanings'. The word 'otherwise', not only enlargers the authority or an officer of a financial institution but also embraces within its' ambit, apart from, the 'Power- of-Attorneys' any other documents i.e. 'Special Power of Attorney', Letter of Authority and/or Board's Resolution, on the basis and strength whereof, a person/officer including Manager of the Financial Institution becomes competent not only to 'verify' the 'plaint on oath' but also becomes competent to institute a suit in Banking Court inter alias for recovery of the outstanding amounts."...
11. The Honourable Division Bench of this Court in case titled "Ehsan-ul-Haq v. MCB Bank Limited through Manager" (2016 CLD 1874) has also adopted liberal interpretation of the concerned provision, however, the Court has also held that when the plaint is not instituted by the manager or an officer holding power of attorney in his favour, he at least must show due authority from the Financial Institution. The following observations of this Court in the above case are highly relevant:- "An officer of the financial institution holding a power of attorney is the designated person to file suits on its behalf apart from the Manager by the force of section 9 of the Ordinance. Any person other than the Manager and the officer holding the power of attorney would of course be required to show due authority from the financial institution for filing of the suit. It is furthermore obvious that "or" appearing in between the three categories of persons in section 9 of the Ordinance has to be read as "and" and that the three categories are to be read disjunctively entitling each of them to validly institute a suit on behalf of a financial institution. It may also be pointed out that the Courts have time and again through their judgments granted recognition to the Manager of a financial institution to be the possessor of the authority to validly institute the suit in terms of section 9 of the Ordinance and 1997 Act".
(Emphasis supplied)
12. In the case at hand, as already discussed that the plaint is not accompanying any power of attorney and the same is not instituted by the manager. The learned Banking Court specifically framed issue No.3 as to the authority for institution of the plaint and its verification. The Bank produced one witness and brought on record as many as sixteen (16) documents including a letter in favour of witness to give evidence but the Bank failed to produce any document showing that Mr. Salman Saeed, who instituted the suit and verified the plaint, had any such authority or IA power as required under section 9 of the Ordinance. When PW-1 was cross-examined by the Appellant side, he was asked specific questions in this respect and he admitted in his cross-examination that some finance officer had signed the plaint and he is not even in the position to testify if any power of attorney was attached with the plaint. The following part of his cross-examination is highly relevant:-
13. Reading of above reproduced part of the cross-examination reflects that the sole witness of the bank has confirmed that no power of attorney is on record or filed with plaint or produced in evidence and as a matter of. face, he has admitted that Mr. Salman Saeed is not authorized to institute tit t suit. Learned counsel for the Respondent-Bank when confronted if he can show any document from record showing such authority, he failed to give any rational answer in this regard.
14. We are of the considered view that matter not how liberally the words "or otherwise" are interpreted but the reading of section 9(1) of the Ordinance Suggests that the same cannot be stretched to the limit that without any instrument of authority every officer of the bank can institute the suit or verify the plaint. The word "otherwise" has to be restricted to the category or species of its former category or else it will be violative of the well-recognized rule of construction known as ejusdem genesis. The words of general category when followed by specific can include genus in the former word(s), which have specific or narrow meanings.
15. Section 9(1) of the Ordinance requires presentation' of plaint through Branch Manager or officers who are authorized by power of attorney or authorization by way of some other instruments, recognized for giving authorization/authority by artificial legal person to its officer. The learned Division Bench of Honourable Sindh High Court while, deciding the case titled "Zarai Tarakiyati Bank Limited through Authorized 'Officer v. Haji Audho through Attorney" (2018 CLD 1327) has observed as follows:- "It may be noted that a corporation, being a juristic entity, can take decisions or act only through its Board of Directors, and an authority or authorization by or on behalf of a corporation is deemed to be valid and legal only when it has the sanction or approval by its Board or Directors. It is well- settled that in the absence of proper board resolution, power of attorney or authorization by a company/corporation specifically authorizing the person named therein. Suits and legal proceedings by such company or corporation cannot be deemed to have been properly instituted. If any authority is needed on this point, reference may be made to the leading case of Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore, PLD 1971 SC 550. In the instant case, the appellant, being a financial institution/company, was required to authorize its branch manager, secretary, any director or other principal officer in terms of section 9 ibid or Order XXIX, Rule 1 ibid to sign and verify the plaint and to institute the Suit on its behalf However, this mandatory legal requirement was admittedly not fulfilled."
Further reference in this regard can be made to the cases titled "Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore" (PLD 1971 Supreme Court 550) and "Bankers Equity Ltd. through Attorney and 5 others v. Sun flo Cit--Russ Ltd. (formerly known as Sunflo Juices Ltd.) through Managing Director" (PLD 1999 Lahore 450).
16. We have considered the entire aspects of the matter from all angles and we are not convinced that the institution of the suit or the verification of the plaint is in accord with section 9 of the Ordinance, therefore, the present Appeal is allowed and suit of the Respondent-Bank is dismissed.
No order as to costs.