' ZAFFAR HUSSAIN MIRZA, J.-As common questions of law were raised in these three appeals they have been heard together and are being disposed of by this common judgment.
2. The facts out of which these three appeals have arisen may, so far as material, be briefly stated.
Civil Appeals Nos. K-67 of 1982 and K-68 of 1982 arise out of a suit filed by the Dubai Bank Limited (respondent in Civil Appeal No, K-67 of 1982) against appellant, General Investments Limited, under Order XXXIV of the Code of Civil Procedure for the recovery of Rs, 1,02,43,422.08 and sale of the mortgaged property in the Special Court for Sind at Karachi, under the Banking Companies (Recovery of Loans) Ordinance, 1979 (to be hereinafter referred to as the Ordinance). The appellant on being served with the summons, entered appearance before the Court and prayed for leave to defend the suit under Order XXXVII, rule 3 of the Code of Civil Procedure. However, the Court upon hearing the parties, was of the view that no triable issue had been raised by the appellant in his application for leave to defend and, therefore, while refusing to the permission to defend the suit decreed the suit of the respondent as prayed against the appellant vide judgment, dated 12-11- 1981. The Court directed that a preliminary decree shall be passed under Order XXXIV, rule 4 of the Code of Civil Procedure for the sale of mortgaged property.
3. The appellant General Investments Limited preferred an appeal against the decree passed by the learned Special Judge Court in the High Court of Sind under section 12 of the Ordinance, being First Appeal No, 65 of 198' and also submitted an application Order XLI, rule 5 of the Code of Civil Procedure etc. Praying that the execution of the decree passed on 12-11-1981 be stayed pending the disposal of the appeal. The appeal and the Miscellaneous Application were put up before a Division Bench of the High Court with an office objection as under : "Section 12(5) of the Banking Ordinance has not been complied with?'
' It may at this stage be stated that section 12(5) of the Ordinance provides that no appeal shall be admitted for hearing unless the appellant deposits in cash in the High Court an amount equivalent to the judgment debt or, at the discretion of the. High Court furnishes security equal in value to such amount". The learned 'Judges of the Division Bench, after hearing the learned counsel for the appellant. However, deferred the consideration of the office objection to be decided after notice to the respondent. Notwithstanding the deferment of the preliminary objection the learned Judges admitted the appeal to regular hearing, vide their order, dated 23-12-1981 by which they also ordered notice to the other side on the stay application. The case came up before another Division Bench of the High Court presided over by the learned Chief Justice on 15-2-1982 when the following order was passed : "We are not inclined to grant interim order of stay, as prayed for, at present, as a serious question has been raised whether this appeal itself is maintainable without the amount being deposited.
' Fix this appeal on a date after one month for decision on the limited point of its maintainability without the decretal amount having been deposited."
In terms of the aforesaid order the case came up before the same Bench on 24-3-1982 when the learned Judges only disposed of the stay application and granted the prayer for the stay of execution of the decree subject to furnishing security by the appellant to the extent of the claim in the suit. As regards the question of maintainability of the appeal the learned Judges ordered that it would be proper that the said question be determined by the same Bench which passed the initial order of admission of the appeal. In the meantime the respondent also submitted an Application (C. M. A. No, 234 of 1982) seeking review of the admission order of appeal on the ground of non- compliance with the provisions of section 12(5). The preliminary point and the review application of the respondent were finally heard and disposed of by the same Bench which had earlier admitted the appeal, by order dated 21-4-1982. The learned Judges held that in view of the fact that the mortgage property in suit being valuable property having been already mortgaged as a security for the debt in question, the same property "may be treated as security for the purposes of section 12(5) of the said Ordinance". They observed : "In such circumstances, since discretion is given to the Court under section 12(5) of the Ordinance to order for security instead of insisting on deposit of cash, we feel that compliance will be made if the mortgaged property which is already with the bank is directed to be treated as security contemplated under section 12(5) of the said Ordinance."
' In this view of the matter the objection raised by the respondent in his review application was rejected and the same was dismissed vide order dated 21-4-1982.
4. Civil Appeal No K-67 of 1982 is directed against the aforesaid orders of the High Court dated 15- 2-1982 and 24-3-1982, whereas Civil Appeal No, K-68 of 1982 calls in question the aforesaid order of the High Court dated 21-4-1982.
5. The facts forming the background of Civil Appeal No, K-71 of 1982 are that in August, 1980, the respondent Pakistan Industrial Credit and Investment Corporation Limited filed a mortgage suit under Order XXXIV of the Code of Civil Procedure against the appellant Consolidated Sugar Mills Limited, in the Special Court for Sind, Karachi set up under the Ordinance for recovery of Rs, 7,99,89,671.74 and also prayed for a preliminary decree for sale of the mortgaged property etc. The appellant in this case also filed an application for leave to defend the suit but the learned Special Judge refused to grant leave as prayed and simultaneously decreed the suit for a sum of Rs, 8,05,88,402.04 with interest by way of preliminary decree under' Order XXXIV, rule 4 of the Code of Civil Procedure vide judgment dated 10-9-1981. Feeling aggrieved the appellant filed an appeal in the High Court of Sind, Karachi under section 12 of the Ordinance being First Appeal No, 60 of 1981, in which also an application under Order XLI, rule 5 of the Code of Civil Procedure for stay of the execution of the decree was filed. A similar objection was raised by the office as in the previous case with regard to the maintainability of the appeal that the requirements of section 12(5) of the Ordinance were not complied with. At the preliminary hearing of the appeal it was contended on behalf of the appellant that the decretal amount being fully secured by an equitable mortgage in favour of the decree-holder, the requirements of section 12(5) were fully satisfid and the appellant should not be required to a fresh security. A Division Bench of the High Court overruled the office objection and admitted the appeal to regular hearing as per order dated 3-12-1981, whereby on the application for stay of execution notice was ordered to the other side. However, when the stay application came up for consideration before another Bench of the High Court, the learned Judges took the view that on a plain reading of section 12(5) stay cannot be granted or appeal admitted, "unless the appellant deposits in cash an amount equal to decretal amount, or, if the High Court so orders in its discretion furnish security". In this view of the matter the learned Judges enquired from the counsel for the appellant whether he was prepared to furnish bank guarantee and on the refusal of the learned counsel for the appellant to do so on the ground that the latter was not in a position to furnish bank guarantee, the stay application was dismissed vide order dated 22-2-1982.
6. Leave to appeal was granted in these appeals in order to set at rest the conflict of opinion between the various Bench of the high Court on the A interpretation of section 12(5) of the Ordinance.
7. The main contention of the learned counsel for the appellants is that the provisions of section 12(5), if literally construed as done in the order of the learned Judges of the High Court dated 15-2- 1982, will render nugatory the right of appeal given by sections 12(1)(2) (3) and (4) of the Ordinance. His argument was that the object underlying the provisions of section 12(5) was not to penalise or punish the appellants by compelling them to furnish a second security, when the decretal amount is fully secured by an equitable mortgage, but to secure the interest of the decree-holder when the Banking Company succeeds in getting a decree. Mr. Naimur Rehman, the learned counsel for Dubai Bank Limited respondent in Civil Appeal No, K-67 of 1982 and appellant in Civil Appeal No, K-68 of 1982), on the other band assailed the order of the High Court dated 21-4- 1982 and argued that in the clear terms of section 12(5) the Court was bound to order security equal in value to the decretal amount either in cash or by way of other surety as a condition precedent to the very entertainment of the appeal and had, therefore, violated the mandatory provisions of law in treating the existing mortgage security in favour of the decree-holder prior to the institution of the suit, as a security for purposes of the said provisions. Mr. Aziz Munshi who appeared for the respondent in Civil Appeal No, K-71 of 1982 also took up the same position.
8. After hearing the learned counsel at length, however, Mr. Naimur Rehman and Mr. Aziz Munshi submitted that their main anxiety was to secure the interests of the decree-holder effectively by a sufficient security and as the Court had not applied its mind to this aspect, even if they accept the mortgage security as a security for the purposes of section 12(5), their clients' interests will be exposed to risk if subsequently the existing security is found to be inadequate in value qua the decretal amount. They agreed that they would not insist on a security aliunde the initial security under section 12 (5), for the purposes of stay of execution of the decree pending the disposal of the appeals in the High Court. In view of this it is not necessary to go into the question of law raised in the arguments of the learned counsel for the parties in this appeal.
9. Mr. A. A. Zari agrees, in the circumstances, that the question of the adequacy of the existing mortagage security was indeed not gone into in first B Appeal No, 65 of 1981 (pending in the High Court) and no security was demanded in the other first appeal viz. First Appeal No, 60 of 1981 (pending) in the High Court). Learned counsel for the parties in all these appeals are, therefore, agreed that the impugned orders be set aside and the cases remanded to the High Court for determining the adequacy of the mortgage security to be treated as security for the purposes of section 12 (5) of the Ordinance. We find that the impugned order in Civil Appeal No, K-71 of 1982 dated 22-2-1982 was passed on the stay application under Order XLI, rule 5 of the Code of Civil Procedure and no order for security in terms of section 12 (5) was passed in this case at the time of the admission of the appeal by the High Court. Learned counsel for the parties to this appeal agreed and we also consider it just and equitable, in order to do complete justice between the parties, that the objection with regard to furnishing security 'under section 12 (5) in First Appeal No, 60 of 1981 pending in the High Court should also be determined afresh. In view of the consent statement of all the parties to these appeals, we allow the same and set aside the impugned orders. The result is that the orders dated 24-3-1982 and 21-4-1982 in First Appeal No, 65 of 1982 pending in the High Court are set aside. Also the orders dated 22-2-1982 and the part of the order relating to the furnishing of the security under section 12 (5) in the order dated 3-12-1981 in First Appeal No, 60 of 1981 pending in the High Court are set aside. In consequence the cases are remanded to the High Court to be decided afresh in the light of the judgment, namely, that the sufficiency and adequacy of the value of the mortgage security vis-a-vis the decretal amount in the two appeals shall be examined and in case of a short for it will be open to the High Court to order cash deposit to meet the shortfall or in its discretion to order security equal in value to the same. In such case on the non-compliance of the order of the High Court the consequences provided in section 12 (5) of the Ordinance shall follow and the appeals shall not be admitted to hearing. It is further directed that in case the Court finds the existing mortgage security sufficient in value to the decretal amount in the two cases, the said securities shall be considered as securities for the purpose of the said provision of law, but in case they are found insufficient then to the extent of sufficiency they shall be treated as security for the same purpose alongwith additional security or deposit as ordered by the Court. Further, no fresh security shall be ordered on the stay application. All the appeals are disposed of in these terms.