1. ' By this order I propose to dispose of C.MA. No, 1883/87 filed by defendants Nos. 1, 2, 3, 5, 6, 7, 8 under section 5 of Limitation Act praying for condonation of delay in filing their applications for leave to appear and defend the suit under Order 37, Rule 3, C.P.C. Bearing C.MAs. Nos. 4548/87, 4549/87, 4450/87, 4451/87, 1883/87.
2. ' M/s. Union Bank of Middle East the original plaintiff had filed this suit under the Banking Companies (Recovery of Loans) Ordinance, 1979, read with Order 37, C.P.C. For recovery of Rs,69,105,521.59 against M/s. United Export Limited defendant No,1, to whom credit facilities/export loans were granted by the plaintiff and also against defendants Nos.2 to 9 who were its guarantors and/or Directors. Subsequent to the filing of the suit, M/s. Emirates Bank Ltd. Were substituted as plaintiff, being successors of the original plaintiff.
3. ' Summons under Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 were issued to all the defendants. On 12-10-1987 the Additional Registrar (O.S.) held service good on all the said defendants through the bailiff as well as by Registered A.D. In the meantime on 3-9-1987 publication of summons also took place against the defendants. However, these defendants filed the aforesaid applications for leave to appear and defend the suit on 18-10-1987.
4. ' In C.MA. No,1883/91 under section 5 of Limitation Act it is stated by the said defendants that one Yaqoob Ali, Officer of defendant No, 1 was entrusted to look after the Court work of defendant No,1.
5. On 11-10-1987, when he visited this Court in connection with other matters of the defendants, he came to know from the office of the Court that the above suit had been filed by the plaintiff against them. Accordingly he received summons from the bailiff of the Court and the said five applications for leave to appear and defend the suit were filed by them on 18-10-1987, i,e, within seven days of the receipt of the summons. As to the publication of summons in the newspaper, it was urged by them that they, do not subscribe or read the Daily "Morning News", in which the summons was published. Hence the delay in filing applications for leave to appear and defend the suit is not intentional. This application was supported by affidavits filed by the said Yaqoob Ali as well as by the said defendants.
6. ' The plaintiff vehemently opposed this application stating that the defendants were first served by publication on 3-9-1987 and thereafter by post on 12-10-1987 but the five applications for leave to appear and defend the suit were filed by the defendants on 18-10-1987, six weeks after they were first served. Thus all the applications were time barred under Article 159 of Limitation Act. Even otherwise these applications were not maintainable as all were filed without affidavit which were filed as late as 9-1-1988 after a delay of four months of service. It was submitted that the date of publication was date of service on the defendants and the date when the defendant's representative received the summons from the Court is not relevant being subsequent to the date of publication of notice. The explanation given by the defendants that they do not read "The Morning News" is not the least plausible. It was further submitted that the defendants' application under section 5 of Limitation Act was filed after about 3-1/2 years on 7-4-1991 and suffers from serious laches and on that ground also C.MA. No, 1883/91 under section 5 of Limitation Act is liable to be dismissed. The reply of the defendants as reflected in their rejoinder affidavits/further rejoinder was that service by publication cannot be deemed to be effected under Order 37, C.P.C.
7. Unless copy of the plaint is simultaneously supplied to a defendant. In so far as service of summons by post or bailiff was concerned, it was denied by them that they ever received any summons by post or through the bailiff. The postal acknowledgments on the basis of which the learned Registrar had held service on them good on 12-10-1989 do not bear the signature of any one of these defendants. The bailiffs report dated 11-10-1989 translated into English may be reproduced as under: "I had gone to serve defendants 1 to 7 on 19-9-1987 and 30-9-1987 at their address (State Life Building No, 2, 9th Floor, Wallace Road, Karachi). There was a clerk who told me that there was no body there, as such, service could not be effected on them. When I went to serve defendant No,8, there was one Mr. Yaqoob who told me that there was no director. I then went to serve defendant No, 9 and found the office closed. On 11-10-1987, Yaqoob came to the Court and collected copies of notices of defendants 1, 2, 3 5, 6 7 and 8 from me. I return summons of defendants 4 and 9."
8. ' The Additional Registrar while holding service good on all the said defendants through the bailiff; misread his report and did not apply his mind and clearly violated the mandatory provisions as contained under Order 5, Rule 9, C.P.C. Which require that where the defendant is residing within the jurisdiction of the Court he must be served personally or through his agent. Servim cannot be made on a defendant through a stranger. If any person comes to the Court premises and collects summons on behalf of defendants, it cannot be said that he was an agent of the defendants and service on them cannot be held good unless it could be shown that the person receiving the summons had the authority to receive it. Service of summons on defendants through post is also bad as none of the acknowledgments due bear the signature of any of the said defendants nor there is any endorsement by the postman stating that the said defendants or any one of them had refused to accept the summons. However, in view of the fact that the defendants have rectified the act of the said Yaqoob in accepting summons on their behalf, I hold service on them good through the bailiff with effect from 11-10-1987, when the latter received summons from the bailiff in the Court premises.
9. ' In so far as the objection raised by Mr. Sajid Zahid, learned counsel for the plaintiff that the said applications for leave to defend the suit were filed without affidavits are not maintainable in view of Rule 74 (1) (c) of the Sindh Chief Court Rules, Mr. Mansoorul Arlin, learned counsel for defendants pointed out that on 10-1-1988, these applications were fixed for non-prosecution as the defendants had failed to file affidavits which were however filed one day earlier by them. On the said date learned counsel for the plaintiff did not press for any order for non-prosecution of these applications. Accordingly the case was adjourned to 3-3-1988 for filing counter-affidavits by plaintiff. On a later date, on 19-10-1989, by consent, the defendants were directed to file rejoinder.
10. Such being the position the plaintiff-Bank is estopped from raising this objection. Besides Order 37, Rule 3, C.P.C. Does not contemplate filing of affidavit by a defendant. What it envisages is merely filing of an application for leave to appear and defend the suit.
11. ' It would be advantageous here to refer to the case of M/s. Union Bank of the Middle East Limited v.
12. M/s. Zubna Limited and 3 others PLD 1987 Karachi 206 which was approved by the Supreme Court of Pakistan in M/s. Ahmad Autos and another v. Allied Bank of Pakistan, PLD 1990 SC 497, an excerpt from which is as under: .
13. "The question that the plaint cannot be annexed in the case of publication should not be held to be an impediment in holding such service to be good inasmuch as, firstly, the copy of the plaint has been annexed to the summons sent to the defendant through bailiff as well as by Registered Post and secondly, the defendant is on notice to collect the copy of the plaint from the office and, in any case, there cannot be impediment in making just an application for leave to defend, even without a copy of the plaint, within the statutory period. The grounds for leave to defend may be submitted later on, after the receipt of the copy of the plaint."
14. A bare reading of Order 37, Rule 3(1), C.P.C. Would reveal that when a defendant files an application for leave to defend the suit he is also required to support the application by an affidavit. A summon under Order 37, C.P.C. In Form 4 of Appendix B also speaks of "obtaining leave on an application to the Court supported by affidavit or declaration " Where there is a failure on the part of the defendant to file affidavit or declaration no doubt there is also noncompliance of Rule 74(1)(c) of Sindh Chief Court Rules and Forms on the original side as pointed out by Mr. Sajid Zahid. But it is always in the discretion of the Court under Order 148, C.P.C. To accept a belated affidavit filed by a defendant. The discretion must be liberally granted in of the defendant in a summary suit and he should not be debarred from setting up his defence under Order 37, Rule 3, C.P.C. Unless the Court is satisfied that he has no other object but to delay or defeat the proceedings in the suit or harass the plaintiff.
15. ' The crux of the matter however, remains as to whether the defendants were duly served under Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 through publication. It would be advantageous here to reproduce Rule 8 as follows:-- "8. Mode of service of summons and notices.--The Reader shall, on receipt of a plaint, order immediate issue of summons and notices to the defendant simultaneously through the Bailiff of the Court, by registered post acknowledgment due and by publication, and service in any of the aforesaid modes shall be deemed proper and valid service for the purposes of the Ordinance."
16. ' Mr. Sajid Zahid learned counsel for the plaintiff submitted that in view of the authoritative judgment of the Supreme Court in M/s. Ahmed Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 on the interpretation of Rule 8, there is no question that the defendants have not been duly served as it was held: "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 summon is not served through a bailiff or by a registered post acknowledgment 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."
17. ' In reply learned counsel for the defendants Mr. Mansoorul Arlin argued out at length that Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 is ultra vires and repugnant to the provisions of Order 37, C.P.C. And the law under which it was made namely "The Banking Companies (Recovery of Loans) Ordinance, 1979" and cannot be given effect to, quoting the following decisions of the Court (i) where a bye-law (which in the present case is Rule 8) which differs materially from the Act should not be enforced, AIR 1921 Lah. 134, (ii) Rules framed under the Act cannot go beyond the Act itself, PLD 1971 Pesh. 226, PLD 1966 Kar. 518, PLD 1967 Karachi 191, (iii)
18. Statutory rules cannot take away or abridge a right conferred by the relevant statute and they cannot abolish what the act permitted 1985 SCMR 386, (iv) Bye-laws may be treated ultra vires when they are unreasonable and repugnant to the statute under which they are made PLD 1961 Kar. 349, (v) The rules framed under the Act cannot override the specific provision of the statute. In case of conflict, the statute must prevail, PLD 1988 SC 66.
19. ' To meet this objection not raised by the defendants before, Mr. Sajid Zahid learned counsel for the plaintiff again referred to the case of Ahmed Autos and another (supra) in which it was observed by the Honourable Supreme Court: "Rule 8 of Banking Companies (Recovery of Loans) Rules, 1980, is not violative of Order XXXVII, C.P.C.
20. Rule 8 has been competently framed by the competent authority. It does not violate in any way Order XXXVII or any other provision of the C.P.C. Section 129 of the C.P.C. Itself contemplates that the Orders and the Rules provided in the C.P.C. Can be amended by the chartered High Courts by framing rules relating to their original civil jurisdiction. Framing of Rule 8 in pursuance of the statutory powers contained in section 15 of the Ordinance seems to be in consonance with the above section 129. The object of the above Rule 8 is to avert delay in effecting service of the summons, which object is in consonance with the proviso 2 to Rule 13 of Order IX, C.P.C.
21. Incorporated by the Law Reforms Ordinance, 1972."
22. ' Without going into the question whether all aspects of the objection as to the Rule 8 being violative of Order XXXVII, C.P.C. Or the Banking Companies (Recovery of Loans) Ordinance, 1979 were considered by the Honourable Supreme Court in the Ahmed Auto's case or not, what I note from the record is that on 25-1-1988 the learned Additional Registrar passed the following order: "For consideration of service on defendants 3, 4, 7 in the light of publication under Rule 8. Adjourned to 29-2-1988."
23. ' On 29-2-1988, the following order was passed by the learned Registrar: "Service on defendants 3, 4 is held good in view of publication under Rule 8 of the Banking Companies (Recovery of Loans) Ordinance, 1979 and D.B. Judgment in C.L.C. Sept. 1987 page 2164.
24. For further proceedings adjourned to 13-9-1988."
25. There is no order on record except the above order either by the Additional Registrar or by the Court holding service to be good on other defendants namely defendants 1, 2, 5 to 9 through publication. Under Rule 147 of the Sindh Chief Court Rules (O.S) "All acts which may be done by the Court under Order 5, Rules 19, 20, 21 and 21-A of the First Schdule to the Code may be done by the Registrar (O.S.) and service of process as may be ordered by the Registrar (O.S.) shall be as effective as if the same had been ordered by the Court". It may further be stated here that under Rule 15 a decision to any question decided by the Registrar may be called in question before the Court within eight days by way of petition except where it relates to the above Rule 147.
26. ' However, it can be argued that despite the embargo placed under Rule 147 of the Sindh Chief Court Rules (O.S.) an appeal would lie against an order passed by him under Rule 147 before the Court. As I am not confronted with such a proposition I will refrain from commenting on it. Similarly I am not inclined to take suo motu notice of the order of the learned Additional Registrar (O.S.) with a view to go behind it. What follows, then, is that service by publication cannot be considered as effective and good under Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 unless it is first held to be good service by the Court or the Additional Registrar (O.S.) as the case may be.
27. Once such an order is passed, time will start running against a defendant w,e,f, the date of publication of summons. But where there is no such order, publication of summons by itself will be of no consequence. In the present case the learned Additional Registrar of the Court while considering the publication of summons in the daily "The Morning News" had held service on defendants 3 and 4 only to be good. The ground urged by defendant No, 3 that he does not read "The Morning News" is no ground for condonation of delay under section 5 of Limitation Act.
28. Accordingly C.MA. No, 1883 of 1987 is dismissed against him so also his application for leave to appear and defend the suit being time-barred with the result that the suit will proceed against him under Order 37, Rule 2, C.P.C. In so far as defendants 1, 2, 5, 6, 7 and 8 are concerned C.MA. No, 1883/87 has become infructuous as they were served on 11-10-1987 and their applications under Order 37, Rule 3, filed on 18 -10-1987 were within time. These applications may now be fixed by the office for hearing.