1. ' In Suit No, 784 of 1989 before the Special Court of Banking at Karachi, where the respondent was plaintiff and the appellant was defendant, an order to the following effect was passed:- "None present for plaintiff. Defendant is called absent though served by publication on 20-10-1989.
2. He has not been served through bailiff and by registered post. Service against defendant is held good on 20-10-1989. No application is filed by defendant. Suit to proceeding ex parte against him.
3. Put off to 20-1-1990 for further proceedings."
4. ' Subsequently, on 2-1-1990, the appellant-defendant filed an application under Order XXXVII, Rule 3, C.P.C. And another under section 5 of the Limitation Act. Relief was sought on the ground that the defendant had not been served in any of the modes adopted by the Court namely, service through bailiff under postal cover and by publication and that the defendant's proprietor had been informed by an officer of the plaintiff-bank on 23-12-1989 of the pendency of proceedings, which being the case, the defendant was applying for leave to defend and for condonation upon re- opening of the Court, after the winter vacations on 2-1-1990. The application for condonation under section 5 of the Limitation Act, was dismissed by the learned Presiding Judge on the ground that no sufficient cause was shown because the publication, at any event, had taken pace on 20-11-1989 and the defendant should be deemed to have been served thereby, in turn satisfying the criterion that service in one of the prescribed mode was sufficient. As to the merits of the controversy the trial Court disallowed leave to defend but that aspect of the case would be dealt with separately.
5. ' Regarding condonation of delay, the learned counsel for the appellant has urged that in view of what was said in United Bank Ltd. v. Mohibali Tannery Ltd. PLD 1994 Karachi 275, genuine and real efforts ought to have been made to save the appellant-defendant in accordance with the provisions in the Banking Companies (Recovery of Loans) Ordinance, 1979, and the Rules made thereunder but because, admittedly, neither service in the ordinary course not by post was ever effected on the defendant and what is more the defendant never came to see the newspaper publication, on which basis alone service was held to be good, the defendant, in effect, had filed the application under Order XXXVII, Rule 3, C.P.0 for leave to defend in time and in substance there was no need for condonation of delay. As to such question of the application for leave to defend being in time and service not being duly effected in the manner prescribed, there appears to be force in the contention of the learned counsel and some support can undoubtedly be drawn from the precedent in the case of United Bank Ltd. (supra). On the facts and circumstances of the case, it was clear that the appellant-defendant was neither served through bailiff nor by post. But that as pointed out in Emirate Bank International v. Dost Muhammad Cotton Mills, 1993 MLD 54, another Karachi decision, this time relied upon by Mr. A.R. Siddiqi, was not a necessary requirement under the Banking Companies (Recovery of Loans) Ordinance and its Rules, the Rules being of 1980.
6. However, the two Karachi decisions in the cases of United Bank Ltd. And Emirate Bank International, if examined closely, are clearly reconcilable. Both draw upon the Supreme Court authority in Ahmed Autos v. Allied Bank of Pakistan Ltd., PLD 1990 SC 497, where, to put it shortly, service by publication alone was found sufficient in circumstances indicating that the defendant actually did come to know of such publication.
7. While it is correct that the postulates of the special law namely, the Banking Companies Ordinance and its Rules are different than the envisaged in the pristine concepts of the Code of Civil Procedure, the fact remains that a real and not a sham effort to serve the defendant under Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980, is to be made and, as hinted in the cited case of United Bank Ltd., the basic requirements of justice, equity and good conscience have to be observed in so doing. In the instant case we have gone through the record with the learned counsel and both of them agree that no notices whatsoever, either through bailiff or under postal cover, were issued in the suit and all that transpired, towards effecting service, was issuance of the requisite notice through publication in the press and on such basis alone the learned Presiding Judge found service to be good and decided to proceed ex parte in the matter as quoted hereinabove. The reason for this laxity is not far to find. Such kind of approach has developed because of over-emphasising the letter of law and overlooking its spirit. The object of Rule 8 of the Rules is no more than to duly and effectively forestall evasiveness and avoidance on the part of defendants from being served with the Court process. Due service still remains the sine qua non of the exercise. Thus if. Genuine efforts at effecting personal service stand aborted, essentially for something the defendant can legitimately be blamed, the presumptive service by publications alone may be invoked to fit into the stipulations of Rule 8 ibid. Issuance of process in all the three modes contemplated by Rule 8 (supra) is yet mandatory. Not only this, there must be genuine attempt(s) to serve the relevant defendant in the ordinary course and under postal cover. Only then service in any of the three modes postulated by the rule should be deemed sufficient.
8. ' If the legislative intent was to resort to presumptive service through publication alone, it could have been so expressed but then rule-making power having a nexus with suborinate legislation such should have given rise to a challenge on grounds unreasonableness etc. Look at the matter whichever way we may, what came about was not permissible either under the authority of the case of Emirate Bank International or of the other Single Bench decision of this Court in Re: United Bank Ltd. Aforequoted or even upon the Supreme Court dicta in Ahmad Autos, the last of which expressly lays down a requirement to issue process in all the three modes prescribed. The requirements of Rule 8 ibib, accordingly, were not satisfied. What is more, about the publication itself, the appellant-defendant made an express and unequivocal statement that such did not come to its notice and the pendency of the proceedings was made known only through an officer of the concerned bank, a proposition that does not seem to have been seriously controverted. It may bear mention here that Rule 8 in the Rules does not, by itself, confer any presumptiveness in service either by post or in the way of publication. For due presumptions to arise recourse to section 3 of the Banking Companies (Recovery of Loans) Ordinance, which stipulates that the "Provisions of the Ordinance shall be in addition to" and, save as provided, "not in derogation of any other law for the time being in force," shall have to be made. This, in turn, would raise a presumption relative to postal service by resorting to the General' Clauses Act. As to service through publication a cross-reference to Order V, rule 20, C.P.C. May likewise be made but for such service to be "as effectual as if it has been made on the defendant personally" it may be relevant to consider whether the defendant as required by Rule 20, Order V, C.P.C. Was keeping out of the way or could not be served in the ordinary manner. This arises because we cannot lift merely the presumptive part of the rule and totally ignore the rest. Hence, as expectation that there should be due efforts to personally serve the defendant simultaneously and it is only in the overall circumstances of a case that service by publication may be deemed enough in itself. No personal process having effectively been attempted let alone served and the defendant denying any timely knowledge of the publication the presumption, if any, regarding service stood displaced.
9. In the circumstances of the case, therefore, either no delay arose or condonation was merited and thus dismissal of the application under section 5 of the Limitation Act by the learned trial Judge was clearly erroneous. Such part of the order cannot be upheld.
10. ' This brings us to the merits of the controversy and there, as well, the learned trial Judge has proceeded to dismiss the defendant's application for leave to defend under Order XXXVII, Rule 3, C.P.C. As to the facts of the case, a project loan in the sum of Rs,7,85,000 was sanctioned to the defendant any by the Bank out of which a sum of Rs,200,000 was disbursed to the seller of the machinery, required for establishing an Ice Factory whereas another sum of Rs,63,000 was made over directly to the defendant for the purpose of raising the requisite structure for setting up of the unit. Mr. Javed Farooqi has contended that because the entire project loan was not released, the bank was in breach of contractual obligations and, therefore, the maximum that it could have been entitled to was repayment of the actual amount disbursed without any profit or other accrual.
11. Mr. A.R. Siddiqi, on his part, has placed on record a letter dated 15-8-1983 with which was appended a letter dated 13-8-1983 from the supplier of the machinery requiring payment of Rs,250,000 so that machinery could be made ready for delivery in 1983. In the defendant's covering letter, dated 15-8- 1983, corresponding request for such payment of Rs,250,000 to the supplier was made. Another letter placed on record by Mr. Siddiqi is one dated 14-4-1985, again by the defendant, whereby the above-referred payments of Rs,200,000 and Rs,63,000 were acknowledged, no complaint whatever of the balance not being paid was raised and on the contrary it was pointed out that the construction work for the project could not commence as water and power connections on the existing plot could not be obtained. As a result, the defendant communicated that in such situation it had decided to change the line of business as well as to substitute the location to another plot, security of which plot was also offered for release of further amount. None of these documents is disputed by the learned counsel representing the defendant/appellant before us. This apart, the learned Presiding Judge of the Special Court has relied upon the letter dated 31-3-1988 from the defendant to the bank wherein no dispute whatever with regard to the actual advance of a total sum of Rs,263,000 was raised. In such circumstances, there does not appear to have been any error in refusing to grant leave to the defendant to defend the suit and findings on that score must be upheld. However, the learned counsel for the plaintiff-Bank, while arguing the case before us, has agreed that instead of allowing accruals on the principal amount at 11 % per annum with quarterly rests, decree may be modified so as to carry such accruals at 11% per annum simple and without any rests. In view of inflation, which manifestly has been running in two digits, this, in the circumstances, is hardly any interest and no exception can be taken to it even in terms of Article 2- A in the Constitution, as urged by Mr. Javed Farooqi. With such modification, as suggested by Mr. A.R. Siddiqi, the decree is, accordingly, upheld and the appeal is dismissed.