' Through this writ petition, the petitioner has challenged the order passed by the Judge, Banking Court No,11, Mu'tan, dated 1-7-1998 through this Constitutional petition, whereby the application filed by the petitioner seeking leave to appear and defend the suit filed by respondent No,2 against the petitioner for recovery of Rs,5,48,489 has been dismissed as barred by time.
2. The learned counsel for the petitioner contends that no notice upon the petitioner was ever served through the Bailiff or process-server of the Banking Court nor by registered post acknowledgement due or by courier as contemplated in subsection (3) of section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. However, he was only served through publication in the newspaper Daily Pakistan, dated 19-3-1998 which had been received by the petitioner only on 21st of April, 1998. In these circumstances, the limitation runs from 21st of April, 1998 and the application filed by him on 8-5-1998 (Annexure "C") seeking leave to appear and defend was well within time and the learned Banking Court dismissed the same without adverting to proviso of section 10 of the aforesaid Act. The application filed by the petitioner seeking leave to appear and defend the suit was duly supported by an affidavit in which he had specifically stated that he was never served through registered post or through the bailiff or process-server of the Banking Court.
3. The contention of the petitioner finds support from the impugned order, wherein the learned Banking Court has also held that acknowledgement due ( URDU TEXT ) is signed by one Muhammad Afzal.
4. The Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, became effective on the 31st of May; 1997, while repealing Banking Companies (Recovery of Loans)
Ordinance, 1979 .(X1X of 1979) and the Banking Tribunals Act, 1984 (LVIII of 1984) under its section 4, the Federal Government establishes a Banking Court where it considers necessary for purpose of exercise of jurisdiction in respect of cases covered by section 2(b)(1) of the Act. Section 7 provides the powers which a Banking Court may exercise and briefly stated it exercises both the powers of a Civil Court under the Code of Civil Procedure (1908) and the powers of a Court of Sessions under the Code of Criminal Procedure.
5. Section 9 of this Act lays down a procedure which the Banking Courts are to observe. Section 9 reads as under:-- Procedure of Banking Courts.-- (1) Where a borrower or a customer or a banking company commits a default in fulfilling any obligation with regard to any loan or finance the banking company or, as the case may be, the borrower or customer, may institute suit in the Banking Court by presenting a plaint duly supported by statement of account which shall be verified on oath in the case of a banking company by the Branch Manager or such other officer as the Board of Directors of a banking company may authorize in this behalf. Copies of the plaint shall also be filed along therewith in sufficient numbers so that there is one copy for each defendant and one extra- copy.
(2) The provisions of section 10 of the Code of Civil Procedure, 1908, shall have no application for and in relation to suits filed hereunder.
(3) On a plaint being presented to the Banking Court a summons in From No,4 in Appendix "B" to the Code of Civil Procedure (Act V of 1908), or in such other form as may, from time to time, be prescribed by rules, shall be served on the defendant through the bailiff or process-server of the Banking Court, by registered post acknowledgement due, by courier and by publication in one English language and one Urdu language daily newspapers and service duly effected in anyone of the aforesaid modes shall be deemed to be valid service for purposes of this Act. In the case of service of the summons through the bailiff or process-server a copy of the plaint shall be attached therewith and in all other cases the defendant shall be entitled to obtain a copy of plaint from the office of the Banking Court without making a written application. The Court shall ensure that the publication of summons shall take place in newspapers with a wide circulation within its territorial limits.
(4) In any case in which the summons has been served on the defendant as provided for in subsection (3) the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided so as to defend the same; and, in default of his doing so, the allegations of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Court may require in the interests of justice."
6. Section 10 is also relevant for purposes of disposal of this petition because it sets a time limit for making of an application by a defendant asking for leave to defend. It reads as follows:-- "Leave to defend.--- Subject to section 11, the Banking Court shall, upon an application made by a defendant within twenty-one days, give leave to defend the suit, if a serious and bona fide dispute is raised thereby: ' Provided that where service has been validly effected only through publication in the newspapers the Banking Court may extend the time for filing an application for leave to defend if satisfied that the defendant did not have knowledge thereof."
7. As is evident section 9(3) of the Act prescribes various modes of service. The purpose of mentioning of these modes is to enable the service upon the defendant with convenient despatch so that, banking cases to be tried under this special law, do not get delayed on account of service.'
If 'the service has taken place in any of the modes other than publication of a citation in the newspaper, it becomes incumbent upon the defendant to make a petition within a period of 21 days from the date of service to the Banking Court asking for leave to defend the suit provided he demonstrates that a serious and bona fide dispute was being raised by him. However, if the service is not possible through the modes otherwise than the publication of a citation in the newspaper, the Banking Court has been authorised to extend the time for filing an application for leave to defend upon satisfaction that the defendant did not have knowledge about the proceedings.
8. These provisions, of the Banking Laws are not to be taken in derogation of the rules of natural justice which provide required notice and hearing. Therefore, if a service by any of the methods mentioned in section 9(3) has taken place and Banking Court is satisfied that in reality the service was effected then the period of 21 days would start running from the date of service. But if that has not happened and there is need for publication of a citation in the newspaper the Banking Court may then adopt this method.
9. The proviso to section 10 reflects the intention of the Legislature of allowing concession with respect to the limitation in case of such a service because there may be a possibility that the defendant had not read such a C publication in the newspaper and may have come across it through information from a third party after the publication of the notice..
10. In this case, it was the case of the petitioner that no service was effected on him under the various modes reflected in section 9(3) of the Act and that he learnt about the notice from a shop- keeper of his village who had read the daily "Pakistan" in Which the notice was published. The learned Banking Court was of the view that he did not attach the affidavit of the said shop-keeper and, therefore, the application being beyond 20 days from the date of service was not tenable.
11. The findings of the learned Banking Judge are erroneous and against the spirit of sections 9 and 10 of the Act. In case the learned Banking Judge had any doubt with respect to the knowledge of the petitioner, he could have asked him ,to furnish proof and this would have enabled the petitioner to produce the shop-keeper concerned. But as has been said by the petitioner, the learned Judge had no proof of service on the petitioner and the signatures on the receipt were of one Afzal about whom nothing has been stated.
12. While dismissing the application through this, mechanical process, in fact the learned Banking Judge has caused delay in the disposal of the case itself and which was also against the spirit of the special law. The order in question, therefore, is perverse and while exercising the writ jurisdiction, this Court sets aside the order in question and remands the case to the Banking Court for hearing the application of the petitioner seeking leave to defend. The writ petition is accepted.
Parties are directed to appear before the Banking Court, Multan, on 1st of March, 2000. In case the parties failed to appear before the Banking Court, they shall be resummoned.