' SYED NAJAM-UL-HASSAN KAZMI, J.---This judgment deals in the disposal of R.F.A. No, 588 of 1996 and R.F.A. No,336 of 1997 as common questions of law and facts arise therein.
2. Respondent No,1 (Habib Credit and Exchange Bank Limited), filed a suit for recovery of Rs,3,65,55,872.74 against Isman Drug House (Pvt.) Ltd. And 2 others appellant in R.F.A. No, 588 of 1996 and Mst. Shahida Sohail, Miss Ayesha Ismail, Dr. Arif Umar Usman Umar (respondents Nos.2 to 5 in R.F.A. No,588 of 1996).
3. On 21-1-1996, the suit was decreed by Chairman, Banking Tribunal No,IV, Lahore, in the sum of Rs,3,04,64,060.74 with costs. However, claim of 20% liquidated damages was disallowed
4. R.F.A. No,588 of 1996 has been filed by Isman Drug House (Pvt.) Limited, Mrs. Hamida Ismail and Irfan Omer, judgment-debtors against the judgment and decree, dated 21-1-1995 of the Baking Tribunal. The judgment and decree of the Banking Tribunal was also challenged in Writ Petition No, 4313 of 1996 by the judgment-debtors which petition was allowed on 21-7-1996, ' alongwith the other connected writ petitions, by a Full Bench of this Court.
5. In R.F.A. No, 336 of 1997, the facts are that Habib Credit and Exchange Bank Ltd., applied for execution of the aforesaid decree of Banking Tribunal, which came up for hearing before the learned Banking Judge, Lahore High Court, where an objection was raised that the decree had already been set aside and, therefore, the execution could not proceed. This objection found favour with the Court and resultantly, the execution petition was dismissed on 20-11-1997 with the observation that decree itself had already been set aside.
6. It has been argued on behalf of the judgment-debtors that the decree was challenged in two forums, one in appeal and other by way of Constitutional petition. The appeal (R.F.A. No,588 of 1996) was filed on 25-2-1996 while the writ petition was instituted on 7-3-1996. It was contended that the writ petition was allowed alongwith the other connected petitions, with the result that the impugned decree being without jurisdiction was set aside. It was argued that the appeal against the decree had become infructuous as no executable decree remained in field. Regarding execution proceedings, it was argued that no execution was possible as decree had already been set aside by the Full Bench of this Court. Sh. Zia Ullah, Advocate, who represents one of the party in this, case, raised additional argument that the suit should be deemed to have been dismissed and there will be no reason for treating it as pending or transferring it to the Banking Court and that the bank should refile a fresh suit.
7. On behalf of Bank, Mr. Khalid Mehmood, Advocate submits that the decree would not be deemed to have been set aside, the execution petition could not be dismissed, the Full Bench protected past and closed transactions and the decree having been passed before the judgment of the Full Bench, would stand protected and could be lawfully executed. It was, thus contended that the appeal of the judgment-debtors should be dismissed while the judgment of learned Judge Banking Lahore High Court should be set aside and execution proceedings be revived.
8. Mr. Muhammad Ismaeel Qureshy, Advocate and Mr. Waqar Saleem Advocate who represented the alleged purchasers in execution, submitted that they participated the execution proceedings in good faith and that they made substantial investment in terms of the orders already passed and, therefore, they should be protected. It was argued that the order passed in execution was once challenged in this Court, and that as a result of the orders passed therein, their clients made payment of the auction price and, thus, could not be denied of the consequential benefits.
9. The questions which need determination in the two appeals are, as to whether the judgment and decree, passed by the Banking Tribunal, in the present case, was set aside in terms of the judgment of the Full Bench reported as Messrs Chenab Cement Product (Pvt.) Ltd. And others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672 or whether the decree is protected. It is not the case of the bank that the decree was not challenged by way of writ petition or that the writ petition was not decided alongwith the other connected matters by the Full Bench of this Court. It is also not denied that in addition to the writ petition, the judgment-debtors had also filed R.F.A. No,588 of 1996 against the same judgment of the Banking Tribunal. It is not denied that the Writ Petition No, 4313 of 1996, filed by the judgment-debtors in this case was allowed by the Full Bench on 21-7-1996.
10. From the judgment of the Full Bench of this Court PLD 1996 Lah. 672 it is obvious that in all those writ petitions, filed by different persons, various provisions of Banking Tribunals Ordinance, 1984, appointment of the Tribunals constituted thereunder and also the judgments rendered and proceedings recorded by those functionaries were challenged Writ petition filed by the judgment- debtors was one of he petition mentioned in the schedule of the cases referred to in the Full Bench judgement, and the decree was challenged on the ground that the provisions of Banking Tribunals Ordinance were ultra vires of the Constitution and that the proceedings held by the Tribunal constituted thereunder were coram non judice. It was held in the Full Bench judgment, that the provisions of section 4 and section 6(6) as amended by Act VII of 1990, first proviso to section 9 of the Banking Tribunals Ordinance, 1984 were unconstitutional as the same erode the independence of Judiciary and were hit by Article 175 read with Articles 2-A, 4, 8 and 25 of the Constitution of Islamic Republic of Pakistan. It was declared that the Notification, appointing Presiding Officer, of Banking Tribunal, issued under the Banking Tribunals Ordinance, 1984 were unconstitutional, without lawful authority and were accordingly quashed. In para.12 of the judgment it was observed that the judgment would not effect cases, past and closed or invalidate judgments/decrees, orders etc. Which had become final as no vacuum could be created in consequence of the judgment.
Protective clause of the judgment deals with those decrees which were past and closed and had not been challenged. It cannot be accepted that the decree which in itself was under challenge before the High Court in the judgment, wherein the establishment of the Banking Tribunals was declared to be unconstitutional and provisions held to be ultra vires and unconstitutional, would not be effected by the said judgment. As a result of the judgment of Full Bench, the cases in which writ petitions had been filed to challenge the decree automatically stood transferred to the respective Banking Courts for decisions afresh. Those judgments and decrees which were not under challenge in appeal or writ and had attained finality or became past and closed transaction were not affected by the said judgment. The same view was taken by a Division Bench of this Court in which one of us (Sayed Najam ul Hassan Kazmi, J.) was a Member while deciding EFA No,113 of 1998). Admittedly, the decree in the present case was subject-matter of challenge in the appeal and also in the writ petition and the writ petition having been allowed the decree would be no longer in field after declaration made by the Full Bench of this Court. Even otherwise, RFA being pending, against the decree of Banking Tribunal, the decree can be declared to be inoperative on the touchstone of the declaration made in the Full Bench judgment. Be that as it may, the decree in itself having been challenged in Writ Petition No,4313 of 1996, writ petition having already been accepted on 21-7-1996, the decree would be deemed to have been declared invalid and inoperative, with the result that the proceedings in the suit would stand revived and transferred to the respective Banking Court. In this view of the factual and legal position, the learned Banking Judge, Lahore High Court, rightly held that the execution petition could not continue as the decree did not exist any longer.
11. As regards the argument that the suit should be deemed to have been dismissed or plaint rejected on account of the judgment rended by the Full Bench and that the bank should be made to file a fresh suit, the argument is devoid of merit. It has been clearly held by the Full Bench of this Court, in the judgment noted supra, that the cases would be triable by the Courts created under the Banking Companies (Recovery of Loans) Ordinance of 1979 which could try the cases under Islamic System of Banking after the amendment of definition of loans by amending Ordinance 50 of 1980, by operation. It was no where held in the judgment that the suits should be deemed to have been dismissed or plaint returned for presentation to the competent Court and, therefore, the appellants who are petitioner in writ petition, in which the judgment was delivered, cannot be permitted to take a position contra to the directive contained in the Full Bench judgment. In terms of the said judgment, the suit, out of which, the present proceedings have arisen would be deemed to have been transferred to the Banking Court, established under the Banking Companies (Recovery of Loans) Ordinance of 1979. On the enforcement of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the suits and proceedings pendings before the Special Court Banking under Ordinance of 1979 would stand transferred to the Banking Court, by operation of section 7(6) of the new law. Section 7(6) of the Act (ibid) is to the following effect: All proceedings, including proceedings following the filing of an arbitration award and proceedings for the execution of a decree within the jurisdiction of a Banking Court, pending in any Special Court constituted under the Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX of 1979), or under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, .1997 (XXV of 1997), or any Banking Tribunal under the Banking Tribunals Act, 1984 (LVIII of 1984), or any other Court including a High Court shall stand transferred to, or be deemed to be transferred to the Banking Court having jurisdiction. On transfer of proceedings under this subsection, a Banking Court shall require the attendance of the parties through notices issued in accordance with the procedure for service of summons or notice laid down in subsection (3) of section 9."
12. In view of the provision of section 7(6) of the Act, the proceedings in the present suit, stand transferred to the respective Banking Court, which will proceed in the matter and decide the suit afresh in accordance with law.
13. Regarding the objection of the alleged buyers, it may be observed that the proceedings in execution, continued, during the pendency of the writ petition, which of course were subject to the decision of the writ petition and also the appeal. Decree had already been challenged in the writ petition which was ultimately accepted and, therefore, the rate of the alleged participants of auction would depend upon the decision in the writ petition and since as a result of decision in the writ petition, the decree ceased to remain operative, therefore, no lawful claim could be made by those persons. This fact is also evident from the sale certificate issued, by the Banking Court, in which it was specifically mentioned that the certificate would subject to the decision of the High Court. The operative part of certificate is as follows:-- "Sale is confirmed subject to decision of the Hon'ble High Court on the point if the judgment of the High Court dated 21-7-1996 tends to set aside the impugned decree or not. In case the decision on the point comes - in affirmative the sale certificate would be treated as redundant, otherwise, the purchaser shall have possession of properties in question"
14. In view of the clear condition in the certificate dated 12-1-1997, it become evident, that the alleged auction-purchaser, proceeded at their own risk and that no unconditional deal was made in their favour and also that they have accepted the condition that if the decree of the Court would be deemed to have been set aside in terms of judgment dated 21-7-1996, they would not be entitled to claim any right. Learned Banking Judge Lahore High Court took the view that the ,decree stood set aside and we are also affirming the same, therefore, the objection raised on the basis of alleged certificate, falls to the ground.
15. For the reasons above, R.F.A. No,336 of 1997 is dismissed while R.F.A. No,588 of 1996 is disposed of, with the observations that the decree challenged in the appeal, having been set aside in Writ Petition No,4313 of 1996, the appeal has borne fruit..