' This is an application under section 12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 for setting aside the ex parte decree which was passed against the defendants on 25-2-2000, when no one had appeared on their behalf. The ground urged in this application is that the defendants were not served with any summonses and had no knowledge of the proceedings of the suits and therefore, they could not move any application for leave to appear and defend the suit.
2. The application has been contested by the plaintiff/respondent by filing a reply in which it has been averred that the service of summonses through publication in the daily newspapers "Nawa-i- Waqt" and "The Nation", Lahore on 22-1-2000 was effectively made on the petitioners/defendants.
3. Before proceeding to consider the arguments of the learned counsel for the parties, some facts need to be noticed, which are that on 11-1-2000 the present suit for recovery of Rs,253,364,253 was brought by the plaintiff against M/s. Ittefaq Textile Mills Ltd. Which is a company incorporated under the Companies Ordinance, 1984 and 5 others. The suit came up for hearing before this Court on 13- 1-2000 when it was ordered to be registered and summonses be issued to the defendants in the prescribed form through ordinary mode, by registered post and publication thereof in the daily Nawa-i-Waqt" and "The Nation", Lahore. The next date of hearing was fixed as 25-2-2000 when no one entered appearance on behalf of the defendants. It was noted that the defendants had been served through their employee as also by citation appearing in the daily Nawai-Waqt" and "The Nation", Lahore of 22-1-2000. As the defendants had failed to appear and obtain leave to appear and defend the suit was decreed against them on the same date. The application for setting aside the ex parte proceedings was moved on 13-3-2000.
4. Mr. A.K. Dogar, learned counsel for the petitioners has contended that there are four modes of service prescribed in section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and as service through courier was not resorted to, no ex parte proceedings could be ordered against the petitioners. He has further contended that as the publication never came to the notice of the petitioners, they cannot be deemed to have been properly served. It was further argued that service through publication should only be resorted to after efforts made for personal service had failed. In this behalf, the learned counsel relied upon United Bank Ltd., Karachi v. M/s. Mohib Ali Tennery Ltd., Karachi and others PLD 1994 Karachi 275.
5. Mr. Sulman Akram Raja, learned counsel for the plaintiff/respondent has, on the other hand, argued that it is not necessary for the Court to order service through courier as other modes adopted for effecting service were sufficient. According to the learned counsel, service effected by any one of the methods prescribed in section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was sufficient.
6. The question whether the service effected through publication in newspaper would be sufficient when the defendants have not been served through any other mode has to be answered with reference to section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 subsection (3) of which ordains that "service duly effected in any one of the aforesaid modes shall be deemed to be a valid service for the purposes of this Act. It is pertinent to refer to the case of Ahmad Autos v. Allied Bank of Pakistan PLD 1997 SC 497 in which it was observed as under:-- "We are inclined to hold that the view taken in the last-referred case of Karachi is in consonance with the spirit of the Ordinance and the Rules framed thereunder. It is a matter of common knowledge that defaulter borrowers in suits brought against them particularly by the Financial institutions used to delay in disposal of the suits by avoiding the service of the summons. In order to expedite the disposal of the suits to be brought by the Banking Companies, the Ordinance was promulgated, which contains special provisions and which inter alia provide that a suit brought by a Banking Company for the recovery of loan is to be tried in summary manner under Order XXXVII.
Section 15 of the Ordinance empowers the Federal Government by a Notification in the Official Gazette to make rules for carrying out the purposes of the Ordinance. In pursuance whereof the rules have been framed. 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 summons is not served through a bailiff or by a registered post acknowledgement 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. The unlamented Rule 8 was silent on the question, whether in order to hold service of summons good, it should be effected by all the three prescribed modes or whether service of the summons by one of the modes was sufficient. In the case of M/s. Allied Bank of Pakistan Limited v. M/s. Tahir Traders and 9 others reported in PLD 1986 Kar. 369 a learned single Judge of the Sindh High Court had taken in view that mere publication of summons under Rule 8 would not be a proper service unless it was proved that defendant was avoiding the service of summons issued through bailiff and registered post or his whereabouts were not known. A contrary view was taken in a subsequent case referred to hereinabove namely in the case of M/s Union Bank of Middle East Limited v. M/s. Zubna Limited and 3 others PLD 1987 Kar. 206, relevant portion of which has been quoted hereinabove. The framers of the Rules by amending Rule 8 by S.R.O. No,71(1)/88 dated 31-1-1988 have resolved the above controversy. It may be advantageous to reproduce the original rule and the addition made by the above S.R.O., dated 31-1-1988 which read as follows: ' (Original Rule 8 as framed): ' 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 acknowledgement 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' ."
' (Underlining is our and is the addition made by SRO No,71(1)/88, dated 31-1-1988).
' However, we may observe that it appears that neither the Courts below nor the learned A.S.C.
Appearing for the petitioners and the respondent/caveat or have taken notice of the above amendment as it has not been referred to in the judgments nor it was referred before us during the arguments. However, we may point out that there was no need to amend the above Rule 8 as the correct legal position was that the service was to be held to be good service if it was effected by any one or more modes of service provided for in the above-quoted Rule 8. If we were to take a contrary view, it would be in conflict with the object of the Ordinance and the Rules framed thereunder, as it would make the service more difficult. It would instead of suppressing the mischief which prompted the framing of above Rule 8, would encourage the mischief as a defendant may successfully avoid service by one of the above three modes of service for considerable period by maneuvering."
7. Mr. A.K.Dogar, Advocate argued that the rule laid down in Ahmad Autos' case supra was not applicable since the case before the Supreme Court had arisen under the Banking Companies (Recovery of Loans) Rules, 1980, while the present case is governed by the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. It was emphasized that though in Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980, the word "simultaneously" appeared but it has been omitted while enacting section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.
8. The distinction pointed out by the learned counsel is immaterial. As already noted section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 clearly postulates issuance of the process simultaneously through more than one mode. Even if the Word "simultaneously" has not been used by the Legislature in section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 yet it is clear from the underlying object that the modes prescribed therein can be resorted to simultaneously and not one after the other. In support of his submission, the learned counsel has relied upon the case of Messrs United Bank Limited Karachi v. Messrs Mohib Ali Tannery Limited, Karachi and others PLD 1994 Karachi 275 but this judgment itself was not followed by the Karachi. High Court in United Bank Limited, Karachi v. Messrs Union Agencies Limited, Lahore and others PLD 1994 Karachi 303. Before concluding the discussion, it may be pointed out that Ahmad Autos' case supra was followed by the Supreme Court in the case of M/s. Qureshi Salt and Spices Industries, Khushab and others v. Muslim Commercial Bank Ltd. Karachi through President and others 1999 SCMR 2353.
9. It may also be stated that in addition to the service through publication, notices were also served upon defendants Nos.2, 3, 4, 5 & 6 through their employees, they cannot, therefore, profess ignorance about the filing of the suit or proceedings taken therein. It is further evident from the record that the registered notices were issued to all the defendants but only notice of defendant No,1 was received back undelivered while the other envelops were not received either delivered or undelivered. The presumption consequently, arises that registered notices must have been delivered to the petitioners/ defendants.
' For all these reasons, I do not find any force in this application which is accordingly dismissed.