' JAVED IQBAL, J.---The petitioners seek leave to appeal against judgment, dated 17-4-2000 passed by learned' Division Bench of High Court of Sindh at Karachi whereby the appeal filed by the petitioner assailing the judgment of learned Banking Court No,1 at Karachi has been rejected.
2. Briefly stated the facts of the case are that petitioners filed a suit for damages of US $ 1,61,226.76 and permanent injunction against M/s. United Bank Limited-respondent with the averments that their predecessor exported carpets and rugs to M/s. M.M.K. Muller Embarkpart, Zurich, Switzerland worth US $ 1,61,226.76 and the consignment was released by the respondent through agent without realizing the price and resultantly they sustained huge loss. It was also case of the petitioners that on account of export bills an amount of Rs,1.3 million was obtained on loan from the respondent- bank. Since the loan could not be repaid the respondent-bank filed a suit against petitioners bearing No,3 of 1985 in High Court of Sindh at Karachi preliminary decree was passed on 22-3-1989 and final decree was made on 2-12-1992. The respondent-bank filed Execution Application No,3 of 1994 in the Sindh High Court when widow of Faqir Muhammad Qureshi had preferred an application under section 12(2), C.P.C. Which was dismissed by the High Court vide order, dated 30- 9-1998 after converting it to J.M. No,48 of 1994. The execution proceedings were subsequently transferred to the Banking Court as a result of enhancement of the pecuniary jurisdiction. The petitioners filed the said suit praying for a decree in the sum of US $ 1,61,226.76 with mark-up at the prevailing rate from October, 1980 till realization with further request for permanent injunction restraining the respondent from auctioning Plot No,8/B, Phase-I, Main Korangi Road, Defence Housing Society, karachi. An application under Order XXXIX, Rules 1 and 2, C.P.C. Read with section 151, C.P.C. Was also moved with the request to restrain the respondent from auctioning of the said plot. The respondent contested the suit strenuously by filing written statement wherein various legal and factual objections were raised including that the subject-matter had already been decided in Suit No,3 of 1985 as such no cause of action was available to the petitioners. The petitioners on the contrary met the said objection by referring section 22(2) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, No,XV of 1997, hereinafter referred to as the Act. The suit of the respondent was, however, decreed on 21-3-1989 against the petitioners jointly and severally in the sum of Rs,41,53,601.76 with interest at the rate of 13% per annum from the date of filing of the said suit with the direction that in case of default the decretal amount would be realized by selling the mortgaged property. In view of the judgment and decree, dated 21-3-1989 passed in Suit No,3 of 1985 preferred on behalf of respondent-bank the suit filed by the petitioner for damages was dismissed vide judgment, dated 22-1-2000. Being aggrieved an appeal was preferred which was dismissed by the Division Bench of Sindh High Court.
3. It is, inter alia, contended by Mr. A.R. Akhtar, learned Advocate Supreme Court on behalf of petitioners that the provisions as contained in section 22(2) of the Act have been misconstrued and misinterpreted as the petitioners have legal right to file a suit for damages against the respondent-bank within limitation period prescribed under section 22(2) of the Act which provides a fresh cause of action to the petitioners as such the suit for damages filed by the petitioners could not have been held to be barred by limitation. It is also urged that the judgment and decree passed in Suit No,3 of 1985 would have no bearing upon the suit for damages filed by the petitioners which aspect of the matter escaped notice of the learned Division Bench and resulted in serious miscarriage of justice. It is urged with vehemence that the Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX of 1979) and the Banking Tribunals Ordinance, 1984 (LVII1 of 1984) did not provide any express remedies to the borrowers or customers of loans or finance either before the Special Banking Court or the Banking Tribunal which remedy has now been provided by enacting section 9 of the Act which enable the borrowers and customers to file claims against the banks before the Banking Court in case there is any default or failure in fulfilling any obligation with regard to any loan or finance by the banking company.
4. Mr. Arif Hussain Khilji, Advocate Supreme Court appeared on behalf of the respondent-bank and vehemently controverted the viewpoint as canvassed on behalf of petitioner and urged with vehemence that the provisions as made in section 22(2) of the Act could not be made applicable as the subject-matter had already been decided in the year 1985 and resultantly the rights accrued in favour of respondent-bank could not be infringed on the basis of said section. He also highlighted the background of objects and reasons for enacting the Act and clarified that the provision of Limitation Act has been made applicable to all suits filed before Banking Courts and section 22(2) of the Act has been incorporated for ensuring that no hardship or inconvenience was caused in those cases where suit could not be filed on account of the fact that no limitation was stipulated by the Ordinance XIX of 1984. It is pressed time and again that section 22(2) of the Act has a limited application in order to save the Banking Company from huge loss on account of the application of the Limitation Act to all future suits where it had failed to file a suit in view of the facts that 1984 Ordinance .Did not provide for any period of limitation. Mr. Arif Hussain Khilji, Advocate Supreme Court also contended that the subject-matter had been decided and attained finality which cannot be reopened being a past and closed transaction.
5. We have carefully examined the respective contentions as agitated on behalf of the parties in the light of relevant provisions of law and record of the case. We had also perused the judgment, dated 22-1-2000 passed by learned Banking Court and impugned judgment passed by learned Division Bench of High Court of Sindh, Karachi. It transpires from the scrutiny of record that the question of the liability of the petitioner was examined in Suit No,3 of 1985 with the following observations:-- ' "As pointed out above the case of the plaintiff is fully supported by various statements of accounts, Exhs.5/18, 5/41 and 5/60, which is further supported by other documentary evidence. No evidence has been produced by dm defendants in rebuttal. The defendant No,1 is a limited company to which loans had been advanced by the plaintiff from time to time. The defendant No,2 executed the aforesaid mortgage to secure the liabilities of the defendant No, 1 . The defendants Nos. 3 to 6 are the guarantor of the payment of the aforesaid loan. Consequently, the liability of each one of the defendants is established.
' Consequently, a preliminary decree is passed against the defendant No,2 under Order 34, Rules 4 and 5, C.P.C. Read with Form V-A of Appendix 'D' in the First Schedule of C.P.C. For the payment of Rs,41,53,601.76 with interest at the rate of 13% per annum from the date of the suit till payment of the amount within two months and in case of default, by sale of the mortgage property being Bungalow No,8/B, situated on the Main Korangi Road, Defence Housing Society, Karachi.
The suit against the rest of the defendants is decreed jointly and severally in the sum of Rs,41,53,601.76 with interest at the rate of 13% per annum from the date of the filing of the suit, till the realization of the aforesaid amount with costs....." (Underlining is ours).
6. A bare perusal would reveal that the subject-matter was decided and by now it has attained finality. It is to be noted that preliminary decree was passed on 22-3-1989 and final decree was passed on 2-12-1992 and application filed under section 12(2), C.P.C. By the petitioner contending that the decree had been obtained by fraud and misrepresentation without adjusting the claim of petitioners has been dismissed. It may not be out of place to mention here that the claim for damages allegedly caused in 1980 has become time-barred and section 22 of the, Act from whatever angle it may be interpreted hardly renders any assistance to the case of petitioner and a time-barred claim cannot be revived or reopened. The provisions as contained in section 22(2) of the Act are free from any ambiguity and adequate enough to meet all sorts of eventualities. The language employed therein is neither ambiguous nor complicated and there is absolutely nothing which could be read between the lines. There appears to be neither any apparent intention nor hidden on the part of legislation inferring that "all the time-barred and settled claims" became alive by virtue of section 22 of the Act and such a far-fetched interpretation is nothing but a misconceived notion and against the settled principles of interpretation. It is pertinent to mention here that "the initial presumption is that an absurdity is not intended by the law-maker. (PLD 1964 Dacca 756, PLD 1962 Lah. 878). In case of doubt as to the intention of Legislature, an interpretation which leads to manifest absurdity should, if possible, be avoided. (PLD 1964 Lah. 101 + PLD 1966 Azad J&K 38). If proposition accepted, leads to absurd result, there is always a presumption against such absurdity". (PLD 1959 Quetta. 1). It is well-settled by now that "the Courts are not only competent to modify the language of the Act to give effect to the manifest and undoubted intention of the Legislature, but the Courts are under statutory obligation to supply the omission with a view to prevent the defeating of the very object of the Act. (PLD 1965 Pesh. 65). They can fill in the gaps in a piece of legislation, where a plain construction would lead to absurd results. (PLD 1964 Dacca. 773 and PLD 1961 SC 119). However, initially the Court is to presume that, an absurdity was not intended by the law-maker". (PLD 1966 Azad J&K 38). See also 'The Interpretation of Statutes' by M. Mahmood.
It is to be noted that section 22(2) of the Act is to be read alongwith the other sections of the Act including objects and reasons. Initially the Act was enacted to harmonize the various existing laws on the subject and to provide a speedy mechanism to get the loan recovered to save the financial institutions/Banks from a complete destruction. It is well-entrenched legal proposition that "an interpretation which is more in consonance with the avowed policy underlying the Act as decipherable from its title and preamble, it is to be preferred to an interpretation, which is at tangent with its object". (PLD 1972 Karachi 421). Indeed section 22(2) of the Act cannot abridge, abrogate or infringe those rights which had accrued in favour of the parties by any means. The controversy between the petitioners and respondent-bank was dilated upon and decided in Suit No,3 of 1985 and section 22 of the Act would have no bearing on the judgment and decree already made. Had there been any intention for reviving all the claims the word "closed" could have been added after the word "past" as used in proviso to subsection (2) of section 22 of the Act. The use of word "past transactions" excluding the word "closed" is indicative of the fact that the past transactions regarding which no suit could be instituted or settlement made can be brought before Banking Court and a fresh cause of action would be available for the purpose of limitation filed on the date when the said Act was promulgated. Both the grammatical and logical interpretation of section 22(2) of the Act would lead to draw the only inference that the right which had extinguished were never revived and real intention which also finds support by exclusion of word "closed" in section 22(2) of the Act seems to save the finance institutions/banks from huge loss enabling them to file their claims (not adjusted, decided or settled previously) on the basis of fresh cause of action made available where the right to sue existed on the date of promulgation of the Act by virtue of section 22 of the Act. "It is well-settled that: 'where the main object and intention of statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used'. (Maxwell, 11th Edition, page 221). Even though, as a general rule, a Court of a law is not authorized to supply a cassus omissus or to alter the language of a statute for the purpose of supplying a meaning, yet in certain circumstances it is permissible for the Courts to give effect to the true and patent intention of the law-maker to I supply the omission in order to avoid doing a manifest injustice". (PLD 1973 Lah. 114). As mentioned herein-above the object and intention of a statute cannot be ignored and the entire statute is to be examined before any particular section could be interpreted.
7. We have also dilated upon the question that up to what extent retrospective effect could be given to the provisions as contained in section 22 of the Act. "The general principle with regard to the interpretation of statutes as laid down in the well-known case of the Colonial Sugar Refining Company Limited v. Irving 1905 AC 369 is that 'if the matter in question be a matter of procedure only' , the provisions would be retrospective. 'On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act', then 'in accordance with a long line of authorities extending from the time of Lord Coke to the present day', the legislation would not operate retrospectively, unless the Legislature had either 'by express enactment or by necessary intendment' given the legislation retroactive effect. To the same effect are the observations of Jessel, Master of the Rolls, in the case of In re: Joseph Suche & Co. Limited (1875) 1 Ch. D. 48 where it was observed that as 'a general rule when the Legislature alters the rights of parties by taking away or conferring any right of action, its enactments, unless in express terms they apply to pending actions,, do not affect them. It is said that there is one exception to that rule, namely, that, these enactments merely affect procedure and do not extend to rights of action, they have been held to apply to existing rights' . The next question, therefore, that arises for consideration is as to what are matters of procedure. It is obvious that matters relating to the remedy, the mode of trial, the manner of taking evidence and forms of action are all matters relating to procedure. Crawford too takes the view that questions relating to jurisdiction over a cause of action, venue, parties, pleadings and rules of evidence also pertain to procedure, provided the burden of proof is not shifted. Thus, a statute purporting to transfer jurisdiction over certain causes of action may operate retroactively. This is what is meant by saying that a change of forum by a law is retrospective being a matter of procedure only. Nevertheless, it must be pointed out that if in this process any existing rights are affected or the giving of retroactive operation cause inconvenience or injustice, then the Courts will not even in the case of procedural statute, favour an interpretation giving retrospective effect to the statute. On the other hands, if the new procedural statute is of such a character that its retroactive application will tend to promote justice without any consequential embarrassment or deteriment to any of the parties concerned, the Courts would favourably incline towards giving effect to such procedural statutes retroactively.
Colonial Sugar Refining Company Limited v. Irving 190 AC 369: In re: Joseph Suche & Co. Limited (1875) 1 Ch.D 48; Crowford on Construction of Statutes, .1940 Edn., p.581 and The State v.
Muhammad Jamil PLD 1965 SC 681 ref." "Law cannot be said to be retrospective unless it takes away or impairs a vested right acquired under existing law or creates some obligation or disability with regard to closed and past transactions. (PLD 1966 Karachi 480). However, retrospective operation of statute cannot divert rights already vested in the absence of clear provision to that effect". (PLD 1973 Lah. 114).
8. In the light of what has been discussed hereinabove it can be said with certainty that the right extinguished due to bar of limitation could not be revived by virtue of the provisions as contained in section 22(1) of the Act as no retrospective effect has been given to it. The provisions as contained in section 22(1) are free from any ambiguity and thus, hardly call for any scholarly interpretation. It simply says that the provisions of Limitation Act shall not be made applicable to all those suits, proceedings or applications pending adjudication and transferred to Banking Court as a result of promulgation of the Act. The section 22(2) of the Act was enacted to remove the anomaly pertaining to "mark-up based transactions" as admittedly the Limitation Act was not made applicable in such-like cases by virtue of section 12 of the Banking Tribunals Ordinance, 1984 but "interest-based transactions" were-excluded from the domain of provisions of section 12 of the Banking Tribunals Ordinance, 1984. In order to remove such distinction or disparity-in between "mark-up-based transactions" L and that of "interest-based transactions" section 22 of the Act was enacted so that it could save the financial institutions/banks from huge loss which could have collapsed them and, accordingly, "fresh cause of action" was made available regarding "mark-up- based transactions" to overcome the hurdle of limitation. While discussing the similar proposition it was held in case titled N.D.F.C. v. Anwar Zaib White Cement Ltd. (1999 MLD 1988) as follows:-- ' "The only reasonable and justifiable effect of the proviso would be that extended period of limitation has been provided in relation to the 'past' transactions, distinct from the 'closed' transactions involving barred or extinguished remedies. The result, therefore, would be two-fold. In regard to all the mark-up-based transactions disbursed prior to enforcement of Act XV of 1997, three years' period of limitation has been prescribed from the enactment of the Act and in relation to the interest-based transactions which were enforceable and the period of limitation, on the date of promulgation of Act XV of 1997, was still alive, an extended and additional period of limitation has been prescribed."
9. We are not persuaded to agree that no remedy whatsoever was available to petitioners prior to promulgation of the Act as he could have invoked the jurisdiction of Special Court under section 6(1)(a) of the Banking Companies (Recovery of Loans) Ordinance, 1979, and suit have been filed because Special Court had jurisdiction in respect of a claim filed by Banking Company against a borrower or by a borrower against a Banking Company. The said remedy was not available by the petitioner and now at this later stage on the basis of provisions as contained in section 22(2) of the Act no fresh suit could be filed.
10. It is worth mentioning that in fact the respondent-bank had acted in two different capacities:--
(a) Extended finance facilities by way of loan in the capacity of financial company;
(b) performed as negotiator on behalf of the exporter.
' For the sake of arguments if it is admitted that there was any lapse on the part of respondent- bank negotiations appropriate action, at opportune moment, could have been taken including suit for damages which was never filed in time. It seems appropriate here at this juncture to point out that the petitioners had approached the relevant Court in Switzerland and obtained a decree of amount in question and, therefore, the question of any injustice as pressed time and again by the learned counsel for the petitioner does not arise.
11. The upshot of the abovementioned discussion is that the right once extinguished cannot be revived unless so provided in specific manner and the provision as contained in section 22(2) of the Act does not give any such impression. In our considered view the Courts below have acted in accordance with law and within the parameters of agreed stipulations in-between the parties.
' In the light of foregoing discussion the impugned judgment being free from any legal infirmity does not call for any interference. The petition being devoid of merit is dismissed.
…and 11 more citing cases