' SABIHUDDIN AHMED, J.-- Through this order, we propose to dispose of two petitions under Article 199 of the Constitution whereby the petitioners have called in question a common order of the learned Banking Court No,1, Karachi (respondent No,1), dated 7-8-2000 in Suits Nos. 510 and 511 of 1999 between the same parties granting leave to the petitioner to defend the above suits filed by the respondent No,2 upon the condition of depositing Rs, 5,00,000 and Rs, 5 million respectively.
2. According to the petitioners, they have been allotted a plot of land for setting up a plant for export of marine fish, fish meal and fish preparation which was financed by the respondent No,2.
The respondent No,2 asked the petitioner to provide collateral security for the financial assistance by way of mortgage of the project land. However, they were informed that such security could not be provided because as a matter of policy the Lasbela Industrial Estate Development Authority (LIEDA), which had allotted the land did not execute leases to allottees still they commence commercial production. However, they were assured that a mortgage will be created as soon as a lease was executed and in this context a guarantee from the LIEDA was also furnished. It is admitted that certain amounts were disbursed by the respondent No,2 by way of making payment to foreign supplier of machinery through letters of credit but when the petitioner requested for further disbursement for clearing the machinery at the port and installing it in the plant the respondent No,2 declined to do so on the ground of mortgage not having been executed. This according to the petitioner amounting to a clear breach of commitment resulting in heavy losses and they have instituted a suit for recovery of damages (Suit No, 358 of 1994) on the original side of this Court.
3. Be that as it may, since according to the respondent No,2 two kinds of loans were advanced to the petitioner i.e, One based on interest and the other on mark-up, two different suits for recovery of money were tiled before this Court and the Banking Tribunal. Subsequently, however, upon the enforcement of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act XV of 1997 (hereinafter mentioned as a 1997 Act) both the suits were transferred to the respondent No,1 and renumbered as Suits Nos. 510 and 511 of 1999 mentioned above. The petitioner had applied for leave to defend the two suits and vide the impugned order such leave was granted subject to deposit of amounts referred to in para.1 above.
4. Mr. Muhammad Sharif learned counsel for the petitioner contended that the 1997 Act did not stipulate imposition of conditions for grant of leave to defend and therefore, once the Banking Court was satisfied that serious triable issues had been raised, leave to defend had to be granted unconditionally. In support of his contention learned counsel inter alia relied upon a Division Bench judgment of this Court in Agro Foster (Pvt.) Limited and others v. Judge of Banking Court No, V and another PLD 1999 Kar. 398 wherein it has been observed that once it is found that a serious and bona fide dispute appears to exist between the parties, the permission to defend the suit was to be granted and no security could be demanded.
5. The above judgment indeed supports Mr. Sharif's contention. However, to augment his arguments learned counsel attempted to trace the history of legislation, and pointed out that Order XXXVII, Rule 3, C.P.C. Which deals with suits on negotiable instruments triable under summary procedure, expressly empowers a Court to grant leave to defend unconditionally or subject to such term as to payment into Court giving security etc. As the Court thinks fit. The Banking Companies (Recovery of Loans) Ordinance, 1979 expressly made the aforesaid summary procedure applicable to suits for recovery of money filed by banks. In the Banking Tribunal Ordinance, 1984, however, this procedure was dispensed with and upon presentation of a plaint the Tribunal was required to issue notice to the defendant to show-cause why a decree should not be passed against him. In case no reply was furnished within 10 days or if it was considered and rejected by the Tribunal a decree would follow. Only if the reply was not rejected the defendant could lead evidence. The 1997 Act on the other hand restores the provisions for leave to defend but does not 'confer any discretion upon the Banking Court to impose condition for defending a suit. The provision of section 10 of Act XV of 1997 are self-contained which reads as under:--- "10. 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."
6. Learned counsel further argued that the 1997 Act was primarily a statute intended to repeal and re-enact the law relating to recovery of hank loans and, therefore, the difference in the language used in it and its predecessor statutes could not be lightly ignored. In this context he relied upon the judgment of the Hon'ble Court in Muhammad Aslam and others v. State PLD 1969 SC 241. Indeed the proposition is too well-established to require the support of authority. Moreover, learned counsel further pointed out under the old law an attempt by defendant to delay passing of a decree in favour of bank by raising a bare plausible defence with respect to certain parts of the claim could only be partially controlled by enabling a Court to impose condition for grant of leave to defend. Under the present dispensation the legislature has found a more viable solution by enabling a Banking Court to pass an interim decree in respect of that part of the claim which cannot be easily controverted by the defendant.
7. Arguments of the learned counsel are indeed formidable. Apart from the fact that the Division Bench judgment in. Agro Foster's case is binding on us. We have also noticed that section 12 of the 1997 Act enables a Banking Court to order make payment to the Court or furnishing of security as a condition for setting aside an ex parte decree. Section 13 also confers similar powers when the disposal of the suit is delayed beyond 90 days. Therefore, in the absence of a similar provision in section 10 there could be no doubt that imposition of condition for grant of leave to defend is illegal. Indeed Mr. Rizwan Ahmed Siddiqui learned counsel for the respondents found it difficult to defend the impugned order on merit.
8. Learned counsel nevertheless questioned the maintainability of the petition. He argued that the eventual decree which may be passed could always be assailed in appeal and the mere fact that the petitioner was called upon to deposit a certain sum of money before being allowed to enter his defence was no ground for exercising the Constitutional jurisdiction of this Court. Moreover, he contended that the petitioner was a chronic defaulter and it would be highly inequitable to exercise the extraordinary jurisdiction of this Court in his favour. He also referred to certain observations of the Hon'ble Supreme Court in the cases of Tank Steel and Re-Rolling Mills (Pvt.)
Limited v. Federation of Pakistan PLD 1999 SC 77 and Balochistan Trading Company (Pvt.) Limited v.
National Bank of Pakistan 1998 SCMR 1899 to show that Courts were reluctant to interfere with orders passed by Banking Court and Tribunals under Article 199 of the Constitution.
9. Though strictly speaking the impugned order grantinE conditional leave to appeal to the petitioner is not appealable under section 21 of the 1997 Act and an alternate remedy to question the same is not available. Mr. Siddiqui appears to be correct to the extent that Courts have been slow in exercising Constitutional jurisdiction to interfere with interlocutory orders which are liable to be merged with final orders and such final order are subject to the incidence of a full-fledged appeal. At the same time learned counsel emphatically argued that a plea to the effect that a Constitutional petition was maintainable because an appeal being entertainable only after deposit of a sum of money was not an adequate alternate remedy had been raised and repelled in a large number of cases. Indeed certain observations made inter alia by Division Benches of this Court in Khursheed Alam v. United Bank Limited PLD 1995 Karachi 409 and the Hon'ble Supreme Court in Tank Steel & Re-Rolling Mills (Pvt.) Ltd. v. Federation of Pakistan PLD 1999 SC 77 tend to show that the Courts have held petitions under Article 199 of the Constitution to be barred in view of statutory remedy of appeal though subject to the precondition of depositing the amount decreed.
10. Nevertheless Mr. Siddiqui himself candidly brought to our attention a recent pronouncement of the Hon'ble Supreme Court wherein Wajihuddin Ahmed, J. In a very lucid enunciation of law drew a distinction between non-maintainability of a Constitutional petition and the discretion of the Court declining to exercise discretionary jurisdiction. His Lordship observed that the broad proposition to the effect that a Constitutional petition was not maintainable suggested in Khursheed Alam's case was not sustainable though upon consideration of merits of the case found that the High Court was eminently justified in not exercising its jurisdiction under Article 199 of the Constitution. The above view indeed seems to explain the correct legal position and is binding upon us. We are, therefore, unable to share Mr. Siddiqui's view to the extent that the petition is not maintainable in view of an alternate remedy of appeal (though subject to deposit) because it also runs contrary to the dictum laid down earlier by the Hon'ble Supreme Court in Eastern Rice Syndicate v. Central Board of Revenue PLD 1959 SC 364.
11. As regards the second part of Mr. Siddiqui's contention it is indeed well-settled that this Court might refuse to exercise discretionary jurisdiction under Article 199 of the Constitution in aid of injustice or when equities are heavily weighed against the petitioner. Indeed learned counsel attempted to demonstrate that the facts of the instant case do not warrant interference on the part of this Court even if the impugned order is found to be contrary of law. We would, however, refrain from undertaking any analyses of fact when the suits are still pending before the Banking Court and a suit for damages is also sub judice on the original side of this Court. On the same principle we are not inclined to grant the petitioner's request for excising that part of the impugned order which required them to make a deposit and granting them unconditional leave to defend though a similar order was passed in the case of Agro Foster quoted in para.4 above. Accordingly, we would allow this petition, setting aside the impugned order as a whole and would remand the matter to the learned Banking Court to decide the petitioner's application for leave to defend in accordance with law. The parties will bear their own costs.