' IJAZ-UL-HASSAN, J.---This appeal is directed against the judgment and decree, dated 1-2-2000 announced by learned Judge Banking Court, Abbottabad, whereby the application of the appellant-Bank for grant of leave to appear and defend the suit was declined and the suit of plaintiff-respondent for the redemption of mortgaged property/deeds was decreed with special costs of Rs,1,000.
2. Facts relevant for the purpose of this appeal are that Khalid Mehmood plaintiff/respondent filed Suit No,758/1 of 1999 against National Bank of Pakistan and others defendants/ appellants seeking redemption of his mortgaged property and release of the documents/deeds in respect thereof.
The plaintiff-respondent an ex-employee of the appellant-Bank availed House Building Advance from City Branch, Abbottabad of National Bank of Pakistan under House Building Finance Scheme, amounting to Rs,5,68,900. The loan was released against the property of loanee Khalid Mehmood.
The loan was fully repaid and adjusted with mark-up and clearance certificate dated 28-2-1998 was issued. After the full and final payment of the loan, the loanee's property was to be redeemed and released forthwith. According to the loanee, the appellant-Bank was requested time and again through legal notice and letters to redeem the property and release the documents but with no result which necessitated the plaintiff-respondent to file suit.
3. The appellant-Bank in its application for grant of leave raised several objections and maintained that the plaintiff/ respondent was served with charge-sheet dated 4-3-1998 for misconduct, commission/omissions and irregularities and as long as he is not cleared of the charges the appellant-Bank is not in a position to redeem the mortgaged property or release its documents.
The learned Banking Judge refused to grant leave with the observations that the property which was mortgaged with the Bank, was security for the payment of loan available by the plaintiff which has already been paid in full and nothing is outstanding against the borrower. The property mortgaged has no concern with the charges levelled against the plaintiff in the charge-sheet.
4. Mr. Fazal Gul, Advocate appeared on behalf of the appellant-Bank whereas the plaintiff/respondent was represented by Mr. Muhammad Tariq Tanoli, Advocate.
5. Learned counsel for the appellant-Bank contended, inter alia, that the judgment of the lower Court is against law, facts and equity and that the leave has been refused without any justifiable cause irrespective of the fact that sufficient material was brought on record justifying grant of leave. The learned counsel added that there was triable issue between the parties which could not be resolved without taking evidence.
Additionally, it was urged that in view of section 7(4) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), the Court had no jurisdiction to adjudicate upon the matter.
6. As against this learned counsel for the plaintiff-respondent supported the impugned judgment and decree and maintained that keeping in view the facts and circumstances of the case, the learned trial Judge had good reasons to decline to accept the application of the appellant-Bank and grant leave.
7. Having heard the arguments of learned counsel for the parties in the light of the material on file we find that there was no triable issue between the parties needing evidence and as such the learned Banking Judge was quite justified to decline to accept the application, of the appellant Bank for grant of leave. Sections 7 and 9 of the Banking Act, 1997 are reproduced below for facility sake:-- "7. Power of Banking Courts. ---(1) Subject to the provisions of this Act a Banking Court shall---
(a) in the exercise of its civil jurisdiction have all the powers vested in a Civil Court under the Code of Civil Procedure, 1908 (Act V of 1908); (b)
' Provided that
(2) A Banking Court shall in all matters with respect to which procedure has not been provided for in this Act, follow the procedure laid down in the Code of Civil Procedure, 1908 (Act V of 1908).
(3) .......
(4) Subject to subsection (5) no Court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under this Act, including a decision as to the existence or otherwise of a loan or finance and the execution of a decree passed by a Banking Court....
9. Procedure of Banking Court, ---(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 a suit in the Banking Court by presenting a plaint duly supported by a 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 authorise 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."
8. A close scrutiny of the above two provisions of the Banking Companies Act, 1997 namely sections 7(4) and 9(1) would reveal that a borrower or a customer or a Banking Company will be entitled to file a suit when any of them commits a default in fulfilling any obligation with regard to any loan or finance. The first requirement is that the parties should be either a borrower or a customer or a Banking Company which have been defined in section 2 of the Act, 1997. According to subsection
(c) of section 2 a borrower means a person who has obtained a loan under a system based on interest from a Banking Company and includes a surety or an indemnifier. This definition is same as of Ordinance, 1979 except to the extent that the loan must be based on the system of interest.
(For detailed discussion on the term `borrower' see United Bank Ltd. v. Adamjee Insurance Co. Ltd.
1988 CLC 1660). The customer has been defined in subsection (d) to section 2 which means a person who has obtained finance under a system which is not based on interest from a Banking Company or is the real beneficiary of such finance `including a surety or indemnifier'. Again, this definition is the same as of `customer' in the Ordinance, 1984, except that the finance should not be based on system of interest. Subsection (a) to section 2 also defines the Banking Company and the names of such Banking Companies have been disclosed in the Schedule to the Act, 1997.
9. The second condition precedent for bringing a suit within the scope of Banking Court is that such suit must arise from a commission of a default in fulfilling any obligation touching the business of loan or finance. This suggests that if the transaction is outside the scope of the loan or finance even then commission of any default in fulfilment of obligation will not bring a suit within the jurisdiction of a Banking Court. However, a question whether there exists any agreement to grant loan or finance will definitely fall within the jurisdiction of Banking Court. Therefore, where a suit is filed by a customer or a borrower claiming that amount received by them was not as a result of loan or finance it will fall within the jurisdiction of Banking Court. Munir Ahmad Siddique and another v. Feroz Ahmad Siddique and 2 others 1990 MLD 1776, National and Grindlays Bank Ltd. v.
N.P. Miranda and 2 others 1984 CLC 2106, Messrs Shafiq Hanif (Pvt.) Ltd., Karachi v. Bank of Credit and Commerce International (Overseas) Ltd., Karachi PLD 1993 Karachi 107 and Kamran Industry (Pvt.) Ltd. v. Industrial Development Bank of Pakistan and others 1994 SCMR 1970.
10. In view of what has gone above, it follows that a Banking Court as established under section 2(b) of the Act, 1997, is competent to hear and adjudicate cases, inter alia, of the following nature:- --
(a) All suits filed by the Banking Companies against borrower or customer for recovery of Loan of Finances, either based on interest or mark-up as defined in Act, 1997.
(b) All suits or claims filed by a borrower or customer against the Banking Company claiming any adjustment, set off or setting up a counterclaim either through . An independent suit or in a suit filed by a Banking Company.
(c) Suits for accounts arising out of a Loan or Finance as defined in the Act, 1997.
(d) Suits for specific performance seeking enforcement of an agreement or contract to pay or re- pay any Loan or Finance or to perform any obligation arising out of such agreement.
(e) All the suits for declaration as to legality, validity or otherwise of a document which creates Loan or Finance as defined in the Act, 1997.
(f) All the suits for cancellation of any instrument through which any liability to pay or to re-pay a Loan or Finance may arise.
(g) All the suits for prohibitory injunction which may restrain any of the parties namely Banking Companies, borrower or customer from performing their obligations and duties arising out of such business pertaining to Loan or Finance. In the like manner, all suits in the nature of mandatory injunction.
(h) All the suits for damages (excluding top cases) arising out of .The breach of contract executed in respect of Loan or Finance between the Banking Company on the one hand and the borrower or customer on the other.
In the wake of above discussion we find that the objection raised on behalf of the appellant Bank regarding jurisdiction of the Banking Court to adjudicate upon the matter is not sustainable and does not hold the field. The controversy relating to redemption of mortgaged property and release of its documents, the Banking Court had exclusive jurisdiction to adjudicate upon the matter.
11. At the time of availment of loan an agreement was executed between the parties on 11-3-1976 enumerating certain terms and conditions of re-payment of loan etc. Clause 14 of the said agreement (deed of mortgage) reads:-- "That the mortgagor shall be entitled at his own expenses to the immediate re-conveyance of the mortgage property on the full and final payment of all the moneys due from the mortgagor to the mortgagee on account of the loan account mentioned above or otherwise."
' A perusal of the above-referred clause would reveal that the mortgagor shall be entitled to the immediate re-conveyance of the mortgaged property on the full and final payment of all the moneys due from him. There is nothing in the agreement/deed to show that in case of service of charge-sheet, the Bank had authority to retain the property and its documents till the mortgagor is cleared of the charges. It needs no reiteratiti that no one can be allowed to go beyond the terms and conditions contained in an agreement executed between the parties. In the instant case, no such condition having been incorporated in the agreement dated 11-3-1976 the appellant Bank had no authority to agitate that as long as the plaintiff/respondent is not exonerated of the charges, the Bank is not in a position to release the mortgaged property or release its documents.
The loan in question had no legitimate nexes with the service of charge-sheet.
12. Having agreed with the learned Banking Judge that no serious or bona fide dispute needing trial existed between the parties, justifying grant of leave, we dismiss the appeal and allow the parties to bear their own costs.