' MIAN HAMID FAROOQ, J.---Messrs ' Waheed Corporation, the appellant/plaintiff, through the filing of the present appeal, has called in question judgment and decree, dated 29-1-2001, whereby the learhed Judge Banking Court rejected the plaint in a suit, filed by the appellant, for the rendition of accounts, damages and permanent injunction, in exercise of its powers under Order VII, rule 11, C.P.C.
2. Facts leading to the filing of the instant appeal are that the appellant filed a suit for rendition of accounts, damages and permanent Injunction, against the respondent-Bank, before the learned Banking Court at Lahore. Consequent to the above, the learned Banking Court issued summons to the respondent-Bank, as required under section 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, thereupon the respondent-Bank filed an application for leave to defend the suit; which was succeeded by another application under section 10(12) of Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), which, despite affording many opportunities was not replied by the plaintiff, therefore, the learned Banking Court, on 18-10-2001, closed the right of filing the reply. Ultimately, after hearing the arguments on the said application, the learned Judge Banking Court, instead of deciding the said application, one way or the other, proceeded to reject the plaint; in purported exercise of jurisdiction under Order VII, rule 11, C.P.C. In the aforenoted suit, filed by the appellant, vide judgment and decree, dated 29-10-2001, hence the present appeal.
3. The learned counsel for the appellant has contended that the learned Judge Banking Court, while hearing the application for leave to defend the suit, could not have, legally, rejected the plaint. He has further contended that the impugned judgment and decree has been passed in complete oblivion of the facts of the case and law on the subject, inasmuch as the provisions of section 10 of the Ordinance XLVI of 2001 have completely been ignored. Conversely, the learned counsel for the respondent-Bank, while supporting the impugned judgment and decree, has submitted that as the appellant's suit was itself not maintainable, thus the learned Banking Court was justified in rejecting the plaint, instead of dilating upon the application for the grant of leave to defend the suit.
4. Upon the examination of the record of the case and the perusal of the impugned judgment, we find that the approach of the learned Banking Court, to say the least, in rejecting the plaint, is perfunctory and cannot be countenanced under any stretch of imagination. By passing the impugned judgment, the learned Banking Court has in fact gone outside the scope of section 10(8) of the aforenoted Ordinance. Admittedly, the respondent-Bank filed an application seeking leave to defend the suit, which was to be decided by the learned Banking Court on its own merits either way. Upon filing an application for leave to defend the suit by a defendant, the Banking Court, as per the provisions of section 10(8) of Ordinance, 2001, shall grant . The defendant leave to defend the suit, if it finds that the substantial questions of law and facts have been raised in respect of which evidence needs to be recorded. It has no where been provided under section 10 of the aforenoted Ordinance, which deals with the application to leave to defend, that while hearing the application for leave to defend the suit the Banking Court is competent to straightway reject the plaint. There cannot be any cavil to the proposition that the Banking Courts, which were established under section 5 of the Ordinance, 2001, are the creature of the statute and, of course, are bound by the provisions of that statute. If the learned Banking Court was of the view that substantial questions of law and facts have been raised by the respondent-Bank, then, at best, leave to defend could have been granted to the respondent-Bank, but to our mind, no way, at that point of time, either the suit or the plaint could have been dismissed/rejected, as has been done in the present case. While deliberating upon the similar issue, the Hon'ble Sindh High Court in a case reported as Messrs Platinum Insurance Company through Chief Executive v. Messrs Highways Bridge, Contractor International (Pvt.) Ltd. And another (1997 M LD 2394) has held as under:-- "---O.XXXVII, R.3---Suit in summary jurisdiction---Court before grant of leave to defend suit could neither dismiss suit, nor rejected plaint, nor pass any adverse order against plaintiff on objection/ assertions of defendant---Such question, however, could be considered at final hearing of suit--- No case was made out for grant of conditional leave---Defendants were, however, granted leave to defend suit subject to furnishing bank guarantee in suit amount within specified period."
6. Perusal of the order sheet manifests that the learned Banking Court, on 11-6-2001, issued summons to the respondent-Bank, as provided under the aforenoted Ordinance, and in response thereto, the respondent-Bank appeared, filed an application for leave to defend the suit and then the case was adjourned for filing the reply, by the appellant, to the said application and for addressing arguments. Reply to the said application was filed by the appellant and thereafter on the asking of the learned Banking Court an amended application for leave to defend, as required under section 10(12) of Ordinance XLVI of 2001, was filed, which was not replied by the plaintiff, resultantly, its right to file the said reply was closed. Ultimately, the case was fixed for addressing arguments, on application for leave to defend the suit, on 27-10-2001, the parties addressed their arguments and the case was adjourned to 29-10-2001 for the announcement of order on the leave application and on the said date, the learned Banking Court rejected the plaint vide judgment and decree of even date.
7. It flows from the above narrative that from the very inception, the main suit was never fixed for hearing and the entire proceedings were undertaken by the learned Banking Court on the application for leave to defend the suit. The parties addressed arguments on the said application and the same was fixed for the announcement of the order. We are of the view that the suit at that stage was not pending before the learned Banking Court and the proceedings were undertaken only on an application for leave to defend the suit. As the suit was not fixed for hearing, therefore, the learned Banking Court could not have rejected the plaint, as has erroneously been done in the present case. It is settled law that the defendant cannot even file any ancillary/interlocutory application and have no right to defend the suit, unless he is allowed by the Court to defend the suit. Reference can be made to a case reported as Messrs United Distributors Pakistan Limited v.
Ahmad Zarie Services and another (1997 M LD 1835) wherein it has been held that till such time as leave to defend was granted, defendant could not even file interlocutory application in order to agitate the point of jurisdiction of Court etc. As noted above, the learned Banking Court, at the maximum, could have granted leave to defend the suit to the respondents and thereafter decided the case in accordance with law. Undoubtedly, after the grant of leave and treating the leave application as written statement, the respondent-Bank was within its rights to have filed an application under Order VII, rule 11, C.P.C. And if the Court reached the conclusion that the case falls under any of the clauses of Order VII, rule 11, C.P.C., of course, plaint could have been rejected, but in no way before the grant of leave to defend the suit.
8. We have examined the impugned judgment in juxtaposition with the facts of the case and law on the subject and find that the same is in clear conflict with the express provisions of Ordinance XLVI, 2001, exceptionable and we are inclined to interfere in the said judgment and decree.
9. Upshot of the above discussion is that the present appeal is allowed and the impugned judgment and decree, dated 29-10-2001 is set aside with no order as to costs. The result would be that the amended application for leave to defend the suit. Filed by the respondent-Bank, and the main suit, both, shall deem to be pending before the learned Banking Court, who shall, in the first instance, decide the leave application, filed by the respondent-Bank, after hearing the parties and in accordance with law. If the learned Banking Court comes to the conclusion that the respondent- Bank is entitled for the grant of leave to defend the suit, in that case, under the law, the leave application shall be treated as written statement and then, of course, the Banking Court shall decide the suit in accordance with law. Office is directed to immediately transmit the record of the case to the Banking Court.