IN THE HIGH COURT OF SINDH AT KARACHI.
Spl. H.C.A. No.25 of 2011.
Muhammad Hanif
v/s
NIB Bank Ltd. &others.
Before:
MR. JUSTICE AQEEL AHMED ABBASI J.
MR. JUSTICE FAROOQ ALI CHANNA J.
Date of Hearing: 26.09.2012
Appellant: Through Mr. Yousuf Moulvi, Advocate.
Respondent: Through Mr. Mehmood Ahmed Khan, Advocate.
FAROOQ ALI CHANNA J.:- Through this appeal, the appellant has assailed the order dated 24.12.2010, passed by the learned Single Judge of this Court dismissing the application U/O 1 Rule 10 CPC filed by the appellant in Suit No. B-31/2010 (NIB Bank Ltd. Vs. Ali Hamid Travels & others) before Banking Court filed by the respondent No.1 for recovery of Rs.56,543,164/= jointly and severally against the respondent Nos.2 to 4, who had defaulted during repayment of loan obtained from the respondent No.1 against several mortgaged properties including the double storied residential house constructed on residential Plot No.C-256, measuring 600 sq. yds. situated in Block-D, Federal “B” Area, KDA Scheme No.16, Karachi, claimed by the appellant to have purchased the same from the respondent No.2 under a valid Sale Agreement executed on 08.04.2009.
2. The learned counsel for the appellant has argued that the appellant is the bonafide purchaser of mortgaged property mentioned above, the possession whereof was handed over to him inasmuch his valuable rights have been created on it as such he was the necessary party to be impleaded in Suit No.B-31/2010 but the learned Single Judge has declined his request on the ground that the appellant has filed his own suit against the respondent No.2, therefore, he has nothing to do with the suit filed by the respondent No.1. Learned counsel has further contended that there is no bar in purchasing the mortgaged property in question. In support of his contention, learned counsel has placed reliance upon the case of Siraj Din and others v. Khushi Mohammad reported as 2002 YLR 1643. Learned counsel has further contended that legally the appellant has become the owner of the subject property hence the bank has to treat him as mortgager. Per learned counsel, by virtue of the Ordinance, 2001, a mortgager is the necessary party in recovery proceedings as if a money decree is passed against the respondent Nos.2 to 4, the appellant will be the ultimate sufferer, as the decretal amount will be recovered by sale of mortgaged property purchased by him during pendency of the case.
3. Learned advocate for the respondent No.1 has supported the impugned order passed by the learned Banking Judge and has also opposed the maintainability of the application U/O 1 Rule 10 CPC filed by the appellant. It has been contended that the respondent-bank has no claim against the appellant nor his status comes within the meaning of “Customer” as defined U/S 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, he cannot be impleaded as necessary or proper party in suit for recovery of loan filed by the Financial Institution against the “Customer”.
4. We have heard both the learned counsel and perused the record. The only question which is to be examined in the instant appeal is to examine legal status of the appellant and to determine as to whether the appellant could be impleaded as defendant in the suit, being a necessary and proper party. In the banking suits filed under the Financial Institutions (Recovery of Finances) Ordinance, 2001, the relationship between the parties as Financial Institution and Customer is a pre-requisite and unless such relationship exists between the parties, provisions of Banking Ordinance, 2001 cannot be invoked. Only such person can be impleaded as a necessary party to the proceeding under the Banking jurisdiction who can show either the existence of an agreement with the Bank/Financial Institution or his course of dealing with the Bank in the capacities as enumerated in Section 2(c) of the Ordinance, 2001. Such requirement of law appears to be missing in the instant case. The mere fact that the appellant has purchased the mortgaged property through an agreement to sell from a mortgager, he would not acquire the status of a “Customer” as defined U/S 2(c) of the Ordinance, 2001. Sale transaction was between two private persons, without the consent/involvement of the Bank, when there is no existence of relationship between the Financial Institution and the subsequent purchaser of mortgaged property. Therefore, no proceedings for and against a person, who is neither a Financial Institution nor a Customer, would be maintainable before the Banking Courts. So far as the claim of the appellant having purchased the mortgaged property from the respondent No.2 is concerned, admittedly the appellant has already availed of the remedy provided under the Law by filing a separate suit against respondent No.2 wherein the respondent No.1-Bank has also been impleaded as party.
5. For the reasons disclosed hereinabove, we do not find any error in the impugned order passed by the learned Single Judge which is based on correct law. The appellant could not make out a prima-facie case whereby he could be impleaded as a necessary and proper party in the suit, as mere execution of agreement to sell a mortgaged property and its possession would not create any legal right in his favour in Banking proceedings.
6. Accordingly, we do not find any merits in the instant appeal, which was dismissed vide our short order dated 26.09.2012 and these are the reasons for such short order.
J U D G E
Dated: 02.10.2012.