IN THE HIGH COURT OF SINDH, KARACHI

      

First Appeal  No.09 of 2010

   Date                            Order with signature of Judge

 

          Present:      Mr. Justice Muhammad Ather Saeed &

                             Mr. Justice Muhammad Ali Mazhar.

 

 

Date of hearing     :         18.01.2011.

 

Appellants           :         M/s. Shaz Packages & others.

 

Respondent           :         M/s. Bank Alfalah Limited.

 

 

Mr.Khaleeq Ahmed,  Advocate for the appellants.

 

Mr.Abdul Shakoor,   Advocate for the respondent.

                  

Muhammad Ali Mazhar,J.:- This First Appeal has been preferred under Section 22 of the Financial Institution (Recovery of Finances) Ordinance 2001 to challenge the judgment dated 05.11.2009 and decree dated 13.11.2009, passed by the learned Banking Court-I, Karachi in Suit No.260/2008, whereby the Leave to Defend Application filed by the appellants was dismissed and the suit was decreed.

 

2. Brief facts of the case are that the respondent had filed a banking suit for the recovery of Rs.5,960,750.69 against the appellants under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 with the following prayer:

 

a)     A decree for a sum of Rs.5,960,750.69 with cost of funds at the latest rate prescribed by State Bank of Pakistan w.e.f.08.01.2008 till the realization of the outstanding amount.

 

b)    A decree for 20% liquidated damages as specified in paragraph No.8 above.

 

c)     A final decree for sale of the mortgaged properties as described in paragraph No.9 of the plaint in favour of the plaintiff.

 

d)  Cost of the suit.

 

 

3. In the suit it was inter alia contended that plaintiff is a Banking Company. The defendant No.1 is a partnership firm and the defendant Nos.2, 3 and 4 are its partners. At the request of defendant No.1 through its Partners i.e defendants Nos.2, 3 and 4, the plaintiff initially sanctioned and advanced a current facility of Rs.4 million on 18-6-2003 valid up to 30.6.2004 and before expiry date of the facility, the defendant No.1 approached the plaintiff to enhance the finance facility from Rs.4 million to Rs.5 million and the plaintiff acceded to the request of the defendant No.1 and enhanced the facility accordingly. Again on 11.10.2004, the defendant No.1 requested for grant of current finance facility for a sum of Rs.4.9 million which was also sanctioned. After expiry of the above limit, the defendant No.1 again approached the plaintiff for grant of current facility of Rs.4.9 million valid up to 31.8.2006 and lease finance facility of Rs.5.788 million valid up to 13.1.2010 and the said facility was also sanctioned. To secure the finance facility, the defendants had also signed the following documents:-

 

(1)  Agreement for financing for short terms/long terms on mark-up basis (Running Finance) dated 21.4.2006.

 

(2)  Promissory note of Rs.6,000,000/- for the value  recovered dated 21.4.2006.

 

(3)  Letter of arrangement dated 21.4.2006.

 

(4)  Letter of continuity dated 21.04.2006

4. In order to further secure the amount, the defendant Nos.2, 3 and 4 had also signed and executed their personal guarantees in favour of the plaintiff. The defendant No.1 availed current finance facility and lease finance facility and presently a sum of Rs.4,899,577.01 is outstanding against the defendants along with markup. Under the terms of agreement for financing for short terms/long terms on markup basis the defendants have failed to liquidate due payment within stipulated time, therefore, the defendants are also liable to pay liquidated damages @ Rs.20% per annum. The defendants No.3 had signed and executed Memorandum of Deposit of Title Deed and Documents and deposited the title documents of the property No.A-15, Sector 7-D-1, North Karachi Township, Karachi with the plaintiff.  As on 22.01.2008, a sum of Rs.4,899.577.01 is outstanding against principle amount, a sum of Rs.1,061,173.67 towards markup and Rs.5,960,750 against the cost of funds.

 

5. The appellants/defendants filed leave to defend application under Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in which various preliminary legal objections were raised inter alia that the person who has signed/verified the plaint is not holding any power of attorney and the suit has been filed by an unauthorized person. No BOD resolution has been produced along with the plaint. The suit has not been filed in accordance with Section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001. The respondent/plaintiff obtained blank documents from the defendants. Section 18 of the Ordinance 2001 does not permit the bank to obtain blank documents from the customer. The claim is based on bogus/forged documents and false statement of account.

 

6. It was further mentioned in the leave to defend application that the firm (Appellant No.1) was dissolved in the month of March, 2005 and the Account Number 01011078 was closed/replaced with Account No.01011269 with effect from 29.4.2006. The amount availed by the defendant No.1 was fully adjusted/repaid from time to time. The appellant/defendant No.1 was dissolved in March, 2005, the documents filed by the respondent/plaintiff bears fake signatures of the appellant/defendant No.2, and 4. Annexure C-1 is a blank document and the name of the defendant No.1 is not mentioned in the agreement and the signatures are also fake. Plots No.77 and 78 Sector 6-H, Mehran Town, Korangi Township had not been offered by the appellant/defendant No.3 for grant of the alleged finance. Neither appellant No.2 nor the appellant No.4 ever signed the documents. The respondent without any authority transferred the repayment of the finance of credit facility into the lease finance without any authority, therefore, the liability could not be reduced. The appellants had already paid more then the amount availed. After examination of the bank statement filed by the plaintiff, it was revealed to the appellants that from the beginning, the respondent had been charging interest upon interest due to which unauthorized debit balance is being reflected in the statement of account which is against the directions of the State Bank of Pakistan. No statement of account has been filed according to the Banker Books Evidence Act.

 

7. In the leave to defend application, following questions of law and facts were raised:

 

“i. Whether the plaintiff is entitled to recover a sum of             Rs.5960751.00?

 

ii. Whether the firm of the defendant No.1 was dissolved and the bank account is replaced by the account No.01011269?

 

iii. Whether any legal agreement was executed between the parties on 21.04.2006?

 

iv. Whether the plaintiff filed correct Statement of Account?

 

v. Whether the defendants agreed to pay markup and Liquidated damages to the plaintiff as claimed?

 

vi. Whether plaintiff made various unauthorized debit entries in the statement of accounts of the defendants?

 

vii. Whether the defendants availed Finance as mentioned in the plaint?

 

viii. Whether the documents bears false rubber stamp and signatures of the defendant No.2 and 4?

 

ix. What should decree be?”

 

 

8. The respondent filed replication in the banking court and maintained that the defendant/appellants have failed to raise any substantial question of fact and law and do not deserve the grant of leave to defend the suit. It was further alleged that the defendants/appellants also failed to comply with the requirements of sub-section (3) and (4) of Section 10 of Financial Institutions (Recovery of Finances) Ordinances, 2001. It was denied that the persons who signed/verified the plaint was not holding any power of attorney.

                            

9. We have heard the learned counsel for the parties. The learned counsel for the appellants argued that in the leave to defend application, besides raising various preliminary objections, the defendants had also framed questions of law but the learned banking court without appreciating the same, dismissed the leave to defend application on 13.11.2008. In the judgment, the learned banking court simply reproduced the contents of the plaint and decreed the suit on the basis of breakup filed by the respondent bank. Instead of giving any specific findings on the questions of law proposed by the defendants,  the learned banking court dismissed the leave to defend application in a slipshod manner. No findings have been given on an important aspect of the case that the appellant No.1 was dissolved and the bank account was also replaced. In the leave to defend application, the appellants also challenged the statement of account appended to the plaint with another crucial aspect whether the defendants in the suit agreed to pay markup on liquidated damages to the plaintiff. Many debit entries were also challenged but no notice was taken by the learned banking court.

10. The crux of the arguments of the learned counsel was that the learned banking court while dismissing the leave to defend application failed to apply its mind and many crucial points of law and facts were ignored. The learned counsel further invited our attention to a letter dated 05.04.2005, which was attached with the leave to defend application, whereby the respondent was informed to the factum of dissolution of partnership firm of “Shaz Packages” with request that operation of account may please be changed on singly or individually title with further request to the respondent to cancel or delete the specimen signature of other partners. In order to substantiate the dissolution of “Shaz Packages”, the learned counsel also produced a certificate of dissolution of firm issued on 12.01.2011 by the Registrar of Firm which is made effective from 31.03.2005. The learned counsel further invited our attention to dissolution deed of “Shaz Packages”, which was attached with the leave to defend application. Learned counsel further argued that not only the dissolution of partnership was intimated to the respondent, but it was also  published in the newspapers for the information of general public.

 

11. The learned counsel also referred to an agreement of financing for short/medium/long term on mark up basis (running finance) which was executed on 01.04.2006 and he argued that most of the columns of  agreement which is available at page 147 of the court file are blank which is in utter violation of Section 18 of Financial Institutions (Recovery of Finances) Ordinance, 2001. This important aspect was also overlooked by the learned banking court. The statement of account attached as Annexure F/1, with the plaint was not verified under the Banker’s Book of Evidence Act, while Annexure F/2 was a breakup, which was though verified but not in accordance with Banker’s Book of Evidence Act.

 

12. The learned counsel further urged that the appellants never signed the financing agreement. He also insisted that unless all the debit entries appearing in the statement of account are examined and thrashed out, no liability of the appellants could  be worked out and in order to decide real controversy, the learned banking court ought to have granted unconditional leave to defend and after allowing fair and ample opportunity of adducing evidence, the matter should  have been decided. So far as plea of exaggerated amount and markup over markup is concerned, instead of giving any cogent findings, the learned banking court simply observed that this can be settled at the time of explanation of breakup of parties but no issue of markup was decided at the time of judgment. In support of his arguments, the learned  counsel for the appellants relied upon the following case law:-

 

1.     2009 CLD 1440 (Messrs Kinza Fashion (Pvt.) Ltd. Versus Messrs Habib Bank Ltd.). In this case, the learned divisional bench of this court held that we have noticed that the banking court dismissed the leave to defend application of the appellant in an hasty manner without examining in detail, the defence put up by the appellant and absence of any material with regard to availing the FATR facility. In such circumstances, in our view, the impugned order passed on the leave to defend application and the consequent decree cannot be sustained. Accordingly, the appeal was allowed and the judgment and decree were set aside and case was remanded to the banking court with the direction to decide the leave to defend application afresh.

 

2.     2007 CLD 975 (Messrs Haq Feed Industries (Pvt.) Limited versus National Development Finance Corporation). In this matter, the learned divisional bench of Lahore high court held that not a single word was mentioned in the impugned judgment as to how banking court had proceeded to decree the suit in the said amount. Banking court had done nothing to reconcile plaint with different statements of accounts produced by plaintiff bank. Impugned judgment and decree, in the circumstances was not at all sustainable. The impugned judgment and decree in this case were set aside.

 

3.     2006 CLD 217 (Habib-ur-Rehman versus Judge Banking Court No.4 Lahore). In this matter, the learned divisional bench of Lahore high court held that statement of account was deficient in material particulars. Banking court dismissed leave to  defend application and decreed the suit in favour of bank. The contention of the defendants in this case were that the claim  of bank consisted of illegal markup charged under various finance agreements rather than the amount actually disbursed to them or markup due thereupon in accordance with the terms of finance agreements must necessarily be examined in the context of the statement of accounts. Infirmities were floating on the surface. Serious disputed questions of facts and law had arisen in the case which could only be adjudicated after recording of evidence as the claim of bank needed to be proved. Application for leave to defend the suit could not have been dismissed outrightly and defendants were entitled to unconditional leave to defend the suit.

 

4.     2004 CLD 1672 (Messrs Naeem Associates versus Allied Bank of Pakistan Limited). In this case, it was held that borrowers disputed two entries in statement of account. It was not clear that that the disputed amounts had been corresponded to the rate of markup agreed upon between the parties. For the resolution of such dispute of excessive and unauthorized charge of markup, the borrowers had made out a case for grant of leave to defend the suit. The judgment and decree passed by the banking court to the extent of the disputed amount was set aside and the case was remanded.

 

5.     Messrs Yussra Textile Corporation versus PICIC Commercial Bank Limited). In this matter, the learned divisional bench held that the plea raised by the defendants was that the markup had been charged/debited illegally against the recognized principles of charging of markup and in violation of circulars issued by State Bank of Pakistan. Banking court dismissed the application for leave to defend and decreed the suit in favour of the bank including the disputed amount of markup. Defendants had taken a specific plea regarding illegal charging of markup but judgment passed by banking court did not give any finding on such issue. Banking court was legally obliged to have rendered some findings on the question of charging of markup one way or the other as there were instructions/ guidelines from the State Bank of Pakistan regarding the charging of markup. Baking court having failed to give findings on the issue of charging of markup, the defendants had made out a case for grant of leave to defend the suit.

 

13. The learned counsel for the respondent/plaintiff argued that the appellants in the leave to defend application failed to raise any substantial question of law and facts, therefore, their leave to defend application was rightly dismissed by the learned  banking court. He further argued that the suit was instituted and verified by duly authorized attorney of the respondents and in presence of power of attorney, there was no legal  requirement to file board resolution along with the plaint. He further argued that while instituting the suit in the banking court, the respondent complied with the requirement of subsection (3) of Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. In fact, it was the appellants who had failed to comply with the mandatory requirements of subsection (3) and subsection (4) of Section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, leave to defend application was rightly dismissed. The appellant was called upon by the learned banking court to submit the breakup, which they had failed to do so, hence, the learned banking court was left with no option but to pass the judgment and decree against the appellants on the basis of breakup filed by the respondent. He further argued that statement of account appearing at page 243 of the court file is showing the existing liabilities of the appellant before its dissolution. He further argued that all correspondences and sanctioned advices issued by the respondent to the appellant No.1 are genuine documents and he emphatically rebutted the arguments of the learned counsel for the appellant that the respondent has fabricated and engineered false documents in the name  of appellant after its dissolution. The learned counsel further argued that though the agreement for finance annexure C/1 of the court file at page 147, carrying blank columns but it is a fact that the partners had signed the agreement even after the alleged dissolution of the firm, therefore, the appellants are not entitled to take any undue advantage on the ground that the columns of the said agreement were left blank. In support of his arguments, the learned counsel for the respondent relied upon the following case law.

 

1.     2004 CLC 535 (Messrs Mach Knitters (Pvt.) Limited versus Allied Bank of Pakistan Limited). In this case, the learned  divisional bench of the Lahore high court has discussed the Negotiable Instruments Act, 1881 vis-à-vis Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and held that under Section 20 of Negotiable Instruments Act where one person signs and delivers to another a paper stamped in accordance with law, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made, or completed into a negotiable instrument, he thereby gives prima facie authority to the person who receives that paper to make or complete it, as the case may be, into a negotiable instrument for any amount. It is further held in this judgment that certain presumptions are attached to negotiable instruments under Section 118 of Negotiable Instruments Act, 1881 such as that the negotiable instrument was made or drawn for consideration and that every negotiable instrument bearing a date was made or drawn on such date.

 

 

2.     2006 SCMR 1347 (Muhammad Arshad versus Citibank N.A. Lahore). In this matter, the hon’ble supreme court held that in our view the entire controversy revolves around the question as to whether the agreement dated 26.06.1999 was executed between the parties or otherwise. A careful scrutiny of the entire record would reveal that agreement was executed between the parties. The agreement was not only signed but the petitioners also affixed the thumb impressions on it which were never denied. We are not at all impressed by the contention raised on behalf of the petitioners that the genuineness and authenticity of the agreement is not above board as the relevant columns were left blank and filled subsequently by the bank. In view of the provisions contained in Section 20 read with Section 118 of the Negotiable Instruments Act, 1881, no benefit could be given to the petitioner on the ground that the agreement was not completely filled in when executed. We have also observed with curiosity that signatures on various documents annexed with the plaint were not disputed by the petitioners which leads us to draw the only an un-escapable conclusion that claim of the petitioners was genuine and based on authentic documents.

 

14. We have examined Section 9 of the Financial Institution (Recovery of Finances) Ordinance, 2001, (hereinafter referred to as the Ordinance), which provides that where a customer or a financial institution commits a default in fulfillment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the banking court. It is further provided under the same section of the Ordinance that the plaint shall be supported by a statement of account which in the case of financial institution shall be duly certified under the Banker Books Evidence Act, 1891 and all other relevant documents relating to the grant of finance. It is also a mandatory requirement of the Ordinance that the plaint in case of financial institution shall specifically state, the amount of finance availed by the defendant from the financial institution, the amounts paid by the defendant to the financial institution and the dates of payments and the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution up to the date of institution of the suit.  In order to establish the claim, the plaintiff has to show that the averments of the plaint are duly supported by the statement of account.

 

15. After institution of the suit, the defendant has to come into arena and file leave to defend application under Section 10 of the Ordinance. Under sub-section (3) of Section 10, it is envisaged that the application for leave to defend shall be in the form of a written statement, and shall contain a summary of the substantial question of law as well as fact in respect of which, in the opinion of the defendant, evidence needs to be recorded and subsection (4) of Section 10 of the Ordinance imposes mandatory obligations upon the defendant to specifically state the amount of finance availed by the defendant from the financial institution, the amounts paid by the defendant to the financial institution and the dates of payments,  the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution up to the date of institution of the suit and amounts of finance and other amounts relating to the finance payable by the defendant to the financial institution up to the date of institution of the suit and the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof.

 

16. At the time of filing leave to defend application, it is also a requirement of sub-section (5) of Section 10 that the application for leave to defend shall be accompanied by all documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him. The repercussion for non-filing of leave to defend application in accordance with the requirements laid down under Section 10 are provided under subsection (6), which converse a penal consequence that an application for leave to defend which does not comply with the requirements of subsections (3), (4) and subsection (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with such requirement.

 

17. The sub-section (8) of Section 10 of the Ordinance confer the powers subject to Section 11, upon banking court to grant the defendant leave to defend if on consideration of the contents of the plaint, the application for leave to defend and the reply thereto, it is of the view that substantial questions of law or fact have been raised in respect of which evidence needs to be recorded. The consequences of non-allowance of leave are provided under sub-section 11 of Section 10 of the Ordinance, which makes it abundantly clear that if the leave to defend is rejected or where a defendant fails to fulfill the conditions attached to the grant of leave to defend, the banking court shall forthwith proceed to pass judgment and decree in favour of the plaintiff against the defendant.

 

18. The Financial Institution (Recovery of Finances) Ordinance, 2001 is a special law, which regulates the relationship between the financial institutions and the customers and also imposes certain mandatory requirements and obligations upon the financial institution then on  the customer before and after the institution of suit in the banking court. The intention of imposing strict conditions under Sections 9 and 10 of the Ordinance by the legislature is to expedite the banking cases, therefore, a detailed and explicit procedure has already been provided for filing the suit and or leave to defend. Under Section 4, it has been stated that the Ordinance shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Under Section 7, a banking court in exercise of its civil jurisdiction shall have all the powers vested in a civil court under the Code of Civil Procedure Code and in exercise of criminal jurisdiction shall have the same powers as are vested in a court of sessions under Cr.P.C. The banking court in all matters with respect to which the procedure has not been provided for in the Ordinance, follow the procedure laid down in the CPC and Cr.P.C. in accordance with exercise of its civil and criminal jurisdiction.

 

19. The minute screening of the various sections of the Ordinance lead us to a right and proper conclusion that while deciding a leave to defend application, heavy responsibility rests upon the banking court to appreciate not only the contents of the plaint but also leave to defend application and replication, if any filed and in order to pass a speaking order with sound reasoning, it is necessary to look into the facts of the case and also consider the documents attached with the plaint, leave to defend application and the replication. After going through the entire pleadings of the parties, it is obligatory upon the banking court to decide the question of law raised in the leave to defend application and not to dismiss or reject the leave to defend application in perfunctory and cursory manner. It is time and again seen in numerous cases that the banking court decides the leave to defend application in a slipshod manner without adverting to the questions of law and facts raised in the leave to defend and thereafter, judgment is delivered with simple reproduction of the contents of plaint which is against the spirit of law. If the banking court deems fit that no case of leave is made out, then it must be a sense of duty to give rational findings for its agreement or disagreement on the questions of law and facts raised in the application for leave to defend. Simple finding that leave to defend application does not reflect any substantial questions of law and facts without adverting to the questions and give specific findings amounts to nullifying and or negating the very spirit of ordinance. In the banking suit, this is a sole opportunity for the defendant to apply for the leave to defend and its entire future rests upon its decision, therefore, in all fairness the defendant has legitimate right to be heard and all questions of law and facts raised in the leave to defend application should be answered by the banking court for the reason that on rejection of leave to defend,  the defendant goes out of arena without any further opportunity to defend. 

 

20. The intention of the legislature as expounded under sub-section 11 of Section 10 of the ordinance makes it abundantly clear that if no case for leave to defend is made out, the banking court shall forthwith proceed to pass judgment and decree against the defendant. The scope and purview of Section 11 of the Ordinance also signifies that if the banking court on consideration of the contents of the plaint, the application for leave to defend and reply thereto, it is of the opinion that dispute between the parties does not extend to the whole of the claim, or that part of the claim is either undisputed, or is clearly due, or that the dispute is mainly limited to a part of the principal amount of the finance or to any other amounts relating to the finance, it shall, while granting leave and framing issues with respect to the disputed amounts, pass an interim decree in respect of the part of the claim which related to the principal amount and which appears to be payable by the defendant to the plaintiff. It is coherent beyond any shadow of doubt that without considering or adverting to the contents of the  plaint, the application for leave to defend and the replication, it is not possible for the banking court to arrive at just and  proper conclusion in the matter whether the case for leave to defend is made out or not, therefore in all conscience, it is necessary for the banking court that instead of dismissing the leave to defend application in cursory manner and then pass a judgment subsequently on reproducing the contents of the plaint verbatim, efforts should be made with proper application of mind to decide the actual controversy between the parties by a speaking order at the time of deciding the leave to defend application.

 

21. We have observed that many vital aspects of the case remained untouched by the banking court, which should have been taken into consideration for just and logical  conclusion. No finding has been given on a crucial aspect of the matter where the defendant had challenged the authenticity of the finance agreements in which various columns were left blank which tantamount the violation of Section 18 of the Ordinance which laid much emphasis that no financial institution shall obtain the signature of a customer on banking document, which contains blanks in respect of important particulars including the date, the amount, the property or the period of time in question. It is further provided under sub-section (2) of the same section that finance agreements executed by or on behalf of a financial institution and a customer shall be duly attested in the manner laid down in Article 17 of the Qanun-e-Shahadat Order, 1984. The defendant also claimed that partnership was dissolved but again this important aspect was overlooked by the banking court. Another crucial point raised in the leave to defend application was that the bank is charging markup over markup with exaggerated amount, but this plea was also ignored without any plausible justification.

 

22. In the order dated 13.11.2008, the learned banking court observed that the plea of exaggerated amount and markup over markup can be settled at the time of explanation of the breakup of the parties, but in the judgment passed on 05.11.2009, the court overlooked its own findings. It is therefore, not conceivable that the order was passed with application of judicious mind. Nothing is mentioned in the judgment to show that what efforts were made by the banking court to reconcile the plaint with different statements of accounts in order reject the veracity of question of law and facts raised in the leave to defend application.

 

23. The judgments relied upon by the learned counsel for the appellant relating to the charge of markup over markup or decision of the banking court in hasty manner without considering the material on record are quite applicable in which the divisional bench of this court observed that the banking court dismissed the leave to defend application in a hasty manner without examining in detail, the defence put up by the defendant and another judgment of the divisional bench of the Lahore high court in which it was held that not a single word was mentioned in the impugned order as to how the banking court had proceeded to decree the suit in the said amount. The banking court had done nothing to reconcile the plaint with different statements of accounts produced by the plaintiff bank and on this ground, in the both aforesaid precedents, the judgment and decree of the banking court were set aside.

 

24. The case law relied upon by the learned counsel for the respondents are only related to Negotiable Instruments Act, which are distinguishable and not helpful in the present case as the appellants had not challenged that any negotiable instrument was taken or retained blank but in the leave to defend application only it was mentioned that the columns of financing agreements were left blank, which cannot be considered as negotiable instruments. In another judgment relied upon by the learned counsel of the respondent it was held that the agreement was not only signed but the petitioners also affixed the thumb impressions on it which were never denied. In the case in hand, the appellants have clearly denied to have signed the agreement.

 

25. Another important aspect, which cannot be overlooked is that after 18th amendment, right of fair trial has become a fundamental right under Article 10-A of the Constitution of the Islamic Republic of Pakistan, which envisages that for the determination of civil rights and obligations or in any criminal charge, the person shall be entitled to fair trial and due process, therefore after insertion of this fundamental right under the Constitution of Pakistan, more responsibility is cast upon the banking court to decide the leave to defend application with due care and caution and pass a  speaking order on all questions of law and facts raised. The upshot of this discussion is that the banking court has not exercised its jurisdiction properly and dismissed the leave to defend application without application of mind and without appreciating the questions of law and facts raised in the application.

 

26. For the foregoing reasons, we are of the considered opinion that the impugned judgment and decree and the order dismissing the leave to defend application can not be sustained . We therefore allow this appeal and set aside the impugned judgment and decree and order dated 13.11.2008, dismissing the leave to defend application  and remand the matter back to the learned banking court to decide the leave to defend application afresh in accordance with law preferably within one month and the suit as soon as possible. The appeal is disposed of in the above terms along with the pending applications.

 

                                                                                       Judge

Karachi:

Dated. 24.3.2011                                                 Judge