2011 C L D 982
[Quetta]
Before Mrs. Syeda Tahira Safdar and Jamal Khan Mandokhail, JJ
MUHAMMAD ALI ---Appellant
Versus
BRANCH MANAGER, NATIONAL BANK OF PAKISTAN and 2 others ---
Respondents
High Court Appeal No. S -1 of 2009, decided on 24th February, 2011.
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) ---
----Ss. 9(5) & 12 ---Ex parte decree against principal debtor and guarantor ---Guarantor's
application for setting aside such decree on ground that he was not served with summons in
suit; that he came to know about decree after his arrest in its execution; and that newspapers
had no circulation in his area ---Validity ---Report in respect of summons issued through
registered post and Divisional Police Officer were not available on record ---Service of
summons was effected upon defendants thro ugh publication in two newspapers available on
record -As service was duly effected on defendants through publication, therefore, no further
notice was required to be issued to them ---Guarantor had not denied his address finding
mention in plaint ---Reports of process serving agencies on notices and warrants issued in
execution proceedings showed avoidance of service by defendants ---Ex parte decree was
passed on 12 -4-2008, whereas guarantor filed such application on 28 -4-2009 after his arrest
on 24 -7-2009 in its execution ---Guarantor had failed to appear before court' at relevant time
after his service through publication -As per his admission, guarantor got knowledge of decree
on 24 -7-2009, when he was arrested ---Guarantor had filed such application after 21 d ays of
his arrest without giving any reason or explanation for such delay ---Avoidance of service of
process of court by defendants showed mala fides on their part ---Nothing on record to show
that Bank had committed fraud with guarantor ---Guarantor had fail ed to approach court
within provided period and establish that he was not properly served ---Such application was
dismissed in circumstances.
Ayaz Swati for Appellant.
Gohar Yaqoob Khan for Respondent No. 1.
Date of hearing: 23rd September, 2010.
JUDGMENT
MRS. SYEDA TAHIRA SAFDAR, J .---Instant appeal has been filed by the appellant
Muhammad Ali, feeling aggrieved of the order dated 7 -9-2009 of Banking Court,
Balochistan, Quetta, whereby his application for setting aside of ex parte judgment d ated
12-4-2008, was rejected. It is contention of the appellant, that no notice was served upon him
in respect of institution of the suit filed by the respondent No.1/National Bank of Pakistan.
Further, the observations made by the trial Court, about circu lation of newspapers in a Tehsil,
is neither reasonable, nor in accordance with law. Further contended, that the trial Court has
made an error while holding that the application has been filed after lapse of one year and
four months, rather the delay was e xplained properly, which was not considered by the trial
Court. It is contention of the appellant that he had not obtained any loan from the Bank,
rather his status has been shown as guarantor of the principal debtor, with fraud. Further, the
documents hav e been got prepared by the principal debtor in connivance of Bank officials.
He never put his thumb impression on any of the documents. Thus in the circumstances, it is
asserted that the impugned judgment and decree has been obtained through fraud. But the
Banking Court, has failed to consider these aspects of the case, which resulted in grave
miscarriage of justice. The appellant has prayed for setting aside of judgment -decree dated
12-4-2008 and also order dated 7 -9-2009, further prayed that case be reman ded to the
Banking Court for conducting the proceedings on merits, in accordance with law.
Counsel for the parties are heard, while record is perused. The appellant is aggrieved of
judgment dated 12 -4-2008, of Banking Court Balochistan, Quetta, whereby the suit filed by
respondent No. 1/National Bank of Pakistan for recovery of Rs.12,908,54 with future mark
up, cost of fund and cost of suit, was decreed, while defendants/ respondents Nos.2, 3 and
present appellant were severally and jointly declared liabl e for payment of decretal amount.
It is further apparent that the Bank sued respondent No.2 as principal debtor, while
respondent No.3 and the appellant were sued in capacity of sureties/guarantors. It is further
apparent from record, that after registrati on of suit, notices were issued in names of the
defendants/respondents Nos.2, 3 and appellant, through registered post, and it was also
ordered that publication be made in Daily Ba -Khabar, Quetta and Balochistan Times
Quetta. In compliance thereof notices were issued, while publication was made in
newspapers. The respective issues of newspapers are present on record. Despite effecting of
service through publication, as the defendants/respondents Nos.2, 3 and appellant, failed to
appear, thus proceeded again st ex parte, while the suit was decreed in favour of the
plaintiff/respondent No.1 by the trial court through judgment dated 12 -4-2008. Whereafter,
proceedings for execution of decree were initiated against the judgment
debtors/respondents Nos.2, 3 and app ellant. During the course several show -cause notices
were issued, in the names of judgment debtors, including present appellant, but remained
unserved. In the circumstances, the Banking Court issued warrants for arrest of judgment -
debtors, while proceeding s for auction of the attached property were also initiated, but till
present the process of auction has not been finalized. During course of execution
proceedings, the appellant was got arrested on 24 -7-2009, and committed to civil prison, as
he refused to deposit the decretal amount.
Meanwhile, the appellant filed an application for setting aside of ex parte judgment on 24 -8-
2009. This application was rejected by the Banking Court, through order dated 7-9-2009,
which is challenged through this appeal, wh erein it is main contention of the appellant that
he has not been properly served, as such he had no knowledge about pendency of the suit,
thus unable to approach the court in time. His second contention is that the decree has been
obtained through fraud a nd misrepresentation by the Bank, he denied to sign any document in
respect of the amount obtained by respondent No.2 Abdul Rehman, the principal debtor.
The appellant mainly contended that service was not properly effected on him, nor he was in
knowledg e of pendency of the suit, further, he never stood guarantor, nor obtained any loan
from the Bank. Subsection (5) of section 9 of Financial Institutions (Recovery of Finances)
Ordinance 2001, is relevant, as it describes the mode of issuance of notice and effecting of
service to the defendant. Section 9 subsection (5) of Financial Institutions (Recovery of
Finances) Ordinance 2001 states as under:
"Section -9(5): ---On a plaint being presented to the Banking Court, summons in
Form No. 4 in Appendix 'B' to t he Code of Civil Procedure, 1908 (Act V of 1908)
or in such other form as may, from time to time, be prescribed by rules, shall be
served on the defendant through the bailiff or process -server of the Banking Court,
by registered post acknowledgement due, b y courier and by publication in one
English language and one Urdu language daily newspaper, and service duly
effected in anyone of the aforesaid modes shall be deemed to be valid service for
purposes of this Ordinance. In the case of service of the summons through the
bailiff or process -server, a copy of the plaint shall be attached therewith and in all
other cases the defendant shall be entitled to obtain a copy of the plaint from the
office of the Banking Court without making a written application but aga inst due
acknowledgment. The Banking Court shall ensure that the publication of summons
takes place in newspapers with a wide circulation within its territorial limits."
As per this provision, on institution of suit summon is required to be served on the
defendant. The modes provided therein are through bailiff of the court, through registered
post acknowledgement due, by courier, and by publication in one English language and one
Urdu language daily newspaper. It is further provided therein, that service effected in anyone
of the aforesaid modes, shall be deemed to be service, for the purpose of this Ordinance LI of
2001. In present case, as per order dated 14 -2-2008, the summonses were ordered to be issued
through registered post, and also through DPO Na seer Abad at Dera Murad Jamali, and also
ordered to be issued through publication in two newspapers. Though no report in respect of
summons issued through registered post, and DPO are present on record, but the
publication was effected in Daily Ba -Khabar, Quetta, and Balochistan Times, Quetta,
relevant issues of both the newspapers are present on record. Thus, keeping in view the
provisions of section 9(5) of Financial Institutions (Recovery of Finances) Ordinance 2001,
the service was duly effected on the defendants/respondents Nos.2, 3 and appellant, no
further notice was required in the circumstances. It is further to be noted, that after passing of
the decree, during course of execution proceedings, process was repeatedly issued for the
judgment -debtors, including the appellant. Several show -cause notices were also issued, due
to non -effecting of service, resultantly, warrants of arrest were issued in names of
judgment -debtors, which also remained un -served. The reports of process serving agencies,
presen t on notices and warrants, clearly reveals that the judgment -debtors including the
appellant, were avoiding the service. As per record the appellant was got arrested on 24 -7-
2009, and committed to civil prison on his refusal to pay the decretal amount. As such the
date of his arrest shall be deemed to be date of knowledge, and period of limitation has to be
counted from the said date. As per record of the trial Court, the appellant though arrested on
24-7-2009, while gave power on the same date to his couns el, the power is present in the
case file of the trial Court, despite the same, he filed application under section 12 of
Financial Institutio ns (Recovery of Finances) Ordinance 2001, seeking setting aside of the
decree, on 24 -8-2009. The provided period, f or filing such an application under section 12 of
the Financial Institutions (Recovery of Finances) Ordinance 2001, is 21 days, from the date
of decree. It is further provided therein, that where the summons was not duly served, when
he got knowledge of th e decree. In present case though service was duly effected through
publication, but he failed to appear before the court at the relevant time. If reliance is made
on contention raised by the appellant, that he had no knowledge about the publication, as
newspapers have no circulation in the area, even then, he admittedly got knowledge about
passing of the decree against him on 29 -7-2009, the date he was arrested, but he filed
application for setting aside of the decree on 24 -8-2009, after the provided period of 21 days.
No reason for such a delay is shown, nor explained by him.
Keeping in view the above mentioned facts, service was properly effected on the appellant as
per relevant provision of law, but he failed to appear before the Banking Court, at the r elevant
time. Further, process was repeated several times during pendency of suit, and also during
course of execution, but the appellant despite being resident of the area, deliberately avoided
the service. It is to be noted that in present appeal the app ellant has mentioned his same
address, which was mentioned in the plaint by the plaintiff/respondent No.1. The defendants,
including the appellant, avoided the process of the court, which shows mala fides on their
part. Their non -appearance was deliberate. The appellant has further failed to place on
record any material, from which it can be ascertained, that fraud has been committed by the
Bank Authorities.
The appellant has failed to approach the trial Court within provided period, he further failed
to establish that he was not properly served, thus deprived of his right. There is no merits in
the appeal, which is hereby dismissed. However, in order to meet the ends of justice the bail
granted in favour of appellant Muhammad Ali through order dated 17 -9-2009, by this Court,
is ordered to be remain valid till 12 -3-2011, enable him to approach the Banking Court for
obtaining' further orders in his favour.
No orders as to costs.
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