Leave to defend (PLA) Allowed (Banking Court)

Leave to defend Allowed (banking court)

Stereo. H C J D A 38.

JUDGMENT SHEET

LAHORE HIGH COURT, MULTAN BENCH,

MULTAN.

JUDICIAL DEPARTMENT

R.F.A. No. 299 of 2022

JUDGMENT

Muhammad Farooq

VERSUS

Zarai Taraqiati Bank Limited

Date of hearing: 20.06.2023

Appellant by:

Muhammad Suleman Bhatti, Advocate.

Respondents by: Rao Riasat Ali Khan, Advocate.

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MUZAMIL AKHTAR SHABIR, J. Through this appeal filed

under Section 22 of Financial Institutions (Recovery of Finances)

Ordinance, 2001 (“the Ordinance”), the appellant (judgment-debtor)

has called in question the judgment & decree dated 15.08.2022

(“impugned decree”) passed by learned Judge Banking Court No.II,

Multan (“Banking Court”) whereby application for leave to defend

filed by the appellant under section 10 of the Ordinance has been

dismissed and the recovery suit filed by the respondent-bank under

section 9 of the Ordinance was decreed to the tune of Rs.939,085.86

against the appellant, in favour of respondent-bank.

It is contended by learned counsel for the appellant that

admittedly original documents relating to finance advanced to the

appellant were not available with the respondent-bank and the claim

of the appellant was that the said documents had been returned to the

appellant on repayment of loan, whereas on the other hand the claim

of the respondent was that the said documents had been snatched by

the appellant from the officer of the Bank, which was a triable issue

therefore, to establish genuineness of the claim of the parties, the

Court was required to grant to the appellant leave to defend the suit

R.F.A. No. 299 of 2022

but the said aspect of the matter was not given due consideration by

Judge Banking Court while dismissing the application for leave to

defend filed by the appellant solely on the ground that it did not meet

with requirements of section 10 of the Ordinance, resulting in the suit

for recovery filed by the respondent-bank being decreed against the

appellant, which according to the learned counsel was not sustainable

and liable to be set aside.

On the other hand, learned counsel for respondent-bank has

defend the impugned order by stating that appellant himself had

snatched the original documents from officers of respondent-bank for

which an F.I.R. was registered against the appellant and the

respondent-Bank filed the titled recovery suit with which scanned

copies of original documents retained in the office of respondent-bank

were attached, which documents were as good as the original

documents and clearly establish the claim of respondent-bank against

the appellant, besides the appellant had not raised any legal or factual

ground entitling the appellant for grant of leave to defend and inter

alia on the basis of aforementioned grounds it is claimed that while

rightly dismissing the application for leave to defend, suit was decreed

against the appellant.

We have heard the learned counsel for the parties and perused

the record with their able assistance.

Perusal of the record shows that the respondent-bank filed suit

for recovery of Rs.1,001,170/- along with markup and cost of funds

and other charges till realization under Section 9 of the Ordinance by

claiming therein that appellant applied to the respondent-bank for

obtaining Agricultural loan in the heads of production and

development finances which were sanctioned for Rs. 8,80,000/- and

disbursed on 12.09.2019 under the G.L. Head nos. 9160, 9303, 9417

and 9018 of Rs.270,000/-, Rs.270,000/-, Rs.110,000/- and

Rs.230,000/- repayable with mark-up rates of 14%, 14.8%, 14.8% and

14% respectively according to bank policy. For obtaining t

R.F.A. No. 299 of 2022

loan/Finance facility, the appellant mortgaged his agricultural

property measuring 40 Kanals and 15 Marlas in Mouza Laabar, Tehsil

Multan details of which were mentioned in his Zarai Pass book No.

023608 and encumbrance/mortgage mutation No. 4630 dated

28.03.2013 of his agricultural land was entered the revenue record in

favour of respondent-bank and for the said purpose the appellant also

executed Loan application, Finance Agreement, Sanction Advice,

D.P. Note, Charge creation certificate, Acknowledgement and other

concerned/relevant documents relating to loan. Afterwards obtaining

loan, it is claimed that the appellant paid nothing and failed to

liquidate the loan liability and a sum of Rs.1,001,170/- was

outstanding against the appellant as on 28.08.2020. The appellant on

being asked to pay the loan amount failed to adjust the same and on

11.06.2020 snatched the original loan case file from the Bank officers

and refused to pay the outstanding amount, resulting in registration of

FIR No. 572/2020 under Sections 353, 382, 379 & 186 PPC against

the appellant with Police Station Muzaffarabad, Multan, proceedings

under criminal law arising out of which are still pending with the

court of competent jurisdiction. The appellant thereafter filed a suit

for declaration titled Muhammad Farooque vs ZTBL to the effect that

he had repaid all the outstanding loan amount and pass book was

returned to him and thereafter nothing was due against him and

prayed that mandatory injunction be granted against the appellant to

issue NOC and to redeem the mortgaged property and not to demand

any amount from the appellant. The same necessitated the filing of the

instant suit for recovery by the respondent Bank against the appellant.

Appellant on being summoned filed application for leave to

defend with the assertion that the appellant in the year 2013 availed a

loan facility of Rs. 800,000/- from the respondent Bank, which was

required to be repaid in 6 years by installments with last installment

due to be paid in September, 2019 and the appellant had paid the said

installments and requested the plaintiff bank to redeem property of the

appellant. The respondent Bank manager promised to redeem the

R.F.A. No. 299 of 2022

property but lingered on with the same and although original pass

book was returned back to the appellant yet redemption letter was not

issued, consequently on 20.06.2020, petitioner filed a suit for

declaration in the Banking Court which is still pending and in the

meanwhile 11.06.2020 the Bank Manager got registered Criminal case

bearing FIR No. 572 of 2020 against the appellant for snatching away

original file from the Bank Manager. Although, appellant accepted

having obtained loan facility in the year 2013 yet in his application for

leave to defend mentioned that said facility had been repaid and

original documents of finance facility were not available with the

respondent-bank as the same had been returned on repayment of

finance but the officers of respondent Bank has not made relevant

corresponding entries in the record and it is claimed that no new

finance facility/loan was obtained by the Appellant, however, it was

not denied that F.I.R. for snatching of said documents from the

officers of respondent-bank was registered against the appellant, and

inter alia on the basis of the afore-mentioned circumstances, it was

claimed that leave to defend was required to be granted to the

appellant. For ready reference some excerpts of relevant portions of

application for leave to defend are reproduced below:-

“1. That in 2013, petitioner /defendant availed a loan

facility for Rs8,00,000/- from the plaintiff bank which was

required to be paid in 6 years by installments, last installment

was to be paid in September, 2019. The petitioner defendant

accordingly paid the said installments and requested the

plaintiff bank to redeem property of the petitioner/defendant.

The respondent bank manager promised to redeem the

property but lingered on the same, although original pass

book was returned back to the petitioner but redemption letter

was not issued, consequently on 20.06.2020, petitioner filed a

suit for declaration in this Honorable Court which remained

sub judice in this Honorable Court and was dismissed for

non-prosecution on 02-11-2021, for the restoration of which

application is being filed, in the meanwhile, bank manager on

11.06.2020 got registered Criminal Case bearing FIR

No.572/20 against the petitioner on the allegations that

petitioner had snatched original file from the plaintiff bank

manager, hence, committed the offence, in which on

25.06.2020 petitioner/defendant filed pre-arrest bail

application in the Court of Learned Session Judge, Multan

which was entrusted to Mr. Izhar-ul-Haq, Learned Additional

Session Judge, Multan for the decision in accordance with

.A. No. 299 of 2022

law. The Learned Additional Session Judge, Multan, on

06.10.2020 was pleased to confirm pre-arrest bail of the

petitioner in which for and against arguments were recorded.

It was specifically mentioned that petitioner had already

cleared the principal and mark up amount secured by him in

the year 2013. As per FIR time of occurrence was mentioned

as 07:30 a.m. in FIR, whereas, that was not working hours of

the bank officials because in Pakistan opening time of banks

is 9.00 a.m., that is why story narrated by bank officials in

FIR was not accepted by the Learned Additional Sessions

Judge, even otherwise, other merits of the case were also

taken into consideration and finally case was found fit for

grant of pre-arrest bail.

…… ………… ……… …… …. …………. ……..

………. ……….. ………….. ………….. …………

The bank officials while filing titled suit have claimed

an amount of Rs. 8,80,000/- as disbursed amount against

Loan Case No. 706127, while annexing voucher of Rs.

63,794/- and Cheque of Rs. 921,000/- in the name of the

petitioner, which facts are sufficient to disbelieve the story

put forward by the bank officials for establishing their case

because in plaint different amounts under different heads are

shown as disbursed amount whereas, through cheque of Rs.

921,000/- is shown disbursement of amount in one go, which

is contrary to the record and documents produced by the

bank itself.

……. ……… ……….. In para No. 2 against column

No. 2, date of disbursement of amount is shown as 12.09.2019

whereas, the expiry date is mentioned as 15.07.2019,

meaning thereby, amount is required to be adjusted before its

disbursement, somewhat how, other documents are also

mentioned under the same analogy having no backing.

Hence, case for grant of leave application is made out.

That no document is available with the bank except

photocopies, which are pertaining to previous loan case and

original of which are not available with the bank. The bank

officials have also tempered dates and loan cases numbers,

hence, petitioners case is fully made out.

…… ………… ……… …… …. …………. ……..

………. ……….. ………….. ………….. …………

That details in terms of Section 10(3)(4)(5)&(6) of the

Financial Institutions (Recovery of Finances) Ordinance

2001 are as under:-

Finance availed:

Nil

Finance Repaid:

Nil

Outstanding: Nil (Entire amount of outstanding

liability is disputed).

That Section 9 of the Ordinance prescribes that suit of

the Financial Institutions must be supported by all the

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requisite documents including a valid statement of account. It

is settled laws that both credit and debit entries should be

particularized in such a manner that the statement discloses a

true and fair picture. All the entries in the statement of

account must be clearly described so as to ascertain from

which account they have been entered and into which account

the same were further transferred. It is specially averred that

no valid statement of account is appended with the plaint

neither the entries therein corroborated with other documents

appended with the plaint. The statement of account attached

with the plaint is not the statement of account as required

under Section 4 of Banker‟s Books of Evidence Act. By mere

verifying the document it does not attain the status of a true

and valid statements, hence, no statement of account has been

attached with the plaint which is a pre-requisite for filing a

suit u/s 9 of Ordinance 2001, hence, the suit in the absence of

statement of account is liable to be dismissed.

…… ………… ……… …… …. …………. ……..

………. ……….. ………….. ………….. …………

10.

That Section 9 of the Ordinance, as well as Article 48

of the Qanun-e-Shahadat Order, 1984, requires that the suit

must be supported by relevant documents. The plaintiff has

based its claim on the fact that the Finance Facility was

provided, (the “Finance Facility”). However, there is no

document to support this claim. Hence, suit is liable to be

dismissed.”

The respondent bank controverted the stance of the appellant by

filing reply to the application for leave to defend. The learned

Banking Court did not agree with the stance taken by the appellant in

its application for leave to defend and dismissed the same. The details

are mentioned in the impugned order, however, this court has gone

through the impugned order whereby the Banking Court has dealt

with the stance of the appellant regarding non-availability of original

documents with the respondent Bank. The excerpt of the relevant

portion is reproduced below:-

“5. ……………….. The defendant‟s version of fabrication of

documents by the bank officials does not fall within the ambit

of jurisdiction of this court. Moreover, the suit has been filed

on 06.11.2020 and the defendant filed application for leave to

defend the suit on 29.11.2021 and even till date, the defendant

has not produced any document showing his intent to

challenge the validity of documents produced by the plaintiff

bank nor he filed any case against the alleged fraud

committed by bank officials at any proper forum, which itself

negates the story concocted by the defendant. Although

original documents are not available with the plaintiff but . 299 of 2022

scanned attested copies have been produced by the plaintiff

kept in due course of business by the financial institution.

Mere oral assertion of the defendant without any supporting

document or proof is not enough to draw any adverse

presumption against the credibility of the documents and

statements of accounts produced by the bank. The defendant

has not specifically denied his signatures and thumb

impression on the finance documents not did he produce any

copy of request to the plaintiff for redemption of his property.

The finance documents have duly been prepared and those

are not violating any clause of Contract Act or Qanoon-eShahadat Ordinance 1984. The defendant has not produced

any proof regarding repayment of loan along with his PLA.

PLA is not fulfilling the requirements of Section 10(3&4) of

FIO, 2001 and on this ground alone it is liable to be rejected

under Section 10(6) of the ordinance ibid. As no substantial

Question of law and fact has been raised for the

determination of which recording of evidence is required,

therefore, PLA is rejected being meritless.

(emphasis supplied)

The learned Banking Court after dismissing the PLA also

decreed the suit filed by the respondent bank for Recovery of Rs.

9,39,085.86 in favour of the respondent Bank and against the

appellant along with costs of suit and costs of funds from 01.03.2020

till the realization of decretal amount/outstanding amount. However, it

was observed that any amount deposited by the appellant during

pendency of the suit shall be deducted from the decretal amount.

We have noticed that the banking court has specifically

observed that the appellant’s/defendant’s version of fabrication of

documents by the bank officials does not fall within the ambit of

jurisdiction of the Banking Court. The Banking Court further

observed that although original documents are not available with the

plaintiff (i.e. respondent Bank) but scanned attested copies have been

produced by the plaintiff (i.e. respondent Bank) kept in due course of

business by the financial institution and mere oral assertion of the

defendant (i.e. appellant) without any supporting document or proof is

not enough to draw any adverse presumption against the credibility of

the documents and statements of accounts produced by the bank.

These observations recorded by the Banking Court were not based on

proper appreciation of the law and facts of the case and were not

sustainable especially when in view of mandatory requirement of

R.F.A. No. 299 of 2022

Section 9 of Ordinance, the respondent bank was required to produce

on record not only the duly certified statement of accounts certified

under the Bankers Books Evidence Act, 1891 but plaint also was

required to be supported by relevant documents relating to grant of

finance, which implies that the said documents in original were

assumed to be actually maintained by the bank in its office. The

operative portion of section is reproduced below:

“9. Procedure of Banking Courts.- (1) 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 by presenting a plaint which shall

be verified on oath, in the case of a financial institution by the

Branch Manager or such other officer of the financial

institution as may be duly authorized in this behalf by power

of attorney or otherwise.

(2) The plaint shall be supported by a statement of account

which in the case of a financial institution shall be duly

certified under the Bankers Books Evidence Act, 1891 (XVII

of 1891), and all other relevant documents relating to the

grant of finance. Copies of the plaint, statement of account

and other relevant documents shall be filed with the Banking

Court in sufficient numbers so that there is one set of copies

for each defendant and one extra copy.

(3) The plaint, in the case of a suit for recovery instituted by a

financial institution, shall specifically state__

(a) the amount of finance availed by the defendant

from the financial institution;

(b) the amounts paid by the defendant to the financial

institution and the dates of payment; and

to the finance payable by the defendant to the financial

institution upto the date of institution of the suit.”

(emphasis supplied)

10. It is also pertinent to mention here that the appellant as

defendant was also required to file application for leave to defend in

conformity with the mandatory provision of section 10 of the

Ordinance, reproduced below;

“10. Leave to defend. _ (1) In any case in which the summons

has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to

defend the suit unless he obtains leave from the Banking

Court as hereinafter provided to defend the same; and, in

R.F.A. No. 299 of 2022

default of his doing so, the allegations of fact in the plaint

shall be deemed to be admitted and the Banking Court may

pass a decree in favour of the plaintiff on the basis thereof or

such other material as the Banking Court may require in the

interests of justice.

(2) The defendant shall file the application for leave to defend

within thirty days of the date of first service by any one of the

modes laid down in sub-section (5) of section 9:

Provided that where service has been validly effected only

through publication in the newspapers, the Banking Court

may extend the time for filing an application for leave to

defend if satisfied that the defendant did not have knowledge

thereof.

(3) The application for leave to defend shall be in the form of

a written statement, and shall contain a summary of the

substantial questions of law as well as fact in respect of

which, in the opinion of the defendant, evidence needs to be

recorded.

(4) In the case of a suit for recovery instituted by a financial

institution the application for leave to defend shall also

specifically state the following __

(a) the amount of finance availed by the defendant

from the financial institution; the amount paid by the

defendant to the financial institution and the dates of

payments;

(b) the amount of finance and other amounts relating

to the finance payable by the defendant to the financial

institution upto the date of institution of the suit;

to the finance payable by the defendant to the financial

institution upto the date of institution of the suit,

(d) the amount if any which the defendant disputes as

payable to the financial institution and facts in support

thereof:

Explanation.- For the purposes of clause (b) any payment

made to a financial institution by a customer in respect of a

finance shall be appropriated first against other amounts

relating to the finance and the balance, if any, against the

principal amount of the finance.

(5) Where application for leave to defend submitted under the

preceding sub-section is found to be materially incorrect at

any stage of the proceedings, the defendant shall lose the

right to defence and shall also be liable to pay penalty of not

less than five percent of the amount to the claim, unless the

defendant can establish that incorrect information was

submitted as a result of a bona fide mistake.

F.A. No. 299 of 2022

(6) The application for leave to defend shall be accompanied

by all the documents which, in the opinion of the defendant,

support the substantial questions of law or fact raised by him.

(7) An application for leave to defend which does not comply

with the requirements of subsections (3), (4) where applicable

and (5) shall be rejected, unless the defendant discloses

therein sufficient cause for his inability to comply with any

such requirement.

11. The requirements of both sections 9 and 10 of the Ordinance

have been declared to be mandatory by the Honourable Supreme

Court of Pakistan in the case titled Apollo Textile Mills Ltd. and

others versus Soneri Bank Ltd. (PLD 2012 SC 268). The operative

portion of the judgment is reproduced below:-

“20. Dr. Farogh Naseem, learned Advocate Supreme Court

for the petitioners placed heavy reliance on the judgment in

the case of "Bankers Equity Limited through Principal Law

Officer and 5 others v. Messrs Bentonite Pakistan Limited

and 7 others" (2003 CLD 931), composed by one of us

(Justice Muhammad Sair Ali) while in the Lahore High

Court, Lahore. This judgment was maintained by an Hon‟ble

Division Bench in the case of “Bankers Equity Limited and 5

others v. Messrs Bentonite Pakistan Limited through Chief

Executive and 7 others” (2010 CLD 651) and was also

referred to and relied upon by various Hon‟ble Benches in

the cases quoted by the learned counsel. In this judgment both

the above reproduced Sections i.e. sections 9 and 10 came

under discussion. This judgment also bears identity of facts

and the law to the case in hand. The defendants in the

referred case also failed to particularize their objections and

had not pleaded Accounts under section 10 of the Ordinance,

2001 like in the present case. Their petition for leave to

defend was rejected under subsection (6) of section 10 ibid as

under:--

“5.---Learned counsel for the applicants/defendants

candidly admitted that no such account or tabulation

was made in the PLA. In absence of such an account

and for not being in the form of a written statement,

the PLA was rejectable under subsection (6) of section

10 of the Ordinance, 2001, for not complying with the

mandatory requirements of subsections (3) and (4) of

section 10 ibid”.

Upon rejection of defendants petition for leave to defendant

the suit, the court on its own examination of the plaint of the

plaintiff financial Institutions and the documents therewith,

rejected the plaint as well by holding that:--

“7. ............ subsection (2) of section 9 of the Financial

Institutions (Recovery of Finances) Ordinance, 2001

makes it mandatory for a Banking institution to

R.F.A. No. 299 of 2022

support its plaint in a suit against the customer by a

Statement of Account duly certified under the Bankers‟

Books Evidence Act, 1891 and also by all other

relevant documents relating to grant of finance.

Without such a „Statement of Account‟ filed along with

the plaint, a customer will obviously remain totally

unaware of the amount advanced, mark up charged

and the basis, break up, premise, mode of calculation

of account, nature of default and the actual amount of

Bank‟s claim against the defendant-customer. He will

thus be unable to frame his defence within the limited

period prescribed by law, to show reasonable, serious

and plausible grounds of contest to be able to seek and

obtain leave to defend the suit. Absence of filing the

requisite Statements of Account along with the plaint,

will essentially amount to absence of providing

adequate, proper and reasonable opportunity of

defence to the defending customer. Being thus unable

to file a proper leave petition within thirty days under

section 10(2) of the Ordinance of 2001 or within

twenty-one days under section 10(12) ibid, such a

customer may or may not later be able to amend his

leave petition. His defence shall thus be rendered

illusory, hence denied. Upon the compliance a

Banking Company with the provisions of section 9(2)

of the Ordinance of 2001, depends the right of defence

of a defendant in the summary suits as visualized

under the Ordinance, wherefor, the filing of duly

certified Statements of Account by a Banking company

along with its plaint, cannot be taken to be a mere

formality or a technicality. This provision can only

be held to be mandatory. Without strict compliance

wherewith, the plaint is incomplete and cannot

become basis of a suit under this law”.

21. The similarity of the provisions legislated in sections 9

and 10 ibid, as discussed above, leads to identical

consequences in the absence of the demanded Accounts and

the documents. Suit of the plaintiff institution will be

rejectable while defendants‟ leave petition will be exposed to

rejection etc. A Plaintiff institution may be rendered unable

or deficient in appropriately setting up its answers to the

accounts, disputed amounts and facts of the defendant in

reply to the leave application as per section 10(8) ibid. And

that in the absence of the requisite accounts and the facts etc.

in defence filed by a defendant in the leave petition, a plaintiff

will remain unaware of the admitted or denied or disputed

accounts and facts of the defendants, to adequately, seriously

and reasonably pursue the suit and its trial. This will

obviously defeat the intent and the object of the provided

provisions of The Financial Institutions (Recovery of

Finances) Ordinance, 2001).

22. Despite rejection of the leave petition as above, and loss

of the right to defend the suit, the learned Advocate Supreme

F.A. No. 299 of 2022

Court for the petitioner/defendants insisted that the Courts

should have considered the request of the petitioners for

rejection of the plaint as in above referred case of “Bankers

Equity Limited through Principal Law Officer and 5 others v.

Messrs Bentonite Pakistan Limited and 7 others” (2003 CLD

931), on the purported basis of incomplete Statements of

Accounts. The cases referred to by the learned counsel did

adjudge that in the absence of the support of Statements of

Accounts and finance documents, Bank‟s plaint was liable to

be rejected. The learned counsel does not appear to have

examined the reasons upon which the said judgments were

founded. Consequent upon the rejection of the leave petition,

the defendants were deemed to have admitted the contents of

the plaint. The defendants remained bound thereto. The Court

of course was not so bound. It was not expected to proceed

blindfolded. The court therefor in performance of its duty,

itself examine in the said cases (as in this case) the plaint

along with documents to decide as to whether the suit

complied with the mandatory provisions of section 9 ibid or

not and as to the nature of the order, judgment or decree

to be passed by the Court.”

(emphasis supplied)

12. The afore-mentioned judgment of the Supreme Court of

Pakistan was relied upon by this Court in case titled The Bank of

Punjab versus Fazal Abbas and another (2020 CLD 977) and this

Court dismissed the suit filed by the bank as not maintainable due to

non-compliance of mandatory requirement of sub-sections 2 & 3 of

section 9, by holding as under:

“9. The counsel for the appellant despite his hectic efforts

has not been able to show us that the mandatory requirements

of section 9(2&3) of the Ordinance had been properly

followed and complied with, therefore, the suit filed by the

appellant failing to comply with the aforesaid mandatory

requirement of law was liable to be dismissed. Reliance is

placed on Apollo Textile Mills Ltd and others v. Soneri Bank

Limited (PLD 2012 SC 268). Consequently, the Banking

Court was justified in deciding both the afore referred issues

Nos. 3 and 5 against the appellant and dismissing the suit

filed by the appellant. The appellant has failed to show any

illegality, erroneous exercise of jurisdiction or misreading

and non-reading of the relevant record to warrant

interference in the well-founded judgment of the Banking

Court whereby suit of the appellant has been dismissed.”

13. In the present case it was specifically mentioned in the

application for leave to defend that loan financing facility of

Rs.800,000/- was obtained by the appellant from respondent-bank in

the year 2013 which was required to be repaid within six years till

R.F.A. No. 299 of 2022

September, 2019 and the same was repaid by the appellant and

accordingly original passbook was returned to the appellant and the

Manager of the bank promised to issue redemption letter to the

appellant but never issued the same to the appellant and hence the

appellant filed suit for declaration on 20.06.2020 to absolve him of the

said finance facility and redeem his property. Manager, on the other

hand, got registered F.I.R. No.572 of 2020 against appellant for

snatching of original loan case file from the officers of respondentbank and in the said case pre-arrest bail of the appellant was

confirmed and the trial of the said case is still stated to be pending. An

objection was raised by the respondent-bank that PLA was barred by

time, however, the learned Judge Banking Court overruled the said

objection and held PLA to be within time, however, declined the PLA

on the ground that the appellant has categorically prayed that the

amount of finance availed has been repaid and should have been

mentioned the date of repayment which was not done whereas

statements of accounts issued by the respondent-bank is in accordance

with Bankers Book of Evidence Act, 1891 and while relying upon the

said statement of account dismissed the application of PLA without

taking into consideration the main ground raised by the appellant that

original documents were not available with the respondent-bank and

consequently suit without granting leave to defend could not have

been decreed. In this scenario the dictates of latter portion of section

10 sub-section (7) of the Ordinance become important which provides

that an application for leave to defend, which does not comply with

the requirements of subsections (3), (4) where applicable and (5) shall

be rejected, unless the defendant discloses therein sufficient cause for

his inability to comply with any such requirement. The appellant had

claimed that the original loan obtained in the year 2013 had been

repaid and original documents had been returned and were not

available with the bank and no subsequent loan was obtain in the year

2019 and the case had been filed on basis of fabricated and tempered

copies of documents relating to previous loan/finance facility; hence

amount of loan obtained, amount repaid and amount due were Nil.

R.F.A. No. 299 of 2022

These grounds were required to be considered while deciding

application for leave to defend, but apparently the same has escaped

the attention of the Banking Court and the court wrongly observed

that the appellant’s version of fabrication of documents by the bank

officials does not fall within the ambit of jurisdiction of Banking

Court, hence order of dismissal of application for leave to defend does

not seem to be based on proper appreciation of record of the case and

law on the subject.

14. Although, learned counsel for the respondent-bank states that

duplicate file containing scanned document, which is as good as

original, is retained by the respondent-bank in its records yet whether

the said duplicate file is to be treated as good as its original file or not,

or its’ substitute and whether such documents could be treated as

primary evidence or were required to be established through

secondary evidence, are questions which were required to be

determined; besides safekeeping of documents was also question

which could have bearing upon final judgment to be arrived at in the

matter. Keeping the afore-referred aspect of the matter in

juxtaposition with the defence of the appellant that he had repaid the

previous loan in the year 2019 in which original pass book/finance

document were returned to him and remaining documents including

NOC were promised to be issued by respondent-Bank including letter

of redemption, etc. and no new loan was obtained by him in the year

2019 and in these circumstances, non-availability of original file with

the respondent-bank, entitles the appellant for grant of leave to defend

as the same raised substantial question of law and fact requiring

recording of evidence for determination, which aspect of the matter

has not been considered by the learned Banking Court.

15. Consequently, we set aside the impugned judgment & decree

dated 15.08.2022 passed by Judge Banking Court No-II, Multan and

remand the matter to the learned Banking Court by granting leave to

defend to the appellant for decision of the matter afresh on its own

merits in accordance with law.

R.F.A. No. 299 of 2022

16. For what has been discussed above, this appeal is allowed in

the afore-referred terms.

(Safdar Saleem Shahid)

Judge

(Muzamil Akhtar Shabir)

Judge

Approved for reporting.

MuzamilMohsin*

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