Judgment Sheet
IN THE HIGH COURT OF SINDH KARACHI
First Appeal No. 09 of 2017
Before :
Mr. Justice Nadeem Akhtar
Justice Mrs. Kausar Sultana Hussain
Appellant : Niaz Ahmed
through Muhammad Khalid Advocate.
Respondent : M/S Bank Al-Falah Limited
through Mr. Harchand Rai Advocate.
Date of hearing : 13.12.2018
J U D G M E N T
NADEEM AKHTAR, J. – This appeal under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, (‘the Ordinance’) is directed against judgment dated 21.02.2017 and decree dated 27.02.2017 passed by learned Banking Court No.II at Karachi in Suit No.35/2014, whereby the said Suit filed by the respondent was decreed with costs against the appellant in the sum of Rs.442,850.00 with cost of funds thereon from the date of default till realization.
2. Relevant facts of the case are that the above Suit was filed by the respondent against the appellant under Section 9 of the Ordinance for recovery of Rs.624,318.11. It was the case of the respondent that the appellant had committed breach of his obligations in relation to a credit card facility granted to him by the respondent. Summons were issued through all modes and since the appellant did not file any application for leave to defend, the Suit was ordered to be proceeded ex-parte against him vide order dated 17.03.2017. Thereafter, the appellant filed an application under Order IX Rule 7 CPC read with Section 151 CPC and Section 10(2) of the Ordinance, praying that the above ex-parte order passed against him be set aside and the application for leave to defend filed by him along with his above application be decided on merits. In his above application, it was pleaded by the appellant that at the time of filing of the Suit he was not residing at the address disclosed in the plaint ; his correct / current / latest address was not disclosed in the plaint by the respondent ; he was never served in the Suit ; and, he came to know about the ex-parte order through the recovery officers of the respondent who were pressing him to settle the alleged dues. The application filed by the appellant for setting aside the ex-parte order was dismissed by the learned Banking Court vide order dated 05.10.2016. Thereafter, vide impugned judgment dated 21.02.2017 and decree dated 27.02.2017, the Suit was decreed against him in the above terms.
3. The above grounds urged by the appellant in his application for setting aside the ex-parte order were reiterated before us by his learned counsel, and in support thereof he drew our attention to the reports submitted by the bailiff and courier service before the learned Banking Court. It appears that two addresses of the appellant / defendant were disclosed in the plaint, one being his residential address and the other being his business address. Record shows that the bailiff had reported that the appellant was not available at any of the said addresses, and the courier service had reported that the appellant had shifted from the residential address disclosed in the plaint. Record further shows that instead of Shop No.26, which is the actual and correct number according to the appellant and as per his business address mentioned in the title of the instant appeal, Shop No.28 was mentioned in the plaint. It was evident from the above reports submitted by the bailiff and courier service that the appellant was not residing at the residential address mentioned in the plaint and his business address mentioned in the plaint was not correct. In the above circumstances, especially in view of the reports of the bailiff and courier service, the respondent / plaintiff ought to have been directed by the learned Banking Court to furnish fresh and latest address of the appellant. However, instead of adopting such course to ensure proper service upon the appellant, ex-parte order was passed against him by the learned Banking Court. Not only this, the said ex-parte order was not recalled by the learned Banking Court despite the above ground urged by the appellant in his application. We are of the view that the above aspect of the case, which was vital for deciding the appellant’s application for setting aside the ex-parte order, has not been appreciated by the learned Banking Court.
4. The impugned ex-parte order, judgment and decree have been supported by learned counsel for the respondent by contending that it was the duty of the appellant to inform the respondent about the change in his address. We do not agree with his contention, firstly, as wrong business address of the appellant was disclosed in the plaint by the respondent, and secondly, as reports submitted by the bailiff and courier service were sufficient to establish that the appellant was not residing and/or carrying on business at the addresses disclosed in the plaint. Needless to say, it was the duty of the learned Banking Court to take notice of such reports and to act accordingly before proceeding further in the matter.
5. Section 9(5) of the Ordinance provides the procedure and modes of service of summons in a Suit filed under Section 9 of the Ordinance. It provides that on a plaint being presented to the Banking Court, summons in Form No.4 in Appendix ‘B’ to the Code of Civil Procedure or in such other form as may be prescribed from time to time, shall be served on the defendant (i) through the bailiff or process-server of the Banking Court, (ii) by registered post acknowledgement due, (iii) by courier, and (iv) by publication in one English language and one Urdu language daily newspaper. It is significant to note that except for publication in newspapers, all the first three modes have one distinctive and common feature that a written report / confirmation must come on record before the Banking Court to ascertain service or non-service of summons on the defendant, either through the bailiff and courier service or by acknowledgement due of the registered post. From the above, the intention of the lawmakers is clear that before proceeding further in the Suit, there must be sufficient and reliable evidence before the Banking Court in order to ascertain as to whether the summons were duly served upon the defendant or not, or if he had refused to receive the same. This opinion formed by us is fortified by the case of Mubarak Ali V/S First Prudential Modaraba, 2011 SCMR 1496, wherein the Hon’ble Supreme Court was pleased to hold that “It is only when the summons are duly served and service is held to be satisfactory by the Court, further proceedings in the suit could be taken, but in the instant case in our view the service upon the petitioner was not at all duly effected, therefore all the proceedings initiated or taken thereafter cannot have sanction of law hence are liable to be struck down / set-aside”. The case of Mubarak Ali supra decided on 04.01.2007 was followed by the Hon’ble Supreme Court in Civil Petition No.19-K/2009 (M/S Axle Products Limited V/S M/S Allied Bank of Pakistan Ltd.) decided on 10.02.2009.
6. Having already held that it was the duty of the respondent to disclose in its Suit the correct and latest address of the appellant and it was the duty of the learned Banking Court to take notice of the reports submitted by the bailiff and courier service and to act accordingly before proceeding further in the matter, we are also of the view that compliance of Sub-Section (5) ibid was not made in the Suit as the correct and latest address of the appellant was not mentioned in the summons nor were the summons issued at his said correct and latest address. We are also of the view that the principle that service duly effected through any of the four modes prescribed in Section 9(5) ibid is deemed to be valid service for the purposes of the Ordinance, can be applied only in cases where strict compliance of Section 9(5) ibid is made as provided therein and not where all the prescribed modes are not adopted simultaneously or where any one or more of them is found to be defective or incomplete. Therefore, service on the appellant in the instant matter could not be deemed to be proper service in terms of Section 9(5) ibid merely on the basis of publication of summons in newspapers. Since the mandatory requirements of Section 9(5) ibid of issuing the summons at the correct and latest address of the appellant were not fulfilled, we are of the considered view that summons in the instant matter were not issued in the modes and manner prescribed in Section 9(5) ibid, and thus service on the appellant was not effected in a valid and proper manner as provided therein.
7. In view of the above, the impugned ex-parte order, judgment and decree cannot be allowed to remain in the field. Accordingly, the same are hereby set aside. In the facts and circumstances of this case, the respondent / plaintiff should have been directed by this Court to get the summons issued afresh in strict compliance of Section 9(5) ibid. However, since the appellant / defendant has already filed an application in the Suit for leave to defend, the learned Banking Court is directed to decide the same strictly in accordance with law.
Foregoing are the reasons of the short order announced by us on 13.12.2018 whereby this appeal was allowed in the above terms with no order as to costs.
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