IN THE HIGH COURT OF SINDH AT KARACHI
First Appeal No. 13 of 2008
|
Date |
Order with signature of Judge |
Present :
Mr. Justice Nadeem Akhtar
Mr. Justice Sadiq Hussain Bhatti
Appellant : Syed Zahid Hussain through his legal heirs,
through Mr. S. S. Mumtaz Alam Advocate.
Respondent : KASB Bank Limited,
through Mr. Muhammad Saleem Iqbal Advocate.
Intervener : Abrar Ahmad,
through Mr. Muhammad Abid Rajput Advocate.
Date of hearing : 08.09.2014.
-----------------------------------
J U D G M E N T
NADEEM AKHTAR, J. – This First Appeal under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001 (‘the Ordinance’) is directed against the order passed by the learned Banking Court No.II at Karachi in the respondent’s Suit No.117/2007, whereby the application filed by the appellant / defendant under Section 12 of the Ordinance read with Section 12(2)CPC was dismissed.
2. Relevant facts of the case are that the respondent-bank filed Suit No.117/2007 on 13.08.2007 against the appellant under Section 9 of the Ordinance for recovery of Rs.715,052.00. It was the case of the respondent that the appellant, who was its employee, availed three separate finance facilities (house finance facility, motorcycle finance facility and personal finance facility) ; in order to secure the repayment of facilities, Flat No.B-11, situated on 1st Floor of the building known as ‘Own Plaza’, constructed on Sub-Plot No.22 of Plot No.1, Sub-Block ‘K’, Block No.1, Nazimabad, Karachi (‘the mortgaged property’), was mortgaged by the appellant in favour of the respondent by executing a memorandum of deposit of title deeds ; the appellant also executed in favour of the respondent promissory notes, letters of continuity and letters of guarantee ; and, the appellant committed default and breach of his obligations under the finance agreements, and thus was liable to pay the amount claimed in the Suit. Summons in the prescribed form were issued through all modes, but no application for leave to defend the Suit was filed by the appellant. Accordingly, the Suit proceeded ex-parte against him and was eventually decreed against him on 29.10.2007 in the sum of Rs.714,970.00 after adjustment of the amounts repaid by him to the respondent as per the record. Costs of the Suit and cost of funds on the decreed amount were awarded to the respondent, and a decree for sale of the mortgaged property was also passed.
3. On 08.11.2007, the appellant filed an application under Section 12 of the Ordinance read with Section 12(2) CPC praying that the judgment and decree passed against him by the learned Banking Court be recalled / set-aside. The main ground urged by the appellant in his said application was that the judgment and decree were obtained against him by the respondent through fraud, concealment and by deliberately giving his wrong / previous address in the plaint, due to which he was never served personally and as such was unaware about filing of the Suit by the respondent. Counter affidavit to this application was filed by the respondent, wherein the allegations of concealment and fraud were denied, and it was asserted that the appellant was fully aware about the Suit. After hearing the parties’ counsel, the application was dismissed by the learned Banking Court vide order dated 17.12.2007, which has been impugned by the appellant through this appeal.
4. C.M.A. No.251/2009 under Order I Rule 10 CPC has been filed in this appeal by one Abrar Ahmad (‘the intervener’), praying that he may be impleaded as respondent No.2 in this appeal. His case is that vide agreement dated 23.06.2005, the appellant had agreed to sell the mortgaged property to him ; prior to the said agreement, possession of the mortgaged property was handed over to him as tenant by the appellant ; out of the agreed sale consideration, the appellant had received substantial part payments from him ; the balance amount was to be paid by him in installments, and upon receiving the entire amount from him, a sale deed in respect of the mortgaged property was to be executed by the appellant in his favour ; the acts of the appellant were dishonest and malafide as he did not disclose to him about the fact of mortgage at the time of the agreement ; and, he has filed Suit No.645/2007 before the VIth Senior Civil Judge, Karachi Central, against the appellant and respondent for declaration, specific performance, damages and injunction.
5. We have heard the learned counsel for the appellant at length and have carefully examined the material available on record. Taking the intervener’s application first, we have observed that the property was mortgaged by the appellant in favour of the respondent on 19.05.2004 when he executed the memorandum of deposit of title deeds, and deposited all the original title documents thereof with the respondent along with the said memorandum ; whereas, the sale agreement between the appellant and intervener was purportedly executed on 23.06.2005. Thus, it is an admitted position that the property was already lying mortgaged with the respondent at the time of the purported sale agreement. It is also an admitted position that the intervener has filed a civil Suit against the appellant and respondent for declaration, specific performance, damages and injunction in relation to the mortgaged property, which is sub judice and is at the stage of evidence. In view of the above, we are of the view that the intervener is neither a necessary nor a proper party to these proceedings and his C.M.A. No.251/2009 is not maintainable, as he has already availed his remedy before the proper forum where his rights, title and interest, if any, in respect of the mortgaged property will be adjudicated upon in accordance with law. We may clarify that this judgment shall not affect the merits or demerits of the case of any of the parties in the intervener’s Suit No.645/2007.
6. The impugned order was assailed by the learned counsel for the appellant by reiterating the grounds urged by the appellant in his application before the learned Banking Court for setting aside the ex-parte decree and in the memorandum of this appeal. It was argued that while the appellant was in the service of the respondent, he intimated the respondent about the change of his address through his letter dated 26.02.2007, but despite such intimation, the respondent deliberately gave his previous address in the plaint. On the other hand, learned counsel for the respondent submitted that the appellant came to know on 15.09.2007 about filing of the Suit by the respondent, but he deliberately avoided to contest the same. In this context, he invited our attention to the appellant’s cross-examination dated 15.09.2007 in a case before the Sindh Labour Court No.V, Karachi.
7. The record reveals that the appellant was cross-examined in the aforesaid case before the Labour Court by the respondent’s counsel on 15.09.2007, when in reply to a question put to him, he had replied that “It is correct to suggest that I am not paying the installment of the Flat from June 2006. Vol. says that my salary was stopped therefore I have not paid the installments of the loan from last month. I do not know that the Bank filed the recovery Suit No.117/2007 against me for recovery of these loans”. If the appellant was not aware about the respondent’s Suit as claimed by him, such fact certainly came to his knowledge on 15.09.2007 when it was suggested to him in his cross-examination that a recovery Suit had been filed against him by the respondent and he was confronted with the specific number of the Suit. The learned counsel for the appellant attempted to argue that even after 15.09.2007 the appellant was unaware about the Suit as the Court where the Suit had been instituted and was pending, was not disclosed to him in his cross-examination. We have noticed that in his application before the learned Banking Court for setting aside the ex-parte decree, the appellant had vaguely stated that some employee of the respondent had informed him about filing of the Suit on the condition that his name should not be disclosed ; thereafter, he instructed his counsel to make inquiries ; and, that is how he came to know about the full particulars of the Suit. The above submission made before us and the stance taken by the appellant in his application do not support his case as they are contradictory.
8. The above-quoted statement of the appellant shows that he had not only admitted having obtained a loan from the respondent, but also having committed default in paying the installments thereof. In such circumstances, it was his duty to make proper inquiry about the Suit in order to defend himself against any adverse order or decree. Being an educated man and an employee of a bank, it should not have been difficult for him to trace the relevant Court where the Suit was pending as there were only few Banking Courts functioning in Karachi at the relevant time. However, despite acquiring knowledge on 15.09.2007 about filing / pendency of the Suit, the application for setting aside the ex-parte decree was filed by the appellant on 08.11.2007 when the Suit had already been decreed on 29.10.2007. The above aspect has been noticed by the learned Banking Court in the impugned order, which is well-reasoned in our opinion. After giving due consideration to all the aspects of the case, we agree with the findings of the learned Banking Court which do not require any interference. The appeal is, therefore, liable to be dismissed.
9. These are the reasons of the short order announced by us on 08.09.2014, whereby this appeal and the listed application were dismissed with no order as to costs.
___________________
J U D G E
___________________
J U D G E