11/12/2025
2022 C L D 1013
[Lahore (Multan Bench)]
Before Sohail Nasir and Ahmad Nadeem Arshad, JJ
HABIB BANK LIMITED through Manager---Appellant
Versus
MUHAMMAD HUSSAIN through Legal Heirs and another---Respondents
F.A.O. No. 44 of 2021, heard on 23rd November, 2021.
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---
----Ss. 9, 10 & 22---Limitation Act (IX of 1908), Art. 181---Suit for recovery of finance---Suit dismissed for absence of plaintiff---Restoration---Date not fixed for hearing---Suit filed by appellant/Bank was dismissed due to its absence on the date it was fixed for attendance of respondents/defendants---Validity---Suit could not be dismissed, if date was not for hearing---Such dismissal had no legal effect and there was no limitation to run against such order, which was void, a nullity and not permissible---Such order of dismissal could be set aside by invoking provision of S. 151 C.P.C.---No limitation provided elsewhere in Limitation Act, 1908 or under S. 151, C.P.C., therefore, in the light of Art. 181 of Limitation Act, 1908, period of three years was available for such type of applications---Appellant/Bank moved application for restoration of the suit and condonation of delay which was supported by affidavit and there was no reason for Banking Court to disbelieve that affidavit---Law favours adjudication on merits and dismissal for non-prosecution should be an exception and not a rule---Court was not to be very strict in such regard---Litigant was not to be deprived of hearing unless there has been something equivalent to misconduct or gross negligence on his part---High Court set aside the order passed by Banking Court as there was no such finding against appellant/ Bank and suit was restored---Appeal was allowed, in circumstances.
Mian Khurram Hashmi for Appellant.
Mian Tahir Iqbal for Respondents.
Date of hearing: 23rd November, 2021.
JUDGMENT
AHMED NADEEM ARSHAD, J.---This First Appeal against Order has been filed under section 22 of the Financial Institutions (Recovery of Finances), Ordinance XLVI, 2001 (Ordinance, 2001) challenging the vires of order dated 07.05.2021 whereby application for restoration of suit filed by the appellant/plaintiff bank against the respondent for recovery of Rs.6,39,285.78 was dismissed by the learned Banking Court No.III, Multan.
2. Facts in brevity are that appellant bank instituted a suit for recovery of Rs.6,39,285.78 against the respondent. On 19.08.2020 neither learned counsel for plaintiff bank nor its representative entered appearance so it was adjourned for order on 20.08.2020. On the said date again nobody appeared and the learned Banking Court dismissed the suit for non-prosecution. After lapse of approximately six months application for restoration of suit was filed on behalf of plaintiff bank on 26.02.2021. Along with the application, petition for condonation of delay under section 5 of the Limitation Act, 1908 was also moved by the plaintiff bank. Both these applications were duly supported by an Affidavit of authorized representative of the bank. The learned Banking Court after hearing preliminary arguments of learned counsel for the plaintiff bank dismissed these applications vide order dated 07.05.2021. Feeling aggrieved by that order appellant/plaintiff bank has filed the instant appeal.
3. In support of this appeal learned counsel for the appellant bank argued that impugned order is against law and facts on the subject; that previous counsel did not inform the bank about dismissal of suit on 20.08.2020, however, the factum of dismissal of suit for non-prosection came to know on 24.02.2020 when appellant bank engaged a new counsel; that the suit had been dismissed for non-prosecution on 20.08.2020 and prior to it on 19.08.2020 suit was fixed for further proceedings meaning thereby that was not a date of hearing; that learned Banking Court dismissed the application for condonation of delay without discussing its contents; that the impugned order suffers from patent infirmities, irregularities and illegalities and that cases should be decided on merits rather on technicalities.
4. On the contrary, learned counsel for the respondent supported the impugned order. It has vehemently been argued that learned counsel for the appellant bank could not point any sufficient cause for setting aside the impugned order and that learned Banking Court has passed the order on sound reasoning which is not open to any exception.
5. We have heard the arguments of learned counsel for the parties and perused the record with their able assistance.
6. Learned Banking Court dismissed the application for restoration of the suit, keeping in view Article 163 of the Limitation Act, 1908, which provides a period of 30-days from the date of dismissal of the suit. The appellant bank instituted the suit on 13.02.2018, after registering the case, the learned Banking Court summoned the respondent/defendant as per section 9(5) of the Ordinance, 2001 and the respondent/defendant moved petition for leave to appear and defend the suit (PLA) in the shape of written statement on 07.04.2018. The appellant/plaintiff bank filed replication on 19.10.2018. On 06.05.2019, learned counsel for defendant informed the learned Banking Court that his client has been passed away and his legal heirs have not contacted him. The learned Banking Court directed the appellant that after getting verification of death of Muhammad Hussain defendant/respondent, amended plaint be filed by impleading his legal heirs. Death Certificate was filed on 08.10.2019. Case was being adjourned for filing of amended plaint after impleading legal heirs of deceased Muhammad Hussain, defendant/respondent when it was dismissed for non-prosecution on 20.08.2020. There is no specific provision existed in the Ordinance, 2001 with regard to dismissal of the suit for non-prosecution. So keeping in view section 7(2) of the Ordinance, 2001 which provides that where procedure has not been provided then the procedure laid down in the Code of Civil Procedure, 1908 be followed, the suit may be dismissed for non-prosecution either under Order IX, Rule 8 or Order XVII, Rule 2 of C.P.C. which describe the situation when the suit may be dismissed for non-prosecution. Order IX, Rule 8, C.P.C. applies only to dismissal in default at the first hearing and Order XVII, Rule 2, C.P.C. deals with dismissal at the adjourned hearings. The suit can be restored either under Order IX, Rule 9, C.P.C. if the dismissal is under rule 8, C.P.C. and under section 151, C.P.C. if the suit dismissed under Order XVII, Rule 2, C.P.C. A suit can be dismissed for non-prosecution if the date was fixed for hearing. The word hearing has not been defined and it is used in different rules with a view to state the different purposes for which the hearing is fixed. It implies a date on which some act for furtherance of the suit or proceedings is to be taken. The Hon'ble Supreme Court of Pakistan while interpreting 'date of hearing' hold that it must be a date on which investigation of a controversy or hearing of arguments or taking of evidence or tendering of document or stricking of issues, etc., is fixed. To ascertain whether a date is fixed for "hearing" or not, no inquiry is needed, this being point of law can be raised at any stage and can be determined from the order sheet.
7. A suit cannot be dismissed, if the date was not for hearing and such dismissal would be no legal effect and no limitation will run against it and such order is void, a nullity and not permissible. Such order of dismissal can be set aside by invoking provision of section 151, C.P.C. As there is no limitation provided elsewhere in the Limitation Act, 1908 or under section 151, C.P.C., therefore, in the light of Article 181 of the Act ibid period of three years is available for such type of applications.
8. The appellant moved applications for restoration of the suit and for condonation of delay, which were duly supported by Affidavits. There was no reason for the learned Banking Court to disbelieve that Affidavits. None of the legal heir of respondent Muhammad Hussain was present when the suit was called for and dismissed for non-prosecution, so they cannot claim any vested right accrued to them. There was no need to be heard the defendants/respondents at the time of restoration of suit. No prejudice has been caused to the defendants/respondents by restoration of the suit, as they have a right to contest the suit during trial.
9. The appellant bank did not mention any provision of law in its application for restoration of suit. The learned Banking Court by presuming on self assumption declared to have been filed under Order IX, Rule 9, C.P.C. and treating it under Article 163 of the Limitation Act, 1908, dismissed being barred by limitation. As discussed supra, the crucial date was not date for hearing and preceding date was fixed for submission of amended plaint, therefore, the suit could not be dismissed for non-prosecution. The dismissal of suit in that eventuality can be got set aside by invoking inherent powers under section 151, C.P.C. Accordingly period of limitation would be regulated by residuary Article 181 of the Limitation Act, 1908, providing three years limitation period for setting aside the order of dismissal of suit for non-prosecution.
10. Law favours adjudication on merits and dismissal for non-prosecution should be an exception and not a rule. The Courts should not be very strict in this regard. A litigant should not be deprived of hearing, unless there has been something equivalent to misconduct or gross negligence on his part. There is no finding of negligence on the part of appellant/plaintiff bank, therefore, the suit was liable to be restored.
11. For the reasons given above, this appeal is allowed. The impugned order being not sustainable is set aside. Consequently, the application for restoration of suit regarding recalling of order for non-prosecution is accepted. The suit of plaintiff bank is restored to its original number and shall be deemed to be pending for decision. The learned Banking-Court shall decide the suit in accordance with law from the stage it was dismissed. There is no order as to costs.
MH/H-5/L Appeal allowed.