Judgment
This suit has been filed by the Plaintiffs, a Banking Company, for the recovery of loan from the Defendants under the Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter referred to as Ordinance).
2. It is not disputed that summons were issued to the Defendants simultaneously through bailiff, by registered post and by publication, as required under Rule 8 of the Banking Companies (Recovery of Loans) Rules, 1980 (hereinafter referred to as Rules). Admittedly the summons through bailiff as well as through registered Post were returned un-served with endorsement that the addressee was not available. However, the learned Additional Registrar, by his order dated 6‑11‑1985, held the service against the defendants by publication in the Daily "Morning News" dated 26‑9‑1985 to be good and the case was fixed before the Court for orders. Before the Court could pass any ex parte decree on the basis of this service, the Defendant filed an application under Order XXXVII, Rule 3, CPC, on 8‑12‑1985. The present application under section 5 of the Limitation Act, was filed on 8‑11‑1986 for condonation of the delay in filing the application under Order XXXVII, Rule 3, CPC.
3. Preliminary objection has been raised by Mr. Inamul Haq learned counsel for the Plaintiffs that this application was not maintainable, as it was not filed alongwith the application under Order XXXVII, Rule 3, CPC, but was filed after eleven months.
4. Mr. Z.U. Ahmed learned counsel appearing for the Defendants submitted, that he did not consider it necessary to file the application under section 5 of the Limitation Act as, in his opinion, there was no delay in filing the application under Order XXXVII, Rule 3, C.PC. But during the course of the arguments on said application he was advised and more as abundant pre‑caution, he filed this application under section 5 of the Limitation Act.
5. The submission of Mr. Z.U. Ahmed, I will consider later, but so far the objection of Mr. Inamul Haq learned counsel for the plaintiffs is concerned, he conceded that there is no limitation against filing of application under section 5 of the Limitation Act. He has relied upon 1973 S C M R 377 wherein also application under section 5 of the Limitation Act was filed much after application under Order XXXVII, Rule 3, CPC was filed. In that case their Lordships declined to grant the Defendant leave to defend the suit, but the refusal was on the grounds other than the late filing of application under section 5 of the Limitation Act. Mr. Inamul Haq conceded that he was not able to find specific case‑law in support of his contention. In my opinion this application under section 5 of the Limitation Act cannot be rejected only because it was filed after the application under Order XXXVII, I E Rule 3, CPC, more so as it has been filed before decision of the application under Order XXXVII Rule 3, CPC.
6.Order V , CPC. provides for the issuance of summons and under this order the summons have to be sent to the Defendant through Bailiff and by registered Post simultaneously. Under Rule 12 of this Order the service has to be made on Defendant in person when practicable or on his agent. Under Rule 15 of this Order the service can be made on male member of Defendant's family, where the Defendant cannot be found‑ Under Rule 17 of this Order, where the Defendant refuses to accept service or cannot be found, a copy of the summons has to be affixed by the Bailiff on the outer door or some conspicuous part of the house or office of the Defendant. Under Rule 20 of Order V, C.P.C. when the Court is satisfied that they Defendant is avoiding service or for other reasons the summons cannot be served, in the ordinary way, the Court shall order the summons to be served by substituted service which includes publication. The Sind Chief Court Rules (OS) provides for issuance of summons by Bailiff only. Under Rule 141 where the person to be served refuses to sign an acknowledgement, or cannot be found, the serving Officer shall affix the summons on outer door of the house of the person. However, under Rule 8 of the Rules, the summons have to be issued by the Reader on receipt of the plaint, simultaneously by registered post through Bailiff and by publication.
7. The question as to whether service by publication alone can be considered to be sufficient service, was considered by this Court and two conflicting decisions of this Court have been cited by the parties. In the case of M/s. Allied Bank of Pakistan Ltd. v. M/s. Tahir Traders and 8 others P L D 1986 Kar. 369 a learned Single Judge of this Court was of the view that mere publication of summons under Rule 8 of the Rules would not be proper service unless the defendant was proved to be avoiding service of summons issued through Bailiff or registered post or whereabouts of the Defendant were not known. While discussing various provisions of the relevant laws and rules, the learned Judge observed "section 3 of the Ordinance provides that its provisions are in addition to and unless otherwise expressly provided not in derogation of any other law for the time being in force. It is clear that the Ordinance will override the provisions of C . P. C . if they are in conflict with it or the applicability of the provisions of C.P.C. have been expressly excluded." In view of the learned Judge there was no conflict in Order V, Rule 20, CPC and Rule 8 of the Ordinance and therefore the equitable principles of CPC were applicable.
8. This question was also considered by another learned Single Judge of this Court in the case of M/s. Union Bank of the Middle East Ltd. v. M/s. Zubna Ltd. and 3 others P L D 1987 Kar. 206. In this case also the learned Single Judge has discussed the various provisions of relevant Rules and laws relating to the service of summons and has come to the conclusion that the Ordinance was remedial statute and as such the proposition that it required service by all the three modes is to be rejected simply because it cannot be theobject of remedial statute. The learned Judge has sought support from subsection (3) of section 4 of the Ordinance which reads as under:‑
"(3) Where, in the opinion of a Banking Company a loan was, or has become or is discovered to be, unsecured or insufficiently secured, the borrower shall provide sufficient security thereof within one hundred and eighty days from the date of the notice served by the Banking Company on the borrower in any of the under-mentioned modes, namely, by being:‑
(a)given or tendered to him, or
(b)sent by registered post of his last known address on the record of the Banking Company, or
(c)affixed on a conspicuous part of his last address known to the Banking Company, or
(d)published in a newspaper."
On the same analogy the learned Single Judge was of the opinion that service by any of the three modes mentioned in Rule 8 of the Rules was sufficient as in his opinion "the issue of summons and notices by the three modes simultaneously is to achieve the purpose of the Ordinance, as soon as possible, without wasting time on first issuing the summons and notices by bailiff and by Registered Post and, if not served, then by publication, as provided in CPC". The learned Judge held service by publication stands on its own footing and is in the same category as service through Bailiff and by Registered Post.
9. It is not disputed that the Ordinance is a remedial Statute and its purpose is to enable the Banks to obtain recovery of loan expeditiously without having recourse to lengthy procedure which consumes lot of time and therefore, even suits of mortgage which are not otherwise triable under Order XXXVII, Rule 3, CPC are triable under the Ordinance according to procedure laid down under Order XXXVII, CPC. If the view is accepted that only that publication can be considered as good service which is made in accordance with the provisions of Order V, Rule 20, CPC it would amount to duplication of the provision of publication. As provided by the Rules the publication has to be made immediately on receipt of the plaint simultaneously with issuance of summons and notice by Registered Post. But if the service by this publication is not considered sufficient, then another publication would have to be made after observing with the requirement laid down under Order V, and Rule 20, CPC. This would make the provisions of publication under Rule 8 of the Rules redundant which cannot be the intention of the Rule‑making authority. Furthermore this duplication would also defeat the purpose of the Ordinance as mentioned above. Besides if the procedure to be followed was intended to be as provided in Order V, CPC, there was no necessity of providing Rule 8 in the Rules.
10. For the above reasons I am inclined to agree with the views of my learned brother expressed in the case of M/s. Union Bank of the Middle East Ltd. In my opinion the service by publication is on C same footing as service by summons or by registered post. However, another aspect of the matter also is to be considered.
11. Subsection (2) of section 7 of the Ordinance provides "that in exercise of civil jurisdiction, a Special Court, shall in all suits before it, including suits based on mortgages of all kinds or statement of account for recovery of money paid up to the order of the Defendant follow the summary procedure provided for under Order XXXVII in Ist Schedule of the Code of Civil Procedure, 1908" Sub‑rule (1) of Rule 2 of Order XXXVII, CPC provides that the summons shall be in Form No.4 in Appendix 'B' or such other form as may be from time to time prescribed. It will be relevant to reproduce Form 4 which is as follows: ‑
"No.4. SUMMON IN SUMMARY SUIT ON NEGOTIABLE INSTRUMENT (0.37, R.2).
(Title)
To
(Name, description and place of residence). Whereas ‑‑‑‑ has institute a suit against you under Order XXXVII of the Code of Civil Procedure, 1908, for Rs.balance of principal and interest due to him as the of a of which a copy is hereto annexed, you are hereby summoned to obtain leave from the Court within ten days from the service hereof to appear and defend the suit, and within such time to cause an appearance to be entered for you. In default whereof the plaintiff will be entitled at any time after the expiration of such ten days to obtain a decree for any sum not exceeding the sum of Rs. and the sum of Rs. for costs (together with such interest, if any, from the date of the institution. of the suit as the Court may order).
Leave to appear may be obtained on an application to the Court supported by affidavit or declaration showing that there is a defence to the suit on the merits, or that it is reasonable that you should be allowed to appear in the suit.
Given under my hand and the seal of the Court, this day of 19
Judge."
In may be pointed, that the period of ten days to file application for leave to defend is provided for in this form and not in any rule of Order XXXVII, CPC.
12. In the case of M/s. Union Bank of the Middle East Ltd. the learned Judge has held that "service by publication of the summons in a suit under 0. XXXVII, R.1, C.P.C. and particularly in a suit under Ordinance, 1979 is proper and valid, if the summons has been published in proper form requiring defendant to make application for leave to appear and defend suit within 10 days". The learned Judge has further held that "the question that the plaint cannot be annexed in the case of publication should not be held to be an impediment in holding such service to be good inasmuch as, firstly, the copy of the plaint has been annexed to the summons sent to the defendant through pailitff an well as by Registered Post and secondly, the defendant on notice to collect the copy of the plaint from the office and, in any case, there can be no impediment in making just an application for leave to defend, even without a copy of the plaint, within the statutory period."
13. Under sub‑rule (2) of Rule 2 of Order XXXVII where the plaint has been filed under Order XXXVII and summons are issued in the form as provided under sub‑rule (1), the defendant shall not appear or defend the suit unless he obtains leave from a judge as hereinafter provided so to appear and defend; and, in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted, and the plaintiff shall be entitled to a decree .... .... .... ...." It may also be relevant to refer to Rule 3 of Order XXXVII which provides under sub‑rule (1) "the Court shall upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application."
14. The Rules are subordinate Legislation. Whenever there is al conflict in the provisions of the Ordinance and the Rules, the latter have to give way to the former.
15. I have already held that under Rule 8 even service by publication is a good service. However, as pointed above under subsection (2) of Section 7 of the Ordinance, the procedure provided under Order XXXVII, CPC has to be followed in the cases under the Ordinance. Order XXXVII provides for the mode of service of summons which are to be issued in Form No.4 of the Schedule in Appendix 'B'. I have already reproduced above, the pro forma of Form No.4 which requires, that the copy of the plaint shall be attached with the summons. The provisions of Order XXXVII are of a penal nature which prohibit the Defendant, from appearing or defending the suit unless he moves an application for leave to defend under Order XXXVII Rule 3, CPC within 10 days from the date of service of summons. Such penal provisions have to be strictly construed and the period of limitation cannot be computed unless the summons are served in Form‑4 alongwith a copy of the plaint. Reference may be made to PLD 1984 Kar. 252. Therefore, in my opinion, in spite of the provisions of Rule 8, the service of summons in suits under the Ordinance cannot be considered good service unless it is effected in accordance with the procedure laid down under Order XXXVII, CPC.
16. It may be argued that in certain cases it may not be possible to serve the defendants with summons or by registered post. In such an eventuality the procedure has been laid down under Order V, Rule 17, CPC and a copy of the summons in Form 4 alongwith a I copy of the plaint be affixed in the manner provided therein. When this procedure has been adopted with regard to service of summons, then the publication can also be considered as a good service, because in that case the Defendant would be deemed to have notice of the suit and the copy of the plaint alongwith summons in Form 4 will be deemed to have been served upon him.
17. It may be argued that such a procedure would defeat the purpose of the Ordinance which is for the expeditious recovery of loans by the Banking Companies. I may point out that this purpose will not be defeated. Procedure provided under Order XXXVII, CPC is considered expeditious disposal and as such it has been specifically provided in the Ordinance to be followed. Order XXXVII, CPC has limited scope and only few kinds of suits can be instituted thereunder. However, the scope of this Order XXXVII, CPC has been enlarged under the Ordinance and under section 7 of the Ordinance, all suits before the Special Court including suits based on mortgage or statement of ‑accounts are to be tried under summary procedure provided for under Order XXXVII, CPC. These suits would otherwise be triabls as long cause suits.
18.With due respect I am unable to agree with the views of my learned brother expressed in the aforesaid case of Union Bank of Middle East Ltd. that publication of summons in Form No.4 is sufficient service or that non‑supply of a copy of the plaint would not be impediment in filing application under Order XXXVII, Rule 3, CPC by the Defendant. I have already pointed, that provisions of Order XXXVII CPC being penal in nature have to be strictly construed. Therefore, the summons are not only to be served in Form 4, but copy of the plaint is also to be attached and served upon the Defendant alongwith the summons. If the Defendant is expected to move application without knowing what is the plaint, he will not be able to file an affidavit disclosing such facts as would make it incumbent upon the plaintiff to prove his case or which the Court may deem fit to be in support of the application. In case of failure to disclose such fact, the Court can even summarily reject the application under Rule 3 of Order XXXVII, CPC. Therefore, in my opinion, the service against the Defendant cannot be considered good unless summons have been served upon him in Form 4 alongwith a copy of the plaint either in person or his agent or in the manner prescribed under Order V Rule 17, CPC and Rule 141 of the Sind Chief Court Rules Original Side.
19.Considering all the facts discussed above, in my opinion, the period of limitation of 10 days in this case will not start running before the date when the Defendant filed application under Order XXXVII, Rule 3, CPC, as admittedly summons with Form 4 alongwith I a copy of the plaint were not served upon him. Application under Order XXXVII, Rule 3, CPC, therefore, cannot be held to be barred by limitation and consequently there was no necessity to file this; application under section 5 of the Limitation Act. The application stands disposed of in the above terms.
A . A . / U‑17/ KOrder accordingly.
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