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Official Citation: 2024 SHC 680
Court / Jurisdiction: Sindh High Court
Year of Decision: 2024
Decision Date: 2024-06-26
Parties: M/s Farooqui Fisheries and others vs Faysal Bank Limited and another
Ruling Summary: This decision was rendered by the Sindh High Court on 2024-06-26, officially reported as 2024 SHC 680. In this matter between M/s Farooqui Fisheries and others and Faysal Bank Limited and another, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
Case cited as 2024SHC680
Court Name: Sindh High Court Judge(s): Muhammad Shafi Siddiqui, Sana Akram Minhas Title: M/s Farooqui Fisheries and others vs Faysal Bank Limited and another Case No.: First Appeal No.89 of 2023 Date of Judgment:2024-06-26 Reported As: 2024 SHC 680, 2024 CLD 1199 Result: Appeal Dismissed
JUDGMENT
JUDGMENT Muhammad Shafi Siddiqui, J.- Faysal Bank Limited (FBL) filed a suit No.78/2012 before the Banking Court No.II, Karachi under Financial Institutions (Recovery of Finances) Ordinance, 2001 [FIO, 2001] for the recovery of the finances extended to the appellants. 2. The Banking Court granted unconditional leave on 05.09.2018 and framed five issues. The evidence was recorded and consequently the judgment was passed on 06.09.2023 followed by a decree which was drawn and prepared on 26.09.2023. 3. Aggrieved of it i.e., the judgment and decree, the appellants being borrowers and defendants in the suit, filed this First Appeal under Section-22 of the FIO, 2001 on 25.10.2023, seemingly within 30 days of date of decree. In this appeal notices were ordered on 22.11.2023 and reply to the memo was filed. 4. While hearing this appeal, primary objection taken by Mr. Adil Khan Abbasi, Respondent No.1's counsel (being Faysal Bank Ltd. FBL) was that this appeal is barred by time in view of the conclusion drawn in the case of First Pakistan Security Limited[1] (hereinafter referred as FSL). Per learned counsel for the Respondent, the judgment provides the interpretation in respect of section 22 of FIO 2001 in such a way that it provides an appeal (in a suit) against the judgment and since the appellants have waited for a decree to be drawn, which was drawn on 26.09.2023, the appeal against the judgment only (not against decree) by that time became barred by limitation; hence the counsel has argued for dismissal of this appeal outrightly on this score, against the judgment however he addressed no arguments for appeal against decree.
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5. Para-9 of the judgment in FSL, which is of a Division Bench, referred above and relied upon deals with the issue in hand. Side note "B" of the judgment, which is its finding on the issue, is as under:- .......We have minutely examined this aspect of the case. The text of section 22(1) is very clear, which requires that any person aggrieved by any judgment, decree, sentence, or final order passed by a Banking Court may, within thirty (30) days of such judgment, decree, sentence or final order prefer an appeal to the High Court. In section 22(1), the conjunction 'OR' indicates that the appeal can be filed either against a judgment or a decree. Since, it is the provision of law that the appeal can be filed against any final order including judgment or decree, hence the period of limitation will start from the date of judgment and not from the decree................... 6. We have perused the scheme of FIO 2001, which is a comprehensive code for both civil and criminal jurisdiction and have attempted to reconcile the two jurisdictions being governed thereunder and found that it requires a detailed understanding of law then what was deliberated in the FSL. 7. While hearing this appeal, we have also appointed Mr. Ijaz Ahmed Zahid, learned Advocate Supreme Court as amicus curiae to assist us in this regard, who very eloquently and ably assisted us and demonstrated the history of the banking jurisdiction that was exercised under different statutes right from 1979 up until the recent Ordinance of 2001. 8. We have heard learned counsel as well as amicus curiae and perused the material available on record. 9. Before we attempt to discuss the merits of the case, we would first take up the objection of the learned counsel for the Respondent that in the light of the recent pronouncement of this court in the case of First Pakistan Security Limited (supra), the appeal having been filed belatedly and presumably after a long await of drawing a decree, is liable to be dismissed being barred by time. 10. The proposed questions thus could be summarized as to whether the appeal must be filed against the judgment alone without waiting for the decree to be drawn? OR Whether Section-22(1) of the FIO, 2001 provides an independent right of appeal against the judgment in a suit or such right is against a decree in a suit filed under the FIO, 2001? The consequential question, which find its articulation with the questions in hand, is that in waiting for such a decree to be drawn, whether the limitation for the appeal, if filed cumulatively, against the judgment/decree shall exclude the time consumed in issuance of a judgment as well as decree or obtaining a certified copy of such judgment and decree and/or when decree is filed later in time (after filing of appeal against judgment only) after it was drawn by office, would exclude the time for its preparation as per law? 11. Not exactly but a summarized form of above questions came for consideration of an earlier Bench of this Court in the case of First Pakistan Security Limited (ibid) which held that an appeal ought to 22 of the FIO, 2001 without waiting for a decree to be drawn and accordingly the period of limitation will start from the date of the judgment and not from the date of the decree, in terms of its conclusion. The observation of the Bench is summarized in para-9 placitum "B" which is available at page-272 and 273 of the reported judgment of First Pakistan Security Limited, reproduced above. However we did not find "OR" in Section 22(1) of FIO 2001, in between judgment and decree for such interpretation as attempted in the aforesaid reasoning; nonetheless the reasonings have been assigned, keeping in mind that the word "OR" disarticulate the two words i.e. judgment and decree . 12. In view of the jurisprudence developed in the case of Multiline Associates[2], the judgment of a Division Bench is binding on this Bench. 13. The binding effect however can only be displaced by us (or subsequent bench) if the relied judgment is found to be either per-incuriam or sub-silentio. In the absence of such findings, i.e. holding First Pakistan Security Limited case as per-incuriam or sub-silentio by us, in case a
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different view is intended, then the matter will need to be placed before larger Bench as summarized in Multiline Associates case. We have made an attempt as a first measure to stand with the reasoning and conclusion drawn, however, we found that the scheme of law (FIO 2001) required interpretation differently. 14. In this regard the first exercise undertaken by us was to see whether the judgment rendered in the case of First Pakistan Security Limited is per-incuriam or sub-silentio. The brief of per- incuriam and/or sub-silentio has also been summarized in the recent pronouncement of Hon ble Supreme Court in the case of Chaudhary Pervez Elahi[3]. 15. The doctrine of per incuriam refers to a judgment of a Court which has been decided without reference to, or in ignorance of a statute or an earlier judgment/precedent and/or overall dress up of the scheme of law, which could have been relevant and therefore such ignorance has affected the result of the case. Some of the factors to be considered while contending that a decision is not a binding precedent and should not be followed or be ignored on the above principles are now summarized hereunder but are not limited. I) A decision where the point in issue is not argued or considered by the Court or decision rendered without an answer to the argument, without reference to the crucial words of the rules and without any citation of authority; II) A decision where a mere direction is issued without laying down any principle of law. III) If a judgment is delivered in ignorance of the "scheme of law" to demonstrate the real intent of legislature will also be recited per incuriam. 16. Legislature's real intent should never be left behind or overshadowed by a judgment rendered per incuriam; jurisprudence evolves and unveils through a constant process the real intent of law. The situation is described by Ralph Waldo Emerson very artistically however we may retune the views that it is always wise to rethink prior believes not born out of legislature. He attempted differently by saying that today's jurisprudential approach could trump yesterday's conclusion. 17. The view in the First Pakistan Security Limited (Supra), does not take into account the consequence of filing of an appeal only against the judgment "and not the decree" (emphasis applied). Following the reasoning of FSL, if the judgment is impugned in the appeal, then the decree would obtain an ambiguous status, as judgment's effect could still or only be seen via decree. It is the decree alone which is executable by the executing court and not the judgment. The referred case of First Pakistan Security Limited also does not discuss the issue that if the view of the said case is accepted, then the word "decree" mentioned in Section-22(1) of the FIO, 2001 becomes redundant and redundancy cannot be attributed to the legislature. 18. A careful study of the entire scheme of law i.e. FIO 2001 would lead us to conclude that these questions have not been dealt with in the First Pakistan Security Limited and has become a case of either sub-silentio or per-incuriam or a blend of both. In any of the two events, the binding effect of the judgment is defeated and diluted, as the ratio in consideration of entire scheme of law as raised before us is not settled in the earlier referred judgment. 19. In order to appreciate the scheme of FIO, 2001, it is inevitable to understand the usage of the term "judgment", "decree" and "order" in FIO, 2001:- (i) The following provisions of FIO 2001 use the phrase "judgment and decree": (I) section 10(1) and 10(12) Leave to defend; (II) section 19(1) Execution of decree and sale with or without intervention of Banking Court; (III) section 22(3) makes furnishing of security a condition for admission of appeal and such security is to be based on the decretal amount: (IV) section 23 - Restriction on transfer of assets & properties. (ii) The following provisions use the phrase "judgment, decree, sentence or order:
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(I) section 22(1)-Appeal: (II) section 27-Finality of order. (iii) The following provisions use the phrase "decree": (I) section 3(3) Duty of a customer; (II) section 7(4) Powers of Banking Courts; (III) section 8(1)-Suit for recovery of written off finances etc.; (IV) section 10(1) - Leave to defend; (V) section 11(1) Interim decree; (VI) section 12-Power to set aside decree; (VII) section 13(1) Disposal of suit; (VIII) section 14-Decree in suits relating to mortgages: (IX) section 17-Final decree; (X) section 20(1)(d) - Provisions relating to certain offences; (XI) section 21(2)- Application of fines and cost; (XII) sections 22(5) and 22(7) - Appeal 20. The scheme of the 2001 Ordinance therefore is such that in case of a suit the proceedings are concluded with the issuance of a decree. Particularly section 10(12) provides that the Banking Court shall pass a "judgment" and "decree" against the defendant in case of rejection of leave to defend or non- compliance with conditions for the grant of leave to defend. Further, section 13 which relates to final disposal of a suit provides that a Banking Court shall pass an interim or final decree for disposal. Moreover, a range of provisions of the 2001 Ordinance use the term "decree". Sub- section 5 of section 22 (Appeal) itself provides that an appeal may be preferred from an exparte decree. 21. That the interpretation of section 22 of the 2001 Ordinance also has to take into account the nature of the 2001 Ordinance. The 2001 Ordinance is a collective hybrid law providing both civil and criminal jurisdiction of a banking court. Section 7 of the 2001 Ordinance provides as follows: "7. Powers of Banking Courts.-(1) Subject to the provisions of this Ordinance, a Banking Court shall- (a) in the exercise of its civil jurisdiction have all the powers vested in a civil court under the Code of Civil Procedure, 1908 (Act V of 1908). (b) in the exercise of its criminal jurisdiction, try offences punishable under this Ordinance and shall, for this purpose have the same powers as are vested in a Court of Sessions under the Code of Criminal Procedure, 1898 (Act V of 1898). ..." (2) A Banking Court shall in all matters with respect to which the procedure has not been provided for in this Ordinance, follow the procedure laid down in the Code of Civil Procedure, 1908 (Act V of 1908), and the Code of Criminal Procedure, 1898 (Act V of 1898). 22. Accordingly, subject to the provisions of the 2001 Ordinance, for and in exercise of civil jurisdiction, the Code of Civil Procedure, 1908 ("CPC") is applicable whereas for and in exercise of criminal jurisdiction, the Code of Criminal Procedure. 1898 ("Cr.PC") is applicable. 23. The terms "judgment", "decree" and "order" are not defined in the 2001 Ordinance. However, these terms are defined in the CPC as follows: (i) section 2(2) of the CPC: "decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties which regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint, the determination of any question within section 144 and an order under rule 60, 98, 99, 101, or 103 of Order XXI), but shall not include-
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(a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation. A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final". (ii) section 2(9) of the CPC: "judgment" means the statement given by the Judge of the grounds of a decree or order". (iii) section 2(14) of the CPC: "order" means the formal expression of any decision of a Civil Court which is not a decree". 24. The Cr.P.C does not contain any definition of the term "judgment", however the terms order and judgment are used, inter alia, in the following provisions: No. Provision Term used (i) section 366-Mode of delivering judgmentjudgment (ii) section 367 Language of judgment Contents of judgmentjudgment (iii)section 376 Power of High Court to confirm sentence or annul convictionproviso uses the term order (iv) section 381-Execution of order passed under section 376"order" (v) section 404-Unless otherwise provided, no appeal to lieagainst "judgment or "order" (vi)section 405-Appeal from order rejecting application for restoration of attached property"order" (vii)417-Appeal in case of acquittal "order" (viii)423-Powers of Appellate Court in disposing of appeal"order" (ix)439 High Court's powers of revision "order"
25. As submitted above, a banking court under the 2001 Ordinance exercises both civil and criminal jurisdiction, however, the section relating to appeal in relation to exercise of jurisdiction is the same i.e, section 22. On a perusal of the provisions of Cr.PC read with section 22 of the 2001 Ordinance one possible interpretation can be that the use of the term "judgment" relates to criminal matters alone. 26. The predecessor law to the 2001 Ordinance was the Banking Companies (Recovery of Loans, Advances. Credits and Finances) Act, 1997 ("Act, 1997"). Section 21 of the 1997 Act which is related to appeals provided as follows:- 21. Appeal-(1) Subject to subsection (2), any person aggrieved by a decree or an order refusing to set aside a decrees or any permitting or presenting the sale of property, or a sentence passed by a Banking Court established under section 4, may, within thirty days of such order, decree or sentence, prefer an appeal to the High Court......" (emphasis added) 27. A bare perusal of section 21 of the 1997 Act shows that under this law an appeal lay against a decree, order or sentence and the term judgment was not used. 28. The predecessor law to the 1997 Act was the Banking Companies (Recovery of Loans) Ordinance, 1979 ("1979 Ordinance"). Section 12 of the 1979 Ordinance which is related to appeals
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provided as follows: "12. Appeals (1) Any person aggrieved by any order, judgment, decree or sentence of a Special Court may, within thirty days of such order, judgment, decree or sentence, prefer an appeal to the High Court within whose jurisdiction the order, judgment, decree or sentence is passed..." (emphasis added) 29. The 1979 Ordinance uses the same language as that of 2001 Ordinance, that is, an appeal lay against any order, judgment, decree or sentence of the Special Court. 30. The Banking Tribunals Ordinance, 1984 ("Banking Tribunals Ordinance"), which was also a predecessor law to the 1997 Act, provided for recovery mechanism for banking companies under a system of financing which is not based on interest. Therefore the same was in force along with the 1979 Ordinance before the enactment of the 1997 Act. Section 9 which is related to appeals provided as follows: "Appeal. (1) Any person aggrieved by any order of the Banking to the Tribunal passed under subsection (4) or subsection (5) of section 6 or a decree or sentence passed under this Ordinance may, within thirty days of such order, decree or sentence, prefer an appeal to the High Court..." (emphasis added) 31. A perusal of the relevant section of the Banking Tribunals Ordinance shows that as with the 1997 Act, under this law an appeal lay against a decree, order or sentence and the term judgment was not used. 32. In view of the provisions of section 7 of the 2001 Ordinance (as reproduced above) for the interpretation of section 22(1) of the 2001 Ordinance, the definitions given in the CPC can be relied upon. If these definitions are read in the 2001 Ordinance, then a suit filed under the 2001 Ordinance will be finally disposed by passing of the decree and not judgment alone. 33. A Division Bench of the Lahore High Court has adopted the meaning given to the term decree from the CPC in the case of Yousaf Garments[4]. This case is regarding the Banking Companies (Recovery of Loans) Ordinance, 1979 and section 2(2) of the Code of Civil Procedure, 1908, which is the definition of a "decree". The Bench held as under:- "2. As no separate definition of decree has been given in the said Ordinance we have to fall back upon the General Law for finding the definition thereof because section 3 (ibid) provides that the provisions contained in the Ordinance are not in derogation of any other law. In the circumstances the definition of the decree contained in the Code of Civil Procedure, 1908, will have the same meaning in its application to the said Ordinance. The word "decree" is defined in clause (2) of section 2 of the Code of Civil Procedure and clearly provides that a decree may be either preliminary or final. The explanation given under the said clause (2) runs as follows: "A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final." It will be seen from the explanation that a decree is preliminary when some further proceedings have to be taken before the suit can completely be disposed of. This particularly was the situation when the preliminary decree was passed on 15-10-1983. Therefore, the definition given in clause (2) of section 2 of the C.P.C. is applicable to the provisions of law contained in the said Ordinance of 1979. Accordingly a preliminary decree can be passed and is appealable in the same manner as is the case of final decree under the said Ordinance," (emphasis added) (paragraph 2, page 1217) 34. This view is also supported from the fact that section 10(12) of 2001 Ordinance, whereunder a large majority of the suits are decided, provides for passing of judgment and decree.
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35. Another point that requires consideration is that a court becomes functus officio when proceedings before it are finally disposed off. However, the 2001 Ordinance envisages that a banking court will pass a decree which in all circumstances follows the judgment. It is therefore in suit proceedings the decree that constitutes the final disposal of the suit under 2001 Ordinance. 36. For the sake of completeness, it is important to mention that a division bench of this Hon'ble Court in the case of Bank of America[5] had held that definition of the term "order" cannot be adopted from the CPC for the purpose of interpreting Banking Companies (Recovery of Loans) Ordinance, 1979. The case was considering the Banking Companies (Recovery of Loans) Ordinance, 1979 ("Ordinance) and the CPC. The Court was of the view that the meaning of the word 'order' under S. 2(14) CPC cannot be used for the phrase 'any order' in the Ordinance. Thus the court had to give ordinary meaning to such words. "13. We are also of the view that the definition of the word "Order" given in clause (14) of subsection (2) of section 2, C.P.C. cannot be imported for the purpose of considering the words "any order" used in subsection (1) of section 12 of the Ordinance. In the absence of any definition of the above words in the Ordinance, the Court has to give ordinary meaning which these words carry. Even otherwise, as observed hereinabove are qualified by the proviso that no appeal shall lie from an interlocutory order, which does not dispose of the entire case before the Special Court. (emphasis added) (paragraph 13. Placitum D. Page 3399) 37. In the context of the present case, the view taken by the Lahore High Court in the case of Yousaf Garments vs. Grindlays Bank (cited above) would be more relevant. 38. The language "judgment, decree, sentence, or final order" used in section 22 of the 2001 Ordinance is the same as the language used in Article 185(1) of the Constitution which provides as follows: "185. (1) Subject to this Article, the Supreme Court shall have jurisdiction to hear and determine appeals from judgments, decrees, final orders or sentences of a High Court." However, the appeals under Article 185 originate from a range of laws and kinds of pleadings. Only suits are concluded by way of a decree, while for example, a constitutional petition would be concluded by a judgment only. The matter of appeals under section 22 of the 2001 Ordinance should be considered in the context of the specific law. The view taken by the Hon'ble Supreme Court in respect of Article 185 is discussed in the later part of judgment in para-50 onwards. 39. The term judgment was also used in the Letters Patent of the High Court. In the case of Sevak Jeranchod Bhogilal[6] the Privy Council held that: "The term judgment in the Letters Patent of the High Court means in civil cases a decree and not a judgment in the ordinary sense." 40. In the case of Letters Patent of the High Court, the term judgment was given a much wider meaning, however, a division bench of this Court in the case discussed below held that even where a decree was not made essential for filing an appeal, if the appellant waited for such decree, the time required for such decree was to be excluded, if aggrieved person waited for drawing of such decree. 41. In the case of H.H.S Feldman[7] the Court held that for the purpose of a Letters Patent Appeal, a decree prepared in pursuance of a judgment is of no relevance. However, it was held that limitation would nevertheless run from the time when a copy of the decree is made available. "9... The learned counsel contends that since under the provisions of this rule the memorandum of appeal need not be accompanied by a copy of the decree, order or judgment appealed from, the appellant should not have waited till a copy of the decree was ready on 23-12-1963, but he should have filed his appeal within 20 days after the certified copy of the judgment was available on 21- 9 1963, i.e on or before 12-10-1963; but the appeal was presented for the first time on 9-1-1964. In
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support of this contention Mr. Ghani has relied on an unreported order of a Division Bench of this Court dismissing L. P. A. No. 122 of 1969 (Messrs Asiatic Industries Ltd. v. Zahid Ali) in limine, and in particular the following observations of Qadeeruddin Ahmed, J. (as he then was), wherein his Lordship referred to rule 4 quoted above and observed as follows:- 'If this rule is read with clause 10 of the Letters Patent of the High Court of Judicature at Lahore, it becomes clear that Letters Patent Appeals are preferred from judgments, and not from decree. The word "judgment" which occurs in the clause, has been interpreted so liberally, that many orders which are made with no possibility of any decree being prepared under them, have…
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