Law:

Section:

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)------S. 9---Procedure of Banking Court---Scope---Borrower or a customer or Banking Company may institute a suit in the Banking Court by presenting a plaint and thereupon the defendants be served through bailiff, by registered acknowledgment due notice, by courier and by publication in the newspapers---If the defendant, after the service of summons, does not obtain leave from the Banking Court, he shall not be entitled to defend the suit and in default of doing so the allegations of fact in the plaint shall be deemed to be admitted and Banking Court may pass a decree in favour of the plaintiff. (b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)----S. 9---Procedure of Banking Court---Defendant-bank had failed to file any application, seeking leave to defend the suit and Banking Court, instead of proceeding against the Bank, for not filing the leave application penalized the plaintiffs by rejecting their plaint---Validity---Held, Banking Court did not adopt the procedure, as prescribed in the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and had in fact, gone outside the scope of S. 9(4) of the said Act---Approach of the Banking Court was perfunctory and casual as S. 9(4) of the Act provided that defendant shall not be entitled to defend the suit, unless he obtained leave from the Court---Banking Court, in the present case, instead of giving premium to the plaintiffs for the neglect of the Bank, for not filing leave application, rejected the plaint in complete oblivion of the facts of the case and law on the subject---Banking Court therefore, had completely by-passed the procedure, as provided under S. 9 of the Act and had evolved its own procedure---Banking Court, which was creation of a Statute; was bound by the provisions of that Statute---Impugned of the Banking Court was set aside by the High Court in appeal being contrary to the provision of the Act. Messrs Waheed Corporation through Proprietor and another v. Allied Bank of Pakistan through Manager 2003 CLD 245 and Sheikh Muhammad Kashif v.…

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