ALI RAZA MUGHERI vs GHULAM RASOOL Ss — 2025 CLD 1158 KARACHI-HIGH-COURT-SINDH

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ALI RAZA MUGHERI VS GHULAM RASOOL Ss.9, 10 & 22---Civil Procedure Code (V of 1908), O. VII, R. 11---Specific Relief act (I of 1877), Ss. 42 & 56---Suit for declaration, settlement of accounts with permanent injunction---Filing of application for leave to appear and defend the suit by the respondent/bank---Suo motu exercise of power by the Banking Court for rejection of plaint under O. VII, R. 11, C.P.C.---Scope---Examination of cause of action by Banking Court with or without application for leave to appear and defend the suit---Scope---Claim of the appellant/customer was that Banking Court without first deciding the pending applications had resorted to rejecting the plaint under O. VII, R. 11, C.P.C.---Validity---Banking Court considered respondent-bank's oral submissions and filed documents, but did not assess the plaint to determine if a cause of action existed---Banking Court should have decided the application for leave to defend and the cause of action issue simultaneously and such holistic determination should have been made after examining the pleadings, noting the parties' averments and considering the counsel' oral submissions---application for leave to defend should have been decided along with the legal points, which would have included a discussion on the cause of action---When the Banking Court found itself going beyond the examination of the plaint to determine if there was a "cause of action", it should have avoided an approach to pick and choose from the application for leave to defend and not to decide the application from which it had selected the facts relied upon to decide the issue of "cause of action"---Depending on the facts and circumstances of each case, the issue of cause of action may be one of the substantial questions of law or fact which has been raised in the pleading or taken up suo motu by the Banking Court in deciding the leave to defend application under the Financial Institutions (Recovery of Finances), Ordinance, 2001 (Ordinance)---Thus, when the Banking Court found itself overreaching, i.e., relying on material beyond the plaint, to decide the cause of action, it should have changed gears and proceeded to decide the issue of cause of action within the context of the leave to defend---appeal was allowed in the circumstances and the matter was remanded to Banking Court for decision afresh after first deciding the application for leave to defend.

ALI RAZA MUGHERI vs GHULAM RASOOL Ss — 2025 CLD 1158 KARACHI-HIGH-COURT-SINDH

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