Mr. Justice Ibad-ur-Rehman Lodhi in his judgment has decided the issue regarding competence of financial institution’s signatories for banking recovery suit on the touchstone of Section 9 of Financial Institutions (Recovery of Finances) Ordinance 2001 in Regular First Appeal No. 201 of 2014.
1. The appellants have challenged the judgment and decree dated 12.02.2014, passed by the learned Judge Banking Court-III, Multan, whereby, the suit, filed by the respondent-Bank, for recovery of Rs.5202758.93/- was decreed with costs and cost of funds w.e.f. 31.03.2011, till the actual date of realization.
2. The plaintiff-Bank has been impleaded as a plaintiff in the following manner:
“Habib Bank Ltd. having its Registered Office at Habib Bank Tower Jinnah Avenue Islamabad and Head Office at Habib Bank Plaza, I.I. Chundrigar Road Karachi and a branch known as Habib Bank Ltd. Sher Shah Road Branch, Multan through its duly authorized Manager/Attorneys.”
Along with the suit, the documents, which are being claimed by learned counsel for the Bank, as Officer’s Power of Attorneys, have been annexed, shown to have authorized Muhammad Aslam Bucha and S. M. Abbas Gardezi to act as attorneys on behalf of the Bank. Such two persons are shown to be the signatories to the plaint and also the verification thereof.
3. The learned counsel for the appellants-defendants, at the very outset, has objected the competence of the signatories to the plaint and its verification on the touchstone of the provisions of Section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter to be referred as “the Ordinance”) and also the law laid down by the superior courts on the subject of power of attorneys.
4. On such preliminary objection, we have heard the learned counsel for the parties and gone through the record.
5. Section 9(1) of the Ordinance provides that:
“9. Procedure of Banking Courts. (1) Where a customer or a financial institution commits a default in fulfillment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may instituted a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power of attorney or otherwise”.
The above provision of law clearly indicates that, the authorization would be in a categoric terms. The word “duly” has been used before word “authorized”, and keeping in view the dictionary meaning of the word “duly”, which in view of Black’s Law Dictionary Sixth Edition is as under:
“In due or proper form or manner, according to legal requirements, upon a proper foundation, according to law in both form and substance”.
As such, we have to be very conscience and mindful in interpreting the word “duly authorized”, which in fact is not being taken seriously by the Banks while instituting the suits under the provisions of Ordinance, 2001, and persons, who signs the plaint and verify it commonly are not duly authorized person on behalf of the Banks.
The perusal of the power of attorneys annexed with the plaint, providing competence to the signatories to the plaint to act on behalf of the plaintiff-Bank reveals that, no independent and specific power has been assigned to any of the attorney to file the suit against the present appellants/defendants in the suit. The power of attorney, under the law, is to be construed strictly. The deeds of power of attorneys placed with the plaint is a copy of cyclostyled proforma and after filling the blanks, has been used in the suit filed at Multan. Even the power of attorneys were notarized at Karachi and these find not mention whatsoever about any power assigned to the signatories to file a suit against M/s Al-Hadeed Mechanical Engineers & 4 others/defendants in the suit. It cannot be denied that, the respondent-Bank is a public limited Company, registered under the Companies Ordinance, 1984, and under the law, if a Company appoints any person on its behalf, the Board of Directors is required to pass a resolution authorizing such person either to pursue any matter or to file any suit on its behalf.
In the present case, there is no such resolution available on record. In absence of any such resolution, no person can participate in the proceedings of any suit filed on behalf of the Company. Reliance can be placed on Khan Iftikhar Hussain Khan of Kamdot (represented by 6 heirs) vs. Messrs Ghulam Nabi Corporation Ltd. Lahore (PLD 1971 SC 550), Pak American Commercial (Pvt) Ltd. through Director vs. Humayoun Latif and 7 others (PLD 2008 Karachi 540) and Telecard Limited through authorized representative vs. Pakistan Telecommunication Authority through Chairman (2014 CLD 415).
6. So far as the copies of power of attorneys annexed with the plaint are concerned, suffice it to say that, the power of attorney is to be construed strictly and such powers qua the explicit object, which are expressly and specifically mentioned in the power of attorney, were to be exercised by the agent/attorney. In this regard, reliance can be placed on Unair Ali Khan and others vs. Faiz Rasaool and others (PLD 2013 SC 190) and Muhammad Akhtar vs. Mst. Manna and 3 others (2001 SCMR 1700).
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