1990 PLP 1139 (CLC)

Noorullah A. Manji for Defendant. C.M.A. No.275/1989 is an application for leave to defend in a suit for recovery of Rs.15,248,851 with interest and cost under the Banking Companies (Recovery of Loans) Ordinance, 1979. The case of the plaintiff/National Bank of Pakistan is that it had granted credit facilities by way of loan to the extent of S.R.2.5 Million (Saudi Rials) to defendant M/s. Gammon Pakistan Ltd. as per terms and conditions contained in agreement dated 18‑3‑198). The defendant‑company enjoyed the credit facilities to the extent of SR.2.5 Million (Saudi Rials), which amount was withdrawn in the month of March, 1986. As security for repayment of the said loan, the Defendant executed D.P. Note with a delivery letter and executed Decd of hypothecation by way of second charge in respect of its present and future plan, machinery etc. One of the conditions of the loan was that the Defendant‑Company shall apply the proceeds of the loan exclusively to the project i.e. to enable the Defendant Comapany to achieve repatriation of its 133 surplus employees from Saudi Arabia to Pakistan and the principal sum together with interest was to be repaid by the Defendant‑Company to the plaintiffs within 12 months from the date of disbursement which they have not pail in spite of demands. Hence this suit after usual notice. Mr. Noorullah A. Manji, who apps:fired for the Defendant has pressed his application for leave to defend on the following, grounds:‑ (1) That this Court has no jurisdiction to entertain the suit as the amount was paid in Saudi Arabia and demand for return was also made outside Pakistan and also because hypothecated machinery was lying outside Pakistan. (2) That the pronote in question is without consideration as the loan was disbursed subsequently to the execution of the Pronote. (3) That the first charge was of two other banks, who also have been joined under Order 34, Rule 1, C.P.C. (4) That the statement of account relied upon by the Plaintiff which was issued by the National Bank of Pakistan, Bahrain, is inadmissible under Section 4 of the Banker's Book Evidence Act. So far as the point of jurisdiction is concerned, it may be mentioned that the agreement dated 18‑3‑1986 was entered into in Pakistan, which has given the Plaintiff cause of action or at least a part of cause of action to rile the suit and therefore, in view of section 20, clause (c), C.P.C. this Court has got jurisdiction to entertain the suit. It is immaterial whether the amount was paid in Saudi Arabia or demand for return of the same was made outside Pakistan. Even the fact that hypothecated machinery was lying outside Pakistan, would not debar this Court from entertaining the suit. So far as the second objection is concerned, which relates to the Pronote, it may be pointed out that the Pronote was obtained as a security for credit facilities by way of loan which agreed to be enjoyed subsequently. It is admitted that the loan facilities were enjoyed and therefore, the Pronote cannot be treated to be a Pronote without consideration. The question of joining the other two banks to have a first charge is also not material for the purposes of application for leave to defend. Regarding the statement of account issued by the National Bank of Pakistan, Behrain, it may be pointed out that the mere fact that National Bank of Pakistan which is admittedly a Pakistani Bank, had opened a branch in Behrains would not convert National Bank of Pakistan into a foreign bank. It will remain Pakistani Bank for all purposes so long as it is registered in Pakistan, and its statement of accounts will be admissible under Section 4 of Banker's Books Evidence Act. It is also contended by Mr. Noorullah A. Manji that the loan amount was to be returned by the Defendant from the amount of the bills which it had to receive from the Government of Pakistan. These bills are lying under objection and have not been paid by the Government of Pakistan as yet. It is, therefore, that the Defendant has not paid the amount. It would appear that the Defendant having admitted the loan as well as the Pronote and the security, is liable to make payment. Under these circumstances I am of the clear view that the Defendant has no plausible defence, nor has he raised any triable issues. His defence is sham therefore, dismiss his application for (cave to defend. The result is that the plaintiffs' suit is decreed against the defendant company for a sum of Rs.15,248,851 being equivalent to SR:3,099,360 together with interest @ 1% over three months BIBOR with quarterly rests from the date of institution of the suit upto the date of final payment of decretal amount by the defendant company to the plaintiff No.1, together with difference between the rate of exchange between Saudi Rials and Pak. Rupees as prevalent on the date of filing of the suit and the date of final payment of the decrctal amount by the defendant to the plaintiff, Costs of the suit shall be born by the defendant. A.A./N‑260/k Application dismissed/Suit decreed,