2005 PLP 1825 (CLD)

S. ALI ASLAM JAFRI, J.

This appeal under section 9 of the Banking Tribunals Ordinance, 1984 is directed against the judgment and decree dated 14-5-1996 passed by the learned Banking Tribunal No.II at Karachi in Suit No. 128 of 1992. The facts relevant for the disposal of this appeal are that plaintiff-United Bank Limited filed a suit for recovery against defendant Mst. Sakeena as Borrower and Israr-ul-Haq Sheikh as Guarantor in Banking Tribunal No.II at Karachi which was decreed only against defendant No.I as principal debtor for Rs.6,875,942.93, with costs, but dismissed as against defendant No.2. The appellant has prayed that after reversing/ modifying the impugned judgment the decree, the suit be decreed jointly and severally against both defendants for Rs.6,875,942.93 with liquidated damages amounting to Rs. 1,375,188.58 and mark-up at the rate of 57 paisa per thousand per day from the date of suit till payment, plus costs throughout. It is the case of the plaintiff that in view of request made by defendant No.1 through an application, the plaintiff-Bank opened three Letters of Credit, two on 29-12-1983 and third one on 9-8-1984 in favour of Messrs I-lysung Corporation Seoul Korea for import of tyres and tubes for agricultural purposes. The initial value of the first two LCs was US $2,12,880 and 67,677.87 respectively whereas the value of the third LC was US $5,353.92. Letter of undertaking and promissory note was executed by the defendant No. I on the same date. On receipt of the import documents the plaintiff-Bank issued demand notice to defendant No. I directing to retire the documents on payment of the bill of exchange. Payments were to be made by the defendant No. 1 on 26-12-1984 viz., the maturity date of bill. The defendant No.2 had executed a common letter of guarantee on 13-8-1985, undertaking repayment of the amount of Rs.43,87,596.09 plus mark-up. The total liability of defendant No. 1 as on 30-11-1990 was worked out to Rs. 82, 51,131.51 which included Rs.13,75,188.58 as liquidated damages. Since the defendants failed to square up and liquidate their liability hence the plaintiff-Bank filed the suit. Summons were served on both the defendants but only defendant No.2 turned up to contest the suit. He filed written statement taking the plea of complete repudiation of the plaintiffs case. He denied to have stood as Guarantor of defendant No.1 or to have executed and signed the alleged guarantee papers. While denying his signatures on the alleged guarantee documents he stated that the same are result of forgery and fraud on the parrt of the bank. He stated to have no connection with defendant No.1 personally or with her business. He also raised another objection that in such cases the bank is expected to assess and verify the credibility and financial worth of the alleged guarantee but the bank did not bother to assess the same so that he could be permitted to act as a guarantor of defendant No.

1. A specific plea has been taken that it is unbelievable that the said defendant would execute the alleged guarantee on 13-8-1985, after expiry of the maturity date viz. 26-12-1984 by which date the amount due from defendant No.1 on account of LCs opened on her request was to be repaid. Defendant No.2 also pleaded that it looked incredible that he would execute one and the same guarantee in respect of two finances, the subject-matter of two separate suits, viz. the other one filed against. Ghulam Rasool as principal borrower and defendant Israr-ul-Haq as guarantor. Another plea has been taken that stamp paper used for guarantee appears to have been purchased on 8-3-1986 whereas the date of alleged guarantee on the said stamp papers is shown to be 13-8-1985 which itself is sufficient to show the falsehood of the claim of the plaintiff-Bank. In view of the pleadings of the parties learned Tribunal framed following four issues:-- (1) Whether the suit is maintainable against the defendant No.2? (2) What amount is due and payable but the defendant No.2? (3) Whether defendant No.2 executed letter of guarantee Annex 'W' to the plaint? (4) What should the decree be? In support to its case affidavit-in-evidence of witness Muhammad Ahsan, Assistant Vice-President of the Bank was filed, who has reiterated the facts as disclosed in the plaint specifically referring to failure on the part the defendants to square up their liability. Since defendant No.1 failed to appear to contest the suit hence it was straightaway decree against her for Rs.6,875,942.93 with costs but dismissed against defendant No.2. The plaintiff/ appellant has filed this appeal to challenge the said part of the judgment and decree which relates to dismissal of suit against defendant No.2 as a whole and for liquidated damages against defendant No.

1. We have heard Mr. A.I. Chundrigar learned counsel for the appellant/ plaintiff and Mr. Shaukat Hayat learned counsel for the respondent No.2. Respondent No.1 has preferred to remain absent. Mr. A.I. Chundrigar learned counsel for the appellant/ plaintiff has mainly urged that the burden of proof was wrongly shifted by the Tribunal upon the plaintiff to prove that guarantee was executed by defendant No.2 and that the document in question was not a forged document. Learned counsel has further argued that Tribunal has erred in law while comparing the signatures of defendant No.2 on the guarantee form instead of referring the same to an expert. Learned counsel has also urged that the learned Tribunal was not justified indisallowing the liquidated damages despite the same having been claimed by the plaintiff/ appellant. Mr. Shoukat Hayat Khan, Advocate for respondent No.2 has argued that the plaintiff-Bank miserably failed to establish the liability of respondent No.2 as a guarantor. Learned counsel further argued that in view of categorical denial by defendant No.2 to have acted as guarantor for defendant No.1 and that he ever executed the document of alleged guarantee which on the face of its appears to be fabricated and subsequently manufactured document in view of the difference in the dates of purchase of stamp paper on 8-3-1986 execution of guarantee on 13-8-1985, the burden was upon the plaintiff-Bank to prove its case against defendant No.2, but the plaintiff-Bank failed to discharge its burden. In order to appreciate the contentions of the learned counsel for the parties, we have examined the material placed on record on behalf of the plaintiff-Bank. It appears from the discussion made by the learned Banking Tribunal with reference to the liability of defendant No.2, in the light of the evidence adduced on behalf of the plaintiff's sole witness Muhammad Ahsan who has mainly referred to and reproduced Para-18 of the plaint in his affidavit-in-evidence and nothing beyond that, we find substance in the findings recorded by the learned Banking Tribunal that the plaintiff has failed to prove the case justifying a decree against defendant No.2 particularly in view of specific plea taken by the defendant No.2 that he neither executed the guarantee documents nor stood as guarantor for repayment of the loan obtainer by defendant No.1, having no means to stand guarantor, it was under the circumstances necessary for the bank to have examined his worth before accepting him as guarantor. There is nothing on record to rebut the contention of defendant No.2 that he is an employee of Messrs Khair Agency of Karachi on a monthly salary of Rs.4, 500 has no other moveable or immovable property. Merely, the fact that the defendant No. 1 is paternal A Aunt of defendant No.2 is not sufficient to establish that he stood as a guarantor for defendant No.1. We also do not find any force in the contention of Mr. A.I. Chundrigar that learned Tribunal should have not taken the burden upon itself of comparing the admitted signatures of defendant No.2 on his Identity Card, Passport and affidavit filed in Court with the disputed signature on the form of guarantee. Indeed, an expert opinion has its own importance, nevertheless under Article 84 of. the Qanun-e-Shahadat Order, 1984 (S.73 of Evidence Act, 1872) Judge is not prohibited or debarred from comparing the admitted and disputed signatures under the particular circumstances of a case, reliance can be placed on the case reported Mst. Fatima v. Abdul Razzak 1988 SCMR 1449. Appreciation of the facts and circumstances of the case led the Tribunal to rightly hold that plaintiff-Bank has not been straightforward in explaining the circumstances in which defendant No.2 had allegedly executed guarantee on behalf of defendant No.

1. The claim for liquidated damages in absence of any evidence and proof as required under the law, was also rightly declined by the learned Tribunal. In view of the discussion made above, we do not find any illegality or material irregularity in the findings recorded by the learned Banking Tribunal that the plaintiff has failed to discharge its burden as required under the law. Resultantly there is no substance in this appeal. By a short order dated 10-11-2004 we had dismissed this appeal and above are the reasons for the same. M.B.A./U-10/K Appeal dismissed.