2014 PLP 1015 (CLD)

MALIK MANZOOR HUSSAIN, J.

My this order will dispose of two applications separately filed by the defendants for leave to defend in Suit No.2 of 2013.

2. Briefly, the facts of the case are that the defendants applied for financial assistance which was allowed through duly executed agreement between plaintiff/Bank and the defendants through agreement for finance on mark up basis (running finance) dated 27-7-2007, 26-5-2008, 1-7-2009 and agreement to finance on mark up basis (export refinance) of the same dates. On 18-3-2011 the defendants again requested for renewal of the financial facilities which was approved by the bank vide letter dated 23-5-2011. In pursuance of the request of defendants certain agreements were executed and offered the personal guarantee dated 25-5-2011, Registered Mortgage dated 24-11-2007, Rectification Deed dated 8-12-2007, Memorandum of deposit of title deed dated 25-5-2011, letter of Continuity of Remortgage dated 25-5-2011, Subordination Agreement dated 10-4-2008. The total amount availed by the defendants was Rs.1,202,103,629.82, whereas an amount of Rs.1,154,934,352.13 has been paid back by the defendants and an amount of Rs.47,169,277.69 remained outstanding. An amount of Rs.3,220,480.00 was imposed as penalty by State Bank of Pakistan on the defendants for their failure to abide the obligations, this amount was also payable by the defendants to the plaintiff/Bank. The details of all the account are fully given in para No. 9 of the plaint. The defendants were reportedly failed to abide the terms and condition of the agreements and security provided to the Bank, thus on their failure the plaintiff filed the instant suit.

3. Defendants Nos.1, 2 and 4, on appearance filed application for leave to defend, while the defendant No.3 filed separate application.

4. At the very outset the learned counsel for defendants Nos.1, 2 and 4 requested that this case should be adjourned or leave to defend may be allowed as the appellant/defendants have already applied for further extension of time and in case the parties reached at any settlement in shape of extension of time then this case should become infructuous and all the proceedings will be the shape of futile exercise, while on merits it was contended that entry reflect in the statement of account do not depict a true picture of the transaction and the mark up is not in accordance with the agreement, thus factual position could not have been resolved without recording evidence. It was further contended that though the documents executed has not been denied but due to certain problems between the Directors of the defendants, Company was not able to run its affairs smoothly which constrain the defendants in the shape of default.

5. The learned counsel appearing on behalf of defendant No.3 argued that the defendant No.3 was a sleeping Partner and has disassociated with the Company therefore he is not responsible to the liabilities of the Company. Arguments heard and with the valuable assistance of the learned counsel, record thoroughly examined.

6. The submission of the learned counsel for the defendants carry no weight as the execution of document has not been specifically denied. The payment performance of defendants was not satisfactory, rather a fine of Rs.3,220,480.00 had been imposed as penalty by the State Bank, for their shortfall performance and failure to abide by the terms and condition of agreement.

7. It is well settled that the defendants seeking to appear and defend the suit must disclose a plausible defence or show that there are substantial questions of facts and law which need to be tried, otherwise leave have to be refused and decree shall follow in the suit. For a considerable time the defendants failed to abide by the terms and conditions of initial sanction of loan with sanction of facility even after imposition of fine the defendants failed to show any disclosure on any plausible defence or suggested any tribal issue. Only on evasive denial or as a routine matter no leave can be granted. The application for extension of time by itself is sufficient to admit the claim of the plaintiff/Bank. All the documents annexed with the plaint are to be read as part and parcel of the plaint and the contents where of could not be read in isolation. As per finance agreement executed between the parties, finance facility was provided to the defendants. All the terms and conditions of the said agreement and sanction letter should be read in conjunction with paras of the plaint and thus it cannot be argued that the plaintiff did not disclose any cause of action or have provided wrong entries in the account statement.

8. So for as the objections taken by the learned counsel of defendant No.3 is concerned, except for the evasive denial, the learned counsel failed to explain, as to why the documents annexed with the plaint be adjudged as fake and fabricated, when the signature of defendant No.3 on the admitted documents such as finance security and guarantee etc on visual inspection tally with those on these letters. The defence set out in the leave application is evasive, illusionary and improbable but has been set out just to delay and prolong the matter, otherwise, no substantial question of law or fact, has been raised. The defendants can not be allowed to blow hot and cold in the same breath as of one to reach of facility on the basis of documents duly executed by them and annexed with the plaint and when the suit is filed they rather objected to execution of the same.

9. It is mandatory Provision of Law that for seeking leave to defend the Provision of section 10(4) should be strictly followed. As per provision of section 10(6), the non-compliance would resolve in shape of rejection of application for leave to defend. For the convenience subsections (4) and (6) are reproduce which are as under:-- 10(4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following:- (a) The amount of finance availed by the defendant from the financial institution; the amounts paid by the defendant to the financial institution and the dates of payments; (b) The amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit; (c) The amounts of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit; (d) The amount if any which the defendant disputes as payable to the financial institution and facts in support thereof. 10(6) An application for leave to defend which does not comply with the requirements of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement.

10. The defendants failed to specify the amount availed and payable by the defendants to the Bank and also failed to disclose the disputed amount in leave to defend application. On this score also the application for leave to defend is liable to be rejected. In view of what has been discussed above, both the leave to defend applications filed by the defendants are rejected and in pursuance therefore judgment and decree as prayed for, is passed against the defendant. KMZ/52/P Suit decreed.