2002 PLP 381 (CLD)

Date of hearing: 14th June, 2001. IJAZ‑UL‑HASSAN, J.‑‑‑Mst. Anwar Begum appellant has filed instant appeal under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) to assail the judgment and decree of the learned Judge Banking Court Hazara Division, Abbottabad dated 25‑9‑2000 vide which the appellant was refused leave to appear and defend the suit, with the result that the plaintiff/respondent -Bank was granted a decree as prayed for alongwith future mark‑up etc.

2. Facts relevant for the disposal of this appeal are, that: Allied Bank of Pakistan Limited through its Officer/Attorney respectively Main Bazar Branch, Haripur instituted suit against Messrs Trade Liners International, Hattar Industrial Estate, Haripur through its partners Hafizur Rehman, Muhammad Adam and Mst. Anwar Begum, for recovery of Rs. 76,26,504 through attachment and sale of all movable and immovable property and hypothecated stock including equitable mortgaged property M.M. Alam Road, Gulberg‑III, Lahore. The defendants entered into an agreement with the plaintiff‑Bank on 9‑8‑1997, whereby the defendant offered the security to the Bank by way of sale against Rs. 2,000 million and agreed to buy back the same for Rs.26, 77, 397 during the period ending on 30‑6‑1998. In order to secure the re‑payment of finance and other charges allowed to defendants in the name of defendant No. 1, defendants Nos.2 to 4 executed various documents, listed in the plaint, in favour of the plaintiff‑Bank. On the request of the defendants the plaintiff‑Bank also sanctioned and provided the defendant No. 1 with a L.C. (Inland) facility of Rs.8.000 million against FATR fonder the terms and conditions as stipulated in the sanctioned letter dated 2‑4‑1998. The defendants opened L.C. (Inland) Nos.98/5 to 98/10 dated 1‑11‑1998, 20‑11‑1998, 23‑11‑1998 and 4‑12‑1998 respectively. Various other documents enumerated in the plaint were also executed in this respect. The re‑payment performance of the defendants remained unsatisfactory which obliged the plaintiff‑Bank to file suit for recovery of Rs. 76,26,504.

3. Mst. Anwar Begum appellant herein, appeared in Court and resisted the Bank's claim on all grounds legal as well as factual and denied having executed any document in favour of the plaintiff‑Bank, remaining defendants did not join the proceedings and they were proceeded against ex parte.

4. The learned trial Judge taking into consideration the objections raised in the application for grant of leave to appear and defend the suit, came to the conclusion that no serious or bona fide dispute has been raised in the application for leave to defend and the same is accordingly dismissed. Having held so, leave was refused through the impugned order which has been, challenged before us by means of the present appeal.

5. Mr. Muhammad Iqbal Mehniwal, Advocate appeared on behalf of the appellant whereas Mr. Abdur Rehman Qadir, Advocate represented the respondent‑Bank. We have heard, at length, the arguments and submissions made by learned counsel for the parties, in the light of the material on record.

6. Learned counsel for the appellant criticised the impugned judgment and decree on a number of grounds and attempted to argue that appellant having set her defence which at least raised a triable issue, appellant was entitled to the grant of leave to defend the suit and even if the defence set up by the appellant could be said to be vague and unsatisfactory the leave still could not have been refused and should have been granted on condition of furnishing security or deposit of amount. The learned counsel added that a fraud has been perpetrated on the appellant by the principal borrowers with the connivance of the Bank officials and payments were made to the actual borrowers in haste and contrary to the Bank practices, which clearly tend to suggest that the appellant had obtained no loan or executed documents and that the Bank officials had a hand in the affair. Additionally, it was urged that the appellant had not signed the document of guarantee and signatures thereon were forged. The appellant was not owner of Property No. 11 /3‑1 Gulberg‑III, Lahore as it was transferred to and in possession of Mst. Nusrat Arshad, to substantiate the pleas, reliance was placed on `Pan Ocean Enterprises (Pvt.) Limited and 4 others v. Faisal Islamic Bank of Bahrain and others 1996 MLD 816; Messrs United Bank Limited v. Flora Textiles Limited and 6 others PLD 1996 Lah. 333; Hazoor Bakhsh v. Ghulam Farid 1996 MLD 704 and Messrs Ali Match Industries Limited and 3 others v. Industrial Development Bank of Pakistan 1997 SCMR 943.

7. Conversely, learned counsel for the respondent‑Bank defended the impugned judgment and decree and prayed for its sustenance maintaining that keeping in view the documentary evidence on record, the learned trial Judge had good reason to refuse to grant leave to appear and defend suit of the respondent‑Bank in terms of the prayer contained in the plaint. The learned counsel contended that the appellant has taken a different stand in the appeal qua her claim in the beginning, which clearly indicates that she has come to the Court with unclean hands disentitling her for any indulgence To augment the submissions, he relied on Sheikh Gulzar Ali & Company Limited and others v. Special Judge, Special Court of Banking and another 1991 SCMR 590 and United Bank Limited v. Muhammad Sharfuddin 2000 MLD 456.

8. It need no reiteration that the grant of leave to appear and defend is not a matter of routine or matter of right. The defendant has to disclose a plausible defence and where there is no substantial question of law or fact needing trial and the defence set up is vague or sham leave can be refused and the suit decreed. For the purpose of grant of leave to defend, the party is required to make out a plausible cause and must show that serious and bona fide dispute exist between the parties which cannot be resolved without recording evidence. In the present case, we find that the appellant‑‑‑arraigned as defendant No. 4 in the suit, is one of the partners in defendant No. 1 Firm and herself has executed all the legal documents required for the sanction and disbursement of the loan and also mortgaged her property through equitable mortgage by appearing in person before the Sub‑Registrar concerned. Her oral denial in presence of duly executed registered documents cannot exonerate her from liability of the outstanding dues of the plaintiff‑Bank. She is severally and jointly liable for re payment. All documents annexed with the plaint are true and correct and have been got executed by the appellant strictly in accordance with the manner provided under the law. Learned counsel for the appellant has not been able to pursuade us to hold that a fraud had been perpetrated on the appellant with the active connivance of the Bank officials and the appellants had not executed documents in favour of the plaintiff‑Bank. We also find ourselves in agreement with learned counsel for the respondent‑Bank that the appellant has taken altogether a different stand at this stage qua the stand taken by her in the application for grant of leave. This fact clearly indicates that the appellant has not come to this Court with clean hands and no indulgence can be shown to her. Adverting to the case‑law produced on behalf of the appellant we find that the cited rulings do not promote the case of the appellant in any manner and speak of the different situation. The rulings are of no help to the appellant. We are satisfied that the appellant had mortgaged her property in favour of the respondent‑Bank at the time of advancement of loan to the principal borrower besides executing various other documents in this respect and it does not lie in the mouth of the appellant to assert that she had not signed or thumb‑impressed documents and had no knowledge about the, loans in question. The discretion exercised by the learned trial Judge in refusing leave to the appellant is neither arbitrary, nor perverse warranting interference of this Court.

9. Resultantly, the appeal fails which is hereby dismissed with no order as to costs. H.B.T./376/P Appeal dismissed.