P L D 1985 Lahore 89 (PLP)

Allied Bank Limited has instituted this suit against the defendants for recovery of a sum of Rs. 11,58,033.90. Defendant No. 1 is the principal borrower to whom two loans are stated to have been given one on 5-10-1980 for Rs. 6 lakhs and the other on 4-11-1980 and 25-11-1980 for a sum of Rs. 4 lakhs. Defendant No. 1 while obtaining the loans executed a demand promissory note dated 5-10-1980 for a sum of Rs. 6 lakhs and alongwith it also executed a letter of hypothecation, letter of waiver, interest and disbursement, letter of continuity and the general form of security for advances and loans. Similarly defendant No. 1 on 4-11-1980 executed demand promissory note for a sum of Rs. 4 lakhs alongwith same set of documents enumerated above. As per demand promissory note interest at the rate of 14 %-per annum with quarterly rests is chargeable.

2. It has also been asserted in the plaint that defendants Nos. 2, 3 and 4 executed letters of guarantees dated 1-10-1980 for re-payment of Rs. 10 lakhs by. accepting joint and several liabilities alongwith defendant No. 1. -The re-payment having not been made the amount due accumulated to Rs. 11,58,033.90 as on 31-5-1983 and therefore the plaintiff bank was obliged to file the suit claiming recovery of the aforesaid amount from the defendants together with interest at the rate of 14% per annum from the date of institution of the suit. Costs of the suit have also been prayed for.

3. Alongwith the suit the plaintiff has filed the statements of accounts duly certified under the Bankers Books Evidence Act showing the sums of Rs. 6,45,711.90 and Rs. 5,12,322.00 as outstanding against the defendants. The supporting documents as mentioned above have also been filed alongwith the plaint.

4. The defendants on receipt of summons in form 4 of Appendix `B' applied for leave to defend the suit on 21-7-1983 through C. M. No. 6416/C of 1983. This application has been resisted by the plaintiff bank.

5. In the application for leave to defend filed by the defendants two grounds have been taken, one that company having gone into voluntary liquidation, the present proceedings cannot continue by virtue of section 171 of Companies Act and the second that nothing having been said in the plaint as to whether the loan is secured or not, shows that the loan is secured and therefore, leave to defend the suit should be granted.

6. The learned counsel for the defendants has today submitted that in pursuance of negotiations between defendant No. 1 and Pakistan Banking Council, the Pakistan Banking Council had advised defendant No. 1 to withdraw voluntary winding up, deliver 2,62,946 shares of Kohi Noor Cotton Mills Limited together with transfer deeds to Habib Bank Limited to secure liability of National Bank, Allied Bank the plaintiff and Habib Bank and that in pursuance of the said arrangement the defendant has made an application for withdrawing winding up petition. He also submitted that the defendants have filed an application, today (C. M. No. 26-B of 1984)-that the learned counsel for the plaintiff be asked to enquire from the plaintiff Bank as to whether in the attendant circumstances that Pakistan Banking Council has arrived at an amicable settlement with defendant No. 1 the plaintiff will continue with the present suit.

7. As regards the second ground, the learned counsel for the defendants submitted that since the plaintiff asked the defendant to secure loan through a notice and there being no averment in the plaint that the loan has not been secured, it should be assumed that the loan stands secured and thus leave to defend should be granted.

8. On the contrary, the learned counsel for the plaintiff submitted that he had already obtained instructions from the plaintiff-Bank three days ago and in the interval today as well in the light of the application of the defendants, he had asked the plaintiff Bank as to whether it wants to proceed with the case or not. He submitted that he has been given specific instructions to continue with the suit as negotiations between the defendant No. 1 and Pakistan Banking Council neith?r legally nor on factual plane bind the plaintiff not to pursue its independent case for recovery of loans advanced by it to the defendants.

9. The learned counsel for the plaintiff further contended that there being no winding up petition pending as admittedly an application for withdrawal of the same has been made and otherwise also the said application for winding up having been instituted subsequent to the institution of the present suit and no stay of proceedings having been allowed by the High Court, the suit can proceed, especially when the proceedings of winding up are Voluntary and obviously intended to deflect the recovery proceedings.

10. As regards the second ground of the defendants, the learned counsel for the plaintiff submitted that the loan has not been secured and mere issuing of a notice calling upon the defendants to secure the loan can in no manner be construed that the loan has been secured. The learned counsel referring to letter dated 10-8-1982 from the defendant No. 1 to the plaintiff submitted that in reply to the said notice, the defendant No. 1 has stated that it can only create a second registered mortgage, to which the plaintiff did not agree.

11. The learned counsel for the plaintiff-Bank in the last contended that the execution of documents having not been denied shall be deemed to have been admitted and the consideration also having not been denied, there is no ground whatsoever available to the defendants to seek leave to defend the suit; The learned counsel for the plaintiff continuing his arguments submitted that no plausible defence has been disclosed in the affidavit of the defendants, which may give rise to any triable issue and consequently the application of the defendants is liable to be dismissed.

12. Having given consideration to the controversy involved, I find' that the contentions raised on behalf of the plaintiff have force. It has been rightly pointed out that the receipt of loan amounts has been admitted and that the execution of documents has also not been denied. The statements of accounts duly certified under the Bankers Books Evidence Act, 1891, having been filed in respect of the two loans, the entries of A the amounts claimed therein as due can lawfully be received as evidence of the existence of those entries and of correctness thereof as provided by section 4 of the Act aforementioned and thus the amounts claimed by the plaintiff from the defendant shall stand established moreso because there is no rebuttal or even denial regarding the correctness of the said statements.

13. The main ground rather the only ground which could legitimately fall for consideration for determining as to whether in this case leave to appear and defend the suit be granted or not, viz. the pendency of voluntary winding up of the defendant-company also having been stated to be no longer available in view of the admitted position that defendant No. 1 bas already applied for withdrawal of the said winding up petition none of the grounds of the application for leave to defend are such which B could give rise to any triable issue. The obvious that follows is that there is no justification to grant to defendants leave to appear and defend the suit. Resultantly the application for leave to defend the suit is dismissed.

14. The application for leave to defend having been dismissed the contents of the plaint shall be deemed as proved and as such the suit of the C plaintiff is decreed with costs in the sum of Its. 11,58,033.90 recoverable) from the defendants jointly and severally. The plaintiff shall also be entitled to future interest at, the rate of 14 % per annum with quarterly rests from the date of institution of the suit till realization of the amount. M,Z, M,???????? Suit decreed.