2020 PLP 274 (CLD)

MUZAMIL AKHTAR SHABIR, J.

Through this Regular First Appeal, filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance"), the appellants have called in question the judgment and decree dated 31.12.2015 passed by the learned Single Judge in Chambers, whereby the recovery suit filed by Plaintiff Bank-Respondent No.1 was decreed against the appellants as principal borrower and guarantors.

2. Learned counsel for the appellants contends that although while passing the impugned judgment and decree, it has been held by the learned Single Judges in Chambers that guarantees executed by the Appellants Nos. 3 and 4 were continuing guarantees but an important aspect of the matter has not been taken into consideration that the finance agreements which were subsequently renewed time and again, although mentioned continuing personal guarantee of Tanvir Ahmad-Appellant No. 2 but the same from the year 2009-10 onwards did not mention the guarantees of Appellants Nos. 3 and 4, therefore, to that extent as the Appellants Nos. 3 and 4 claim to have been discharged from payment of the afore referred amount of finance as guarantors on account of novation of contract, they were entitled at least for grant of leave to defend the suit.

3. On the other hand, learned counsel appearing on behalf of the Respondent No. 1 has supported the impugned judgment and decree by claiming that the guarantees of Appellants Nos. 3 and 4 were continuing guarantees, therefore, the leave to appear and defend the suit was rightly disallowed and decree was validly passed against them.

4. Heard. Record perused.

5. The pivotal point raised by the learned counsel for the appellants is that although through initial finance agreements, the respondent bank disbursed and renewed the finance facility between the years 2003-04 to 2007-08 against guarantees of Appellants Nos. 3 and 4 but subsequently renewals of the said finance facility from 2009-10 onwards did not mention continuing guarantee of the said appellants against such renewals whereas guarantee of Appellant No.2 was specifically mentioned and claim that the relationship of banker and customer thereafter ceased to exist between the parties.

6. Although learned Single Judge in Chambers has referred to the continuing guarantees of Appellants Nos. 3 and 4 issued between 14.07.2003 to 01.07.2008 against renewals of finance facility but the said judgment is silent as to the effect of renewal agreements dated 01.07.2009 onwards, which only refer to continuing guarantee of Appellant No.2 but not to the guarantees issued by Appellants Nos. 3 and

4. Even the Plaint is silent to that effect, which only refers to personal guarantees of the Appellant Nos. 3 and 4 up to the renewal of agreement for the years 2007-08. The effect of the afore-referred non-mentioning of the personal guarantees of the Appellants Nos. 3 and 4 was required to be determined while passing the impugned judgment, which is not forthcoming on the record, therefore, the said appellants were at least entitled for granting leave to defend to establish that their guarantees had been discharged.

7. In view of the above, we allow this appeal to the extent of Appellant Nos. 3 and 4 only and set aside the impugned judgment and decree to their extent and allow their applications for leave to defend and remand the matter to the learned Single Judge in Chambers for proceeding further.

8. So far as contentions of other appellants are concerned, learned Single Judge in Chambers has properly appreciated the controversy and rightly dismissed their applications for leave to defend as no substantial question of law and facts requiring recording of evidence has been raised and application for leave to defend was not in consonance with the provisions of section 10(3, 4 and 5) of the Ordinance and was rightly refused. Besides learned. Single Judge in Chambers has rightly relied upon the statement of accounts and excluded an amount of Rs.11,830,843/- as markup charged beyond the expiry period to decree the suit against the remaining appellants jointly and severally for an amount of Rs.51,892,960.50/- together with costs of funds and costs of suit. The afore-referred finding of the learned Single Judge is in consonance with the material available on the record and is well founded warranting no interference. Consequently, no exception can be taken to the same.

9. For what has been discussed above, this appeal to the extent of Appellant Nos. 1 and 2 is dismissed. SA/G-15/L Order accordingly.