2008 PLP 1297 (CLD)

ANWAR ZAHEER JAMALI, J.

This appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, is preferred against the order, dated 19-9-2005 passed by Banking Court No.1, Karachi, whereby application for leave to defend filed by the appellant in Suit No.2 of 2005 was dismissed, and the subsequent judgments and decrees, dated 10-11-2005 and 3-12-2005 respectively passed in said suit by the Banking Court No.1, Karachi.

2. In a nutshell, relevant facts of the base are that a suit for recovery of Rs.46,88,762 was instituted by respondent No.1 against the appellant and respondents Nos.2 and 3, wherein appellant and respondent No.3 were joined as party to the suit in their capacity as guarantors, for the finance facility extended to respondent No.2 by respondent No.

1. Applications for leave to defend, separately moved by respondents Nos.2 and 3 and the appellant, were dismissed by Banking Court vide its order, dated 19-9-2005, concluding therein that no plausible defence entitling them for grant of leave to defend was made out. Subsequently, on filing of break-up, suit of the respondent No.1 was decreed in the sum of Rs.15,70,436 jointly and severally against the appellant and the respondents Nos.2 and 3 with future monthly lease rentals of both the leased assets/buses being Rs.91.908 per month for the period/month of November, 2005 and onwards till the return of the buses to the respondent No.1. Further, the appellant and respondents Nos.2 and 3 were directed to hand over the possession of the lease assets/buses to the respondent No.1 and also to bear the cost of the suit.

3. Mr. Muhammad Iqbal learned counsel for the appellant, while arguing this appeal, vehemently contended that once the respondents Nos.2 and 3 had played fraud and game of cheating with the appellant for obtaining his signatures on the letter of guarantee, which formed basis for holding the present appellant liable for payment of decretal amount, it was incumbent upon the Banking Court to have granted the leave to defend application of the appellant, so as to provide him proper opportunity to prove his case in that regard. In support of his case, learned counsel has placed reliance upon the cases of Messrs National Security Insurance Company Limited and others v. Messrs Hoechst Pakistan Limited and others 1992 SCMR 718, American Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880 and Messrs Habib Bank Limited v. Messrs Pan Islamic Steamship Co. Limited and 6 others 2005 CLD

626. Learned counsel, however, did not dispute that the letter of guarantee, which formed basis of passing of decree against the appellant was signed by him, at six places and such signatures were not disputed by him, so also the signatures on other documents which were subsequently produced by the respondent No.1/Bank to show his involvement in the financial transaction.

4. On the other hand, Ms. Samia Durrani learned counsel for the respondent No.1 has contended that it is the normal practice followed by the borrowers and guarantors that they set-up false, baseless and concocted defence in order to defeat or at least to delay the recovery of sum due against them and the plea raised by the present appellant is nothing but an attempt on the same lines.

5. We have carefully considered the arguments advanced by learned counsel for the parties and perused the material placed on record, which goes to show that indeed the appellant on receipt of notice of recovery from the Bank/respondent No.1, had initially disputed his liability as guarantor, but at the same time he had conceded that his signatures were available on the letter of guarantee. It is not a plausible defence acceptable to the Court that a person knowing well about the contents of some documents will put his signatures over it at six places and subsequently he will take a "U" turn that his signatures over such documents were obtained by his employees through fraud and cheating. It is pertinent to mention here that after service of notice in the suit the appellant/guarantee even did not bother to submit application for leave to defend under his own signatures or even to file his personal affidavit in denial of the allegations of respondent No.1 that the letter of guarantee was genuinely and knowingly executed by him.

6. The learned Banking Court while passing its impugned order, dated 19-9-2005, and the judgment and decree, has judiciously examined the defence of the appellant and rightly concluded that no plausible defence, entitling the appellant for grant of leave to defend the suit was made out. In view of the clear admission about his signatures on the letter of guarantee as well as other documents available on record the suit was also rightly decreed. This being the position, this appeal has no merits. It is accordingly dismissed in limine along with the listed application. M.H./B-41/K Appeal dismissed.