1987 PLP 1843 (CLC)

QURBAN SADIQ IKRAM, J.‑‑In a suit by Muslim Commercial Bank Ltd., for recovery of Rs.9,79,284.28 defendants put in appearance before learned Special Judge Banking Lahore. Defendants 1 to 7 and defendants 8 to 10 filed separate applications under Order XXXVII Rule 3 C.P.C. seeking leave to appear and defend the suit inter alia on the grounds that they never requested to plaintiff bank for grant of cash credit facility of Rs.10,00,000; that the plaint did not disclose the details of the so‑called loan document or hypothecation documents; that the alleged pronote attached with the plaint was not signed by them; that according to the plaint the limit for cash credit facility had been sanctioned for a period of six months which expired on 30‑4‑1979 but the documents appended with the plaint were purported to have been signed on 7‑4‑1979; that the documents have been forged by the bank with ulterior motive and that defendants never issued any cheque to avail the alleged cash credit facility. They also denied the personal sureties alleged to have been issued by defendants 8 to

10. The learned Special Judge vide order dated 7‑10‑1982 granted permission to defendants to contest the suit on the condition that they should deposit the suit amount in cash in the Court by the next date of hearing i.e. 11‑11‑1982. This time was extended till 6‑1‑1983. On that date the presiding officer of Court was on leave and suit was fixed for hearing on 3‑2‑1983. The defendants did not deposit the suit amount as directed by the Court who, therefore, vide the impugned order dated 3‑2‑1983 decreed the suit with costs and interest in favour of the plaintiff and against the defendants. Hence this appeal.

2. We have heard the learned counsel appearing on behalf of the parties. It is admitted on behalf of the respondents bank that the loan against cash credit facility to the defendants 1 to 7 had been fully secured and that defendants 8 to 10 also furnished personal surety for the said loan. It is correct that under Rule 3 of Order XXXVII, C.P.C. conditional leave to appear and defend is permissible but as is apparent from the two applications, the defendants raised substantial questions of law and facts and set up plausible defence. Leave should have, therefore, been granted unconditionally specially when the loan had been fully secured. In our view the impugned order was arbitrary and unjustified in the facts and circumstances of this case. In view of the above we set aside the impugned order and decree dated 3‑2‑1983. The defendants are granted leave to appear and defend the suit which is accordingly remanded to the learned Special Judge Banking Lahore for trial and decision according to law. The parties are left to bear their own costs of this appeal and are directed to appear before the lower Court on 21‑6‑1987. The office will remit the record immediately to the trial Court. A.A./B‑23/L Case remanded.