2002 PLP 524 (CLD)

Malik M. Rashid Awan for Respondent No.

1. Date of hearing: 28th November, 2001. JAWAD S. KHAWAJA, J.‑‑‑This appeal calls in question the impugned judgment and decree, dated 31‑7‑1995 passed by the learned Banking Tribunal No. III, Lahore. The respondent‑Bank filed a suit against ten defendants in all including the appellant who was arrayed as defendant No. 10 in the suit through an amended plaint filed by the respondent -Bank. The said suit was for the recovery of Rs. 53,10,197.37. It was asserted in the plaint that the Bank of Credit and Commerce International (Overseas) Ltd., defendant No.9 had executed a guarantee in favour of the respondent‑Bank to secure repayment of finance which had been allowed by the respondent‑Bank to Punjab Cables Ltd., defendant No.1 (respondent No.2 herein). The Bank of Credit and Commerce International (Overseas) Ltd. had been taken over by the appellant‑Bank which necessitated the above‑referred amended plaint filed by the respondent‑Bank before the learned Banking Tribunal.

2. The appellant‑Bank submitted a reply to the show‑cause notice issued to it under the Banking Tribunals Ordinance, 1984. It was contended in the said reply that the appellant-Bank or the Bank of Credit and Commerce International (Overseas) Ltd., had not executed any guarantee in favour of the respondent‑Bank to secure the liabilities of Punjab Cables Ltd. It was pointed out that another Bank, which was a separate corporate entity, called "Bank of Credit and Commerce International (S.A.) Ltd." had issued guarantees in favour of the respondent‑Bank to secure the obligations of Punjab Cables Ltd. As such, according to the appellant‑Bank, if at all any bank was liable under guarantees favouring the respondent Bank, it was the Bank of Credit and Commerce International (S.A.) and not the Bank of Credit and Commerce International (Overseas) Ltd.

3. The matter before us is, therefore, very simple. If, indeed, the respondent‑Bank holds any guarantees issued by Bank of Credit and Commerce International (Overseas) Ltd., it would be entitled to enforce the said guarantees against the said Bank or against the appellant‑Bank as its successor. If, however, the guarantees held by the respondent‑Bank, were issued by the other Bank, namely Bank of Credit and Commerce International (S.A.) then the guarantees would not be enforceable against the appellant‑Bank.

4. We repeatedly asked learned counsel for the respondent- Bank to show us the instruments of guarantee on the basis of which its claim had been asserted against the Bank of Credit and Commerce International (Overseas) Ltd., and the appellant -Bank. He was not in a position to show us any such document. Some letters were brought to the attention of the Court showing that various letters of guarantee had been issued in favour of the respondent‑Bank. None of these letters, however, has been issued by the Bank of Credit and Commerce International (Overseas) Ltd., or by the appellant‑Bank. As such, the said letters have no relevance whatsoever in the present case and cannot, on any legal principle, be used against the appellant- Bank.

5. In view of the above discussion, we are left in no manner of doubt that the appellant‑Bank was not liable to the respondent‑Bank under any letter of guarantee. The impugned judgment and decree of the learned Banking Tribunal No. III, Lahore, dated 31‑7‑1995 are, therefore set aside as against the appellant‑Bank. This judgment shall not affect the enforceability of the impugned judgment and decree against the respondents Nos. 2 to 9.

6. This appeal is allowed in the above terms. S.A.K./H‑77/L Order accordingly.