2004 PLP 104 (CLD)

R. F. Virjee for Respondent No.

1. Moin Azhar for Respondent No.2. Date of hearing: 25th March, 2003. The appellants have preferred this appeal under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997 against the judgment and decree passed by the Banking Court No. IV, Karachi, in Suit No. 1925 of 1992. Heard Miss Sofia Saeed, learned counsel for the appellants, Mr. R.F. Virjee, learned counsel for the respondent No. 1 and Mr. Moin Azhar, learned counsel for the respondent No.2, and vide short order dated 25‑3‑2003, the appeal was dismissed in limine. The learned counsel for the appellants mainly argued that the learned Judge did not appreciate that the properties were not mortgaged with the respondent No. 1 for the finances provided to respondent No.2 but in fact documents were handed over to respondent No. 1 in respect of finance provided to Messrs Supreme Trading Corporation and Messrs Haseeb Traders. The learned counsel further argued that the learned Banking Court Judge did not appreciate that the appellants had already filed Suit No. 1169 of 1992 before VIth Senior Civil Judge, Karachi South for recovery of original documents of the properties given as a security for Supreme Trading Corporation, Haseeeb Traders and Zircon Trading Corporation. On the other hand, Mr. R. F. Virjee, the learned counsel for respondent No. 1‑Bank, argued that by well‑reasoned judgment the learned Banking Court has decreed the suit against the appellants as well as against respondent No.2, the principal borrowers and the present appeal is filed by the guarantors/mortgagors just to obstruct and delay the recovery of outstanding liabilities. We have given anxious consideration to the respective arguments of the learned counsel for the parties and have also gone through the record. Brief facts of the case are that the respondent No.2, a proprietorship concern, opened a current account with the respondent‑Bank, which was operated by his Manager Muhammad Yousaf son of Muhammad Siddique. The appellant No. 1 was also maintaining mutual open Current Account No.3806.60 in the respondent‑Bank and was operated by the same person who signed the documents to obtain finance from the Bank. The appellant No. 1 executed personal guarantees for the finance used and utilized by the respondent No.2. The appellants created equitable mortgage by deposit of original title deeds in respect of the properties being Plot No.35/11, Survey Sheet No.35/P/1, Blocks 7 and 8, C.P. & Berar Cooperative Housing Society Ltd., Karachi, Flat No.A‑5, first floor, constructed on Plot No.15/636 in Bahadur Yar Jang Cooperative Housing Society Ltd., Karachi and Office No.205 on second floor, Panorama Centre, Fatima Jinnah Road, Karachi. It is stated in the plaint that respondent No. 1 established Letter of Credit on behalf of the respondent No.2 with the guarantees of the appellant No. 1 and on failure of the respondent No.2 to pay the amount' under letter of guarantees as well as under bill of exchange the respondent No.1 Bank filed suit against the appellants as well as respondent No.2 for recovery of tts.69,17,

659. After hearing the parties the learned Banking Court No. IV decreed the suit for a sum of Rs.66,20,043 and the liability of the appellant No.1 was only to the extent of Rs.5,50,

221. It appears from the record that the account of the respondent No.2 as well as of the appellants were operated by the same person and it is interesting to note that the same person filed reply on behalf of, the appellants disputing mortgage in favour of the respondent No.2 who was operating the account of the respondent No.2. This clearly shows collusion between the appellants and respondent No.2 so as to avoid the liability. The respondent No.2 has not specifically denied availing of the funds and only the appellants questioned their liabilities on the ground that the documents were deposited in respect of the facilities availed by the appellants and not in respect of the facilities used and utilized by respondent No.2. The burden to prove that the charge on the said properties was not created in respect of the funds provided to respondent No.2 heavily lie upon the appellants which they failed to discharge. Suit No.1169 of 1992 has been filed by the' appellant after service of summons of suit filed by respondent No.

1. The appeal is apparently filed to prolong the proceedings and to avoid payment of outstanding dues. We are not making any observation about the maintainability of the suit filed by the appellants before the Civil Court as the same is sub judice before Court, however, we have come to the conclusion that the appellants failed to point out any discrepancies in the judgment' passed by the Banking Court to call for interference. The appeal is, therefore, dismissed. H. B.T./ S‑332/K Appeal dismissed.