P L D 1987 Lahore 290 (PLP)

In this suit under the Banking Companies (Recovery of Loans) Ordinance, 1979, instituted by the National Bank of Pakistan, the plaintiff, against Messrs Elegzender & Co. and 2 others, the defendants, for recovery of Rs.31,14,875.75 two petitions for leave to appear and defend the suit have been filed as under:‑ P.L.A. No.ll‑B of 1985 by defendant No.3, and P.L.A. No.12‑B of 1985 by defendants Nos.l and

2. The relief claimed in the suit has been split up as under:‑ Decree: as against defendants Nos.l and 2 for a sum of Rs.25,14,.875.75 with costs and interest at the rate of 14$ per annum from the date of institution of the suit till realization of the decretal amount; and as against defendant No.3 for a sum of Rs.6,00,000 with costs and interest at the rate of 14$ per annum from the date of institution of the suit till realization of the decretal amount. The suit amount has been claimed from defendants Nos. 1 and 2 on account of the following seven transactions: (1) Small Loan; (2) L/C Account No.1175; (3) L/C Account No.1251; (4) L/C Account No.1266; (5) L/C Account No.1371; (6) L/C Account No.1441, and (7) L/C Account No.1464. The details of each transaction have been given in para. 6 of the plaint. The basis of claim against defendant No.3 is that he stood guarantee for repayment of Rs.6,00,000 towards the outstanding liability of defendants Nos. 1 and

2. P.L.A. No.ll‑B of 1985 The learned cousnel for defendant No.3 in support of the petition of defendant No.3 has submitted that the documents mentioned in para. 8 of the plaint viz. Demand Promissory Note etc. allegedly executed by defendant No.3 in favour of the plaintiff‑Bank are forged documents and that the defendant never executed any of the said documents. The learned counsel has drawn my attention to para. 2 of the petition for leave to appear and defend the suit in which it has been categorically asserted that neither the said defendant No.3 stood surety or guarantor for the loan in question nor has he signed any of the documents mentioned in the plaint. This para. is supported by an affidavit. He has also drawn my attention to the reply filed by the plaintiff to the aforementioned para. of the petition for leave to appear and defend the suit to say that it is the admitted position that the signatures on the documents in question are not identical as these had been allegedly differently put by defendant No.3. The learned counsel argued that this ground alone is sufficient to grant leave to defendant No.3 to appear and defend the suit as the controversy about the genuineness of the documents or otherwise can only be resolved after a proper trial. The learned counsel for the plaintiff in reply has only submitted that the documents were signed by defendant No.3 though he cleverly put signatures in different forms and shapes; that there is evidence to show that the said defendant No.3 stood surety and guarantee for the loan in question upto the extent of Rs.6,00,000 and that he signed these documents in the presence of the witnesses. Having given consideration to the controversy I am of the view that in the attendant circumstances narrated above leave shall have to be granted to defendant No.3 to appear and defend the suit as the plaintiff can prove the execution of the denied documents by the said defendant only by leading evidence. The other question left to be examined is as to whether the leave to be granted should be unconditional or subject to some conditions. I am clear in my mind that leave to be granted to defendant No.3 to defend the suit shall have to be conditional as the plaintiff has alleged that the property which was equitably mortgaged by this defendant with the plaintiff has been further alienated by him without A the permission of the plaintiff whilst the said defendant has asserted that no equitable mortgage or encumberance was incurred by him. I would, therefore, allow this petition and grant leave to defendant No.3 to appear and defend the suit subject to his depositing a sum of Rs.3,00,000 in cash in Court within two months from today and furnishing security within the above‑mentioned period for payment of the balance sum of Rs.3,00,000 plus the interest that might accrue in case ultimately the suit is decided against him. P.L.A. No.12‑B of 1985 The learned counsel for defendants Nos.l and 2 in support of the petition for leave to appear and defend the suit filed by the said defendants has mainly contended that the court‑fee paid on the plaint is deficient and is not in accord with section 17 of the Court Fees Act, 1870. Elaborating his contention, the learned counsel submitted that as per the plaint the claim of the plaintiff is constituted of seven different subjects, viz. one Small Loan Account and six different Letters of Credit Accounts and, therefore, the plaint shall be chargeable with the aggregate amount of the dourt‑fees to which the plaints in suits embracing separately each of the aforementioned subjects would be liable under the Act. He in support of his contention relied on Secretary of State v . N . M . R . Ayyasami Chettiar A I R 1933 Mad. 178; North A rcot District Central Co‑operative Stores Ltd. v. State Government of Madras A I R 1957 Mad. 163; In re: D. Lakshminarayana Chettiar and another A I R 1954 Mad. 594 and Ava A. Cowasjee and 8 others v. Nasreen Nizam Shah and 4 others 1984 C L C 2705. The learned counsel also contended that the statements of accounts annexed with the plaint do not reflect the correct and true position of the accounts and one instance of the same is that penal interest has been charged in the said accounts although there is no agreement by the defendants to pay the same. The learned counsel also wanted to raise some more contentions on merits but I thought it fit to first call upon the learned counsel for the plaintiff to reply to the first contention of the learned counsel for the defendants. The learned counsel for the plaintiff in reply to the said contention of the counsel for defendants submitted that since the maximum court‑fee of Rs.15,000 has been paid as provided by the proviso to Article 1 of Schedule I of the Court Fees Act, there is no deficiency in the court‑fee. He in support of his above contention relied on Kashi Prosad Singh v. Secretary of State for India‑in‑Council I L R 29 Cal. 140 to contend that Article 1 of Schedule I has an overriding effect qua section 17 of the Court‑Fees Act. The learned counsel for the applicants‑defendants at this juncture has drawn my attention to Aslam Industries Limited, Khanpur v. Pakistan Edible Corporatiod and others reported as 1983 S C M R 316 to contend that the precise point as to whether section 17 of the Court‑Fees Act, 1870, is subject to the proviso to Article 1 of Schedule I of the Court‑Fees Act as substituted by section 8 of Punjab Finance Act, 1973, has been held to be one which requires consideration and that being so, a case for grant of leave to appear and defend the suit has been made out on this sole ground inasmuch as the applicants‑defendants have disclosed a prima facie defence. It is well‑settled that in order to succeed in obtaining leave to defend a suit instituted under Order XXXVII of the Code of Civil Procedure the defendant has only to disclose a plausible defence which may give rise to a triable issue. He has not to establish that the defence disclosed by him is one which is likely to succeed at the trial The defence disclosed by the defendants in the case in hand, inter alia, raises the question whether the provision regarding maximum court‑fee as contained in the proviso to Article 1 of Schedule I of the Court‑Fees Act, 1870, is to have an overriding effect on the provisions of section 17 of the Court‑Fees Act? The question so raised is certainly of great general importance which needs to be dealt with in a proper trial. Moreover, it has been brought to my notice, as observed above, that the Supreme Court has granted leave to consider this precise question in the case titled Aslam Industries Limited, Khanpur v. Pakistan Edible Corporation and others reported as 1983 S C M R

316. To my mind the mere fact that the Supreme Court of Pakistan has considered the question to be of sufficient importance so as to grant leave to consider the same is by itself a valid rather a binding consideration to hold that the defence disclosed raises a triable issue for the purposes of grant of leave to defend a suit filed under Order XXXVII of the Code of Civil Procedure, and in that view of the matter the defendants Nos. l and 2 have made out a case on the basis of the first contention alone for grant of leave to appear and defend the suit. Yet another aspect of the matter which has prevailed with me to allow the petition of defendants Nos.l and 2 is the fact that defendant No.3 has also been granted permission to appear and defend the suit and, therefore, in order to have an effectual and complete adjudication of the controversy defendants Nos.l and 2 should also be granted permission to appear and defend the suit. The next question that again arises for consideration is whether leave should be conditional. The learned counsel for the plaintiff has today placed on record a copy of the conmuniction dated 7‑10‑1985 from defendant No.2 as Proprietor of defendant No.l to show that liability to the extent of Rs.14,40,000 has been admitted by the said defendants. He submitted that since there is practically no security with the plaintiff‑Bank regarding the amount claimed in the suit as the value of the alleged pledged goods is also very little, the leave to appear and defend the suit should be conditional so as to ensure recovery in case the suit is decreed. In view of the foregoing allowing this petition I would grant permission to defendants Nos.l and 2 as well to appear and defend the suit subject to their depositing in Court the sum of Rs.14,40,000 in cash within two months from today and furnishing within the same period adequate security for payment of the remaining amount plus interest that may accrue if ultimately the suit is decreed against them. The securities shall be furnished by defendants Nos.l, 2 and 3 within the period mentioned in each case to the satisfaction of Officer on‑Special Duty (J) of this Court. Case to come up on 6‑5‑1987. M.B.A./N‑22/L Order accordingly.