2006 PLP 1107 (CLD)

JAWWAD S. KHAWAJA, J.

The appellants-defendants impugn the judgment and decree of the learned Banking Court, Gujranwala dated 8-9-1999, whereby a suit filed by Habib Bank Limited (respondent No.2) has been decreed against the appellants and respondents Nos.3, 4 and 5.

2. The principal debtor in the case was respondent No.3, namely, Messrs Thapur Garments (Private) Limited. The appellants and respondents Nos.4 and 5 are brothers and were impleaded as defendants on the basis of personal guarantees and mortgage of properties made by them in favour of the bank to secure the liabilities of the principal-debtor. In an earlier round of litigation, the appellants had challenged a decree passed in favour of the respondent-Bank through R.F.A. No.498 of 1998. The said appeal was allowed to a limited extent. The case was remanded to the learned Banking Court to determine the personal liability of the present appellants on the basis of personal guarantees furnished by them to the bank.

3. Learned counsel for the appellants has argued, with a lot of vigour, that the appellants were not liable under the personal guarantees because they had not signed the same. He repeatedly emphasized the fact that the signatures of the appellants on the bank guarantees had not been sent to the Finger Print Bureau for comparison with the admitted or proved signatures of the appellants despite an application moved by them for this purpose. This submission, however, has lost all relevance because learned counsel for the bank has stated that the bank does not intend enforcing the personal guarantees of the appellants.

4. Another development has been brought to our attention during the hearing of the appeal. The respondents Nos.3 and 4, who are the company, named above, and its Chief Executive, namely, Sh. Arslan Azmat, are represented through counsel. He states that the liability of the bank has been settled in accordance with the terms of Circular No.29 issued by the State Bank of Pakistan. Learned counsel for the bank has confirmed this fact.

5. In the foregoing circumstances, it is not necessary for us to decide whether the appellants had executed any personal guarantees and are liable to the bank thereunder. This appeal, c however, succeeds to the extent that the appellants will not be personally liable for satisfaction of the decree in favour of the respondent-Bank.

6. Before parting with this judgment, we need to touch upon another aspect of the case. The properties belonging to the appellants, which were mortgaged in favour of the respondent-Bank, have been put to auction on 9-1 1-1999 in execution of the decree. Respondent No.6, who is the auction purchaser, is represented by counsel. The appellants as well as respondents Nos.3 and 4 have filed objection petitions before the learned Banking Court to challenge the auction. Needless to say, the learned Banking Court will proceed to decide the objections of the appellants on their own merits. However, learned counsel for respondents Nos.3 and 4 has clearly stated that the settlement between the respondents under Circular No.29, mentioned above envisages that if the Court auction is set aside, respondents Nos.3 and 4 shall be responsible for making good the shortfall, which may arise as a result of the setting aside of the Court auction. The Court auction, however, is not a matter of which we are seized.

7. In view of the above discussion, this appeal, having borne fruit, is disposed of. S.A.K./A-108/L?????????????????????????????????????????????????????????????????????????????????? Order accordingly.