2019 PLP 1010 (CLD)

ASIM HAFEEZ, J.

This regular first appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance 2001 ("Ordinance of 2001") is against judgment and decree dated 21.06.2006 passed by learned Judge Banking, Court-I, Multan, whereby suit filed by respondent No.1 (Bank of Punjab) was decreed, against the appellants, for Rs.7,861,038/- along with costs of funds from the date of default i.e. 30.06.2004 till realization of the decrettal amount.

2. The appellant No.2 is proprietor of 'Bismilah Cotton Factory', who has executed finance documents, including his personal guarantee along with others. Appellant No.2, acing as Guardian for the appellants Nos.6 to 10, created mortgaged charge in favour of respondent bank on the properties of appellants Nos.6 to 10, alleged as minors, to the extent of their shares. Appellants Nos. 1 to 10 filed consolidated application under section 10 of Ordinance of 2001 for seeking grant for leave to defend the suit. Appellant No.2 filed said application for and on behalf of appellants Nos. 6 to 10 the minors-being their guardian. On failure of the appellants to raise substantial question of law and facts, leave was declined and consequently suit was decreed. Hence, this appeal.

3. Before adverting to the submissions made by the learned counsel, it is appropriate to identify application bearing No.1985-C of 2012 filed by appellant No.7 on behalf of the appellants Nos.6, 8 to 10, in instant appeal whereby certain documents were placed on record under Order XLI, Rule 27 of Code of Civil Procedure, 1908, to be treated as additional evidence. Without going into the question of maintainability of said application, when leave to defend was declined, in essence, the purpose of this conscious effort was to highlight an illegality in the creation of mortgage charge over the properties of appellants Nos.6 to 10, which properties were subject matter of mortgage charge and the judgment and decree under reference. In brief, the submission was that the properties under reference could not be mortgaged when no permission had been obtained from learned Guardian Judge, more particularly in the context of the limitation put in the certificate of Guardianship issued under section 7 of Act No.VIll of 1890 - Guardians and Wards Act, 1890.

4. Precise submissions by the learned counsel for the appellants are that in view of restraint on appellant No.2, i.e. not to mortgage the property or any part thereof without the express sanction of the court, no enforceable charge by way of mortgage can be created against the properties, identified as property No.1 and property No.2 in the plaint. In brief, the only objection raised was regarding the nullity of mortgage charge qua the properties and absence of enforceability thereof, pursuant to the judgment and decree, in wake of the restriction contained in the guardianship certificates.

5. Conversely, leaned counsel for the respondent bank defended the judgment and decree dated 21.06.2006 and contended that the submissions made on behalf of the minors regarding illegality and unenforceability of mortgage charge was an afterthought and otherwise, collusive. The appellants were the real beneficiaries of the loan extended. It is contended that no such objection has been raised while submitting the application for leave to defend the suit and there was no specific denial that appellant No.2 was the legally appointed guardian of the minors and acted as such.

6. Arguments heard. And available record perused.

7. No serious dispute was raised regarding the finance facility extended and execution of the finance and security documents. The heart of the controversy is that whether properties belonging to the minors can be mortgaged with the respondent bank for the purpose of securing repayment of finance facility, extended and availed. Whether the respondent No. 1 was aware of the factum of the actual ownership of the properties of the minors, at the time of the grant of finance and whether any step was taken to secure repayment of the finance by way of mortgage charge over the properties. A reference to copies of the sanction advices dated 19.11.2002 and 29.07.2003 and conditions therein regarding subjecting the disbursement of finance with procurement of guardianship certificate along with permission for mortgage to the extent of the shares of the minors from the concerned Guardian Judge, may prove knowledge of the bank, if any permission was obtained from the concerned Guardian Judge. It is pointed out that two properties are subject matter of this appeal, one - to the extent of 24 Kanals and 10 Marlas being the share of the minors - of the property was part of Guardianship certificate dated 25.10.2002 and other -- to the extent of 10 Marlas, comprising of commercial shops - was part of amended Guardianship certificate dated 03.09.2003, both of which certificates were mentioned in C.M. Application No.1985-C of 2012, filed by the appellants Nos. 6 to 10.

8. The thrust of the argument was on the conditions appearing in the Guardianship certificates, including amended certificate dated 03.09.2003 issued by learned Judge Guardian Court, in terms of section 7 of Act No.VIII of 1890, wherein restraint was placed on the guardian appointed regarding mortgage, sale or transfer of the properties, mentioned therein. The conditions imposed, imply that mortgage charge can be raised, on the properties, with the express sanction of the Court of Guardian Judge. The learned counsel for respondent bank provided copy of application seeking sanction of the court and order dated 29.10.2002, which order contained grant of permission/sanction by the court for creating mortgage charge over property measuring 24 kanals and 10 Marlas in lieu of loan from the respondent bank, to secure welfare of the minors. The order dated 29.10.2002 reads as; "The petitioner Abdul Sattar moved an application for permission to mortgage the property of minors. He has been appointed Guardian of the minors vide order dated 25.10.2002. He prayed that a Factory Bismallah Cotton Factory, is running his business in which minors have their equal shares, hence as guardian he may be allowed to mortgage property for purchase of limit drawn from the bank of Punjab for the welfare of minors. 2- There is nothing contrary to the petition in hand. The petitioner has already been appointed as guardian of the property of minors, hence petition is hereby accepted accordingly, subject to all the just exception".

9. It transpired from the record that the appellant No.2 had filed application seeking amendment in the guardianship certificate issued on 25.10.2002, for the reason that one of the properties measuring 10 Marlas was not included in the said certificate. The application was accepted on 03.09.2003. It is interesting to note that permission/sanction of the Guardian Judge was sought specifically for loan from the respondent bank, on the plea that such loan was required to ensure welfare of the minors, failing which the factory had to be closed. It is expedient to reproduce order dated 03.09.2003, by learned Guardian Judge, which reads as; The instant petition has been filed by the petitioner namely Abdul Sattar who has been appointed as guardian of person and property of minors/legal heirs of deceased Abdul Malik. His contention is that inadvertently the property measuring 10-Marlas bearing Khata No.2, situated in Mouza Shahr Sultan Part-II could not be incorporated in the Guardian Petition. The petitioner is running all the affairs of the business and intends to have loan from The Bank of Punjab and without in collusion of property mentioned in the instant petition he would not be able to get the said loan which would adversely effect the interest of the minors. His contention is corroborated by his statement. In view of the above, in the best interest of justice, the present petition is allowed. Amended Guardian Certificate be issued in the name of the petitioner after inclusion of the property mentioned in the instant petition. File be consigned to the record room after its due completion."

10. Upon perusal of the order dated 03.09.2003, it becomes clear and obvious that permission/sanction was obtained accordingly. In view of the order dated 03.09.200, the restraint incorporated in the guardianship certificate would not apply to mortgage under reference in wake of sanction permission in writing in terms of order dated 03.09.2003. No objection was ever raised by the appellants Nos.6 to 10 to the order dated 03.09.2003. Record showed that Mortgage deed dated 26.09.2003, regarding property measuring 10 Marlas, was executed after the order dated 03.09.2003. Any argument regarding illegality and unenforceability of mortgage charge, in view of the orders passed and in absence of denial of beneficial interest by the minors while filing petition for leave to defend, is devoid of any force, raises adverse inferences against the appellants and otherwise denudes the submission raised of any credibility. It appears that the appellants are trying to evade their liabilities/obligations, which cannot be done in view of the facts narrated and orders dated 29.10.2002 and 03.09.2003.

11. In the circumstances, the creation of mortgage charge is legal and same is enforceable against the appellants in terms of the judgment and decree. No illegality or defect was pointed in the judgment and decree dated 21.06.2006.

12. In view of the above, instant appeal is without any merit and same is, therefore, dismissed. The judgment and decree dated 21.06.2006 passed by learned Judge Banking Court-I, Multan, is upheld.

13. No order as to the costs. MH/B-11/L Appeal dismissed.