1994 PLP 1404 (CLC)

‑‑‑‑OXXXVII, R. 3‑‑‑Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), S. 6‑‑‑Suit for recovery of loan‑‑‑Application to appear and defend suit‑‑‑Guarantors who were defendants in the suit, had filed application to appear and defend suit‑‑‑Guarantors had claimed that they had denied their liabilities, but in spite of denial of liabilities through several letters and notices addressed to the Bank, no reply was given by the Bank‑‑‑Once liability was denied and clear stand was taken by alleged guarantors, it was duty of the Bank to reply same and controvert their stand‑‑‑No such step having been taken by Bank, silence of Bank over matter without even showing them or explaining that defendants/alleged guarantors, were guarantors for borrowing company, would seriously reflect adversely upon Bank's case‑‑‑Plausible defence having been made out by defendants, they were granted leave to appear and defend suit in circumstances. Mamnoonul Hassan, Noor Muhammad, Rana Muhammad Aslam and Muniruddin AM for Plaintiff. Date of hearing: 1st March, 1987. The defendants Nos. 13 and 15 have filed this application under Order XXXVII, rule 3, C.P.C. for leave to appear and defend the suit. It has been alleged in the plaint that on 13‑io‑1982 the defendant No. 1 requested the Plaintiff to allow it overdraft and loan against packing. Credit facilities and to undertake underwriting shares liabilities of the Businessmen's Insurance Co. Ltd. a sister concern of the defendant No.l. In this regard the defendants Nos. 2 to 13 executed letter of guarantee. Besides this other advances were made to the defendant No. 1 but the defendant No. 13 has not been alleged to be liable for that. So far defendant No. 15 is concerned it has been .stated that the plaintiff has granted loan of Rs.20,00,000 to defendant No.

1. The defendants Nos. 2 to 4, il, 12, 14 and 15 executed separate letter of guarantee guaranteeing the repayment of principal amount not exceeding Rs.20,00,000 excluding interest and charges therefor. The defendant No. 13 executed letter of guarantee Exh.1/12 to the plaint and the defendant No. 15 is alleged to have executed letter of guarantee Exh.K-6 to the plaint. The defendant No. 13 has stated in the application that the had executed the letter of guarantee but it was in respect of liability arising from underwriting by the plaintiff in respect of shares of the Businessmen's Insurance Company Limited. It has been denied that he has guaranteed the loan advanced to U.T.C. From the letter of guarantee it seems that both‑these companies have been mentioned in the document. From the averments made in the plaint primarily it seems that the defendant No. 1 had requested the plaintiff to undertake underwriting the shares liabilities of the Businessmen's Insurance Company Limited. It has been alleged that although the shares were offered but as no proper response was received from public objection was raised by the Controller of insurance and the. amount received from the subscribers has been returned back to them. There does not seem to be any dispute with regard to the liabilities which may have accrued due to floating of the shares and underwriting the same by the plaintiff No.

1. No such claim has been made by the plaintiff with regard to this dispute. In the suit claim is in respect of loan advanced to U.T.C. when the defendant came to know the claim of the plaintiff regarding guarantee for U.T.C. he addressed several letters from the year 1983 to 1984 till such time the legal notice was served by the plaintiffs counsel which was also replied reiterating that he has nothing to do with U.T.C. nor he has in any manner stood surety for U.T.C. The significant aspect of the case is that in spite of denial of liability by the defendant No. 13 and writing several letters, the plaintiff did not reply. I am making this observation on the basis of the documents produced by both the parties in these proceedings. Mr. Mamnoonul Hassan the learned counsel states that the letters written by the defendant No. 13 were replied but they have not been produced. The absence of such letter primarily leads to the inference, for the purposes of this application, that no reply was sent. Once liability was denied and clear stand was taken it was the duty of the plaintiff to reply the same and controvert the allegations. No such step was taken. So far defendant No. 15 is concerned he has taken the plea that he was Director of Muhammadi Textile Mills and had executed a blank deed of guarantee which was handed to the plaintiff. Once he had ceased to be a Director, having no connection with the Muhammadi Textile Mills and fresh guarantee having been taken over, his liabilities extinguished, he, therefore, addressed letter to the plaintiff asking it to discharge him. In spite of this letter which was repeated several times the plaintiff neither cancelled the guarantee nor denied his claim. The plaintiff's silence over the matter without even showing them or explaining that the defendant No. 15 is the guarantor for U.T.C. seriously reflects adversely upon the plaintiff's case. In the circumstances in my view a plausible defence has been made out by defendants Nos. 13 and 15: 1 grant them leave to appear and defend the suit unconditionally.

2. Defendant No. '16 and his Advocate called absent. Application is dismissed. H.B.T/U‑150/K Order accordingly