Leave to appear and defend the suit

2023 CLD 1021 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 9, 10 & 22Suit for recovery of bank loanLeave to appear and defend the suitAvailing of finance facility was admitted by the clients (appellants) of the bankCourt dismissed the appellants' application to leave to defend and decreed the suit of the bank/respondentAppellants asserted that the amounts paid by them towards adjustment of finance facility had not been accounted forValidity

Held, that such assertion had not been substantiated by the appellants in their application for leave to defend through tangible material/details of any amount adjusted and even no specific amount that could have been counted as disputed was mentioned in said application

When the application for leave to defend did not fulfill the dictates of Ss. 10(3), 10(4) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 (' the Ordinance 2001'), then such application was liable to be rejected in terms of S. 10(6) of the Ordinance 2001 and in consequence, allegation of facts as contained in the plaint were deemed to have been admitted as per S. 10(1) of the Ordinance 2001

Appellants also failed to raise any substantial question of law and fact

No illegality or infirmity was noticed in the impugned judgment and decree passed by the Court below

Appeal was dismissed, in circumstances.

2023 CLD 235 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 9, 10 & 19Suit for recovery of Bank loanLeave to appear and defend the suitBank not returning pledged stock of borrowsScope

Defendants/borrowers sought leave to appear and defend the suit on the plea that pledged stock was in the custody of plaintiff/Bank therefore, it could not seek recovery unless pledged stock was returned

Validity

Matter relating to shortfall in pledged stocks would be determined in execution proceedings when collateral securities were required to be sold

Such was not a ground of defence for grant of leave to defend the suit

Claim of plaintiff/Bank in the suit was substantiated by documents and statement of accounts

Defendants/borrowers were not able to raise any substantial question of law or fact requiring recording of evidence for its resolution

High Court declined to grant leave to appear and defend and decreed the suit in favour of plaintiff/Bank

High Court converted proceedings into execution proceedings under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Suit was decreed accordingly.

2021 MLD 264 ISLAMABAD Judicial Precedent

O.XXXVII, Rr.1, 2 & O.XXXVIII, Rr.1, 9Suit for recovery of moneyLeave to appear and defend the suitFiling of application by defendant

Suit for recovery of money on the basis of dishonored Bank cheque was filed by plaintiff/appellant who sought attachment of vehicle of defendant/respondent before judgment

Trial Court, on application filed by defendant/respondent recalled order of attachment of vehicle

Validity

No application on behalf of defendant / respondent, who had not obtained leave to appear and defend the suit was maintainable, even if such application was an interlocutory or with respect to ancillary matter

Defendant/respondent was not granted leave to appear and defend the suit by Trial Court and application for release of attached property was not maintainable

High Court set aside order passed by Trial Court as the same was illegal and without jurisdiction

Constitutional petition was allowed, in circumstances.

2019 PLD 141 PESHAWAR-HIGH-COURT Judicial Precedent

O. XXXVII, R.3Leave to appear and defend the suitConduct of defendantRelevance

Grant of leave is not a matter of course or right, rather the defendant has to show/disclose a plausible defence, which may give rise to a triable issue and if he succeeds then leave to defend is to be granted unconditonally

Plausible defence which gives rise to triable issue must be cogent, fair, bona fide, reasonable and disclosed upon an affidavit

Court at the time of determining the factor of plausible defence, has to consider substantial question of law, jurisdiction of court, complex question of limitation, instrument not properly stamped or not attested by two witnesses or the same is issued without consideration or element of fraud requiring inquiry

Leave may be rfused and suit be decreed if plausible defence is not made out

Conduct of defendant is very much relevant in granting or refusing leave to appear and defend the suit.

2016 CLD 26 PESHAWAR-HIGH-COURT Judicial Precedent

Ss. 9 & 10Suit for recovery of financeLeave to appear and defend the suitAuction of defendant companyTriable issuesScope

Equity Participation Fund (EPF) had been declared as "Banking Company" by Federal Government vide notification dated 4-2-1987

Defendant Company secured Equity support of Rs. 700,000 disbursed in year 1975 but could not repurchase the shares as per the agreement

Equity Participation Fund filed suit for recovery of 650,000 before Banking Court

Validity

Several triable issues like equal responsibility of EPF in the management of defendant company and bringing the functioning of defendant company to a standstill in year 1996 due to auction and removal of machinery and equipment etc. by auction purchaser were raised in the application for leave to defend

Such objections to the suit went to the roots of the case and required adjudication on merits

High Court set aside the order passed by Banking Court and remanded the case to Banking Court for decision afresh on application for leave to defend the suit

Appeal was allowed accordingly.

2016 CLD 29 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 9 & 10Suit for recovery of financesLeave to appear and defend the suitManager of BankLocus standi to file suitAccount statement, non-filing of

Defendant company filed application for grant of leave to appear and defend the suit and objected the maintainability of the suit on the plea that no resolution of the bank was filed with the plaint

Validity

Defendant which was a limited liability Company, it was all the more necessary for it to place with its petition for leave to appear and defend the suit, the current account statement or its accounts/audited accounts in order to meet requirements of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 particularly where it had denied availing the finance facility or disbursement of amounts thereunder

Plaintiff stated that plaint was filed through a person who was Branch Manager/Chief Manager which averment was not at all denied by defendants

Requirements of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 were thus met with by plaintiff Bank and parties were not at issue on such fact

Defendants failed to raise any substantial question of fact requiring evidence, therefore, High Court declined to grant leave to appear and defend the suit

Suit was decreed in circumstances.

2013 CLD 1867 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 10Suit by borrower against financial institutionLeave to appear and defend the suitSubstantial question of fact and lawScope

Plaintiff availed finance facility from House Building Finance Corporation and matter was finally settled in Supreme Court in terms of calculating liability

Official Assignee was appointed to calculate liability

Plaintiff filed the suit disputing markup/interest and also claimed recovery of excess amount paid to House Building Finance Corporation and also claimed liquidated damages and general damages which could not be adjudicated through a snap decision

Validity

Was necessary to see whether Official Assignee rightly calculated outstanding liability in terms of settlement reached before Supreme Court and to be adjudicated whether plaintiff was liable to pay markup/profit up to the date of taking over the possession by the Corporation or it was continuing right to claim markup/profit on last calculation made by Official Assignee up to 1-12-2006

Even defendant in leave to defend showed calculation up to 30-4-2009, payable by plaintiff which was on and on

In order to resolve such controversy including the claim of damages and excess amount an opportunity needed to be provided to parties for leading evidence so that bone of contention might be decided

Defendant in its leave to defend application had raised substantial question of law and fact hence, deserved unconditional leave to defend

High Court directed Official Assignee to submit latest report in court with up to date calculation of dues if any

Application was allowed accordingly.