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Suit No.177 of 1983, decided on 7th August, 1986.
---O.XXXVII, Rr.2 & 3--Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), S. 7--Suit for recovery of loan--Application for leave to defend suit--Granting of loan by plaintiff-Bank having been admitted by defendants and pleas raised by them in their application for leave to defend not meriting any consideration, application for leave to defend suit was dismissed.
Hassan A. Shaikh for Plaintiff.
G.H. Malik for Defendant.
This is an application for leave to defend the suit under Order XXXVII, Rule 3, C.P.C.
In January 1980, the plaintiff granted credit facilities to the extent of Rs.5,00,000 to the defendants against execution of a registered mortgage deed. In March 1980, the defendants again approached- the plaintiffs for further credit facilities to the extent of Rs.15,00,000 and in consideration thereof, the defendants executed another mortgage dated 18-8-1980. A demand promissory note for Rs.8,50,000 dated 25-4-1980 and hypothecation agreement were also executed by the defendants in favour of the plaintiff by way of collateral security. Thereafter, the defendants failed to pay the principal amount as well as the interest becoming due to the plaintiff despite demands and hence the suit.
The contention of the defendants is that after extending the credit facilities to the defendants for Rs.5,00,000 the plaintiffs failed to honour their commitment of extending further credit facilities to the extent of 85.15,00,000 to the defendants for installation of their re-rolling Mill as the plaintiff paid only Rs.3,50,000 to the defendants. Therefore, according to the defendants, if the plaintiffs has fulfilled their commitment to the defendants, the latter would have earned large profits from the Mill and repaid the loan and because of the plaintiffs refusal to honour their commitments the investment made by the defendants for installation of the re-rolling Mill remained blocked thus burdening the defendants with huge interest and depriving them of earning profits. The defendants, therefore, maintain that they are entitled to claim set off to the tune of Rs.30,00,000 from the plaintiffs. The creation of further charge on the original mortgage has also been challenged by the defendants as being without consideration, as the subsequent was riot a part of the agreed limit of Rs.15,00,000.
The contention of Mr. Hassan A. Shaikh learned counsel for the plaintiffs, or the other hand, is that since granting of loan by the plaintiffs has not been disputed by the defendants the application filed by them for grant of leave to defend the suit should be dismissed.
After considering the respective pleas raised by the counsel. I am clearly of view that leave should be refused as the defence raised by the defendants does not merit consideration. The granting of loan has been admitted by the defendants and the pleas raised by the defendants hardly carry any force.
Leave therefore, cannot be granted to the defendants to defend the suit and this application stands dismissed. The suit may be fixed for final disposal.
H. B. T./H-5/K Application dismissed.
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