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Civil Miscellaneous Applications Nos.2746 and 3103 of 1986 in Suit No.243 of 1983, decided on 21st August, 1986.

---O.XXXVIII, R.5 & O.XXXIX, Rr.1, 2 & 4 read with S.151--Suit for recovery of loan advanced to defendants against mortgage of their property--Defendant, during pendency of suit, entering into an agreement of sale for disposing of their other properties-- Plaintiffs thereafter filing an application under O.XXXVIII, R.5 and O.XXXIX, Rr.1 & 2 read with S.151, C.P.C. inter alia prayiag for attachment before judgment of said properties as according to plaintiffs sale was being effected by defendants with a view to obstruct and delay execution of decree which might be passed in suit--Ad interim order accordingly passed in favour of plaintiff by issuance of injunction restraining defendants from alienating said properties--Defendants making application under O.XXXIX, R.4 read with S.151, C.P.C. for vacation of ad interim order on ground that the amount of money advanced as loan stood fully secured by mortgage of building in favour of plaintiffs and secondly, that plaintiffs had failed to establish that sale of said properties was with intention to obstruct or delay execution of decree which was the requirement of O.XXXVIII, R.5, C.P.C.--Plaintiffs, in opposing defendant's application, contending that security furnished by defendants had become insufficient and defendants were consciously trying to obstruct plaintiffs--Loan although secured by a mortgage but property mortgaged with plaintiffs, being an old building and mostly occupied by tenants had not appreciated in value--Loan granted to defendants in 1978 initially was Rs.34,90,369.42 but due to accumulation of interest thereon outstanding amount had reached the figure of Rs.1,45,22,722.17 and it was hard to accept that security of property now sufficiently covered the amount in suit--Burden to establish mala fide intention on part of defendants was undeniably on plaintiffs for getting an order under O.XXXVIII, R.5, C.P.C. but jurisdiction of Court under S.151, C.P.C. had also been invoked-- Intention of defendant can always be inferred from circumstances of the case and since security furnished by defendants failed to sufficiently cover amount of money claimed in suit, interest of plaintiffs needed to be safeguarded--Ends of justice, held, would be best served if interim order is modified to extent that the defendants may be directed not to complete the sale transaction pending final disposal of the suit--Order accordingly.

Liaquat Merchant for Plaintiffs.

Shahenshah Hussain and Naseem Farooqui for Defendants.

This application under Order 39, rule 4 and section 151, C.P.C. has been filed on behalf of the defendant for vacation of the ad interim order dated 26-5-1986, passed on C.M.A. No.274s/86 filed by the Plaintiffs under Order 38, rule 5, and Order 39 rules 1 & 2 read with section 151, C . P. C .

2. Both these applications have arisen from a suit (No.243 of 1983) filed by Messrs Habib Bank Limited, National Bank of Pakistan Limited and United Bank Limited for recovery of Rs.1,45,22,722.17 from the defendants which was advanced to the latter by way of loan, and/or over-draft against mortgage of their property, namely, Hotel Metropole Limited Defendant No.1, has now entered into an agreement of sale dated 12-5-1986 for disposing of their two properties, bearing Survey Nos.295 and 43 respectively and situated in Deh Drigh, Tappo Malir, Taluka and District Karachi to another party namely, Messrs Millat (Private) Limited for Rs.14,00,000/- out of which the defendants have received Rs.3,50,000/- from the vendee as part payment of the sale consideration. As a part performance of the contract, physical possession of the said hotel building has also been handed over to the vendee.

3. Thereafter, the plaintiffs filed an application under Order 38 rule 5, and Order 39, Rules 1 and 2, read with section 151, C.P.C., inter alia, praying for attachment before Judgment of the said properties as according to the Plaintiffs the sale was being affected by the defendant No.1 with a view to obstruct and delay the execution of decree which may be passed in the suit.

4. After filing of such application 'i.e. C.M.A. No.2746/86 an ad interim order was passed in favour of the plaintiff on 26-5-1986 by issuance of injunction against defendant No.l restraining him from alienating the said properties.

5. The contention of Mr. Naseem Farooqui, learned counsel for the defendants now firstly, is that the amount of money advanced as loan stands fully secured by mortgage of Hotel Metropole building in favour of the plaintiffs and secondly that the plaintiffs have failed to establish that the sale of properties in question was with intention to obstruct or delay the execution of decree which may be passed against the defendants in the suit, which was the requirement of 0.38, R.5, C . P. C . , therefore, the ad interim order passed in favour of the Plaintiffs may be vacated.

6. Mr. Liaquat Merchant while vehemently opposing C . M. A . No.3103/86, has contended that due to efflux of time the security furnished by the defendants has become insufficient and the defendants being conscious of this fact are now trying to obstruct the plaintiffs. As to the second contention of Mr. Farooqui, the reply of Mr. Liaquat Merchant was that the plaintiffs have also invoked the jurisdiction of this Court under section 151, C.P.C., which gives wide powers to this Court to pass any order which may be deemed fit under the circumstances of the case.

7. After considering the respective arguments advanced by the learned counsel for the parties, I am of the view that ad interim order dated 26-5-1986 should be confirmed. Although admittedly the loan is secured by a mortgage but according to Mr. Liaquat Merchant the property mortgaged with the plaintiffs has not appreciated in value as the same is mostly occupied by tenants. Then the building Metropole is an old building and its value cannot appreciate extent as the same of a hotel building should normally do. Then one cannot be oblivious of the fact, that the loan was granted to the defendants in 1978 which initially was Rs.34,90,369.42 but due to accumulation of interest thereon the outstanding amount has reached the figure of Rs.1,45,22,722.17. It is, therefore, hard to accept that the security of Hotel Metropole now sufficiently covers the amount in the suit. Although it cannot be denied that the burden to establish mala fide intention on the part of the defendants is on the plaintiff for the purposes of getting an order passed under Order 38, Rule 5, C.P.C., but the jurisdiction of this Court under section 151, C . P. C . has also been invoked. In any case, the intention of the defendant can always be inferred from the circumstances of the case. Since the security furnished by the defendants fails to sufficiently cover the amount of money claimed in the suit the interest of the plaintiffs needs to be safeguarded.

7. I am therefore, of the view that the ends of justice will be best served if the interim order dated 26-5-1986 is modified only to this extent that the defendants may be directed not to complete the sale transaction pending final disposal of the suit and it is ordered accordingly.

Both C.M.A. No.2746/86 and C.M.A. No.3103/86 stand disposed of.

S.Q./H-46/K Order accordingly.

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