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Regular First Appeal No.8 of 1982, decided on 7th April, 1987.
---Ss.6 & 7--Civil Procedure Code (V of 1908), O.XXXVII, R.3--Suit for recovery of Bank loan--Application for leave to defend suit--Goods of considerable value pledged with Bank by applicants being already in custody of Bank which could be sold and sale proceeds thereof could be adjusted towards payment of loan--Applicants/appellants who had raised substantial questions of fact and law which needed to be investigated, held, ought to have been granted leave to defend suit without onerous condition of payment of entire disputed amount in Court in circumstances.
Fine Textile Mills Ltd., Karachi v. Haji U mar P L D, 1963 S C 163 ref.
---Ss.6, 7 & 12--Civil Procedure Code (V of 1908), O.XXXVII, R.3- Suit for recovery of Bank loan--Leave to defend suit--Order to deposit full amount of claim--Appeal against--Where goods of considerable value pledged by appellants admittedly were in custody of respondent Bank, passing verdict against appellants seeking leave to defend suit on account of their failure to comply with unjustifiable and unbearable condition of payment of full amount of claim, held, would amount to condemning them unheard, and they could not be said to have been given a fair trial in circumstances--High Court accepting appeal against order of Court below remanded case for fresh. trial and decision according to law.
Haji Sh. Ghias Muhammad for Appellants.
Muhammad Nazir Sheikh for Respondent.
Date of hearing: 7th April, 1987.
-This appeal against the judgment and decree of the learned Special Court Banking, Lahore, dated the 19th December, 1981, decreeing the respondent's suit for the realisation of Rs.2,46,931.84 arises out of the following circumstances. Appellants 2 and 3 are partners of appellant firm. Against the pledge of goods comprising eight power looms the appellants took a loan of Ra.1,00,000 from the respondent, Allied Bank of Pakistan Limited, on the 20th September, 1974. In the course of time interest and other expenses swelled the loan to Rs. 2,46,931.84 for the recovery of which the respondent had to institute suit on the 4th June, 1981, in the Special Court Banking, Lahore, against the appellants.
2. The appellants applied under Order XXXVII, rule 3 of the Code of Civil Procedure for grant of unconditional leave to defend the suit. They questioned the correctness of the statement of accounts prepared by the respondent and maintained that unauthorised debit entries of interest and other charges had been made. They stated that no agreement touching rate and mode of payment of interest existed and in any case the respondent had waited charging of interest with effect from the 1st October, 1978, by reversing the debit entries pertaining to interest. Admittedly the appellants' power looms were under pledge with and in the custody of the respondent.
3. The learned Special Court ordered on the 2nd July, 1981, that since the appellants had admitted having secured tree loan leave to defend the suit was granted to them on their payment in the Court till the 10th September, 1981, full amount of loan sought to be recovered by the respondent.
4. On the 10th September, 1981, the appellants moved application to the learned Special Court for removing the condition of deposit of the total amount in dispute attached to the order granting leave to defend the suit. They pointed out that their goods were lying pledged with the respondent and they had raised substantial questions requiring investigation. However, the learned Court raid not give any favourable response and decreed the suit for the appellants' failure to fulfil the condition of payment of the amount in question. Feeling aggrieved the appellants have approached this Court in appeal.
5. The appellants no doubt raised substantial questions of fact and law which needed to be investigated. Their goods of considerable value were already with the respondent and it cannot be denied that the respondent could sell them and adjust the sale proceeds towards payment of loan. In the circumstances in view of what has been laid down by the Supreme Court of Pakistan in Fine Textile' Mills Ltd. Karachi v. Haji Umar P L D 1963 Supreme Court 163 the appellants ought to have been granted leave to defend the suit without the onerous condition of payment of the entire amount in dispute. To pass verdict against the appellants on account of their failure to comply with the unjustifiable and unbearable condition of payment of full amount of claim would amount to condemning them unheard. They cannot be said to have been given a fair trial. The judgment and 1 decree under appeal cannot stand the test of scrutiny by this Court. The appeal is, therefore, accepted, the impugned judgment and decree are set aside and the suit is remanded to the learned Special Court Banking, Multan, for fresh trial and decision according to law. The appellants are given leave to defend the suit on furnishing security to the satisfaction of the learned trial Court. The parties are directed to appear before the learned trial Court on the 5th May, 1987. The parties are left to bear their own costs.
H.B.T./A-69/L Appeal accepted.
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