1. ' By this order I propose to dispose of C.M.A. No,7618 of 2001, which is an application for leave to defend under section 10 of the Ordinance XLVI of 2001, submitted on behalf of defendant No,3.
2. ' Case of the defendant No, 3, as disclosed in this application, is that he had not executed the purported documents viz. General Power of Attorney dated 19-11-1998, memorandum of Deposit of Title Deeds dated 18-11-1998 and the guarantee document dated 18-11-1998 but the same were fraudulently managed by plaintiff in collusion with defendants Nos.1 and 2. Further plea raised in the application is that scrap valuing Rs.855,00,000 pledged by defendants Nos.1 and 2 with the Bank was removed in collusion with the staff of plaintiff-Bank and defendants Nos.1 and 2 with mala fide intention and thus the liability of defendant No,3 stands discharged as per law. The application is accompanied with bunch of documents which have been marked as Annexures D/1 to D/24.
3. ' On notice of this application, replication has been filed on behalf of plaintiff-Bank wherein it has been asserted that the documents attributed to defendant No,3 have been executed by him, therefore, this fact was not denied by defendant No,3 during exchange of notices which have been brought on record by defendant No,3 himself alongwith his application for leave to defend. It has further been averred in the replication that no serious or bona fide dispute has been raised by defendant No,3 which may entitle him for grant of his application for leave to defend, therefore, said application be dismissed and consequently suit be decreed. The fact with regard to removal of pledged stocks (ship scrap) and initiation of proceedings in this context by the plaintiff-Bank has however, not been denied by the plaintiff.
4. ' Perusal of case record reveals that this.Suit was instituted on 16-11-2000 against four defendants.
5. After service of notice, defendants Nos.1, 2 and 4 did not move any application for leave to defend, thus, vide order dated 17-5-2001 suit was decreed against them in the terms incorporated in the said order and decree was accordingly drawn on 31-5-2001.
6. ' Mr. Muhammad Shafi Siddiqui, learned counsel for defendant No,3 besides disputing the execution of above referred three documents by defendant No,3 asserted that vide pledge letter dated 6-2- 1999 ship scrap valuing Rs.85,500,000 was admittedly pledged with the plaintiff-Bank but subsequently without the knowledge of defendant No,3 same was unlawfully removed in collusion with plaintiff and defendant No,2 for which initially a complaint was lodged by the plaintiff-Bank with F.I.A. On 25-10-2000 and thereafter an F.I.R. Has also been lodged. In such circumstances, relying on sections 139 and 141 of the Contract Act 1872, he contended that the present suit for recovery of Rs.7,57,52,367 cannot be maintained against defendant No,3, who was simply surety/guarantor in the matter and stood relieved of his liability due to such misappropriation of scrap. He next referred the letter dated 2nd December 1999 and urged that without the knowledge and consent of defendant No,3 the terms of original contract of finance facility between plaintiff and defendants Nos.1 and 2 were altered and in such circumstances by virtue of section 133 of Contract Act, liability of defendant No,3 stood discharged. In support of his arguments, learned counsel placed reliance on the following cases:-- ' PLD 1986 SC 83; PLD 1966 Lahore 1; PLD 1984 Karachi 211; 2000 CLC 819; AIR 1967 SC 1105; AIR 1944 Lahore 482 and AIR 1938 Madras 422.
7. ' On the strength of above contentions learned counsel contended that not only on facts but legally also defendant No,3 has succeeded to bring before the Court genuine defence against the claim of plaintiff and thus his leave to defend application may be allowed unconditionally.
8. ' In reply to the above arguments, Mr. Zubair Qureshi referred various documents filed by the plaintiff and defendant No,3 and contended that in his statement before F.I.A. (Annexure D/24 to the application for leave to defend) the defendant No,3 has not denied the execution of various documents in favour of bank on the basis of which the present suit for recovery has been instituted against him and in such circumstances the whole defence set up by defendant No,3 falls on the ground. Placing his reliance on a recent decision of Honourable Supreme Court of Pakistan in the case of Messrs Huffaz Seamlen Pipe Industries Ltd. And 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419 he contended that unless some genuine and strong case was made out by defendant No,3 to dispute the claim of plaintiff his leave to defend application is liable to be dismissed. He specifically referred paragraphs 5 and 6 of the plaint to show the claim of plaintiff-Bank against defendant No,3 and contended that the original registered irrevocable general power of attorney dated 31-10-1998 and lease agreement dated 28-11-1994 are in possession of plaintiff which prima facie prove the genuineness of the claim of the plaintiff against defendant No,3. He also referred the contents of letter of guarantee executed by defendant No,3 in favour of plaintiff and contended that such guarantee executed by defendant No,3 is unqualified and unconditional to other eventualities, therefore, on the basis of this document alone suit against defendant No,3 can be decreed.
9. ' I have carefully considered the arguments advanced by the learned counsel for the parties and perused the relevant record available before me. From the submissions made by the counsel for defendant No,3, as noted above, and on perusal of material available on case record and the cases cited at the bar, I am convinced that defendant No,3 has succeeded to make out a plausible case for grant of his leave to defend application in the present suit.
10. ' At this stage Mr. M. Shafi Siddiqui learned counsel for defendant No,3 makes a statement on behalf of defendant No,3 that till final disposal of this suit, allegedly mortgaged land viz. 15 acres of Industrial/Commercial land from Naclas No,24, City Survey 285, Deh Dih Tapo Ibrahim Haideri Taluka and District Malir Karachi will not be sold or encumbered by defendant No,3 in any manner whatsoever.
11. ' In view of the above statement of learned counsel for defendant for defendant No,3, which shall be binding on defendant No,3 leave to defend application is allowed unconditionally.