' JAWWAD S. KHAWAJA, J.--This appeal impugns the judgment and decree dated 23-6-1999 passed by the learned Banking Court.
2. The facts of this case are relatively straightforward. The respondent Atlas Lease Limited filed a suit against the appellants-defendants for the recovery of a sum of Rs,1,92,48,194 as outstanding lease rentals together with mark-up and liquidated damages. The appellants-defendants filed an application under section 10 of Act XV of 1997 for grant of leave to appear and defend the suit. The said application was disallowed by the learned Banking Court on the ground that no serious or bona fide defence had been raised by the appellants-defendants. The learned Banking Court, however, disallowed the amount claimed by the respondent leasing company by way of additional lease rentals. As a consequence, the suit was decreed for a sum of Rs,1,20,33,175 with costs.
3. Before us learned counsel has firstly submitted that the lease transaction asserted by the respondent on the basis of an equipment lease agreement dated 3-12-1993 is fictitious. It was argued that the equipment allegedly leased by the respondent company was owned by the said company. It was also installed at the premises of the first appellant and was being used by it when a fictitious sale of the same was statedly made by the first appellant in favour of the respondent company. It was further contended that there was no agreement of sale between the parties and that the entire device adopted by the respondent company was with the object of circumventing the restriction on the respondent against lending money.
4. It was not denied by learned counsel for the appellant that a sale invoice dated 23-11-1993 had been made out by the appellant company to sell the- equipment in question to the respondent leasing company for a sum of Rs, 1,00,00,000. The execution of the equipment lease agreement dated 5-12-1993 by the appellant company was also not disputed. It was, however, contended that although the sale invoice was for Rs,1,00,00,000, a sum of Rs,76,12,900 only was disbursed to the appellant company. Out of the said sum an amount of Rs,28,46,525 was paid back to the respondent company.
5. On the basis of the above submissions, it was contended on behalf of the appellants that the appellant was only liable for repaying the balance of Rs,47,66,375 to the respondent company. We have considered the arguments of learned counsel for the appellants and find that the same are misconceived. The mere fact that the equipment in question was initially owned and was being used by the appellant does not mean that the appellant company could not have sold the equipment to the respondent leasing company. The fact that the said equipment was in fact sold is proved firstly by the sale invoice and secondly by the equipment lease agreement, wherein the appellant company has acknowledged that the aforesaid equipment is the property of the respondent leasing company.
6. We also note that although a sum of Rs,76,12,900 only was disbursed to the appellant company out of the total sale price of Rs, 1,00,00,000, the balance undisbursed amount was also paid/deposited in accordance with the instructions of the appellant company. Significantly, it is to be noted that the appellants did. Not at any point prior to the filing of the respondent's suit, raise any grievance either on the score that the lease transaction was a sham or that the entire sale consideration of Rs,1,00,00,000 had not been paid by the respondent company. This again is relevant considering that the lease transaction took place in December, 1993, while the respondent company had filed its suit for recovery on 1-7-1998. Furthermore, the other circumstance that the appellant company had itself paid a sum of Rs,28,46,525 as lease rentals is also proof of the relationship of lessor and lessee between the respondent company and the appellant company.
7. The cumulative effect of the above circumstances is to establish that the appellant company had accepted and was bound by the terms of the equipment lease agreement dated 3-12-1996. It is now too late in the day to raise the pleas noted above. In the circumstances, we agree with the learned Banking Court that the appellants had not raised any serious or bona fide dispute justifying the grant of leave to appear and defend to them. The decree for Rs,1,20,33,175 with costs was, therefore, rightly passed by the learned Banking Court.
8. Before parting with this judgment we need to note that the respondent company has also preferred an appeal (R.F.A. No,456 of 1999) to challenge the same judgment and decree dated 23- 6-1999, which has been impugned in the present appeal. In the said appeal the respondent company has claimed additional lease rentals, which were denied to it by the learned Banking Court. Although the said appeal was listed for hearing alongwith this appeal today, we have had to adjourn the same as there is no Court time left to hear the said appeal.
9. This appeal, however, is dismissed for the reasons discussed above.