' SABIHUDDIN AHMED, J.---This appeal is directed against the order of the learned 1st Banking Court dated 13-6-1998, directing the Commissioner to prepare an inventory of the leased equipment in possession of the appellants and delivered the same to the respondent.
2. By way of factual background, it may be stated that the respondents are a Modaraba Company engaged in the business of leasing machinery and equipment etc. The appellants entered into an agreement with the respondents for leasing certain diesel generating sets for a period of three years, the monthly rent for the first 12 months being Rs,210,330 and for the remaining 12 months at Rs,1,50,000 vide lease agreement dated 16-6-1996. Personal guarantees were furnished by the appellants Nos,2 and 3, for repayment of the amount. According to the respondent the appellants kept paying lease rental up to December, 1996 in accordance with the agreement, but defaulted subsequently, whereupon the respondent filed Suit No,5 of 1997, for recovery of Rs,2,030,029 before the 1st Banking Court, Karachi, claiming the amount due together with penalty and damages. The appellant upon being served filed a reply statement and after hearing the counsel for the parties the learned Banking Court decreed the suit in the following terms:-- "In the light of the above circumstances, the plaintiffs' suit is decreed against the defendants in the sum of Rs,14,48,000 with costs. The defendants are directed to deposit a sum of Rs,5,20,000 within 30 days in Court from today and the balance decretal amount to be deposited in 24 equal monthly instalments. In case if four consecutive defaults the entire decretal amount shall become due and payable at once and the defendants shall be liable to return the leased equipment to the plaintiff forthwith. The defendants are directed to pay accruing monthly rentals to the plaintiff directly without fails."
3. Apparently though the appellants deposited the amount of Rs,520,000 on 12-12-1997, they did not pay the monthly rental, whereupon the respondent moved an application, seeking return of the equipment. An order was passed upon the aforesaid application, apparently without notice to the appellants appointing Mr. Bashir Ahmad Memon, presently Official Assignee of the Court, as Commissioner to make inventory of the leased assets and take possession thereof. The aforesaid Commissioner addressed a letter dated 13-2-1998 to the appellants requiring them to permit him to prepare the required inventory and take possession of the leased assets in the presence of a representative of the respondents. Consequently the appellants on having become aware of the order submitted an application for the recall thereof before the Banking Court. This application was contested by the respondents. Apparently on 2-6-1998 i,e, the date of hearing of the appellants' application, the appellant No,2 who is also the Chief Executive of the appellant No,1 and husband of appellant No,3 appeared and acknowledged the liability of the appellants to pay lease rental in the sum of Rs,2,334,506 up to April, 1998, and promised to pay the same up to 10-6-1998. The matter was therefore, adjourned to 13-6-1998. On the adjourned date of hearing however, nobody on behalf of the appellants appeared and thereupon the learned Banking -Court passed the impugned order.
4. Aggrieved by the above, the appellants have preferred this appeal.
5. Before discussing the Contentions of the parties it may be mentioned that on the date of the admission of this appeal the Court was apparently given the impression that the appellant had paid the amount of Rs,2,334,530 towards lease rentals and yet the impugned order was passed, consequently the appeal was admitted for regular hearing and the operation of the orders stayed.
The respondents however, have filed an application under Order 39, rule 4, C.P.C. Alleging that a misunderstanding was created by the appellants, as is evident from the impugned order, the appellants had only promised to pay such amount. The appellants have not filed any counter- affidavit to the aforesaid application and in fact the statement of payments up to 30-6-1998 filed by themselves does not indicate any such payment having been made.
6. Be that as it may Mr. Anwar Muhammad Siddiqui, learned counsel for the appellants contended that after the decree the appellants had been faithfully complying with its terms inasmuch as Rs,5,20,000 were deposited on 12-12-1997 and a further amount of Rs,77,332 covering the first two of the 24 monthly instalments was also deposited on 20-2-1998 as such no occasion had arisen for the learned Banking Court, to assume that the terms of the decree had not been adhered to. In any event the entire decretal amount and the direction to return the leased assets could have become operative only in the event of default in depositing four consecutive monthly instalments and therefore, the impugned order was illegal and liable to be set aside. Moreover, he contended that even after the passing of the impugned order the appellants had paid a further amount of Rs,5,00,000 to the respondent and out of the agreed amount to Rs,6,126,360 and amount of Rs,2,911,312 had already been paid by the appellant which was not denied by the respondent. In the circumstances the order directing return of leased assets was highly unjust and inequitable.
7. Mr. Anwar Mansoor Khan, learned counsel for the respondent on the other hand argued that the decree of the Banking Court had to be read as a whole and while it may be true that the appellant had complied with the first part to the effect that the initial payment and monthly instalments of the decretal amount were deposited, the direction to pay monthly rentals without fails was clearly violated. Moreover he contended that in terms of the lease agreement the leased assets were always to remain the property of the respondent and were liable to be returned upon the expiry of terms of the lease. The appellants could in no circumstances claim a right to retain such assets or even any equitable interest therein when they had admittedly defaulted in payment of rentals. He also argued that the decree dated 13-11-1997 could not be read in isolation and drew our attention to the terms of the plaint, wherein specific prayer for return of leased assets was made. Therefore, according to the learned counsel, the appellants could not claim a right to retain the leased assets even when he failed to pay monthly rentals despite a specific direction of the Court to such effect.
8. We have carefully considered the respective contentions of the counsel and the documents placed on record. It is indeed true that a superficial reading of the operative part of the judgment dated 13-11-1997 quoted in para. 2 above does convey the impression that the leased equipment was liable to be returned forthwith together with the entire unpaid decretal amount having become payable only in the case of four consecutive defaults committed by the appellants in payment of monthly instalments. Nevertheless upon a careful consideration of the same in the relevant context it appears quite plain that the learned Banking Court could not confer title or ownership of the aforesaid assets when the agreement between the parties in unmistakable terms stipulates in terms of Article 7 that title, ownership and right of property shall at all times remain vested in the Modaraba and Article 9 provides that at the end of the lease terms the leased property would be returned by the lessee in good operating condition and working order. It may also be mentioned that the aforesaid agreement does not even bind the Modaraba to enter into an agreement for sale of the leased property to the lessee.
9. It is indeed true that in terms of the agreement between the parties the lessee was liable to pay Rs,6,126,360 and after 3 years return the leased assets to the Modaraba though, the admitted cost of such assets stipulated in the schedule was about Rs,1 million. Nevertheless, it has neither been shown nor urged that the contract was voidable on the ground of having been obtained through undue influence or void for- being opposed to public policy.
10. In the circumstances we find no substance in this appeal and are constrained to dismiss the same with costs.