' MIAN SAQIB NISAR, J.---While rejecting the leave application of the appellants, learned Banking Court, vide judgment and decree dated 19-4-1999, has allowed the suit of the respondent-Bank filed against the appellants.
2. Briefly stated the facts of the case are that appellant No, 1, applied for the financial assistance to the respondent-Bank, which was allowed under the sanction advise dated 18-1-1994 and through the financial agreement dated 7-7-1994, duly executed between the bank and the borrower, the facility amounting to Rs.7.5 million under L.M.M. Scheme, was duly provided to the said appellant; the appellants Nos.2 and 3, who are the Chief Executive and the Director respectively of the appellant No,1, duly executed certain documents, including registered floating charge over the property of the appellant No,1; the pronote and also created equitable mortgage of the immovable properties.
3. In view of the nature of the facility, appellant No,1, further entered into a contract with Messrs Classic Engineering (Pvt.) Ltd., who was to supply the machinery for the project of the said appellant and the payment of the price on account of the above to the seller was directly to be made by the respondent-Bank, out of the said facility. On the specific request of the appellant No,1, showing full satisfaction about the quantum and quality of the machinery supplied to it, the bank has disbursed the amount to Messrs Classic Engineering (Pvt.) Ltd. Subsequently, as the liability was not discharged by the appellants, the respondent-Bank was constrained to file the suit for recovery before the Banking Court at Lahore. The appellants filed their application for leave to appear and defend, in which, they evasively denied their obligation, to repay the suit amount.
4. It may be pertinent to state here that prior to the institution of the above suit, the appellants had also filed a Civil Suit bearing No,35 of 1997, before the learned Banking Court, challenging the aforementioned finance agreement and also the documents, executed by them for securing the facility, imputing those to be the result of fraud and misrepresentation. The suit was dismissed by the Court on 6-6-1997, against which, the appellants preferred a writ petition, which as has been apprised by the learned counsel for the respondent-Bank, the factum not denied 'by the appellant's counsel, also stands dismissed for the non-prosecution.
5. Be that as it may, learned Banking Court has refused the leave to the appellants and has decreed the suit to the tune of Rs.1,51,01,219. Hence this appeal.
6. Mr. Asghar Hamid Bhutta, learned counsel for the appellants contends that Messrs Classic Engineering (Pvt.) Ltd., had never supplied the machinery to appellant No,1, which was the condition precedent for the entitlement of the seller to receive the amount and the obligation of the bank to pay, but as the supply was not made, consequently, any payment made by respondent-Bank, on account of the LLM facility of appellant No,1, shall be unauthorized, illegal and result of collusion between the respondent-Bank and the seller. Therefore, the appellants are not bound to pay such amount. It is further stated that the appellants not only had denied the execution of certain document, filed alongwith the plaint, by the bank but also the letters filed by the respondent, with the reply to the leave application, showing that the payment to the seller was made on the instructions of the appellant No,
1. Therefore, the circumstances warranted the grant of leave to prove and disprove the aforesaid documents, enabling the parties to produce the evidence.
7. We have heard learned counsel for the parties. As far as the factum about the sanctioned advice, the execution of the finance agreement, the floating charge, the pronote and the documents pertaining to the creations of equitable mortgage is concerned, there is no denial that those had not been executed as are represented by the bank. However, the stance of the appellants in the leave application is, that the machinery had not been supplied by Messrs Classic Engineering (Pvt.) Ltd. And payment was unauthorizedly and illegally made to it by respondent- Bank, suffice it to say that this plea of the appellants, is duly controverted by virtue of the agreement between appellant No,1 and the Messrs Classic Engineering (Pvt.) Ltd. For the purchase of the machinery, coupled with large number of letters, which have been appended along with the reply to the leave application and are dated 16-8-1994, 24-12-1994, 12-6-1994, 11-10-1995 and 16-6- 1996; these are all on the letter head of appellant No,1, particularly, letter dated 16-8-1994, is in the handwriting of appellant No,2, who is the Managing Director of appellant No, 1 . The collective reading of all these letters, clearly shows that it is appellant No,2, Managing Director, who has been shown his full satisfaction about the supply of the machinery and has been requesting the bank to make the payment of the price to the supplier. It is on the basis of the above, that through various cheques, which are on the record, the payment to Classic Engineering Pvt. Ltd. Was made.
8. Except the evasive denial, Mr. Asghar Hameed Bhutta, the learned counsel for the appellant has failed to explain, as to why the above letters be adjudged as fake and fabricated, when those are on the letterhead of the appellant No,1, the signature of appellant. No,2, on the admitted documents such as finance agreement, etc. On visual inspection tally with those on these letters. Moreover, it has not been denied, if the letter dated 16-8-1994, is not in the handwriting of the said appellant.
Further when questioned, he has not been able to show if before the reply to the legal notice, issued by the respondent to the appellants, it was ever complained to the respondent-Bank that the machinery has not been supplied by Messrs Classic Engineering (Pvt.) Ltd. Or there is any deficiency or defect in the supply and therefore, no payment should be made to the supplier. To our mind, it seems to be a clear case of misstatement and the defence set out in the leave application is evasive, illusionary and improbable and perhaps has been set out just to delay and prolong the matter, otherwise, no substantial questions of law of fact, has been raised. In such circumstances, we do not find any error in the judgment of the learned Court below, which for the additional reason herein stated, is hereby upheld, resultantly, the appeal is dismissed.