MIAN HAMID FAROOQ, J.---Messrs Ravi Enterprises and two others, the appellants, through the filing of the present first appeal, have called in question judgment and decree dated 12-10-2000, whereby the learned Judge Banking Court, after dismissing appellant's application for the grant of leave to defend the suit, proceeded to pass a decree for recovery of Rs.49,99,593, against the appellants.
2. Precisely stated the facts, relevant for the decision of the present appeal, are that the respondent-Bank filed the suit for recovery of Rs.84,71,000, with future mark-up at the rate of 20%, against the appellants, before the learned Banking Court, inter alia, pleading that defendants Nos.1 and 2 availed the financial facility of rupees 5.100 Million by way of L/C; the defendants executed the documents as mentioned in paras 10, 12 and 13 of the plaint; the defendants issued four bills of exchange in respect of L/C facility, which were dishonoured outstanding amount was converted into finance against dishonoured bills (FADB); the said financial facility was further converted into running finance facility and appellant's failure to liquidate their liabilities necessitated the filing of the suit. The appellants filed the application seeking leave to defend the suit, asserting therein that the matter in issue is directly in issue in the previously instituted appellant's suit for damages, therefore, the suit merits dismissal. The appellants also challenged the entries in the statement of accounts and the authority of the attorneys to file the suit, as no resolution, passed by the Board of Directors, was appended. It was further the case of the appellants that they have liquidated the financial facility as far back as on 31-12-1991. The learned Banking Court, after hearing the parties, found that it is not fit case for the grant of permission to the appellants to defend the suit, dismissed their leave application and consequently, proceeded to pass a decree for recovery of Rs.49,99,593, vide impugned judgment and decree dated 12-10-2000, hence the present appeal.
3. Learned counsel for the appellant has contended that since the suit for recovery, filed by the appellants, was decreed, though later in point of time, therefore, the appellants are entitled to the grant of leave to defend the suit. He has further submitted that the impugned judgment is not sustainable in law. Conversely, the learned counsel for the respondent-Bank has supported the impugned judgment and decree.
4. The principal stance of the appellants, before the learned Banking Court as well as in the present appeal, is that as the matter in issue in Bank's suit for recovery is directly and substantially issue in the previously instituted appellant's , suit for damages, therefore, the suit, filed by the respondent- Bank, deserves dismissal. After hearing the learned counsel for the parties and examination of the records of both the suits, we are of the firm view that under the present set of circumstances, neither section 10 nor section 11 of the Code of Civil Procedure is attracted in the present case.
Additionally, provisions of section 9(2) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and section 9(4) of Financial Institutions (Recovery of Finances)
Ordinance, 2001, specifically exclude the applicability of section 10 of the Code of Civil Procedure in relation to the suits, filed under the said enactments. Even otherwise, the principal plea, upon which the appellants were banking upon, stands extinguished as this Court, today, while deciding two appeals (R.F.A. Nos.901 and 902 of 2001), has set aside the decree for recovery of Rs.65,43,992, passed by the learned Banking Court in favour of the appellants. We have examined the application, filed by the appellants, for leave to defend the suit and find that although they raised certain objections, yet availing of financial facility and the execution of documents have not been denied, inasmuch as it has been claimed that the appellants liquidated their liabilities. To our mind, no case for the grant of leave to defend the suit has been made out by the appellants, however, pendency of appellant's suit for, recovery as damages has persuaded us to grant them leave to defend the suit, of course subject to condition. The respondent-Bank filed a suit for recovery of Rs.84,71,000, wherein the principal amount claimed is Rs.5.100 Million. Under the circumstances, we feel that if the appellants are put to some conditions in order to secure, at least, the principal amount, that will meet the ends. of justice. As the principal amount is huge, therefore, it appears appropriate to direct the appellants to furnish the bank guarantee to the tune of Rs.2 Millions, and to submit surety bond regarding rest of the amount within a period of two months.
5. In the above perspective, we are inclined to set aside the impugned decree, accept appellant's application for the grant of leave to defend the suit and allow them to defend the suit subject to the furnishing of bank guarantee, and surety bond, as noted above. In view whereof, the impugned judgment. and decree are set aside.
6. Upshot of the above discussion is that the present appeal stands finally decided in the following terms:-
(i) Present appeal is allowed and the impugned judgement and decree are set aside.
(ii) Appellant's application seeking leave to defend the suit is also accepted, subject to the condition of furnishing bank guarantee, amounting to Rs.2 Millions, and surety bond for a sum of 3.1 Millions to the satisfaction of the learned Banking Court within a period of two months from today.
(iii) If the appellants fulfil the conditions, as noted above, within the stipulated period, in that case the learned Banking Court shall decide the suit, after framing the issues, recording the evidence of the parties and of course in accordance with law.
(iv) If the appellants do not fulfil the conditions subj NI to which leave has been granted, their application shall be deemed to be dismissed and needless to add that the law will take its own