CH. IJAZ AHMAD, J.---Brief facts out of which the present appeal arises are that the respondent- Bank has opened a Letter of Credit on 24-5-1981, on the request of appellant and respondents Nos.2 and 3. The goods arrived in Pakistan but the appellant and respondents Nos.2 and 3/defendants failed to get the same cleared through Custom. The respondent-Bank paid the Customs Duty and other taxes on behalf of the appellant and respondents Nos.2 and 3 in terms of Letter of Credit dated 24-5-1981 and secured physical custody of the goods. The respondent-Bank had paid Rs.7,95,199.00 which was debited to the loan against the imported Merchandize No.56 of appellant and respondents Nos. 2 and 3 on 17-10-1981, out of which a sum of Rs.3,25,000 was paid by the appellant and respondents Nos.2 and 3 on the said date. The remaining outstanding of the respondent-Bank is amounting to Rs.4,70,199.00. The appellant and respondents Nos.2 and 3 did not discharge their liability in terms of Letter of Credit. Respondent-Bank being aggrieved filed a suit for recovery amounting to Rs.2,46,024.00 along with interest @ 14% per annum against the appellant and respondents Nos.2 and 3 in the Banking Court No.1, Lahore.
2. Appellant along with respondents Nos.2 and 3 filed an application for Leave to appear and defend before the learned Banking Court. After receiving reply from the respondent- Bank the learned Banking Court refused to grant leave as prayed and decreed the suit vide impugned judgment and decree dated 7-6-1999. Appellant being aggrieved filed this appeal.
3. Learned counsel of the appellant submits that the trial Court failed to appreciate the controversy that the letters referred to are not by the appellant. He further submits that stamps were not crossed and the suit of the respondent-Bank was highly time-barred, which contentions and pleas of the appellant were rejected by the Banking Court in the impugned judgment and decree without application of mind. He further submits that goods were in the custody of the respondent-Bank which were not given by the respondent-Bank to the appellant. This fact cannot be decided without recording evidence. The Banking Court decided the same without application of mind. He further submits that suit was filed by incompetent person on behalf of the respondent-Bank.
4. On the other hand, learned counsel for respondent-Bank submits that appellant admitted the liability vide letter dated 20-8-1985 and the suit was filed by the respondent-Bank well within time and the contentions raised by the counsel of the appellant before the Banking Court were duly considered and rejected by the Banking Court in paras. 4, 5 and 6 of the impugned judgment and decree.
He further submits that goods were given to the appellant on their request and appellant has misappropriated the goods, therefore, impugned judgment and decree is valid.
5. We have given our anxious consideration to the contentions of the learned counsel of the parties and perused the record ourselves.
6. It is better and appropriate to reproduce paras.2 and 3 of the plaint and para.4 of the application for leave to defend and reply of application for leave to defend.
Paras. 2 and 3 of the plaint.
2. That defendant No.1 is a partnership firm and defendants Nos.2 to 4 are the partners thereof. On the request of the defendants, the plaintiff allowed to the defendants loan and financial facility in the matter of import of electric cables and wires of the value of U.S. Dollars 51,476.00 to be imported from Osaka, Japan and opened at Letter of Credit on 24-5-1981 in that behalf. The goods arrived in Pakistan but on the failure of the defendants to get the same cleared through customs, the plaintiff did the needful and after paying all the taxes and duties in that behalf obtained the physical custody of the goods. The costs of goods and the taxes etc. paid thereupon totaling Rs.7,95,199.00 were debited to the Loan against Imported Merchandise No.56 of the defendants on 17-10-1981 out of which a sum of Rs.3,25,000 was paid by the defendants on the same date thereby leaving a debit balance of Rs.4,70,199.00.
3. That on the request of the defendants, the plaintiff kept the said imported merchandise in the premises of the defendants at 41-Lawrence Road, Lahore under "Open Pledge" but by their dishonest, fraudulent and deceitful acts, the defendants have since removed the said goods and sold the same thereby misappropriating the proceeds thereof."
Para. 4 of application for leave to defend.
That the plaintiff-Bank had obtained the delivery of goods directly as according to banks averments in the plaint the duties taxes and other ancillary charges were paid by the Bank itself.
The allegation that the goods were under open pledge is vehemently refuted. The goods were under effective lock and key of plaintiff-Bank which is also ascertainable from Insurance charges paid by the Bank and debited to the LIM A/C of defendants.
Reply of application for leave to defend.
Incorrect and denied. The averments of the plaint are reiterated. The allegations to the contrary are denied. The goods were under open pledge and were placed in the premises of the applicants who disposed of the same without the consent of the plaintiff and misappropriated the proceeds thereof.
Mere reading of the aforesaid paragraphs makes it crystal clear that according to the version of the respondent-Bank the goods were handed over to the appellant on his request. It is pertinent to note that the respondent-Bank did not bring anything on record so as to show that any written request was made by the appellant for the delivery of goods or any receipt from appellant so as to show that the goods were handed over to the appellant. This fact brings the case in the area that the Banking Court has decided the controversy between the parties without application of mind which is a condition precedent as per law laid down by the Honourable Supreme Court in the following judgments:-- Gouranga Mohan Sikdar v. Controller of Import and Export and 2 others PLD 1970 SC 158; Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 173.
7. So far as the findings qua suit of the respondent was time-barred and stamps were not crossed have no force in view of the letter of the appellant dated 20-8-1985, although, appellant has used the letter pad of Carpet Sale Corporation Limited, the signatures on this letter and application for leave to defend are exactly similar which is the proof that the appellant has accepted the liability and acknowledged the same in terms of the contents of the letter dated 20-8-1985, therefore, contention of the learned counsel of the appellant on the basis of sections 19 and 21 of the Limitation Act have no force. The Banking Court has rightly rejected the same in para.4 of the impugned judgment. Similarly, the findings of the Banking Court in para.5 with regard to the stamps are also valid as we have seen the stamps, which are crossed and signed. Similarly, the contentions of the appellant that suit is not filed by a competent person has no force in view of the law laid down by the Division Bench of this Court in Muhammad Ramzan's case reported as 2001 CLC 158. As mentioned above, the factual controversy is not decided by the Banking Court and there is no document on the record on the basis of which we can decide the factual controversy with regard to the goods whether the goods were given back to the appellants on the request of the appellants by the respondent-Bank or not. In this view of the matter, to this extent the impugned judgment is set aside, therefore, we grant leave to defend to the appellant subject to their furnishing two sureties of equal amount qua the claimed amount mentioned in the plaint, of two persons whose property is to the extent of the amount claimed in the plaint to the satisfaction of Banking Court within one month. In case the appellants failed to furnish securities in aforesaid terms, within the prescribed period then this order shall not be operative automatically. Parties are directed to appear before the Banking Court on 4-5-2005.