1. ' ANWAR ZAHEER JAMLI, J.---This appeal under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, is directed against the judgment and decree dated 6-4-1999 passed by the Banking Court No,III, Karachi in Suit No,26 of 1995, whereby the suit for recovery of Rs.24,23,265.88 filed by respondent No,1 was decreed against defendants Nos.1 to 4 in the suit, including the appellant.
2. ' Precisely, the case of the appellant is that he was merely Director of the borrower Company Messrs French Food Products (Pvt.) Ltd. (respondent No,2) and had not executed any personal guarantee or undertaking in favour of respondent No,1-Bank to pay their liability, therefore, passing of the decree against him by the Banking Court in his personal capacity was not warranted by law.
3. ' The appeal, being time-barred, is accompanied with an application under section 5 of the Limitation Act, being C.M.A. No,726 of 2001, whereby the appellant has sought condonation of delay in filing of this appeal on the ground that though the judgment in the suit was announced on 6-4- 1999 but he was not aware about this judgment until receipt of letter from the decree-holder-Bank in December, 2000, threatening to report matter to F.I.A. He further stated that the learned Banking Court Judge had kept the suit file in its Chambers without giving any date after 4-9-1998 and the judgment was announced after about eight months without any intimation or notice of such date to the appellant, therefore, he had no knowledge of such judgment earlier.
4. ' In order to verify this aspect of the case we have called the R and Ps of the suit from the Banking Court and in this context passed following order on the last date of hearing:-- "In compliance of order dated 20-1-2004 passed in this appeal Mr. Imran E. Rajput, UDC of Banking Court No,III, Karachi, is present in Court. He has filed a statement explaining the position regarding supply of certified true copies of judgment and decree to the appellant. The facts stated in his statement are confirmed from the relevant record which he has brought with him. The concerned clerk of the Banking Court has also brought Photostat copies of the cause list of the Banking Court No,III, Karachi, for the relevant period which indicate that after 4-9-1998 till passing of impugned judgment dated 6-4-1999 in Suit No,26 of 1995 it was not listed in cause list on any date. Thus, his statement that the suit file was kept by the Presiding Officer during this period is also confirmed.
5. ' Learned counsel for the appellant, has filed a statement in compliance of the ' order dated 20-1- 2004 which is accompanied with another photostat copy of letter issued by M.C.B. He has also filed affidavit of Saleem Hayat Khan. Copies of these documents have been supplied to other side.
6. ' Learned counsel for respondent No,1 requests Tor time to file reply to the affidavit filed in Court by the appellant side.
7. ' By consent adjourned to 18-2-2004."
8. (Sd.) (Sd.)
9. Judge Judge ' Mr. Masood Shahreyar, the learned counsel for decree-holder Bank is unable to controvert the stand taken by the appellant for seeking condonation of delay in filing of appeal, which is duly supported from the record of the proceedings in the suit. He, however, referred to the counter- affidavit filed by the Bank Officer showing that after passing of decree two letters were dispatched to the appellant on 6-8-1999 and' 23-12-2000. In the rejoinder filed by the appellant, he has categorically denied the assertion of the decree-holder-bank/respondent No,1 in this regard and has stated that he never lived at the addresses at which such notices were dispatched. He has also made categorically statement on oath that' he had no earlier knowledge of the passing of the impugned judgment and decree against him by the Banking Court. It is well-settled principle of law that no party shall be made to suffer due to the act or omission of the Court in the performance of its duties. In the instant case, it is appearant from the case record that the suit file was kept by the Presiding. Officer of the Banking Court in his Chambers for more than 'eight months and thereafter without any notice of any date of hearing in the suit or intimating the parties concerned about pronouncement of judgment, judgment was announced on 6-4-1999 after eight months. In such circumstances, which are borne from the case record and duly supported with the assertion of the appellant in his supporting affidavit to C.M.A. No,726 of 2001 and the rejoinder filed thereto, we find that the appellant has succeeded to make out his case for condonation of delay in filing of appeal.
10. Accordingly C.M.A. No,726 of 2001 is allowed.
11. ' Reverting to the merits of the appeal we find that this position is clearly visible from the case record (R and Ps of the suit file) and even the learned counsel for the respondent No,1-Bank has not been able to controvert that the appellant was neither the guarantor nor he had executed any documents in his personal capacity to share the liability of respondent No,2-company. Mr. Masood Shahreyar, has made reference to the letter of hypothecation and the letter of memorandum of deposit of title deeds which is signed by the directors of the respondent No,2 company, including the appellant. Indeed, these documents have been signed by the appellant but in the capacity of Director of respondent No,2 company, therefore, on the basis of these two documents the liability of respondent No,2-Company cannot be shifted in person against the appellant. This view of the matter is supported from 'the case of Ayaz Durrani and others v. Chairman, WAPDA and others, reported in PLD 2000 Lahore 414. However, on the basis of above-referred two documents the hypothecated goods and property under mortgage by way of deposit-of title deeds -Would be liable to be attached and sold towards satisfaction of decree passed against the respondents.
12. ' Mr. Salman Hamid, learned counsel for the respondent No,5 has also candidly conceded to this settled legal position that liability of respondent No,2 company could not "ipso facto" fall upon its directors, who had no personal liability upon execution of documents on behalf of the company unless they have stood guarantor or executed other documents undertaking such liability as their personal liability in any capacity. We also find no cavil to this legal position. Accordingly the impugned judgment and decree, to the extent it creates any personal liability against the appellant, is set aside. It may again be clarified that irrespective of this judgment, rights created in favour of. Respondent No, 1 /decree-holder Bank on the basis of letter of hypothecation and memorandum of deposit of title deeds shall remain enforce.
13. ' The appeal is allowed in the above terms.