1. ' The plaintiff (Bank) filed a suit for recovery of Rs.2,04,73,736.86 against the defendants before the Banking Tribunal, Bahawalpur on 19-1-1994 under the Banking Tribunals Ordinance, 1984. An ex parte decree was passed against the defendants by the Banking Court No,2, Bahawalpur on 26-11- 1998. The defendants made an application C.M. No,774-B of 2001 for setting aside the ex parte decree dated 26-11-1998. After the promulgation of Corporate and Industrial Restructuring Corporation Ordinance 2000 the defendant No,1 was declared as "nonperforming asset" and was taken over by the CIRC (Corporate and Industrial Restructuring Corporation) under section 18 of the aforementioned Ordinance and it (CIRC) substituted the Bank. After the receipt of the case in this Court the ex parte decree dated 26-11-1998 was set aside vide order dated 10-12-2002.
2. ' The facts adumbrated in the plaint are that the defendant-Company was allowed a Non-Refund Based Finance Facility for the import of Palm Oil against L.Cs. Up to Rs.1,70,00,000. Two Letters of Credit Nos.312/005/ 1991 dated 30-5-1991 and No, 312/006/1991 dated 25-7-1991 were established in favour of the Foreign Exporters. L.C. No,1 was opened for US$ 3,38,000 (Pak Rs.80,92,660 at the relevant time). The same was enhanced to US$ 3,46,000 (Pak Rs.85,61,582.19 at the relevant time) at the request of defendant-Company. According to the terms and conditions of the L.Cs. The amount was repayable by or before 23-10-1991.
3. ' L.C. No,II was established for US$ 2,30,400 (Pak Rs.57,08,805.12 at the relevant time), the same was reduced to US$ 2,28,600 (Pak Rs.56,68,822) at the request of the defendant-Company. As per terms ind conditions of the L.C. The finance was repayable by or before 12-12-1991.
4. ' In order to secure the L.Cs./finance facility the defendants executed the following documents in favour of the plaintiff:--
(i) Application and Agreement for irrevonble documentary Letter of Credit dated 30-5-1991.
(ii) Application and Agreement for irrevocable documentary Letter of Credit dated 25-7-1991.
(iii) Personal Guarantees dated 30-5-1991 of 'he defendants.
5. ' In addition to the aforementioned documents defendant-Company created mortgage charge in favour of the plaintiff on its fixed and floating assets up to Rs.5,00,000 registered with the Registrar Joint Stock Companies, Multan. Plot No,13 measuring 24 Kanals with building thereon and land measuring 281 Kanals. 14 Marlas, (the detail of which has been given in the plaint) were also mortgaged. Despite notices the defendants failed to liquidate their liability.
6. ' The defendants filed their written statement (reply to the show-cause notice) under the Banking Tribunals Ordinance, 1984. After promulgation of the Financial Institutions (Recovery of Finances)
7. Ordinance, 2001, the defendants filed an amended application for leave to defend the suit under section 10(12) of the Ordinance.
3. Learned counsel for the plaintiff contended that the L.Cs. Were duly established in favour of the Exporters, the defendants availed the finance facility against the security documents. They have not paid off their debts. He prayed for a decree as per statement of account appended with the plaint.
8. ' Learned counsel for the defendants submitted that the imported Oil was in the control of the plaintiff. It had posted its guards and godown keeper at the premises. The Oil is worth more than Rs.4 crore, the same has been misappropriated by the plaintiff. The suit for recovery of damages against the plaintiff is pending. The liability of the defendants can only be determined if the evidence is recorded. Learned counsel further added that the guarantees were obtained on blank papers and that in these circumstances the application for leave to defend the suit be allowed.
9. ' I have considered the arguments of the learned counsel for the parties and perused the record.
10. The defendants have admitted the opening of the L.Cs. In favour of the Exporters and availing the finance facility. The Oil was imported and duly reached Pakistan. The question whether the Oil was misappropriated by the Bank or sold by the defendants cannot be gone into in the instant suit. The plaintiff has lodged an F.I.R. Against the defendants for the theft of the Oil. The defendants have filed a suit for recovery of damages. If the suit of the defendants is decreed they can recover the amount. The finance obtained by the defendants is duly secured by the aforementioned security documents. In these circumstances no case for leave to defend the suit has been made out. The application for leave to defend the suit of the defendants/applicants is, therefore, dismissed. The claim for 20% liquidated damages amounting to Rs.34,12,289.47 is rejected as the same having not been proved. See Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd. Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596. The suit is, therefore, decreed for a sum of Rs.1,70,61,447.39 with costs and cost of funds as envisaged in section 3(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.