1. ' NADEEM AZHAR SIDDIQI, J.---The plaintiff has filed this suit for recovery of Rs, 125,555,349.81 and for sale of mortgaged/hypothecated/pledged properties under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The plaintiff claimed that at the request of the defendant No,1 the plaintiff granted finance/credit facility/ accommodation in the sum of Rs,35 million which was credited to the Account No,420753-56 on 30-6-1990 which was fully availed and utilized by the defendant No,
1. It was stated in the plaint that as security of the repayment of amount the defendant No,1 through the Director created an equitable mortgage in favour of plaintiff by depositing original title deeds of Plot No,F1-3, Block No,10 Gulshan-e-Iqbal, KDA Scheme No,24, Karachi measuring 4845 sq. Yards. The plaintiff further states that as further security the defendant No,1 executed agreement for financing on mark-up basis on 1-7-1991 and agreed to sell to the bank the raw materials/finished goods/ spares/machinery etc. Up to total sum of Rs,35 million and the defendant No,1 further agreed to purchase the said goods from the bank at the price of Rs,41,142,500. The defendant No,1 also executed demand promissory note and letter of hypothecation dated 1-7-1991 in the sum of Rs,41,142,500. It was further stated in the plaint that defendants Nos.2, 3 and 4 executed personal guarantee dated 1-7-1991 guaranteeing the repayment of amount of Rs,41,142,500 to the plaintiff. It was further stated in the plaint that the defendant No,1 failed to make payment and the plaintiff by letter dated 4-10-1992 informed the defendant No,1 that an amount of Rs,48,795,013 was outstanding. Since the payment was not made the defendant by letter dated 12-5-1994 against the defendant No,1 that total outstanding amount comes to Rs,64,902,715. The defendant No,1 by their letter dated 17-9-1996 requested the plaintiff to charge simple mark-up and to reschedule the payment instalments. The defendant No,1 by letter dated 24-6-1997 requested the plaintiff to let them know the outstanding principal amount enabling them to make payment in accordance with State Bank of Pakistan Circular No,19 dated 5- 6-1997, whereby a one time opportunity was given to the borrowers to settle the outstanding loan.
2. The plaintiff further states that on 30-6-1999 a sum of Rs,125,555,439 was due and payable by the defendants.
3. ' After service the defendants Nos.1, 2 and I filed separate application under section 10 of the inking Companies Act No,XV of 1997. No application for leave to defendant was filed by defendant No,3.
4. On 25-11-1999 the application being C.M.As. Nos.8671 and 8672 of 1999 filed by defendants Nos.1 and 2 and defendant No,4 come up for hearing. The defendants Nos.1 and 2 admits the claim of the plaintiff to the extent of 35 million and mark-up of Rs,2.835 million and gives no ejection for interim decree.
5. ' The defendant No,4 in his application pleaded that his signatures on the guarantee has been forged by the plaintiff-Bank and that he is neither a Director nor has ever been connected with the company in any capacity. The application of the defendant No,4 was rejected and the Court passed interim decree dated 25-11-1999 in the sum of Rs,37.835 against all defendants.
6. ' The interim decree was challenged by the defendant No,4 by filing H.C.A. No,274 of 2000. The appeal was allowed by order dated 24-8-2001 and the case was remanded for rehearing of application under section 10 of Act of 1997 after providing full opportunity of hearing to the appellant (defendant No,4).
7. ' That during the pendency of H.C.A. No, 274 of 2000 the suit was finally decreed on 16-3-2000 and the interim decree passed earlier was confirmed. The final decree was amended on 18-1-2001 and the sale of the mortgaged properties was included in the decree.
8. ' On 25-5-2002 leave to defendant the suit was granted to defendant No,4 to the extent that whether the purported agreement bears the signature of defendant No,4. The defendant No,4 filed his written statement. In para.4 of his written statement he states as under:-- "That the contents of paragraph 8 of the plaint are vehemently denied. The answering defendant neither executed any guarantee jointly with other defendants or severally and the signature purporting to be that of the defendant No,4 was forged/fabricated by the plaintiff Bank."
9. ' On 9-8-2002 the Court directed the defendant No,4 to give specimen of his signatures in terms of section 84 of the Qanun-e-Shahadat Order, 1984.
10. From the pleadings the following issues were framed on 25-10-2002:--
(1) Whether the defendant No,4 has executed the guarantee which appears at page 59 of the file as annexure-E to the plaint?
(2) Whether by virtue of having executed this guarantee is liable for the amount claimed?
(3) Whether the defendant No,4 was the Director in the Company and if so, its effects?
(4) Relief.
11. ' On behalf of plaintiff Wazir Ali was examined as P. W.1 (Exh.5) and produced documents from Exhs.6 to 20 and closed his side. The defendant examined himself and closed his side.
12. ' After closing of the evidence, by order dated 9-2-2004 the parties were directed to name the Handwriting Expert to whom the admitted and disputed signatures of defendant No,4 could be referred for verification. Through a joint statement the parties suggested the name of Mr. Muhammad Ashraf Malik Retired PSP Police Officer for examination/ comparison of signatures of defendant No,4. The Handwriting Expert submitted his report on 22-10-2005. By order dated 11-1- 2005 the defendant was allowed to examine Handwriting Expert at his cost. The Handwriting Expert was examined in Court on 15-11-2005 as D.W.2 Exh.23 who produced his report along with photocopies of the documents as Exhs.23/1 to 23/12. The learned counsel for the plaintiff cross- examined the witness.
13. ' My findings on the issues involved in this suit are as under:-- ' Issues Nos.1 and 2 "The burden to prove this issue is upon the plaintiff. The learned counsel for the plaintiff submits that the plaintiff being one of the Directors has executed personal guarantee along with other Directors. He further submits that the name of defendant No,4 is appearing on various documents submitted with the Registrar Joint Stock Companies. He further submits that burden is upon the defendant No,4 to prove that guarantee was not signed by him particularly in view of the fact that he is one of the Directors of the company. The learned counsel for the defendant contended that the evidence of the defendant is sufficient to prove that the defendant No,4 has not executed Exh.7 and this fact has been confirmed from the report of Handwriting Expert. He further contended that the evidence of the defendant No,4 gone unrebutted and the plaintiff failed to establish that Exh.7 was signed and executed by defendant No,4. On the other hand the learned counsel for the plaintiff contended that the defendant No,4 with mala fide intention denying his signature on Exh.7 and other documents. He disputed the report of Handwriting Expert by saying that the same is collusive and cannot be relied upon. Mr. Shakeel Pervaiz further submits that from the evidence and the cross-examination of the Handwriting Expert it is clear that the defendant No,4 purposely signed different signatures on different documents to avoid the liabilities. He relied upon the following reported cases.
(1) Anwar Khan v. Mst. Nafis Bano 2005 SCM R 152.
(2) Anwar Khan v. Mir Wali PLD 58 Lahore 447.
(3) M. Umar Shah v. Bashir Ahmed 2004 SCM R 1859 ' I have carefully examined the evidence available on record. In his evidence the defendant No,4 has clearly stated that he was never a Director of defendant No,1 nor connected with the defendant No,1 in any capacity and he also denied his signature on Exh.7. I have also gone through the cross- examination of defendant No,4 which remain unshattered. In cross-examination also the defendant No,4 denied his connection with the defendant No,1 and had showed his ignorance about the financial facility availed by the defendant No,1 from the plaintiff, he also denied his signature on Exh.7. The defendant No,4 denied his signatures on Exhs.9 to 18 and admits his signatures on Exh.8 and Exh.19. On the other hand the evidence of the witness of the plaintiff was not inspiring-confidence. He was not aware of the facts of the case and had deposed on the basis of record available with him. No officer who was dealing with the matter was examined. In his cross-examination he deposed that the guarantees were not executed before him and he is not witness to the transaction. He also deposed that he is not aware whether the persons visited the bank or not. He also deposed that none of Exh.9 to 18 were prepared in his presence. I have also examined the signatures of defendant No,4 appearing on Exh.7 with his admitted signatures taken in Court for verification attested by the learned counsel for defendant No,4. I found that the signatures are not similar to each other. The flow of both signatures are different, style is different and the characteristic and the way particular alphabets were written are altogether different. I have also perused the Handwriting Expert report who submits as under:-- "The questioned signatures marked Q1 to Q6 did not bear identical characteristics with the specimen signatures of M. Hussain. The non-identical characteristics have been noted down between the questioned and the specimen signatures of Mr. Hussain as my Laboratory notes and could be produced as and when required. I have also shown and marked the nonidentical characteristics of the signatures pasted on the photo analysis chart No, 1."
14. ' The Handwriting Expert is also of the view that the signature of defendant No,4 on Exh.7 is not the genuine signature of defendant No,4. In the authorities cited by the learned counsel for the plaintiff it was held that evidence of Handwriting Expert is always considered to be a weak type of evidence and in presence of overwhelming evidence, oral and documentary should not be allowed to prevail. I have examined the evidence keeping in view the principle held by Honourable Supreme Court. In this case there is no overwhelming evidence. The guarantee does not bear the signature of any witness. No officer was examined in whose presence the guarantee was signed. The learned counsel for the plaintiff stressed upon the last few lines of the cross-examination of the witness of the plaintiff being an admission by defendant No,4. Even if those few lines are taken as admission the same is admission with regard to execution of guarantee in some other case and not in this case. Even if I ignore the report and evidence of Handwriting Expert the evidence of the plaintiff is not sufficient to prove the execution of Exh.7 by the defendant No,4. In view of above I hold that Exh.7 (Annexure-E appearing on page 59 of B the plaint) does not bear the signatures of defendant No,4 and the defendant No,4 is not liable for the amount claimed in the suit.
15. ' Issue No,3'
16. ' In view of my finding on Issue No,1 no finding on this issue is necessary. The leave was granted to limited extent of examining Exh.7. Moreover the learned Appellate Bench in his judgment dated 24- 8-2001 held as under:-- "At the outset it may be stated that even if the signatures on the memorandum of association and articles of association are in the handwriting of the appellant, such factum would not automatically make him responsible for repayment of the loan. A company registered under the Companies Ordinance is a separate legal entity and the liability of the Director is. Not coextensive with that of a Joint Stock Company, therefore, unless and until some act on the part of any Director can be attributed by virtue of which he had undertaken himself to be liable or responsible for the acts or omissions of such Joint Stock Company, he could not be held responsible for any act, omission or default of the Joint Stock Company. In view of this, e re 1 if the signatures appearing on the memorandum of association and articles of association were in the handwriting of the appellant, which fact has been vehemently denied by him, such factum would not make him responsible to respondent No,1 in respect of the loan advanced by it to respondent No,2."
17. ' In view of above even if it is proved that the other documents were signed/executed by the defendant No,4 the same is not sufficient to decree the suit against defendant No,4.
18. ' Issue No,4 The suit against defendant No,4 is dismissed with no order as to costs.