IJAZ-UL-HASSAN, J.-By this single judgment, we intend to dispose of all the above appeals as the issues raised therein are common, in all these appeals judgment and order dated 6.10.2004 passed by Mr. Muhammad Irshad Khan, Judge, Banking Court-II, NWFP, Peshawar has been called in question, whereby applications of the appellants for grant of leave to appear and defend suits were rejected and resultantly bank suits for recovery were decreed.
2. Shortly narrated the facts are that respondent bank instituted suits against the appellants for recovery, In the plaints it was asserted that the appellants had obtained agricultural loans from the respondent bank; that repayment performance of the appellants remained, unsatisfactory and that despite issuance of notices, the appellants declined to discharge their liabilities which obliged the respondent bank to file suits against them. The appellants in their applications for grant of leave to appear and defend the suits denied having applied or obtained the financial assistance and maintained that in fact one Talehmand, the then Manager, Takht Nusrati Branch of the respondent bank, had a hand in the affair and he was responsible to prepare fake and fictitious documents to obtain in the names of the appellants. The pleas raised by the appellants did not find favour with the learned Trial Judge and the applications for grant of leave were rejected and bank suits were decreed.
3. Learned counsel for the appellants bitterly criticized the impugned judgment and order of the learned Trial Judge and attempted to argue that the appellant had neither applied for grant of loan-nor executed any document in favour of the respondent bank and they suffered at the hands of Talehmand, the then Manager of the concerned branch, who was behind the entire transaction.
The learned counsel added that Talehmand had fraudulently prepared all necessary documents for loan on appellants' behalf, put his signature on the same and availed the financial assistance.
Concluding the arguments, the learned counsel submitted that the liability having been denied, the learned Trial Judge had no justifiable reason to "ignore applications of the appellants and refused to grant leave to appear and defend the suit.
4. Contrarily, learned counsel for the respondent bank supported the impugned judgment and order and maintained that appellants in their applications to appear and defend suits failed to disclose any plausible defence and could n6t suggest any triable issues and had taken only vague any routine type of objection in that applications which were rightly rejected.
5. Having heard the arguments of the learned counsel for the parties, we tend to agree with learned counsel for the appellants that the liability having been denied at the earliest possible opportunity, learned Trial Judge had no legal justification to ignore applications of the appellants and refuse to grant leave to appear and defend the suits, It needs no reiteration that where the question involved between parties were not merely illusory but substantial having considerable repercussions in final determination of liability to pay the debt, leave to defend a suit was to be allowed. Test for allowing defendant to defend suit would not be seen if defence so put up by defendant would succeed, it would be enough to perceive that those grounds formed a plausible defence to displace rebuttable presumption attached to banking documents under section 118 of Negotiable Instruments Act. Even if defence set up was deemed to be vague or unsatisfactory, or there was doubt as to its genuineness, leave should not be refused altogether but defendant would be put on terms either to furnish security or to deposit the amount claimed in Court. Fine Textile Mills Ltd. v. Haji Umer (PLD 1963 SC 163), Haji AH Khan and Company, Abbottabad through Managing Director and 8 others v. M/s. Allied Bank of Pakistan Limited (1992 CLC 1906) and Habib Bank Ltd.
(Foreign Exchange Branch) v. Dost Muhammad Cotton Mills Ltd. And others (PLD 1997 Karachi 331).
6. It may be noticed here that the leave has been declined mainly on the ground that appellants have made simple allegations in their petitions for grant of leave to defend and the bank's claim is fortified with the mortgage deeds executed by the appellants in favour of the respondent bank, It may be pertinently mentioned here that no such mortgage deed is available on the record. When attention of learned counsel for respondent bank was drawn to this aspect of the case, he had no plausible reply to make and conceded that no mortgage deed has been annexed with the plaints, It appears to us that the impugned decision has been recorded in a mechanical manner without application of mind which has resulted in manifest injustice. The learned Trial Judge had no legal justification to reject the applications of the appellants for grant of leave to appear and decree the bank's suits, totally ignoring that a bona fide and substantial dispute existed between parties, needing recording of evidence.
In the result and for the foregoing reasons, we accept the appeals, set aside the impugned judgment and order and remand the case back to the learned Trial Judge with direction to decide the same afresh after affording reasonable opportunity to the parties to adduce evidence in support of their respective contentions. We make no order as to costs. Office is directed to dispatch record of the cases to the Court concerned immediately.