SYED HAMID ALI SHAH, J.--- Respondent filed a recovery suit, against the appellant in respect of financial facility extended for the purchase/lease of Honda VTI Car. The appellant in response to the notices moved an application for leave lo defend suit. Appellant alter denying the delivery of vehicle to him asserted in the application that one Muhammad Akram Sheikh (his employer) fraudulently got sanctioned various facilities for the purchase of vehicles, in different names. It was also asserted that officials of the hank had connived with Muhammad Akram Sheikh and the delinquent officials of the bank were subsequently sacked. Learned Trial Court, refused to grant leave to defend the suit and vide judgment and decree dated 29.5.2004 decreed the suit in favour of the respondent against the appellant. Hence this appeal.
2. It is contended that financial assistance was never availed by the appellant. The employer (Muhammad Akram Sheikh) availed various lease finance facilities. Two in his own name, one for the purchase of car in the name of his wile, one in the name of his father and the fifth in the name of the appellant. It is contended that initial installment and other charges were paid by said Muhammad Akrarn Sheikh. He went on to argue that the officials of the bank responsible for extending finance facility to Muhammad Akram Sheikh, in the name of various persons, were sacked by the bank, for their fraudulent act. It was further submitted that the appellant, being a petty! Employee of Akram Sheikh, had no financial worth. He summed up his arguments with the contention that the vehicle in question, is registered in the name of Akram Sheikh, which fact clearly proves that financial assistant was not availed by the appellant.
3. Learned counsel for the respondent, on the other hand, has fully supported the impugned judgment. He has submitted that the grounds taken in this appeal were not urged in the application for leave to defend. Appellant has taken fresh grounds at the appellate stage to fill the lacunas in his case. Learned counsel has submitted that delivery letter as well as all other loan agreements, were signed by the appellant himself, therefore, he cannot wriggle out of his responsibility, by mere denying the financial facility
4. Heard learned counsel for the parties and record perused.
5. ' Learned Banking Court has refused the grant of leave to defend the suit to the appellant, on the ground that the appellant has signed the finance agreement, delivery/acceptance letter and has provided his National Identity Card to the respondent bank. The possession receipt also contains his signatures. Learned Court further observed that the appellant who has singed the relevant documents, is neither a Parda Nashin lady nor illiterate person, therefore, cannot be absolved of his responsibility of paying of all the debts of the respondent bank. The appellant cannot be held responsible for the payment of debt, if the financial assistance is not extended to him and the amount of lease finance had not been disbursed to him There is no dispute that the appellant was an employee (Marketing Manager) of Akram Sheikh. Latter, had availed various lease finance facilities, in identical manner and the officers of the hank were sacked and removed from the job of the bank for extending illegally lease finance facilities to Akram Sheikh.
6. Sector' 10(8) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 deals with grant of leave to defend The suit. It has been provided in this provision of law that for the purpose of grant of leave, a Banking Court has to consider con ten Is of the =plaint, application to leave to defend the suit and reply thereto. The Court, after considering the plaint, application and reply, is of the view that questions of law or facts have been raised, which need evidence lo be recorded, shall grant leave.
Mere perusal of sub-section (8) ibid reveals that whenever a question, of law and fact is raised which needs evidence to be recorded, grant of leave to defend the suit is the only course. The essentials for grant of leave are the questions of law and fact which require determination through recording of evidence. Registration Book speaks about the fact that leased vehicle was delivered to Muhammad Akram Sheikh and remained in his constructive as well as legal possession and use The questions as to whether the leased vehicle was delivered to the appellant; it remained in his possession; lease finance was utilized by appellant and that he was a customer or the loan in his name existed as Benamdar, require evidence to be recorded for its proof. These . Questions cannot be ascertained summarily, these questions require determination through recording of evidence: Mere signing of the finance documents, does not establish the case against the appellant. Learned Court has erroneously declined the appellant leave to defend the suit.
7. The nature of financial assistance allegedly extended to the appellant is lease finance. The liability of a hirer, arises only when leased assets are delivered by the hire grantor.
8. The 'lease' can be termed as a contract allowing somebody exclusive possession of another's property for a particular time, in return for rent. 'Lease' according to "The Concise Oxford Dictionary" is an agreement by which the owner of a building or land etc. Allows another to use it for specific time in return for payment . Lease according to it's definition in "Black's Law Dictionary" 6th Edition means a contract by which one owning such property grants to another the right to possess, use and enjoy it for specified period of time in exchange for periodic payment of a stipulated price, referred to as rent.
9. The passage from "Lease Finance and Hire Purchase" by Vinod Kothari, requires mention and relevant part at page 7, is reproduced hereunder:- "The subject of a lease is the asset, article or property to be leased. The asset may be anything - an automobile, or aircraft, or machine, or vehicle, or land, or building, or a factory. Only tangible assets can be leased one of the essential elements of a lease is handing over of possession, alongwith the right to use. Hence intangible assets are assigned, whereas tangible assets may be leased."
The author discussed following essentials of a valid lease:---
(1) What cannot be owned cannot be leased. Thus, human resources cannot be "leased", though there may be a personal or organizational contract -for availing personal or personal services.
(2) While lease of movable properties can he effected by mere delivery, a lease of immovable property in order to be effective has to be by way of written instrument. Such instrument requires compulsory registration, and has to be stamped under the Stamp Act.
(3) Unless it were a lease of immovable property, a lease of movable property is initiated by delivering the property, and terminated by redelivering the property to the lessor.
(4) It is the duty of the lessor to deliver the goods to the lessee.
10. It will be advantageous to discuss and refer to the cases from English jurisdiction where:- It was held in the case of "Karsales (Harrow) Ltd. v. Wiffias" [(1956) AH ER 866] that I he lease does not commence until the goods have been delivered. The obligation to delivery may carry with it the duty to supply documents which are necessary to enable the goods to be lawfully used. The rules regarding place, time and mode of delivery appear to be same as stipulated in the Sale of Goods Act, 1930," "Therefore, there is an implied warranty in a lease agreement that the lessor, in addition to putting the lessee into possession of goods, will also leave him in peaceful possession o them during the currency of the agreement. This warranty is broken if the lessee's enjoyment of possession is interfered with either by the owner himself or by the lawful acts of third parties. It may be noted that as the lessor does not intend to transfer the title to the lessee, there is no implied condition as to the title."
11. Associated Japanese Bank (International) v.
Credit Du Nond SA and another [(1988) 3 ALL ER 902]. The lease equipment in this case was found to be non-existence. It was held that there was no lease in the eyes of law and when goods are not delivered by the hire grantor to the hirer, a lease cannot be created according to law. In the case of "Domestic Electric Rentals Ltd v. Dowson" [(1943) LJ CCR 31], it was held that the rights and liabilities are created only when. The goods are delivered. Property in goods without Material possession is an abstract thing and cannot create any rights. In the case of "Karsales (Herrow) v. Wallias" [(1956)
ALL ER 86], it was held that it is the duty of the lessor to deliver the goods to the lessee. Possession granted must be actual as it will entitle the hirer to actually make use of the goods. Lease commences at the lime when the goods arc delivered.
12. The essential of a valid lease, is the delivery of leased assets. There is no lease when there is no "lease property ". The lease commences when lease assets are delivered and the date on which the parties signed the lease agreement is not material in this regard. A legal and valid lease is one where the hire grantor has delivered the possession of the leased assets to the hirer. In the absence of possession. The rights and obligations of the hire grantor and hirer are not created in the eyes of law
13. In the case in hand, the plaintiff has not proved or established that the leased car was delivered to the appellant and remained in his use. Registration book of the leased car speaks of it's possession, with another person was Muhammad Akram Sheikh. Banking Court without determining the factum of delivery of possession has proceeded to pass the decree. Such I decree is not legally sustainable.
14. For the foregoing, this appeal is allowed, the impugned judgment and decree passed by learned Banking Court being not sustainable and is set aside. Resultantly the suit of the respondent is deemed to be pending. The appellant is granted leave to defend the suit subject to his furnishing adequate security for the suit amount, to the satisfaction of learned Banking Court. Parties to bear their own costs.