' ABID AZIZ SHEIKH, J.---This appeal has been filed, by appellants Nos.1 to 6. Appellant No,1, in plaint, was impleaded as defendant No,5 and appellants Nos.2 to 6, were the legal heirs of defendant No,4. This appeal is against the judgment and decree dated 14-4-2008 passed by learned Judge Banking Court No, 1 Multan through which the suit of the respondent bank was decreed against all the defendants including the appellant No,1 and predecessor of appellants Nos.2 to 6 (hereinafter referred to as appellants) for an amount of Rs,23,19,410.91 with cost of suit and cost of funds.
2. Facts in brief are that respondent bank filed a suit for recovery of Rs,23,21,639.91 along with cost of funds and other costs against the appellants and other defendants therein. Defendant No,1 in the suit was sued being a principle debtor whereas the other defendants including appellants were sued being guarantors. The appellants were also sued being the mortgager of the property which was mortgaged with the bank to secure the finance of the company. The appellants filed joint petition for leave to appear and defend the suit, which was dismissed on 29-1-2008. Finally after calculating the claim of the respondent bank through a retired Regional Audit Chief, the suit against all the defendants including the appellants was decreed on 14-4-2008, hence this appeal.
3. The learned counsel argued that the appellants were neither guarantors nor mortgagors of the finance availed by the principal judgment debtor company (defendant No,1). Further argued that no document regarding personal guarantee or the mortgage deed executed by the appellants was produced on record by the respondent bank to prove its claim. Adds that in any case, the thumb impressions of the appellants were taken' on certain documents fraudulently by Bank officials in connivance with respondents Nos.2 and 3 for which the matter was also referred to Federal Investigation Agency (PIA). Learned counsel further argued that while passing the impugned judgment dated 14-4-2008, the contentions of the appellants were not at all discussed, hence the impugned judgment and decree is liable to be set aside. To support his arguments, reliance is placed on Industrial Development Bank of Pakistan through Chief Manager v. Shaf Industries (Pvt.) Ltd. And another (2006 CLD 743), Habib ur Rehnian and another v. Judge Banking Court No,4, Lahore and another (2006 CLD 217) and Messrs Taxila Cotton Mills Ltd. And 10 others v.
Allied Bank of Pakistan Ltd. And 4 others (2005 CLD 244).
4. Conversely the learned counsel appearing on behalf of respondent bank argued that in Para. Nos.2 and 7 of the plaint, it is specifically mentioned that appellants were impleaded being .The guarantors and mortgagors of the finance availed by the principal debtor (defendant No,1). Further argued that the appellants had executed personal guarantees dated 27-10-2001 for the finance availed by the company/defendant No,
1. Further submits that appellants have also executed an equitable mortgage through two separate memorandums of deposit of title deed dated 27-10- 2001 and the original title documents were also deposited with the bank which constitute a valid mortgage under section 68(0 of the Transfer of Property Act, 1882. Submits that the matter was only referred to the F.I.A. When the recovery notices were issued to the appellants. The learned counsel for the respondent bank adds that the personal guarantees being continuing guarantees are enforceable under section 130 of the Contract Act 1872.
5. We have heard the learned counsel for the parties and have given anxious consideration to the submissions ' made.
6. In this case, the finance agreement dated 27-10-2001 is primarily a contract and the provisions of Contract Act, 1872, of course subject to the special law i,e, Financial Institutions (Recovery of Finances) Ordinance 2001 are applicable. The perusal of record shows that the appellants had given personal guarantees dated 27-10-2001 which were duly executed and signed by them to secure the loan availed by Messrs Aims Corporation Pvt. Ltd. And it was undertaken in the said guarantees to repay the loan amount availed by the company on demand. The grounds of the appeal show that appellants' contention in appeal is that no guarantees were executed by appellants. Even the learned counsel for the appellants vehemently argued that no guarantees are available on the Court record. The aforesaid contention is contrary to the record where personal guarantees dated 27-10-2001 are available. We are of the view that once given the above-referred guarantees, it is not open for the appellants to wriggle out of it on a bald assertion that there is no guarantee available on the record. Though it is not argued before us that signatures on the guarantees are forged, however, even in such situation, the Division Bench of this Court in case Ghazala Arif v. Union Bank Ltd. (now Emirates Bank International), Lahore (2000 CLC 1201) held that mere denial of signatures on document is not sufficient ground for grant of leave unless it is prima facie shown that document is forged and fabricated. Further section 128 of the Contract Act 1872, specifically mandates that the liability of the surety is coextensive with that of the principal debtor unless it is otherwise provided by the contract.
7. The record also shows that the appellant No,1 executed an equitable mortgage in favour of the Bank through Memorandum of Deposit of Title Deed (M.O.D.) on 27-10-2001. The said M.O.D. Also gives the list of documents submitted with the bank which include, (i) the agreement of sale registered with Sub-Registrar Urban at Sr. No,1667 dated 11-3-1999, (ii) N.E.C. Dated 18-3-1999 issued by Sub-Registrar Urban Multan, (iii) Transfer letter No,5789/ EM/MDA dated 12-3-1988 issued by the Deputy Director, Estate Management, MDA and (iv) Approved Map. Whereas predecessor of appellants Nos.2 to 6 had also executed Memorandum of Deposit of Title Deed dated 27-10-2001 and submitted with the Bank documents which include, (i) Agreement of sale dated 7-6-1999 registered at serial No,3975 with Sub-Registrar, Urban Multan, (ii) NEC dated 23-4-2001 issued by Director, Estate Management, MDA, (iii) Encumbrance certificate dated 1-9-2001 No,252/DD/E and IM/MDA Multan, (iv) Approved Map dated 13-3-1997. The deposit of aforesaid documents with the bank duly constitute an Equitable Mortgage in favour of bank under section 58(f) of the Transfer of Property Act, 1882. In petition for leave to appear and defend (P.L.A.), the appellants' stance was that though the mortgage was executed in favour of Bank but it was not for finance to the company/defendant No,1 but for availing finance for the appellants. The above plea is not sustainable for the reason that there is no correspondence or letter of the Bank brought on record by the appellants to show that any finance facility to the appellant was sanctioned or under consideration by the Bank. The argument of learned counsel for the appellants that the documents were obtained collusively is also not convincing as the said documents are with the bank since 27- 10-2001 and till the date of default of the company, the appellants have not challenged the veracity of the aforesaid documents before any competent Court of law.
8. The next argument of learned counsel for the appellants that the learned Banking Court in the impugned order dated 14-4-2008 has not discussed the arguments of the appellants raised in PLA is misconceived as the learned Banking Court has already vide detailed order dated 29-1-2008 dismissed the petition for leave to appear and defend filed by the appellants and this fact was also noted in the final judgment which was passed after calculation of the decretal amount on 14-4- 2008. The order dated 29-1-2008 whereby the joint PLA of the appellants was dismissed is not under challenge in this appeal. Further the case-law relied upon by the learned counsel for the appellants is inapt to the facts and circumstances of the present case.
9. For what has been discussed above, we do not see any illegality in the impugned judgment and decree of the learned Banking Court. The appeal has no merits and the same is hereby dismissed with no orders as to costs.