' By this application made under Order XXXVII, rule 3, C, P. C. The defendants seek leave to appear and defend the suit brought under Order XXXVII of C. C. For recovery of Rs 14,36,3.10.40 with costs and interest.
1. (i) Mr. Shaikh Inamullah, Advocate for defendants Nos. 1 and 2 in support of the application firstly argued that no particulars of the transfer of debit entry made on 22-104973 of the amount of Rs, 30,000 in the defendant's account has been given by the plaintiffs. This plea raised on behalf of the defendants is without any substance. In their application the defendants have not challenged the said entry except raising a vague plea that the correctness of this transfer entry could not be ascertained as a certified copy of account maintained by the defen cants with the Standard Bank Ltd., has not been filed. This vague plea obviously has no substance as it would be seen that Rs, 5,49,742.80 as the outstanding amount against the defendants, was confirmed by them on 31-12- 1974. This plea is, therefore, rejected.
(ii) The learned counsel for the defendants then argued that the suit is barred by limitation.
' In order to appreciate the plea raised as above it would be relevant to mention that the admitted facts supported by documents produced with the plaint are that the defendants had an account with Messrs Standard Bank Ltd., from whom they had obtained loan/overdraft facility a certified copy of the statement of account has been produced by the plaintiff Habib Bank Ltd. (with whom Standard Bank Ltd. Stands merged on its nationalization). The defendants for repayment of the outstanding amount on 30-6-1975 executed promissory note whereby they acknowledge their liability and made promise to pay on demand to the then Standard Bank Ltd., Rs, 5,91,858.80 with interest at the rate mentioned therein. This promissory note has not been challenged by the defendants. The said promissory note was accompa lied by delivery letter of the same date (Annexure 'B-4') and also letter of undertaking (Annexure executed on behalf of the defendants No,
1. In para. 3 of the said letter of undertaking the defendants also undertook to keep the plaintiff/bank indemnified against any losses costs, expenditure etc. Which the said Bank might have to incur in case of any default in repayment of the above-mentioned amount. The plaintiffs have also produced statement of account (Annexure 'C') certified as required by the Bankers Books of Evidence Act, according to which as on 16-11-1981 the defendants were liable to pay Rs, 14,36,310.40 to the plaintiffs. The correctness of this amount and or any of the entries made therein were not challenged by the learned Advocate for the defendants during his arguments.
2. Mr. Liaquat Merchant referred to Annexure 'D-1' to the plaint. Which is a notice, dated 16-8-1979 addressed to the defendants whereby the plaintiffs called upon the defendants to repay the Bank's money amounting to Rs, 7,17,830 together with all interest within 7 days of the receipt of the said notice. The defendants were warned that in case amount was not paid as demanded, the goods pledged with the bank would be disposed of and the shortfall would be recovered from the defendants by instituting legal proceedings. In reply to the aforementioned notice the defendants by their letter, dated 31st August, 1977 (Annexure 'D-3' to the plaint) acknowledged their liability and promised to make the payment of the amount due but requested for accommodation till 30th December, 1977 on the plea that everything would be settled by October, 1977 and that they shall be able to make payment and clear the bank's amount by December, 1977.
3. As no payment was made on 25th June, 1980 the plaintiff/Bank issued notice under section 4 of the Banking Companies (Recovery of Loans) Ordinance, 1979. By the said notice after drawing attention of the defendants to the fact that a sum of Rs, 11,77,766.40 was outstanding in the account with the plaintiffs as on 23rd June, 1980 and that despite repeated requests and demands the defendants had failed and neglected to liquidate their liability and that the above debt being unsecured and the security furnished by the defendants by way of pledge of goods was grossly insufficient, the plaintiff/ bank called upon the defendants to provide sufficient security therefor within the statutory period of 180 days from the date of the said notice for the repayment of the above mentioned amount with interest. The defendants were warned that in case of their failure to comply with the requisition made as above the plaintiffs would be constrained to institute legal proceedings against the defendants for recovery of the amount due at the defendants' risk and cost. In reply to the aforementioned notice the defendants on 30-12-1980 executed the document (Annexure "F" to the plaint) wherein they stated :- "From Pyramid Industries.
' To The Manager.
' Habib Bank Limited.
' My Account No, ' The balance in the above account as on shows a debit of Rs, 11,85,147.40.
I/We have examined the correctness of same and am/are returning this letter duly signed per the registered signature as desired.
Yours faithfully, (Sd.)
Authorised Signatures."
4. Mr. Shaikh Inamullah, the learned counsel for the defendants however argued that this document (Annexure 'F') referred to above, is a mere acknowledgment which was made after the period or limitation and, therefore, would not have the effect of extending the period of limitation for filing the present suit.
Mr. Liaquat Merchant the learned counsel for the plaintiff, however relied upon section 4 of the Banking Companies (Recovery of Loans) Ordinance, 1979 which provides :- "4. Securing and repayment of loan due on the commencing day.-(1) This section applies only to loans outstanding on the commencing day.
(2) A loan or part thereof outstanding on the commencing day shall, unless secured or repaid earlier, be secured and repaid as provided in this section notwithstanding the fact that the period of limitation within which a suit for the recovery of the loan or part thereof could have been or may be filed expired or expires on or after the first day of January, 1974.
(3) Where, in the opinion of a banking company, a loan, was, or has become or is discovered to be, unsecured or insufficiently secured, the borrower shall provide sufficient security, therefore, within one hundred and eighty days from the date of the notice served by the banking company on the borrower in any of the under-mentioned modes, namely, by being :
(a) given or tendered to him, or
(b) sent by registered post to his last known address on the record of the banking company, or
(c) affixed on a conspicuous part of his last address known to the banking company, or
(d) published in a newspaper.
(4) Where a loan is not, or has not become, sufficiently secured under subsection (3), the banking company may apply to the Special Court for attachment of so much of the property of the borrower as is equal in value, with reasonable margin, according to banking practice to the outstanding amount of the loan.
(5) Where the loan is, or has become, sufficiently secured under subsection (3), the outstanding amount shall, unless a different schedule of repayment is drawn by the bank, be repaid in accordance with the schedule of repayment agreed to at the time of sanction of the loan.
(6) The decision of the bank in fixing the Schedule of repayment under subsection (5) shall not be questioned in any Court."
5. It is not disputed that on the day when the aforementioned Ordinance, 1979 came into force, the loan was outstanding against the defendants. The learned counsel for the defendant has also not disputed the defendants' letter dated 31-8-1977, whereby the latter expressly agreed to repay the amount by 30th December, 1977. According to the defendant's own counsel, the loan/amount claimed by the plaintiffs was outsanding on the day when the aforementioned Ordinance No, XIX of 1979 came into force.
' In view of the above discussion I have no hesitation in holding that the suit has been filed within time and that the plea raised that it is barred by time has no substance.
6. The learned counsel for the defendants 'finally raised the plea that plaintiff/bank under section 4 of the Ordinance of 1979 could only apply for attachment of the property. In my opinion the attachment could be made only by recourse to the Special Court by filing a suit the procedure for which is provided by section 7.
7. Mr. Inamullah, the learned counsel finally contended that the letter (Annexure 'B-3') which reads as follows does not amount to a promise to pay the amount due and that it merely amounts to an acknowledgment :- "Mr. Ibrahim M. Bawani, ' Law Officer, ' Habib Bank Ltd., Head Office, ' Habib Bank. Plaza, Karachi.
' Our Unadjusted P-Credit Account at Your McLeod Road Branch Karachi.
' Dear Sir, ' We are in receipt of your letter of the 16th August, 1977 (received by us on 26th August).
' As you know, after the grant of time by you, there were severe political disturbances, strikes etc. Paralysing the business activities. Due to this reason and subsequent heavy rains, we were unable to sell the goods and clear our limine account with you.
' We, therefore, request you to kindly give us time till 30th December, 1977. We have every hope that everything will be settled by October and we shall be able to sell the goods and clear your account by December.
' The undersigned is leaving for Budapest shortly and we have every hope that our buyers will establish the L. C. And the goods will be shipped. Thanking you.
Yours faithfully, (Sd.)
Pyramid Industries."
' The mere perusal of the above-mentioned letter would show that the defendant had requested for time till December, 1977 to clear the outstanding and had expressly promised that the loan amount would be settled by October, 1977 and that they shall be able to sell the goods and clear the plaintiff's amount by December, 1977. Thus, I find no substance in the point raised as above.
8. For the reasons stated above, I find no tribal issues have been disclosed and accordingly the application is dismissed.
' The plaintiff's suit is thus decreed with costs and interest at the rate of 14% per annum as prayed.