1. ' The plaintiff" has filed this suit for recovery of sum of Rs,1,81,056.67 against the defendants on the allegation that the defendant No,1 had availed the overdraft facility in his current account against pledge of 7025 shares of United Bank Limited of the face value of Rs,10 each and that defendant No,2 also stood as a guarantor of the defendant No,1 and pledged with the Bank 1185 units of 3rd ICP mutual fund of face value of Rs,100 for each unit. The defendants contested the claim of the plaintiff in the suit and filed their respective written statements. On pleadings of the parties the following consent issues were framed:-
(1) Whether the suit is properly instituted?
(2) Whether the plaintiffs showed negligence in taking delivery of shares from the United Bank? If so to what effect.
(3) Whether the plaintiffs have no cause of action against the defendants No,1 and/or 2.
(4) Whether the plaintiffs have a claim for moneys advanced against the defendants Nos. 1 and 2.
2. If so to what effect.
(5) What is the effect of two Letters of Lien by the defendants Nos. 1 and 2, and plaintiffs letter dated 25-1-1973.
(6) Whether the plaintiffs are entitled to claim interest on the overdraft? If so to what amount?
(7) Whether the defendant No, 1 has a claim against the plaintiffs in damages? If so to what amount?
(8) Whether the suit is barred by limitation?
(9) Whether the defendant No,1 committed fraud on the plaintiffs by pledging shares not held by him in his right, if so to what effect?
(10) To what amount if any the plaintiffs are entitled to from the defendants No,1 and/or 2?
(11) What should the decree be.
3. ' When the suit came up for evidence before me on 8-11-1983 only the plaintiff and his counsel appeared and defendants remained absent. The plaintiff in support of his claim examined one Muhammad Shafi Wahidi, the Manager of the Main Branch of the plaintiff bank and closed their side. As the defendants and their counsel were also absent their side was also closed and the case was fixed for arguments on 10-11-1983. On 10-11-1983. K.S.Talati learned counsel for the plaintiff appeared and defendants and their counsel again remained absent and therefore I heard Mr.Talati, on behalf of the plaintiff. My findings on the issues framed are as follows:- Isue No,1: ' On this issue the plaintiff has examined Muhammad Shafi Wahidi, who has stated that the plaint is signed by Abdul Hayee Khan, who at the relevant time was Mtinager of Judas Street Branch of the Bank. He has identified the signature of said Abdul Hayee Khan on the plaint and has further stated that as a Manager of the bank Mr. Abdul Hayee Khan was fully authorized to sign the plain. The statement made by this witness has not been challenged or disputed and no evidence in rebuttal has been produced by the defendants. I accordingly hold that the suit has been properly instituted and signed by an authorized person. Issue No,2: ' The burden of proving this issue is on the defendants. It is an admitted position that at the time of availing overdraft facility by the defendant No,1 the said defendant pledged with the plaintiff bank 7025 shares of UBL of the face value of Rs,10 each share. The plaintiff's witness Muhammad Shafi Wahidi, stated in his examination in chief that these shares were lodged with the United Bank Limited and were finally transferred in the name of defendant No,l. In the plaint which is also on oath it is stated that at the time of filing of the suit these shares were under dispute in some litigation pending in a civil Court in Lahore, and Mr.Talati, learned counsel for the plaintiff contends that the transfer of these shares in favour of defendant No,1 has taken place much after the filing of the suit. As the burden of proving this issue was on the defendants and they have failed to produce any evidence in this behalf I hold that the defendants have failed to prove this issue. Issue No,3: The burden of proving this issue is on the defendants. It is an admitted position that at the time of availing overdraft facility by the burden of proving this issue is also on the defendants. Both in the plaint as well as in the evidence the plaintiff has asserted that the money was athiariced to defendant No,1 against the pledge of shares and .against a further pledge of 1185 units of 3rd ICP mutual fund and these allegations have not been controverted by the defendants, The above allegation made by the plaintiff coupled with the fact that it is asserted by the plaintiff that the amount due against overdraft account has not been paid to them sufficiently constitutes cause of action against the defendants. This issue is accordingly answered as above.
4. Issue No,4: The utilization of overdraft account is not disputed by defendant No,l. The only defence taken by the defendant No,1 in the written statement is that the plaintiff acted negligently in obtaining transfer of 7025 shares from UBL. I have already held under issue No,2 that the defendants have failed to establish any negligence on the part of the plaintiff and therefore I hold that the plaintiff had claim of money against the defendant No,1. So far defendant No,2 is concerned the plaintiff has asserted that the defendant No,2. also stood as guarantor for repayment of the loan by the defendant No,1 and in this connection executed a letter of lien, dated 15th June, 1970 under which he pledged 1185 units of 3rd ICP mutual fund. The original letter of lien executed by the defendant has been produced in evidence. However, from the letter, dated 15th February, 1973 addressed by the Advocate of the plaintiff to defendant No,2 it appears that by letter dated 11th February, 1973 the defendant No,2 had revoked the letter of lien. The endorsement made by defendant No,2 in his own hand writting on the letter of lien Exh.5/2 do give him authority to revoke the letter of lien at any time he likes. Since the letter of lien at any time he likes. Since the letter of lien executed by defendant No,2 has been revoked on 11-2-1973 therefore the liability of defendant No,2 against overdraft account came to an end on 11-2-1973. The plaintiff has however not produced any evidence on record to show the amount outstanding in the overdraft account on 11th February, 1973, and from the statement of account filed by the plaintiff in the suit, the total amount outstanding as on 28-12-1972 was Rs,1,81,047.67. I therefore, hold that on the date of filing of the suit the amount due against both the defendants was Rs,1,81,056.67 but defendant No,2 will not be liable for any .further amount which may become due thereafter.
5. Issue No,5: ' The two letters of lien executed by defendants 1 and 2 are produced as Exh.5/1 and Exh.5/2, respectively. Under Exh.5/1 the defendant No,1 pledged 7015 shares of United Bank Ltd., as a security for repayment of the overdraft account. Similarly under Exh.6/2 the defendant No,2 pledged with the plaintiff bank 1185 units of 3rd ICP mutual fund but the letter of lien Exh.5/2 was a conditional letter on which the defendant No,2 wrote the following endorsement:-- "As soon as, Mr.A.A.K.Qureshi, pledges other and further securities against overdraft allowed to him this letter of lien will automatically stand revoked and cancelled and rescinded. (Syed Ahmed Saeed). This letter of lien is subject to revocability at any time at my notice of this letter of lien should not be taken and deemed to be irrevocable. The securities being pledged by me in this letter of lien should not be adjusted against the overdraft allowed to Mr.A.A.K.Qureshi; Syed Ahmad Saeed."
6. ' The letter of lien Exh.5/1 was unconditional and therefore defendant No,1 continued to remain liable for all the amount which became due and payable at all times against the overdraft account and such amount could be adjusted by sale of shares pledged by the defendant No,1. However, in so far the letter of lien Exh.5/2 is concerned it was subject to the condition that if defendant No,1 furnishes any alternate or further security against the overdraft account the letter of lien Exh.5/2 was to become void and unenforceable and there was a further condition that defendant No,2 could revoke this letter of lien at any time he likes. There is no evidence on record to show that after the execution of Exh.5/2 by defendant No,2 any further security was furnished by defendant No,1 and therefore the letter of lien Exh.5/2 remained operative until it was revoked by the defendant No,2.
7. From the letter Exh.5/9 it appears that the defendant No,2 on or about 11-2-1973 revoked the letter of lien Exh.5/2 and therefore until the date of revocation the defendant No,2 remained liable to pay all amounts which were due and payable against defendant No,1 in the overdraft account. In so far the plaintiff's letter, dated 25-10-1973 Exh.5/7 is concerned, it is a letter addressed to defendant No,1 by plaintiff and a copy thereof was endorsed to defendant No,2. In this letter the defendant No,1 has been called upon to pay the amount of loan outstanding against him at that time but no demand is made against defendant No,2. to whom copy of this letter has been endorsed. However, this letter could not absolve the liability of defendant No,2 under the letter of lien (Exh.5/2) until and unless the same was revoked by him. Issue No,5 is accordingly answered as stated above.
8. Issue No,6: ' Both the letters of lien Exh.5/1 and Exh.5/2 state that the defendant has agreed to pay interest at the rate of 91$ per annum with quarterly rests. This evidence has not been controverted by the defendants and I accordingly hold that the plaintiff are entitled to charge interest on the amount at the rate of 9% per annum with ,quarterly rests. Issue No,7: ' This issue has been raised by defendant No,1 and relates to the alleged damages suffered by him.
9. In the absence of any counter-claim in the suit and the court-fee paid thereon this issue cannot be decided.
10. Issue No,8: ' The burden of proving this issue is on the defendants. The loan was advanced in January, 1970 and in paragraph 15 of the plaint it is stated that a part payment was made by the defendant towards repayment of amount. The statement of account produced by the plaintiff shows deposit by cheque in the sum of Rs,21,000 by defendant No,1 in the overdraft account. The suit having been filed on 16-2-1973 is, therefore, within time. Issue No,9: ' The burden of proving this issue is on the plaintiff. Neither any evidence has been led on this issue nor any allegation in this regard has been made in the evidence produced by the plaintiff before the Court. I, therefore, hold this issue in the negative. Issues Nos.10 and 11: Under these two issue I decree the suit of the plaintiff for Rs,1,81,056.67 with interest at the rate of 91st per annum from the date of filing of suit till the amount is paid. The plaintiff will also be entitled to costs against defendants.