1. 'SALEEM AKHTAR, J.--These applications will be disposed of by this Order. The plaintiff has filed this suit against the defendants for recovery of Rs,89,08,370.49. The defendant No,1 is a private limited company and the defendants Nos.2 to 9 are its share-holders which according to the plaintiff are jointly or severally liable for all the dues of the plaintiff. The defendant No,1 had three accounts. (1)
2. The Current Account No,CA-8 was opened on 22-7-1963. In or about 1966 over a draft limit of Rs,5 lacs was granted to the defendant No,1 who utilized it in full. On or about 31-12-1970 the limit was increased upto Rs,10 lacs which was also utilized by the defendant No,l. For repayment of this loan the defendant No,1 had executed promissory note, dated 31-12-1970 for Rs,10 lacs and letter of, hypothecation of the same. The defendant No,1 also pledged/hypothecated its trading stocks including the present and future frozen packed stocks as continuing collateral security. On or about 30-11-1971 to secure the, advances in all the three accounts the defendant No,1 created an equitable mortgage by deposit of title deeds pertaining to Ginning Factory and Oil Mill, Mian Channu, District Multan and executed a memorandum of deposit of title deed. The defendant No,2 stood as guarantor for repayment of the entire loan in all the three accounts. In Current Account No,8 certain payments were made in the months of November and December, 1971. During the period of 30-6-1967 to 31-12-1973 the defendant No,1 confirmed the balance which on 31-12-1973 stood at Rs,12,68,611.25. The defendant No,2 who is the Managing Director of defendant No,1 executed a promissory note on 31-12-1980 and letter of hypothecation at the same date.
3. ' It is alleged that by a letter, dated 21-8-1979 the defendant No,2 requested that the mortgaged factory be allowed to be sold. The property was sold and sales proceeds were adjusted in the fixed loan account. The plaintiff has treated defendant's letters, dated 21-8-1979 and 2-10-1979 as acknowledgment of liability by the defendant No,1. On 11-6-1980 the defendant No,1 executed and delivered a promissory note for Rs,49,64,340.09 which comprised of Rs,28,79,922.85 in Current Account No,8 and Rs,20,84,417.24 in cash Credit Account No,658 as on 11-6-1980.
4. ' The second account is the packing cash Credit Account No,1 C.D.658 opened on or about 30-11- 1971 in which initial cash credit limit of Rs,2,50,000 was sanctioned. In or about October, 1972 the limit was raised to Rs,15 lacs which was also fully utilized by the defendant No,1. To secure the repayment, on 3-10-1972 the defendant No,1 executed letter of hypothecation, letter of pledge, letter of pledge of stock packed -and stored as stated in the plaint and promissory note for Rs,15 lacs. It was also secured by the equitable mortgage created earlier. The pledged goods were sold by the plaintiff and sale proceed was, deposited in this account on 6-10-1975 and the debit balance was reduced to Rs,10,21,012.77. It is alleged that the defendants have deposited various amounts during the period 18-2-1974 to 3-5-1976. It is also alleged that the defendant No,1 acknowledged that Rs,10,56,525.64 were payable on 31-12-1973 and executed balance confirmation slip, pronote and letter of hypothecation. The plaintiff alleges that the defendant No,1 acknowledged liability by letters, dated 21-8-1979 and 2-10-1979. The defendant No,1 executed a promissory note, dated 11-6- 1980 for a total sum of Rs,49,64,340.09 which included Rs,20,84,417.24 being the amount due and payable under this account.
5. ' The third account was the fixed loan account opened on 13-12-1969 in which sanctioned limit of Rs,5 lace was utilized. On 11-6-1980 it showed a debit balance of Rs,16,23,068.01. It was secured by equitable mortgage. According to the plaintiff this amount has fully been settled and nothing is due in this account.
6. ' It is alleged that the defendants Nos.2 to 9 are family members and shareholders of the defendant No,1 which is a private limited company and are liable to pay the amount due. On 25-4-1982 the defendant No,1 executed a promissory note for Rs,65,36,953.09 being the aggregate amount due in Current Account No,CA.No,8 and cash Credit Account No,658, Letter of hypothecation was also executed on the same date. As the defendant failed to make payment suit was filed on 26-8-1984.
7. ' Mr. Khalid M. Ishaque and Mr. Nizam Ahmed the learned counsel for the defendants have contended that the promissory note, dated 11-6-1982 and 25-4-1982 and all other security documents alleged to have been executed on those dates are not binding on the defendants as the defendants had delivered these documents in blank to Australasia Bank Limited and the same could not have been filled and completed by the plaintiff. A perusal of these documents will show that they have been made in favour of Australasia Bank Limited which after nationalization was merged with the plaintiff in the year 1974. Therefore, if these documents would have been signed and delivered to the plaintiff then instead of Australasia Bank Limited, plaintiff's name would have appeared in prima facie it seems obvious that these documents were signed' by defendants Nos.1 and 2 in blank and were delivered to the Australasia Bank Limited before nationalization in January, 1974. Mr. Khalid M. Ishaque the learned counsel for the defendants has contended that firstly the plaintiff did not have the authority to complete the documents and fill in the blanks and alternatively if at all there was an authority it should have been exercised within a reasonable time.
8. According to the learned counsel these documents were completed in the years 1980 and 1982 which cannot be termed to have been done within a reasonable time and, therefore, the suit is barred by time, There is no denial of the fact that the loan had been advanced to defendant No,1 and that defendant No,2 stood as surety for the defendant No,1. The question which will arise for consideration is whether the plaintiff had the authority to complete the inchoate instruments and if so whether they were completed within a reasonable time. Mr. Anwar 'Mansoor Khan the learned counsel for the plaintiff has, pointed out that by letters, dated 21-8-1979 and 2-10-1979 the defendants have acknowledged their liability. These two letters straight-away can hardly constitute admission of liability. The plaintiff has filed statement of account of fixed loan account in which no amount is due. The statement of account of other two accounts though alleged to have been filed with the plaint have not been filed. However, from the averments made in the plaint, it seems that in Current Account No,8 the defendant No,1 made repayment on several dates the last being on 1-12-1971 and signed balance confirmation slip in the years 1967, 1970, 1971 and the last being dated 31-12-1973 when the debit balance was Rs,12,68,611.25. A promissory note was also executed on the same date. Likewise in packing Credit Account No,658 the last payment was made on 3-5--1976 and the liability to the extent of Rs,10,56,525.64 and admitted on 31-12-1973 by executing a balance confirmation slip. A promissory note of the said amount was also executed by defendant No,1. All the documents from 1974 onwards alleged to have executed on behalf of defendant No,1 were executed in favour of Australasia Bank Limited and are subject to challenge as contended by the learned counsel for the defendants. The plaintiff has alleged that a sum of Rs,20,84,417.24 was due in Account No,658 on 11-6-1980. In order to show the balance on 25-4-1982 the plaintiff has relied on promissory note and other security documents executed in the name of Australasia Bank Limited and prima facie filled by the plaintiff. In view of these facts there seems to be arguable defence raised by the defendants. In this regard reliance has been placed on Abdul Karim Jaffari v. United Bank of Pakistan 1984 SCMR 568. In view of observations made in the aforesaid judgment of the Supreme Court the defendant No,1 is allowed to appear and defend the suit on furnishing security in the sum of Rs,24,00,000 within a period of two months to the satisfaction of the Nazir of the Court.
9. ' The defendant No,2 is the Managing Director of the defendant No,1 and had executed a letter of guarantee on 30-11-1970. It was a continuing guarantee undertaking to make due payment of all the dues two days after the demand made by the plaintiff. In the affidavit filed by the defendant No,2, he has not denied the execution of letter of guarantee. He has raised the same plea which have been advanced by the defendant No,l. The plaintiff had served two notices on the defendant No,2 dated 30-3-1980 and 30-7-1984. The question will arise if notice, dated 30-3-1980 is a notice of demand will the suit against defendant No,2 be within time. Besides this plea as on the defence raised by the defendant No,1 which has been pressed by the defendant No,2, conditional leave has been granted to defendant No,1, I would grant leave to the defendant No,2 to appear and defend the suit on furnishing a guarantee in the sum of Rs,20,00,000 to the satisfaction of the Nazir within two months.
10. ' So far defendants Nos.3 to 9 are concerned the plaintiff seeks to enforce the claim after lifting the veil of incorporation. To press the plea except the fact that they are all family members and shareholders no other ground necessary for applying the principle of lifting the veil of incorporation has been pleaded or satisfactorily brought on record. Defendants Nos.3 to 9 have not executed any document. They are therefore allowed to appear and defend the suit unconditionally.
11. ' In all these applications the defendants have prayed for extension of time in filing the application under Order XXXVII; rule 3, C.P.C. The Additional Registrar by order, dated 15-10-1984 had held the service by publication made in a newspaper, dated 23-9-1984 to be valid and proper. The defendants have also prayed for setting aside this order. The defendants Nos.1, 2, 4, 6, 7, 8 and 9 have alleged that their address was not correctly mentioned in the plaint. From the record it seems that the summonses sent to defendants by registered post A/D and through the bailiff were returned unserved as either they were not residing at that place or were not traceable. Except one attempt by post and through the bailiff no further attempts were made to serve the defendants. In these circumstances publication of summons D under Rule 8 will not be a proper and valid service of summons unless it is established that the defendants were avoiding the normal process of, service. In these circumstances the defendants were not properly served and, therefore, the applications under Order XXXVII, Rule 3, C.P.C. Filed by them immediately on coming to know of the suit are within time.