' AKHTAR HASAN, J.--This Regular First Appeal is directed against the decree dated 21-12-1980 of the learned Special Judge (Banking), Rawalpindi Camp at Faisalabad, whereby the respondent United Bank Limited's claim for recovery of Rs.3,81,246.33 was allowed against the appellants--Loanees with costs and interest till realisation.
2. Earlier the suit was being tried by a Civil Judge where on filing written statement some issues had been framed. Subsequently, however, owing to change in the forum it was transferred to the learned Special Judge appointed under the Banking Companies (Recovery of Loans) Ordinance, 1979, who declined permission to the appellants to defend it on the simple ground that they admitted to have had obtained the loan from the Bank on depositing with them the R. Rs. Of their goods. He proceeded to receive ex parte evidence consisting of L. Cs. Exhs. P.1--P.2 and Khatas Exhs.
P.3--P.5 relying upon which implicitly he decreed the suit.
3. Sheikh Ghias Muhammad, Advocate, for the appellants adverting attention to the plaint as also their own stance taken up in the petition for leave to defend the suit, urged that some definite questions of fact as well as of law were raised calling for determination and that in view of the rule enunciated in Finance Textile Mills Ltd. Karachi v. Haji Umar PLD 1963 SC 1643 it was incumbent upon the trial Court to have granted them permission to prove the same.
4. The respondent's case was that they had opened on various dates Letters of Credit on the request of the appellants for import from U.S.A. (i) Acetate Yarn, (ii) Viscose Yarn and (iii) export of Sarees to Mauritius on the express condition to retire to them shipping documents against payment with no obligation on their part for clearance of the goods or subsequent shortages. They averred that on receipt of the goods the appellants or their nominee Javed Ahmad did not retire the documents on payment, nor did they clear the goods, and likewise the other nominee for them namely Messrs Farhat Industries failed to deliver to them the stock of Sarees for export in order to recover the debt through the bills of their sale. They claimed that total amount due was Rs.3,81,246.33 and that the same had even been acknowledged by the appellants in their letter dated 7-1-1976.
5. On the other hand while admitting to have had initiated the opening of the Letters of Credit, the appellants denied liability to pay off the debts for the reasons that "the goods were nowhere which could be accepted in accordance with the shipment and L.C. Documents. They explained that the number and particulars on cartons were not in accord with the import documents and, therefore, they had instructed the respondent Bank not only to point out the discrepancies to the exporting Bank but also to refuse acceptance of delivery thereof. They maintained that the respondent Bank in a fraudulent manner colluded with some Clearing Agents at their own risk in showing false deliveries of such goods as were not imported by them and that they could not be bound down to pay for them. They equally disputed liability to pay for Sarees which Messrs Farhat Industries did not deliver to the respondent Bank for onward export and asserted that those had eventually been misappropriated by the respondent's Attorneys. They stressed that their pleas deserved to be tried by affording them an adequate opportunity in a regular trial rather than be spurned summarily.
6. As already pointed out, the learned trial Court was influenced by the admission on the part of the appellants of having undertaken the loan by depositing R.Rs. Of their goods with the respondent Bank and dismissed their application for leave to defend the suit.
7. Counsel maintained that there was a serious dispute in regard to the competence of the respondent Bank to receive deliveries of the goods. Referring to the contents of the plaint, he submitted that on their own showing there was no such obligation placed upon the respondent- Bank, but later they actually collected the goods, and according to the appellants, version, even misappropriated them or caused their devaluation. He urged that this point itself was a bona fide allegation partaking the shape of a triable issue and further that taking steps against the agreement involved even a point of law constituting quite a plausible and substantial question needing trial. He criticised the impugned order observing that it was mechanical inasmuch as no points both of facts and law urged in the relevant petition were at all discussed therein. Still further, his contention was that merely admitting to have raised loans was not by itself sufficient to rule out all sorts of defences which may be raised by the loanee to show why he was not liable to pay the debt. He heavily relied upon the precedent case, cited above which to his reading made it compulsory for the lower Court to have objectively considered the pleas raised in the relevant petition.
8. Reading the plaint as also the appellants petition we find that there were reasons to believe that some triable issues were involved. The plaint itself in a way affirms that there was no obligation upon the respondent-Bank to clear the goods and yet it reveals that they had collected those.
Apparently the point needed to be tried as to why there was departure from the initial understanding in that behalf. Similarly it had to be seen if the appellants could refuse acceptance of deliveries merely because number and particulars shown on the cartons were not in accord with the import documents. As regard Sarees, it was a common case that Messrs Farhat Industries were involved in delivering these to the respondent-Bank after necessary processing. One version was that they failed to do their job while the appellants contended that they could not be burdened with the consequences of their neglect. Lastly, there was a specific allegation of the respondent- Bank acting in collusion with the Clearing Agents for misappropriating the goods. All these questions were not merely illusory; rather those were substantial having had considerable repercussions in final determination of the liability to repay the debt. At the same time those gave an appearance of being bona fide and not entirely based upon a wanton desire to evade payment of loan. The test was not to see if those will succeed; it was enough to preceive that those formed a plausible defence to displace rebuttable presumption attached to banking documents under section 118 of the Negotiable Instruments Act, 1881. We agree with the contention that the appellants should have rather been allowed opportunity to defend the suit. Rejection of the application was harsh and indeed inequitable. At best they may have been put to terms as contemplated by. Order XXXVII, Rule 3, C.P.C.
9. We accept the appeal, set aside the impugned order as also the decree and instead allow the application to defend the suit subject to the appellants furnishing security to the satisfaction of the trial Court. The case is remanded to it (Special Judge Banking Multan) for further proceedings.
Parties shall appear before him on 5-4-1987. No order as to costs. The record be sent back without delay.