1. WAHEEDUDDIN AHMAD, J.-The respondent filed a suit on the 16th March 1970, for the recovery of its.
2. 27,28,752/3, being the balance amount due and payable on a promissory note for Rs. 75 lacks dated the 2 7th September 1967, from the petitioners Nos. 1, 2 and 3, under Order XXXVII, rule 3, C. P.
3. C. The petitioners filed an application for leave to defend the suit and a learned Single Judge of the High Court of Sind & Baluchistan, Karachi, has allowed the petitioners to defend the suit on con-- dition that they furnish security for the amount claimed in the suit to the satisfaction of the Nazir of the Court. The petitioners seek permission to file an appeal against the said order.
4. The facts leading to the case are that the petitioners Nos. 2 3 purchased from the Government of Pakistan its shareholding in the Karachi Road Transport Corporation at Rs. 1,35,42,130. Rs. 10 lacs were paid in cash and the rest of the amount was to be paid in four equal yearly instalments commencing from June 1954. They further took loan of Rs. 12,50,000 from the respon--dent-Bank and Rs. 20 lacs from the National Bank of Pakistan, but failed to make any further payment to the Government. In order to discharge the above liabilities, the petitioners Nos. 2 and 3, in December 1966, started transport business in partnership under the name of Khalid Rifat Transport Company.
5. The respondent-Bank agreed to finance petitioner No. 1 on condition that the entire management and financial control of the business of petitioner No. 1 shall be handed over to the nominee of the respondent-Bank until such time as all the liabilities of petitioners Nos. 2 and 3 to the Government of Pakistan and the respondent-- Bank and the other creditors are fully met to the satisfaction of the respondent-Bank. These terms were embodied in an agree--ment dated the .20th January 1967. In pursuance of this agreement, M/s. Industrial Management Ltd. Were appointed as Attorney of petitioner No. I and they were entrusted the business of the company. On the 26th January 1967, the current account in the name of petitioner No. t was opened and the Bank granted over-draft facilities in the current account so opened. On the 27th April 1967, a total sum of Rs. 48,21,839.35 was due and payable by the petitioner No. 1 to the respondent-Bank. It appears that the agreement entered into between the parties did not prove successful. In June 1969, the petitioners filed a suit known as Suit No. 462 of 1969, for the recovery of Rs. 1,87,01,009 on account of damages and for accounts against the respondent --Bank and the said Industrial Management Limited on the ground that the respondent-Bank and the said Industrial Management Ltd. Had caused heavy loss to the petitioners by their inefficiency and mismanagement.
6. It was thereafter that the respondent-Bank brought a suit for the recovery of Rs. 27,38,762/3 against the petitioners.
7. Mr. S. A. Nusrat, learned counsel for the petitioners, has contended that the entire management of the business was with the respondent's nominee and they have caused heavy loss by their inefficiency and mismanagement. According to the learned counsel, the petitioners are entitled to claim the said amount as set off and the High Court should have granted unconditional leave to the petitioners. The contention of the learned counsel has not impressed us. The execution of the promissory note is admitted. The consideration is also admitted. In these circum--stances, the petitioners cannot claim any benefit on account of the suit filed by them against the Industrial Management Limited and the respondent-Bank.
8. We have considered the reasoning of the learned Judge of the High Court and are of the opinion that the learned Judge was perfectly justified in demanding the security from the petitioners for granting leave to defend the suit. The learned counsel for the petitioners submitted that the amount involved is a very large amount and the petitioners are not in a position to furnish its security. He prays that unconditional leave should be granted to the petitioners. The question whether unconditional leave or conditional leave should be granted is a question which is entirely within the discretion of the trial Court. It is open to petitioners to move the High Court again on this point and we are sure that the High Court will take a compassionate view of the matter and redress the grievance of the petitioners, if possible. Subject to the above remarks, the petition is dismissed.