ABAID ULLAH KHAN, J.--The facts relevant for the purpose of disposal of this appeal against the judgment and decree of the learned Judge in Chamber constituting Special Court under the Banking Companies (Recovery of Loans) Ordinance, 1979, dated the 26th June, 1985, decreeing the respondent's suit for recovery of Rs.11,24,934.03 against the appellants may be shortly stated. On the move of the appellants the respondent, United Bank Limited, Mcleod Road, Lahore, sanctioned in their favour loan and cash credit facilities to the extent of Rs.6 44,000 (overdraft limit of Rs.4,00,000 and loan against foreign bills limit of Rs.2,4-1,000) against the securities of hypothecation of stocks-in-trade (carpets) worth Rs.8,00,000 and mortgage of 190 kanals 18 marlas of land situate in the area of village Khateel, tehsil Shakargarh, District Sialkot. Appellant 3 duly executed the letter of hypothecation and mortgage deed on the 20th November, 1977.
2. On the 19th December, 1981, the respondent instituted suit for realisation of Rs.11,24,934.03 which was stated to be outstanding against the appellants on account of principal debt and interest.
3. On the appellants' application under OXXXVII, Rule 3 of the Code of Civil Procedure the learned Special Court, by its order of the 11th December, 1984, granted leave to the appellants to appear and to defend the suit subject to their depositing Rs.7,30,283.23 in the Court by 25th February, 1985.
The learned Court remarked in its order that the value of the mortgaged property had been asserted to be only about Rs.2,(N),000 which could hardly cover the principal amount of loan against foreign bills. It considered the liability of overdraft accumulated to Rs.7,30,283.23 to be without any security and consequently conditioned the grant of (cave on payment of the said amount
4. On the 13th January, 1985, the appellants filed application seeking review of the abovcmentioned order of the learned Court for getting condition of depositing of Rs.7,30,283.23 dropped. They contended that the value of the mortgaged property, as assessed by the surveyor (whose certificate they produced) on the 5th January, 1985, was Rs.9,92,680 and was in excess of their liability towards the respondent. Pending hearing of this application the learned Court suspended the operation of its order directing the appellants to deposit Rs.7,-30,283.23. Parties took some time for settling the matter by compromise which could not be arrived at. On the 26th June, 1985, when the review application was taken up for hearing none entered appearance on behalf of the appellants and, therefore, it was dismissed. The appellants were proceeded against ex parte and for their non-compliance with the condition of payment of Rs.7,30,283.23 preliminary decree for recovery of the suit amount by sale of the mortgaged property was passed.
5. Apart from others the appellants' grievance against the imposing of condition of payment of Rs.7,30,283.23 by the learned Special Court seems to be not without reason. According to respondent Bank's own records the value of the appellants' stocks-in-trade was no less than Rs.8,00,000 and that of the mortgaged land was about Rs.4,00,000 when the goods were pledged and the land was encumbered under mortgage on the 20th November, 1977. By the 11th December, 1984, when the leave granting order was passed by the learned Special Court, the value of land could very well be taken to have risen manifold. The combined value of the land and stocks-in- trade was certainly more than Rs.7,30,283.23. It means that the outstanding amount of loan was adequately secured by the appellants' property. If this fact had been properly brought to the notice of the learned Special Court it would not have made the payment of Rs.7,30,283.23 as a condition precedent to the grant of leave to appear and to defend the suit rather it would have granted leave unconditionally. In view of sufficient security for payment of loan being available with the respondent the appellants can be permitted to proceed with the defence of the suit without requiring them to furnish additional security much less make any payment. In the A circumstances the appeal is accepted, the impugned judgment and decree are set aside and the appellants are allowed leave to appear and to defend the suit unconditionally. The suit is remanded to the learned Special Court for deciding it afresh according to law. The parties arc left to bear their own costs.