RAZA AHMAD KHAN, J---The instant application made on behalf of Industrial Development Bank, the decree-holder respondent herein arose out of an order of a learned Division Bench of this Court dated 31-10-1989 which reads: "This is regular first appeal. Points raised therein requires consideration. Admit subject to all just and legal exceptions on incompetency of the appeal."
It is prayed in the application that the appellants having failed to fulfil the condition precedent admitting an appeal, as ordained in section 12 (5) of the Banking Companies (Recovery of Loans), Ordinance, 1979 (hereinafter referred to as the Ordinance), they may be directed to deposit the decretal amount or furnish security equal in value to such amount failing which the appeal shall merit dismissal.
2. We have heard Mack Mahmood Akhtar Advocate learned counsel for the applicant-respondent and Malik Fazal Hussain Advocate learned counsel for the appellants at length in support of their respective pleas.
3. The learned counsel for the applicant-respondent, while reiterating his prayer in the application, referred -to the mandatory nature of the provision as contained in section 12 (5) of the Ordinance and placed reliance on two decisions of the Supreme Court namely, Mohammad Noor v. Allied Bank of Pakistan (1984 SCMR 1238) and Mir Afzal v. Allied Bank of Pakistan (1986 SCMR 1533).
4. As against this, the learned counsel for the appellants while did not controvert the legal aspect of the matter, however, contended that the security already furnished to the Bank for re-payment of loan may be accepted as due compliance of section 12 (5) for the purpose of admission of appeal thereunder and that this Court has ample jurisdiction to exercise such discretion in favour of the appellants. He relied on a decision of Sindh High Court in case of Usman Hussain vrs. Habib Bank Ltd. Reported as PLD 1988 Karachi 628.
5. We have given our serious consideration to the submissions made by the learned counsel in support of their respective pleas.
6. The sole question that falls for determination is as to whether a security furnished to the Bank for re-payment of loan can or cannot be treated as a security for the purpose of section 12 (5) of the Ordinance. A reference to section 12 (5) of the Ordinance may be usefully made: "12.Anneal s
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(4) ------- (5)No appeal shall be admitted for hearing unless the appellant deposits in cash with the High Court an amount equivalent to the judgment debt or, at the discretion of the High Court, furnishes security equal in value to such amount."
A bare reading of the aforequoted provision would reveal firstly that it is of a mandatory nature in that there is a prohibition prescribed for the admission of an appeal for hearing unless it is accompanied with the deposit in cash with the High Court of amount equivalent to the one decreed. A discretion, however, has been conferred on the High Court to order furnishing a security equal in value of such amount. It is, however, pertinent to note that the appellant is not debarred to file an appeal without compliance with the requirements of subsection (5) of section 12 (ibid) and it will be at the stage of its preliminary hearing that the question of deposit of the decretal amount or, as the case may be, furnishing of security shall arise.
7. Again, it is noteworthy that the above-quoted provision does not specify the nature of the security to be furnished and gives discretion to the Court, rather in general terms, to accept security instead of cash deposit equivalent to the amount of judgment debt. In the absence of any embargo, we are inclined to hold that, in appropriate cases, such discretion can be exercised in favour of the appellant by accepting the security furnished to the Bank for re-payment of loan, as a security for the purpose of admitting the appeal in terms of section 12 5) of the Ordinance and we respectfully agree with the Full Bench decision of Sindh High Court in Usman Hussain's case (PLD 1988 Karachi 628) in this regard.
8. We tend to subscribe also to the view expressed in the aforementioned decision to the effect that on account of the passage of time or for any other reasonable cause, if the security, furnished at the time of securing the loan, has lost its value or the property which was accepted by the Bank is not readily disposable: " ....The Court in such a case will have to pass an appropriate order to ensure that, in case of the dismissal of the appeal, the judgment debt is realized without any further delay.
Nor acceptance of such security at the time of granting the loan, shall constitute estoppel against the decree-holder or shall stand as a bar from pressing into service a claim that the security which was accepted against the loan should not be accepted under section 12 (5) (ibid) as such.
9. On this aspect of the case, learned counsel for the applicant expressed his apprehensions that the security furnished by the appellants at the time of seeking loan of Rs. 9 Million advanced and that too more than 6 years back i.e on 16-4-1984, might be no more sufficient to discharge the judgment debt of Rs. 12,15,579.93 and on this score, he submitted that it will be in the interest of justice if the appellants may be ordered to furnish a Bank Guarantee.
10. After hearing- the learned counsel for the parties and having gone through the record of the case, we are of the considered opinion that the ends of justice will be better served if, keeping in view the attending circumstances of the case, the appellants furnish a Bank guarantee equivalent to the decretal amount of Rs. 12,15,579.93 appealed against, within a period of two months and we hereby order accordingly. In case the appellants fail to do the needful within the specified period, this appeal shall stand dismissed. This application is thus disposed of in the terms indicated above.
C.M. ~No. 315/89 accordingly stands dismissed.