1. ' C.MA.No,519 of 1989 is an application for leave to defend in a suit for recovery of Rs,29,653,306 with interest and cost under the Banking Conrpanies (Recovery of Loans) Ordinance, 1979.
2. ' The case of the plaintiff/National Bank of Pakistan is that it had granted credit facilities by way of loan to the extent of SR.6.0 Million (Saudi Rials) to defendant Messrs Gammon Pakistan Ltd. As per terms and conditions contained in agreement dated 29-5-1986. The defendant company enjoyed the credit facilities to the extent of SR.5.0 Million (Saudi Rials), which amount was withdrawn in the month of June, 1986. As security for repayment of the said loan, the defendant executed D.P. Note with a delivery letter and executed Deed of Hypothecation by way of second charge in respect of its present and future plan, machinery etc. One of the conditons of the loan was that the defendant Company shall apply the proceeds of the loan exclusively to the project i,e, construction of Pakistan Embassy in Riad (Saudi Arabia). The Defendant diverted a substantial amount from the aforesaid loan to his other projects and, therefore, the plaintiff called upon the defendant to repay unauthorisedly diverted funds, but without any response. Hence this suit after usual notice. Mr. Noorullah A.Manji, who appeared for the defendant has pressed his application for leave to defend on the following grounds:--
(1) That this Court has no jurisdiction to entertain the suit as the amount was paid in Saudi Arabia and demand for return was also made outside Pakistan and also because hypothecated machinery was lying outside Pakistan.
(2) That the pronote in question is without consideration as the loan was disbursed subsequently to the execution of the pronote.
(3) That the first charge was of two other banks, who also have been joined under Order 34, Rule 1, C.P.C.
(4) That the statement of accounts relied upon by the Plaintiff which was issued by the National Bank of Pakistan, Behrain, is inadmissible under section 4 of the Bankers'-Books Evidence Act.
3. ' So far as the point of jurisdiction is concerned, it may be mentioned that the agreement dated 29- 5-1986 was entered into in Pakistan, which has given the plaintiff cause of action or at least a part of cause of action to file the suit and, therefore, in view of section 20 clause (c), C.P.C. This Court has got jurisdiction to entertain the suit. It is immaterial whether the amount was paid in Saudi Arabia or demand for return of the same was made outside Pakistan. Even the fact that hypothecated machinery was lying outside Pakistan, would not debar this Court from entertaining the suit.
4. 'So far as the second objection is concerned, which relates to the pronote, it may be pointed out that the pronote was obtained as a security for credit facilities by way of loan which was agreed to be enjoyed subsequently. It is admitted that the loan facilities were enjoyed and, therefore, the pronote cannot be treated to be a pronote without consideration.
5. ' The question of joining the other two banks to have a first charge is also not material for the purposes of application for leave to defend.
6. ' Regarding the statement of accounts issued by the National Bank of Pakistan, Behrain, it may be pointed out that the mere fact that National Bank of Pakistan which is admittedly a Pakistani Bank, had opened a branch in Behrain, would not convert National Bank of Pakistan into a foreign bank. It will remain a Pakistani Bank for all purposes so long as it is registered in Pakistan, and its statement of accounts will be admissible under section 4 of Bankers' Books Evidence Act.
7. ' In Annexure 'F' to the plaint it is admitted by the defendant that they had diverted Saudi Rials 2787778 on other projects of the defendant mentioned therein. Mr. Noorullah A. Manji has explained this by saying that this amount was of the defendant company itself, which it had spent on those other projects before the Consortium loan was withdrawn by it. It is also contended by Mr. Nooruallh A. Manji that the loan amount was to be returned by the defendant from the amount of the bills which it had to receive from the Government of Pakistan. Those bills are lying under objection and have not been paid by the Government of Pakistan as yet. It is, therefore, that the defendant has not paid the amount. It would appear that the defendant having admitted the loan as well as the pronote and the security, is liable to make payment. So far as the bills are concerned, for that also the contention of the plaintiff is that the defendant had committed breach of condition by diverting the amount of the loan to other projects which they had not only admitted in the meeting of the Banking Council, but have given in writing also in Annexure 'F' to the plaint.
8. ' Under these circumstances I grant leave to the defendant to defend the suit, but on the condition that the Defendant shall deposit the suit amount i,e, Pakistan Rupees 2,96,53,306 in the Court within one month or furnish bank guarantee to the extent of said amount.
9. Leave to defend .