' SALEEM AKHTAR, J---The petitioner seeks leave to appeal against the order of the learned Judges of the High Court whereby his application seeking permission to file appeal in forma paupris was rejected.
2. The respondent Bank filed suit against the petitioner for recovery of Rs,12,52,673 under the Banking Companies (Recovery of Loans) Ordinance. It was pleaded that the petitioner was maintaining a current account with the bank and in the year 1983 applied for grant of secured loan in the sum of Rs,5,00,000, which was granted to him. As a security for re-payment of loan besides the promissory note, the petitioner had executed a mortgage deed dated 20-8-1983 in respect of house entered at Khasra No, 148 situated in Khushkaba Takhtani Tappa Kechi Baig, Tehsil Quetta, which was registered with the Sub-Registrar. According to the petitioner a notice of hearing for 12- 1-1991 was served on him on 3-1-1991. On 16-1-1991 the petitioner submitted an application, in which it was pleaded that he had deposited Rs,1,13,161 against the loan of Rs,5,00,000 on various dates and a sum of Rs,4,89,429.67 including interest was outstanding on 17-3-1985 as Banking Council of Pakistan had waived interest from the said date. It was also pleaded that the market value of the mortgaged property is more than Rs,3,00,000 and he has no other property. The said house has been placed at the disposal of the Court of District Judge, Quetta in an insolvency petition filed by the petitioner. He prayed that the proceedings may be stayed. It seems that on 10-3-1991 tfie Court granted leave to defend subject to furnishing bank guarantee for the amount claimed by the bank within three weeks. However, after dictating the order and before signing it the learned Judge realised that in fact no application had been filed for leave to defend the suit. In one application the petitioner had prayed for extension of time and the other was for stay of the proceedings. In view of these facts and realising the mistake committed inadvertently, the learned Judge issued notice to the parties for correcting the order in their presence on 17-3-1991 the learned. Judge referring to the previous order in view of the fact that no application for leave to appear and defend had been filed, the suit was decreed in the sum of Rs,12,52,673 with interest. The petitioner, filed an application under Order XLIV, rule 1, C.P.C. Seeking permission to file appeal in forma paupris. In the application it was stated that he does not own property worth Rs,1,000 other than necessary wearing appeal. The only property belonging to him has been mortgaged to the bank and is subject-matter of insolvency proceedings. When this application came up for hearing, it was noticed that the petitioner had received compensation of Rs,40,000 from the Deputy Commissioner on 26-11-1988. There was nothing on record to explain its realization as well as the amount advanced to him as loan. The learned Judges accordingly dismissed the application by the impugned order.
3. Mr. Basharatullah, learned counsel for the petitioner contended that merely because the compensation received in 1988 had remained unexplained, it could not be made a ground for dismissal of the application. It was further contended that on merits the petitioner had good defence and for that reason first leave had been granted. The learned counsel further pointed out that from 30-12-1984 till the year 1986 no interest had been charged and the petitioner had been allowed to pay the loan in instalments under Order XLIV, rule 1, C,P.C. a person entitled to file an appeal, who is unable to pay the court-fee, may apply for permission to sue in forma pauperis.
Such application is accompanied by a memo. Of appeal and is decided on the principles and provisions relating to suits in forma pauprise, which have been made applicable to appeals.
However, there is an exception provided that such application shall be rejected if a Court on perusal of the judgment and decree against which appeal has been filed, comes to the conclusion that he decree is not contrary to law or usage having force of law or is erroneous. Therefore, a condition precedent has been imposed while deciding an application under Order XLIV, rule 1, C.P.C.
That the Court has first to examine the impugned judgment and decree and unless it comes to the conclusion that it is illegal, unjust and against the provisions of law, the application cannot be maintained. This is a departure from the procedure for by provisions relating to suit by pauperis.
4. In view of this fact, we inquired for the learned counsel for the petitioner whether there is any document to show the Banking Council of Pakistan and the respondent bank had waived their right to charge interest from the year 1984-85 and on what terms such concession was allowed to the petitioner. The learned counsel requested for time, which was granted and today he only produced a copy of the statement of account in which interest had been charged up to 30-12-1984 and thereafter instalments had been paid up to 1986. However, this is not a document to prove conclusively that the bank had agreed to waive interest. The learned counsel admitted that the instalments had been paid up to 1986 and thereafter nothing has been paid by the petitioner.
There may have been some arrangement between the parties with regard to payment of loan in which some concession may have been granted, but the petitioner, as is obvious from the statement of account, was to pay the loan in instalments. The petitioner failed to pay and as admitted, from 1986 nothing has been paid. In these circumstances, decree passed by the learned Judges cannot be said to suffer from illegality or infirmity as provided in proviso to Order XLIV, rule 1, C.P.C. We, therefore, find no merit in the petition and refuse to grant leave. However if the petitioner pays the court-fee subject to all just exceptions and the appeal proceeds on merits, the observations made herein will not in any manner influence or affect the judgment of the learned Judge who decide the appeal.