This is a suit for recovery of Rs,64,412,034 filed by Messrs Dawood Leasing Company Limited, a Banking Company within the meaning of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act. 1997 against Messrs Regent Dyeing and Finishing Mills (Pvt.) Limited, a company incorporated under the Companies Ordinance, 1984 and 5 others who have been sued as Directors/Guarantors.
2. According to the facts stated in the plaint, at the request of defendant No,1 certain machinery mentioned in the plaint was leased out by the plaintiff to the defendants through agreement dated 8-3-1995. Subsequently, there was another agreement between the parties on 30-6-1997 for the rental of some other machinery. In order to secure the repayment of the amounts due under the agreements the defendants had executed documents referred to in para. No,6 of the plaint and had also created mortgage over the property by deposit of title deeds. According to the case of the plaintiff neither the principal amount nor the other due rentals have been paid by the defendants to the plaintiffs and as such the amount claimed in the suit is due and payable.
3. Two applications for leave to appear and defend the suit have been filed in this case. One by defendants Nos.1 and 3 to 6 which is P.L.A. No,173/B of 1998 and the other is C.M. No,417/B of 1998 filed by defendant No,2. So far as defendants Nos.1 and 3 to 6 are concerned they admit the contents of the plaint and learned counsel has only argued that the project could not go through and as such the agreement between the parties was frustrated and the plaintiff can at the most recover the machinery rented out
4. This contention on the face of it is not acceptable. Under the agreement between the parties the defendant had in addition to price of the machinery also undertaken to pay the rentals. If the defendants could not set up the project or there was some difficulty in doing so the plaintiff cannot be made to suffer. No ground for grant of leave to appear and defend the suit to defendants Nos.l, 3 to 6 is made out. P.L.A. No,173/B of 1998 is, therefore, dismissed.
5. So far as defendant No,2 is concerned he has stated that he is not a guarantor of the loan. It is, however, admitted in the application that he was the first Chairman of Company and the letter of guarantee which he had executed has not been denied, though it has been stated that he has resigned and left the company and certain other guarantees have been substituted. Learned counsel for the plaintiff has explained that other guarantees are with respect to the second agreement executed between the parties but defendant No,2 remained as guarantor as regards the first agreement to which he was a signatory.
6. In these circumstances, defendant No,2 cannot escape his liability so far as the loan due under the first agreement is concerned. His application for leave is, therefore, dismissed with the clarification that he shall not be liable to pay any amount due under the second agreement of lease.
7. Under the statement of accounts annexed with the plaint a sum of Rs,38,364,820 are outstanding under the first agreement and a sum of Rs,26,047,214 are due and payable under the second agreement. In all it comes to Rs,64,412,034.
8. In view of the above a decree for recovery of Rs,26,047,214 is passed against defendants Nos. 1, 3 to 6 while a decree for recovery of Rs,38,364,820 is passed against all the defendants with costs.