' This is a suit for recovery of Rs,106,675,127.40 filed by the Prime Commercial Bank Limited, a banking company against M/s. Chaudhry Wire Rope Industries (Pvt.) Ltd., defendant No,1 and Shama Wire and Cable Industries (Pvt.) Ltd., defendant No,5, both of which are companies incorporated under the Companies Ordinance, 1984 and 7 other defendants who have been sued as guarantors. It is alleged in the plaint that defendant No,5 is a sister concern of defendant No,1, both of which have been ordered to be wound up by the Company Judge and the plaintiff has obtained permission of the Court to proceed with the suit as required by section 316 of the Companies Ordinance, 1984.
2. The precise allegations on which the suit is based are that defendant No,1 was allowed various finance facilities including a facility of 80 million which was later on enhanced to 300 million under an agreement dated 5th of September, 1992 which was availed of by defendant No,1 in the manner described in para. 6 of the plaint. As a security for repayment of the loan the defendant No,1 executed Demand Promissory Note dated 22nd of May, 1993, letter of Hypothecation dated 5th of September, 1992 along with a supplementary letter of Hypothecation dated 22nd of May, 1993. To further secure the repayment defendants No,2 to 9 issued guarantees in favour of the plaintiff and created mortgage over the properties listed in para. 10 of the plaint. Various other documents are also alleged to have been executed by the defendants. According to the plaintiff the defendants failed to discharge their liabilities with the result that a sum of Rs,106,675,127.40 was outstanding against them.
3. As already mentioned, defendants Nos.1 and 5, which are incorporated companies, appeared before this Court and filed application for leave to appear and defend the suit on 7th of March, 2000 which was registered as P.L.A. No,43-B of 2000. Later on an application was filed by the Liquidator seeking amendment in the application for leave. Defendants Nos.2 to 4 and 6 to 9 have, however, filed separate application for leave to appear and defend the suit which was registered as PLA No,2-B of 2000.
4. The main thrust of the arguments of the learned Liquidator was that as defendants Nos.1 and 5 Companies have gone into liquidation, the remedy of the plaintiff lies in filing the claim before the Liquidator rather than instituting this suit. This contention is ill-founded. Under section 316 of the Companies Ordinance the learned Company Judge has the power to allow the filing of any suit or other proceedings against a Company under liquidation. In the present case admittedly permission of the learned Company Judge was obtained before the suit was filed. Consequently the main ground urged by the learned Liquidator has absolutely no force. It may also be mentioned that along with the application for amendment the defendants Nos.1 and 5 appended an amended petition for leave in which it has been clearly stated that the Official Liquidator has no objection if a decree is passed against the defendants except the Company. Consequently in view of the above P.L.A. No,43-B of 2000 and C.M. No,260-B of 2000 are dismissed.
5. Coming now to the application for leave moved by defendants Nos.2 to 4 and 6 to 9 it is to be noted that these defendants have neither denied the availing of the loan or its nature nor the signatures on any of the documents have been disputed. It has; however, been stated that the documents relied upon by the plaintiff were blank at the time of signatures and were filled in by the defendants subsequently and also that the guarantees executed by the defendants have not been attested in the manner provided by Article 17 of the Qanun-e-Shahadat Order, 1984.
6. A complete answer to the above contention is provided by subsection (3) of section 17 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. Section 17 may be reproduced as under:- "17. Banking documents.--(1) No bank shall obtain the signatures of a borrower or customer on banking documents which contain blanks in respect or important particulars including the date, the amount or the period of time in question.
(2) All banking agreements executed by or on behalf of a bank and a borrower or customer shall be duly attested in the manner laid down in Article 17 of the Qanun-e-Shahadat Order, 1984 (P.O. 10 of 1984).
(3) Nothing contained in subsections (1) and (2) shall invalidate any document executed prior to the coming into force of this Act.
(4) .
' As is obvious from the above subsection which clearly prohibits any bank from obtaining any blank signatures while subsection (2) insists that all documents shall be executed and decided in the manner provided by Article 17 of the Qanun-e-Shahadat Order, 1984 but exception has been made in the cases of those documents which have been executed prior to coming into force of the said Act. All the documents relied upon by the plaintiff are covered by this exception. Consequently these documents cannot be said to be invalid or suffering from any illegality.
7. It was lastly submitted by the learned counsel for the defendants that at one time the balance in the account of the defendants became Nil and their liabilities stood discharged and they had no responsibility for the period thereafter. This contention loses sight of the fact that the facility was running finance facility in which the amounts fluctuate. In the reply to the application for leave, the defendants have fully explained that the arrangement was of running finance which fluctuate during the continuation of the agreement for running finance. There is no specific denial in the application for leave of the running finance having been availed of. No triable issue has been disclosed by the defendants in this application also.
In view of the above, this application is also dismissed. Since the application filed for leave to appear and defend the suit, has been dismissed, the suit of the plaintiff is decreed as prayed for in the plaint.