1. HAMID ALI MIRZA, J.- This is an appeal under Section 21 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 against the judgment and decree, dated 21.8.1998 passed by learned Single Judge of this Court in Suit No.. 147 of 1998 (First UDL Modaraba v. Kohinoor Fibres Limited and 3 others) whereby suit of respondent No. 1/plaintiff was decreed against the appellants jointly as well as severally for the sum of Rs.3,43,64,400 with mark-up at the rate of 21.5% per annum from the date institution of suit till its payment whereas suit against respondent No. 2 defendant was dismissed hence this appeal.
2. Brief facts of the case are that a lease agreement, dated 30th September, 1992 was executed between respondent No. 1/plaintiff and appellant No. 1 /defendant wherein it was acknowledged by the appellants that the cost of leased property was Rs.2,72,87,982 and the appellants further agreed to pay lease rentals in 20 instalments, in all amounting to Rs.4,72,19,984, out of the said amount the appellant No. 1/defendant paid first eight instalments amounting to Rs. 1,28,55,584/- and the lease was to continue for five years. As per respondent No. 14 the appellant No. 1 failed to pay balance of retails amounting to Rs.3,43,64,400, consequently on account of said default the respondent No. 1 served legal notice, dated 22nd September, 1996 on the appellants demanding payment of lease rents which had fallen due till service of notice. After expiry of period of lease 30th December, 1997 the instant suit was filed for recovery of unpaid lease rentals and for the possession of lease property. The appellant No. 1/defendant filed an application for leave to defend on the ground that he has been paying an amount of Rs.6,00,000 per month to respondent No. 1/plaintiff towards the arrears of lease rentals and that unpaid lease rentals could not be paid in time on account of law and order situation which had caused heavy losses to him. The appellants Nos. 2 and 3, defendants had executed personal guarantees to pay on demand the outstanding amount of lease rentals for appellant No. 1 in accordance with the agreement, dated 30th December, 1992 who have also made an application for leave to defend.
3. The learned single Judge after hearing the counsel for the parties refused to grant leave to the appellants on the ground that the grounds urged hardly made out a case for grant of leave considering that the liability of payment of arrears of lease rentals was not disputed.
4. We have heard the learned counsel for the parties, perused the impugned order and record and proceedings of the case.
5. Learned counsel for the appellants has submitted that, in fact, as per ground--(e) of memo, of appeal that there was neither any deliberate nor contumacious default in the payment which was due to uncompromising global economic factors beyond the control of the appellants considering also the fact that appellants continued to make payment of portion of admitted liability consequently such conduct entitled the appellant No. 1 to a concession of payment by instalments under Section 15 of the Banking Companies of Act XV of 1997, therefore, this Court may allow the appellants to make payment in instalments hence the learned Judge in Chambers has erred in law by not exercising the jurisdiction vested in him.
6. We do not find substance in the submission made by the learned counsel for the appellants.
7. Section 15 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 runs:- "15. Decree (1)
8. (a)
9. (b)
(2) notwithstanding anything contained in sub-section (1) if the Court is satisfied that it is not feasible to make a full recovery of a loan or finance by reason of the fact that the security or assets are inadequate and with a view of facilitating recovery and in the best interest of the bank company, it may, on condition that the customer pays the principal amount and such part of the interest or mark-up as has not been remitted-
(a) remit to release part of the interest or mark-up;
(b) allow repayment of instalment.
10. Provided that
(i) Prior to exercise the powers conferred herein the Court shall obtain in detail a detailed and reasoned opinion of the banking company in writing in relation to the above setting out the relevant facts and circumstances;
(ii) in no event shall a write-off of interest or mark-up for a period in excess of one year of the grant of instalments in excess of two years, be allowed without then written consent of the banking company, which consent shall set out in detail the relevant facts and circumstances; and
(iii) a copy of the order shall be forwarded to the State Bank."
11. We do not find anything on record whereby it could be said that the appellants had made out any ground within the meaning of sub-section (2) of Section 15 of the said Act for the grant of repayment of decretal amount by way of instalments before the learned Single Judge. As per proviso (b)(i) of sub-section (2) of Section 15 of the said Act, the Court prior to the exercise of powers with regard to the repayment of decretal amount by way of instalments has to obtain in detail, the detailed and reasoned opinion of the banking companies in writing in relation to the grant of instalments in excess of two years, could be allowed only with the consent of banking companies giving in detail the relevant facts and circumstances but in the instant case as no such ground for installment was placed/made before the learned Single Judge, therefore, no such opinion or consent of the respondents was called for from him by the learned Single Judge hence the submissions made before this Court of Appeal have no merits and substance, It may also be pointed out that the appellants had obtained the said amount by way of facility from the respondents in the year 1992 and the said amount was payable in 20 instalments i.e. By 30th September, 1997 but the appellant No.1 did not keep his promise to pay the said amount even by way of instalments and he only paid eight instalments amounting to Rs. 1,28,55,585 out of Rs.4,72,19,984 without any lawful cause and the appellants Nos. 2 and 3 being guarantors would be liable jointly and severally under Sections 127 and 128 of the Contract Act with appellant No. 1 for having committed default in the payment of the loan to the respondents.
12. No other plea has been raised consequently the appeal is dismissed in limine.
13. These are the reasons in respect of short order passed on 28.10.1999.