' SYED JAMSHED ALI, J.---This judgment will also dispose of R.F.A. No, 67 of 2000 as the two appeals are directed against the consolidated judgment. Dated 29-10-1999 of the learned Banking Court whereby the suit of the Agricultural Development Bank of Pakistan for the recovery of a sum of Rs,87.83,575 has been decreed while the suit of the appellants for rendition of accounts and permanent injunction has been dismissed. R.F.A. No, 592 of 1999 arises out of the suit of the respondent while R.F.A. No, 67 of 2000 arises out of the suit of the appellants.
2. The case of the respondent-Bank was that a loan in the sum of Rs, 24.00.000 was sanctioned in favour of the appellants on 4-6-1984 with 12% interest and other charges for the purpose of a Dairy Farm. Apart from the mortgage of the property. It was secured by the personal guarantees of the appellants 2 to 5. Demand promissory note and hypothecation of the machinery etc. Out of the sanctioned amount an amount of Rs,7.50,000 was dismissed on 13-3-1983 while an amount of Rs,16,00.000 was released to the appellants on 2-6-1985. The loan was recoverable in fourteen half yearly instalments commencing one year after disbursement of the first instalment. It was averred that despite repeated demands, the appellants did not pay the amount due. The appellants were served through registered post acknowledgement due on 25-2-1997 while the summons through the ordinary process were served on 7-3-1997.. On 15-3-1997, the appellants filed an application under rule 3 of Order XXXVII of the Code of Civil Procedure seeking leave to appear and defend the suit on a number of grounds. During the pendency of the suit, the appellants made an application under section 67 of the Transfer of Property Act read with sections 34 and 154 of the Code of Civil Procedure with a prayer that the respondent-Bank be directed to exercise their right as contemplated by paragraphs 15 and 16 of the mortgage deed and make arrangements for taking over the management of the project and sale of assets of the company. The application of the appellants for leave to appear and defend and the applications under section 67 of the Transfer of Property Act were dismissed by the learned Banking Court vide judgment, dated 29-10-1999 and on the basis of the finding that the liability was not denied by the appellants, the suit filed by the respondent was decreed.
3. Appellant No,1 had meanwhile, on 16-9-1992 filed a suit for rendition of accounts and permanent injunction. Their case was that in accordance with the direction of the respondent-Bank the entire project was insured with the Eastern Federation Union Insurance Company but on account of a heavy floods in Sutlej River the entire project of the Dairy Milk Unit was washed away. It was further averred that a claim was lodged with the Insurance Company but till the filing of the suit nothing had been done, appellant No,1 had moved the respondent-Bank to pursue the claim and on the move of appellant No,1, the respondent-Bank pressed the Insurance Company for payment of the claim to appellant No,
1. Further that the Dairy Milk Units had been declared sick units. It was further averred that the respondent-Bank was harassing the appellants through the Revenue Department for the recovery of the principal amount and a large amount of mark-up while the interest had been declared as unIslamic. With these averments it was prayed that the agreement for loan and the sanction letter be declared as having been frustrated and incapable of performance on account of the omission and commission of the respondent-Bank, with a prayer that the respondent should be directed to render accounts and a decree for the amount due be passed in favour of the appellant. A permanent injunction was also claimed restraining the respondent from seeking to enforce the said frustrated and discharged agreement and be restrained from proceeding against appellant No,1 or sits property in any manner to recover the loan and interest as arrears of Land Revenue. Leave to appear and defend the suit was filed by respondent No, 1 .
4. Both the suits were consolidated and while the suit of appellant No,1 was dismissed the suit filed by the respondent was decreed.
5. The learned counsel for the appellant contends that the two suits were different in nature and their disposal by the consolidated judgment is illegal. He further contends that during the pendency of the suit of the respondent, the appellants had surrendered the mortgaged property in favour of the respondent who should have proceeded to recover the outstanding amount by sale of the said property and, therefore, the suit was liable to be dismissed. He contends that in the application for leave to appear and defend. The appellants had raised a bona fide dispute which according to him was the damage to the project on account of floods, which was an act of God, the project was insured at the direction of the respondent and they should have pursued the Insurance Company to pay the claim of the appellant No,1. It was next contended that the impugned order, in so far as it directed dismissal of the suit of appellant No,
1. Was not sustainable as the nature of the controversy raised therein was entirely different. He next contended that the decree granted was not in accordance with Forms Nos.7 and 7A to 7E of Appendix 'D of the Code of Civil Procedure. It was a money decree simplicitor, and therefore, the property mortgaged could not be sold. He next contended that even in the impugned judgment, the learned trial Court observed that the objections raised by the appellants were casual and routine type. From this observation he wanted to persuade us that a bona fide triable dispute did exist between the parties..
' On the other hand, the learned counsel for the respondent-Bank submits that since the two suits were between the same parties and involved common questions of law and fact, these were disposed of by a consolidated judgment and it has so been noted in the impugned judgment. He next contended that availing of the facility and execution of security documents was candidly conceded by appellants in their suit. He next contended that in fact, for the loss statedly caused on account of the floods appellant No,1 had no cause of action against the respondent, the claim was rejected by the Insurance Company after a due inquiry, the appellants accepted rejection of the claim and it was for them to have enforced their claim, if any, against the Insurance Company by filing a suit against the said Company. It was maintained that the appellants were served through registered post acknowledgement due on 25-2-1997 while the application for leave to appear and defend was filed on 15-3-1997 which was barred by time. An objection was taken before the learned Banking Court which was noted but was not adverted to.
7. With respect to the last submission of the learned counsel for the respondent, the learned counsel for the appellants explained that they were served through ordinary process on 7-3-1997 and the application for leave to appear and defend the suit filed on 15-3-1997 was within the prescribed period of 10 days.
8. We have considered the submissions made by the learned counsel for the parties. The claim of the respondent-Bank was supported by a statement of accounts duly certified which shows that on the date of the suit, the liability outstanding against the appellants was Rs, 87.83,575. The statement of accounts further shows that an amount of Rs, 2,36,000 was paid by the appellants on 12-7-1986 while another amount of Rs,2,36,000 was paid on 7-2-1987. These payments were duly accounted for and thereafter the liability was worked out at Rs,87,83,575. The learned counsel for the appellants neither disputed the awailing of the facility by the appellants for the terms of the agreement between the parties. Execution of security documents such as the demand promissory note, letters of guarantee and by hypothecation of machinery were also not disputed. Even the quantum of liability was not disputed. His emphasis has been that since the project had completely been wasted away on account of heavy floods (the date or year of the flood was not given in the plaint. The learned counsel however, at the bar, submitted that it was in the year, 1988).
The contract stood frustrated and since the project was insured at the direction of the respondent, they should have persuaded the Insurance Company for their claim. This was in fact the main ground in the suit filed by the appellant No,
1. On being questioned the learned counsel for the appellants frankly conceded that the claim was turned down by the Insurance Company and no further proceedings were taken by appellant No,1 against the Insurance Company. If appellant No,1 was aggrieved of the action of the Insurance Company in declining to admit its claim, the remedy of the appellants was a suit against the Insurance Company. Merely because the appellants had statedly suffered loss on account of floods, it did not relieve them of his liability under the agreement. The triable issue according to the learned counsel for the appellant disclosed in the application for leave to appear and defend was the damage to the project and the liability of the respondent to get the claim settled from the Insurance Company. As noted above, it was not the responsibility of the Bank. After rejection of their claim by the Insurance Company they, did not further pursue the matter.
9. As far as the objection of the learned counsel to the disposal of the two suits by consolidated judgment is concerned, it has no merit. The defence of the appellants to the suit of the respondent was the loss sustained as a result of floods which was the main ground in the suit for rendition of accounts, filed by appellant No,
1. Both the suits involved common questions of law and fact and there was nothing illegal in the disposal of the two suits by a consolidated judgment.
10. As far as the contention that only the mortgaged property could be proceeded against is concerned, it was inconsistent with the submission noted in para. 5 that the decree was not issued in the prescribed form. Apart from mortgage of the property, appellants 2 to 5 had also executed letters of guarantees. Thus, not only the mortgaged property could be proceeded against the respondent could lawfully enforce the personal covenant against appellants 2 to 5. Merely because the appellant was prepared to surrender the property of the project in favour of respondent-Bank, the personal covenant was not wiped out.
11. As far as the contention that the decree passed by the learned trial Court is not in accordance with form 7, 7-A, 7-B, 7-C is concerned, these contemplate the forum of a preliminary decree while forms Nos. 7-D and 7-E pertain to a final decree in a suit for foreclosure and sale in a redemption suit respectively. However, according to section 14 of Act No, XV of 1997, the Banking Court is not required to pass a preliminary decree as provided under Order XXXIV of the Code of Civil Procedure and can straightaway pass a final decree.
12. We have taken into consideration the submission of the learned counsel for respondent that the application for leave to appear and defend was barred by time. The objection was noted by the learned Banking Court but was not adverted to. The appellants were served through ordinary process on 7-3-1997 while they had already been served through registered post acknowledgement due on 25-2-1997 and the application for leave to appear and defend was filed on 15-3-1997 which was beyond the prescribed period of 10 days under section 6(2) of the Banking Tribunal Ordinance, 1984 under which the suit was filed. It was, therefore, barred by time. The contention of the learned counsel for the appellant that the starting point was 7-3-1997 when the summons were served through ordinary process and, therefore, the application was within time has no merit. Reference may be made to Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497. It was held that any mode of service provided under rule 8 of the Banking Companies Recovery of Loans, Rule. 1980 was due service. The aforesaid rule was applicable for service under the Banking Tribunal Ordinance, 1984 by virtue of section 6(3) of the aforesaid Ordinance. The application for leave to appear and defend was, thus, barred by time.
13. For what has been stated above, we find no merit in these appeals which are accordingly dismissed.