' JAWWAD S. KHAWAJA, J.---This appeal impugns the judgment and decree, dated 19-6-1998 passed by the learned Banking Court-IV, Lahore.
2. Platinum Commercial Bank Ltd. Respondent No,1 filed a suit on 28-10-1997 against nine defendants including the appellants and the respondents Nos.2 and 3. The suit filed by the respondent-bank was for the recovery of Rs,89,93,742 from the defendants jointly and severally.
3. We have gone through the record of the learned Banking Court and have also heard arguments of learned counsel for the parties. The facts of the case are simple. No serious objection has been raised by the appellants in respect of the facility granted by the respondent-bank. Learned counsel for the appellants merely stated that the appellants Nos.5 and 6 namely Messrs Plastic Crystal and Messrs Polymer International had availed Letter of Credit facilities from the respondent-bank, pursuant to which certain goods were imported. Under the terms of the Letter of Credit facilities the appellants were entitled to 90 days credit to retire the L/C documents. It was contended by learned counsel for the appellants that imported goods were kept in custody by the respondent-bank and such custody to date has been retained by the bank. On this basis, it was argued that the imported goods constituted adequate collateral available with the bank to meet the bank's claim. It was also stated by the appellants that they would have no objection to the sale of the pledged goods. It was, however, contended that the suit of the bank was not maintainable prior to the sale of the pledged goods. This contention is wholly without merit. Under the provisions of the Contract Act, the pledgee bank was entitled either to sell the goods prior to the filing of the suit or to file its suit and to retain the pledged goods as collateral security. It is clear that the bank exercised the second option and is therefore, entitled to retain the imported goods in its custody, as collateral security.
4. Learned counsel for the appellant next argued that the respondent-bank is under law required to account for the imported goods in its custody. This may be so. However, this is a matter, which can only arise in the execution proceedings, when the collateral security is realized in such proceedings through sale of the same.
5. Finally, learned counsel for the appellants argued that appellant No,1 had not availed any Letter of Credit facility and was therefore, not liable for the amount claimed by the bank. He also contended that Messrs Plastic Crystal appellant No,5 and Messrs Polymer International appellant No,6 were independent entities and that Messrs Crystal Enterprises appellant No,1 could not be saddled with liability arising from facilities availed by the said two appellants.
6. We have considered the aforesaid submissions of learned counsel for the appellants and find that the same have no material bearing on this case. The aforesaid appellants Nos.5 and 6 are not separate legal entities. Appellant No,5 is a sole proprietary concern of Tariq Ghaffar appellant No,4 while Messrs Polymer International is a sole proprietary concern of Tahir Ghaffar appellant No,3.
Messrs Crystal Enterprises appellant No,1 is a partnership of which the aforesaid Tahir Ghaffar, Tariq Ghaffar and their father Abdul Ghaffar appellant No,2 are the only partners. It is also asserted in the plaint and not seriously disputed by the appellants that the Letter of Credit facilities availed by appellants Nos.5 and 6 were actually granted by the respondent-bank at the request of Messrs Crystal Enterprises appellant No, 1.
7. In these circumstances, the appellants Nos.2, 3 and 4, are the only partners of Messrs Crystal Enterprises, and are also the proprietors of appellants Nos.5 and 6, who admittedly have availed the Letter of Credit facilities granted by the respondent-bank. Furthermore, the said appellants Nos.2, 3 and 4 have also executed personal guarantees to secure the facilities advanced by the respondent-bank. These guarantees are not disputed by the appellants.
8. In the foregoing circumstances, we harbour no doubt that the appellants are liable for the bank's claim and have not been able to show any credible, bona fide or substantial defence to the suit filed by the respondent-bank. Their application seeking leave to appear and defend the suit was, therefore, rightly dismissed by the learned Banking Court while passing the impugned decree. This appeal as such, being without merit, is dismissed with costs.