1. ' This is a suit for recovery of Rs,85,246,891 with accruing mark-up and costs under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act No,XV of 1997. The plaintiff namely Messrs Union Bank Limited advanced financial facilities to the defendants in between 1994 to 2000 against the guarantees in the form of mortgagees and personal securities. The defendant No,1 is a private limited company and defendants Nos.2 to 14 are guarantors/ mortgagors in their own capacity as well as the legal heirs of the deceased Directors of the Company namely Farzand Ali and Shaukat Ali, whereas defendants Nos.15 to 18 are legal heirs of Muhammad Ishfaq one of the mortgagors. The financial liability of the defendant was reduced into writing vide agreement, dated 7-3-2000 with the description of transaction in the body of the plaint. Upon failure of the defendant to discharge the financial liability in terms of the agreement, a legal notice, dated 27-3-2001 was served by the plaintiff upon the defendants and in reply thereto, the defendant without denying the liability demanded the certified copies of the documents relating to the securities. The claim of the plaintiff was that as per statement of account a net amount of Rs,71,039,076 (on 10-5-2001) was payable by the defendants as their joint and several responsibility. The plaintiff has also claimed liquidated damages at the rate of 20% amounting to Rs,14,207,815 and sought a decree to the tune of total amount of Rs,85,246,891. The financial facility was extended to defendants within the territorial jurisdiction of this Court, therefore, the suit has been filed for the recovery of amount in question before this Court with future mark-up at the rate of 22% per annum from the date of filing of the suit with the prayer of attachment of the mortgaged properties mentioned in para. No,9 (a to g supra) and the sale of goods hypothecated by the defendants for the satisfaction of the decree.
2. ' The application for leave to appear and defend the suit filed by the defendants under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act XV of 1997 was later amended under Financial Institutions (Recovery and Finances) Ordinance, 2001. The defendants Nos.2 to 18 have jointly filed an application for leave to appear and defend the suit and the defendant No,1 the company was being represented by defendant No,2. The learned counsel appearing on behalf of defendants Nos.15 to 18 has submitted that said defendants had neither authorized the counsel for the remaining defendants to file such an application on their behalf nor they had put their signatures on the application and their names in the application for leave to appear and defend the suit may be struck off. The learned counsel further stated that the responsibility of predecessor-in-interest of said defendants was only confined to the extent of mortgagor and that they were neither beneficiary nor furnished guarantee for the remaining defendants, therefore, said defendants were not necessary party and their names as defendants in the suit may also be struck off.
3. ' The learned counsel for the plaintiff having acknowledged the statement of the learned counsel for defendants Nos.15 to 18 to the extent that the predecessor-in interest of said defendants (Nos.16 to 18) was only mortgagor and was not a beneficiary of the financial facility and that they would only be responsible if ultimately decree is passed in favour of the plaintiff and the same is not satisfied through the sale of the mortgaged properties belonging to defendants Nos.2 to 14 and the securities furnished by them. The learned counsel has conceded that the liability of defendants Nos.15 to 18 was not similar to that of defendants Nos.2 to 14 but in any case, they being necessary parties, their names cannot be struck off. The learned counsel, however, has agreed that the said defendants need not to join the proceedings actively as in case of failure of the remaining defendants to discharge their liability or in case the decree if passed, is not satisfied. Only then their property mortgaged with the plaintiff will be under the charge. Keeping in view the position explained by the learned counsel for the plaintiff and defendants Nos.15 to 18, the names of said defendants in the application for leave to appear and defend the suit are struck off, whereas the application moved by them for deleting their names as defendants in the suit is disposed of with the observation that they shall be treated as pro forma defendants in the suit.
4. ' The learned counsel appearing on behalf of defendants Nos.15 to 18 has contended that the agreement dated 7-3-2000 was a fake document and the financial liability being burdened upon the said defendants under the agreement in question was against the record. The learned counsel contended that in fact the dispute related to the purchase and sale price of the goods and that the plaintiff has- neither produced a valid agreement nor the amount being claimed was payable by the defendants. The learned counsel for the defendants while raising technical and legal objections has sought leave while conceding the liability of the defendants by taking the plea that the documents on the basis of which, the claim was being made were not representing the correct factual position. The learned counsel for the defendants having acknowledged the dispute between the parties argued that the same can only be resolved in the light of statement of account prepared on the basis of Bank ledger which was not done and in absence of which, it is difficult to determine the issue and fix the liability of the defendants. The learned counsel for the defendants during the course of arguments on 12-12-2001 on the question put by the Court as to whether the defendants were prepared to deposit the cash amount to the extent of purchase price or furnish bank guarantee for the grant of leave to appear and defend the suit sought time to seek instructions and consequently the case was adjourned to 13-12-2001 but the learned counsel failed to make contact with his client and requested for further time, therefore, the case was adjourned for today. The learned counsel for the defendants has stated that the conditional grant of leave to appear and defend the suit was not acceptable to the defendants with the contention that they were not liable to pay anything to the plaintiffs and unconditional leave may be granted. The learned counsel argued that since the genuineness of the documents is under challenge, therefore, unless a proper opportunity is provided to the defendants to rebut the claim of the plaintiff through the evidence, it will be difficult to fix their liability and they in the given situation shall be entitled to be granted unconditional leave to appear and defend the suit.
5. ' The learned counsel for the plaintiff, on the other hand, contended that the bundle of documents in the hands of defendants are available with bank in support of the claim of the plaintiff in addition to the documents placed on record and the denial of the liability in general terms raising the objection to the genuineness of the documents would disentitle them even for the grant of conditional leave to appear and defend the suit and prayed that the suit.May be decreed.
6. ' The perusal of the documents placed on record by the plaintiff in support of the suit and the stand taken on behalf of the defendants would show that the plea of defendants was not being substantiated through any evidence/document. The mere denial of the liability without denial of getting the financial facility from the plaintiff would not be enough to suggest that either there was no liability or it was discharged. The mistake in the calculation of claim or the dispute relating to the mark-up would also be not a ground either to reject the claim of plaintiffs in toto or grant unconditional leave. The financial facility admittedly was extended to the defendants by the plaintiff and the only question for determination would be that to what extent their liability was in existence under the agreement in question and consequently for this purpose the examination of documents in presence of both the parties would be necessary. The defendants instead of offering any explanation for not discharging their liability or accepting their liability to such extent have flatly denied the claim of the plaintiff through evasive pleadings, which would lead to draw an inference that the defendants instead of discharging their liability intended to prolong the return of loan. The defendants having obtained the financial facility from the plaintiff a financial institution were under legal and moral obligation to discharge their liability in terms of agreement and on failure were bound to face the consequences. Having examined the matter in detail, I have not been able to find out any plausible and reasonable ground to grant tin conditional leave to the defendants to appear and defend the suit. I, therefore, in the light of the controversy and the pleadings between the parties and for the foregoing reasons, grant leave to appear and defend the suit to defendants Nos.2 to 14, subject to their furnishing cash security or Bank guarantee to the tune of purchase price amounting to Rs,71,039,076 to the satisfaction of this Court within one month failing which, the suit shall be deemed to be decreed for the total claim of Rs,45,246.891 with costs.