' Habib Bank Limited filed suit for recovery of Rs,407.752 million against Ramzan Bakhsh Textile Mills Limited and 13 otheRs, Defendant No,1, i,e,, Ramzan Bakhsh Textile Mills Limited (the company) was sued as the principal customer, while defendants Nos,2 to 14 were impleaded as parties in their capacity as guarantors/ mortgagoRs, This suit was initially filed under the repealed Banking Tribunals Ordinance, 1984, before the learned Banking Tribunal No,1, Punjab, Lahore. Upon receipt of requisite show-cause notices, three replies were filed respectively by defendants Nos, 1, 2, 3 and 6 to 13; by defendants Nos,4 and 5 and by defendant No,7. Upon repeal of the Banking Tribunals Ordinance, 1984, the suit became triable by this Court under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (which has also since been repealed). The above-referred replies to show-cause notices were treated as P.L.As. And were renumbered as under:--
(i) P.L.A. No,45-B of 2000 by defendant No,7;
(ii) P.L.A. No,46-B of 2000 by defendants Nos,1, 2, 3, 6 and 8 to 13, and
(iii) P.L.A. No, 47-B of 2000. By defendants Nos,4 and 5.
' It is noteworthy that names of defendants Nos,5 to 14 were deleted by the then Banking Tribunal under Order I, rule 10, C.P.C. Vide order dated 7-5-1996. Application of defendant No,4 for deletion was, however, rejected by the same order. On 17-11-2000 plaintiffs application for impleadment of new defendants (new Directors of the Company) was accepted and, as a result, defendants Nos,15 to 23 were added as defendants through amended plaint dated 27-11-2000. As a result of settlement/ compromise, a decree in terms of settlement agreement (Mark 'A'), was passed by this Court on 20-3-2001 against defendants Nos,1, 6, 8 to 13 and 15 to 23, under Order 23, rule 3, C.P.C., for recovery of Rs,470,000,000 (470 million) repayable in instalments as per schedule of agreement between the parties. Defendants Nos,2, 3 and 7 did not enter into the settlement with the plaintiff and also did not subscribe to the joint application under Order 23, rule 3, C.P.C. Of the plaintiff and above defendants, therefore, their petitions for leave remained pending for arguments. In the meanwhile, defendant No,7 is stated to have died, but legal heirs of the said defendant were not impleaded as parties.
2. Upon promulgation of, Financial Institutions (Recovery of Finances) Ordinance, 2001, amended P.L.A. No,76-B of 2002 was filed under section 10(12), C.P.C. On behalf of defendants Nos,2, 3 and 14.
Learned counsel for the said petitioners at this stage stated that this petition was erroneously filed on behalf of defendant No,14, whose name had already been deleted through order dated 7-5- 1996. He thus stated that the amended P.L.A. Be treated as application for leave to defend only on behalf of defendants Nos,2 and 3. On 11-7-2002, the abovesaid defendants also filed C.M.No,480-B of 2002 under Order 7, rule 11, C.P.C. For rejection of plaint against them stating that defendant No,1 (the company) was upto date on its financial obligations towards the plaintiff under the above- referred compromise decree dated 20-3-2001 and only a balance amount of Rs,252,631,472 outstood as on 16-11-2002 against the Company. It was thus asserted that since defendant No,1 was not in default under the substituted arrangement as per decree dated 20-3-2001, therefore, the present suit against defendants Nos,2 and 3 (the applicants/guarantors) cannot proceed. The P.L.As. As well as C.M. No, '480-B of 2002 on the request of the learned counsel for the parties, were taken up together.
3. Learned counsel for the applicants/defendants referred to the personal guarantees of defendants Nos,2 IA and 3 at pages 189 and 191 of the suit file. Examination of these guarantees show that the said guarantees do not contain any of the essential facts and particulars to bring into existence enforceable and binding agreements of guarantee between the parties. The said guarantee forms are blank as to the following:--
(i) The beneficiary/creditor of the guarantees.
(ii) The date(s) or particulars of agreements, performance of which was purportedly guaranteed.
(iii) The customer or the debtor or the person whose obligations were allegedly indemnified or guaranteed; and
(iv) The date of execution of guarantees.
' These guarantees are stereotype letter form guarantees addressed to Habib Bank Limited, but without particularizing the branch, the address or the office of the Bank. It thus lends support to the arguments that beneficiary of the guarantees was not specifically identifiable and signatures of defendants Nos,2 and 3, if admitted, were obtained on blank forms. Had the guarantees been complete in other essentials thereof, such non-particularization of beneficiary of guarantees could have been ignored because the guarantees were addressed to an incorporated Banking Company, a legal person. The purported guarantees in the present case are blank and thus fatally devoid of mandatory conditionality's of binding guarantee contracts. In the first line of the guarantees, a blank space has been left against the agreement sought to be guaranteed by and from defendants Nos,2 and 3. Similarly, company/customer/person whose contractual obligations were required to be guaranteed has also not been specified or named in the second line of the guarantee forms. At the end of this routine guarantee form, even the date of the execution of guarantees has not been mentioned. The spaces reserved in the guarantee forms for above facts, have been left blank. Being unilateral letter form guarantees, the same have also not been countersigned by any person on behalf of the plaintiff-Bank i,e,, the alleged beneficiary, wherefor the beneficiary remains shrouded and the guarantee contract unproved. In absence of the above- stated essential ingredients, neither the beneficiary nor the customer (whose obligations are allegedly to have been guaranteed) can be identified. Furthermore, in absence of date of execution of the guarantee, the date of commencement or termination of the obligations and the corresponding rights of the respective parties under the guarantee cannot be determined. The period of effectiveness of the guarantee also remains uncertain.
4. Section 126 of the Contract Act, 1872, defines a contract of guarantee. The provisions being pertinent in the context under discussion, are reproduced hereunder:-- "A 'contract of guarantee' is a contract to perform the promise, discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the 'surety'; the person in respect of whose default the guarantee is given called the "principal debtor" and the person to whom the guarantee is given is called the 'creditor', A guarantee may be either oral or written."
5. Bare reading of the above section shows that contract of guarantee is a tri-partite agreement between the creditor, the principal debtor and the surety/ guarantor. Guarantee gives rise to triangular contractual relationship wherein there are three parties; the creditor; the principal debtor and the surety. At the request of the principal debtor, the surety agrees to answer the default of the debtor and undertakes performance of the debtor towards the creditor. In the present case, neither the creditor has been specifically identified nor the principal debtor or his obligations towards the creditor have been specified. So how can the surety be imposed with the burden of performance of undefined obligations upon default of unspecified debtor. As such the so-called guarantee forms do not give rise to any enforceable and binding agreement of guarantee between the parties.
6. Having held that the blank guarantee forms, as filed by the plaintiff, are not valid and enforceable agreements of guarantee between the parties, it will serve no purpose to keep the suit pending against defendants Nos,2 and 3 after granting them leave to appear and defend the suit.
Defendants Nos,2 and 3 cannot be said to be the guarantors, sureties, indemnifiers or "the customers" of the plaintiff-Bank in the present case in terms of section 2(c) of the Ordinance of 2001. Learned counsel for the plaintiff has confirmed that the case of the plaintiff-Bank against defendants Nos,2 and 3 was only in their purported capacity as guarantors and not as mortgagoRs, In view of what has been held above, the names of defendants Nos,2 and 3 are deleted from the array of defendants and are struck off as parties from the suit for not being guarantors for the finance of defendant No,1, i,e, the Company. The names of the said defendants have been struck out by invoking the provisions of Order I, rule 10, C.P.C. For the reasons that the suit of the plaintiff-Bank was decreed in terms of compromise decree dated 20-3-2001 as against defendants Nos,1, 6, 8 to 13 and 14 to 23 and plaint in the suit cannot be partly rejected as prayed for in C.M. No,480-B of 2002 by defendants Nos,2 and 3.
7. Resultantly, the suit as observed above, stands decreed in terms of settlement agreement (Annexure 'A') against defendants Nos,1, 6, 8 to 13 and 14 to 23. The names of defendants. Nos,2, 3, 5 and 14 stand struck out under Order I, rule 10, C.P.C. No amended petition under section 10(12) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, was filed on behalf of defendant No,4 or defendant No,7 (or his legal heirs) and no one appeared on their behalf, wherefore, they are proceeded against ex parte. The learned counsel for defendants Nos,2 and 3 has stated that defendant No,7 probably died prior to the suit. The information is contrary to record as defendant No,7 himself filed reply to show-cause notice (P.L.A. No,45-B of 2002) and there is nothing on record to show that defendant No,7 has expired. Be that as it may. After amendment in Order 22, rule 1, C.P.C., suit does not abate upon death of a party even if his legal heirs are not impleaded in the suit. As such for non-filing of amended petition for leave to defend the suit by defendants Nos,4 and 7, they are deemed to have admitted plaintiffs claim in the suit which is accordingly decreed against defendants Nos,4 and 7 as well.
8. The suit as well as all P.L.As. And C.Ms. Stand disposed of in above terms.