' MIAN SAQIB NISAR,J.---This judgment, will dispose of R.F.A. No,235 of 2002, R.F.A. No,354 of 2002, E.F.As. Nos.48 and 150 of 2003.
2. Brief facts of the case are, that respondent No,1, filed a suit for the recovery of an amount of Rs,14,259,767 alongwith mark-up against the appellants and respondents Nos.2 to 7, before the Banking Court, Lahore, claiming in the plaint, that appellant No,1, applied for a finance facility for opening the letters of credit (Usance) amounting to Rs,15.2 Million, and respondents Nos.2 to 7, mortgaged their immovable properties for securing the said facility. It is further stated that, during the period commencing from 8-3-2000 till 15-12-2000, appellant No,1, opened 25 inland letters of credit (Usance 90 days) in favour of Pakistan Steel Mills, in order to purchase certain kinds of the goods. The L.Cs amounts were duly paid by the respondent-Bank to the beneficiary, but the appellant No,1 has failed to discharge its liability in terms of the agreement between the parties, thus the above amount was due to the respondent-Bank from appellant No,1, and the appellant No,2 and other defendants Nos.2 to 7, were responsible as the mortgagors. The appellants, as also the other defendants, filed leave applications, setting out the defence that, no doubt, the facility was sanctioned, but as the bank failed to open the letters of credit in terms of the sanction letter, therefore, the appellant No,1, paid the 100% margin amount to the respondent-Bank for each of the letter of credit. In this behalf, the appellants placed on record certain pay-in-slips, showing that for each L.C, the amount covered therein, was deposited before the L.0 could be opened. It may be pertinent to state here that the appellants also filed an application under Order II, rule 14, C.P.C, praying therein for the direction to the respondent-Bank to place on record the copies of the accepted bills of exchange, drawn upon the letters of credit. The learned Banking Court; However, dismissed the leave application, and has held as follows:-- "In case defendants Nos.1 and 2 were to pay the entire amount of the L.0 then what was the fun of opening the L.0 with the plaintiff-Bank. The defendants Nos.1 and 2 could deposit the entire amount with the concerned authority i.e. Pakistan Steel Mills Karachi. This contention of the defendants has no force. I have also perused the statement of accounts. No objection is taken regarding the statement of account. Even otherwise the statement of account is prepared in accordance with the provisions of Banker's Book of Evidence Act. The defendants have failed to raise any substantial ground in their application for leave to defend the suit. In such circumstances, I see no force in the petitions for leave to defend the suit filed by the defendants so same are dismissed."
' Resultantly, the suit was decreed.
3. Learned counsel for the appellants has taken us through various pay-in-slips, according to which, the amount covered by the L.Cs, seems to have been fully paid to the bank at the time when the L.Cs, were opened. It is also shown to us that in relation to certain L.Cs, the amounts were directly paid by the appellants to Pakistan Steel Mills and the originals of the L. Cs documents, are also claimed to be in possession of the appellants, thus, it is submitted that the Banking Court has drawn an erroneous presumption against the appellants, while holding in the aforesaid reproduced portion of the judgment that "In case defendants Nos.1 and 2 were to pay the entire amount of the L. C then what was the fun of opening the L.0 with the plaintiff-ifank". It is also stated that the learned Banking Court has not at all adverted to discuss the pay-inslips and the L. Cs, the amount whereof, has been paid by the appellants, and the judgment is not only presumptuous, but reflects the non-application of mind by the learned Banking Court.
4. The learned counsel for the respondent, while supporting the impugned judgment and decree, has not been able to satisfy us, if the Banking Court, has adverted to the defence set up by the appellants. However, states, that he can prove from the record that these payments were not made, rather the amounts on these L. Cs, were paid by the bank to the beneficiary.
5. We are afraid that, in the appellate jurisdiction, we would not like to undertake this task. It was the duty of the Banking Court, in the first instance, to look into the defence set up by the appellants, and to give its opinion, if the defence, did disclose serious and bona fide dispute or not. From the reproduced paragraph of the judgment, it does not seem, if the Banking Court has adverted to the real controversy and had applied its mind, while refusing leave to t he appellants.
6. In the light of above, we find that the judgment of the learned Banking Court is non-speaking judgment, which does not reflect proper judicial application of mind, and such judgment, and the decree based thereon, cannot be sustained. Resultantly, by allowing this appeal, we set aside the impugned judgment and decree and direct the learned Banking Court to re-decide the leave application, filed by the appellants in the light of defence set out by them in the application, controverted by the respondent-Bank in reply to the application.
7. As regards R.F. A. No,354 of 2002, this is also against the same impugned judgment and decree, filed by the other defendants. The arguments raised by the learned counsel for the appellants in R.F.A. No, 235 of 2002, have been adopted by the learned counsel for the appellants in this R.F.A.
8. Learned counsel for the respondent-Bank in this appeal, has raised an objection, that the appeal is barred by time. Be that as it may, as in R.F.A. No, 235 of 2002, filed by the principal borrower, the judgment and decree of the Banking Court-II, Lahore, dated 4-3-2000, has been set aside, resultantly, such judgment and decree cannot be sustained against the appellants in this case, who were the co-defendants and the guarantors in the suit. Therefore, their application for leave to appear and defend, shall also be deemed pending and decided by the learned Banking Court-II, Lahore.
9. E.F.As. Nos.48 and 150 of 2003, are against the orders passed by the learned Banking Tribunal, whereby the Tribunal on the application of the respondent-Bank, under section 19(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, has allowed the bank, to take over the possession of the mortgaged property. As the judgment and decree, on the basis of which, the respondent-Bank, had applied to obtain the possession, has already been set aside in R.F.A. No,235 of 2002, therefore, the respondent-Bank in the execution proceedings, is not entitled to the grant of the possession. Resultantly, the orders impugned in these E.F.As., are also set aside.