MUNIR A. SHEIKH, J.-- This petition is directed against the judgment dated 23.1.2003 of the Lahore High Court, Lahore, whereby appeal filed by the petitioners against the judgment and decree of the Modaraba Tribunal, has been dismissed.
2. The respondents filed suit for the recovery of an amount of Rs.70,600,240/- in respect of the following finance facilities:-
(a) 8 Morabaha agreements.
(b) Lease finance agreement.
3. An application was made by the petitioners for grant of leave to appear and defend the suit in which with general allegations that documents on the basis of which the suit had., been filed were forged, bogus and fictitious, it was admitted that 8 Morabaha agreement, were executed. As regards lease finance agreement, though it was averred that the same had not been acted upon but later on, in the same application, it was admitted that an amount of- Rs.2,76,75,008/- was disbursed to the petitioners in pursuance thereof out of which, they paid through cheques certain amounts to liquidate the liability under the 8 Morabaha agreements. The jurisdiction of the Tribunal to entertain and try the suit was also challenged. The Tribunal through order dated 27.7.1999 rejected the said application meaning thereby that grant of leave to appear and defend the suit was declined, It (Tribunal) proceeded to pass decree for the recovery of a sum of Rs.70,600,240/- on the above-mentioned to kinds of finance facility advances against which appeal filed by the petitioners has been dismissed by a Division Bench of the Lahore High Court, Lahore, through the impugned judgment dated 23.1.2003 against which leave is sought.
4. Learned counsel for the petitioners submitted that grant of leave to appear and defend the suit should have been allowed in routine without going into the question whether the petitioners had raised any defence worth trial. He relied upon judgment in the case of Fine Textile Mills Ltd., Karachi v. Haji Umar (PLD 1963 SC 163).
5. The facts of the said case are not similar to this case and in view of development of law later by promulgation of different banking laws to secure prompt recovery of the bank loans, the argument cannot be accepted, In our view, if the application made by the petitioners for grant of leave to appear and defend the suit is read as a whole, the execution of agreements on the basis of which the said suit was filed, had been admitted alongwith the liability thereunder and general allegations made therein that documents were fabricated, fictitious and forged had been raised merely to delay the disposal of the suit and recovery of the amount due, as such, the application lacked bona fide and was rightly rejected by the Trial Court.
6. Learned counsel for the petitioners submitted that the suit was barred by time. He referred to Article 5 of the Schedule of Limitation Act to argue that period of limitation for recovery of the sued amount was one year from the date the same had become recoverable. According to him, in the present case, the suit was filed after the expiry of one year from the date when the amount had become recoverable, for the deficiency in payment was alleged to have taken place in 9995.
7. The High Court in the impugned judgment has dealt with this aspect of the case adequately, It has been held that the liability was acknowledged by the Chief Executive of the petitioners company, therefore, the suit filed within the said extended period was within the period of limitation.
8. We have examined the law, the said findings of the High Court and the arguments raised by the learned counsel for the petitioners and find that these findings do not suffer from any illegality, therefore, it was rightly held that the suit was not barred by time.
9. Learned counsel for the petitioners submitted that as regards recovery of the amount under the lease finance agreement, the same was not within the purview of Modarba Companies and Modaraba (Floatation and Control) Ordinance, 1980, for it was a simple case of recovery of lease money of the machinery which the respondent-plaintiff company leased out to the petitioners at specified rate of monthly rent.
10. We have gone through the documents regarding these finance agreements and find that the petitioners requested through resolution finance facility of Rs.4.00 million out of which Rs.2,76,75,003/- was credited to their account and in lieu thereof, they provided their machinery as security in favour of the respondents to secure the payment of the said amount. In the plaint, the recovery of the amount of Rs.70,600,240/- released in favour of the petitioners was claimed alongwith additional amount which they were liable to pay as rent of the machinery. Clause 8.02 of the lease finance agreement also provides that the machinery will revert back to the petitioners' company on the expiry of the said agreement or on the recovery of the amount due. If all these documents are read together, it is clearly made out that finance facility of an amount of Rs.34,500,000/- was provided to the petitioners on their request by the respondents and the machinery owned by the petitioners was given as security for the repayment of the said amount.
The respondents claimed recovery of only that much amount i.e. Rs.2,76,75,008/- which had been paid to the petitioners which had become due upto the date of institution of the suit. Section 2(ab) of the said Ordinance defines as under:- "(ab) "modarba" means a business in which a person participates with his money and another with his efforts or skill or both his effort and skill and shall include Unit Trust and mutual Funds by whatever name called".
11. After examining the terms of the transaction of finance facility under lease agreement, the status of machinery against which the same was advanced to the petitioners and the fact that money was provided from modaraba fund by the respondents, we are satisfied that the transaction fell within the purview of definition of modaraba as reproduced above, for the respondents- company had provided money for doing business to the petitioners by their skill, as such, it could not be argued that the Tribunal was not vested with the jurisdiction to entertain and decide the suit in respect thereof.
12. Learned counsel for the petitioners attempted to argue that the suit against the directors of the company on the basis of documents executed as mere guarantors was not maintainable under Order XXXVII, CPC as the said documents were not negotiable instruments.
The fallacy of this argument lies in erroneous assumption as if it was a suit directly under Order XXXVII, CPC in the ordinary Court. Section 26(2) of the Ordinance provides as under:- "(2) In the exercise of its civil jurisdiction, the Tribunal shall, in all suits before it, including suits for recover of money, follow the summary procedure provided for in Order XXXVII of the First Schedule to the Code of Civil Procedure, 1908 (Act V of 1908)."
It is manifest from this provision that it was merely provided that the suit filed under the Ordinance shall be tried in summary manner as provided under Order XXXVII, CPC and not that the same should be a suit maintainable under the said provisions. The present suit was filed by Modaraba Company against the petitioners for recovery of the amount paid from modaraba found for doing business by the petitioners with their skill, therefore, was maintainable under the .Ordinance and triable exclusively by the Tribunal established thereunder and merely procedure of summary trial as provided under Order XXXVII, CPC was required to be followed, therefore, the argument has no force.
13. For what has been discussed above, we are fully convinced that the judgments passed by the to Courts below do not suffer from any legal infirmity, therefore, this petition has no merits which is accordingly dismissed and leave refused. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.