' CH. IJAZ AHMAD, J.---We intend to decide the following appeals:--
(1) R.F.A. No,120 of 2000,
(2) R.F.A. No,121 of 2000 and
(3) R.F.A. No,122 of 2000 ' by one consolidated judgment having similar facts and law.
2. Brief facts out of which the present appeals arise are that the predecessor-in-interest of the appellants secured loans from the respondent-Bank and agreements were also executed between the parties. According to the terms and conditions of the agreements the appellants have to repay the loan in easy instalments. The appellants failed to discharge their liabilities in terms of the agreements. The respondent-Bank being aggrieved filed suits for the recovery of the loan against the appellant before Banking Court II, Lahore. The appellants filed applications for leave to defend and raised various objections qua the loan sanctioned by the respondent-Bank in favour of the appellants and denied claim of the respondent-Bank and also taken a plea that the appellants had filed a suit for damages against the respondent-Bank before the Civil Court and the respondent-Bank has filed the written statement. The aforesaid suits for recovery against the appellants are the counter blast. The Banking Court dismissed the application for leave to defend of the appellants and decreed the suits of the respondent-Bank vide judgments and decrees dated 14-2-2000. The appellants being aggrieved filed the aforesaid appeals.
3. Learned counsel for the appellants submits that the impugned judgments and decrees of the Banking Court are not in accordance with law. In support of his contentions he relied upon Fine Textile Mills Ltd. Karachi v. Haji Umar PLD 1963 SC 163; Lt. Col. (Retd) M.M.A Beg and others v. Messrs Sarhad Bank Limited 1987 CLC 2298; Messrs Hongkong and Shanghai Banking Corporation v. Aftab Iqbal NLR 1988 TD 408 and Habib Bank Limited v. Messrs Khawaja and Sons NLR 1987 TD 293. He further submits that on the basis of the aforesaid judgments the appellants have raised serious questions of law in their applications for leave to defend, which were not adverted to by the Banking Court in its true perspective. He further submits that the learned Banking Court erred in law in not referring the judgments of the Superior Courts in the impugned judgment relied upon by the learned counsel for the appellant, therefore, the judgments and decrees of the Banking Court are without lawful authority. In support of his contention the learned counsel for appellants relied upon Khalid Rafiq Ahmad v. Province of Punjab 1992 ALD 515(2). He further submits that the Banking Court erred in law not to take into consideration the suit filed by the appellant's against the respondent- Bank for damages amount to Rs.2 Crores and the respondent-Bank has filed the aforesaid suit for recovery against the appellants as a counter blast, which is not in consonance with the law laid down in Ghee Corporation of Pakistan Ltd. And 2 others v. Habib Bank Ltd. And 2 others PLD 1984 Lahore 421; Allied Bank of Pakistan Limited v. Maqbol Co. Ltd. Etc 1987 MLD 1112 and Muhammad Nazir Afandi v. Industrial Development Bank of Pakistan, Karachi and 3 others PLD 1992 Peshawar 87.
He further submits that the value of the property mortgaged with the respondent-Bank is more than to Rs.80 Lac, therefore, it was the duty and obligation of the Banking Court to grant unconditional leave to defend. In support of his contentions learned counsel relied upon Abdul Karim Jaffarani v. United Bank Ltd. And 2 others 1984 SCMR 568; Habib Bank Limited etc. v. Karachi Properties Investment Co. Ltd., etc. PLD 1984 Kar.257; Baghpatee (Pvt.) and others v. Messrs Pak Libya Holding Company (Pvt.) Ltd. 1991 SCMR 33; Abdul Rashid v. Mst. Fazal Bibi and 18 others 1983 CLC 283 and Malik Gul Hasan and Corn. And 5 others v. Allied Bank of Pakistan 1996 SCMR 237. He further submits that the Banking Court erred in law to award compound interest in favour of the bank, which is not in accordance with law laid down in Allied Bank of Pakistan v. Maqsood Ahmad Khan 1994 MLD 1557. He further submits that the suits were not filed by the competent person.
4. Learned counsel for the respondent-Bank submits that the respondent-Bank has raised certain objection qua the sanctioning of loan in their favour but they admitted their liability in para.2 of the applications filed by the appellants before the Banking Court for leave to defend. He further submits that the appellants have executed various documents including the mortgage deed, hypothecation and D.D. Notes and the appellants did not challenge the vires of the said documents in the applications for leave to defend. He further submits that the applications for leave to defend were filed after the prescribed date, therefore, it is the duty of the Banking Court to decree the suits of the respondent-Bank in terms of the law laid down in Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497. He further submits that the appellants did not deny the correctness of statements of accounts filed by the respondent-Bank before the Banking Court by any oral and documentary evidence. He further submits that the appellants had secured huge loan from the respondent-Bank and had paid only Rs.7,890 to the respondent-Bank, therefore, the appellants did not approach the Court with clean hands and filed suit for damages against the respondent-Bank mala fide simply to avoid the outstanding of the bank. Learned counsel for the respondent-Bank further submits that the Banking Court discussed all the grounds which were argued by the learned counsel for the appellants and repelled the same with cogent reasons.
Learned counsel further submits that the learned counsel for the appellants has not attached any affidavit qua the judgments cited and all the pleas were argued at the time of hearing the application for leave to defend before the Banking Court.
5. We have considered the contentions of the learned counsel for the parties and perused the record. It is better and appropriate to reproduce para.2 of the leave applications to resolve the controversy between the parties:- " but most unfortunately the plaintiff-Bank in the first instance sanctioned loan amounting to Rs.3.25 Million in favour of the defendant No,2 on 5-9-1991 for expansion of the aforesaid Poultry Farm and for the installation of the Feed Mills. The plaintiff-Bank sanctioned loan in the light of the report submitted by the representative of the plaintiff-Bank in 1990, but when the loan was sanctioned and paid to the defendant No,2 the prices of the construction material had gone up to a considerable extent and further rate of the labour were also gone up. This fact was also brought to the notice of the representative of the plaintiff-Bank that the aforesaid loan would not be sufficient to meet the requirements of the construction of the project as well as for the purchase of the machinery of the Feed Mills due to the enhancement in the prices. The representative of the plaintiff-Bank gave assurance to the defendant No,2 that they would further sanction a loan for the construction/completion of the entire project and they would also sanction a loan for working capital according to the requirements of the defendant No,2 but later on they failed to fulfil their undertakings due to which the defendant No,2 sustained a loss to more than rupees two crores for which the defendant No,2 was compelled to file a suit referred to above."
' The aforesaid admission clearly reveals that the appellants had secured the loan from the respondent-Bank and admitted the execution of documents, i.e. Mortgage, Hypothecation and D.P.
Notes, meaning thereby evidence of the respondent/plaintiff has gone unchallenged and un- rebutted, therefore, the appellants are not in a position to wriggle out from this position as the law laid down in Haji Ghulam Rasool and others v. The Chief Administrator of Auqaf, West Pakistan PLD 1971 SC 376. The plea of the learned counsel for the appellants that the suit was not filed by the competent person is not tenable in view of section 9(4) of Act XV of 1997, which was interpreted by the Division Bench of this Court in Muhammad Ramzan v. Citibank N.A. 2001 CLC 158 and it was held that the Branch Manager is competent to file the suit before the Banking Court. Even otherwise we have perused the record and find that the suit was instituted by the competent person and has also executed power of attorney in favour of the Branch Manager, who has filed the suit before the Banking Court. The respondent-Bank filed the suits for recovery of loan, which were based on the statements of accounts and the statements of accounts were also attached with the plaints, which were duly verified by the Bankers' Books Evidence Act, 1891 and was not rebutted by the defendants.
The statements of accounts having presumption of truth by virtue of section 4 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the same was not rebutted by the appellants with cogent reasons either through oral evidence or through documentary evidence. The appellants failed to deny the other documents meaning thereby the appellants having admitted the loan, as well as aforesaid documents, are liable to make repayment of loan. From mere reading of section 6(1) of Act XV of 1997, and Order XXXVII of C.P.C., it follows that the grant of leave to appear and defend is not a matter of routine or matter of right.
The defendants have to disclose a plausible defence and when there is no substantial question of law or facts needing trial and the defence set up is vague or sham, leave can be refused and the suit decree. No plausible defence was put up nor an arguable case was made out before the Banking Court as well as before this Court, therefore, judgments relied upon by the learned counsel of the appellants are distinguished and the said precedent cases are of no avail to the appellants.
The Banking Court has rightly come to the conclusion that the appellants have failed to make out any plausible defence for the grant of leave to defend the suit and the Banking Court was justified to reject the application for leave to defend and consequently decreed the suit as per principle laid down by the Honourable Supreme Court in Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 and Hamidullah Khan v. Muhammad Nawaz Qasuri PLD 1982 Lahore 203. We have also examined the statement of Accounts and the learned counsel for the appellants failed to point out any infirmity that the respondent-Bank has charged compound interest from the appellants, therefore, this plea of the appellant's counsel also has no force. The other pleas raised by the learned counsel of the appellants have no force as the same were not urged before the learned Banking Court as is evident from the contents of the impugned judgment, which means that these grounds were not pressed which could be urged before this Court by filing affidavits of the learned counsel of the appellants who appeared before the Banking Court. In arriving to this conclusion we are fortified by the following judgments reported as Government of the Punjab through Secretary, Department of Education, Lahore v. Prof. Mst. Jamida Malik and another 1991 MLD 824 and Safdar Ali through his Legal Heirs and 3 others v. Muhammad Malik and 4 others 1995 CLC 1751.
' In view of what has been discussed above, we find no merits in these appeals, thus, the same are dismissed, leaving the parties to bear their own costs.