FINE TRADERS Versus MUSLIM COMMERCIAL BANK, LAHORE

ABAID ULLAH KHAN, J .--‑‑This appeal is directed against the judgment and decree of the learned Special Judge, Banking, Lahore, dated 11th February, 1982, decreeing the respondent's suit for the recovery of Rs.2,74,293,00 against the appellants. Siraj Din, appellant 2, is the proprietor of Messrs Fine Traders, Lahore, appellant 1. Muhammad Abdullah, appellant 3, is the attorney of appellants 1 and 2. Messrs Fine Traders and others opened two irrevocable without recourse letters of credit with the respondent, Muslim Commercial Bank, Gowalmandi Branch, Lahore, for the import of chemicals from abroad. Contrary to the agreement the appellants were said to have defaulted in retiring the documents on receipt against payment of all dues relating thereto resulting in driving the respondent to institute suit against them for recovery of outstanding dues.

2. The appellants applied to the learned trial Court under Order XXXVII, Rule 2(2) of the Code of Civil Procedure for leave to defend the suit on various grounds. They contended that the goods had been imported by a number of persons for whom they had acted only as attorney for the limited purpose, so far as the respondent Bank was concerned, of opening, amending, extending the letters of credit and retiring shipping documents. They insisted that all the importers were necessary parties to the suit. They pleaded their bar of limitation and questioned the vires of section 4(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979. Again they said that they had asked the respondent to recover the amount due by selling the imported goods but the same had not been done and resultantly the goods had perished for which loss they were not responsible. The learned Court was not favourably impressed by the appellants' contentions and declined to grant them leave to defend the suit which was consequently decreed.

3. The learned counsel for the appellants tried to argue that it was not Messrs Fine Traders alone who had opened the letters of credit rather there were so many other persons who had joined with it in opening the letters of credit and as they were beneficiaries they should be held answerable for the liability. However, when he was confronted with the original form of application and agreement for opening the letters of credit which had been signed only by Messrs Fine Traders which had agreed in unequivocal words to pay the amount due without recourse to and without sharing liability with any one else, he could not dispute the exclusive liability of Messrs Fine Traders. It is a fact that the facilities in the letters of credit were availed of and the goods were imported thereunder. In the circumstances the appellants are fully liable to pay the amount due.

4. The learned counsel's objection to the vires of section 4(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, is without force. The suit was well within time. The learned trial Court's action in refusing leave to the appellants to contest the suit was legally in order and does not demand interference. The appeal is dismissed with costs.

S.Q./F‑40/L Appeal dismissed.