UNITED BANK LIMITED Versus KAMANI TEXTILE MILLS LIMITED
ORDER
1. This is an application by the defendant No 4 for leave to appear and defend the suit. The defendant No 4 has sought leave on the grounds that: (i) the defendant No 4 resigned from the Directorship of the defendant No. l to the knowledge of the plaintiff‑Bank, who has taken a fresh guarantee thereafter from the rest of the Directors; and that the defendant No 4 is therefore, not liable on the guarantee executed by him, (ii) that the suit is barred by limitation in view of the plea in paragraph‑20 of the plaint, (iii) that the suit as against the defendant No.4 in his capacity as a legal representative of Muhammad Sadiq is time‑barred because Muhammad Sadiq died on 21‑2‑1982; whereas the suit was filed on 23‑8‑1993, (iv) that the amount of loan is sufficiently secured by the mortgage, and (v) that the defendant No.4 is liable only to the extent of the amount guaranteed by him. That the outstanding and a copy of that notice was sent to the defendant No.4 requiring him to comply with it. By the guarantee Annexure‑K to the plaint the defandant 4 guaranteed due repayment "within two days after demand". The demand was admittedly made on 15‑11‑1992 and the suit was filed within three years from that date. The suit is, therefore, not barred by limitation. The plea that the suit as against the defendant No.4 in his capacity as the legal representative of Muhammad Sadiq is time‑barred because Muhammad Sadiq died on 21‑2‑1982, is without substance for the same reasons. It was argued by the learned counsel that in fact no demand had been made under the guarantee upon the defendant No.4. That does not appear to be correct; but even if that were so, the suit itself amounts to a demand and, therefore, is not barred by limitation.
2. The argument that the value of the mortgaged property is a sufficient security for the amount claimed by the plaintiff needs only to be stated to be rejected. The sufficiency or otherwise of the value of the mortgaged property A may be relevant to the question of security to be furnished but is not relevant to the question of granting leave to the defendants to appear and defend the suit.
3. It was argued, lastly, that the defendant No.4 is liable only to the extent of the amount guaranteed by him. The amount guaranteed by the defendant No.4 is Rs.48,95,962.47 together with interest, charges, costs etc. The amount claimed in the suit is the amount of the guarantee together with interest thereon from the date of the guarantee uptodate. Mr. S. Mamnoon Hasan has, however, conceded that the defendant No.4 would not be liable for any fresh loans granted by the plaintiff to the defendant No.l and has, in pursuance of the order dated 8‑8‑1994, filed a revised statement of account relating to the defendant No.4 only showing that a sum of Rs.6,654,209.96, as on the date of the suit, is due and payable by the defendant No.4 to the plaintiff.
4. In the circumstances, the defendant. No.4 is not entitled to leave to appear and defend the suit. The suit is, therefore, decreed against him for 8 Rs.6,654,209.96, with interest thereon at 14% per annum with quarterly rests and proportionate costs of the suit.
2. This is an application by defendants Nos. l, 2, 3, 5 and 6 for leave to appear and defend the suit. Mr. S. Hamid Hussain, learned counsel for the defendants, contends: (i) that the plaintiff obtained documents from the defendants in connection with the request by the defendants for a fresh loan, but ultimately refused to grant a fresh loan and misused the documents by unauthorisedly filing them up to connect them to the loan in question in this suit. Those documents are Annexures L, M, N and O to the plaint. Annexures L, M, N and O are respectively Promissory Note, dated 17‑1‑1991, Letter of Arrangement dated 17‑1‑1991, Letter of Hypothecation dated 17‑1‑1991 and Guarantee, dated 17‑1‑1991. Mr. S. Hamid Hussain has drawn my attention to the copies of the correspondence filed with the affidavit of the defendants. It appears from the correspondence that on 15‑12‑1990 the defendants had requested the plaintiffs for fresh loan and on 17‑1‑1991 had sent to the plaintiff certain documents including a Promissory Note, a Letter of Hypothecation and a Guarantee. The plaintiffs have not denied the receipt of the letter dated 17‑1‑1991 and the documents sent therewith. In fact, the subsequent letter of the plaintiff appears to acknowledge the receipt of the letter written by the defendants in connection with the request for a fresh loan. Mr. S. Mamnoon Hasan says that the plaintiffs have, in their counter‑affidavit, denied that any documents were sent by the defendants in connection with any request for a fresh loan. However, it is a mere denial on the part of the plaintiffs and there appears to be no answer to the correspondence relied upon. It follows that even if the documents dated 17‑1‑1991 cannot, for any reason, be relied upon by the plaintiffs, the suit would be within period of limitation. Mr. S. Hamid Hussain has added further argument that the promissory note dated 17‑1‑1991 cannot be relied upon because the stamps thereon have not been duly cancelled as required by section 12 of the Stamp Act. A perusal of the promissory note shows that the stamps‑have been duly cancelled and, in any case, even if that were so the suit would still, as stated above, be within the period of limitation.
5. It is, then, contended by Mr. S. Hamid Hussain that the plaintiffs, in contravention of the agreement to pay interest at the rate of 11 % per annum have been charging interest at the rate of 14 % per annum. The argument is negative by the terms of the promissory note dated 31‑12‑1983 as well as by the Memorandum of mortgage of property Annexure ' H' to the plaint.
6. Mr. S. Hamid Hussain then attempted to argue that the statement of account filed by the plaintiffs is "full of discrepancies". There is, however, no plea to that effect in the affidavit filed by the defendants in support of their application and no specific entry in the statement of account has been challenged by them in the affidavit. That being so any argument with reference to any specific entry of the statements of account at this stage would take the plaintiffs by surprise and certainly cannot be permitted. If the defendants wanted to challenge any particular entry they should have been done so in their affidavit so that the plaintiffs would have had an opportunity to rebut the allegations.
7. No other argument having been advanced in support of the application and the arguments mentioned above found to have been without any substance, this application is dismissed and the suit of the plaintiffs is decreed against defendants Nos. l, 2, 3, 5 as 6 are prayed.
8. With regard to mortgage by defendant No. 1, it is hereby declared that the amount due on the mortgage is Rs.2,20,45,303.38 with interest thereon at the rate of 14 % per annum with quarterly rests and costs of the suit. Let preliminary decree in Form V‑A, Appendix‑D, Schedule I of C.P.C. be drawn up.
9. A.A./U‑16/K ?????????????????????????????????????????????????????????????????????????????????????? ??????????????????????????????????? Suit decreed