MUHAMMAD ASHRAF Versus UNITED BANK Ltd.

MUNIR A. SHEIKH, J.‑‑ This is an appeal against judgment and decree dated 21‑11‑1983 passed by learned Special Judge Banking, Lahore by which the suit of the respondents for the recovery of an amount of Rs.1,43,219 has be decreed with costs etc.

2. The facts of the case in brief are that respondents filed a suit for the recovery of an amount of Rs.1,43,219. According to the facts pleaded in the plaint, on 3‑11‑1977 cash credit facility to the tune of Rs.2,00,000 was allowed to the appellant who was defendant No.1 in the suit against the security of pledge of paddy m the open premises of the godown, pledge of rice in bags, equitable mortgage of property and the proceeds of the bills to be collected from the Food Department. According to the respondent/plaintiff an amount of Rs.1,43,219 was outstanding against the appellant on ,the date of institution of the suit for the recovery of which the Bank filed the suit. The appellant made an application under Order XXXVII, Rule 2 read with Section 151 C.P.C. for grant of leave to defend the suit. The learned trial Court granted the leave to the appellant to contest the suit by order dated 10‑7‑1983 subject to the condition of deposit of the suit amount in cash in Court on or before 12‑9‑1983. On 12‑9‑1983, a request for extension of time for making deposit was made which was allowed and the appellant was required to deposit the amount upto 19‑11‑1983. On 19‑11‑1983 it was found that the deposit of the amount was not made therefore, the learned Judge Banking Court proceeded to decree the suit by impugned judgment dated 21‑11‑1983.

3. Learned counsel for the appellant mainly argued that the condition of deposit of suit amount in cash in Court in the circumstances of this case was very harsh and amounted to decreeing the suit and setting in motion the proceedings for recovery of the decretal amount and as such the grant of leave to defend the suit was rendered meaningless and ineffective.

4. We have examined the record. It has been pleaded by respondents in the plaint itself that the suit amount was also secured through equitable mortgage of property of defendant No.4 who is brother of the appellant who had surrendered his original document of title of the property to the respondent. No doubt under the relevant provision of law the trial Court held the discretion to grant leave to defend the suit subject to any condition, but this discretion has to be exercised judicially keeping in view all the attending circumstances of the case and not arbitrarily. The intention behind attachment of a condition to the leave granted to defend the suit is to secure the payment of the amount if the suit was ultimately decreed. In the instant case, adequate security has already been provided through equitable mortgage of property of defendant No.4 therefore, in the peculiar circumstances of this case there was no need for further security for the payment of the suit amount. Considering from this angle, the argument of the learned counsel for the appellant that condition of deposit of amount m cash was not only harsh but also arbitrary, has substance. The condition as a matter of fact amounted to decreeing the suit, rather even the recovery of the decretal amount which as a matter of fad rendered the very grant of leave to defend ineffective. Once the learned trial Court came to the conclusion that it was a case for grant of leave to defend, then the question of attachment of any condition to it should have been considered in the light of the circumstances of the case as noted above and could not be passed arbitrarily as has been done.

5. For the foregoing reasons, the order of the learned Judge Banking Court dated 21‑11‑1983 to the extent of attaching condition of deposit of suit amount to the grant of leave to defend the suit cannot be sustained which is hereby set aside leaving the said leave without any condition. In the result, the appeal is accepted. The impugned judgment and decree dated 21‑11‑1983 is hereby set aside and the case is remanded to the trial Court for disposal of the suit on merits in accordance with law. The parties are directed to appear before the learned trial Court on 6‑6‑1988.

H.B.T./M‑760/L Case remanded.