UNITED BANK LIMITED Versus OKARA TRADING COMPANY

ORDER

This application is filed by the defendant No.4 for leave to defend the suit on the ground that the Insurance Company is only liable to pay the amount guaranteed under the performance bond, if the default in payment of the guaranteed amount is committed by the principal debtor. It is also contended that the goods pledged with the bank are to be sold first and the proceeds adjusted against the liability of principal debtor and if there is any shortfall in the amount, only that can be recovered from defendant No.4. The performance bond is produced alongwith plaint as Annexure `W'. The execution of the performance bond is not denied by defendant No.4 Alter going through performance bond executed by defendant No.4 in favour of plaintiff I find that the amount payable under it is recoverable from defendant No.4 in the event of non‑payment of the amount by principal debtor within the time specified in the bond. It is not disputed that the time mentioned in the bond has expired. The principal debtors in the case namely defendants Nos.1 and 2 are not defending the suit and have not applied for leave to defend the suit.There is, thus, nothing on record to show that principal debtors had discharged the liability in full or in part. I accordingly grant leave to the defendant No.4 on the condition that the amount or t performance bond will be brought in Court after encashment and will be invested in Khas Deposit Certificates.

2. This application made by the defendant No.4 at this stage is misconceived and is accordingly dismissed. The defendant No.4 is however, not debarred from raising this plea at the trial of suit, if available to him under the law.

3. This application is filed by defendant No. 3 for leave to defend on the (Sajjad Ali Shah, J) ground that he retired from the firm and had also notified his retirement to plaintiff who continued to deal with defendants Nos. 1 and 2, thereafter, and as such he has no liability for the claim in the suit. It is not disputed by the learned counsel for the plaintiff that the defendant had notified dissolution of the B firm on 15‑5‑1984 and the plaintiff continued to deal with defendants Nos. 1 and 2 even, thereafter. The suit has been filed in the year 1987. In these circumstances I grant leave to defendant No.3 unconditionally.

M.Y.H./U‑53K Order accordingly.