WALL MUHAMMAD GUT MUHAMMAD Versus NATIONAL BANK OF PAKISTAN

1. MUHAMMAD GUL, J. ‑These two petitions arise out of the same judgment of a Division Bench of the High Court of Sind & Baluchistan dated 13‑5‑197.1 dismissing two first appeals by the petitioners herein against two money decrees passed by the Civil Judge, Hyderabad on 24‑?‑1969 in two suits filed by the respondent‑Bank for the recovery of two sums due in respect of over‑draft account of the petitioners in each case. The facts and law points involved in both the cases are common and therefore can be conveniently disposed of together.

2. The petitioners in each case, being engaged in business were allowed credit facilities by the respondent‑Bank. Accordingly, on 13‑9‑1963 the petitioners in each case executed a promissory note for an amount equivalent to the maximum limit of the credit agreeing to pay interest at the rate of 6 % with monthly rests and to repay the balance on demand. It also appears that under the terms of the credit agreement, the petitioners pledged with the respondent‑Bank certain quantities of paddy but were allowed to draw on the over‑draft accounts up to 70 %of the value of the stock of paddy pledged with the respondent‑Bank.

3. In August 1965, the respondent sued the defendants in each case for the recovery of Rs. 2,04.632.04 and Rs. 75,063.20. The suits were contested on various grounds giving rise to a number of issues between the parties which are however, not material for the purpose of this order. The allegations in the plaint were that the petitioners herein in each case had "withdrawn" the stock of paddy and rice pledged with the respondent‑Bank leaving the aforesaid amounts due against them severally. On hearing the parties evidence, the learned trial Judge decreed the suit with costs.

4. In the two appeals w the High Court the only point urged by the petitioners herein was that owing to unprecedented floods in the area daring the material time the stock of paddy and rice pledged with the bank was washed away thus reducing the value of the security. The petitioners charged the respondent‑Bank with negligence in that it had failed to insure the stock of paddy pledged with it. The learned Judges in the High Court however repelled the argument on the ground that the evidence on record showed that the defendants in both the cases (the petitioners herein themselves had removed the stock of paddy which throughout had been lying in their own promises. The respondent‑Bank had only posted al chowkidar to keep a watch over the stock of paddy lying in the premises of the petitioners. There was also evidence to show that the petitioners had removed and appropriated the stock before the institution of the suit against them without any protest. In these circumstances the learned Judges repelled the contention raised on behalf of the petitioners more so when they had not claimed any i98ue in the trial Court as to, the negligence of the respondent‑Bank to adequately ensure the stock of paddy.

5. Learned counsel for the petitioners argued that the fact that the petitioners had pledged the stock with the respondent‑Bank not being denied, the latter was in law liable to account for the stock pledged and also to indemnify the petitioners for any loss incurred owing to the negligence of the respondent‑Bank. In support of his argument, learned counsel cited House of Lords judgment of Trustee of the property of Ellis & Company v. Dixon‑Johnson (1925AC489). The facts of that case were materially different. In that case the creditor was proved to have sold certain shares without the knowledge or the authority of the debtor and it appropriated the amount to the balance due keeping all the time the debtor in ignorance of the sale till after the bankruptcy of the creditor firm. It was in these circumstances that the creditor was held liable to account for the security.

6. After hearing the petitioners learned counsel, we consider that the view taken by the learned Judges in the High Court is unassailable.

7. The petitions are accordingly dismissed.

8. Petitions dismissed.