Law:

Section:

C.MA.No.519 of 1989 is an application for leave to defend in a suit for recovery of Rs.29,653,306 with interest and cost under the Banking Companies (Recovery of Loans) Ordinance, 1979.

 The case of the plaintiff/National Bank of Pakistan is that it had granted credit facilities by way of loan to the extent of SR.6.0 Million (Saudi Rials) to defendant Messrs Gammon Pakistan Ltd. as per terms and conditions contained in agreement dated 29-5-1986. The defendant company enjoyed the credit facilities to the extent of SR.5.0 Million (Saudi Rials), which amount was withdrawn in the month of June, 1986. As security for repayment of the said loan, the defendant executed D.P. Note with a delivery letter and executed Deed of Hypothecation by way of second charge in respect of its present and future plan, machinery etc. One of the conditions of the loan was that the defendant Company shall apply the proceeds of the loan exclusively to the project i.e. construction of Pakistan Embassy in Riad (Saudi Arabia). The Defendant diverted a substantial amount from the aforesaid loan to his other projects and, therefore, the plaintiff called upon the defendant to repay unauthorisedly diverted funds, but without any response. Hence this suit after usual notice.

 Mr. Noorullah A.Manji, who appeared for the defendant has pressed his application for leave to defend on the following grounds:--