Law:

Section:

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) Ss.9 & 10 Suit for recovery of loan amount Bank at the request of borrowing company opened Letter of Credit for import of goods, while other defendant stood guarantor for repayment of amount Goods arrived in Pakistan, but defendants, did not repay the amount Banking Court decreed suit after dismissing leave application of defendants Plea of defendants was that goods were of perishable nature, which perished due to delay in its arrival, thus Bank could not claim amount from them ¬Validity Bank had paid amount to corresponding Bank abroad and goods had reached Pakistan As per documents placed on record, defendants as principal and surety respectively were bound to pay suit amount to Bank upon demand Constitutional petition appended with appeal showed that goods were not released on account of tripartite dispute between defendants inter se and Customs Department, which claimed that goods belonged to another person, who owed money to Department Such Constitutional petition was decided with consent, whereby guarantor defendant agreed to release of goods to borrowing company Department had consented to such arrangement on basis of letter addressed to Bank requesting for release of goods to borrowing company High Court dismissed appeal in circumstances. JUDGMENT MAUVLI ANWARUL HAQ, J. On 30 6 1997 the respondent filed a suit against the appellants for recovery of Rs.3,52,011. According to the plaint the appellant No. 1 requested respondent to open a Letter of Credit for import of Urea Moulding compound from Italy. The request was granted and LC was established on 30 5 1993 in the sum of US $ 18450. Appellant No.2 stood guarantee for repayment of amount on demand. The goods were imported and arrived in Pakistan and used by the appellants. However, the appellant had not repaid the said amount. A decree in the suit amount was accordingly prayed for. The appellants were served in accordance with law. They put in appearance and sought leave to defend by filing an application. This application was resisted. Learned Judge Banking Court IV, Lahore, dismissed the said application and…

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