Law: Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997

Section: 10

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---S.10---Recovery of loan---Leave to defend the suit, grant of--­Equipment lease agreement---Grievance of the borrower was that the financial institution had not disbursed the whole amount--­Plea raised by the financial institution was that in accordance with the instructions of the borrower, the un-disbursed amount was paid/deposited accordingly---Borrower did not at any point of time, prior to the filing of the suit by the financial institution, raised any such grievance---Banking Court declined leave to defend the suit -and decree was passed in favour of the financial institution---Validity---Borrower had accepted and was bound by the terms of the equipment lease agreement---Banking Court had rightly declined leave to defend the suit as the borrower had not raised any serious or bona fide dispute justifying grant of leave to appear and defend to the borrower---High Court declined to interfere with the and decree passed by the Banking Court. JUDGMENT JAWWAD S. KHAWAJA, J.--This appeal impugns the judgment and decree dated 23-6-1999 passed by the learned Banking Court. 2. The facts of this case are relatively straightforward. The respondent Atlas Lease Limited filed a suit against the appellants-defendants for the recovery of a sum of Rs.1,92,48,194 as outstanding lease rentals together with mark-up and liquidated damages. The appellants-defendants filed an application under section 10 of Act XV of 1997 for grant of leave to appear and defend the suit. The said application was disallowed by the learned Banking Court on the ground that no serious or bona fide defence had been raised by the appellants­ defendants. The learned Banking Court, however, disallowed the amount claimed by the respondent leasing company by way of additional lease rentals. As a consequence, the suit was decreed for a sum of Rs.1,20,33,175 with costs. 3. Before us learned counsel has firstly submitted that the lease transaction asserted by the respondent on the basis of an equipment lease agreement dated 3-12-1993 is fictitious. It was argued that the equipment allegedly leased by the respondent company…

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