Law: Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

Section: 10

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--S.10---Contract Act (IX of 1872), Ss. 133, 139 & 141--­Suit for recovery of loan amount---Application by guarantor for leave to defend suit---Plea of guarantor was that General Power of Attorney, Memo. of Deposit of Title Deed and guarantee documents had been fraudulently managed by the Bank in collusion with borrower; that goods pledged with the Bank had been removed without his knowledge in collusion with the Bank and borrower, thus, his liability stood discharged as per law and that terms of original contract of finance facility between the Bank and borrower had been altered without his knowledge and consent, thus, his liability stood discharged by virtue of S.133 of Contract Act, 1872---Guarantor had made out a plausible case for grant of leave to defend suit---Statement of guarantor's counsel that till final decision of suit, guarantor would not sell/encumber alleged mortgaged land, would be binding on the guarantor---Application for leave to defend was allowed unconditionally. PLD 1986 SC 83; PLD 1966 Lah. 1; PLD 1984 Kar. 211; 2000 CLC 819; AIR 1967 SC 1105; AIR 1944 Lah. 482; AIR 1938 Mad. 422 and Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 14,19 ref. ORDER By this order I propose to dispose of C.M.A. No.7618 of 2001, which is an application for leave to defend under section 10 of the Ordinance XLVI of 2001, submitted on behalf of defendant No.3. Case of the defendant No. 3, as disclosed in this application, is that he had not executed the purported documents viz. General Power of Attorney dated 19-11-1998, memorandum of Deposit of Title Deeds dated 18-1 1-1998 and the guarantee document dated 18-11-1998 but the same were fraudulently managed by plaintiff in collusion with defendants Nos.1 and 2. Further plea raised in the application is that scrap valuing Rs.855,00,000 pledged by defendants Nos.1 and 2 with the Bank was removed in collusion with the staff of plaintiff-Bank and defendants Nos.1 and 2 with mala fide intention and thus the liability of defendant No.3 stands discharged as per law. The application is…

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