Libyan Arab Airlines Boeing 707 aircraft Registration 5A-DJI, took off from Karachi Airport (runway 25R) for schedule flight LN-263 on 6th January, 1989 at 0749 hrs 1ocal time. Take off was normal. During climb at about 900 feet a loud noise was heard by Cockpit crew. Cabin rate of climb indication on Flight Engineer pannel became unsteady, Turbo compressor (T/C) No.2 light came 'ON' and T/C was shut off automatically. During climb power setting engine No.2 failed to responed, and it remained at 80% Nl. At this stage Flight Engineer physically saw the No.2 engine and found its cowling missing. As such Captain decided to land back. After dumping the excess fuel, the aircraft landed· back safely at 0815 hrs LT. No.2 engine was shut down by pulling fire handle.