Not passing because of a defect (7)
I believe the answer is:
failing
I believe this is a double definition.
'not passing' is the first definition.
('fail' is the opposite to 'pass')
'a defect' is the second definition.
(I've seen this before)
'because of' acts as a link.
(Other definitions for failing that I've seen before include "Character weakness" , "Weak point" , "Flunking" , "Defect" , "conking out" .)