2013 PLP 2116 (CLD)

SHOAIB SAEED, J.

This Regular First Appeal under section 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 is directed against the judgment and decree dated 10-1-2012 passed by the Judge Banking Court-II, Lahore.

2. Brief facts of the case are that appellant/defendant requested for a finance facility known as Businessline on markup basis from respondent/plaintiff which was allowed vide letter dated 27-8-2005 and an amount of Rs.6,300,000 was sanctioned to the appellant in terms thereof. To secure the facility, appellant mortgaged his immovable property, particulars are described in paragraph 3 of the plaint. Original documents were delivered and the respondent created equitable mortgage by deposit of title deeds. Appellant also executed Charge documents in favour of the respondent. The facility was disbursed to the appellant in his Businessline account and utilized, details of debit and credit entries are reflected in the statement of account. During the currency of the said facility appellant requested for conversion of the said facility into Home Loan facility vide application dated 3-2-2006 which was accepted and the facility stood converted. Appellant's liability at the time of conversion in Businessline account was 63,56,459.61. Home loan facility of Rs.7,500,000 was sought which was sanctioned vide letter dated 29-3-2006. The said facility was repayable in 144 months (12 years). Property already mortgaged was adjusted against the new facility as a security. Appellant also executed Charge/relevant documents in this regard in favour of the bank. Appellant had to clear his Businessline account in order to avail fresh limit of Home Loan facility. After adjustment of Businessline account, balance amount of Rs.1,143,540 was paid to the appellant through Pay Order No.07402155 dated 3-4-2006. Appellant thereafter was not entitled to operate the Businessline account but through various cheques he kept withdrawing amounts on different dates from the said account and also utilized Home Loan facility of Rs.7,500,000.

3. The trial Court held that Home Loan facility outstanding as on 18-9-2007 was Rs.72,50,821.52 and the Businessline facility on 23-4-2007 was Rs.62,94,658.82, thus, decreed the suit for the recovery of Rs.1,35,45,480.34 with costs along with cost of funds to be determined under section 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

4. It was contended by the counsel for appellant that Businessline facility stood fully adjusted and nothing remained to be paid from the said account as is evident in Loan Exit Form dated 30-3-2006. It was asserted that the principal amount is not reflected anywhere in the statement of accounts nor the statement of account mention account numbers in respect of the finance facility availed. The statement of account was not in accordance with the requirements of the Bankers' Books. Evidence Act. Respondent failed to meet the statutory requirements of section 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, the requirements as envisaged under section 10(4) of the Act could not be looked into. It was also averred that after adjustment of Businessline facility, appellant did not Operate the said account.

5. Conversely, it was argued that despite adjustment of Businessline facility, appellant through various cheques kept withdrawing amounts from 24-6-2006 and onwards and the said withdrawals are reflected in the statement of account. The mandatory requirements of section 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 have not been met. It was also averred that though requirements of section 9 are in place but there was nothing in the Ordinance that unless requirements of section 9 are not fully met mandatory requirement of section 10(4) of the Act ibid cannot be looked into. Statement of accounts of the facilities availed reflected true and accurate entries as mentioned therein which were not rebutted. It was also argued that under section 65 of the Contract Act that any person who has received any advantage under an agreement which is discovered to be void or when a contract becomes void such person is bound to restore advantage received thereunder. Appellant failed to raise any question of law for allowing application .for leave to defend. Judgment and decree passed by the trial Court was in accordance with law.

6. Arguments heard. Record perused.

7. Admittedly, appellant availed Businessline facility which was adjusted against new facility in the nature of Home Loan facility but there is no denying the fact that appellant kept utilizing the previous facility and withdrew amounts from the said account according to his volition through various cheques, therefore, adjustment of previous facility will not discharge liability of the appellant, the money drawn stands as reflected in the statement of account. Behavior/ conduct of the appellant needs to be deprecated. Respondent on its part failed to put a debit block, the negligence needs to be looked into by the respondent-bank in order to curb such mishappenings. Subsequent facility of Home Loan availed also remained fully outstanding. Not even a single debit and credit entry as reflected in the statement of account was rebutted/contradicted by the appellant. The nature of facilities availed were such in which after allowing limit the borrower is entitled to utilize the same within the contracted period at his discretion. The objection that such amount is not reflected in the statements of account is not sustainable. Moreover, when appellant admits adjustment of one facility against the other in the Loan Exit Form then he cannot raise the plea that limit is not reflected in the statement of account. Statement of account appended with the plaint are in line with the requirements of the Bankers' Books Evidence Act. Section 9(2) of the Act ibid no where bars that in case suit or its ancillary requirements if not met, borrower is absolved from fulfilling the mandatory requirements of section 10(3)(4)(5) of the Act ibid. Having failed to meet the mandatory requirements of sections 10(3)(4)(5) of the Act ibid wherein appellant was bound to specify the amounts disputed and obligated to put in a definite response to the banks accounting in his leave to defend. The cause or reason assigned for not complying with or inability to meet such requirements is not justifiable. Section 65 of the Contract Act, 1872 also protects the respondent from wrongful advantage taken by any person, such person is bound to restore the same in its entirety. The Banking Court rightly exercised the jurisdiction vested in it. There is no infirmity or irregularity in the impugned judgment and decree which does not require interference. In the light of what has been discussed above, this appeal having no merit is dismissed. KMZ/M-233/L Appeal dismissed.