1997 PLP 801 (MLD)

12. 30‑9‑1986 1,14,331 13. 30‑3‑1987 1,16,353 14. 3‑6‑1987 1,17,440 15. 30‑9‑1987 1,23,408 16. 29‑12‑1987 1,29,324 17. 17‑9‑1990 15,99,046 Mr. Abdul Qadir Siddiqui, Advocate in view of the above legal and factual position has conceded to the said proposal and has vehemently argued that as per Annexure "C" (Sanction Advice) dated 24‑4‑1983, the defendant had agreed to pay interest at 4 % above the bank rate but at a minimum rate of 14 % . Since this matter can be disposed of after the ascertainment of real amount outstanding against the defendant, I direct both the parties to file up to date statement strictly in accordance with Annexure "C" within two weeks." On 29‑5‑1996, after hearing was concluded, both the parties have filed their respective statements of account which are as follows:‑‑ "Plaintiff's statement of account dated 22‑5‑1996 In compliance with the Honourable Court, dated 9‑5‑1996. The penal interest and its compounding impact is reduced/deducted from the Bank's demand in the statement of account as under:‑‑ Bank's demand i.e. Suit filed amount. Rs.17,377,348 Less penal interest and its compounding impact? as per Honourable Court order. 5,068,228 12,309,120 Less repayment/deposits after suit filed 5,000,000 7,309,120 Additional interest accrued as per the sanctioned advice i.e. 4% above the bank rate minimum 14% P.A. with quarterly rests for the period from 18‑9‑1990 to 31‑5‑1996. 10,610,236 Bank's Demand 17,919,356 ??????????????????????????????????? Defendant's statement of account dated 29‑5‑1996. Loan granted on 25‑4‑1983 5,000,000 Interest @ 14% P.A. Up to 31‑5‑1996 (as per detail attached) 5,224,392 10,224,392 Amount deposited (as per detail attached) 5,92,0000 Balance payable 4,304,392 The statement filed by the defendant as well as by the plaintiffs shows difference of more than 13 millions of rupees. It is pertinent to note that in the statement of plaintiff it is admitted that the defendants have further made repayments of loan even after filing of this suit which was disclosed to be Rs.5 million. The defendants alongwith the abovesaid statement of account have also filed letter of the Manager U.B.L. Airport Branch dated 16‑5‑1996 to show that from 1‑6‑1983 till 16‑8‑1992 a sum of Rs.59,20,000 have been repaid by the defendants as against loan of Rs. 5 million. The plaintiff in their statement have simply totalled the amount of penal interest as disclosed in the statement of loan account and have deducted the same from the final balance. In my view this is not the proper method for calculation as ordered by this Court on 9‑5‑1996. For the first time the bank has charged penal interest of Rs.66,653 on 26‑12‑1983 and again thereafter charged penal interest of Rs.65,380 on 7‑1‑1984. After addition of this amount of penal interest in the statement of account the bank has again charged an amount of interest. The bank should have first deducted these two entries of penal interest and then should have imposed the agreed rate of interest and the same method should have been adopted for further entries. Therefore, merely adding all the amounts of penal interest and deducting the same from the last figure shown is not the correct and proper approach. So far the question of charging penal interest is concerned, I fully agree with the learned counsel for the defendants that the plaintiff bank is not entitled to charge penal interest since, it was never agreed by the borrower/defendant. In this regard I would like to refer the case Radha Kishun and others v. Hira Lal Shah and others AIR 1927 PC 50 where it was held that in a suit for recovery of amount with compound interest, the burden is on the plaintiff of proving an agreement with the defendant to pay compound interest. In the instant case, the plaintiff was not able to show any agreement to this effect. In view of this matter, the statement of account filed with the plaint as Annexure "G" and the figure shown as outstanding, therefore, becomes doubtful. I have gone through Annexure "G" which is statement of account. The total amount of penal interest imposed in this statement from time to time comes to Rs.33,69,

369. In view of the above discussion and after going through the pleadings of the parties and documents, I am of the view that the defendants have made out a good arguable case disclosing plausible defence. I, therefore, grant this application in the following manner:‑‑ (i) In view of the statement of accounts filed by the defendants admitting up to date outstandings, I decree the suit of the plaintiff up to Rs.4,304,392 with proportionate cost and interest at the rate of 12% from the date of suit till its repayment. (ii) For the remaining amount of claim of the plaintiff the defendants are granted unconditional leave to appear and defend the suit. With the above directions C.M.A. No.5892 of 1990 stands disposed of. A.A./U‑11/K ????????????????????????????????????????????????????????????????????????????????????? Suit partly decreed.