P L D 1984 Karachi 426 (PLP)

MUHAMMAD ZAHOORUL HAQ, J .-These,are fifteen appeals directed against the same judgment of a learned Single Judge of this High Court in Judicial Miscellaneous Applications Nos 100/1972 to 104/1972, dated 17-5-1977. Five connected appeals are filed by five Co-operative Housing Societies against the award of compound interest. Five connected appeals have been filed by House Building Finance Corporation against the refusal of the learned Single Judge to grant pendente lite interest and five connected appeals have been filed by Habib Bank Limited complaining of the grant of compound interest against them as well and also complaining that their liability should have been discharged w. e. f. 17-6-1967 when they tendered the amounts due to H. B. F. C. All these appeals were beard together .and were disposed of by order dated 27-10-1983. These are the reasons of the said order. The relevant facts are that five Co-operative Housing Societies had got loans sanctioned from H. B. F. C. for construction of multi-storeyed build ings to the extent of Rs. 10,00.000 on 25-9-1962 which was reduced to Rs. 8,00,000 on 14-5-1965. Between 6-10-1962 to 15-5-1963 different amounts were advanced to the Societies by H. B. F. C. towards sanctioned loans. On 17-5-1963 the Societies had executed Mortgage Deeds in favour of H. B. F. C. wherein it had been provided that they will pay monthly instalments of Rs. 6,884 and interest at 6'1 % per annum. Messrs Standard Bank Limited, the predecessor of respondent No.

2. Habib Bank and Asbfaq Hussain and D, Silva had provided guarantees on 6-4-1964, on behalf of the societies to H. B. F. C. in respect of loans granted by it. It is admitted position that each one of the Co-operative Housing Secieties had been paid till June, 1963 a total amount of Rs. 4,10,900 only. The loans were recalled by H. B. F. C. by notice, dated 7th of June, 1967 on account of diversion of funds by the Societies and they were directed to return the loans with interest. The guarantors were also directed to make the payments due from the Societies. The interest was calculated at 61 simple without any monthly rests. Societies felt aggrieved on that account and filed five suits in the High Court for declaration and injunction challenging the said notice of demand. On 15-6-1967 ad interim injunction was issued restraining the H. B. F. C. from enforcing payment or collecting any payment. On 27-6-1967 interim order of stay of the operation of notice of H. B. F. C. dated 7-6-1967 was confirmed in the five suits on the con dition of the deposit of five cheques certified to be good for payment in Court by the Societies for the entire claim of House Building Finance Corporation. Some. .time thereafter Messrs Standard Bank Limited, the predecessor of Habib Bank deposited the required cheques in the High Court. It is important to note that on 17-6-1967, Habib Bank had tendered the cheques of the required amounts to H. B. F. C. but they had declined on 24-6-1967 to receive the said cheques on account of the ad inter:m injunc tions in the said suits. . The rest of the proceedings in respect to those suits are hardly relevant and, therefore, they are not referred to except that those suits all stand disposed of as dismissed and the Letters Patent Appeals were also dismissed and even the Supreme Court upheld the dismissals, in petitions for Leave to Appeal which were dismissed in 1972. H. B. F. C. filed five Misc. Applications against the five Housing Societies in May, 1972 which were numbered as J. Misc. Nos. 100 to 104 of 1972. The same bad been filed under section 30 of the House Building Finance Corporation Act, 1952 for sale of. properties of defendent for dues which plaintiffs had granted to the Housing Societies and the interest thereon cal culated on simple basis at 61 % per annum. After the suits of five Societies were finally dismissed, the Hon'ble Single Judge allowed H. B. F. C. on 27-3-1972 to withdraw the five cheques from the Court deposited by the Societies in terms of the following order :-- "All that is urged by Mr. Ajmal Mian is that under Mortgage Deeds the defendants can recover simple interest which the plaintiffs are ready to pay and after the cheques have been encashed the defendant should be returned the Mortgage Deeds which are in their possession, Mr. Anwar Ali has got no objection provided the amount deposited by the cheques are encashed and satisfied the entire claim of the defendent. " Suits Nos. 100 to 104 of 1972 were tried together. Written statements were filed by the Societies and other three defendants namely Standard Bank (Predecessor of Habib Bank, Ashfaq Hussain and D'Silva. Following issues were framed :-- (1) Whether under the terms of the mortgage the applicants are entitled to recover simple or compound interest ? (2) Whether the, applicants assured respondent No. 4 that they would release the mortgaged land on receipt of payment from the said respondent No. 4, the amounts of the bank guarantee/cheques. If so, what is the effect ? (3) On what terms respondent No. 1 Societies in J.. Misc. Appli cations Nos 100 to 104/72 agreed to the handing over of five cheques to the applicants at the time of the passing of the order by this Hon'ble Court on 27-3-1973 in Suit No. 142/67 ? (4) Whether the indemnity bond executed by respondent No. 5 cannot be enforced ? (5) V4 hether respondents Nos. 2 and 3 stand discharged as the Guaran tors ? (6) What amount, if any, the applicants are entitled to recover and from which of the respondents ? (7) Which of the property is liable to be put to auction for satisfaction of the applicants' alleged claim ? (8) Did the respondent No. 4 pay the guarantee amount on 17-6-1967 as demanded by the applicants, if so, its effect ? In respect of Humayun Society in J. Misc. No. 100/1972 the additional issue framed was as under :- Whether the amount of Rs. 6,07,605.32 deposited on 8-12-1970 by respondent No. 1 in the account of the applicants included uptb date interest in accordance with the terms of the mortgage deed. If so, what is its effect ? Evidence was recorded. Finally the Hon'ble Single Judge allowed all the applications on 4-6-1978 and hold, tbat H. B. F. C. was entitled to charge compound interest from 1-6-1967 but he did not decree any pendentelite. interest. He refused to give a direction for the release of the mortgaged documents. He held that Ashfaq Hussain and D' Silva were not discharged from their liability as gurantors. He held that there was no valid tender of payment by Standard Bank/Habib Bank under the terms of guarantee on 17-6-1967, and, therefore, guarantees were not discharged. In respect of Humaytin Co-operative Housing Society he held that this Society had paid Rs. 6,07,605.32 on 8-12-1970 and it will, therefore, only be liable to pay compound interest from 31-5-1967 to 8-12-1970 and necessary adjust ment will be made. He further held that various Societies were liable to pay following amounts :-- (1) Shahenshah Aurangzeb Co-operative Seciety. . (J. M. 101/1972)............................... Rs. 2,10,514 (2) Shahenshah Bahadur Shah - Co-operative Society. (J. M. 102/ 1972).............................. Rs. 2,13,674 . (3) Shabenshah hah Alam Co-operative Society. . (J. M. 103/1972)............................... Rs. 2,10,51:4 (4) Shahenshah Farruk Co-operative Seciety. (J. M. 104/1972)............................... Rs. 2,10,51.4 He further directed that the dues should first be recovered from the property which was mortgaged as security for the loans. The learned counsel Mr. Riazui Hasan for the five Co-operative Hous ing Societies and Mr. Yousuf Rafi for the Habib Bank Limited have challenged the judgment of the Hon'ble Single Judge on the grounds that the mortgage deeds were not the primary documents evidencing loans and as they were merely security documents for the loans which had been granted by the H. B. F C. earlier and even payments of part of the loan amount had been. made to the Housing Societies by H. B. F. C. before the execution of the mortgage deeds or security of loan documents on 17-5-1963 and 6-4-1964. Their contention was that the documents evidenc ing original loans had intentioned only 61 % interest and there was no mention of monthly rests and hence monthly rests should not have been allowed by the Hon'ble Single Judge. They further contended that Regu lation 11, of H. B. F. C. Regulations, 1952 was not a statutory regulation and, therefore, it should have been ignored. They further contended that the said regulation even if it had statutory effect was merely directory in its nature and not mandatory and in any case the same had been waived by the H. B. F. C. by its conduct throughout upto the period of 1972 and, therefore, H. B. F. C. was estopped from claiming monthly rests in respect of the interest. Mr. Yousuf Rafi has also contended that Habib Bank Limited having tendered payment to H. B. F. C. by cheques on 17-6-1963 they were discharged from any liability thereafter. He further contended that in any case the learned Judge should have ordered the release of mortagage deeds in favour of the Habib Bank Limited after it had made payments of the amounts due is 1973. Syed Nasiruddin had attacked the said judgment on the ground that that pendente lite interest at Q % per annum with monthly rests should have been allowed by the learned Single Judge from the date of filing of the suit till the realization of the decree. He had also submitted that H. B. F. C. had merely been indulgent and graceful to the Societies by not charging interest with monthly rests from the upto the period of 31-5-1967 and a mere grant of concession should not be regarded as waiver of its right which it had under Regulation 11 of the H. B. F. C. Regulations 1952. Before procceding with further elaboration of the arguments we may also note here that Mr. Riazul Hassan had submitted in the opening of his arguments that regulation of H. B. F. C. were not amended and, therefore, Regulation 11 cannot be taken into consideration. However Mr. Anwar Ali appearing with Syed Nasiruddin had produced Gazette of Pakistan, dated 15-2-1957, part Vli, page 33 whereby the provision of interest with monthly rests was introduced and regulation 11 was added which provided that in terest shall be payable by the borrowers and will be recoverable by monthly rests. After having a look at the Gazette of Pakistan Mr. Riazul Hassan gave up that point. Mr. Riazul Hassan and Mr. Yousuf Rafi, the learned counsels for the appellants had submitted that the H. B. F. C. Loan Regulations of 1954, being merely the regulations framed by the Finance Corporation did not have the force of law and at least could not be placed at par with the law framed by the Legislature. In reply Syed Nasiruddin, the learned counsel for the respondent sub mitted that those Regulations have been framed under section 42 of the H. B. F. C. Act 18 of 1952 and since they had been made with the previous, sanction of the Government they have the force and effect of statutory law.' Mr. Nasiruddin relied upon (1947) 1 A. E. R. 205 (206), (1947) A C 362 (H. L.) Wicks v. Director of Public Prosecution where it was held, "when an Act, enable an authority to make Regulation, a Regulation which is validly made under the Act i. e. which is intra vires of the regulation making authority, should be regarded as though it were itself an enactment." In A I R 1955 Orissa 151, it was held "a Bye-law or Regulation being in the nature of subsidiary legislation has statutory force, and the general principle governing the interpretation of statutes would, therefore, apply in construing them". In view of the above decisions the appellants cannot contend that the Loan Regulations framed by H. B. F. C. did not have the force of law. In fact the definition of "Rules" given in section 2 of General Clauses Act includes "Regulations." The appellant's counsel thereafter contended that Regulation 11 was merely of a directory nature and not mandatory in its scope. It is submitted that the whole conduct of the respondent H. B. F. C. showed that they had treated Regulation 11 which allowed interest with monthly rests as not a mandatory provisions inasmuch as they did not burden the appellants Secieties with monthly rests from 1963 upto June, 1967 and merely charge simple interest at 6 % per annum. It was only in 1972 that the respondent Corporation decided to charge penal interest with monthly rests from July, 1967 although even in the notice issued by the respondent-Corporation on 7-6-1967, when they had recalled the loan, there was no mention that henceforward interest with monthly rests would be charged from the appel lants Societies and their sureties. The counsel further submitted that even the statement made by the witness (P. W. Muhammad Azam Sami) of the respondent-Corporation made it very clear that the respondent-Corpora tion had not been charging monthly rests from their debtors. He had adopted the position that it was only from the defaulters that the interest with monthly rests was charged and even for that purpose the reliance was placed by that witness upon banking practice and not upon the Regulation 11 of the H. B. F. C. Regulations, 1954. Another important submission of appellants was that in the mortgage deeds which were signed by the appellants there was no mention of the monthly rests and that although almost every other regulation of H.B.F.C. Regulations of 1954 had been copied verbatem in the mortgage deeds yet Regulation No. 11 was not so copied and its omission from the mort gage deed showed that the .respondent-Corporation which was the author of these Regulations, did not consider the same mandatory. Mr. Yousuf Rafi had contended that mention of the Regulations in sub-paragraph 11 (a) of the mortgage deed is in the following terms :- "11 (a) that he will from time to time and at, all times hereafter comply with the Rules framed by the Central Government under H. B. F. C. Act, 1952 and the Regulations of the Corporation for the time being in force and applicable to the loan hereby granted.' The underlined* portion of the above sub-para. clearly shows that it is only that particular regulation, which is applicable to the loan which has already been granted, which would required to be complied with by the borrowers and since in the present case the letter of sanction of loan and even para. 1 of the Mortgage Deed talks of only 6 % of monthly interest, therefore, that part of Regulation 11 which requires the recovery of B interest with monthly rests cannot be regarded as applicable to this loan and, therefore, the above-quoted para could be treated as a requirement of complying with the entire set of regulations of H. B. F. C. We are, therefore, of the view that Regulation ll which require interest with monthly rests was not applicable regulation to this loan. Paragraph 16 of the Mortgage Deed which talks of the additional powers of the Corporation only speaks of H. B. F. C. Act, 1952 and the rules made thereunder and does not refer to the regulations and consequently this paragraph 16 cannot be utilized for the purpose of making regulations as integral part of the Mortgage Deed. We are clearly of the view that the original agreement of loan and paragraph I of the Mortgage Deed in question are quite clear in providing interest at the rate of Of % per annum and they do not talk at all of pay ment 'of interest with monthly rests and hence interest with monthly rests could not be charged by the Corporation. The above submission of the learned counsels seem to have a great deal of force and Syed Nasiruddin and Mr. Anwar Ali were not able to show as anything to the contrary to the facts enumerated above. The only submission made by them was that the respondent-Corporation had been showing a grace and indulgence in not charging interest with monthly rests if the debtor paid instalment regularly but they resorted to their legal right of charging monthly rests as soon as the default was committed by the debtors. They argued that indulgence cannot amount to estoppel and in any case there was no estoppel against the law. We fail to understood the distinction that the respondent-Corporation wants to make between ordinary debtor and the defaulting debtor. This is a distinction of their arbitrary choice as Regulation 11 does not allow such a distinction to be made. In fact if the Regulation 11 was mandatory in its effect or the respondent-Corporation treated it to be mandatory in its effect then they had no choice in the matter but to charge monthly interest from every debtor from the very beginning of the instalment without waiting for a default to be committed by him. But it is an ad mitted position that the H. B. F. C. have not ordinarily charged interest with monthly rests and, therefore, it is obvious that the respondent Corporation did not read Regulation 11 as of mandatory nature and effect as otherwise they would have charge interest with monthly rests from every one of the debtors without any distinction of a defaulter or a non-defaulter. This fact alone that the H. B. F. C. did not charge interest with monthly rests from the debtors until they defaulted clearly show that the respondent-Corporation, which was the author of this Regulation 11, did not consider the same as of a binding and mandatory nature 'and, therefore, treated the same as merely directory which amply authorise them to charge interest with monthly rests from the defaulters at their choice. They had shown no indulgence or grace but had been deliberately either ignoring Regulation II or treating it as a provision directory in nature and not mandatory or binding in every case. Moreover, the very conduct of the respondent-Corporation that they had not charged interest with monthly rests from the appellant Societies from 1963 till 1967 clearly showed that the respondent-Corporation did not intend to charge interest with monthly rests from the appellants Societies and once they had adopted this position it was not open to them to say in 1972 that they would now burden the appellants with the liability of monthly rests with restrospective effect from July, 1967. This in fact amounted to the imposition of an arbitrary penalty by the respondent-Corporation for which they did hardly any justification particularly when they had not treated Regulation No. 11 as a provision which had to be followed by everyone and which had the mandatory effect in law. , If Regulation 11 was mandatory then the H. B. F. C. itself had been committing the breach of this mandatory law right from 1962 till 1972. by not insisting upon its strict compliance and by relaxing the same as against those who did not commit defaults. It would be difficult to con ceive such a situation. Correct inference, therefore, would be that H.B.F.C. itself treated the latter part of Regulation No. 11 as merely an enabling directory provision which they could waive at their will to attract more borrowers. It was, therefore, not such a provision of law compliance of which in its' absolute terms was absolutely essential. The learned Single Judge, therefore, fell in error in giving Regulation No. 11, the effect of a mandatory law by enforcing its' terms strictly. Mr. Yousuf Rafi had referred to section 26 of H. B. F. C. Act, 1952 which empowers H. B. F. C. to enter into such agreement with borrowers as it deems necessary would saferguard its interest. This section 26 gives absolute powers to H. B. F. C to settle the terms of loan, and indi cates that if H. B. F. C. wanted to give up any of the regulations it could do so. Even Regulation 5 itself gives powers to H.B. F. C. to make agreement in particular circumstances in each case and this regulation itself could allow H.B. F.C. to waive condition of interest with monthly rests. And since loan agree ment. which had been entered into first in 1962 and then amended in May, 1963, before execution of the Mortgage Deeds, had provided only for charg ing of simple interest at 6 %, therefore, the H. B. F. C. does appear to have) waived and given up its right to charge interest with monthly rests. That waiver of the interest with monthly rests could not be revived by a vague and bleak reference to the Regulation in some portions of the Mortgage Deed. Mr. Yousuf Rafi, Advocate for the appellant Bank had also submitted that the learned Single Judge was not justified in treating the Mortgage Deeds as the principal documents. He submitted that the principal docu ments were the application of loan made by the appellant Co-oparative Housing Societies and the sanction of loan letter issued by the respondent Corporation which were made and issued in 1962, much before the execu tion of the Mortgage Deed on 17-5-1963. The application and sanction letters did no: contain any reference to interest-with-monthly rests and, therefore, interest-with-monthly rests could not be regarded as a terms and conditions of the contract. The Mortgage Deeds executed on 17-5-1963 could be regarded only as ancillary documents securing the repayment of the mortgage and not as principal documents because the principal documents had already been made and issued earlier than the Mortgage Deeds and in fact of the loan had been advanced before the execution of the Mortgage Deeds on 17-5-1963. Reliance was placed by Mr. Nasiruddin upon section 24 of H. B. F. C. Act where subsection (6) provided that the loan shall be payable in monthly instalments sufficient to cover the principal and the interest in such manner as may be prescribed. But this section does not refer to rules or regulations at all and moreover this subsection merely postulates the prescribing of the manner of repayment of loan with interest and its' effect cannot be extended to cover the charging of interest with monthly rests. We find these submissions quite convincing. Exh. 3/49 was the letter of sanction of the loan issued by the respondent-Corporation and the same is, dated 21-9-1962 and it contains no mention of interest with monthly rests. The request for sanction of loan made by the appellant Housing Societies must have been before this date. Same was not produced to show that monthly rests in interests had been visualized at any stage. The Mortgage Deed which were executed after about 8 months of the actual sanction of the loan admittedly after the receipt of a part of the loan by the Societies can, therefore, not be treated as the primary document evidenc ing the loan. The mortgage deeds were in fact document securing the re-payment. Even these mortgage deeds do not talk clearly of interest with-monthly rests but they were relied upon by respondents to show that there was a, mention in the mortgage deeds that the borrowers will be bound by the H. B. F. C. Loan Regulations. This was however, an oblique reference to the Loan Regulations and being deeds executed quite a good deal after the sanction of the loans there mortgage deeds were not the principal docu ments of contract and they could not change the main form of contract of loan with simple interest into a loan with compound interest and.that too by indirect reference to the Loan Regulations as a whole. It is, therefore, obvious that since the letter of sanction only mentions simple interest of six and a quarter per cent, therefore, it was simply a loan) with simple interest which was sanctioned by the House Building Finance Corporation. Therefore, the respondents did regard the charging of interest with monthly rests under regulation 11 of H. B. F. C. Loan Regulations of 1954 as merely directory in nature not mandatory and conciously waived the same originally and hence they could not resort to it in 1952 as they were bound by the original contract of loan. Mr. Youauf Rafi also contended that the provisions of regulation 11 of H. B. F. C. Loan Regulations, 1954 had been waived by the respon dent Corporation as this regulation had been made solely for the benefit and protection of the respondent-Corporation and hence it could be disposed with by them and such action of the respondent-Corporation did not infringe any public right or public policy. The counsel relied upon Maxwell on Statutes (2/- Ed. published by Tripathi) p. 328 where it was opined as under :- "Everyone had a right to waive and agree to waive the advantage of law made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with by them without infringing any public right or public policy." Reliance for the above opinion was placed on great Eastern Rly. Com pany v. Sir Julian Golds-Mid ((1884) 9 A C 1927) (House of Lords). Also relied upon was the case of Fast India Company v. Odit Charon Paul ((1899) 7 Moore (P C) 85) were it was held that a person may agree to waive the benefit of the Limitation Act. In Lubavsky v. Snelling ((1944) 1 K B 44) it was held :- "That the agreement constituted a contract not to plead section 3 of the Fatal Accidents Act, 1846 which provided that action under that Act must be commenced within 12 months of the death and that consequently the defendent could not do so and the plaintiff was entitled to recover." There are however, eases where a statutory requirement which is imposed in public interest cannot be waived. It was held in (1867) 1 LR 520 (P C) as under :- "there can be no waiver of a statutory requirement which is imposed in the public interest, prisoner cannot consent to waive what the law requires in the course of his trial." In P L D 1964 S C 536 it was held that requirement of a notice under section 30 of the Displaced Persons (Compensation and Rehabilitation) Act of 1958, could not be waived by the tenant as the requirement of the notice by Registered A. D. post was in public interest. From the perusal of the authorities cited above it is apparent that if a provision in law is made in the public interest then the individual cannot waive the requirements of that provision but in, case the provisions of any law are not in public interest and for public benefit, but are merely to safeguard the rights of an individual then the individual can waive those rights. If seen in this light, Regulation No. 11 of House Building Finance Corporation Loan Regulations, 1954, to the extent of recovery of interest by monthly rests appears to be a regulation made by the respondent-Corporation in its own interest and not for the benefit of the public. We will reproduce the said Regulation hereunder :-- "

11. Interest shall be payable by the borrower from the date the payment is made by the Corporation and will be recoverable by monthly rests." There are two parts of the above Regulation one is that interest shall be payable which could be regarded as mandatory because of the use the word "shall be payable" although it has been held in a great deal of cases that "shall" and "may" interchangeable words and that mere use of they word "shall" would not make it mandatory and vice versa. Howover, the second part of this Regulation 11 appears to be prima facie director because the words used are "will be recoverable" before the word "b monthly rests" therefore, the emphasis appears to be on interest and not on monthly rests. We find support for our view from the preamble to the House Building Finance Corporation Act, 1952 which provides as under :- "whereas it is expedient to establish a House Building Finance Cor poration for the purpose of providing financial facilities for the cons truction, reconstruction, repair and purchase of houses." It thus appears that the House Building Finance Corporation was established for the purpose of providing financial facilities to the General' Public for constructing or purchasing their houses etc. not for the purpose of doing the banking business in respect of construction and purchase of house. The dominant purpose was, therefore. of providing facilities to the public to have access to ready and cheap finances. And in this respect the utmost that could be urged was that the provision of interest in pay ment of loan could be the condition of the grant of loan so that the debtor is obliged to pay back the principal in time and is made to do so as otherwise the interest would continue to run against him. But no such argument could be advanced in favour of the provision of recovery of interest by monthly rests as the same is harsh provision and militates against the facility of financial assistance and obliges the borrower to pay the huge sums of money and is likely to scare away an ordinary borrower who cannot pay compound interest. We are convinced that the provision of recovery of interest by monthly rests was not a provision for public benefit and hence the same could be waived by the respondent-Corporation. In fact we find that respondent Corporation has itself taken the position that it had no intention of charging interest by monthly rests and thus it had been in fact originally waived by the respondent-Corporation, and they are bound by the same. In finding that the charge of interest by monthly rests was not for public benefit, we get support from the objective Resolution which had been passed by the Constituent Assembly of Pakistan in 1949, and had provided that, "the Authority to be exercised by the people of. Pakistan within the limits prescribed by Allah is a Sacred Trust : it is the will of the people of Pakistan to establish an order wherein the State shall exercise its power and authority through the chosen representatives as of the people; wherein the principles of Democracy, Freedom, Equality, Tolerance and Social Justice as ennuniciated by Islam, shall be fully observe"; etc. It is common knowledge that the Social justice in Islam does not favour the charging of interest and its' continuance is being suffered under extreme economic necessity and continuance for a limited time. Therefore, a pro vision that allow charging of even compound interest. -viz- interest by monthly rests, could hardly be regarded as a provision for the benefit of public or in the public interest in the Islamic Republic of Pakistan which had come into being to bring as Islamic Order. Consequently charging of interest by monthly rests could have been waived by the respondent Corporation. Mr. Yousuf Rafi had submitted that the Standard Bank Ltd. having tendered cheques on 17-6-1967 to the respondent-Corporation, therefore, the responsibility of Standard Bank Ltd or its successor Habib Bank Ltd., the present appellants, had been completely discharged. We do not agree. Mr. Yousuf Rafi had conceded that the liability of the Bank was co extensive with the liability of the borrower, Co-operative Societies under F section 121 of the Contract Act. We have already seen that the borrower Co-operative Societies had filed five suits in 1967 in the High Court and obtained ad interim injunction on 15-6-1967, against the present respondent which had restrained them from recovering the said loan or accepting any payment in respect of the same. In the presence of this injunction it was not possible for the respondent-Corporation to accept any payment in res pect of these loan and, therefore, the respondent had rightly declined to accept the payments: There was no genuine tender by the appellant-Bank of the required amount due in view of injunction of the Court which had been obtained by the present appellants Co-operative Housing Secieties whose liability was co-extensive with the liability of the Bank. We are clear in our mind that if the Bank was sincere in its efforts to make the payment to the respondent-Corporation then the bank should nave made an ap plication to the Court in 1967, and sought permission from the Court to make the payment. But it did not do so and, therefore, their attempt to make the payment on 17-6-1967, in spite of injunction of the Court, was a mere eye wash and not a sincere effort to clear the dues. It cannot be regarded as a proper tender of the amount due. Therefore, the reliance of Mr. Yousuf Rafi upon provision of sections 38 and 140 of the Contract Act ; is hardly of any avail because we do not consider the tender of the cheques on 17-6-1967 as a real and proper tender on the part of the Bank. There before, this submission of Mr. Yousuf Raft is found to be without any force. The other submission of the Bank that the liability of the Bank should be considered to have ceased after they had tendered the pay orders in Suit No. 142 of 1973 is quite justified in view of the fact that we have come to the conclusion that only simple interest was payable by the Co-operative Housing Societies and, therefore, the tender by the appel lant-Bank of the amount involved on 27-3-1973 in Suit No. 142 of 1973 was a proper tender of the amount due. We are, therefore, of the view that interests was payable by the appellants only at 6 1/4 % simple interest and not with monthly rests upto period of tender of the pay orders in 1973. Therefore, the total liability of the appellants had been discharged on 27-3-1973 and hence the Judicial Miscellaneous Applications of the respondent H. B. F. C. should have been dismissed thereafter. In respect of appeals, against refusal to grant pendente lite interest, by H. B. F. C. Mr. Nasiruddin, the learned counsel for the appellant has submitted that section 30 provides the procedure for relief to the Corporation in case of breach of agreement by the borrower. And subsection (1) of this section talks of payment of the amount due by the borrower to the Cor poration which means that the whole .amount due from the borrower to the Corporation including the principal and. the interest is envisaged in subsection (1) of section

30. The learned counsel further submitted that subsection (i) of section 30 has to be read with subsection (7) (a) of this very section which provides for passing of the order by the Judge and the Judge has to record his findings as to the amount due by the borrower to the Corporation and the interest payable thereon. The learned counsel argued that section 30 (7) (a) means that the whole amount of principal and interest due by the borrower to the Corporation should be found by the Judge and on the top of it the Judge has to specify as to how much interest is payable thereon. We do not agree with these submissions. The expression "amount due by the borrower to the Corporation". refers to the principal amount of loan taken by the borrower and it may include other amounts which are payable by the borrower in accord ance with the contract. But this expression cannot mean to include interest payable on the amount due. If the intention had been, as contended by the learned counsel, then there was no necessity of separately specifying that finding in respect of interest should also be given by the Judge under section 30 (7) (a). It is, therefore, apparent that the Judge is only bound to find the principal amount due by the borrower to Corporation and then to specify the interest which is payable on the amount due. What is however important is that nowhere in section 30 it is made incumbent upon the judge, hearing the application of the Corporation, to order that interest pendente lite should also be allowed to the Corporation. Therefore, in this respect the maximum that the appellant can urge is that section 34 of the C. P. C. should have been used by the Hon'ble Judge in allowing pendente lite interest to the appellants. The Hon'ble Judge on the original side however, was of the view that section 30 was a complete code in itself and it nowhere provides for the payment of pendeme lite interest. Mr. Nasirudddin has not been able to contend that the view of the learned Judge in respect of section 30 is incorrect. He has on the other hand submitted that section 30 did provide for the payment of pen dence lite interest under section 30 subsection (7) (a) but we do not agree with this submission as mentioned above. To us the view of the learned Judge does not seem to be incorrect that section 30 alone should be referred to for the purpose of the final order which has to be passed by the Hon'ble Judge and that general provisions of C. P. C. should not be ordinarily attracted with these proceedings. Even section 34 of C. P. C. provides that' "where and insofar as a decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so ad judged, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit". It is, therefore, abvious that section 34 gives a complete discretion to the Court to award pendente lite interest if it deems reasonable to do so. In P L D 1965 , S C 310 it was held that it was discretionary with the Court' to award interest under section

34. We have seen the judgment of the Hon'ble Judge and he was of the view that in the first instance it was not a decree for the payment of money because section 30 (1) (a) and (c) provide for the relief delivery of the Corporation or sale of property or mortgage or any injunction restraining the borrower from transferring the property or for interim attachment of the property. It is only incidental to the above reliefs that under subsection (7) (a) the Judge has also to record his findings about the amount due and the interest payable thereon. Therefore, an order under section 3(I . is not essential in the nature of a decree for the payment of money but is in the nature of a suit for foreclosure of the mortgage and hence the provisions of section 34 of C. P. C. are not squarely attracted to .the proceedings under section 30 of the Act. Even otherwise the provisions of section 34 being discretionary it was available to the learned Judge to award pendente lite interest or not. Since the appellants had themselves not claimed any pendente lite interest the discretion exercised by the learned Judge does not seem to be incorrect. We therefore, see no force in the five appeals of H. B. F. C. and the same were therefore, dismissed. We have noted the arguments of the learned counsel in spite of the fact that we had allo rued the connected appeals of the Co operative Housing Societies and Habib Bank against the grant of interests with monthly rests. In fact these appeals of H. B. F. C. had become infructuous after the decision of these appeals. But we have dealt with these appeals on merits in view of the elaborate arguments advanced. M. Z. M. Appeal dismissed.