2004 PLP 110 (CLD)

This is an application under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 filed by the defendants for grant of unconditional leave to defend the suit. Briefly the facts giving rise to this suit are that this is a suit for recovery of Rs.148,321,982‑50 filed by the plaintiffs against the defendants. Defendant No.1 is a customer while defendants Nos.2 and 3 are guarantors. The plaintiffs sanctioned first Internal Sanction Advice with regard to Running Finance facility of Rs.2.5 million, L/C facility up to Rs.70.0 million and Fafeb facility of Rs.27.5 million to defendants. The defendants executed certain documents with the plaintiffs. The defendants filed the aforesaid application for leave to defend the suit and raised several preliminary objections as regards plaintiff's claim as the same according to them is exaggerated and based on concocted pleas hence the suit is not maintainable. It is further contended by the defendants that they controvert and deny propriety, authenticity, admissibility and effectiveness of each documents annexed to the plaint as such the plaintiff has not come to this Court with clean hands. It is further contended that the plaintiff has charged mark‑up at the higher rate and for more than agreed period as well as charged mark‑up on mark‑up and liquidated damages which need to be proved. It is further averred that the plaintiffs have failed to file the complete and correct statement of account with the plaint. I have heard the learned counsel for plaintiffs and defendants at length and also perused the record. The counsel for defendants has reiterated the objections raised by him in the application for leave to defend the suit. He has relied on the case of Messrs Habib Bank Ltd. v. Messrs Schon Textiles Ltd. 2001 YLR 1244 wherein a learned Single Judge of this Court has held as follows:‑‑ "All these need a detailed investigation and cannot be merely determined from the accounts, ex facie, vouchers, bills and other similar documents would be required to be produced and detail investigated. For this purpose and which seems to be a genuine dispute the application for leave to defend is granted." He has also placed reliance on the case of Agricultural Development Bank of Pakistan v. Jasarat Hussain 2002 CLD 93 wherein a learned Division Bench of Lahore High Court has observed as follows:‑‑ "Mark‑up having been included in the instalment amount, cannot be charged by the appellant twice. Mark‑up cannot be allowed to the appellant like interest recurring on the interest bearing loan. It will be a total negation of the mark‑up system of finance introduced by abolishing interest‑based loans of the Banking Companies." The learned counsel for defendants has also relied on a number of decisions of this Court as well as Lahore High Court. Keeping in mind the above‑cited judgments and objections raised by the defendants. I am of the considered view that defendants have made out a prima facie case for grant of unconditional leave as the objections raised require detailed investigation through recording of evidence. For the aforesaid reasons by a short order announced in Court on 21st January, 2003. I had granted the listed application while above are the reasons for the same. M.H./A‑478/K Leave granted.