2003 PLP 1468 (CLD)

(ii) Plaintiff only produced in the Court on 3-11-1997, letter dated 22-10-1997 containing terms of the settlement. (iii) Plaintiff never mode any application or request for unconditional withdrawal of the suit C.O.S. No.135 of 1997. (iv) The Court, upon recording that the bank had accepted the terms of settlement package, proceeded to dismiss plaintiff's suit as having been withdrawn by order dated 3-11-1997. (v) Subsequent applications filed by the plaintiff for modification or order dated 3-11-1997 to record the settlement and pass a compromise decree under rule 3 of Order XXIII, C.P.C. in absence of any request by the plaintiff for withdrawal of the suit or to revive the suit, were dismissed on technical grounds. (vi) The defendants in their reply to C.M. No.361-B of 1998 seeking revival of Suit No.135 of 1997, did not assert that plaintiff made any application or request to unconditionally withdraw C. O. S. No. 135 of 1997.

10. In PLAs filed in present suit, defendants do not at all plead, contend or state that plaintiff ever made any request for unconditional withdrawal of C.O.S. No.135 of 1997 on 3-11-1997 under sub-rule (1) of - rule 1 of Order XXIII, C.P.C.

11. It is thus evident that plaintiff at no stage of suit (C.O.S. No. 135 of 1997) made any request for withdrawal of the suit. Instead the Court acting suo motu, without request from plaintiff, dismissed the guit as withdrawn after recording the factum about settlement dated 22-10-1997 between the parties.

12. The provisions of law relating to Withdrawals of suit and compromise decree are contained in Order XXIII of Civil Procedure Code.

13. Rule 1 of Order XXIII, C.P.C. contains provisions relating to withdrawals, while rule 3 ibid provides for a decree upon compromise of a suit. These provisions being pertinent to questions in hand are reproduced hereunder:-- Order XXIII, rule 1: (1) At any time after the institution of a suit the plaintiff may, as against all or any of the defendants, withdraw his suit or abandon part of his claim. (2) Where the Court is satisfied

(a) that a suit must fail by reason of some formal defect, or (b) that there are other sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of a claim. (3) Where the plaintiff withdraws from a suit, or abandons part of a claim, without permission referred to in sub-rule (2) he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim. (4) Nothing in this rule shall be deemed to authorize the Court to permit one of several plaintiffs to withdraw without the consent of the others. Order XXIII, rule 3: Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfied the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit."

14. The reading of the above reproduced rule 1 reveals that a plaintiff at any time during the proceedings of the suit can withdraw his suit or abandon his claim partly or entirely against all or any of the defendants under sub-rule (1) thereof. The sub-rule (1) as such visualizes absolute relinquishment of claim and unconditional withdrawal of the suit by a plaintiff. This sub-rule essentially incorporates plaintiff's unqualified right ana privilege to withdraw from a suit or to withdraw the suit by abandonment of his claim, subject of course to sub-rule (4) thereof. Upon such withdrawal or abandonment of claim a plaintiff incurs the bar and costs under sub-rule (3) of Order XXIII, C.P.C. On exercising the right and privilege to so withdraw, plaintiff under sub-rule (3) is precluded from instituting a fresh suit in respect of such subject-matter of such part of the claim. The mechanism of withdrawal under sub-rule (1) and attractibility of the bar under sub rule (3) thereof is triggered only when a plaintiff withdraws a suit and abandons a claim without any conditions reservations or riders. Since the suit is that of the plaintiff therefore, after institution of such suit, it is only the plaintiff who has the unqualified right to withdraw therefrom and to give up his claim and cause raised therein. Therefore, it is logical and prudent that no other person including a defendant has been granted a right to seek withdrawal of the suit. The terms of the rule contained in sub-rules (1) and (3) of Order XXIII, C.P.C. are concise, clear and unambiguous and thus do not appear to admit of any other interpretation. The right to choose to continue or elect to discontinue the suit, absolutely ana unambiguously vests in a plaintiff. Upon plaintiff's request to withdraw his suit, the Court has no discretion to decline disposal/ dismissal of the suit as withdrawn except in extraordinary and limited circumstances, where rights have come to vest in defendants, third persons or in general public etc. Such instances have by now been well-enumerated in law developed by Honourable Courts of superior jurisdictions. No such question is involved or has been raised for decision by this Court in the present case.

15. The plaintiff has been provided with another course under sub-rule (2) of rule 1 of Order XXIII, C.P.C. to save his right and cause to re-file a suit on the same subject matter by applying to the Court under sub-rule (2) for "permission" to withdraw from his suit or to abandon part or whole of the claim with liberty to institute a fresh suit in respect of same subject-matter. Upon recording its satisfaction as to existence of "formal defect" fatal to a suit or "other sufficient grounds", the Court may allow a plaintiff to withdraw from the suit and permit such plaintiff "to institute a fresh suit on the same subject -matter, upon terms to be decided by the Court". This sub rule safeguards against situations of injustice, inequity or unfairness likely to be faced by a plaintiff by loosing a right to re-file a suit on the same subject-matter if the earlier suit was bound to fail by reason of some formal defect or otherwise. This rule prevents technicalities from defeating justice. Even in situations and exigencies visualized in above said sub-rule (2), a defendant or any other person has no right to seek withdrawal of plaintiff's suit and to obtain Court's permission to re-file the same. It is only and only a plaintiff who has the absolute privilege to unconditionally withdraw under sub-rule (1) or to seek Court's permission to withdraw a suit with liberty to re-file the same under sub-rule (2) ibid whereupon such plaintiff will escape the bar imposed under sub-rule (3) ibid.

16. Honourable Supreme Court of Pakistan in the case of Haji Abdul Rashid Sodagar v. S.M. Lalita Roy and others PLD 1959 SC (Pak.) 287 at page 290 was pleased to even rule that "under sub-rule (1), the plaintiff may withdraw his suit at any stage of proceedings and without an order of the Court, under sub-rule (2) he has to obtain a permission of the Court for withdrawal and the Court's own power to permit withdrawal is limited to the instances specifically mentioned in clauses (a) and (b)". None of the cases relied upon by the learned counsel for defendants in support of the bar to the present case of sub-rule (3) of rule 1 ibid are on the proposition involved in this case as to who can withdraw the suit and as to whether the Court can dismiss a suit as withdrawn without a request of withdrawal by a plaintiff. In all these cases including the case of "Bashiran Bibi etc. v. Hidayatullah etc." 1996 SCMR 1051, it has been observed that if a plaintiff withdraws his earlier suit unconditionally, without Court's permission to bring a fresh suit, bar of sub-rule (3) will apply to the fresh suit. In the case of "Rafaqat Ali v. Government of Punjab etc." PLD 1998 Lahore 441, an Honourable Division Bench of this Court held plaintiff's right to withdraw his case to be "an indefeasible right" and also observed that "no Court has a right to clog it and keep an unwilling plaintiff in arena of litigation and that the plaintiff, if moves such an application to the Court, the Court has no option but to accede to his- request ". Even in these celebrated judgments, right to withdraw the case was emphasized to rest with the plaintiff.

17. It is thus evident that unless and until a plaintiff so requests, a Court has no jurisdiction or discretion under above-referred rules of law to act suo motu-and dispose of or dismiss plaintiff's suit as withdrawn with or without permission to re-file the same.

18. In the present case the record, the pleadings of the parties and even the order dated 3-11-1997 prominently demonstrate the fact that plaintiff-Bank made no application, prayer or request for unconditional withdrawal of the suit under sub-rule (1) of rule 1 of Order XXIII, C.P.C. The bar of sub-rule (3) ibid therefore, cannot be applied to the present suit to hold that plaintiff-Bank was precluded from filing a fresh suit on the same subject matter (if so). Order dated 3-11-1997 dismissing the suit as withdrawn is to be read and interpreted in its entirety, Defendant's application (C.M. No.341-B of 1997) seeking a decree in terms of a compromise between the parties was entertained in the Court. The plaintiff's counsel confirmed the compromise. As such compromise decree could of course be passed under rule 3 of Order XXIII, C.P.C. The learned Court thus recorded in order dated 3-11-1997 that the Bank admitted in letter dated 22-10-1997 (produced in the Court by the learned counsel for the plaintiff-Bank), to have accepted terms of compromise offered by defendants and thereafter observing that "that being so", the Court proceeded to dismiss the suit of the plaintiff as withdrawn instead of decreeing the same. This order as such neither culminated in a compromise decree under rule 3 of Order XXIII, C.P.C. nor can it be termed as an order for unconditional withdrawal under sub-rule (1) ibid owing to absence of request by the plaintiff for withdrawal. It was therefore, in effect an order to dismiss the suit as infructuous upon compromise/ settlement between the parties. This order can, for above reasons, in no way be interpreted to impose bar of sub-rule (3) ibid to the present suit to deprive the plaintiff-Bank of the remedy of fresh suit.

19. Furthermore a suit of the same nature is not barred, if it has been filed on the basis of fresh cause of action if accruing to the plaintiff against the defendants. The present suit has been filed by the plaintiff-Bank also on breach by defendants of the terms of compromise dated 22-10-1997. Reference is made to the paras. 25 and 26 of the plaint. Defendants in their reply to C.M. No.331-B of 1998 in C.O.S. No.135 of 1997 had also conceded this right to plaintiff by stating that instead of seeking revival of the suit, plaintiff-Bank could maintain a fresh suit upon default by defendants of settlement package as such default would give rise to a separate cause of action in favour of plaintiff.

20. In view of what has been observed above, it is held that the present suit is maintainable and do not in any way attract the bar of sub-rule (3) of rule 1 of Order XXIII, C. P. C.

21. Adverting to the other submissions of the learned counsel for the applicant defendants, I do not agree that upon compromise dated 22-10-1997 and disposal of plaintiff's earlier suit, defendants Nos.2 to 8 stood discharged of their obligations as guarantors under their personal guarantees. As stated above, application dated 3-11-1997 (C.M. No.34-B of 1997) was made by learned counsel for all the defendants to seek a decree in terms of settlement package in C.O.S. No.135 of 1997 and defendants Nos.2 to 8 specifically admitted the agreement and particularly undertook to remain bound thereunder. Para. 2 of the said application being relevant is reproduced hereunder: "

2. That the applicants after negotiations with the plaintiff-Bank have arrived at a compromise. The applicants (defendants Nos. 2 to 8) have no objection if a consent decree in the sum of Rs.38.8 million is passed against the defendants on the following terms and conditions: (a) That a consent decree in the sum of Rs.38.8 million is passed against defendants Nos.1 to 8 as full and final settlement of the matter. (b) Defendants Nos.1 to 8 will liquidate the decretal amount within 22 months from the date of the decree." Having admitted that compromise settlement was negotiated by them and having sought a decree on that basis, defendants Nos. 2 to 8 are estopped from claiming discharge thereunder. Even otherwise in a recent judgment dated 4-12-2002 delivered by a Division Bench of this Court (of which I was a member) in R.F.A. No.486 of 1999 titled Mian Aftab A. Sheikh v. Messrs Trust Leasing Corporation, personal guarantees similar to those executed by defendants Nos.2 to 8 were considered and it was held that guarantors under such guarantees remain bound by guaranteed obligations even if variations, concessions. time enlargements and indulgences, are granted by a, creditor to the principal debtor as the guarantors in such personal guarantees pre-consent to changes without reference, recourse or notice to them.

22. I also do not find any material in arguments of the learned counsel for defendants that question of performance or non-performance of promises under settlement package dated 22-10-1997 by parties needs evidence, in view of admitted facts on record in respect of absence of title of defendant's associated company in land proposed to be equitably mortgaged under the settlement package dated 22-10-1997 and non-payment of the value of pledged goods to seek its release. The terms of settlement package were brought on the record C.O.S. No.135 of 1997 through letter dated 22-10-1997 which reads as under:-- "With reference to your application dated 13-2-1997 we advise that competent authority at H.O., Karachi has accepted your settlement package and approve as under:

The package offered by Mr. Ashfaq to release pledged merchandise to him against mortgage of 181 Kanals and 3 Marlas evaluated at Rs.6.000 (M) by Bank's Engineer and then depositing cash on rotation basis against merchandise to be released and repeated time and again till pledged merchandises are totally consumed/ released. After release of pledged merchandises, the sale of properties already mortgaged with the Bank to be taken in hand through public auction/to prospective buyers to be identified by Mr. Ashfaq to the satisfaction of the bank and sale proceeds to be credited to FIM account and exercise to be completed in 18 months. The bank would release pledged stocks/ merchandises towards adjustment of liabilities of Rs.38,874,300". We, therefore, advise you to please come forward for completion of settlement package as given above. Also please complete mortgage formalities". On defendants application, plaintiff's earlier suit was disposed of/dismissed by the learned Court in view of this settlement between the parties. As per this settlement, pledged goods were to be released only (i) against mortgage of land measuring 181 Kanals, 3 Marlas and (ii) then on defendants' depositing cash value of merchandises on rotation till total release of pledged goods, and (iii) thereafter properties already mortgaged with the bank by defendants were jointly to be sold within eighteen months for adjustment through such sale proceeds of FIM account; the total liabilities wherein were fixed at Rs.38,874,

300. The admitted facts are that pledged goods of the value of Rs.150 million were released by the defendants upon submission of title deeds in the name .of Messrs Said Nadeem Bicycle Limited for land submitted to be mortgaged. In order to complete equitable mortgage, plaintiff demanded from defendants to get its name incorporated in Revenue Record as mortgagee of the said land. Defendants were unable to do so because land in question in fact belonged to Saif Nadeem Kawasaki Motors Limited i.e. a company with which defendants had no connection and Land Acquisition Collector vide order, dated 25-8-1998 had held Saif Nadeem Kawasaki Motors Limited as owner of the said land and the said order had been upheld by the Honourable Peshawar High Court vide order dated 22-4-1999. This obviously meant that defendants associated company namely Saif Nadeem Bicycle Limited had no title and could not have submitted title deeds for creation of equitable mortgage. Defendants through a contempt petition on 5-11-1999 also obtained the said documents back from the plaintiff. All this obviously meant that defendants failed to fulfil even the first pre-condition of giving security of a valid mortgage to the plaintiff-Bank although they had admittedly deprived plaintiff-Bank of pledged goods worth Rs.1.5 million without depositing any money. Plaintiff-Bank thus alleging fraud and breach of agreement, revoked agreement dated 22-10-1997 and initially sought revival of C.O.S. No.135 of 1997 but later legitimately filed the present suit on 17-11-1999.

23. In view of what have been discussed above it is held that defendants have failed to raise any serious, plausible and bona fide dispute entitling them to defend the suit by putting them to issues and evidence. The PLAs filed by the defendants are hereby rejected.

24. Upon rejection of defendant's applications for leave to defend the suit, the plaintiff-Bank is entitled to a decree. Defendants through the present suit claim a sum of, Rs.71,501,827 as of 30-9-1999 with costs, charges and expenses and 22% mark-up per annum from institution of the suit to the date of payment thereof.. The suit amount so "claimed by the plaintiff per para. 25 of the plaint is based upon, Statements of Accounts annexed with the plaint as Annex. "K" to Annex. "K/47". These Statements of Accounts relate to the FIM (Finance against Imported Merchandise) Account of defendant No.

1. For each L/C transaction amount, a 'separate Statement of Account has been filed. All the Statements of Accounts have been duly certified as per Bankers' Books Evidence Act, 1891. Finally a duly certified consolidated Statement of Account has been filed reflecting total outstanding debit balance on net balance basis of each above referred Statement for L/C transaction. This consolidated Statement of Account show liability of defendants as Rs.71,504,827 (the suit amount). At the end of this consolidated Statement of Account, year wise mark-up w.e.f. 1992 to 1999 has been debited. Statement of Account filed afresh by the plaintiff shows debit of mark-up uptil 30-6-2002 with total amount due at Rs.85,728,

613. However, upon query as to the competence and authority of the plaintiff-Bank to charge mark-up beyond the expiry period of finance agreements, the learned counsel for the plaintiff made important statements which were recorded in order dated 19-2-2003 as under:-- (1) "Fresh Statements of Accounts have been filed. Examination of fresh Statements of Accounts shows that plaintiff has only added one page to debit amounts (if mark-up from 1999 to 30-6-2002. It was also admitted by the learned counsel for the plaintiff that only two financing agreements were made between the parties as under: (i) Agreement dated 6-1-1991 at page 326 of the plaint, showing a purchase price of Rs.581,96,250. (ii) Second agreement dated 5-1-1992 at page 338 of the plaint with a purchase price of Rs.5,82,96,250. (2) It was stated and admitted by the learned counsel for the plaintiff that date of expiry respectively of the above said agreements was 31-12-1991 and 31-12-1992. Further admitted that no other financing agreement was ever made between the plaintiff-Bank and the defendants apart from the above said two agreements. (3) Statements of Accounts annexed with the plaint and relied upon by the plaintiff as well as updated Statement of Account, as submitted today, show that plaintiff has charged mark-up in the Statements of Accounts for periods beyond the finance agreements which, at maximum, admittedly expired on 31-12-1992. Learned counsel .for the plaintiff seeks time to assist the Court as to authority and competence of the plaintiff-Bank to charge mark-up beyond the expiry of date of financing agreement."

25. On 20-2-2003, during arguments the learned counsel for the plaintiff categorically admitted that plaintiff-Bank had no authority and power to charge mark up after expiry on 21-12-1992 of the second agreement dated 5-1-1992 (page 338 of the plaint) and also admitted that plaintiff-Bank cannot claim any amount above Rs.58,196,250 as agreed upon in second agreement dated 5-1-1992. It was again reiterated that after 31-12-1992 no other finance agreement was made or entered into between the parties though financing accommodation was extended uptil 1993 for a few L/C transactions by the plaintiff-Bank to the defendants.

26. I am thus of the opinion and as validly admitted by the learned counsel for the plaintiff-Bank, the plaintiff Bank had no authority to charge mark-up beyond the second agreement which expired on 31-12-1992. As such mark-up charged uptil 1992 in the consolidated statement of account is allowed. Mark-up charged for 210 days cushion period as per instructions of the State Bank of Pakistan is also allowed. Mark-up amount charge for years 1993 to 1999 and, thereafter uptil 30-6-2002 is disallowed as plaintiff-Bank cannot charge mark-up beyond the period of financing agreements. However, financial accommodation against L/Cs of 1993 is held to be recoverable as defendant No. 1 has not denied availing of this financial facility which falls within the definition of "finance" as given in section 2 (d) of Financial Institutions (Recovery of Finances) Ordinance, 2001. As such lifting the entries from consolidated statement of account, the amounts due and payable by the defendants to the plaintiff-Bank are adjudged to be as under:-- Amount due on FIM A/C Rs.27,778,667 as on 20-5-1993: Mark-up for 1992: Rs. 4,387,598 210 days mark-up Rs. 5,548,797 Rs.37,715,062 Defendants in the settlement package 22-10-1997 (filed in C.O.S. .135 of 1997) admitted their liability of Rs.38,874,300 and sought a decree in the said suit for this amount in terms of the settlement package. However, the debit entries in the consolidated statement of account by the plaintiff-Bank for the FIM A/c, mark-up of.1992 and 210 days mark-up for cushion period show total amount due at Rs.37,715,

062. The plaintiff-Bank has filed the present suit on the basis of its Statements of Accounts, therefore this Court has no option but to pass a decree on the basis of figures given in the Statement of Accounts instead of above said amount admitted by the defendants in settlement package dated 22-10-1997 which stood revoked. As such decree with costs for a sum or Rs.37,715,062 alongwith cost of funds of the plaintiff-Bank certified by State Bank of Pakistan from time to time w.e.f. 22-10-1997 till payment by defendants, is jointly and severally passed against the defendants Nos.1 to

8. Costs of the suit are also allowed. Upon failure of the defendants to pay the decretal amount by or before 30-5-2003, plaintiff-Bank shall be entitled to recover the same through enforcement of securities and other modes as allowed by law. S.A.K./ N-309/L Suit decreed.