1991 PLP 446 (CLC)

Messrs Allied Bank of Pakistan Ltd. v. Messrs Sainjecs Restaurant Hotel 1985 C L C 391; Abdul Karim Jaffarani v. United Bank Ltd. and 2 others 1984 S C M R 568; Messrs United Bank Ltd. v. Qazi Amir Ali P L D 1977 Kar, 905 and Messrs Habib Bank Ltd. v. Messrs Kaycee Corpn., Karachi P L D 1980 Kar. 143 ref. (e) Civil Procedure Code (V of 1908)‑‑ ‑‑‑‑O. XXXVII, R.3 & S.34‑‑‑Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), Ss. 6 & 7‑‑‑Suit for recovery of money‑‑‑Dispute relating to quantum of bank rate of interest‑‑‑Plaintiffs counsel conceding that plaintiff would be entitled only to the minimum rate of interest mentioned in the instrument on which loan was advanced‑‑‑Plaintiff thus had no need to lead evidence as to the bank rate. (f) Civil Procedure Code (V of 1908) ‑‑ ‑‑‑‑O. XXXVII, R.3‑‑‑Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), Ss. 6 & 7‑‑‑Suit for recovery of loan in summary jurisdiction‑‑‑‑Leave to appear and defend suit‑‑‑Defence raised by defendant in his application for leave to defend suit was illusory in nature‑‑‑In an earlier order it had been held that applications on behalf of guarantors to appear and defend suit were time‑barred and their application for condonation of delay had been dismissed‑‑‑Defendant's (principal debtor's) application was also dismissed with the result that plaintiff was granted decree against all the defendants jointly and severally with cost, and interest. S.A. Sarwana for Plaintiff. Farooque Naek for Defendants. Date of hearing: 7th November, 1990. C.M.A. No.1455/1987 is an application under Order 37, Rule 3, C.P.C. Plaintiff, M/s. Banque Indosuez had at the request of Defendant No.l in August, 1981 allowed credit/loan facility. Defendant No.l utilised the said facility from time to time by making withdrawals and payments in his account with the Plaintiff‑Bank. By way of acknowledgements and as a security for repayment of the same and any outstanding balance which may be found due and payable by Defendant No.1 to the Plaintiff in the said loan account alongwith interest, Defendant No.l executed several documents including Demand Pronote for Rs.15 lacs with interest thereon with 4% above bank rate minimum 14% per annum with quarterly rests. He also executed Letter of Acknowledgement, Letter of Continuing Agreement to pay various charges to the Bank, hypothecation of book debts and assets of the Company. Defendants Nos.2, 3, 4 and 5 executed betters of Guarantee and Defendant No. 5 additionally mortgaged his property by deposit of Title Deeds and executed Power of Attorney in favour of Plaintiff Bank. By way of acknowledgement of the loan and as a security for repayment of the outstanding balance, defendants Nos.2 and 5 executed Pronote for Rs.22,51,900.60 on 10‑5‑1984. Defendant No.l on various occasions acknowledged the debt, one of which is dated 10‑5‑1984. Defendants owed to the Plaintiff a sum of Rs.28,69,514.83 on 10‑1‑1986. Hence this suit for the amount with interest @ 19% per annum with quarterly rests etc.

2. It is contended by Mr. Farooque Naek that the persons, who have signed the plaint on behalf of the Plaintiff‑Bank, were not authorised to do so by a resolution, nor were given any Power of Attorney. Mr. S.A. Sarwana stated that he had produced the original Power of Attorney before the Additional Registrar at the time of filing of the suit and had filed photostat copy of the Power of Attorney alongwith the plaint, which is available on the record. On verification it was found that photostat copy of the Power of Attorney was in the name of only one person i.e. Syed Rasheed Akhtar while the plaint is signed by both, Syed Rasheed Akhtar as well as Saleem. Mr. S.A. Sarwana states that due to oversight" he could not file Power of Attorney of Saleem. He shows the original to the Court and files a photo copy of the Power of Mohammad Saleem, which is taken on; record. The objection is, therefore, repelled. So far as the resolution by the Bank is concerned, it is not necessary to produce the same before the Court at the time of filing of the suit. Mr. Farooque Nack has relied upon the case of National, Bank of Pakistan v. Mohammad Ashraf Sanik and another (P L D 1987 Lah. 17), wherein a suit filed by National Bank of Pakistan by a person holding Power of Attorney which authorised him to institute/defend any action or other proceedings relating to affairs of Principal, was held to be a proper authority. This ruling would not help the Defendants.

3. It was next contended by Mr. Farooque Naek that para 2 of Annexure `Z' with the Counter‑Affidavit of Mohammad Saleem which is permission of Defence Officers Housing Authority to mortgage the house with the Plaintiff Bank shows that the permission to mortgage was given only for the purposes of raising loan for house‑building, whereas the Defendant No.l has raised the loan not for the purposes of house building, but for the purposes of securing a loan given to M/s. Globe Travel Agency. Hence the mortgage is not valid. It may be pointed out that Defendant No.1 cannot take advantage of his own fraud. If he was granted permission by the Defence Officers Housing Authority for mortgaging the property for obtaining a housing‑building loan and he mortgaged it for obtaining loan for some other purpose, it is only the Defence Officers Housing Authority which can avoid the mortgage and not the Defendant No.5 himself. Hence this plea is also not available to Defendant No.5.

4. It was next contended by Mr. Farooque Naek that Defendant No.5 was only granted `A' Lease in respect of this Plot which authorised him to raise construction and did not authorise him to mortgage the plot and therefore, the mortgage was not valid. This objection is also illusory inasmuch as permission to mortgage the property was granted to Defendant No.5 as is evident from Annexure `Z'.

5. The next objection was that Defendant No.5 has not deposited his Documents of Title with the Plaintiff. As such no equitable mortgage was created. He relied upon the case of M/s. Allied Bank of Pakistan Ltd. v. M/s. Sainjees Restaurant and Hotel (1985 C L C 391) where it was held that extract from Property Register of Jamabandi and documents of similar nature which are Government record for fiscal or revenue purposes were not documents of title. This ruling is distinguishable from the present case inasmuch as Defendant No.5 has deposited `A' Lease which is Document of Title and is not of the nature of documents which are referred to in, the above ruling. He then contended that the second Pronote executed on 10‑5‑1984 for a sum of Rs.22,81,900.62 is without consideration inasmuch as no amount was paid on that date. This objection also does not hold any water, because the second Pronote was executed by Defendants Nos.2 and 5 as a security for the outstanding balance of the amount mentioned therein which was due from Defendant No.l on account of the above loan utilised by him from time to time, and the interest accrued thereon. Hence it cannot be termed as without consideration. The rulings relied upon by Mr. Farooque Naek i.e. (1) Abdul Karim Jaffarani v. United Bank Ltd. and 2 others (1984 S C M R 568) and (2) M/s. United Bank Ltd. v. Qazi Amir Ali (P L D 1977 Kar. 905), are quite distinguishable from this case in view of the above factual position.

6. It was lastly contended by Mr. Farooque Naek that the bank rate of interest should be proved by evidence, and that the Plaintiff will be entitled only to the rate of interest mentioned in the Pronote and that he will have to prove the bank rate. In this connection it may be pointed out that Mr. S.A. Sarwana conceded that the Plaintiff was entitled only to 14% being the minimum rate of interest mentioned in the instrument itself. Hence it was not necessary for the Plaintiff to lead any evidence as to the bank rate. The ruling in M/s. Habib Bank Ltd. v. M/s. Kaycee Corpn., Karachi (P L D 1980 Kar. 1431 cited by Mr. Farooque Naek on this point is, therefore, not applicable to the facts of this case. It would, therefore, appear that all the defences raised by Defendant No.l are illusory in nature. It was held by Mr. Justice Haziqul Khairi in his order dated 30‑5‑1990 that the applications on behalf of Defendants Nos.2 to 5 were time barred and therefore, their application under section 5 of the Limitation Act was dismissed. Consequently I refuse leave to defend the suit to defendant No.l as well. The result is that the suit of the Plaintiff is decreed against all the five Defendants jointly and severally with costs for a sum of Rs.2,869,514.83 with interest a 14% per annum with quarterly rests from the date of filing of the suit till the payment of decretal amount. A preliminary decree in Form V‑A of Appendix `B' to C.P.C. is also passed. In case the decretal amount is not paid, within 6 months, final decree for sale of the mortgaged property shall follow. A.A./B‑180/K Leave to defend suit refused.