2003 PLP 931 (CLD)

Commitment Charges Const. Prior Profit TFC Return on Mark‑up Financing IMM Expenses Project Monitoring Fee Foreign Currency Loan Penal Interest on FCL Return on Mark‑up Financing FCL

14. Plaintiff No.2 i.e. National Bank off Pakistan has filed three Accounts at pages 825, 827 and 829 under the heading of "Statement of recoverable up to 30-4‑2000", narrating the following Accounts: (1) Purchase price (2) Instalment after due date (3) Purchase price Instalment over‑due (4) Liquidated damages on overdue instalment @ 20% Under the above schedule, break‑up of principal outstanding, mark‑up outstanding, total outstanding, disbursement for construction outstanding or discount ACC MP, liquidated damages, Bank dues up to 30‑4‑2000 and total outstanding, has been stated.

15. Plaintiff No.3 i.e. Habib Bank Limited has filed and relied upon schedule of its Accounts at page 831 by giving particulars of outstandings as under:‑‑ Mark‑up Add‑Mark‑up from 1‑4‑1988 to 30‑4‑2000 @ 15% (S/T TFCs) Add‑Mark‑up from 1‑4‑1996 to 30‑4‑2000 @ 15% (L/T TFCs) Add‑Mark‑up from 1‑5‑1997 to 30‑4‑2000 @ 15% (AI/T TFCs) Less Recovery Add‑Liquidated Damages Add‑Central Excise Duty Total Outstanding as on 30‑4‑2000

16. Plaintiff No.4 i.e. United Bank Limited has similarly filed and relied upon the schedules of its Accounts at page 833 under the head "Outstanding/Over‑dues as on 30‑4‑2000". Particulars whereof have been set out in the following format:‑‑ (A) Short Term TFCs Date of Disbursement Amount Disbursed Repurchase price Date of Production (B) Long Term TFCs (C) Additional TFCs Under the schedule of mark‑up, following particulars have been stated alongwith rate of such mark‑up as charged: 15% St TFCs 15% ST TFCs 12% LT TFCs 12% LT TFCs 15% Additional TFCs Total Mark‑up during construction After the above two schedules, United Bank Limited records the total position of outstandings in another box on the same page.

17. Plaintiff No.5 i.e. Muslim Commercial Bank filed and relied upon its Account schedule at page 835 in the following form:‑ Type of Advance Amount Period Number of Days Rate of mark‑up 17% Amount Mark‑up LT TFCs ST TFC ST TFC Total Mark‑up S. No. Particulars

1. Principal

2. Mark‑up Total (A + B).

8. Similarly plaintiff No.6 i.e. Allied Bank Limited filed and relied upon its schedule of Accounts at pages 837, 839 and 841 by stating the following particulars:‑

1. Principal loan

2. Mark‑up @ 15% P.A.

3. Closing balance

4. Summary as on 30‑4‑2000 Principal Mark‑up Liquidation Damages C.E.D. Grand Total At page 839 Principal (Loan Given) Mark‑up Charged in Advance Additional Mark‑up from 1‑5‑1997 to 30‑4‑2000 (1096 days @ 15% p.a.) Closing Balance Summary as on 30‑4‑2000 Principal Mark‑up Liquidation Damages C.E.D. G. Total Principal (Loan Given) Mark‑up charged in Advance Additional Mark‑up from 1‑4‑1996 to 30‑4‑2000 (1491 days @ 15% p.a.) Closing Balance Principal Mark‑up Liquidation Damages C.E.D. G. Total

19. Examination of, purported statements of balances as filed and relied upon by the plaintiff‑Banks and as reproduced above, clearly show that the plaintiff‑Banks have filed and relied upon Certificates or Schedules or Balances and not Statements of Accounts. The above said Schedules and Certificates of Balances show that the plaintiff‑Banks have charged mark‑up at a fixed rate from 12% or 15% or 17% (like interest), mark‑up in advance, return on mark‑up, liquidated damages @ 20%, expenses, costs, fees and penal interest. These debits have been made in general in a consolidated form to reach the total amount of claim of each plaintiff‑Bank. Such method/form of accounts or mark‑up at fixed rate or mark‑up in advance or liquidated damages or expenses and fees are ‑not debitable under the law in a Statement of Account. The above‑stated Certificates or Schedules of Balances, though contain certificate or verification close to the prescribed certification under Bankers' Books Evidence Act, yet such Certificates or Schedules can in no way be true and faithful copies of the entries of Books of Accounts maintained in the "usual and ordinary course of business" by a Bank in accordance with the requirements of Bankers' Books Evidence Act (section 2(8) referred). No presumption of truth or correctness can possibly be attached to the above‑stated Schedules or Certificates of Balances containing unauthorised entries to be admissible in evidence and to become basis of a suit or a decree as prescribed in section 9(1) and (2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

20. In the case of "IDBP v. Al‑Mansoor Limited and 6 others" (PLD 1989 Peshawar 191), a learned. Division Bench of Peshawar High Court was pleased to hold that‑‑ "certificate issued by Manager of the Bank does not fall within the provisions of section 4 of Bankers' Books Evidence Act, 1891 and no presumption can be legally attached to it." Even as to entries in Statements of Accounts, the law has been consistently interpreted that entries therein, if dubious, objected to or, challenged, cannot alone be taken to be sufficient to prove Bank's claim or customers' liability thereto. In the case of "Messrs Muhammad Siddiq Muhammad Umer and another v. Australasia Bank Limited (PLD 1966 SC 684) it was observed as under: "Certified copy of account not of any greater efficacy than original‑‑‑Admissibility of evidence not to be confused with sufficiency of evidence to charge with liability‑‑‑Entry alone not sufficient to charge with liability‑‑‑Corroboration necessary." Similarly, the Hon'ble Division Bench of this Court in the case of "Citibank N.A., A Banking Company v. Riaz Ahmad" held as under:‑‑ "S.9. Bankers' Books Evidence Act (XVIII of 1891)‑‑ Suit for recovery of bank loan‑‑‑Statement of account‑‑‑Proof‑‑‑Validity‑‑‑Entry in. the statement of account alone was not sufficient to prove the plaintiff‑Bank's claim, corroboration was necessary in the circumstances."

21. On examination of the above‑said Certificates or Schedules of Account Balances; the learned counsel for the plaintiff was thrice confronted with the fact that a plaint unsupported by a duly certified Statements of Accounts cannot become basis of trial of a civil suit filed by a bank and is liable to be rejected under Order VII, rule 11, C.P.C. read with section 151, C.P.C. The learned counsel every time very candidly and frankly stated that the above Certificates of Balances are Statements of Accounts because they have been "provided by the Banks and if there is any fault in the same, the Banks must suffer". Since the Certificates or Schedules of Accounts filed by the plaintiff‑Banks purportedly to support the plaint, containing entries, which cannot and do not truly reflect the entries in the Bankers' Books of Accounts, therefore, the same cannot be held to be Statements of Accounts. Furthermore, plaintiff‑Banks did not produce any Books of Accounts to support the contents of the above‑stated Certificates of Balances or the amounts of claim pleaded in the plaint, I, therefore, have no option but to hold that the plaintiff‑Banks have failed to comply with the strict provisions of section 9(1) and (2) of the Finance Institutions (Recovery of Finances) Ordinance, 2001 to support the plaint with Statements of Accounts duly certified per the provisions of Bankers' Books Evidence Act. Such a plaint cannot initiate a civil suit in terms of section 9 ibid to be legally proceeded with. As such the suit so filed is not only barred by law but also fails to disclose a cause of action in terms of subsection (2) of section 9 ibid. The plaint, therefore, is rejectable under the provisions of Order VII, Rule

11. C. P. C. read with section 151, C. P. C.

22. In view of the above, the plaint in COS. No.44‑2000 titled "Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited and 7 others" is rejected. There shall, however, be no order as to costs. Consigned to record. M.B.A./B‑149/L Plaint rejected.