2005 PLP 1830 (CLD)

SYED HAMID ALI SHAH, J.

Lease finance facility was extended by the respondent to appellant No. 1, on 18-4-1996, and the parties executed various documents. The appellant No.1 committed default, which resulted into filing of suit for recovery of Rs.56,258,515 on 19-12-1998, in the Lahore High Court, Lahore, in its banking jurisdiction. The suit was decreed in favour of respondent on 13-5-1999, for Rs.56,258,515 with costs, mark-up etc. till the satisfaction of the decree. The execution proceedings were instituted against the appellants and during the pendency of the execution proceedings, the parties reached a compromise, according to which the appellant was requirred to pay Rs.57,789,705 in 43 months from August, 1999 to January, 2003. The parties subsequently replaced the compromise agreement with the supplemental equipment lease agreement dated 30-5-2000. The amount of Rs. 102,042,360 was agreed to be paid by virtue of the subsequent supplemental agreement, in 72-lease rentals. The parties again executed loan documents, pursuant to the agreement dated 30-5-2000. The appellant No.1 in the meantime, once again approached the respondent and offered to pay Rs.40 million in lump sum to clear all the liabilities of respondent, by obtaining finance facility from United Bank Ltd. The respondent accepted the proposal and conveyed to UBL through letter dated 17-10-2002 confirming therein to UBL of its assent to release all the securities encumbrance subject to the payment of Rs.40 million. The United Bank Ltd. through its Letter No.MN/492/02-MIS dated 22-10-2002 forwarded Pay Order No.67986 for Rs.40 million to the respondent-Bank as full and final settlement of the liabilities of appellant No.

1. The respondent No.1 encahsed the said pay order and, in pursuance thereof, released all the security documents. NOC dated 22-10-2002 for vacation of charge registered with the Companies Registration Office was also issued.

2. The respondent after the release of security document, served upon the appellant legal notice dated 2-12-2002, claiming therein an amount of Rs.3.28 million being the balance amount. The respondent, thereafter on 7-2-2004, filed a suit for recovery of Rs.3,286,242 in the Banking Court-I, Lahore. The appellants, within the stipulated period, filed the application for leave to appear and defend the suit. The application was dismissed and as a result thereof the suit was decreed vide impugned judgment and decree dated 24-5-2004. The appellants have challenged the impugned decree dated 24-5-2004, in the instant appeal.

3. Learned counsel for the appellants has submitted that it is evident from letter dated 22-10-2002 that the amount of Rs.40 million was agreed between the parties as full and final settlement; the respondent received the letter from UBL, wherein it was clearly mentioned that amount of Rs.40 million is full and final settlement of the total claim of the respondent. The respondent after receipt of the said amount returned all the security documents, the NOC was also issued and no fresh documents were executed between the parties. If there was any amount payable by the appellants then the respondent would have either kept the charge documents or at least insisted on execution of fresh documents with regard to the balance amount. The total claim was settled at Rs.40 millions, therefore, the claim of the bank is neither contractual nor legal. He lastly contended that the claim of the respondent stands abandoned and if any amount was payable it stood waived when the respondent encashed the pay order.

4. Learned counsel for the respondent, on the other hand, supported the impugned decree. He contended with vehemence that the bank never agreed to receive an amount of Rs.40 million as full and final settlement of its claim. He referred to Letter bearing No.Monit/TM/Acc-2002/26 dated 19-10-2002, wherein the respondent conveyed to the appellants that the letter addressed to UBL is being issued on the express condition that the appellants will pay residual balance of Rs.3.20 million within 12-months. He submitted further that the letter written to UBL was dated 17-10-2002 and the letter in question was subsequent in date, which shows the intention of the respondent, that it has not waived its claim for residual amount of Rs.3.2 million.

5. Heard learned counsel for the parties and examined the record.

6. The contents of letter dated 22-10-2002, issued by United Bank Ltd. to the respondent are reproduced as under:-- "With reference to your letter dated 17-10-2002 we enclose herewith Pay-order No.679863 for Rs.40,000,00 as full and final settlement of liabilities of Messrs Sayid Paper Mills (Pvt.) Ltd. Kindly deliver the Security documents to Mr. Mubasher Nazar, Relationship Manager whose signatures are attested below:- Thanking you." The respondent after receipt of this letter, encashed the pay order and released the security/charge documents. NOC was also issued. The respondent neither insisted to execute fresh documents for the residual amount nor conveyed to the UBL as well as the appellants, that amount of Rs.40 million is not full and final settlement. The respondent has failed to place on file a single document showing that the appellants have accepted the claim of' respondent, conveyed through letter dated 19-10-2002. This letter can at the most be a proposal and without its acceptance in express terms, it carries no weight. It is settled law that acceptance of any consideration offered with the proposal amounts to the acceptance. Section 8 of the Contract Act, which is reproduced hereunder, can be referred:-- "Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal."

7. The respondent has accepted the conditional offer, got the payment order encahsed and released the documents unconditionally. The respondent has by doing so, abandoned its claim for residual amount of Rs.3.2 million and right to recover the same stood waived. Such claim was not liable to be entertained by the Banking Court.

8. In view of the above, we, allow this appeal and set aside the impugned judgment and decree dated 24-5-2004, with the result that the suit filed by the respondent stands dismissed. No orders as to costs. S.A.K./S-445/L Appeal accepted.