1994 PLP 362 (SCMR)

NASIR ASLAM ZAHID, J.‑‑‑In this appeal, the judgment dated 31‑10‑1983 of a learned Single Judge of the Lahore High Court allowing the Regular First Appeal of the respondent‑Bank has been challenged. Appellant No.l Saeed Akhtar Hussain Bokhari is the sole proprietor of appellant No.2, M/s. Bokhari Ice Factory, District Sialkot. The appellants had taken loans from the respondent‑Bank against mortgage of their property. As the loans were not repaid, the Bank filed a mortgage suit for the recovery of the loan with interest agreed to be paid by the appellants. The suit was filed before the Special Judge Banking, Lahore, under the Banking Companies (Recovery of Loans) Ordinance, 1979. According to section 7(2) of the Ordinance‑ in the exercise of its civil jurisdiction, the Special Court shall, in all suits before it, including suits based on mortgages of all kinds follow the summary procedure provided for in Order 37, C.P.C. The appellants on being served filed an application under Order 37, Rule 3, C.P.C. for leave to defend the suit but, instead of persuing that application, when the suit came up for hearing before the Special Court, appellant Saeed Akhtar Hussain Bokhari made a statement admitting the claim of the Bank. He further stated in his statement recorded by the Special Judge, that he was ready to repay the entire amount due from him provided facility of easy instalments was extended to him. He also prayed that for the period the suit remained pending before the Special Judge, no interest be charged. After recording the statement of appellant No.l, the Special Judge allowed the Bank's claim for the recovery of Rs.4,65,763 and directed repayment in annual instalment of Rs.50,000 each, the first being payable on 31‑10‑1981 and further directing that in default of any instalment, the entire loan was to be paid in lump sum. It was further ordered that the appellants will pay simple interest at the rate of 8% from the date of the institution of the suit i.e. 28‑11‑1979 till the date of the decree and 12% thereafter till the realisation of the whole amount. The agreement between the parties under which the loans had been advanced, however, provided that the repayment will be made in quarterly instalments of Rs.28,000 each with interest at the rate of 13% per annum. The Special Judge did not pass any orders regarding the mortgaged property.

2. The respondent Bank filed a Regular First Appeal before the Lahore High Court which was allowed. The High Court was of the view that the respondent‑Bank had filed a mortgage suit and, therefore, a preliminary decree should have been passed in the first instance as prescribed by Order XXXIV, rule 4, C.P.C. keeping intact the charge on the mortgaged property till the amount was paid either through its sale proceeds or otherwise. As regards interest, the Bank had relied upon section 4‑A, C.P.C, and Section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, which made it obligatory that the decree shall provide interest from the date of decree till the payment at the contracted rate or 2% above the bank rate whichever was higher. No defence could be advanced against the contention on behalf of the Bank relating to interest based on section 34‑A, C.P.C. and section 8(2) of the Ordinance. The appeal was, therefore, accepted by the High Court and the decree of the Special Judge was set aside and instead a preliminary decree was passed with interest at the rate of 13% per annum.

3. We have heard Ch. Mushtaq Ahmad Khan, learned counsel for the appellants and Mr. Shah Abdur Rashid, learned counsel appearing for the respondent‑Bank. On behalf of the appellants, Ch. Mushtaq Ahmad Khan raised two contentions before us:‑‑ (a) The decree passed by the Special Judge was a consent decree and no appeal lay against a consent decree. According to learned counsel, consent in such cases can also be implied and for that he relied upon (PLD 1969 Lah. 365); (b) The statement of appellant No.l recorded by be Special Judge was a conditional admission of liability and either the entire statement in which he had also prayed for concession in interest and easy instalments should have been accepted and a decree passed accordingly as was done by the Special Judge or the statement ignored and the application filed by the appellants for leave to defend the suit should have been heard and decided according to law. In the circumstances it was prayed that this appeal be accepted and either the decree passed by the Special Judge be restored or the case remanded to the Special Judge for deciding the application for leave to defend filed by the appellants and, thereafter, taking further action in the suit in accordance with law.

4. We find no substance in either of the two contentions advanced on behalf of the appellants. The judgment and decree passed by the Special Judge, makes no mention of the consent on behalf of the Bank. In the usual course of things, if consent had been given, the judgment would have made mention about it, which is not the case here. Implied consent can also not be inferred in this case. It was a claim of a Bank based on agreed terms regarding interest and instalments. For giving concession on these agreed matters, in the circumstances of this case, implied consent cannot be inferred.

5. As regards the other contention that the statement of appellant No.l recorded by the Special Judge should have been accepted as a whole or not at all being a conditional admission of liability was not conditional. The statement recorded by the Special Judge on 10‑2‑1981 is reproduced here:‑‑ As would be observed from the above statement, appellant admitted the claim of the bank and stated that due to losses suffered by him in business he could not make payments according to agreement with the Bank. He only prayed for easy instalments and concession in interest for the period when the suit was pending.

6. We find no merit in the appeal. But Mr. Shah Abdul Rashid, learned counsel appearing for the respondent‑Bank pointed out that when the suit was filed in 1979, section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, read as follows:‑‑ "The decree shall provide for interest on the judgment debt from the date of the decree till payment at the .contracted rate or at the rate of two per cent above the bank rate, whichever is higher:" According to learned counsel, the. Special Judge could, therefore, grant 8% interest from the date of the filing of the suit i.e. 28‑11‑1979, till the date of decree i.e. till 10‑2‑1981, and to that extent he would concede to the case of the appellant but for the period before the date of institution and after the date of decree, the Special Judge could not reduce the agreed rate of interest. Learned counsel is correct in his submission. It was by section 7 of Ordinance II of 1983 that the words "from the date of the decree" in section 8(2) of the Ordinance were substituted by "from the date of institution of the suit".

7. The High Court has, however, accepted the claim of the Bank with interest throughout @ 13% per annum. In view of the law as it stood during the pendency of the suit before the Special Judge and the concession made by learned counsel for the Bank, the judgment of the High Court is modified to the extent that interest chargeable from 28‑11‑1979 to 10‑2‑1981 on the claim shall be 8%. Subject to this modification, the appeal is dismissed with costs. It may be added here that according to learned counsel for the appellants, the Bank had agreed to grant certain concessions in interest and instalments to the appellants during the pendency of this appeal. Dismissal of this appeal should not be taken as a bar by the Bank if it still wants to give any concessions to the appellants. A.A./S‑776/S Appeal dismissed.