2005 PLP 934 (CLD)

Nemo for Respondent. Date of hearing: 17th February, 2005. MIAN HAMID FAROOQ, J. ‑‑‑Appellants, through the filing of the instant first appeal, under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act No.XV, 1997 (hereinafter referred to as Act) have called in question judgment and decree dated 22‑1‑1998, whereby the learned Judge Banking Court, after rejecting appellant's application for leave to defend the suit, proceeded to pass the decree for the recovery of Rs.4,88,095 with costs and mark‑up against the appellants.

2. Precisely stated the facts of the case are that the respondent bank, on 21‑7‑1997; filed the suit for recovery of Rs.4,88,095 along with mark‑up and liquidated damages, against the appellants, before the learned Banking Court. It was stated that at the request of the appellant No.1, a financial facility of Rs.3,00,000, under the Prime Minister's Self‑Employment Scheme, was sanctioned in favour of the appellants and for securing the said financial facility, the appellants executed different documents, photocopies whereof, duly verified by the Bank Manager, were placed on record. It was the case of the respondent‑Bank that the appellants availed the said facility and although certain instalments were deposited towards the repayment of the financial facility, yet the appellants failed to repay the total outstanding amount, which necessitated the filing of the suit. In response to the requisite notices, issued‑by the learned Judge Banking Court, the appellants filed the application for leave to defend the suit, inter alia, pleading that the appellants executed blank documents; the respondent has charged excessive mark‑up; the suit amount includes the interest and compound interest; the attorneys of the respondent bank were not authorized to institute the suit and that the appellant No.1 is filing the application before the respondent bank for settlement of the loan. Learned Judge Banking Court, after hearing the parties, rejected the said application and ultimately passed the decree for the recovery of Rs.4,88.095, favouring the respondent bank, with costs and mark‑up, vide impugned judgment and decree dated 22‑1‑1998, hence the present appeal.

3. This is represented case. Despite the fact that the names of the learned counsel of the parties have duly been published in today's cause list, yet none has entered appearance to represent the respondent bank, thus it is proceeded ex parte.

4. The learned counsel for the appellants has contended that the charge documents, attributed to the appellants, were though executed by the appellants, yet at the relevant time they were blank, therefore, no decree could be passed on the basis of these documents. He has submitted that excessive mark‑up has been charged and the attorneys were not competent to file the suit, therefore, the decree is unsustainable in law.

5. In view of the arguments of the learned counsel, we have examined the impugned judgment and perused the summoned record. Perusal of the contents of the application for leave to defend the suit, filed by the appellants, manifests that the appellants neither denied the execution of documents nor availing of the financial facility, inasmuch as it has been pleaded that the excessive mark‑up has been charged and that "the defendant No. 1 is going to move an application to the bank under B.R.D. Circular No. 19 of State Bank of Pakistan for the settlement of the loan." Specifically the said assertion, coupled with other contents of the leave application, are sufficient to show that the appellants did not dispute the execution of the documents and also admit availing of the financial facility. As regards the execution of blank documents, we have examined the photo copies of the charge documents, which were placed on record by the respondent bank, and find that all the documents were executed on 7‑4‑1993. Section 17(1) of the Act provides that no bank shall obtain the signatures of a borrower or customer on banking documents which contain blanks in respect of important particulars. Section 17(3) of the Act provides that nothing contained in subsections (1) and (2) shall invalidate any document executed prior to the coming into force of this Act. The Act was promulgated on 31‑5‑1997. It is thus clear from the above narrative that the appellants executed the documents before coming into force of Act. Even if the documents were executed by the appellants, when certain columns were blank, those documents are valid and legal per force of section 17(3) of the Act, as they were admittedly executed prior coming into force of the Act. The contention of the learned counsel is without any substance.

6. Coming to the contention regarding charging of excessive mark‑up, we have examined the statement of accounts and find that on the financial facility of Rs.3,00,000 (which was admittedly availed in the year 1993) mark‑up of Rs.1,99,800 has been charged, while certain amounts deposited by the appellants stood credited in their account. The mark‑up agreement shows that it was executed for seven years, therefore, the bank was entitled to charge mark‑up for the said period. Marked‑up price of Rs.4,99,800 has been incorporated in the agreement, meaning thereby that even in the mark‑up agreement, an amount of Rs.1,98,000 has been charged as mark‑up, which amount is reflected in the statements of account. The appellants executed the documents thereby admitting that an amount of Rs.4,99,800 can be claimed' by the bank after the charge of mark up, therefore, now at this stage, they cannot be allowed to turn round and say that excessive mark‑up has been charged.

7. As regards last contention, we find from the record that the respondent bank has placed on record photo copy of power of attorney, authorizing the attorneys to institute the suit. This prima facie establishes that the attorneys, who have signed the plaint and instituted the suit, had lawful authority to undertake the said acts. The appellants failed to place on record any material, in rebuttal, to show that the said attorneys were not authorized to file the suit. The respondent bank cannot be non‑suited on this ground, more importantly when the availing of the financial facility and execution of documents stands admitted.

8. In the above perspective, we have examined the impugned judgment and find that the learned Judge Banking Court has adverted to all the material aspects of the case and passed a reasoned judgment, which does not suffer from any legal errors/defects. Thus we are inclined to maintain the impugned judgment.

9. Upshot of the above discussion is that the present appeal is devoid of any merits, hence dismissed leaving the parties to bear their own costs. S.A.K./A‑406/L Appeal dismissed.