2010 PLP 635 (CLD)

MS. RUKHSANA AHMED, J.

This order will dispose of C.M.A. No.11316 of 2008 which is an application filed under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 by the defendants Nos. 1 to

10. The suit has been filed by the plaintiff-Bank for recovery of Rs. 161,774,484 under section 9 of the Ordinance XLVI of 2001. It is admitted fact that the defendants had availed Finance Facility with the then plaintiff PICIC Bank which was latter taken over by NIB Bank. The said facilities have been in detail mentioned in plaint at typed pages 11, 12 and 13, three of the facilities pertain to the terms of finance agreement while fourth facility was agreement of Finance for short/medium/long term loan on markup basis. The said finance facility was sanctioned to the defendants supported with execution of the following documents:-- Registered Irrevocable General Power of Attorney dated 2-2-2005 and title deeds/Behnama/Sale-deed dated 8-5-1991 in respect of the above referred property are annexed herewith and marked as Annexures G-1 and G-2. Copy of Memorandum and Deposit of Title Deeds dated 24-2-2005 to secure the facility of Rs.45,757,752.09 Copy of Memorandum and Deposit of Title Deeds dated 16-3-2005 to secure facility of Rs.75,766,471.78 is annexed herewith and marked as Annexure G-3. Copy of Memorandum and Deposit of Title Deeds dated 5-4-2005 to secure the facility of Rs.47,532,290.95 is annexed herewith and marked as Annexure G-5. Copy of Letter of Pledge dated 15-12-2006 to secure an amount of Rs. 133,153,082 is annexed herewith and marked as Annexure G-6. This sanction of facilities has not been denied by the defendants they in their leave to defend application raised substantial question of law which they feel will be requiring evidence.

1. Whether the suit is maintainable?

2. Whether any default that has occurred is attributable to the plaintiff?

3. What is the effect of force majeure?

4. What are the public policy consideration?

5. Whether the suit has been filed counter blast to suit B-60 of 2008?

6. Whether the evidence has to be led in this suit and Suit No.B-60 of 2008 to effectively adjudicate this matter? In Leave to defendant application learned counsel has submitted that table of finance facility which was sanctioned followed by amount of mark-up totalling amount payable by defendants to the Bank payable also reproduced first three facilities table. Further summary of the repayment which has been made till 23-2-2007. Counsel has further stated that the severe economic losses suffered to the country due to the sad demise of Mohtrama Benazir Bhutto and factory of the defendants and godowns were set on fire which resulted in spoiling of stocks and raw material along with portion of building being gutted, damages and claims worth of Rs. 162.464 million have been lodged with the Insurance Company. It is then contended by the learned counsel for the defendants that his client wants to invest his capital in the business but such permission was not granted by the plaintiff/Bank and as such the defendants continued to suffer financial loss due to negligence and conservative mind-set of the plaintiff/Bank. Defendants during the course of arguments has produced letter of the plaintiff-Bank dated 10th April, 2009 addressed to the defendants subject "Settlement of Insurance Claim" in which the plaintiff-Bank has referred earlier letter dated 11-3-2009 on the captioned subject and confirmed that upon payment of entire settlement amount of Rs.42 million as per terms of the settlement letter mentioned above. Balance amount of Rs.7,759,421 against outstanding Running Finance Facility of Rs.49,759,421 would be written by NIB and Running Finance Facility (Pledge) stands released, cleared fully and finally settled. Learned counsel states that in view of the said letter 4th facility stood settled and there was lodged discrepancy in the said suit amount filed by the plaintiff Bank and further contended that no amendment in the amount of recovery had been filed till to date and as such there was discrepancy which had to be addressed before proceeding further. Plaintiffs have filed replication to the defendants leave to defend application in which they have contended that leave to defend has not been filed by an authorized officer of the defendant No.1. He has failed to produce any Board Resolution passed by defendant No.1 whereby he was authorized to file instant application, even copy of power of attorney has not been annexed to this application, hence in the present situation, he has contended that the suit of the plaintiff is liable to be decreed as prayed. Keeping in view subsection (11) of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. As to the substantial question of law raised by the defendants in respect of which the evidence is required. The contention of the Advocate for the plaintiff is that only contention in field is that plaintiff charged excess of mark-up which according to settled principle of law is not substantial question of law and facts. Further the defendants have failed to fulfil the mandatory requirements/condition as subsections (4) and (5) of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The application would be liable to be rejected under the Penal provision provided in the special law being subsections (6) of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. Further no inability on the part of defendants has been shown as to why they have failed by not complying with the requirement as required in subsections (4) and (5) of the section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 the mandatory condition precedent for filing of the application by a customer under the Ordinance, 2001. Further it has been breach of contract on the part of plaintiff and in the absence of any breach of contract or violation of any provision of the agreement or law by the plaintiff the defendant's application is not maintainable. Reference given by the defendants to Suit No.B-60 of 2008 instituted by defendant No.1 against the plaintiff is based on mala fide as it is ill-disguised attempt to divert the attention of the present recovery proceeding instituted against the defendant. Case of the plaintiff being that oil account of default committed by defendants the plaintiff has sought recovery of sum, which has not been paid by the defendants even after acceptance of the liabilities. The relationship of the plaintiff and defendants are governed by Finance Agreements as mentioned in the plaint and in presence of such written contracts no oral contention has any force in the eye of law. Defendants were required to fulfil their, obligations as per term of contract, in which they failed and hence the suit was filed. Plaintiff has sent notice of demand dated 12-6-2008 through Advocate which reply was received the defendant's Advocate on 27-6-2008 both Advocates annexed the same with plaint mark-up charges and all the facilities in term of agreement and sanctioned advices which had been duly signed and accepted by the defendants the charged breakup again have been given by the plaintiff in his replication for all the four facilities. Statement of account of facilities granted have been filed, duly certified as per law. Plaintiffs Advocate is fortified by a decision in a similar case to the present case which had been reported in 2003 SCMR 1156, on the point of admission 2007 CLC 1356 and 2007 CLD

217. After hearing the arguments advanced by both Advocates, the Court is of the view that leave to defend application which has been filed by defendants Nos. 1 to 10 is dismissed due to non-compliance of mandatory requirement of subsections (3) and (4) of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and further due to admission on behalf of defendants towards utilizing the finance facilities and owning the liabilities. Only matter in my view which needs to be settled, is the amount due and payable by the defendants. Both the Advocates for the parties are directed to file their respective breakup statements before this Court for adjudicating actual amount due by defendants to the plaintiff. The leave to defend application being C.M.A. No.11316 of 2008 is dismissed accordingly with no orders as to cost. S.A.K. /N-17/K Application dismissed.