2005 PLP 1442 (CLD)

MUHAMMAD MUZAMMAL KHAN, J.

Instant first appeal is directed against the judgment/decree dated 9-4-2004 passed by the learned Judge Banking Court-II, Gujranwala, whereby suit for recovery of Rs.5,01,110 with return/cost of funds was decreed against the appellant.

2. Succinctly, relevant facts leading to instant appeal are that respondent-Bank on 22-10-2003 filed a suit for recovery of the above referred amount with the averments that appellant vide LC No.105486 dated 20-2-1995 availed finance facility of Rs.4,44,400 for purchase of tractor/trolla against execution of usual documents, including the loan agreement, besides creating charge over his agricultural land etc.

3. Appellant being defendant in the suit, was served with a notice on 3-11-2003 and in response thereto he on 1-12-2003 filed an application under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, praying leave to appear and defend the suit. The leave was prayed mainly on the ground that the suit amount included compound interest which was not chargeable under the agreement between the parties and was not permissible under Islamic laws, besides the stance that finance agreement did not contain any schedule of repayment or timeframe for discharging liability, hence he had committed no default and the suit by the respondent-Bank was premature. The learned Judge Banking Court, seized of the matter, after getting reply from the bank while dismissing the said application filed by the appellant, decreed the suit as prayed vide judgment/decree dated 9-4-2004. Appellant thereafter filed instant appeal which was admitted to regular hearing and respondent in response to notice, has appeared and is represented through its counsel.

4. Learned counsel for the appellant submitted that besides the grounds taken in the petition for leave to appear and defend the suit, appellant availed finance facility for purchase of tractor to the tune of Rs.3,54,400, out of which he has already repaid an amount of Rs.2,42,220, but this amount has not been deducted from the liability as is evident from the plaint, but the learned trial Judge without adverting to this aspect of the matter decreed the suit of the respondent, as it stood. It was further argued that appellant had made out a case for trial, as he was not liable to pay compound interest/mark up, but this matter escaped notice of the trial Court negatively reflecting on the impugned judgment. It was further emphasized that since in the original finance agreement there was no time schedule for repayment of the finance availed, the respondent could not have filed suit for recovery grading the appellant as a defaulter. His precise submission was that suit could only be filed if the loanee committed any default in complying to the schedule agreed between the parties.

5. Appeal was opposed, refuting the arguments of the appellant and supporting the impugned judgment, with the arguments that appellant could not make out any case requiring adjudication, hence leave to defend the suit has correctly been refused. It was further submitted that the appellant had not only availed the finance for tractor, but he also availed an amount of Rs.90,000 for purchase of trolla, hence in spite of payment of Rs.2,42,220 the decretal amount is payable by him. It was categorically denied that the appellant was burdened with any compound interest/mark-up.

6. We have minutely considered the respective arguments of the learned counsel for the parties and have examined the record, with their assistance. The impugned judgment revealed that learned Judge Banking Court with a single lined order which reads as under: "The execution of documents and availing of loan has not been denied" dismissed the application of the appellant for leave to appear and defend the suit, holding that the same is liable to dismissal under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, thus findings are not only sketchy and non-speaking but also do not furnish a lawful basis for refusal of the relief prayed without going into the stance canvassed by the appellant in his application. Appellant had raised a number of triable issues like charging of compound interest and denial of liability to repay the entire finance amount instantly, without timeframe in the original finance agreement. Plaint as it stood in paragraph-3 narrated the total amount of finances advanced to the appellant as Rs.4,44,400 and suit for recovery of Rs.5,01,110 without adjusting the amount repaid by the appellant Rs.2,42,220, without working out interest/mark-up payable was not at all justified. In our view, appellant had made out triable issues which required recording of evidence.

7. Application of the appellant under section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 may not have been happily worded, but it fulfilled all the requirements of subsections (3), (4) and (5) of section 10 of the Ordinance (ibid), hence could not be rejected as remarked by the trial Court:. Judgment like the one impugned which lacked the qualifications of being a judgment was not expected from a judicial officer discharging responsible judicial work, hence the same was not capable of maintaining in appeal and deserved to be annulled.

8. For the reasons noted above, we are constrained to hold that appellant had made out a case for grant of leave to defend the suit, hence we allow this appeal, set aside the impugned judgment dated 9-4-2004 and grant him leave unconditionally by accepting his application. Case is sent back to the trial Court for its decision in accordance with law. There will be no order as to costs. M.H./E-16/L Leave granted.