1994 PLP 237 (CLC)

On the above pleadings, the following issues, by consent of the parties, arise:‑‑ (1) Whether the suit is not maintainable in law? (2) What should be the rate of interest 11% or 14% per annum with quarterly rests, with penal interest? (3) Whether the interest is un‑Islamic and cannot be charged by the plaintiff? If so, what effect? (4) What relief the plaintiff is entitled to? (5) What should the decree be? The plaintiff examined Abdul Hameed Zuberi as its witness and closed its side. The defendants examined Mehfooz Ali son of Maqsood Ali as their witness and closed their side. I have perused the record and heard the arguments of the learned counsel for the parties; my findings on the issues are as follows:‑‑ ISSUE No.l: No argument has been advanced by Mr. Noor Muhammad in support of this issue. I, therefore, hold that the suit is maintainable. ISSUE No.2.‑‑Although the plaintiff had stated in the plaint that it is entitled to charge interest at the rate of 14% per annum, Mr. Sadiq Khan has conceded that the plaintiff is entitled to charge interest only at the rate of 11% per annum with quarterly rests. The stand of the defendant is also that the plaintiff is entitled to charge interest at the rate of 11% per annum with quarterly rests. This stand is also reflected in the evidence given on behalf of the parties and is substantiated by the terms of the deed of mortgage which is Exh.6/1.1, therefore, hold that the plaintiff is entitled to charge interest at the rate of 11% per annum with quarterly rests. As for penal interest, Mr. Noor Muhammad contends that the plaintiff is not entitled to charge penal interest because there is no agreement between the parties for payment of penal interest. Mr. Sadiq Khan, on the other hand, submits that the deed of mortgage expressly provides for payment of penal interest at the rate of 2% per annum in addition to the usual interest upon default in payment by the defendants. The contention of Mr. Sadiq Khan is correct as is shown by the provisions of clause 4‑a of the deed of mortgage. 1, therefore, hold that the plaintiff is entitled to charge penal interest at the rate of 2% per annum in addition to the usual interest as provided by the deed of mortgage. ISSUE NO. 3.‑‑‑Mr. Noor Muhammad submits that the interest in un- Islamic and cannot be awarded by this Court. In support of his submission, he relies on the case reported in PLD 1987 Kar.

466. The argument is based on the premise that in view of Article 2A of the Constitution, this Court should not grant interest. However, in view of the later pronouncements of the Supreme Court, this argument has no merit and the interest as claimed by the plaintiff has to be allowed. It may, in passing, be noted that Mr. Noor Muhammad has restricted his argument on this issue merely to making a reference to the judgment cited above without making any attempt to discuss the principle involved. ISSUES NOS. 4 AND 5: ‑‑‑Mr. Noor Muhammad contends that the statement of account (Exh. 6/13) produced by the plaintiff is not correct and that there are various unauthorised debit entries in that statement. He has taken exception to the debits on account of godown‑keeper charges. Mr. Sadiq Khan says that the total amount debited on account of godown‑keeper charges comes to Rs.6,032 and he does not press the plaintiffs claim on that account. Mr. Noor Muhammad also objects to the debits on account of legal charges amounting to Rs.21,755 which appear on page 9 of Exh.6/13. Mr. Sadiq Khan says that a larger part of these debits are on account of the expenses incurred in filing the suit. The fact, however, remains that the plaintiff has also claimed cost in this suit. It, therefore, cannot claim the expenses of litigation twice over. The plaintiff is, therefore, not entitled to claim the amount of Rs.21,755 debited on account of legal expenses. Finally, Mr. Noor Muhammad contests the plaintiff's right to claim insurance charges. Mr. Sadiq Khan contends, on the other hand, that in terms of the deed of mortgage (Exh.6/1), the defendants were obliged to keep the mortgaged properties insured and that in the event of failure on the part of the defendants to do so,. the plaintiff was entitled to have the property insured and to debit the expenses of its doing so to the account of the defendants. Clause 7 of the mortgage deed supports the contention of Mr. Sadiq Khan regarding the obligation of the defendants and the right of the plaintiff to have the mortgaged property insured. Mr. Noor Muhammad, however, contendes that there is no proof that the property was insured by the plaintiff and that, therefore, the plaintiff is not entitled to recover anything on account of the costs of the insurance. The defendant has not taken any plea in the written statement that the plaintiff was not entitled to debit the costs of insurance to the defendant's account although the statement of account was filed with the plaint and copy thereof was available to the defendant; and no question has been asked in cross‑examination of the plaintiffs witness with regard to the claim of the plaintiff on account of the costs of insurance. 1, therefore, hold that the defendants are liable to pay the plaintiff the cost of the insurance of mortgaged property in terms of the deed of mortgage. According to the statement of account (Exh.6/13), a sum of Rs.14,65,385 is due and payable by the defendants to the plaintiff after taking into account the part payments made by the defendants to the plaintiff after the filing of the suit. However, the plaintiffs are not entitled to recover the sum of Rs.6,032 claimed on account of godown‑keeper charges and a sum of Rs.21,755 on account of legal charges. A total of these amounts comes to Rs.27,

787. The plaintiff is, therefore, entitled to recover from the defendants Rs.14,37,

598. Mr. Sadiq Khan says that although the defendants had executed a promissory note, the plaintiff is not relying on it and claims only a decree on the basis of the mortgage as against the mortgagors mentioned in the plaint. It is, therefore, hereby declared that the sum due on the mortgage mentioned in the plaint is Rs.14,37,598 with interest thereon at the rate of 11% per annum with quarterly rests from the date of the suit till payment and proportionate costs of the suit. Let preliminary decree in Form 5‑A, Appendix D, Schedule I, C.P.C. been prepared. Since the defendants Nos. 6 and 7 have been sued as guarantors, they are liable to have the money decree passed against them. The suit as against the defendants Nos.6 and 7 is, therefore, decreed for Rs.14,37,598 with interest and costs as aforesaid. H.B.T./U‑141/K Suit decreed.