2004 PLP 889 (CLD)

Ch. Imam Ali for Appellants. Khalid Mahmood Sheikh for Respondent. Date of hearing: 6th April, 2004. CH. IJAZ AHMAD, J.‑‑‑The brief facts out of which the present appeal arises are that appellants secured financial accommodation from respondent‑bank upto Rs.4 millions alongwith mark‑up at the rate of 45 paisa per thousand rupee or part thereof on daily produce. An agreement for financing for short/long term of mark‑up basis were executed between appellants and respondent on 16‑2‑1988 which was subsequently rescheduled as a fresh agreement to that extent was also executed between the parties on 14‑7‑1999. The appellants allegedly failed to discharge their liability in terms of the aforesaid agreement. The respondent‑Bank being aggrieved filed a suit on 14‑4‑1995 for recovery amounting to Rs.30,83,570 alongwith mark‑up liquidated damages and other charges through the sale of mortgage property and from the person and other assets of the appellants before the Banking Tribunal concerned. The learned Banking Tribunal decreed the suit vide judgment and decree dated 11‑6‑1995 amounting to Rs.11,71,

400. The respondent being aggrieved filed R.F.A. No.449 of 1996 before this Court which was accepted and the case was remanded to the Banking Court No.II to decide the suit after framing issues out of the pleadings of the parties. The learned Banking Court decreed the suit vide judgment and decree dated 28‑9‑1998 amounting to Rs.24,47,

570. The appellants being aggrieved filed this appeal.

2. The learned counsel for the appellants submits that Banking Court erred in law to decree the suit against the appellants without discussing the evidence on record. The Banking Court decreed the suit without adverting to the documents on record executed between the parties and without adverting to the statement of accounts Exh.P.19. He further submits that Banking Court refused to grant liquidated damages to the respondent‑Bank as is evident from findings on Issues Nos.4 and 5 on the ground that liquidated damages amounting to Rs.6,00,000 are also shown in the claim of the respondent‑Bank, therefore, respondent‑Bank cannot claim the same, whereas, the Banking Court erred in law not to grant the same to the appellants qua the entries in the statement of accounts dated 29‑12‑1988, according to which respondents are not entitled to liquidate damages amounting to Rs.3,94,

820. He further urges that Banking Court erred in law to grant the mark‑up over mark‑up to the respondent‑Bank as is evident from the statement of accounts Exh.P.19, which is not in consonance with the law laid down by the Superior Court. In support of his contentions, he relied upon the following judgments:‑‑ (1) Habib Bank v. Messrs Qayyum Spinning Ltd. 2001 MLD 1351; (2) Habib Bank Ltd. v. Messrs Farooq Compost Fertilizer Corporation Ltd. and 4 others 1993 MLD 1571; (3) Citibank N.A., a Banking Company through Attorney v. Riaz Ahmad 2000 CLC 847; (4) National Bank of Pakistan v. Messrs West Pakistan Tanks Terminal (Pvt.) Ltd. 2000 CLC 896; (5) PLD 2002 Karachi 246; (6) 2002 CLC

276. He further submits that respondent failed to prove the liquidated damages by producing sufficient evident on record. Therefore, Banking Court erred in law to grant liquidated damages which is not in consonance with the provisions of sections 73 and 74 of the Contract Act. In support of his contention, he has relied on 1989 MLD 3900, 1993 MLD 1571 Habib Bank Ltd. v. Messrs Farooq Compost Fertilizer Corporation Ltd. and 4 others. He further submits that Banking Court erred in law to decree the suit of respondent‑Bank against the appellants on the wrong admission of the appellants which is not in accordance with law laid down by the superior Courts. In support of his contention, he has relied upon PLD 1975 SC 311, PLD 1989 SC 749 Barkhurdar v. Muhammad Razzaq, 1988 MLD 1126, 1994 MLD (sic). On the basis of aforesaid judgments, he further submits that Banking Court erred in law to award compound interest which is not permissible under the law. He further urges that Issue No.1 was also decided by the Banking Court without adverting to the statement of accounts Exh.P.19 wherein it is revealed that respondent‑Bank has advanced four millions to the appellants on 16‑2‑1988 and mentioned that appellants have deposited one million credited in the account of respondent‑Bank on 17‑2‑1988. These two entries clearly show that respondent‑Bank had advanced rupees three millions to the appellants instead of four millions in terms of Regulations Nos.32 and 33, issued by the State Bank of Pakistan. He further submits that Banking Court erred in law to decide the case against the appellants as the appellants did not challenge the said entries well in time without adverting to the reply submitted by the appellants to the respondent in response to legal notice. Legal notice and reply are exhibited as Exh.D.1 and Exh.D.2 which are admitted by P.W.1 Jamil Akhtar and P.W.2 Muhammad Ashraf in cross‑examination. He further submits that appellants have repaid Rs.25,00,000 to the respondent -Bank. This fact was not considered by the learned Banking Court in its true perspective in the impugned judgment. He further submits that respondent has no lawful authority to claim any mark‑up from the appellants in view of Exh.P.19 rescheduling agreement in view of paras. Nos.1 and 2 of Exh.P.14. He further submits that in case the appellants have secured finance facility amounting to rupees three millions, then the appellants have to pay to the respondent‑Bank Rs.40,00,000 in case the appellants have received finance facility amounting to Rs.40,00,000 then the appellants have to pay Rs.45,76,

000. The respondent -Bank is entitled to the remaining amount' after deducting amount already paid by the appellants to the respondent- Bank i.e. Rs.25,42,

750. The learned counsel of the appellants submits that documents were executed by the appellants and were not denied by the appellants as is evident from the cross‑examination of D.W.1 Rao Mukarram Ali Khan. He also submits that Exh.P.14 is the last agreement executed between the parties and the amount is also mentioned in the last agreement according to this agreement the respondent‑Bank is entitled to mark up over the principal amount for 210 days and the Banking Court has passed the decree to this amount. Therefore, contention of the appellants' counsel has no force. He however urges that Banking Court has decreed the suit after proper application of mind and learned counsel of the appellants failed to point out any infirmity or illegality in the impugned judgment of the Banking Court.

3. We have considered the contentions of the learned counsel of the parties and have perused the record ourselves.

4. Appellants have admitted liability amounting to Rs.11,71,400 in terms of prayer clause of the appeal as well as claim of the respondent‑Bank was admitted by the appellants to this extent in the earlier round of litigation before the Banking Court. The appellants have availed finance facility to the extent of Rs.4 millions. Reappraisal of the evidence on record and findings on Issue No. 1 is upheld as we do not find any infirmity or illegality, therefore, preliminary interim decree to the extent of aforesaid amount is passed against the appellants in view of section 11(2) of Act No.XV of 1997 or section 11(2) of Ordinance, 2001. The Banking Court had not discussed any evidence qua the remaining issues, therefore, Banking Court erred in law to decree the suit which is not in consonance with the law laid down by the Honourable Supreme Court in PLD 1970 SC 1703. Even the public functionaries are duty bound after addition of section 24‑A in the General Clauses Act to decide the matters after application of mind as the law laid down by the Honourable Supreme Court in 1998 SCMR 2268 Messrs Airport Support v. The Airport Manager Quaid‑e‑Azam International Airport Karachi and others, 1998 SCMR 2419, Zain Yar Khan v. The Chief Engineer C.R.B.C. WAPDA Division. It is pertinent to mention here that Banking Court did not advert to the case‑law on the subject, therefore, judgment of the Banking Court on the remaining issues is not sustainable in the eye of law. The impugned judgment is a slipshod and devoid of reasons qua all issues except Issue No.1. The tenor of the impugned judgment amply manifests that the learned Banking Court before saddling the appellants with the colossal liability has not been taken into consideration the record of the case and the pleadings of the parties. Therefore, judgment of the Banking Court on the remaining issues is set aside to the extent of amount decreed over and above the claim admitted by the appellants counsel as mentioned above wherein it is directed to deposit the C interim decretal amount i.e. 11,71,400 before the Banking Court within one month. Parties are directed to appear, before the Banking Court on 22‑4‑2004 and the Banking Court is directed to proceed in the matter and decide the remaining issues afresh as expeditiously as possible. Parties/their counsel shall cooperate Banking Court so that the matter may be finalized as expeditious as possible. In case, parties fail to cooperate with the learned Banking Court then the learned Banking Court shall take coercive measures against the parties. M.H./P‑22/L Order accordingly.