2001 PLP 713 (CLC)

mark‑up on Running Finance as per Letter No. FA/RMR/99/115, dated 18‑8‑1999 for the period commencing from 1‑1‑1997 upto 30‑6‑1999. (5) Wrongly charged and claimed on the Rs.103,415,691 Letters of Credits apart from what has been mentioned above for the period from 1‑1‑1997 upto 30‑6‑1999 Total: Rs.38,143,795

31. The defendant is claiming from the plaintiff a total amount of Rs.350.299 (M) vide its letter, dated 18‑8‑1999. As against this the amount which is payable by the defendant to the plaintiff is Rs.345,970,

988. It would show that only an amount of Rs.4.328 (M) is payable to the defendant which the plaintiff is ready and willing to pay in full and final satisfaction to the defendant's claim. The defendant has in its pledge the plaintiff's stock of Steel Round 12596.13 M. Tons out of which the defendant can claim pledge only over 274 M. Tons. The balance quantity 12,322.13 M. Tons stands free from defendant's pledge and the defendant has no right to retain the same with it. The defendant is liable to release plaintiff's goods under its pledge. Also plaintiff's factory at Nooriabad mortgaged to the extent of Rs.130,000,000 and hypothecation of current assets to the extent of Rs.130,000,000 in favour of the defendant are liable to be released..." Since this case was filed under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, therefore, the defendant has not filed its written statement, but has filed an application under section 9 of the Act, 1997 seeking leave to defend the above suit. In that application as well as in its supporting affidavit, they have vehemently denied the averments of the plaint and have asserted that the plaintiff, as on 31st October, 1999, was liable to pay over Rs.350.563 million. It is an admitted fact that till the date i.e. 2‑12‑1999 when the last hearing of this application took place, the defendant had not filed any suit for recovery against the plaintiff. In a counter‑affidavit to this application, they have denied that the plaintiff is entitled for the interim relief as prayed.] I have heard Mr. Mansoor‑ul‑Arfin, Advocate for the plaintiff and Mr. A.I. Chundrighar, Advocate for the defendant. Mr. Arfin has referred to Annexure P.52 (at page 245 of the case file) which is a sanction advised for cash finance of Rs.250 million (fresh) and Rs.100 million renewal. At page 3 of the said document, the date of final adjustment shown is 30th January, 2000. On the basis of this document, it was argued by Mr. Arfin that the claim of the defendant is premature and, therefore, they tare not entitled to refer the names of the plaintiff and its Directors as' defaulters to the State Bank of Pakistan. It was also argued that during the period commencing from August, 1998 till September, 1999 the plaintiff has repaid to the defendant an amount of Rs.17 million approximately. On 16‑11‑1999 after hearing parties at' length and for reason that the hearing was not concluded, the matter was adjourned for further hearing and ad interim injunction was granted till next date of hearing, restraining the defendant from forwarding the name of plaintiff (and not its Directors) as defaulter to the State Bank of Pakistan in respect of loan/advance which is subject‑matter of the suit. Mr. A.I. Chundrighar has submitted that the plaintiff is a defaulter and, therefore, defendant is entitled to send its name as defaulter to the State Bank of Pakistan (SBP) as it is the official duty' of all the bankers. He has referred to a Circular bearing No.BPRD(RU‑51)/571 15547/99, dated 6th October, 1999 through which Deputy Director SBP had called from all the Presidents and Chief Executives` of the tanks/D.F.Is., the correct position of their total defaults/stuck up loans. Mr. A.I. Chundrighar has also referred to an order, dated 10th November, 1999 passed by a learned Single Judge of this Court, Mr. S.A. Sarwana, J. on C.M.A.‑ No.9123 of 1999 in Suit No.423 of 1994 (Abdul Shakoor and others v. Habib Bank Limited). In that case an application was filed by the plaintiff asking the Court to restrain the defendants/H.B.L. from terming the plaintiffs as loan defaulters and from taking action against the plaintiffs under the pretext or cover of term "loan defaulters" and/or releasing their names to the press or to any authority. That application was dismissed on the ground, inter alia, that in view of Circular No.1 /98 dated 8th June, 1998 read with abovementioned circular, dated 6th October, 1999 the defendant Bank was found to follow such instruction. Mr. A.I. Chundrighar has also argued that the plaintiff has acknowledged its liability and now he cannot avoid the same by filing the suit. He has placed reliance on the cases Shahzad Muhammad Umar Beg v. Sultan Mahmood Khan and another PLD ' 1970 SC 139 and Deputy Custodian of Enemy Property v. K.E.S.C. Ltd. 1986 CLC 2808. In reply, Mr. Mansoor‑ul‑Arfin has also relied upon an unreported order, dated 25‑11‑1999 passed on C.M.A. No.9657 of 1999 in suit No. 1560 (Ali Khan Junejo and 7 others v. I.D.B.P. and 2 others). In that case defendant No.2 was N.D.F.C. and defendant No.3 was S.B.P. The plaintiff of that suit filed an application under sections 94/151, C.P.C. read with Order 39, Rules 1 and 2, C.P.C. to restrain I.D.B.P., N.D.F.C. and S.B.P. from harassing or arresting the plaintiff for recovery of alleged dues of Al‑Hayat Dairies (P.) Ltd. Further injunction was sought against the defendants to remove the names of plaintiff from the list of defaulters and from Exit Control List (ECL), and not to act on the list of defaulters as published by S.B.P. on 14‑11‑1999 and not to treat plaintiffs as defaulters or to take any action against the plaintiffs pursuant to that. The same learned Judge who has passed order in Suit No.423 of 1994 referred by Mr. A.I. Chundrigahr, after hearing parties passed the following order:‑‑ .... N.D.F.C. was served with the notice of this application but none has appeared on their behalf so far. Mr. Shikoh has also not filed any counter‑affidavit though S.B.P. was served on 16‑11‑1999. IDBP in their counter‑affidavit have admitted that the plaintiffs did not sign any guarantee in their personal capacities with regard to the loans and for finances of AI‑Hayat Dairies Ltd. In view of above position the application is granted and the defendants are hereby restrained from harassing or arresting the plaintiffs for the alleged dues of Al‑Hayat Dairies Ltd. (In liquidation) or publishing their names in any newspaper or inclusion in the E.C.L. until the decision of this suit .... " Before proceeding further it would be relevant to reproduce the contents of circular, dated 6th October, 1999 upon which both the parties have placed reliance and which reads as follows:‑‑ " .... In this connection it has been observed that some of the banks/D.F.Is. have not been reporting correct position of their total defaults in the captioned statement. You are, therefore, advised to send the statement for the month of September, 1999 as per the enclosed revised pro forma incorporating the actual position of defaults as envisaged in our B. R. D. Circular No. 13, dated the 30th November, 1993, which is reproduced below‑‑‑ A person, whether natural or juridical, shall be deemed to be a defaulter if he (or his dependent family members or concerns owned or controlled by him or concerns in which he or his dependent family members are major share‑holders) has failed to pay off or liquidate any. fiduciary obligation towards any banking company or a legitimate financial institution in Pakistan as was agreed upon, or required under the terms and conditions of availment of the financing facility or to do or perform an act agreed to or undertaken in writing to be done or performed by him and such failure has continued for a period of 365 days from the date on which he was required to make the payment or to do or perform the act. The above information may be furnished by 12th October, 1999 positively. " It is settled law that in order to obtain interim injunction, the plaintiff is required to prove. that he has a good prima facie case and that the balance of convenience lies in favour of granting interim injunction and unless the same is granted, he will suffer irreparable loss and injury. According to Mr. Chundrighar, since the defendant is performing their statutory duty by forwarding the names of defaulters, it could not be claimed that the plaintiff has prima facie case. It was also argued that the claim of plaintiff is mainly based on damages and that on such basis he is seeking to offset their liabilities against the amount of loan due against them. It is very painful to note that this country and its people have been deprived of more than 250 billion rupees by few people and despite all possible efforts of the Government machinery only 2% amount of the stuck up loan has been recovered so far. At the same time, there are some genuine and bona fide businessmen who may not fall within the definition of "wilful and deliberate defaulters". It is the duty of the Government as well as the State Bank of Pakistan to protect such genuine and bona fide business community from being harassed by some arrogant and unscrupulous banking officers. It is pertinent to note that the amount being claimed by the defendant has not. been finally determined or adjudicated by a competent Banking Court. Apprehension of the plaintiff, that the mark‑up have been wrongly and maliciously calculated and that huge penalties have been imposed cannot be ruled out at this stage. What amount the plaintiff is liable to pay is yet to be determined, by a competent Banking Court. It is to be. noted that the Banking Courts are reluctant in granting liquidated damages in favour of Banks. Learned counsel for the defendant was not able to satisfy this Court as to the definition of the term "wilful defaulter" and why bank has not filed any suit for recovery of this amount? It is settled law that before adopting coercive methods in order to recover statutory dues, there should, be .well‑ascertained and determined sum of money. If any reference is need please see the cases Agricultural Development Bank of Pakistan v. Sanaullah Khan and others PLD 1986 SC 67, Abdul Latif v. Government of West Pakistan and others PLD 1962 SC 384 and Raj Kumar and 3 others v. National Bank of Pakistan and another 1994 CLC

206. In the instant case, the plaintiff, during the course of arguments, have deposited a sum of Rs.4,328 million on 2‑12‑1999, which has been accepted and received by the defendant. without prejudice to their rights, which also reflects bona fides of the plaintiffs. They have claimed that as against the liabilities of Rs.350 million the defendant is holding plaintiffs' property and other goods worth more than the alleged dues. All these facts indicate genuine efforts on the part of plaintiffs. It is desired that the defendant bank before forwarding the name of the plaintiff as defaulter to the State Bank of Pakistan will consider all the above noted facts, as well as all the circulars of the State Bank of Pakistan issued' from time to time. Efforts of the banks and the State Bank of Pakistan should be to recover the stuck up loans. 11t the same time some such efforts should be adopted for recovery of outstanding loans from a non‑wilful defaulter without destroying the company which has obtained such loan. With the aforesaid observations, this application stands dismissed. H.B.T./H‑25/K Application dismissed