2023 PLP 329 (CLD)

QAISER RASHID KHAN, C.J.

Through the appeal in hand, the appellant No.2 namely, Salah-ud-Din being the proprietor and sole owner of Messrs Kamran Filling Station (hereinafter called as "the appellant") has called in question the judgment and decree dated 14.02.2022 of the learned Judge, Banking Court-I, Peshawar, whereby his application for leave to defend was dismissed and consequently, the recovery suit of the respondent-bank/plaintiff was decreed against him to the tune of Rs.1,54,02,916/- along with costs of funds and costs of the suit.

2. The learned counsel for the appellant-defendant contends that the statement of account, annexed with the recovery suit, as instituted against the appellant carried wrong and incorrect entries whereby several amounts have been debited to his account and as such he has been burdened with an excessive amount. He further contends that every single entry, which was unauthorized and illegal was duly pointed out in the leave to defend application of the appellant reflecting that a sum of Rs.48,794,77/- was illegally debited to his account and raising such serious factual questions indeed called for recording pro and contra evidence by allowing leave to defend to the appellant but such right was denied to him and thereby he has been burdened with a very excessive amount through the impugned judgment and decree.

3. The learned counsel for the respondent-bank, on his turn, defends the impugned judgment and decree of the learned trial court on almost the same grounds as detailed therein.

4. Arguments heard and the available record perused.

5. As the record unfolds, it was Messrs Kamran Filling Station through its proprietor Salah-ud-Din, who applied to the respondent-bank for a running finance facility of Rs.60,00,000/- way back in the year, 2014, which was accordingly sanctioned in his favour for a period of one year vide Sanction Advice dated 16.12.2014 with its expiry date as 31.10.2015. By way of security, he executed all the charge documents like Finance Agreement dated 16.12.2014 and Letter of Hypothecation dated 16.12.2014 in favour of the respondent-bank. He also executed his personal guarantee in favour of the respondent-bank. Likewise, by way of collateral security, the appellant also mortgaged his property in favour of the respondent-bank. Such facility continued when the appellant applied to the respondent-bank for the renewal and enhancement of the said running finance facility. Such requests of the appellant were acceded to and accordingly, the finance limit was renewed and enhanced upto 10,000,000/- vide Renewal letter dated 13.11.2015 with its expiry date as 31.10.2016. Another agreement for financing in lieu of the renewed facility was executed by the appellant in favour of the respondent-bank along with his personal guarantee both dated 13.11.2015. It is followed by another request of renewal of the said facility of Rs.10,000,000/- dated 27.10.2016 and in turn it was renewed for another year vide Renewal letter dated 14.11.2016 with its expiry date as 31.10.2017. The agreement for financing and personal guarantee were accordingly executed by the appellant in favour of the respondent-bank. Such business relationship between the respondent-bank and the appellant continued smoothly when the request of the appellant of finance limit was renewed and enhanced upto 15,000,000/- vide Renewal letter dated 20.11.2017 with its expiry date as 31.10.2018. It was lastly renewed for another year vide Renewal letter dated 30.10.2018 with its expiry date as 31.10.2019. The appellant showed due compliance to the requirements of such letters of renewal and enhancement by executing the necessary finance agreement, letter of continuity and personal guarantee in favour of the respondent-bank and also equitably mortgaged his property through various memorandums/deeds for the renewal and enhancement of amount. It was on his default in liquidating his liabilities as per the terms of letter of renewal/certain sanction advice when the respondent-bank was constrained to file a recovery suit against the appellant. On being put to notice, the appellant filed his leave to defend application raising various legal and factual objections particularly in respect of certain entries made in his statement of account. In his application, the appellant has mentioned certain entries pertaining to the years 2015, 2016, 2017, 2018 and 2019, which, according to him, are unauthorized and fall within the meaning of mark up over mark up. We have before us such statement of account. The same reflects that the appellant continued business with the respondent-bank by entering into several correspondences with it through executing all the charge documents including finance agreements, letters of hypothecation and personal guarantees etc. Though such finance facility was renewed and enhanced several times on the requests of the appellant but he never raised any objection in respect of any entry mentioned in his statement of account till the filing of the recovery suit by the respondent-bank. We cannot lose sight of the fact that as per the spirit of the running finance facility, the borrower, in this case, the appellant, made hundreds of transactions during the currency of the finance limit, wherein various amounts were deposited and simultaneously withdrawn. Such entries are duly reflected in the statement of account as available on record. The argument of the learned counsel for the appellant that mark up as charged on the account of the latter way back in the year, 2015 is in fact the mark up over mark up stands belied by the statement of account annexed with the suit, which has been duly certified within the meaning of section 4 of the Bankers' Books Evidence Act, 1891 and also in terms of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. It needs no reiteration that under the normal Banking Practice and Procedure, the bank duly provides a copy of the statement of account to the borrower on quarterly or half early basis and the appellant could be no exception to such general practice especially in view of the heavy monetary transactions, in which, he continued to engage with the bank for over good five years till he went into default. Thus, the objection of the appellant displaying ignorance about some entries to have been illegally debited to his account during all those years falls on all fours.

6. Though the appellant has undertaken quite some exercise by referring to several entries of the years, 2015, 2016, 2017, 2018 and 2019, but failed to meet the requirements of section 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which reads as under:- (4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following: (a) the amount of finance availed by the defendant from the financial institution; the amounts paid by the defendant to the financial institution and the dates of payments; (b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit; (c) the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof. Such provision of law enjoins upon the borrower to show in all fairness as to what amount he had availed of from a financial institution, the payment so made by him to the financial institution and the amount which is accepted to be his liability to be finally paid to the bank. The said section of law carries penal consequences as well which is that in the event of failure of a borrower to meet the requirements of subsections (3), (4) and (5) of section 10 of the Ordinance ibid., his leave to defend application shall be rejected.

7. In view of the foregoing discussion, we find no substance in the present appeal and the same is hereby dismissed with costs along with C.M. MH/291/P Appeal dismissed.