2010 PLP 1792 (CLD)

FAISAL ARAB, J.

Nazimuddin, the plaintiff in Suit No.B-20 of 2002 is sole proprietor of Messrs Ali Enterprises. This enterprise has obtained various financial facilities from the defendant, The Bank of Khyber. On 4-5-2002, the plaintiff filed Suit No.B-20 of 2002 taking the plea that against various financial facilities that were availed by the plaintiff from time to time, the defendant-Bank has recovered excess payments which are liable to be refunded to the plaintiff. Prior to filing of this suit, the Bank had also filed a suit which was given Suit No.B-39 of 2003 against the plaintiff for recovery of Rs.48,959,776 said to be outstanding against the plaintiff. After hearing respective contentions of the parties, this court on 19-4-2005 by consent of the parties, appointed Mr. Liaquat Zaman, a Chartered Accountant to examine the accounts and submit report regarding outstanding amounts. Chartered Accountant submitted his report. Thereafter certain objections were taken by the plaintiff and this court on 2-6-2007 directed the plaintiff to submit statements of accounts with regard to his objections. After examining record the Chartered Accountant in his report has submitted that the plaintiff obtained three financial facilities i.e., (1) Export Refinance Facility which was availed to the extent of Rs.20 millions, (2) Finance Against Foreign Bills to the extent of Rs. 13.7 millions and (3) Running Finance Facility to the extent of Rs.1.999,960, making altogether Rs.35,699,

960. Mark-up on these three facilities was calculated at Rs.12,130,638 making altogether Rs.17,830,598 as outstanding against the plaintiff. In addition to this, Chartered Accountant has also reported that two other proprietorship concerns of the plaintiff owe Rs. 111,966 and Rs.390,601 which were availed in the form of running finance. Thus in his report, an amount of Rs.36,532,530 was reported by Chartered Accountant as outstanding towards principal and Rs. 12,824,760 towards mark-up making together Rs.19,357,290 as payable by the plaintiff.

2. The only substantial objection to these calculations that has been raised by the plaintiff pertains to Export Refinance Facility. It is contended that Rs. 30 millions in its entirely were not disbursed towards Export Refinance Facility and that amount claimed towards this Facility includes roll-over of the facility on which additional mark-up has been charged which is not permissible in law. It is also contended that Export Refinance Facility is said to be extended from 1997 whereas in the plaint it is not mentioned that facilities were extended in 1997. It has been admitted that this Export Refinance Facility has been rolled-over every year therefore it was not necessary-to establish that it was being provided since 1997 or subsequently because the effect of roll-over only revives the same facility extended in the past. Therefore the objection that Rs.20 millions were not actually disbursed, is to be examined from the pleas taken in the leave to defend application. The bank in paragraphs Nos. 1 to 8 of the plaint has stated that Facility of Export Refinance was extended to the extent of Rs.20 millions. In reply to this, the plaintiff has not denied that Export Refinance Facility was not availed to the extent of Rs.20 millions. All that has been said in paragraphs No.5 and 6 of leave to defend application is that request for such facility was not made by Nazimuddin in his personal capacity which means that finance was not extended to the plaintiff Nazimuddin but was extended to his business, concern namely All Enterprises which is admittedly owned by the plaintiff Nazimuddin. In view of absence of categorical denial of the extent of availing this facility of Rs. 20 millions, oral objection with regard to non-availing of such facility at the time of arguments is of no legal consequence. However, the argument that whenever a financial facility is rolled-over, mark-up over mark-up is charged, is a substantial objection as charging of mark-up after roll-over would amount to converting a mark-up based facility into interest bearing facility, which is not permissible under banking laws.

3. Considering this position, counsel for the Bank has very candidly conceded at Bar that against all the three facilities, the defendant-Bank does not press its claim for mark-up and seeks decree only on the principal amount that has been determined by the Chartered Accountant in his report. Chartered Accountant in the conclusion of his report at page 17 has separately provided outstanding principal amount of various facilities and mark-up accrued thereon. Ignoring the component of mark-up, the outstanding amount which remains recoverable from the plaintiff comes to Rs.36,532,530 hence Suit No.B-30 of 2003 (Messrs The Bank of Khyber v. Nazimuddin and another) is decreed to the extent of Rs.36,532,530 which shall be recoverable from the sale of mortgaged assets whereas Suit No.B-20 of 2002 Nazamuddin v. Messrs The Bank of Khyber is dismissed as liability stands determined in Suit No.B-39 of 2003, In addition to the, decretal amount, the decree-holder shall also be entitled for coasts of funds as provided under section 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001. H.B.T./B-10/K Order accordingly.