2006 PLP 1409 (CLD)

MIAN HAMID FAROOQ, J.

The appellants/judgment?debtors, through the present appeal, have called in question judgment and decree dated 10-12-1998, whereby the learned Judge Banking Court, after finding that the appellants failed to disclose any genuine and reasonable defence in their leave application, rejected their leave application and consequently, after deducting a sum of Rs.1,00,000, passed a decree for the recovery of Rs.46,74,636.61, with future mark-up and costs, against the appellants jointly and severally.

2. The respondent-Bank filed the suit for recovery of Rs.47,74,636.61, against the appellants, before the learned Judge Banking Court, inter alia, pleading that the appellant No.1 was allowed credit facility in the form of FAPC-II to the extent of Rs.4.100 (M), against the securities of hypothecation of stocks in trade and equitable/registered mortgage of properties; the appellants executed all the relevant documents in favour of the respondent-Bank; the credit facility was availed; subsequently, the appellants committed default in fulfilling their contractual obligations and the Bank was constrained to file the suit for recovery. The respondent-Bank, while relying upon the documents and statement of accounts, claimed the suit amount together with liquidated damages at the rate of 20%. The appellants, on 20-11-1997, in response to the summons issued to them, as required under the law, filed the application seeking leave to defend the suit, asserting therein that the suit amount in the statement of accounts does not reflect the actual "amount due" recoverable from the defendant No 1; illegal amounts have been added as mark-up; the statement of accounts is not in accordance with law and that the plaint does not disclose details of any transaction. It was further pleaded that the respondent-Bank did not attach copies of charge documents including I.B. 6 and I.B.29. The leave application was opposed by the respondent-Bank through its reply, which was accompanied by photocopies of all the documents. The learned Banking Court, after hearing the parties, found that the appellants failed to raise any bona fide dispute, thus, proceeded to dismiss their leave application and consequent thereto, after deducting a sum of Rs.1,00,000, deposited by the appellants, passed a decree for the recovery of Rs.46,74,636.61 with costs and future mark-up against all the appellants, jointly and severally, vide impugned judgment and decree dated 10-12-1998, hence the present appeal.

3. Learned counsel for the appellants contends that the respondent-Bank failed to place on record mark-up agreement, which is the most crucial document in Islamic mode of financing, therefore, the suit against the appellants was not competent. He further submits that the statement of accounts, which was the sole basis for passing a decree against the appellants, is sketchy, bears unauthorized entries and shows overcharging of mark-up amounts and, thus, is unreliable and cannot be made basis for the passing of the decree. He has relied upon Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD

587. Conversely, the learned counsel for the respondent states that certain documents were annexed with the plaint, however, copies of the documents, asked for by the appellants in their leave application, were submitted along with the reply to the application. He adds that the decree was rightly passed on the basis of statement of accounts.

4. We have heard the learned counsel and examined the summoned record. We find from the record that respondent-Bank did file photocopies of certain documents together with the reply to appellant's leave application, which includes the copy of mark-up agreement, thus, it cannot be argued that suit was decreed in the absence of mark-up agreement. Contention of the learned counsel is repelled.

5. As regards the other contention, raised by the learned counsel for the appellants, we find that the same, of course, has some substance. The learned counsel for the appellants is right in pointing out that the statement of accounts, furnished by the respondent-Bank in support of its claim, bears unauthorized entries, inasmuch as mark-up has incorrectly been charged. Even the entries in the computerized statement of accounts do not show the details of the amount transferred and to which account and for what purpose the amounts from the account of appellant No.1 were transferred. We are of the view that the appellants cannot be saddled with such a colossal liability on the basis of sketchy, incomplete and untrustworthy statement of accounts, furnished by the appellants. The said statement of accounts cannot be said to be prima facie proof of the appellants liabilities under any stretch of imagination. It is true that the respondent-Bank is entitled to claim lawful outstanding amount from the appellants, but it is equally true that the Bank cannot be allowed to recover the amounts from a customer at its own whims, on the basis of conjuncture and which is not at all "due Of course actual outstanding amounts are to be recovered, but a customer should not be squeezed and pushed in a blind corner by a financial institution. The appellants in para.10 of their leave application have admitted that they are ready to "pay due and lawful amount determined after rendition of accounts and filing of correct statement of accounts by the plaintiff-Bank in easy instalments extended over' a period of two years." The learned Banking Court has mainly relied upon the said para. of leave application to state that "they would pay the outstanding amount in instalments within two years" but strangely enough, it skipped over the crucial aspect of the said para., wherein, the appellants showed their willingness to pay "amount due" and "lawful amount".

6. In view whereof, we are persuaded to grant leave to defend the suit to the appellants only to determine the "amount due" and "lawful amount" recoverable from the appellants, however, interest of justice would adequately be met if some condition for cash deposit is attached with the said leave. At this stage, learned counsel for the appellants when asked to deposit, at least, half of the decretal amount, states that the appellants have already deposited a sum of Rs.10,00,000, as ordered by this Court, and that they will further deposit a sum of Rs.1,500,000, provided a period of two months is allowed to them.

7. In the above backdrop, the appeal is decided in the following terms:-- (i) The appeal is partly allowed and the impugned judgment and decree dated 10-12-1998 is set aside. (ii) The appellants are granted leave to defend the suit only on the question as to whether the suit amount is "due" and legally recoverably from the appellants subject to deposit of Rs.2,500,000, in cash, by the appellants with the respondent-Bank within a period of two months from today. (iii) The appellants had already deposited a sum of Rs. 10,00,000 with the respondent-Bank (which finds mention in the interim order dated 9-7-1999 passed by this Court), therefore, now the appellants shall only deposit a sum of Rs. 15,00,000, making total deposit of Rs.25,00,000, within a period of two months. (iv) If the appellants deposit the said amount within the period stipulated in para.(iii) above, the learned Banking Court shall decide as to whether the suit amount is "legally due" and "recoverable" from the appellants after recording evidence of the parties, if so they choose, and of course in accordance with law. (v) In case the appellants finally succeed in the suit, subject to decisions of appeals, if filed, the respondent-Bank shall refund the amount so deposited along with accrued profit to the appellants. (vi) If the appellants fail to deposit the amount of Rs.15,00,000, as noted above, leave granted to them shall be deemed to be rescinded and recalled and needless to add that law will take its own course and in that case amount of Rs.10,00,000 already deposited by the appellants, shall be adjusted towards the satisfaction of decretal amount. (vii) No order as to costs. S.M.B./L-16/L ?????????????????? ??????????????????????????????????????????????????????????????????Order accordingly.