2019 PLP 152 (CLD)

MUZAMIL AKHTAR SHABIR, J.

Through this appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the appellants/judgments debtors have called in question judgment and decree dated 26.11.2014, passed by Banking Court No.3 Multan whereby suit for recovery filed by the respondent No.1/bank against the appellants and respondent No.2 was partially decreed.

2. Brief facts of the case are that respondent No.1/Faysal Bank filed a recovery suit for an amount of Rs.7,340,650.69 against the appellants and respondent No.2 by stating therein that appellants and respondent No.2 had obtained finance facility limit of Rs.4.5 millions which was approved on 03.03.2008 for a period of three years against security of agricultural and for agricultural purposes on creating charge over property measuring 528 kanals 9 marlas agricultural land. The expiry date of the loan was 20.02.2011. The borrowers/customers defaulted in re-payment of finance and an amount of Rs.7,340,650.69 was due and outstanding against customers/borrowers as principal and mark-up for the recovery of which suit was filed before the banking court No.3. The appellants filed an application for leave to defend the suit which was dismissed and the recovery suit was partially decreed for an amount of Rs.55,00,525.44. The said judgment and decree is under challenge through this appeal.

3. It has been argued on behalf of the appellants that the suit had not been filed by a competent person. The statements of accounts have not been prepared in accordance with law. Mark up over mark-up has been charge and mark-up beyond the expiry date had also been charged.

4. Respondent No.2 was proceeded against ex parte vide order dated 06.12.2017.

5. Arguments heard. Record perused.

6. In this case obtaining of Finance Facility and execution of corresponding documents has not been denied. However, certain objections have been raised against the recovery suit. The first objection relates to the competency of the persons to file suit on behalf of the respondent/bank as the suit has not been filed by the Bank Manager, however, the legal position as provided in the section 9 of the F.I.O., 2001, is that the Branch Manager or any other officer authorized by the bank may file recovery suit on behalf of the bank. For this purpose reliance is placed on 2011 CLC 461 (KSB Bank Limited v. Mirza Ghulam Mujtaba) 2016 CLD 29 (Bank of Punjab through Branch Manager v. Unique Developers Pvt. Limited) 2017 CLD 1711 (ABL v. Fatima Enterprises Limited). In the present case Zafar Hussain Zafar, Area Manager and Muhammad Arshad, Relationship Bank Manager of Faysal Bank Bosan Road Multan filed a suit by mentioning therein that they had duly been constituted general attorneys and authorized signatories on behalf of the plaintiff/bank and were well conversant with the facts of the suit. In view of the foregoing, the objection raised by the appellants that the said persons were not competent to file the suit is without any legal justification and consequently is declined.

7. The second objection raised by the appellants is that the statements of accounts have not been prepared in accordance with law. However from the perusal of statements of accounts it is seen that both the statements regarding principal amount and mark-up bear a certificate that the entries in the said statements of account are true copies of the entries contained in the books of bank/bank record and the same books are in safe custody of the bank and the statement of accounts is prepared as per Bankers' Books Evidence Act, 1891. As the afore-referred certificate is available on both the statements relating to the principal and mark-up accounts and none of the entries in the statement has been challenged as incorrect, therefore, the objection raised by the appellants is without any substance and is accordingly repelled. Reliance in this behalf may be placed on Messrs Ravi Medical Supplies (Pvt.) Ltd. through Chief Executive and 4 others v. Messrs First Women Bank Limited through Branch Manager (2016 CLD 1726). The next objection raised by the learned counsel for the appellants relates to charge of mark-up over mark-up but no entry has been pointed out in these statements of accounts whereby the mark up has been charged upon mark-up. Consequently this objection is without any substance and is over ruled. Another objection-raised by the learned counsel for the appellants is that the mark up has been charged upon the expiry period. For this purpose only calculations are required and the learned banking court made calculation while passing the afore-referred judgment and decree, therefore no ground existed whereby the appellant had raised a substantial question of law and facts that was required to be determined by record of evidence, therefore the learned banking court was justified to decline the application for leave to defend the suit. The next question relates to the calculation which could be made without granting leave to defend the suit. In the present case, as already observed, the statements of accounts had been duly verified in terms of Bankers' Books Evidence Act and no discrepancy has been found in the same. Therefore the said statements have rightly been relied upon by the banking court. However the banking court while passing the final judgment and decree has mentioned 30.04.2011 as expiry date whereas the sanction advice as well as the agreement between the parties provides the expiry date as 20.02.2011. The statements of account shows that principal amount of Rs.44,91,323.37 and mark-up of Rs.7,58,716.07 as outstanding against the appellants as on 30.12.2010, the date before the expiry period, which could legally be changed. The mark-up beyond the expiry date could not be changed or allowed by the Banking Court. Reliance is placed on Habib Metropolitan Bank Limited v. Faizan Ali and Company (Pvt.) Ltd. (2017 CLD 1583). The Banking Court in the present case has allowed mark-up up to 30.04.2011 by making the calculation up to the said date itself for an amount of Rs. 250,486/-. However, the said date was beyond the expiry date fixed as 20.02.2011. In such situation mark-up beyond expiry period cannot be allowed. For this reliance is placed on Pace Pesticides Pvt. Ltd. v. Saudi Pak Commercial Bank Ltd. (2014 CLD 1436), wherein the court modified the decree by deducting mark-up beyond expiry period. Therefore, the amount of mark-up calculated after expiry date up to 30.04.2011 of Rs.250,486/- allowed by the Banking Court is declined by this Court. Consequently while up-holding the decree to the extent of principal amount of Rs.44,91,323.37 and mark-up of Rs.7,58,716.07 totaling Rs. 52,50,039.44 in favour of the respondent/Bank, the claim of mark-up of Rs. 250,486/- allowed by the Banking Court beyond the expiry period is set aside. The decree is modified in above terms. The appellants and respondent No.2 are held jointly and severally liable to pay the said amount with costs and costs of funds which shall be calculated from 21.02.2011 till the date of realization. KMZ/A-69/L Order accordingly.