1999 PLP 1643 (CLC)

(2) Whether entire liabilities were adjusted by the defendant as on 1‑3‑1992 in which the plaintiff bank second time recovered the mark‑up of Rs.13,18,927.41, if so, to what effect? (3) Whether the sanction advice Annexure "B" and "B/1" to the plaint are not pertained to the account which is subject‑matter in the above suit. (4) Whether the plaintiff is entitled to charge claim and recovery from the defendant the mark‑up on mark‑up, excise duty and liquidated damages as done in the above suit, if so, on what basis? (5) Whether the sum of Rs.10.50 million deposited by the defendant with the plaintiff for change of security, have not yet been adjusted in the statement of account, if so, to what effect? (6) Whether the plaintiff failed to change the mortgaged property despite its letter, dated 29‑11‑1992 (Annexure "D/6" to the written statement), Which caused losses to the defendants, if so, to what effect? (7) Whether the Annexures "E", "G/3" and "H" to the plaint were not executed on 3‑2‑1992 and do not pertain to the suit transaction, if so, to what effect? (8) Whether the Annexures "C" to "H" to the plaint were blank and filled in by the plaintiff for exaggerated amounts and dates of its own choice, if so, to what effect? (9) Whether the plaintiff is entitled to recover the alleged suit amount from the defendants? (10) What shall be the decree? The plaintiff in support of its claim has examined one S. Ejazuddin who has produced documents Exh.A. to Exh.M. From the defendant's side, one Zohair Akhtar Usmani (Exh.5) has filed his affidavit‑in‑evidence before the Banking Tribunal No.11 and he was cross‑examined before this Court after transfer of the proceedings. At the time of hearing, it is found that most of the issues settled on 27‑11‑1995 do not require adjudication and only two issues need to be resolved which are issues Nos.9 and

10. In the circumstances, by consent of the learned counsel, issues Nos. l to 8 are dropped. My findings on the remaining issues are as follows:‑‑ In support of the plaintiff's claim, besides the oral deposition, the plaintiff has produced sanction Advice, dated 30‑4‑1391 as Exh.B which shows that a sum of Rs.7.5 million was sanctioned as Running Finance in favour of the defendant No.

1. The revised Sanction Advice, Exh.B/1, dated 9th February, 1992, has been produced to show enhancement of facility to the extent of Rs.20 million with mark‑up at the rate of 50 paisas per thousand per day having been agreed between the parties. The terms contained in the Sanction Advice fully support the plaintiff's claim in relation to grant of finance. The revised Sanction Advice is stated to have been substantiated by Financing Agreement (Exh.C), dated 3rd February, 1992, whereby the defendant No. l had agreed to sell the goods, referred therein, to the plaintiff‑bank for a sum of Rs.20 million. The defendant No. l is stated to have immediately repurchased the very goods for a price of Rs.25.75 trillion which had to be paid by 31‑12‑1992. On account of inclusion of mark‑up for cushion period in the above‑referred buy‑back price, it was provided in the agreement that in the event of repayment by the stipulated date, cushion period mark‑up amounting to Rs.2,100,000 would be paid back to the defendant No. l by way of prompt payment bonus. The defendant No. l is stated to have executed Promissory Note, Exh.D. on 10‑2‑1992 for payment of the buy‑back price, mentioned in the Agreement, Exh.C. Similarly, Letter of Hypothecation, Exh.E., is stated to have been executed for securing repayment of the buy‑back price. The Facility Letter, Exh.F. also shows the extent of liability as Rs.25.75 million. The defendants Nos.2, 3 and 4 are stated to have executed separate guarantees for repayment of the sum of Rs.25.75 million. Exh.G.3 is yet another Letter of Guarantee executed jointly by the defendants Nos.2, 3 and

4. The defendant No.l is further stated to have executed deed of mortgage, dated 3‑2‑1992 which was duly registered with the Registrar of Registration pertaining to property described in the schedule thereto. The mortgage deed was further registered with the Registrar of Companies and an undertaking, Exh.I/l, was executed by Messrs Omega Construction (Pvt.), Limited for deposit of the sale proceeds and booking price of plots carved out of the mortgaged land. The statement of account produced as Exh.J. shows disbursement of the amount of facility on various dates. It is shown from the statement of account that the defendant No.l had duly availed the facility and had made certain repayments as well. The amount of repayments have duly been adjusted through the said statement. On the late of expire of limit viz. 31‑12‑1992, the outstanding balance, upon adjustment of receipts, is shown as Rs.19,990,052.30. Thereafter, one debit entry, dated 12‑1‑1993 is shown in the statement besides mark‑up entry dated 31‑10‑1994 in the sum of Rs.7,825,678(?) and excise duty in the‑sum of Rs.587,465 on the same date. On 31‑10‑1.994, the balance outstanding is shown as Rs.28,405,319.84. In the next entry dated 28‑2‑1995, the balance brought forward is surprisingly shown as Rs.19,992,182.30 instead of Rs.28.405,319.84 which is shown as the previous balance. On the last mentioned date i.e. 28‑2‑1995 further mark‑up upto February, 1995 in the sum of Rs.8,958,029.71 and excise duty in the sum of Rs.454,105 is shown to have been debited and the final balance claimed as outstanding is shown to be Rs.29,604,317.01. The plaintiff has claimed, in addition to the above, liquidated damages in the sum of Rs.5,920,863.40. The plaintiff's further case is that through notice, dated 18th April, 1994 (Exh.K.), the defendants were called upon to pay a sum of Rs.24,894,269.95 claiming the same as outstanding amount as on 31‑12‑1993. The learned counsel for the plaintiff, during his arguments, has referred to reply, dated 27‑4‑1994 (Exh.L.) which was received from the defendant acknowledging the above‑referred amount claimed through notice, Exh.K. The learned counsel, therefore. Presses for decree on the basis of the above‑referred acknowledgment contained in Exh.L. and the various documents referred hereinabove. In reply, Mr. Zaheer Ahmed Qureshi has contended that the defendant's are not liable for payment of mark‑up beyond expiry date, mentioned in the revised Sanction Advice, Exh.B/l and the Financing Agreement, Exh.C. The learned counsel submits that the defendants concede to the liability shown in the statement of account, Exh.J., as on 31‑12‑1992 which is Rs.19,990,052.30 besides mark‑up upto the said date calculated at the rate of 50 paisa per thousand per day. However, the plaintiff's claim for mark‑up beyond the said date is neither justified nor authorized. The claim for liquidated damages is also disputed as contrary to section 73 of the Contract Act. The objection taken by Mr. Zaheer Ahmed Qureshi relating to mark‑up beyond the expiry date is quite justified and a creditor, under the current system of banking, cannot claim mark up beyond the agreed date. Admittedly, the expiry date for the facility 'was 31‑12‑1992 and such fact is deducible from the contents of revised Sanction Advice, Exh.B/1, and the Financing Agreement, dated 3‑2‑1992 which has been produced as Exh.C. As regards claim for liquidated damages, the plaintiff has not shown if it had suffered any loss on account of non‑payment by due date and on the basis of mere inference, decree for liquidated damages cannot be granted ray virtue of section 73 of the Contract Act, compensation cannot be given for any remote indirect loss of damage by reason of breach of contract. Consequently, a party claiming compensation for breach of terms of agreement is required to prove the' loss. In absence of any evidence to the above effect the claim for liquidated damages cannot be granted. In this view, I am supported by the dictum laid down by a Division Bench of this Court in the case of H.B.L. v. Messrs Farooq Composit Fertilizer and others 1993 MLD 1571. In the circumstances, the plaintiff's claim for mark‑up for the period beyond 1‑12‑1992 cannot be sustained nor can the liquidated damages be awarded in 0hc matter. As regards the claim for excise duty, although the plaintiff has not produced any challan evidencing payment thereof, the statement of account, Exh.D., shown that a sum of Rs.654.105 has been paid by the plaintiff towards excise duty in relation to the finance to question. The amount paid towards the excise duty is evidently recoverable from the defendant and the claim thereto cannot be disputed. My finding, therefore, on this issue is that the plaintiff is entitled to recover the principal balance as shown in the statement of account, Exh.J., on 31‑12‑1992 with mark‑up thereon worked at the rate of 50 paisa per thousand per day. It is pertinent to note that the learned counsel for the defendants has conceded to decree to the above extent. In view of my finding on issue No.9, the plaintiff is entitled to decree in the sum of Rs.21,068,938.27 which includes mark‑up upto 31‑12‑1992 calculated at the agreed rate. The plaintiff has submitted such calculation in Court today. At this stage, the plaintiff and defendant No.l have submitted application under Order XXIII, Rule 3, C.P.C. containing terms of settlement reached between them. The request is made jointly by the learned counsels for the plaintiff and the defendants that the suit as between the plaintiff and defendant No.l be decreed in terms of the compromise and in relation to the remaining defendants, the law may take its own course. Although the compromise application, submitted belatedly seeks adoption of a singular course both the learned counsel jointly insist that in the interest of justice, the compromise be recorded in the terms of application. The application for compromise is signed by authorized officers of plaintiff‑Bank and one Zohaii Akhtar Usmani, Executive Director of defendant No.

1. The two learned counsel have also signed the application in token of acceptance of the terms. The execution of signatures is duly admitted by the two officers of the plaintiff‑Bank who are present in Court as well as the authorized representatives of defendant No.

1. The terms of compromise appear to be lawful. In the circumstances the application for compromise is accepted and the suit between the plaintiff and defendant No. l is decreed in terms thereof with no order as to costs. As regards defendants Nos.2, 3 and 4 who have been sued as guarantors, the plaintiff's suit is decreed jointly as well as severally in the sum of Rs.21,068.9382? with. mark‑up at the rate of 50 paisa per thousand per day from the date of institution of suit till payment. The plaintiff shall also be entitled to proportionate costs against defendants Nos.2, 3 and

4. The office is directed to assign C.M.A. number to the compromise application presented in Court today. Q.M.H./M.A.K./H‑84/K Suit decreed.