2007 PLP 562 (CLD)

This appeal is directed against the judgment and decree dated 13-8-1999, whereby the suit filed by the respondent was decreed in favour of the respondent-Bank.

2. Brief facts leading to the filing of this appeal are that the respondent. No.1 filed a suit for recovery of Rs.76,70,115 against the appellants and respondents Nos.2 to

7. It is contended in the plaint that two separate finance facilities namely Export Re-finance Part-2 (E.R.F.) and Finance Against Foreign Bills (F.A.F.B.), were granted to the appellant-Company, which were secured by the guarantees and the mortgages by the other appellants and respondent Nos.2 and

7. And upon failure of the appellants and respondents Nos.2 to 7 to adjust the liability the instant suit for recovery of the aforesaid amount was filed. That as per the case of the respondent No.1-Bank as stated in the plaint, in respect of E.R.F. finance, a sum of Rs.25,00,000 was due as principal amount and a sum of Rs.2,68,675 was due as mark-up; totalling Rs.27,68,675 while in respect of F.A F.B. facility it was claimed that an amount of Rs.42,40,000 was due as a principal amount and a sum of Rs.6,61,440 on account of mark-up, thereby totalling Rs.49,01,

440. The defendants in the suit i.e. the appellants and respondents Nos.2 to 7 filed applications seeking leave to defend the suit. After hearing the parties the Banking Court seized of the matter dismissed the said applications and decreed the suit as prayed for vide the impugned judgment and decree dated 13-8-1999.

3. Learned counsel for the parties have been heard and the record requisitioned from the Banking Court perused.

4. Learned counsel for the appellants has challenged the impugned judgment and decree on three grounds; firstly, it is contended, that the bank legally could not recover the mark-up of cushion period; secondly, it is contended that the future mark-up has been awarded without taking into account that there were two facilities with separate rates of mark-up; and, thirdly, it 'is contended that the payments made by the appellants were not being taken into consideration.

5. Learned counsel for the respondents has controverted the contentions raised on behalf of the appellants. It is contended that no mark-up for the cushion period was included in the claim and in this behalf he referred to the statements of accounts appended with the plaint in order to establish that there is no debit entry of mark-up for the said cushion period therein. He has further contended that the future mark-up had been awarded on the average mark-up on the two facilities. The learned counsel acids that the payments, if any, made by the appellants towards the satisfaction of the decree may be adjusted but such exercise can only be carried out by the Executing Court and it is not the case of appellants in the PLA that any payments made prior to the institution of the suit were not included in the statements of accounts-on the basis whereof two suits were filed.

6. The matter of adjustment of payments, if any, made by the appellants is within the jurisdiction of the Executing Court and cannot form a subject-matter of this appeal. Furthermore, there can also be no escape from the fact that the future mark-up only has been awarded on the contracted rate and since there are two separate facilities with separate rates of mark-up, future mark-up must necessarily be awarded in terms thereof as has rightly been contended by the learned counsel for the appellants.

7. With reference to the disputed mark-up for the cushion period, no doubt there appears to be assertion in the plaint that such mark-up is included in the claim. However, the learned counsel for the appellants was unable to point out any specific debit entry for mark-up, which pertains to the cushion period. A perusal of the statements of accounts reveals that in the F.A.F.B. account mark-up was only being charged till 1995 while the agreement sued upon was executed in 1997. Similarly, in the E.R.F. account mark-up has been charged till 1998 in respect of agreement dated 13-3-1997. In the circumstances, contentions' of the learned counsel for the appellants, in this behalf, are not found on the record especially as the learned counsel has been unable to identify any specific debit entry that a sum Rs.4,79,000 as mark-up for the cushion period in F.A.F.B. account or a sum of Rs.1,27,392 as mark-up for the cushion period in E.R.F. account, as alleged. However, there can be no escape from the fact that there is assertion in the plaint with reference to the inclusion of mark-up for the cushion period. Some sort of defence in this behalf appears to have been made out insisting grant of leave to defend to the extent of the claim of mark-up of the cushion period however not unconditional. The upshot of above discussion is that the appellant is entitled to leave to appear and defend the suit with respect to the alleged markup for cushion period subject to the condition of furnishing the bank guarantee of the said amount. Such amount also liable to be deducted from the decree of the balance amount appears to be in accordance with law and not challenged by the counsel for the appellant. However, the future mark-up must obviously be charged at the contracted rate separately for the two facilities. The mark-up of the two facilities is mentioned in the requisite sanction advice and finance agreements sued upon in respect of E.R.F. and F.A.F.B. Facilities as 13% per annum and Paisas 60/1000 per day respectively. Consequently, this appeal is partially accepted. The decree of the Banking Court is modified in the following terms:-- that the Bank is 'entitled to a decree for Rs.70,63,723 along with mark-up @ 13% per annum on a sum of Rs.26,41,283 and @ Paisas 60/1000 per day on a sum of Rs.44,22,

440. Such mark-up shall be payable from the date of institution of the suit till its realization. Leave to appear and defend is granted in respect of the balance claim of the Bank amounting to Rs.6,06,392 subject to furnishing a bank guarantee to the satisfaction of the Banking Court. This appeal is accepted. The case remanded in the above terms. H.B.T./E-3/L??????????????????????????????????????????????????????????????????????????????????????? Case remanded.