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Petitioner: Messrs CIE COMPUTERS through Proprietor and 2 others VS Respondent: NIB BANK LIMITED JUDGMENT
Court Name: Sindh High Court Judge(s): Aziz-ur-Rehman, Muhammad Saleem Jessar Title:Messrs CIE COMPUTERS through Proprietor and 2 others vs NIB BANK LIMITED
JUDGMENT
Reported As: 2020 P C T L R 1278, 2019 CLD 760 Result: Order accordingly Judgment JUDGMENT AZIZ-UR-REHMAN, J. The Appellants-Defendants feeling 'aggrieved' and 'dis-satisfied' with the impugned 'judgment' and `decree' both dated 12.06 .2013, passed in favour of Respondent Bank-plaintif f Bank, by Banking Court No.1, Hyderabad, in Suit No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computers and 2 others], have approached this court by way of filing the instant 1st Appeal with the following prayer[s]:- "i. Set aside the Impugned judgment and decree dated 12.06.2013 passed in Suit No.129/201 1. ii. Call on Record of proceeding of Suit No.129/201 1. Grant cost of proceedings to the Appellants. iii. Grant such other further/better relief/s as this Hon'ble Court may deem fit and proper in the interest of justice." 2. The precise relevant facts leading to the filing of the aforesaid 1st Appeal are as follows:- 3. The Respondent i.e. NIB Bank Limited., is a Banking Company incorporated under the Laws of Pakistan, having its' Registered Office at Muhammadi House I.I. Chundrigar Road, Karachi, and having a Place of business/branch at Saddar Hyderabad , as such, falls within the meaning of section 2(a) of the Financial Institutions [Recovery of Finances] Ordinance, 2001 [In short F10, 2001]. 4. The Appellate No.1-Defendant No.1 viz. Messrs CIE Computers is running its' business at Shop No.MB-08, Mezzanine Floor , Tayab Complex, Cantt: Area, Hyderabad, through its' proprietor Aqeel Hassan Khan availed Financial Facility[ies] from time to time from Respondent Bank. The Appellant-Defendant No.1 besides, being a sole proprietor of Appellant No.1, is a guarantor . The Appellant No.3, is a mortgagor in respect of the financial facility[ies] granted to and availed by Appellant No l, thus they are 'Customers' within the meaning of section 2(c) of the Financial Institutions [Recovery of Finances] Ordinance, 2001. 5. The Finance Facility granted to and availed by Appellant No.1, as per record, was renewed in the year, 2009, at its' request but, indeed, after execution of various documents duly 'signed' and 'executed' by the Appellants i.e.
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Sanction Letter , Agreement for finance, DP note, Guarantee, Memo of deposit of title deeds, Mortgaged deed, Irrevocable general power of attorney , Charge of bank lien, Letter of continuity , Letter of arrangement, Confirmation and undertaking etc. 6. The Running Finance Facility granted/r enewed in the year, 2009, of course, was at the request of the Appellants and knowingly it was mark-up based. The said finance facility in the sum of Rs.12,00,000 /- [Rupees twelve lacs only], though was fully availed but Appellants in their own wisdom either failed and/or avoided to liquidate the same, as per Agreement for Financing dated 30.07.2009 [Available at Page 47 of the court file]. The expiry date, as per said Agreement for Financing on Mark-up Basis was 30.06.2010 . The sale price as mutually agreed and fixed by the parties is Rs.12,00,000/- [Rupees twelve lacs only] and the purchase price also fixed mutually is Rs.14,75,280/- [Fourteen lacs, seventy five thousand, two hundred eighty only]. 7. Per assertions made in the Plaint, Appellant No.1, though had fully availed and utilized the said finance facility , as per Agreement For Finance on Mark-up Basis dated 30th day of July 2009 , but Appellant No.1-Defendant No.1, who was/is running business through its proprietor viz. Aqeel Hassan Khan, either failed and/or otherwise, ignored to repay the outstanding amount[s] and that too despite of time and again requests. On committing 'willful default', Respondent Bank-Plaintif f-Bank thus constrained to issue a Legal Notice of 22.02.201 1 to the Appellants- Defendants for repayment of Bank's dues . The Appellants-Defendants, nevertheless, despite of their commitments/ promises, however , failed to clear the outstanding amount due to the Respondent Bank-Defendant Bank. 8. The particulars/details of the amounts of finance facility granted to and availed by Appellant No.1-Defendant No.1, the amounts repaid to the Respondent Bank-Plaintif f Bank, the balance outstanding principal amount and other financial charges, as given in the Plaint and required as per section 9(3) of Financial Institutions [Recovery of Finances] Ordinance, 2001, are as follows:- a.Amount of Finance Principal availed as per statement of Account.Rs.1,200,000 b.Amount deposited by defendant towards Principal as per statement of account on various dates.(-)Rs.7,047/51 c.Amount deposited by defendant towards markup relating to finance as per arrangements(-)Rs.430,917/97 d.Amount of mark-up outstanding from 10.11.2006 to 30.06.2011(+)Rs.803,068/40 Total outstanding amount Rs.1,565,102/92 9. Per 'assertions' made in Para-15 of Plaint , the 'cause of action' had arisen in favour of the Respondent Bank- Plaintif f-Bank and against the Appellants-Defendants on dates when, various documents were voluntarily signed and executed, finance facility was granted to and availed by the Appellants -Defendants and finally when, Appellants-Defendants committed 'willful default' vis-a-vis repayment of Bank's dues. 10. The Respondent Bank-Plaintif f Bank thus constrained to file a Recovery Suit against the Appellants-Defendants inter alia for recovery of the outstanding amount in the sum of Rs.1,565,102/92, on 18.07.201 1, under section 9 of Financial Institution [ Recovery of Finances ] Ordinance No. XL VI of 2001, with the prayers as follows:- "a. Decree for Rs.1,565,102/92 may be passed against the defendants Nos. I and 2 jointly and severally along with cost and Cost of fund as provided under Ordinance 2001 till realization of amount. b. In case defendants fails to repayments of decretal amount, Mortgaged property belonging to defendants as mentioned in para No.7 of the plaint be ordered to be sold out for realization of decretal amount and also for Sale of movable and immovable property of the defendants. c. In case proceeds of sale are found insufficient for amount under decree than money decree for remaining amount. d. To grant/award 20% liquidated damages. e. The cost of the suit be saddled on defendants. f. Any other relief[s], which this Honourable Court deems fit, just and proper ."
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11. On filing of the aforesaid suit on 18.07.201 1, process under section 9(5) of FIO. 2001, were issued to the Appellants-Defendants by all prescribed modes including publication in daily Newspapers i.e. 'The Nation' Karachi , dated 04.08.201 1 and Daily 'Jang' Karachi , dated 03.08.201 1. In response Appellants Nos.2 and 3-Defendants Nos.2 and 3. did appear and contest the Suit bearing No.129 of 2011 [NIB Bank Limited v. Messrs CIE Compu ter and another ], by way of filing two [2] separate Applications for Leave-to-Defend under section 10 of Financial Institutions [Recovery of Finances] Ordinance, 2001 [In short F10, 2001]. The said Applications for Leave-to- Defend, however , were later on dismissed for 'non-prosecution' vide order dated 07.02.2013 , passed by Banking Court No.I, Hyderabad. 12. Nevertheless, Defendant No.3-Appe llant No.3, as reflects from the record had thereafter , opted to file an Application under Order IX, Rule 9 read with section 151, C.P.C., on 07.03.2013 for re-calling of the earlie r order dated 07.02.2013 , whereby , the two [2] Leave-to-Defend Applications, filed by Appellants Nos.2 and 3/Defendants Nos.2 and 3, were dismissed for 'non-prosecution'. The said Applicatio n under Order IX, Rule 9 read with section 151, C.P .C. however , was also dismissed by Banking Court No.1, Hyderabad, vide its' order dated 30.05.2013 . 13. Subsequently , on 12.06.2013 when, the Bank's Recovery Suit bearing No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computer and another ], came-up before the court then, learned Banking Court-I, Hyderabad, perhaps keeping in view the nature of the Plaint and Suit, having been duly verified on Oath and supported with various documents duly signed and executed i.e. Sanction Letter , Agreement for finance, Demand Promissory Note, Guarantee, Memo of Deposit of Title Deed, Mortgaged deed, Irrevocable genera l power of attorney , Charge of bank lien, Letter of continuity , Letter of arrangement, Confirmation and undertaking and also annexed/supported with duly certified statement of accounts/Break-ups, finally the Bank's Recovery Suit bearing No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computer and another], was decreed in favour of the Plaintif f-Respondent Bank and against the Defendants-Appellants that is to say , jointly and severally in the sum of Rs.15,65,102/- with costs. 14. Besides, 'cost of funds' in terms of section 3 of the Financial Institutions [Recovery of Finances ] Ordinance, 2001 [In short. F10, 2001], was also awarded i.e. from the date of 'default' , till realization , as certified from time to time by State Bank of Pakistan [In short SBP]. The prayer of Respondent Bank-P laintif f-Bank for awarding of the liquidated damage , however , was declined. Per Judgment and Decree both dated 12.06.2013 , the Appellants- Defendants were also directed to pay the decretal amount within thirty [30] days i.e. w.e.f. 12.06.2013 , otherwise if, the decree passed remained un-satisfied then, in such eventuality the subject mortgaged property i.e Shop No.60, constructed on Mezzanine Floor , part of Plot Nos.44, 44A and 44B, Survey No.57, Tayyab Complex, situated in Civil Lines, Cantonment Area Hyderabad, with construction fixtures and furniture thereon, was ordered to be sold towards' satisfaction of the decretal amount . 15. The Appellants-Defendants thus feeling 'aggrieved ' and 'dis-satisfied' with the judgment and decree both dated 12.06.2013 , have approached this court by way of the instant 1st Appeal No.44 of 2013 filed on 05.08.2013 , 'inter alia' with a prayer to set-aside the impugned judgment and decree, passed by the Banking Court No.1, Hyderabad, in Bank's Suit No.129 of 201 1 [NIB Bank Limited v . Messrs CIE Computer and another]. 16. On 24.09.2018 , when, the above Ist Appeal came-up before us then we heard Mr. Muhammad Asif Arain, learned counsel for the Appellants and Mr. Altaf Ahmed Shahid Abro, learned counsel for Respondent-Bank and also scanned the record available before us with their valuable assistance. 17. Mr. Muhammad Asif Arain, learned counsel for the Appellants while, arguing the instant 1st Appeal, forcefully contended that the Respondent-Plaintif f Bank's claim[s] put forward in the suit against the Defendants was not only exaggerated but also not maintainable. Per learned counsel, the Appellants-Defendants in no manner are liable to pay such an exaggerated , exorbitant and un-warranted claim of the Respondent-Bank. Per learned counsel, the entire claim of Respondent Bank-Plaintif f Bank claimed in the Bank's recovery suit was based on `Mark-up' , `Mark- up over Mark-up' , liquidated damages and other so called charges etc. The Respondent Bank-Plaintif f Bank, as such, is not entitled to claim such impermissible amounts under the law. Respondent-Bank, as urged, by Mr. Muhammad Asif Arain, in no event, is entitled to recover the said illegal claimed amounts from the Appellants- Defendants or any of them.
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18. According to the Appellants' couns el, even the amounts paid to the Respondent-Bank, have not been appropriately adjusted towards'/against the principal amount . Rather , the paid amounts, as urged, have been adjusted/appropriated against the un-lawf ul, un-authorized `Mark-up' , `Mark-up over Mark-up' and/or against other amounts of charges. The Respondent Bank-Plaintif f Bank, as such, in clear cut violation of the Agreement For Financing dated 30.07.2008 [Annexed at Page 47 of the court file] cannot be allowed either to generate for its benefit illegal revenue and/or otherwise, charge 'Mark-up' beyond the expiry date i.e. 30.06.2010 of Finance Agreement dated 30.07.2009 . Any such `profit/mark-up' charged by Respondent Bank-Plaintif f Bank besides, being un-called under law cannot be allowed to be recovered from the Appellants-Defendants or any of them in clear violation of law . 19. Per the Appellants-Defendants' stand since, the claim put-forward by the Respondent Bank-Plaintif f Bank was/is exorbitant and exaggerated, as such, it would have not been allowed by Banking Court-1, Hyderabad. The actual amount due and payable by the Appellants-Defendants to Respondent-Ba nk, per learned counsel, for the Appellants-Defendants, is very much lesser than the decretal amount of Rs.1,565,102 /-. According to Mr. Muhammad Asif Arain, the claim of Respondent-Plaintif f Bank against the Appellants-Defendants, is not only vindictive but has been designed for the benefits of Respondent-Plaintif f Bank to generate un-warranted revenue and earn thereon, more and more profits for itself, however , at the cost of customers . The entire claim of Respondent Bank-Plaintif f Bank thus besides, bogus is false. The same as such, in no event, can be recovered from the Appellants-Defendants jointly and/or severally . 20. Mr. Muhammad Asif Arain, learned counsel for the Appellants next urged, that all the 'subject documents' were got signed in blank by bank's officials. The claim of the Respondent Bank on this ground, as well, cannot be allowed or the decretal amount otherwise, be permitted to be recovered under the garb of a 'DECREE ' obtained 'inter alia' on the basis of blank documents. Per learned counsel, the alleged 'BLANK DOCUMENTS' have been filled-up later on, by the Bank's officials with artificial and bogus figures of their choice. Moreover , the Respondent Bank-Plaintif f Bank, despite of time and again requests has also failed to provide 'statement of accounts' to the Appellants-Defendants. The principal amount left, amount deposited by Appellants-Defendants and the amount of outstanding mark-up , as such, could not be ascertained properly . The claim of Respondent Bank-Plaintif f Bank, under such scenario, is presumed to be a 'bogus', 'doubtful' and exaggerated. 21. Lastly , learned counsel for the Appellants prayed for setting aside the impugned judgment and decree both dated 12.06.2013, passed by Banking Court-I, Hyderabad, in Suit No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computer and another] and of allowing the instant 1st Appeal consequently . 22. On the other hand, Mr. Altaf Ahmed Shahid Abro, learned counsel for Respondent Bank-Plaintif f Bank strongly opposed the stand taken by the Appellants-Defendants' counsel, by submitting that Leave-to-Defend Applications , as framed and filed by Mr. Aqeel Hassan Khan son of Habib Khan who, besides a sole proprietor of Messrs CIE Computers-Appellant No.1, is Appellant No.2 in his capacity as a guarantor in respect of the finance facility [ies] granted to and availed by Appellant No.1-Defendant No. l. The another Leave-to-Defend Application , filed by the mortgagor/Appellant No.3, was also not maintainable, as both the said Applications for Leave-to-Defend were against the mandatory provisions of section 10 of F.I.O., 2001. Both the said Applications for Leave-to-Defend as being against provisions of section 10 of F.I.O.. 2001, even otherwise, as well, were liable to be rejected in terms of subsection (6) of section 10 of F .I.O., 2001 [Ordinance No.XL VI of 2001]. 23. According to Mr. Altaf Ahmed Shahid Abro, learned counsel for Respondent Bank, the suit instituted by the Plaintif f Bank-Respondent Bank on 13.07.201 1, was not only within time but also quite in accordance with the mandatory provisions of section 9 of F.I.O., 2001. Per learned counsel, sections 9 and 10 of F.I.O., 2001, of course, oblige the parties to the suit to plead inter alia nature of accounts or head of accounts. In case of failure to comply with the mandatory provisions of law, parties to the suit then to face the consequ ences. Mr. Altaf Ahmed Shahid Abro, Advocate, further contended that all the documents annexed with Plaint/Memo of Appeal herein, and relied upon by the Respondent Bank-Plaintif f Bank, are not only genuine but were also duly filled-up at the time of signing of such documents. For this obvious reason, such documents were not only singed by Defendants-Appellants but the same were also returned to the Plaintif f Bank-Respondent Bank after the same were signed.
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24. Per learned counsel for Respondent Bank, all the payments received by Respondent Bank, of-course, have been duly 'credited' in the customer's Account[s] maintained with the Respondent Bank. The Appellants-Defendants even otherwise, have failed to pin-point any entry in the certified statement of account[s], as being false or incorrect. It is needless to say, a Bank's customer always obtain statement of account[s] inter alia for Income Tax purposes and preparation of Balance Sheet. In the case in hand, the Appellants-Defendants before filing of the recovery Suit No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computer and another], have never raised any objection whatsoever vis-a-vis the alleged signing of the documents in blank. Likewise, no any entry of debt or credit in the statement of account[s] has been ever challenged/questioned. The raising of such objections 'at this belated stage' are not only after thought but also seems an attempt to forestall the recovery of decretal amount, after passing of the DECREE in favour of the Plaintif f Bank-Respondent Bank on 12.06.2013. 25. With regard to the assertions made by the Appellants-Defendants that any of the amount paid by the Appellants-Defendants and received by Respondent Bank-Plaintif f Bank as alleged has been adjusted against `Mark-up' , `Mark-up over Mark-up' amounts, Mr. Altaf Ahmed Shahid Abro, Advocate while, controverting such allegations as being false, forcefully submitted that all the amounts paid to and received by Respondent Bank- Plaintif f Bank, have been rightly adjusted against the outstanding 'principal amount' and `Mark-up amount' . Per learned counsel, in this regard, no any illegality , as contended by learned counsel for the Appellants, has been committed by the Respondent Bank-Plaintif f Bank. Per learned counsel for Respondent Bank, the stand as taken by the Appellants-Defendants on the face of record is not only mis-conceived but also mis-leading. 26. Heard and record perused. 27. Before proceeding further , it would be proper to refer to and reproduce herein, subsection (3) of section 9 and subsections (3), (4), (5) and (6) of section 10 of the Financial Institutions [Recovery of Finances ] Ordinance, 2001 [In short F.1.0., 2001 ], which provisions are not only mandatory but also oblige parties to the suit to identically plead/mention the nature of accounts/heads of accounts. Being relevant, the provisions of section 9(3) and section 10(3), (4), (5) and (6) of F .I.O., 2001 are reproduced at (a) and (b) respectively here-in-below:- (a) "9. Procedure of Banking Courts :- (1)............... (2)............... (3) The plaint, in the case of a suit for recovery instituted by a financial institution, shall specifically state:- (a) the amount of finance availed by the defendant from the financial institution; (b) the amounts paid by the defendant to the financial institution and the dates of payment; and (c) the amount of finance and other amount relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit. (b) 10. Leave to Defend:- (1)...................... (2)..................... (3) The application for leave to defend shall be in the form of a written statement, and shall contain a summary of the substantial questions of law as well as fact in respect of which, in the opinion of the defendant, evidence needs to be recorded. (4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following (a) the amount of finance availed by the defendant from the financial institution; the amount paid by the defendant to the financial institution and the dates of payments; (b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit; (c) the amounts of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit. (d) the amount if any which the defendant disputes as payable to the financial institution and fact in support thereof;
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Explanation:- For the purpose of clause (b) any payment made to a financial institu tion by a customer in respect of a finance shall be appropriated first against other amount relating to the finance and the balance, if any, against the principal amount of the finance. (5) The application for leave to defend shall be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him. (6) An application for leave to defend which does not comply with the requirement of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement." [Underlining is ours] . . . 28. From bare perusal of the aforesaid provisions of law, it reflect that the Financials Institutions and Customer[s] are under a legal obligation to particularly state/plead in clear words the amount of finance availed by a Defendant from Financial Intuition, the amount of finance paid by the Defendant to the Financial Institution and dates of payments besides, other amounts pertaining to the finance and payable by a Defendant to the Financial Institution/Bank upto the date of Institution of the Suit. Apart from the above, a Defendant has been saddled with further responsibility not only to mention/specify the amount of finance if any, which the Defendant disputes as payable but also the facts in support thereof. 29. The Leave to Defend Application[s] available on record if, seen in juxta-position of aforesaid mandatory provisions of law then one can easily reach at the conclusion that the said two [2] Leave-to-Defend Applications filed by the Appellants Nos.2 and 3 [Defendants Nos.2 and 3] before Banking Court No.1, Hyderabad, in Suit No.129 of 2011 [NIB Bank Limited v. Messrs CIE Computer and another], were also not maintainable and liable to be rejected under subsection (6) of section 10 of F.I.O., 2001, due to non-fulfilling the mandatory requirements under subsections (3), (4) and (5) of section 10 of F.I.O., 2001. In the case in hand, it is significant to note, the two [2] Leave-to-Defend Applications filed by the Appellants Nos.2 and 3, as reflects from the impugned Judgment and Decree both dated 12.06.2013 , were dismissed for `non-prosecution' on 07.02.2013 . Even, the Restoration Application filed thereafter , by Appellant No.3/Defendant No.3, under Order IX, Rule 9, C.P.C., was also dismissed on 30.05.2013 . 30. In the above scenario, being relevant reference can be made to the case of AppoloT extile Mills Ltd. and others v. Soneri Bank Ltd. [PLD 2012 SC 268 ] wherein, it was observed as follows:- "19. In this case, the application for leave to defend the suit filed by the petitioners did not fulfil the requirements of section 10(3), (4) and (5) of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001. It was admittedly not in conformity with the said mandatory provisions. No cause or the reason for inability to comply with said requirements was shown. Instead it was expressly admitted by the learned Senior Advocate Supreme Court for the petitioners before the High Court and also before us that the petitioners failed to fulfil the mandates of the said provisions and did not plead the required Accounts. The petitioners/defendants thus attracted the prescribed legal consequences of:- (i) Rejection of their leave petition under section 10(6); (ii) Non-entitlement under section 10(1) to defend the suit for not obtaining leave to defend the suit in terms provided for in section 10; (iii) The allegations of fact in the plaint were deemed under section 10(1) to have been admitted by them; and (iv) A judgment and decree against them and in favour of the plaintiff bank under section 10(1) and (1 1) ibid. 31. As far as, the contention of the Appellants-Defendants' counsel regarding signing of documents in blank , is concerned, the same besides, being baseless, without any foundation is also contrary to the record available before us. All the documents available on record are duly filled-up and signed. The Appellants-Defendants, it is worth to mention herein have not denied the…
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