1. No leave to defend application has been filed on behalf of the defendants Nos,2, 3 and 8. It is, however, pointed out that the defendants Nos,2 and 3 have expired. Mr. Zubair Qureshi does not press his case against the defendants Nos,2 and 3. The suit is thus dismissed as against the said defendants. The suit to proceed ex parte against the defendant No,8.
2. This application (C.M.A. 6843 of 2000) for leave to defend the present suit has been filed on behalf' of the defendants Nos,1, 4, 5, 6 and 7. The counsel for the said defendant has not appeared in Court since almost the beginning of the proceedings despite due intimation notice being sent to him. Today also he is not present. I shall however, take up this application on its own merits. It is the case of the said defendants that the bank has not come to this Court for recovery of their dues with clean hands. It is also their case that the case is barred by limitation. The said defendants also state that the amounts in the statement have been manipulated which can only unfold during the course of a complete and full trial. It is also their case that, mark-up beyond the period of facility have been added which amounts to interest. It is the case of the said defendants that the said Mehran Bank (now merged into National Bank of Pakistan, the plaintiff) were charging the mark-up at the rate of 54% wherefore, it amounted to charging on a regular basis an amount which could be termed only as 'Riba'. The said defendants have further added that the defendant was not allowed to avail facilities/limits which had been granted due to the said bank facing liquidity problems which caused serious losses and prejudice to them. A letter has been filed by the said defendants addressed to Mehran Bank Ltd., bearing a signature of receipt but without any rubber stamp of the bank to that effect. It is the case of the said defendants that it is because of the bank itself namely, the plaintiff that their actions have caused loss to them which according to them is reflected in the various accounts that have been filed. All these are true but the question categorically is that they have not denied the transaction of having availed the facility. In fact, Annexure 'J' has been filed to the application which in itself is an acknowledgement of liability and request has been made for restructuring the finances. In fact, the bank has advised them to approach the lead bank. Further a letter has been stated to have been issued by Galaxy Textile Mills for revival of a sick unit. This also admittedly shows that the unit, had become sick in the letters filed there is nothing to show that any cause of loss was on account of any default of the bank.
Further there is no allegation on the part of the defendants in any of the said letters against the bank. In view of the above, I do not find any merits in the application. There is no genuine or bona fide dispute.. Leave therefore, cannot be granted. Application is thus dismissed.
3. On account of dismissal of the application for leave, I proceed to pass judgment on merits in suit.
The present suit has been filed against the defendants on the basis of an agreement dated 10th March, 1992, wherein repurchase price was stated to be Rs,23,996,750. The plaintiff had disbursed the aforesaid amount and on the date of the expiry of the said agreement, less the mark-up charged to arrive at the repurchase price the total outstanding amount came to Rs,4,858 million.
The entire mark-up liable to be paid by the defendant is Rs,4.997 million wherefore the total claim payable by the defendants to the plaintiff is Rs,8.845 million under the said agreement.
Subsequently, another agreement was entered into which was in fact, a rescheduling agreement.
However, such was also on account of enhancement granted to the said defendants. Such agreement was entered into on 27th December, 1993 wherein the sale price was given at Rs,41.00 million with repurchase price at 47.570 million. In fact the statement of account shows that a sum of Rs,17.324 million was actually disbursed which included the aforesaid amount of Rs,4.858 million.
The said amount of Rs,4.858 million cannot be taken into account as has been detailed above. The said amount of Rs,4.858 million is therefore, deleted, and the amount disbursed as sale price is therefore, in fact only Rs,12.466 million. This is only amount on which a repurchase price therefore, can be calculated. The mark-up is calculated at 18% of the sale price i.e. Rs,12.466 million to arrive at a repurchase price. The mark-up therefore, liable on this amount could only be Rs,2.244 million.
The repurchase price would thus be Rs,14.710 million. The said amount of Rs,14.710 million is therefore, payable under the second agreement. The total amount liable under the first and second agreement would therefore come to Rs,23.555 million. The excise duty is payable at the rate of 1/12th of 1% of the amount outstanding which comes to Rs,0.02 million. The total amount therefore payable by the defendant to the plaintiff is Rs,23.575 million.
' It is stated that the defendants Nos,2 and 3 have expired whereas the defendants Nos,4, 5, 6 and 7 in addition to their being legal heirs are also guarantoRs, The said defendants Nos,4 to 7 are also therefore liable under the letter of guarantees dated 10-3-1992 and 27-12-1993. Admittedly the defendant No,8 is neither borrower nor guarantor and therefore, is not a customer within the meaning of law. The, said defendant No,8 is therefore not liable to pay the said amount. In view of the above the suit is decreed against the defendants Nos,1, 4, 5, 6 and 7 for a sum of Rs,23.575 million jointly and severally. The suit is also decreed for sale of the mortgaged properties for the said amount. The suit is also decreed for the sale of hypothecation stock as mentioned in the plaint.
' As the defendants Nos,2 and 3 have expired the suit has already been dismissed against them, and the defendant No,9 has been struck off from the array of defendants vide order dated 22-1- 2001, no order is passed therefore, against him. However, as observed earlier no case has been made out against the defendant No,8. In fact he has been incorrectly and wrongly joined in as defendant. He is neither borrower nor customer. The suit has been wrongly filed against him. No doubt he has not appeared, but his name would have appeared in the publication. Such wrongful act cannot be allowed by responsible person, especially by banks. There is no explanation why he has been impleaded. It is only said that he is a director. Being a director, it is by now well established that they cannot bring him within the definition of 'Borrower' or 'Customer'. The plaintiff is liable to be penalized. The suit is dismissed against defendant No,8 with penalty of Rs,50,000 payable by the plaintiff to the said defendant No,8 with maximum compensatory costs under section 35-A, C.P.C., also payable to the defendant No,8. The defendant No,8 is free, in addition to the above, to take action as may be prescribed by law.
' At this stage, whilst I was about to conclude the judgment that a copy of fax has been received by Mr. Muhammad Shan Gul and Associates that, he is unwell. The present case has been proceeded, and despite the said application now, as he has otherwise not attended this Court also prior to this date, and the order has already been passed.
' The report of investigation has been filed. I am not convinced with the reasons given. Maximum compensatory costs are awarded against the plaintiff under section 35-A, C.P.C. To its maximum payable to the defendant No,8. However, the defendant No,8 is free, in addition to the above, take action if he so chooses in accordance with law.