' MIAN SAQIB NISAR, J.--On 25-7-2000, the respondent-Bank, brought a suit for the recovery of an amount of Rs,1,14,953 against the appellant on account of its outstanding due for the Credit Card Facility, provided to the defendant-appellant. The appellant, unsuccessfully applied for leave to appear and defend, and through the impugned judgment and decree, dated 10-4-2001, the suit has been allowed, hence this appeal.
2. Learned counsel for the appellant, though, has not denied the availing of the Credit Card Facility, but has taken exception to certain amounts, such as Service Fee, Late Charge and other charges, claimed by the bank in the suit and awarded in the decree. It is stated by the learned counsel for the appellant that the amount at the rate of 3% charged as Service Fee, is neither due to the respondent under the terms of facility, nor permissible under the law. As regards the late payment charges, it is submitted that the amount is purely in the nature of interest, which under the Islamic Modes of Financing, is prohibited, therefore, any such claim of the bank is illegal. For the last category i.e. Miscellaneous charges, the objection is that these are unjustified.
3. Vide order dated 22-1-2003, we have appointed Messrs Dr. Pervaiz Hassan and Salman Akram Raja, Advocates, as amicus curiae, to assist the Court on the question, whether the Service Fee claimed by the bank was in the nature of interest or for the services rendered by the bank. The learned counsel for the parties and the learned amicus, have mainly addressed the Court on the above question.
4. Mr. Umer Atta Bandial, Advocate, learned counsel for the respondent-Bank, has in detail, explained to us as to how the Credit Card Facility is provided and what steps are taken and the services are rendered by the bank at different stages in the process of the transactions, conducted by the card-holder in using the credit card. On the basis of above, and in the light of clause 5.1.2. Of the Terms and Conditions, settled between the bank and the credit card holder, the charging of service fee has been justified. Both the learned amicus, have also supported the submissions of Mr. Umer Ata Bandial, Advocate, and have argued that from the time, the facility is applied by the cardholder, till the realization of amount from him, the bank provides extensive services to the holder and the agreement amount at the rate of 3% p. m. Is chargeable on account of such services rendered, and is not an interest.
5. As regards the late payment charges, learned counsel for the respondent-Bank, in view of trivial amount of Rs,4,992 'claimed in the suit, and to avoid further complication, without conceding, that the bank is not entitled to claim this amount, has stated to withdraw the bank's claim in respect thereof. Thus, to this . Extent, there remains no issue between the parties.
6. For the other/miscellaneous charges, the learned counsel for the appellant has not been able to show any illegality in that behalf, because most of the amounts in this category, as per the statements, are either the payments of the membership annual fee, which the appellant is obliged to pay under the agreement, or are the cash transactions, which the appellant had made on the basis of the credit card. Undoubtedly, these amounts are due to the respondent-Bank.
7. Now coming back to the question, whether the service fee is in the nature of interest or otherwise.
As explained by Mr. Bandial and not controverted by the learned counsel for the appellant, the bank has a separate and independent set up for the purposes of providing credit card facility; this independent department of the bank starts providing service to the customer, the moment a customer approaches the bank for the grant of a credit card, this includes, the investigation about the eligibility and credit history and ability of the customer for availing the facility; the entering into an agreement in that regard with the customer; the issuance of the credit card; A making the arrangements with the concerns, where the card can be utilized; providing on-line facilities to such concerns to verify about the validity and credit position of the card holder; collecting/receiving documents/vouchers for the transaction made by the customer, while using the card; making payment to the concerns for utilizing the card; maintaining the accounts, and sending the bills/ statements to the holder etc. All these steps come specifically within the realm of rendering/providing services to the card-holder. Moreover, according to clause 5.1.2. Of the terms and conditions of the facility, which are duly accepted by the card holder, reads as follows:- "5.1.2. If the card member effects payment of any amount less than the current balance then outstanding on or before the applicable payment due date. The card member agrees to pay a service fee of 3% (or such other percentage as the bank may specify from time to time) of the Current Balance then outstanding in the Card Account detailed in the Statement Of account to which such payment relates."
8. Thus, it is clear from the above that, not only extensive services at different stage, are provided by the bank to the card holder, but in acknowledgment of such services, the holder has also agreed to pay a fixed service fee to the bank. Therefore, the amount charged in this behalf, to our mind, is not the interest, but a fee for the services rendered in the terms of the agreement between the parties. Therefore, the argument of the learned counsel for the appellant that the service fee is interest, is repelled.
' Before parting; we may extend our appreciation for the valuable assistance rendered by Dr. Perviaz Hassan and Mr. Salman Akram Raja, Advocates, in explaining and elaborating the nature, and various dimensions of the credit card facility.
' In the light of above, this appeal has no merits and is hereby dismissed. However, as the learned counsel for the respondent-Bank has stated to withdraw the claim of the bank to the tune of Rs,4,992, the late payment charges, therefore, to this extent, the decree of the Banking Court, is modified.