' JAWWAD S. KHAWAJA, J.---This appeal impugns the judgment and decree dated 20-1-1999 passed by the Modaraba Tribunal, Lahore, whereby a sum of Rs.20,22,365, together with further mark-up and costs, was passed against the appellant/defendant in favour of the respondent Modaraba.
2. The admitted facts of the case are that the appellant obtained a Morabaha facility from the respondent Modaraba to the tune of Rs.15,00,000 which amount was disbursed to the appellant on 19-12-1996. The appellant was supposed to pay the said amount alongwith the agreed mark-up aggregating a sum of Rs.18,07,500, by 18-12-1997. However, the claim of the respondent-Bank is that the said amount has not been paid by the appellant as agreed. The respondent-Bank, therefore, filed a suit for recovery of Rs.2,022,365 alongwith mark-up and other expenses against the appellant on 15-9-1999. The appellant applied for leave to appear and defend which application has been rejected through the order dated 20-11-1999 and simultaneously the suit of the respondent has been decreed as prayed for.
3. It has been argued by learned counsel for the appellant that the respondent has charged excessive mark-up in the form of interest which is not permissible to a Modaraba under the law. In this behalf, it is contended that the Morabaha facility obtained by the appellant expired on 18-12- 1997. The respondent Modaraba, however, chose to delay the filing of its suit for recovery of the amount payable by the appellant. The suit for recovery was filed on 15-9-1999. The amount claimed by the respondent Modaraba in its plaint was Rs.2,022,365 alongwith mark up and other expenses. The claimed amount included an amount over and above the buy-back price agreed upon between the appellant and the respondent Modaraba. This contention seems to be well founded as it is based on the record.
4. The Morabaha facility, we note, was for an amount of Rs.15,00,000 and stipulated a buy-back price of Rs.18,07,500. It was this buy-back price which could have been recovered by the respondent Modaraba. However, as noted above, the Modaraba itself charged interest between the date of the expiry of the facility i.e. 18-12-1997 and the date of the filing of its recovery suit i.e. 15- 9-1999. An amount of Rs.3,07,500 by way of mark-up has already been received by the respondent Modaraba for the facility.
5. According to statement of account provided to us on behalf of the respondent Modaraba, an amount of Rs.5,22,365 being mark-up from the date of expiry of the facility till the date of the filing of the suit has been charged. Learned counsel for the appellant/defendant has argued that this amount constitutes interest and is impermissible on a Morabaha facility. This contention is well founded. Learned counsel for the Modaraba was not able to advance any valid argument to justify the claim for the aforesaid amount of Rs.5,22,365 by way of mark-up. He merely referred to the provisions of Order 37, C.P.C. To assert that interest was claimable under the said Order. This argument is wholly misconceived. It is only the procedure prescribed by Order 37, C.P.C., which is applicable to suits, filed by a Modaraba. The substantive provisions such as charging of interest cannot be deemed to be incorprated in the Modaraba Companies and Modarabas (Floatation and Control) Ordinance, 1980. This is particularly so in view of the express prohibition against interest contained in the said statute.
6. Learned counsel for the appellant also argued that the Modaraba Tribunal could not have awardea mark-up pendente lite and from the date of decree till realization of the decretal amount.
In support of this argument, learned counsel could only refer to the terms of the facility agreement between the appellant and the Modaraba, according to which a fixed amount of Rs.18,07,500 was stipulated as being payable by the appellant on account of the Morabaha facility availed by him. It is correct that the liability of the appellant under the Morabaha facility had been fixed by agreement between the parties. However, this fact per se, does not preclude the Tribunal from awarding compensation to the Modaraba for any breach of promise committed by the appellant resulting in delayed realization of the amount owed to the respondent Modaraba. The Modaraba Tribunal has, therefore, rightly awarded compensation to the Modaraba pendente lite and from the date of the decree till the realization of the decretal amount.
7. In the foregoing circumstances, the impugned decree is modified by holding that the amount of Rs.5,22,365 being mark-up for the period between the expiry of the Morabaha facility and the date of the filing of the respondent Modaraba's suit, is not payable by the appellant. As a consequence the amount of the decree is reduced from Rs.20,22,365 to Rs.15,00,000 together with agreed mark- up thereon from the date of filing of the suit till realization.