' MIAN HAMID FAROOQ, J.--- Union Bank Limited, through the filing of the instant appeal, under section 9 of the Banking Tribunals Ordinance, 1984, has partially called in question judgment and decree dated 18-4-1996, whereby the then Banking Tribunal, passed a decree for the recovery of Rs.8,92,354 with costs against the respondents.
2. Brief facts giving rise to the filing of the present appeal are that the appellant-Bank filed a suit for the recovery of Rs.14,40,569, against the respondents, before the then Banking Tribunal (since defunct) averring therein that at the request of respondent No,1, a Bank guarantee for Rs.1 million alongwith mark-up etc. Was issued on behalf of the respondent No,1 favouring Messrs Prudential Investment Bank Ltd., which guarantee was secured by the mortgage of property and the personal guarantees of the Directors of respondent No,1. Under the aforenoted arrangement, the appellant- Bank issued a bank guarantee No,152 dated 16-1-1994 for Rs.1 million favouring Messrs Prudential Investment Bank Ltd. , the respondent No,1, statedly, committed default in the arrangement with Prudential Investment Bank Ltd., who asked the appellant-Bank to encash the Bank guarantee and consequent thereto the appellant-Bank paid an amount of Rs.12,20,880 to the said Prudential Investment Bank Limited. After having made the payment, the appellant-Bank demanded the said amount alongwith mark-up etc. From the respondents and on their refusal the Bank filed the aforenoted suit for recovery.
3. Pursuant to the issuance of notices, as per section 6(2) of the then Banking Tribunals Ordinance, 1984, the respondents Nos.1,2 and 4 filed reply to the show-cause notices thereby pleading legal and factual controversies, however, it was admitted that, at best, they are only liable to pay the guaranteed amount of Rs.1 million minus the cash margin of Rs.107,646, already deposited by them with the appellant-Bank. Ultimately, the learned Banking Tribunal, after hearing the parties, agreed with the stance of the respondents and proceeded to pass a decree for the recovery of Rs.8,92,354 together with costs vide judgment and decree dated 18-4-1996, hence, the present appeal.
4. Learned counsel for the appellant-Bank has contented that the learned Banking Tribunal did not provide any opportunity to the appellant-Bank to rebut the defence of the respondents by leading evidence and that the Banking Tribunal erroneously and illegally accepted the defence of the respondents and passed a decree for Rs.8,92,354. It has further been contended that the appellant-Bank paid a sum of Rs.12,20,880 to the Messrs Prudential Investment Bank Limited on behalf of respondent No,1 and in addition to that the appellant-Bank is entitled for the recovery of the amount of mark-up and liquidated damages, thus, according to the learned counsel, the impugned decree deserves to be modified and the appellant-Bank is entitled for the decree of Rs.14,40,569.
' On the other hand, the learned counsel for the respondents, while reiterating the stance of the respondents taken before the then Banking Tribunal, has submitted that the Bank guarantee of Rs.1 million was issued and after deducting an amount of Rs.107,646, already deposited by the respondents with the appellant-Bank, the Banking Tribunal has rightly passed the decree in respect of the remaining amount of Rs.8,92,354.
5. Upon the examination of the record of the case, we find that the appellant-Bank issued a bank guarantee No,152 dated 16-1-1994 favouring Messrs Prudential Investment Bank Limited for a sum of Rs.1 million payable by the customer on or before 15-1-1995. It was undertaken through clause (1)(a) that the guaranteed amount shall be paid to the beneficiary together with all service charges, commissions, mark-up and all other dues, costs, charges and expenses payable by the beneficiary in terms of the agreement. It appears from the record that when the respondents committed default in terms of the arrangement, reportedly, entered into between the said Messrs Prudential Investment Bank Limited and the respondents, the beneficiary Bank invoked the terms of the bank guarantee, through letter dated 11-1-1995 requiring the appellant-Bank to encash the aforenoted bank guarantee and to pay a sum of Rs.12,20,880, which includes the principal amount, mark-up and the central excise duty. It further appears from the record that the appellant-Bank paid the said amount and in response thereto Prudential Investment Bank Limited, vide letter dated 15-1- 1995 addressed to the appellant-Bank, acknowledged the payment of a sum of Rs.12,20,880 from the appellant-Bank and thus, they returned/released the bank guarantee issued by the appellant- Bank, having been adjusted alongwith the mark-up and other dues. It is apparent from the record that on account of the acts and omission of the respondents, a sum of Rs.12,20,880 fell due against them, resultantly, Messrs Prudential Investment Bank Limited invoked the terms of the bank guarantee and consequent thereto, the appellant-Bank paid a sum of Rs.12,20,880 on behalf of the respondents. Thus, we are of the view that the appellant-Bank is entitled to recover the amount of Rs.12,20,880 after deducting an amount of Rs.107,646, already deposited by the respondents as a margin amount, as the said amount was paid by the appellant-Bank to the beneficiary/13ank on behalf of the respondents as per the terms of the bank guarantee, as noted above. In this manner, the outstanding amount against the respondents is worked out to be as Rs.11,13,234 (Rs.12,20,880--- Rs.1,07,646--- Rs.11.13,234) and the learned Banking Tribunal has erroneously passed a decree for the recovery of Rs.8,92,354. As a matter of fact, to our mind, a decree for the recovery of Rs.11,13,233 ought to have been passed instead of a decree for Rs.8,92,354 and now we are inclined to modify the impugned decree so as to grant a decree for a sum of Rs.11,13,234 instead of Rs.8,92,354.
6. So far as the claim of the appellant-Bank of Rs.2,44,176, in respect of the liquidated damages, the same is not permissible under the law. This Court in a case reported as Allied Bank of Pakistan Limited, Faisalabad v. Messrs Aisha Garments and others 2001 M LD 1955 has held that the Banks are not entitled to recover the liquidated damages. For the findings given and reasons recorded in the aforenoted case, we are not inclined to grant the amount of liquidated damages to the appellant-Bank, thus, the same is declined.
7. As regards the claim of mark-up, we do not find on record any mark-up agreement executed in favour of the appellant-Bank by the respondents. Even during the arguments, when the learned counsel was asked to show any mark-up agreement executed between the parties, despite his best efforts, he could not point out any such agreement. Upon the examination of the available record, we are unable to find any mark-up agreement or any other document showing that the respondents have ever undertaken to pay the mark-up to the appellant-Bank and at what rate, thus, the said claim of the appellant-Bank is also refused.
8. Upon the examination of the impugned judgment, we find that the learned Banking Tribunal erroneously passed a decree for the recovery of Rs.8,92,354, while as a matter of fact, as noted above, the appellant-Bank is entitled to the sum of Rs.11,13,234. We accordingly modify the said decree.
9. Upshot of the above discussion is that the present appeal is partially allowed and the impugned decree stands modified in the terms that the appellant-Bank is granted a decree for the sum of Rs.11,13,234 instead of Rs.8,92,354, as passed by the then Banking Tribunal. No order as to costs. partially.