' SYED JAMSHED ALI, J.---The judgment and decree dated 28-10-2002 passed by the learned Banking Court No,IV, Lahore has been assailed in this appeal. It. Arises out of the following circumstances.
2. On 3-2-1994, the Agricultural Development Bank of Pakistan (hereinafter referred to as the bank) filed a suit for the recovery of an amount of Rs.75,42,952. An amount of Rs.48,25,000 was advanced to the company, appellant No,1, while the other appellants and one Syed Mahmood Ali Bokhari deceased (defendant No,2 in the suit) were the guarantors. The aforesaid finance was advanced under the buy back agreement dated 15-2-1987. There was, however, a patent error in the said buy back agreement inasmuch as that the sale price and the purchase price was the same i.e. Rs.48,25,000. Vide letter dated 5-4-1993 of the respondent-Bank the appellants were informed that the purchase price was Rs.81,06,004. The case of the bank was that according to the sanction advice 15 % mark-up was also agreed to. The appellants filed an application for leave to defend the suit which was dismissed vide order dated 28-10-2002. The learned Banking Court found that the total amount recoverable by the bank was Rs.75,42,952 and according to the statement of accounts, a total amount of Rs.43,45,474 had been repaid by the appellants leaving an unpaid balance of Rs.32,07,478. Accordingly, the suit of the respondent-Bank was decreed for a sum of Rs.32,07,478 along with the costs of the fund under section 3 of the Financial Institutions (Recovery of Finances) Ordinance (No,XLVI of 2001).
3. The learned counsel for the appellants contends that the statement of accounts was not read in its entirety and only the payments made by the appellants during the pendency .Of the suit were taken into consideration. He invited our attention to the said statement of accounts according to which the following payments were made by the appellants:-- Sr.No. DatePrincipal (Credit)Return (Credit)Other (Credit)
1. 11-03-1987 50555.00
2. 14-03-1987 31712.00
3. 11-08-1987 26711.00
4. 02-11-1987 32000.00
5. 16-11-1987 26000.00
6. 16-11-1987 20210.00
7. 22-11-1987 25000.00
8. 08-03-1988 24579.00
9. 31-05-1988 261960.00
10. 31-05-1988 138040.00
11. 26-06-1989 216671.00
12. 26-06-1989 125979.00
13. 21-06-1990 126294.00
14. 21-06-1990 443706.00
15. 04-02-1991 24900.00
16. 27-06-1991 124837.00
17. 27-06-1991 425263.00 18 27-02-1992 18443.00
19. 27-06-1991 24900.00
20. 27-02-1992 55057.00
21. 30-06-1996 1732484.00
22. 16-11-1999 351699.00
23. 16-11-1999 1857546.00
24. 16-11-1999 393755.00 Total 1275351.00 4323661.00 959289.00 Grand total 6558301.00 ' He maintained that against the claim of the bank for an amount of Rs.75,42,952 a total amount of Rs.65,58,301.00 had been paid leaving a balance of Rs.9,84,651 which amount the appellants were prepared to pay.
4. On the other hand, the learned counsel for the respondent-Bank defended the impugned judgment and decree. He maintains that according to 15% agreed markup the liability of the appellants had accordingly been worked out. He further submits that in any case, the respondent- Bank was also entitled to the costs of fund on the balance outstanding amount from the date of the default i.e. 22-8-1993 when the last instalment was required to be paid.
5. The submissions made by the learned counsel for the parties have been considered. The learned Banking Court, while decreeing the suit of the respondent-Bank for a sum of Rs.32,07,478, did not take into consideration the payments made by the appellants before the institution of the suit. The chart in para.3 of the judgment is based on the statement of accounts placed on the record by the bank itself which supports the contention of the learned counsel for the appellants that the outstanding amount against them was Rs.9,84,651. The contention that the respondent-Bank was entitled to 15% mark-up on the basis of the sanctioned advice is not acceptable for the reason that the buy back agreement was in the nature of Bai-muajjal, therefore, claim to mark-up was not sustainable and the liability of the appellants was to be determined according to the buy back agreement. The said agreement gave out a schedule according to which the total amount payable by the appellants was Rs.75,42,952. This included an amount of Rs.27,17,952 over and above the principal amount. Therefore, the bank was not entitled to recover anything beyond the said amount.
6. As far as grant of costs of fund is concerned, we note that the recovery suit in the present case was filed on 3-2-1994 when Banking Tribunals Ordinance, 1984 was in force. There was no provision in the said statute for accrual of further liability outside the terms of the buy back agreement as is visualized by the cost of funds in terms of section 3 of the Ordinance XLVI of 2001. The suit was filed long before the promulgation of the Ordinance XLVI of 2001 while finance in this case was extended pursuant to a buy back agreement executed on 15-2-1987. We are of the view that neither under the buy back agreement executed in this case nor under the Banking Tribunals Ordinance, 1984, whereunder proceedings were initiated for recovery of dues there is room for awarding cost of funds. Furthermore, the provisions of section 3 of Ordinance XLVI of 2001 are not procedural in nature because they impose a pecuniary burden on a defaulting customer/judgment-debtor that amounts to a substantive obligation. Nothing in the express provisions of section 3 of the said Ordinance suggests retrospective application nor does the law favours substantive obligation.
Accordingly, we find that the provisions of section 3 of Ordinance XLVI of 2001 are not retrospective and, therefore, the costs of fund provisions have no application to the present case.
7. For what has been stated above, this appeal is partly allowed. The impugned judgment and decree of the learned Banking Court is modified and instead of an amount of Rs.32,07,478 the suit of the respondent-Bank is decreed in the sum of Rs.9,84,651. No order as to costs.