1. The plaintiff (Bank) filed a suit for recovery of Rs.1,37,93,977 against the defendants before the Banking Tribunal, Bahawalpur on 19-1-1994 under the Banking Tribunals Ordinance, 1984. An ex parte decree was passed against the defendants by the Banking Court No.2, Bahawalpur on 26-11- 1998. The defendants made an application C.M. No.773-B of 2001 for setting aside the ex parte decree dated 26-11-1998. After the promulgation of Corporate & Industrial Restructuring Corporation Ordinance, 2000, the defendant No.1 was declared as "non-performing asset" and was taken over by the CIRC (Corporate & Industrial Restructuring Corporation) under section 18 of the aforementioned Ordinance. After the take over CIRC substituted the Bank. After the receipt of the case in this Court the ex parte decree dated 26-11-1998 was set aside by this Court vide order dated 10-12-2002.
2. The facts as stated in the plaint are that the defendant No.1 availed the following finance facilities in the year 1991-92:- I. Cash Finance against the Rs.75Lacs following security documentsExcluding mark-up.
(a) Agreement for finance dated 30-6-1991 between the bank and the defendants.
(b) Letter of Pledge dated 30-6-1991.
(c) Demand Promissory Note for Rs.90 Lacs along with letter of continuity dated 30-6-1991.
(d) Letters of Guarantee dated 30-6-1991 by defendants Nos.2 to 4.
2. II.Cash Finance against the Rs. 10 Lacs security documents Excluding mark-up.
(a) Agreement for finance dated 30-6-1991 between the bank and the defendant Nol.
(b) Letter of Hypothecation dated 30-6-1991 by defendant No.1.
(c) Letter of Guarantee by defendants Nos.2 to 4 dated 30-6-1991.
(d) Demand Promissory Note for Rs.12.50 Lacs along with Letter of Continuity dated 30-6-1991.
3. III. Finance against Trust Receipt Rs.25Lacs.
4. (F.T.R.) against the documentsExcludir g mark as under up.
(a) Agreement for finance dated 12-1-1992 e' .cuted between the bank and defendant Nol.
(b) Demand Promissory Note dated 12-1-1992 for Rs.30 Lacs
(c) Letters of Guarantee dated 12-1-1992 by defendants Nos.2 to 4.
5. The aforementioned "Finances" were also secured by creating equitable mortgage of land measuring 16 Kanals. The finance facilities Nos.1 and 2 were repayable before 30-6-1992 and the third finance facility (F.T.R.) was repayable before 30-12 1992. It was further averred that the defendants illegal]. and unauthorizedly removed the stocks pledged and a case has been registered against the defendants and criminal legal proceedings are pending against them under section 7 of the Banking Tribunals Ordinance, 1984. The defendants filed their reply to the show- cause notice/written statement under the Banking Tribunals Ordinance, 1984. After the promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 the defendants filed an amended application for leave to defend the suit under section 10(12) of the Ordinance.
6. Learned counsel for the plaintiff contended that the defendants wrote letter on 29-10-1992 for restructuring of the facilities which request was acceded to by the plaintiff-Bank and finance agreements were executed. The aforementioned finance facilities have not been repaid by the defendants, notwithstanding, various notices. He prayed for a decree as per statement of account appended with the plaint. He contended that the defendants took possession of the pledge stock
(Oil) in July, 1992. It transpired in October, 1992 that the defendants misappropriated the same. No case is made out for grant of leave to defend the suit.
7. Learned counsel for the defendants submitted that the statement of account relating to CF-72 shows the disbursement of Rs.74,73,073, whereas, the said amount was not actually disbursed to the defendants. He urged that the payment of the aforementioned amount has not been proved.
8. The documents appended with C.M. No.124-B of 2004 were not appended with the plaint as such cannot be relied upon. Learned counsel argued that the defendant No.5 Mst. Inayat Begum died in 1992 before the filing of the suit as such the suit was liable to be dismissed on this ground alone. He prayed for grant of leave to defend the suit.
3. I have considered the arguments of the learned counsel for the parties and perused the record.
9. The contention of the learned counsel for the defendants that disbursement of Rs.74,73,073 is not proved on the record is devoid of any force. The defendants in their earlier written statement (reply to the show-cause notice) stated as under:-- "In reply of para.3, it is submitted that the defendant firm availed only facility of finance in the years 1991/1992 amounting to Rs.74,35,056.
(ii) In reply of para.(ii), it is submitted that the defendant availed on Rs.9,85,000 against Hypothecation of stock.
(iii) In reply of para.(iii), it is submitted that defendant availed loan against F.T.R. amounting to Rs.11,00,000.
10. The bare reading of the aforementioned para. shows that the defendants admit the availing of the finance facilities. However, a preliminary objection was raised that the defendants had filed a suit against the Bank for damages. It is pertinent to mention here that the application of the defendants for the consolidation of the suit for damages was declined by the Honourable Chief Justice vide order dated 19-1-2004. In the amended PLA No.115-B of 2002 filed by the defendants it is stated in ground a(ii)(1) as under:-- "From 9-1-1991 to 23-5-1992 applicants/defendants obtained Rs.4,08,23,465."
11. It is thus clear that the defendants/applicants have admitted obtaining the finance facilities, however, they stated that the same have been repaid. There is nothing on the record to show that the plaintiffs have repaid the facilities. It is further alleged that the plaintiff-Bank was in control of Cotton Seed and RBD Palm Oil weighing 885.281 tons valuing about Rs.407,22,926. The same has been misappropriated by the Bank and it is liable to pay the same along with damages. The matter is pending before the Banking Tribunal on the criminal side. The civil suit filed by the defendants for recovery of damages is also pending.
12. This question cannot be decided in the instant suit. The finance facilities advanced to the defendants are duly supported by the security documents mentioned above. In this view of the matter the application of the defendants/applicants for leave to defend the suit has no merit and is dismissed.
13. 1st Finance Facility The statement of account relating to CF-72 shows the withdrawal of Rs.74,73,073.93. The availing of the finance facility has been admitted by the defendants in para.3 of their earlier written statement reply to show-cause notice. The other withdrawals mentioned in the account number CF-72 do not pertain to the agreement dated 30-6-1991. It is not the case of the plaintiff that the finance facility amounting to Rs.75 lacs was sanctioned and the defendants had been withdrawing the different amounts from time to time as running finance out of the sanctioned amount. The statement of account clearly shows the disbursement of Rs.74,73,073.93. I had also called for the ledger of the Bank, the same amount finds mention therein. The suit relating to the first finance facility is, therefore, decreed to the extent of Rs.90,00,000 only. This amount is the buy-back price and includes the mark-up charged by the Bank on the principal amount. The sum exceeding this amount is not allowed. Twenty per cent liquidated damages amount to Rs.18,18,800 are also disallowed as the same are not proved as held in Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd. Islamabad v. Messrs Allied Bank of Pakistan and another 2003 CLD 596.
14. 2nd Finance Facility The statement of account CF-70 shows die disbursement of Rs.9,90,000. The Bank has charged the it rkup on the same as follows:--
(i) Rs.444 Rs.82,055
(iii) Rs.1,99,950 Total:Rs.2,82,449 Under the buy-back agreement dated 30-6-1991 the principal amount of finance facility is Rs.
15. 10,00,000 and the buy-back price is Rs.12,50,000. The Bank cannot charge mark-up more than Rs.2,50,000. The liquidated damages amounting to Rs.2,40,600 are not allowed as the same have not been proved.
16. The Central Excise Duty is allowed. The suit relating to second finance facility is decreed in the sum of Rs.11,69,830.
17. 3rd Finance Facility The statement of account pertaining to account FTR shows that out of Rs.25,00,000 (as per agreement dated 12-1-1992) only Rs.11,00,000 were disbursed and Rs.98650 has been charged as mark-up. The liquidated damages amounting to Rs.2,39,800 are disallowed as having not been proved. The third finance facility is, therefore, decreed for a sum of Rs.11,98,650 only. The defendants are jointly and severally liable.
18. As far as the contention of the learned counsel for the defendants that Mst. Inayat Begum, defendant No.5 was dead at the time of the filing of the suit is concerned, suffice to say that her legal representatives are already on the record.
4. For what has been stated above the suit is decreed for a sum of Rs.1,13,68,480 with costs and cost of funds as envisaged in section 3(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.