1. ' FAISAL ARAB, J.---This suit has been filed against the defendants under section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 for recovery of Rs, 531,234,505.98 along with mark-up, liquidated damages, charges and cost of funds.
2. ' Vide order dated 3-9-2005, this suit was ordered to be fixed for final disposal as in spite of due service, the defendants failed to seek leave to defend this suit. The suit against them therefore, had to proceed ex parte.
3. ' The plaintiff provided two financial facilities to the defendant No,
1. The first facility was based on buyback agreement dated 4-1-1992. Under this agreement, a consortium of banks including the plaintiff granted finance to the extent of Rs,108,806,000 of which Rs,10,880,000 was provided by the plaintiff. Defendant No,1 was to repay the facility in 14 semiannual instalments commencing from 1- 1-1995 and ending on 1-7-2001. Under the agreement defendant No,1 was liable to pay the buyback price. In schedule "C-V to the agreement dated 4-1-1992, there are two buyback prices given. The first is to the extent of Rs,33,815,600.00 and the second is to the extent of Rs,27,753,122.00. The reduced buyback amount was to be charged in case the defendant No,1 makes repayments of the instalments within due dates. In PLD 2001 Karachi 276, it has been held that recovery of reduced amount for timely repayments is in fact the actual buyback price and recovery of any additional amount for delayed payments is in the nature of penalty which is not permissible under section 74 of the Contract Act. The plaintiff is therefore, entitled to recover only Rs,27,753,122.00 against the first facility. From the statement of account it is evident that no repayments have been made and therefore, the entire buyback priced of Rs,27,753,122.00 is recoverable from the defendants. In addition to this buyback price, the plaintiff shall be entitled to recover cost of funds from the date of default of each instalment till realization of entire buyback price.
4. ' The second financial facility is based on agreement of guarantee dated 4-7-1993 executed by defendant No,1 in favour of the plaintiff as well as in favour of three other banks namely, National Bank of Pakistan, Habib Bank Limited and United Bank Ltd. This guarantee was executed by the defendant No,1 to secure the deferred payment credit facility provided in foreign currencies by foreign supplier of plaints, machinery, mechanical and electrical engineering services. As against this contact of guarantee dated 4-7-1993 the plaintiff along with other banks provided counter- guarantee to National Bank of Pakistan to secure the installments payable to foreign suppliers. The plaintiffs counter guarantee was to the extent of 16% of the amount availed by defendant No, 1.
5. ' The defendant No,1 failed to remit several instalments to the foreign suppliers which resulted in invoking of counter guarantee by National Bank of Pakistan against the plaintiff. Under the counter- guarantee the plaintiff was forced to pay two sum Rs,105,904,148.76 and Rs,167,553,072.74 both totalling Rs,273,457,221.50 on behalf of defendant No,1. The plaintiff therefore, is entitled to recover against the second facility a sum of Rs,273,457,221.50 along with mark-up at the contractual rate of Rs,51 per Rs,1000 per day up to the period when the last instalment was to be repaid under supplier's credit agreements. Thereafter the plaintiff is entitled to recover cost of funds at the applicable rates till the realization of amount.
6. To secure the above two facilities, the defendant No,1 created an equitable mortgage by way of deposit of title documents over its immovable property bearing Plot No,129, 130, 131, 132 and 133 measuring 10 acres or thereabouts, together with the buildings and structures constructed thereon, situated at Hatter Industrial Trading Estate, Hattar, Tehsil, Haripur, District Abbottabad. The aforesaid equitable mortgage is evidenced by the Memorandum of Deposit of Title Deeds dated 4- 1-1992. The defendants Nos.2 to 8 also executed their personal guarantees to secure the above two facilities.
7. ' The suit is therefore, decreed for a total sum of Rs,301,210,343.50 with mark-up and applicable rate of cost of funds as stated hereinabove to be recovered from the defendants who were jointly and severally liable. The claim of the liquidated damages is however, rejected. The recovery of decretal sum is to be effected through sale of the mortgaged properties and assets of the defendants.