C.M.-2 of 2006: Although C.M. 2 of 2006 for grant of interim relief is fixed for hearing, however, with the consent of both the parties we intend to decide the main appeal.
2. This appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, is directed against judgment and decree dated 14-2-2006.
3. Brief facts leading to the filing of this appeal are that the respondent filed a suit for recovery of Rs.779,050 along with compensation and cost of funds against the appellants. It was contended in the plaint that appellant No.1, a private limited company, had obtained a lease finance facility from the respondent, which was guaranteed by appellants Nos.2 and 3. It was further contended that the tenure of the lease was three years and 36 monthly rentals of Rs.15,955 were payable and the appellants had only paid seven rentals. In consequence whereof, the suit amount of Rs.779,050 was due from the appellants.
4. The appellants entered appearance and filed an petition for leave to defend the suit, in which, the factum of the lease was admitted however, various objections were taken. After hearing the parties the Banking Court dismissed the petition for leave to defend filed by the appellants and decreed the suit vide impugned judgment and decree dated 14-2-2006.
5. Learned counsel for the parties have been heard and the record available on the record has also been perused.
6. It is contended by learned counsel for the appellant that the Banking Court has incorrectly invoked subsections (3) and (4) of section 10 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001, as the same had been complied with. It is also contended that there were triable issues requiring the recording of evidence hence leave should have been granted in the instant case.
7. Learned counsel for the respondent has controverted the contentions raised on behalf of the appellants. It was farther contended that no plausible defence was made out justifying the grant of leave to defend the suit, hence, the petition was rightly dismissed and the suit decreed.
8. We have examined the petition for leave to appear and defend filed by the appellants. A perusal thereof reveals that the amount of lease finance availed has been specifically stated. Similarly, the amount paid by the appellants to the respondent was also specifically stated. In fact there is no dispute between the parties in this behalf. In the circumstances, we are not persuaded to hold that the petition for leave to defend was liable to be summarily rejected for non-compliance of section 10 subsections (3) and (4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
9. Perusal of the record reveals that it is an admitted fact between the parties that the lease finance facility was obtained by the appellants from the respondents. It is also an admitted fact between the parties that finance facility was repayable in 36 equal instalments of Rs.574,380 each.
It is also an admitted fact between the parties that only 7 such rentals were paid by the appellants to the respondents and the balance rentals remained unpaid. Said overdue rental amount to Rs.462,717 is also not disputed by the appellants. No plausible defence in respect of this portion of the claim has been raised by the appellants. The appellants raised an issue about the deposit in lieu of salvage price. This amount could only be adjusted if the leased machinery was to be returned to the respondent company. In the instant case said machinery had not been directed to be returned to the respondents by way of the impugned judgment and decree. In fact said leased machinery has been sold in execution of another decree passed against appellant No.1 and the amount received therefrom has been adjusted or will be adjusted to the benefits of the appellants with regard to another liability. The appellants cannot claim adjustment of the salvage amount against their liability to the respondents.
10. In view of above, it is clear and obvious that the appellants had failed to make out a plausible defence with regard to unpaid overdue rentals amount of Rs.462,717. Balance claim of the respondents pertains to late payment charges and cheque return charges. The former is prima facie a penalty and the latter too needs to be proved in evidence by the respondents.
Consequently, in the facts and circumstances of the case, respondents were entitled to an interim decree of Rs.462,717 along with cost of funds and were entitled to unconditional leave to defend the suit vis-a-vis the balance claim of the respondents. For the foregoing facts and reasons, we accept this appeal with modification in the judgment and decree of the trial Court in the terms incorporated ibid.