1. ' FARRUKH ZIA G. SHAIKH, J.---Plaintiff has instituted this suit for recovery of Rs,126,121,627 under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter to be referred as the Ordinance).
2. ' Brief facts of the case are that the plaintiff is a financial institution, while the defendant is conducting business as a sole proprietor under name and style of Messrs Bukhari Commercial Exporters and is a customer of the plaintiff-Bank. The defendant had approached the plaintiff-Bank with, a request of availing export refinance facility vide letter dated 16-7-2004, which the plaintiff approved vide its sanction advice dated 28-10-2004 extending an Export Refinance Facility of Rs,100 million and on 17-8-2004 both the plaintiff and defendant entered into a finance agreement on mark-up basis. In consideration of the above finances the defendant executed and deposited with the plaintiff the following documents:--
(i) registered Mortgage Deed dated 28-8-2004 (Copy is attached herewith as Annexure "E");
(ii) memorandum of Deposit of title Deeds dated 17-8-2004 (Copy is attached herewith as Annexure "E/1");
(iii) declaration of the defendant stating that the mortgaged property is free of encumbrances (Copy is attached herewith as Annexure "E/2");
(iv) declaration/Affidavit regarding the mortgaged property (Copy is attached herewith as Annexure "E/3");
(v) demand Promissory Note dated 17-8-2004 for Rs,107,900,000 (Copy is attached herewith as Annexure "E/4");
(vi) letter of Hypothecation for Rs,112,000,000 (Copy is attached herewith as Annexure "E/5");
(vii) guarantee of defendant as proprietor for Rs,150,000,000 dated 17-8-2004 (Copy is attached herewith as Annexure "E/6");
(viii) guarantee of defendant as owner of the mortgaged property for Rs,100,000,000 dated 17-8- 2004 (Copy is attached herewith as Annexure "E/7"); ' At the time of executing the Memorandum of Deposit of Title Deeds dated 17-8-2004, the defendant deposited with the plaintiff the following documents:--
(i) "NOC of Mukhtiarkar for mortgage dated 17-9-2004 (Copy is attached herewith as Annexure "E/8")
(ii) Conveyance-Deed in favour of the defendant dated 11-5-2004 (Copy is attached herewith as Annexure "E/9")
3. ' The defendant mortgaged land measuring 10 acres out of total land measuring 17 acres 27 Ghuntas bearing Survey No,170 situated at Deh Safooran, Tappo Drigh Road, Karachi. The defendant fully availed the finance facility of Rs,100,000,000 but failed to repay the same and defaulted, therefore, the plaintiff filed the present suit with the following prayers:--
(a) a decree be passed against the defendant for payment to the plaintiff-Bank an amount of Rs,126,121,627 along with the cost of funds, service charges and all other charges from the date of default until realization of the same;
(b) the decretal amount be ordered to be realized both by execution of personal decrees against the defendant, by attachment and sale of the hypothecated assets and other immovable properties of the defendant that may be located/pointed out by the plaintiff-Bank and the sale proceeds be applied towards satisfaction of the decretal amount;
(c) cost of the suit throughout be granted;
(d) any other relief that this Honourable Court deems fit and proper in the circumstances of the case may also be granted.
4. ' Learned counsel for the plaintiff submitted that plaintiff served upon the defendant a legal notice dated 16-11-2007 requesting therein to pay the outstanding amounts which the defendants are liable to pay to the plaintiff otherwise plaintiff shall take all civil and criminal actions against the, defendant as the title documents of the mortgaged properties were found forged but despite the expiry of time period specified in the said notice, the defendant failed to pay all the outstanding amount to the plaintiff. He has further submitted that as per the books of accounts pertaining to finances a sum of Rs,94,850,700 plus Rs,31,270,927 being mark-up as on 31-1-2008 which comes to total Rs,126,121,627 is now due and payable by the defendant: the defendant committed fraud by providing intentionally and fraudulently forged property documents to secure his repayment obligations.
5. ' He next argued that after admission of the suit process under section 9 subsection (5) of the Ordinance was issued to the defendant by all modes: statutory period for filing leave to defend application has expired but no leave to defend application has been filed, in support of his above submissions, he has relied upon the cases reported as 2002 CLD 1510; PLD 1990 SC 497; 1987 CLC Karachi 2164; 2006 CLD 261; 2005 CLD 1705 and 2002 CLD Karachi 242.
6. ' I have heard the learned counsel and perused the record available before me.
7. ' It appears from the record that defendant despite service through publication in daily newspapers daily Jang and daily Dawn dated 13-3-2008 as well as through courier and registered post A/D did not appear to defend the suit and by order dated 18-4-2008 the Assistant Registrar has ordered that the matter be placed before the Court for final disposal as the statutory period for filing leave to defend application has expired. The suit has been filed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, and in support of the plea the plaintiff has filed statement of account (Annexure `P') showing the outstanding dues against the defendant.
8. Before proceedings further it will be pertinent to reproduce section 9 and section 10 of the Ordinance:--
9. Procedure of Banking Courts:--
(1) Where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or, as the case maybe, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power of attorney or otherwise.
(2) The plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers Books Evidence Act, 1891 (XVII of 1891), and all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account and other relevant documents shall be filed with the Banking Court in sufficient numbers so that there is one set of copies for each defendant and one extra copy.
(3) The plaint, in the case of a suit for recovery instituted by a financial institution, shall specifically state -
(a) the amount of finance availed by the defendant from the financial institution;
(b) the amounts paid by the defendant to the financial institution and the dates of payment; and
(c) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit.
(4) The provisions of section 10 of the Code of Civil Procedure, 1908 (Act V of 1908), shall have no application for and in relation to suits filed hereunder.
(5) On a plaint being presented to the Banking Court, a summons in form No,4 in Appendix 'B' to the Code of Civil Procedure, 1908 (Act V of 1908) or in such other form as may, from time to time, be prescribed by, rules, shall be served on the defendant through the 'bailiff or process-server of the Banking Court, by registered post acknowledgment due, by courier and by publication in one English language and one Urdu language daily newspaper, and service duly effected in any one of the aforesaid modes shall be deemed to be valid service for purposes of this Ordinance. In the case of service of the summons through the bailiff or process-server, a copy of the plaint shall be attached therewith and in all other cases the defendant shall be entitled to obtain a copy of the plaint from the office of the Banking Court without making a written application but against due acknowledgement. The Banking Court shall ensure that the publication of summons takes place in newspapers with a wide circulation within its territorial limits.
10. Leave to defend:--
(1) In any case in which the summons has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided to defend the same; and, in default of his doing so, the allegations of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Banking Court may require in the interest of justice.
(2) The defendant shall file the application for leave to defend within thirty days of the date of first service by any one of the modes laid down in subsection (5) of section 9: ' Provided that where service has been validly effected only through publication in the newspapers, the Banking Court may extend the time for filing an application for leave to defend if satisfied that the defendant did not have knowledge thereof.
(3) The application for leave to defend shall be in the form of a written statement, and shall contain a summary of the substantial questions of law as well as fact in respect of which, in the opinion of the defendant, evidence needs to be recorded.
(4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following:--
(a) the amount of finance availed by the defendant from the financial institution; the amounts paid by the defendant to the financial institution and the dates of payments;
(b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit;
(c) the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof; Explanation.-For the purposes of clause (b) any payment made to a financial institution by a customer in respect of a finance shall be appropriated first against other amounts relating to the finance and the balance, if any against the principal amount of the finance.
(5) The application for leave to defend shall be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him.
(6) An application for leave to defend which does not comply with the requirements of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement.
(7) The plaintiff shall be given an opportunity of filing a reply to the application for leave to defend, in the form of a replication.
(8) Subject to section 11, the Banking Court shall grant the defendant leave to defend the suit if on consideration of the contents of the plaint, the application for leave to defend and the reply thereto it is of the view that substantial questions of law or fact have been raised in respect of which evidence needs to be recorded.
(9) In granting leave under subsection (8), the Banking Court may impose such conditions as it may deem appropriate in the circumstances of the case, including conditions as to deposit of cash or furnishing of security.
(10) Where the application for leave to defend is accepted, the Banking Court shall treat the application as a written statement, and in its order granting leave shall frame issues relating to the substantial questions of law or fact, and subject to fulfilment of any conditions attached to grant of leave, fix a date for recording of evidence thereon and disposal of the suit.
(11) Where the application for leave to defend is rejected or where a defendant fails to fulfil the conditions attached to the grant of leave to defend, the Banking Court shall forthwith proceed to pass judgment and decree in favour of the plaintiff against the defendant.
(12) Where an application for leave to defend has been filed before the coming into force of this Ordinance, the defendant shall be allowed a period of twenty-one days from the date of coming into force of this Ordinance, or from the date of first hearing thereafter, whichever is later, for filing an amended application for leave to defend in accordance with the provisions of this Ordinance.
9. In view the above legal and factual position and keeping in mind the case-law cited by the learned counsel for the plaintiff, which supports the pleas of plaintiff and contentions of the plaintiff which have gone unrebutted and unchallenged, the A suit is decreed in favour of the plaintiff as prayed, however, as defendant did not defend the suit, there will be no order as to costs.
10. ' Regarding depositing of fake documents of mortgaged property, the plaintiff is at liberty to initiate criminal B proceedings against the defendant, if provided, under the law. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.