C.M.As. Nos.8420 and 8421 of 2008 ' MUHARRAM G. BALOCH, J.---By this order I propose to dispose of C.M.As. Nos.8420 and 8421 of 2008.
Both these applications for leave to defend under section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, 'are filed on behalf of defendants Nos.1 and 2 to 7 respectively.
2. The case of the plaintiff is that the plaintiff provided finance facility to the defendant No,1 up to sum of Rs,80 Million in pursuant to the Corporate Resolution dated 20-9-2006 of the plaintiff. The plaintiff sanctioned demand finance facility to the defendant No,1 up to an amount of Rs,80 Million repayable in monthly instalments within a period of four years on markup basis vide agreement dated 9-10-2006 whereby the defendant No,1 confirmed having sold the present and future current assets for a sum of Rs,80 Million being sale price to the plaintiff and re-purchased prior to the execution of the agreement the same at the mark up price of Rs,147, 239 Million (termed therein as "Purchase Price") from the plaintiff. According to the plaintiff the defendant had executed promissory note dated 9-10-2006 and promised to pay to the plaintiff on defnand sum of Rs,147.239 Million. The defendants Nos.2 to 7 had executed personal guarantees respectively in favour of the plaintiff up to the maximum amount of Rs,150 Million plus cost of funds and all costs, fees, expenses and liquidated damages and thus guaranteed to the plaintiff repayment of amount due and payable by the defendant No,1 jointly and severally in favour of the plaintiff.
3. According to the plaintiff, the defendant No,1 repaid the few instalments in time, however, it neglected to make payment of the instalments for the months of July and August, 2007 and quarterly mark-up from July to September. Nevertheless; the defendant No,1 issued in favour of the plaintiff three cheques bearing No,0105672 dated 27-11-2007 for Rs,1,000,000, 0105673 dated 30-11- 2007 for Rs,1,000,000 and 9720836 dated 28-11-2007 for Rs,1,633,739 drawn on M.C.B. Badar Commercial Branch, Karachi, against due instalments and mark-up respectively. However, the same were dishonored upon presentation. It is the case of the plaintiff that the plaintiff served a legal notice upon defendant No,1 thereby the defendant No,1 was called upon to pay the obligation .Otherwise the plaintiff would be constrained to initiate criminal and civil proceedings against it.
The defendant No,1 subsequent to the above mentioned notice made part payment of Rs,12,912.92 on 28-1-2008 and Rs,995,000 on 20-2-2008. The defendant also forwarded a cheque No,2744630 dated 5-4-2008 for a sum of Rs,1,750,000 drawn on M.C.B. Bank Ltd., Badar Commercial Branch, Karachi, but the same was dishonored on presentation. The defendant failed to pay all amounts due and payable and thus committed default in fulfilment of his obligation with regard to the finances, as mentioned above, therefore, he brought the above suit.
4. The defendants Nos.1 and 2 to 7 have filed their respective applications for leave to defend under section 10 of Financial Institution (Recovery of Finances) Ordinance, 2001, inter alia, raising the substantial questions of law and facts that no cause of action accrued in favour of the plaintiff till date and since the amount was required to be paid by or before 30-9-2010, as stipulated in clause 6 of the agreement dated 9-10-2006, and in view of the fact that the compliance of clause 3 of the above agreement has not been made nor has any thing been specified in the agreement and the repayment as per clause 6 of the agreement is to be made on or before 30-9-2010. The defendant also raised the question that there is apparent contradiction in the plaint in so far as in the plaint and the agreement. The defendants have also questioned the maintainability of the suit under the provisions of Financial Institution (Recovery of Finances) Ordinance, 2001 and so also other legal pleas with refuting the allegations of the plaintiff bank.
5. I have heard Mr. Qazi Faiz Isa, learned counsel for the defendants, and Mr. Shakeel Pervez Bhatti, learned counsel for the plaintiff bank.
6. Learned counsel for the defendant has referred to the obligation as contained in subsection (4) of section 10 of Ordinance, 2001 which defines as under:-- "(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 payment; {b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution up to 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."
7. According to him when substantial questions of law or fact have been raised in respect of which evidence needs to be recorded then leave to defend should be granted as per subsection (8) of section 10.
8. He referred to page 27 of the file which is Annexure B/1 filed by the plaintiff which is a letter written by the Bank to the defendant No,
1. According to this document the expiry date of repayment of the loan is mentioned as September 30, 2010. In support of his arguments he has placed reliance on the case of National Bank of Pakistan v. Messrs Shoaib Corporation and another 2004 CLD 631, Asad Pervaiz v. Habib Bank Ltd. 2005 CLD 1525, Amtul Rehman Industries (Pvt.) Ltd. v. Habib Bank Limited 2005 CLD 1746 and Habib-ur-Rehman v. Judge Banking Court No,4 2006 CKD 217.
9. As against, learned counsel for the plaintiff vehemently opposed these applications on the grounds (i) that defendant No,1 has defaulted in payment of instalment and so also the cheques presented by him towards instalments were dishonoured and (ii) that the applications filed by the defendants for leave to defend are barred by time.
10. He argued that the defendants issued cheques on 27-11-2007, 28-11-2007, 30-11-2007 were dishonored, therefore, the defendant No,1 did not fulfil his liability whereby he has so far made payments of Rs,24 Million and then stopped. According to the learned counsel Rs,71 Million payable by the defendants is outstanding against it. Learned counsel for the plaintiff further contended that the leave to defend is to be filed within 30 days of the notice/publication and in the present suit the publication was made in Daily Jang in its circulation dated 19-6-2008 and these applications have been filed on 2-8-2008, thus beyond stipulated period of 30 days. According to him the applications for leave to defend are barred by time. Learned counsel for the plaintiff in support of his case has relied upon Mst. Amena Bibi v. Abdul Haqees 2000. SCMR 675, First Grindlays Modaraba v. Pakland Cement Ltd. 2000 CLD 2017, Muhammad Sharif v. Rehmat Khan 2003 SCM R 1346, Rubina Jamshed v. United Bank Ltd. 2005 CLD 50, Shahid Farooq Sheikh v. Allied Bank of Pakistan Ltd. 2005 CLD 1489, Muhammad Shareef v. Muhammad Ramzan 2006 CLC 618. Learned counsel for the plaintiff thus prayed for dismissal of the above applications and decree of the suit.
11. Learned counsel for the defendant in rebuttal to the arguments of learned counsel for the plaintiff submitted that the defendant No,1 has not committed default in payment of installment and referred to statement annexed with the applications whereby he submitted that the cheques which was said to have been dishonoured in November, 2007 were reissued on various dates i,e, 3- 12-2007, 11-1-2008, 24-1-2008, 25-1-2008 and 15-2.2008 and the amount of above cheques is Rs,4,950,000 i,e, more than the amount of the cheques which are said to be dishonoured. He further stressed the point that the question of fact needs to be probed and that it is "admitted fact that the final repayment is to, be made up to 30-9-2010 as per document relied upon by the plaintiff along with the plaint as Annexure B/1 page 27 of the file. Under such circumstances, he submitted that the suit has been filed before above mentioned date thus the same is premature one, therefore, in such situation the leave is to be granted.
12. On the next point which was argued by learned counsel for the plaintiff that the applications are time barred, learned counsel for the defendants referred to Rule 7 of Sindh Chief Court Rules in respect of the Court holidays, which is reproduced as under:-- "7. Courts holidays.--The several Courts and offices of the Chief Court on its original and Appellate Sides shall be closed on such holidays as the Chief Court from time to time directs. A list of such holidays shall be published yearly in the official Gazette: provided that a suitable arrangement shall be made for urgent work during Court holidays and the long vacation."
He also referred to section 10 of the General Clauses Act, 1897 which defines the computation of time which is as under:-- "10. Computation of time.--(1) Where, by any Central Act or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period , then, if the Court or office is closed on the day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open."
' Lastly he referred to section 4 of the Limitation Act, 1908 which speaks that where the period of limitation prescribed for any suit, appeal or application expires on a day when the Court is closed, the suit, appeal or application may be instituted, preferred or made on the day that the Court re- opens. According to him the defendants have filed the applications on the first day of reopening of the Court after vacation i,e, 2-8-2008, therefore, the applications are very much in time and the same are not hit under the provisions of the Limitation Act. In support of the above contentions he placed reliance on the case of Fazal Karim v. Ghulam Jilani 1975 SCM R 452, Ikramullah v. Saud Jamal 1980 SCM R 375 and Port Muhammad Bin Qasim v. National Insurance Corporation, Karachi 1983 CLC 3126.
13. 1 have considered the arguments of both the learned counsel appearing for the parties and with their assistance gone through the material available on record and the case relied upon by them.
14. Learned counsel for the plaintiff mainly contended that the publication of the notice of this suit was made on 19-6-2008 and the applications are filed on 2-8-2008, therefore, according to him, the applications are barred by time. On the other hand, learned counsel for the defendants, has submitted that the defendants are bound by statutory law i,e, Limitation Act, Sindh Chief Court Rules and General Clauses Act, therefore, he submitted that the applications are very much in time, therefore, the contention raised by learned counsel for the plaintiff has no force.
15. Having carefully gone through the case law relied upon by the learned counsel for the parties, I am convinced that the plain reading of section 4 of Limitation Act is clear that the period during which the Court remains closed on account of vacation has to be excluded for computation of the limitation as provided by the statutory provisions of law as mentioned above. Thus, I am in agreement with the contention raised by learned counsel for the defendant that the applications are in time.
16. Since the questions of law and facts in respect of filing of the suit before the date of repayment and that the instalments were paid or not is to be probed, therefore, under such circumstances, I am convinced that the defendants Nos.1 to 7 have succeeded to make plausible case for grant of leave to defend in the present suit. Consequently, both the applications are allowed and the applications for leave to defend are granted to the defendants Nos. 1 to 7 unconditionally.